Final 43 101 Technical Report August 2016

NI 43-101 Technical Report
BMC Manganese, Gold, Tin Project

Rondnia, NW Brazil
Effective Date: August 26, 2016
Report Date: August 26, 2016
Report Prepared for
CANCANA RESOURCES CORP.

650 West Georgia, Suite 620
Vancouver, BC V6B 4N9
Canada
Report Prepared by
SRK Consulting (U.S.), Inc.

5350 Neil Road
Reno, Nevada 89502
SRK Project Number: 481000.010
Signed by Qualified Persons:

J. B. Pennington, M.Sc., C.P.G.
Co-authored by:
A.N. McArthur, BSc (Hons), PhD, FAusIMM
Reviewed by:
Brooke Miller, M.Sc., C.P.G.
Kent Hartley, B.Sc., P.E.
NI 43-101 Technical Report BMC Project, Rondnia, Brazil Page ii
Table of Contents
1 Summary....................................................................................................................... 1
1.1 Property Description and Ownership .................................................................................................. 1
1.2 Geology and Mineralization ................................................................................................................ 1
1.3 Status of Exploration, Development and Operations .......................................................................... 1
1.4 Mineral Processing and Metallurgical Testing .................................................................................... 2
1.5 Mineral Resource Estimate ................................................................................................................. 2
1.6 Mineral Reserve Estimate ................................................................................................................... 2
1.7 Mining Methods ................................................................................................................................... 2
1.8 Recovery Methods .............................................................................................................................. 2
1.9 Project Infrastructure ........................................................................................................................... 3
1.10 Environmental Studies and Permitting ................................................................................................ 3
1.11 Conclusions and Recommendations .................................................................................................. 3
2 Introduction .................................................................................................................. 4
2.1 Terms of Reference and Purpose of the Report ................................................................................. 4
2.2 Qualifications of Consultants (SRK).................................................................................................... 4
2.3 Details of Inspection ............................................................................................................................ 5
2.4 Sources of Information ........................................................................................................................ 5
2.5 Effective Date ...................................................................................................................................... 5
2.6 Units of Measure ................................................................................................................................. 5
3 Reliance on Other Experts .......................................................................................... 6
4 Property Description and Location ............................................................................ 7
4.1 Property Location ................................................................................................................................ 7
4.2 Mineral Titles ....................................................................................................................................... 7
4.2.1 Nature and Extent of Issuers Interest ..................................................................................... 9
4.3 Agreements, Royalties and Encumbrances ...................................................................................... 10
4.4 Environmental Liabilities and Permitting ........................................................................................... 10
4.4.1 Environmental Liabilities........................................................................................................ 10
4.4.2 Required Permits - Brazilian Environmental Regulation ....................................................... 10
4.4.3 Current Status of the BMC Project ........................................................................................ 13
4.5 Other Significant Factors and Risks.................................................................................................. 13
5 Accessibility, Climate, Local Resources, Infrastructure and Physiography ........ 14
5.1 Topography, Elevation and Vegetation ............................................................................................. 14
5.2 Accessibility and Transportation to the Property .............................................................................. 15
5.3 Climate and Length of Operating Season ......................................................................................... 16
5.4 Sufficiency of Surface Rights ............................................................................................................ 16
JBP/SH FINAL_NI43_101_TR_BMC_Property_Report_481000.010_20160826.docx August 2016

NI 43-101 Technical Report BMC Project, Rondnia, Brazil Page iii
5.5 Infrastructure Availability and Sources.............................................................................................. 16

5.5.1 Power .................................................................................................................................... 16
5.5.2 Communications .................................................................................................................... 17
5.5.3 Water ..................................................................................................................................... 17
5.5.4 Mining Personnel ................................................................................................................... 17
5.5.5 Potential Tailings Storage Areas ........................................................................................... 17
5.5.6 Potential Waste Disposal Areas ............................................................................................ 17
5.5.7 Potential Processing Plant Sites ........................................................................................... 17
5.5.8 Ports ...................................................................................................................................... 18
6 History......................................................................................................................... 19
6.1 Prior Ownership and Ownership Changes ....................................................................................... 19
6.2 Exploration and Development Results of Previous Owners ............................................................. 19
6.3 Historic Mineral Resource and Reserve Estimates .......................................................................... 19
6.4 Historic Production ............................................................................................................................ 19
7 Geological Setting and Mineralization ..................................................................... 21
7.1 Regional Geology.............................................................................................................................. 21
7.2 Local Geology ................................................................................................................................... 23
7.3 Property Geology .............................................................................................................................. 24
7.4 Significant Mineralized Zones ........................................................................................................... 28
8 Deposit Type .............................................................................................................. 30
8.1 Manganese Oxide ............................................................................................................................. 30
8.1.1 Manganese Oxide Colluvium ................................................................................................ 30
8.1.2 Manganese Oxide Veins ....................................................................................................... 31
8.1.3 Geological Model ................................................................................................................... 33
8.2 Gold ................................................................................................................................................... 35
8.3 Tin ..................................................................................................................................................... 37
8.4 Kimberlites ........................................................................................................................................ 39
9 Exploration ................................................................................................................. 42
9.1 Relevant Exploration Work - Manganese ......................................................................................... 42
9.1.1 Petrophysical Properties Studies .......................................................................................... 42
9.1.2 Reconnaissance Rock Chip Geochemistry ........................................................................... 43
9.1.3 Trial Ground Geophysical Surveys ....................................................................................... 44
9.1.4 Aerial Geophysics Review of CPRM Radiometric Data ..................................................... 50
9.1.5 Aerial Geophysics CPRM and CGG Magnetics ................................................................. 52

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9.1.6 Aerial Geophysics CGG HeliTEM Conductivity................................................................... 53

9.1.7 Mapping, Pitting and Trenching Programs ............................................................................ 55
9.2 Relevant Exploration Work - Gold..................................................................................................... 58
9.3 Relevant Exploration Work - Tin ....................................................................................................... 61
9.4 Relevant Exploration Work - Kimberlites .......................................................................................... 63
9.5 Sampling Methods and Sample Quality ............................................................................................ 64
9.5.1 Manganese Oxide Colluvium ................................................................................................ 64
9.5.2 Manganese Oxide Veins and Breccias - Trenches ............................................................... 66
9.5.3 Manganese Oxide Veins - Drill Core ..................................................................................... 67
9.5.4 Manganese Oxide Stockpiles ................................................................................................ 69
9.5.5 Soil Sampling ........................................................................................................................ 69
9.5.6 Reconnaissance Pan Concentrate Sampling........................................................................ 70
9.6 Significant Results and Interpretation ............................................................................................... 70
10 Drilling......................................................................................................................... 73
10.1 Type and Extent ................................................................................................................................ 73
10.2 Procedures ........................................................................................................................................ 74
10.3 Interpretation and Relevant Results .................................................................................................. 75
11 Sample Preparation, Analysis and Security ............................................................ 81
11.1 Security Measures ............................................................................................................................ 81
11.2 Sample Preparation and Analysis ..................................................................................................... 82
11.2.1 SGS Laboratories, Belo Horizonte (Brazil) ............................................................................ 82
11.2.2 ALS Laboratories ................................................................................................................... 83
11.2.4 SGS Laboratories, Belo Horizonte (Brazil) ............................................................................ 84
11.2.5 SGS Laboratories, Braslia (Brazil) ....................................................................................... 84
11.2.7 ACME / Bureau Veritas ......................................................................................................... 85
11.3 Quality Assurance/Quality Control Procedures ................................................................................ 85
11.3.1 Standards .............................................................................................................................. 85
11.3.2 Blanks .................................................................................................................................... 91
11.3.3 Duplicates .............................................................................................................................. 92
11.3.4 Repeats ................................................................................................................................. 93
11.3.5 Umpire Testwork ................................................................................................................... 93
11.3.6 Actions ................................................................................................................................... 94
11.4 Opinion on Adequacy ........................................................................................................................ 94
12 Data Verification ......................................................................................................... 95
12.1 Procedures ........................................................................................................................................ 95

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12.2 Limitations ......................................................................................................................................... 95

12.3 Opinion on Data Adequacy ............................................................................................................... 95
13 Mineral Processing and Metallurgical Testing ........................................................ 96
13.1 Testing and Procedures .................................................................................................................... 96
13.1.1 Mineralized Waste Review .................................................................................................... 96
13.1.2 Heavy Liquid Separation Tests ............................................................................................. 97
13.1.3 Stratification Tests ................................................................................................................. 98
13.1.4 Spiral Tests ........................................................................................................................... 99
13.1.5 Comminution Tests ............................................................................................................... 99
13.1.6 Sample Representativeness ............................................................................................... 100
13.2 Relevant Results ............................................................................................................................. 101
13.2.1 Mineralized Waste Review .................................................................................................. 101
13.2.2 Heavy Liquid Separation Tests ........................................................................................... 102
13.2.3 Stratification Tests ............................................................................................................... 103
13.2.4 Spiral Tests ......................................................................................................................... 105
13.2.5 Comminution Tests ............................................................................................................. 106
13.2.6 Trial Vein Mining .................................................................................................................. 107
13.3 Recovery Estimate Assumptions .................................................................................................... 108
13.4 Significant Factors........................................................................................................................... 108
14 Mineral Resource Estimate ..................................................................................... 109
15 Mineral Reserve Estimate........................................................................................ 110
16 Mining Methods ........................................................................................................ 111
16.1 Current or Proposed Mining Methods ............................................................................................. 111
16.1.1 Colluvial Mining ................................................................................................................... 111
16.1.2 Trial Vein Mining .................................................................................................................. 112
16.2 Parameters Relevant to Mine or Pit Designs and Plans ................................................................. 113
17 Recovery Methods ................................................................................................... 114
17.1 Operation Results ........................................................................................................................... 114
17.2 Processing Methods........................................................................................................................ 114
17.3 Flowsheet ........................................................................................................................................ 118
17.4 Plant Design and Equipment Characteristics - Pilot Plant .............................................................. 119
17.5 Consumable Requirements ............................................................................................................ 121
18 Project Infrastructure............................................................................................... 122
18.1 Infrastructure and Logistic Requirements ....................................................................................... 122
18.1.1 On-Site Infrastructure .......................................................................................................... 122
18.1.2 Water Supply ....................................................................................................................... 122

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18.1.3 Water and Tailings Management ........................................................................................ 122

18.1.4 Service Roads and Bridges ................................................................................................. 125
18.1.5 Power Supply and Distribution ............................................................................................ 126
18.1.6 Freight ................................................................................................................................. 126
19 Market Studies and Contracts ................................................................................ 127
19.1 Contracts and Status....................................................................................................................... 128
20 Environmental Studies, Permitting and Social or Community Impact ................ 130
20.1 Required Permits and Status .......................................................................................................... 130
20.2 Environmental Study Results .......................................................................................................... 130
20.3 Social and Community .................................................................................................................... 130
20.4 Reclamation Measures during Operations and Project Closure ..................................................... 132
21 Capital and Operating Costs ................................................................................... 134
22 Economic Analysis .................................................................................................. 135
23 Adjacent Properties ................................................................................................. 136
24 Other Relevant Data and Information ..................................................................... 137
25 Interpretation and Conclusions .............................................................................. 138
25.1 Conclusions ..................................................................................................................................... 138
25.2 Risks 139
25.3 Foreseeable Impacts of Risks ......................................................................................................... 140
25.4 Opportunities ................................................................................................................................... 141
26 Recommendations ................................................................................................... 142
26.1 Recommended Work Programs and Costs .................................................................................... 142
26.1.1 Work Program ..................................................................................................................... 142
26.1.2 Costs ................................................................................................................................... 143
27 References................................................................................................................ 144
28 Glossary.................................................................................................................... 146
28.1 Mineral Resources .......................................................................................................................... 146
28.2 Mineral Reserves ............................................................................................................................ 146
28.3 Definition of Terms .......................................................................................................................... 147
28.4 Abbreviations .................................................................................................................................. 148
List of Tables
Table 2-1: Site Visit Participants ......................................................................................................................... 5
Table 4-1: Mineral Titles ..................................................................................................................................... 8
Table 9-1: Petrophysical Properties of Massive to Breccia Ores ..................................................................... 42

NI 43-101 Technical Report BMC Project, Rondnia, Brazil Page vii
Table 11-1: Key Company-Submitted Manganese Certified References ........................................................ 86

Table 13-1: Summary of Grade in Heavy-Mineral Concentrates Following Heavy-Liquid Separation .......... 102
Table 13-2: Lithium borate fusion XRF results of tailings sample. ................................................................. 103
Table 13-3: Manganese Recovery in Tailings Sample: results of Gekko and allmineral stratification tests .. 103
Table 13-4: Summary of Comminution Test Results ...................................................................................... 107
Table 17-1: Average Grades (Mn%) by Prospect .......................................................................................... 114
Table 20-1: BMC Permit and License Status ................................................................................................. 130
Table 26-1: Summary of Costs for Recommended Work (US$) .................................................................... 143
Table 28-1: Definition of Terms ...................................................................................................................... 147
Table 28-2: Abbreviations ............................................................................................................................... 148
List of Figures
Figure 4-1: Project Location Map ....................................................................................................................... 7
Figure 4-2: Land Tenure Map ............................................................................................................................. 9
Figure 5-1: Typical Relief in Project Area ......................................................................................................... 15
Figure 5-2: Pimenta Bueno City Substation; rural grid power lines and Jaburi Plant generator ...................... 16
Figure 6-1: Sites of Historical Colluvial Manganese Production on Current BMC Project Area ...................... 20
Figure 7-1: Tectonic Setting of the BMC Project Area ..................................................................................... 22
Figure 7-2: Regional Geology Map ................................................................................................................... 23
Figure 7-3: Local Geology Map ........................................................................................................................ 24
Figure 7-4: Physiography of Project Highlands ................................................................................................ 25
Figure 7-5: Broad Valley Floors, with Alluvium Concealing Bedrock Exposure ............................................... 26
Figure 7-6: Property Geology Map, CPRM Geology ........................................................................................ 27
Figure 7-7: Updated Structural Interpretation, based on analysis of lineaments in the digital elevation
model ................................................................................................................................................... 28
Figure 8-1: Colluvial Mineralization Style ......................................................................................................... 30
Figure 8-2: Detail of Dark Manganese Fragments in Colluvial Profile, Jaburi 3 Prospect ............................... 31
Figure 8-3: Exposure of Colluvium after Removal of the A Horizon in Road Construction .............................. 31
Figure 8-4: Overview of Massive to Breccia Style Manganese Oxide with Granite Fragments ....................... 32
Figure 8-5: A Rare Exposure of Manganese Veining at So Felipe Prospect ................................................. 32
Figure 8-6: Schematic Comparison of the High-tenor Hydrothermal Vein Mineralization ................................ 33
Figure 8-7: Comparison of Fault-hosted Mn Mineralization ............................................................................. 34
Figure 8-8: Comparison of Radiating Crystalline Manganese .......................................................................... 34
Figure 8-9: Structural Setting of the Woodie Woodie Manganese Mineral System ......................................... 35
Figure 8-10: Gazetta Prospect ......................................................................................................................... 36
Figure 8-11: Schematic Cross-section ............................................................................................................. 37
Figure 8-12: Segregation and Stockwork Vein Systems .................................................................................. 38

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Figure 8-13: Schematic Representation of Different Forms of Vein-Stockwork Tin Deposits .......................... 39
Figure 8-14: Regional Kimberlite Occurrences................................................................................................. 40
Figure 8-15: Section of Kimberlite Pipe, with intrusive root zone and diatreme components .......................... 41
Figure 9-1: Field Readings of Different Rock Types with a TerraPlus magnetic susceptibility conductivity
meter .................................................................................................................................................... 43
Figure 9-2: Geochemical Plots for Some Key Elements .................................................................................. 44
Figure 9-3: BMC Ground Geophysical Survey Activities .................................................................................. 45
Figure 9-4: IP Orientation Survey over the So Filipe Prospect....................................................................... 46
Figure 9-5: Ground Penetrating Radar Technique, showing example profile over the Tumelero Prospect .... 47
Figure 9-6: Examples of Gridded Gravity Data in Trial Survey Areas .............................................................. 48
Figure 9-7: Plan and Perspective Views of Analytic Signal Ground Magnetic Image at So Filipe Prospect . 49
Figure 9-8: Ternary Radiometric Signature ...................................................................................................... 51
Figure 9-9: Detail of Gridded CGG Survey Data .............................................................................................. 53
Figure 9-10: CGG / LASA Prospeces Helicopter Survey ............................................................................. 54
Figure 9-11: Gridded Conductivity Image from CGG / LASA Prospeces HELITEM Survey ........................ 55
Figure 9-12: Reconnaissance Evaluation of Structural Corridors .................................................................... 56
Figure 9-13: Comparison of Known Manganese Occurrences ........................................................................ 57
Figure 9-14: Trenching Activities ...................................................................................................................... 57
Figure 9-15: Examples of Vein Positions, exposed with the removal of the upper layer of colluvium ............. 58
Figure 9-16: Emerging Gold Anomalies on the BMC Project Area .................................................................. 59
Figure 9-17: First Phase of Gold Evaluation, Pan Concentrate Program, Sincol Araatuba Target ............ 60
Figure 9-18: Geochemical Survey Results at the Gazetta Gold Target ........................................................... 60
Figure 9-19: Lithogeochemical Plots ................................................................................................................ 61
Figure 9-20: Pan Concentrate Program ........................................................................................................... 62
Figure 9-21: Tin Radiometrics, Anomalies and Examples ............................................................................... 63
Figure 9-22: Example of Dipole Magnetic Anomaly, with coincident conductive and IP response .................. 64
Figure 9-23: Example of a Vertical Channel Sample through colluvial profile in pit ......................................... 65
Figure 9-24: Example of Auger Sample ........................................................................................................... 65
Figure 9-25: Example of Dispersion Field of Colluvial Manganese and Tonnage Estimates .......................... 66
Figure 9-26: Channel Sampling of Breccia Vein Zone ..................................................................................... 67
Figure 9-27: Sample collection, weighing, core photography and cutting at BMC facilities ............................. 68
Figure 9-28: Comparison of Oxide Stockpile Grades ....................................................................................... 69
Figure 9-29: Soil Geochemical Surveys in progress at the Gazetta Target ..................................................... 70
Figure 9-30: Regional Pan Concentrate Sampling ........................................................................................... 70
Figure 9-31: Preproduction Data Coverage ..................................................................................................... 71
Figure 9-32: Currently Defined Aerial Geophysical Targets for manganese exploration, along with gold and tin
target areas from surface geochemical surveys .................................................................................. 72
Figure 10-1: Geotechreserves LF90 Rig; Energold EGD SII rig; Geotechreserves LY44 rig .......................... 73

NI 43-101 Technical Report BMC Project, Rondnia, Brazil Page ix
Figure 10-2: Location Map of Drill Collars ........................................................................................................ 74

Figure 10-3: Manganese Grade Correlation with Silica and Alumina .............................................................. 75
Figure 10-4: The Eduardo Mendes - Ademir - Vitalino Target Corridor ........................................................... 76
Figure 10-5: Manganese Vein Trends in Colluvium in the Vitalino Ademir Victoria Area ............................. 78
Figure 10-6: Manganese Vein Trends in Colluvium in the Eduardo Mendes Area .......................................... 79
Figure 10-7: Drill core from DDH_AG_002 and Cross Section for the Antonio Gomes Project ....................... 80
Figure 11-1: Tamper-proof Bar-coded Seals on Sample Bags ........................................................................ 81
Figure 11-2: OREAS170a Results from Bureau Veritas in Relation to 2-3 Std. Dev. for the CRM .................. 87
Figure 11-3: OREAS170b Results from Bureau Veritas in Relation to 2-3 Std. Dev. for the CRM .................. 87
Figure 11-4: GMN-03 Results from Bureau Veritas in Relation to 2-3 Std. Dev. for the CRM ......................... 88
Figure 11-5: OREAS170a Results from ALS in Relation to 2-3 Std. Dev. for the CRM ................................... 88
Figure 11-6: OREAS170b Results from ALS in Relation to 2-3 Std. Dev. for the CRM ................................... 89
Figure 11-7: GMN-03 Results from ALS in Relation to 2-3 Std. Dev. for the CRM .......................................... 89
Figure 11-8: OREAS170a Results from SGS in Relation to 2-3 Std. Dev. limits of the laboratory .................. 90
Figure 11-9: OREAS170b Results from SGS in Relation to 2-3 Std. Dev. limits of the laboratory .................. 90
Figure 11-10: GMN-03 Results from SGS in Relation to 2-3 Std. Dev. limits of the laboratory ....................... 91
Figure 11-11: SGS Blanks ................................................................................................................................ 91
Figure 11-12: Laboratory Duplicates for SGS, Bureau Veritas and ALS ......................................................... 92
Figure 11-13: Field Duplicates of Stockpile Samples ....................................................................................... 93
Figure 11-14: Laboratory Repeats .................................................................................................................... 93
Figure 11-15: Umpire Laboratory Correlation Charts ....................................................................................... 94
Figure 13-1: Examples of mineralized waste samples. .................................................................................... 97
Figure 13-2: allmineral Jigging Test, Prior to Stratification ............................................................................... 98
Figure 13-3: Example of Stratification Test Results ......................................................................................... 99
Figure 13-4: Example Grade Distribution by size fraction for the upper discharge pond at Rio Madeira ...... 102
Figure 13-5: Process Flowsheet for treatment of the fine fraction ................................................................. 104
Figure 13-6: Grade Recovery Curve for Teca run-of-mine sample with mixed 5 to 25 mm size range ......... 105
Figure 13-7: Release Curves for the MG4 MC7000 spiral tests; <1 mm size fraction ................................ 106
Figure 13-8: Breccia Vein with clay-altered granite fragments ....................................................................... 108
Figure 16-1: Colluvial Extraction at the Laudir Prospect ................................................................................ 111
Figure 16-2: Commencement of Dry Screening at the Ademir California Prospect ....................................... 111
Figure 16-3: Trial Vein Mining at Lucas, with rock fragments containing a higher proportion of silicate
breccia ............................................................................................................................................... 112
Figure 16-4: Trial Vein Mining of massive manganese veins at Jaburi 2 ....................................................... 112
Figure 16-5: Manganese Vein Breccia Zone at the Adesvaldo Prospect ....................................................... 113
Figure 17-1: Undercover RoM Pad, Apron Feeder and Trommel at the Jaburi Plant .................................... 115
Figure 17-2: Coarse Manganese Product Pile at the Rio Madeira Plant ....................................................... 116
Figure 17-3: Current Jigs at the Rio Madeira Plant (top), and at Jaburi (bottom) .......................................... 117

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Figure 17-4: Manganese Oxide product stockpiles, and loading / unloading activities .................................. 118
Figure 17-5: Schematic Representation of the Rio Madeira Processing Plant .............................................. 118
Figure 17-6: Schematic Representation of the Jaburi Processing Plant ........................................................ 119
Figure 17-7: Pilot Plant Schematic Flow Diagram .......................................................................................... 120
Figure 17-8: Allmineral Jig .............................................................................................................................. 120
Figure 18-1: On-site Infrastructure: Jaburi Camp Accommodation ................................................................ 122
Figure 18-2: Rio Madeira Plant Water and Tailings Management Schematic ............................................... 123
Figure 18-3: Jaburi Plant Water and Tailings Management Plan ................................................................... 124
Figure 18-4: Water Tank at the Rio Madeira Plant Site .................................................................................. 124
Figure 18-5: Wash Plant Components and Discharge ................................................................................... 125
Figure 18-6: Settlement Ponds, with direction of overflow from left to right ................................................... 125
Figure 18-7: Example of Company Road Improvements ............................................................................... 126
Figure 19-1: Manganese Price Chart ............................................................................................................. 128
Figure 20-1: Corporate Social Responsibility Program .................................................................................. 132
Figure 20-2: Examples of colluvial mining areas being reseeded and returned to pasture ........................... 133
Appendices
Appendix A: Certificates of Qualified Persons

NI 43-101 Technical Report BMC Project, Rondnia, Brazil Page 1
1 Summary
This report was prepared as an exploration-level Canadian National Instrument 43-101 (NI 43-101)
Technical Report (Technical Report) for Cancana Resources Corp. (CNY) by SRK Consulting (U.S.),
Inc. (SRK) on Brazil Manganese Corporations (BMC or the Company) BMC Project (the Project). This
report has been prepared to inform the market of the status of Project exploration activities and
prospectivity in advance of a proposed ownership restructure reported by CNY to the TSX on 21 July
2016. The proposed restructure would be implemented by way of a plan of arrangement under the
British Columbia Business Corporations Act, pursuant to which Ferrometals will acquire all of the
securities of CNY in exchange for securities of Ferrometals, after Ferrometals has converted its legal
form to that of a Societas Europaea. Ferrometals would seek to assume CNYs listing on the TSX-V
exchange.
BMC produces a high-quality manganese (Mn) oxide product for sale to steel manufacturers, the
fertilizer industry and other niche markets. The Company is engaged in exploration for manganese
oxide mineralization and other commodities on its property portfolio.
1.1 Property Description and Ownership

The site is located approximately 30 kilometers (km) east of the town of Espigo DOeste in the State
of Rondnia, Brazil. Access to the Project is four hours by air from Sao Paulo to Cacoal, Rondnia,
and then 60 km by car on paved roadways to Espigo DOeste. Access to the work site is via a network
of rural dirt and gravel roads connecting the districts many cattle ranches.
BMC operates a joint venture exploration and development project in Rondnia, NW Brazil.
Ferrometals BV owns approximately 78.6% and CNY owns the remaining 21.4% of BMC. Ferrometals
BV is privately held by The Sentient Group, a private equity group focusing on natural resources
projects through exploration, development and mining activities. CNY is a TSX-V listed resource
company.
1.2 Geology and Mineralization

The BMC Project is located in a Proterozoic terrane the SW margin of the Amazon Craton. The Project
area hosts hydrothermal manganese oxide mineralization which has supplied the domestic market in
Brazil with over 100,000 tonnes (t) of high quality product since 2007. Manganese mineralization
occurs in two main forms: 1) structurally controlled high-angle primary hydrothermal veins; and 2) near-
surface colluvium where manganese oxide rock fragments are located at the base of the soil profile.
The colluvium has been deposited through weathering and disaggregation of the underlying primary
veins.
1.3 Status of Exploration, Development and Operations

The Company is exploring for, producing and marketing high-grade, high-quality manganese oxide. It
is a supplier to the domestic premium micro-nutrient agricultural market and the steel market, with
average sales grades of >50% Mn. This makes the Company one of the highest grade niche producers
in the global market. The product is sought-after due to low phosphorous contents, high tenor and high
manganese: iron ratios, making it an effective grade enhancement when blended with lower-grade
materials from other suppliers.

At present, mining of both colluvial and vein mineralization is carried out, with a focus on the former
based on current process plant configurations. Excavations are conducted at shallow depths within
the overburden and weathering profile; therefore, no drilling and blasting is required. Material is
transported to process facilities via rural country roads using 23 tonne rigid frame haulage trucks. The
same trucks deliver the processed manganese oxide product to the stockpile area in Espigo DOeste,
where material is catalogued, sampled and stored for sales. BMC currently sells three unrefined sizes:
lump (>25 mm), medium (15 to 25 mm) and fine manganese oxide (5 to 15 mm).
BMC has embarked on a first round of HQ-sized core drilling in parallel with mapping, pitting and
trenching programs for manganese oxide mineralization. Samples are being sent to SGS Laboratories
in Belo Horizonte for analysis, and quality control protocols are being implemented.
Manganese has been a principal focus for exploration and production to date, but a dedicated team
has now been established to evaluate emerging gold (Au) and tin (Sn) anomalies. Diamondiferous
kimberlites are also known from the broader district and warrant further investigation as a target on
the BMC property package.
1.4 Mineral Processing and Metallurgical Testing

The Companys manganese oxide production is currently derived from two wash plants that use gravity
separation (jigging) with minor crushing. No chemical beneficiation is required. These plants have
historically produced ~10,000 tonnes per annum (tpa). BMC is upgrading to a 50,000 tpa plant with
additional crushing and grinding capacity following initial metallurgical and scoping studies conducted
through American Metallurgical Lab LLC, SGS Canada, Ausenco, allmineral and Gekko Systems.
1.5 Mineral Resource Estimate

Inferred resource estimates have been previously quoted for the manganese colluvium; however,
these historical resource estimations do not meet current requirements for NI 43-101 reporting. There
are no Mineral Resources presented this report.
1.6 Mineral Reserve Estimate

Mineral Reserves have not been estimated for this Project.
1.7 Mining Methods

Manganese colluvium is currently freely dug from a 1 to 2 m thick soil profile. Depending on distance,
material is either trucked directly to the plant or dry-screened on site to separate the <5 mm soil fraction
from the coarser colluvium. Screened reject material is returned to the site of extraction, top soil
replaced, and the site is reseeded for reclamation and return to pasture.
1.8 Recovery Methods

Manganese ores are conventionally recovered by gravity concentration techniques (jigging and spiral
concentration), or by heavy-liquid separation.
The Rio Madeira and Jaburi Plants recover the 5 to 25 mm size fraction by jigging, with mineralization
in the <5 mm fraction going to tailings. The jigging process concentrates a product which is currently
~80% mineral product, 20% gangue. The jig reject material is on average 20% to 35% mineral product.

The coarse lump (>25 mm product) at the BMC Plants is currently recovered by screening and hand-
sorting, with lower-grade breccia material discarded. Mass balance trials on the plant in 2014
suggested that overall recoveries of ~75% to 80% of manganese mineral product from typical plant
feed. Current plant improvements scheduled for 2015-2016 are designed to introduce more efficient
jigs with options for recovery of finer material.
1.9 Project Infrastructure

The plants operate from a combination of grid electricity and diesel power generation. A network of
rural roads allows access to the various mining sites. The roads are maintained by the municipality.
Water requirements for the plants are met by a combination of bores and allocation from local drainage
systems, which require environmental permits that have been secured by the Company.
1.10 Environmental Studies and Permitting

The Company has current environmental and extraction permits in support of its current production
activities. There are two licensed operational processing plants and one granted mining license
(886321/2005). Extraction activities on regional claims are undertaken on a series of Guias de
Utilizao approved by State mining and environmental agencies.
1.11 Conclusions and Recommendations

SRK makes the following conclusions and recommendations:
The BMC Project hosts a newly recognized style of structurally-controlled hydrothermal

manganese oxide mineralization hosted in Proterozoic-age bedrock. Structural trends are at
early stages of evaluation through geophysics, reconnaissance drilling and trenching. Aerial
geophysics has identified 211 strike kilometers of structure along which 62 areas of enhanced
response have been defined for follow-up activities. Additional ground geophysics is
recommended to improve prospect-scale controls for targeting thickened vein zones given the
limited surface exposure in the district. Colluvial mineralization in the region has been eroded
and transported from veins in the Proterozoic host rock.
Trial production is establishing niche market applications for the high-quality product, which is
currently among the highest grade manganese oxide product produced globally. Production
capacity is being expanded from an historical average of ~10,000 tpa to 50,000 tpa with the
introduction of a pilot plant.
Potential for additional high-value commodities has been recognized within the Project land
package. Gold anomalies in pan-concentrate drainage samples have been prioritized for
evaluation through soil grid sampling which remains in progress. Tin (cassiterite) has also
been recognized through pan-concentrate sampling and recommended for evaluation through
mapping and soil sampling as a second priority. Diamondiferous kimberlites are known in the
broader district beyond the immediate limits of the Project area. Any point-source geophysical
anomalies are recommended for detailed field evaluation to determine the source.

2 Introduction
2.1 Terms of Reference and Purpose of the Report
This report was prepared as a National Instrument 43-101 (NI 43-101) Technical Report (Technical
Report) for Cancana Resources Corp. (CNY) by SRK Consulting (U.S.), Inc. (SRK) on the BMC
Project, Rondnia, Brazil. The report has been prepared to inform the market of the status of Project
exploration activities and prospectivity in advance of a proposed ownership restructure reported by
CNY to the TSX on 21 July 2016.
The quality of information, conclusions, and estimates contained herein is consistent with the level of
effort involved in SRKs services, based on: i) information available at the time of preparation, ii) data
supplied by outside sources, and iii) the assumptions, conditions, and qualifications set forth in this
report. This report is intended for use by CNY subject to the terms and conditions of its contract with
SRK and relevant securities legislation. The contract permits CNY to file this report as a Technical
Report with Canadian securities regulatory authorities pursuant to NI 43-101, Standards of Disclosure
for Mineral Projects. Except for the purposes legislated under provincial securities law, any other uses
of this report by any third party is at that partys sole risk. The responsibility for this disclosure remains
with CNY. The user of this document should ensure that this is the most recent Technical Report for
the property as it is not valid if a new Technical Report has been issued.
This report provides an update on the BMC Project in accordance with the Canadian Institute of Mining,
Metallurgy and Petroleum Standards on Mineral Resources and Reserves: Definitions and Guidelines,
May 10, 2014 (CIM, 2014).
2.2 Qualifications of Consultants (SRK)

The Consultants preparing this technical report are specialists in the fields of geology, exploration,
Mineral Resource and Mineral Reserve estimation and classification, underground mining,
geotechnical, environmental, permitting, metallurgical testing, mineral processing, processing design,
capital and operating cost estimation, and mineral economics.
None of the Consultants or any associates employed in the preparation of this report has any beneficial
interest in CNY. The Consultants are not insiders, associates, or affiliates of CNY. The results of this
Technical Report are not dependent upon any prior agreements concerning the conclusions to be
reached, nor are there any undisclosed understandings concerning any future business dealings
between CNY and the Consultants. The Consultants are being paid a fee for their work in accordance
with normal professional consulting practice.
The following individual, by virtue of his education, experience and professional association, is
considered Qualified Persons (QP) as defined in the NI 43-101 standard, for this report, and are
members in good standing of appropriate professional institutions. The QP certificate of the author is
provided in Appendix A. Jay Pennington, M.Sc., C.P.G. is the QP responsible for all material provided
in this report.

2.3 Details of Inspection

Table 2-1: Site Visit Participants
Personnel Company Expertise Date(s) of Visit Details of Inspection
Review of BMC exploration
SRK Consulting November 30 to
Jay Pennington Geologist program, metallogenesis model,
(U.S.), Inc. December 5, 2015
and exploration concepts
Source: SRK, 2016
2.4 Sources of Information

The sources of information include data and reports supplied by CNY personnel as well as documents
cited throughout the report and referenced in Section 30. This includes:
Various unpublished company reports,

Technical publications and referenced journal articles,
TSX press releases by Cancana Resources Corp.
Dr. Adrian McArthur of BMC and Carlos Braga of Ferrometals were contributing authors of this report,
and are also QPs by NI 43-101 definition.
2.5 Effective Date

The effective date of this report is August 26, 2016.
2.6 Units of Measure

The metric system has been used throughout this report. Tonnes (t) are metric of 1,000 kg, or
2,204.6 lb. All currency is in U.S. dollars (US$) unless otherwise stated.

3 Reliance on Other Experts

The Consultants opinion contained herein is based on information provided to the Consultants by CNY
in all technical areas including legal and environmental matters. SRK has relied upon the work of other
consultants or technical contractors in the project areas in support of this Technical Report. These
consultants have been appropriately cited in the report.
The Consultants used their experience to determine if the information from previous reports was
suitable for inclusion in this technical report and adjusted information that required amending. This
report includes technical information, which required subsequent calculations to derive subtotals, totals
and weighted averages. Such calculations inherently involve a degree of rounding and consequently
introduce a margin of error. Where these occur, the Consultants do not consider them to be material.
These items have not been independently reviewed by SRK and SRK did not seek an independent
legal opinion of these items.

4 Property Description and Location

4.1 Property Location
The main property block is centered on -60o 42 5.7 W; -11o 33 6.7 S (GCS WGS 1984), located on
the 1:100,000 Map Sheets Serra Azul (MI 1747), Primavera (MI 1804), Sargento Paixo (MI 1805).
Several satellite licenses are present in the broader vicinity. (Figure 4-1)
Source: BMC, 2016
Figure 4-1: Project Location Map
4.2 Mineral Titles

The BMC Project claim group (Table 4-1 and Figure 4-2) currently consists of:
One approved mining license

o Concesso de Lavra: 2,986 ha
Twenty-four exploration claims (one of which is awaiting renewal)
o Autorizao de Pesquisa: 105,122 ha
Six registered exploration claim applications (awaiting to active licenses)
o Requerimento de Pesquisa: 26,032 ha
Four exploration applications (awaiting approval)
o Habilitaes: 19,495 ha

Table 4-1: Mineral Titles

Claim Area (ha) Phase
886321/2005 2,985.72 Concesso de Lavra
886241/2005 6,969.87 Autorizao de Pesquisa
886406/2014 752.84 Autorizao de Pesquisa
886168/2015 7,583.49 Requerimento de Pesquisa
886167/2015 1.57 Requerimento de Pesquisa
886133/2016 688.53 Requerimento de Pesquisa
886081/2006 8,217.57 Habilitaao
886344/2010 2,637.66 Habilitaao
886165/2012 3,031.09 Habilitaao
886341/2011 5,608.59 Habilitaao
Source: BMC, 2016

Source: BMC, 2016
Figure 4-2: Land Tenure Map
4.2.1 Nature and Extent of Issuers Interest

The mining sector in Brazil is administered by the National Department of Mineral Production (DNPM),
part of the Ministry of Mines and Energy. Like many countries, minerals are owned by the government,
and the private companies have the right to explore and develop resources in return for royalty
payments. The mineral code allows for legal right of entry (Decret-Law N 227, De 28 De Fevereiro
De 1967 - Brazilian Mining Code). The Company is sensitive to community needs and all mining and
exploration work is undertaken under agreement with private landholders.
Exploration licenses are granted for an initial period of three years. Subject to assessment of
exploration progress reports, exploration claims are extendable for a further three years. During this
phase, bulk sampling can be conducted to test processing performance of different material types. At
the conclusion of this period, the Company submits a final report, outlining the findings of its work
programs. Where resources are defined, an application for a mining license (Lavra) is made and the
area is typically reduced in size to a footprint required for development and operation. In instances
where exploration does not define a resource of interest, a negative final report is submitted and the
license is typically relinquished.
Upkeep of the claims requires an annual fee payment of $R3.06 per hectare over the first three years
and $R4.63 per hectare in the renewal phase. Submission of exploration progress reports and work

plans are required. Activities are developed in accord with environmental laws. All claims within the
Companys portfolio are in good standing.
4.3 Agreements, Royalties and Encumbrances

The definitive acquisition agreement for Rio Madeira was signed December 19, 2013 with acquisition
closing December 20, 2013. A Memorandum of Understanding was signed for the claims held by
Eletroligas on March 12, 2014, with a definitive asset sale agreement signed on July 14, 2014. The
MLB claims were transferred to Cancana Brasil Mineracao Ltda on February 7, 2015. The Cancana
Brasil shares were subsequently transferred to BMC.
Depending on the commodity, royalty payments on production to the government are 0.2% to 3%:
3% rate for aluminum ore, manganese, rock salt and potassium;
2% for iron, fertilizer, coal and other substances;
0.2% for precious stones and noble metals; and
1% for gold.
Landholders also receive a production royalty payment at half of the above rates in addition to the
government royalty. Standardized agreements are also established with the landholders to
compensate for land use until sites are rehabilitated.
4.4 Environmental Liabilities and Permitting

4.4.1 Environmental Liabilities
BMC makes annual provisions for remediation of its mine sites. Remediation commences once mining
and exploration activities are complete at each mine site. Pasture typically regenerates within 3-6
months from completion of mining activities and reseeding, with monitoring ongoing. Reclamation
costs are not a significant component of the current operations relative to other mining operations,
given the shallow levels of extraction. Certain historic areas mined prior to the change of ownership in
December 2013 still require reclamation. The Company has a dedicated environmental department
which is progressively attending to requirements for these historical sites.
The Company has reviewed closure strategy. In the event that any existing plant is decommissioned
or relocated, which would involve removal of surface infrastructure, concrete foundations, fuel
containers, capping of tailings ponds. Sites would be checked with a soil sampling program and
revegetated.
The Company has made provision for restoring pasture in historical mine sites and closure costs in
the Companys auditing (estimated in the range of US$100,000 to US$200,000).
4.4.2 Required Permits - Brazilian Environmental Regulation

The current Brazilian Environmental Regulation was built from 1981, with the approval of the 6938 Act,
on 31 August 1981, which created the National Environment Policy, and regulates the 1st Article of
the Federal Constitution of Brazil, sections VI and VII of 23rd Article. This Article determines the
responsibility of the Federal Government, States, Federal District and municipalities to protect the
environment and fight pollution in any form, and preserve the forests, fauna and flora.

In addition to the National Environmental Policy, objectives and mechanisms were established for
formulating and implementing the National Environmental System (SISNAMA) and the Environmental
Defense Register.
The SISNAMA consists of a coalition of Federal, State, District, and Municipal entities responsible for
protecting and improving environmental quality.
The SISNAMAs consultative and deliberative agency is the National Environment Council (CONAMA),
whose objective is to propose guidelines, norms and standards for an ecologically balanced
environment and essential to a healthy quality of life.
The executing agency is the Brazilian Institute of Environment and Natural Renewable Resources
(IBAMA), which objective is to implement and enforce, as a federal agency, government policy and
guidelines established for the environment, just as the state and municipalities agencies responsible
for implementing programs, projects and the control and supervision of activities capable of causing
environmental degradation.
States and municipalities within its sphere of competence and areas of their jurisdiction may prepare
supplementary and complementary rules and standards related to the environment, observing that are
established by CONAMA.
The first CONAMA Resolution of 23 January 1986, establishes definitions, responsibilities, basic
criteria and general guidelines of the Environmental Impact Study as an instrument of the National
Environmental Policy.
This resolution considers the environmental impact of any change in physical properties, chemical and
biological environment, caused by any form of matter or energy resulting from human activities that
directly or indirectly affect the health, safety and welfare of the population; the social and economic
activities; biota; aesthetic and sanitary conditions of the environment, and quality of environmental
resources.
The licensing of activities that modify the environment, including the extraction of ore, will be judged
and if appropriated, approved based on the development of an "Estudo de Impacto Ambiental" or EIA;
(equivalent to an Environmental Impact Study) and an Environmental Impact Report (EIR), to be
submitted to the competent state agency or IBAMA,
Also according to this resolution, the environmental impact study should include all technological
alternatives and location of project, comparing them with the hypothesis of non-execution of the
project; identify and systematically assess the environmental impacts generated during the
deployment and operation of the activity; define the limits of the geographic area to be directly or
indirectly affected by, called the project area of influence, considering in all cases in which the
watershed is located; and consider the plans and government programs, proposed and under
implementation over the area of influence of the project and its compatibility.
Under the regulation, whenever necessary, IBAMA or the state agency may promote the public hearing
for information about the project and its environmental impacts.
The 6.938/81 Act is considered the origin of the Brazilian Environmental Regulation because it
determines, in its article 10 that "the construction, installation, expansion and operation of facilities and
activities that use environmental resources considered effective and potentially polluting as well as
capable in any form, to cause environmental degradation, depend on prior licensing of competent state

agency, member of the National System of Environment - SISNAMA, and the Brazilian Institute of
Environment and Natural Resources - IBAMA, in a supplementary fashion, without prejudice to other
required licenses. " (Wording given by the 7.804 Act, in 1989).
In 1997, the CONAMA Resolution No. 237 established a review of the procedures and criteria used in
the environmental permission process, including the need to establish criteria for exercising the power
to license (state or federal).
The CONAMA 237 further stipulates that licenses will be issued for the activity. The main licenses are:
The Preliminary License (LP), which is given in the preliminary planning stage approving its
location and design, environmental sustainability certifying and establishing the basic
requirements and conditions to be met in the next stages of its implementation;
The Installation License (LI), authorizing the installation of the project or activity in accordance
with the specifications of the plans, programs and projects approved, including the
environmental control measures and other conditions, which constitute a determinant reason;
The Operating License (LO), which authorizes the operation of the activity or project, after the
verification of effective compliance with the permits listed above, with the environmental
control measures and requirements for the operation.
To receive these permits, the activity must meet the environmental licensing procedures, which
comprises the following steps:
(1) Definition by the competent environmental agency, with the participation of the entrepreneur,
about documents, projects and environmental studies needed to initiate the licensing process
corresponding to the permit being requested;
(2) Application of environmental permit by the entrepreneur, together with the documents,
relevant projects and environmental studies, giving due publicity;
(3) Analysis by the competent environmental agency, about documents, projects and
environmental studies presented and the performance of technical inspections when
necessary;
(4) Request for clarification and additional information by environmental agency, once as a result
of the analysis of documents, projects and environmental studies presented, when
appropriate, and there may be a reiteration of the same request if the clarifications and
additions have not been satisfactory;
(5) Public hearing, when applicable, in accordance with relevant regulations;
(6) Request for clarification and additional information by the competent environmental agency
arising out of public hearings, when appropriate, and there may be restatement of the request
when the clarifications and additions have not been satisfactory;
(7) Issue of technical opinion and, where applicable, a legal opinion; and
(8) Approval or rejection of license application, giving due publicity.
Once these steps are completed, the activity may be performed and it is considered legal under
Brazilian Environmental Laws.

4.4.3 Current Status of the BMC Project

Small scale operations have been carried out for several years in the region, with production steadily
increasing following BMCs acquisition of the Project. The Company has one definitive Mining permit,
with its respective operating license. The Company also maintains in good standard the operating
permits for both processing plants.
BMC also has been mining in some areas where exploration is ongoing under special Brazilian
regulation called a Guias de Utilizao (GU), issued by the Bureau of mines. For this temporary mining
permit, the environmental permits are also requested, and the Company has constantly obtained and/
or renewed them, whenever the situation requires. The Company currently has five GUs approved,
one GU application analyzed and awaiting publication, and two GUs submitted and under analysis.
The Company is preparing additional applications as pre-production programs outline new production
areas. Typically 6000tpa is sourced annually from GU for pilot processing. The Company has made a
submission for expanding the production limit in certain areas to gain a better understanding of the
colluvial-vein dispersion patterns and allow detailed vein channel sampling.
BMCs objective is to develop a larger scale project, which requires investments in exploration,
engineering and technical studies. As the project matures, the Company will engage in the
development of an EIA and an EIR, comprising all the features of the new project. These documents
will be submitted to the Rondnia State Environmental Agency to follow the legal procedures for the
proper permitting.
4.5 Other Significant Factors and Risks

CNY provided a press release on October 10, 2014, regarding legal action between two government
departments - Brazilian Federal Prosecutors Office (the FPO) and Brazilian Mining Authority
DNPM.
The FPO had lodged a civil public action with the DNPM, seeking to withdraw all existing exploration
applications and mining authorizations within a 10 km buffer of the indigenous lands of the Povo Cinta
Larga. The DNPM in turn has filed appeals to block the FPO civil public action. The BMC Project area
borders the indigenous land and the proposed buffer if applied could impact an area of 38 km2.
BMC has retained TozziniFreire Advogados, an established Brazilian law firm, to represent the joint
venture. On behalf of BMC, TozziniFreire has filed a motion to join the proceedings at the appellate
level, claiming a stakeholders and all tenements mandatory joinder to the lawsuit, which, if granted,
could render null all previous procedural acts, including the relevant Appellate Court ruling. In parallel,
TozziniFreire has also prepared a depth of legal arguments to request a revision of the FPO injunction
concerning research applications and mining authorizations in order to prevent the withdrawal of
stakeholder licenses until the issue is resolved.
The action has not placed any limitations on the current activities of the Company and the market will
be informed of any developments. The Company has expanded its license block in areas beyond the
buffer zone to mitigate the risk. The BMC activities have no impact on the indigenous lands
themselves.

5 Accessibility, Climate, Local Resources,

Infrastructure and Physiography
5.1 Topography, Elevation and Vegetation
Eastern Rondnia has a combination of flat terrain interspersed with hills of Precambrian Brazilian
Shield granitoids, gneisses and schists. The area bordering the State of Mato Grosso (the Chapada
dos Parecis) has topography dominated by plateaus and eroded valleys. Towards the Bolivian border
to the south, there is an extensive alluvial wetland savanna or pantanal along the Guapor River.
The BMC Project Properties lie mainly in the Precambrian Shield granitoid sector.
The Project Area is characterized by a relatively gentle undulating relief, locally with steeper ridges
and gullies (Figure 5-1). Elevation varies from ~150 to ~550 m across the Project area. Many of the
ridges have an easterly trend, influenced by structural trends in the underlying geology. The Project
area has a digital relief model developed from the global elevation data (ASTER GDEM), and from
altimetry data gathered during the Companys aerial geophysical survey. Sharp scarps and extensive
flat plains predominate over many of the Proterozoic basement lithologies and over the Paleozoic
Pimenta Bueno Formation. Relief becomes lower over the younger arenaceous Casa Branca
Formation to the south.
The majority of the area is open farm land, which is variably used primarily for grazing (beef and dairy
cattle), and occasional cropping. Approximately 20% of the area is covered by timbered areas, some
of which is under managed logging licenses. Timbered areas are often located in steeper areas less
suited to farming. The eastern margin of the Project area is flanked by the Roosevelt Indigenous Area
(a primary forest reserve inhabited by indigenous people). The Project tenements are located outside
of this area.

Source: BMC, 2016
Figure 5-1: Typical Relief in Project Area
5.2 Accessibility and Transportation to the Property

The BMC Project is located in the Brazilian state of Rondnia in NW Brazil. The state is serviced by
regular scheduled jet air flights to the capital city Porto Velho, and regional population centers at
Cacoal, Ji Parana, and Vilhena.
The main Project block is located to the east of Espigo DOeste (population ~30,000; Lat 1134'60
S and Long 6058'60 W at an altitude of 282 meters). Espigo DOeste is accessible by a good-quality
paved highway from these centers. Espigo DOeste is located ~500 km to the south east of the state
capital, Porto Velho, and 55 km by road to the east Cacoal. It lies some 20 km north of Highway BR-
364 serviced by a paved highway BR-387 The township has an unpaved airstrip.
Cacoal was initially established as an outpost, to guard the regional telegraph line connecting Porto
Velho to Cuiab, capital of Mato Grosso. Today it is the administrative and service center of a major
agricultural community. The town has numerous colleges, schools, hospitals and excellent industrial
service facilities. A long-distance, air conditioned bus service connects Cacoal with Porto Velho.
Within the Project area, vehicle access is available via a network of all-weather municipal dirt roads.
During the wet season, 4WD access is advisable on some sectors.

5.3 Climate and Length of Operating Season

The region is generally hot and humid with temperatures reaching highs of 36 to 42 Celsius. Average
humidity is between 80% and 85%. The area has a dry season which typically extends from April to
October, and a wet season generally extends from November until March. The annual precipitation of
the area is between 1,900 and 2,500 mm (largely concentrated during the wet period). BMCs current
process plants operate through all months, with peak production periods in the dry season due to the
greater ease of screening operations.
5.4 Sufficiency of Surface Rights

The Project concession package provides legal basis for entry and exploration. Agreements are
required with local surface rights owners prior to surface disturbance activities. Permits for extraction
are obtained through application to the states environmental and mining agencies (SEDAM and the
DNPM). The QP has verified these agreements are complete and current.
5.5 Infrastructure Availability and Sources

5.5.1 Power
In the region there is a major power line connecting the state Capital, Porto Velho, and its major
hydroelectric power plant, to the major power grid in the south of the country. This is a 130 kVA
capacity line, and it crosses the road between Espigo DOeste and Pimenta Bueno (Figure 5-2). In
this road there is a section from which a subsidiary line, also with 130 kVA, is connected to the Pimenta
Bueno city substation. From this substation, lines of 34.5 kVA capacity feed power to Pimenta Bueno
and Espigo DOeste towns.
Most of the farms in the district are supplied with electrical power connected to the national grid.
However, both plants currently operate using diesel feed generators to supply the required power. The
Jaburi plant has a power consumption of 200 kWh and the Rio Madeira plant consumes 300 kWh.
Source: BMC, 2016
Figure 5-2: Pimenta Bueno City Substation; rural grid power lines and Jaburi Plant generator

5.5.2 Communications
There is a landline telephone system in several areas, and partial coverage for cellular telephone
networks within the around the township of Espigo DOeste. The Company has established internet
and radio communication to its processing plants.
5.5.3 Water
Several rivers and creeks flow through the area and these provide water for current drilling and mining
operations. The drainage pattern of the region is primarily northwards into the southern part of the
Amazon Basin. Water resources policies in Brazil state that surface waters are Union domain in case
of trans-boundary or interstate rivers and reservoirs built with federal funds. All other surface water
and groundwater belongs to the state. The Secretary of State Environmental Development (SEDAM)
is the environmental agency of the State of Rondnia responsible for administering a sustainable
surface and groundwater policy. The Company obtained water usage licenses from this agency
(Sections 21.1.2, 23.1).
5.5.4 Mining Personnel

Brazil has an advanced mining economy, with a long history of production in many commodities
including manganese. The country has a strong system of universities and professional institutions.
Experienced professional staff in remote locations typically work on a fly-in / fly-out basis, with
residential options available. Rondnia itself has active mines, quarrying and alluvial operations.
Laborers can be sourced from the local cities and agricultural community. BMC currently employs
approximately 100 staff with an administrative office, two processing plants, a core shed and ore
stockpile area in Espigo DOeste.
5.5.5 Potential Tailings Storage Areas

Waste water and tailings are initially stored in ponds on site, which have been inspected by an
independent advisor. The water cascades through a series of settling ponds and is recycled for re-
use. The ponds are periodically cleared with soil and grit stockpiled in designated areas adjacent to
the plants. Tailings from the gravity separation process are non-toxic and have no chemical impact.
5.5.6 Potential Waste Disposal Areas

The soil that is separated from the colluvial manganese is returned to pasture for rehabilitation. Broken
waste rock (granite, quartz, and dolerite) is stockpiled and occasionally used for armoring dirt roads.
The ore processing does not involve any chemical treatment. Local waste disposal companies remove
waste lubricating oils from the plants.
5.5.7 Potential Processing Plant Sites

The Company has two permitted, operating processing plants, located at -60o 44 45.2 W; -11o 34
7.7 S (Rio Madeira Plant) and -60o 44 45.1 W; -11o 38 1.4 S (Jaburi Plant). The Jaburi Plant will be
the site of pilot plant expansion. Future potential sites will be considered depending of the outcomes
of exploration activities.

5.5.8 Ports
Porto Velho was the northern terminus of the now-defunct Madeira-Mamor Railway, which was built
to carry rubber from Mato Grosso state and northeastern Bolivia. Tin ore, lumber and medicinal plants
and oils are now exported from Porto Velho. Porto Velho lies on the principal highway between Manaus
to the northeast and Rio Branco to the west, in Amazonas and Acre States, respectively. The city is
also linked by highway with the city of So Paulo to the southeast, in So Paulo State. Porto Velho is
a major administrative and service center with well-developed infrastructure, facilities and services.
The all-weather BR-364 highway links the states of Mato Grosso, Rondnia and Acre with the rest of
Brazil. This highway has provided a valuable alternative corridor for the export of forestry and
agricultural products and minerals to European and North American markets. The Madeira River at
Porto Velho is navigable by large freight barges (> 200 tonne capacity). Shipments out are trans-
shipped to ocean-going vessels in Manaus. This is analogous to the situation in the Great Lakes-St.
Lawrence seaway system in the U.S. and Canada.

6 History
6.1 Prior Ownership and Ownership Changes
The BMC Project was amalgamated from claims held by three groups in the district:
Rio Madeira Comrcio Importao e Exportao de Minrios Ltda (Rio Madeira);
Eletroligas Ltda. (Eletroligas); and
Cancana Brasil Minerao Ltda / M.l.b. de Nogueira Minerao (MLB).
The definitive acquisition agreement for Rio Madeira was signed December 19, 2013 with acquisition
closing December 20, 2013. A Memorandum of Understanding was signed for the claims held by
Eletroligas on March 12, 2014, with a definitive asset sale agreement signed on July 14, 2014. The
MLB claims were transferred to Cancana Brasil Mineracao Ltda on February 7, 2015. The Cancana
Brasil shares were subsequently transferred to BMC.
6.2 Exploration and Development Results of Previous Owners

Exploration for manganese in this region has been performed since 2008 by Rio Madeira and by
Eletroligas Ltda since 2010. During 2008, Rio Madeira was granted a Lavra for production of
manganese and have produced product continuously since. Eletroligas has produced manganese for
its own internal use since 2010.
The level of work conducted by prior owners has typically been restricted to surface prospecting for
manganese occurrences, and limited trenching and pitting programs at prospects targeted for prior
production. Rio Madeira conducted an IP survey over the Florncio Prospect (where one of the current
plants is located) and drilled a number of vertical holes (which are not considered an effective test of
the steeply dipping vein at this prospect). Records of this limited historical drilling are not available.
Prior to this, exploration in this part of Rondnia was focused on the search for diamonds in the 1990s.
Specific records of this work over the BMC claims are not available.
6.3 Historic Mineral Resource and Reserve Estimates

Previous colluvial mineral resources estimates were prepared by Harper (2013a, b), calculating 1 Mt
at 52% Mn in colluvial resources. Due to the lack of auditable supporting data, this is a non-compliant
mineral resource. No historical mineral reserved have been reported.
6.4 Historic Production

The company Rio Madeira operated since 2007, producing 80,482 t of manganese oxide (Figure 6-1).
Production records are not available for the claims purchased from Eletroligas. At the time of writing,
BMC had produced 35,550 t.

Source: BMC, 2016
Figure 6-1: Sites of Historical Colluvial Manganese Production on Current BMC Project Area

7 Geological Setting and Mineralization

7.1 Regional Geology
The South American platform of Brazil is underlain by an assemblage of two cratons, the Amazon
craton and the So Francisco craton. Rondnia is located on the Amazon craton (Figure 7-1) within
basement rocks of Proterozoic age (1.8 to 1.2 Ga). The tropically weathered host rocks are referred
to as the Serra de Providncia Intrusive Suite. This suite includes amphibole-biotite monzo-granites,
syeno-granites, and high-level porphyries.
The Project is located at a convergence of major structures. Two large continental scale lineaments
are defined by airborne magnetics. The northwest-southeast trending lineament is referred to as the
125AZ. Throughout this region, kimberlite and alkaline intrusions appear controlled by this major
structural discontinuity. The BMC Project is also located along the northern border of the Pimenta
Bueno Graben (Figure 7-2). This major structural feature and is bound to the north by the President
Hermes fault (125AZ) and Itapoa fault (~E-W) to the south. Both are sub-parallel to the axis of the
graben. The graben is located at the northwest end of the 125AZ lineament and is underlain by
Amazon Precambrian Shield.
Outside the graben, an assemblage of north-northwest/south-southeast steep dipping gneisses and

amphibolitic rocks of Precambrian age form the basement. A supercrustal assemblage of acid sub-
volcanic and hyperbyssal rocks (1.6 billion years), granitic rocks (1.2 to 1.4 billion years) and mafic
intrusions usually sub-parallel the graben borders. These intrusions correspond to the last major
tectonic event, the Rondoniense, at 1.2 to 1.3 billion years.
There are a number of release structures roughly perpendicular to the major regional 125 structural
trend. These may be related to the break-up of Gondwanaland or the last structural event in the area.

Source: Hunt, 2011
Figure 7-1: Tectonic Setting of the BMC Project Area

Source: BMC, 2016
Figure 7-2: Regional Geology Map
7.2 Local Geology

The stratigraphic section (Figure 7-3) exposed in and around the BMC Project regional includes (from
oldest to youngest):
I. Paleoproterozoic Jamari Complex: a protolithic assemblage of granites, granodiorites,

tonalities and diorites metamorphosed to amphibolite grade. Local packages of turbidites
intercalated with metamorphosed mafic igneous rocks.
II. Mesoproterozoic Roosevelt Volcanic Suite: flows and pyroclasitcs of predominately acid
composition, intercalated with phyllite, sericite-quartz schist, banded iron formation,
sandstone, siltstone and conglomerate.
III. Mesoproterozoic Serra da Providencia Intrusive Suite: granitoids with a characteristic rapakivi
texture.
IV. Mesoproterozoic Alto Candeias Intrusive Suite: syeno- and monzogranites.
V. Mesoproterozoic Cacoal Basic Ultrabasic Intrusive Suite: grading from gabbro to peridotite.

VI. Phanerozoic Rondnia Sedimentary Rocks: this includes the Paleozoic Cacoal Formation, the
Pimenta Bueno Formation, and Fazenda Casa Branca Formation; the Mesozoic Botucatu
Formation and the Parecis Group.
Source: BMC, 2016
Figure 7-3: Local Geology Map
7.3 Property Geology

Bedrock exposure in the southern and central sectors of the claims is generally poor and is limited to
rounded granitic outcrops on steep hillsides and to the graded roadbeds of the unpaved rural highways
and farm tracks where the sand and dirt has been washed away. Areas of higher elevation represent
a lateritized palaeosurface (Planalto Dissecado Sul da Amaznia), which obscures bedrock and
hinders the effectiveness of surface mapping. On steeper valley slopes, intermittent exposure of fresh
rock is present, with the upper weathering profile having been stripped. The quality of exposure
dwindles again onto the broad valley floors, where bedrock is obscured by soil, alluvium and a

preserved clay saprolite profile (Figure 7-4 and Figure 7-5). The depth of the tropical weathering profile
is highly variable and is generally extends to a depth of 3 to 8 m, but it has been observed to a depth
of 30 m.
Lateritized Paleosurface
Dissected rocky slopes
Source: BMC, 2016

Showing the planar lateritized palaeosurface in the highlands and dissected slopes with intermittent exposure. Detail of the
laterite profile is shown in a gravel pit exposure below, with weathering effects strongly overprinting bedrock textures.
Figure 7-4: Physiography of Project Highlands

Source: BMC, 2016
Figure 7-5: Broad Valley Floors, with Alluvium Concealing Bedrock Exposure
The only geological maps available for the Project area at the time of commencement were the regional
CPRM geological maps of Rondnia (1:1M scale; Figure 7-6). This effectively shows the boundary
between the Proterozoic crystalline basement to the north and the Phanerozoic Pimenta Bueno
Graben to the south. The basement units are divided into two dominant units the Rio Pardo Intrusive
Suite (Monzogranite to Granodiorite), and to the west, the Serra da Providncia package broadly
described as Rapakivi Granites, Charnockite, Monzogranites, Syenogranites, and mafic rocks.
The CPRM geology formed as useful starting point, but a higher-resolution interpretation was required
to develop a framework for the local manganese occurrences. A subsequent stage of evaluation
progressed through lineament analysis of an ASTER digital terrane model, followed by reprocessing
and review of the government geophysical data (Rio Machado magnetic-radiometric survey). This
produced an updated structural interpretation, and provided initial indications of more subdivisions
within the granite package. Work continues on updating the geological model based on the Companys
subsequent geophysical survey program and continued mapping. These activities are described
further in Section 12 of the report.

Source: BMC, 2016
Figure 7-6: Property Geology Map, CPRM Geology

Source: BMC, 2016
Figure 7-7: Updated Structural Interpretation, based on analysis of lineaments in the digital
elevation model
7.4 Significant Mineralized Zones

Exploration activities to date have extended the distribution of known colluvial manganese oxide
occurrences and have shown that in all cases mineralization can be traced to local hydrothermal vein
systems. The veins are hosted within variability weathered granitic basement rocks. The colluvial
occurrences cover areas up to several hectares in size. From site to site, based on experience of
extraction to date, these can include 500 to 20,000 t of colluvium.
The manganese oxide vein systems remain under exploration. Drilling to date indicates that the vein
systems extend to a vertical depth of at least 100 m. Aerial geophysics indicates a network of
prospective structures extending over a strike length of 211 km which are situated over or extend from
known manganese occurrences. The current focus of drilling program has been to test the extensions
of these structures to confirm their prospectivity as manganese vein and colluvial targets.
Drill results have been reported in press releases by Cancana Resources. Results have included:
Jaburi 3 Prospect: 4.8 m @ 35% Mn from 32.2 m, including 1.9 m @ 57.8% Mn;
Eduardo Mendes Prospect: 4.5 m @ 31% Mn from 21.75 m, including 0.45 m @ 53.8 Mn;
Antonio Gomes Prospect: 23.55 m @ 14.3% Mn from 33 m, including 5 m @ 32.9% Mn;
Vitalino Prospect: 4.6 m @ 22% Mn from 28.8 m; and

Ademir Vitoria Prospect: 9.65 m @ 19.3% Mn from 46.55 m, including 1.1 m @ 53.5% Mn.
Drilling is generally being conducted on broad reconnaissance intervals of 300 to 500 m along strike.
Infill drilling and trenching will be required to confirm continuity. Trial vein extraction at a number of
sites indicates that individual veins can extend over strike lengths of 100 to 300 m.
The deposit model, mineralization controls, and exploration activities are described in greater detail in
the following sections.

8 Deposit Type
8.1 Manganese Oxide
Mineralization is extracted from a combination of colluvial and hydrothermal vein deposits. The
colluvial mineralization has developed through erosion and dispersion of material from vein sources.
8.1.1 Manganese Oxide Colluvium

The colluvial mineralization occurs as high-grade clasts of manganese oxide, typically ranging in size
from sand to angular blocks greater than a half meter in size. The clasts are loose to close packed and
range from a thin veneer to thicknesses up to 1.5 meters in depth. Red soil is the matrix material.
Accessory granite, quartz and dolerite fragments accompany the manganese fragments to various
degrees. This style of mineralization has is the main source of material for production to date in the
current wash plants. Examples are shown in Figure 8-1, Figure 8-2 and Figure 8-3.
Source: BMC, 2016 (left); Allaby, 2015 (right)
Figure 8-1: Colluvial Mineralization Style

Source: BMC, 2016

Initial extraction from this prospect generated product containing >58% Mn after washing. Inset shows massive crystalline
pyrolusite in freshly broken fragment.
Figure 8-2: Detail of Dark Manganese Fragments in Colluvial Profile, Jaburi 3 Prospect
Source: BMC, 2016
Figure 8-3: Exposure of Colluvium after Removal of the A Horizon in Road Construction
8.1.2 Manganese Oxide Veins

Vein mineralization consists of massive, breccia, stringer and stockwork styles of manganese oxide
Figure 8-4 and Figure 8-5). The vein systems are typically steep with predominant east to east-north-
east trends, but with subsidiary orientations to the north and north-west. The veins are generally not
well exposed.

Relief in some areas mimics the structural trends, with some structures hosting associated quartz
veining forming strike ridges. Other structures exhibit kaolinitic alteration halos and have been
recessively weathered to form valleys.
An early objective of the drilling program was to test the depth extensions to the surface manganese
occurrences observed in surface trenching. The drilling has confirmed that the manganese oxide
mineralization extends through the weathered saprolite and into primary granite in structurally
controlled positions at depth.
Source: BMC, 2016
Figure 8-4: Overview of Massive to Breccia Style Manganese Oxide with Granite Fragments
Source: BMC, 2016
Figure 8-5: A Rare Exposure of Manganese Veining at So Felipe Prospect

8.1.3 Geological Model

World-wide, most manganese is mined from stratiform horizons in sedimentary basins. Major
production centers have included South Africa, Brazil, and Australia. These deposits typically have low
grades in the range of 30% to 40% Mn. The manganese oxide hosts silica and iron inclusions, and
generally these ores have elevated levels of phosphorous. Sedimentary deposits can have oxide and
carbonate components. In some settings, the manganese carbonate weathers to from supergene
caps, which can be high grade but have a limited depth extent (Figure 8-6).
The BMC Project was selected to target another style of deposit: structurally controlled hydrothermal
manganese mineralization. The best documented example of such a deposit is the Woodie Woodie
Project in the Pilbara region in Western Australia (Jones, 2011; Jones et al, 2013). In that district,
multiple manganese orebodies were emplaced in a network of extensional structures (normal and
transform faults), associated with development on an adjacent basin. The dominant manganese
minerals there are pyrolusite, cryptomelane and braunite, with minor quartz and barite gangue
minerals. Broader haloes of hematite-goethite alteration are present in places. The manganese oxide
locally overprints and replaces quartz in pre-existing structures. The deepest known mineralization at
Woodie Woodie is 210m below surface and open at depth. The manganese minerals were deposited
as hydrothermal oxide phases, without manganese carbonates or manganese sulfides. The Woodie
Woodie ores have low phosphorous contents (<0.1 P2O5), and manganese:iron ratios are high (~13).
Lower grade breccia style mineralization is separated from gangue phases by dense-liquid separation.
Examples of manganese mineralization and geologic controls at Woodie Woodie are provided in
Figure 8-7, Figure 8-8 and Figure 8-9.
Source: BMC, 2016

At the BMC Project (right) with a sedimentary style of mineralization where high-grade cap sites over a bedded carbonate
package (left)
Figure 8-6: Schematic Comparison of the High-tenor Hydrothermal Vein Mineralization

Fault-
hosted
Mn
Granite
Source: Jones, 2011; BMC, 2016

Left: At Woodie Woodie (from Jones, 2011); right: BMC Project Dnei Pit (2016)
Figure 8-7: Comparison of Fault-hosted Mn Mineralization
Source: Jones et al, 2014; BMC, 2016

Left: At Woodie Woodie (from Jones et al, 2013); right: mineralization from the BMC Project (2016)
Figure 8-8: Comparison of Radiating Crystalline Manganese

Source: Jones (2011)

The fault architecture is illustrated schematically to the left. Specific mineralized positions are shown to the right in relation to
gravity data and fault intersections.
Figure 8-9: Structural Setting of the Woodie Woodie Manganese Mineral System
8.2 Gold
Recent work has identified gold anomalies in drainage systems through a pan-concentrate evaluation
program. Soil geochemistry and geological mapping has since been initiated in areas where a positive
response has been detected (Figure 8-10). The soil grids cover an aggregate strike length of 10km
along structural corridors identified in mapping coupled with analysis of the aerial magnetic data. The
program remains in the early stages of target definition, with the geochemical survey grids requiring
infill and extension. Host structures will be mapped in detail and trenched as the next stage of
evaluation.

Source: BMC, 2016

Variably sheared to brittle quartz veins with sulfides and boxworks
Figure 8-10: Gazetta Prospect

The Project area is located on the SW margin of the Amazon Craton, which hosts a number of
Proterozoic gold provinces. The 7 Moz Alta Floresta - Juruena gold province is located to the east in
the neighboring state of Mato Grosso and hosts lode gold deposits, intrusive-related to epithermal and
associated with calc-alkaline I-type intrusions. To the south, the Alto Guapor belt hosts orogenic gold
deposits associated with the Proterozoic Sunss orogeny. More broadly in Rondnia, alluvial placer
gold deposits have been worked, particularly in the north of the state in the Rio Madeira.
In general, gold deposits can be classified into three styles (high-level epithermal, deeper porphyry or
granite intrusive-related systems, and mesothermal orogenic lode gold systems; Figure 8-11).
Sufficient work has been conducted within the BMC Project to indicate that the gold anomalies
identified in drainage systems are from a local source, but there are not enough constraints on the
timing of event to link the mineralization to a particular regional event. Early observations of shear
zones with early to later stage quartz veining supports an orogenic gold model, although the possibility
of intrusive-related gold models will also be considered.

Source: Robert et al., 2007

Showing the key geologic elements of the main gold systems and their crustal depths of emplacement
Figure 8-11: Schematic Cross-section
8.3 Tin
Reports of historical tin prospecting sites in the BMC Project area have recently been followed up in a
two-stage program:
Lithogeochemical sampling was conducted to better understand the difference granite phases
present in the basement. Among a spectrum of compositions recognized was a high-silica
granite unit with elevated background levels of tin. This body exhibited favorable
lithogeochemical indices, indicative of fractionation processes consistent with tin-bearing
systems.
A reconnaissance stream geochemical program was subsequently initiated to evaluate heavy-
mineral phases. This program remains in progress, but to date has identified cassiterite (SnO2)
grains in drainage samples from the central and northern parts of the Project area.
More intensive sampling programs are will be conducted to test for commercial quantities of cassiterite.
However, the early observations are of exploration significance, given that Rondnia and neighboring
Bolivia form part of a recognized tin province (the state having produced over 270,000 t of tin). The
main commercial production centers in Rondnia are situated regionally north of the Project area, but
the tectonic province hosting these mineral systems extends into the BMC Project area (Rondnian

San Ignacio Province / Jamari Complex). Examples of tin-bearing quartz veins in granite are shown in
Figure 8-12.
Source: BMC, 2016

Observed in areas of granitic subcrop in the catchment areas of tin-anomalous drainage
Figure 8-12: Segregation and Stockwork Vein Systems

Tin mineralization is associated with highly fractionated granite bodies emplaced at relatively shallow
crustal levels (Figure 8-13). In granitic magmas, large highly-charged cations - Sn, Nb, Ta, Sb, Mo, W,
As, Sb, Bi - tend to concentrate in less polymerized hydrous melts along with Na, Li, Be, F, B and Cl.
The progression of fractional crystallization concentrates these metals in the later-stage melt and fluid
phases (Taylor, 1979).
Cassiterite can form as disseminations within the host granitic body, or can be remobilized in late-
stage pegmatitic melts and/or hydrothermal fluids. The pegmatites and vein systems can be injected
into discrete structures, or can form broader stockwork-style fracture systems in which the granite body
or surrounding rock mass is extensively fractured. The magmatic fluids can be can be responsible for
skarn and greisen development in host rocks.
Mineral systems may be chemically zoned, at the scale of individual intrusions, or at a district scale,
in metals such as Sn, Mo, As, Bi, W, Be, Ag, Pb (although polyphase intrusive or hydrothermal events
can complicate patterns of metal distribution). Elements nearer to the beginning of this list tend to be
concentrated closer to source intrusion, while those at the end of the list can be mobilized over
significant distances.

Source: Sinclair, 1996
Figure 8-13: Schematic Representation of Different Forms of Vein-Stockwork Tin Deposits
8.4 Kimberlites
The BMC Project area is bordered by various kimberlite occurrences illustrated in the Brazilian state
geologic survey (CPRM) deposit database (Figure 8-14). The diamondiferous Carolina kimberlite
occurrence (Hunt et al, 2009) is located approximately 7 km to the west of the main Project block. The
Pepper-Cosmos kimberlite cluster is distributed 10 to 30 km to the south (Masun & Scott Smith, 2006,
2008). To the east, artisanal miners worked alluvial diamonds in Rio Roosevelt in the 1990s (Quadros
MLES, and Rizzotto GJ, 2007).
Alluvial diamond deposits are known in the Pimenta Bueno and Comemoraco Rivers and their
tributaries since the 1930s. Reported alluvial production from these areas totaled 260,000 carats
(based on DNPM figures). However, such declared production figures are unreliable and often far less
than actual amounts. Garimpo production for the Rio Roosevelt in the 1990s was reported much
larger, although official figures are not available.
Reviews of aerial geophysical surveys and aerial imagery over the BMC Project area have identified
a number of point-source anomalies which warrant investigation as kimberlite targets.

Source: BMC, 2016

In relation to the BMC Project area (in yellow). Also shown are regional structures from 1:1M scale CPRM interpretation over a
digital terrain model in the background
Figure 8-14: Regional Kimberlite Occurrences

Kimberlitic magmatism in Brazil has been variably linked to mantle plume events and/or continental
break-up of Gondwanaland. Commercially significant kimberlites require specific mantle source areas
in which diamonds are stable, which typically correlates with areas of thickened crust (Archean
cratons, or Proterozoic cratons with favorable pressure-temperature conditions). The presence of
mineralization in the broader district indicates that a suitable source area has been present in the
mantle at depth. Petrographic studies on garnets from the Carolina body indicate that a post-Archean
setting is consistent with a lack of harzburgitic G10 garnets, but a high population of Group I eclogitic
garnets provides a good indication of diamond potential (Hunt et al, 2009).
Kimberlites present small targets, typically covering areas of several hectares and rarely over 10 to 20
hectares. They typically have funnel-shaped geometries in cross-section, and where not deeply
eroded, preserve an upper eruptive / diatreme zone, tapering to intrusive plugs at depth (Figure 8-15).
The bodies are typically elliptical near surface although more linear dykes and sills can also develop.
Geophysical exploration methods and geochemical surveys for path-finder minerals are key
exploration techniques, along interpretation of deep-seated controlling structures which influence

emplacement. However, geophysical noisy basement geology, as well as decomposition of labile

minerals present challenges (Wit, 2010), requiring careful survey.
Source: Lorenz and Kurszlaukis, 2007
Figure 8-15: Section of Kimberlite Pipe, with intrusive root zone and diatreme components

9 Exploration
9.1 Relevant Exploration Work - Manganese
9.1.1 Petrophysical Properties Studies
Geophysical exploration methods had been a key exploration tool for hydrothermal manganese
mineralization at in the Woodie Woodie camp. Based on this, the Company conducted a study of the
physical properties of the BMC manganese mineralization, to calibrate appropriate techniques for
identifying structural corridors for targeting hidden mineralization.
Samples were selected based on advice of the Companys consultant geophysicist (Mat Cooper of
Core Geophysics). Laboratory tests were conducted by Systems Exploration (NSW) Pty Ltd (Australia)
on 4 massive manganese samples, two granite samples, and three manganese breccia samples,
supplementing field readings taken over seventeen prospects using a conductivity and magnetic
susceptibility meter (TerraPlus KT10 V2 plus S/C meter, model 8073). Readings were taken during
the Companys 2014 orientation program to assist with survey planning (Cooper, 2014).
Results indicated a contrast in conductivity between the manganese mineralization and typical granitic
host rocks. Massive manganese oxides exhibited conductivities of 16 to 76 Siemens per meter (S/m),
being higher than overburden (alluvium / colluvium / laterite / saprolite: 0 to 15 S/m), and fresh granitic
basement (0 to 1 S/m). It is important to note that more impure manganese breccias exhibit lower
conductivities, and some of the basement mineralization may therefore not exhibit a conductive
response. Petrophysical properties of massive to brecciated manganese mineralization are tabulated
below, compared to the properties of the host succession (Table 9-1). The results were important in
suggesting that electric geophysical evaluation methods could be of value in exploration (Figure 9-1).
Table 9-1: Petrophysical Properties of Massive to Breccia Ores

General BMC Massive BMC Breccia
Literature Mineralization Mineralization
Density (g/cm3) 4 to 5 2.32 to 4.19 2.23 3.62
Conductivity (S/m) 5 to 25 16 to 72 1 to 26
Chargeability m/s 30 to 120 140 to 169 32 to 146
Magnetic Susceptibility (SI) 0.001 to 0.005 0.0001 to 0.0028 0.0001 to 0.0028
Rock Type Conductivity S/m MagSus x10-3 SI

Alluvium/Colluvium/Saprolite 0 to 10 0 to 2
Granites fresh (non-magnetic) 0 to 1 0 to 1
Mafic Dyke 0 to 2 0 to 10
Quartz Veins 0 0
Laterite 5 to 15 2 to 10
Source: BMC, 2016
From select test samples in the regional BMC Project area (top) compared to data of massive ores from the general literature
(bottom)

Source: BMC, 2016
Figure 9-1: Field Readings of Different Rock Types with a TerraPlus magnetic susceptibility
conductivity meter
9.1.2 Reconnaissance Rock Chip Geochemistry

A rock chip geochemical study was undertaken in 2014, to provide a framework for compositional
variation in future colluvial production corridors (Figure 9-2). High tenor manganese oxides were found
to be widespread through the licenses. A number of samples were reported at maximum detection
limit of SGS (>58% Mn). Manganese grade variation could be correlated with the observed amount of
alumino-silicate breccia content. Samples exhibited low iron contents (<2%), easily meeting Mn:Fe
ratios required by customers to date (Mn:Fe Ratio: average 427, minimum 24). Phosphorous contents
were low, suiting the specialty ferromanganese requirements. Results were below detection to 0.038%
P. Some variations were observed in the BaO content. In the absence of observable barite and with
low sulfur contents, this was taken to reflect variations between pyrolusite and cryptomelane
mineralogy (subsequently confirmed by petrography and XRD studies). The controls on mineralogical
variation are not currently well understood, but are not material to current buyers of the product.
Accessory elements were acceptable to current customer requirements.

Source: BMC, 2016
Figure 9-2: Geochemical Plots for Some Key Elements
9.1.3 Trial Ground Geophysical Surveys

Following the findings of the physical properties testwork program, CGG (Land Geophysics) was
engaged to conduct trial surveys in Induced Polarization (IP), Ground Magnetics and Gravity over four
prospects (Tumelero, Ademir, Eduardo Mendes and So Felipe). Prospects were selected based on
initial mapping and trenching activities which had provided information on the strike of the mineralized
structures (Figure 9-3).
Surveys were conducted over late 2014 to 2015. In addition, in-house trials were conducted of ground-
penetrating radar and self-potential techniques. All were of value, with Chargeability / Resistivity
appearing most promising for mapping the host structure and mineralization.

Source: BMC, 2016
Figure 9-3: BMC Ground Geophysical Survey Activities
Gradient array induced polarization (IP) techniques revealed corridors of low resistivity corresponding
with the strike of known structures. More discrete chargeability highs were present, some of which
corresponded to areas of manganese veining (and others presenting targets for follow-up evaluation).
Dipole-Dipole tests along specific lines allow for more specific depth-imaging of these features (Figure
9-4).
Gradient Array IP surveys were conducted in blocks covering ~4km 2 each, with 100m spaced lines,
50m dipoles, 25m station spacing. Select lines were chosen for Dipole-Dipole orientation trials (lines
with 50m dipoles, 25m station spacing n=8). The survey was conducted using IRIS time domain
system with ELRECPro receiver, VIP4000 4 KVA transmitters supported by a 6.5 KVA power
generator.

Source: BMC, 2016

Top: Gridded Resistivity image with superimposed outlines of chargeability anomalies. An ENE-trending resistivity low (in blue)
coincides with the trend of surface Mn occurrences. Red polygons mark the position of the chargeability anomalies. The location
of a manganese vein partially excavated in early 2014 is shown to the east (see photo inset). IP inversions show that an
anomalous response extends along strike and at depth to the vein position.
Bottom: Perspective view and slices of inversion of chargeability data.
Figure 9-4: IP Orientation Survey over the So Filipe Prospect
Ground penetrating radar was trialed to test whether colluvial / saprolite / bedrock interfaces could be
mapped along with potential vein zones. The technique works by mapping reflectors which mark
boundaries between materials of different physical properties (Figure 9-5). The trials were conducted
using an UltraGPR advanced deep penetrating radar system (operated being towed by a single
person). Surveys were done along select lines following the IP surveys. The trial showed horizontal
reflectors conforming to colluvial - saprolite interfaces, although resolving the presence of manganese-
bearing colluvium and barren rocky colluvium appeared not within the resolution of the instrument,
Areas of interference in the basement were observed to align with chargeability anomalies and were

interpreted to represent a combination of veining and alteration associated with the host structure. The
technique has application as a near-surface exploration tool, although IP was preferred as a technique
offering deeper penetration.
Source: International Ground Radar.website; BMC, 2016
Figure 9-5: Ground Penetrating Radar Technique, showing example profile over the Tumelero
Prospect
Gravity surveys were conducted with a Scintrex CG5 model with accuracy equal to or better than
1 microGal (Figure 9-6). Surveys were conducted in ~1 km2 blocks with 20 m station spacing and
100m line spacing. Orientation work at select prospects suggested that the mineralized structures
correlate with gravity gradients. However the technique at this resolution appears less effective at
resolving location of the mineralization itself. The technique might be considered at a broader scale
for supplementing an understanding of the deep structural architecture.

Source: BMC, 2016

Highlighting an association between manganese oxide mineralization (in mapping and trenching), and gradients in the gravity
data.
Figure 9-6: Examples of Gridded Gravity Data in Trial Survey Areas
Magnetic surveys were conducted with GSM-19 Proton magnetometer (GEMSystem). Surveys were
conducted over the same areas as the IP and the gravity surveys (survey blocks of ~1 km2), on 25 m
line spacing. Manganese oxides are only very weakly magnetic, but might be detected in host rocks
of low magnetic susceptibility. The ground trials showed that the signature of magnetite in dykes and
certain magnetic granite phases overwhelmed the response (Figure 9-7). Ground magnetic techniques
may be of value in improving prospect-scale maps of subsurface geology, but the other geophysical
methods appear more effective for direct detection of manganese oxides. More regional aerial
magnetics (see next section) is nevertheless a useful tool for developing a project-scale structural
framework.

Source: BMC; 2016; aerial photography Google Earth

The higher responses reflect a more magnetic granite phase (north) and a dyke (south)
Figure 9-7: Plan and Perspective Views of Analytic Signal Ground Magnetic Image at So Filipe
Prospect

Further ground geophysics is planned to better target thickened vein arrays in the poorly exposed area
once the current drilling program confirmed the presence of mineralization in the targeted structures.
9.1.4 Aerial Geophysics Review of CPRM Radiometric Data

The Companys development of initial project-scale geological and structural models was based on
reprocessing the 500 m line spaced government magnetic and radiometric data.
Radiometric data is of interest for its value in supporting bedrock interpretation. The signal is typically
derived within 30 cm of the topographic surface, and thus can be influenced by a variety of factors,
including the primary rock type, alteration and weathering. Some of the considerations in interpreting
the radiometric data in relation to the Project area include:
Primary rock type: Granitic rock types typically have high levels of potassium, although levels
of uranium and thorium increase with progressive magmatic fractionation. In areas of near-
surface fresh rock, the radiometric signature can provide insights into boundaries between
different granite phases.
Alteration: different types of alteration can produce different results. Potassic alteration events
can enhance its corresponding radiometric signature. However, silicification and argillic
alteration can cause depletion in K-Th-U (sometimes with retention of thorium relative to the
other elements).
Weathering: Weathering processes in felsic rocks generally leads to depletion of K, U and Th
by up to 20% to 30% of their primary values. Under extreme lateritic weathering conditions
there is strong loss of K, relative to U and Th (which retain 60% to 80% of their initial values).
Th/K ratios are often effective in mapping strong laterite profiles.
A ternary radiometric plot is an effective method of examination the relative abundance of components,
and when evaluated in relation to elevation data provides some insight into features that may be linked
to physiography and weathering, and those that may have a bedrock component (Figure 9-8).

Source: BMC, 2016

Draped over the digital elevation model, in plan and perspective views. The data highlights domains with variations in the relative
abundance of K-Th-U.
Figure 9-8: Ternary Radiometric Signature

A number of observations from the survey are:
The Pimenta Bueno graben area is expressed as an area of subdued relief. The radiometric
response as seen in the ternary image is variable. However, the overall total count is low and
the signature mainly correlates with surficial processes, evident from concentrations of
basement-derived alluvial wash and differences in surficial weathering. It lies in sharp
juxtaposition with the uplifted Proterozoic granite basement.
The ternary radiometric response over the granite package is generally dominated by elevated
responses in the potassium and uranium relative to thorium. The uranium signal in the ternary
image to some extent follows areas of low relief (in part possibly reflect subtle concentrations
of radon gas). This can mask a general potassic signature that is characteristic of a less
fractionated acid intrusive or subvolcanic phase. Some highland areas have a thorium
response marking lateritic weathering caps developed over the older palaeosurface.
Various areas were identified with the U-Th response is believed to mark the presence of more
evolved intrusive phases, in the central and northern parts of the Project area (described in
more detail in Section 12.3).
Review of individual channels suggests there may be some subtle response associated with
alteration domains associated with vein development. At high structural levels in hydrothermal
manganese systems, low-temperature argillic alteration selvages may be developed around
veins with carbonate and adularia. At equivalent deeper level structural positions, veins tend
to be associated with zones of potassic alteration, silicification, and/or albitization. There
seems to be some general correlation with mapped manganese zones and areas of enhanced
response in the K and U channels. These corridors are progressively being evaluated in the
field.
Landsat data was briefly evaluated to see whether it provided any new insights to the bedrock geology
and mineralization. In some areas, some stippling was observed in the iron channel, which is of some
interest as manganese and iron oxides are known to partition in hydrothermal systems. However, the
overwhelming response is from vegetation and the data could not be used for detailed targeting.
9.1.5 Aerial Geophysics CPRM and CGG Magnetics

CGG / LASA Prospeces S.A. was contracted to undertake a 7300 line kilometer survey HELITEM
survey, which was completed over April to June 2015. The survey MULTIPULSE technology to
maximize resolution of near-surface conductors (described in the following section) and in addition
provided a high-resolution magnetic dataset.
The CGG survey was flown on 100m lines with an AS350 B3 Helicopter (Operator: HeliSul). The
Magnetometer was a Scintrex Cesium Vapour (CS-2), mounted in the plane of the transmitter loop
with an operating range of 15,000 to 100,000 nT and Sampling rate: 10.0 Hz. Tie lines were flown at
1,000 m.
Data from the surveys was levelled by CGG with final image processing conducted by the Companys
geophysical consultant (Mathew Cooper of Core Geophysics). The CGG survey data supplemented
more regional magnetic data from the CPRM Rio Machado data flown on 500 m line spacing. A variety
of gridded images have been generated to highlight different magnetic trends. The processing has
also included an inversion technique to highlight major deep-seated zones of magnetic contrast
(worming, originally developed by the Australian research organization CSIRO). This technique

combines wavelet analysis, potential field edge detection and upward continuation to attempt to
recover the horizontal location of contrasting features, and to characterize their extension at depth.
Observations include:
The various derivatives highlight gradients which appear to represent a combination of

structure, dykes, and different granite phases. A prominent ENE and WNW trending seems to
correspond with a mafic dyke swarm (mafic dykes have been seen occupying the same
structural trends as the manganese veins in several cases).
These is some coincidence in the trend of major structures in the Proterozoic basement with
those forming the boundaries of the Pimenta Bueno Graben, suggesting the possibility of
some relationship.
Some areas can be seen where the gradients in the magnetic data correspond to alignment
in manganese occurrences illustrated below in the Jaburi area (Figure 9-9).
Source: BMC, 2016

Total magnetic intensity image, left; analytic signal, right; over the Jaburi Prospect group. The coincidence of manganese
occurrences (shown in yellow) is evident with gradients in the magnetic data.
Figure 9-9: Detail of Gridded CGG Survey Data
9.1.6 Aerial Geophysics CGG HeliTEM Conductivity

CGG / LASA Prospeces survey used HELITEM 30 m loop with MULTIPULSE 50 channel
multicoil system add-on. The transmitter had a loop area of 708 m2 with a nominal height above ground
of 35 m. The receiver consisted of a Multicoil system (X, Y and Z) with a final recording rate of 10
samples per second of X, Y and Z component data; 30 channels of half sine pulse and 20 channels of
square pulse, with nominal height above ground of 61.7 m. The survey included 30 Hz Base frequency
with a Pulse width of 4 ms for the half sine and 1 ms square. Off time was half sine pulse was 13 ms
and square pulse was 1 ms. The transmitter Current was 1061 A and dipole moment 7.5 x 105A-m
(nominal). The use of MULTIPULSE technology is designed to maximize resolution of near-surface
conductors. The helicopter and transmitted loop are shown in Figure 9-10.

Source: BMC, 2016
Figure 9-10: CGG / LASA Prospeces Helicopter Survey
The survey was highly successful in defining corridors of conductivity which show a spatial relationship
with and extend outwards from the various manganese occurrences that have been mapped to date
(Figure 9-11). The cumulative strike length of features targeted for follow-up evaluation extends over
211 strike kilometers. The data has been used to test for manganese occurrences (veins and
associated colluvium), resulting in the identification of new zones of mineralization.

Source: BMC, 2016

with manganese occurrences known at the point of project commencement (white circles)
Figure 9-11: Gridded Conductivity Image from CGG / LASA Prospeces HELITEM Survey
9.1.7 Mapping, Pitting and Trenching Programs

The first step in evaluation of the anomalous geophysical corridors defined in the aerial survey program
has involved mapping to search for manganese oxide float, coupled with a pitting and trenching
program to test for mineralization that may be hidden beneath a thick soil profile (Figure 9-12).
The dispersion zone of colluvial manganese oxide is mapped and defined by backhoe excavation of
pits and trenches, and auger drilling. Specific areas where the colluvial manganese is concentrated
are scheduled for more systematic sampling programs on a regular grid. The dispersion zones are
traced to source vein positions which are documented in trenching activities. Areas of vein
development undergo a first phase of reconnaissance drilling to evaluate the vein systems, at broad
step out distances of ~200 to 400 m on strike.

Source: BMC, 2016

More elevated areas sometimes preserve boulder trains and talus fans of manganese scree. Flatter areas generally require
pitting as a first phase of subsurface evaluation for manganese where the manganese is concentrated lower beneath the soil
layer.
Figure 9-12: Reconnaissance Evaluation of Structural Corridors
The development of the structural framework from the geophysical datasets has allowed a significant
number of new manganese occurrences to be delineated. The currently identified occurrences are
shown to the right below, compared to those known from the prior database (Figure 9-13).

Source: BMC, 2016

Left: At the start of BMCs involvement in the project; Right: Compared to current identified Mn points
Figure 9-13: Comparison of Known Manganese Occurrences
The trenching activities are particularly useful for characterizing structure, veining, and alteration
(Figure 9-14). Vein positions are surveyed and channel sampled, with allowing data to be integrated
with subsurface drilling activity. The extraction of the colluvial mineralization also provides an
opportunity to inspect and map the vein systems in detail (Figure 9-15).
Source: BMC, 2016

Left: Kaolinitic alteration zone evident in white clay piles adjacent to trench marking structural zone
Centre and Right: Manganese veining exposed in trenching and examples or marginal kaolinite and limonite veining
Figure 9-14: Trenching Activities

Source: BMC, 2016
Figure 9-15: Examples of Vein Positions, exposed with the removal of the upper layer of
colluvium
9.2 Relevant Exploration Work - Gold

Soil surveys for the gold exploration program are being conducted on a 400 m x 50 m reconnaissance
grid, with infill of anomalous areas on 100 m x 25 m pattern. The soil grids target catchment areas to
the anomalous stream pan concentrate samples (Figure 9-16, Figure 9-17 and Figure 9-18). The
survey program remains in progress, with 328 pan concentrate samples having been collected to date,
and gold analyses have been returned from 980 of the 1,537 soil samples collected.

Mapping is underway to confirm potential source areas. The basement is intermittently exposed, with
the majority of the area obscured by soil and colluvium. Subcrop of variably sheared and locally pyritic
quartz veins are observed in the catchments of anomalous areas, along with bordering areas of silica-
sericite-pyrite alteration. Trenching programs will be undertaken as the next phase of work as the infill
soil program advances. Three initial trenches (with a total length of 518 m) have been made to expose
the bedrock beneath the soil and colluvium at the Gazetta Prospect. The trenches are being used to
gather information on the position and orientation of underlying structures. A systematic trenching
program will be conducted to test grade distribution in the structures once soil infill results are available.
Source: BMC, 2016

Areas circled have a positive response to gold on pan concentrates (1 count and upwards)
Figure 9-16: Emerging Gold Anomalies on the BMC Project Area

Source: BMC, 2016
Figure 9-17: First Phase of Gold Evaluation, Pan Concentrate Program, Sincol Araatuba
Target
Source: BMC, 2016

With interpreted structures (based on mapping and geophysical interpretation)
Figure 9-18: Geochemical Survey Results at the Gazetta Gold Target

9.3 Relevant Exploration Work - Tin

The Companys tin evaluation first commenced with a lithogeochemical study on 34 granite samples
to better understand the spectrum of compositions in the area. The sampling indicated that the different
granitoid phases have variable silica content (64.1% to 76.9% SiO2), and appear to lie along a
fractionation trend. The most silica-rich end members return values ranging of 7 to 34 ppm Sn, with
an average of 21 ppm Sn, accompanied by variation in favourable lithogeochemical vectors (Rb/Sr;
Li/Mg; Rb/K; Rb/Ba; Figure 9-19). Values of > 5 to 10 ppm Sn are generally regarded as marking the
signature of a prospective system.
Source: BMC, 2016

Showing an association between Group 2 granites and elevated background levels of tin, along with accompanying
lithogeochemical indicators Li/Mg; Rb/Sr
Figure 9-19: Lithogeochemical Plots
The lithogeochemical program was followed up by a pan concentrate program once a multicommodity
team was established in 2016. The pan concentrate is first evaluated using the tinning test in the
field, whereby cassiterite effervesces and assumes a shiny metallic lustre when exposed to
hydrochloric acid in a zinc plate (Figure 9-20). Samples are crosschecked through submission to SGS
for semi-quantitative petrography.
The cassiterite has been located over the Group 2 Granite position, and in flanking environments
(Figure 9-21). Accompanying minerals have included monazite, topaz, tourmaline, and zircon. Further
field mapping and drainage sampling remains to be conducted to confirm the source rocks. It is not
yet clear whether the alluvial tin was derived from disseminations in the granite, or from locally
observed quartz veins and pegmatites. Some sheared quartz-green mica lithologies have also been
identified which possibly represent greisen zones.

Source: BMC, 2016

With cassiterite concentrate identified by tinning test
Figure 9-20: Pan Concentrate Program

Source: BMC, 2016

Top Left: Total count radiometric plot, with rock sample points superimposed, colored by lithogeochemical index. The radiometric
anomaly conforms to a Group 2 granite location.
Top Right: Sites of cassiterite located in pan concentrate samples (yellow squares).
Bottom: Sheared quartz green-mica lithology possible greisen zone.
Figure 9-21: Tin Radiometrics, Anomalies and Examples
9.4 Relevant Exploration Work - Kimberlites

To date the Company has not conducted specific field campaigns for kimberlite evaluation. Desktop
reviews of the geophysical data have been conducted which show the presence of discrete point
source anomalies warranting evaluation (Figure 9-22). Further regional claims lie outside the area of
aerial coverage and have been targeted on the basis of circular anomalies and aerial imagery. Several
of the licenses for kimberlite exploration have only recently been authorized for active exploration.

Source: BMC, 2016

(images processed from CGG survey data)
Figure 9-22: Example of Dipole Magnetic Anomaly, with coincident conductive and IP response
9.5 Sampling Methods and Sample Quality

9.5.1 Manganese Oxide Colluvium
The Companys pre-production activities are designed to outline production areas for extraction of
colluvium (Figure 9-23 and Figure 9-24). In pits, samples are collected by extracting vertical channels
on the walls of the excavation to natural boundaries in the soil profile. A mechanical auger recovers
material using a spiral blade with a diameter of 15 cm.
Material is bagged on site, with sample mass depending on the thickness and composition of the layer.
For pits, the sample mass ranges from 1.5 to 217 kg (on average 30 kg). For auger holes, the sample
mass ranges from 2.5 to 94 kg (on average 18 kg).
Material is transported to Espigo DOeste where the samples are processed by an in-house sizing
laboratory crew. To replicate the performance through the plants, the sample is first weighed, then
washed and screened to separate the >5mm size fraction. The >5 mm fraction is then passed through
a set of sieves to replicate plant recoveries at the 5 to15 mm, 15 to 25 mm and >25 mm size ranges.
The resulting fractions are then hand sorted into the manganese oxide and gangue components and
weighed, to determine relative weight abundances of manganese to gangue.
Pitting is a preferred technique where the colluvium is coarse, as there is a possibility the 15 cm auger
blade will not recover the larger fragments. Auger techniques are used where ground conditions do

not allow backhoe access. The pattern of sampling varies from site to site depending on dispersion
characteristics. Initial reconnaissance lines in areas of more concentrated colluvium are inserted at
intervals of 100 m. Infill patters are typically made at intervals of 25 m along the strike of the dispersed
horizon, and 15 m across strike. The preproduction data is used for internal planning for colluvial
extraction (Figure 9-25).
Source: BMC, 2016

The sample is screened and sorted with fractions weighed to estimate recovery through the wash plant.
Figure 9-23: Example of a Vertical Channel Sample through colluvial profile in pit
Source: BMC, 2016

Which is screened and sorted with fractions weighed to estimate recovery through the wash plant.
Figure 9-24: Example of Auger Sample

Source: BMC, 2016

Developed for definition of extraction areas. Red dots are initial mapping observation points.
Figure 9-25: Example of Dispersion Field of Colluvial Manganese and Tonnage Estimates
9.5.2 Manganese Oxide Veins and Breccias - Trenches

Trenching was initially used as a reconnaissance tool for general geological mapping. However, now
that the hydrothermal manganese model has been confirmed, a sampling program has commenced
to integrate near-surface trench data with subsurface drilling. Trenches are geologically logged to
record weathering, rock type, structure and mineralization. Key contacts and trench positions are
surveyed by differential GPS, and vein positions are marked by survey pegs and sampled before
trenches are backfilled (Figure 9-26).
Sampling is conducted on the veins and adjacent wall rock intervals in the trench walls. The sampling
is conducted to geological boundaries (with a maximum interval of 1m). Volume is carefully controlled
with a trenching tool creating a regular depth. The vein material in the oxide profile is generally soft.
Subtle variations in sample volume may occur, but the technique ensures full sample recovery across
the interval.
Unlike the colluvial samples, the material is submitted to in bulk for laboratory analysis to examine the
in situ grade. Dedicated trench samples for metallurgical testwork will subsequently be conducted.

Source: BMC, 2016
Figure 9-26: Channel Sampling of Breccia Vein Zone
9.5.3 Manganese Oxide Veins - Drill Core

The Companys current program primarily uses HQ-sized drill core. Drilling is conducted under
controlled conditions in soft ground to maximize recoveries. The drill core undergoes initially logging
in the field, which includes mark up of meterage intervals and recording any details of recovery. Core
is then transported to a handling facility in Espigo DOeste. The core is logged in detail, and
photographed before splitting and sampling. Mineralized core is typically sampled to a maximum of
1m lengths, but modified locally to match geological boundaries. Sampling is continuous in
mineralization with up and down-hole extensions into lower grade halo material (Figure 9-27).
Archimedes-style density measurements are taken on mineralized intervals. When core is soft or
porous, it is wrapped in thin plastic cling wrap. At the stage of resource definition drilling, alternative
techniques for sealing (such as wax or latex coatings) will be tested, along with volumetric
determination through caliper methods.

Source: BMC, 2016
Figure 9-27: Sample collection, weighing, core photography and cutting at BMC facilities

9.5.4 Manganese Oxide Stockpiles

Current practices involve sampling of individual stockpiling which are on average ~24 t (ranging from
8 to 14 t). Minimum sample size is governed by ISO Guidelines, according to particle size (ISO 4296/1).
Samples are taken as a continuous channel from the toe to the peak of the pile from two to three
sectors, to produce a sample in the range of 20 to 30 kg. Duplicate samples are taken at a frequency
of 1 in 20.
In addition, reference samples are taken on departing sales truckloads. The sampling is designed to
provide a reference sample in the case of difference in estimation with customers. The number of
increments is based on ISO 4296/1 guidelines, according to the formula: n = (2w / S) 2, where
n = number of samples
w = quality variation (standard deviation of Mn content; based on initial stockpile results)
S = targeted precision of sampling.
An example of grade comparison between the initial stockpile sample and the wagon (umpire) sample
is illustrated below (Figure 9-28).
Source: BMC, 2016

Left: Typical BMC stockpile.
Right: Table showing forecast consignment grade, calculated initial composite stockpile sampling of two pile STKP202 and
STKP203 (consignment grade is weight-adjusted based on loaded tonnage). This compares with wagon sampling results of
loaded material, highlighting low quality variance (standard deviation of sample to sample variability).
Figure 9-28: Comparison of Oxide Stockpile Grades
9.5.5 Soil Sampling

Soil samples are collected by pitting or hand-auger from B-Horizon, with a targeted sample mass of
500 g. Samples are inserted in a plastic bag for submission (Figure 9-29). Surveys are conducted on
an initial 400 m x 50 m reconnaissance grid, with infill of anomalous areas on 100 m x 25 m pattern.
Grid lines are controlled in the field by tape and compass, with sample sites locations recorded by
hand-held GPS. Sites are marked by survey pegs for future reference and if required differential GPS
survey.

Source: BMC, 2016
Figure 9-29: Soil Geochemical Surveys in progress at the Gazetta Target
9.5.6 Reconnaissance Pan Concentrate Sampling

Samples are collected from gravels bedload near the bedrock interface. Material is removed by spade
into a bucket to collect ~20 liters of gravels. The coarse fraction is then screened with over a 2 mm
sieve. Coarse rocks are monitored to understand the rock types in the catchment area. The fraction
passing 2 mm is then concentrated by pan to remove clay and light sand fractions. Gold counts are
monitored visually and the presence of cassiterite is tested via the hydrochloric acid - zinc crucible
tinning test. The concentrate is stored in a plastic bag with a fraction sent for mineralogical analysis
(Figure 9-30).
Source: BMC, 2016
Figure 9-30: Regional Pan Concentrate Sampling
9.6 Significant Results and Interpretation

The trenching program was the first step in confirming the exploration model for structurally-controlled
hydrothermal manganese mineralization has since been confirmed by drilling. This was an important

milestone, as manganese deposits in Brazil were generally regarded as being related to Precambrian
manganiferous oxide sediments. BMC has a first-mover advantage in development expertise for
exploration and treatment of this high-tenor style of mineralization.
The full extent of the mineralized structures continues to be tested over the extent of the claim package.
The Company has expanded production since assuming responsibility for the Project and has
confirmed the high-tenor of the manganese oxide mineralization. Ongoing exploration programs are
focused on testing scalability and beneficiation of the vein style of mineralization, while the
preproduction activities are largely designed to delineate targets for ongoing extraction of colluvium.
Areas covered to date by the pre-production activities are shown in Figure 9-31. A significant
proportion of the claim package remains under evaluation.
Source: BMC, 2016
Figure 9-31: Preproduction Data Coverage
Manganese, tin and gold targets defined for follow-up programs are illustrated in Figure 9-32. The
aerial geophysical program has identified 211 strike kilometers of structure along which 62 areas of
enhanced response have been defined for follow-up activities. The reconnaissance drilling program
has confirmed the presence of mineralized zones within these corridors. Further ground geophysics
will be undertaken to test the potential for thickened podiform vein zones, which are characteristic of
the Woodie Woodie mineral system, where many of the discoveries were blind or had limited surface
expression. The tin and gold exploration programs are at the initial stages of evaluation. The work to
date is defining multiple anomalies in both commodities. Source areas are still being constrained with

infill geochemical programs. Trenching and ultimately drilling will be conducted to test the potential of
these targets.
Source: BMC, 2016
Figure 9-32: Currently Defined Aerial Geophysical Targets for manganese exploration, along
with gold and tin target areas from surface geochemical surveys

10 Drilling
10.1 Type and Extent
Core drilling to date has been conducted by commercial service providers
Geotechreserves do Brasil Servios de Perfuraes e Sondagens LTDA:

o LF90 Boart Longyear track mounted diamond core rig
o LY44 Boart Longyear skid mounted diamond core rig
Energold Perfuraes Ltda:
o EGD SII rig hand-portable rig
The rigs are illustrated in Figure 10-1. The Geotechreserves rig uses 3m rods. The Energold rig uses
1.5m rods. The Geotechreserves rigs are used for drilling in relatively flat pasture areas, whereas the
portable Energold rig can be broken down into components, hand carried, and re-assembled, allowing
access to areas where conventional drilling is not possible due the terrain. All rigs produce HQ-
diameter core.
Source: BMC, 2016
Figure 10-1: Geotechreserves LF90 Rig; Energold EGD SII rig; Geotechreserves LY44 rig
At the time of writing, 14,079 m of drill core have been completed with a focus largely on broad
reconnaissance patterns, typically at 300 to 500 m spacing along strike of the defined structures, and
typically with one to three holes per section. Initial drilling typically targets depth intervals of 10, 30 and
50 m vertical meters below surface, although actual depth is variable depending on the dip of veining.
Most holes are drilled at an inclined angle of 45 to 60o into the vein sets that are generally steeply
dipping. True vein width is estimated to be approximately 50% to 70% of the down-hole width. The
location of drill collars is plotted in Figure 10-2.

Source: BMC, 2016
Figure 10-2: Location Map of Drill Collars
10.2 Procedures
Drill collar coordinates are initially recorded by hand-held GPS with an accuracy of 5m, with key holes
subsequently surveyed by a differential GPS (Trimble R3; horizontal accuracy: 5 to10mm; vertical
accuracy: 5 to 20mm). Collar positions are marked with a cement plug and metal tags.
Down-hole survey data is collected via Reflex GYRO downhole surveying instruments. Specified
instrument accuracy is 0.2 dip / 0.2 inclination. Data is recorded and downloaded digitally.
Measurements are typically taken in 10 m down-hole increments, but may be shortened in shallow
holes (down to 5 m increments).
Drill core is laid out in racks on the drill site for initial field logging, which includes mark up of meterage
intervals, fitting of core and inspection for lost intervals, and recording of basic geotechnical information
(Rock Quality Designation; Fractures per Meter). This work is conducted by technicians at day and
night shift who work under the supervision of site geologists. The quality of recovery has been good to
excellent. Recovery is recorded by core runs, and any areas of core loss that can be more specifically
identified are recorded. Core stored in treated wooden trays and is transported at the end of each shift
to the central logging facility located in Espigo DOeste. Core trays are covered with nailed wooden
lids and are secured during transport to prevent disruption.

Drill core is logged for lithology, mineralization, weathering, alteration and structure. Sampling intervals
are written on the core, with sampling conducted to geological boundaries. Sampling is conducted on
mineralization, alteration haloes and occasional unmineralized wall rock for geochemical
characterization. Core is photographed after mark-up for with trays labelled. Photographs of dry and
wet core are taken. Specific gravity measurements are taken by immersion techniques prior to cutting.
Half of the HQ core is cut with the other half retained. All drill core is stored in racks for future reference
in a locked core storage compound with limited access. Pulps are returned for storage on site after
analysis.
All data is entered into a centralized Access database.
10.3 Interpretation and Relevant Results

The drilling has been staged in phases. The first phase program involved a 2000m program over select
targets. The specific objective was to confirm that the mineralization extended in structurally controlled
positions at depth, and that the primary manganese minerals persisted in the oxide form (rather than
transitioning to a manganese carbonate mineral phase, for example). The Company has progressively
reported results to the share market, incorporating intersections, collar positions, dip and azimuth. A
selection of drillhole intercepts are noted below.
The results from the first stage confirmed the structural model, with drill core beneath the base of
weathering showing manganese oxide veins and hydrothermal breccias in the predicted structural
positions. Massive mineralization returns grades similar to surficial material:
DDH_J3_001: 3.1m @ 48.9% Mn, including 1.9m @ 57.8% Mn from 32.2m
The grade of breccia mineralization correlated proportionally to the abundance of silicate clasts within
the intersection (Figure 10-3). This was an important observation in indicating the underlying tenor of
the oxide mineralization had a high manganese content - a key requirement for beneficiation compared
to other mineralization styles containing finely dispersed iron oxides and/or cryptocrystalline silica.
Source: BMC, 2016

Left: Massive to breccia manganese oxide mineralization from the Jaburi 3 prospect
Right: relationship observed between manganese grade and alumino-silicate content in Phase I massive to breccia
intersections.
Figure 10-3: Manganese Grade Correlation with Silica and Alumina

The second phase of drilling has focused on extending the drilling broadly along structural corridors
defined in the geophysical programs to confirm the presence of mineralization. Five claims have only
recently been renewed for exploration activities from June 2016 and drilling and trenching activities
are just commencing in these areas.
Drilling has generally been regional in character, although a limited amount of infill to 100 m intervals
supported but additional trenching is being conducted along some corridors. Several of these more
advanced prospects are described below.
The Eduardo Mendes - Ademir - Vitalino Corridor is located in the northern project sector, forming an
ENE trending structural corridor traceable for 26 km in geophysical data. Prior to the claim extension,
reconnaissance drilling, trenching and detailed mapping had only extended over parts of a 13 km
central sector (Figure 10-4). Work is now commencing to evaluate this trend on the renewed claims.
Examples of mineralization being evaluated in these settings are illustrated below. Intersections where
quoted are down-hole widths.
Source: BMC, 2016

Showing drilling in the central sector and manganese occurrences under initial evaluation with trenching along strike extensions
in the renewed claim areas (outlined in red).
Figure 10-4: The Eduardo Mendes - Ademir - Vitalino Target Corridor

At a prospect-scale, several trends of separate veins are sometimes apparent amidst the broadly
dispersed colluvium (Figure 10-5, Figure 10-6). These colluvial areas are scheduled for extraction this
year, and a priority objective is to map and sample the associated vein systems in detail.

Source: BMC, 2016

Top: Overview of drilling and mapping program in the Vitalino - Ademir Victoria area.
Below: Examples of mineralization encountered in drilling (DDH_ADV_001), down-dip from vein position encountered in
trenching. The weathering profile here extends to 20-30m with a clay altered matrix which can be freely dug.
Figure 10-5: Manganese Vein Trends in Colluvium in the Vitalino Ademir Victoria Area

Source: BMC, 2016

Top: Overview of drilling at the Eduardo Mendes Prospect, showing extensions to the historical colluvial manganese extraction
area.
Below: Examples of mineralization encountered in drilling (DDH_EM_012), and veins exposed in the colluvial mining area.
Figure 10-6: Manganese Vein Trends in Colluvium in the Eduardo Mendes Area

Field evaluation in the Antonio Gomes areas has identified a series of east-west and north-east
trending structures associated with dispersed colluvium (Figure 10-7). An infill and extensional drill
program has commenced with the Energold rig. Results here have included multiple breccia veins with
intervening stockwork zones:
DDH_AG_002 23.6m @ 14.3% Mn from 14.5m, including

o 5m @ 32.9% Mn from 33m
Source: BMC, 2016
Figure 10-7: Drill core from DDH_AG_002 and Cross Section for the Antonio Gomes Project

11 Sample Preparation, Analysis and Security

11.1 Security Measures
Until dispatch, samples are stored in the Companys secured stockpile yard or exploration office. The
samples are couriered to the assay laboratory using a commercial contractor (Eucatur). Consignments
are weighed prior to dispatch and on receipt at the laboratory. Pulps and rejects are returned to the
Company and stored indoors in a secured depot where the Company is installing its own sample
preparation facilities. Individual samples are tagged with tamper-proof, bar-coded tags (Figure 11-1).
Source: BMC, 2016
Figure 11-1: Tamper-proof Bar-coded Seals on Sample Bags

11.2 Sample Preparation and Analysis

Chemical analyses are conducted through a number of laboratories, depending upon the character of
the sample.
11.2.1 SGS Laboratories, Belo Horizonte (Brazil)

Rodovia MG 10 Km 24.5 Angicos - Vespasiano MG - CEP: 33200-000
Manganese Mineralization: Scheme One (drill core and rock chip samples)
Used for massive, breccia and stringer styles of mineralization

o
PRP102_E: Samples are dried at 105 C, crushed to 3 mm, homogenized, and split to produce
a 250 to 300 g pulp in a steel mill with 95% passing 150 mesh. Preparation is conducted at
the SGS facility in Goinia (Gois State; Avenida Pedro Ludovico Teixeira, Quadra 84, lote
07, galpo 2 Parque Oeste Industrial - CEP: 74.375-400). Pulps are sent on the analytical
laboratory in Belo Horizonte.
XRF79C_10: Lithium borate fusion to produce a glass bead for analysis of major oxides by X-
Ray fluorescence: SiO2, Al2O3, Fe2O3, CaO, MgO, TiO2, P2O5, Na2O, K2O, Mn, BaO, PbO.
o
PHY01E: Loss on Ignition measured by calcination of the sample at 1000 C
Optional Supplementary Methods (conducted for characterization of associated elements from
prospect to prospect on occasions)
o CSA17V: Total Sulphur determined by LECO
o ICP40B: Multi-element package determined by multi-acid digest and ICP-OES analysis:
Ag, Al, As, Ba, Be, Bi, Ca, Cd, Co, Cr, Cu, Fe, K, La, Li, Mg, Mn, Mo, Na, Ni, P, Pb, Sb,
Sc, Se, Sn, Sr, Th, Ti, Tl, U, V, W, Y, Zn, Zr
o FAA505: Gold determination by fire assay of 50 g charge and AAS analysis
Manganese Mineralization: Scheme Two (drill core)
Used for wall-rock alteration zones with trace levels of mineralization.

o
PRP102_E: Samples are dried at 105 C, crushing to 3 mm homogenized, and split to produce
a 250 to 300 g pulp in a steel mill with 95% passing 150 mesh. Preparation is conducted at
the SGS facility in Goinia (Gois State; Avenida Pedro Ludovico Teixeira, Quadra 84, lote
07, galpo 2 Parque Oeste Industrial - CEP: 74.375-400). Pulps are sent on the analytical
ICP40B: Multi-element package determined by multi-acid digest and ICP-OES analysis: Ag,
Al, As, Ba, Be, Bi, Ca, Cd, Co, Cr, Cu, Fe, K, La, Li, Mg, Mn, Mo, Na, Ni, P, Pb, Sb, Sc, Se,
Sn, Sr, Th, Ti, Tl, U, V, W, Y, Zn, Zr
FAA505: (optional) Gold determination by fire assay of 50 g charge and AAS analysis

11.2.2 ALS Laboratories

2103 Dollarton Hwy, North Vancouver, BC, Canada or
Calle 1 LT-1A Mz-D, esq. Calle A, Urb. Industrial Bocanegra Callao 01, Lima, Peru.
Whole Rock Lithogeochemistry: Scheme Three (drill core and rock chip samples)
Used for lithogeochemical characterization of granites and pegmatites, primarily for identifying
intrusions prospective for tin mineralization. Suitable only for samples without manganese
mineralization.
PREP-31: Sample is dried then crushed to better than 70% of the sample passing 2 mm, then
split sample using riffle splitter. A sample split of up to 250 g is pulverized to better than 85%
of the sample passing 75 microns. Preparation is conducted at the ALS facility in Goinia
(Gois State; Avenida Anhangera, Qd 25 Lt 11, no. 15.060 Setor Santos Dumont Goiania -
Gois - CEP: 74.463-350). Pulps are sent on the analytical laboratory in Canada or Peru.
CCP-PKG03: Complete Characterization Package
o Au-AA24 gold determination by fire assay of 50 g charge with AA finish
o C-1R07 Total Carbon by Leco
o ME-4ACD81 Base Metals by 4-acid digest and ICP-AES Finish: Ag, Cd, Co, Cu, Li, Mo,
Ni, Pb, Sc, Zn
o ME-MS42: Aqua Regia Digestion and ICP-MS Finish for analysis of As, Bi, Hg, In, Re, Sb,
Sc, Se, Te, TI
o ME-MS81: Lithium Borate Fusion ICP-MS analysis of Ba, Ce, Cr, Cs, Dy, Er, Eu, Ga, Gd,
Ge, Hf, Ho, La, Lu, Nb, Nd, Pr, Rb, Sm, Sn, Sr, Ta, Tb, Th, Tm, U, V, W, Y, Yb, Zr
o ME-XRF26: Lithium Borate Fusion with XRF analysis of: Al203, BaO, CaO, Cr203, Fe203,
K20, MgO, MnO, Na20, P205, Si02, SrO, Ti02
o
o OA-GRAO5x: Loss on ignition by Thermal Decomposition Furnace at 1000 C
o S-1R08 Total Sulphur by Leco

2103 Dollarton Hwy, North Vancouver, BC, Canada or
Calle 1 LT-1A Mz-D, esq. Calle A, Urb. Industrial Bocanegra Callao 01, Lima, Peru.
Granite-related mineralization package Scheme Four (drill core and rock chip samples)
Used for to test for tin mineralization and associated elements.

of the sample passing 75 microns. Preparation is conducted at the ALS facility in Goinia
(Gois State; Avenida Anhangera, Qd 25 Lt 11, no. 15.060 Setor Santos Dumont Goiania -
Gois - CEP: 74.463-350). Pulps are sent on the analytical laboratory in Canada or Peru.
ME-XRF10: A calcined or ignited sample (0.9 g) is added to 9.0g of Lithium Borate Flux, mixed
well and fused in an auto fluxer between 1050 to 1100C. A flat molten glass disc is prepared
from the resulting melt. This disc is then analyzed by X-ray fluorescence spectrometry for
nominated elements: Sn, Nb, Sb, Ta, Th, U, W, Zr, Ba, Fe, K, Mg, Na

11.2.4 SGS Laboratories, Belo Horizonte (Brazil)

Rodovia MG 10 Km 24.5 Angicos - Vespasiano MG - CEP: 33200-000
Reconnaissance geochemistry for soils Scheme Five
PREPS80P: The soil fraction is dried, screened at 80 mesh, homogenized and pulverized in
a steel mill to produce a pulp with 95% passing 150 mesh. Preparation is conducted at the
SGS facility in Goinia (Gois State; Avenida Pedro Ludovico Teixeira, Quadra 84, lote 07,
galpo 2 Parque Oeste Industrial - CEP: 74.375-400). Pulps are sent on the analytical
FAA505: Gold determination by fire assay of 50g charge and AAS analysis
ICP40B: Multi-element package determined by multi-acid digest and ICP-OES analysis: Ag,
Al, As, Ba, Be, Bi, Ca, Cd, Co, Cr, Cu, Fe, K, La, Li, Mg, Mn, Mo, Na, Ni, P, Pb, Sb, Sc, Se,
Sn, Sr, Th, Ti, Tl, U, V, W, Y, Zn, Zr
11.2.5 SGS Laboratories, Braslia (Brazil)

SIA Trecho 3 lote 985, Bloco D Salas 216 a 218 CEP 71200-030 Braslia-DF Brasil
Semi-quantitative mineralogy report Scheme Six, to for laboratory confirmation of dense mineral
pan-concentrate fraction
PRPCL_Prep: magnetic phase separated by 800G hand-magnet. Material is sized into three
fractions (0.71 to 1 mm; 0.42 to 0.71 mm; 0.30 to 0.42 mm. The coarser fraction is analyzed
where field inspection visually identifies coarse gold. A split fraction is passed through a dense
liquid (Bromoform; SG 2.85 2.9). Splits and rejects phases at each stage are retained for
optional chemical analyses. Samples are prepared at SGS Geosol Laboratrios Ltda. Rod.
MG 10 - Km 24,5 Bairro Angicos - Vespasiano MG.
ANACL_MIN: Semi-quantitative mineralogy determined by binocular microscope
investigation by dedicated mineralogical consultant (Marcia Braga, Universidade de Braslia).
Supplementary microprobe analysis is also conducted at the Universidade de Braslia if optical
determination for certain phases is uncertain.

2103 Dollarton Hwy, North Vancouver, BC, Canada.
High precision analysis of product stockpile manganese oxide samples Scheme Seven.
Used for inventory and sales grade determination.

of the sample passing 75 microns. Conducted at ALS Goinia sample preparation facilities
(Gois State; located at Avenida Anhanguera, Qd 25 Lt 11 ,n1 5060,setor Santos Dumont,
Goiania, GO, Brazil).
ME-XRF26s: A prepared sample (0.33 g) is fused with a 12:22 lithium metaborate lithium
tetraborate flux which also includes an oxidizing agent (Lithium Nitrate), and then poured into
a platinum mould. The resultant disk is analyzed by XRF spectrometry for reporting of Al2O3,
As2O3, BaO, CaO, Cr2O3, CuO, Fe2O3, K2O, MgO, MnO, Na2O, PbO, P2O5, SO3, SiO2, TiO2,

OA-GRA05x: Loss-on-ignition in Furnace at 1000C.
11.2.7 ACME / Bureau Veritas

58 Sorbonne Crescent Canning Vale, Perth WA 6155 Australia.
High precision analysis of product stockpile manganese oxide samples Scheme Seven.
Used for inventory and sales grade determination (note this scheme was used to April 2016
at which time ACME suspended its operations in Brazil).
PRP70-250 - PULSW: Samples were oven dried at 105C, then crushed, split and pulverized
to produce 250g pulp passing 200 mesh, with a glass wash between samples. Preparation
was conducted at Acme Analitica Laboratorios Ltda, MG 010 KM 26 Linha Verde
Vespasiano MG CEP.: 33.200-000
XF203: The samples were cast using a 12:22 flux with added sodium nitrate, to form a glass
bead. The resultant disk is analyzed by XRF spectrometry for reporting of Al2O3, BaO, CaO,
Cu, Fe2O3, K2O, MgO, Mn, P2O5, S, SiO2, TiO2.
LA101 (optional): Laser Ablation Inductively Coupled Plasma Mass Spectrometry on fused
bead for reporting of Pb, Cr, Tl, As, Cd.
PF100 (optional): Boron analysis by peroxide fusion.
LOI1000: Loss on Ignition results have been determined using a robotic TGA system.
Furnaces in the system were set to 110C and 1000C.
11.3 Quality Assurance/Quality Control Procedures

11.3.1 Standards
BMC has used various commercial standards to monitor manganese results: AMIS0104, OREAS170a,
OREAS170b, GMN-01, GMN-03, GMN-04. Individual laboratory submissions are currently certified
references at a frequency of 1 in 20 samples or less. These are submitted as blind tests, such that
the laboratory has no knowledge of the expected value prior to analysis. In addition, the various
laboratories use their own internal standards. The results for these are reported to BMC to support
analysis of quality control. The OREAS and GMN series standards have been most routinely used and
results for the higher grade standards OREAS170a, OREAS170b, and GMN-03 are Tabulated in Table
11-1 and results are charted in Figure 11-2 to Figure 11-10. As production expands, the Company
plans to generate customized standards from local mineralization. Submissions for gold geochemistry
are accompanied by Rocklabs Certified Reference OxF85.

Table 11-1: Key Company-Submitted Manganese Certified References

GMN-01 GMN-03 GMN-04 OREAS 170a OREAS 170b
Analyte Average Average Average Average Average
1 1 1 1 1
% % % % %
MnO 57.13 0.21 17.33 0.16 58.17 0.47 59.46 0.43
Mn 13.56 0.14
Fe2O3 6.49 0.1 7.04 0.08
SiO2 25.76 0.15 10.39 0.14 8.12 0.11 11.34 0.07 9.49 0.06
Al2O3 4.634 0.071 1.869 0.023 1.444 0.021 4.44 0.05 3.9 0.06
MgO 2.785 0.024 0.297 0.02 13.27 0.2 0.222 0.021 0.329 0.018
CaO 12.89 0.12 0.301 0.009 19.52 0.2 0.09 0.004 0.27 0.007
TiO2 0.203 0.0065 0.0478 0.0051 0.0562 0.0053 0.179 0.005 0.189 0.004
K2O 1.202 0.015 1.011 0.018 0.6465 0.0053 1.7 0.03 1.8 0.04
P2O5 0.3722 0.0071 0.1682 0.0052 0.152 0.005 0.195 0.005
Na2O 0.06 0.011 0.049 0.023 0.276 0.034 0.318 0.022
LOI 25.19 0.19 11.456 0.083 32.994 0.094 12.14 0.07 11.95 0.15
BaO 0.0283 0.0038
SnO2 0.0057 0.0017
V2O5 0.0149 0.0069 0.0041
As 0.0062 0.0028
Cr 0.0019 0.0018
Cu 0.0124 0.0048 0.0038
Ni 0.0176 0.0091 0.0041
Cl 0.0072 0.0023 0.0148 0.0044
Pb <0.02 0.0035 0.0037
S 0.0041 0.002 0.0104 0.0012 0.0086 0.0028
Fe 5.003 0.087 8.231 0.082 3.293 0.058
P 0.1512 0.0021
Zn 0.0183 0.0048 0.0065
SrO 0.079 0.0066 0.025 0.011
U 0.007 0.0027
W 0.01 0.016
Source: BMC, 2016; compiled from data published reported by Geostats Pty Ltd and Ore Research & Exploration. Pty Ltd
Bureau Veritas Control Charts
Charts of Company-submitted certified references are plotted below in relation to the performance
gates listed on the certified reference.

Source: BMC, 2016
Figure 11-2: OREAS170a Results from Bureau Veritas in Relation to 2-3 Std. Dev. for the CRM
Source: BMC, 2016
Figure 11-3: OREAS170b Results from Bureau Veritas in Relation to 2-3 Std. Dev. for the CRM

Source: BMC, 2016
Figure 11-4: GMN-03 Results from Bureau Veritas in Relation to 2-3 Std. Dev. for the CRM
ALS Control Charts
Charts of Company-submitted certified references are plotted below in relation to the performance
gates listed on the certified reference.
Source: BMC, 2016
Figure 11-5: OREAS170a Results from ALS in Relation to 2-3 Std. Dev. for the CRM

Source: BMC, 2016
Figure 11-6: OREAS170b Results from ALS in Relation to 2-3 Std. Dev. for the CRM
Source: BMC, 2016
Figure 11-7: GMN-03 Results from ALS in Relation to 2-3 Std. Dev. for the CRM
SGS Control Charts
Charts of Company-submitted certified references are plotted below in relation to the limits of control
provided by SGS laboratories, Belo Horizonte.

Note the laboratory control limits are broader the performance gates of CRM plotted on the charts
above. Stockpiles requiring high precision analysis are analyzed by Scheme 7 (above), whereas SGS
is used for reconnaissance drilling.
Source: BMC, 2016
Figure 11-8: OREAS170a Results from SGS in Relation to 2-3 Std. Dev. limits of the laboratory
Source: BMC, 2016
Figure 11-9: OREAS170b Results from SGS in Relation to 2-3 Std. Dev. limits of the laboratory

Source: BMC, 2016
Figure 11-10: GMN-03 Results from SGS in Relation to 2-3 Std. Dev. limits of the laboratory
11.3.2 Blanks
SGS and ALS have reported results of blanks inserted as part of the quality control procedure (Figure
11-11).
Source: BMC, 2016
Figure 11-11: SGS Blanks

11.3.3 Duplicates
All commercial laboratory monitor sample preparation quality with regular duplicates pulps made from
the primary sample. Results are charted below are return R values of 0.9997 (SGS), 0.9961 (Bureau
Veritas), and 0.9991 (ALS), showing a strong correlation (Figure 11-12).
Source: BMC, 2016
Figure 11-12: Laboratory Duplicates for SGS, Bureau Veritas and ALS
Duplicate samples are taken at a frequency of ~1 in 20 on stockpile samples, including some lower
grade material from trial excavation of breccia material. For sixty-seven duplicate samples, the average
grade of the original was 48.54% Mn and the average grade of the duplicate pairs was 48.39% Mn. A
total of 51% of the samples repeat within a range of 1% of the original value and 75% of the samples
repeat within a range of 2% of the original value (Figure 11-13).

Source: BMC, 2016
Figure 11-13: Field Duplicates of Stockpile Samples
11.3.4 Repeats
Analytical repeats have returned R values of 0.9996 (SGS), 0.9998 (Bureau Veritas), with results
plotting well within the range of analytical repeatability for these commercial laboratories (Figure
11-14).
Source: BMC, 2016
Figure 11-14: Laboratory Repeats
11.3.5 Umpire Testwork

BMC has undertaken umpire analyses to further confirm that laboratory results are repeatable. A
selection of pulps from different submissions is sent to an independent laboratory for XRF analysis.

Results are compared to original values. The umpire program indicates that there is a strong
correlation between results of the paired samples. The observed scatter of values lies between the
expected tolerance levels of the laboratories different. An example of the correlation is illustrated below
(Figure 11-15):
Source: BMC, 2016
Figure 11-15: Umpire Laboratory Correlation Charts
11.3.6 Actions
A dialogue is maintained with all laboratories on quality control. No specific actions have been required
11.4 Opinion on Adequacy

It is the authors opinion that BMC is conducting sampling, sample preparation and analytical work with
standards that meet or exceed current industry standards. Results will be suitable for future use in
resource estimation. Quality control measures are in place and are being evaluated regularly to
monitor and correct analytical errors or issues. The author has advised BMC that sample storage
security should be improved, though there have been no issues associated with the current
arrangement or protocols.

12 Data Verification
12.1 Procedures
Drill collar locations and geochemical sample sites are initially spatially checked in GIS systems to
ensure positions plot in expected locations. Drill holes and their trajectories are further checked after
surface surveys in 3-D plotting systems (Surpac / Xplorpac).
Database queries have been established to check for data entry errors or omissions:
Collar without matching downhole survey
Collar without matching drill assay
Collar without matching geology
Survey depth > hole depth
Geology depth > hole depth
Sample depth > hole depth
Hole Azimuth < 0; Hole dip > 0
Data without matching hole_id
Holes are initially described in the field during drilling and plotted on working sections. These are
followed by more detailed logging, which is visual checked for consistency.
Site practices were inspected during a site visit by SRK.
12.2 Limitations
In the course of continued drilling, BMC intends to capture all drill collars using differential GPG survey
for entry to the database. Source survey documents will be retained to cross-check collar positions to
the electronic database.
BMC is keeping original source files from the various laboratories to verify values in the electronic
database. Much of the electronic data is hand entered, so procedures are in place to cross-check data
entry to match source information. More direct hands-off data entry practice is being investigated.
12.3 Opinion on Data Adequacy

SRKs interrogation of the electronic database has been limited at this stage of exploration. There are
no mineral resources stated and therefore, no immediate need for full rigor in database verification.
Complete data verification will be employed at the next step of project development related to resource
estimation.

13 Mineral Processing and Metallurgical Testing

The current Rio Madeira and Jaburi Plants have been designed for processing material from the
colluvial manganese deposits and have been operational for several years. BMC has initiated
studies to better optimize the recovery while maintaining product quality.
In 2014, BMC conducted internal studies to assess the proportion of mineralization being lost to
tailings and rejects (Figure 16.1). In 2015, BMC commissioned an engineering review with Ausenco
Ltd to examine scalable processing options for the Companys two plants. Ausenco completed a site
audit, and reviews were accompanied by metallurgical testwork program overseen by Jason Beale of
American Metallurgical Lab LLC (AML). The Company has further conducted field tests on vein
extraction and processing at a number of sites. Metallurgical evaluation will be an ongoing
component of the Companys programs.
13.1 Testing and Procedures

13.1.1 Mineralized Waste Review
The proportion of manganese oxide going to tailings and reject streams was assessed in 2014 through
a stop belt exercise where each plant was brought to a steady state of operation, throughput rates
measured, then samples taken from the various streams in a mass balance exercise overseen by John
Rockwell (then of Oregon Resources Corporation). A total of thirty-five samples were taken between
the two plants. This was followed by an auger drilling program with 128 samples taken from the various
waste stockpiles at each site.
Samples were split for analysis of major oxides through fusion-XRF techniques at SGS (Scheme 1).
One analysis was done on the whole fraction. Another split was sieved into the following size fractions
with the various components sent for analysis.
>25.4 mm
12.7 to 25.4 mm
9.52 to 12.7 mm
4.0 to 9.52 mm
2.0 to 4.0 mm
1.0 to 2.0 mm
500m to 1.0 mm
150 to 500m
75 to 150 m
< 75 m
Examples of mineralized waste are depicted in Figure 13-1.

Source: BMC, 2016

Top: auger site in tailings pond with dark manganese oxide streaks evident in the surface.
Bottom: photographs of stockpiled rejects from left to right: a) gritty soils from tailings pond, b) 5 to 15mm jig reject pile, c) 15
to 25mm jig reject pile
Figure 13-1: Examples of mineralized waste samples.
13.1.2 Heavy Liquid Separation Tests

A split from each size fraction from the tailings reject sample was passed through a heavy liquid
separation to determine the amount of heavy mineral in each fraction and to estimate the potential
grade and recovery that can be achieved by wet gravity separation. The test uses tetrabromethane
(TBE) liquid with a specific gravity of 2.9. Material that sinks to the bottom of the liquid is considered
the heavy mineral fraction. Tests were conducted al AML laboratories.

13.1.3 Stratification Tests

BMC sent a 1,750 kg sample to AML from the current reject stream to conduct bulk sample testwork
to produce different size fractions for physical and chemical analysis. The purpose was to investigate
possible methods of physical separation to maintain a product suitable for the fertilizer market.
Testwork was conducted by allmineral and Gekko Systems.
The bulk sample was first de-slimed by wet screening over a 1mm gyrovibe screen. The retained
<1 mm and >1 mm fractions were collected in barrels for further sizing. The >1mm fraction was
screened into different sizes fractions (>12.5 mm, 5 to 12.5 mm and 1 to 5 mm) and split with one
fraction sent to Allmineral and another to Gekko Systems for testwork. The fines fraction (0.075 to
1 mm) was tested by AML on spiral separators (see below).
A run-of-mine samples from an active extraction area was also tested to determine if the jig separator
can concentrate a mixed 25mm x 5mm size feed.
Jigging tests were conducted by allmineral in their Alpharetta Georgia facility (USA), using standard
procedures on their pilot-scale minijig (Figure 13-2, Figure 13-3). Tests conducted by Gekko Systems
were conducted through their Metallurgical Laboratory in Ballarat, Australia. Testwork was done on a
DMS Viking cone and a DMS cyclone to simulate the results of their jig separator.
Source: allmineral, 2015

Left: 1 to 5 mm sample. Center: 5 to 12.5 mm sample. Right: 5 to 25 mm sample.
Figure 13-2: allmineral Jigging Test, Prior to Stratification

Source: allmineral, 2015

5 to 12.5 mm sample
Figure 13-3: Example of Stratification Test Results
13.1.4 Spiral Tests

The dried 0.074 to 1 mm sample was tested at:
1.5 Mtph on an Outotec MC7000 spiral; and
1.25 MTph on the MG-4 spiral.
Spiral tests were completed in closed circuit testing. Samples were taken at various steady state
conditions and the products were dried, weighed, and analyzed to construct release curves.
13.1.5 Comminution Tests

A selection of samples representing different manganese oxide mineralization types were sent to SGS
Canada for grindability, abrasion, compression strength, and mineralogy.
Samples initially underwent Particle Size Analysis (PSA) as received. The four samples received
were subjected to screening from top size down to 400 mesh (38 microns). For each sample, the
coarse fractions (+ inch) were screened in their entirety while a sub-sample of the - inch was taken,
as required, and submitted for size analysis.
Crushed Product Particle Size Analyses were then conducted from 100 kg charges, using the size
fraction proportions in the as received samples. The four samples were subsequently crushed once
through a conventional jaw crusher having a 1.5 inch opening, prior to operation. Similarly to the feed
charges, the products were subjected to screening from top size down to 400 mesh (38 microns). For
each sample, the coarse fractions (+ inch) were screened in their entirety while a sub-sample of the
- inch was taken and submitted for size analysis.
Bond Low-energy Impact Tests were conducted to determine the Bond Crusher Work Index (CWI),
which can be used to calculate power requirements for crusher sizing. Approximately twenty rocks in

the range of 2 inch to 3 inch from the test samples were shipped to the SGS laboratory in Vancouver
for the completion of the Bond low-energy impact testing.
SMC Tests were performed on rocks from a single size fraction from each mineral style (-31.5/+26.5
mm), following procedures developed Steve Morrell of SMC Testing Pty Ltd (SMCT).
Bond Ball Mill Grindability Tests were performed at 270 mesh of grind (53 microns) on the four
samples. Bond Abrasion Tests were conducted on the four mineralization types and results
compared to the SGS database.
13.1.6 Sample Representativeness

Feed characteristics can be variable from prospect to prospect. The stop-belt mass balance exercise
was conducted on unscreened soil with manganese colluvium from one prospect to provide an initial
insight into plant performance. The auger sampling exercise from the two plants was careful to collect
a representative spectrum of material types. The targeted piles had accumulated over several years,
reflecting the long-term waste characteristics of the plants. The sampling was conducted to provide an
order of magnitude assessment of waste characteristics, rather than specifically to define a
mineralized waste resource estimate.
The bench-scale samples collected for the 2015 study were selected as being representative of the
mineralization / reject styles observed in the project area.
Jigging and Reject Evaluation
RMDP0034: 1750kg of representative of tailings from the current plants, representing material
lost and discarded the through the sorting and wash process.
RMDP0027: 50kg of run-of-mine plant feed (from the Teca prospect)
RMDP0026: 63kg of material from the cyclone underflow
RMDP0033: 100kg of fine manganese concentrated in trial hydrocyclone tests on site.
RMDP0030: 80kg of medium concentrated jigged mineral product
RMDP0031: 75kg of fine concentrated jigged mineral product
Mineralogy tests
EDRK0006: 51kg of field vein material
Comminution tests
RMDP0028: 468kg of massive to acicular manganese oxide

RMDP0029: 498kg of acicular to massive manganese oxide
RMDP0032: 368kg of breccia mineralization
ELPL0016: 342 kg of friable manganese vein mineralization
Samples RMDP0028, RMDP0029 and RMDP0032 were collected from stockpiles.
Sample ELPL0016 was collected from veins exposures in the Jaburi area,

13.2 Relevant Results

13.2.1 Mineralized Waste Review
Waste Material Types at the Rio Madeira plant were found to have the following composition:
Jig Rejects: 18-24% Mn; average 21.8% Mn
Tailings Ponds: 2 - 14% Mn; average 6.7% Mn
Tailings Dumps: 1 - 8% Mn; average 4.1% Mn
Retreated tailings: 6-9% Mn; average 7.9% Mn (small piles de-slimed by spiral)
Coarse Lump Reject (hand-sort waste): 4-14%; average 8.8% Mn
Material types at the Jaburi plant include:

Jig Rejects: 9-20% Mn; average 13% Mn
Tailings ponds: 0.4- 24%; average 4.8% Mn
Tailings dumps: 0.7 7.4%; average 2.7% Mn
Trommel Wash Dump: 1.2 - 13%; average 7 % Mn (material from channel to ponds).
Coarse Lump Reject (hand-sort waste): 3.8 5.5% Mn; average 4.6%Mn
The difference in the grade of the reject jig material between the two plants results from different jigs
being used between the two plants, with the Jaburi Plant at the time having a low-throughput manually
controlled jig.
Charting of the results of sieved fractions in tailings material indicates that the bulk of the manganese
oxide mineralization is concentrated in the >1mm size fraction (with grade increasing commensurate
with grain size; Figure 13-4). The gangue is dominated by clay from the soil, fine quartz sand from
weathered granite, and minor rock fragments.

Source: BMC, 2016
Figure 13-4: Example Grade Distribution by size fraction for the upper discharge pond at Rio
Madeira
13.2.2 Heavy Liquid Separation Tests

Analytical XRF results from the heavy mineral fraction following heavy-liquid separation tests are
shown in Table 13-1
Table 13-1: Summary of Grade in Heavy-Mineral Concentrates Following Heavy-Liquid

Separation
Source: Beale, 2015
Analytical results of each size fraction produced from the sample heavy mineral separates predicted
that ~9.3% weight of the received tailings sample would result in:
1 to 5 mm product @ 44.9 % Mn (bulk product is 47.6 % Mn) @ 4.9% wt to concentrate

5 to 12.5 mm product at 50.1 % Mn (bulk product is 48.7 % Mn) @ 3.7% wt to concentrate

For the +12.5 mm fraction, a 0.6% product weight is estimated assuming 47% by weight
recovered to product (due to the inability to conduct heavy liquid separation on such large
particles at bench-test scale)
The 0.075 mm to 1 mm size test resulted in the heavy fraction containing 26.4% Mn under perfect
separation conditions indicating that it will be difficult to upgrade the naturally fine manganese to a
high grade commensurate with the other products. The heavy mineral fraction was also tested on an
induced roll magnet which increased quality of Mn from 26 to 36% Mn.
13.2.3 Stratification Tests

The calculated head grade of the tailings sample was 6.45% Mn, with major oxides reporting to
different size fractions as shown in Table 13-2.
Table 13-2: Lithium borate fusion XRF results of tailings sample.

Head Feed Sample Straight XRF of sized fractions (ICP for Tl and Pb)
Sample ID % Wt % HM % Mn % Fe % SiO2 % Al2O3 % TiO2 LOI Tl (ppm) Pb (ppm)
120-1.1 + 12.5 mm 1.4 - 17.2 4.7 48.8 9.6 0.7 7.8 < 15 351
120-1.2 +5 mm 6.5 - 28.7 2.5 40.5 5.5 0.2 7.8 < 15 2400
120-1.3 +1 mm 26.8 - 10.2 2.7 73.0 4.4 0.3 3.6 < 15 730
120-1.4 +0.074 mm 24.3 - 3.9 4.5 71.5 9.5 0.9 4.7 < 15 297
120-1.5 -0.074 mm 41.0 - 1.7 7.4 48.6 25.0 1.4 10.1 < 15 647
Source: Beale, 2015
Table 13-3 shows the results of each fraction tested in the stratification tests on the RMDP0034 tailings
sample. They are compared to the heavy liquid separation results of the feed sample (which represent
a theoretical best performance). The Company has noted that industrial units allow better control of
grade and recovery than the batch testing unit.
Table 13-3: Manganese Recovery in Tailings Sample: results of Gekko and allmineral
stratification tests
Source: Beale, 2015

The following flow sheet was developed for reprocessing tailings and/or capturing the mineralization
in the 1 to 5 mm size component, based on the mass splits obtained from screening the RMDP0034
sample (Figure 13-5):
Source: Beale, 2015
Figure 13-5: Process Flowsheet for treatment of the fine fraction
Reprocessing only the tailings of an equivalent grade to the test sample at area 100 tph would result
in 9.3 tph of manganese oxide production:
5.5 tph of 1 to 5 mm product

3.2 tph of 5 to 12.5 mm product
0.6 tph of 12.5 to 25 mm product
Tests on the run-of-mine ore from the Teca mining area (RMDP0027) were screened to a 5 to 25 mm
size population to determine how well the Alljig separator can concentrate a feed sample with a larger
particle size distribution. The single sample produced 46.2% Mn product grade with 82% Mn recovery
(Figure 13-6).

Source: Beale, 2015
Figure 13-6: Grade Recovery Curve for Teca run-of-mine sample with mixed 5 to 25 mm size
range
13.2.4 Spiral Tests

The fine fraction 0.074 to 1 mm was concentrated better on the spiral than expected. However, a
product grade commensurate with targets on this particular sample was not achieved. The MG4 spiral
resulted in 58% of the Mn being recovered at 13% weight to concentrate with a concentrate grade of
20% Mn. The MC7000 spiral achieved slightly better results with 56% Mn recovery at 10% mass yield
to concentrate with a grade of 23% Mn. Release curves shown below (Figure 13-7).

Source: Beale, 2015
Figure 13-7: Release Curves for the MG4 MC7000 spiral tests; <1 mm size fraction
13.2.5 Comminution Tests

Test data are presented in Table 13-4. The four different samples display as expected show a range
of properties, ranging from soft to moderately soft and mild to moderately mild in terms of their degree
of abrasiveness.

Table 13-4: Summary of Comminution Test Results
Sizing data includes as received values (F80 = 80% passing the nominated size range). The
crushed product P80 values were obtained following the processing through a jaw-crusher
with a 1.5 inch opening.
Sample ELPL-0016 (porous soft manganese oxide vein mineralization) and sample RMDP-0032,
(breccia) exhibited similar behavior, being soft to moderately soft when tested at coarse and medium
sizes (CWI, SMC), and harder when tested at a fine size (BWI).
Samples RMDP-0028 and RMDP-0029 (variably massive to fibrous manganese oxide had the highest
density values and were characterized as soft to moderately soft but were harder at a coarse size
(CWI) and softer when tested at medium and fine sizes (SMC, BWI).
13.2.6 Trial Vein Mining

The various test pits were designed to test the performance of vein material through the current wash
plant ahead of plant improvements. The plants have limited crushing capability and are not suited to
upgrading fresh breccia mineralization associated with vein quartz or granite. However, the Dnei
breccia vein was associated with a clay-altered granite and excavated to a depth of 20-30m below
surface. The manganese oxide mineralization ranged from approximately 25 to 75% of the rock mass
(Figure 13-8).
The Dnei vein was processed through the wash plant and successfully upgraded to a salable product
with 6,400t of material produced. Average grades of the different product sizes were Coarse (>25 mm):
51.8% Mn, Medium (15 to 25mm): 48.8% Mn, Fine (5 to 15mm): 51.6% Mn.

Source: BMC, 2016

Dnei coarse product pile after processing through the wash plant; > 50% Mn product.
Figure 13-8: Breccia Vein with clay-altered granite fragments
13.3 Recovery Estimate Assumptions

A comprehensive metallurgical testwork program will be conducted in parallel with resource definition
programs as areas are prioritized for infill drilling or additional vein systems undergo trial extraction.
Treatment of breccia mineralization was an integral part of mining at the exploration analogue (Woodie
Woodie). There is a significant density contrast between manganese mineral phases and the gangue
assemblage at the BMC project (granite-quartz) the phases are expected to be amenable to gravity
separation techniques.
13.4 Significant Factors

BMC is continually evaluating the process streams of their small processing plants and conducting
beneficiation studies to improve production, much of which is in preparation for future expansion to
higher throughputs and for production of mineralized manganese veins in addition to the current
colluvial feed stock. It is SRKs opinion that there are a number of process optimization opportunities
available, but these will need to be tailored to the eventual resource quantum and Companys
production objectives.

14 Mineral Resource Estimate

There are no Mineral Resources presented this report.

15 Mineral Reserve Estimate

Mineral Reserves have not been estimated for this Project.

16 Mining Methods
16.1 Current or Proposed Mining Methods
16.1.1 Colluvial Mining
Colluvial mining follows a simple procedure. The pre-production auger and pitting data is plotted to
confirm manganese distribution. Top soil is segregated and barren overburden is stockpiled on site for
later reclamation activities. Extracted material is fed through a recently commissioned dry screen in
the field near then mine site (Figure 16-1 and Figure 16-2).
Source: BMC, 2016
Figure 16-1: Colluvial Extraction at the Laudir Prospect
Source: BMC, 2016
Figure 16-2: Commencement of Dry Screening at the Ademir California Prospect

16.1.2 Trial Vein Mining

In addition to the processing activities on the Dnei vein, trial vein extraction has been conducted at the
Lucas, Adesvaldo and Jaburi 2 Prospects.
The Lucas and Adesvaldo prospects had higher proportions of fresh silicate breccia, requiring crushing
to liberate the higher tenor manganese oxide mineralization from the gangue. It was unsuitable for the
wash plants. The Jaburi 2 Prospects contained multiple veins of more massive high-grade manganese
oxide, but coupled with more competent wall rock was again not well suited for the wash plants. The
large boulders currently require breaking manually. The various prospects will be reconsidered for
extraction when crushing facilities are installed which are suitable for the more competent material
(Figure 16-3, Figure 16-4 and Figure 16-5).
Source: BMC, 2016
Figure 16-3: Trial Vein Mining at Lucas, with rock fragments containing a higher proportion of
silicate breccia
Source: BMC, 2016
Figure 16-4: Trial Vein Mining of massive manganese veins at Jaburi 2

Source: BMC, 2016
Figure 16-5: Manganese Vein Breccia Zone at the Adesvaldo Prospect
16.2 Parameters Relevant to Mine or Pit Designs and Plans

Pit design and optimization studies have not yet been conducted.

17 Recovery Methods
17.1 Operation Results
At the end of Q2, 2016, BMC cumulative production since assuming responsibility for the project stood
at 23,936 t. Some closure periods had been incurred for the plants for safety and operating
improvements. The operation had a record second half of production in 2015 and recent production
since installation of the dry screens in July 2016 has averaged over 1,000 t per month.
The operations have allowed grade characterization at a range of prospects. Plant improvements are
scheduled to allow for beneficiation of the breccia style material encountered at a number of sites.
Variation in grade occurs as expected from prospect to prospect, but through stockpile management
and batching of material, the Company has maintained sales grades in excess of 50% Mn.
Table 17-1: Average Grades (Mn%) by Prospect
Source: BMC, 2016
17.2 Processing Methods

Processing methods for the Rio Madeira and Jaburi Plants are described below, with photographs
provided in Figure 17-1, Figure 17-2, Figure 17-3 and Figure 17-4 and flowcharts presented in Section
20.3. The plants are located 40 km and 30 km respectively from the Companys office in Espigo
DOeste. The plants operate 5 days/week, in two shifts of 10 hours / day. During the night shift, only
the jigs operate.
The process consists of a crusher for the materials over 75 mm and a screening for the undersized
fractions, where the organic material and soil is separated. The material continues to flow to the plant
where it is washed in a trommel-scrubber system and finally separated into the three different size
fractions (5 to 15mm; 15 to 25mm; 25 to 75mm).
Crusher
The run of mine (RoM) is stocked in piles in the plant hangar. The feeder box has an apron feeder at
the discharge which is followed by a fixed grizzly with an opening of 75 mm. The oversized material is
fed by a front end loader goes to a jaw crusher which has an opening of 70 mm; the undersized
material is carried to a screen, where the organic material is separated. The crushed material is
discharged to a conveyor and delivered in another conveyor where it is comingled with the material
from the screening.

Scrubber-Trommel
A conveyor carries the material to a scrubber-trommel system that is responsible for the washing
process. The process has as its aim to separate the organic material that the screening couldnt retain.
The reject slurry is channeled to a set of tailings ponds, where the fines and the organic material are
decanted and the water can be reused in the plant.
Screener
After the washing process, the mineralized feed stream passes through a screen that divides the
bedload into three parts: Fines (5 to 15 mm), Medium (15 to 25 mm) and Coarse (25 to 75 mm). All
material is conveyed to a pile of respective grain size category. The coarse material is hand-screened
by workers who remove the gangue (largely vein quartz and granite blocks, and any organic material
that wasnt removed by the scrubber-trommel washing system). It is then ready to be stockpiled and
sold. The medium and fine materials are transported to the jig system.
Jigs System
The jigs systems both wash and concentrate the dense manganese oxide fraction using a gravimetric
method. The granite and quartz fragments are sent to the top, since their density is lower than the
manganese. The process produces two piles, one a manganese oxide concentrate, and a second pile
that contains rejects of quartz and granite with lesser manganese. The reject piles can be reprocessed
through a lower-throughput manual jig for further recovery.
Source: BMC, 2016
Figure 17-1: Undercover RoM Pad, Apron Feeder and Trommel at the Jaburi Plant

Source: BMC, 2016
Figure 17-2: Coarse Manganese Product Pile at the Rio Madeira Plant

Source: BMC, 2016
Figure 17-3: Current Jigs at the Rio Madeira Plant (top), and at Jaburi (bottom)

Source: BMC, 2016
Figure 17-4: Manganese Oxide product stockpiles, and loading / unloading activities
17.3 Flowsheet
The schematic flow sheet for each operating plant is shown in Figure 17-5 and Figure 17-6.
Source: BMC, 2016
Figure 17-5: Schematic Representation of the Rio Madeira Processing Plant

Source: BMC, 2016
Figure 17-6: Schematic Representation of the Jaburi Processing Plant
17.4 Plant Design and Equipment Characteristics - Pilot Plant

BMC has committed to the construction of a new pilot plant, which will be installed at the current Jaburi
plant site. This will allow for treatment of both colluvium and primary vein material through crushing,
along with providing operational efficiencies, including:
improving recovery through more efficient jigging and recovery of finer fractions
eliminating the need for hand-sorting in the coarse material;
increase water recovery reducing make up water requirements
The plant (schematic shown in Figure 17-7) will have the capacity to produce 50 kt per year, with the
key equipment selected for this improvement is the Allmineral jig equipment (Alljig; Figure 17-8).
allmineral is a German company with expertise in providing complete solutions for manganese mines
around the world. The jigs have a proprietary operating system and the main parts will be manufactured
in Europe. The jigging system has strictly controlled material stratification and product discharge
processes. Based on BMC testwork results, three new jigs would be installed the size fractions in the
range of 1 to 10 mm, 10 to 25 mm and 25 to 75 mm.

Source: BMC, 2016
Figure 17-7: Pilot Plant Schematic Flow Diagram
Source: allmineral website
Figure 17-8: Allmineral Jig
The chosen upgrade provides a plug-in solution for increasing capacity at the current Jaburi
processing plant, after the scrubbing and screening processes which is already installed and operating.
A secondary, cone crusher is also included to process the rejects of the coarse material jigging.
Thickening equipment planned for the tailings is forecasted to recover about 90% of the water used,
and reduce significantly the use of the tailings ponds and all the work related to recover these ponds.

The 50 kt operating capacity is based on utilization over in two shifts, 9 months of the year. Key
advantages for the investment in the pilot plant include:
More cost-efficient processing,

o Production capacity for more material with less downtime;
o Elimination of the need for hand sorting.
Environmentally management, allowing recovery of most water used in the process;
Capability to processing primary vein breccia:
o The plant will allow for pilot tests and processing of a diverse style of vein mineralization,
positioning the group for evaluating further scale-up scenarios as resources are defined.
The increased processing capacity will allows BMC with supply manganese in domestic
markets in Brazil, while pursuing opportunities abroad. The capability to supply customers in
key niche markets with its premium high-grade products positions the Company well for future
marketing as it peruses resource development and expansion strategies.
17.5 Consumable Requirements

No chemical reagents are used in the processing.

18 Project Infrastructure
18.1 Infrastructure and Logistic Requirements
18.1.1 On-Site Infrastructure
Plants currently have on-site accommodation for members of the workforce who do not live in the
immediate rural area (Figure 18-1).
Source: BMC, 2016
Figure 18-1: On-site Infrastructure: Jaburi Camp Accommodation
18.1.2 Water Supply

Current water requirements are met under licensed permits from bores, tanks and local streams. The
current consumption is ~50 m 3/h for each plant, which based on utilization equates to ~10,000 m 3 per
month per plant. Current authorization permits allow for 35,000 m 3 per month at for the Jaburi, Plant
and 83,000 m3 per month at Rio Madeira.
18.1.3 Water and Tailings Management

Soil which enters the water through the wash plant circulate is contained in a series of discharge and
settling ponds. The current configuration is illustrated below (Figure 18-2, Figure 18-3, Figure 18-4,
Figure 18-5 and Figure 18-6). Requirements for the Jaburi Pilot Plant expansion have been reviewed,
with forecast requirements for 20,000 m3 per month on two shifts well within extraction limits.

Source: Ausenco, 2015
Figure 18-2: Rio Madeira Plant Water and Tailings Management Schematic

Source: Ausenco, 2015
Figure 18-3: Jaburi Plant Water and Tailings Management Plan
Figure 18-4: Water Tank at the Rio Madeira Plant Site

Source: BMC, 2016

a) Scrubber feed water; b) trommel sprays; c) trommel undersize; d) stabilizing tank; e) pump discharge to settlement ponds
Figure 18-5: Wash Plant Components and Discharge
Source: BMC, 2016
Figure 18-6: Settlement Ponds, with direction of overflow from left to right
18.1.4 Service Roads and Bridges

An existing network of rural roads provides all required access to the extraction sites on the Companys
property (Figure 18-7). Local tracks are constructed on individual properties and where required
bridges and cattle grids are constructed.

Source: BMC, 2016
Figure 18-7: Example of Company Road Improvements
18.1.5 Power Supply and Distribution

The Jaburi plant has a power consumption of 200 kWh and the Rio Madeira plant consumes 300 kWh.
Both plants currently operate using diesel generators to supply the required power. Gravity storage
tank with 6,000 liter capacity are used to supply fuel for power generator and the vehicle fleet. The
pilot plant will consume 800 kWh. To feed this consumption, a connection in 34.5 kVA capacity will be
erected to connect the new plant to one of the main lines feeding Espigo DOeste city. In the case of
future expansions, capacity will be scaled to meet requirements.
18.1.6 Freight
Freight for the Companys products in Brazil is conducted by trucks contracted by the consumers.
Although there are no railways reaching the mine area region, the roads provide reasonable access
and there are multiple trucking companies operating in the area.
BMC continues to investigate competitive logistic arrangements with local carriers to be able to export
its product. The best option to export part of its production is via Manaus Port. This alternative corridor
involves transporting ore from the mine to Porto Velho by trucks (a distance of 550 km), and from Porto
Velho to Manaus Port by barges. For larger tonnages, the alternatives are transporting the ore by
trucks to Porto Velho and by barges to Santarm or Barcarena Port that are able to receive Handmax
and Panamax vessels.

19 Market Studies and Contracts

The Roskill Consulting Group was commissioned to conduct a market review for the Company in
October 2015.
Almost ninety-five percent of the worlds manganese consumption is directed to the steel industry,
which drives manganese ore international benchmark price. The manganese ore is used by the steel
industry to form Mn alloys. Use in batteries represents the second largest market at 2.2% of global
manganese consumption. Agricultural applications account for about 0.6% of global consumption.
Batteries and agriculture are the niche markets which generally require a high grade manganese ore.
The percentage of global manganese consumption attributable to steel has risen somewhat over the
past two decades due to the increased average manganese content of steel. However, global crude
steel production decreased in 2015 (1.71 billion t, down 2.9% on 2014, with global capacity utilization
around 70%). The International Manganese Institute estimates a drop of 0.8% in the global steel
demand in 2016 followed by an increase of 0.4% in 2017.
Until 2015, China was driving the global steel industry. In 2016 to 2017, steel demand in China is
expected to fall, but recover in the rest of the world. In terms of tonnes, Roskill expects an expansion
of global manganese ore consumption of 900ktpy (contained metal by 2020). It is difficult to predict
whether the niche applications will grow by less or more than total manganese ore demand; history
suggests that the growth rate will probably be slightly lower.
Global Manganese Ore Inventory
Manganese ore supply fell in 2015 on lower demand from Mn alloys smelters, being down 20% to 45.9
million wet metric tonnes (wmt). Supply adjustments were made at the end of last year, because of
price falls in November and December. Production dropped in South Africa, China, India, Kazakhstan,
Ukraine, Ghana and Malaysia. Supply-Demand balance in the World was 2,041.9wmt in 2015 and -
130.5wmt at June 2016.
Because of several production cuts announced in 2015/2016, some of the stocks accumulated in 2013-
2015 (mostly at alloy plants) are being consumed in 2016, and the market is becoming more balanced.
Globally, around 12.3 million mt of Mn ore capacity cuts were announced at the end of 2015 and
beginning of 2016, due to low Mn ore prices and high stocks.
Manganese Ore Prices
The most established price series for manganese ore is the South 32 benchmark price. That price
reflects prices for 44-46%Mn high grade lump ore from South 32 Gemco mine in Australia. It has been
published monthly since June 2006 and was published for many years prior to that. Since the end of
2008, a lower grade price series has also been published reflecting prices for semi-carbonate South
African ore containing 36-39% manganese. After reaching bottom-low-level in 2015, around 12.3
million mt of Mn ore capacity cuts were announced globally at the end of 2015 and beginning of 2016.
The combination of announced cuts and rose in demand resulted in prices increased in 1Q2016 and
it is in the level of US$3.64/dmtu CIF China for 44% Mn ore at the time of this writing. (Price chart -
Figure 19-1).

Source: BMC, 2016
Figure 19-1: Manganese Price Chart
Brazils Manganese Industry
There are a number of active manganese mines in Brazil and there is only one integrated producer for
Manganese ore and alloys. The combined manganese ore production capacity is around 3.6 million
mt per year. The majority of the mines are located in Minas Gerais state in the East of the country
(mostly low grade resources), in the Northern state of Par (mid-high grade) and in the West (high-
grade ore). The production capacity is larger than local demand, with excess capacity going to exports.
In 2015 the Brazils Mn ore production was 2.6 million wmt and 2.15 million wmt were exported (58%
to China).
Agriculture is the second largest consumer of manganese ore in Brazil. According to Agroconsult
estimation, the agriculture market in Brazil demanded 80,000 thousand tons of Mn ore in 2014. In the
past five years this market has grown at annual rate of 7.8%. In the next decade, agriculture and cattle
expansion together with the improvement of technological levels at farms would sustain increase of
about 9.4 thousand tons of Mn.
Overall manganese ore consumption in Brazil is expected to drop this year because the crude steel
production of 33 million ton in 2015 seems to be slowing in 2016, with production between January
and May 2016 off 14% from the same period last year, to 12.3 million mt. Demand for steel has been
affected by Brazils economic issues and the 26% fall in automotive production in the opening four
months of 2016, according to ABRAFE (Brazilian Ferroalloys Association).
There are eight different companies producing manganese alloys in Brazil with capacity for 490,000
mtpy but some smelters still have some of their furnaces idled in 2016. Brazilian smelters cut
production by 14% per year on average between 2012 and 2015. The total production from Jan to May
2016 was 98kt (100kt in the same period of 2015).
19.1 Contracts and Status

BMC is known in the market as a very high grade producer and it is recognized as an important supplier
for the production of high carbon ferromanganese that demands high quality ore. Few producers in
Brazil can supply ore with similar quality, which positions BMC as an important player in the
manganese industry.

In 2016 the Company undertook a considerable effort in marketing its past inventory (circa 20 thousand
tonnes) and assessing the options for this years production capacity (another 30 thousand tonnes).
Around 60% of this production will be sold in the local market and 40% will be exported. In the local
market, 80% is being sold for Mn alloy producers, and the remaining for niche producers in the
Fertilizer business. The Company is also engaging in negotiation with other niche producers in the
welding and battery markets. In terms of prices, the businesses in the local market were concluded
with an average Premium of 20% over the Mn international benchmark prices, on a CIF basis. Similar
conditions are expected for exports to niche markets, and something between 5 to 10% premium over
the benchmarking for exports to alloy producers.

20 Environmental Studies, Permitting and Social or

Community Impact
20.1 Required Permits and Status
BMC has operated its processing and extraction activities in line with the requirements outlined in
Section 4.4.2. A current list of relevant licenses is presented in Table 20-1.
Table 20-1: BMC Permit and License Status

Agency License No. Activity
Installation license / Licena de Instalao 137250 Manganese ore extraction
Operating license / Licena de Operao 137242 DNPM Claim 886304/2012
Preliminary license / Licena Previa 139,136
Underground water extraction
Installation license / Licena de Instalao 139137
Jaburi Plant
Operating license / Licena de Operao 139,138
Installation license / Licena de Instalao 137,244
Mining and beneficiation of manganese
Operating license / Licena de Operao 137245
DNPM claim 886643/2008
Operating license / Licena de Operao 139,312
Installation license / Licena de Instalao 137261 Water Gallery for Rio Madeira Plant
SEDAM
Operating license / Licena de Operao 133016 Mining and beneficiation of manganese, DNPM Claim 886321/2005
Operating license / Licena de Operao 139 057 Manganese ore evaluation DNPM Claim 886114/2012
Preliminary license / Licena de Operao 140 062
Open pit extraction and processing of manganese ore
Installation license / Licena de Instalao 140 063
DNPM Claim 886262/2012
Operating license / Licena de Operao 140064
284/2015
Grant Agreement 192/2015 Water catchment for Plant Madeira River
(Termo de Outorga) 210/2015
198/2016 Water uptake to Jaburi Plant
009/2016
Mining and manganese ore beneficiation
008/2016
(Certido de Viabilidade Ambiental) 024/2016 Stockpiling and Sample Preparation
SEMAME
Environmental Viability Certificate 060/2016
061/2016 Exploration, Mining and manganese ore beneficiation
059/2016
Source: BMC, 2016
20.2 Environmental Study Results

BMC engaged environmental group URS Brasil to undertake an environmental audit of the Jaburi plant
prior to acquisition of the project from Eletroligas. The Company has undertaken safety and
environmental improvements at both the Jaburi and Rio Madeira Plants to implement
recommendations.
The Company monitors water quality, rainfall, and vegetation regrowth. Detailed environmental studies
will be conducted in parallel with feasibility assessment of scaled up mining or processing activities in
line with State and Federal requirements.
20.3 Social and Community

The Company has established a Corporate Social Responsibility (CSR) program, staffed by a
dedicated in-house team and supported by an external consultancy (Mineral Engenharia E Meio
Ambiente Mineral). Mineral conducted a comprehensive on site analysis of the environment and
community in 2014 when group assumed responsibility for the licenses. A strategic actions plan was
developed for in in-house staff, supported by a training program. The program is focused on

developing and open and transparent relationship with all community stakeholders within the township
of Espigo DOeste and the surrounding rural area encompassing its broad tenement package.
The CSR team performs a variety of tasks
Establishing initial land access for the exploration team

Negotiating mining agreements for production sites
Informing community groups in general about the mineral industry and the Companys
processes and products.
This CSR team works through a combination of one on one meetings, group presentations, and
participation in community events (Figure 20-1). The Company has produced a series of information
pamphlets which describe the stages of exploration and mining and BMCs commitment to
environmental rehabilitation processes. The Company is strongly focused on promoting an internal
culture among its employees centered on its moto of Respect Connect Prosper. Employees have
become BMC ambassadors to the community and volunteer services in several community projects
that the CSR team has organized.

Source: BMC, 2016

Top: BMC Staff introducing the company to rural landowners and community meetings.
Center: BMC company geologists participating in community education programs.
Bottom: BMC display booths at Expoeste (Fair of the Espigo DOeste township).
Figure 20-1: Corporate Social Responsibility Program
20.4 Reclamation Measures during Operations and Project Closure

All extraction sites undergo a reclamation process and a dedicated environmental team is established
to oversee the return of sites to productive pasture. Following replacement of the overburden and
topsoil, the area is fenced off and reseeded. Stabilization measures are put in place to prevent erosion

on sloping ground. Areas are typically left for a full season for root systems to become full established,
retuning the area to a condition suitable for grazing (Figure 20-2).
Figure 20-2: Examples of colluvial mining areas being reseeded and returned to pasture

21 Capital and Operating Costs

Until resources and reserves are established and a feasibility study has been completed, the Company
is operating on a trial basis while building relationships with various customers.

22 Economic Analysis
An economic analysis will be conducted at the point when resources and reserves are established.

23 Adjacent Properties
There are no active large-scale manganese exploration projects adjacent to BMC. Surrounding land
claims are held by small exploration companies or private individuals. There is one dolomitic limestone
quarry in the region operated by Companhia de Minerao de Rondnia S.a. BMC is pioneering
exploration for hydrothermal manganese, gold and tin in this particular region.

24 Other Relevant Data and Information

There is no other information being presented.

25 Interpretation and Conclusions

25.1 Conclusions
The BMC Project hosts a newly recognized style of high-quality hydrothermal manganese
oxide mineralization in northwest Brazil. Exploration drilling and trenching has shown that the
colluvial mineralization in the district can be traced to structurally controlled vein, breccia and
stockwork zones in the Proterozoic host rock. Aerial geophysics has identified 211 strike
kilometers of structure along which 62 areas of enhanced response have been defined for
follow-up activities.
The vein positions are typically concealed beneath a shallow cover of soil and colluvium.
Ground geophysical trials and aerial geophysical surveys have shown that structural trends
can be effectively mapped in the poorly exposed terrain. Electrical methods (conductivity and
induced polarization techniques) are most effective in detecting mineralization.
Reconnaissance drilling has confirmed the presence of multiple mineralized structural trends
across the Project area, with dominant east to east-north-east trends, and subsidiary
orientations to the north and north-west. Further ground geophysics will assist in developing
prospect-scale targets for thickened individual vein zones, breccias and vein arrays. Ongoing
trenching will provide a cost-effective method to prioritize these targets for exploration and
resource definition drilling programs.
The in situ grade of the primary manganese mineralization is proportional to the abundance
of alumino-silicate inclusions in the host rock. High quality products in deposit analogues can
be produced where the silicate gangue is separated from the high-tenor manganese oxide
matrix. Gravity concentrate through jigging and heavy liquid separation techniques are
traditionally applied.
Trial processing has been conducted on a number of bedrock sources. Breccia mineralization
at Dnei was successfully upgraded to a high-quality product, where the clay-altered granite
was effectively separated from the manganese oxides through the existing wash plants. Hard-
rock breccias with quartz or fresh granite will require crushing and comminution. Further
metallurgical testwork and pilot processing will be conducted on a range of mineralization
styles.
The Company has maintained a production profile utilizing its wash plants and is expanding
on relationships with niche customers in the fertilizer, specialty steel and battery industries.
Production capacity is being increased by processing improvements which include: 1) dry-
screening techniques to concentrate colluvial feed sources at sites of extraction; 2) installation
of a 50kta pilot plant in late 2016 2017, which will allow for effective treatment of hard-rock
breccia vein material.
Targets for additional commodities are emerging through stream and soil geochemical
programs.
o Early mapping supports an orogenic model for gold detected in pan concentrate programs
in the central portion of the Project area. Soil surveys are in progress to develop targets
for trenching and drilling.
o Cassiterite has been detected in some drainage systems adjacent to fractionated granites.
Catchment areas require mapping to detect possible sources.

Some discrete point source anomalies are apparent in geophysical datasets. These warrant
evaluation given the presence of diamondiferous kimberlites in the broader district. Areally-
restricted ultramafic plugs and diatremes may be recessively weathered in the tropical
environment, requiring higher-resolution geochemical surveys, trenching and/or
reconnaissance drilling to effectively test.
Access to rural properties for exploration and mining is successfully facilitated by a dedicated
community relations team. The Company has in-house capabilities for liaison with government
agencies on permitting, and an established environmental management program.
25.2 Risks
Economic Risk: Brazil is the worlds ninth largest economy, with a GDP of US$1.7 trillion.
Brazil's per capita GDP is lower than Chiles, but higher than fellow BRICS members China
and India. Brazils economy has recently retracted, but is expected to return to positive growth
in 2017. The World Economic Forum Global Competitiveness Index for 2015-16 ranked Brazil
75 out of 140 countries and the World Bank's 2015 rankings for 'ease of doing business' placed
Brazil 116 out of 189. Overall levels in foreign investment in recent years have been in the
order of $60-70 billion annually. With respect to the mineral industry, Brazil ranked 52 on
Investment Attractiveness Index among the 122 countries in the Fraser Institutes Survey of
Mining Companies 2014. (Jackson, 2014; KPMG, 2015, The World Factbook, 2015-16). The
country has both Brazilian and foreign companies engaged in mineral exploration and
production activities.
Political and Legislative: Brazil has democratic system of government. The Mining Code
(Act No. 227) of 1967 governs resource activities in Brazil and was aimed at providing an
impetus to foreign investment in the mining sector. Successive amendments to the constitution
have now made it possible for foreign entities to have 100 percent ownership of Brazilian
companies. A plan for a new mining policy was announced in 2009. In June 2013, the Brazilian
Government submitted a bill of law (PL 5807) to the National Congress that included provision
for an increase in royalties to 4% and an auction process for new licenses. It was proposed in
a climate of stronger commodity prices, and opposition to the bill saw it rejected. The countrys
leading coalition has recently changed and the country continues to operate under the original
legislation.
Legal: In its acquisition of the Project, BMC assumed responsibility for any legal, labour,
environmental and tax matters for historical operations. The Company has taken and
continues to take all necessary and available steps to comply with relevant laws and
regulations, with known contingencies disclosed in Cancana's financial statements.
Operating Climate and Seasonality: Rainfall is concentrated over the summer months in the
Project area. Exploration activities can be conducted throughout the year, although some
geophysical activities and geochemical activities are better-suited to seasonal conditions.
Peak production for colluvial extraction and processing through wash plants is traditionally
concentrated in the dry season. Mining and processing can operate through the year, although
access to some sites would require surfacing of local access tracks to make them suitable for
all-weather use. Under-cover RoM pads provide an opportunity to stockpile material to mitigate
against some of the seasonal effects.

Security: Like many places, crime in Brazil tends to be more concentrated in areas where
drug trafficking, drug and alcohol use, or social inequality is marked. The region hosting the
Project area is a more recently settled part of the country, with many cities established in the
1970s-1980s. It lacks the favelas which are better known in larger and longer established
cities. Various levels of the countrys police force are present in the region and administer law
and order (Polcia Federal, Polcia Rodoviria Federal, Polcia Militar, Polcia Civil). For the
stage of the Companys activities, there are no additional measures required beyond routine
precautions. The Companys facilities are secured by lockable gates and monitored.
Technical. Modern exploration has been initiated over the last two years in the Project area.
Various targets have been developed by geophysical and geochemical techniques. Note that
exploration targets are preliminary in nature and not conclusive evidence of the likelihood or
scale of a mineral deposit. However, the definition of a large number of unexplored anomalies
illustrated a robust exploration opportunity in an area with multiple styles of mineralization now
being defined and production is being trialed. Manganese is an industrial mineral, where one
of the risks can be in developing markets for a product, where different consumers often have
specific chemical requirements. The Companys production profile has mitigating this risk by
establishing the quality of the product with various customers. Data quality and procedures
can be a technical risk for projects, (particularly where there are large amounts of historical
data). All data is being generated to modern standards pursuant to NI 43-101 reporting
requirements. SRK has inspected the site and collaborated with the technical group on
systems and procedures.
Social and Community: The area has a large number of rural landholdings. Some properties
are effectively subsistence or hobby farms while others are well-organized commercial
enterprises. While resource companies have rights of access, BMC has only been conducting
its exploration and extraction activities with the agreement of the landholders. Most
landholders are supportive of development, and receive a direct benefit through royalties if
targets proceed to production. The Companys licenses do not overlap indigenous lands. The
Company is managing liaison with the community through its CSR team and following the
comprehensive 2014 site analysis of the environment and community stakeholders conducted
by the consultancy Mineral Engenharia E Meio Ambiente (Mineral).
Permitting: The Fraser Institute last release survey of mining companies and jurisdictions
notes that while Brazil has Federal legislation, significant authority is devolved to the State
Agencies, and permitting delays are experienced in some parts of the country (Jackson, 2014).
BMC already has various permits for its extraction activities and processing plants. New
development areas will require additional permits. The Company maintains regular contact
with SEDAM and the DNPM to provide briefings on its activities.
25.3 Foreseeable Impacts of Risks

At this early stage of exploration, it is difficult to specifically predict and quantify a risk until such time
that the location of advanced resources is understood. The Company has successfully facilitated
required permitting for expanding capacity on its current operations. These activities require personnel
beyond what might normally be required if the focus was solely on exploration. The Company regards
this as a value-adding investment, allowing it to be optimally positioned for positive exploration
outcomes.

25.4 Opportunities
BMCs high-quality manganese oxide product is among the highest grade in the world, which allows it
to evaluate applications in niche markets at premium prices. Trial production de-risks uncertainty in
marketing that can sometime accompany industrial minerals products. Its current commitment to
production allows it to develop customer relations and market share at a time when various
manganese projects have scaled back or closed operations.
The recognition of targets for additional high-value commodities may add significant value once the
commercial potential of these commodities is better understood.
The Companys proven approach to community relations and environmental management allows it to
build its reputation and a committed and capable organization for any new business opportunities that
may arise.

26 Recommendations
26.1 Recommended Work Programs and Costs
26.1.1 Work Program
Current priorities are to continue with definition of targets and complete a phase of reconnaissance
testing (Phase I) as a prelude to infill resource definition drilling (Phase II). A selection of vein targets
will be tested for infill trenching and drilling to evaluate as feed sources for the pilot plant and to better
understand variability.
Including activities in the current budget year, the immediate recommended programs are listed below.
Manganese Oxide Resource Definition
Extend reconnaissance phase of exploration trenching and drilling over all target corridors
defined from the aerial geophysical program.
Expand pre-production activities over colluvial corridors to define feed sources for pilot plant.
Conduct infill trenching or drilling program over five initial vein target corridors to characterize
potential vein feed sources for pilot plant.
Purchase Induced Polarization survey equipment to develop in-house capability for
conducting geophysical surveys to better target geologically blind thickened vein arrays and
improve prospect-scale controls at a higher resolution to the aerial survey.
Subject to reconnaissance drilling and geophysical survey outcomes, scope requirements for
a more extensive infill resource definition drill programs to identify feed sources which can
expand operations beyond the pilot plant capacity.
Multi-commodity Target Definition
Complete reconnaissance pan-concentrate program in streams to identify catchments with

gold and tin anomalies.
Infill areas with gold and tin anomalies with soil surveys, to define areas sourcing the
mineralization.
Evaluate multicommodity targets with initial programs of trenching.
Contingent upon positive trench results, define a reconnaissance drilling program once targets
have been ranked and prioritized.
Monitor heavy mineral fractions for any kimberlite indicator minerals as a first phase of
evaluation. Scope requirements for more detailed surveys targeting localized point-source
anomalies, given the potential a more subtle expression due to weathering of labile minerals.

26.1.2 Costs
Cost estimates of the work program phases are provided in Table 26-1.
Table 26-1: Summary of Costs for Recommended Work (US$)

PHASE I: 3-6 MONTHS
Reconnaissance Manganese Exploration
Trenching and Earthworks $200,000 - $300,000
Advanced Sampling (trenches, drill core, production) $200,000 - $300,000
Geophysical equipment purchase $100,000 - $200,000
Total (range) $500,000 - $800,000
Reconnaissance Multi-commodity Exploration

Surface Sampling (soils, rock chips and pan concentrates) $50,000 - $100,000
Advanced Sampling (trenching) $50,000 - $100,000
Total (range) $100,000 - $200,000
PHASE II: 6 - 12 MONTHS

Manganese Drilling
Drilling $2,000,000 - $3,000,000

Technical Studies $100,000 $200,000
Total (range) $2,700,000 - $4,000,000
Multi-commodity Drilling
Drilling $500,000 - $1,000,000
Total (range) $700,000 - $1,400,000

27 References
Ausenco (2015) Brazil Manganese Corporation, Brazil Manganese Corporation. Operations Review
and Site Visit Report Tailings and Water Management, Ausenco report. 4011-01-RPT-01
Allaby M (2015) How soils form and age. Timberpress Blog, 2015:
http://www.timberpress.com/blog/2015/07/how-soils-form-and-age/
Allmineral (2015) Brazil Manganese Corporation (BMC) for American Metallurgical Lab. Final Report
Bettencourt et al (2015) Metallogenetic systems associated with granitoid magmatism in the

Amazonian Craton: An overview of the present level of understanding and exploration significance.
Journal of South American Earth Sciences 68, 1-28
Beale J (2015) Manganese Evaluation Report. Project: # 14019. Laboratory Test Work.
Characterization, Size Classification, Wet Gravity, Grindability, Mineralogy. Prepared for: Brazil
Manganese Corporation. Report by American Metallurgical Lab LLC.
CIM (2014). Canadian Institute of Mining, Metallurgy and Petroleum Standards on Mineral Resources
and Reserves: Definitions and Guidelines, May 10, 2014.
CGG (2015) Geophysical survey report airborne magnetic and HELITEM MULTIPULSE Survey.
Project AIRR214021. Brasil Mangans Corporation Minerao S.A.
Cooper M (2014) Espigo do Oeste Manganese Project Rondnia, Brazil. Site Visit Report. Report
No: CG-BMJV-0414-01.
Dardenne MA and Schobbenhaus C (2003) Chapter 7: Depsitos Minerais no Tempo Geolgico e

pocas Metalogenticas Mineral Deposits of Brazil: Distribution in Time, Provinces and
Metallogenic Epochs. In Geologia, Tectnica e Recursos Minerais do Brasil. LA Bizzi, C
Schobbenhaus, RM Vidotti, JH Gonalves (eds.) CPRM, Braslia, 2003
Gibson SA, Thompson RN, Leonardos OH, Dickin AP and Mitchell JG (1995) The Late Cretaceous
Impact of the Trindade Mantle Plume: Evidence from Large-volume, Mafic, Potassic Magmatism
in SE Brazil. Journal of Petrology 36, 89-229
Harper J (2013a) M.L.B. de Nogueira Minerao Manganese Properties Rondnia, Brazil. Technical
Report prepared for Cancana Resource Corp.
Harper J (2013b) Rio Madeira Comrcio Importao e Exportao de Minrios LTDA Manganese
Properties Rondnia, Brazil. Technical Report prepared for Cancana Resource Corp.
Hunt L, Stachela T, Mortona R, Grtterc H and Creasera RA (2009) The Carolina kimberlite, Brazil -
Insights into an unconventional diamond deposit. Lithos 112, 843-851.
Hunt L (2011) Conditions of Diamond Formation and Preservation from On- and Off-Craton Settings.
Thesis submitted to the Faculty of Graduate Studies and Research in partial fulfillment of the
requirements for the degree of Doctor of Philosophy. University of Alberta
ISO (1984) International Standard ISO 4296/1. Manganese ores - Sampling - Part 1: Increment
sampling. First edition - 1984-06-01. INTERNATIONAL ORGANIZATION FOR
STANDARDIZATION.

Jackson T (2014) Fraser Institute Annual Survey of Mining Companies. 2014.

https://www.fraserinstitute.org
Jones S (2011) Proterozoic deformation in the east Pilbara Craton and tectonic setting of fault-hosted
manganese at the Woodie Woodie mine. Australian Journal of Earth Sciences 58, 639-673.
Jones S, McNaughton NJ, Grguric B (2014) Structural controls and timing of fault-hosted manganese
at Woodie Woodie, East Pilbara, Western Australia. Ore Geology Reviews 50, 5282.
KPMG (2015) KPMG Global Mining Institute: Brazil: Country Mining Guide 2015. KPMG International.
https://assets.kpmg.com/content/dam/kpmg/pdf/2016/01/brazil-mining-country-guide.pdf
Lorenz and Kurszlaukis (2007) Root zone processes in the phreatomagmatic pipe emplacement model
and consequences for the evolution of maar-diatreme volcanoes. Journal of Volcanology and
Geothermal Research 159, 432.
McArthur A (2014) Rio Madeira & Eletroligas Stockpile Sampling Exercise. Internal BMC progress
report
Quadros MLES, and Rizzotto GJ (2007) Geologia e Recursos Minerais Do Estado De Rondonia: Texto
Explicativo Do Mapa Geologico e de Recursos Minerais Do Estado De Rondonia : Escala
1:1.000.000. Porto Velho: CPRM - Servio Geologico do Brasil.
Masun K and Scott Smith BH (2006) The Pimenta Bueno Kimberlite Field, Rndonia, Brazil: evidence
for tuffisitic kimberlite. Long Abstracts. 2006 Kimberlite Emplacement Workshop. Saskatoon,
Canada September7-12th, 2006.
Masun K and Scott Smith BH (2008) The Pimenta Bueno kimberlite field, Rondnia, Brazil: Tuffisitic
kimberlite and transitional textures. Journal of Volcanology and Geothermal Research 174, 81
89.
Patsias J and Imeson D (2015) An Investigation into The Characterization Of Four Samples prepared
for Brazil Manganese Corporation. Project 15011-001 Final Report SGS Canada Inc.
Robert F, Brommecker R, Bourne BT, Dobak PJ, McEwan CJ Rowe RR Zhou X (2007) Models and
Exploration Methods for Major Gold Deposit Types. In Milkereit B. (ed) "Proceedings of Exploration
07: Fifth Decennial International Conference on Mineral Exploration" p. 691-711
Sinclair WD (1996) Vein-Stockwork tin-tungsten. In Geology of Canadian Mineral Deposit Types, In

Eckstrand OR, Sinclair WD, Thorpe RI (eds) Geological Survey of Canada, Geology of Canada,
No. 8, p. 409-420.Taylor R (1979) Geology of tin deposits. Eslevier Scientific Publishing Company.
Developments in Economic Geology 11.
The World Factbook (2015-16). Washington, DC: Central Intelligence Agency, 2016.
https://www.cia.gov/library/publications/the-world-factbook/index.html.
Teague A (2015) Testwork Report - American Metallurgical Laboratory. IPJ Amenability Testwork.
Report No. T1370.
Wit M de (2007) Identification of Global Diamond Metallogenic Clusters to Assist Exploration. The
Southern African Institute of Mining and Metallurgy. Diamonds Source to Use 2010.

28 Glossary
The Mineral Resources and Mineral Reserves have been classified according to CIM (CIM, 2014).
Accordingly, the Resources have been classified as Measured, Indicated or Inferred, the Reserves
have been classified as Proven, and Probable based on the Measured and Indicated Resources as
defined below.
28.1 Mineral Resources

A Mineral Resource is a concentration or occurrence of solid material of economic interest in or on
the Earths crust in such form, grade or quality and quantity that there are reasonable prospects for
eventual economic extraction. The location, quantity, grade or quality, continuity and other geological
characteristics of a Mineral Resource are known, estimated or interpreted from specific geological
evidence and knowledge, including sampling.
An Inferred Mineral Resource is that part of a Mineral Resource for which quantity and grade or
quality are estimated on the basis of limited geological evidence and sampling. Geological evidence
is sufficient to imply but not verify geological and grade or quality continuity. An Inferred Mineral
Resource has a lower level of confidence than that applying to an Indicated Mineral Resource and
must not be converted to a Mineral Reserve. It is reasonably expected that the majority of Inferred
Mineral Resources could be upgraded to Indicated Mineral Resources with continued exploration.
An Indicated Mineral Resource is that part of a Mineral Resource for which quantity, grade or quality,
densities, shape and physical characteristics are estimated with sufficient confidence to allow the
application of Modifying Factors in sufficient detail to support mine planning and evaluation of the
economic viability of the deposit. Geological evidence is derived from adequately detailed and reliable
exploration, sampling and testing and is sufficient to assume geological and grade or quality continuity
between points of observation. An Indicated Mineral Resource has a lower level of confidence than
that applying to a Measured Mineral Resource and may only be converted to a Probable Mineral
Reserve.
A Measured Mineral Resource is that part of a Mineral Resource for which quantity, grade or quality,
densities, shape, and physical characteristics are estimated with confidence sufficient to allow the
application of Modifying Factors to support detailed mine planning and final evaluation of the economic
viability of the deposit. Geological evidence is derived from detailed and reliable exploration, sampling
and testing and is sufficient to confirm geological and grade or quality continuity between points of
observation. A Measured Mineral Resource has a higher level of confidence than that applying to
either an Indicated Mineral Resource or an Inferred Mineral Resource. It may be converted to a Proven
Mineral Reserve or to a Probable Mineral Reserve.
28.2 Mineral Reserves

A Mineral Reserve is the economically mineable part of a Measured and/or Indicated Mineral
Resource. It includes diluting materials and allowances for losses, which may occur when the material
is mined or extracted and is defined by studies at Pre-Feasibility or Feasibility level as appropriate that
include application of Modifying Factors. Such studies demonstrate that, at the time of reporting,
extraction could reasonably be justified.

The reference point at which Mineral Reserves are defined, usually the point where the ore is delivered
to the processing plant, must be stated. It is important that, in all situations where the reference point
is different, such as for a saleable product, a clarifying statement is included to ensure that the reader
is fully informed as to what is being reported. The public disclosure of a Mineral Reserve must be
demonstrated by a Pre-Feasibility Study or Feasibility Study.
A Probable Mineral Reserve is the economically mineable part of an Indicated, and in some
circumstances, a Measured Mineral Resource. The confidence in the Modifying Factors applying to a
Probable Mineral Reserve is lower than that applying to a Proven Mineral Reserve.
A Proven Mineral Reserve is the economically mineable part of a Measured Mineral Resource. A
Proven Mineral Reserve implies a high degree of confidence in the Modifying Factors.
28.3 Definition of Terms

The following general mining terms may be used in this report.
Table 28-1: Definition of Terms

Term Definition
Assay The chemical analysis of mineral samples to determine the metal content.
Capital Expenditure All other expenditures not classified as operating costs.
Composite Combining more than one sample result to give an average result over a larger
distance.
Concentrate A metal-rich product resulting from a mineral enrichment process such as gravity
concentration or flotation, in which most of the desired mineral has been
separated from the waste material in the ore.
Crushing Initial process of reducing ore particle size to render it more amenable for further
processing.
Cut-off Grade (CoG) The grade of mineralized rock, which determines as to whether or not it is
economic to recover its gold content by further concentration.
Dilution Waste, which is unavoidably mined with ore.
Dip Angle of inclination of a geological feature/rock from the horizontal.
Fault The surface of a fracture along which movement has occurred.
Footwall The underlying side of an orebody or stope.
Gangue Non-valuable components of the ore.
Grade The measure of concentration of gold within mineralized rock.
Hangingwall The overlying side of an orebody or slope.
Haulage A horizontal underground excavation which is used to transport mined ore.
Hydrocyclone A process whereby material is graded according to size by exploiting centrifugal
forces of particulate materials.
Igneous Primary crystalline rock formed by the solidification of magma.
Kriging An interpolation method of assigning values from samples to blocks that
minimizes the estimation error.
Level Horizontal tunnel the primary purpose is the transportation of personnel and
materials.
Lithological Geological description pertaining to different rock types.
LoM Plans Life-of-Mine plans.
LRP Long Range Plan.
Material Properties Mine properties.
Milling A general term used to describe the process in which the ore is crushed and
ground and subjected to physical or chemical treatment to extract the valuable
metals to a concentrate or finished product.
Mineral/Mining Lease A lease area for which mineral rights are held.
Mining Assets The Material Properties and Significant Exploration Properties.
Ongoing Capital Capital estimates of a routine nature, which is necessary for sustaining
operations.
Ore Reserve See Mineral Reserve.

Term Definition
Pillar Rock left behind to help support the excavations in an underground mine.
RoM Run-of-Mine.
Sedimentary Pertaining to rocks formed by the accumulation of sediments, formed by the
erosion of other rocks.
Shaft An opening cut downwards from the surface for transporting personnel,
equipment, supplies, ore and waste.
Sill A thin, tabular, horizontal to sub-horizontal body of igneous rock formed by the
injection of magma into planar zones of weakness.
Smelting A high temperature pyrometallurgical operation conducted in a furnace, in which
the valuable metal is collected to a molten matte or dor phase and separated
from the gangue components that accumulate in a less dense molten slag phase.
Stope Underground void created by mining.
Stratigraphy The study of stratified rocks in terms of time and space.
Strike Direction of line formed by the intersection of strata surfaces with the horizontal
plane, always perpendicular to the dip direction.
Sulfide A sulfur bearing mineral.
Tailings Finely ground waste rock from which valuable minerals or metals have been
extracted.
Thickening The process of concentrating solid particles in suspension.
Total Expenditure All expenditures including those of an operating and capital nature.
Variogram A statistical representation of the characteristics (usually grade).
28.4 Abbreviations
The following abbreviations may be used in this report.
Table 28-2: Abbreviations

Abbreviation Unit or Term
A ampere
AA atomic absorption
A/m2 amperes per square meter
ANFO ammonium nitrate fuel oil
Ag silver
Au gold
AuEq gold equivalent grade
C degrees Centigrade
CCD counter-current decantation
CIL carbon-in-leach
CoG cut-off grade
cm centimeter
cm2 square centimeter
cm3 cubic centimeter
cfm cubic feet per minute
ConfC confidence code
CRec core recovery
CSS closed-side setting
CTW calculated true width
degree (degrees)
dia. diameter
EIS Environmental Impact Statement
EMP Environmental Management Plan
FA fire assay
ft foot (feet)
ft2 square foot (feet)
ft3 cubic foot (feet)
g gram


gal gallon
g/L gram per liter
g-mol gram-mole
gpm gallons per minute
g/t grams per tonne
ha hectares
HDPE Height Density Polyethylene
hp horsepower
HTW horizontal true width
ICP induced couple plasma
ID2 inverse-distance squared
ID3 inverse-distance cubed
IFC International Finance Corporation
ILS Intermediate Leach Solution
kA kiloamperes
kg kilograms
km kilometer
km2 square kilometer
koz thousand troy ounce
kt thousand tonnes
kt/d thousand tonnes per day
kt/y thousand tonnes per year
kV kilovolt
kW kilowatt
kWh kilowatt-hour
kWh/t kilowatt-hour per metric tonne
L liter
L/sec liters per second
L/sec/m liters per second per meter
lb pound
LHD Long-Haul Dump truck
LLDDP Linear Low Density Polyethylene Plastic
LOI Loss On Ignition
LoM Life-of-Mine
m meter
m2 square meter
m3 cubic meter
masl meters above sea level
MARN Ministry of the Environment and Natural Resources
MDA Mine Development Associates
mg/L milligrams/liter
mm millimeter
mm2 square millimeter
mm3 cubic millimeter
MME Mine & Mill Engineering
Moz million troy ounces
Mt million tonnes
MTW measured true width
MW million watts
m.y. million years
NGO non-governmental organization
NI 43-101 Canadian National Instrument 43-101
OSC Ontario Securities Commission
oz troy ounce
% percent
PLC Programmable Logic Controller
PLS Pregnant Leach Solution
PMF probable maximum flood
ppb parts per billion


ppm parts per million
QA/QC Quality Assurance/Quality Control
RC rotary circulation drilling
RoM Run-of-Mine
RQD Rock Quality Description
SEC U.S. Securities & Exchange Commission
sec second
SG specific gravity
SPT standard penetration testing
st short ton (2,000 pounds)
t tonne (metric ton) (2,204.6 pounds)
t/h tonnes per hour
t/d tonnes per day
t/y tonnes per year
TSF tailings storage facility
TSP total suspended particulates
m micron or microns
V volts
VFD variable frequency drive
W watt
XRD x-ray diffraction
y year

NI 43-101 Technical Report BMC Project, Rondnia, Brazil Appendices
Appendices

NI 43-101 Technical Report BMC Project, Rondnia, Brazil Appendices
Appendix A: Certificates of Qualified Persons

SRK Consulting (US) Inc.
5250 Neil Road, Suite 300
Reno, Nevada 89502
T: (775) 828-6800
F: (775) 828-6820
reno@srk.com
www.srk.com
CERTIFICATE OF QUALIFIED PERSON
I, J.B. Pennington, M.Sc., C.P.G., do hereby certify that:

1. I am Principal Mining Geologist of SRK Consulting (U.S.), Inc., 5250 Neil Road, Suite 300, Reno,
Nevada 89502.
2. This certificate applies to the technical report titled NI 43-101 Technical Report BMC Manganese, Gold,
Tin Project Rondonia, NW Brazil with an Effective Date of August 26, 2016 (the Technical Report).
3. I graduated with a Bachelor of Science Degree in Geology from Tulane University, New Orleans, La.,
USA; May 1985; and a Master of Science Degree in Geology from Tulane University, New Orleans, La.,
USA; May 1987. I am a Certified Professional Geologist through membership in the American Institute of
Professional Geologists, C.P.G. #11245. I have been employed as a geologist in the mining and mineral
exploration business, continuously, for the past 30 years, since my undergraduate graduation from
university. My relevant experience for the purpose of the Technical Report is:
Project Geologist, Archaen gold exploration with Freeport-McMoRan Australia Ltd. Perth Australia,
1987-1989;
Exploration Geologist, polymetallic regional exploration, Freeport-McMoRan Inc; Papua, Indonesia,
1990-1994;
Chief Mine Geologist, mine geology and resource estimation, Grasberg Cu-Au Deposit, Freeport-
McMoRan Inc, Papua, Indonesia 1995-1998;
Corporate Strategic Planning: Geology and Resources, Freeport-McMoRan Inc., New Orleans, LA.,
1999;
Independent Consultant: Geology, Steamboat Springs, CO., 2000;
Senior Geologist, environmental geology and mine closure, MWH Consulting, Inc., Steamboat
Springs, CO., 2000-2003;
Principal Mining Geologist and Practice Leader, precious and base metal exploration, resource
modeling, and mine development, SRK Consulting (U.S.), Inc., 2004 to present;
Experience in the above positions working with, reviewing and conducting resource estimation and
feasibility studies in concert with mining and process engineers; and
As a consultant, I have participated in the preparation of NI 43-101 Technical reports from 2006-
2016.
4. I have read the definition of qualified person set out in National Instrument 43-101 (NI 43-101) and
certify that by reason of my education, affiliation with a professional association (as defined in NI 43-101)
and past relevant work experience, I fulfill the requirements to be a qualified person for the purposes of
NI 43-101.
5. I visited the BMC Project on November 30, 2015 for six days.
6. I am responsible for all material provided in this Technical Report.
7. I am independent of the issuer applying all of the tests in section 1.5 of NI 43-101.
8. I have not had prior involvement with the property that is the subject of the Technical Report. .
9. I have read NI 43-101 and Form 43-101F1 and the sections of the Technical Report I am responsible for
and they have been prepared in compliance with that instrument and form.
U.S. Offices: Canadian Offices: Group Offices:

Anchorage 907.677.3520 Saskatoon 306.955.4778 Africa
Clovis 559.452.0182 Sudbury 705.682.3270 Asia
Denver 303.985.1333 Toronto 416.601.1445 Australia
Elko 775.753.4151 Vancouver 604.681.4196 Europe
Fort Collins 970.407.8302 Yellowknife 867.873.8670 North America
Reno 775.828.6800 South America
Tucson 520.544.3688
SRK Consulting (U.S.), Inc. Page 2
10. As of the aforementioned Effective Date, to the best of my knowledge, information and belief, the
sections of the Technical Report I am responsible for contains all scientific and technical information that
is required to be disclosed to make the Technical Report not misleading.
Dated this 26 Day of August, 2016.
--Signed--
_______________________________ C.P.G. # 11245
J.B. Pennington, M.Sc., C.P.G.
QP_Cert_Pennington_481000-010_jbp.docx

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BMC Manganese, Gold, Tin Project

Report Prepared for

CANCANA RESOURCES CORP.

SRK Consulting (U.S.), Inc.

SRK Project Number: 481000.010

Signed by Qualified Persons:

JBP/SH FINAL_NI43_101_TR_BMC_Property_Report_481000.010_20160826.docx August 2016

5.5 Infrastructure Availability and Sources.............................................................................................. 16

JBP/SH FINAL_NI43_101_TR_BMC_Property_Report_481000.010_20160826.docx August 2016

9.1.6 Aerial Geophysics CGG HeliTEM Conductivity................................................................... 53

JBP/SH FINAL_NI43_101_TR_BMC_Property_Report_481000.010_20160826.docx August 2016

12.2 Limitations ......................................................................................................................................... 95

JBP/SH FINAL_NI43_101_TR_BMC_Property_Report_481000.010_20160826.docx August 2016

18.1.3 Water and Tailings Management ........................................................................................ 122

JBP/SH FINAL_NI43_101_TR_BMC_Property_Report_481000.010_20160826.docx August 2016

Table 11-1: Key Company-Submitted Manganese Certified References ........................................................ 86

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JBP/SH FINAL_NI43_101_TR_BMC_Property_Report_481000.010_20160826.docx August 2016

Figure 10-2: Location Map of Drill Collars ........................................................................................................ 74

JBP/SH FINAL_NI43_101_TR_BMC_Property_Report_481000.010_20160826.docx August 2016

JBP/SH FINAL_NI43_101_TR_BMC_Property_Report_481000.010_20160826.docx August 2016

1.1 Property Description and Ownership

1.2 Geology and Mineralization

1.3 Status of Exploration, Development and Operations

JBP/SH FINAL_NI43_101_TR_BMC_Property_Report_481000.010_20160826.docx August 2016

1.4 Mineral Processing and Metallurgical Testing

1.5 Mineral Resource Estimate

1.6 Mineral Reserve Estimate

1.7 Mining Methods

1.8 Recovery Methods

JBP/SH FINAL_NI43_101_TR_BMC_Property_Report_481000.010_20160826.docx August 2016

1.9 Project Infrastructure

1.10 Environmental Studies and Permitting

1.11 Conclusions and Recommendations

The BMC Project hosts a newly recognized style of structurally-controlled hydrothermal

JBP/SH FINAL_NI43_101_TR_BMC_Property_Report_481000.010_20160826.docx August 2016

2.2 Qualifications of Consultants (SRK)

JBP/SH FINAL_NI43_101_TR_BMC_Property_Report_481000.010_20160826.docx August 2016

2.3 Details of Inspection

2.4 Sources of Information

Various unpublished company reports,

2.5 Effective Date

2.6 Units of Measure

JBP/SH FINAL_NI43_101_TR_BMC_Property_Report_481000.010_20160826.docx August 2016

3 Reliance on Other Experts

JBP/SH FINAL_NI43_101_TR_BMC_Property_Report_481000.010_20160826.docx August 2016

4 Property Description and Location

Source: BMC, 2016

Figure 4-1: Project Location Map

4.2 Mineral Titles

One approved mining license

JBP/SH FINAL_NI43_101_TR_BMC_Property_Report_481000.010_20160826.docx August 2016

Table 4-1: Mineral Titles

JBP/SH FINAL_NI43_101_TR_BMC_Property_Report_481000.010_20160826.docx August 2016

Source: BMC, 2016

Figure 4-2: Land Tenure Map

4.2.1 Nature and Extent of Issuers Interest

JBP/SH FINAL_NI43_101_TR_BMC_Property_Report_481000.010_20160826.docx August 2016

4.3 Agreements, Royalties and Encumbrances

4.4 Environmental Liabilities and Permitting

4.4.2 Required Permits - Brazilian Environmental Regulation

JBP/SH FINAL_NI43_101_TR_BMC_Property_Report_481000.010_20160826.docx August 2016

JBP/SH FINAL_NI43_101_TR_BMC_Property_Report_481000.010_20160826.docx August 2016