N1 43 110 Kingashy, Verhnekingasky and Kuyovsky Nickel Cooper Deposits

Intergeo MMC Ltd
TECHNICAL REPORT ON
MINERAL RESOURCES OF THE
KINGASHSKY, VERKHNEKINGASHSKY AND
KUYOVSKY NICKEL-COPPER DEPOSITS
AND RESULTS OF THE
PRELIMINARY ECONOMIC ASSESSMENT
KRASNOYARSK KRAI,
RUSSIAN FEDERATION
Prepared By:
Stanley C. Bartlett, P.Geo.
Micon International Co Limited

Suite 10 Keswick Hall, Norwich, NR4 6TJ, United Kingdom
Effective Date: 1st December, 2011

Signing Date: 14th April, 2012
Micon International Co Limited. Suite 10, Keswick Hall, Keswick, Norwich, Norfolk, U.K., NR4 6TJ
Telephone (44) (1603)-501501 Fax (44) (1603)-507007 E-mail office@micon-international.co.uk. Registered no. 4026319, England.
TABLE OF CONTENTS
Page
1.0 SUMMARY .................................................................................................................... 1
1.1 INTRODUCTION ..................................................................................................... 1
1.2 LOCATION AND PROJECT HISTORY ................................................................. 1
1.2.1 Location ................................................................................................................. 1
1.2.2 History ................................................................................................................... 4
1.3 GEOLOGY AND MINERALISATION ................................................................... 4
1.4 MINERAL RESOURCES ......................................................................................... 5
1.5 MINERAL RESERVES ............................................................................................ 7
1.6 METALLURGICAL TESTING ............................................................................... 7
1.7 PROCESS DESIGN .................................................................................................. 9
1.8 ECONOMIC ANALYSIS ....................................................................................... 12
1.8.1 Capital Costs ....................................................................................................... 12
1.8.2 Operating Costs ................................................................................................... 13
1.8.3 Summary Economic Analysis ............................................................................. 14
1.9 REVENUE .............................................................................................................. 16
1.10 CAPITAL AND OPERATING COSTS ................................................................. 17
1.11 TAXATION ............................................................................................................ 17
1.12 SENSITIVITY ANALYSIS .................................................................................... 17
1.13 ENVIRONMENTAL AND SOCIAL CONSIDERATIONS.................................. 20
1.14 CONCLUSIONS AND RECOMMENDATIONS .................................................. 21
2.0 INTRODUCTION ....................................................................................................... 23
2.1 INTERGEO MMC LTD ......................................................................................... 23
2.2 MICON INTERNATIONAL LIMITED ................................................................. 23
2.3 QUALIFICATIONS OF THE CONSULTANT ..................................................... 24
2.4 UNITS OF MEASURE ........................................................................................... 24
3.0 RELIANCE ON OTHER EXPERTS ........................................................................ 25
4.0 PROPERTY DESCRIPTION AND LOCATION .................................................... 26
4.1 LOCATION............................................................................................................. 26
4.2 TITLE AND LEGAL STATUS .............................................................................. 27
4.3 ROYALTIES ........................................................................................................... 28
5.0 ACCESSIBILITY, CLIMATE, LOCAL RESOURCES,
INFRASTRUCTURE AND PHYSIOGRAPHY ...................................................... 31
5.1 PROPERTY ACCESS ............................................................................................ 31
5.2 PHYSIOGRAPHY .................................................................................................. 31
5.3 CLIMATE ............................................................................................................... 31
5.4 LOCAL RESOURCES, INFRASTRUCTURE AND POPULATION .................. 31
6.0 HISTORY ..................................................................................................................... 33
6.1 EXPLORATION HISTORY ................................................................................... 33
6.2 HISTORIC MINERAL RESOURCE ESTIMATES .............................................. 35
6.2.1 Kuyovsky and Verkhnekingashsky ..................................................................... 35
6.2.2 Kingashsky .......................................................................................................... 36
6.3 MICON MINERAL RESOURCE ESTIMATE, 2008 ............................................ 36
7.0 GEOLOGICAL SETTING AND MINERALISATION ......................................... 38
7.1 GEOLOGICAL SETTING...................................................................................... 38
7.1.1 Regional Geology ................................................................................................ 38
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7.1.2 Property Geology ................................................................................................ 39

7.1.3 Local Geology ..................................................................................................... 40
7.2 MINERALISATION ............................................................................................... 42
7.2.1 Introduction ......................................................................................................... 42
7.2.2 Primary Disseminated Sulphide Mineralisation .................................................. 45
7.2.3 Epigenic Sulphide Mineralisation ....................................................................... 46
7.2.4 Sulphide Alteration ............................................................................................. 47
8.0 DEPOSIT TYPES ........................................................................................................ 49
9.0 EXPLORATION .......................................................................................................... 51
9.1 INTRODUCTION ................................................................................................... 51
9.2 GEOLOGICAL MAPPING AND TRENCHING .................................................. 52
9.3 GEOCHEMISTRY .................................................................................................. 52
9.4 GEOPHYSICS ........................................................................................................ 54
9.4.1 Ground Surveys ................................................................................................... 56
9.4.2 Airborne Surveys................................................................................................. 59
10.0 DRILLING ................................................................................................................... 64
10.1 HISTORICAL DRILLING CAMPAIGNS ............................................................. 64
10.1.1 Kuyovsky and Verkhnekingashsky Drilling Campaigns ................................. 64
10.1.2 Kingashsky Drilling Campaigns ...................................................................... 64
10.2 PROVISIONAL FUTURE DRILLING PROGRAMME ....................................... 65
10.3 CONCLUSION ....................................................................................................... 65
11.0 SAMPLE PREPARATION, ANALYSES AND SECURITY ................................. 68
11.1 SAMPLE PREPARATION AND ANALYSIS ...................................................... 68
11.1.1 Sampling and Sample Preparation ................................................................... 68
11.1.2 Sample Analysis............................................................................................... 69
11.1.3 Specific Gravity, Bulk Density and Moisture Determinations ........................ 69
11.2 QUALITY ASSURANCE AND QUALITY CONTROL ...................................... 70
11.2.1 Internal Duplicates ........................................................................................... 70
11.2.2 External Duplicates .......................................................................................... 77
11.3 CONCLUSIONS ..................................................................................................... 83
12.0 DATA VERIFICATION ............................................................................................. 84
13.0 MINERAL PROCESSING AND METALLURGICAL TESTING ....................... 85
13.1 METALLURGICAL TESTWORK ........................................................................ 85
13.2 MINERAL PROCESSING ..................................................................................... 87
13.2.1 General Discussion on Ore Type and Mineralogy ........................................... 87
13.2.2 Testwork Sample Selection and Characterisation............................................ 89
13.2.3 Testwork Procedures ........................................................................................ 92
13.2.4 Testwork Results.............................................................................................. 94
13.2.5 Discussion ........................................................................................................ 99
13.3 EXTRACTIVE METALLURGY ......................................................................... 100
13.3.1 Sample Selection and Characterisation .......................................................... 100
13.3.2 Testwork Procedures ...................................................................................... 100
13.3.3 Testwork Results............................................................................................ 101
14.0 MINERAL RESOURCE ESTIMATES .................................................................. 102
14.1 2011 MICON MINERAL RESOURCE ESTIMATE ........................................... 102
14.1.1 Database ......................................................................................................... 102
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14.1.2 Specific Gravity ............................................................................................. 102

14.1.3 Geology and Mineralisation Model ............................................................... 103
14.1.4 Statistical Analysis ......................................................................................... 106
14.1.5 Variography ................................................................................................... 111
14.1.6 Search Ellipse and Selection of Number of Samples..................................... 127
14.1.7 Block-Model .................................................................................................. 127
14.1.8 Grade Interpolation ........................................................................................ 128
14.1.9 Block Model Validation ................................................................................. 129
15.0 MINERAL RESERVE ESTIMATES ...................................................................... 148
16.0 MINING METHODS ................................................................................................ 149
17.0 RECOVERY METHODS ......................................................................................... 154
17.1 INTRODUCTION ................................................................................................. 154
17.2 MINERAL PROCESSING ................................................................................... 154
17.2.1 Process Design and Beneficiation Options .................................................... 154
17.2.2 Beneficiation Plant ......................................................................................... 155
17.2.3 Process Description ........................................................................................ 156
17.2.4 Beneficiation Option 1: Gipronikel Flow Sheet ............................................ 157
17.2.5 Option 2: Valleriite Regrind .......................................................................... 158
17.2.6 Option 3: Sulphidisation Flow Sheet ............................................................. 160
17.2.7 Economic Evaluation of Concentrator Process Options ................................ 162
17.2.8 Concentrator Capital Costs ............................................................................ 163
17.2.9 Concentrator Operating Costs ........................................................................ 164
17.3 SMELTING AND REFINING COMPLEX ......................................................... 164
17.3.1 Process Selection ........................................................................................... 164
17.3.2 Smelting and Refining Flow Sheet ................................................................ 165
17.3.3 Smelting Option 2 .......................................................................................... 166
17.3.4 Converter Option 2 ........................................................................................ 166
17.3.5 Gas Cleaning Option 2 ................................................................................... 167
17.3.6 Refining.......................................................................................................... 167
17.3.7 Process Design Criteria .................................................................................. 168
17.3.8 Key Performance Indicators .......................................................................... 168
17.3.9 Forecast Production ....................................................................................... 170
17.3.10 Capital Cost .................................................................................................... 170
17.3.11 Operating Costs .............................................................................................. 172
18.0 PROJECT INFRASTRUCTURE ............................................................................ 174
18.1 GENERAL ............................................................................................................ 174
18.2 DESCRIPTION OF MINING OPERATIONS AREA AND
PROPOSED BENEFICIATION PLANT SITE................................................ 174
18.3 PROPOSED INFRASTRUCTURE ORE MINING AND
BENEFICIATION INTEGRATED WORKS ................................................... 175
18.3.1 Crushing Plant ................................................................................................ 177
18.3.2 Tailings Management Facilities ..................................................................... 177
18.3.3 Tailings Storage Site ...................................................................................... 177
18.3.4 Water Storage Area ........................................................................................ 178
18.3.5 Transport ........................................................................................................ 179
18.4 DESCRIPTION OF METALLURGICAL PLANT SITE..................................... 181
18.5 INFRASTRUCTURE AT METALLURGICAL PLANT COMPLEX ................ 182
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18.5.1 Technological Warehouses ............................................................................ 183

18.5.2 Waste Disposal Facilities ............................................................................... 184
18.5.3 Transport ........................................................................................................ 184
18.6 POWER ................................................................................................................. 185
18.6.1 Beneficiation Plant ......................................................................................... 185
19.0 MARKET STUDIES AND CONTRACTS ............................................................. 187
20.0 ENVIRONMENTAL STUDIES, PERMITTING AND SOCIAL OR
COMMUNITY IMPACT .......................................................................................... 188
20.1 INTRODUCTION ................................................................................................. 188
20.2 KINGASHSKY ENVIRONMENTAL SURVEYS .............................................. 189
20.2.1 Kingashsky Soil Survey ................................................................................. 189
20.2.2 Kingashsky Surface Water Survey ................................................................ 189
20.2.3 Kingashsky Silt Survey .................................................................................. 190
20.2.4 Kingashsky Radiation .................................................................................... 191
20.2.5 Kingashsky Exploration Environmental Impact ............................................ 191
20.3 KUYOVSKY AND VERKHNEKINGASHSKY
ENVIRONMENTAL PROGRAMME ............................................................. 191
20.4 ENVIRONMENTAL RECOMMENDATIONS ................................................... 192
21.0 CAPITAL AND OPERATING COSTS .................................................................. 194
21.1 CAPITAL COSTS ................................................................................................. 194
21.2 OPERATING COSTS ........................................................................................... 194
22.0 ECONOMIC ANALYSIS ......................................................................................... 197
22.1 INTRODUCTION ................................................................................................. 197
22.2 OPEN PIT OPTIMISATION ................................................................................ 197
22.3 PRODUCTION SCHEDULING ........................................................................... 201
22.4 IN PIT RESOURCES............................................................................................ 202
22.5 ECONOMIC ANALYSIS ..................................................................................... 211
22.6 REVENUE ............................................................................................................ 213
22.7 CAPITAL AND OPERATING COSTS ............................................................... 214
22.8 TAXATION .......................................................................................................... 214
22.9 SENSITIVITY ANALYSIS .................................................................................. 214
22.10 RISK ...................................................................................................................... 216
23.0 ADJACENT PROPERTIES ..................................................................................... 219
24.0 OTHER RELEVANT DATA AND INFORMATION........................................... 220
24.1 PROJECT IMPLEMENTATION PLAN .............................................................. 220
24.1.1 Project Execution and Project Objectives ...................................................... 220
25.0 INTERPRETATION AND CONCLUSIONS ......................................................... 223
25.1 GENERAL ............................................................................................................ 223
25.2 SCENARIO 5 (VALLERIITE SULPHIDISATION FLOW SHEET) ................. 225
25.3 RISK FACTORS ................................................................................................... 226
26.0 RECOMMENDATIONS .......................................................................................... 228
27.0 REFERENCES ........................................................................................................... 231
28.0 GLOSSARY AND ABBREVIATIONS ................................................................... 232
28.1 MINERAL RESOURCES AND RESERVES DEFININTIONS ......................... 232
28.1.1 Mineral Resources ......................................................................................... 232
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28.1.2 Mineral Reserves ........................................................................................... 232

28.2 COMPANIES AND INDIVIDUALS CITED IN REPORT ................................. 233
28.3 VOCABULARY AND PROCESSES................................................................... 233
28.4 ABBREVIATIONS ............................................................................................... 237
29.0 SIGNATURE PAGE.................................................................................................. 241
30.0 CERTIFICATE OF QUALIFIED PERSON .......................................................... 242
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LIST OF TABLES
Table 1.1: Kuyovsky, Verkhnekingashsky and Kingashsky Mineral Resources ...................... 6

Table 1.2: Kingash In-Pit Resources Derived From Measured + Indicated +
Inferred Mineral Resources ................................................................................... 8
Table 1.3: Metallurgical Recoveries to Concentrate for Gipronikel Flow Sheet .................... 11
Table 1.4: Base Case Capital Costs ......................................................................................... 12
Table 1.5: Base Case Life of Mine Unit Operating Costs ....................................................... 13
Table 1.6: Base Case Life of Mine Smelter Unit Operating Costs .......................................... 13
Table 1.7: Unit Costs and Rates ............................................................................................... 13
Table 1.8: Base Case Life of Mine Production Highlights ...................................................... 14
Table 1.9: Base Case Life of Mine Financial Highlights......................................................... 15
Table 1.10: Base Case Metal Prices ......................................................................................... 16
Table 1.11: NPV and IRR Sensitivity to Nickel Price ............................................................. 17
Table 1.12: NPV and IRR Sensitivity to Revenue, Operating Cost and Capital
Cost ...................................................................................................................... 17
Table 1.13: Summary of Annual Production ........................................................................... 19
Table 1.14: Proposed Budget for Work in 2012 Through 2014 .............................................. 22
Table 4.1: Licence Details of the Kingashsky Deposit ............................................................ 27
Table 4.2: Licence Details of the Verkhnekingashsky and Kuyovsky Deposits ..................... 28
Table 4.3: Status of Licence Commitments as at 15th January 2012 ....................................... 30
Table 6.1: Kuyovsky and Verkhnekingashsky Mineral Resources as of 1st
January 2008 ........................................................................................................ 37
Table 7.1: Mineral Composition Kingashsky, Verkhnekingashsky and Kuyovsky
Deposits ............................................................................................................... 45
Table 7.2: Average Chemical Composition of Main Sulphide Minerals................................. 46
Table 7.3: Chemical Composition of Kingashsky, Verkhnekingashsky and
Kuyovsky Mineralisation .................................................................................... 46
Table 9.1: ICP Detection Limits Kingash Element Suite ........................................................ 53
Table 9.2: Details Geophysical Survey Conducted Kingash District ...................................... 56
Table 10.1: Drilling Programmes Summary - Kingash Project (1993 to 2009) ...................... 65
Table 11.1: Specific Gravities of Host Rocks at Kuyovsky, Verkhnekingashsky
and Kingashsky ................................................................................................... 70
Table 13.1: Summary of Metallurgical Testwork Completed for the Kingashsky
Deposits ............................................................................................................... 85
Table 13.2: Kingashsky Mineral Processing Sample Details and Chemical
Analyses .............................................................................................................. 90
Table 13.3: Verkhnekingashsky Mineral Processing Sample Details and
Chemical Analyses .............................................................................................. 91
Table 13.4: Kuyovsky Mineral Processing Sample Details and Chemical
Analyses .............................................................................................................. 91
Table 13.5: Nickel and Copper Distribution by Mineral ......................................................... 92
Table 13.6: Bulk Sample Pilot Plant Flotation Results ........................................................... 99
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Table 13.7: Bulk Concentrate Sample Analyses.................................................................... 100

Table 13.8: Melting Test Product Analyses ........................................................................... 101
Table 14.1: Specific Gravities of the Host Rocks at Kuyovsky and
Verkhnekingashsky and at Kingashsky ............................................................. 103
Table 14.2: Basic Statistics – Kuyovsky Deposit .................................................................. 106
Table 14.3: Basic Statistics – Verkhnekingashsky Deposit ................................................... 106
Table 14.4: Basic Statistics – Kingashsky Deposit................................................................ 107
Table 14.5: Basic Statistical Parameters of Top-Cut Assay Data .......................................... 108
Table 14.6: Basic Statistics for Composited Data – Kuyovsky ............................................. 110
Table 14.7: Basic Statistics for Composited Data – Verkhnekingashsky .............................. 110
Table 14.8: Basic Statistics for Composited Data – Kingashsky........................................... 111
Table 14.9: Summary of Variogram Parameters for All Elements for Kuyovsky................. 116
Table 14.10: Summary of Variogram Parameters for all Elements for
Verkhnekingashsky ........................................................................................... 121
Table 14.11: Summary of Variogram Parameters for All Elements for
Kingashsky ........................................................................................................ 126
Table 14.12: Summary of Estimation Parameters ................................................................. 127
Table 14.13: Dimensions of the Kuyovsky and Verkhnekingashsky and
Kingashsky Block Models ................................................................................. 128
Table 14.14: Kuyovsky and Verkhnekingashsky Mineral Resource Estimate as at
1st December 2011 ............................................................................................. 145
Table 14.15: Kuyovsky and Verkhnekingashsky Metal Content as at 1st
December 2011 .................................................................................................. 145
Table 14.16: Kuyovsky and Verkhnekingashsky Sulphur Grades as at 1st
December 2011 .................................................................................................. 146
Table 14.17: Kingashsky Mineral Resource Estimate as at 1st December 2011 ................... 146
Table 14.18: Kingashsky Metal Content as at 1st December 2011 ........................................ 146
Table 14.19: Kingashsky Sulphur Grades ............................................................................. 146
Table 16.1: Kingash Mining Fleet Estimate .......................................................................... 150
Table 17.1: Design Process Plant Criteria ............................................................................. 155
Table 17.2: Key Concentrate Parameters for Beneficiation Plant Option 1 .......................... 158
Table 17.3: Key Process Parameters for Beneficiation Plant Option 1 ................................. 158
Table 17.8: Concentrator Options Metallurgical Recoveries ................................................ 163
Table 17.9: Concentrator Options Capital Cost Estimations ................................................. 163
Table 17.10: Concentrator Options Operating Cost Estimations........................................... 164
Table 17.11: Beneficiation Plant Option 2 Operating Costs.................................................. 164
Table 17.12: Key Process Design Criteria ............................................................................. 168
Table 17.13: Metal Recoveries .............................................................................................. 169
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Table 17.14: Key Process Performance Indicators ................................................................ 169

Table 17.15: Forecast Production in First Six Years of Operation ........................................ 170
Table 17.16: Smelter and Base Metal Refinery Capital Cost Summary (Direct
Costs Only) ........................................................................................................ 171
Table 17.17: Exclusions from Smelter and Base Metal Refinery Capital Cost
Estimate ............................................................................................................. 171
Table 17.18: Smelter, Gas Cleaning and Base Metal Refinery Operating Cost
Summary............................................................................................................ 172
Table 17.19: Smelter/Converting Operating Costs ................................................................ 173
Table 17.20: Gas Cleaning Plant Operating Costs................................................................. 173
Table 17.21: Base Metal Refinery Operating Costs .............................................................. 173
Table 18.1: List of Site to Site Roads .................................................................................... 181
Table 20.1: Statistical Summary Soil Analysis...................................................................... 189
Table 20.2: Statistical Summary Water 2007 Analysis ......................................................... 190
Table 20.3: Statistical Summary Water 2008 Analysis ......................................................... 190
Table 20.4: Statistical Summary Silt 2007 Analysis ............................................................. 191
Table 20.5: Statistical Summary Silt 2007 Analysis ............................................................. 192
Table 21.1: Base Case Capital Costs ..................................................................................... 194
Table 21.2: Base Case Life of Mine Unit Operating Costs ................................................... 195
Table 21.3: Base Case Life of Mine Smelter Unit Operating Costs ...................................... 195
Table 21.4: Unit Costs and Rates ........................................................................................... 195
Table 22.1: Base Case Metal Price and Selling Cost Parameters Used in Open Pit
Optimisation ...................................................................................................... 197
Table 22.2: Base Case Parameters Used in Open Pit Optimisation ....................................... 198
Table 22.3: Annual Production Schedules for Kuyovsky, Verkhnekingashsky
and Kingashsky ................................................................................................. 203
Table 22.4: Annual Production Schedules for Kuyovsky, Verkhnekingashsky
and Kingashsky by Metal .................................................................................. 204
Table 22.5: Kingash In-Pit Resources derived from Measured + Indicated +
Inferred Mineral Resources ............................................................................... 210
Table 22.6: Base Case Life of Mine Production Highlights .................................................. 211
Table 22.7: Base Case Life of Mine Financial Highlights..................................................... 212
Table 22.8: Base Case Metal and Product Prices .................................................................. 213
Table 22.9: NPV and IRR Sensitivity to Nickel Price ........................................................... 214
Table 22.10: NPV and IRR Sensitivity to Revenue, Operating Cost and Capital
Cost .................................................................................................................... 214
Table 22.11: Risks Identified with the Project at This Stage of Development ...................... 217
Table 24.1: Key Milestones ................................................................................................... 221
Table 25.1: Kuyovsky, Verkhnekingashsky and Kingashsky Mineral Resources ................ 224
Table 25.2: Base Case Life of Mine Financial Highlights..................................................... 225
Table 25.3: Production and Financial Highlights for Scenarios 3 and 5 ............................... 226
Table 26.1: Proposed Budget for Work in 2012 Through 2014 ............................................ 230
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LIST OF FIGURES
Figure 1.1: Location Kingash Licence Areas Krasnoyarsk Region ........................................... 2

Figure 1.2: Kingash Mine Location of Main Facilities.............................................................. 3
Figure 1.3: Base Case Cumulative Net Cash Flow .................................................................. 16
Figure 1.4: NPV and IRR Sensitivity to Nickel Price ............................................................. 18
Figure 1.5: NPV Sensitivity to Revenue, Operating Cost and Capital Cost ............................ 18
Figure 1.6: IRR Sensitivity to Revenue, Operating Cost and Capital Cost ............................. 19
Figure 4.1: Location Kingash Project Licence Areas Krasnoyarsk Region ............................ 26
Figure 6.1: Location Historical Area Exploration Kingash District ........................................ 34
Figure 7.1: Regional Geology Kingash District Krasnoyarsk Region ..................................... 38
Figure 7.2: Property Geology and Structural Map Kingash Licence Area .............................. 39
Figure 7.3: Property Geology and Structural Map Kingash Licence....................................... 43
Figure 7.4: Cross-Sections ....................................................................................................... 44
Figure 7.5: Disseminated Sulphides (A) Interstitial Sulphides (B), Kingashsky .................... 45
Figure 7.6: Sulphide Breccia (A) Massive Ni-Cu Vein (B)..................................................... 47
Figure 7.7: Late Magnetite-Valleriite (A) Late Magnetite-Mackinawite (B) .......................... 48
Figure 8.1: Copper and Nickel Grades Versus Ore Tonnes..................................................... 49
Figure 8.2: Nickel Model and Deposit Settings, CSIRO E&M 2001, 2002 ............................ 50
Figure 9.1: Ni, Cu, Co and Cr Contour Soil Geochemistry ..................................................... 54
Figure 9.2: Airborne Geophysical Surveys over the Kingash Mineral District ....................... 55
Figure 9.3: Isometric View of Ground Geophysical Surveys Kingash Licence
Area ..................................................................................................................... 55
Figure 9.4: Ground Geophysics Surveys Verkhnekingashsky and Kuyovsky
Deposits ............................................................................................................... 57
Figure 9.5: Magnetics (High Blue) (A), Natural Potential (B) ................................................ 58
Figure 9.6: IP Apparent Resistivity (A), IP Phase Shift (B) .................................................... 59
Figure 9.7: 1996 Airborne Magnetic Surveys.......................................................................... 60
Figure 9.8: 2003 to 2004 Airborne Magnetic, Infrared and Gamma-Spectrometry ................ 60
Figure 9.9: 2003 to 2004 Airborne Magnetic, Infrared and Gamma-Spectrometry ................ 62
Figure 9.10: AeroTEM Airborne Magnetics (A) and AeroTEM Airborne EM (B) ................ 63
Figure 10.1: Drill Hole and Adit Locations – Kingashsky Deposit......................................... 66
Figure 10.2: Drill Hole and Adit Locations – Verkhnekingashsky and Kuyovsky
Deposits ............................................................................................................... 67
Figure 11.1: Correlation Plot for Duplicate Nickel Assays, Kingashsky Internal
Laboratory ........................................................................................................... 71
Figure 11.2: Precision Plot for Duplicate Nickel Assays, Kingashsky Internal
Laboratory ........................................................................................................... 71
Figure 11.3: Correlation Plot for Duplicate Copper Assays, Kingashsky Internal
Laboratory ........................................................................................................... 72
Figure 11.4: Precision Plot for Duplicate Copper Assays, Kingashsky Internal
Laboratory ........................................................................................................... 72
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Figure 11.5: Correlation Plot for Duplicate Cobalt Assays, Kingashsky Internal
Laboratory ........................................................................................................... 73
Figure 11.6: Precision Plot for Duplicate Cobalt Assays, Kingashsky Internal
Laboratory ........................................................................................................... 73
Figure 11.7: Correlation Plot for Duplicate Nickel Assays, Kuyovsky and
Verkhnekingashsky, Internal Laboratory ............................................................ 74
Figure 11.8: Precision Plot for Duplicate Nickel Assays, Kuyovsky and
Figure 11.9: Correlation Plot for Duplicate Copper Assays, Kuyovsky and
Figure 11.10: Precision Plot for Duplicate Copper Assays, Kuyovsky and
Figure 11.11: Correlation Plot for Duplicate Cobalt Assays, Kuyovsky and
Figure 11.12: Precision Plot for Duplicate Cobalt Assays, Kuyovsky and
Figure 11.13: Correlation Plot for Duplicate Nickel Assays, Kingashsky External
Laboratory ........................................................................................................... 77
Figure 11.14: Precision Plot for Duplicate Nickel Assays, Kingashsky External
Laboratory ........................................................................................................... 77
Figure 11.15: Correlation Plot for Duplicate Copper Assays, Kingashsky
External Laboratory ............................................................................................. 78
Figure 11.16: Precision Plot for Duplicate Copper Assays, Kingashsky External
Laboratory ........................................................................................................... 78
Figure 11.17: Correlation Plot for Duplicate Cobalt Assays, Kingashsky External
Laboratory ........................................................................................................... 79
Figure 11.18: Precision Plot for Duplicate Cobalt Assays, Kingashsky, External
Laboratory ........................................................................................................... 79
Figure 11.19: Correlation Plot for Duplicate Nickel Assays, Kuyovsky and
Verkhnekingashsky, External Laboratory ........................................................... 80
Figure 11.20: Precision Plot for Duplicate Nickel Assays, Kuyovsky and
Figure 11.21: Correlation Plot for Duplicate Copper Assays, Kuyovsky and
Figure 11.22: Precision Plot for Duplicate Copper Assays, Kuyovsky and
Figure 11.23: Correlation Plot for Duplicate Cobalt Assays, Kuyovsky and
Figure 11.24: Precision Plot for Duplicate Cobalt Assays, Kuyovsky and
Figure 13.1: Nickel Recovery versus Mill Feed Grade %Ni ................................................... 94
Figure 13.2: Concentrate Grade Ni versus Mill Feed Grade %Ni ........................................... 95
Figure 13.3: Copper Recovery versus Mill Feed Grade %Cu ................................................. 95
Figure 13.4: Concentrate Grade %Cu versus Mill Feed Grade %Cu ...................................... 96
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Figure 13.5: Copper Recovery versus Nickel Recovery .......................................................... 96

Figure 13.6: Cobalt Recovery versus Nickel Recovery ........................................................... 97
Figure 13.7: Platinum Recovery versus Nickel Recovery ....................................................... 97
Figure 13.8: Palladium Recovery versus Nickel Recovery ..................................................... 98
Figure 13.9: Gold Recovery versus Nickel Recovery ............................................................. 98
Figure 14.1: Vertical Section of the Mineralised Zone Wireframe for Kuyovsky ................ 104
Figure 14.2: Vertical Section of the Mineralised Zone Wireframe for
Figure 14.3: Vertical Section of the Mineralised Zone Wireframe for Kingashsky .............. 105
Figure 14.4: Geological Wireframes for Verkhnekingashsky ............................................... 105
Figure 14.5: Geological Wireframes for Kingashsky ............................................................ 106
Figure 14.6: Log-Probability Plot of Platinum Assays for Verkhnekingashsky ................... 107
Figure 14.7: Log-Probability Plot of Nickel Assays for Kingashsky .................................... 108
Figure 14.8: Distribution of the Length of the Samples – Kuyovsky .................................... 109
Figure 14.9: Distribution of the Length of the Samples – Verkhnekingashsky..................... 109
Figure 14.10: Distribution of the Length of the Samples – Kingashsky ............................... 110
Figure 14.11: Comparison of the Average Grade of Raw Assays and Composites .............. 111
Figure 14.12: Down-Hole Variogram for Ni Grade for Kuyovsky ....................................... 112
Figure 14.13: Omni-Directional Variogram for Ni Grade for Kuyovsky .............................. 112
Figure 14.14: Down-Hole Variogram for Cu Grade for Kuyovsky....................................... 112
Figure 14.15: Omni-Directional Variogram for Cu Grade for Kuyovsky ............................. 113
Figure 14.16: Down-Hole Variogram for Co Grade for Kuyovsky....................................... 113
Figure 14.17: Omni-Directional Variogram for Co Grade for Kuyovsky ............................. 113
Figure 14.18: Down-Hole Variogram for S Grade for Kuyovsky ......................................... 114
Figure 14.19: Omni-Directional Variogram for S Grade for Kuyovsky ............................... 114
Figure 14.20: Down-Hole Variogram for Pt Grade for Kuyovsky ........................................ 114
Figure 14.21: Omni-Directional Variogram for Pt Grade for Kuyovsky .............................. 115
Figure 14.22: Down-Hole Variogram for Pd Grade for Kuyovsky ....................................... 115
Figure 14.23: Omni-Directional Variogram for Pd Grade for Kuyovsky ............................. 115
Figure 14.24: Down-Hole Variogram for Au Grade for Kuyovsky ...................................... 116
Figure 14.25: Omni-Directional Variogram for Au Grade for Kuyovsky ............................. 116
Figure 14.26: Down-Hole Variogram for Ni Grade for Verkhnekingashsky ........................ 117
Figure 14.27: Omni-Directional Variogram for Ni Grade for Verkhnekingashsky .............. 117
Figure 14.28: Down-Hole Variogram for Cu Grade for Verkhnekingashsky ....................... 117
Figure 14.29: Omni-Directional Variogram for Cu Grade for Verkhnekingashsky .............. 118
Figure 14.30: Down-Hole Variogram for Co Grade for Verkhnekingashsky ....................... 118
Figure 14.31: Omni-Directional Variogram for Co Grade for Verkhnekingashsky .............. 118
Figure 14.32: Down-Hole Variogram for S Grade for Verkhnekingashsky .......................... 119
Figure 14.33: Omni-Directional Variogram for S Grade for Verkhnekingashsky ................ 119
Figure 14.34: Down-Hole Variogram for Pt Grade for Verkhnekingashsky......................... 119
Figure 14.35: Omni-Directional Variogram for Pt Grade for Verkhnekingashsky ............... 120
Kingash Preliminary Economic Assessment xi Intergeo MMC Ltd

Page
Figure 14.36: Down-Hole Variogram for Pd Grade for Verkhnekingashsky ........................ 120
Figure 14.37: Omni-Directional Variogram for Pd Grade for Verkhnekingashsky .............. 120
Figure 14.38: Down-Hole Variogram for Au Grade for Verkhnekingashsky ....................... 121
Figure 14.39: Omni-Directional Variogram for Au Grade for
Figure 14.40: Down-Hole Variogram for Ni Grade for Kingashsky ..................................... 122
Figure 14.41: Omni-Directional Variogram for Ni Grade for Kingashsky ........................... 122
Figure 14.42: Down-Hole Variogram for Cu Grade for Kingashsky ................................... 122
Figure 14.43: Omni-Directional Variogram for Cu Grade for Kingashsky........................... 123
Figure 14.44: Down-Hole Variogram for Co Grade for Kingashsky .................................... 123
Figure 14.45: Omni-Directional Variogram for Co Grade for Kingashsky........................... 123
Figure 14.46: Down-Hole Variogram for S Grade for Kingashsky....................................... 124
Figure 14.47: Omni-Directional Variogram for S Grade for Kingashsky ............................. 124
Figure 14.48: Down-Hole Variogram for Pt Grade for Kingashsky ..................................... 124
Figure 14.49: Omni-Directional Variogram for Pt Grade for Kingashsky ............................ 125
Figure 14.50: Down-Hole Variogram for Pd Grade for Kingashsky..................................... 125
Figure 14.51: Omni-Directional Variogram for Pd Grade for Kingashsky ........................... 125
Figure 14.52: Down-Hole Variogram for Au Grade for Kingashsky .................................... 126
Figure 14.53: Omni-Directional Variogram for Au Grade for Kingashsky .......................... 126
Figure 14.54: Three-Dimensional View of the Kuyovsky and
Verkhnekingashsky Block Models Showing Nickel Grades............................. 128
Figure 14.55: Three-Dimensional View of the Kingashsky Block Model
Showing Nickel Grades ..................................................................................... 129
Figure 14.56: Block Grades versus Nickel Drill Hole Data Kuyovsky ................................. 130
Figure 14.57: Block Grades versus Nickel Drill Hole Data Verkhnekingashsky.................. 130
Figure 14.58: Block Grades versus Nickel Drill Hole Data Kingashsky .............................. 131
Figure 14.59: Block Grades versus Declustered Nickel Composites – Kuyovsky ................ 131
Figure 14.60: Block Grades versus Declustered Copper Composites – Kuyovsky ............... 132
Figure 14.61: Block Grades versus Declustered Cobalt Composites – Kuyovsky ................ 132
Figure 14.62: Block Grades versus Declustered Sulphur Composites – Kuyovsky .............. 132
Figure 14.63: Block Grades versus Declustered Platinum Composites –
Kuyovsky ........................................................................................................... 133
Figure 14.64: Block Grades versus Declustered Palladium Composites –
Kuyovsky ........................................................................................................... 133
Figure 14.65: Block Grades versus Declustered Gold Composites – Kuyovsky .................. 133
Figure 14.66: Block Grades versus Declustered Nickel Composites –
Figure 14.67: Block Grades versus Declustered Copper Composites –
Figure 14.68: Block Grades versus Declustered Cobalt Composites –
Kingash Preliminary Economic Assessment xii Intergeo MMC Ltd

Page
Figure 14.69: Block Grades versus Declustered Sulphur Composites –

Figure 14.70: Block Grades versus Declustered Platinum Composites –
Figure 14.71: Block Grades versus Declustered Palladium Composites –
Figure 14.72: Block Grades versus Declustered Gold Composites –
Figure 14.73: Block Grades versus Declustered Nickel Composites - Kingashsky .............. 136
Figure 14.74: Block Grades versus Declustered Copper Composites –
Kingashsky ........................................................................................................ 136
Figure 14.75: Block Grades versus Declustered Cobalt Composites –
Kingashsky ........................................................................................................ 137
Figure 14.76: Block Grades versus Declustered Sulphur Composites -
Kingashsky ........................................................................................................ 137
Figure 14.77: Block Grades versus Declustered Platinum Composites -
Kingashsky ........................................................................................................ 137
Figure 14.78: Block Grades versus Declustered Palladium Composites -
Kingashsky ........................................................................................................ 138
Figure 14.79: Block Grades versus Declustered Gold Composites - Kingashsky ................. 138
Figure 14.80: Plan Showing Sections of the Mineralised Zone for Kuyovsky ..................... 139
Figure 14.81: Plan Showing Sections of the Mineralised Zone for
Figure 14.82: Plan Showing Sections of the Mineralised Zone for Kingashsky ................... 140
Figure 14.83: Block Model Grade versus Composite Grade by Section -
Kuyovsky for Ni, Cu, Co and S ......................................................................... 140
Kuyovsky for Pt, Pd and Au .............................................................................. 141
Verkhnekingashsky for Ni, Cu, Co and S ......................................................... 141
Figure 14.86: Block Model Grade versus Composite Grade by Section –
Kingashsky for Ni, Cu, Co and S ...................................................................... 142
Kingashsky for Pt, Pd and Au ........................................................................... 143
Figure 14.89: Resource Classification – Kuyovsky and Verkhnekingashsky ....................... 144
Figure 14.90: Resource Classification – Kingashsky ............................................................ 144
Figure 18.1: Site Layout of Kingash and Verkhnekingashsky Deposits ............................... 176
Figure 18.2: Proposed Conveyor Routes and Internal Roads ................................................ 180
Figure 18.3: Plot Plan for Metallurgical Site ......................................................................... 186
Figure 22.1: Kingashsky Sensitivity to Metal Price .............................................................. 199
Figure 22.2: Verkhnekingashsky Sensitivity to Metal Price ................................................. 200
Kingash Preliminary Economic Assessment xiii Intergeo MMC Ltd

Page
Figure 22.3: Kuyovsky Sensitivity to Metal Price ................................................................. 201

Figure 22.4: Production Schedule for Kuyovsky Pit ............................................................. 205
Figure 22.5: Production Schedule for Verkhnekingashsky Pit .............................................. 206
Figure 22.6: Production Schedule for Kingashsky Pit ........................................................... 207
Figure 22.7: Kingash Operation Combined Production Schedule ......................................... 208
Figure 22.8: Kingash Operation Combined Production Schedule ......................................... 209
Figure 22.9: Base Case Cumulative Net Cash Flow .............................................................. 213
Figure 22.10: NPV and IRR Sensitivity to Nickel Price ....................................................... 215
Figure 22.11: NPV Sensitivity to Revenue, Operating Cost and Capital Cost ...................... 215
Figure 22.12: IRR Sensitivity to Revenue, Operating Cost and Capital Cost ....................... 216
Figure 26.1: Proposed Drilling Kingashsky........................................................................... 229
Figure 26.2: Proposed Drilling Verkhnekingashsky.............................................................. 229
Kingash Preliminary Economic Assessment xiv Intergeo MMC Ltd

1.0 SUMMARY
1.1 INTRODUCTION
Micon International Limited Co. (Micon) has been commissioned by Intergeo MMC Ltd
(Intergeo) to complete a Preliminary Economic Assessment (PEA) of a group of mineral
deposits in the Sayansky District of Krasnoyarsk Krai, Russian Federation. The three mineral
deposits in question, Kingashsky, Verkhnekingashsky and Kuyovsky (collectively the
“Kingash Project”), contain nickel-copper-cobalt-platinum group metals, gold and silver and
are located 220 km southeast of Krasnoyarsk, the regional capital.
This assessment conducted by Micon has been compiled into the National Instrument 43-101
Standards of Disclosure for Mineral Properties (NI 43-101) report format as required by the
Canadian Securities Administrators.
This report is intended to be used by Intergeo MMC Ltd subject to the terms and conditions
of its contract with Micon. Intergeo may file this report as a National Instrument 43-101
technical report with the Canadian Securities Regulatory Authorities. Any other use of this
report, by any third party, is at that party’s sole risk.
The conclusions and recommendations in this report reflect the author’s best judgment in
light of the information available at the time of writing. The author and Micon reserve the
right, but will not be obliged, to revise this report and conclusions if additional information
becomes known to them subsequent to the date of this report. Use of this report
acknowledges acceptance of the foregoing conditions.
1.2 LOCATION AND PROJECT HISTORY
1.2.1 Location
As illustrated in Figure 1.1, the Kingash Project is located in the Sayansky District of
Krasnoyarsk Krai, approximately 220 km southeast of the city of Krasnoyarsk, the regional
capital. The infrastructure of the area is relatively undeveloped and access to the project area
is via gravel logging roads that are only passable during some seasons by all-terrain vehicles.
From the project site a 55 km gravel road leads to Tugach, (population 3,000). An improved
gravel road of 35 km connects Tugach to Aginskoye (population 9,000). An asphalt highway
leads 35 km from Aginskoye to the railway station at Sayanskaya and a further 185 km to
Krasnoyarsk. A general site layout is presented in Figure 1.2.
Based on Micon’s review, there are no foreseeable reasons relating to licencing and
permitting why Intergeo/Kingashskaya will not acquire sufficient surface rights to conduct
mining and processing operations, or that development will not proceed.
Kingash Preliminary Economic Assessment 1 Intergeo MMC Ltd

Figure 1.1: Location Kingash Licence Areas Krasnoyarsk Region
Figure 1.2: Kingash Mine Location of Main Facilities
Kingash Preliminary Economic Assessment
Verkhnekingashsky Open Pit Kuyovsky Open Pit
Waste Rock Waste Rock

Dump Dump
3
Tailings Pond
Kingash
Offices Beneficiation
Plant
Kingashsky Open Pit
Intergeo MMC Ltd
Kingash General Site Layout

Image provided by Intergeo
Scale in Metres
1.2.2 History
Nickel-copper mineralisation was initially discovered at the Verkhnekingashsky deposit

between 1991 and 1996. This exploration programme was conducted by GGP
Krasnoyarskgeologiya and Kingashsky GRP NKGRE, a subsidiary of OJSC MMC Norilsk
Nickel (Norilsk Nickel). The nickel–copper mineralisation was identified in dunite-peridotite
intrusions. Exploration work in 1991 was directed toward geochemical anomalies in the
Bolshekuzinsky area, which lies to the south and west of the Kingash deposit. A single hole
in the Verkhnekingashsky prospect returned an intersection of 55 m with average grades of
0.30% Ni and 0.09% Cu.
Due to lack of funding, exploration work significantly declined between 1995 and 1997. In
1998, when exploration activity resumed, the full potential of the Kingash deposits was
realised. It became apparent that there was a significant presence of low-grade base metal
resources such as nickel, copper and platinum. Exploration rights were granted to OJSC
Norilsk Nickel on 2nd October 2002, via licence KRR11303 TP. Norilsk Nickel
commissioned GPP-Geologicheskaya Company to explore the region between 2002 and
2003.
GPP-Geologicheskaya Company worked alongside LLC Prikladnaya (Applied Geology)

from 2004 to 2005 exploring the Verkhnekingashsky, Kuyovsky and Kuskanak areas.
Detailed geochemical surveys, geological mapping and ground geophysical surveys were
used to assess the mineral potential of the area. Diamond drilling and trenching also took
place, and three large samples collected from the drill cores were sent to a laboratory for
mineralisation characterisation tests. The disseminated mineralisation found in the
Kingashsky, Verkhnekingashsky and Kuyovsky deposits was delineated from 2007 to 2009.
During this time, the majority of the drilling was completed.
On 12th July 2011, LLC Intergeo Managing Company, (Intergeo Managing) a company based
in the Russian Federation, acquired Kingashskaya Mining Company LLC (Kingashskaya)
and became legal owners of the Kingash Project. Intergeo Managing commissioned Micon to
conduct a “pre-scoping” level technical study of the Kingash Project during 2011 and at the
same time commissioned Hatch Engineering and Consulting LLC (Hatch) to conduct a
scoping study level review of the Kingash Project to examine concentrating, smelting and
refining options for the project. Micon has utilised the information contained in the TEO of
Ore Quality Requirements Report for the Estimation of Platinum – Copper – Nickel Reserves
of Kingash and Upper Kingash Developed by Gipronikel as well as the Kingash Scoping
Study compiled by Hatch to produce this Preliminary Economic Assessment.
1.3 GEOLOGY AND MINERALISATION
The three disseminated deposits of Verkhnekingashsky, Kuyovsky and Kingashsky represent

large, low-grade magmatic nickel-copper-cobalt-PGM mineralisation. All three are within
close proximity to one another; the Verkhnekingashsky and Kuyovsky deposits are spaced
approximately 1.5 km apart and the Kingash deposit lies 5.5 km further north.
Underlying the region of the Kingash Project is the Sayan metamorphic belt of Upper
Proterozoic Age. There is a wide variety of rocks in the area, including mafic and ultramafic
intrusive rocks. Host rocks include dunite, peridotite, olivine clinopyroxenite and gabbroic
phases.

The mineralisation is similar for all three sites and consists of disseminated sulphides with
minor amounts of breccia-textured mineralisation. The main sulphide minerals include
pentlandite, chalcopyrite, valleriite, pyrrhotite and pyrite, which are disseminated throughout
the dunite and peridotite host rocks.
A small amount of epigenetic mineralisation can be found in the form of sulphide stringers
within the host rocks near the contact with the country rocks. These epigenetic zones can
vary in width from millimetre-scale stringers/veinlets to more than 20 m, but represent only a
small proportion of the total nickel-copper mineralisation. The deposits are unusual in that
the amount of pentlandite present is greater than pyrrhotite and the platinum to palladium
ratio is close to one. Although the sulphides are relatively fine-grained, they form interstitial
aggregates amongst euhedral silicate minerals. The form and habit of the pentlandite and
chalcopyrite mineralisation appears to render it favourable for mineral particle liberation and
metallurgical processing.
1.4 MINERAL RESOURCES
Using geological and assay data from diamond drilling core samples, Micon has constructed
mineral resource block models for the Kingashsky, Verkhnekingashsky and Kuyovsky
deposits. The assay data for nickel, copper, cobalt, platinum, palladium, gold and sulphur has
been verified through thorough testing. Using this data, the basic statistical and geostatistical
parameters of the deposits have been established and mineral resource block models have
been created. Mineral resources have been categorised as Measured, Indicated and Inferred
following the definitions of the Canadian Institute of Mining, Metallurgy and Petroleum
(CIM Definitions Standards November 27, 2010, referred to herein as CIM) and in
accordance with NI 43-101. Mineral resources for the three deposits as at 1st December 2011
are presented in Table 1.1.
Mineral resources that are not reserves do not have demonstrated economic viability. There
are no mineral reserves on the Kingashsky, Verkhnekingashsky and Kuyovsky deposits. The
author is not aware of any specific issues with regard to the environment, permitting, legal,
title, taxation, socio-political, marketing or other relevant issues that would materially affect
the estimate of mineral resources.

Table 1.1: Kuyovsky, Verkhnekingashsky and Kingashsky Mineral Resources
as at 1st December 2011
Grade Metal
Tonnage
Deposit Category
(Mt) Ni Cu Co Pt Pd Au Ni Cu Co Pt Pt Pd Pd Au Au
(%) (%) (%) (g/t) (g/t) (g/t) (kt) (kt) (kt) (t) (koz) (t) (koz) (t) (koz)
Measured 50.99 0.56 0.34 0.019 0.30 0.29 0.14 285 173 10 15 495 15 472 7 229
Kuyovsky
Indicated 40.08 0.51 0.29 0.019 0.28 0.26 0.12 204 117 8 11 365 10 329 5 159
Measured 66.15 0.40 0.19 0.015 0.29 0.30 0.09 267 126 10 19 615 20 638 6 200
Verkhnekingashsky Indicated 106.86 0.39 0.18 0.015 0.21 0.20 0.06 415 194 16 22 715 22 694 7 220
Inferred 17.61 0.34 0.16 0.014 0.20 0.21 0.06 60 28 2 4 116 4 117 1 33
Measured 100.92 0.44 0.19 0.016 0.30 0.33 0.11 447 192 16 30 970 33 1,054 11 354
Kingashsky Indicated 126.59 0.35 0.14 0.016 0.13 0.12 0.06 443 181 20 16 529 15 480 7 224
Inferred 83.69 0.30 0.10 0.015 0.11 0.08 0.05 250 87 13 9 285 7 221 4 121
Measured 218.05 0.46 0.23 0.016 0.30 0.31 0.11 999 491 36 65 2,080 67 2,165 24 783
Indicated 273.53 0.39 0.18 0.016 0.18 0.17 0.07 1,061 493 44 50 1,608 47 1,503 19 602
Kingash Project
6
Meas + Ind 491.59 0.42 0.20 0.016 0.23 0.23 0.09 2,060 984 80 115 3,688 114 3,667 43 1,385
Inferred 101.30 0.31 0.11 0.015 0.12 0.10 0.05 310 115 15 12 401 10 337 5 154
Notes:
1. Mineral resources were classified following the guidelines and using the definitions of CIM.
2. The cut-off grade applied was 0.2% Ni.
3. Measured mineral resources were defined by diamond core drilling on a grid of 50 m by 50 m.
Indicated mineral resources were defined by diamond core drilling on a grid of 100 m by 100 m.
Inferred mineral resources were defined within the 0.2% Ni mineralised envelope but beyond the limits of the 100 m by100 m definition diamond core drilling grid. The nominal spacing for Inferred mineral
resources is 200 m by 200 m.
4. Bulk densities of 2.94 t/m3 for Kuyovsky, 2.90 t/m3 for Verkhnekingashsky and 2.83 t/m3 for Kingashsky were used to calculate mineral resources.
Intergeo MMC Ltd
For this PEA, Micon has calculated the potentially mineable resources of the Kingash Project
within the three pit shells and has referred to these as “in-pit resources”, a descriptive term
that is frequently used in this context. These in-pit resources are derived from Whittle-pit
shells with no formal ramp design and are indicative of the potentially mineable portion of
the mineral resources. In-pit resources include 4% dilution at nil grade and are reduced by
4% to account for mining losses.
Whittle pit optimisations were prepared for Measured, Indicated and Inferred mineral
resources in order to assess the potential ultimate size of the pit and to assess the impact that
further definition drilling may have on the mineral reserves of the project. Measured,
Indicated and Inferred in-pit resources are presented in Table 1.2.
It is Micon’s opinion that demonstrating the proportion of in-pit resources that are derived
from the Measured, Indicated and Inferred categories of the mineral resources provides the
reader with a level of understanding of the degree to which in-pit resources have been defined
by drilling.
The reader is reminded that the PEA is preliminary in nature. It includes inferred mineral
resources that are considered too speculative geologically to have the economic parameters
applied to them that would enable them to be categorised as mineral reserves, and there is no
certainty that the results of the PEA will be realised.
1.5 MINERAL RESERVES
The Kingash Project hosts no Canadian Institute of Mining, Metallurgy and Petroleum (CIM)
or NI 43-101-compliant mineral reserves.
1.6 METALLURGICAL TESTING
Between 1996 and 2003 and at a later period between 2007 and 2008, extensive mineral
processing and metallurgical testwork was conducted on samples from the Kingashsky,
Verkhnekingashsky and Kuyovsky deposits. Initially testwork utilised drill core composite
samples but later large bulk samples were collected from declines driven on each of the
Kingashsky, Verkhnekingashsky and Kuyovsky deposits.
The testwork was completed on behalf of Norilsk Nickel, and primarily focused on
conventional flotation processes. This produced a low-grade, bulk nickel/copper sulphide
concentrate, which was then smelted to a high-grade matte. Hydrometallurgical processes
then refined the high-grade matte to metal.
Samples of pilot plant bulk concentrates from each of the deposits were used for laboratory-
scale smelting testwork. The samples were mixed and split into representative portions for
chemical analysis and testwork.

Table 1.2: Kingash In-Pit Resources Derived From Measured + Indicated + Inferred Mineral Resources
Source Mill Feed Ni Cu Co Pt Pd Au Ni Cu Co Pt Pt Pd Pd Au Au

Deposit
Category (kt) (%) (%) (%) (g/t) (g/t) (g/t) (kt) (kt) (kt) (t) koz (t) koz (t) koz
Measured 102,775 0.42 0.18 0.015 0.28 0.31 0.10 432 185 15 29 937 32 1019 11 341
Indicated 130,770 0.33 0.13 0.015 0.12 0.11 0.05 431 176 20 16 512 14 463 7 217
Kingashsky
Total 233,545 0.37 0.15 0.015 0.19 0.20 0.07 863 361 35 45 1,449 46 1,482 18 558
Inferred 84,752 0.28 0.10 0.015 0.10 0.08 0.04 239 82 13 9 277 7 214 4 117
Measured 69,000 0.38 0.18 0.014 0.27 0.28 0.09 262 123 10 19 603 19 624 6 198
Indicated 106,353 0.36 0.17 0.014 0.20 0.19 0.06 385 181 15 21 670 20 648 6 204
Verkhnekingashsky
Total 175,353 0.37 0.17 0.014 0.23 0.23 0.07 647 304 25 40 1,273 39 972 12 402
Inferred 12,257 0.29 0.14 0.014 0.15 0.16 0.04 36 17 2 2 60 2 61 0 15
Measured 51,388 0.53 0.32 0.018 0.29 0.27 0.13 274 166 9 15 478 14 454 7 219
Kuyovsky Indicated 32,046 0.51 0.29 0.018 0.30 0.27 0.13 162 93 6 10 311 9 281 4 134
Total 83,433 0.52 0.31 0.018 0.29 0.27 0.13 436 260 15 25 788 23 735 11 354
Measured 223,163 0.43 0.21 0.016 0.28 0.29 0.11 967 475 35 63 2,018 65 2,098 24 759
Indicated 269,168 0.36 0.17 0.015 0.17 0.16 0.06 978 450 41 46 1,492 43 1,392 17 555
Total Project
Total 492,331 0.39 0.19 0.015 0.22 0.22 0.08 1,945 925 76 109 3,510 108 3,490 41 1,314
8
Inferred 97,009 0.28 0.10 0.015 0.11 0.09 0.04 275 98 14 10 337 9 275 4 132
Intergeo MMC Ltd
Most of the recent laboratory scale flotation and smelting testwork was conducted by the
Gipronikel Institute (Gipronikel), St. Petersburg, Russian Federation. Flotation pilot scale
testwork was conducted by Technopark-Apatity, Apatity, Murmansk Region. Based on the
testwork results, Gipronikel proposed fluid bed drying, DC electric smelting and converting
of the smelter matte to high-grade matte using a Vanyukov furnace.
Using the testwork conditions and results, Gipronikel produced material and thermal balances
for the smelting and converting processes. These balances were used by Gipronikel for
equipment sizing and capital and operating cost estimates incorporated in the Kingashsky
TEO of Permanent Conditions, 2008.
1.7 PROCESS DESIGN
The similar metallurgical response of the three deposits facilitates their processing in one
plant, which is proposed to be located equidistant (2 km to 3 km) from the three pits. It is
proposed that the processing plant include the following main facilities:
• Coarse ore reception and storage;

• Crushing plant;
• Main building, including crushed ore storage, grinding and flotation;
• Concentrate thickening, filtration, drying, storage and load out to trucks for road
transport to the smelter at Zelenogorsk;
• Tailings dewatering and storage facility;
• Process water storage, recirculation and distribution;
• Power supply and distribution;
• Other utilities; and,
• Offices, laboratory, warehouse and maintenance facilities.
Hatch has conducted a Scoping Study for the Kingash Project, including beneficiation
options, bulk concentrate hydrometallurgical treatment options, bulk concentrate smelting
and off-gas handling and converted matte refinery options based on information contained in
the TEO of Ore Quality Requirements Report of Platinum – Copper – Nickel Reserves of
Kingash and Upper Kingash Deposits developed by Gipronikel in 2009. The basic operating
criteria are proposed to be as follows:
• 18.5 Mt/a of mill feed processed; and,

• Grinding and flotation operating schedule of three, eight-hour shifts, 340 days per
year (93.2% utilisation), with a design throughput of 2,267 t/h.
The process criteria (grind sizes and flotation stages and residence times) are based on the
laboratory and pilot plant testwork carried out by Gipronikel.
As part of the Hatch scoping study a number of options were considered for the beneficiation
of ore, smelting and converting (including off gas handling) of concentrate, and base metal

refining of either converter matte or direct refining of concentrate to produce final products of
Ni and Cu cathode and by-products.
Review of the three beneficiation options, three smelting converting options and two base
metal refining options chosen resulted in the identification of eight potential combinations of
the options (Scenarios) for further study as flow sheets for treating material delivered from
the mine through to final metal products.
The eight scenarios were evaluated based on the mass and energy balances (developed
through modelling) as well as estimates of capital and operating cost for the various options
incorporated in each scenario.
Based on the above work, one scenario has been selected as preferred for the purposes of the
PEA. The process components of the preferred scenario are described below.
The beneficiation plant is designed to address valleriite recovery and is similar to the method
used at the Palabora Mining Company in South Africa. The flow sheet provides for
optimisation of processes and includes magnetic separation of scavenger flotation tails to
separate valleriite for regrinding and column flotation. The beneficiation plant Option 2 flow
diagram (BFD) includes:
• Coarse crushing with high production rate crusher;

• Two stage grinding with a SAG mill operating in closed loop with screen (SAG mill)
and pebble crusher, and a ball mill operating in closed loop with hydrocyclones.
Classified product (P80 is -0.071 mm) is fed to a flotation circuit;
• Rougher flotation with two stages of rougher concentrate cleaning;
• Scavenger flotation of rougher flotation tails;
• Regrind of scavenger flotation and tails of 1st and 2nd stage cleaner flotation;
• Regrind cleaner flotation;
• Magnetic separation of scavenger flotation tails to concentrate valleriite;
• Fine grinding of valleriite concentrate; and,
• Column flotation of finely ground valleriite concentrate.
The advantages of this option over the Gipronikel flow sheet used in the TEO include:
• Crushing and grinding require less power and consumables and require a smaller
footprint;
• Flotation circuit includes valleriite separation and column flotation of valleriite
concentrate; and,
• Flotation process could increase Ni mass pull by up to 5% over the Gipronikel design.
It is important to note that additional testwork will be required to confirm the viability of the
valleriite regrind process in subsequent phases of work.
Recoveries of metal to concentrate are as shown in Table 1.3.

Table 1.3: Metallurgical Recoveries to Concentrate for Gipronikel Flow Sheet
Valleriite Regrind Sulphidisation

Element
Recovery (%) Recovery (%)
Nickel 62.88 67.05
Copper 51.7 59.15
Cobalt 54.09 57.53
Platinum 63.83 63.83
Palladium 55.42 55.42
Gold 56.86 56.86
Silver 53.60 53.60
Rhodium 30.67 30.67
Ruthenium 32.00 32.00
Iridium 17.40 17.40
Ni Conc. Grade 10.27 10.95
The concentrate is proposed to be fed to thickening, filtration and drying to achieve 2%

moisture content. Low moisture content is required to provide transportation to the
metallurgical plant from the concentrator in severe climatic conditions.
The tails from different flotation stages are combined and fed to thickening to achieve 50%
solids in the thickener underflow. Thickened tailings are discharged to the tailings storage
area. Thickener overflow from the concentrate and tailings thickeners and filtrate from the
concentrate filters are returned to process to minimise water losses.
It is proposed that the concentrate will be transported by road to the metallurgical plant
located at Zelenogorsk.
The preferred process scenario smelting and refining option is based on the treatment of
458,327 dry t/a of valleriite regrind concentrate and involves:
• Receipt, unloading and storage of dry concentrate;

• Smelting of the concentrate, recycled converter slag and flux materials in a 6-
electrode electric furnace to give molten copper/nickel/iron matte, a slag which is
granulated and suitable for disposal, off-gas containing sulphur dioxide and
particulate matter;
• Upgrading of the matte using an Ausmelt converter to produce a slag, copper/nickel
matte and off-gas containing approximately 20% sulphur dioxide. The converter slag
is granulated, dried and returned to the smelting furnace. The matte is poured into
ladles and allowed to cool slowly at a controlled rate;
• The combined gas stream from the smelting and converting furnaces is diluted with
air, cooled, de-dusted in an electric precipitator and then sulphur dioxide is captured
as 98% sulphuric acid in a double contact/double absorption acid plant. Some
sulphuric acid is used in the base metal refinery and the remainder stored prior to rail
transport to customers;

• The slow cooled matte is broken and crushed and then treated in a magnetic
separation plant where the bulk of the PM and PGM are recovered as a magnetic
alloy. The non-magnetic fraction is the feed to the base metals refinery;
• In the base metals refinery the non-magnetic matte fraction is subject to several
stages of high temperature acid leaching and solution purification followed by
electrowinning of high grade copper and nickel cathodes and recovery of cobalt as
hydroxide. Sodium sulphate crystals are produced as a by-product to control the
sulphate concentration in the base metal refinery circuit; and,
• The base metals refinery leach residue contains small amounts of copper and nickel
plus the remaining PM and PGM and is toll treated.
The financial analysis is based on expected metallurgical recoveries from the concentrate to
smelter matte of:
• Ni 97%;
• Cu 98%;
• Co 98%; and,
• PM/PGM 99%.
1.8 ECONOMIC ANALYSIS
1.8.1 Capital Costs
The forecast initial and life-of-mine (LOM) capital costs are summarised by area in
Table 1.4.
The capital costs were estimated by Hatch and reviewed by Micon except for the mine
mobile equipment costs that were estimated by Micon. They are considered to be appropriate
for the 4th Quarter of 2011 and assumed to be accurate to ± 40%. The cost estimates include
appropriate allowances for scale, location and 20% contingency and exclude Value Added
Tax (VAT). It is assumed that VAT on initial capital is recovered in the first two years of
operation and on sustaining capital in the year of expenditure.
Table 1.4: Base Case Capital Costs
Capital Cost (US$ ,000)

Area
Initial LOM Total
Feasibility Studies 52,839 52,839
Owner 20,167 - 20,167
Mine Equipment/Infrastructure 89,599 198,434 288,033
Process Plant/TMF/Infrastructure 605,274 290,532 895,806
Smelter/Acid Plant/ Base Metal Refinery Infrastructure 700,786 336,377 1,037,163
Project Indirects + Contingency (30%) 1,226,109 1,226,109
Working 52,680 -52,680 0
Closure -
Total 2,747,454 772,663 3,520,117
Sustaining capital for mine mobile equipment is based on replacement of 20% of the fleet
every five years from Year 6, including additional mining equipment that is added during the

mine life to achieve mine production targets. Mine infrastructure sustaining capital is based
on 2% of initial mine infrastructure capital per year from Year 4. Sustaining capital for
processing, smelting equipment is estimated at 2% per year, respectively, from the second
year of operation. Change in working capital is estimated as the sum of 25% of total
operating cost, 10% of production cost for production stores and 30% of production cost
VAT.
1.8.2 Operating Costs
The forecast base case LOM mine unit operating costs are presented in Table 1.5.
Table 1.5: Base Case Life of Mine Unit Operating Costs
Unit Cost
Area
(US$/t ore)
Mining 10.82
Processing 7.19
Concentrate Transport 0.43
General and Administration 1.64
Royalty 3.78
Total Operating Cost 23.86
The forecast base case LOM smelter unit operating costs are presented in Table 1.6.
Table 1.6: Base Case Life of Mine Smelter Unit Operating Costs
Unit Cost
Area
(US$/t concentrate)
Smelter 105.72
Acid Plant 7.60
Matte Transport 0.04
Base Metal Refinery 238.85
The mine operating costs are derived from the Verkhnekingashsky Project TEO of Permanent
Conditions, 2009 and Kingashsky Project TEO of Permanent Conditions, 2008 inflated to
4th Quarter 2011 and with some adjustment from in-house data. The concentrator, smelter,
base metal refinery operating costs and the general and administration costs were developed
by Hatch and reviewed by Micon. The unit cost and rate inputs are presented in Table 1.7.
Table 1.7: Unit Costs and Rates
Area Input
Kingashsky Waste Mining (US$/t of Waste Mined) 2.32
Kingashsky Ore Mining (US$/t of Ore Mined) 2.79
Verkhnekingashsky Waste Mining (US$/t of Waste Mined) 1.93
Verkhnekingashsky Ore Mining (US$/t of Ore Mined) 2.72
Kuyovsky Waste Mining (US$/t of Waste Mined) 1.85
Kuyovsky Ore Mining (US$/t of Ore Mined) 2.64
Ore Stockpile Reclaim (US$/t Ore Reclaimed) 1.46
Processing Variable (US$/t of Ore Processed) 6.71

Area Input
Processing Fixed (US$,000/year) 8,470
Mine General and Administration (US$,000/year) 28,964
Concentrate Transport (US$/t Concentrate) 17.00
Smelter Variable (US$/t Concentrate) 85.37
Smelter Fixed (US$,000/Year) 9,302
Acid Plant Variable (US$/t Concentrate) 6.81
Acid Plant Fixed (US$,000/Year) 361
Base Metal Refinery Variable (US$/t Matte) 1,221.45
Base Metal Refinery Fixed (US$,000/Year) 12,297
Matte Transport (US$/t Matte) 0.25
Base Metal Royalty (% of Mining Operating Cost, Including Depreciation) 8.0
Property Tax (% of Depreciated Asset Value) 2.2
The operating costs assume full refund of VAT but Micon has provided for some VAT
repayment delay in the working capital provision.
1.8.3 Summary Economic Analysis
The NPV and IRR of the Kingash Project net cash flow have been determined after profit tax
and on a 100% equity basis. The cash flow is in constant US$ (i.e. not inflated), with RUB
costs as at 4th Quarter 2011 and an exchange rate of 30 RUB to the US$, and discounted at a
real rate of 8%.
The revenue and operating and capital cost inputs to the financial model are based on the
production schedule, technical and operating criteria and cost estimates discussed in the
preceding sections.
The base case LOM project production and financial highlights are summarised in Table 1.8
and Table 1.9, respectively.
Table 1.8: Base Case Life of Mine Production Highlights
Criteria Value
Production Life (years) 25
Waste (Mt) 1,788.9
Mill feed (Mt) 432.2
Stripping Ratio (including Pre-Strip) 4.1
Mill feed Grade (% Ni) 0.42
Mill feed Grade (% Cu) 0.20
Mill feed Grade (% Co 0.02
Mill feed Grade (g/t Pd) 0.24
Mill feed Grade (g/t Pt) 0.24
Mill feed Grade (g/t Au) 0.09
Flotation Concentrate Produced (kt) 10,999.8
Flotation Concentrate Contained Ni (kt) 1,129.7

Criteria Value
Flotation Concentrate Contained Cu (kt) 441.8
Flotation Concentrate Contained Co (kt) 37.5
Flotation Concentrate Contained Pd (t) 56.7
Flotation Concentrate Contained Pt (t) 65.2
Flotation Concentrate Contained Au (t) 21.8
Matte Produced (kt) 1,903.9
Matte Contained Ni (kt) 1,093.1
Matte Contained Cu (kt) 431.9
Matte Contained Co (kt) 36.7
Matte Contained Pt (t) 64.4
Matte Contained Pd (t) 56.0
Matte Contained Au (t) 21.5
Ni Metal Sold (kt) 1,033.9
Cu Metal Sold (kt) 422.9
Co Sold (kt) 26.7
Pt Sold (t) 52.8
Pd Sold (t) 45.9
Au Sold (t) 17.6
Ni Equivalent Metal Sold (Mlb) 3,0801
1
Nickel equivalent metal is calculated from all metals sold and the
metal prices shown in Table 1.10.
Table 1.9: Base Case Life of Mine Financial Highlights
Criteria Value
Net Revenue (US$ million) 29,323.9

Net Smelter Return (%) 89.7
Mine Production Cost (US$/t of Ore) 23.86
Smelter Production Cost (US$/t of concentrate) 352.21
Total Operating Cost Excluding Royalty (US$ million) 13,293.4
Cash Unit Operating Cost (US$/lb of Ni) 5.83
By-product Credits (US$/lb Ni) 3.51
Net Cash Operating Cost (US$/lb Ni)1 2.32
Net Cash Income (US$ million) 12,864.6
Initial Capital Cost including Initial Working Capital and VAT (US$ million) 3,230.7
LOM Capital Cost (US$ million) 4,054.1
Net Cash Flow (US$ million) 8,810.5
NPV (US$ million) 1,392.6
IRR (%) 13.4
Initial Capital Payback (y) 7.21
1
Net cash operating cost is the “C1 Cash Cost” as defined by Brook Hunt.
The NPV of the projected Kingash cash flow discounted at a rate of 8% is US$1,392.6
million and the internal rate of return is 13.4%. The capital payback period is projected to be
7.21 years. It is emphasised that this PEA is preliminary in nature and includes inferred
mineral resources. There is no certainty that the results of the PEA will be realised.

The base case cumulative net cash flow after profit tax and before financing is presented in
Figure 1.3.
Figure 1.3: Base Case Cumulative Net Cash Flow
1.9 REVENUE
The base case gross revenue is calculated using the metal prices presented in Table 1.10.
Table 1.10: Base Case Metal Prices
Metal Price
Nickel (US$/lb) 9.50
Copper (US$/lb) 2.75
Cobalt (US$/lb) 16.00
Palladium (US$/oz) 500
Platinum (US$/oz) 1,600
Gold (US$/oz) 1,100
Silver (US$/oz) 16
Rhodium (US$/oz) 1,875
Ruthenium (US$/oz) 175
Iridium (US$/oz) 1,050
Sulphuric Acid (US$/t) 40
Sodium Sulphate (US$/t) 85
Net revenue is calculated after concentrate and matte transport costs, nickel and PGM
refinery recoveries and costs, and sales costs from the TEO, with inflation as appropriate.
The overall net smelter return (net revenue/produced concentrate contained metal value) is
89.7%.
1.10 CAPITAL AND OPERATING COSTS
Capital and operating costs are discussed in Section 21 of this Report.
1.11 TAXATION
Profit tax is calculated at 20% of cash income after deduction for asset depreciation.
Straight-line depreciation of capital costs over 12 years is used.
A VAT rate of 18% is used for calculation of initial capital and change in working capital.
The Kingash operation will be primarily a base metal producer. Russian metal production
royalties are based on 8% of mine operating costs plus mine capital depreciation.
Property tax is calculated as 2.2% of net book value of assets.
1.12 SENSITIVITY ANALYSIS
The sensitivities of NPV and IRR to variations in nickel price and to variations in net
revenue, total operating cost and total capital cost are summarised in Table 1.11 and
Table 1.12 respectively, and in Figure 1.4, Figure 1.5 and Figure 1.6.
Table 1.11: NPV and IRR Sensitivity to Nickel Price
Ni Price NPV IRR

(US$/lb) (US$M) (%)
6.65 -51.58 7.9
7.60 414.80 9.9
8.55 964.92 11.9
9.50 (Base Case) 1,392.56 13.4
10.45 1,942.67 15.2
11.40 2,492.79 16.9
12.35 3,042.91 18.5
Table 1.12: NPV and IRR Sensitivity to Revenue, Operating Cost and Capital Cost
Variable Revenue Operating Cost Capital Cost

Variance NPV IRR NPV IRR NPV IRR
(%) (US$ M) (%) (US$ M) (%) (US$ M) (%)
70 -878.10 3.8 2,571.73 17.4 2,286.96 19.5
80 -121.22 7.6 2,178.67 16.1 1,988.82 17.1
90 635.67 10.7 1,785.61 14.8 1,690.69 15.1
100 (Base Case) 1,392.56 13.4 1,392.56 13.4 1,392.56 13.4
110 2,149.44 15.9 999.50 12.0 1,094.42 12.0
120 2,906.33 18.1 606.44 10.6 796.29 10.8
130 3,663.22 20.3 213.38 9.0 498.16 9.7

Figure 1.4: NPV and IRR Sensitivity to Nickel Price
Figure 1.5: NPV Sensitivity to Revenue, Operating Cost and Capital Cost
Figure 1.6: IRR Sensitivity to Revenue, Operating Cost and Capital Cost
As would be expected, at the base case metal prices the NPV and IRR are particularly
sensitive to variations in net revenue. They are less sensitive to a range of variance of the
operating and capital costs, up to the accuracy of estimation, although the capital variance is
greater than would usually be expected.
Similarly, the project economics are more sensitive to variations in nickel price, as the major
contributor to revenue.
Table 1.13 provides a summary of projected metal and other products generated over the 25-
year life of the operation.
Table 1.13: Summary of Annual Production
Ni Cu Co Pt Pd Au Ag Rh Ru Ir H2SO4 Na2SO4
Year
(kt) (kt) (t) (koz) (koz) (koz) (koz) (kg) (kg) (kg) (kt) (kt)
2017 31 12 853 45 34 16 8 10 40 4 135 69
2018 42 17 1,051 74 58 24 12 15 60 7 186 94
2019 40 16 1,087 67 55 22 11 14 58 6 177 90
2020 43 18 1,135 63 52 21 12 15 62 7 192 97
2021 42 17 1,118 60 51 21 12 15 60 7 185 94
2022 49 20 1,154 89 81 30 14 17 71 8 219 111
2023 49 21 1,126 97 86 30 14 17 71 8 218 111
2024 44 18 1,158 65 56 23 12 15 63 7 194 98
2025 51 22 1,191 92 84 33 15 18 74 8 228 116
2026 49 20 1,184 88 81 30 14 17 70 8 216 110
2027 50 21 1,167 91 84 31 14 18 72 8 221 112
Ni Cu Co Pt Pd Au Ag Rh Ru Ir H2SO4 Na2SO4
Year
(kt) (kt) (t) (koz) (koz) (koz) (koz) (kg) (kg) (kg) (kt) (kt)
2028 46 19 1,128 85 75 29 13 16 66 7 204 104
2029 47 19 1,111 93 87 30 13 16 67 7 207 105
2030 46 18 1,159 75 67 25 13 16 67 7 205 104
2031 43 17 1,152 65 56 22 12 15 62 7 191 97
2032 42 16 1,066 70 66 23 12 15 60 7 186 94
2033 45 18 1,019 112 101 30 13 16 66 7 201 102
2034 33 14 993 40 32 16 9 11 47 5 146 74
2035 40 16 1,155 48 39 18 11 14 57 6 176 89
2036 41 17 1,134 62 54 22 12 14 59 6 183 93
2037 39 16 1,160 48 36 17 11 14 57 6 175 89
2038 40 16 1,140 51 40 18 11 14 58 6 178 90
2039 41 16 1,117 58 48 17 12 14 59 6 183 93
2040 42 17 1,146 61 53 19 12 15 60 7 185 94
Total 1,034 423 26,706 1,698 1,476 567 292 362 1,489 161 4,591 2,330
1.13 ENVIRONMENTAL AND SOCIAL CONSIDERATIONS
In order to assess the environmental impact of the Kingash Project, six basic studies were
conducted by LLC Eco-supervisor Krasnoyarsk from 2007 to 2008. The findings were
collated and presented in a report entitled “Environmental Monitoring Programme Kingash
Ore Field”. In addition a review of environmental matters was prepared by ERM of Moscow
and presented in “Scoping Report, Kingash and Upper-Kingash Deposits Ore Mining and
Processing Production Complex, ERM, August 2011”. The objective of the six studies was
twofold: to ascertain how, if at all, the work executed at Kingash affected the local
environment; and secondly, to collect data for future environmental monitoring programmes.
The methodology for the surveys varied slightly for each deposit area, but was similar for the
most part. All surveys considered:
• Soils;
• Surface waters and river silt sediments;
• Level and degree of hazardous radiation;
• Study of fauna and flora;
• Surface impact from exploration work; and,
• Air pollution.
Analysis of the survey data revealed that the concentration levels of soil, water and silts did
not exceed maximum baseline levels for the three classes of hazardous elements. Elements
Ti, V, Mn, Ga, Zr and Y were slightly higher than the natural maximum levels in the soils
and the silts, but no hazardous radiation was detected in the areas of the three deposits.
Surface and underground water quality was exceptionally high and free of hazardous levels
of toxic metals. Atmospheric samples were collected to evaluate the quality of the air in the
buffer zone between the mine and the housing facilities and the results met Russian
standards.

Although exploration activities have had minor environmental impacts on the Kingash area,
no long term or significant damage has been done. It is possible, however, that the
construction of the mine itself may have adverse environmental impacts on the surrounding
ecosystem. The Kingashsky TEO of Permanent Conditions recommends a number of
environmental measures be implemented over the life of the mine at a cost of RUB589
million.
1.14 CONCLUSIONS AND RECOMMENDATIONS
Micon’s Preliminary Economic Assessment has developed a robust mineral resource model
for the Kingashsky, Verkhnekingashsky and Kuyovsky deposits. The mineral resources
summarised in Table 1.1, and the potentially mineable portions of the mineral resources
presented in Table 1.2 demonstrate that the Kingashsky, Verkhnekingashsky and Kuyovsky
deposits represent very significant future sources of Ni, Cu, Co, PGM and Au.
The following work is recommended to advance the development of the Kingash Project and
for the improvement of the mineral resources with respect to compliance with the CIM
Standards for reporting Mineral Resources and Reserves:
1. Testwork supporting the Hatch sulphidisation beneficiation option should be carried out
to validate this approach as the Hatch work for this flow sheet shows significant
improvement in metal recoveries with an increase of Project NPV to US$1,765.8
million.
2. Geotechnical studies are required to optimise pit slope designs. Local hydrological
conditions need to be assessed in order to understand the impact of water on the pit
slope design.
3. Open pit optimisation studies are recommended to identify the most economical
development sequence for the project. The principal question is whether two or three
open pits should be developed at the onset of production. The Phase 1 pits should
contain a combined total of approximately 100 Mt of ore. The Phase 1 pits will identify
portions of the deposits that should be the focus of detailed definition drilling.
Approximately five to ten years of production should be drilled in detail in advance of
the commencement of commercial mineral processing operations.
4. Additional metallurgical testwork is required to refine metallurgical recoveries and

optimise the recovery method. Further definition of PGM concentrates and treatment is
required to fully investigate operating costs and metallurgical recoveries.
5. A preliminary feasibility study is recommended to further consider the various options

identified by Hatch and to prioritise the most economical and most feasible development
scenarios.
6. Additional diamond drilling is recommended with the objective of upgrading Inferred

mineral resources to the Indicated category so that these can be used to develop
Probable mineral reserves. The total amount of drilling proposed is:
Kingashsky 14,400 m in 36 holes;

Verkhnekingashsky 2,400 m in 6 holes.

It should be noted that this is an indicative programme that will be adapted and adjusted
in light of results obtained as drilling progresses.
The budget for the work items recommended above is shown as Phase 1 in Table 1.14.
Table 1.14: Proposed Budget for Work in 2012 Through 2014
Phase 1 Phase 2 Total

2012-2013 Post 2013
Activity $ Million $ Million $ Million
Field Studies, Engineering Surveys (incl. Geotechnical Work, Data 14.54 14.54
Collection, Permitting)
Metallurgical Sample Collection 1.06 1.06
Metallurgical Testwork, Pilot Plant Tests (Ore Preparation, Beneficiation) 2.50 2.50
Metallurgical Testwork, Pilot Plant Tests (Smelting, Base Metal Refinery) 2.13 2.13
Development of Basic Engineering 19.00 19.00
Development Drilling (incl. Assay QC) 5.09 5.09
Preliminary Feasibility Study (incl. Optimisation Studies) 6.00 6.00
Feasibility Study 40.00 40.00
Total 31.32 59.00 90.32
Contingent on the successful outcome of Phase 1, work in Phase 2 will be directed towards
preparation of a feasibility study for the Kingash Project. This will include $19 million to be
spent on basic engineering studies required in Russia to support permitting requirements.
Micon has reviewed the proposed budget and recommends that it is implemented by
Intergeo/Kingashskaya.

2.0 INTRODUCTION
Micon International Limited Co. (Micon) has been commissioned by Intergeo MMC Ltd
(Intergeo) to complete a preliminary economic assessment (PEA) of a group of mineral
deposits in the Sayansky District of Krasnoyarsk Krai, Russian Federation. The three mineral
deposits in question, Kingashsky, Verkhnekingashsky and Kuyovsky, collectively, the
Kingash Project, all host nickel-copper-cobalt platinum group metals and are located 220 km
southeast of Krasnoyarsk, the regional capital.
This assessment conducted by Micon has been compiled into the National Instrument 43-101
Standards of Disclosure for Mineral Properties (NI 43-101) report format as required by the
Canadian Securities Administrators.
2.1 INTERGEO MMC LTD
Intergeo is a diversified mineral resource company primarily focused on developing,

exploring and acquiring base metal properties in Russia. Intergeo holds its interest in the
Kingash project through its subsidiary Kingashskaya Mining Company LLC.
2.2 MICON INTERNATIONAL LIMITED
Micon is an independent firm of geologists, mining engineers, metallurgists and

environmental consultants, all of whom have extensive experience in the mining industry.
The firm operates from integrated offices in Norwich, United Kingdom and Toronto and
Vancouver, Canada.
Micon offers a broad range of consulting services to clients involved in the mineral industry.
The firm maintains a substantial practice in the geological assessment of prospective
properties, the independent estimation of resources and reserves, the compilation and review
of feasibility studies, the economic evaluation of mineral properties, due diligence reviews,
and the monitoring of mineral projects on behalf of financing agencies.
Micon’s practice is worldwide and covers all of the precious and base metals, the energy
minerals (coal and uranium) and a wide variety of industrial minerals. The firm’s clients
include major mining companies, most of the major United Kingdom and Canadian banks and
investment houses, and a large number of financial institutions in other parts of the world.
Micon’s technical, due diligence and valuation reports are regularly filed with regulatory
agencies such as the London Stock Exchange, the US Securities and Exchange Commission,
the Ontario Securities Commission, the Toronto Stock Exchange, and the Australian Stock
Exchange.
Micon is internally owned and is entirely independent of Intergeo MMC Ltd. and
Kingashskaya Mining Company LLC and other subsidiaries. The person responsible for the
review and opinions expressed in the PEA is a full-time employee of Micon. For its services
in preparing the PEA, Micon is receiving payment from Intergeo/Kingashskaya based on time
and expenses and will not receive any capital stock from Intergeo/Kingashskaya or its
affiliates. Micon is reimbursing its associates based on time and expenses.

2.3 QUALIFICATIONS OF THE CONSULTANT
Stanley C. Bartlett, M.Sc., P.Geo., of Micon International Co Limited is the registered

Qualified Person allocated to the project and has supervised and verified all areas of this
report. Mr. Bartlett has over 30 years of field experience with precious and base metal
mineralisation similar to that of the three Kingash deposits.
Mr. Bartlett visited the Krasnoyarsk offices and project site of GPP Geologicheskaya
Kompania LLC (LLC Geocomp) from 3rd to 6th October 2007 and the Kingash Project site
from 1st to 4th August 2011. In 2007 Micon was accompanied to site by Mr. Alexander
Stekhin, General Director of Kingash GRK, Mr. Alexey Menchikov, Chief Geologist,
Mr. Viktor Lomaev, General Director of LLC Geocomp and Mr. Sergey Voroshin, Head of
Norilsk Nickel MMC Explorations Division IT Department. In 2011 Micon visited the
project site with Mr. Ilya Galtsov, Director of MMC Intergeo Engineering and Design, Mr.
Alexey Menchikov, Deputy General Director of Kingash GRK and Mr. Sergey Voroshin,
Director of Intergeo.
During his visit, Mr. Bartlett performed the following tasks:
• Examination of the surface geology and mineralisation of the Verkhnekingashsky,

Kuyovsky and Kingashsky deposits;
• Examination of drill core, core logging and core storage facilities;
• Review of core and channel sampling practices, sample preparation and shipping
procedures, surveying records and documentation procedures with the on-site
geological personnel and Kingashskaya representatives; and,
• Examination of the bulk sample adits at each of the Verkhnekingashsky, Kuyovsky
and Kingashsky deposits.
2.4 UNITS OF MEASURE
Quantities are generally stated in SI units, as utilised by the Canadian and international
mining industries, including: metric tons (tonnes, t), million metric tonnes (Mt), kilograms
(kg) and grams (g) for weight; kilometres (km), metres (m), centimetres (cm) or millimetres
(mm) for distance; cubic metres (m3), litres (l), millilitres (ml) or cubic centimetres (cm3) for
volume, square kilometres (km2) or hectares (ha) for area, weight percent (%) for base metal
grades, grams per metric tonne (g/t) for gold grades (g/t Au) and tonnes per cubic metre (t/m3)
for density. Precious metal grades may also be expressed in parts per billion (ppb) or parts
per million (ppm) and their quantities may also be reported in troy ounces (oz), a common
practice in the mining industry. All currency amounts are stated either in US dollars (US$) or
Russian roubles (RUB). A glossary of terms and abbreviations can be found in Section 28.0
of this report.

3.0 RELIANCE ON OTHER EXPERTS
The author of this report has reviewed and analysed data provided by Kingashskaya, its
contract drillers and analytical laboratories and has drawn his own conclusions there from.
Micon has also undertaken direct field examinations of the Kingash Project in person.
The author of this report has not conducted any independent exploration work, drilled any
holes or performed any sampling and assaying programmes. Micon has examined outcrops
and core samples from the drill holes that intersected the deposit in order to confirm the
presence of nickel-copper-bearing mineralisation.
The title of Intergeo/Kingashskaya to the property which is the subject of this report has been
reviewed by Micon and appears to be in order; however, Micon offers no legal opinion as to
the validity of the mineral title claimed. A description of the property, and ownership thereof,
is provided for general information purposes only. Comments on the state of environmental
conditions, liability and remediation have been made where required by NI 43-101. Micon
offers no opinion on the state of the environment on the properties.
While exercising all due diligence in checking, testing and confirming this information, the
author of this report has relied upon the data presented by Intergeo to make the mineral
resource estimates and in preparing the PEA.
This report has been prepared under the reporting requirements of NI 43-101 on behalf of
Intergeo. It is based on information available at the time of preparation, data supplied by
outside sources, and the assumptions, conditions and qualifications set out herein. This report
is intended to be used by Intergeo, subject to the terms of its agreements with Micon.
The author would like to acknowledge the cooperation of Intergeo’s management and field
staff, all of whom made any and all data requested available and responded openly and
helpfully to all questions.

4.0 PROPERTY DESCRIPTION AND LOCATION
4.1 LOCATION
As illustrated in Figure 4.1, the Kingashsky, Verkhnekingashsky, and Kuyovsky deposits are
located in the Sayansky administrative district of Krasnoyarsk Krai, situated approximately
220 km southeast of the city of Krasnoyarsk, the regional capital. The infrastructure of the
area is poorly developed and access to the project area is via a gravel road from the village of
Tugach (population 3,000). The road is passable during most seasons by 4WD vehicle. From
the south, the project site is connected to Tugach by a 55 km long gravel road. An improved
gravel road for a distance of 35 km connects Tugach to Aginskoye (the administrative centre)
of Sayansky District (population 9,000). An asphalt highway connects Aginskoye to the
railway station at Sayanskaya.
Figure 4.1: Location Kingash Project Licence Areas Krasnoyarsk Region
Exploration and mining licence KRR № 14012 TE for Cobalt-Copper-Nickel Ore and
Associated Minerals Exploration and Production for the Kingash deposit was registered with
the Federal Agency for Subsoil Use on 9th April 2007. The Kingash Licence is valid until 1st
April 2027 and covers a total area 16.3 km2.
Prospecting and appraisal licence KRR № 13780 TP for prospecting and appraisal of the
Verkhnekingashsky and Kuyovsky nickel-copper-PGM ore deposits
(Verkhnekingashsky/Kuyovsky Licence) was registered with the Federal Agency for Subsoil
Use on 11th October, 2006. According to Exhibit 3 of the licence, the
Verkhnekingashsky/Kuyovsky Licence covers a total area of 260 km2 and the licence is valid
until 31st December, 2012. Application for an extension of the licence will be made in mid-
2012. Micon is not aware of any reason why the extension may not be received.
4.2 TITLE AND LEGAL STATUS
The licence holder for the Kingash Project is the Kingashskaya Mining Company LLC, which
was formerly owned by Norilsk Nickel. The three deposits are covered by two licences
issued in the name of the Kingashskaya. Micon has seen the licences of Kingashskaya for the
Kingash deposits. On 12th July 2011, Intergeo, a company based in the Russian Federation,
acquired Kingashskaya and became the owner of the Kingash Project.
Exploration and mining Licence KRR № 14012 TE allows the company to explore and mine
cobalt-copper-nickel and associated minerals from the Kingashsky deposit. The licence was
purchased through an auction held on 15th February 2007 in Krasnoyarsk and was registered
with the Federal Agency for Subsoil Use on 9th April 2007. It is valid until 1st April 2027.
The total surface area of the tenement is 16.3 km2 and the licence permits mining to a
maximum depth of 1,000 m. The use of the land acreages was preliminarily sanctioned by
the Sayansky District Administration (Resolution № 87-p dated 22nd March 2005). The
licence area coordinates are listed in Table 4.1.
Table 4.1: Licence Details of the Kingashsky Deposit
Licence Corner Latitude Longitude

Points Degree Minute Second Degree Minute Second
1 54 54 45 95 24 40
2 54 55 45 95 27 20
3 54 53 50 95 29 40
4 54 52 30 95 27 10
The licence terms and conditions include the following obligations:
• Prepare a development plan and obtain required approvals according to established

procedures;
• Receive a positive production opinion from the relevant expert panels by 1st April
2014;
• Commence construction of mine infrastructure by 15th December 2014;
• Commence commercial production of the nickel-copper-PGM ores by 1st April 2017;
and,
• Advance production to a capacity of not less than 1 Mt/a of ore by 1st October 2017.
The status of licence commitments as at 15th January 2012 is shown in Table 4.3.

The Exploration Licence KRR № 13780 TP allows the company to carry out prospecting and
evaluation of the Verkhnekingashsky and Kuyovsky deposits. The licence area was obtained
through the process of reissuance of Licence KRR 11303 TP pursuant to Article 17.1 of the
Subsoil Law. The licence area coordinates are listed in Table 4.2.
The Article permitted the licence holder to establish a new legal entity for continuing its
activities in the licence area owned by the licence holder. Originally, the licence was granted
to Norilsk Nickel pursuant to the Ordinance by the RF Ministry of Natural Resources and, in
coordination with the Krasnoyarsk Krai Administration, on 7th August 2002 (date of state
registration on 2nd October 2002).
Table 4.2: Licence Details of the Verkhnekingashsky and Kuyovsky Deposits
Licence Corner Latitude Longitude

Points Degree Minute Second Degree Minute Second
1 54 55 35 95 23 45
2 54 52 30 95 27 26
3 54 53 45 95 31 15
4 54 46 20 95 38 40
5 54 43 10 95 30 05
6 54 53 45 95 18 55
Licence KRR № 13780 TP was registered by the Federal Agency for Subsoil Use on 11th
October, 2002. According to Exhibit 3, the licence is valid until 13th December, 2012 and
covers a total surface area of 260 km2. The licence does not have any depth restrictions with
respect to mining. The Sayansky District Administration has granted its general preliminary
consent for the land use for the purpose of prospecting and appraisal of the deposits
(Resolution № 359, dated 7th October, 2002).
It is assumed that after approvals are obtained, a new licence will be issued for the
exploration and production of the Verkhnekingashsky and Kuyovsky deposits based on the
discovery of a deposit prior to expiry of the KRR № 13780 TP licence term without any
tender or auction. Kingashskaya’s obligations pursuant to the licence are detailed below:
• Prepare reserves and resources estimation report stating estimated values of С2, Р1 and
Р2 categories and submit the same for approval to the Krasnoyarsk Krai Federal
Agency for Subsoil Use, by no later than 1st December 2012; and,
• The completion of 6,000 m of drilling in 2011 and an additional 4,000 m in 2012.
The status of licence commitments as at 15th January 2012 is shown in Table 4.3.
The exploration activities required to be completed in the licence area are listed in Exhibit 3
of the KRR № 13780 TP licence.
4.3 ROYALTIES
In accordance with Russian practice, the value of platinum group metals was assumed to be
subject to a 6% royalty based on the revenue generated. Further royalties for Ni, Cu and Co
were calculated based on 8% of the total mining costs. It was assumed that 4% dilution and
4% loss of ore will occur during the mining process.

Based on Micon’s review, there are no foreseeable reasons relating to licencing and
permitting why Intergeo/Kingashskaya will not acquire sufficient surface rights to conduct
mining and processing operations; or that development will not proceed.

Table 4.3: Status of Licence Commitments as at 15th January 2012
Milestone
№ Licence Terms and Conditions Actual Status
(deadline)
Kingash deposit (Licence KRR 14012 TE, Kingashskaya mining company LLC, Krasnoyarsk Krai)
1. 01.04.2008 Prepare exploration plan and obtain approvals for the same Completed
01.07.2008 Commence exploration Completed
Complete exploration and submit Conditions TEO complete with resource statement to state experts for
1. 01.04.2011 Completed ahead of schedule (09.12.2010)
review
2. 01.04.2014 Russian design package complete with approval from relevant state expert panels -
3. 15.12.2014 Commence infrastructure facilities construction -
4. 01.04.2017 Commence commercial mining -
5. 01.10.2017 Commission the mine with 1 Mt pa (min.) capacity -
6. 01.10.2008 Complete Environmental Baseline Study Completed
7. Annually Conduct environmental monitoring Conducted during the field season
Kingash area (Licence KRR 13780 TP, Kingashskaya mining company LLC, Krasnoyarsk Krai)
1. 30.02.2003 Prepare prospecting/exploration plan Completed
30
2. 30.06.2003 Conduct environmental baseline study Completed

3. 30.06.2003 Commence field work Completed
Complete Phase I of prospecting. Required minimum of works: traversing = 300 km, geochem surveys to
4. 30.12.2004 Completed
scale 1:50000 = 300 km2, geochem surveys to scale 1:10000 = 30 km2, drilling= 3500 m.
5. 01.12.2012 Complete prospecting and appraisal and submit the report complete with resource statement. Required The programme for “Exploration and Appraisal of New Ni-Cu-
minimum of drilling in 2011-2012: 10,000 m PGM Orebodies and Deposits in the Northeastern Part of Kingash
Area in 2011-2012” prepared and approved.
Completed magnetic survey (68 km2), VES-IP survey (24.6 km2).
To comply with the terms and conditions of the licence the
company must drill 10,000 m during the first half of 2012. If the
licence term is not extended during the second half of 2012, the
company will be required to prepare a report on the results of the
2011 to 2012 exploration programme, reclaim the land, return
forested lands, and submit the original field data and core to the
local (territorial) geological data bank for permanent storage.
Intergeo MMC Ltd
5.0 ACCESSIBILITY, CLIMATE, LOCAL RESOURCES, INFRASTRUCTURE
AND PHYSIOGRAPHY
5.1 PROPERTY ACCESS
The closest settlements to the three deposits in question are Tugach and Orye. Tugach is
situated on the west bank of the Kan River, 45 km north of the Kingash deposits. Access
from Tugach to the Kingash deposits is via a dirt road, which is only suitable for 4WD
vehicles. Orye is situated on the east bank of the Kan River 26 km from the Kingash
deposits. The district centre, Aginskoye, is 35 km to 45 km from Orye. A highway of
220 km connects Aginskoye to Krasnoyarsk, the regional capital. The nearest railway station
can be found in Sayanskaya, which is 90 km northwest of the Kingash deposits.
5.2 PHYSIOGRAPHY
The Kingash deposits are located in the northwest part of the East Sayan mountain range, on
the western slope of the Idarskoye Belogorie ridge. The Kingash and Pryamoye Kuyovsky
river basins form the upper tributaries of the Kan River.
The terrain of the area is rugged and the mountains are covered with black taiga, spruce,
larch, pine and limited birch and aspen trees. The mountain summits are dome-shaped and
watershed areas are relatively narrow with elevations ranging from 650 m to 1,300 m. The
topsoil of the slopes is represented by 0.2 m to 3.0 m thick scree/loamy deposits. The slopes
are steep ranging up to 30°. Overburden and soil cover is thin and ranges in thickness up to
3 m.
Upper parts of the Kingash and Pryamoye Kuyovsky River valleys are narrow and V-shaped
with elevations of 50 m to 300 m from the river to the ridges. The rivers frequently dry up in
the summer, freeze in late October and are ice-free by the end of April.
5.3 CLIMATE
The climate in the area is continental, Köppen climate classification Dfc (subarctic climate)
with temperatures ranging from -50°C in the winter to 34°C in the summer with an average
annual temperature of -1.5°С. There are up to 85 days per year with the temperature lower
than -30ºC. The annual precipitation levels are 550 mm to 650 mm with most of the
precipitation (70%) falling within the period May to October. Snow fall begins in September
and accumulation commences in early October. During late May through the first half of
June snow melts and unsealed roads turn to mud. The prevailing wind direction throughout
the year is from the southwest.
There is some potential for the winter climate to adversely affect mining operations due to
extremely low temperatures or unusually high levels of snowfall. However, the operation
will be designed to minimise the potential for the climate to adversely impact production
activities.
5.4 LOCAL RESOURCES, INFRASTRUCTURE AND POPULATION
Local economy and road infrastructure are poorly developed in the Kingash Project area.
Agriculture, small scale logging and hunting are the predominant occupations in local

communities. Tugach has a local population of 3,000 while Aginskoye has a population of
9,000. The nearest 110 kV power line is 40 km northwest of the deposit at Aginskoye. The
nearest coal mine is situated at Pereyaslavski approximately 106 km to the northwest of the
Kingash district.
The Sayansky District is self-sufficient with respect to construction minerals including clay,
sand, limestone and timber. Several small placer gold deposits occur near Kingash but the
resources are nearly exhausted. Process water can be sourced from the Kingash River and its
tributaries. The future work force for the mine will be sourced from the villages of Tugach,
Oryo, Kan-Okler, Gladkovo and Aginskoye.

6.0 HISTORY
6.1 EXPLORATION HISTORY
Nickel-copper mineralisation was first discovered at Kingash during a geological survey

(scale 1:200,000) carried out by the State from 1957 to 1960. The mining potential of the
district was first recognised during the field investigation of Idar ultramafic rocks in 1964.
The field programme identified 300 small, serpentinised, intrusive bodies, of which 47 were
explored for nickel. Copper-nickel mineralisation was identified in the largest of the massifs
at Kingash. The mineralisation was represented by disseminated pentlandite, chalcopyrite,
valleriite and violarite. The areas which were previously explored are shown on Figure 6.1.
By 1983, a geological survey of the area was completed at scale 1:50,000. The survey data
confirmed that the Kingash massif contained copper-nickel mineralisation and should be
further explored through drilling a series of 150 m to 200 m prospecting holes.
Several overlapping airborne geophysical surveys have been conducted in the Kingash area.
The earliest took place in 1961 at a scale of 1:50,000. Airborne magnetics and gamma
spectrometry were used to assess the area. A second more detailed survey using the same
techniques was conducted at a scale of 1:25,000 using aerial photographic navigation in 1971.
A 1:200,000 gravity survey was also undertaken in the area from 1978 to 1980. A 1:500,000
gravity map was compiled from the reinterpretation of the 1:200,000 survey data.
From 1990 to 1994, prospecting and mapping were carried out over 15 km2 in the Kingash
massif at a scale of 1:10,000 and reported by Tarasov in 1994. The prospecting programme
involved lithogeochemical surveying over primary and secondary anomalies at a station
spacing of 200 m by 40 m and 100 m by 20 m. Ground IP survey, two-dimensional magnetic,
pitting and trenching and core drilling were completed over a 54 km2 area at the scale of
1:25,000. A number of outstanding nickel anomalies were identified associated with mafic
and ultramafic intrusive rocks located in the Idar Block.
The first mineral discoveries were made in the Verkhnekingashsky and Kuyovsky deposits
during the prospecting campaigns which took place from 1991 to 1996. Prospecting activities
to the south and west of the Kingashsky deposit focused on the Bolshekuzinsky massif,
Verkhnekingashsky and Kuyovsky massifs. Mineralised ultramafic rocks were identified in
Kuyovsky with grades ranging from 0.4% to 0.8% Ni, 0.3% to 1.2% Cu and 0.020% to
0.038% Co. In the Verkhnekingashsky area, the mineralised ultramafic rocks carried grades
ranging from 0.30% to 0.45%, Ni, 0.2% to 0.3% Cu and 0.020% to 0.03% Co mostly
confined to the northeastern part of the massif. In 1993, two holes were drilled in the
Verkhnekingashsky area. The first hole was barren and the second intersected 55 m of
mineralisation starting from the surface with an average grade of 0.30% Ni, 0.09% Cu,
140 ppm Co and 0.31% S.
By 1996, the Central Arctic Exploration Team (CAGRE) geophysical team had completed an
integrated helicopter geophysical survey at a scale of 1:25,000 over 261 km2 area including
the Kingash deposits. The survey utilised the 5-channel geophysical tool STK-03 consisting
of a proton precession magnetometer and a gamma-spectrometer. The interpretation defined
50 anomalies, 17 of which potentially hosted nickel mineralisation in ultramafic rocks.

Figure 6.1: Location Historical Area Exploration Kingash District
Note: grid is oriented north-south.
From 1995 to 1997, work carried out on the Kingash deposits was limited because of a lack of
funds. Exploration work included geological, geochemical and geophysical surveying and
3,562 m of drilling in ten holes. Mill feed processing characteristics were studied and a
preliminary flow sheet was developed for beneficiation using a modified bulk flotation
process.
From 1999 to 2002, an evaluation programme was carried out in the Kingashsky deposit area
resulting in a revised Russian resource estimate. The new estimates were submitted to the
Territorial Committee for Reserves (TKZ) on 1st January 2003.
From 2003 to 2004, the Norilsk branch of the VSEGEI R&D Institute completed two
comprehensive airborne geophysical surveys at a scale of 1:25,000 over Kingash and the
adjacent areas to the southeast covering an area of 1,000 km2 and 850 km2 respectively. The
survey data was interpreted in combination with the gravity, geomorphological and Landsat
data. The programme delineated 21 prospective Ni-Pt-Cu anomalies and ten additional areas
which were considered prospective for lode gold.
From 2004 to 2005 a detailed exploration was conducted over the first priority prospects in
the Kingash area. These included Verkhnekingashsky, Kuyovsky, Kuskanak, Goreloye
Kuyovsky, Idar, Sredny and Pryamoye Kuyovsky. The exploration programme included
1:25,000 soil geochemical, ground geophysical surveying (1:10,000 scale magnetic, EM and
two-dimensional gravity), trenching and exploration drilling. Metallurgical testwork was
undertaken on the disseminated mineralisation from Verkhnekingashsky and Kuyovsky using
three laboratory-sized samples collected from the drill core. These were evaluated by
Gipronikel.
From 2006 to 2007, a follow up exploration programme was implemented in the

Verkhnekingashsky and Kuyovsky deposits, including ground geophysical surveys (magnetic
and EM surveys, two-dimensional gravity survey), trenching and additional exploration
drilling.
From 2007 to 2009, a resource drilling programme was undertaken on the Kingashsky,
Verkhnekingashsky and Kuyovsky deposits to a variable depth ranging from 300 m to 800 m.
Additional exploration drilling was undertaken along the margins of the Kuyovsky deposit to
evaluate high grade mineralisation to a depth of 600 m to 800 m. The parameters for a
feasibility assessment were prepared, including an economic evaluation and the best case
scenario for the development of the mine infrastructure and concentrator.
6.2 HISTORIC MINERAL RESOURCE ESTIMATES
The historical Russian resource/reserve estimates described herein are historical in nature,
were not prepared in compliance with the reporting requirements of NI 43-101, and cannot be
relied upon. The data are presented for information purposes only.
6.2.1 Kuyovsky and Verkhnekingashsky
The Verkhnekingashsky deposit was discovered in 1993, but the potential of the Kuyovsky
and Verkhnekingashsky deposits was not recognised until a second exploration and drilling
programme was undertaken in 2006/2007. Following these initial investigations, an extensive
programme of in-fill drilling was carried out between 2007 and 2009. Category B Russian
reserves were estimated to the depth of 200 m to 250 m ensuring compliance with the GKZ
requirements.
In order to evaluate the high-grade mineralisation in the Kuyovsky deposit, additional

exploration drilling was executed to depths ranging from 600 m to 800 m.
The GKZ approved the С1 and С2 Russian reserves for Kuyovsky and Verkhnekingashsky for
open-cast mining down to 500 m to 600 m on 1st January 2008.
On 23rd December 2009 the GKZ temporarily approved the resource estimates for the
Verkhnekingashsky and Kuyovsky deposits. The Verkhnekingashsky and Kuyovsky reserves
are currently ready for submission to the GKZ for approval but this cannot be accomplished
until a production licence is granted.

6.2.2 Kingashsky
An evaluation of the Kingashsky deposit was carried out from 1999 to 2002 and resulted in
the first GKZ Russian resource estimate in the С1, С2 and Р1 categories, submitted to the GKZ
on 1st January 2003. An economic evaluation of the project indicated that the deposit could
be profitably developed as an open-cast operation to a depth of 360 m.
A second drilling and metallurgical programme was undertaken at Kingashsky from 2007 to
2009. The work resulted in an increase in the Russian resources and reserves and the
conversion of an important proportion of the previous C2 and P1 Russian resources and
reserves into B and C1 categories which were submitted to the GKZ on 23rd December 2009.
The Kingashsky reserves and in-situ metal content were approved by the GKZ on 1st January
2010.
In 2009, Gipronikel prepared a scoping study report based on the approved parameters used
in the Kingash reserve estimation process. The GKZ approved (Ref. № 270-k dated 1st
February 2010) the standing exploration quality parameters for the open pit project. On 10th
September 2010, the Kingash reserves were successfully included in the State register.
6.3 MICON MINERAL RESOURCE ESTIMATE, 2008
In 2008, Micon created mineral resource block models and generated a JORC Code-
compliant mineral resource statement for the Kuyovsky and Verkhnekingashsky deposits on
behalf of Kingashskaya.
Micon constructed the models using geologic and assay information from 37 diamond drill
holes (16,191.85 m) for Kuyovsky and 50 diamond drill holes (22,883.95 m) for
Verkhnekingashsky. Mineral resources were categorised as Indicated and Inferred following
the guidelines of the JORC Code. The mineral resource estimate as of 1st January 2008 is
presented in Table 6.1.
The mineral resource estimate prepared in 2008 is superseded by the mineral resource
estimate presented in Section 14. It is provided for information purposes only.

Table 6.1: Kuyovsky and Verkhnekingashsky Mineral Resources as of 1st January 2008
Grade
Tonnage
Area
(Mt) Ni Cu Co S Pt Pd Au
(%) (%) (%) (%) (g/t) (g/t) (g/t)
Indicated Mineral Resources
Kuyovsky 60.03 0.536 0.315 0.017 1.414 0.204 0.221 0.068
Verkhnekingashsky 162.70 0.386 0.182 0.015 0.798 0.181 0.188 0.076
Total 222.74 0.426 0.218 0.016 0.964 0.187 0.197 0.074
Inferred Mineral Resources
Kuyovsky 14.16 0.641 0.354 0.019 1.516 0.242 0.258 0.074
Total 14.16 0.641 0.354 0.019 1.516 0.242 0.258 0.074
Notes:
1. Mineral resources were classified following the guidelines of the JORC Code.
3. Indicated mineral resources were defined by diamond core drilling on a grid of 100 m by 100 m.
4. Inferred mineral resources were defined within the 0.2% Ni mineralised envelope but beyond the limits of the 100 m by 100 m
definition diamond core drilling grid. The nominal spacing for Inferred mineral resources is 200 m by 200 m.
5. Bulk densities of 2.94 t/m3 for Kuyovsky and 2.89 t/m3 for Verkhnekingashsky were used to calculate mineral resources.

7.0 GEOLOGICAL SETTING AND MINERALISATION
7.1 GEOLOGICAL SETTING
7.1.1 Regional Geology
The Siberian Craton evolved during the Paleoproterozoic age, between 1.95 and 1.90 Ga. It
developed through collisions with several other Archaean and Paleoproterozoic protoliths.
The Neoproterozoic (southwestern margin) and Phanerozoic sutures located along the
margins of the Siberian Craton developed during the formation of Pangaea. Figure 7.1A
(after Turkina et al, 2007), shows the location of the Kingash Project in relation to the
Siberian Craton. As depicted in the map, the project area is located in the Paleoproterozoic
Kan Terrane, an allochthonous unit of the Yenisei Ridge fold-nappe belt that extends 700 km
to the north and developed on the western margin of the Siberian platform. Three areas of
basement rocks are exposed within and along the margins of the Siberian Craton and these
include the Aldan Shield (located south of Lake Baikal), the Anabar Shield and the Yenisey
uplift.
Figure 7.1: Regional Geology Kingash District Krasnoyarsk Region
As illustrated by Figures 7.1A, 7.1B and 7.2, to the east and northeast of the Kingash Project
area, the Kan Terrane is bordered by the Kan-Oklerskaya Structural Zone which is comprised
of a series of steep northeast dipping faults. This zone separates the Kan Terrane from the
Agulskiy Basin to the east, which is dominated by Devonian age terrigenous sediments and
Ordovician age volcanogenic rocks.
Figure 7.2 demonstrates that the Kan Terrane is comprised of five tectonic blocks including
Idar, Kingash, Central, Karagan, and Upper Kan. Idar Complex is comprised of two mafic
tectonic blocks separated by a gneiss complex. Kingash block is predominantly mafic in
composition and contains numerous amphibolite and ultramafic intrusions. The Central
Block consists of gneiss in the northwest part and mafic rocks in southeast. The Karagan
Block is similar to the Kingash Block and is dominated by mafic gneiss that includes
amphibolite and gabbro. Upper Kan Block comprises highly deformed and granitic gneiss.
The Kingash Project area exhibits a complex faulting pattern including an early series of belt-
parallel northwest strike-slip faults and shears cross-cut by later series of northeast disjunctive
faults with 2nd order north-trending riedel faults. The important nickel-copper mineralisation
is solely confined to the Kingash block and associated with ultramafic intrusions, which have
been emplaced along the early series of structures and offset by the later northeast-trending
fault system.
Figure 7.2: Property Geology and Structural Map Kingash Licence Area
7.1.2 Property Geology
Underlying the majority of the Kingash area is the Karagan Block, which comprises a
northwest-trending sequence of biotite, hornblende-biotite and amphibole gneiss. The gneiss
often contains garnet and intercalated lenses of amphibolite, quartzite and graphitic schist.
The Palaeozoic-age Kuvai and Okler Formations are thrust over the Karagan Block. The
footwall of the thrust zone comprises tectonised slate and mélange is observed in the north-
eastern part of the licence area.
The Karagan Series is dominated by numerous mafic to ultramafic intrusive units, which are
related to the Kingash and Idar Complexes. The Kingash Complex comprises gabbro,
wehrlite, peridotite, and dunite while the Idar Complex contains dunite, harzburgite and
gabbro. Copper-nickel mineralisation is genetically associated with the intrusions of the
Kingash Complex.
Faulting plays a significant role, controlling the location of mafic-ultramafic intrusive bodies
and associated mineralisation. The Kingash Fault represents a northwest-trending branch of
the Idar Fault. The Kingash tectonic zone is complex and poorly exposed, averaging 2 km to
3 km in width. It appears to have had a fundamental influence on the location of the
mineralised ultramafic stocks, which host the Kingashsky, Verkhnekingashsky and Kuyovsky
deposits. The Verkhnekingashsky deposit is cut by a northwest-trending shear zone, which is
associated with recumbent folding. The recumbent folding has overturned the intrusive
bodies with the gabbro situated in the footwall and the sulphide mineralisation restricted to
the hangingwall.
7.1.3 Local Geology
Mafic to ultramafic intrusive units studied in the Kingash District can be divided into two
groups; mineralised Kingash Complex and non-mineralised Idar Complex. The Kingash
Complex includes three mafic-ultramafic intrusive stocks termed the Kingashsky,
Verkhnekingashsky and Kuyovsky massifs. The massifs are similarly composed of dunite,
peridotite, pyroxenite, olivine clinopyroxenite, wehrlite and gabbro. The dunite and
peridotite are difficult to distinguish from a petrographic and chemical perspective. The
primary magnesium bearing mineral is olivine which is often replaced with serpentine,
magnetite and accessory minerals that include pyroxene, cummingtonite and phlogopite.
Serpentine alteration has pervasively altered all the dunite-peridotite intrusive units. Wehrlite
replaces dunite-peridotite in the upper part of the massifs and displays a spotted texture.
Gabbro is abundant in all the massifs and is characterised by a high CaO content.
The northeast part of the massif is comprised of serpentinised dunite and peridotite. The
disseminated sulphides are associated with lizardite, antigorite, sometimes chrysotile. The
mineralisation weakens and attenuates to the southwest. The Verkhnekingashsky massif
exhibits a similar compositional layering as observed in the Kingashsky massif but the
percentage of amphibolite dykes is reduced.
The massif was intersected by drilling to a depth of over 700 m. The contact between the
Karagan gneiss and the massif is steep from 60° to 75° and exhibits a step-like pattern due to
faulting. The Karagan series comprises biotite and amphibole-biotite gneiss with intercalated
lenses of amphibolite and carbonaceous rocks. Carbonaceous rocks occur near the contact of
the massif and may represent carbonaceous shears. The massif is transected by numerous
shear zones that are accompanied by metasomatic alteration. In the gabbro, the alteration
assemblage comprises tremolite-clinozoisite-actinolite-epidote. In the ultramafic rocks, the
assemblage consists of serpentine-tremolite-actinolite-talc-chlorite with variable amounts of
carbonaceous material. Intense hydrothermal and metasomatic alteration is developed along
the northeast contact of the massif and is associated with a branch fault from the Kingash
Shear. The faulted contact has been intruded by a wide range of diorite, granite, plagiogranite
and albite dykes.
Sulphides occur as disseminations and veins in strongly serpentinised dunite and peridotite.
Sulphide content is 3% to 5% on average but can exceed 20% over narrow intervals. The
highest nickel-copper-PGM grades are located in the northeast part of the massif and are
associated with intrusive dykes and metasomatic alteration. In this location sulphide
mineralisation is also developed in the Karagan gneiss and along the margins of the intrusive
dykes.

With reference to Figure 7.3 and Figure 7.4, the Kuyovsky Massif is located 900 m to the
south of the Verkhnekingashsky massif and forms a tear-shaped body that is 500 m in length
and up to 250 m in width. The boudinaged shape of the massif is probably the result of post-
magmatic shearing between two sub parallel northeast-trending faults. Drilling has traced the
massif to a minimum depth of 650 m. The country rocks comprise graphitic amphibolite
gneiss with intercalated migmatites of the Karagan series. The northeastern contact of the
massif dips to the northeast at 45° to 60°; the western contact dips in the same direction by at
60° to 80°.
As depicted in Figure 7.3 and Figure 7.4, the Kingash Massif is oval-shaped and measures
2,250 m by 1,000 m. The axis of the massif is orientated in a northwest direction and the
contacts with the surrounding gneiss are semi-concordant. In cross section, the massif
exhibits an asymmetrical, lopolith-shape with steeply-dipping, thrust-faulted contacts. The
massif is in contact with a thin discontinuous marble unit. In the northwest part of the massif,
the marble is replaced by a garnet-tremolite-albite skarn.
The massif displays up to four compositional cycles ranging from ultramafic to mafic. The
base of each cycle is composed of dunite/peridotite and progresses upwards through
pyroxenite to wehrlite to gabbro at the top of each cycle. The cycles range in thickness from
50 m to 200 m and are sub-horizontal with a shallow dip to the west. Generally, the highest
nickel-copper grades are associated with dunite while lower grades are associated with
pyroxenite.
Five distinct, intrusive units from the base of the Kingash massif are identified and described
below. All rock types are cut by later gabbro, plagiogranite and ortho-amphibolite dykes
including:
1. Contact zone between the massif and the marble or gneiss ranges in thickness from
10 m to 20 m and is strongly sheared, brecciated and altered by serpentine.
2. Dunite and peridotite are strongly altered by serpentine throughout the massif. In the
central and southeastern parts the ultramafic is underlain by gabbro, which pinches out
to the south and southeast directions. The mineralised ultramafic unit ranges in
thickness from 40 m at the north end of the massif to 430 m in the southeast portion of
the massif near Line 10.
3. The transition zone developed between mineralised zone and the overlying pyroxenite
ranges in thickness from 10 m to 75 m and is strongly serpentinised and cut by ortho-
amphibolite and plagiogranite dykes.
4. The pyroxenite unit includes clinopyroxenite, olivine-clinopyroxenite and wehrlite
and ranges in thickness from 80 m to 240 m.
5. The gabbro unit includes gabbro-amphibolite, olivine-gabbro and gabbroic-pyroxenite
and comprises the southern half of the massif. The contact between the gabbro and
pyroxenite units is strongly metasomatised and altered to epidote-clinozoisite-
amphibole. The gabbro unit is up to 310 m thick in the central part of the massif and
pinches out to the south and north.
The northeast part of the massif is comprised of serpentinised dunite and peridotite. The
disseminated sulphides are associated with lizardite, antigorite, sometimes chrysotile. The

mineralisation weakens and attenuates to the southwest. The Verkhnekingashsky massif
exhibits a similar compositional layering as observed in the Kingashsky massif but the
percentage of amphibolite dykes is reduced.
Figures 7.3 and 7.4 show that the Verkhnekingashsky Massif is rhomboid in shape and
measures 1,100 m by 600 m. The massif has been transposed into a series of boudinaged
lenses by a series of sub parallel northeast-trending shears. The shears represent branch faults
of the main Kingashsky Shear Zone, which is located to the east of the Verkhnekingashsky
massif.
7.1.3.1 Sulphide Mineralogy
With reference to Table 7.1, the mineralogy of the disseminated sulphide mineralisation is
dominated by pentlandite with lesser quantities of pyrrhotite and chalcopyrite. Pentlandite
often contains fine flame-like exsolutions of mackinawite (FeNiS), which might comprise up
to 20% to 30 % of a pentlandite grain as illustrated on Figure 7.7 (B).
Platinum group minerals include sperrilite PtAs2 (95% of all PGM), sobolevskite Pd(Bi,Sb),
michenerite PdBiTe, merenskite (Pt,Pd)(Te,Bi)2, and erlichmanite OsS2. Sperrilite forms
euhedral grains (0.020 mm to 0.053 mm), and usually occurs as a separate phase within
pyrrhotite-pentlandite grains. Palladium minerals (0.04 mm by 0.06 mm) tend to cluster on
the contacts of chalcopyrite and cubanite grains and in some cases palladium minerals are
integrated with tellurides.
7.2 MINERALISATION
7.2.1 Introduction
Two broad types of mineralisation have been identified within the Kingashsky,
Verkhnekingashsky and Kuyovsky deposits: low to medium-grade disseminated nickel
mineralisation (95% to 97% of total mineralisation), and the secondary vein, breccia and
stringer mineralisation (0.3%). Lateritic silicate nickel mineralisation is also present, forming
thin weathered rinds over the ultramafic rocks (3% of mineralisation). The oxidation zone is
variable and extends to a depth ranging from 3 m at Kuyovsky to a maximum of 20 m at
Kingashsky.

Figure 7.3: Property Geology and Structural Map Kingash Licence
Figure 7.4: Cross-Sections
7.2.2 Primary Disseminated Sulphide Mineralisation
Primary disseminated sulphide mineralisation is hosted by serpentinised dunite, peridotite and

their pervasively amphibole-chlorite-serpentine altered varieties. The sulphide content varies
from 1% to 20%, with an average of 2.6%. The mineralisation is fine grained (0.1 mm to
3 mm) and evenly dispersed within the host rock occurring as interstitial to cumulus minerals.
Fine-grained pentlandite-pyrrhotite-chalcopyrite occurs as lobate, isolated aggregates at
triple-point junctions in the olivine crystals as shown on Figure 7.5 (A) and (B).
Figure 7.5: Disseminated Sulphides (A) Interstitial Sulphides (B), Kingashsky
A B
Table 7.1: Mineral Composition Kingashsky, Verkhnekingashsky and Kuyovsky Deposits
Kingashsky Verkhnekingashsky Kuyovsky

Minerals
(%) (%) (%)
Pentlandite (Pn) 1.1 1.5 1.6
Pyrrhotite (Po) 0.4 1.3 1.7
Chalcopyrite 0.3 0.7 0.6
Valleriite 0.6 0.5 1
Mackinawite 0.1 <0.1 0.1
Cubanite < 0.01 < 0.01 < 0.01
Magnetite + Cr-spinel 3.4 3.0 3.8
Olivine 10 19 1
Serpentine 63 45 72
Clinopyroxene <0.1 <1 <0.1
Amphibole 6 10 8
Biotite + Phlogopite 3 8 2
Talk <0.1 1.5 1
Chlorite 9 5 6
Carbonate 2 5 1
Pn : Po 2.8 1.2 0.9
Native metals have also been detected including native copper, native silver, gold-silver alloy,
arsenides, tellurides, and selenides. Native gold forms fine grains (0.006 mm to 0.003 mm)
within chalcopyrite and in close proximity to sphalerite. Iron-bearing oxide minerals
comprise magnetite, Cr-spinel, rare ilmenite grains. Other sulphides present include
valleriite, cubanite, bornite, chalcocite, covellite, sphalerite, galena, millerite and
molybdenite.
7.2.2.1 Sulphide Chemistry
The chemistry of the Kingash sulphide mineralisation has been studied as part of the
metallurgical testing programme. The chemical composition of the main sulphide minerals
was analysed using a scanning electron microscope and the results are summarised in
Table 7.2.
Table 7.2: Average Chemical Composition of Main Sulphide Minerals
Element, % wt.
Sulphide Mineral
Ni Co Cu Fe S Total
Pentlandite 29.9 1.0 - 37.3 32.6 100.8
Hexagonal Pyrrhotite 0.3 - - 61.1 38.5 99.9
Chalcopyrite - - 34.1 31.8 34.1 100.0
Valleriite - - 16.8 31.0 20.9 96.1
Non-ore minerals mainly consist of olivine, serpentine and chlorite and the proportion of each
mineral is dependent on the intensity of the alteration. Average composition of olivine from
Verkhnekingashsky and Kuyovsky comprises: 45.8% MgO, 0.4% Al2O3, 40% SiO2, 14%
FeO and 0.2% MnO. The bulk chemical composition of disseminated mineralisation is given
in Table 7.3.
Table 7.3: Chemical Composition of Kingashsky, Verkhnekingashsky and Kuyovsky Mineralisation
Mineral Kingashsky Verkhnekingashsky Kuyovsky

Ni total (%) 0.41 0.57 0.62
Ni sulphide (%) 0.34 0.51 0.56
Ni silicate (%) 0.068 0.06 0.06
Cu (%) 0.163 0.30 0.35
MgO (%) 32.5 31.1 28.3
Pt (ppm) 0.19 0.59 0.41
Pd (ppm) 0.219 0.62 0.40
Pt : Pd 0.9 0.9 1.1
7.2.3 Epigenic Sulphide Mineralisation
Later stage overprinting mineralisation is associated with zones of intense chlorite and
silicification alteration developed at the contact between the country rock and the intrusive
bodies or within the ultramafic stock. The mineralisation comprises stringer-type and less
abundant breccia and vein-type. Epigenic processes are responsible for locally increasing the
grades of the low-grade mineralisation in these zones of intense alteration.
7.2.3.1 Stringer-Type Mineralisation
Stringer sulphide veinlets are irregular and exhibit boudinaged textures. The sulphides are
principally hosted by calcite and quartz veinlets. The sulphide content ranges between 1%

and 5% but can range as high as 50% in intensively serpentinised peridotite or along the
margins of the plagiogranite dykes and the basement gneiss.
Stringer sulphide mineralogy is dominated by chalcopyrite and cubanite and secondary re-
crystallised pyrrhotite-pentlandite, which is developed in selvages. The veinlets are often
monomineralic, filled with pentlandite or chalcopyrite. Sulphides are extensively replaced by
magnetite and silicates. At contacts with the plagiogranite, the sulphides occur in tensional
fractures and consist of pyrrhotite with lesser chalcopyrite, sphalerite, mackinawite and
molybdenite flakes.
7.2.3.2 Vein and Breccia Mineralisation
As illustrated in Figure 7.6, vein and breccia mineralisation displays various textures ranging
from massive to stringer-disseminated to banded.
Figure 7.6: Sulphide Breccia (A) Massive Ni-Cu Vein (B)
A B
Smaller scale textures are even more variable with minerals forming xenomorphic grains, re-
crystallised euhedral grains, hypidiomorphic, solid solution textures (chalcopyrite–cubanite,
pyrrhotite–troilite), replacement (valleriite, magnetite) and cataclastic (Cr-spinel) textures.
Vein mineralisation is dominated by pyrrhotite, pentlandite and chalcopyrite (90% of all
sulphide minerals), with lesser mackinawite, Cr-spinel, ilmenite, sphalerite and rutile.
7.2.4 Sulphide Alteration
Primary sulphide assemblages are replaced by secondary sulphides, magnetite, as well as

secondary silicate minerals. Overprinting sulphide assemblages include valleriite
(Figure 7.7A), cubanite, bornite, chalcocite, covellite, galena, sphalerite, millerite, and
molybdenite. Magnetite replacement of sulphides is most abundant at the Kingashsky
deposit, where up to 38% of disseminated sulphide aggregates are replaced by magnetite. At
Kuyovsky up to 28% of interstitial sulphides are replaced by magnetite (Figure 7.7A). At
Verkhnekingashsky magnetite replacement is not as dominant and affects only 18% of
sulphides. The level of magnetite replacement may correspond to the degree of
serpentinisation of rocks, which directly influences the amount of magnetite that is released
from serpentinised olivine and locally mobilised.
Figure 7.7: Late Magnetite-Valleriite (A) Late Magnetite-Mackinawite (B)
A B
Sulphide replacement by secondary silicates (antigorite and chlorite) is less prominent than
magnetite replacement as depicted in Figure 7.7B.
8.0 DEPOSIT TYPES
Magmatic nickel-copper-cobalt and PGM deposits are associated with mafic to ultramafic
intrusions and their volcanic equivalents. These volcanic activities have been derived from
lower and upper mantle differentiated magma sources. The majority of the deposits are
Archaean and Paleoproterozoic in age with one notable exception; the Norilsk-Talnakh
deposit, which is Triassic in age and is considered the largest nickel deposit in the world. The
nickel and copper deposits range in size from a few hundred thousand tonnes to over one
billion tonnes. Nickel equivalent grades for the disseminated types of mineralisation range
from 0.5% to over 2% (Norilsk-Talnakh, Russian Federation). In Figure 8.1, the range of
nickel and copper grades are plotted versus tonnage for the world class deposits.
Disseminated nickel-copper deposits are often spatially associated with high-grade massive
sulphide mineralisation, which occurs in the same geological environment. Mafic to
ultramafic hosted massive and disseminated sulphide deposits can be subdivided into six
groups. Groups one, two and four contain the largest reserves of nickel and copper:
1. A meteorite-impact mafic melt sheet that contains basal sulphide ores (Sudbury).
2. Rift and continental flood basalt-associated mafic sills (Norilsk-Talnakh, Jinchuan and
Nokomis).
3. Mg-rich komatiitic volcanic flows and related sill-like intrusions (Thompson, Raglan,
Mt. Keith, Kambalda and Pechenga).
4. Unusual mafic/ultramafic intrusions (Voisey’s Bay, NorthMet, Lynn Lake, Giant
Mascot, Kotalahti, Selebi-Phikwe and Aguablanca).
5. Magmatic breccia-type in layered mafic/ultramafic intrusions (Platreef, Lac des Iles
and Marathon).
6. Ophiolite related ultramafic intrusions island arc-related (Brady Glacier, Tullamen).
Figure 8.1: Copper and Nickel Grades Versus Ore Tonnes
Nickel-copper sulphides are generated during the magmatic process referred to as ‘liquid
immiscibility’. A sulphide liquid separates from the silicate magma when it becomes
oversaturated in sulphur. The process occurs over a wide range of physical and chemical
conditions such as changes in pressure, in temperature and in chemical composition of the
magma. Upon cooling, the sulphur-rich liquid crystallises into pyrrhotite, pentlandite and
chalcopyrite. Typical magmatic nickel-copper deposits tend to occur at embayments or near
the base of the intrusive/extrusive hosts. Recent evidence suggests that wallrock assimilation
contributes a significant portion of sulphur in the sulphides. The source of the sulphide is
derived from both metamorphic and sedimentary rocks as shown on Figure 8.2. Nickel-
copper deposits exhibit three distinct mineralisation types; massive, net-textured and
disseminated; often all occurring in the same deposit, such as Norilsk-Talnakh, Jinchuan and
Sudbury.
Other metals are recovered from nickel-copper ores and include gold, silver, sulphur,
selenium, cobalt and tellurium and these metals can sometimes comprise more than 10% of
the total value of the mineralisation. In deposits such Norilsk-Talnakh, Sudbury and Raglan
high levels of platinum group elements are present and contain significant quantities of
osmium, iridium, ruthenium and rhodium.
Some Ni-Cu-PGE deposits occur as single large disseminated sulphide bodies such as
Kingash, Mt Keith and Nokomis and are associated with mafic and ultramafic intrusions.
Others occur as groups of small sulphide bodies associated with one or more related
magmatic bodies which form camps that extend for up to 100 km such as Raglan and
Sudbury. The notable nickel-copper camps with multiple mineralised zones include Sudbury,
Thompson, Norilsk-Talnakh, Kambalda and Raglan.
Figure 8.2: Nickel Model and Deposit Settings, CSIRO E&M 2001, 2002
Copper content in the nickel ores tends to increase as the MgO content decreases. A good
example of this is the Nokomis deposit (reserves in excess of 800 Mt), which has a copper to
nickel ratio of 3:1. The majority of the high-MgO deposits such as the Kambalda camp have
very low copper to nickel ratios in the range of 1:10. The Kingashsky deposit is more mafic
than Mt Keith which is reflected by its higher PGM content and a copper to nickel ratio of
1.5:1. The Kingash deposits show close geological similarities to the Mesamax and Expo
nickel-copper-PGM deposits situated in the Raglan belt in that they exhibit similar metal
ratios, high PGM contents, similar age and tectonic setting.
9.0 EXPLORATION
9.1 INTRODUCTION
All of the primary exploration information used in the development of the mineral resource
model that forms the basis of this PEA was conducted on behalf of Kingashskaya between
2007 to 2009 and none is attributed to Intergeo. Preliminary exploration work including
geological mapping, geochemical surveys and geophysical surveys conducted prior to 2005
were conducted on behalf of the Russian State. Norilsk Nickel and Kingashskaya
commissioned exploration work from 2004 to 2009.
The copper-nickel-cobalt mineralisation at Kingash was discovered in 1964 and was

subsequently explored until 1993. At this point, the first significant nickel intersection was
encountered at the Verkhnekingashsky deposit. A single hole returned 55 m at an average
grade of 0.30 % Ni, 0.09% Cu, 140 ppm Co and 0.31% S.
The majority of the Russian reserves and resources for the Kingashsky, Verkhnekingashsky
and Kuyovsky deposits were defined during an intensive drilling programme carried out
between the years of 2007 to 2009. The general contractor responsible for the evaluation
programme was LLC Geocomp whose primary responsibilities included undertaking the
diamond drilling programmes, down hole geological logging, core sampling and core logging.
It also carried out on-site X-ray-fluorescent analysis and completed the hydrogeological,
topographic and environmental surveys on the licence areas. LLC Geocomp also completed
the selection bulk test samples and petrographic analysis of rocks and mineralisation in thin
and polished sections.
LLC Geocomp subcontracted the geotechnical, analytical, geophysical and metallurgical

work to a number of government-approved companies. The list of the subcontractors and
their function is summarised as follows:
1. LLC Mining and Engineering Company for adit excavation Kingashsky,

Verkhnekingashsky and Kuyovsky deposits;
2. State Company Krasnoyarsk Aerogeodetic Organisation for topographic and geodetic
surveys;
3. State Company Siberian R&D Institute of Geology, Geophysics and Minerals
(SNIIGGiMS) for mis-a-la-masse survey;
4. Test centre under АО KrasnoyarskGeologia for semi-quantitative spectral analysis
(SQSA) for 25 components and chemical composition tests for nickel, copper, cobalt,
sulphur, PGM and gold, and testing the geo-ecological and water samples;
5. LLC GeoServis for geophysical surveys (two-dimensional magnetic survey, IP and
natural field EM surveys, lithochemical sampling along geophysical lines);
6. LLC Mining and Engineering Company for mine excavations (adit 1);
7. LLC Stewart Geochemical and Assay (Stewart Geochemical) for fire assay
(commencing with the ICP-AES method) for PGM and gold; third-party (arbitration)
control of data on nickel, copper, cobalt and sulphur assays;

8. LLC Institute Gipronikel (St. Petersburg) laboratory-scale tests and pilot processing
of bulk samples, preparation of Scoping Report for the standing quality parameters;
external audit of test data on base and precious metal grades;
9. Test laboratory under KNIIGiMS R&D Centre, Krasnoyarsk for rhodium, silver,
ruthenium and iridium analyses (ICP-MS method); petrography on thin and polished
sections of potential ore and host rocks;
10. Regional Analytical Centre ZAO Mechanobr Engineering Analit for third-party
(arbitration) verification of silver, rhodium, iridium and ruthenium assays;
11. Krasstroy test centre under ОАО Krasnoyarsk Promstroy NI project for geotechnical
work on rock mechanics.
9.2 GEOLOGICAL MAPPING AND TRENCHING
The Kingash district has been extensively studied and explored since work was initiated in the
district in 1956. Geological mapping and geochemical surveying at scales of 1:200,000 and
1:50,000 were undertaken by the State in four campaigns in the 1960s and 1970s. By the
early 1990s, exploration had delineated 21 nickel-copper targets and 10 lode gold prospect.
The majority of these were trenched and sampled but the assay data is not presented in the
TEO reports.
9.3 GEOCHEMISTRY
Geochemical exploration work within the Kingash and Verkhnekingashsky licence area was
initially carried out as an integral part of the ground geophysical programmes. From 2005 to
2008, a total of 6,885 samples were collected and assayed over different target areas including
the Kingashsky, Verkhnekingashsky and Kuyovsky deposits on behalf of Norilsk Nickel and
Kingashskaya. Random shallow trench and prospecting shaft samples were also excavated
and assayed during the same period.
Usually the geochemical soil samples were taken from shallow pits ranging from 20 cm to
60 cm in depth along the ground geophysical profiles over 100/200 by 20/40 m grid. Sieved
and packed samples were sent to the Stewart Geochemical laboratory in Moscow for drying
and pulverising to 0.071 mm, and subsequent ICP-AR/ES analyses (atomic-emission
spectrometry with inductively coupled plasma) for 25 elements: Ag, Al, As, Ba, B, Ca, Co,
Cr, Cu, Fe, K, Mg, Mn, Mo, Na, Ni, P, Pb, Sb, Sn, Sr, Ti, V, Zn and Zr.
The analytical sensitivities (detection limits) for each element is shown in Table 9.1.

Table 9.1: ICP Detection Limits Kingash Element Suite
Type of Type of
Element Detection Limit Element Detection Limit
Analysis Analysis
Ag ICP-AR/ES 0,5х10-4% Mo ICP-AR/ES 1х10-4%
Al ICP-AR/ES 0,01% Na ICP-AR/ES 0,01%
As ICP-AR/ES 5х10-4% Ni ICP-AR/ES 1х10-4%
Ba ICP-AR/ES 2х10-4% Pu ICP-AR/ES 10х10-4%
B ICP-AR/ES 1х10-4% Pb ICP-AR/ES 2х10-4%
Ca ICP-AR/ES 0,01% Sb ICP-AR/ES 5х10-4%
Co ICP-AR/ES 1х10-4% Sn ICP-AR/ES 20х10-4%
Cr ICP-AR/ES 1х10-4% Sr ICP-AR/ES 1х10-4%
Cu ICP-AR/ES 1х10-4% Tl ICP-AR/ES 5х10-4%
Fe ICP-AR/ES 0,01% V ICP-AR/ES 10х10-4%
K ICP-AR/ES 0,01 % Zn ICP-AR/ES 1х10-4%
Mg ICP-AR/ES 0,01% Zr ICP-AR/ES 1х10-4%
Mn ICP-AR/ES 1х10-4%
The following conclusions can be drawn:
• For most elements, the assays are well above their detection limits, and are, therefore,
representative and can be effectively used as an exploration tool; and,
• Sb and As in all samples are below the detection limit of analysis and should be
excluded from further considerations.
The results of the statistical analysis of geochemical assays were used to compile maps of the
secondary dispersion halos of major ore-indicative elements (Figure 9.1). The maps indicate
that within the Kingashsky deposit magnetic feature elements such as Co, Ni and especially
Cu form complex anomalies, representing zones of serpentinisation of the ultramafic
intrusion. Within the mineralised parts of the deposit the highest concentrations of
chromium, nickel, copper and cobalt are observed in wehrlites. Previous studies indicate that
the potential for ore complexes (grades of nickel sulphides and copper, and associated PGE
and gold) is directly associated with the content of sulphur in mineralised rocks. Within the
Verkhnekingashsky and Kuyovsky deposits secondary dispersion halos of copper, nickel and
cobalt form a single anomalous zone associated with mineralised host rocks. The
geochemical and magnetic anomalies are spatially coincident. The main body of the
Verkhnekingashsky deposit is enriched by Cu, Ni, and Co, with Cu being dominant. An
anomalous zone strikes northwesterly, consistent with the regional tectonic trend and is
complicated by transverse tectonic faults.
Future exploration within the Kingash deposit area will focus on the secondary geochemical
anomalies, which overlap with favourable geophysical (magnetic and gravity) features.
Initially they will be covered by IP/resistivity surveys and first priority targets will then be
drilled.

Figure 9.1: Ni, Cu, Co and Cr Contour Soil Geochemistry
9.4 GEOPHYSICS
Geophysical investigation of the region began in the early 1950s. An airborne magnetic
survey was conducted in 1961 and a gravity survey in 1980. Ground radiometric surveys
were also conducted in 1983. The complex magnetic-electrical survey of 1989 was the
largest operation undertaken after the discovery of the Kingashsky deposit.
Since the mid-1980s both ground and airborne geophysical surveys have been completed over
the Kingashsky and Verkhnekingashsky/Kuyovsky licence areas. The surveys were carried
out using modern geophysical methods, which had been applied to the area since the late
1980s. Data from the surveys has mainly been used to plan the on-going exploration and
development of the Verkhnekingashsky tenement. Although some detailed brownfield works
were conducted within the Kingashsky deposit, the last ground geophysical programme was
executed in 2009 on behalf of Kingashskaya. Locations of the airborne and ground
geophysical surveys are shown on Figures 9.2 and 9.3 respectively. Technical details of the
geophysical surveys are given in Table 9.2.
Figure 9.2: Airborne Geophysical Surveys over the Kingash Mineral District
Figure 9.3: Isometric View of Ground Geophysical Surveys Kingash Licence Area
Table 9.2: Details Geophysical Survey Conducted Kingash District
Survey
Year Contractor Licence / Survey Type Survey Specifications
Size
Rotary wing platform
State Enterprise Kingash deposit/Verkhnekingashky 1,200
1996 (MI-8), 250 m line
NF VSEGEI Airborne Magnetics / Radiometrics line km
spacing, STK-03 station

2003- State Enterprise Verkhnekingashky/Airborne Magnetics / 8,220
(MI-8), 250 m line
2004 NF VSEGEI Radiometrics line km
spacing, KAS-1 station
Aeroquest Ltd / Verkhnekingashky/Airborne Magnetics / (MI-8), 250 m line 5,497
2007
AeroRus Electromagnetics (TDEM) spacing, AeroTEM IV line km
system
Different state- Individual profiles with
2004- Kingash deposit/Verkhnekingashky/Ground 110 line
owned 20 to 40 m distance
2006 gravity surveys km
companies between stations
Profiles with line spacing
LLC
Verkhnekingashky/Ground magnetic of 100 to 250 m and
2005 Prikladnaya 24 km2
survey sampling rate of 20 to 40
Geologiya
m
Mag, SP, IP/Res, TDEM
LLC Sibir’- Five areas of the Verkhnekingashky/ round 39 km2 +
2005 over 100 / 250 by 20 m
Geophysica complex survey 8 lin km
grid
Five areas over the Kingash deposit/ Profiles with line spacing
LLC Geo- 185 line
2006 Verkhnekingashky/ Ground complex of 100 / 250 m and
Service km
survey sampling rate of 20 / 40 m
9.4.1 Ground Surveys
The majority of the most recent ground geophysical surveys carried out over the Kingash and
Verkhnekingashky prospects are compound, and usually include magnetics, induced
polarisation/resistivity (IP), self-potential gradient (SP), and radiometrics (U, K, Th). All
surveys were conducted along the same grid lines. Geochemical soil samples were normally
collected along the same profiles.
Due to the secret status of gravity data in the Russian Federation, gravity surveys were always
conducted separately. From 2004 to 2006, three surveys totalling 110 line km were carried
out by different contractors within the Verkhnekingashky/Kuyovsky Licence area along
individual profiles shown in Figure 9.4. Mafic and ultramafic massifs with potential for Ni-
Cu mineralisation showed good correlation with gravity anomalies above 1.5 m Gal to 2 m
Gal. Also complex interpretation of the gravimetric surveys results with magnetic and
electrical datasets allowed improvement in local geological mapping (especially structural-
tectonic setting), and in selecting drill targets.
In 2005 ground magnetic, IP/Resistivity, SP and time-domain electromagnetic (TDEM)

surveys were undertaken by LLC SibirGeophysica over five target areas of the
Verkhnekingashky/Kuyovsky Licence area on behalf of Norilsk Nickel. The interpretation
and analysis of the data collected and subsequent target drilling led to the accurate definition
of the mineralised zones and the increase in Russian mineral reserve at the

Verkhnekingashsky and Kuyovsky deposits. Magnetic readings were taken over 100 m by
20 m (Verkhnekingashsky and Kuyovsky) and 250 m by 20 m grids with total length of
profiles 188 line km. A TDEM survey with moving loop 100 m by 100 m was conducted
over the Verkhnekingashsky area only (8 line km). Gradient array IP/resistivity survey
profiles totalled 106 line km, SP totalled 180 line km. The geophysical data interpretations
for the 2005 survey over Verkhnekingashsky and Kuyovsky are shown in Figure 9.4.
Figure 9.4: Ground Geophysics Surveys Verkhnekingashsky and Kuyovsky Deposits
Ground geophysical surveys between 2006 and 2008 were carried out by LLC “GeoService”.
The main objectives of the survey were detailed prospecting of the known deposits (Kingash,
Verkhnekingashsky and Kuyovsky) and ground evaluation of the airborne target areas. Line
spacing within the known mineralisation was 50 m to 100 m, and usually 250 m within new
target areas. Sampling distance varied for different programmes and changed from 5 m to
50 m. The Schlumberger array with A100m40n100B electrode setting was used in
IP/Resistivity profiling. Theoretical depth of investigation for this type of array in local
conditions is 150 m to 200 m. MINIMAG proton magnetometers were used for the magnetic
surveys and recording the earth magnetic field variations. Proprietary equipment was used
for the IP/resistivity survey.
Combining knowledge of the previous survey data with geological information enabled a
more comprehensive understanding of the geophysical characteristics of the Kingash
deposits.
Kingashsky has a very distinctive geophysical signature manifested as a strong dipole

magnetic anomaly as shown on Figure 9.5A. Kingashsky also exhibits a strong IP signature,
which is to be expected because of the disseminated nature of the sulphide mineralisation.
Mineralised sections of the gabbro massifs are characterised by intensive high-gradient
positive anomalies which are flanked by negative ones. Positive anomalies are up to
6,000 nT for Kingashsky and 6,800 nT for Verkhnekingashsky/Kuyovsky, negative
anomalies are -2,500 nT for Kingashsky and -3,500 nT for Verkhnekingashsky /Kuyovsky.
Gravity data differs for the Kingashsky and Verkhnekingashsky/Kuyovsky sites. At the
Kingashsky deposit, the most altered mineralised zones are associated with negative
anomalies, which generally coincide with positive magnetic features. Barren rocks are
distinguished more often by a combination of positive values of the gravity field with
relatively low values of the magnetic field. Comparatively, the Verkhnekingashsky and
Kuyovsky mineralised rocks correlate spatially with an anomalous positive gravity and a
northerly orientation as shown on Figure 9.5. In this case, a lateral relationship between
positive gravimetric anomaly and dipole magnetic anomalies may be observed.
The Verkhnekingashsky and Kuyovsky deposits are confined to high-gradient gravity zones
that have a strong, positive magnetic signature. Results of the ground IP/resistivity and self-
potential surveys exhibit values of the electrical properties typical for rocks with sulphide
mineralisation. Apparent resistivity varies from 10 Ohm/m to 50 Ohm/m to 25 Ohm/m to
500 Ohm/m, negative values of IP phase shift changes from -3 to -5o, natural potentials range
from -100 to -400 mV shown on Figures 9.5B and 9.6A and 9.6B. Radiometric data show a
sharp decline in concentrations of the major radioactive elements (uranium to a lesser extent)
and total count values within mineralisation zones.
Figure 9.5: Magnetics (High Blue) (A), Natural Potential (B)
A B
Figure 9.6: IP Apparent Resistivity (A), IP Phase Shift (B)
A B
9.4.2 Airborne Surveys
The first airborne magnetic and radiometric survey was conducted at a scale of 1:25,000 from
June to July 2006. A helicopter was flown over the licensed Kingash area using line spacing
of 250 m. The survey was undertaken by Norilsk Branch of the St. Petersburg All Russian
Geological Institute (NF VSEGEI). As illustrated in Figure 9.7, the magnetic field exhibited
a number of strong dipole-shaped anomalies that coincided with Ni-Cu occurrences sites
defined by historic regional exploration and mapping programmes in the Kingash district.
In 1997 some selected targets were drill-tested that led to the discovery of the Kingashsky
deposit. A subsequent ground geophysical programme undertaken in the Verkhnekingashsky
and Kuyovsky area resulted in the discovery of the deposits.
From 2003 to 2004 the same contractor conducted a large scale, complex airborne survey of
the Verkhnekingashky licence and adjacent area. In total 1,850 km2 (8,220 line km) were
covered by magnetic, infrared and radiometric survey at a scale of 1:25,000 (250 m line
spacing). Images of the data collected are shown in Figure 9.8. As a result of the
interpretation of new data, the following conclusions were made regarding the prospective
Ni-Cu mineralisation of the area:
• It is located in a highly intensive structural-tectonic environment with structural

control of spatial location of potentially ore-bearing mafic-ultramafic massifs;
• Areas display moderate gradient with a relative increase of the gravitational field
intensity;
• The areas show slightly negative gradient of magnetic field; and,
• Localisation within zones of overall increase in the level of fracturing.
Figure 9.7: 1996 Airborne Magnetic Surveys
Note: grid lines are oriented north-south.
Figure 9.8: 2003 to 2004 Airborne Magnetic, Infrared and Gamma-Spectrometry
Based on the geophysical interpretation, first and second priority targets were selected for
ground follow up. The ground geophysical programme was carried out between 2005 and
2007.
In 2007, the first large-scale magnetic and electromagnetic survey was flown over the
northwest Verkhnekingashky/Kuyovsky License area as shown on Figure 9.2. Time-domain
electromagnetic system AeroTEM IV was developed by the Canadian company AeroQuest
Ltd. in 1999 to 2005. AeroTEM is a concentric-loop time-domain EM system designed for
mineral exploration and geologic mapping. The high-dipole moment of the transmitter in
combination with the unique superimposed dipole coil geometry allows the system to achieve
a depth of exploration similar to fixed-wing systems, but with the resolution and target
response symmetry that is typical of conventional helicopter-borne EM systems.
AeroTEM is capable of achieving the depth penetration of fixed-wing AEM systems, and
with the spatial resolution and conductance discrimination of the HEM systems. This is made
possible by using a rigid platform and measuring during the transmitter on-time with accurate
primary field removal. The concentric-coil geometry produces simple and diagnostic
conductor responses that are independent of the flight line direction. This makes it possible to
proceed directly to a drilling programme without the requirement for ground geophysics.
Maximum conductance discrimination is 500 S with the current base frequency of 150 Hz,
which is greater than off-time systems operating at 30 Hz. A new system is under
development having a transmitter moment of 120,000 Am2. This system will have an
exploration depth in excess of 300 m.
Analysis and interpretation of the airborne magnetic (Figure 9.9A) and electromagnetic
(Figure 9.9B) data defines two groups of EM anomalies. The first group comprises very
intense and elongated linear EM anomalies, which correlate with the main regional structural-
tectonic elements and represent most likely barren mineralisation zones (pyrite-pyrrhotite
sulphides and graphite), and highly conductive overburden. The second group of the EM
anomalies is associated with the known Ni-Cu deposits. The most promising EM anomalies
are isolated conductive anomalies, coinciding with magnetic ones. However, the possibility
of combination of productive and non-productive mineralisation is possible. A total of 18 (11
x first priority, 7 x second priority) targets were selected from the interpreted magnetic and
electromagnetic data and proposed for further testing. A number of the selected EM
anomalies were modelled with the Maxwell (EMIT, Australia) software package.
The magnetic and radiometric survey covered an area of 1,300 km2 and was flown at an
average height of 70 m over the terrain (see Figure 9.2). The EM survey was flown along the
same lines over two separate blocks selected on results of previous exploration data. The
total length of the magnetic-radiometric surveys was 5,642 line km, the EM survey size was
1,249 line km. Some results of the airborne surveys are shown on Figures 9.9 and 9.10.
Brief survey equipment/specifications are as follows:
• Magnetics: cesium magnetometer CS-3 (15,000 nT to 105,000 nT range), recording

on four independent channels with 1 sec to 0.05 sec sampling rate;
• Gammaspectrometry: gammaspectrometer GSA with six NaI(Tl) crystal blocks of
37.8 litres in total, 512 recording channels, measured energy range 0.1 MeV to 3.0
MeV, sampling rate 0.25 sec to 4 sec; and,
• Electromagnetics: Russia’s newly developed time-domain electromagnetic system
EQUATOR – first system, using advantages of both time-domain and frequency
technologies.

Features of the system are:
• It is highly effective in both conductive and resistive environments;
• It is easy to transport and to install: it can be transported in a mid-size car and installed
in less than four hours;
• Due to the system’s compact design survey speed can increase up to 150 km/hr to
170 km/hr without decline of data quality;
• Full-time measurements of the secondary signal;
• Tracking/compensation of the EM bird movements; and,
• High-frequency signal analysis allows achievement of high resolution at shallow
depth (subsurface level).
Figure 9.9: 2003 to 2004 Airborne Magnetic, Infrared and Gamma-Spectrometry
A B
Figure 9.10: AeroTEM Airborne Magnetics (A) and AeroTEM Airborne EM (B)
B
10.0 DRILLING
10.1 HISTORICAL DRILLING CAMPAIGNS
10.1.1 Kuyovsky and Verkhnekingashsky Drilling Campaigns

Between 2006 and 2009, a total of 28,843.3 m of drilling was executed on the Kuyovsky and
Verkhnekingashsky deposits on behalf of Kingashskaya. In total, 172 diamond drill holes
intersected the two deposits, with 78 holes drilled (28.868.9.9 m) at the Kuyovsky deposit and
94 holes (39, 562.2 m) at Verkhnekingashsky. In addition to these initial campaigns, two
further drill holes (1,133.0 m) were completed in 1993 at the Verkhnekingashsky deposit on
behalf of the State.
In the Verkhnekingashsky area, drilling was carried out on a 50 m by 50 m grid between

Lines 3 and 4. At Kuyovsky, 50 m by 50 m drilling was undertaken between Lines 7.5 and
8.5. Wider-spaced drilling – 100 m by 100 m centres – was used for the upper parts of the
mineralised zones and a 100 m by 200 m grid was used for the lower mineralised zones. The
hole depths varied between 40 m and 850 m and were mostly inclined at approximately -70°.
The drilling process required two types of rig; Russian-made SKB-4 and SKB-5 and
Christensen CS-14. The core diameter for the drilling was 76 mm and 93 mm, or NQ and HQ
size. Two adits were constructed at a -20° decline for 40.4 m in the Kuyovsky deposit and
51.3 m in the Verkhnekingashsky deposit. A total of 84 bulk samples were collected from
these adits for metallurgical testwork. Nine hydrogeological holes were drilled for 3,030.6 m,
including 28 pumping tests to evaluate water flow and discharge parameters.
After extraction from the core barrel, the drill core was geologically analysed and logged,
with particular attention paid to mineralisation, sulphide content and composition, alteration
and rock type. Geotechnical logging was also carried out by measuring RQD, core loss and
fracture patterns. Core recovery from the drill holes was in the region of 92% to 100%.
Sampling intervals were identified visually by sulphide content and then a hand-held XRF
analyser NITON XL3 was used to discern key minerals. The average length of the core
samples was 2.0 m, and ranged from 0.6 m to 3.2 m. The core was sawn in half along the
axis and one half was placed into a sample bag and sent to the sample preparation facility.
The other half of the sample was kept and sent to a core storage facility in case further
reference is needed.
After the completion of each hole, a series of down-hole geophysical surveys was completed
at 10 m intervals. The surveys included the following: natural gamma logging (GL),
resistivity logging (RL), self-potential gradient (SP), magnetic susceptibility logging (MS), of
induced polarisation potential (IP), electrode potential logging (EP) and inclinometry.
10.1.2 Kingashsky Drilling Campaigns
The drilling programme undertaken on the Kingashsky deposit was completed in two
campaigns. The first took place between 1994 and 2002 and was undertaken by Russian
authorities and Norilsk Nickel and the second was undertaken from 2007 to 2009 by
Kingashskaya. In total 165 diamond drill holes were completed for 35,454.8 m. Closely-
spaced drilling between Lines -2 and +2 was executed on a 50 m by 50 m grid. Holes were

drilled on a grid of 100 m by 100 m between Lines +2 and +4 and their depth varied between
24.3 m and 616 m. The average inclination of the holes was -78°. The drilling process
required two types of rig: Russian-made SKB-4 and SKB-5 and Christensen CS-14. The core
diameter for the drilling was 76 mm or NQ size.
A 228 m adit was excavated along Line 0 and was designed for the collection of 137 bulk
samples to be used for the metallurgical testwork. A total of 15 hydrogeological holes were
drilled for 2,009 m and 25 pumping tests were conducted to evaluate water flow and
discharge parameters.
A similar methodology was employed when preparing the Kingashsky drill cores. The
average length of the samples was 2.05 m. After the completion of each hole down-hole
geophysical surveys were completed at 10 m intervals.
10.2 PROVISIONAL FUTURE DRILLING PROGRAMME
Intergeo/Kingashskaya plans to conduct a preliminary feasibility study during 2012. It is

planned that 3,000 m of drilling will be undertaken in the area located between the Kuyovsky
and Verkhnekingashsky deposits in order to test geological targets. Based on
recommendations from this report and the preliminary feasibility study, drilling will also be
required to sterilise the proposed plant site and to collect more material for a second round of
metallurgical testing.
10.3 CONCLUSION
A summary of the holes drilled on the Kingashsky, Verkhnekingashsky and Kuyovsky

deposits is given in Table 10.1 and the drill hole locations are shown on Figures 10.1 and
10.2. Micon considers that the exploration work completed to date has been performed to a
high standard and in a systematic manner using modern techniques and equipment.
Table 10.1: Drilling Programmes Summary - Kingash Project (1993 to 2009)
Kuyovsky Verkhnekingashsky Kingashsky All Deposits

No. of No. of No. of No. of
Campaigns Metres Metres Metres Meters
Holes Holes Holes Holes
1
Prospecting 1993 2 1,133.0 2 1,133.0
1
Exploration 1994-2002 17 5,078.4 17 5,078.4
Exploration 2006-20072 38 17,100.5 60 25,776.3 98 42,876.8
Prospecting/Exploration
40 11,768.4 34 13,785.9 148 30,376.4 222 55,930.7
2007-20092
Hydrogeological Holes2 5 4 15 2,009.0 24 5,039.6

2
Adit 1 40.4 1 51.3 1 228 3 319.7
1
Russian authorities.
2
Kingashskaya.

Figure 10.1: Drill Hole and Adit Locations – Kingashsky Deposit
December, 2011.
Figure 10.2: Drill Hole and Adit Locations – Verkhnekingashsky and Kuyovsky Deposits
December, 2011.
11.0 SAMPLE PREPARATION, ANALYSES AND SECURITY
11.1 SAMPLE PREPARATION AND ANALYSIS
11.1.1 Sampling and Sample Preparation
Trench logging and sampling were carried out at the Kingashsky, Verkhnekingashsky and
Kuyovsky deposits following the Russian industry’s standard regulations. For each trench,
the surface and one of the walls was documented for lithology, structure and alteration. The
logging also included photo-documentation and the location, length and number of channel
samples. The cut-channel sample sizes were generally 2 cm by 5 cm and 2 m long. Samples
were collected manually with the aid of a hammer and chisel. The average sample weight was
6 kg.
At the Kingashsky deposit, channel samples were collected from adit number one using a
pneumatic saw. Channel length was 1.96 cm on the average and weighed 6.4 kg. A total of
114 samples were taken from the southeastern wall of the adit and 23 samples were collected
from the adit floor. A total of 280 channel samples were collected at Verkhnekingashsky and
189 samples from Kuyovsky.
The handling, logging, and sampling of the diamond drill core were conducted according to
the Russian industry standard regulations. The drill core was removed from the core barrel by
the drill crew and placed into wooden core boxes with the drill core interval documented by
water-proof marker on the edges of the box. The drill core was transported by truck to the
core logging facility where it was washed to remove any drilling fluids and mud. Geologists
then logged the core, determined core recovery, documented lithology, alteration, and
structural features. Visually detectable mineralised sections and wider host rock intervals
were continuously scanned by portable X-ray fluorescence spectrometer NITON XL3.
Digital, colour photographs of the core were taken using natural light, and the images were
uploaded daily to the on-site computer. The results of the core logging were later coded and
transformed into digital geological data for three-dimensional modelling.
The sample intervals were marked by the geologist based on significant features noted during
the logging procedure and the results of the XRF. The length of the core sampling interval
was approximately 2 m. Most of the samples used were extracted from drill holes that were
76 mm in diameter, and their weight was usually less than 10 kg. Sample numbers and
intervals were written on wooden blocks and secured at the end of sample interval in the core
box. The samples were then cut into two equal sized samples along the core axis. Extremely
low-grade samples (<0.01% Ni based on XRF analysis) located outside the mineralised zones
were not sent for assaying.
During the core sampling programme at the Kingashsky project, no sampling errors were
encountered that would bias the assay results. Core recovery was high at 97% due to the
competent nature of ultramafic rock. Based on statistical analysis, no relationship was found
between Ni and Cu grade and core recovery, which would suggest that no significant
contamination occurred through the selective grinding of the core sample.
The preparation of the samples was conducted at the project site.

11.1.2 Sample Analysis
Single interval samples were analysed at the independent AO KrasnoyarskGeologia

(Krasgeo) laboratory in Krasnoyarsk. Ni, Cu, Co and S were analysed using atomic
absorption with acid digestion; Pt, Pd and Au were fire assayed with atomic absorption finish.
Composite samples were analysed at the independent Stewart Geochemical laboratory in
Moscow (LLC Stewart Geochemical and Assay). External duplicate assays were completed
at the facilities of Gipronikel in Saint Petersburg. All three laboratories are independent of
Kingashskaya and are ISO/IEC 17025 accredited.
The Kuyovsky deposit database contains a total of 12,681 core samples, which were analysed
for nickel, copper and cobalt. This includes 5,165 core samples analysed for sulphur and
3,265 core samples analysed for platinum, palladium and gold.
The Verkhnekingashsky deposit database contains a total of 17,872 core samples, which were
analysed for nickel, copper and cobalt. This includes 8,936 core samples analysed for sulphur
and 6,361 core samples analysed for platinum, palladium and gold.
The Kingashsky deposit database contains a total of 18,190 core samples, which were
analysed for nickel, copper and cobalt. This includes 14,042 core samples analysed for
sulphur and 11,864 core samples analysed for platinum, palladium and gold. A total of 445
composite samples were tested for platinum, silver, gold, rhodium, ruthenium and iridium.
11.1.3 Specific Gravity, Bulk Density and Moisture Determinations
The specific gravity and other geotechnical characteristics of the mineralisation and host
rocks were calculated at the Krasgeo laboratory. The geotechnical and engineering
characteristics of the deposit are based on core logging data and the results of laboratory tests.
The average moisture for Kingashsky rocks determined from 30 samples was exceptionally
low at 0.06%. At Verkhnekingashsky and Kuyovsky, water absorption was estimated based
on 72 sample measurements and was found to be low at 0.12%, which is normal for
crystalline rocks.
At the Kingashsky deposit, 128 chip samples were collected from core, outcrops and adits to
determine the physical properties of the rock. Density and moisture were determined for 102
rock chip samples from Verkhnekingashsky and 154 from the Kuyovsky core as well as from
adits used for metallurgical bulk sample collection.
Specific gravity for the intrusive rocks of the Kuyovsky deposit averaged at 2.94, 2.90 for the
Verkhnekingashsky deposit and 2.83 for the Kingashsky deposit.
Specific gravities of the host rocks at Kuyovsky and Verkhnekingashsky and at Kingashsky
are summarised in Table 11.1.

Table 11.1: Specific Gravities of Host Rocks at Kuyovsky, Verkhnekingashsky and Kingashsky
Deposit Rock Type Specific Gravity

Caliciphyre 2.81
Gabbro 3.1
Kuyovsky and
Gneiss 2.82
Verkhnekingashsky
Pyroxenite 2.89
Serpentinite 2.79
Caliciphyre 2.78
Gabbro 2.75
Kingashsky Gneiss 2.65
Serpentinite 2.83
Quaternary 2.00
11.2 QUALITY ASSURANCE AND QUALITY CONTROL
In order to maintain and insure quality control, prescribed Russian procedures were adhered
to whilst assaying the samples. Sample pulps were assayed twice at the original laboratory to
ensure consistent results. An external laboratory, Gipronikel Laboratory in Saint Petersburg,
also assayed the sample pulps twice in order to confirm that the original laboratory was
reliable.
The Russian protocol did not include use of blind certified standard and blank samples as part
of each batch of samples sent for assay (although this had been recommended by Micon
following is site visit in 2007).
Internal quality control assay results are presented in Figures 11.1 to 11.12 and external
quality control results are presented in Figures 11.13 to 11.24.
11.2.1 Internal Duplicates
A portion of the sample pulps were re-submitted to the original laboratory for duplicate
analysis. Micon has used the internal duplicate assay data to generate a series of scatter plots.
The correlation and precision plots presented below show results for the Kingashsky,
Verkhnekingashsky and Kuyovsky deposits.
The correlation plots featured below compare the results of the original and internal
laboratory analyses. The precision plots illustrate the distribution of error for duplicate assay
pairs. In overall terms, the results are considered reasonable.

Figure 11.1: Correlation Plot for Duplicate Nickel Assays, Kingashsky Internal Laboratory
Figure 11.2: Precision Plot for Duplicate Nickel Assays, Kingashsky Internal Laboratory
Figure 11.3: Correlation Plot for Duplicate Copper Assays, Kingashsky Internal Laboratory
Figure 11.4: Precision Plot for Duplicate Copper Assays, Kingashsky Internal Laboratory
Figure 11.5: Correlation Plot for Duplicate Cobalt Assays, Kingashsky Internal Laboratory
Figure 11.6: Precision Plot for Duplicate Cobalt Assays, Kingashsky Internal Laboratory
Figure 11.7: Correlation Plot for Duplicate Nickel Assays, Kuyovsky and Verkhnekingashsky, Internal
Laboratory
Figure 11.8: Precision Plot for Duplicate Nickel Assays, Kuyovsky and Verkhnekingashsky, Internal
Laboratory
Figure 11.9: Correlation Plot for Duplicate Copper Assays, Kuyovsky and Verkhnekingashsky, Internal
Laboratory
Figure 11.10: Precision Plot for Duplicate Copper Assays, Kuyovsky and Verkhnekingashsky, Internal
Laboratory
Figure 11.11: Correlation Plot for Duplicate Cobalt Assays, Kuyovsky and Verkhnekingashsky, Internal
Laboratory
Figure 11.12: Precision Plot for Duplicate Cobalt Assays, Kuyovsky and Verkhnekingashsky, Internal
Laboratory
11.2.2 External Duplicates
Pulp samples were sent to the Gipronikel laboratory for quality control analysis. The results,
which are considered reasonable, are presented in Figures 11.13 to 11.24.
Figure 11.13: Correlation Plot for Duplicate Nickel Assays, Kingashsky External Laboratory
Figure 11.14: Precision Plot for Duplicate Nickel Assays, Kingashsky External Laboratory
Figure 11.15: Correlation Plot for Duplicate Copper Assays, Kingashsky External Laboratory
Figure 11.16: Precision Plot for Duplicate Copper Assays, Kingashsky External Laboratory
Figure 11.17: Correlation Plot for Duplicate Cobalt Assays, Kingashsky External Laboratory
Figure 11.18: Precision Plot for Duplicate Cobalt Assays, Kingashsky, External Laboratory
Figure 11.19: Correlation Plot for Duplicate Nickel Assays, Kuyovsky and Verkhnekingashsky, External
Laboratory
Figure 11.20: Precision Plot for Duplicate Nickel Assays, Kuyovsky and Verkhnekingashsky, External
Laboratory
Figure 11.21: Correlation Plot for Duplicate Copper Assays, Kuyovsky and Verkhnekingashsky, External
Laboratory
Figure 11.22: Precision Plot for Duplicate Copper Assays, Kuyovsky and Verkhnekingashsky, External
Laboratory
Figure 11.23: Correlation Plot for Duplicate Cobalt Assays, Kuyovsky and Verkhnekingashsky, External
Laboratory
Figure 11.24: Precision Plot for Duplicate Cobalt Assays, Kuyovsky and Verkhnekingashsky, External
Laboratory
11.3 CONCLUSIONS
Notwithstanding the lack of of blind certified standard and blank samples as part of each
batch of samples sent for assay under Russian protocols, it is the opinion of the author, that
the sample preparation, analysis and security procedures were to a standard which is
acceptable for assays used in mineral resource estimation.

12.0 DATA VERIFICATION
During the 2007 site visit Micon inspected drilling sites and drill core and reviewed all
aspects geological mapping, core logging and sampling. A hand-held, Nitron XRF analyser
was used to compare drill core Ni and Cu assays with remaining split cores that were stored at
the Verkhnekingashsky and Kuyovsky sites. Micon also visited the primary assay laboratory
in Krasnoyarsk to inspect the sample preparation and analytical facilities and discuss assay
methodologies. Micon concluded that all aspects of the exploration activities and data
collection were to a high standard with the exception of the lack of use of Certified Reference
Materials for assay standards. This issue remains a problem and Micon has recommended a
programme of re-assaying using blind standard samples.
Micon obtained the Kingash geological interpretation and assay database in digital format
from Kingashskaya. All geologic and mineralised zone wireframes were inspected for
reasonableness and where Micon identified incongruities between the drill hole data and the
geologic interpretation the wireframes were amended.
The assay database was subject to validation methods using tools within Surpac mining
software to ensure that no false sample intervals were included in the database. Summary
assay statistics were prepared to examine the range of all assays contained within the database
and to identify assay outliers, which are potentially sampling errors.
All available assay laboratory quality control data was analysed by Micon to identify biases
and errors. The data comprised a set of duplicate assays that had been re-analysed at the
original laboratory (internal quality control) and a set of assay duplicates; one derived from
the original laboratory and one derived from an independent secondary laboratory (external
quality control). Correlation diagrams and error plots were generated to assess the quality of
the available assay data. (See Section 11.)
Micon concluded that the assay database was reliable and appropriate for mineral resource
modelling. As noted above, however, Micon continues to recommend that standard certified
reference materials are routinely submitted during the analytical programme.

13.0 MINERAL PROCESSING AND METALLURGICAL TESTING
13.1 METALLURGICAL TESTWORK
An extensive amount of metallurgical testwork was undertaken from 1996 to 2003 by Russian
authorities and Norilsk Nickel and from 2007 to 2009 by Kingashskaya. A total of six
different metallurgical processes were evaluated and are summarised in Table 13.1.
Ultimately, Kingashskaya decided that flotation would be the most cost effective process and
this was tested in the laboratory by Gipronikel using a 15.5 t bulk sample. The material base
for the testwork was collected from core and bulk samples taken from adits on the
Kingashsky, Verkhnekingashsky and Kuyovsky deposits.
Table 13.1: Summary of Metallurgical Testwork Completed for the Kingashsky Deposits
Samples Selected Ni, Cu Grade Recovery

Process Company
No. Wt. Location (%) (%)
Kingashsky Deposit
Gipronikel Institute, Ni, 0.26-0.59% Ni, 65.7%
Flotation 32 Core 50-100 kg Adit 1
Tekhnopark-Apatity Cu, 0.08-0.34% Cu, 74.8%
X-Ray Ni, 0.45%; Cu, 0.17% Ni, 54.65%; Cu, 60.36%

2 bulk 5t
Radiometric Adit 1 LLC Rados, Krasnoyarsk Ni, 0.28%; Cu, 0.077% Ni, 41.2%; Cu, 48.4%
samples 3t
Separation
Siberian Federal
Staged Ni, 72.7%
1 100 kg Adit 1 University Dept.
Flowsheet Cu, 26.1%
Beneficiation
Agitation leaching
Ni, 80%;
Ni, 0.50% Cu, 99%
Bioleaching 2 200 kg Adit 1 LLC Center-ESTgeo Ni, 0.26% Heap bioleaching:
Ni, 92%
Cu, 97%
Hydromet Ni, 0.59%

2 100 kg Adit 1 Institute of Chemistry 1) Ni, 60%; Cu, 70%
1) Fe Dissolution Cu, 0.27%
20.3 kg DH 87 Krasnoyarsk 2) 2) Ni, 70%; Cu, 80%
2) Chlorination
Verkhnekingashsky and Kuyovsky Deposits

21 Verkhnekingashsky Gipronikel Institute, Ni, 0.45-1.02% Ni, 51-79%
Flotation 100 kg
Core Kuyovsky Tekhnopark-Apatity Cu, 0.20-0.44% Cu, 18-88%
2 bulk Verkhnekingashsky, Ni, 0.54%;Cu, 0.20% Ni, 62.5%; Cu, 33.4%
Gipronikel Institute
samples Kuyovsky Ni, 0.55%; Cu, 0.33% Ni, 68.6%; Cu, 17.6%
X-ray
2 bulk 5t Ni, 0.45%; Cu, 0.17%
Radiometric LLC Rados, Krasnoyarsk
samples 3t Ni, 0.28%; Cu, 0.077%
Separation
Siberian Federal
Staged
1 sample 200 kg University Dept. Ni, 0.57%; Cu, 0.254% Ni, 72.7%; Cu, 26.1%
Flowsheet
Beneficiation
Ni, 0.50%; Cu 0.165% Heap bioleaching
Bioleaching 2 samples 200 kg Adit 1, 109 m to 113 m
Ni, 0.26%; Cu, 0.11% Ni, 92%; Cu, 97%
Kingashskaya intended to treat the mill feed from the three deposits as a blended feed, which
would be processed at a central concentrator equidistant from the three mines. The
beneficiation process applied for the Kingashsky, Verkhnekingashsky and Kuyovsky
mineralisation includes a flotation circuit producing a bulk copper-nickel concentrate
containing PGMs. The process flow sheet used for the testwork was originally developed by
Kingashskaya based on existing processes used for similar disseminated nickel-copper-PGM
ores located in Zapoliarny, Murmansk Region in the Kola Operating Division of Norilsk
Nickel. The Kingash Project deposits appear to have similar lithological and mineralogical
characteristics with the Zapoliarny deposit and this has been used to guide the development of
processing options.

Most of the recent laboratory-scale flotation and smelting testwork was conducted by the
Gipronikel Institute (Gipronikel), St. Petersburg. Flotation pilot scale testwork was
conducted by Technopark-Apatity, Apatity, Murmansk Region.
In addition to the above, the following alternative processes were tested:
• X-ray radiometric sorting, by LLC Rados, Krasnoyarsk;

• Stage magnetic separation and flotation beneficiation, by Siberian Federal University;
• Whole-ore bioleaching, by LLC Center-ESTgeo;
• Other whole-ore hydrometallurgical processes, by the Institute of Chemistry,
Krasnoyarsk; and,
• Hydrometallurgical processing (pressure oxidation leaching) of flotation concentrate
(Gipronikel).
The testwork that took place on the mineralogy and processing properties helped to clarify the
main physical and chemical parameters that will impact the concentration process. It was
determined that the degree of sulphide replacement with magnetite and silicate alteration
(serpentine and chlorite), as well as the presence of the laminar copper mineral, valleriite,
significantly affects the nickel and copper concentration process. The test results showed that
metal recovery is highly dependent on the ore composition and recoveries showed the
following ranges: nickel 51% to 79%; copper 18% to 88% and precious metals 37% to 86%.
A large bulk sample remains on site for the three deposits and a second sample representing
the unused portion of the Kingashsky metallurgical bulk sample is being stored in wooden
boxes in Krasnoyarsk.
The testwork results were used to develop a common beneficiation process. The
recommended beneficiation process includes the following operations:
• Transportation of -900 mm mill feed to concentrator;

• Mill feed handling and coarse crushing, feeding the crushed mill feed to the
intermediate bin;
• Two crushing stages, the medium crushing process is an open circuit, while fine
crushing is a closed-circuit process with a sieve size of 10 mm to 12 mm;
• Two stages of ball milling (ball sizes 100 mm to 120 mm and 60 mm, respectively) in
closed circuit complete with hydrocyclone units to produce flotation feed 80% to 85%
-0,071 mm;
• Flotation and scavenging process producing flotation tailings and rough concentrates
one and two, routed separately to the cleaning circuit producing copper-nickel
concentrates;
• Regrinding of middlings and rough concentrates in the ball mill (ball size 20 mm to
30 mm) in closed circuit with hydrocyclone units to 95% -0,071 mm;
• A circuit consisting of the main cleaning (two) and re-cleaning (three) units producing
copper-nickel concentrates;

• Dewatering of the Cu-Ni concentrate, including concentrate thickening and filtration,
producing commercial concentrate with 11% to 13% moisture and “clean” overflow
routed to the settling pond and further to water circulation system;
• Cu-Ni concentrate drying; and,
• Thickening of tailings and slurry pumping to the tailings dam.
The proposed process was first tested on samples in a closed circuit and on pilot scale where
bulk Cu-Ni concentrate was produced for further metallurgical tests. The proposed process
flow sheet still needs to be optimised in terms of concentrate quality and recovery rates.
The testwork was completed on behalf of Norilsk Nickel, and primarily focused on
conventional flotation processes. This produced a low-grade, bulk nickel/copper sulphide
concentrate, which was then smelted to a high-grade matte. Hydrometallurgical processes
then refined the high-grade matte to metal.
The results obtained from stage beneficiation did not prove advantageous over conventional
flotation. Biological leaching gave significant improvement in dissolution of nickel and
copper over conventional flotation recovery, but the subsequent recovery stages were deemed
to be problematic. Precious metals were also not recovered. The other whole-ore
hydrometallurgical processes were similar, plus capital and operating costs were considered
to be prohibitive. Although the technical feasibility of hydrometallurgical processing of
flotation concentrate was demonstrated by Gipronikel, further work is required to ensure its
economic feasibility. As a result of these evaluations, Norilsk Nickel rejected the alternative
process routes and focused on conventional flotation, smelting and refining for the TEO.
Micon is also of the opinion that this is the best method.
The mineral processing and metallurgical testwork performed has been summarised in two
reports, which were prepared in 2009 by Gipronikel. One of the reports focuses on the
Kingashsky deposit, and the other on the Verkhnekingashsky/Kuyovsky deposits. The
conclusions and recommendations summarised in these testwork reports are the basis for the
metallurgical aspects of the TEO of Permanent Conditions for Reserve Estimation for
Kingashsky and Verkhnekingashsky/Kuyovsky, also prepared in 2009 by Gipronikel.
Gipronikel, previously a subsidiary of Norilsk Nickel, is very familiar with the metallurgical
operations of the Kola Division. The information provided in this section of the report is
derived from these reports.
13.2 MINERAL PROCESSING
13.2.1 General Discussion on Ore Type and Mineralogy
The Kingash deposits are associated with stratified ultrabasic masses of dunite and peridotite,
which have been subjected to varying degrees of intensity of metamorphic processes. These
processes have resulted in serpentinisation, amphibolisation, chloritisation and
carbonatisation.
The sulphide mineralisation is predominantly present as sideronitic, low-grade dissemination

(Kingashsky 94%; Verkhnekingashsky 92%; Kuyovsky, 96%). Minor, higher-grade,
epigenetic sulphide mineralisation is present as breccia, massive, disseminated veins, and
dense dissemination (Kingashsky 0.7%; Verkhnekingashsky 2.9%; Kuyovsky 3.3%). Near-

surface, oxidised mineralisation is relatively minor and variable (Kingashsky 5.3%;
Verkhnekingashsky 5.4%; Kuyovsky 0.6%). The low-grade sulphide mineralisation is
always accompanied by PGM and, to a lesser extent, gold and silver.
The main sulphides in the disseminated mineralisation are pentlandite, pyrrhotite,

chalcopyrite and valleriite (by replacement of chalcopyrite). The degree of sulphide
impregnation is variable, from dense to negligible. Pyrrhotite and chalcopyrite often exceed
pentlandite in the epigenetic mineralisation. Disseminated sulphide mineral grain size varies
from 200 µm to 3.5 mm, predominantly 300 µm to 1.5 mm, with some variation between the
deposits.
In addition to the sulphide mineralisation, oxides (magnetite, chrome spinel and ilmenite) are
present. The main rock-forming minerals are: olivine, serpentine, clinopyroxene, amphiboles,
chlorite, calcite, talc and micas (biotite and phlogopite).
The disseminated sulphide mineralisation is further complicated by the replacement of

sulphides with magnetite and to a lesser extent by secondary silicates (serpentine and
chlorite). Locally, valleriite (copper mineral) has also replaced sulphides. This may have
implications for recovery in processing.
Sulphide replacement with magnetite occurs primarily on the rims, with potential for loss of
sulphide to tailings after grinding and flotation. The average degree of magnetite replacement
is different in the three deposits (Kingashsky, 38%; Verkhnekingashsky, 18% and
Kuyovsky, 28%).
The replacement of sulphide by secondary laminar silicates (antigorite and chlorite) is less
common than replacement by magnetite (Kingashsky 22%; Verkhnekingashsky 15%;
Kuyovsky 11%). Where sulphides are replaced by silicates they are disintegrated into
smaller, angular aggregates, which in turn may be replaced by valleriite around the perimeter.
When such mineralisation is ground prior to flotation, the sulphides contained in the
valleriite, which itself is not floatable, are not liberated and are lost to tailings. On average,
the replacement with valleriite is 5% to 10 % and is greatest in the Kuyovsky deposit.
Secondary and associated minerals are represented by copper, nickel and iron sulphides,
tellurides, native gold, gold-silver alloy and PGM minerals. Of the latter minerals, sperrilite
accounts for about 90% to 95% of the PGM. The grain size of precious metals is
predominantly 5 µm to 30 µm, but does range to 120 µm, and gold minerals are generally
larger.
The oxidised material, locally abundant in the mineralised outcrops to surface, has been
significantly weathered and formed iron hydroxides overprinting oxides, silicates and,
partially, sulphides. Disseminated sulphide copper-nickel mineralisation alterations
significantly changed the original mineral composition and redistribution of valuable minerals
into non-extractable forms. On average, 65% of total nickel in the oxidised material is not
recoverable by conventional mineral processing.
Although there are differences between the Kingashsky, Verkhnekingashsky and Kuyovsky
deposits, their mineralogy, fabric and texture are comparable with regards to their potential
response to mineral processing.

13.2.2 Testwork Sample Selection and Characterisation
13.2.2.1 Sample Selection and Preparation
Laboratory testwork was conducted on a number of drill hole and adit/decline channel
composite samples of up to 100 kg each. Details of the samples are summarised in
Tables 13.2 to 13.4. Pilot-scale testwork was conducted on adit/decline bulk samples of
approximately 13 t each for Verkhnekingashsky and Kuyovsky and 15.5 t for Kingashsky.
The laboratory samples were initially jaw crushed in two stages to -10 mm and in a third
stage with a closing screen to -2.5 mm. The -2.5 mm sample was then split by coning and
quartering and by riffling to provide representative portions for mineral and chemical analysis
and processing testwork. Composites of nominally average grade for each deposit were
prepared from the laboratory sample balances and the remainder stored for further testwork.
13.2.2.2 Chemical Analysis
A full chemical analysis was conducted on all the testwork samples, using wet chemical, fire
assay and XRF, as appropriate. The analyses include non-ferrous metals, iron, sulphur, PGM,
gold, silver, potential penalty elements and whole rock oxide. The relevant analyses are
summarised in Tables 13.2 to 13.4.
The majority of the nickel grades provided by the Verkhnekingashsky laboratory are above
the deposit average and therefore are not fully representative of the deposit. However, the
composite sample constituents were selected so that its grade is more representative of the
average. The Kingashsky and Kuyovsky composite grades are higher but close to the
averages for the deposits. The Kuyovsky bulk sample grade is close to the deposit average
but the Kingashsky and Verkhnekingashsky bulk sample grades are somewhat above the
averages for the deposits.

Table 13.2: Kingashsky Mineral Processing Sample Details and Chemical Analyses
Hole/ Interval Nit Nis Cu Co Fet S Pt Pd Au Ag SiO2 Al2O3 MgO CaO

Sample
Adit (m) (%) (%) (%) (%) (%) (%) (g/t) (g/t) (g/t) (g/t) (%) (%) (%) (%)
SHT-1 Adit 1 11-13 0.39 0.22 0.08 0.016 8,49 0.40 0.06 0.08 0.04 0.60 35.7 1.65 37.8 0.66
SHT-2 Adit 1 53-57 0.44 0.39 0.17 0.017 8.48 0.70 0.16 0.17 0.10 0.98 35.2 2.10 36.2 0.58
K-11 С-49 11.0-65.85 0.59 0.49 0.30 0.017 9.50 0.90 0.56 0.67 0.18 1.42 36.0 3.39 32.9 1.61
K-12 С-4А 102.2-131.9,143.0-150.5 0.50 0.42 0.20 0.017 9.24 0.92 0.37 0.48 0.11 0.56 39.0 4.25 34.9 1.94
K-13 С-64 296-338 0.34 0.27 0.16 0.017 8.78 0.85 0.11 0.12 0.03 0.69 40.9 3.27 35.4 2.22
K-14 С-2А 167-223.1 0.34 0.31 0.12 0.015 7.30 0.54 0.10 0.15 0.04 0.56 39.3 3.06 34.5 1.17
K-15 С-20А 263-308 0.38 0.34 0.13 0.015 8.05 0.58 0.15 0.19 0.05 0.70 38.5 3.26 33.4 1.66
K-16 С-1А 240-251,281-323.1 0.37 0.32 0.18 0.013 8.10 0.80 0.17 0.16 0.12 0.77 37.2 3.76 31.9 2.10
K-18 С-51 57-109.2 0.53 0.46 0.25 0.016 8.58 1.05 0.71 0.91 0.19 1.37 39.3 5.73 26.2 4.48
K-21 С-69 132,1-158 0.47 ND 0.23 0.017 8.30 0.95 0.14 0.13 0.08 1.25 36.8 3.21 32.8 1.11
K-22 С-58 39.6-61.5 0.44 ND 0.20 0.013 7.78 0.71 0.17 0.18 0.10 1.89 40.3 4.55 25.6 3.35
K-23 Adit 1 101.0-104.6 0.49 0.45 0.17 0.015 9.52 0.94 0.24 0.23 0.09 0.98 35.6 2.80 35.3 0.98
90
K-24 Adit 1 157.2-161.0 0.32 ND 0.15 0.013 6.58 0.70 0.21 0.22 0.13 0.76 41.5 5.64 24.0 4.41
K-25 Adit 1 200.5-205.6 0.48 ND 0.19 0.017 8.94 0.80 0.30 0.28 0.12 1.09 37.0 4.20 30.5 2.46
K-28 С-17А 234-262 0.38 0.35 0.18 0.018 8.36 0.79 0.05 0.06 0.02 0.66 34.5 1.70 36.6 0.47
K-29 С-19А 176.7-209.1 0.33 0.27 0.08 0.013 7.10 0.42 0.08 0.09 0.04 0.37 37.6 3.78 32.7 2.08
K-30 С-68 173.7-198.2 0.40 0.29 0.19 0.016 7.44 0.72 0.09 0.09 0.06 0.40 41.5 3.65 35.6 1.40
K-31 С-93 46-71 0.40 0.34 0.09 0.015 7.38 0.61 0.14 0.12 0.04 0.37 38.1 3.96 31.7 1.18
K-32 С-93 127-150.5 0.42 0.36 0.13 0.015 8.10 0.63 0.27 0.29 0.08 0.46 36.4 2.68 33.1 1.71
K-33 РК-50 67-99 0.37 0.31 0.11 0.016 8.60 0.53 0.21 0.22 0.08 0.54 42.7 2.97 29.3 0.82
K-34 С-8А 4 -31.45 0.31 0.26 0.15 0.015 9.84 1.04 0.05 0.08 0.05 0.69 40.1 7.03 20.8 1.29
K-36 С-91 82-104 0.40 0.27 0.16 0.020 9.90 0.69 0.07 0.07 0.05 0.67 37.4 1.39 39.8 0.94
Intergeo MMC Ltd
K-37 С-82 66.4-88.0 0.41 0.38 0.17 0.018 8.70 0.37 0.09 0.10 0.07 0.72 36.1 2.18 35.2 1.26
Composite Laboratory Samples 0.40 ND 0.16 0.017 ND 0.76 0.14 0.19 0.08 ND ND ND ND ND
K-VTP-1 Adit 1 Pilot Plant Bulk Sample 0.45 ND 0.16 0.015 ND ND 0.16 0.14 0.12 0.87 ND ND ND ND
Table 13.3: Verkhnekingashsky Mineral Processing Sample Details and Chemical Analyses

Sample
Adit (m) (%) (%) (%) (%) (%) (%) (g/t) (g/t) (g/t) (g/t) (%) (%) (%) (%)
Vks с-302 39.0-380.0 0.51 ND 0.27 ND ND 1.10 0.50 0.37 0.15 ND ND ND ND ND
Vks-2 с-151 24.2-66.1 0.82 0.72 0.40 0.026 11.40 1.78 0.69 0.67 0.24 1.30 36.0 1.34 40.2 0.67
Vks-4 с-111, с-159 157.0-220.7 0.53 0.47 0.33 0.018 9,82 1.42 0.48 0.51 0.11 1.10 35.3 5.21 20.9 7.87
Vks-5 с-157 83.0-129.9 0.67 0.62 0.37 0.018 9,65 2.00 1.21 0.93 0.26 1.20 35.8 4.66 ND 5.36
Vks-6 с-159 227.0-294.0 0.70 0.65 0.40 0.020 9.77 1.62 0.99 1.37 0.40 1.50 37.3 5.22 27.8 3.10
Vks-7 с-143 77-183,449-470.2 0.45 0.40 0.24 0.018 9.43 0.97 0.19 0.23 0.08 1.10 36.7 2.72 32.3 2.20
Vks-8 с-193 402.0-457.0 0.66 0.60 0.38 0.018 9.32 1.38 0.80 0.86 0.21 1.96 38.4 4.54 29.3 4.32
Vks-9 с-155а 70.0-117.0 0.45 0.42 0.21 0.018 9.74 0.80 0.77 0.82 0.28 1.38 36.4 3.88 33.6 2.64
Vks-10 с-112а 361.0-410.0 0.47 0.44 0.19 0.017 9.40 0.81 0.35 0.37 0.13 1.01 36.2 2.53 34.3 1.01
Vks-11 с-247 61.6-88.0 0.49 0.45 0.26 0.020 10.09 1.09 0.22 0.15 0.07 0.95 36.0 2.51 33.5 1.31
Vks-12 с-251 208.0-233.6 0.44 0.35 0.19 0.016 7.70 0.78 0.24 0.26 0.06 1.05 35.0 2.68 28.4 1.39
VK-1 Decline 1 Pilot Plant Bulk Sample 0.54 ND 0.21 0.018 ND ND 0.38 0.39 0.12 ND ND ND ND ND
Table 13.4: Kuyovsky Mineral Processing Sample Details and Chemical Analyses
91

Sample
Adit (m) (%) (%) (%) (%) (%) (%) (g/t) (g/t) (g/t) (g/t) (%) (%) (%) (%)
Ks-1 с-140 216.7-284.9 0.71 0.66 0.38 0.009 9.90 1.66 0.62 0.44 0.20 1.90 34.9 3.11 32.1 1.01
Ks-2 с-164 3.5-6.4,14-58.7 0.43 0.39 0.28 0.019 9.97 1.28 0.10 0.17 0.05 1.20 35.2 3.66 24.7 3.32
Ks-3 с-167 130.0-211.7 0.49 0.44 0.29 0.020 10.50 1.44 0.12 0.21 0.07 1.20 36.9 2.98 32.3 1.71
Ks-4 с-168 90.9-151.0 0.63 0.57 0.37 0.018 9.82 1.60 0.56 0.49 0.20 1.80 34.6 4.19 29.3 2.56
Ks-5 с-189 177.6-228.0 0.80 0.70 0.46 0.025 10.80 2.25 0.54 0.73 0.40 1.40 38.0 6.28 24.0 5.06
Ks-6 с-214 27.,0-321.0 1.01 0.96 0.62 0.028 12.33 3.05 0.93 0.71 0.25 1.90 34.2 4.07 27.2 3.59
Ks-7 с-215 476.0-520.0 0.52 0.49 0.29 0.018 10.30 1.43 0.38 0.35 0.20 0.75 34.8 2.05 34.2 0.62
Ks-8 с-225 478.0-525.0 0.46 ND 0.25 0.017 9.52 1.10 0.18 0.18 0.10 1.18 39.0 3.14 28.1 2.71
Ks-9 с-221 50.0-74.0 0.59 0.58 0.31 0.020 9.90 1.20 0.24 0.26 0.11 1.83 36.2 3.90 29.0 4.85
Intergeo MMC Ltd
Ks-10 с-228 181.0-207.2 0.55 0.45 0.28 0.016 10.00 1.08 0.40 0.44 0.14 1.52 39.5 7.3 22.6 4.51
VK-2 Decline 2 Pilot Plant Bulk Sample 0.55 ND 0.34 0.20 ND 1.39 0.21 0.22 0.12 1.43 ND ND ND ND
Tellurium, selenium, arsenic and bismuth levels in the samples all appear to be at acceptably
low levels (ppm) for subsequent concentrate smelter and base metal refinery operations.
However, a small number of Verkhnekingashsky and Kuyovsky samples have anomalously
high fluorine analyses in excess of 1%, although the mineralogical association is not apparent
from the Gipronikel reports. The high MgO content is likely to be of most concern for
subsequent concentrate smelter operation.
13.2.2.3 Mineralogical Analysis
A full mineralogical analysis was conducted on each of the testwork samples. Details of the
minerals and their associations for each sample are presented in the Gipronikel reports; these
details contributed to the summary in Section 13.2.1. All of the laboratory and pilot scale
samples are of the disseminated sulphide mineralisation type.
The average mineral and nickel and copper distribution by mineral for Kingashsky and
Verkhnekingashsky/Kuyovsky (average data for separate deposits not reported by
Gipronikel) is summarised in Table 13.5.
Table 13.5: Nickel and Copper Distribution by Mineral
Kingashsky Verkhnekingashsky/Kuyovsky
Mineral Distribution (%) Distribution (%)
Mineral Ni Cu Mineral Ni Cu
Pentlandite 1.1 83.5 - 1.5 86.8 -
Pyrrhotite 0.4 0.2 - 1.5 0.6 -
Machinavite 0.1 0.8 0.7 0.1 1.1 -
Chalcopyrite 0.3 - 51.4 0.7 - 68.1
Valleriite 0.6 1.2 44.6 0.7 0.4 30.6
Other Sulphides Trace Trace 3.3 Trace Trace 1.3
Oxides 3.4 - - 3.3 - -
Olivine 9.8 6.0 - 12.2 6.1 -
Serpentine 62.9 7.7 - 56.3 4.4 -
Amphibole 5.9 0.6 - 9.2 0.4 -
Other Non-Metallic 15.5 - - 14.5 0.2 -
The mineralogical analyses show nickel is predominantly present as pentlandite, with only
minor amounts in other sulphides. The remainder of the nickel is in silicate minerals and is
unrecoverable.
13.2.3 Testwork Procedures
The following standard laboratory procedures and equipment were employed: crushing,
screening, grinding, size/assay fraction analysis, flotation, and magnetic separation. Most of
the work was conducted on 1.2 kg portions of the -2.5 mm crushed samples (see
Section 13.2.2.1).
Based on the analogy of the Zapoliarny deposit and processing operations, the flotation
process resulted in the production of a relatively low-grade nickel/copper concentrate. The
nominal flotation test procedure consisted of ball-mill grinding, followed by three 15-minute

stages of rougher flotation using soda ash for pH adjustment, butyl xanthate as collector,
copper sulphate as activator and a frother. The following criteria were investigated for the
development of a standard flotation procedure:
• Grind size;
• Rougher and rougher-scavenger flotation time;
• Rougher and rougher-scavenger cleaning stages and regrind size;
• Reagents; and,
• Magnetic separation scavenging of flotation rougher-scavenger tailing, including
regrinding and flotation of the magnetic concentrate.
Based on these investigations, a standard locked-cycle procedure was developed for

comparative testing of the laboratory samples:
• Primary grind size of 85% passing 71 µm;

• Ten minutes rougher flotation time;
• 30 minutes rougher-scavenger flotation time;
• Two stages of rougher concentrate cleaning: first rougher-cleaner tailing to rougher-
scavenger concentrate regrind; second cleaner tailing re-circulated to first cleaner; and
second cleaner concentrate to final concentrate;
• Rougher-scavenger concentrate and first rougher-cleaner tailing reground to 90%
passing 45 µm; and,
• Reground rougher-scavenger concentrate and first rougher-cleaner tailing cleaned in
three stages: second and third cleaner tailings recycled to the previous stage; third
stage cleaner concentrate to final concentrate; first cleaner tailing to cleaner-
scavenger, cleaner-scavenger concentrate recycled to first cleaner; and cleaner-
scavenger tailing to final tailing.
The following reagent suite was selected:
• Soda ash and butyl xanthate to the primary grind;

• Butyl xanthate/Aerofloat 80, copper sulphate, Akremon D13 (magnesium silicate
depressant) and DSF 004 frother to the rougher conditioner;
• Stage addition of butyl xanthate, copper sulphate, Akremon D13 and DSF 004 to the
rougher conditioner; and,
• Further additions of butyl xanthate to the cleaners.
The adit/decline bulk samples were tested in a 210 kg/h capacity pilot plant. The circuit
arrangement consisted of a three-stage crushing section ahead of grinding and flotation stages
and operating conditions as for the standard laboratory procedure. Continuous, stable
operation over an extended period was reported and the actual operating parameters were
found to be close to those forecast. A bulk sample of concentrate was produced for
metallurgical testwork and thickening testwork was conducted on samples of concentrate and

tailing. No laboratory or pilot scale testwork is reported by Gipronikel for the oxide zone
material.
13.2.4 Testwork Results
The standard flotation results are presented in a number of scatter plots to facilitate analysis.
Note that one data point (Kuyovsky sample Ks-6) is excluded from the scatter plots due to its
anomalously high grade but relatively low metal recoveries. There may be a mineralogical
cause rather than testwork or data error but if so, it is not apparent from the Gipronikel report.
The following abbreviations are used in Figures 13.1 through 13.9: K, Kingashsky; Vks,
Verkhnekingashsky; and Ks, Kuyovsky.
Figure 13.1 shows a reasonable trend between nickel recovery and mill feed nickel grade,
although Kuyovsky shows some anomalous data to the trend (see comment above).
Figure 13.2 shows a similar trend between nickel in concentrate and mill feed nickel grade,
albeit the points are more scattered.
Figure 13.1: Nickel Recovery versus Mill Feed Grade %Ni
85
80
75
70
Ni Recovery (%)
65
Vks Laboratory
60 Vks Composite Laboratory

Vks Adit 1 Pilot Plant
Ks Laboratory
55 Ks Composite Laboratory
Ks Adit 2 Pilot Plant
K Laboratory
50 K Composite Laboratory
K Adit 1 Pilot Plant
45
0.3 0.4 0.5 0.6 0.7 0.8 0.9
Ore (% Ni)
Figure 13.2: Concentrate Grade Ni versus Mill Feed Grade %Ni
Figure 13.3: Copper Recovery versus Mill Feed Grade %Cu
Figure 13.3 shows a weak trend between copper recovery and mill feed copper grade, with an
extreme scatter. This scatter is primarily due to the Kuyovsky data, which exhibits a lower
copper recovery than Verkhnekingashsky for the same mill feed copper grade.
Figure 13.4 shows a similar trend for copper in concentrate grade versus mill feed copper
grade, albeit the points are somewhat less scattered.
Figure 13.4: Concentrate Grade %Cu versus Mill Feed Grade %Cu
Figure 13.5 shows a reasonable trend between copper recovery and nickel recovery, with no
overall variation between the deposits. One extraneous point is for the Kuyovsky pilot plant
result, which exhibits an anomalously low copper recovery.
Figure 13.5: Copper Recovery versus Nickel Recovery
Figure 13.6 shows a good trend between cobalt recovery and nickel recovery, with no overall
variation between the deposits. Similar results are obtained for platinum, palladium and gold
versus nickel recovery as shown in Figures 13.7 to 13.9, albeit with varying degrees of
scatter.
Figure 13.6: Cobalt Recovery versus Nickel Recovery
Figure 13.7: Platinum Recovery versus Nickel Recovery
95
90 Vks Laboratory
Vks Composite Laboratory

85
Vks Adit 1 Pilot Plant
80 Ks Laboratory
Ks Composite Laboratory
75 Ks Adit 2 Pilot Plant
K Laboratory
70
Pt Recovery (%)
K Composite Laboratory
65 K Adit 1 Pilot Plant
60
55
50
45
40
35
30
40 45 50 55 60 65 70 75 80 85
Ni Recovery (%)
Figure 13.8: Palladium Recovery versus Nickel Recovery
Figure 13.9: Gold Recovery versus Nickel Recovery
95
90 Vks Laboratory
Vks Composite Laboratory

85 Vks Adit 1 Pilot Plant
80 Ks Laboratory
Ks Composite Laboratory
75 Ks Adit 2 Pilot Plant
Au Recovery (%)
70 K Laboratory
K Composite Laboratory
65 K Adit 1 Pilot Plant
60
55
50
45
40
35
30
40 45 50 55 60 65 70 75 80 85
Ni Recovery (%)
The flotation responses of the composite and pilot plant samples are generally within the
individual laboratory test result trends, although Kuyovsky is an exception in some cases, as
noted above. A summary of the pilot plant results for each deposit bulk sample is presented
in Table 13.6.
Table 13.6: Bulk Sample Pilot Plant Flotation Results
Kingashsky Verkhnekingashsky Kuyovsky

Metal Grade (% or g/t) Recovery Grade (% or g/t) Recovery Grade (% or g/t) Recovery
Feed Conc. (%) (%) Conc. (%) Feed Conc. (%)
Ni 0.45 8.18 61.6 0.54 8.10 62.5 0.55 8.51 68.6
Cu 0.16 1.45 31.2 0.21 1.65 33.4 0.34 1.33 17.6
Co 0.015 0.24 53.7 0.018 0.24 57.2 0.020 0.30 66.8
Pt 0.16 3.05 65.6 0.38 4.99 55.9 0.21 2.44 54.1
Pd 0.14 2.01 48.1 0.39 4.63 50.5 0.22 2.19 49.6
Au 0.12 1.66 48.9 0.12 1.90 67.1 0.12 1.23 50.8
The low copper recovery for the Kuyovsky sample is anomalous.
13.2.5 Discussion
The scatter plots demonstrate generally consistent flotation response for the different
deposits, with mill feed grade being the primary controlling criterion for nickel and copper
recovery and concentrate grade. The mineralogical analysis indicates that any extreme
variability in the trends is a function of the degree of substitution of nickel sulphides by
magnetite, machinavite and silicates and chalcopyrite by valleriite. This variability appears to
be particularly evident in the Kuyovsky deposit samples. Precious metal and PGM recovery
is closely correlated to sulphide recovery.
Gipronikel attempted to demonstrate the metallurgical response of the deposits by plotting

recovery contours based on the mill feed grade/recovery statistical correlations of the
laboratory standard flotation test results. The curves for nickel recovery are shown on
Figure 13.1. While it is suggested that this analysis is simplistic, (the true situation is
complicated by sulphide alteration that is not always in clear zones and the results should be
used with caution) Gipronikel’s conclusions are summarised as follows:
• In the Kingashsky deposit, the highest metal recovery occurs in mineralisation from
the southwestern and northwestern flanks of the deposit. The lowest recoveries occur
in mineralisation from the northern flank of the deposit. Copper recovery is further
reduced by a pronounced north-south zone of valleriite alteration;
• In the Verkhnekingashsky deposit, highest metal recovery occurs in mineralisation
from the southeastern and northwestern flanks of the deposit associated with high
grade material. The lowest recoveries occur in mineralisation in the central band
running southwest to northeast; and,
• In the Kuyovsky deposit, highest recovery occurs in mineralisation from the southeast
flank of the deposit. The lowest recovery occurs in mineralisation from central zone
running southwest to northeast.

For the purposes of this report, recovery of nickel is estimated on the basis of mill feed grade
using Figure 13.1 and recoveries of other metals are estimated from nickel recovery using
Figures 13.2 to 13.9.
Although nickel and copper in concentrate are weakly correlated to mill feed grade and
recovery to concentrate, the Gipronikel TEO has used a nominal grade of 9% Ni; copper and
other metal grades are subsequently derived from metal recoveries. Figure 13.2 indicates that
this assumption is optimistic. Average laboratory concentrate grades for Kingashsky,
Verkhnekingashsky and Kuyovsky are estimated to be 6.5% Ni, 7% Ni and 8.5% Ni,
respectively. Higher grades were obtained for Kingashsky and Verkhnekingashsky, 8.2% Ni
and 8.1% Ni respectively, albeit at mill feed grades higher than the deposit averages.
Overall, the samples and testwork appear to provide a representative basis for the
metallurgical response of the deposits. Although additional standard flotation tests may
facilitate optimisation of recovery and concentrate grades, the indicated lack of zoning of the
sulphide alteration features suggests that the results may not differ significantly.
13.3 EXTRACTIVE METALLURGY
13.3.1 Sample Selection and Characterisation
Samples of pilot plant bulk concentrates from each of the deposits were used for laboratory-
scale smelting testwork. The samples were mixed and split into representative portions for
chemical analysis and testwork.
The chemical analyses of the concentrate samples are presented in Table 13.7.
Table 13.7: Bulk Concentrate Sample Analyses
Analysis (%)
Sample
Ni Cu Co Fe S SiO2 MgO Al2O3 CaO
Kingashsky 8.43 1.58 0.30 21.7 12.08 20.3 19.5 1.74 0.69
Verkhnekingashsky 8.78 1.87 0.25 16.2 12.36 24.5 18.9 1.63 1.28
Kuyovsky 8.19 1.22 0.24 25.1 16.32 18.2 13.2 2.39 2.08
There are some anomalies in Verkhnekingashsky and Kuyovsky results against the overall
pilot plant results reported in Table 13.6.
13.3.2 Testwork Procedures
The following laboratory procedures were used for the Kingashsky samples:
• Briquetting using a roll press. Strength tests were conducted on briquettes produced
with and without sodium lignosulphate as binder and before and after drying;
• Preliminary melting tests at 1,470 ºC and 1,550 ºC to determine flux and fayalite
(equivalent to recycled converter slag) proportions for acceptable slag liquidus
temperature for electric smelting;

• Large-scale laboratory tests with a small electrical arc furnace at temperature of
1,470 ºC using a charge weighing 30.8 kg, including bulk concentrate, converter slag,
quartz flux and coke; and,
• XRF and scanning electron microscope analysis of the matte and slag produced from
the large-scale laboratory tests.
Based on the Kingashsky testwork, Gipronikel proposed the use of concentrate drying and
DC electric furnace smelting, obviating the requirement for briquetting. The following
laboratory procedures were used for the Verkhnekingashsky and Kuyovsky bulk concentrate
samples:
• Drying;
• Melting tests in a laboratory furnace at 1450 ºC with quartz flux and fayalite; and,
• XRF and scanning electron microscope analysis of the matte and slag produced.
13.3.3 Testwork Results
Chemical analyses of the matte and slag produced from the melting test are summarised in
Table 13.8.
Table 13.8: Melting Test Product Analyses
Analysis (%)
Product
Ni Cu Co Fe S SiO2 MgO Al2O3 CaO
Kingashsky Matte 22.0 6.32 1.21 45.5 21.0 - - - -
Verkhnekingashsky Slag 0.18 0.21 0.09 26.2 - 38.8 15.6 3.14 4.36
Verkhnekingashsky Matte 24.7 4.88 0.41 38.9 25.3 - - - -
Verkhnekingashsky Slag 0.21 0.12 0.08 22.5 - 53.1 15.1 2.41 1.06
Kuyovsky Matte 17.6 2.41 0.31 47.4 26.1 - - - -
Kuyovsky Slag 0.19 0.14 0.11 25.4 - 48.8 11.8 3.41 1.91
Microscope analysis of the slags confirmed practically no prills or matte inclusions, thus
confirming the adequacy of the melting conditions and slag properties.

14.0 MINERAL RESOURCE ESTIMATES
Historical mineral resource estimates are described in Section 6.
14.1 2011 MICON MINERAL RESOURCE ESTIMATE
At the request of Intergeo, Micon constructed mineral resource models for the Kuyovsky,
Verkhnekingashsky and Kingashsky deposits using geologic and assay information derived
from drill hole core samples. In this section of the report, the methodology used to develop
the mineral resource models is described. Primary assay data for nickel, copper, cobalt,
platinum, palladium, gold and sulphur were compiled and validated. Assay data were then
composited and the basic statistical and geostatistical parameters of the data were determined.
The parameters developed have been used to create the mineral resource block models.
Surpac mining software was used for mineral resource modelling.
The mineral resource estimate was derived from the models and prepared following the CIM
Standards on Mineral Resources and Reserves, Definitions and Guidelines adopted by CIM
Council on 27 November, 2010. The effective date of the mineral resource estimate is
1st December, 2011
14.1.1 Database
The database used to estimate the mineral resources of the Kuyovsky deposit contains 80
boreholes and the Verkhnekingashsky database contains 95 boreholes. The database used to
estimate the mineral resources of the Kingashsky deposit contains 170 boreholes, including
165 exploration holes (35,454.8 m), four hydrogeological holes (843 m), and one adit
(228 m).
A series of systematic checks were performed on the databases to ensure that the data met
specific validation requirements and that no overlapping intervals or down-hole survey errors
were present in the data. No errors were found during the checks.
14.1.2 Specific Gravity
Specific gravity for the intrusive rocks of the Kuyovsky deposit averaged 2.94, 2.90 for the
Verkhnekingashsky deposit and 2.83 for the Kingashsky deposit. Specific gravities of the
host rocks at Kuyovsky and Verkhnekingashsky and at Kingashsky are summarised in Table
14.1.

Table 14.1: Specific Gravities of the Host Rocks at Kuyovsky and Verkhnekingashsky and at Kingashsky
Deposit Rock Type Specific Gravity

Caliciphyre 2.81
Gabbro 3.1
Kuyovsky and
Gneiss 2.82
Verkhnekingashsky
Pyroxenite 2.89
Serpentinite 2.79
Caliciphyre 2.78
Gabbro 2.75
Kingashsky Gneiss 2.65
Serpentinite 2.83
Quaternary 2.00
14.1.3 Geology and Mineralisation Model
The mineralisation at the Kingashsky project consists of disseminated sulphides (with minor
amounts of breccia-textured mineralisation) comprised mainly of pentlandite, chalcopyrite,
pyrrhotite and pyrite that are developed more or less throughout the entire volume of the
dunite and peridotite host rocks.
A small amount of epigenetic mineralisation can be found as sulphide stringers that are
present within the host rocks near the contacts with the country rocks. These epigenetic
zones can vary in width from millimetre-scale stringers/veinlets to more than 20 m, but
represent only a small proportion of the total nickel-copper mineralisation.
The deposits are unusual in that the amount of pentlandite present is greater than pyrrhotite.
Although relatively fine grained, sulphides form interstitial masses amongst euhedral silicate
minerals. The form and habit of the pentlandite and chalcopyrite mineralisation appears to
render it favourable for mineral particle liberation and metallurgical processing.
Drilling data was projected on to vertical sections oriented on the azimuths of the drilling
sections. Nickel mineralisation was outlined on each section using a 0.2% Ni cut-off grade
and was linked to form three-dimensional wireframes. The following criteria were applied
when constructing the wireframes: a minimum mineralised length of 10 m for Kuyovsky and
Verkhnekingashsky and of 5 m for Kingashsky, and a maximum consecutive waste length of
10 m for the three deposits. The three-dimensional wireframes used to generate the mineral
resource model were supplied to Micon by Kingashskaya.
Micon inspected these and was satisfied that the cut-off criteria had been applied correctly.
Typical vertical sections through the wireframes are presented in Figure 14.1 for Kuyovsky,
in Figure 14.2 for Verkhnekingashsky and in Figure 14.3 for Kingashsky. The mineralisation
wireframes are displayed in red and the topography in brown. Grade variation was addressed
in the estimation protocol so that block model grades represent drill hole grades, and the
grade variation inherent in the deposit.

Figure 14.1: Vertical Section of the Mineralised Zone Wireframe for Kuyovsky
Line 7.5
Figure 14.2: Vertical Section of the Mineralised Zone Wireframe for Verkhnekingashsky
Line 3.5
Figure 14.3: Vertical Section of the Mineralised Zone Wireframe for Kingashsky
Line 1
Intergeo/Kingashskaya also constructed geological wireframes outlining the various rock

types. These wireframes were used to attribute densities to the blocks of the block-model.
The geological wireframes for Verkhnekingashsky and Kingashsky are displayed in
Figure 14.4 and 14.5.
Figure 14.4: Geological Wireframes for Verkhnekingashsky
Note: Supplied by Kingashskaya.

Figure 14.5: Geological Wireframes for Kingashsky
Note: Supplied by Kingashskaya
14.1.4 Statistical Analysis
14.1.4.1 Basic Statistical Analysis
The sample data within the wireframes was flagged in the drill hole databases. Basic
statistical parameters were calculated for nickel, copper, cobalt, platinum, palladium, gold
and sulphur and these are provided in Tables 14.2 to 14.4.
Table 14.2: Basic Statistics – Kuyovsky Deposit
Parameter Ni Cu Co S Pt Pd Au
Number of Samples 3,668 3,668 3,149 3,636 2,909 2,881 2,610
Minimum 0.003% 0.001% 0.000% 0.001% 0.005 g/t 0.005 g/t 0.003 g/t
Maximum 6.842% 2.592% 0.111% 14.910% 2.600 g/t 3.000 g/t 1.280 g/t
Mean 0.531% 0.324% 0.019% 1.435% 0.298 g/t 0.285 g/t 0.127 g/t
Median 0.514% 0.299% 0.019% 1.390% 0.240 g/t 0.210 g/t 0.100 g/t
Standard Deviation 0.281 0.187 0.006 0.878 0.249 0.232 0.111
COV 0.53 0.58 0.33 0.61 0.84 0.81 0.88
Table 14.3: Basic Statistics – Verkhnekingashsky Deposit
Minimum 0.002 % 0.001 % 0.000 % 0.001 % 0.003 g/t 0.003 g/t 0.003 g/t
Maximum 2.465 % 4.470 % 0.065 % 9.830 % 61.950 g/t 5.320 g/t 2.290 g/t
Mean 0.388 % 0.187 % 0.015 % 0.795 % 0.287 g/t 0.285 g/t 0.087 g/t
Median 0.350 % 0.150 % 0.015 % 0.642 % 0.170 g/t 0.151 g/t 0.054 g/t
COV 0.65 0.88 0.39 0.93 3.21 1.27 1.18
Table 14.4: Basic Statistics – Kingashsky Deposit
Minimum 0.00005 % 0.00010 % 0.00005 % 0.00045 % 0.00250 g/t 0.00150 g/t 0.00125 g/t
Maximum 10.020 % 5.000 % 0.238 % 42.830 % 17.050 g/t 6.230 g/t 12.310 g/t
Mean 0.402 % 0.168 % 0.016 % 0.743 % 0.239 g/t 0.260 g/t 0.096 g/t
Median 0.380 % 0.140 % 0.016 % 0.600 % 0.150 g/t 0.160 g/t 0.070 g/t
COV 0.78 0.90 0.49 1.39 1.50 1.27 1.74
14.1.4.2 Top-Cutting of Outliers
The nickel, copper, cobalt, platinum, palladium, gold and sulphur distributions were
examined to identify the possible presence of extreme high-grade outlier populations. Outlier
values may result from sampling errors and can cause errors during block grade interpolation.
Log-probability plots of the distribution of nickel, copper, cobalt, platinum, palladium, gold
and sulphur sample values were generated. Two log-probability plots are displayed as
examples in Figure 14.6 and 14.7.
Figure 14.6: Log-Probability Plot of Platinum Assays for Verkhnekingashsky
Figure 14.7: Log-Probability Plot of Nickel Assays for Kingashsky
There are no outliers identified by Micon for nickel, copper, cobalt and sulphur. This is
confirmed by the low coefficients of variation calculated for the elements. Based on the plots
and the above analyses, Micon identified samples above 3.1 g/t Pt (three samples), above
2.5 g/t Pd (four samples) and above 1 g/t Au (two samples) for Verkhnekingashsky and above
7 g/t Pt (six samples) and above 2 g/t Au (five samples) for Kingashsky, as outliers. Those
grades were reduced to the respective top-cutting value in the assay database. Basic
statistical parameters were calculated after reducing the grades and are provided in
Table 14.5.
Table 14.5: Basic Statistical Parameters of Top-Cut Assay Data
Verkhnekingashsky Kingashsky
Parameter
Pt Top-Cut Pd Top-Cut Au Top-Cut Pt Top-Cut Au Top-Cut
Number of Samples 5,103 5,050 4,543 10,269 9,332
Minimum 0.003 g/t 0.003 g/t 0.003 g/t 0.003 g/t 0.001 g/t
Maximum 3.100 g/t 2.500 g/t 1.000 g/t 7.000 g/t 2.000 g/t
Mean 0.275 g/t 0.284 g/t 0.086 g/t 0.238 g/t 0.095 g/t
Median 0.170 g/t 0.151 g/t 0.054 g/t 0.150 g/t 0.070 g/t
Standard Deviation 0.315 0.350 0.098 0.325 0.106
COV 1.14 1.23 1.13 1.37 1.12
14.1.4.3 Compositing
Within the wireframes, the sample length is variable with a minimum of 0.1 m and a
maximum of 15.9 m. Considering the distribution of the sample length, displayed in
Figures 14.8, 14.9 and 14.10, Micon decided to composite all samples to 2 m.
Figure 14.8: Distribution of the Length of the Samples – Kuyovsky
Figure 14.9: Distribution of the Length of the Samples – Verkhnekingashsky

Figure 14.10: Distribution of the Length of the Samples – Kingashsky
The composites were made using a best-fit algorithm that allowed the composite length to be
varied within a given tolerance of 0.2 m, in order to minimise the loss of data but maintain a
consistent composite length. Basic statistical parameters for composited data are presented in
Tables 14.6 to 14.8.
Table 14.6: Basic Statistics for Composited Data – Kuyovsky
Number of Composites 3,302 3,302 3,048 3,279 2,767 2,751 2,422
Minimum 0.003% 0.001% 0.001% 0.006% 0.005 g/t 0.005 g/t 0.003 g/t
Maximum 2.261% 2.203% 0.064% 8.730% 2.600 g/t 3.000 g/t 1.280 g/t
Mean 0.538% 0.330% 0.019% 1.450% 0.306 g/t 0.294 g/t 0.130 g/t
Median 0.519% 0.307% 0.019% 1.395% 0.247 g/t 0.221 g/t 0.110 g/t
COV 0.45 0.50 0.28 0.54 0.77 0.78 0.84
Table 14.7: Basic Statistics for Composited Data – Verkhnekingashsky
Minimum 0.002% 0.001% 0.0002% 0.001 0.003 g/t 0.003 g/t 0.003 g/t
Maximum 2.253% 2.298% 0.061% 9.283 3.100 g/t 2.500 g/t 0.820 g/t
Mean 0.389% 0.187% 0.015% 0.796 0.273 g/t 0.282 g/t 0.083 g/t
Median 0.350% 0.153% 0.015% 0.640 0.174 g/t 0.157 g/t 0.052 g/t
COV 0.60 0.80 0.36 0.89 1.11 1.22 1.10
Table 14.8: Basic Statistics for Composited Data – Kingashsky
Minimum 0.0001% 0.0001% 0.0001% 0.001% 0.003 g/t 0.002 g/t 0.001 g/t
Maximum 6.063% 2.795% 0.124% 28.507% 7.000 g/t 5.420 g/t 2.000 g/t
Mean 0.402% 0.168% 0.016% 0.722% 0.243 g/t 0.256 g/t 0.093 g/t
Median 0.380% 0.140% 0.016% 0.600% 0.166 g/t 0.164 g/t 0.071 g/t
COV 0.57 0.77 0.35 1.03 1.21 1.18 0.99
The average grade of the samples and of the composites for each element are the same or
very close, as shown in Figure 14.11, which confirms that there is no significant change in
average grade due to compositing.
Figure 14.11: Comparison of the Average Grade of Raw Assays and Composites
14.1.5 Variography
Assay composites were compiled in order to analyse variography. The uniformity of grades
for all the elements as seen in the basic statistical analysis for the deposits prompted down-
hole variogram analysis in order to determine the nugget effect and the deposit uniformity.
Variography was conducted for all the seven elements for the three deposits. The
experimental variograms and variogram models for the Kuyovsky deposit are shown in
Figures 14.12 to 14.25.
Figure 14.12: Down-Hole Variogram for Ni Grade for Kuyovsky
Figure 14.13: Omni-Directional Variogram for Ni Grade for Kuyovsky
Figure 14.14: Down-Hole Variogram for Cu Grade for Kuyovsky

Figure 14.15: Omni-Directional Variogram for Cu Grade for Kuyovsky
Figure 14.16: Down-Hole Variogram for Co Grade for Kuyovsky
Figure 14.17: Omni-Directional Variogram for Co Grade for Kuyovsky

Figure 14.18: Down-Hole Variogram for S Grade for Kuyovsky
Figure 14.19: Omni-Directional Variogram for S Grade for Kuyovsky
Figure 14.20: Down-Hole Variogram for Pt Grade for Kuyovsky

Figure 14.21: Omni-Directional Variogram for Pt Grade for Kuyovsky
Figure 14.22: Down-Hole Variogram for Pd Grade for Kuyovsky
Figure 14.23: Omni-Directional Variogram for Pd Grade for Kuyovsky

Figure 14.24: Down-Hole Variogram for Au Grade for Kuyovsky
Figure 14.25: Omni-Directional Variogram for Au Grade for Kuyovsky
The results of the variogram models for the Kuyovsky deposit are summarised in Table 14.9.
The table shows a low relative nugget effect, confirming the uniformity of the deposit. This
effect prompted Micon to select inverse distance as a method of grade interpolation for this
deposit.
Table 14.9: Summary of Variogram Parameters for All Elements for Kuyovsky
Relative
Elements Co R1 C1 R2 C2 R3 C3 Nugget Effect
(%)
Ni (%) 0.004 7.0 0.020 56.8 0.024 153.0 0.010 7
Cu (%) 0.004 7.3 0.010 100.9 0.011 168.2 0.002 14
Co (%) 0.00000289 7.0 0.00001284 51.2 0.0000071 107.7 0.0000057 10
S (%) 0.061 9.1 0.204 135.6 0.357 10
Pt (g/t) 0.006 6.4 0.014 120.9 0.035 11
Pd (g/t) 0.006 6.6 0.009 119.4 0.038 11
Au (g/t) 0.001 7.1 0.003 72.8 0.005 120.0 0.003 10
Note: C0-Nugget, C1, C2, C3- Co-variance, R1, R2, R3 – Ranges
A similar set of variograms was made for the Verkhnekingashsky deposit for each of the
elements. The experimental variograms along with the models are shown in Figures 14.26 to
14.39.
Figure 14.26: Down-Hole Variogram for Ni Grade for Verkhnekingashsky
Figure 14.27: Omni-Directional Variogram for Ni Grade for Verkhnekingashsky
Figure 14.28: Down-Hole Variogram for Cu Grade for Verkhnekingashsky

Figure 14.29: Omni-Directional Variogram for Cu Grade for Verkhnekingashsky
Figure 14.30: Down-Hole Variogram for Co Grade for Verkhnekingashsky
Figure 14.31: Omni-Directional Variogram for Co Grade for Verkhnekingashsky

Figure 14.32: Down-Hole Variogram for S Grade for Verkhnekingashsky
Figure 14.33: Omni-Directional Variogram for S Grade for Verkhnekingashsky
Figure 14.34: Down-Hole Variogram for Pt Grade for Verkhnekingashsky

Figure 14.35: Omni-Directional Variogram for Pt Grade for Verkhnekingashsky
Figure 14.36: Down-Hole Variogram for Pd Grade for Verkhnekingashsky
Figure 14.37: Omni-Directional Variogram for Pd Grade for Verkhnekingashsky

Figure 14.38: Down-Hole Variogram for Au Grade for Verkhnekingashsky
Figure 14.39: Omni-Directional Variogram for Au Grade for Verkhnekingashsky
The results of the variography for all the elements for Verkhnekingashsky are summarised in
Table 14.10. The relative nugget effect is greater than for Kuyovsky but is still quite low. As
a result, the inverse distance method of grade interpolation was also selected for
Verkhnekingashsky.
Table 14.10: Summary of Variogram Parameters for all Elements for Verkhnekingashsky
Relative
Elements C0 R1 C1 R2 C2 Nugget Effect
(%)
Ni (%) 0.009 9.7 0.020 113.0 0.026 16
Cu (%) 0.003 9.7 0.008 134.8 0.011 15
Co (%) 0.00000390 11.3 0.00001910 110.6 0.0000048 14
S (%) 0.066 11.5 0.180 110.0 0.259 13
Pt (g/t) 0.011 6.0 0.014 103.4 0.066 13
Pd (g/t) 0.005 6.8 0.025 119.4 0.088 4
Au (g/t) 0.001 8.3 0.002 121.5 0.005 13
Note: C0-Nugget, C1, C2, C3- Co-variance, R1, R2, R3 – Ranges
A similar set of variograms were made for Kingashsky deposit for each of the elements. The
experimental variograms along with the models are shown in Figures 14.40 to 14.53.
Figure 14.40: Down-Hole Variogram for Ni Grade for Kingashsky
Figure 14.41: Omni-Directional Variogram for Ni Grade for Kingashsky
Figure 14.42: Down-Hole Variogram for Cu Grade for Kingashsky

Figure 14.43: Omni-Directional Variogram for Cu Grade for Kingashsky
Figure 14.44: Down-Hole Variogram for Co Grade for Kingashsky
Figure 14.45: Omni-Directional Variogram for Co Grade for Kingashsky

Figure 14.46: Down-Hole Variogram for S Grade for Kingashsky
Figure 14.47: Omni-Directional Variogram for S Grade for Kingashsky
Figure 14.48: Down-Hole Variogram for Pt Grade for Kingashsky

Figure 14.49: Omni-Directional Variogram for Pt Grade for Kingashsky
Figure 14.50: Down-Hole Variogram for Pd Grade for Kingashsky
Figure 14.51: Omni-Directional Variogram for Pd Grade for Kingashsky

Figure 14.52: Down-Hole Variogram for Au Grade for Kingashsky
Figure 14.53: Omni-Directional Variogram for Au Grade for Kingashsky
The results of the variograms for all the elements for Kingashsky are summarised in
Table 14.11. The relative nugget effect is generally low. As a result the inverse distance
method of grade interpolation was also selected for Kingashsky.
Table 14.11: Summary of Variogram Parameters for All Elements for Kingashsky
Relative
Elements C0 R1 C1 R2 C2 R3 C3 Nugget Effect
(%)
Ni (%) 0.009660 4.6 0.021212 42.6 0.037883 14
Cu (%) 0.002407 4.9 0.005990 65.2 0.009263 14
Co (%) 0.000005 3.9 0.000014 37.3 0.000021 13
S (%) 0.059368 3.0 0.213382 47.2 0.509332 8
Pt (g/t) 0.009021 4.5 0.019355 63.6 0.007281 156.0 0.052 10
Pd (g/t) 0.008213 4.9 0.012965 60.7 0.011730 156.4 0.059 9
Au (g/t) 0.000906 4.6 0.002907 97.0 0.004811 11
Note: C0-Nugget, C1, C2, C3- Co-variance, R1, R2, R3 – Ranges.
14.1.6 Search Ellipse and Selection of Number of Samples
The basic statistical analysis, combined with the variography and assay composites analysis,
indicates the appropriate method and parameters for block grade estimation. The details of
the parameters are given in Table 14.12. Multiple pass estimation procedures were used in
order to preserve the local variation of grades. The last passes were adjusted to the number of
composites for certain elements.
Table 14.12: Summary of Estimation Parameters
Kuyovsky Verkhnekingashsky Kingashsky

Parameter
Pass Pass Pass Pass Pass Pass Pass Pass Pass Pass
1 2 3 1 2 2 1 2 3 3
S, Pt,
S, Pt, Ni, Cu, Co, Pt, Pd, Ni, Cu,
Elements All All All All All Pd,
Pd Au S Au Co
Au
Minimum
3 3 1 5 5 2 3 3 1 1
Number of
Minimum
8 8 8 10 10 10 8 8 8 8
Number of
Maximum
2 - - 4 - - 2 - - -
Number of
Search
50 150 150 120 240 240 60 120 240 240
Distance
Search
50 150 150 120 240 240 60 120 240 240
Distance
Search
6.25 18.75 150 20 40 40 7.5 15 60 120
Distance
Bearing (°) 320 320 320 320 320 320 330 330 330 330
Plunge (°) 0 0 0 0 0 0 0 0 0 0
Dip (°) -40 -40 -40 -40 -40 -40 -20 -20 -20 -20
14.1.7 Block-Model
The Kuyovsky and Verkhnekingashsky deposits were block modelled together, whilst a
second, separate model was completed for the Kingashsky deposit. For both models, regular-
shaped blocks measuring (X) 20 m by (Y) 20 m by (Z) 5 m have been used. This size was
deemed most appropriate considering the morphology of the mineralisation and the
distribution of sample information. To better estimate the volume within the mineralisation,
a partial percentage within the wireframe was calculated for each block. The parameters that
describe the block models are summarised in Table 14.13.

Table 14.13: Dimensions of the Kuyovsky and Verkhnekingashsky and Kingashsky Block Models
Deposit Block Model X Direction Y Direction Z Direction

Origin 75,200 576,000 200
Kuyovsky and
Block Size (m) 20 20 5
Verkhnekingashsky
Number of Blocks 160 90 240
Origin 656,360 87,960 180
Kingashsky Block Size (m) 20 20 5
Number of Blocks 109 118 161
14.1.8 Grade Interpolation
Grade interpolation was performed using inverse distance squared (ID2) for all the elements.
Images of the block models with nickel grade values are presented in Figures 14.54 and
14.55.
Figure 14.54: Three-Dimensional View of the Kuyovsky and Verkhnekingashsky Block Models Showing
Nickel Grades
(View from the Northeast)
Figure 14.55: Three-Dimensional View of the Kingashsky Block Model Showing Nickel Grades
(View from the Northeast)
14.1.9 Block Model Validation
The resource model was validated using the following methods:
1. A series of visual examinations: the visual examination involved the comparison of

block model grade values with drill hole data. This was performed to check for
misallocation of grade on a global scale. Typical sections are presented in
Figures 14.56 to 14.58. The comparison shows that the drilling data is more variable
than the resulting block model, which is a function of the block size. There is
generally a good correlation between the drill hole data and the block model.
Figure 14.56: Block Grades versus Nickel Drill Hole Data Kuyovsky
Line 7.5
Figure 14.57: Block Grades versus Nickel Drill Hole Data Verkhnekingashsky
Line 3.5
Figure 14.58: Block Grades versus Nickel Drill Hole Data Kingashsky
Line 1
2. Declustering of the drill hole composites: for all elements, the composite file was
declustered to the block size of (X) 20 m by (Y) 20 m by (Z) 5 m and the declustered
grade for each element was then plotted against the estimated grade from the block
model. The corresponding plots are shown in Figures 14.59 to 14.79. The
declustering shows no significant bias for any of the elements. The declustering
analysis provides a comparison of local block grade estimates and the composites that
occur within the block. The figures indicate that the local grade estimates compare
well with local composite data.
Figure 14.59: Block Grades versus Declustered Nickel Composites – Kuyovsky

Figure 14.60: Block Grades versus Declustered Copper Composites – Kuyovsky
Figure 14.61: Block Grades versus Declustered Cobalt Composites – Kuyovsky
Figure 14.62: Block Grades versus Declustered Sulphur Composites – Kuyovsky

Figure 14.63: Block Grades versus Declustered Platinum Composites – Kuyovsky
Figure 14.64: Block Grades versus Declustered Palladium Composites – Kuyovsky
Figure 14.65: Block Grades versus Declustered Gold Composites – Kuyovsky

Figure 14.66: Block Grades versus Declustered Nickel Composites – Verkhnekingashsky
Figure 14.67: Block Grades versus Declustered Copper Composites – Verkhnekingashsky
Figure 14.68: Block Grades versus Declustered Cobalt Composites – Verkhnekingashsky

Figure 14.69: Block Grades versus Declustered Sulphur Composites – Verkhnekingashsky
Figure 14.70: Block Grades versus Declustered Platinum Composites – Verkhnekingashsky
Figure 14.71: Block Grades versus Declustered Palladium Composites – Verkhnekingashsky

Figure 14.72: Block Grades versus Declustered Gold Composites – Verkhnekingashsky
Figure 14.73: Block Grades versus Declustered Nickel Composites - Kingashsky
Figure 14.74: Block Grades versus Declustered Copper Composites – Kingashsky

Figure 14.75: Block Grades versus Declustered Cobalt Composites – Kingashsky
Figure 14.76: Block Grades versus Declustered Sulphur Composites - Kingashsky
Figure 14.77: Block Grades versus Declustered Platinum Composites - Kingashsky

Figure 14.78: Block Grades versus Declustered Palladium Composites - Kingashsky
Figure 14.79: Block Grades versus Declustered Gold Composites - Kingashsky
3. Comparison of composite data and block average grade by sections: Micon compared
the composites and the estimated block average grades inside sections orientated
parallel to the drilling sections as shown on Figures 14.80 to 14.82. This method is
used to validate the efficiency of the block model over larger sectors of the model.
Figure 14.80: Plan Showing Sections of the Mineralised Zone for Kuyovsky
Figure 14.81: Plan Showing Sections of the Mineralised Zone for Verkhnekingashsky
Figure 14.82: Plan Showing Sections of the Mineralised Zone for Kingashsky
Figures 14.83 and 14.84 provide a comparison of grades for each of the element for the
sections of Kuyovsky, Figures 14.85 and 14.86 show the same comparison for
Verkhnekingashsky and Figures 14.87 and 14.88 show the comparison for Kingashsky.
The plots generally show good correlation between estimated and composite average grades
in sections.
Figure 14.83: Block Model Grade versus Composite Grade by Section - Kuyovsky for Ni, Cu, Co and S
Figure 14.84: Block Model Grade versus Composite Grade by Section - Kuyovsky for Pt, Pd and Au
Figure 14.85: Block Model Grade versus Composite Grade by Section - Verkhnekingashsky for Ni, Cu,
Co and S
Figure 14.86: Block Model Grade versus Composite Grade by Section – Verkhnekingashsky
for Pt, Pd and Au
Figure 14.87: Block Model Grade versus Composite Grade by Section - Kingashsky for Ni, Cu, Co and S
Figure 14.88: Block Model Grade versus Composite Grade by Section - Kingashsky for Pt, Pd and Au
No validation errors were discovered upon analysing the block models and Micon concluded
that they are accurate.
14.1.9.1 Resource Classification
Mineral resources were classified following the guidelines of CIM as adopted by CIM
Council on 27 November, 2010.
• Measured mineral resources were defined as those portions of the mineralised zone
above the cut-off grade that were defined by drilling at a spacing of 50 m by 50 m.
• Indicated mineral resources were defined as those portions of the mineralised zone
above the cut-off grade that were defined by drilling at a spacing of 100 m by 100 m.
• Inferred mineral resources were defined as those portions of the mineralised zone
above the cut-off grade, which were defined by more widely spaced drilling, and
where mineralisation was projected with confidence of the geological continuity.
Figures 14.89 and 14.90 show the classification applied to the block models.
The Kingash PEA is an early stage study. Further studies that demonstrate the economic
viability of the project must be completed, necessary permits must be obtained, a production
decision must be made and financing for construction and development must be arranged.
Mineral resources, which are not mineral reserves, do not have demonstrated economic
viability. The Kingash Technical Report has not estimated any mineral reserves for the
Kingash Project. The Kingash PEA is preliminary in nature and includes Inferred mineral
resources that are considered too speculative geologically to have the economic
considerations applied to them that would enable them to be categorised as mineral reserves.
There is no certainty that the results presented in the Kingash PEA will be realised.
Figure 14.89: Resource Classification – Kuyovsky and Verkhnekingashsky
Isometric View from the Northeast
Figure 14.90: Resource Classification – Kingashsky

Isometric View from the Northeast
14.1.9.2 Mineral Resource Estimate
Mineral resources were reported based on their potential for economic extraction. An
economic cut-off grade of 0.2% nickel was used to define the in-situ geological mineral
resources for the Kuyovsky, Verkhnekingashsky and Kingashsky deposits.
The Micon mineral resource estimates for the Kuyovsky and Verkhnekingashsky deposits
with a cut-off grade of 0.2 % nickel are reported in Table 14.14. The metal content of both
deposits are reported in Table 14.15 and the sulphur grades in Table 14.16.
Table 14.14: Kuyovsky and Verkhnekingashsky Mineral Resource Estimate as at 1st December 2011
Cut-Off Grade 0.2% Nickel
Grade
Tonnage
Deposit Category Ni Cu Co Pt Pd Au
(Mt)
(%) (%) (%) (g/t) (g/t) (g/t)
Measured 50.99 0.558 0.339 0.019 0.302 0.288 0.140
Kuyovsky
Indicated 40.08 0.508 0.293 0.019 0.283 0.255 0.123
Measured 66.15 0.404 0.191 0.015 0.289 0.300 0.094
Verkhnekingashsky Indicated 106.86 0.388 0.182 0.015 0.208 0.202 0.064
Inferred 17.61 0.340 0.161 0.014 0.204 0.206 0.059
For the Kuyovsky deposit, Measured mineral resources are estimated at 50.99 Mt at 0.558%
nickel, and Indicated mineral resources at 40.08 Mt at 0.508% nickel. For the
Verkhnekingashsky deposit, Measured mineral resources are estimated at 66.15 Mt at 0.404%
nickel, Indicated mineral resources at 106.86 Mt at 0.388% nickel and Inferred mineral
resources at 17.61 Mt at 0.340% nickel.
Table 14.15: Kuyovsky and Verkhnekingashsky Metal Content as at 1st December 2011
Metal
Deposit Category Ni Cu Co Pt Pd Au
(t) (t) (t) (oz) (oz) (oz)
Measured 284,506 172,845 9,687 495,057 472,108 229,497
Kuyovsky
Indicated 203,628 117,447 7,616 364,714 328,629 158,515
Measured 267,244 126,345 9,922 614,632 638,026 199,915
Verkhnekingashsky Indicated 414,598 194,476 16,028 714,578 693,965 219,870
Inferred 59,881 28,355 2,466 115,513 116,645 33,408

Table 14.16: Kuyovsky and Verkhnekingashsky Sulphur Grades as at 1st December 2011
Cut-Off 0.2% Nickel
Tonnage Grade
Deposit Category
(Mt) S (%)
Measured 50.99 1.479
Kuyovsky
Indicated 40.08 1.332
Measured 66.15 0.767
Verkhnekingashsky Indicated 106.86 0.827
Inferred 17.61 0.726
The Micon mineral resource estimates for the Kingashsky deposit, based on a cut-off grade of
0.2% nickel, are reported in Table 14.17. The metal contents of the deposits are reported in
Table 14.18, and the sulphur grades in Table 14.19.
Table 14.17: Kingashsky Mineral Resource Estimate as at 1st December 2011

Grade
Tonnage
Category Ni Cu Co Pt Pd Au
(Mt)
(%) (%) (%) (g/t) (g/t) (g/t)
Measured 100.92 0.443 0.190 0.016 0.299 0.325 0.109
Indicated 126.59 0.350 0.143 0.016 0.130 0.118 0.055
Inferred 83.69 0.299 0.104 0.015 0.106 0.082 0.045
For the Kingashsky deposit, Measured mineral resources are estimated at 100.92 Mt at
0.443% nickel, Indicated mineral resources at 126.59 Mt at 0.350% nickel and Inferred
mineral resources at 83.69 Mt at 0.299% nickel.
Table 14.18: Kingashsky Metal Content as at 1st December 2011

Metal
Category Ni Cu Co Pt Pd Au
(t) (t) (t) (oz) (oz) (oz)
Measured 447,057 191,740 16,147 970,112 1,054,469 353,653
Indicated 443,082 181,031 20,255 529,116 480,274 223,857
Inferred 250,225 87,035 12,553 285,204 220,630 121,077
Table 14.19: Kingashsky Sulphur Grades

Cut-Off 0.2% Nickel
Tonnage Grade
Category
(Mt) S (%)
Measured 100.92 0.791
Indicated 126.59 0.628
Inferred 83.69 0.729
Mineral resources are not mineral reserves as they do not have demonstrated economic
viability.

Micon believes that no environmental, permitting, legal, title, taxation, socio-economical,
marketing, political or other relevant factors exist that could materially affect the mineral
resource estimate for the Kuyovsky, Verkhnekingashsky and Kingashsky deposits at the time
of compiling this report.
The effective date of the mineral resource estimate is 1st December, 2011.

15.0 MINERAL RESERVE ESTIMATES
No mineral reserves have been estimated for the Kingash Project in accordance with the CIM
Definitions and the reporting requirements of NI 43-101.

16.0 MINING METHODS
It is proposed that the Kingash mine be developed as a series of three open pits on the
Kingashsky, Verkhnekingashsky and Kuyovsky deposits, respectively. When the operation
reaches full capacity in Year 5 of the production schedule the mines will yield a combined
annual tonnage of 18.5 Mt. The capacity of each mine is planned as follows:
• Kingashsky – 9.5 Mt/a;

• Verkhnekingashsky – 5.5 Mt/a;
• Kuyovsky – 3.5 Mt/a.
The maximum mining rate is planned to be 125 Mt/a.
The Kingashsky, Verkhnekingashsky and Kuyovsky pits will be developed simultaneously

and will achieve full production in Years 4, 3 and 3, respectively.
The mines will utilise large-scale mining equipment to achieve economies of scale.
Excavators such as the Terex RH-170 (400 t) with a bucket capacity of 21 m3 and RH-90
(170 t) with a bucket capacity of 10 m3 are planned. Mill feed and waste will be hauled using
trucks such as CAT 789 D (180 t).
Auxiliary support equipment will include equipment such as CAT D10 bulldozers (78 t),
Atlas Copco (DМ-М3 and ROC L8) blasthole drill rigs. The operating fleet will include a
selection of bucket loaders, graders, compactors, water carts, maintenance and explosives
vehicles.
The majority of the rock will be blasted using ammonium nitrate-fuel oil (ANFO) explosive.
In saturated areas of the mine emulsion-based explosives will be used.
Waste mining will be conducted on 10 m benches and ore mining on 5 m benches. Grade
control will utilise assay data derived from samples of production blasthole cuttings.
A preliminary analysis of the production schedule was conducted to estimate the mining fleet
required to achieve the planned production. Haul profiles for material types from each mine
to the various destinations were estimated and cycle times were estimated based on
manufacturers’ recommendations and operating experience. The number of shovels and
trucks required to yield the target production was estimated. Auxiliary fleet components
were estimated based on the primary fleet size and level of production. Table 16.1
summarises the calculation of the number of excavators and trucks required at each of the
three open pits, and the estimated capital cost of the total fleet of mining equipment.

Table 16.1: Kingash Mining Fleet Estimate
Kuyovsky Yr 1 Yr 2 Yr 3 Yr 4 Yr 5 Yr 6 Yr 7 Yr 8 Yr 9 Yr 10 Yr 11 Yr 12 Yr 13 Yr 14 Yr 15 Yr 16
Mill Feed Tonnes (kt) 615 2,005 3,500 3,013 3,500 3,237 3,500 3,500 3,500 3,510 3,500 3,500 3,500 3,314 3,494 3,500
Mined per month (kt) 51 167 292 251 292 270 292 292 292 292 292 292 292 276 291 292
Mined per day (kt) 1.7 5.6 9.7 8.4 9.7 9.0 9.7 9.7 9.7 9.7 9.7 9.7 9.7 9.2 9.7 9.7
Loads @ 200 t trucks 9 31 54 46 54 50 54 54 54 54 54 54 54 51 54 54
Average cycle time 25 25 25 25 25 25 25 25 35 35 35 35 35 35 35 35
Loads per hour 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2
Truck hours 4.7 15.5 27.0 23.2 27.0 25.0 27.0 27.0 27.0 27.1 27.0 27.0 27.0 25.6 27.0 27.0
Required in 24 hours 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1
Waste Tonnes (kt) 10,479 10,738 14,473 14,500 14,473 14,720 14,713 14,543 14,497 14,652 25,133 25,337 40,005 40,260 40,172 41,327
Mined per day (kt) 29.1 29.8 40.2 40.3 40.2 40.9 40.9 40.4 40.3 40.7 69.8 70.4 111.1 111.8 111.6 114.8
150
Loads @ 200 t trucks 162 166 223 224 223 227 227 224 224 226 388 391 617 621 620 638
Loads per hour 4 4 4 4 4 4 4 4 3 3 3 3 3 3 3 3
Truck hours 40.4 41.4 55.8 55.9 55.8 56.8 56.8 56.1 74.6 75.4 129.3 130.3 205.8 207.1 206.6 212.6
Trucks 4 4 4 4 4 4 4 4 5 5 8 8 13 13 13 13
Excavators 1 1 1 1 1 1 1 1 1 1 2 2 2 2 2 2
Intergeo MMC Ltd
Verkhnekingashsky Yr1 Yr2 Yr3 Yr4 Yr5 Yr6 Yr7 Yr8 Yr9 Yr10 Yr11 Yr12 Yr13 Yr14 Yr15 Yr16
Mill Feed Tonnes (kt) 700 2,507 5,500 5,500 5,500 5,515 5,500 5,500 5,500 5,515 5,500 5,500 5,500 5,515 5,500 5,500
Mined per day (kt) 2 7 15 15 15 15 15 15 15 15 15 15 15 15 15 15
Loads @ 200 t trucks 10 35 76 76 76 77 76 76 76 77 76 76 76 77 76 76
Loads per hour 2 2 2 2 2 2 2 2 1 1 1 1 1 1 1 1
Truck hours 5 17 38 38 38 38 38 38 76 77 76 76 76 77 76 76
Waste Tonnes (kt) 17,727 18,141 21,746 21,963 21,671 21,875 28,875 28,965 54,729 55,090 54,610 54,959 54,252 55,126 54,752 54,312
Mined per day (kt) 49 50 60 60 59 60 79 79 150 151 150 151 149 151 150 149
Loads @ 200 t trucks 243 249 298 301 297 300 396 397 750 755 748 753 743 755 750 827
151

Loads per hour 4 4 4 4 4 4 4 4 3 3 3 3 3 3 3 3
Truck hours 61 62 74 75 74 75 99 99 250 252 249 251 248 252 250 276
Trucks 5 7 7 7 7 7 8 8 18 18 18 18 18 18 18 19
Excavators 1 1 2 2 2 2 2 2 3 3 3 3 3 3 3 3
Intergeo MMC Ltd
Kingashsky Yr 1 Yr 2 Yr 3 Yr 4 Yr 5 Yr 6 Yr 7 Yr 8 Yr 9 Yr 10 Yr 11 Yr 12 Yr 13 Yr 14 Yr 15 Yr 16
Mill Feed Tonnes (kt) 3,408 6,305 8,342 9,500 9,500 9,523 9,500 9,220 9,500 9,501 9,500 9,500 9,500 9,526 9,500 9,500
Mined per day (kt) 9 17 23 26 26 26 26 25 26 26 26 26 26 26 26 26
Loads @ 200 t trucks 47 86 114 130 130 130 130 126 130 130 130 130 130 130 130 145
Loads per hour 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2
Truck Hours 23 43 57 65 65 65 65 63 65 65 65 65 65 65 65 72
Waste Tones (kt) 9,125 9,150 9,236 9,144 9,019 9,150 9,095 9,125 9,098 9,150 9,074 9,062 9,030 9,144 9,066 9,064
Mined Per Month (kt) 760 763 770 762 752 763 758 760 758 763 756 755 753 762 755 755
Mined Per day (kt) 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25
Loads @200 t trucks 125 125 127 125 124 125 125 125 125 125 124 124 124 125 124 138
152
average cycle time 20 20 20 20 20 20 20 20 30 30 30 30 30 30 30 30

Loads per hour 3 3 3 3 3 3 3 3 2 2 2 2 2 2 2 2
Truck Hours 42 42 42 42 41 42 42 42 62 63 62 62 62 63 62 69
Trucks 4 6 6 7 7 7 7 7 8 8 8 8 8 8 8 8
Excavators 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1
Intergeo MMC Ltd
Cost Estimate Yr 1 Yr 2 Yr 3 Yr 4 Yr 5 Yr 6 Yr 7 Yr 8 Yr 9 Yr 10 Yr 11 Yr 12 Yr 13 Yr 14 Yr 15 Yr 16
Truck Fleet 13.0 16.0 16.0 18.0 18.0 18.0 19.0 19.0 31.0 31.0 34.0 34.0 40.0 40.0 40.0 41.0
O&K RH 170 ( 23 m3) 3 3 4 4 4 4 4 4 5 5 6 6 6 6 6 6
Loader (CAT 994) 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1
Grader CAT 14M 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4
Dozer CAT D10 R 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5
Water Trucks 3 CAT 785 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4
Compactor Sheeps Foot 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1
Compactor Flat Drum 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1
Truck Fleet Cost ($ 000) 41,600 9,600 6,400 3,200 38,400 9,600 19,200 3,200
Excavator Cost ($ 000) 19,500 6,500 6,500 6,500
Loader Costs ( $ 000) 1,800
Grader ($ 000) 3,000
Dozers ($ 000) 11,039
Water Truck ($ 000) 600
153
Compactor 1 ($ 000) 160

Compactor 2 ($ 000) 940
Mobile Fleet Cost 78,639 9,600 6,500 6,400 0 0 3,200 0 44,900 0 16,100 0 19,200 0 0 3,200
Total Primary Fleet ($ 000) 187,739
4 Drill Rigs ($ 000) 4,377
Fuel Truck ($ 000) 2,895
Service Truck 648
Explosives Truck ($ 000) 1,140
Utility Back Hoe ($ 000) 380
Wheel Dozer ($ 000) 2,152
Intergeo MMC Ltd
Lighting Plants ($ 000) 336

Total Auxiliary Fleet ($ 000) 11,927
Total Mining Fleet ($ 000) 199,666
17.0 RECOVERY METHODS
17.1 INTRODUCTION
As part of the Hatch scoping study carried out in 2011, a number of options for the
beneficiation of ore, smelting and converting (handling of including off-gases) of
concentrate, and base metal refining of either converter matte or direct refining of concentrate
to produce final products on Ni and Cu cathode and by products was considered.
Review of the three beneficiation options, three smelting conversion options and two base
metal refining options chosen resulted in the identification of eight potential combinations of
the options (Scenarios) for further study. Flow sheets for treating material delivered from the
three mining operations through to final metal products were developed and analysed.
The eight scenarios were evaluated based on the mass and energy balances (developed
through modelling) as well as estimates of capital and operating cost for the various options
incorporated in each scenario.
Process design details together with a description of the various process component options
described below.
17.2 MINERAL PROCESSING
17.2.1 Process Design and Beneficiation Options
The basic concentrator design criteria are as follows:
• 18.5 Mt/a of mill feed processed; and,

• Grinding and flotation operating schedule of three eight-hour shifts, 340 days per year
(93.2% utilisation), with a design throughput of 2,267 t/h.
The process criteria (grind sizes and flotation stages and residence times) are based on the
laboratory and pilot plant testwork, as summarised in Section 13.
The design recovery and concentrate grade criteria are summarised in Table 17.1. These
criteria are based on the feed grade/recovery/concentrate grade relationships presented in
Section 13.

Table 17.1: Design Process Plant Criteria
Deposit
Parameter
Kingashsky Verkhnekingashsky Kuyovsky Combined
Recovery to Concentrate
Ni (%) 60 61 67 61.9
Cu (%) 43 44 47 44.5
Co (%) 52 53 61 54.2
Pt (%) 60 62 67 62.3
Pd (%) 52 54 56 53.6
Au (%) 54 60 67 59.3
Concentrate Grade
Ni (%) 9.0 9.0 9.0 9.0
Cu (%) - - - 3.08
Co (%) - - - 0.31
Pt (g/t) - - - 5.08
Pd (g/t) - - - 4.36
Au (g/t) - - - 1.81
17.2.2 Beneficiation Plant
The proposed Kingash concentrator includes the following areas:
• Mill feed preparation (crushing and grinding);

• Flotation; and,
• Concentrate handling (thickening, filtration).
The original concept was for two beneficiation plants, one close to the Kingashsky mine and
the other for the Verkhnekingashsky mine (Verkhnekingashsky and Kuyovsky pits).
However, due to the close proximity of the two mining areas and the need to minimise
utilities and infrastructure requirements, a decision was taken to construct a single
beneficiation plant, which would service both areas. This will result in lower capital and
operating costs than for two smaller plants.
The concentrator design has been based on the processing of 18.5 Mt/a mill feed, with
9.5 Mt/a coming from the Kingashsky pit, 5.5 Mt/a from the Verkhnekingashsky pit and
3.5 Mt/a from the Kuyovsky pit.
Development of the mass and energy balance of the beneficiation plant was based on the
feasibility assessment of mill feed quality requirements (cut-off grade assessment) report,
laboratory and pilot testing performed by Gipronikel Institute and on the data obtained from
the experience of Hatch specialists.
The purpose of concentrator construction for Kingash is the beneficiation of mill feed from
the Kingashsky, Verkhnekingashsky and Kuyovsky deposits in order to produce nickel-
copper bulk concentrate. The major portion of precious metals and platinum group metals
also report to the concentrate.

Data on the content of payable components in mill feed were exported into METSIM™
software as the concentrator feed. Hatch developed a model for calculation of the
concentrator mass and energy balances. The modelling work resulted in preparation of
summary mass and energy balances with key parameters of the concentration process.
The specification of major process equipment was prepared on the basis of the mass balance,
design calculations and inquiries to equipment suppliers. Summary capital and operating
costs were estimated at the final stage of the concentrator concept development and these data
were used as a basis for the financial model.
It is proposed that the processing plant includes the following main facilities:
• Coarse mill feed reception and storage;

• Crushing plant;
• Main building, including crushed mill feed storage, grinding and flotation;
• Concentrate thickening, filtration, drying, storage and load out to trucks for road
transport to the smelter at Zelenogorsk;
• Tailings dewatering and storage facility;
• Process water storage, recirculation and distribution;
• Power supply and distribution;
• Other utilities; and,
• Offices, laboratory, warehouse and maintenance facilities.
17.2.3 Process Description
The following beneficiation options were considered in the Hatch study:
1. Beneficiation Option 1: Gipronikel flow sheet. This is based on the flow sheet
developed by the Gipronikel Design Institute.
2. Beneficiation Option 2: Valleriite regrind flow sheet. This flow sheet provides for
magnetic separation of scavenger flotation tails, with separation of valleriite for
regrinding and column flotation.
3. Beneficiation Option 3: Sulphidisation flow sheet. This is similar to Option 2 with

the addition of a sulphidisation stage to enhance flotation of the valleriite.
The following has been prepared by Hatch for each of the selected beneficiation options:
• Process description;
• Beneficiation plant process flowcharts;
• Mass balance;
• Key production indicators;
• Preliminary list of the major equipment;

• Capital cost estimate; and,
• Operating cost estimate.
The beneficiation plant will process 18.5 Mt/a of mill feed to produce a Ni-Cu concentrate for
further processing at the metallurgical complex. The different options focused on the
recovery of Ni and Cu and the costs associated with each flow sheet.
17.2.4 Beneficiation Option 1: Gipronikel Flow Sheet
17.2.4.1 Process Flow Sheet
Option 1 is based on the concept flow sheet provided by Gipronikel and described in the
Gipronikel TEO, 2009. The beneficiation plant Option 1 basic flow diagram (BFD) includes:
• Three stages of crushing (coarse, middle and pebble);

• Two stages of grinding. Both stages are performed in ball mills equipped with
hydrocyclones for milled product classification. The classified product (P80 is
-0.071 mm) is fed to the flotation circuit;
• Rougher flotation with 2 stages of rougher concentrate cleaning;
• Scavenger flotation of rougher flotation tails;
• Regrind of scavenger flotation and tails of 1st stage cleaning flotation;
• Three stages of regrind cleaner flotation; and,
• Cleaner flotation of regrind rougher flotation tails.
The concentrate is fed to thickening, filtration and drying to achieve 2% moisture content.
Low moisture content is required to provide transportation to the metallurgical plant from the
concentrator in severe climatic conditions. The indicated moisture needs to be confirmed.
Higher moistures of 8% are more typical for this material type.
The tails from different flotation stages are combined and fed to thickening to achieve 50%
solids in the thickener underflow. Thickened tails are discharged to tailings storage area.
Thickener overflow from the concentrate and tails thickeners and filtrate from the concentrate
filters are returned to process to minimise water losses.
This option is an old flow sheet used for the plants designed during the 1960s.
17.2.4.2 Advantages and Disadvantages
Advantages:
• Will be considered as a primary option since all laboratory testwork and pilot plant
tests are used as a basis. It is suggested that it should be considered as an option for
mass balance calculation and estimation.

Disadvantages:
• The crushing circuit and grinding circuit have high power consumption;
• Two stage grinding – high grinding media consumption; and,
• Flotation circuit is not optimised - a lot of recycled flows and too many re-cleaning
flotation stages.
17.2.4.3 Mass and Energy Balance
Based on the METSIM™ model calculations, a summary mass and energy balance was
developed for Option 1.
17.2.4.4 Key Process Parameters
The key process parameters obtained by mass balance calculations are presented in
Tables 17.2 and 17.3.
Table 17.2: Key Concentrate Parameters for Beneficiation Plant Option 1
Grade (%) Recovery (%) Throughput (t/h) Throughput (t/a)

Component
Conc. Tailings Conc. Tailings Conc. Tailings Conc. Tailings
Nickel 9.85 0.18 60.1 39.9 5.65 3.75 46,141 30,588
Copper 2.36 0.09 42.4 57.6 1.35 1.84 11,038 15,032
Cobalt 0.34 0.008 51.8 48.2 1,579 1,4714
Table 17.3: Key Process Parameters for Beneficiation Plant Option 1
Component Units Concentrate Tailings

Solids flow t/h 57.39 2,142
t/a 468,300 17.479,000
Liquid Flow m3/h 4.99 2,142
m3/a 40,720 17,478,591
Slurry Flow t/h 62.38 4,284
t/a 509,000 34,957,00
17.2.4.5 Preliminary List of Major Process Equipment
The major process equipment specification for beneficiation plant Option 1 was determined
from the above data.
17.2.5 Option 2: Valleriite Regrind
Option 2 aims to address valleriite recovery and follows a similar approach as used at
Palabora Mining Company in South Africa, and is based on the experience of Hatch process
engineers. The flow sheet provides for optimisation of processes where possible at this level

of study and includes magnetic separation of scavenger flotation tails to separate valleriite for
regrinding and column flotation. The beneficiation plant Option 2 basic flow diagram
includes:
• Coarse crushing with a high production rate crusher;

• Two stages of grinding performed by a SAG mill operating in closed circuit with a
screen and pebble crusher and a ball mill operating in the closed loop with
hydrocyclones. Classified product (P80 is -0.071 mm) is fed to the flotation circuit;
• Scavenger flotation of rougher flotation tailings;
• Regrind of scavenger flotation concentrates and tailings of 1st and 2nd stage cleaner
flotation;
• Regrind rougher and cleaner flotation;
• Magnetic separation of scavenger flotation tailings to concentrate valleriite;
• Fine grinding of valleriite concentrate; and,
• Column flotation of the finely-ground valleriite concentrate.
The concentrate is fed to thickening, filtration and drying to achieve 2% moisture (the
dryer/calciner could be used as the equipment to achieve such low moisture content). The
indicated moisture needs to be confirmed. Higher moistures of 8% are more typical for this
material type.
The tailings from different flotation stages are combined and fed to thickening to achieve
50% solids in the thickener underflow. Thickened tailings are discharged to the tailings
storage area. Thickener overflow from the concentrate and tailings thickeners and filtrate
from the concentrate filters are returned to process to minimise water losses.
Advantages:
• Crushing and grinding require less power and consumables, and a smaller footprint;
• Flotation circuit includes valleriite separated flotation and column flotation of the
valleriite concentrate; and,
• Flotation process could increase Ni mass pull up to 5% over Option 1.
Disadvantages:
• Additional testwork is required to confirm the viability of Option 2.


Component
Nickel 10.27 0.163 62.9 37.1 5.92 3.49 48,279 28,477
Copper 2.86 0.072 51.7 48.3 1.65 1.54 13,435 12,579
Cobalt 0.35 0.008 54.1 45.9 1,650 1,400

t/a 470,100 17.470,000
m3/a 40,900 17,470,000
t/a 511,000 34,941,00
from the above data.
17.2.6 Option 3: Sulphidisation Flow Sheet
Option 3 is based on Option 2, with the addition of a sulphidisation stage to improve the
flotation characteristics of the valleriite in order to improve recoveries. The Option 3 basic
flow diagram includes:
• Coarse crushing with a high production rate crusher;

• Two stage grinding by a SAG mill in closed loop with screen and pebble crusher, and
a ball mill operating in closed loop with hydrocyclones. The classified product (at
80% -0.071 mm) is the feed to a flotation circuit;
• Scavenger flotation of rougher tailings;
• Regrind of scavenger flotation concentrates and tailings of 1st and 2nd cleaner
flotation;
• Regrind rougher and cleaner flotation;

• Sulphidisation of the valleriite concentrate under hydrothermal conditions and
neutralisation of the concentrate;
• Fine grinding of the valleriite concentrate; and,
• Column flotation of the finely ground valleriite concentrate.
Flotation concentrate is fed to thickening, filtration and drying to achieve 2% moisture. The
moisture content needs to be confirmed. Typically a moisture content of 8% is applied for
similar products.
The tailings from different flotation stages are combined and fed to thickening. Thickened
tailings with solids content of 50% are discharged to tailings storage.
Concentrate and tailings thickeners overflow and filtrate from concentrate filters are recycled
to the process to minimise water losses.
Advantages:
• Crushing and grinding require less power and consumables;

• Flotation circuit is optimised (it is based on nickel and copper plant practices);
• Flotation circuit includes valleriite separation, sulphidisation and subsequent flotation
that is provided in column flotation machines;
• Flotation in this option could increase Ni mass pull up to 20% to 25%;
• Lower energy consumption for crushing and grinding, and,
• Grinding and crushing stages require smaller footprint and the capital expenditures
will be lower.
Disadvantages:
• Additional testwork is required to confirm viability of Option 3;

• A significant amount of SO2 is required for the sulphidisation process; and,
• There is only limited industrial application of the valleriite sulphidisation process and
no known operating plant is using this process currently.


Component
Nickel 10.95 0.145 67.1 32.9 6.31 3.10 51,475 25,322
Copper 3.27 0.061 59.2 40.8 1.89 1.31 15,386 10,657
Cobalt 0.37 0.007 57.5 42.5 1,755 1,295

t/a 470,100 17.470,000
m3/a 40,900 17,470,000
t/a 511,000 34,941,00
using the above data.
17.2.7 Economic Evaluation of Concentrator Process Options
17.2.7.1 Metal Recoveries
Based on the Micon mine plan the tonnages processed in the beneficiation plant start-up at
15.5 Mt/a in Year 2 and ramp up to 18.5 Mt/a in Year 5. Commencement of the beneficiation
plant is deferred by one year during which mill feed is stockpiled to maximise the ramp-up
rate.
The recoveries of the three concentrator options studied are shown in Table 17.8.
Nickel and copper recoveries were determined from testwork conducted by Gipronikel in
2009. Cobalt recoveries are tracked by nickel recovery and all other metal recoveries are
based upon the testwork performed by Gipronikel on the base flow sheet.
Similarly, concentrate grades in each of the three options were determined from base flow
sheet assays and all PGM concentrate grades were determined as functions of nickel
recovery.

Table 17.8: Concentrator Options Metallurgical Recoveries
Gipronikel Base Valleriite Regrind Valleriite Sulphidisation

Metal
Flow Sheet (%) Flow Sheet (%) Flow Sheet (%)
Nickel 60.08 62.88 67.05
Copper 42.43 51.70 59.15
Cobalt 51.77 54.09 57.53
Platinum 63.83 63.83 63.83
Palladium 55.42 55.42 55.42
Gold 56.86 56.86 56.86
Silver 53.60 53.60 53.60
Rhodium 30.67 30.67 30.67
Ruthenium 32.00 32.00 32.00
Iridium 17.40 17.40 17.40
Ni Conc. Grade 9.85 10.27 10.95
17.2.8 Concentrator Capital Costs
The capital expenditure estimates for the concentrator options include the following costs:
• Civil works;
• Concrete;
• Architectural;
• Instrumentation;
• Electrical;
• Mechanical equipment;
• Platework;
• Piping; and,
• Structural steel.
Equipment costs were estimated based on the inquiries to Western equipment suppliers
(Metso, Outotec, Sandvik). The costs were estimated on the basis of data for concentrators
similar to the Kingash concentrator.
Estimated capital costs for the concentrator options are presented in Table 17.9.
Table 17.9: Concentrator Options Capital Cost Estimations
Option Description US$

1 Gipronikel Base Case 327,064,784
2 Valleriite Regrind 364,194,571
3 Sulphidisation 379,286,047
Note: Based on a throughput rate of 18 Mt/a.

17.2.9 Concentrator Operating Costs
Operating expenditures were estimated from first principles using the consumption rates of
reagents, auxiliary inputs and utilities, and the estimated labour headcount required for the
concentrator operation. Hatch’s estimates include a contingency of 15%. Table 17.10
provides the operating cost estimate for the concentrator options.
Table 17.10: Concentrator Options Operating Cost Estimations
Option Description US$ US$/t ore

1 Gipronikel Base Case 151,817,512 8.43
2 Valleriite Regrind 132,566,605 7.36
3 Sulphidisation 135,676,553 7.54
Note: Based on a throughput rate of 18 Mt/a.
Based on the estimated capital and operating costs and the predicted metallurgical recoveries,
Option 2 is used in the financial assessment. Option 1 is old technology whilst Option 3 is
unproven and would require significant testwork to verify.
Micon subdivided Hatch’s operating cost estimate for Option 2 into fixed and variable
components for cash flow modelling. The breakdown is provided in Table 17.11.
Table 17.11: Beneficiation Plant Option 2 Operating Costs
Beneficiation Plant 2 RUB/Year US$/Year US$

Reagents 1,705,600,000
Consumables 425,615,625
Water 143,682,362
Electricity 981,230,279
Labour 253,593,000
Maintenance 466,765,915
Transport 510,972
Total 3,976,998,153
Fixed (per year) 254,103,972 8,470,132
Variable ( per t of ore) 3,722,894,181 124,096,473 6.71
17.3 SMELTING AND REFINING COMPLEX
17.3.1 Process Selection
Several options for smelting and refining of concentrates were evaluated in the scoping study:
Smelting and Converting • Electric furnace and Peirce Smith converters (Option 1);
• Electric furnace and Ausmelt converters (Option 2);
• Ausmelt furnace and Ausmelt converters (Option 3);
Gas Cleaning/Sulphur • Cansolv-Lurec process plus double contact/double
Fixation absorption (DCDA) acid plant for smelter Option 1;
• Double contact/double absorption acid plant for smelter
Option 2;

• Double contact /double absorption acid plant with sulphur
burner for smelter Option 3;
Refining • Slow cooled converter matte treatment and subsequent
sulphate leaching followed by electrowinning to recover
Ni and Cu cathodes. PGM alloy, cobalt hydroxide and
sodium sulphate are by-products.
The Platsol process, a hydrometallurgical process route, was also considered for direct
pressure leaching of the concentrate to recover Ni and Cu as cathodes, PGM precipitate,
cobalt hydroxide and sodium sulphate as by-products.
Hatch developed the conceptual processes using conceptual process design criteria and mass
and energy balances using METSIM™ simulation software. The conceptual design includes:
• Conceptual-level process description;

• Conceptual-level process design criteria;
• Mass and energy balances developed using METSIM™ software;
• Preliminary sizing of major equipment and development of an order-of-magnitude
capital cost estimate; and,
• Utilities and consumables consumptions and associated operating cost estimate.
Advantages and disadvantages for each option were considered taking account of factors
including the characteristics of the concentrate, status of development of the process,
operational factors, operating and capital cost.
The preferred process for economic evaluation was the Hatch Smelter Option 2, selected on
the basis of capital cost and operational factors. The Ausmelt converter is preferred over
Peirce Smith converters due to its continuous operating mode and hence stable production of
high strength SO2 off-gas. This simplifies the SO2 fixation process allowing the use of the
DCDA acid plant only.
17.3.2 Smelting and Refining Flow Sheet

The smelting and refining complex treats the concentrate from the beneficiation plant and
consists of four main units of operation:
• The electric smelting furnace in which concentrates are smelted to matte and slag
(Option 2);
• The Ausmelt converter furnaces for upgrading the matte (Option 2);
• Gas handling and cleaning section for dust capture and fixation of sulphur (Option 2);
• Base metals refinery (BMR) where slow cooled converter matte is leached and the
copper and nickel cathodes electrowon from the solution. Cobalt hydroxide is
recovered as a by-product; and,
• Precious metals (PM) and platinum group metals (PGM) are recovered as an alloy, the
magnetic fraction resulting from magnetic separation of the slow cooled matte. Some

PM and PGM are also contained in the matte leach residue. Both of these products
are toll treated.
17.3.3 Smelting Option 2
Concentrate, dried to 2% moisture, is received by rail from the concentrator in 1 tonne bags.
After unloading, the concentrate is conveyed pneumatically, firstly to a dry concentrate silo
and then to one of two concentrate feed bins above the electric furnace. Feed bins for
reductant and granulated converter slag are also located above the furnace.
The feed materials are charged to a rectangular 6-in-line electric arc furnace with a power
rating of 70 MW distributed via 6 x 1,600 mm Söderberg electrode columns supplied from
three transformers. The smelting products consist of matte and slag phases and a low-
strength SO2-bearing gas. Slag is tapped intermittently through one of three slag tapholes and
flows into one of three launders where it contacts a high-pressure water spray and is
granulated. The granulated slag is dewatered by rake classifiers discharging the dewatered
slag onto a belt conveyor. The belt conveyor transports the granulated slag from all three
rake classifiers to storage silos, from which dump trucks transport the granulated slag to a
disposal site. The slag granulation water is processed in dedicated thickeners and cooling
towers and recycled back to the high-pressure granulation spray nozzles. Make-up process
water is provided to compensate for the slag granulation system losses.
Matte is tapped via one of three matte tapholes into two 25-t ladles and transported to one of
two matte granulation stations where the molten matte is poured into a high-pressure water
stream. The granulated matte is dewatered in a bin equipped with a vibrating screen, where
excess water is drained back to a hot well. Dewatered granulated matte at 5% moisture is
discharged and conveyed to the Ausmelt matte feed bins.
The furnace off-gas is exhausted via a water-cooled uptake and then combined with hot gas
from the Ausmelt converter.
17.3.4 Converter Option 2
The converter section includes two Ausmelt converter plants, one operating and one either in
reserve or under maintenance. Each Ausmelt converter consists of a 4.5 m diameter vessel
equipped with a vertically suspended lance, and has feed bins for pulverised coal, silica flux
and granulated furnace matte. Oxygen-enriched air and pulverised coal are injected through
the lance and combusted at the lance tip to provide heat to the furnace. Granulated smelter
matte is fed to the furnace and FeS is oxidised to FeO and SO2. Silica is added to form a
fayalitic slag.
Converter slag is tapped every hour into a high-pressure water stream and the granulated slag
is dewatered on vibrating screens. The dewatered, granulated slag is dried from 10% to 15%
moisture to <1% moisture in a pneumo-drier and then recycled back to the electric furnace
feed bins.
Converter matte is tapped every 2 hours into a 25-t ladle and then poured into moulds where
the matte is allowed to cool and solidify slowly. The moulds are equipped with liquid
propane gas-fired burners to control the rate of cooling. Once solidified, the matte is broken
and crushed before being transported to the base metals refinery.

The off-gas from the converter is diluted with ambient air in a volumetric ratio of 1:1 before
combining with the electric furnace off-gas.
17.3.5 Gas Cleaning Option 2
The combined electric and converter furnace gas stream is cooled to 350oC in a water-cooled
duct and then de-dusted in an electrostatic precipitator (ESP). The dust collected in the ESP
is recycled back to the concentrate storage silo.
The partially de-dusted gas passes through a quench scrubber to remove any residual dust and
to cool the hot gas by saturating with water vapour in a low-pressure drop venturi scrubber,
equipped with a dewatering cyclone. The saturated scrubber outlet gas is indirectly cooled in
a cooling tower prior to final dust removal and acid mist collection in a bank of wet
electrostatic precipitators.
Sulphur dioxide (SO2) is captured in a double contact sulphuric acid plant. The SO2-bearing
gas stream is dried by counter flow contact with 93% sulphuric acid and then enters the
catalytic converter containing multiple catalyst beds. Most of the SO2 in the off-gas is
converted to SO3 in this first conversion stage. The gas containing SO2 and SO3 passes
through a packed column absorption tower where sulphuric acid is trickled down to allow
SO3 to react with water in the acid mixture and increase the acid strength. The gas stream
from the absorber tower is cooled to remove some of the heat generated as a result of the
exothermic reaction. In a further stage of catalytic conversion a high proportion of the
remaining SO2 in the gas stream is oxidised to SO3, which is collected as sulphuric acid in a
second absorption tower. The gas leaving the absorber tower contains minimal amounts of
SO2 and SO3 and passes through a mist eliminator prior to discharge to atmosphere via a
stack.
17.3.6 Refining
The crushed converter matte is treated in the magnetic separation plant where the magnetic,
PGM-containing alloy fraction is separated from the non-magnetic, sulphide fraction, which
contains mainly copper, nickel and cobalt.
The sulphide matte fraction is contacted with discharge solution from the first stage nickel
leach in the copper removal circuit. A metathesis reaction occurs where any dissolved copper
in the nickel leach discharge solution is cemented out and partly leaches nickel from the
matte.
The matte is then leached in two stages to dissolve firstly nickel and then copper. In the first
stage nickel leach, nickel is leached with sulphuric acid and oxygen. Non-oxidising
conditions are used in the final section of the nickel leach to minimise the leaching of copper.
The discharge solution is then contacted with fresh matte in the copper removal circuit before
proceeding to further purification. The solids fraction from the first stage leach is re-leached
under oxidising conditions at high temperature to dissolve copper. Residue from the copper
leach contains PM and PGM plus small amounts of base metals and is toll refined.
Copper cathode is recovered from the copper leach solution in electrowinning cells and the
spent electrolyte is returned to the leaching circuit. Nickel-rich solution from the copper
removal circuit is treated in solvent extraction circuit to separate nickel from the cobalt and

other metal impurities. Cobalt hydroxide is precipitated from the solvent extraction circuit
strip liquor whilst nickel cathode is recovered from the nickel-rich raffinate in electrowinning
cells. The spent nickel electrolyte is treated to control the level of nickel and sulphate;
sodium sulphate crystals are recovered as a by-product.
17.3.7 Process Design Criteria
The key process design criteria used to develop mass and energy balances for the smelting
and converting sections are based largely on Hatch’s in-house data, as given in Table 17.12.
Mass balance outputs were used for preliminary sizing of major unit processes.
Table 17.12: Key Process Design Criteria
Parameter Units Value Comment
Electric Furnace
As received Concentrate moisture % 2 Client requirement
Furnace operating factor % 85% Hatch in-house data
Furnace heat losses % EF power 10% Hatch in-house data
Furnace ingress air rate Nm3/hr/m2 42,600 Hatch standard furnace design
Hearth power density kW/m2 180 Standard Hatch design for plate cooled furnaces
Estimated based on projected slag composition
Slag liquidus temperature °C 1450
using FACTSageTM
Slag superheat °C 100 Hatch in-house data
Furnace offgas °C 400 Assumed data based on SA PGM furnaces
Slag-matte temperature difference °C 150 Average based on SA PGM furnaces
Ausmelt Furnace
Oxygen enrichment vol% 40 Assumed based on similar operation
Oxygen utilisation vol% 95 Assumed based on similar operation
Slag temperature °C 1310 Assumed
Matte temperature °C 1260 Assumed
Offgas temperature °C 1310 Assumed
Converter heat losses MW 9 In-house data
Fe in converter matte wt% 3.5 In-house data
Fe/SiO2 ratio wt% 1.6 In-house data
17.3.8 Key Performance Indicators
The process is based on the treatment of 470,094 dry t/a of valleriite regrind concentrate at a
nominal feed rate of 63.1 dry t/h. The expected metal recoveries from concentrate to final
products used to develop the production forecast and financial analysis are given in
Table 17.13.
Cobalt recovery of 98% is high compared with other similar operations, e.g., at the Norilsk
Nickel electric smelting recovery at the Pechanga operation of approximately 65% Co.

Table 17.13: Metal Recoveries
Stage Ni% Cu% Co% PM/PGM

To converter matte 97.0 98.0 98.0 99.0
From converter matte to BMR feed 87.7 99.7 10.0 10.0
From BMR feed to cathode 98.0 98.0
From BMR feed to hydroxide 98.0
The key process performance indicators are shown in Table 17.14.
Table 17.14: Key Process Performance Indicators
Area/Parameter Units Value
Throughput
Dry concentrate t/h 63
Converter slag t/h 29
Electric Furnace Matte
Production rate t/h 38
Ni % 23
Cu % 4.5
Fe % 40
S % 30
Electric Furnace slag
Production rate t/h 53
Ni in slag % 0.15
Cu in slag % 0.10
Electric Furnace off-gas
Flow rate Nm3/hr 44750
Temperature °C 400
SO2 vol% 2.6
Electric Furnace Energy
Furnace power (nominal) MW 65
Furnace power (design) MW 70
Specific energy consumption kWh/t 1030
Ausmelt Converter
Furnace matte treated t/hr 38
Flux added t/hr 10
Converter matte t/hr 10
Ni % 59
Cu % 13
Converter slag t/hr 29
Converter offgas (without ingress) Nm3/hr 29000
SO2 in converter gas vol% 20
Lance + Shroud Air Nm3/hr 23000
Lance +Shroud Oxygen (99.5 vol%) Nm3/hr 6300
CONATE STORA
GE

17.3.9 Forecast Production
The distributions of base metals between the magnetic PGM-bearing alloy fraction and the
non-magnetic metal sulphide fraction within the converter matte was determined by
calculation. It was assumed that 90% of the alloy fractions (metallic Fe, Ni, Cu and Co)
reports to the PGM alloy fraction in the magnetic separation plant. The remainder, together
with the non-magnetic metal sulphides, is the feed to the base metal refinery.
The forecast throughput of concentrate and production levels of the main products and by-
products in the first six years of the smelter operation are summarised in Table 17.15.
Table 17.15: Forecast Production in First Six Years of Operation
Parameter Units Year 2 Year 3 Year 4 Year 5 Year 6 Year 7
Concentrate Feed t 324,646 444,689 423,918 459,442 443,842 524,292

Base Metal Refinery t
Ni in cathode t 27,736 37,991 36,217 39,252 37,919 44,792
Cu in cathode t 12,434 17,336 15,761 17,791 17,092 20,339
Co in hydroxide t 115 141 146 153 151 155
In Leach Residue
Pt g 170,840 279,303 253,868 238,448 226,095 339,439
Pd g 129,706 220,700 207,500 196,266 193,080 307,439
Au g 59,189 91,757 82,403 79,679 81,090 112,430
Ag g 29,250 44,935 42,325 46,214 44,505 53,788
Rh g 1,171 1,791 1,697 1,846 1,780 2,129
Ru g 4,835 7,360 7,014 7,603 7,344 8,683
Ir g 523 796 758 822 794 939
In PGM Alloy
Ni t 2,778 3,805 3,627 3,931 3,797 4,486
Cu t 28 39 35 40 38 45
Co t 738 910 940 982 968 998
Pt g 1,230,046 2,010,985 1,827,851 1,716,826 1,627,886 2,443,962
Pd g 933,886 1,589,041 1,494,003 1,413,117 1,390,180 2,213,559
Au g 426,164 660,647 593,305 573,686 583,846 809,493
Ag g 210,602 323,532 304,741 332,738 320,439 387,271
Rh g 8,431 12,896 12,215 13,291 12,819 15,330
Ru g 34,809 52,995 50,498 54,744 52,880 62,516
Ir g 3,765 5,732 5,461 5,921 5,719 6,763
Sulphuric Acid t 135,493 185,593 176,924 191,750 185,239 218,816
Sodium Sulphate t 68,764 94,190 89,791 97,315 94,011 111,051
17.3.10 Capital Cost
17.3.10.1 Basis of Estimate
The estimate of the direct capital cost of the smelter, base metal refinery and gas cleaning
section was developed for major mechanical and electrical equipment, based on an assumed
equipment configuration and preliminary equipment sizing. Major equipment costs are based
on similar equipment capacities from previous projects, or vendor budget quotes, scaled as
required and escalated to 2011 prices. Other discipline costs (civils, concrete, architectural,
platework, structural, piping, control and instrumentation and electrical) are factored on
mechanical equipment costs.

Indirect costs such as contingency, owner’s costs, insurance, spares and engineering,
procurement and construction management (EPCM) are not included in the smelter/base
metal refinery estimate below, but are added to the total project cost and amount to 43% of
the project direct costs. A contingency of 30% of the total direct plus indirect costs is
included in the total capex, which reflects the preliminary status of the project design.
17.3.10.2 Capital Cost Summary
A summary of the direct costs for each main area is given in Table 17.16.
Table 17.16: Smelter and Base Metal Refinery Capital Cost Summary (Direct Costs Only)
Smelting/ Base Metal

Gas Cleaning Total Total
Item Converting Refinery
RUB RUB US$
RUB RUB
Equipment 3,294,131,238 1,811,312,759 5,022,034,876 10,127,478,873 337,582,629
Civil works 46,396,215 4,144,645 70,732,886 121,273,746 4,042,458
Concrete 463,962,146 41,446,451 707,328,856 1,212,737,453 40,424,582
Earthworks 139,188,644 12,433,935 212,198,657 363,821,236 12,127,375
Architectural 231,981,073 20,723,226 353,664,428 606,368,727 20,212,291
Control & Instrumentation 139,188,644 12,433,935 212,198,657 363,821,236 12,127,375
Electrical 371,169,716 33,157,161 565,863,085 970,189,962 32,339,665
Piping 324,773,502 29,012,516 495,130,199 848,916,217 28,297,207
Structural 463,962,146 41,446,451 707,328,856 1,212,737,453 40,424,582
Totals 5,474,753,325 2,006,111,080 8,346,480,498 15,827,344,903 527,578,163
The major exclusions from the smelter and base metal refinery direct costs include facilities
for the supply of utilities, reducing agent and flux materials which are included in the
infrastructure capital cost estimate. Other exclusions include weak acid effluent treatment
and mobile equipment. Exclusions are summarised in Table 17.17.
Table 17.17: Exclusions from Smelter and Base Metal Refinery Capital Cost Estimate
Area Exclusion
Dry Concentrate Receiving Area
Furnace Building, Including Building Lifts, Electrode Paste Addition Crane and Aisle Crane, Platforms, etc.
Furnace Gas Uptakes and Gas Handling Systems
Mobile Equipment
New Sub-Stations, MV Switchgear and Overhead Lines (Battery Limits: Terminals of Furnace Switchgear)
Ausmelt Converter Copper Cooling Elements (Requirements to be Defined in Next Phase of Engineering)
Smelting and
Converting Allowance for Cooling Water Plant for Potential Ausmelt Cooling Requirements
Minor Equipment, Including Ladles and Slag Pots
Furnace Control System
Provision of Reductant, Pulverised Coal and Silica To The Feed Bins from Utilities Area
Provision of Compressed Air, Instrument Air, Oxygen from Utilities Area
All Utilities and Services (Oxygen Plant, Compressors, Air Dryers, Water Supply Systems, Water Treatment
Systems, Effluent Treatment Plant, Etc.)
Effluent Water Treatment
Weak Acid Treatment
Fugitive Emissions Capture System (Included in Smelter capex)
Gas Cleaning Ducting
Mobile Equipment
New Sub-Stations
All Utilities and Services (Compressed Air, Instrument Air, Water Supply Systems, Etc.)
Refining PGM-Alloy Treatment Leaches and Supporting Equipment for Further PGM Concentration

Area Exclusion
Mobile Equipment
Provision of Compressed Air, Instrument Air, Oxygen from Utilities Area
17.3.11 Operating Costs
The major operating cost categories of the smelter, gas cleaning section and base metal
refinery are summarised in Table 17.18.
Staffing levels are based on those used at similar operations taking into account the
requirements of Russian labour regulations. Salaries are based on typical labour rates at
similar Russian operations.
Consumption rates of reagents and consumables are based on mass and energy balances and
Hatch’s in-house data for items not generated from the mass balance such as minor
consumables and furnace repairs. Furnace power, pulverised coal, reductant, oxygen and flux
consumption rates were calculated from the mass and energy balances. Power consumptions
for other major unit operations were calculated as a fraction of furnace power based on in-
house information for similar operations.
The costs of instrument air, steam and building heating are included in infrastructure costs.
For use in the cash flow model operating costs were divided into fixed and variable portions.
A contingency of 15% was added to both fixed and variable components.
Table 17.18: Smelter, Gas Cleaning and Base Metal Refinery Operating Cost Summary
Cost per Year RUB

Category
Smelting/Converting Gas Cleaning Refining
Reagents/ Consumables 211,408,560 1,591,460,377
LPG 7,728,000
Repairs & Rebuilds 143,570,978
Raw and Potable Water 6,334,256 38,857,000
Power 559,873,050 34,848,000 399,000,000
Spares 99,560,494 204,433,000
Labour 242,649,000 9,405,000 320,796,000
Contingency (15%) 189,509,451 7,798,000 508,564,710
Total 1,452,905,788 98,636,000 3,275,870,910
Total US$ million 48,430,193 3,287,857 109,195,697
US$/t concentrate or matte 105.67 7.17 1,376.46
Smelter/converting, gas cleaning and refining operating costs are presented in Tables 17.19 to
17.21 respectively. Smelter/converting and gas cleaning variable costs are based on the LOM
annual average tonnage of concentrate produced equal to 458,327 t. Refining variable costs
are based on LOM annual average tonnage of matte produced equal to 79,331 t.

Table 17.19: Smelter/Converting Operating Costs
Smelter Option 2 RUB/Year US$/Year US$

Reagents/Consumables 211,408,560
Repairs & Rebuilds 143,570,978
Raw and Potable Water 6,334,256
Power 559,873,050
Spares 99,560,494
Labour 242,649,000
Contingency (15%) 189,509,451
Total 1,452,905,788
Fixed (RUB) 279,046,350 9,301,545
Variable per t of Conc (RUB) 1,173,859,438 39,128,648 85.37
Table 17.20: Gas Cleaning Plant Operating Costs
Gas Cleaning Plant RUB/Year US$/Year US$

Gas Cleaning
Electrical Load ID Fan 21,780,000
Make-up water 11,557,000
Acid Plant
LPG 7,728,000
Electrical Load 13,068,000
Cooling water 27,300,000
Labour 9,405,000
Contingency (15%) 7,798,000
Total 98,636,000
Fixed (RUB) 10,815,750 360,525
Variable per t of Conc (RUB) 93,647,950 3,121,598 6.81
Table 17.21: Base Metal Refinery Operating Costs
Base Metal Refinery RUB/Year US$/Year US$

Reagents/Consumables 1,591,460,377
Repairs & Maintenance 204,433,000
Power 399,357,019
Miscellaneous Consumables 332,537,004
Labour 320,796,000
Contingency (15%) 508,564,710
Total 3,275,870,910
Fixed (RUB) 368,915,400 12,297,180
Variable per t of Matte (RUB) 2,906,955,510 96,898,517 1,221.45
Although the smelting operations will produce approximately 200,000 t/a of sulphuric acid,
the cost of sulphuric acid is included in the base metal refinery operating costs. Annually, an
average of approximately 27,454 t of acid will be consumed. The cost of acid is assumed to
be the same as the selling cost of 1,200 RUB/t (US$40/t).

18.0 PROJECT INFRASTRUCTURE
18.1 GENERAL
The Kingash, Verkhnekingashsky and Kuyovsky deposits are located in the Sayansky District
of Kransnoyarsk Region of the Russian Federation. The deposits have been discovered on
the slopes of the Idarskoye Ridge in the East Sayan, in the upper valley of the Kingash and
Pryamoye Kuyo Rivers.
The regional centre, Aginskoye (9,000 habitants) is located 50 km northwest of the mine site.
The nearest railway station, Sayanskaya, on the Abakan-Tayshet line is 90 km from the
deposit in a straight line and 120 km by road. The nearest settlements in the area are Tugach
(45 km away) and Orye (26 km away). Unpaved forestry roads connect Tugach with the
plant site, but the connection with Orye is only possible via a winter road along the Kingash
valley. All settlements are connected to Aginskoye by gravel roads. The connection from
Aginskoye to Krasnoyarsk City some 220 km away is by paved highway.
The concentrator processing the copper-nickel mill feed excavated from the Kingash,
Verkhnekingashsky and Kuyovsky deposits will be located on the same site as the mining
operations, thus forming an ore mining and beneficiation integrated works, also referred to as
the GOK.
The off-site metallurgical production plant is designed to process concentrate from the
beneficiation plant, which is located on the Kingashsky project site.
18.2 DESCRIPTION OF MINING OPERATIONS AREA AND PROPOSED

BENEFICIATION PLANT SITE
The terrain of the deposit is hilly with slopes up to 30°. Elevations are within the range of
650 m to 1,198 m above sea level. The area is covered in thick black taiga with wind-fallen
trees and burnt areas. The slopes of the mountains are grass covered and are cut by boulder
streams.
The river network is developed and represented by the Kingash River and its tributaries, a
shallow rather narrow river bed with rifts and boulders. There are two flood seasons, spring
and early autumn.
The climate is continental Dcf of Köppen classification (sub arctic), with temperature
variations from +34ºC to -50 ºC and an average annual temperature of -1.5oC. Locally there
are areas of permafrost. Annual precipitation ranges from 550 mm to 650 mm. Snow melt is
in May - early June, the first frosts are towards the end of August. Snow fall starts early to
mid-September and the area is snow covered by early October.
The region is seismic, with a seismicity rating of VIII on MSK-64 scale, with a recurrence
rate of 1% in 50 years. Major earthquakes are rare. The last earthquake measuring force VII
(very strong) on the MSK-64 scale occurred in 2000.
Economy and transport routes are poorly developed. The main activity of the local
population is timber logging and agriculture.

The Sayansky District has construction materials, clay, sand and limestone together with
forest products. The river water can be used for potable and process needs.
18.3 PROPOSED INFRASTRUCTURE ORE MINING AND BENEFICIATION

INTEGRATED WORKS
Due to lack of the developed infrastructure the construction of the Kingash operation will
involve the development of a full complex for all the plant activities.
It is planned for the project site to be located 4 km southwest of the Kingash open pit mine
and 2 km west of the Verkhnekingashsky open pit mine. It is proposed that the beneficiation
plant will be located on this site together with administrative and office buildings, 220 kV
electric substation, machinery and repair shop with outdoor assembly area, garage with open
parking place, mining equipment maintenance facilities, fire station, fuel and lubricants
warehouses and materials warehouse, pump stations for water supply and sewage, water
treatment plants. These facilities will be shared with the mining operations developing the
Kingash, Verkhnekingashsky and Kuyovsky deposits.
Auxiliary services areas for the beneficiation plant and pits are located close to the
beneficiation plant on the western side of the hill at a maximum elevation level of 1,084 m.
The rotation camp for the construction workers and the 220/110/35 kV main stepdown
substation are located in the valley of Kingash River northwest of the Kingash open pit in the
area of the existing exploration base.
The explosive materials storage is located to the south of Kingash open pit, 2 km distant on a
straight line.
A river diversion will be used for development of the Kingash open pit mine located in the
valley of Kingash River; for this purpose a retaining dam, pump station and pipeline will be
constructed along the right side of the river.
It is proposed that the tailings storage facility for the beneficiation plant will be located in the
floodplain of Bolshoye Kusye, approximately 4 km distant to the west of the plant.
It is planned that the tailings storage facility will be cascade type:
• The upper first section having a capacity of approximately 120 million m3 is located
at elevations 620 m to 750 m and is formed by a bund wall (extension of the crest is
approximately 0.89 km), the area of tailings storage facility is 2.7 km2; and,
• The lower second section having a capacity of approximately 120 million m3 is
located at elevations 580 m to 690 m and is formed by a bund wall (extension is
1.1 km), the surface area of tailings storage facility is 2.0 km2.
The total area required for construction of the facilities is 2,400 ha. Figure 18.1 shows the
proposed site layout.

Figure 18.1: Site Layout of Kingash and Verkhnekingashsky Deposits
Russian English
Вахтовый поселок строителей (Temporary) Construction Camp
Отвал вскрышных пород Overburden Dump
База геологов Surveyors Camp
База стройиндустрии Building Industry Facility
Кингашский карьер Kingash Open-Pit Mine
Склад ВМ Explosives Storage
Водохранилище Water Storage Reservoir
Хвостохранилище Tailings Storage Facility
Обогатительная фабрика Beneficiation Plant
Верхнекингашский карьер Verkhnekingashsky Open-Pit Mine
Объекты вспомогательного и обслуживающего назначения Utility and Service Facilities
Куевский карьер Kuyo Open-Pit Mine
Отвал вскрышных пород, V= 150 млн.куб.м Overburden Dump, V= 150 Million m3
Отвал вскрышных пород, V= 600 млн.куб.м Overburden Dump, V= 600 Million m3
Note: Grid squares are 1,000 m by 1,000 m.
To supply the beneficiation plant with fresh process water the project provides for
construction of water storage basin on the Kingash River 2 km to the south from the Kingash
open pit.
In order to ensure transportation connections for the open pit mine a 26 km off-site road from
the production site to Oryo will be constructed.
18.3.1 Crushing Plant
Two options were considered in the Hatch study: i) mill feed truck haulage to a central
crushing plant located at the beneficiation plant site; and ii) construction of three primary
crushing plants situated at the edge of each open pit fed by the CAT 789D dump trucks with
crushed mill feed conveyed to the beneficiation plant. In this study Micon has assumed that
mill feed will be hauled to the beneficiation plant by mine trucks.
18.3.2 Tailings Management Facilities
Tailings management facilities (TMF) will be designed for storage of the beneficiation plant
tailings from processing of Kingash ores.
In accordance with the process flow diagrams the following capacities are anticipated at this
stage of project development.
• Tailings discharge, as solids – 17,479 Mt/a;

• Thickened tailings at 50% solids shall be discharged to the TMF;
• Slurry flow rate is 4,284 t/h;
• Tailings particle density is 2.2 t/m3; and,
• TMF operation period shall be 25 years.
The total TMF volume with a filling factor of 0.9 is 236 million m3. The TMF active storage
capacity includes the accumulation of the TMF area surface precipitation inflows.
18.3.3 Tailings Storage Site
Two options have been studied for location of the TMF:
1. Option No.1: location suggested in the Kingashsky Project TEO of Permanent

Conditions, 2008 by Gipronikel – in the flood plain of Karimovsky and Pryamoie
Kuyo Creeks at a distance of 3 km to 5 km southward from the beneficiation plant.
The tailings storage will consist of two areas. The first site having a volume of
140 million m3 is located at elevations from 680 m to 800 m and will be formed by a
hydraulic fill dam (1 km long along crest and 100 m to 120 m high) and located
downstream of the confluence of Karimovsky and Pryamoie Kuyo Creeks. The
storage surface area is 2.6 km2.
The second tailings storage site having a volume of 90 million m3 will be located at
elevations from 760 m to 880 m and will be formed by an hydraulic fill dam (0.9 km
long along crest and 100 m to 120 m high) and located in the flood plain of
Karimovsky Creek. The storage surface area is 2.1 km2.
2. Option No.2: In the flood plain of Bol Kuzje creek, at a distance of approximately
4 km west of the concentrator.The tailing storage shall be of cascade design.

The first upper tailing storage site with a volume of approximately 120 Mm3 will be
located at elevations from 620 m to 750 m and will be formed by an embankment
(approximately 0.89 km long along crest along crest), having a surface area of
2.7 km2.
The lower tailing storage site with a volume of approximately 120 Mm3 is located at
elevations from 580 m to 690 m, and will be formed by embankments (1.1 km long),
having surface area of 2.0 km2.
Each of the options considered would have sufficient storage capacity for the life of the mine.
For both options the distance to the beneficiation plant is approximately the same.
At this stage Option No.2 with the tailings storage location in the flood plain of Bol Kuzje
Creek has been adopted.
18.3.4 Water Storage Area
Beneficiation plant fresh process water demand has been estimated as 2.37 thousand m3 at
start-up and 10.8 Mm3 per annum at the end of ramp up.
Average Kingash River runoff is estimated at 11.8 Mm3 per annum (1,347 m3/h) including:
10.6 Mm3 (2,430 m3/h) – river runoff from May to October; and,
1.2 Mm3 (275 m3/h) – river runoff from November to April.
The annual Kingash River runoff volume is sufficient for the plant’s fresh water demand;
however, in the cold season (November-April) river runoff volume is not sufficient to satisfy
the water demand dictating the need for a water storage construction of 5.3 M m3 capacity.
Two locations for the 40 m high retaining dam have been considered.
• Option 1: At the Kingash River, directly at the limit of the Kingash pit as proposed in
the Kingashsky Project TEO of Permanent Conditions, 2008 by Gipronikel; and,
• Option 2: At the Kingash River 1,600 m upstream.
Option 1 is expected to negatively affect the inflow of ground water to the pit and Option 2
has been adopted at this stage of the project’s development.
The main characteristics of the dam are:
• Dam crest elevation 800 m;

• Crest length 370 m;
• Average height 20 m;
• Maximum height 40 m; and,
• Slope 1:3.5.

The retaining dam at the Kingash River will be constructed using open-pit stripping and
overburden material. The dam is classified as a waterworks facility Class III.
18.3.4.1 Auxiliary Facilities and Administrative Buildings
The following are the auxiliary facilities necessary to the project:
• Administrative and welfare building;

• Shift camp;
• Mechanical repair shops and vehicle maintenance;
• Fire station and mine rescue;
• Power distribution facilities;
• Utilities, services and pit lighting;
• Weighbridges;
• Warehousing;
• Explosive storage;
• Explosive production plant;
• Fuel storage;
• Filling station;
• Waste disposal facilities;
• Chemical laboratory and sample preparation;
• Boiler house;
• Main step-down substation;
• Tailings dam industrial water treatment; and,
• River and recycled water pump stations.
18.3.5 Transport
18.3.5.1 On-Site Ore Transport
The three open pits when fully developed will produce 18.5 Mt/a of mill feed.
Two options for mill feed haulage have been considered:
• Road transport – by mine dump trucks direct to the beneficiation plant; and,
• Conveyor transport – by mine dump trucks in the open-pit mine and by conveyor
from the open pit mine to the beneficiation plant.
In this study Micon has assumed that mill feed will be hauled to the beneficiation plant by
mine trucks.

The basic ore haulage parameters for the options under consideration were:
• Kingashsky – 9.5 Mt/a;

• Verkhnekingashsky – 5.5 Mt/a;
• Kuyovsky – 3.5 Mt/a.
The road transport option is based on CAT 789D, 180 t capacity dump trucks. The conveyor
option utilises a total of six conveyors, three for the Kingashsky open pit feeding directly to
the beneficiation plant, with a further three conveyors transporting the mill feed from the
Verkhnekingashsky and Kuyovsky open pits. The conveyor option requires the use of three
primary crushers, each one situated at the top of the open pit ramp.
Whilst hauling directly to the beneficiation plant has been selected as the preferred option for
this report, further work on the satellite primary crushers and then conveying to the plant is
recommended before this alternative transport method is discarded.
Figure 18.2 shows the required routes for the conveyor option and Table 18.1 lists the
requirements for the road option.
Figure 18.2: Proposed Conveyor Routes and Internal Roads
Conveyor Routes
See Table 18.1 for translation of project facilities.

Table 18.1: List of Site to Site Roads
No From To Length km Type

1 Northern Edge of Kingashsky Open Pit Verkhnekingashsky Open Pit 10.1 1
2 Kuyovsky Open Pit Support Services Facilities 5.2 1
3 Verkhnekingashsky Open Pit Point on Road 2 1.3 1
4 Kuyovsky Open Pit Overburden Dump 1 1.1 1
5 Point On Road 1 Overburden Dump 3 2.6 1
6 Point On Road 2 Overburden Dump 2 0.2 1
7 Point On Road 2 Beneficiation Plant 0.3 1
8 Camp Point A on Road 1 1.9 2
9 Southern Edge of Kingashsky Open Pit Point on Road 1 1.9 2
10 Explosives Storage Point on Road 2 1.7 2
11 Tailings Storage Point on Road 2 6.7 2
Note: Type 1 Roads Width carriageway 23 m, with road side shoulders 2.5 m and 1.5 m.
Type 2 Roads Width carriageway 7 m with roadside shoulders of 1.5 m.
18.3.5.2 Off-site Transport
It is planned to haul the concentrate produced in the beneficiation plant 120 km to

Sayanskaya railway station and then reload it onto rail wagons for transport to the
metallurgical plant site located in Zelenogorsk City.
A fleet of 16 42-tonne dump trucks are required to transport the concentrate to Sayanskaya
railway station.
To facilitate the concentrate transfer to Sayanskaya a 26 km long off-site road from the plant
site to Oryo will be constructed.
The use of flatbed trucks and 1-t tote bags as opposed to dump trucks is an option which has
been considered and adopted for this report. Further investigations into the options available
for concentrate transport to the metallurgical complex are recommended before a final
decision is made on the preferred concentrate transport method.
18.4 DESCRIPTION OF METALLURGICAL PLANT SITE
The metallurgical plant complex is planned to be located in Zelenogorsk City, Krasnoyarsk

Territory, Russian Federation. The site is situated on the left bank of the Kan River, 6 km to
the west of Zelenogorsk and 100 km distant from Krasnoyarsk.
The site of the metallurgical plant facilities requires the use of territory within the established
industrial zone of Zelenogorsk. The HPS-2 and electrochemical plant (ECP) are currently
located in the industrial zone. A synthetic fibre production plant was also constructed within
the zone but is now closed and has been decommissioned.
The northern side of the metallurgical plant site area is limited by the existing ash disposal
area of Krasnoyarsk SDPS-2 CJSC and River Kan. Parallel to the eastern border of the
industrial site, there is an approach line to the Vechnaya railway station and five power
transmission lines from the SDPS to the ECP. The Zelenogorsk urban forestry lands are
located to the west of the site and the ECP infrastructure facilities are located to the south.

The surface of the metallurgical plant site displays a uniform slope of the northeastern
exposure with an elevation difference from 165 m to 196 m. The site is covered by
deciduous and coniferous forests and wetland meadows. The climate of the district is
continental, with fluctuations in temperature from +34oC to -50°C. The number of days with
temperatures below -30° C is up to 85 days a year. Annual precipitation is 550 mm to
650 mm per year. The majority of precipitation falls between May and October. The frost
period lasts 180 to 200 days per year.
The transport network of the district is quite well developed. The Vechnaya station is located
1.5 km to the northeast of the metallurgical plant site. The highways going to Zelenogorsk
are located along the south boundary of the metallurgical plant site.
The design of the metallurgical plant and its infrastructure requires an area of 150 ha to
200 ha.
18.5 INFRASTRUCTURE AT METALLURGICAL PLANT COMPLEX
The planned infrastructure facilities common for the entire metallurgical plant complex are
heat, water, power, roads, and administration buildings.
Administration and on-site facilities comprise project management offices, engineering

offices, health care, public catering facilities, laundry, and ablutions to service both the
personnel of the metallurgical plant and the administrative staff.
The following repair facilities are envisaged:
• Repair unit;
• Scoop repair and cleaning shop; and,
• Utility vehicles repair shop.
Service facilities will comprise:
• Material and specialised equipment storage;

• Metal and equipment storage;
• Outdoor storage with overhead gantry crane;
• Refractory store;
• Garage;
• Fire department;
• Fuel oil depot and storage; and,
• First aid stations.

18.5.1 Technological Warehouses
18.5.1.1 Warehouses for Nickel Concentrate and Bulk Solid Materials
The concentrate warehouse will be designed for the receipt, storage and dispatch of nickel
concentrate, which will enter the warehouse in railway cars. Concentrate will be unloaded
from the railway cars and stored in the warehouse before transfer to concentrate feed bins
situated above the furnaces.
Warehouses for similar bulk materials, which are used in the production of final metal
products, will be designed in a similar manner to the concentrate warehouse. In areas of
concentrate and granular material handling, extraction systems are provided to remove
hazardous and noxious substances in the form dust, gases and vapours, to ensure that the
maximum permissible concentration of these substances, as determined by the current
standards, is not exceeded.
The nickel concentrate warehouse will be designed for a capacity of 14 days, which translates
to a holding capacity of 20,000 t. The flux warehouse is planned for 7 days with a holding
capacity of 1,500 t.
18.5.1.2 Coal Warehouse
It is proposed that coal will be delivered to the metallurgical complex in open wagons, each
with a carrying capacity of 69 t to 90 t. The wagons will discharge into a bunker, which is
equipped with a plate feeder. The coal supply will be transported to the storage area by
conveyor belt. Stockpile storage will be 7 days, which translates to a capacity of 3,500 t.
Dispatch of coal is planned via an underground conveyor belt. The unloading, storage and
transportation of coal will be conducted in accordance with safety regulations and in
accordance with the instructions approved by the technical manager of the area.
The coal warehouse is a sheltered building with a floor. The warehouse shelter is supported
by an unprotected steel structure.
Protective covers will be made from steel profile sheets or other non-combustible sheet
materials. The storage part of the warehouse, located on the surface, will be unheated. The
underground part of the warehouse (where unloading occurs) will have heating provided.
The calculation of heat generation and the required heating devices will take into account the
ventilation systems, dust collection and suppression systems at coal transfer sites, as well as
the wet cleaning of the basement to remove dust and coal spillages.
18.5.1.3 Finished Goods Warehouse
The finished products warehouse is intended for storage and shipment of products to the
consumer. The warehouse will be designed for storage of two weeks of product. Loading and
unloading operations, as well as movement of materials within the warehouse, will be
mechanised. The warehouse will be equipped with a ramp for the shipment of products to
consumers. Ventilation, heating and air conditioning systems will comply with safety
regulations and requirements of the applicable standards, building and sanitary codes and
regulations.

18.5.1.4 Sulphuric Acid Storage
Storage will be provided for the sulphuric acid (98%) produced in the metallurgical plant off-
gas treatment process. The storage capacity is 9,500 t (approximately 5,100 m3). The storage
capacity is designed based on the sulphuric acid stock accumulated during 14 days. The
storage is located in a stand-alone building on the leeward of the main production buildings.
18.5.1.5 Sodium Sulphate Storage and Loadout
Sulphur is precipitated from nickel-bearing solution in the form of saleable sodium sulphate
crystals. Storage capacity of seven days will be provided for sodium sulphate. On the basis
of the smelter production output the holding capacity of the storage will be designed at
2,700 t (~1,000 m3). Sodium sulphate will be shipped either by rail or by road, and will be
loaded through silos to discharge to motor or railway tank cars.
18.5.1.6 Oxygen Plant
The oxygen plant will be located on the same site as the compressor station. Input feed for
oxygen production includes ambient air containing chemically unbounded oxygen, nitrogen,
argon, carbon dioxide, etc. Oxygen is used as the oxidising component in converter smelting,
for welding and metal cutting. The compressor type and number as well as the dimensions of
the oxygen plant will be determined during the next engineering phase.
18.5.2 Waste Disposal Facilities
A separate area will be designated for the storage and treatment of industrial and domestic
waste produced by the metallurgical complex. The waste will be classified according to
hazard class and treated and or disposed of accordingly.
18.5.3 Transport
18.5.3.1 On-Site
The rail siding will be extended on-site to allow both concentrate and coal to be delivered
directly to their respective storage sheds. The onsite roads will be asphalt surfaced.
18.5.3.2 Off-Site
The delivery of concentrates and other products from the railway station at Sayanskaya will
be by rail transport. The distance is approximately 100 km. The metallurgical complex will
be linked to the existing main line rail system using a new spur connection approximately
1.5 km in length. The connection will be made at the existing rail station at Voechnaya.
Road transport links between the metallurgical plant and the network of public roads leading
to the main Zelenogorsk highway will be achieved by an access road adjacent to
Lebedevskaya Street.
Figure 18.3 shows the proposed layout of the facilities at the metallurgical site.

18.6 POWER
18.6.1 Beneficiation Plant
Major power loads of the project site for a total production rate of 18.5 Mt/a of mill feed are
in the beneficiation plant, production site facilities, camp, heat and water supply facilities.
The total rated power input is estimated to be in the order of 140 MW.
The nearest 35 kV power line is located 40 km northwest of the deposits. To supply the
beneficiation plant 140 MW power draw a 200 km long double chain 220 kV overhead power
line from Kamala will be required. The capital cost of constructing of this 220 kV line is not
included in the project capital estimate as it has been assumed that this will be State funded.
A 220/110/35 kV substation with two transformers rated at 160 (200) MVA will be
constructed to provide power to the site. The 220 kV substation will be tap connected to the
double circuit overhead power line.
18.6.1.1 Metallurgical Complex
In estimating power consumption at the metallurgical plant site Hatch considered eight
scenarios. The power draw for the scenarios considered ranged from 44 MW with an annual
power consumption of 385,000 MWh to 75 MW with an annual power consumption of
675 MWh.
The metallurgical plant will be supplied from the existing Kamala substation. The Kamala
substation is supplied by a grid with a capacity of 1,000 MW, which is sufficient for any of
the three scenarios considered.

Figure 18.3: Plot Plan for Metallurgical Site
19.0 MARKET STUDIES AND CONTRACTS
Only limited marketing studies have been conducted to date by Intergeo, commensurate with
the level of development of the project. The company anticipates achieving London Metal
Exchange (LME) certification for its metal products and selling approximately 75% of nickel
and copper production through the LME.
There are no other material contracts applicable to the project at this stage in its development.

20.0 ENVIRONMENTAL STUDIES, PERMITTING AND SOCIAL OR
COMMUNITY IMPACT
20.1 INTRODUCTION
The information available for review of environmental matters is contained in three

documents:
• Kingashsky Project TEO of Permanent Conditions, Gipronikel, 2008;

• Verkhnekingashsky Project TEO of Permanent Conditions, Gipronikel, 2009; and,
• Scoping Report, Kingash and Upper-Kingash Deposits Ore Mining and Processing
Production Complex, ERM, August 2011 presented as an appendix to the Hatch
report.
The objectives of environmental surveys conducted for the Kingash Project have been
twofold: to establish baseline data for future environmental monitoring programmes and to
assess the level of environmental impact resulting from exploration work conducted in the
Kingashsky, Verkhnekingashsky and Kuyovsky deposit areas. The work was undertaken by
LLC Ecosupervisor Krasnoyarsk from 2007 to 2008 and is summarised in the report entitled
“Environmental Monitoring Programme, Kingash Ore Field”. The study was reviewed and
approved by the Subsoil Authority in Krasnoyarsk in 2008. Six basic surveys were
undertaken to collect data for an environmental baseline study. The methodology for each
survey varied for each deposit area but was essentially similar. The surveys included:
• Soil survey;
• Surface waters and river silt sediments;
• Level and degree of hazardous radiation;
• Study of fauna and flora;
• Surface impact from exploration work; and,
• Air pollution.
Analysis of the soil, water and silts survey data from each deposit showed that the
concentration levels did not exceed maximum baseline levels for the three classes of
hazardous elements. Elements including Ti, V, Mn Ga, Zr and Y were slightly higher than
the natural maximum levels in the soils and the silts. No hazardous radiation was detected in
the areas of the three deposits. Although exploration activities impacted the local
environment, none was considered to be significant and to have any long term effect. Surface
and underground water quality was exceptionally high and free of hazardous levels of toxic
metals. Atmospheric samples were collected to evaluate the air quality in the buffer zone
between the mine and the housing facilities and the results demonstrated that air quality met
Russian standards.
Development of the Verkhnekingashsky deposit will have a higher adverse environmental

impact on the ecosystem in vicinity of the mine. The Verkhnekingashsky TEO of Permanent
Conditions includes a number of recommendations for environmental measures to be

implemented over the life of the mine and these are provided for in the cash flow for the
project.
Micon is not aware of any impediment to the application or approval of any further permits
required to complete the proposed Kingash development programme.
20.2 KINGASHSKY ENVIRONMENTAL SURVEYS
20.2.1 Kingashsky Soil Survey
The objective of the baseline study was to determine the physical characteristics of the soil
prior to the development of the deposit. This was the first soil baseline study undertaken on
the Kingashsky deposit. The predominant soil type overlying the deposit is podzol. The soil
profile can be divided into five horizons. The soils were collected from the A and B horizons
and analysed by ICP for 40 elements. The concentration of deleterious including Bi, W, Cd,
As, Sb, Ce, Li, U, Th, Hf, Ta, Tl, Hg, Te were not elevated and pose no environmental risk.
A total of 213 samples were analysed and the ICP results showed that 35 samples had least
one element that exceeded maximum baseline value. Elements were grouped according to
four classes of hazard:
• Class 1 - Pb, Zn;

• Class 2 - Cu, Co, Cr, Ni, B;
• Class 3 - V, Mn, Ba, Sr; and,
• Other elements - Ti, Ga, Zr, Y.
Table 20.1 summarises the results of the soil survey.
Table 20.1: Statistical Summary Soil Analysis

(ppm)
Element Pb Cu Zn Co V Cr Ni Ti Mn Ga Mo Sn Ba Sr Zr B P Ag
TH 0.2 0.1 5.0 0.2 0.5 1.0 0.2 10.0 1.0 0.2 0.1 0.1 20.0 10.0 3.0 1.0 40.0 0.01
BLM 2.3 2.9 8.4 1.0 14.0 24.0 5.7 690.0 54.0 1.6 0.2 0.3 56.0 16.0 21.0 3.6 53.0 0.02
SD 1.0 1.9 2.8 0.6 4.5 21.0 6.7 183.0 17.0 0.4 0.05 0.1 18.0 9.8 5.2 0.8 30.0 0.01
BLX 5.2 8.7 17.0 2.8 27 88.0 26.0 1,238.0 105.0 2.9 0.4 0.5 111.0 45.0 36.0 6.0 143.0 0.05
NX 15.0 15.0 20.0 3.0 30.0 150.0 50.0 1,000.0 150.0 2.0 0.3 0.6 300.0 60.0 40.0 6.0 200.0 0.06
Note: TH-threshold limit, BLM-baseline median, SD-standard deviation, BLX-baseline maximum, NX-natural maximum.
With reference to Table 20.1, the conclusion was that all the geochemical soil anomalies were
related to the underlying bedrock. None of the Class 1 to 3 of hazardous elements exceeded
the maximum baseline permissible concentration levels.
20.2.2 Kingashsky Surface Water Survey
In 2007, a water survey was conducted in the upper basin of the Kingash River. ICP analysis
of the dry residue from 28 water samples showed below background levels in Ga, Mo, Ge,
Bi, W, Cd, As, Be, La, Ce, Sc, Li, V, Th, Hf, Ta, Tl, Hg, Te and In. Elements including Zr,

Y, Р, and Sb were at or slightly above background threshold limits. The pH levels of the
water ranged from 6.6 to 7.4 and based on very low trace element content, the water was
deemed safe for local consumption.
In 2008, water of the upper reaches of the Kingash River was re-sampled. It was established
that average concentrations of Zn, Co, Cr, Ni, Mn, Sn and Ba were lower in the 2008 survey.
Only concentrations of Pb, V and Mo remained at the same level while the concentration of
Ti was higher, but did not exceed the maximum baseline values. Concentrations for Sr and
Ag increased relative to the 2007 survey.
Table 20.2: Statistical Summary Water 2007 Analysis
(ppm)
TH 0.09 0.19 9.43 0.03 0.06 0.33 0.26 3.37 1.31 0.02 0.04 2.63 5.77 4.82 0.003 5.54 0.09 0.19
BLM 0.10 0.62 12.13 0.07 0.24 0.88 0.73 5.32 1.81 0.06 0.06 4.37 17.89 3.60 0.01 48.23 0.10 0.62
SD 0.38 1.20 40.41 0.16 0.43 1.88 1.51 15.43 5.74 0.13 0.19 12.26 35.21 18.06 0.02 64,84 0.38 1.20
BLX 0.33 0.96 28.71 0.1 0.33 1.51 1.31 12.75 4.78 0.10 0.17 11.39 28.47 14.87 0.01 54.80 0.33 0.96
Note: TH-threshold limit, BLM-baseline median, SD-standard deviation, BLX-baseline maximum.
Table 20.3: Statistical Summary Water 2008 Analysis

(ppm)
BLM 0.10 0.39 6.29 0.04 0.26 0.40 0.44 7.09 1.48 0.05 0.02 3.57 23.10 2.86 0.07 0.10 0.39 6.29
NX 0.16 0.85 11.35 0.04 0.41 0.61 0.82 10.24 2.84 0.09 0.02 5.12 40.96 4.28 0.13 0.16 0.85 11.35
Note: BLM-baseline median, NX-natural maximum.
A comparison between Tables 20.2 and 20.3 shows that the concentration levels of the
elements did not vary significantly from the 2007 survey. It will be necessary to continue to
monitor the elemental concentration levels in the water over a longer period of time to
determine seasonal variations in metal content in the river.
20.2.3 Kingashsky Silt Survey
In 2007, a silt survey was conducted in the upper basin of the Kingash River at the same
location from which the water samples were collected. All samples were analysed by ICP for
a 40 element suite.
Elements were grouped according to four classes of hazard:
• Class 1 - Pb, Zn;

• Class 2 - Cu, Co, Cr, Ni, B;
• Class 3 - V, Mn, Ba, Sr; and,
• Other elements - Ti, Ga, Zr, Y.

Table 20.4: Statistical Summary Silt 2007 Analysis
(ppm)
Element Pb Cu Zn Co V Cr Ni Ti Mn Ga Ba Sr Zr B Y
TH 0.2 0.1 5.0 0.2 0.5 1.0 0.2 10.0 1.0 0.2 10 10 3.0 1.0 1.0
BLM 2.2 8.0 11 3.7 19 47 20 400 60 1.8 54 33 14.8 2.3 3.2
SD 0.5 8.1 2.3 2 2 35 19 98.1 17 0 8.3 9 2.5 1 2
NX 0.2 0.1 5.0 0.2 0.5 1.0 0.2 10.0 1.0 0.2 10 10 3.0 1.0 1.0
Note: TH-threshold limit, BLM-baseline median, SD-standard deviation, NX-natural maximum.
As illustrated in Table 20.4, the results of the survey clearly showed that the geochemical
characteristics of the silt sediments were strongly affected by relief, climate and composition
of soil forming the local rocks. A total of six elements were slightly higher than the natural
average threshold, V, Ti, Mn, Ga, Sr and Zr.
20.2.4 Kingashsky Radiation
Radiation measurements were collected during the airborne spectrometer survey flown over
the Kingash licence area. The gamma-activity over the licence area ranged from 2 micro-
Roentgens per hour to 20 micro-Roentgens per hour and is considered to be within acceptable
limits.
20.2.5 Kingashsky Exploration Environmental Impact
A number of different studies were carried out to determine the adverse impact on the
environment caused by exploration work undertaken on the property since 1993. The
exploration work which included surface drilling, adit construction, bridge construction, soil
sampling and line cutting were considered to have some local impact on the environment.
Although all these activities impact the local environment, none was considered to be
significant and to have any long term impact.
20.3 KUYOVSKY AND VERKHNEKINGASHSKY ENVIRONMENTAL

PROGRAMME
Environmental work commenced on the Kuyovsky and Verkhnekingashsky deposit areas in

2006 and continued until 2009. The main objectives were threefold;
• To determine baseline concentrations based on sampling;

• To create basis to implement a unified environmental monitoring; and,
• To study the dynamics of various changes taking place in environmental processes.
During 2005 to 2006 during geophysical surveying and soil sampling were also carried out on
a 100 m x 20 m grid. A total of 1,578 samples were collected and analysed by semi-
quantitative spectral analysis for 15 elements that included Pb, Zn, Cu, Co, V, Cr, Ni, Ti, Mo,
Sn, Bi, W, Ag, As, and Sb. These elements were used to define baseline levels for the eluvial
and B horizons at the deposit sites.

During the period 2006 to 2007 an additional 254 soils and 52 silt samples were collected and
analysed for a much wider range of elements using mass spectrometry with ICP (X-7 ICP-
MS). A total of 63 samples were analysed for Li, Be, B, Al, P, Sc, Ti, V, Cr, Mn, Co, Ni, Cu,
Zn, Ga, Ge, As, Se, Br, Rb, Sr, Y, Zr, Mo, Nb, Ru, Rh, Ag, Cd, In, Sn, Sb, Te, Cs, Ba, La,
Ce, Pr, Nd, Sm, Eu, Gd, Tb, Dy, Ho, Er, Tm, By, Lu, Hf, Ta, W, Re, Os, Ir, Pt, Au, Hg, Tl,
Pb, Bi, Th and U.
A total of 76 water and soil samples were collected to determine the level of oil
contamination in the soils and heavy metal contents in water residues. During 2008 and
2009, additional geochemical testing was performed on 72 humus and eluvial soil samples.
Surface water and stream silt sediments were collected from the Kingash and Pryamoe Kuyo
Rivers. A total of 11 dry residue samples were selected for chemical and semi-quantitative
analysis for 40 elements.
All analytical work was conducted by Krasnogeologia. A statistical summary for the number
of samples collected and for the survey type that was completed on the two deposits is shown
in Table 20.5.
Table 20.5: Statistical Summary Silt 2007 Analysis
2006-2007 2008-2009
Survey Type (No. of (No. of Total
Samples) Samples)
Geochemical Sampling of Soil for Heavy Metals 254 36 290
Testing for Oil Products 42 - 42
Geochemical Sampling of Silt Sediments 52 11 63
Water Sampling for Heavy Metals 34 11 45
Geochemical Sampling of Eluvial Level 1587 19 1606
Geochemical Sampling of Humus Level - 17 17
20.4 ENVIRONMENTAL RECOMMENDATIONS
The following facilities are potential sources of air pollution: the three open pits, southern
and western waste dumps, beneficiation plant, maintenance shop and the tailings storage
facility. Other sources include diesel-powered equipment in the open pits, pollution related
to drilling and blasting and loading, haulage and unloading mill feed and waste. Gas
emissions from diesel equipment and other forms of transport equipment comprise nitrogen
oxide, sulphur dioxide, carbon monoxide and finely dispersed hydrocarbons.
In order to decrease gas and dust emissions it is proposed that the following preventative
measures be taken:
• Equip drill rigs with dust collection and dust suppression systems;
• Irrigate dust deposition zones during drilling and blasting operations;
• Irrigate working faces where shovels or bulldozers are operating;
• Utilise high-capacity imported diesel equipment equipped with exhaust catalytic
converter systems;
• Use dust exhaust systems at the plant;

• Use irrigation and dust suppressants on gravel roads, particularly during the summer
season; and,
• Undertake periodic monitoring and diagnostic analysis of engine emissions from
processing equipment and transport vehicles.
The Kingash Project area has not seen significant prior mining activities. Micon is not aware
of historical mining environmental liabilities that would affect development of the project.

21.1 CAPITAL COSTS
The forecast initial and LOM capital costs are summarised by area in Table 21.1.
Table 21.1: Base Case Capital Costs
Capital Cost (US$ ‘000)

Area
Initial LOM Total
Feasibility Studies 52,839 52,839
Owner 20,167 - 20,167
Mine Equipment/Infrastructure 89,599 198,434 288,033
Process Plant/TMF/Infrastructure 605,274 290,532 895,806
Smelter/Acid Plant/ Base Metal Refinery Infrastructure 700,786 336,377 1,037,163
Project Indirects + Contingency (30%) 1,226,109 1,226,109
Working 52,680 -52,680 0
Closure -
Total 2,747,454 772,663 3,520,117
The capital costs are considered to be appropriate for the 4th Quarter of 2011 and assumed to
be accurate to ± 40% based on the scoping study-level of engineering. The cost estimates
include appropriate allowances for scale, location and 30% contingency and exclude Russian
VAT at 18%. It is assumed that VAT on initial capital is recovered in the first two years of
operation and on sustaining capital in the year of expenditure. The cost of a preliminary
feasibility is assumed to be 0.5% of the total initial direct and indirect capital costs and the
cost of the feasibility study is assumed to be 1.5% of total initial direct and indirect capital
costs.
Indirect costs include contractor mobilisation and demobilisation, freight, spare parts, Owner
and vendor commissioning costs, first fills, temporary facilities, camp, duties and taxes,
project design, an allocation for winter weather losses, labour transport, construction risk
insurance, start-up costs and EPCM.
Sustaining capital for mine mobile equipment is based on replacement of 20% of the fleet
every five years from Year 6, including additional mining equipment that is added during the
mine life to achieve mine production targets. Mine infrastructure sustaining capital is based
on 2% of initial mine infrastructure capital per year from Year 4. Sustaining capital for
processing and smelting equipment is estimated at 2% per year, from the second year of
operation. Change in working capital is estimated as the sum of 25% of total operating cost,
10% of production cost for production stores and 30% of production cost VAT.
21.2 OPERATING COSTS
The forecast base case LOM mine and beneficiation plant unit operating costs are presented
in Table 21.2.

Table 21.2: Base Case Life of Mine Unit Operating Costs
Unit Cost
Area
(US$/t ore)
Mining 10.82
Processing 7.19
Concentrate Transport 0.43
General and Administration 1.64
Royalty 3.78
The forecast base case LOM smelter unit operating costs are presented in Table 21.3.
Table 21.3: Base Case Life of Mine Smelter Unit Operating Costs
Unit Cost
Area
(US$/t concentrate)
Smelter 105.72
Acid Plant 7.60
MatteTransport 0.04
Base Metal Refinery 238.85
The mine operating costs are derived from the TEO inflated to 4th Quarter 2011. The
concentrator, smelter, base metal refinery operating costs and the general and administration
costs were developed as part of the work for the scoping study and reviewed by Micon. The
unit cost and rate inputs are presented in Table 21.4.
Table 21.4: Unit Costs and Rates
Area Input
Kingashsky waste mining (US$/t of waste mined) 2.32
Kingashsky ore mining (US$/t of ore mined) 2.79
Verkhnekingashsky waste mining (US$/t of waste mined) 1.93
Verkhnekingashsky ore mining (US$/t of ore mined) 2.72
Kuyovsky waste mining (US$/t of waste mined) 1.85
Kuyovsky ore mining (US$/t of ore mined) 2.64
Ore stockpile reclaim (US$/t ore reclaimed) 1.46
Processing variable (US$/t of ore processed) 6.71
Processing fixed (US$,000/year) 8,470
Mine general and administration (US$,000/year) 28,964
Concentrate transport (US$/t concentrate) 17.00
Smelter variable (US$/t concentrate) 85.37
Smelter fixed (US$,000/y) 9,302
Acid plant variable (US$/t concentrate) 6.81
Acid plant fixed (US$,000/y) 361
Base metal refinery variable (US$/t matte) 1,221.45
Base metal refinery fixed (US$,000/y) 12,297
Matte transport (US$/t matte) 0.25
Base metal royalty (% of mining operating cost, including depreciation) 8.0
Property tax (% of depreciated asset value) 2.2

The operating costs assume full refund of VAT but Micon has provided for some VAT
repayment delay in the working capital provision (see Section 21.1).

22.1 INTRODUCTION
Micon has created an effective mine plan in order to ascertain the potentially economic
portions of the Kingashsky, Verkhnekingashsky and Kuyovsky deposits. The analysis has
been conducted to determine the sensitivity of the economic feasibility of the project to
variation of the metal prices. Each of the three deposits was evaluated separately for
optimisation and mine production scheduling.
22.2 OPEN PIT OPTIMISATION
Open pit optimisation was conducted using Whittle mining software and the Micon 20 m by
20 m by 5 m recoverable mineral resource block model. In determining pit optimisation,
only the Measured and Indicated mineral resources flagged in the block model were
considered, but Inferred resources contained within the pit shell were included as mill feed in
the production plan and economic analysis.
The base case technical and economic parameters shown in Tables 22.1 and 22.2 were
applied to the block model grades to create a net value block model for use in Whittle.
The metal prices used to calculate the economic portions of the deposits remained the same
for all three deposits. Mining costs were calculated based on the haulage distances and
different recovery methods, and processing costs were determined using the average grades
for each deposit. The processing costs and metal recoveries were the same for each deposit
since it was assumed that the mill feed would be blended and treated in a single concentrator.
In accordance with Russian practice, the value of platinum group metals was assumed to be
subject to a 6% royalty based on the revenue generated. Further royalties for Ni, Cu and Co
were calculated based on 8% of the total mining costs. It was assumed that 4% dilution and
4% loss of ore will occur during the mining process.
Table 22.1: Base Case Metal Price and Selling Cost Parameters Used in Open Pit Optimisation
Parameter Type Value Units

Ni 22,420.93 US$/t
Cu 9,066.85 US$/t
Co 37,478.20 US$/t
Metal Price
Pt 1,768.50 US$/oz
Pd 768.36 US$/oz
Au 1,528.66 US$/oz
Ni 750.32 US$/t
Cu 246.34 US$/t
Co 1,798.96 US$/t
Selling Costs
Pt 127.76 US$/oz
Pd 32.62 US$/oz
Au 15.85 US$/oz

Table 22.2: Base Case Parameters Used in Open Pit Optimisation
Deposit Parameter Type Value Units

Ore 2.72 US$/t
Mining Costs
Waste 1.93 US$/t
Processing and G & A Costs Ore 18.38 US$/t ore
Ni 56.2 %
Cu 37.1 %
Co 34.8 %
Processing Recoveries
Pt 50.5 %
Kingashsky
Pd 44.5 %
Au 44 %
Ni, Cu, Co 8 % of total mining costs
Royalties
Pt, Pd, Au 6 % of revenue
Other Pit Slope Angle 43 degrees
Dilution 4 %
Losses 4 %
Ore 2.72 US$/t
Mining Costs
Waste 1.93 US$/t
Ni 57.1 %
Cu 38 %
Co 35.8 %
Pt 52.2 %
Verkhnekingashsky Pd 46.2 %
Au 48.9 %
Royalties
Degrees Reduced to 39
Other Pit Slope Angle 43
in W Direction
Dilution 4 %
Losses 4 %
Ore 2.64 US$/t
Mining Costs
Waste 1.85 US$/t
Ni 62.7 %
Cu 40.6 %
Co 41.2 %
Pt 56.4 %
Kuyovsky Pd 47.9 %
Au 54.6 %
Royalties
Degrees Reduced to 40
Other Pit Slope Angle 42
in W Direction
Dilution 4 %
Losses 4 %
For all three deposits, the variables that can affect revenue were considered. A series of
nested pit shells was generated for each deposit using revenue factors (multiples of the based

case grades) between 0.3 and 2. The results for optimised Whittle pit shells in are illustrated
in Figures 22.1 to 22.3.
A revenue factor of 1 has an optimised pit shell for the Kingashsky deposit, using the metal
prices defined in Table 22.1.
Figure 22.1: Kingashsky Sensitivity to Metal Price

Ton.nes
Revenue Factor
Figure 22.1 shows that the mill feed contained within the pit shell on Kingashsky deposit is
not sensitive to a reduction of metal prices within 60% of the base case prices. As metal
prices drop below this limit, the mill feed contained within the pit decreases due to the
increasing cut-off grades. The stripping ratio is fairly stable for all increments of metal
prices.
Figure 22.2: Verkhnekingashsky Sensitivity to Metal Price
Ton.nes
Revenue Factor
Figure 22.2 shows that the mill feed contained in the pit shell on the Verkhnekingashsky
deposit is sensitive to changes in metal prices. The steeper geometry of the deposit and its
valley-centred location result in a rapid increase in the amount of waste as the revenue factor
increases. The quantity of waste to be mined increases at two sharp inflexion points at
revenue factors 0.68 and 0.82. Between revenue factor 0.82 and revenue factor 1, the mill
feed increase by 15.6% while the waste to be removed increases by 40.9%.
Figure 22.3: Kuyovsky Sensitivity to Metal Price
Ton.nes
Revenue Factor
Figure 22.3 shows that the in-pit resources contained in the Kuyovsky deposit pit shell are
sensitive to changes in metal prices. The quantity of in-pit resources contained within the pit
shell decreases at a relatively constant rate as metal prices drop below the base case prices.
The amount of in-pit resources decreases rapidly at metal prices below 50% of the base case
prices. The stripping ratio is very sensitive to metal prices as the deposit has a fairly steep
geometry. The quantity of waste within the pit shell increases sharply at a revenue factor
0.78. Between revenue factor of 0.78 and revenue factor 1 the in-pit resources increase by
16.2% while the waste to be removed increases by 56.6%.
22.3 PRODUCTION SCHEDULING
A preliminary production schedule for the Kingashsky, Verkhnekingashsky and Kuyovsky

deposits was prepared using MineSched software, using the base case metal prices pit shell
(revenue factor 1).
The production schedules were designed to deliver nominal feed rates of 9 Mt, 5.5 Mt and
3.5 Mt of mill feed per year from the Kingashsky, Verkhnekingashsky and Kuyovsky pits,
respectively, while maintaining a steady strip ratio and maximum mining rate of 125 Mt/a.
Inferred mineral resources that occur within the pit shells were included in the mill feed. A
one-year period of mining will precede the commencement of mineral processing operations.
The first year of mining will yield some 4.7 Mt of mill feed that will be stockpiled at the plant
site.
The processing plant is expected to ramp-up to full production over a two-year period.
During Year 2 of the project (Year 1 of plant production) the plant is planned to process
15.54 Mt or 84% of feed capacity. Plant production in Year 3 is planned to be 17.3 Mt or
93.5% of feed capacity.
The life of the project is 25 years from the commencement of mining. The annual mine
production schedule for each pit is presented in Table 22.3. A combined mine production
schedule is presented in Table 22.4.
Production schedules for the Kuyovsky, Verkhnekingashsky and Kingashsky mines are
presented in Figures 22.4, 22.5 and 22.6, respectively. (Note: “ore” on these figures refers to
mill feed). The combined mine production schedule is shown graphically in Figures 22.7 and
22.8. Mill feed will be derived from both the mines and stockpile in Year 2, the first year of
processing. From Year 3 onward, the mill feed schedule will parallel the mine production
schedule presented in Table 22.3.
22.4 IN PIT RESOURCES
For this PEA, Micon has calculated the potentially mineable resources of the Kingash Project
within the three pit shells and has referred to these as “in-pit resources”, a descriptive term
that is frequently used in this context. These in-pit resources are derived from Whittle-pit
shells with no formal ramp design and are indicative of the potentially mineable portion of
the mineral resources. In-pit resources include 4% dilution at nil grade and are reduced by
4% to account for mining losses.
Whittle pit optimisations were prepared for Measured, Indicated and Inferred mineral
resources in order to assess the potential ultimate size of the pit and to assess the impact that
further definition may have on the mineral reserves of the project. In-pit resources derived
from Measured, Indicated and Inferred mineral resources are presented in Table 22.5.
Intergeo/Kingashskaya’s production plans for the Kingash Project are based upon in-pit
resources derived from Measured, Indicated and Inferred mineral resources. These are not
mineral reserves and do not have demonstrated economic viability. Inferred mineral
resources are considered to be too speculative geologically to have the economic
considerations applied to them that would enable them to be categorised as mineral reserves,
and there is therefore no certainty that the conclusions of the production plans and PEA will
be realised.

Table 22.3: Annual Production Schedules for Kuyovsky, Verkhnekingashsky and Kingashsky
Kuyovsky Verkhnekingashsky Kingashsky

Year
Waste Mill feed Ni Cu Co Pt Pd Au Waste Mill feed Ni Cu Co Pt Pd Au Waste Mill feed Ni Cu Co Pt Pd Au
Tonnage Tonnage (t) (t) (t) (kg) (kg) (kg) Tonnage Tonnage (t) (t) (t) (kg) (kg) (kg) Tonnage Tonnage (t) (t) (t) (kg) (kg) (kg)
1 10,478,750 615,025 3,397 2,115 104 206 186 67 17,727,473 700,070 2,651 1,163 105 171 143 52 9,125,000 3,408,159 10,464 4,593 520 350 283 172
2 10,738,077 2,005,314 11,097 6,982 376 663 627 260 18,141,230 2,506,734 8,334 3,740 368 502 434 178 9,150,000 6,304,823 22,972 9,389 990 1,119 961 443
3 14,473,295 3,499,985 19,616 12,334 634 1,100 1,114 423 21,746,478 5,499,820 20,186 9,449 784 1,433 1,273 474 9,236,256 8,342,418 32,827 13,327 1,312 1,898 1,645 737
4 14,499,989 3,012,838 15,007 9,591 535 824 766 338 21,963,005 5,499,820 20,918 10,344 797 1,812 1,712 546 9,143,842 9,500,196 33,312 11,986 1,492 1,391 1,313 584
5 14,473,067 3,499,985 19,355 12,546 642 1,228 1,183 446 21,670,712 5,499,820 21,547 9,401 786 1,418 1,360 448 9,018,980 9,500,220 34,137 14,085 1,519 1,137 1,044 526
6 14,720,404 3,236,975 16,473 10,628 589 830 774 369 21,875,156 5,514,888 21,508 9,682 816 1,539 1,612 503 9,150,000 9,523,247 34,510 14,307 1,499 1,218 1,142 571
7 14,712,780 3,499,985 19,408 12,041 661 1,165 1,180 450 28,874,949 5,499,820 23,201 10,886 842 1,657 1,860 527 9,095,087 9,500,220 43,021 18,266 1,493 2,563 2,577 1,024
8 14,543,483 3,499,985 19,707 12,668 669 1,072 1,040 421 28,964,818 5,499,820 22,601 10,662 791 1,706 1,836 538 9,125,000 9,219,500 42,974 18,316 1,465 3,049 3,093 1,095
9 14,497,243 3,499,985 20,500 12,492 690 1,197 1,155 515 54,728,794 5,499,820 20,775 10,038 823 1,338 1,435 459 9,098,150 9,500,220 34,473 13,550 1,496 1,396 1,312 606
10 14,651,637 3,509,574 24,625 15,138 744 1,544 1,524 717 55,090,308 5,514,888 23,746 11,602 808 1,976 2,050 623 9,150,000 9,501,403 40,814 17,395 1,544 2,042 2,269 863
11 25,133,273 3,499,985 22,277 12,975 728 1,232 1,204 585 54,609,510 5,499,820 22,042 10,383 808 1,635 1,719 547 9,073,529 9,500,220 40,345 17,450 1,539 2,425 2,677 863
12 25,336,779 3,499,985 21,681 12,561 728 1,228 1,132 553 54,958,798 5,499,820 26,498 12,866 828 2,150 2,408 656 9,062,305 9,500,220 38,169 16,222 1,474 2,089 2,255 860
203
13 40,005,163 3,499,985 19,163 11,157 707 878 780 507 54,252,115 5,499,820 21,303 10,214 816 1,410 1,552 466 9,030,134 9,500,220 39,423 16,464 1,407 2,820 2,842 1,003
14 40,260,000 3,313,846 20,858 12,041 651 1,160 1,090 573 55,125,974 5,514,888 19,280 8,930 805 1,066 1,165 337 9,143,621 9,526,248 41,060 17,725 1,429 3,384 3,769 1,110
15 40,172,425 3,493,553 23,858 13,750 740 1,322 1,240 646 54,751,811 5,499,820 20,451 9,456 800 1,295 1,426 411 9,065,954 9,500,220 36,016 14,010 1,473 1,895 1,973 655
16 41,327,421 3,499,980 19,121 10,984 676 985 867 522 54,311,727 5,499,820 22,025 9,868 849 1,455 1,584 416 9,063,524 9,500,220 33,492 13,390 1,468 1,474 1,457 536
17 42,197,181 2,515,260 10,104 5,841 453 406 354 275 54,924,366 5,499,820 22,996 9,965 850 1,410 1,449 380 9,118,825 9,500,220 39,660 16,482 1,466 2,369 2,771 927
18 41,923,059 3,509,558 18,980 10,556 650 1,214 1,089 518 55,490,819 3,501,114 17,030 7,439 593 963 875 221 9,150,001 9,186,951 42,803 19,287 1,405 4,572 5,047 1,321
19 41,082,522 3,499,985 17,790 9,788 628 1,208 1,028 486 55,393,913 2,209,800 6,327 3,594 336 197 191 98 9,094,319 9,500,220 32,900 15,195 1,616 1,001 996 484
20 41,614,179 3,499,985 16,534 9,005 616 1,061 981 467 54,963,267 5,499523 16,316 8,081 766 701 644 238 9,121,694 9,500,220 36,037 15,346 1,620 1,105 1,103 527
21 41,562,360 3,499,985 18,536 10,577 654 1,269 1,129 563 54,237,567 5,499,820 17,124 8,115 759 782 682 247 9,008,897 9,500,220 35,912 14,987 1,533 1,709 1,954 668
22 11,850,857 3,509,574 17,733 9,269 606 1,226 1,083 532 54,635,325 5,514,888 18,186 8,155 774 900 818 240 9,098,772 9,526,248 32,642 15,131 1,634 757 583 355
23 4,214,700 3,499,985 15,538 9,094 656 760 680 375 29,667,051 5,499,820 20,803 9,980 821 1,139 1,072 296 8,683,002 9,500,220 33,223 14,031 1,486 1,141 1,047 547
Intergeo MMC Ltd
24 1,521,059 3,499,985 15,515 9,418 677 701 666 322 5,887,819 5,499,820 22,794 10,809 806 1,337 1,287 285 2,273,767 9,500,220 33,187 12,911 1,418 1,431 1,364 571
25 154,229 3,499,985 17,862 11,404 780 702 611 342 15,630,218 5,499,820 21,730 10,536 806 1,319 1,372 308 1,856,481 9,500,220 32,979 13,228 1,391 1,639 1,672 612
Total 576,143,932 81,221,287 444,738 264,995 15,597 25,182 23,482 11,273 999,623,203 124,473,913 480,374 225,358 18,337 31,310 31,960 9,495 213,137,140 226,542,493 877,351 367,074 35,689 45,976 47,150 17,660
Table 22.4: Annual Production Schedules for Kuyovsky, Verkhnekingashsky and Kingashsky by Metal
Total Mill Ni Cu Co Pt Pd Au Ni Cu Co Pt Pd Au Total Waste Strip

Year
Feed (t) (%) (%) (%) (g/t) (g/t) (g/t) (t) (t) (t) (kg) (kg) (kg) Tonnage Ratio
1 4,723,254 0.35 0.17 0.015 0.15 0.13 0.06 16,513 7,870 729 727 612 291 37,331,223 7.90
2 10,816,871 0.39 0.19 0.016 0.21 0.19 0.08 42,402 20,111 1,733 2,284 2,021 881 38,029,307 3.52
3 17,342,223 0.42 0.20 0.016 0.26 0.23 0.09 72,630 35,110 2,730 4,431 4,033 1,634 45,456,029 2.62
4 18,012,854 0.38 0.18 0.016 0.22 0.21 0.08 69,237 31,922 2,823 4,027 3,791 1,468 45,606,836 2.53
5 18,500,025 0.41 0.19 0.016 0.20 0.19 0.08 75,039 36,032 2,947 3,783 3,586 1,419 45,162,759 2.44
6 18,275,110 0.40 0.19 0.016 0.20 0.19 0.08 72,491 34,617 2,905 3,587 3,528 1,444 45,745,560 2.50
7 18,500,025 0.46 0.22 0.016 0.29 0.30 0.11 85,631 41,194 2,997 5,385 5,618 2,002 52,682,816 2.85
8 18,219,305 0.47 0.23 0.016 0.32 0.33 0.11 85,282 41,645 2,925 5,827 5,969 2,054 52,633,301 2.89
9 18,500,025 0.41 0.20 0.016 0.21 0.21 0.09 75,748 36,080 3,008 3,931 3,901 1,580 78,324,187 4.23
10 18,525,865 0.48 0.24 0.017 0.30 0.32 0.12 89,184 44,134 3,095 5,562 5,843 2,204 78,891,945 4.26
11 18,500,025 0.46 0.22 0.017 0.29 0.30 0.11 84,665 40,808 3,076 5,292 5,601 1,995 88,816,312 4.80
12 18,500,025 0.47 0.23 0.016 0.30 0.31 0.11 86,349 41,648 3,031 5,467 5,794 2,068 89,357,882 4.83
204
13 18,500,025 0.43 0.20 0.016 0.28 0.28 0.11 79,889 37,835 2,931 5,107 5,175 1,975 103,287,412 5.58
14 18,354,982 0.44 0.21 0.016 0.31 0.33 0.11 81,198 38,696 2,885 5,611 6,024 2,021 104,529,595 5.69
15 18,493,593 0.43 0.20 0.016 0.24 0.25 0.09 80,325 37,216 3,012 4,512 4,639 1,713 103,990,190 5.62
16 18,500,020 0.40 0.19 0.016 0.21 0.21 0.08 74,638 34,243 2,993 3,913 3,908 1,474 104,702,672 5.66
17 17,515,300 0.42 0.18 0.016 0.24 0.26 0.09 72,761 32,287 2,770 4,185 4,573 1,582 106,240,372 6.07
18 16,197,623 0.49 0.23 0.016 0.42 0.43 0.13 78,814 37,283 2,648 6,749 7,012 2,060 106,563,879 6.58
19 15,210,005 0.37 0.19 0.017 0.16 0.15 0.07 57,016 28,577 2,580 2,406 2,215 1,068 105,570,754 6.94
20 18,499,728 0.37 0.18 0.016 0.15 0.15 0.07 68,887 32,432 3,001 2,867 2,728 1,232 105,699,140 5.71
21 18,500,025 0.39 0.18 0.016 0.20 0.20 0.08 71,571 33,679 2,946 3,760 3,765 1,478 104,808,824 5.67
22 18,550,710 0.37 0.18 0.016 0.16 0.13 0.06 68,561 32,555 3,015 2,883 2,484 1,127 75,584,954 4.07
Intergeo MMC Ltd
23 18,500,025 0.38 0.18 0.016 0.16 0.15 0.07 69,564 33,105 2,963 3,040 2,800 1,218 42,564,753 2.30
24 18,500,025 0.39 0.18 0.016 0.19 0.18 0.06 71,495 33,138 2,902 3,470 3,316 1,179 9,682,645 0.52
25 18,500,025 0.39 0.19 0.016 0.20 0.20 0.07 72,571 35,168 2,977 3,660 3,655 1,262 17,640,928 0.95
Total 432,237,693 0.42 0.20 0.016 0.24 0.24 0.09 1,802,463 857,387 69,623 102,468 102,592 38,428 1,788,904,275 4.14
Figure 22.4: Production Schedule for Kuyovsky Pit
205
Intergeo MMC Ltd
“Ore” refers to mill feed.

Figure 22.5: Production Schedule for Verkhnekingashsky Pit
206
Intergeo MMC Ltd

Figure 22.6: Production Schedule for Kingashsky Pit
207
Intergeo MMC Ltd

Figure 22.7: Kingash Operation Combined Production Schedule
208
Intergeo MMC Ltd

Figure 22.8: Kingash Operation Combined Production Schedule
209
Intergeo MMC Ltd

Table 22.5: Kingash In-Pit Resources derived from Measured + Indicated + Inferred Mineral Resources
Source Mill Feed Ni Cu Co Pt Pd Au Ni Cu Co Pt Pt Pd Pd Au Au

Deposit
Category (kt) (%) (%) (%) (g/t) (g/t) (g/t) (kt) (kt) (kt) (t) koz (t) koz (t) koz
Measured 102,775 0.42 0.18 0.015 0.28 0.31 0.10 432 185 15 29 937 32 1019 11 341
Indicated 130,770 0.33 0.13 0.015 0.12 0.11 0.05 431 176 20 16 512 14 463 7 217
Kingashsky
Total 233,545 0.37 0.15 0.015 0.19 0.20 0.07 863 361 35 45 1,449 46 1,482 18 558
Inferred 84,752 0.28 0.10 0.015 0.10 0.08 0.04 239 82 13 9 277 7 214 4 117
Measured 69,000 0.38 0.18 0.014 0.27 0.28 0.09 262 123 10 19 603 19 624 6 198
Indicated 106,353 0.36 0.17 0.014 0.20 0.19 0.06 385 181 15 21 670 20 648 6 204
Verkhnekingashsky
Total 175,353 0.37 0.17 0.014 0.23 0.23 0.07 647 304 25 40 1,273 39 972 12 402
Inferred 12,257 0.29 0.14 0.014 0.15 0.16 0.04 36 17 2 2 60 2 61 0 15
Measured 51,388 0.53 0.32 0.018 0.29 0.27 0.13 274 166 9 15 478 14 454 7 219
Kuyovsky Indicated 32,046 0.51 0.29 0.018 0.30 0.27 0.13 162 93 6 10 311 9 281 4 134
Total 83,433 0.52 0.31 0.018 0.29 0.27 0.13 436 260 15 25 788 23 735 11 354
Measured 223,163 0.43 0.21 0.016 0.28 0.29 0.11 967 475 35 63 2,018 65 2,098 24 759
210
Indicated 269,168 0.36 0.17 0.015 0.17 0.16 0.06 978 450 41 46 1,492 43 1,392 17 555
Total Project
Total 492,331 0.39 0.19 0.015 0.22 0.22 0.08 1,945 925 76 109 3,510 108 3,490 41 1,314
Inferred 97,009 0.28 0.10 0.015 0.11 0.09 0.04 275 98 14 10 337 9 275 4 132
Intergeo MMC Ltd
The NPV and IRR of the Kingash Project net cash flow have been determined after profit tax
and on a 100% equity basis. The cash flow is in constant United States dollars (US$) (i.e. not
inflated), with costs in RUB as at 4th Quarter 2011, an exchange rate of 30 RUB to the US$,
and discounted at a real rate of 8%. Although sufficient in-pit resources are present to sustain
production for approximately 29 years, the project cash flow model was limited to 25 years of
mining production and 24 years of mineral processing and metal production.
The revenue and operating and capital cost inputs to the financial model are based on the
production schedule, technical and operating criteria and cost estimates developed in this
PEA.
The base case LOM project production and financial highlights are summarised in Table 22.6
and Table 22.7, respectively.
Table 22.6: Base Case Life of Mine Production Highlights
Criterion Value
Production Life (years) 25
Waste (Mt) 1,788.9
Mill feed (Mt) 432.2
Stripping Ratio (including Pre-Strip) 4.1
Mill feed Grade (% Ni) 0.42
Mill feed Grade (% Cu) 0.20
Mill feed Grade (% Co 0.02
Mill feed Grade (g/t Pd) 0.24
Mill feed Grade (g/t Pt) 0.24
Mill feed Grade (g/t Au) 0.09
Flotation Concentrate Produced (kt) 10,999.8
Flotation Concentrate Contained Ni (kt) 1,129.7
Flotation Concentrate Contained Cu (kt) 441.8
Flotation Concentrate Contained Co (kt) 37.5
Flotation Concentrate Contained Pt (t) 56.7
Flotation Concentrate Contained Pd (t) 65.2
Flotation Concentrate Contained Au (t) 21.8
Matte Produced (kt) 1,903.9
Matte Contained Ni (kt) 1,093.1
Matte Contained Cu (kt) 431.9
Matte Contained Co (kt) 36.7
Matte Contained Pt (t) 64.4
Matte Contained Pd (t) 56.0
Matte Contained Au (t) 21.5
Ni Metal Sold (kt) 1,033.9
Cu Metal Sold (kt) 422.9
Co Sold (kt) 26.7
Pt Sold (t) 52.8
Pd Sold (t) 45.9
Au Sold (t) 17.6
Ni Equivalent Metal Sold (Mlb) 3,0801
1
Nickel equivalent metal is calculated from all metals sold and the
metal prices shown in Table 22.8.

Criteria Value
IRR (%) 13.4
1
The NPV of the projected cash flow for the Kingash Project, discounted at a rate of 8% per
year is US$1,392.6 million and the IRR is 13.4%. The capital payback period is projected to
be 7.21 years. The average estimated cash cost is US$2.32 per pound. The Kingash PEA is
preliminary in nature and includes Inferred mineral resources. There is no certainty that the
results of the PEA will be realised.
Intergeo/Kingashskaya’s production plans for the Kingash Project are based upon in-pit
resources derived from Measured, Indicated and Inferred mineral resources. These are not
mineral reserves and do not have demonstrated economic viability. Inferred mineral
resources are considered to be too speculative geologically to have the economic
considerations applied to them that would enable them to be categorised as mineral reserves,
and there is therefore no certainty that the conclusions of the production plans and PEA will
be realised.
The base case cumulative net cash flow after profit tax and before financing is presented in
Figure 22.9.

Figure 22.9: Base Case Cumulative Net Cash Flow
22.6 REVENUE
The base case gross revenue is calculated using the metal prices presented in Table 22.8.
Table 22.8: Base Case Metal and Product Prices
Metal/Product Price
Nickel (US$/lb) 9.50
Copper (US$/lb) 2.75
Cobalt (US$/lb) 16.00
Palladium (US$/oz) 500
Platinum (US$/oz) 1,600
Gold (US$/oz) 1,100
Silver (US$/oz) 16
Rhodium (US$/oz) 1,875
Ruthenium (US$/oz) 175
Iridium (US$/oz) 1,050
Sulphuric acid (US$/t) 40
Sodium sulphate (US$/t) 85
Net revenue is calculated using transport costs for concentrate, base metal and PGM refinery
recoveries and costs from the scoping study work, and sales costs of 1.5% for nickel and
copper. Cobalt and PGM revenues are reduced by 20% and 30%, depending on the recovery
process. The overall net smelter return (net revenue/value of metal contained in concentrate)
is 89.7%.
Capital and operating costs are discussed in Section 21 of this Report.
22.8 TAXATION
Profit tax is calculated at 20% of cash income after deduction for asset depreciation.
Straight-line depreciation of capital costs over 12 years is used.
A VAT rate of 18% is used for calculation of initial capital and change in working capital.
The Kingash operation will be primarily a base metal producer. Russian metal production
royalties are based on 8% of mine operating costs plus mine capital depreciation.
Property tax is calculated as 2.2% of net book value of assets.
22.9 SENSITIVITY ANALYSIS
The sensitivities of NPV and IRR to variations in nickel price and to variations in net
revenue, total operating cost and total capital cost are summarised in Table 22.9 and
Table 22.10, respectively and in Figures 22.10, 22.11 and 22.12.
Table 22.9: NPV and IRR Sensitivity to Nickel Price
Ni Price NPV IRR

(US$/lb) (US$M) (%)
6.65 -51.58 7.9
7.60 414.80 9.9
8.55 964.92 11.9
9.50 (Base Case) 1,392.56 13.4
10.45 1,942.67 15.2
11.40 2,492.79 16.9
12.35 3,042.91 18.5
Table 22.10: NPV and IRR Sensitivity to Revenue, Operating Cost and Capital Cost
Variable Revenue Operating Cost Capital Cost

Variance NPV IRR NPV IRR NPV IRR
(%) (US$ M) (%) (US$ M) (%) (US$ M) (%)
70 -878.10 3.8 2,571.73 17.4 2,286.96 19.5
80 -121.22 7.6 2,178.67 16.1 1,988.82 17.1
90 635.67 10.7 1,785.61 14.8 1,690.69 15.1
100 (Base Case) 1,392.56 13.4 1,392.56 13.4 1,392.56 13.4
110 2,149.44 15.9 999.50 12.0 1,094.42 12.0
120 2,906.33 18.1 606.44 10.6 796.29 10.8
130 3,663.22 20.3 213.38 9.0 498.16 9.7

Figure 22.10: NPV and IRR Sensitivity to Nickel Price
Figure 22.11: NPV Sensitivity to Revenue, Operating Cost and Capital Cost
Figure 22.12: IRR Sensitivity to Revenue, Operating Cost and Capital Cost
As would be expected, at the base case metal prices the NPV and IRR are particularly
sensitive to variations in net revenue. They are less sensitive to a range of variance of the
operating and capital costs, up to the accuracy of estimation, although the capital cost
variance is greater than would usually be expected.
Similarly, the project economics are more sensitive to variations in nickel price, as the major
contributor to revenue.
22.10 RISK
A large portion of the mineral processing and metallurgical work completed on the Kingash
Project is based upon the following reports:
• Kingashskaya mining company LLC Kingash Scoping Study Project Report produced
by Hatch dated 23rd November 2011.
• The Scoping Study prepared by Hatch, based on the basic engineering content of the
following studies:
• Kingashsky Project TEO of Permanent Conditions, Gipronikel, 2008; and,

• Verkhnekingashsky Project TEO of Permanent Conditions, Gipronikel, 2009.
These feasibility studies examined the main options for exploiting the Kingashsky,
Verkhnekingashsky and Kuyovsky deposits and included mining method and sequence,
development methods, and the ore processing and metallurgical process.
The Hatch analysis focused on developing the Gipronikel recommendations by taking the
engineering conclusions on deposit resources, stripping, extraction, ore processing, smelting
and refining and modifying them to achieve a production rate of 18.5 Mt/a of ore.
A total of eight potential flow sheets were assessed by Hatch but in Micon’s economic
analysis only the Hatch Scenario 3 was considered.
When considering the economic analysis presented herein, the accuracy level (±50%) for
both capital and operating costs should be taken into account. Variations towards the upper
or lower accuracy limit will have a significant effect on the projected NPV and IRR.
Two of the process options assessed incorporate technology that has only been proven at
laboratory level. The removal of these from the prospective options is seen as prudent.
As no one process option stands out above the rest, hasty or inflexible decisions based on the
current scoping study are seen as a major risk at this stage of the project’s development. To
completely mitigate this risk the planned preliminary feasibility study should be scoped to
encompass a further review and evaluation of the more attractive options before a preferred
process route is adopted and developed to a feasibility study level of accuracy.
Table 22.11 presents a qualitative risk matrix for the Kingash Project.
Table 22.11: Risks Identified with the Project at This Stage of Development
Risk
Risk Risk Effect
Probability
Security of Licences High Unknown
Envisaged Permitting Problems High Low
Resources High Low
Resources/Mining High Low
Adverse Metallurgical Test-Work Results High Low
Adverse Pilot Plant Studies High Unknown
Processing Beneficiation Plant High Low
Processing Metallurgical Plant High Medium
Process Equipment Operational Availability (92%) High Low
Power Supply Security High Unknown
Natural Phenomena e.g. Earthquake High Low
Infrastructure Medium Medium
Implementation Medium Medium
Personnel and Local Skills Shortage High Unknown
Logistics Medium Low
Environmental and Social Issues Medium Low
Commercial / Markets High Low
Capital Cost High Unknown
Operating Cost High Unknown
Economics / Finances High Unknown
Country Risk ( Financing Programme ) Medium Medium

At this stage of the project development, none of the identified risks is deemed to be a fatal
flaw to advancement of the project and all are considered to be commensurate with a project
in the early stages of development.
As further study work is completed it is anticipated a significant reduction in the level of the
identified risk will be achieved.

23.0 ADJACENT PROPERTIES
The area surrounding the Kingashsky, Verkhnekingashsky and Kuyovsky deposits has
limited exploration and mining history because of the mountainous terrain and lack of
infrastructure in the area. The only mines situated in proximity to the Kingash Project are the
former placer gold operations at the Karaganskoe and Tukshinskoe mines.

24.0 OTHER RELEVANT DATA AND INFORMATION
24.1 PROJECT IMPLEMENTATION PLAN
24.1.1 Project Execution and Project Objectives
Traditional project execution strategies include:
• EPC (Engineering, Procurement, and Construction);

• EPCM (Engineering. Procurement, and Construction Management);
• LSTK (Lump Sum Turnkey); and,
• Design/Build/Own and Operate.
A single EPCM contractor supported by the Owner’s team has been considered as the
preferred option for project delivery as it provides the greatest degree of control for a project
of this scale and complexity.
The project implementation plan provides the summary basis for the implementation of the
Kingash mining and metallurgical complex by defining the execution strategy, methodology,
systems, tools and personnel to be used by an EPCM contractor to deliver the project in
accordance with the Owner’s goals and expectations and the EPCM contract.
The schedule delivered at completion of this PEA phase provides an initial basis for the final
project schedule.
The schedule broadly defines the preliminary construction durations and sequences, long lead
items, major contracts and detailed engineering durations and sequences. The schedule does
not include any schedule risk mitigation measures or contingency, other than foreseeable
risks such as discipline productivity factors and weather impacts. Key milestones of the
preliminary implementation schedule are included in Table 24.1.

Table 24.1: Key Milestones
Milestone Date
Pre-Feasibility Study Started (PFS – FEL2) Year - 4

Report – Integrated Site Evaluation Year - 4
Feasibility Study Started (FS – FEL3) Year - 4
Feasibility Study Completed Year - 3
TEO Approval Year - 3
Detailed Design Started Year - 3
Kingash River Diversion Year - 3
Start of Construction - Mining Year - 3
Start of Construction Concentrator and Metallurgical Plant Year - 2
Start of BMR Construction Year - 1
Detailed Design Completed Year - 1
Start of Ore Production Year 1
Start of Concentrator Year 2
Start-Up of Smelter Year 2
Start-Up of Base Metal Refinery Year 2
Mining and Metallurgical Complex Ramp-Up to full production capacity Year 5
The project critical path is driven by:
• Preparation and compiling of report on integrated site evaluation at pre-feasibility

stage;
• Preparation of basic engineering design (project documentation) and its expert review
and approval;
• Early works prior to EPCM contract award (constructor mobilisation);
• Detail design and critical works contract award;
• Site preparation, construction infrastructure, overburden stripping, construction of
water storage reservoir and tailing management facilities;
• Construction of concentrator;
• Start of pit operation; and,
• Preliminary testing, start-up of the concentrator and ramp-up to design capacity.
Construction and delivery of the metallurgical complex including smelter and base metals
refinery are scheduled accounting for the requirements to commissioning of facilities and
form the additional critical path. The critical elements include:
• Site preparation and foundations;

• Steel structures and cladding installation;
• Concrete works inside buildings and major equipment installation;
• Mechanical equipment installation, including piping, cables and instrumentation;

• Start-up and pre-operational testing of the smelter, followed by the base metals
refinery; and,
• Performance tests and ramp-up to design production capacity.
Stockpiling of mill feed will be necessary since ore will be mined before the beneficiation
plant starts operation. The mill feed stockpile will be used during hot commissioning and
during process plant ramp up. It is anticipated that by Year 5 the stockpile will be depleted
and both mine and process plant will be at full production.

25.0 INTERPRETATION AND CONCLUSIONS
25.1 GENERAL
Micon’s PEA has developed a robust mineral resource model for development of the
Kingashsky, Verkhnekingashsky and Kuyovsky deposits. The mineral resources summarised
in Table 25.1 demonstrate that the Kingashsky, Verkhnekingashsky and Kuyovsky deposits
represent very significant future sources of Ni, Cu, Co, PGM and Au.
Mineral resources that are not reserves do not have demonstrated economic viability. There
are no mineral reserves on the Kingashsky, Verkhnekingashsky and Kuyovsky deposits. The
author is not aware of any specific issues with regard to the environment, permitting, legal,
title, taxation, socio-political, marketing or other relevant issues that would materially affect
the estimate of mineral resources.
The results of the base case economic analysis for this PEA are shown in Table 25.2.
The NPV of the projected cash flow for the Kingash Project, discounted at a rate of 8% per
year is US$1,392.6 million and the IRR is 13.4%. The capital payback period is projected to
be 7.21 years.
The PEA is preliminary in nature. It includes inferred mineral resources that are considered
too speculative geologically to have the economic parameters applied to them that would
enable them to be categorised as mineral reserves, and there is no certainty that the results of
the PEA will be realised.
Additional work is required to further develop the mineral resources of these deposits,
particularly with respect to technical parameters related to metallurgical recoveries and
deleterious elements that may affect the marketability of the concentrates and detailings
related to mining capital and operating costs. Platinum group metals and gold potentially
represent about 20% of the revenue from the operation and further work is required to
confirm recoveries from mill feed to marketable products.
More detailed geotechnical work is required in order to optimise pit slope designs.
Detailed mine planning is required to optimise the sequence of mine development and rate of
mining for each of the three mines. It is likely that it will prove more economical to develop
two mines initially, realising a savings in mine capital. A more detailed analysis of mill feed
and waste haulage is required to definitively establish the mine mobile fleet requirements and
to assess the merits of conventional truck haulage of mill feed to the beneficiation plant
versus crushing the mill feed at the crest of the pit and conveying the crushed material to the
concentrator.
Further engineering studies are required to refine operating methods and consequent capital
and operating costs. Hatch prepared a preliminary analysis of eight scenarios that varied in
metal recovery and capital and operating cost. Some of the more attractive options were
based on unproven technology but these technologies offer upside potential for the project.

Table 25.1: Kuyovsky, Verkhnekingashsky and Kingashsky Mineral Resources
as at 1st December 2011
Grade Metal
Tonnage
Deposit Category
(Mt) Ni Cu Co Pt Pd Au Ni Cu Co Pt Pt Pd Pd Au Au
(%) (%) (%) (g/t) (g/t) (g/t) (kt) (kt) (kt) (t) (koz) (t) (koz) (t) (koz)
Measured 50.99 0.56 0.34 0.019 0.30 0.29 0.14 285 173 10 15 495 15 472 7 229
Kuyovsky
Indicated 40.08 0.51 0.29 0.019 0.28 0.26 0.12 204 117 8 11 365 10 329 5 159
Measured 66.15 0.40 0.19 0.015 0.29 0.30 0.09 267 126 10 19 615 20 638 6 200
Verkhnekingashsky Indicated 106.86 0.39 0.18 0.015 0.21 0.20 0.06 415 194 16 22 715 22 694 7 220
Inferred 17.61 0.34 0.16 0.014 0.20 0.21 0.06 60 28 2 4 116 4 117 1 33
Measured 100.92 0.44 0.19 0.016 0.30 0.33 0.11 447 192 16 30 970 33 1,054 11 354
Kingashsky Indicated 126.59 0.35 0.14 0.016 0.13 0.12 0.06 443 181 20 16 529 15 480 7 224
Inferred 83.69 0.30 0.10 0.015 0.11 0.08 0.05 250 87 13 9 285 7 221 4 121
Measured 218.05 0.46 0.23 0.016 0.30 0.31 0.11 999 491 36 65 2,080 67 2,165 24 783
224
Indicated 273.53 0.39 0.18 0.016 0.18 0.17 0.07 1,061 493 44 50 1,608 47 1,503 19 602
Kingash Project
Meas + Ind 491.59 0.42 0.20 0.016 0.23 0.23 0.09 2,060 984 80 115 3,688 114 3,667 43 1,385
Inferred 101.30 0.31 0.11 0.015 0.12 0.10 0.05 310 115 15 12 401 10 337 5 154
Notes:
1. Mineral resources were classified following the guidelines and using the definitions of CIM.
3. Measured mineral resources were defined by diamond core drilling on a grid of 50 m by 50 m.
Indicated mineral resources were defined by diamond core drilling on a grid of 100 m by 100 m.
Inferred mineral resources were defined within the 0.2% Ni mineralised envelope but beyond the limits of the 100 m by100 m definition diamond core drilling grid. The nominal spacing for Inferred mineral
resources is 200 m by 200 m.
4. Bulk densities of 2.94 t/m3 for Kuyovsky, 2.90 t/m3 for Verkhnekingashsky and 2.83 t/m3 for Kingashsky were used to calculate mineral resources.
Intergeo MMC Ltd
Criteria Value
IRR (%) 13.4
1
Based on the selected technologies, Hatch investigated a number of scenarios (various

combinations of options) for beneficiation, smelting, converting, off-gas handling and base
metal refining. The base case scenario selected for the PEA was Scenario 3.
25.2 SCENARIO 5 (VALLERIITE SULPHIDISATION FLOW SHEET)
In order to verify the valleriite sulphidisation flow sheet additional flotation testwork is
required to ensure that the metal recoveries projected are achievable. Conceptual studies
indicate that this work is warranted, since the sulphidisation flow sheet has the potential to
materially improve project economics.
Micon investigated Hatch’s Scenario 5 to assess its upside potential. The valleriite
sulphidisation process, used in Scenario 5, has the potential to yield an improved concentrate
grade (10.95% versus 10.27% Ni) and this, combined with improved recoveries, would lead
to lower unit costs. The most significant advantages of Scenario 5 over Scenario 3 are
improved copper, nickel and cobalt recovery, improved nickel concentrate grade with
consequent improved copper and cobalt grade, and higher sodium sulphate recovery. Due to
higher revenue from nickel, copper and cobalt, Scenario 5 demonstrates a potential
improvement in NPV of 26.8%. A comparison between Scenario 3 and Scenario 5 is
provided in Table 25.3.

Table 25.3: Production and Financial Highlights for Scenarios 3 and 5
Variance
Element Scenario 3 Scenario 5
(%)
Ore Processed (kt) 432,238 432,238 0.0
Ni Sold (kt) 1,033.9 1,102.4 6.6
Cu Sold (kt) 422.9 483.8 14.4
Co in Concentrate Sold (kt) 26.7 28.4 6.4
Pt Sold (t) 52.8 52.8 0.0
Pd Sold (t) 45.9 45.9 0.0
Au Sold (t) 17.6 17.6 0.0
Ag Sold (t) 9.1 9.1 0.0
Rh Sold (t) 0.4 0.4 0.0
Ru Sold (t) 1.5 1.5 0.0
Ir Sold (t) 0.2 0.2 0.0
Net Revenue (US$’000) 29,323.9 31,175.9 6.3
Total Operating Cost, incl Royalty (US$’000) 14,592.3 15,004.6 2.8
Net Cash Income (US$’000) 12,864.6 14,013.3 8.9
Initial Capital Cost incl VAT (US$’000) 3,230.7 3,221.7 -0.3
LOM Capital Cost (US$’000) 4,054.1 4,043.3 -0.3
Total Net Cash Flow (US$’000) 8,810.5 9,970.0 13.2
Net Present Value 8% (US$’000) 1,392.6 1,765.8 26.8
Internal Rate of Return 13.4 14.7 9.2
Initial Capital Payback (years) 7.2 6.8 -5.6
It is emphasised that there is only limited industrial application of the valleriite sulphidisation
process and that there is no known operating plant presently using this process. The technical
and financial results for Scenario 5, as summarised in Table 25.3, must be regarded as
conceptual in nature, pending the results of further testwork.
25.3 RISK FACTORS
Factors that may affect the reliability of the mineral resource estimates contained in this PEA
include, but are not limited to, natural variance in sampling and analysing geological
materials, and natural variances in manipulating the sample data to produce a resource
estimate. Similar errors may also occur in surveying and in incorporating historical location
surveys with more modern surveys. Location of samples may therefore be subject to
variances similar in nature to those experienced by analytical results. The geostatistical
methods employed are designed to quantify and minimise errors in estimation, but are not
able to eliminate the natural statistical variance in the estimates.
There is a risk that the technical and economic parameters developed for the PEA will be
found to be inappropriate upon further engineering study and that the financial projections
will prove to be inaccurate. There is also the possibility that the exploration efforts will not
be successful in upgrading the Inferred mineral resources to the Indicated category. This
could impact negatively on the production plan as reflected in the cash flow.
Micon is not aware of any impediment to the application or approval of any further permits
required to complete the proposed Kingash Project development programme. However, it is

conceivable that various issues may arise, and will need to be addressed, during the
regulatory phase of its permitting activities. If at any time in the future permits essential to
operations are not obtained, or not obtained in a timely manner, there is a risk that the
Kingash Project may not be able to operate successfully.

26.0 RECOMMENDATIONS
Micon recommends the following work to advance the Kingash Project:
1. Review of the assay quality control protocol. The benefit of the use of standard certified
reference materials is widely recognised. Standard samples for all economically
significant elements should be submitted with each initial batch of drill core sample
pulps. Since standard samples were not submitted with the original core samples a
programme of re-assay, including standard samples should be conducted to validate the
assay database. The scale of the programme should encompass approximately 100 Mt
of mineral resources that represents the “first five years” of a conceptual mine plan
derived from the open pit optimisation study recommended in point three below.
2. Geotechnical studies are required to optimise pit slope designs. Local hydrological
conditions need to be assessed in order to understand the impact of water on the pit
slope design.
3. Open pit optimisation studies are recommended to identify the most economical
development sequence for the project. The principal question is whether two or three
mines should be developed at the onset of production. The Phase 1 pits should contain a
combined total of approximately 100 Mt of ore. The Phase 1 pits will identify portions
of the deposits that should be the focus of detailed definition drilling. Approximately
five to ten years of production should be drilled in detail in advance of the
commencement of commercial mineral processing operations.
4. Additional metallurgical testwork is required to refine metallurgical recoveries and

optimise the recovery method. Further definition of PGM concentrates and treatment is
required to fully investigate operating costs and metallurgical recoveries.
5. A preliminary feasibility study is recommended to further consider the various options

identified by Hatch and to prioritise the most economical and most feasible development
scenarios.
6. Addition diamond drilling is recommended to upgrade Inferred mineral resources to the

Indicated category so that these can be used to develop Probable mineral reserves. The
total amount of drilling proposed is (see Figures 26.1 and 26.2):
Kingashsky 14,400 m in 36 holes;

Verkhnekingashsky 2,400 m in 6 holes.
It should be noted that this is an indicative programme that will be adapted and adjusted
in light of results obtained as drilling progresses.

Figure 26.1: Proposed Drilling Kingashsky
Total number of proposed holes: 36.

Total amount of drilling proposed:
14,400 m.
Average depth of hole: 400 m.
Note: Existing holes in magenta, proposed holes in yellow.

Grid lines oriented north-south.
Figure 26.2: Proposed Drilling Verkhnekingashsky
Total number of proposed holes: 6.

Total amount of drilling proposed:
2,400 m.
Average depth of hole: 400 m.
Note: Existing holes in magenta, proposed holes in yellow.
Gride lines oriented north-south.
The budget for the work items recommended above is shown as Phase 1 in Table 26.1.
Table 26.1: Proposed Budget for Work in 2012 Through 2014
Phase 1 Phase 2
Total
Activity 2012-2013 Post 2013
US$ Million US$ Million US$ Million
Field Studies, Engineering Surveys (incl. Geotechnical Work, Data
14.54 14.54
Collection, Permitting)
Metallurgical Sample Collection 1.06 1.06
Metallurgical Testwork, Pilot Plant Tests (Ore Preparation,
2.50 2.50
Beneficiation)
Metallurgical Testwork, Pilot Plant Tests (Smelting, Base Metals
2.13 2.13
Refinery)
Development of Basic Engineering 19.00 19.00
Development Drilling (incl. Assay QC) 5.09 5.09
Preliminary Feasibility Study (incl. Optimisation Studies) 6.00 6.00
Feasibility Study 40.00 40.00
Total 31.32 59.00 90.32
Contingent on the successful outcome of Phase 1, work in Phase 2 will be directed towards
preparation of a feasibility study for the Kingash Project. This will include $19 million to be
spent on basic engineering studies required in Russia to support permitting requirements.
Micon has reviewed the proposed budget and recommends that it is implemented by
Intergeo/Kingashskaya.

27.0 REFERENCES
1. Sazonov A.M., Gertner I.F., Zvyagina E.A., Tishin P.A., Poleva T.V., Leontyev S.I,
Kolmakov Y.V. and Krasnova T.S. Ore-forming Сonditions of the Blagodat Gold
Deposit in the Riphean Metamorphic Rocks of the Yenisey Ridge According to
Geochemical and Isotopic Data. Journal of Siberian Federal University. Engineering
& Technologies 2 (2009), Pages 203 to 220.
2. Turkina O.M., Nozhkin A.D., Bayanova T.B., Dmitrieva N.V., and Travin A.V.
Precambrian Terranes in the Southwestern Framing of the Siberian Craton: Isotopic
Provinces, Stages of Crustal Evolution and Accretion-Collision Events. Russian
Geology and Geophysics 48 (2007), Pages 61 to 70.
3. Verkhnekingashsky Project TEO of Temporary Conditions, 2008.
4. Verkhnekingashsky Project Reserve Calculations, 2008.
5. Verkhnekingashsky Project TEO of Permanent Conditions, Gipronikel, 2009.
6. Verkhnekingashsky Project Reserve Calculations, 2010.
7. Kingashsky Project TEO of Permanent Conditions, Gipronikel, 2008.
8. Kingashsky Project Reserve Calculations, 2010.
9. Kingash Scoping Study Project Report, Hatch, 24 November 2011.
10. Scoping Report, Kingash and Upper-Kingash Deposits Ore Mining and Processing
Production Complex, ERM, August 2011.
11. Kingashsky Project TEO of Permanent Conditions, Gipronikel, 2008;
12. Verkhnekingashsky Project TEO of Permanent Conditions, Gipronikel, 2009,
13. Environmental Monitoring Programme Kingash Ore Field”, LLC Eco-supervisor
Krasnoyarsk, 2008.
14. H338887 Kingash Concept Study FEL1, Hatch, December, 2011.

28.0 GLOSSARY AND ABBREVIATIONS
28.1 MINERAL RESOURCES AND RESERVES DEFININTIONS
28.1.1 Mineral Resources
The Kingash Project mineral resources have been classified according to the “CIM Standards
for Mineral Resources and Reserves: Definitions and Guidelines” (27th November 2010). In
adherence with the standards provided, the Kingash mineral resources have been classified as
Measured, Indicated or Inferred.
A Mineral Resource is a concentration or occurrence of diamonds, natural solid inorganic

material, or natural solid fossilised organic material including base and precious metals, coal,
and industrial minerals in or on the Earth’s crust in such form and quantity and of such a
grade or quality that it has reasonable prospects for economic extraction. The location,
quantity, grade, geological characteristics and continuity of a Mineral Resource are known,
estimated or interpreted from specific geological evidence and knowledge.
An ‘Inferred Mineral Resource’ is that part of a Mineral Resource for which quantity and
grade or quality can be estimated on the basis of geological evidence and limited sampling
and reasonably assumed, but not verified, geological and grade continuity. The estimate is
based on limited information and sampling gathered through appropriate techniques from
locations such as outcrops, trenches, pits, workings and drill holes.
An ‘Indicated Mineral Resource’ is that part of a Mineral Resource for which quantity, grade
or quality, densities, shape and physical characteristics can be estimated with a level of
confidence sufficient to allow the appropriate application of technical and economic
parameters, to support mine planning and evaluation of the economic viability of the deposit.
The estimate is based on detailed and reliable exploration and testing information gathered
through appropriate techniques from locations such as outcrops, trenches, pits, workings and
drill holes that are spaced closely enough for geological and grade continuity to be reasonably
assumed.
A ‘Measured Mineral Resource’ is that part of a Mineral Resource for which quantity, grade
or quality, densities, shape, physical characteristics are so well established that they can be
estimated with confidence sufficient to allow the appropriate application of technical and
economic parameters, to support production planning and evaluation of the economic
viability of the deposit. The estimate is based on detailed and reliable exploration, sampling
and testing information gathered through appropriate techniques from locations such as
outcrops, trenches, pits, workings and drill holes that are spaced closely enough to confirm
both geological and grade continuity.
28.1.2 Mineral Reserves
A Mineral Reserve is the economically mineable part of a Measured or Indicated Mineral

Resource demonstrated by at least a Preliminary Feasibility Study. The study must include
adequate information on mining, processing, metallurgical, economical and other relevant
factors that demonstrate, at the time of reporting, that economic extraction can be justified. A
Mineral Reserve includes diluting materials and allowances for losses that may occur when
the material is mined.

28.2 COMPANIES AND INDIVIDUALS CITED IN REPORT
AeroQuest Ltd: Aeroquest Airborne Ltd collects and interprets data that reveals what is at
and beneath the earth’s surface.
CIM: Canadian Institute of Mining, Metallurgy and Petroleum.
Gipronikel: Gipronikel Institute is a metallurgic research, development and design institute

in the Russian Federation.
Hatch Africa (Pty): Hatch supplies engineering, project and construction management
services, process and business consulting and operational services to the mining,
metallurgical, energy and infrastructure industries. Hatch Africa (Pty) is the subsidiary
engaged to conduct the Kingash scoping study.
Intergeo MMC Ltd: Intergeo is a diversified mineral resource company primarily focused
on developing, exploring and acquiring base metal properties in Russia. Intergeo holds its
interest in the Kingash project through its subsidiary Kingashskaya Mining Company LLC.
Kingashskaya Mining Company LLC: Kingashskaya mining company Limited Liability

Company engages in mining of ores and precious metals sands which includes gold, silver,
and platinum metal sands. The company was founded in 2006 and is based in Krasnoyarsk,
Russian Federation.
Micon: Micon International Limited has provided consulting services to the international
mining industry since 1988, with particular focus upon mineral resource estimations,
metallurgical services, mine design and production scheduling, preparation of pre-feasibility
and feasibility studies, independent reviews of mining and mineral properties, project
monitoring, independent engineer roles, financial analysis and litigation support.
OJSC MMC Norilsk Nickel: Norilsk Nickel is the world’s largest producer of nickel and
palladium and one of the leading producers of platinum and copper. It also produces various
by-products, such as cobalt, chromium, rhodium, silver, gold, iridium, ruthenium, selenium,
tellurium and sulphur.
Russian Federation Ministry of Natural Resources: The Ministry of Natural Resources

and Environmental Protection is a federal agency responsible for drafting national policy and
legal regulation in the study, regeneration and conservation of natural resources, including
mineral deposits, water resources, protected forestland, wildlife and natural wildlife habitats.
St. Petersburg All Russian Geological Institute (NF VSEGEI): is under the Ministry of
Natural Resources (MNR) of the Russian Federation, and is the premier institute for regional
geological studies.
28.3 VOCABULARY AND PROCESSES
Adit: A nearly horizontal passage from the surface by which a mine is entered. Frequently
called a drift or adit level.

Allochthonous: A term applied to rocks of which the dominant constituents have not been
formed in-situ.
Amphibolite: A crystalloblastic rock consisting mainly of amphibole and plagioclase.
Archaean: Meaning ancient, the oldest rocks of the Precambrian.
Assay: A test to determine the elemental content of ores or minerals by chemical or physical
methods.
Ball Mill: A steel cylinder filled with steel balls into which crushed mill feed is fed. The ball
mill is rotated, causing the balls to cascade and grind the mill feed.
Base-Line Levels: A surveyed line established with more than usual care, to which surveys
are referred to for co-ordination and correlation.
Block Models: Three-dimensional representations of mineralisation created using regular-

sized blocks and sub-blocks to represent volumes of rock and mineral types and topographic
features.
Breccia-Textured: Fragmental rock whose components is angular and therefore, as

distinguished from conglomerates, is not water worn.
Carbonaceous: Pertaining to, or composed largely of, carbon.
Certified Reference Materials: standard sample materials with known confidence intervals
used for quality control purposes.
Chalcopyrite: Copper Pyrite, CuFeS2. An important source of copper.
Concentrator: Increases the strength by diminishing the bulk as of a liquid or an ore; to

intensify or purify by getting rid of useless material; to separate metal or ore from the gangue
of associated rock.
Cut-Off Grade: An assay cut-off is the break-even economic value of the ore; the block cut-
off is the economic value that optimises the net present value of the operating assets.
Dilution: Waste rock that is, by necessity, removed along with the ore in the mining process
subsequently lowering the grade of the ore.
Dunite: A peridotite consisting almost wholly of olivine and containing accessory pyroxene
and chromite.
Feasibility Study: As defined by the CIM, a Feasibility Study is a comprehensive technical

and economic study of the selected development option for a mineral project that includes
appropriately detailed assessments of realistically assumed mining, processing, metallurgical,
economic, marketing, legal, environmental, social and governmental considerations together
with any other relevant operational factors and detailed financial analysis, that are necessary
to demonstrate at the time of reporting that extraction is reasonably justified (economically

mineable). The results of the study may reasonably serve as the basis for a final decision by a
proponent or financial institution to proceed with, or finance, the development of the project.
Fineness: The proportion of pure gold or silver in jewellery or bullion expressed in parts per
thousand.
Flotation: A mineral separation process whereby a froth created in water by a variety of

reagents floats some finely crushed minerals whereas others sink.
Gabbro: A plutonic rock consisting of calcic plagioclase (commonly labradorite) and

clinopyroxene, with or without orthopyroxene and olivine; loosely used for any coarse-
grained dark igneous rock.
Geochemical Exploration: Exploration or prospecting methods depending on chemical

analysis of the rocks or soil, or of soil gas and plants.
Gneiss: A coarse-grained rock in which bands rich in granular minerals alternate with bands
in which schistose minerals predominate.
Gosudarstvennaya Komissia po Zapasam (GKZ): State Commission for Mineral

Reserves. Founded in 1927, GKZ manages mineral reserves on behalf of the Ministry for
Environmental Protection and Natural Resources of the Russian Federation.
Hangingwall: The rock on the upper side of a vein or ore deposit.
Host Rocks: The wall rock of in which a mineral deposit occurs.
Hydrocyclone: A mineral processing device that converts pressure energy into rotational
momentum to provide centrifugal force to separate minerals by size and specific gravity.
Hypidiomorphic: A general term applied to those minerals of igneous rocks that are
bounded only in part by their characteristic crystal faces; a textual term applied to a granular
plutonic rock in which there are few idiomorphic minerals.
Intrusions: A body of igneous rock that invades older rock. The invading rock may be a
plastic solid or magma that pushes its way into the older rock.
Jaw crusher: A device in which rock is broken by a reciprocating compressive action

between two steel plates.
JORC Code: The Australasian Code for Reporting of Mineral Resources and Ore Reserves
prepared by the Joint Ore Reserve Committee of the Australasian Institute of Mining and
Metallurgy, Australian Institute of Geoscientists and Minerals Council of Australia. The
current edition is dated 2004.
Low-Grade Ore: Ore which is relatively poor in the metal for which it is mined.
Mafic: Subsilicic, basic. Pertaining to or composed dominantly of the magnesian rock-

forming silicates; said of some igneous rocks and their constituent minerals. In general,
synonymous with ‘dark minerals’.

Magmatic: Of, pertaining to, or derived from magma.
Magnetic Susceptibility (MS): A measure of the degree to which a substance is attracted to

a magnet; the ratio of the intensity of magnetisation to the magnetic field strength in a
magnetic circuit.
Magnetite: Magnetic iron mineral. An important source of iron.
Migmatites: Rocks consisting of thin alternating layers or lenses of granite and schist.
Mine: An excavation from which valuable materials are recovered.
Mineral Deposit: A body of mineralisation that represents a concentration of valuable

metals. The limits can be defined by geological contacts or assay cut-off grade criteria.
Mineral Reserve: The CIM defines an mineral reserve as “the economically mineable part of
a Measured or Indicated mineral resource demonstrated by at least a Preliminary Feasibility
Study. This Study must include adequate information on mining, processing, metallurgical,
economic and other relevant factors that demonstrate, at the time of reporting, that economic
extraction can be justified. A Mineral Reserve includes diluting materials and allowances for
losses that may occur when the material is mined”.
Mineral Resource: The CIM defines a mineral resource as “a concentration or occurrence of

material of intrinsic economic interest in or on the Earth's crust in such form and quantity that
there are reasonable prospects for eventual economic extraction”. Subdivided into measured,
indicated and inferred categories depending on how well they are defined.
Mineralisation: The process of replacing the organic constituents of a body by inorganic

fossilisation; the addition of inorganic substances to a body.
NI43-101: Standards of Disclosure for Mineral Projects as dictated by the Canadian Institute
of Mining (CIM).
Open Pit: A mine that is entirely on surface; also referred to as open-cut or open-cast mine
Ore: A mineral, or an aggregate of minerals, more or less mixed with a gangue, which from
the standpoint of a miner can be won at a profit or from the standpoint of a metallurgist can
be treated at a profit.
OVOS: The Russian equivalent to an Environmental and Social Impact Assessment.
Oxide Ore: Ore which has undergone the process of natural oxidation.
Palaeozoic Age: One of the eras of geologic time that, between the Late Precambrian and
Mesozoic eras, comprises the Cambrian, Ordovician, Silurian, Devonian Mississippian,
Pennsylvanian and Permian systems.
Primary Ore: Ore which is in its primary mineralised state and has not undergone the
process of natural oxidation.

Pyrite (FeS2): Iron sulphide. Sulphide mineral which can contain refractory gold.
Recumbent Fold: A fold in which the axial plane is more or less horizontal.
Rougher: Primary processing stage in which the bulk of the gangue is removed from the ore.
Run of Mine (ROM): A term used loosely to describe ore of average grade as produced
from the mine.
Semi-Autogenous (SAG) Mill: A mill for grinding rock into fine powder, in the form of a
steel cylinder of high aspect ratio (diameter/length), in which the grinding media consists of
large pieces of rock and large steel balls.
Serpentine: Mg3Si2O5(OH)4. A metamorphic product of the hydration of ultramafic rocks.

Includes the minerals antigorite and chrysolite.
Stringers: A narrow vein or irregular filament of mineral traversing a rock mass of different
material; a thin layer of coal at the top of a bed, separating in places from the main coal by
material similar to that comprising the roof.
Sulphide Ore: Ore which is in its primary mineralised state and has not undergone the
process of natural oxidation.
Techniko-Ekonomicheskie Obosnovie (TEO): Standard Russian format for characterising a

mineral deposit.
Techniko-Ekonomicheskie Raschoti (TER): Standard Russian format for calculating the

mineral reserves of a deposit.
Territorialnaya Komissia po Zapasam (TKZ): Territorial Commission for Mineral

Reserves.
Thickener: A large, round tank used in milling operations to separate solids from liquids;
clear fluid overflows from the tank and rock particles sink to the bottom.
Trenching: In geological exploration, a narrow, shallow ditch cut across a mineral showing
or deposits to obtain samples or to observe character.
Ultramafic: Some igneous rocks containing less than 45% silica; containing virtually no
quartz or feldspar and composed essentially of ferromagnesian silicates, metallic oxides and
sulphides, and native metals, or all three.
28.4 ABBREVIATIONS
The imperial system has been used throughout this report unless otherwise stated. All
currency is in U.S. dollars. Market prices are reported in US$ per troy ounce of gold and
silver. The following abbreviations are typical to the mining industry and may be used in this
report.
° Degree (Angle)

°C Degree Centigrade
µm Micron
Ag Silver
Al Aluminium
An2 Amperes*square metres (magnetic moment)
As Arsenic
Au Gold
B Boron
Ba Barium
Ca Calcium
CAGRE Central Arctic Exploration Team (Tsentralnaya Arkticheskaya
Geolorazvedochnaya Expeditsia) now Norilsk Filial All Russia
Geological Institute
Cov Coefficient of Variation
Cr Chrome
CRM Certified Reference Material
Cu Copper
Deg, o Degree
DC Direct current
EHS Environment Health and Safety
ESIA Environment and Social Impact Assessment
Fe Iron
G&A General and Administration
g/t grammes/tonne
Ga Gallium
GGP Gosudarstvennoe Geologicheskoe Predpriyatie. State Geological
Enterprise
GKZ State Commission for Mineral Reserves
ICP-AAS Inductively Coupled Plasma-Atomic Adsorption Spectrometry
ICP-AR/ES Inductively Coupled Plasma Atomic Emission Spectroscopy (ICP-
AES), is an analytical technique used for the detection of trace metals
ID2 Inverse Distance Weighting to the Power of Two
Intergeo Intergeo MMC Ltd.
IP Induced Polarizaition
IRGS Intrusive Reduced Gold Settings
IRR Internal Rate of Return
ISO/IEC 17025 International Organization for Standardization/ International
Electrochemical Commission General requirements for the competence
of testing and calibration laboratories
Kingashskaya Kingashskaya mining company LLC
K Potassium
kg Kilogramme
km Kilometre
km2 Square Kilometre
km3 Thousand Cubic Metres
koz Thousand Ounces
kt Thousand Tonnes
kV Kilovolt
LOM Life-of-Mine
M RUB Million Roubles

m Metre
m2 Square Metre
m3 Cubic Metre
Mm3 Million Cubic Metres
MAC Maximum Acceptable Concentration
Micon Micon International Co Limited
M Million
Min Minute
mm Millimetre
Mn Manganese
MNR Ministry of Natural Resources
Mo Molybdenum
Moz Million Ounces
Mt Million Tonnes
Mt/a Million Tonnes per Year
MW Megawatt
Na Sodium
Ni Nickel
NN Nearest Neighbour
NPVR Net Present Value (Real Discount Rate %)
NQ and HQ size Tube sizes for drills
nT nanoTesla (magnetic intensity)
Ohm/m A unit of electrical resistance
oz Ounce
P Phosphorus
Pd Palladium
PEA Preliminary Economic Assessment
PGE Platinum Group Elements
PGM Platinum Group Metals
Pt Platinum
QP Qualified Person
q-q plot Quantile-Quantile Plot
Re Rhenium
Report Technical Report
RIP Resin-in-Pulp
RQD Rock Quality Designation
RUB Russian Rouble
S Sulphur
SAG Semi-Autogenous Grinding
Sec Second
SEE State Environmental Expertise
SEHS Social Environment Health and Safety
SEM Scanning Electron Microscope
SMU Selective Mining Unit
Sn Tin
SP Self Potential
t Tonne
t/a Tonnes/Year
t/d Tonnes/Day
t/h Tonnes/Hour

TEO Techniko-Ekonomicheskie Obosnovie
TDEM Time Domain Electromagnetic
TMF Tailings Management Facility
US$ United States Dollar
V Vanadium
VAT Value Added Tax
XRF X-ray fluorescence
Zr Zirconium

29.0 SIGNATURE PAGE
Signed on behalf of Micon International Co Limited:
Stanley C. Bartlett, M.Sc., PGeo. (#19698)

Senior Economic Geologist, Managing Director,

30.0 CERTIFICATE OF QUALIFIED PERSON
Stanley Currie Bartlett

Micon International
Suite 10 Keswick Hall, Norwich, NR4 6TJ, United Kingdom
As the author of the “Technical Report on Mineral Resources of the Kingashsky,

Verkhnekingashsky and Kuyovksy Nickel-Copper Deposits and Results of the Preliminary
Economic Assessment, Krasnoyarsk Krai, Russian Federation” (the Technical Report)
effective date 1st December, 2011, I, Stanley Currie Bartlett, hereby certify that:
1) I am employed by, and conducted this assignment for, Micon International Co

Limited, Suite 10, Keswick Hall, Norwich, United Kingdom. tel. 0044(1603) 501
501, fax 0044(1603) 507 007 e-mail sbartlett@micon-international.co.uk;
2) I hold the following academic qualifications:
B.Sc. Geological Sciences University of British Columbia,

Vancouver, Canada, 1979
M.Sc. (Mining Geology) Camborne School of Mines,
Redruth, England, 1987
3) I am a registered Professional Geoscientist with the Association of Professional

Engineers and Geoscientists of the Province of British Columbia (membership #
19698); In addition I am a member in good standing of the Society for Mining,
Metallurgy and Exploration;
4) I have worked as a geologist in the minerals industry for 32 years;
5) I do, by reason of education, experience and professional qualifications fulfil the

requirements of a Qualified Person as defined in National Instrument 43-101
Standards of Disclosure for Mineral Projects (“NI 43-101”). My work experience
includes five years as an exploration geologist developing tungsten, gold, silver
and base metal deposits, more than 14 years as a mining geologist in both open pit
and underground mines and 12 years as a consulting geologist working in precious,
ferrous and base metals and industrial minerals. I have previous experience with
mineral resource estimation;
6) I visited the properties that are the subject of the Kingash Preliminary Economic
Assessment from 3rd to 6th October 2007 and from 1st to 4th August 2011;
7) In 2007 and 2008 I reviewed the Verkhnekingashsky and Kuyovsky deposits for
MMC Norilsk Nickel. I have had no prior involvement with the Kingashsky
project that is the subject of the Kingash Preliminary Economic Assessment;
8) As of the date of this certificate, to the best of my knowledge, information and

belief, the Technical Report contains all scientific and technical information that is
required to be disclosed to make this report not misleading;

9) I am independent of Intergeo MMC Ltd. as described in Section 1.5 of NI 43-101;
10) I have read NI 43-101 and the Technical Report has been prepared in compliance
with NI 43-101; and,
11) I am responsible for the Hatch Engineering and Consulting LLC scoping study
prepared on December, 2011, as incorporated by reference into the Technical
Report entitled “Technical Report on Mineral Resources of the Kingashsky,
Verkhnekingashsky and Kuyovksy Nickel-Copper Deposits and Results of the
Preliminary Economic Assessment, Krasnoyarsk Krai, Russian Federation”.
12) I am responsible for the preparation or supervision of preparation of all sections of

the Technical Report entitled “Technical Report on Mineral Resources of the
Kingashsky, Verkhnekingashsky and Kuyovksy Nickel-Copper Deposits and
Results of the Preliminary Economic Assessment, Krasnoyarsk Krai, Russian
Federation”.
Stanley C. Bartlett, M.Sc., PGeo. (#19698)

Senior Economic Geologist, Managing Director,

N1 43 110 Kingashy, Verhnekingasky and Kuyovsky Nickel Cooper Deposits

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Intergeo MMC Ltd

Stanley C. Bartlett, P.Geo.

Micon International Co Limited

Effective Date: 1st December, 2011

Kingash Preliminary Economic Assessment i Intergeo MMC Ltd

7.1.2 Property Geology ................................................................................................ 39

Kingash Preliminary Economic Assessment ii Intergeo MMC Ltd

14.1.2 Specific Gravity ............................................................................................. 102

Kingash Preliminary Economic Assessment iii Intergeo MMC Ltd

18.5.1 Technological Warehouses ............................................................................ 183

Kingash Preliminary Economic Assessment iv Intergeo MMC Ltd

28.1.2 Mineral Reserves ........................................................................................... 232

Kingash Preliminary Economic Assessment v Intergeo MMC Ltd

Table 1.1: Kuyovsky, Verkhnekingashsky and Kingashsky Mineral Resources ...................... 6

Kingash Preliminary Economic Assessment vi Intergeo MMC Ltd

Table 13.7: Bulk Concentrate Sample Analyses.................................................................... 100

Kingash Preliminary Economic Assessment vii Intergeo MMC Ltd

Table 17.14: Key Process Performance Indicators ................................................................ 169

Kingash Preliminary Economic Assessment viii Intergeo MMC Ltd

Figure 1.1: Location Kingash Licence Areas Krasnoyarsk Region ........................................... 2

Kingash Preliminary Economic Assessment ix Intergeo MMC Ltd

Kingash Preliminary Economic Assessment x Intergeo MMC Ltd

Figure 13.5: Copper Recovery versus Nickel Recovery .......................................................... 96

Kingash Preliminary Economic Assessment xi Intergeo MMC Ltd

Kingash Preliminary Economic Assessment xii Intergeo MMC Ltd

Figure 14.69: Block Grades versus Declustered Sulphur Composites –

Kingash Preliminary Economic Assessment xiii Intergeo MMC Ltd

Figure 22.3: Kuyovsky Sensitivity to Metal Price ................................................................. 201

Kingash Preliminary Economic Assessment xiv Intergeo MMC Ltd

1.2 LOCATION AND PROJECT HISTORY

Kingash Preliminary Economic Assessment 1 Intergeo MMC Ltd

Verkhnekingashsky Open Pit Kuyovsky Open Pit

Waste Rock Waste Rock

Kingash General Site Layout

Nickel-copper mineralisation was initially discovered at the Verkhnekingashsky deposit

GPP-Geologicheskaya Company worked alongside LLC Prikladnaya (Applied Geology)

1.3 GEOLOGY AND MINERALISATION

The three disseminated deposits of Verkhnekingashsky, Kuyovsky and Kingashsky represent

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1.4 MINERAL RESOURCES

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as at 1st December 2011

1.5 MINERAL RESERVES

1.6 METALLURGICAL TESTING

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Source Mill Feed Ni Cu Co Pt Pd Au Ni Cu Co Pt Pt Pd Pd Au Au

1.7 PROCESS DESIGN

• Coarse ore reception and storage;

• 18.5 Mt/a of mill feed processed; and,

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• Coarse crushing with high production rate crusher;

Recoveries of metal to concentrate are as shown in Table 1.3.

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Valleriite Regrind Sulphidisation

The concentrate is proposed to be fed to thickening, filtration and drying to achieve 2%

• Receipt, unloading and storage of dry concentrate;

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1.8 ECONOMIC ANALYSIS

1.8.1 Capital Costs

Table 1.4: Base Case Capital Costs

Capital Cost (US$ ,000)

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1.8.2 Operating Costs

Table 1.5: Base Case Life of Mine Unit Operating Costs