STANDARD PROCEDURES

LATERITE EXPLORATION
INCO TECHNICAL SERVICES LIMITED

Disclaimer

Procedures set out in this document are compiled from Inco laterite exploration and
other tropical exploration programs of Inco as a general guide to laterite exploration .
Certain aspects of the specific locations will require modifications to these example
procedures or will require a different procedure to suit the laterite characteristics or
the topography or other factors at different properties. ITSL does not warrant these
procedures are the best available, nor appropriate for all local situations . ITSL and its
parent Inco Limited each expressly disclaims any and all liability arising from the use
or application of these procedures.

ITSL Standard Procedures Nickel Laterite Exploration 1

 TABLE OF CONTENTS

NICKEL LATERITE STANDARD PROCEDURES

1. GENERAL PROVISIONS

2. FIELD ORIENTATION PROGRAM

3. SURVEYING AND MAPPING

4. DRILLING AND ENVIRONMETNAL CONTROLS

5. CORE LOGGING

6. TEST PITTING

7. ANALYTICAL AND QUALITY CONTROL

8. JAPANESE INDUSTRIAL STANDARD M8109

9. APPENDICES

ITSL Standard Procedures Nickel Laterite Exploration 2

 STANDARD PROCEDURES

LATERITE EXPLORATION

1. GENERAL PROVISIONS Environment, Health and Safety

Personnel, including contractors, must be advised and knowledgeable of the scope of the work plan.

All employees, including contractors, must be fully aware and comply with all Company environment, health
and safety requirements. The project manager must periodically review compliance.

No person shall work under the influence of intoxicating liquor, drugs or narcotic substances.

Personnel must respect the presence and habitat of indigenous wildlife; historical culture sites
(archeological/paleontological remains, structures, buildings or objects); the rights of property owners, native
lands, and other water or land users. Discovery of threatened or endangered wildlife species or archeological
finds must be promptly brought to the attention of the project manager who will contact the appropriate
regulatory authorities. Care must be taken not to disturb or destroy the find by continued exploration activity.

Exploration activities in environmentally fragile areas, along natural watercourses, protected forests or animal
preserves demand special care and planning.

Environmental baseline studies are to be undertaken as required by local regulatory authorities or project
management to record the undisturbed conditions of the natural environment prior to major project
development.

FIELD RECONNAISSANCE (Includes base and cross-line topo surveying and geology mapping)

The person(s) in charge of the work must:

Acquire necessary permits and approvals beforehand.

Instruct field crews to avoid unnecessary disturbance of vegetation, wildlife and public properties.

Obtain permission and guidance from resident landowners or tenants before traveling through their
properties, observe all posted signs, and travel on established roads or trails wherever possible.

Note the location of watersheds used as sources of drinking water by local settlements and minimize
equipment use in these areas.

Clean up litter. Ensure proper storage, handling and disposal of garbage at all times. In principle, carry out
what is carried in. Use suitable receptacles to store and handle all refuse.

Follow safety procedures in lighting, containing and extinguishing campfires including the use of protective
firebreaks and the availability of appropriate fire fighting equipment.

Post and follow instructions on proper handling, use and storage of fuel and other hazardous materials to
prevent accidental spills or leaks and injury to site personnel. Prepare an emergency response plan for spills

ITSL Standard Procedures Nickel Laterite Exploration 3

 that must include reporting requirements. In the event of a spill, on-site personnel must, with due regard for
their own safety, take prompt action to limit or contain the damage.

GEOLOGICAL, GEOCHEMICAL AND GEOPHYSICAL SURVEYS

Avoid unnecessary brush cutting and blazing of trees along control grid lines. Cut survey lines at the minimum
width practical.

Upon completion of the survey, remove all wire and other materials that may be a hazard.

Minimize disturbance of natural surroundings to the extent possible. Avoid contaminating soil and water during
surveys.

TEST PITTING or TRENCHING

Fence the perimeters of excavations that are greater than one meter deep if they are left open and
unattended.

Backfill, re-grade and, if required, revegetate excavation areas when they no longer need remain exposed for
further investigations.

Clear right-of-way timber and debris in an orderly manner. Dispose of debris by offering valuable timber to the
locals and the waste by burning if permitted, or by burying it in off-site push piles if permitted. Whenever
possible, stack timber so that it can be salvaged by landowners and other land users.

For excavations deeper than 2 meters, specific actions are required to line the excavation with frame and
planks during the advance of pitting (no more than 2 meters open wall). In the case of side hill trenching, a
factor of safety is to be at least 1.5 horizontal to 1 vertical in the case of limonite and competent saprolite.

In some situations it will be necessary to determine soil strength and stability prior to extending the depth
and to wear safety belts and life lines in the case of test pits or to remain a reasonable distance from the
trench wall. Where the weathering profile shows signs of instability (slumps on steep slopes) or would
reasonably expected to be unstable, there should be no manual test pitting or trenching.

In all cases the exploration leaders and the supervisors will have special training in order to provide
supervision for the crews.

Access to pits or trenches must be restricted until excavations return to a dry condition after a period of
heavy or prolonged rainfall.

At no time can spoil piles from the excavation be placed on surface within 2 meters of the excavation (such
surcharging of a cut soil pile is the main cause of circular failures in laterite or tropical wet soils).

DRILLING

Wherever feasible, lay out drill sites and water lines in areas where their access and operation will create the
least amount of disturbance. Take advantage of landforms and vegetation to screen drilling activities from
public view.

ITSL Standard Procedures Nickel Laterite Exploration 4

 Reduce disturbances to the natural environment by using the smallest available size of drill rig and equipment
that will provide adequate sampling for the purpose intended.

Ensure that proper receptacles for debris are provided and used at drill sites, and that these sites are cleaned
up once work ceases.

Recycle drilling mud and water as much as possible by using tanks or sumps for containment and avoid
discharges into watercourses.

Minimize noise pollution.

Keep oil absorbent materials and/or oil booms (depending on the amounts and location of fuel storage) for
containment and clean up of spill or leaks. Control any spills and/or leaks by establishing berms around
fuel/oil storage and use areas.

Upon completion of drilling, cap the casing if future re-entry is likely; otherwise re-contour any steep slope cuts
of the drill pad area to blend with the local topography, plug the collar of the hole with a concrete cover to
minimize surface disturbances and label the hole cover with the hole number and coordinates.

CAMP SITES

Providers of food and lodging should ensure that the facilities:

Obtain necessary permits and approvals beforehand.

Are maintained in a clean and orderly state.

Have appropriate sewage disposal (pit privies and/or septic tanks) to adequately service all camp personnel
and visitors.

Are sufficiently removed from watercourses so as not to contaminate the water.

Handle, store and dispose of materials in manner that least disturbs the natural environment.

Compost organic waste and deposit inorganic domestic waste in approved landfill sites if available (it may be
necessary to have special containers to keep food supplies and kitchen wastes away from wildlife).

Properly use, handle and store fuel, lubricating oil, grease and other hazardous materials. Fuel containers
should be stored in a designated area well removed from the campsite and from watercourses. Security
fencing may be necessary in some localities to prevent unauthorized access.

Have on-site personnel trained in first aid and fire-fighting procedures. Each campsite must carry appropriate
first aid and medical supplies for the size and type of activity. At least one person has to be certified in First
Aid and CPR.

Have emergency evacuation procedures for sick or injured.

Establish and adopt procedures for temporary closure or permanent abandonment of camps before vacating
them. Campsites are to be left in a clean and tidy condition. Where feasible and permitted, organic wastes
are to be composted, combustibles burned and other inert refuse buried. Hazardous materials, such as used
batteries, should be removed for proper disposal or recycling wherever possible. All excavations no longer in
use should be backfilled or secured. All excavations not requiring future re-entry are to be backfilled and
slope contoured to blend with the local topography. Compacted soil surfaces should be scarified to encourage
revegetation.
ITSL Standard Procedures Nickel Laterite Exploration 5
2. FIELD ORIENTATION PROGRAM

ORIENTATION BEFORE FIELDWORK BEGINS

Equipment check
GPSs check that all units are set on the appropriate datum
Establish a base station with a known elevation and coordinate if no survey points are available then
establish one using the best available information
Check all GPSs against the base station and note the variation between units
Set all altimeters to the base station each day before going to the field and check again at days end, noting
the difference
Check GPSs against the base station at least once a week to establish their accuracy
Site test all compasses on a distant point to determine variation between compasses adjust declination to
correct any difference
Test all clinometers for consistency and review operation procedures

Field Procedures
Review sampling, and mapping procedures
Emphasize importance of taking quality samples
Review use of proper sample numbers (different sampling number codes for each activity) and the use of
standard samples and duplicate samples included with each sample shipment to the commercial lab.
Review sample cards and data entry system
Review sample shipping system and sample security

3. SURVEYING AND MAPPING

Regional surveying. All exploration is conducted on the basis of accurate topographic maps, if available, at
scales varying from 1:250,000 to 1:50,000. The smaller scale maps can be enlarged to 1:50K or larger scale
base maps (1:25K), for easier plotting of sample locations and geological features. Where no suitable
topographic maps are available, base maps have to be produced from satellite or radar imagery, or aerial
photographs. The latter are also very useful to check and enhance existing topographic maps.

All exploration work is to be recorded to UTM coordinates on GIS software (Arcview is ITSLs standard).

Stream sediment and float/outcrop sample locations are determined (whenever topography permits) with GPS
instruments recording the UTM co-ordinates. Elevations are recorded using digital altimeters. In absence of the
GPS control, stream sediment and float/outcrop sample locations are also determined by measuring from major
junctions using a topofil or hipchain The GPS coordinates should not be used as the only tool for determining
sample location.

The following points must be remembered when using GPS instruments and altimeters:

because of terrain conditions and jungle cover at times there will not be a direct line of sight to sufficient
satellites, and thus it will not be possible to determine the accurate UTM position in all instances;
After a position has been obtained, either record this in a notebook together with the sample number and the
datum used, or store the reading in memory naming the waypoint as the sample number. A GPS position
recorded in a notebook by itself, but without giving the datum setting at the time of the reading, is useless;
however, when the reading is stored in memory the instrument can later be set to WGS84, and all stored
positions will be correct relative to each other;

ITSL Standard Procedures Nickel Laterite Exploration 6

 elevations as shown by a 3-D GPS reading are more often than not unreliable;
GPS positions are accurate to within 50 meters at best, and rather than rigidly adhering to GPS readings for
plotting sample locations, it is better to plot locations on the base map so as to conform with the actual
topography as seen in the field, in particular when the UTM co-ordinates of the base map itself are of doubtful
accuracy;
Altimeters must be calibrated at a known elevation at regular intervals, since variations in atmospheric
pressure caused by the weather will result in incorrect readings; also, some instruments have been found to
malfunction on occasion because of high humidity.

Detailed surveying. This includes surveying of creeks during geological mapping and sampling traverses,
ridge-and-spur soil sampling, and gridline surveying for soil and rock sampling, mapping and geophysical
surveying. Scales may vary between 1:10,000 and 1:2,500, and surveys are conducted with tape, compass and
clinometer. For semi-detailed less accurate traverses a chainman (topofil) with cotton reel, rather than a tape,
can be used.

Before starting tape and compass surveys, all compasses and clinos to be used should be checked for accuracy
and differences between instruments (in particular compasses) must be noted. Suunto clinometers and
compasses are best used for detailed surveying, and can be reliably read to half a degree. However, individual
compasses may differ by up to a couple of degrees, and it is not advisable to change compass halfway through a
traverse, unless such differences have been taken into account, or noted down beforehand. It is also important
to use these instruments with both eyes open; one focused on the survey station, the other on the graticule, in
order to reduce parallax errors.

For each leg of a traverse, information recorded must include: stations (from and to), bearing, slope angle (+up, -
down), slope distance, and observations re. geology, samples, creek junctions, track crossings, ridges, etc. After
completion of a traverse the horizontal distances, and elevation differences can be calculated, and plotting
completed.

Survey stations. These should be marked with flagging tape showing station number, date and initials of survey
crew. In addition to flagging, permatags and red spray paint are also very useful to mark survey stations in the
field.

Geology Mapping

The objectives of laterite mapping are to identify the styles of laterite landform development, document the
structure that may impact on the laterite formation, determine the original composition of the parent bedrock
underlying the laterite and the degree of bedrock serpentinization.

The following information is to be recorded:

1) Colour and thickness of the weathered crust.

2) Colour of the fresh surface.
3) Estimation of the rock type based on the modal mineralogy.
4) Magnetism estimated with a magnetic pen on a scale of 0 to 5, 5 corresponding to pure magnetite.
5) Hardness estimated with a good knife on a scale of 1 to 10, 10 being the hardness of diamond.
6) Grain size and a general description of the texture.
7) Modal mineralogy and information specific to each mineral observed.
8) Orientation and spacing of the dominant joint sets.
9) Orientation, nature and displacement of the faults.
10) Any other information judged significant.

This information can be entered into an Access database and to GIS software. An example of the variability of a
laterite profile can be seen in the following photo.

ITSL Standard Procedures Nickel Laterite Exploration 7

Road exposure of typically irregular laterite profile of dark red hematitic overburden, yellow laterite
(limonite) and rocky clay-boulder saprolite

4. DRILLING AND ENVIRONMENTAL CONTROLS

Drill Site Selection

An inspection of the proposed drill site must be carried out to ascertain that the location is suitable and the
planned drilling will have a minimal impact on the environment. If unsuitable (e.g. too close to a creek, too steep
a slope) the site should be relocated to the nearest acceptable location, and the drill hole adjusted to still be able
to test the target.

Drill Site Preparation

Before setting up the drill rig, a site of minimum size of 6 x 6m for the rig and about the same for the rods and
core boxing area is to be cleaned, smoothed and leveled. In some cases the site will have to be excavated. All
topsoil should be stored separately as much as possible, for later rehabilitation of the site. Additional excavated
material should also be carefully stored, preventing carrying away of material by run-off from rainwater, which
could result in contamination of nearby drainage.

Handling Of Drilling Mud / Water if there is circulation return

To prevent pollution of the environment (surrounding land surface and river water) drilling mud and water from
the drill hole should be carefully controlled. At each drill pad 45-gallon drums can be used for water/mud, or
commercial mud tanks can be used if provided.

ITSL Standard Procedures Nickel Laterite Exploration 8

Typical HQ core dozer track mounted with support vehicle. Two or three man crew works 8-hour shift and can be
three shift operation with lighting and safety procedures rigidly enforced. Environmental controls on drilling fluids
must be maintained.

5. CORE LOGGING
Core handling procedures are detailed in the Appendix. The following general guidelines apply:

Core Logging Scheme

1. Photographing the core

All core trays should be photographed with clearly visible hole number and sampling intervals and a metric scale.
Photographs should be mounted on a single heavyweight paper and properly filed. If there are special features in
the core, a close-up shot should be taken to illustrate them.

2. Hole bottom samples

The logging geologist should take a 10-cm core sample representing the bedrock in each hole and put it aside
for geological studies. The sample should be properly described in the log, marked showing hole number, co-
ordinates and the depth of the sample. These samples should be properly stored but remain easily accessible for
geological studies.

3. LOI determination for estimate of bedrock serpentinization

Loss-on-Ignition (LOI) determinations are required at the outset on one bedrock sample for each hole (not the
saprolite clay portion). For the bedrock the amount of serpentine (that may in turn be related to ore type in the
overlying saprolite) can be approximated from an LOI determination. If considerable variation in bedrock LOI is
measured from hole to hole, there will be a requirement for LOI determinations on different size fractions within

ITSL Standard Procedures Nickel Laterite Exploration 9

the saprolite profile that comprises the ore zone per meter. Sample rejects and sample pulps must be kept
following initial analyses.

4. Screening of core samples

Core samples are to be screened using a variety of screen sizes to start. The purpose would be to determine ore
characteristics and upgrading potential. An common example would be the following screen fractions:

-1
+1-2
+2-6
+6

Each sample (per meter break and per lithology break) will require screen fraction analyses for individual and
cumulative Ni, Co, Fe, SiO2, MgO, Al2O3, CaO, MnO, and Cr2O3 and dry weight and percent weight recovery
from the head grade. Moisture determination on individual size fractions of core is complicated by the ambient
conditions and the need to semi-dry each sample prior to passing through the sizing screens. Care must be
taken to ensure that proper procedures are being followed for moisture determinations. Refer to the Appendix.

5. Sample breaks by geology

All sample breaks are to be made on the basis of visible geological features. However, no single sample will be
larger than one metre. The following criteria can be used to determine sample breaks:

Red laterite-yellow laterite contact

Transition zone between limonite and saprolite
Yellow laterite (Limonite)-saprolite contact
Boulders in saprolite >6
Bedrock
Silica zones
Breccia zones
High or low nickel zones
Black manganese wad or cobalt zones
Relict bedrock structures preserved in the laterite
Other visible differences that may be of interest

6. Core logging

All cores need to be logged by a competent geologist. The geologist will also determine the sample breaks
before screening of semi-dried core is carried out. One laterite-coding scheme given on the following pages can
serve as an example.

ITSL Standard Procedures Nickel Laterite Exploration 10

 EXAMPLE LATERITE CORE LOGGING SCHEME

Borehole Header Information

The header information will include the following:

Site Information:

Deposit name

Some examples of Laterite landforms under Topography.

o Terrace or plateau or mesa
o Basin
o Steep linear ridge
o Spur
o Steep slope (flank)
o Crest deposit
o Foot of hill
o Pediment beyond foot of hill

Pad cut/fill (vertical cut or addition to make the drill pad)

Hole Information:

o Hole number
o Hole coordinates and elevation
o Hole type

Logging Information:

o date logged and the logger

o final depth
o number of samples
o validation of analyses (signed)
o validation of the final log (signed)

Borehole Detailed Information

Sample specifics

o depth from
o depth to
o recovered length
o sample number (from a linked table)
o screen fraction (from a linked table)
o dry weight (from a linked table)
ITSL Standard Procedures Nickel Laterite Exploration 11
 Material Code (3 upper-case letters)
The material codes identify the following components of the anticipated profile:

CAP Silica cap zone

LIM limonite
SAP saprolite
TRN limonite/saprolite transition
BLD boulder
BRK bedrock

Rock type Code (3 upper-case letters)

This code would apply to saprolite, breccia, transition zone, boulder and bedrock.

DUN dunite
HRZ harzburgite
SRP serpentinite
OPX orthopyroxenite
CXT clinopyroxenite
GAB gabbro
SIL silica
LHZ lherzolite
PDT peridotite

Grain size of the rock (2 lower-case letters)

fg fine-grained
mg medium-grained
cg coarse-grained

Degree of serpentinization (3 lower-case letters)

nil nil (0 10%)

low low (10 25%
med medium (25 60%)
hi high (60 100%)

Degree of weathering (freshness) is indicated by numerals as follows:

1 soft, completely decomposed

2 medium hard, slightly decomposed
3 fresh, green, brown or black

Colour codes (3 lower case letters)

Each material code must be described as to its colour. Use the following abbreviations.

blk black
brn brown
grn green
gry grey

ITSL Standard Procedures Nickel Laterite Exploration 12

 red red
yel yellow
wht white

Primary texture of material (3 lower-case letters)

The texture and fracture descriptions apply to the main material described under Material Code above: Fill on the
primary column for major texture and secondary column with secondary texture.

bxk box work

ven vein
brc breccia
jnt jointing
frc fractures

Mineral code (3 lower-case letters)

Fill the columns with only one mineral code without combination could be primary or product of alteration. Major
minerals should fill the primary column (related to rock name), secondary and tertiary columns filled by significant
minerals but less important.

chl chlorite
chr chromite
grt garnierite
mgt magnetite
mng manganese wad
opx orthopyroxene (bronzite/enstatite)
ser serpentine
sil silica
tlc talc
mgh maghemite
hmt hematite
asb asbolite
gth goethite
mgs magnesite
non nontronite

Comments Column

The geologist can describe in more detail the key observations if an expansion on the above coding is required to
clarify or highlight specific aspects of the laterite. An example of a logging form is shown on the following page.

Data Recording

Commercial software (such as DrillKing) is available to simplify the process of data entry to electronic file As well
Access or Excel provide alternative formatting options for database construction that includes geological
comments and analytical data. An example of a spreadsheet format for core and test pit data recording is
provided in Appendix 4.

ITSL Standard Procedures Nickel Laterite Exploration 13

ITSL Standard Procedures Nickel Laterite Exploration 14
7. Core length versus drilled length Extrusion factor

Core drilling in laterite can lead to extrusion of the softer material when the core barrel is advanced faster than
the cutting action of the bit. A variable amount of material is extruded into the core sample as the effective core
diameter changes with different formations (no extrusion in weathered rock to highest extrusion in limonite).

Measurement of the hole depth is critical and is based on the rod stickup measured from a constant point
(surface elevation most commonly). The depth of the sample is written as the depth of the hole. The length of the
core will not agree with the measured length of the hole as measured by the rods. An extrusion of 50% or more
can occur. Core recovery is overstated and losses can be hidden by extrusion.

It is important to record both the sample length per individual core run as well as the actual drilled length for each
run. Extrusion can seriously mask lost core and loss of high-grade garnierite in soft breccia zones or fractures.
The following pictures illustrate core logging for a laterite project.

Logging of limonite portion of laterite. Length of core and length of drill run are both recorded. Extrusion
of limonite and saprolite requires documentation so that hole depth and geology are synchronized; not
core length with geology.

ITSL Standard Procedures Nickel Laterite Exploration 15

Example of boulder in saprolite. Both the clay saprolite and the boulder are to be sample separately. This
example is a boulder that must be rejected during the mining/processing operation.

Example of rocky saprolite and breccia near base of weathered zone. Note separate samples for each
lithology break.

ITSL Standard Procedures Nickel Laterite Exploration 16

Rock specimens for bedrock study of mineralogy (parent and degree of serpentinization)

Core samples being collected for weighing and sample processing (dry weight size fraction recovery and
grade and chemistry)

ITSL Standard Procedures Nickel Laterite Exploration 17

Basic set up for weighing the core sample accurate to 50 gm. Better system is digital recording to
electronic file.

Basic set up for core sample preparation by drying and screening. Here the coarse boulder fraction is
being crushed (can be by crusher or manual) for size reduction prior to sending for analysis.

ITSL Standard Procedures Nickel Laterite Exploration 18

5. TEST PITTING or TRENCHING
An example of test pit procedures is provided in the Appendix. Safety features were stated previously. The following
general guidelines apply for a trench or test pit manually dug:

Trench on a side hill

mapping (usually in detail, e.g. 1:100) and sampling (usually channel) must be should be done as soon as
possible during excavation
after assay results have been received and assessed, the excavation should be filled and rehabilitated unless
further access is required at a later date. In this case the trench must be cordoned off to prevent accidental entry
by locals or animals.

Excavation Working Tools

1. Crowbar
2. Shovel
3. Hoe
4. Pick axe
5. Chisel
6. Hammer
7. Large field Parang/knife
8. Axe
9. Rattan baskets
10. Wheelbarrow
11. Timbers and planks
12. Nails of various sizes
13. Ladder or rope

Personal safety equipment:

1. Helmet
2. Safety Boots
3. Goggles/Safety Glasses
4. Gloves
5. Safety belts and lifelines

Sample Procedures for a Trench

For undisturbed laterite sampling exposed in large cuts, the preferred method is channel sampling along the floor
of the trench from the bedrock contact outwards to the overburden contact. Channel width is to be 3 times the
largest particle size of interest (Japanese Industrial Standard). The channel is sampled each meter length or
broken at geological contacts. Channel spacing should be no more than 5 meters. Logging can use the example
core logging form.

Samples are to be semi-dried (if required) prior to sample reduction into size fractions previously noted for core
drill sample treatment. Weights of each size fraction are recorded.
Sample size reduction prior to submission to a commercial lab must follow standard procedures. Reference is
made to the Japanese Industrial Standard (JIS M 8109-1974 (Reaffirmed 1979) in Appendix 3.

Alternative sample reduction schemes (Pierre Gy formula) are available, but are not appropriate as the
liberation factor often is indeterminable for nickel garnierite ore and the density of particles by size classification
may be erratic due to the variable mineralogy and local weathering characteristics.

ITSL Standard Procedures Nickel Laterite Exploration 19

Test Pitting

A practical pit dimension is at least 1 meter on a side. However, given the bulk sample nature of the test pit, a
1.25x1.50m pit is considered appropriate for sampling the equivalent in situ material where no greater than 150
cm would likely be considered ore in a serpentinized profile. Material encountered in a test pit that is ore grade
and falls between +150 cm and 500 cm diameter is not likely to be representative of the distribution in the profile
nor is it likely to be representatively sampled because of its large size, difficulty in sampling and presentation in
the test pit walls and/or floor. Test pits are not representative of run of mine when large boulders are
characteristic of the profile.

The process of excavating, mapping and sampling the pit is summarized below. Refer to Appendices 2 a.b.c for
more detailed examples of test pit procedures. Attention to safety is paramount as is described below:

Tools & personal safety equipment: as for trenching, plus:

1. Pulley
2. Hook
3. Tripod
4. Manila rope of 1,5 or 2
5. Plastic rope
6. Transparent tarpaulin
7. Tarpaulin
8. Raffia rope
9. Safety belts and life lines

Workers have to wear long-sleeved shirts and long pants.

Area around the test pit location has to be cleared of tall and dead trees that could fall into the working area.
Before excavation is started, planks or timbers have to be installed outlining the pits size.
A drainage system is to be constructed, including a settling pond to settle any mud before water can run off to
the surrounding area (river, etc.).
Store all equipment in a safe place.
Install a tripod complete with crossbeam.
Construct/install the transparent tarpaulin.
If the excavation has not been completed and is still to be continued following a temporary suspension, the pit
has to be covered by planks.
If the excavation has been completed, it should be covered and a fence should be installed.

Some country-specific safety Issues may apply. In general:

1. If the excavation reaches the water table prior to its completion, the excavation will cease and the excavation
will be abandoned.

2. The excavation crew must be supervised at all times by a captain who is charged with safety of the crew.
Workers cannot work unsupervised in an excavation deeper than 2 meters.

3. There must be at least 2 shovels at surface that are ready for extracting a buried worker in case of a wall
failure but this is permitted only when the immediate failure area is declared safe by the senior person at
the accident site.

4. In the case of a wall failure, if the workers are free they leave the pit immediately. In the case one is buried,
the other worker removes himself to safety, inspects the scene, and under instruction from the senior person
on the scene, helps in a rescue mission.

ITSL Standard Procedures Nickel Laterite Exploration 20

5. A rescue crew of no more than 2 may be in the excavation on lifelines at the accident site. The captain or the
geologist first determines the remaining wall is safe with approval of the project manager (or designate). The
rescue crew is to take all necessary precautions to not place their own lives at risk.

6. A full incident investigation and report are to be completed in any wall failure incident, whether or not
personnel are involved.

7. Beyond 2 meters planking is required each meter of advance.

The following photos are illustrative of safe pit conditions:

Typical test pit layout with braced tripod, fencing around opening, safety ropes, sun/rain cover and pit
captain with 4 man crew (alternate digging at least each 30 minutes)

ITSL Standard Procedures Nickel Laterite Exploration 21

Wall cribbing, safety rope, safety plank and bucket being lowered on rope attached to sheave on tripod.

Pit Mapping and Sampling:

Mapping pit walls (all 4) must be completed during excavation and prior to wall cover by supporting posts and
planks. Refer to the example core logging for a guide to geology mapping.

Sample Collection, weighing and preparation:

The following annotated photos depict test pit sample collection, weighing and preparation.

A standard basket holds 10 to 15 kg of laterite and is hauled by rope on the tripod sheave to surface. A
wood shelf in the pit above the worker provides protection in case of debris falling from the basket.

ITSL Standard Procedures Nickel Laterite Exploration 22

 Each basket is weighed; weights are recorded per meter advance.

The 6 excavated material that is all weighed, is then quartered per meter advance to provide about 300
kgs from about 2+ wet tonnes that is sent to sample processing for drying, size classification, and
analyses.

ITSL Standard Procedures Nickel Laterite Exploration 23

The +6 oversize excavated material may or may not be ore. It is separately weighed and crushed
manually by hammer, quartered per meter advance and sent for analysis. This oversize is combined
with the 6 material to arrive at a head grade which is assumed to be equivalent to future run-of-mine.

Example of the reject piles left over after the primary samples have been collected for processing.

ITSL Standard Procedures Nickel Laterite Exploration 24

Sample processing facility. This one has a trommel dryer, sets of screens, splitters and a weigh scale.
An alternative to trommel drying is pan drying over an open fire. Moisture reduction to about 20% is
required prior to screening below

ITSL Standard Procedures Nickel Laterite Exploration 25

Sample processing facility requires sample reduction following screening. Sample reduction is either be
successive quartering or by riffling depending on the quantity of material and the initial size.

7. ANALYTICAL AND QUALITY CONTROLS

Sample Numbers

Sample number books should be printed. Each sample number is to have a detachable tag, which is to
accompany the sample to the lab. Sample numbers electronically reference all data, such as geochemical
results, location, geological description, and petrography, associated with a particular sample.

Security

The name of the property must not be shown on sample bags or on documentation accompanying the
samples to the lab - use a project account number and/or a simple code.
Project information electronically transferred via the Internet must be zipped or otherwise encrypted using a
password.

Quality Control

A system using field duplicates, internal standards and blanks is essential for quality control purposes. The
necessary information to track all of the quality control must be forwarded to the authorized QC individual at the
time the samples are submitted to the laboratory, in order that the analytical data can be adequately evaluated as
these are generated. Ideally, this information would be a spreadsheet sent by e-mail. The spreadsheet will
contain the samples submitted to the lab, the hole identification and sample depth (from to), in-house
standards inserted in the shipment, as well as the field duplicates.
ITSL Standard Procedures Nickel Laterite Exploration 26
It is strongly recommended that sample books be pre-made-up on a daily basis for the inclusion of the quality
control samples. Pre-marking the sample books for the quality control samples, and removing the detachable
tags, will ensure that the QC samples will be inserted randomly within a batch, and not all lumped together at the
end of the batch of samples. The individual charged with QC should monitor all of the quality control samples
inserted in the field, in addition to the labs quality control data. In the event that any problems are encountered
with the QC samples, the QC individual will handle the requests to the lab with respect to repeats also. It is
recommended that random samples (1 in 20) be selected for check analysis at the commercial lab, or by lab
batch, if less than 20 samples per batch.

Duplicates

Duplicates are to be taken at a frequency of 1:20.

Blanks

Experience has shown that the sample preparation stage has the potential to contaminate drill core or rock
samples significantly if the previous sample is strongly mineralized, and the cleaning routine in the lab between
samples is minimal. The lab procedures should be checked to confirm that between sample client batches the
crushers and pulverizers are flushed clean with a suitable sample of quartz (or other non-mineralized rock such
as limestone).

In-House Standards

In order to assess the accuracy of the analytical results as they are received, in-house standards should be
prepared. These standards are to be randomly inserted with the project samples going to the sample preparation
laboratory at a 1:20 ratio. Care must be taken not to submit a mineralized standard with non-mineralized
samples since this can result in contamination of the samples.

Sample Submissions

Sample preparation is to be done preferably at the project site by a contract lab. In order to avoid cross
contamination and to facilitate data handling, a laboratory submission form should be made. In addition, if there
are samples of rock or drill core that are visibly mineralized (say with garnierite) with respect to the rest of the
samples, the mineralized samples should be segregated and submitted on a separate submission form in order
to avoid contamination of the non-mineralized samples.

The submission form going to the lab must include:

the submitters name

the project account number
the sample series in the shipment
the analytical packages required
any mineralized samples should be noted as such on the form

Sample Preparation

Drill core is to be cut in half in the field and one half will be submitted for analysis. In the event sample material is
required for check purposes the remaining half of the core will be sampled. All core samples will be crushed and
pulverized in their entirety to -200 mesh prior to XRF Fusion (or similar reliable analytical method) at the
commercial lab. Test pit samples must be reduced in quantity prior to preparation of sample pulps for
commercial analyses (mentioned previously). Backup sample rejects of test pit material are to be kept (covered if
possible to avoid washing of fines during the wet season).

ITSL Standard Procedures Nickel Laterite Exploration 27

Analytical Method

Laterite analyses suffer from interference of iron with other elements including nickel silica and magnesia if the
samples are presented in pressed pellet form for X-ray fluorescence or for ICP. The only proper method of
treating laterite samples of unknown mineralogy is by fusion to homogenize the sample prior to XRF or ICP
analyses. After several thousands of analyses of fused samples are in hand, a calibration matrix can be
established to measure X-ray intensities from fused and unfused samples of the same pulp. This step is not
taken until exploration is completed and production ensues. Even then, standards and QC samples must be
compared with other labs using only fused sample preparation.

Analytical Comparisons

Some round robin analyses should be conducted at several reputable commercial labs on a randomly selected
suite of core samples and test pit samples periodically throughout the exploration campaign. All sample pulps
should be fused prior to analyses.

8. JAPANESE INDUSTRIAL STANDARD M8109

JIS M8109 is a standard procedure that provides a Method for Sampling and Method of Determination of
Moisture Content of Garnierite Nickel Ores. Various Japanese smelters and their nickel laterite ore suppliers in
Indonesia, Philippines and New Caledonia use this standard for reduction of large samples to smaller samples
for moisture and grade and chemistry estimation. It is the method of choice for determining the value of bulk
nickel laterite ores for sale. The document is copied and included as Appendix 3. Reference can be made to
Appendix 3 when considering the merit of ITSLs method of sample collection and reduction for analyses.

ITSL Standard Procedures Nickel Laterite Exploration 28

 APPENDICIES

Appendix 1 Lab Requirements

Appendix 2(a) Check List- Standard Operating Procedure Test Pit Excavation
Appendix 2(b) Check List- Standard Operating Procedure Test Pit Sampling
Appendix 2(c) Check List- Standard Operating Procedure Test Pit Data Management
and Assessment
Appendix 2(d) Check List- Standard Operating Procedure Drill Pad Preparation with
Dozer
Appendix 2(e) Check List- Standard Operating Procedure Drill Refueling and Lube
Appendix 2(f) Check List- Standard Operating Procedure Core Drilling
Appendix 2(g) Check List- Standard Operating Procedure Core Drill Sample Recovery
and Preparation of Fines Fraction
Appendix 2(h) Check List- Standard Operating Procedure Core Drill Sample Recovery
and Preparation of Coarse Size Fractions
Appendix 2(i) Check List- Standard Operating Procedure Sample Pulp Storage and
Retrieval
Appendix 2(j) Check List- Standard Operating Procedure For Safe Working Practices
for Drilling
Appendix 3 JIS M 8109-1974 (Reaffirmed 1979)
Appendix 4 Example of Electronic Data file

ITSL Standard Procedures Nickel Laterite Exploration 29