Africascdrill.com/down/report.doc · Web viewThis project study outlines a project mine located in the Copper belt province of Katanga Democratic Republic of Congo in Central Africa.

DEMOCRATIC REPUBLC OF CONGO KATANGA PROVINCE

FEASIBILITY STUDY &TIMELESS REPPORT OF

PR 11106, 11107, 11108, 11109

JANUARY 2010

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AFRICA

MAP 1 AFRICA

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DEMOCRATIC REPUBLIC OF CONGO

MAP 2 DEMOCRATIC REPUBLIC OF CONGO

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KATANGA PROVINCE

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INTRODUCTION

This project study outlines a project mine located in the Copper belt province of

Katanga Democratic Republic of Congo in Central Africa. The copper deposits of Katanga were

discovered early last century by prospectors Belgian and English. Different companies working

mainly for holding Belgian or British were active in the Congo. Union Minière du Haut

Katanga certainly played a role in the mining of copper and cobalt in the Copper belt

province.

The deposit for the project described in this pre-feasibility study, is a deposit of less than

world class. It totals about that 450,000 tonnes of copper and 20,000 tons of cobalt content. The

Congo gained its independence June 30, 1960 and January 1968 the Union Minière is

nationalized. A new company called Gecomin then Gécomines and finally Gécamines was

created to ensure the continuity of their exploitation. In 1986 production Gécamines reached a

maximum of 476,000 tonnes of copper and 14,500 tonnes of cobalt and in 2002 the results were

20,000 tonnes of copper and 4,000 tonnes of cobalt. If the general climate uncertainty that

characterized the last two decades has ruled out the possibility of institutional and private

investment over 15 years in the Congo can say today that several very positive signs indicate

that it is again possible to consider safe and profitable investment.

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The accession to power of President Joseph Kabila who succeeded his father Laurent

Desire Kabila has caused a radical change in the landscape and customs policies of the country.

Ituri. Moreover, the government does everything they can to be recognized as a genuine rule of

law. A New Mining Code was enacted to attract foreign investors. He was drafted by a team of

experts drawn from government, the World Bank, the business nationally and internationally as

well as countries with strong mining tradition, such as Chile. We can say now that the New

Mining Code and its corollaries, to Mining Code Regulations and the Mining Cadastre; mining

tool suitable are required by any professional investor who wants to develop and secure a

mining project in Democratic Republic of Congo.

It is also worth mentioning that everyone believes that the internal rate of return of 20%

is a normal lens. This document is the pre-feasibility study of project Kitanda. This is a classic

mining project in the area of non-ferrous metals. The document's purpose is to define a

framework for designing and working to guide project development. Moreover, the current

analysis, is clear the very significant impact of the project for the state and neighboring

communities.

SUMMARY FOR EXECUTIVES

The deposits of Katanga have the reputation of being very rich. The words spoken long

ago by, or at least attributed to Jules Cornet geologist who even reported a geological scandal,

so the deposits are rich, has always attracted investors. However it must be well aware that even

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if the deposits are actually among the richest in the world, all the techno-economic parameters

reduces their potential and thus makes them attractive to investors a little less interesting. In any

case we can afford to work without resorting to the most effective techniques to compensate for

factors "unfavorable" by productivity and efficiency increased. Among the unfavorable factors

should be mentioned in particular the physical isolation in the middle of Central Africa, a

complex and variable mineralization does not allow defining a single metallurgical process and

finally, the mining plan, a high stripping rate doubled sometimes difficult to exhaust. Among the

positive factors we must insist on the high metal content of ores, the presence of sufficient

potable and industrial water and the presence of a skilled and productive as long as the

traditions of leadership and laws of the labor market are met and that we put up an adequate

social support. Assumptions unfavorable progress as well as estimates rather exaggerated export

costs was included in all economic calculations in order not to show an excess of confidence or

optimism inadvisable.

ENVIRONMENTAL AND TECHNICAL DATA.

1. GENERAL DESIGN, LOCATION AND JUSTIFICATION.

a. General Design

This project lies within the sound development of the mining industry of the Democratic

Republic of Congo to play through it a leading role in reviving the national economy, according

to the legislature's concern that defined the legal framework of the New Mining Code to achieve

this goal. . As mentioned earlier the project fully respects the New Mining Code.

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b. Location

The site is located Kitanda more months or 725 km northeast of the city Lubumbashi

Kolwezi. It is accessed via the national road No. 628 leading from Lubumbashi in the Eastern

Province from the North Katanga before the junction to the Manono city as you leave the

village level Kalumbalumba westward on a track twenty kilometers. This site is located within

the new Mining Code in 11106,11107,11108,11109; but only 11107 and 11108 have given the

good results in the exploration program of this area off the PR of 631,4 square Km cadastral.

This area is bounded by the vertices whose geographical coordinates are:

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REGION 5 MAP KITANDA (location)

c. Justification.

The importance of the mineral potential of the Democratic Republic of Congo, which is

a well known fact, not only specialists but also to the public interest that justifies the many

potential investors are in the province Katanga. However it should more than ever to work in

the most efficient order to keep costs below cost in the international supply and thus ensure a

profit margin to ensure repayment of investment and profit rates adapted to industry and the

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mainland. It was by digging exploratory wells arranged in lines oriented NE-SW, 50 m apart, in

the alignment of the extension instance LUFUKWE''''is known for its mixed copper ores and

Silver .

Wells acknowledged tabular formations of Katanguian, here represented by the

Kundelungu levels 2.2Roan ks. These formations are stratified dolostones similar to those of

Roan (SD) but for layering mineralization contain copper oxide (malachite and Chrysocole) in

the bedding planes. A secondary remobilization following the establishment of a set of fault

causes an enrichment result of this mineralization. The presence in money trail suggests the

hypothesis of enrichment by hydrothermal fluid. RATRSFRSCSD of baseCMN

2. TECHNICAL DESCRIPTION.

d. Geology, topography, design and mine planning.

Modern technology, making use of tools have been used to draw in three dimensions,

and plans cuts in the geological model that has qualified and classify not only training but also

the mineralized rocks rock and groundwater levels. The same software was also used for

compiling all the topographical data and then to establish the pattern of the final pit finalefosse

well as various intermediate pits. e. Land and general accommodation

01. Land "generalities"

Katanga Province is located in the heart of Africa in the south-eastern Democratic

Republic of Congo. It adjoins the north Kivu region, north-west region of Kasai and shares

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borders with Angola to the west, Zambia to the south, Tanzania to the east. Although

qu'enclavée the heart of Africa, various railway lines, roads and lakes and waterways provide

relatively easy access to the ocean. An internal infrastructure of communication facilities (roads,

paths fer, Inland River and lake, and airports) is an additional logistical support, essential to

economic development in the region.

The development of Katanga took place around a former mining flourishing his

basement full of metals such as copper, cobalt, zinc, cadmium, plomb, uranium, manganese,

nickel, tin, gold, silver and other rare metals (palladium, platinum, germanium, gallium,

selenium, niobium, tantalum ...).

Built around a network of production and distribution of hydroelectric energy efficient,

this historic mining activity is a real pole of development and remains the basis of important

industries, particularly in respect of rolled products and wire, cimentciment, coal, lime,

limestone, construction aggregates, quartzite, sulfuric acid, civil engineering, wood, textiles,

soap, food, commercial products of all kinds...

For effect and in support of these activities, medical facilities, social and general

education, primary and secondary technical and university have developed and used to have in

place a skilled workforce-oriented Industrial. The persistence of some traders as well as efforts

to stabilize the country has boosted the economic machine, including through new ideas that

create jobs.

02. Geology

(1) General

The important metallogenic province of Central Africa consists mainly of stratiform copper

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deposits-corallifères spread over 500 km in the Democratic Republic of Congo and Zambia.

Katangan sediments, which contain these deposits are Proterozoic and higher were deposited

discordantly on the base Prékatanguien, probably in a pool-type continental rift. Several recent

works of synthesis have gathered the essential characteristics of sedimentology,

lithostratigraphy and sediment Katanguian metallogeny of Central Africa. In this classic model

of copper-cobalt deposit can be added another which is linked al'existence of major faults. This

is the case in Zambia Kansanshi Dikulwishi and North Katanga. The difference between these

two deposits is based on the contribution of the hydrothermal Dikulushi demonstrated by the

presence of silver in ores. The deposit is now presented is closer to that type.

(2) Stratigraphy

The copper-cobalt occurrences existing in the southern Katanga belong System Katanga. This

unit, which was deposited during the Proterozoic era (between 1200 and 650 million years)

forms a solid pleated called Katanga Copper Arch, which lies between Angola to the west, and

Zambia south-east. Katanga The system is a set of thick sediments of about 7000 m of upper

Proterozoic age (between 1100 and 650 million years). It is divided into three great groups:

bottom-up, RoanRoan (1,500 m), Kundelungu lower (3,000 m) and Kundelungu higher (2,500

m).

The copper-cobalt deposits of Katanga may have formed following the deposition of

pyrite in the core group Roan R2 (MinesGroupe Group of Mines). Fluid copper-cobalt would

result in very locally through the salt level between the Roan R1 of R2. One or two orebodies

would thus formed, thick about 20 m in total, containing about 4.5% copper and 0.3% cobalt as

sulphides (cuprite and small carrollite). Near the surface, minerals are altered by water runoff,

water level up. The sulphides are converted into carbonate (malachite #), silicate (chrysocolla)

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and oxide (heterogenite). They also invade the surrounding rock formations. So break out the

rich ores (greater than 10% copper and 1% cobalt) that can be treated without prior enrichment.

The progress of the Katangan mégabrèche has been hampered by the North Channel is

Kibaran Mesoproterozoic creating beyond the arc Lufilian a package of Katangan who

remained tubular. The action of late phases of orogenesis Katanguian and the loosening of

constraints have allowed ascent of hydrothermal fluids, which has led the development of vein

type deposits in the Katangan type tabular. These deposits are in northern Katanga contain

mainly sulphide type Cuprite accompanied by silver minerals. The deposit was discovered

following an exploration well in small as well as some work sondage Kolwezi. Some wells have

been altered ore in a sort of breccia body now moving away from conventional.

They are in a plain, covered by a few yards of red clay alteration without clearing

poisoning. The tonnage of ore available could be very high (18,000,000 tonnes for the first

tranche of 100 m). The tonnage of reserves quoted above represents only a first phase of a

project. Many surveys will be drilled to provide reserves "some" sure that will be a project more

complete. The river is close Kitanda the reservoir, the water table is near the surface (probably

between 30 and 40 meters).

If searches are successful, we can recover a small tonnage of ore rich altered. For cons,

the gangue minerals in normal unaltered who give very good returns to the flotation, will be

quickly achieved and therefore exploitable. Two continuous conglomerates, probably of ice, can

divide the System Katanga into three units: Above, the super-group Kundelungu higher Ks:

approximately 2,500 m of clastic sediments (shale, sandstone and dolomite microgra) of marine

origin, At center, the Super-Group Kundelungu lower Ki: approximately 3,000 m of sediments

of marine origin also with the middle of the bottom half, a calcareous dolomite formation whose

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thickness can vary between 0 and 250 m, called limestone Kakontwe " Underneath the super-

group Roan R: about 1,500 m of impure dolomite, shale and sandstone dolomitic lagoonal

origin. This is the most interesting part of the System Katanga because there are more than 95%

of known occurrences of copper in Katanga.

(3) Metamorphism

The metamorphic rocks are low in the copper arc. We are in the epizone. It is strongest

in the south of the Arc and in Zambia, with the onset of greenschist facies and amphibolite

(mésozone).

(4) Tectonics

Left subhorizontal north, the System Katanga was heavily wrinkled further south,

along and beyond the Arc copper. A first phase of folding, called "the Kolwezi", occurred while

the middle part of Kundelungu than was deposited. It was shown by anticlines spilled

northward or overlaps oriented from south to north, as well as a major thrust in the Kolwezi

region. A second phase of folding, called "the Kundelungu" took place later, when everybody

has filed Kundelungu higher. It was shown by anticlines spilled southward or overlaps oriented

north to south.

In addition, there are irregular masses of Roan that sink deep between two walls of rocks

younger age of Kundelungu lower or higher along major faults. These structures, called

"extrusion", locally cut the folds. They may belong partially to a final tectonic phase, called "the

Monwezi. The results of these tectonic events are clearly visible on the design of a cutting along

the meridian to joining Shinkolobwe, Kambove.En. In addition to a map of regional structures

we can see that the Shinkolobwe deposit (Cu-U) is on the same alignment and deposits Dikushi

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north and Kansanshi in Zambia.

(5) Metal mineralization

The copper-cobalt mineralization is stratiform classic and is distributed according to

two "ore bodies (OB) well-defined, thick every few meters to ten meters or more. Both ore

bodies lie at the base of the Group of Mines Groupe (Roan R2), on both sides of the level

RSCRSC (cellular siliceous rock and stromatolitic dolomite) whose power is variable. Primary

copper mineralization consists of disseminated sulphides (chalcopyrite, bornite, digenite ...)

implemented in the sediment during the period of diagenesis. The sulphide mineralization has

been greatly enriched and / or remobilized by hydrothermal and supergene alterations. The

primary cobalt was associated with copper to form the carrollite and monitoring copper in the

process of secondary enrichment.

The action of weathering may alter significantly the mineralization, enrich or washing

and having varying intensity with depth Other occurrences are finally listed in DiPetta,

Kundelungu brackets. With the exception of deposits containing zinczinc of plomb and copper

Kundelungu lower (Ki? 1.2) to Kipushi, Lombe and Kengere, these occurrences are usually not

usable.

(6) Qualification and classification of minerals.

The current classification includes several categories of minerals and takes account of

the content:

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- Total copper and total cobalt, Copper in the form of oxides, silicates, phosphates,

sulfides, Cobalt in the form of oxides and sulfides, Soluble lime (CaO). The cutoff between

low-grade ores and ores is recoverable fixed respectively at 1% and 2% for copper and

respectively 0.5% and 1% for cobalt. An ore is considered when dolomitic lime content soluble

(CaO) is greater than or equal to 0.4% or possibly when the content of soluble lime (CaO) is

greater than the fifteenth of the total content of copper. The dolomitic oxide ores contain up to

0.5% as copper sulphide and sulphide ores to 0.5% as copper oxidized ores were mixed levels

between these two limits. (7) Methods of stock assessment The exploration works, trenches and

small pits, underground workings (shafts and tunnels) and criss-cross the field surveys at a grid

spaced 50 meters. These books have been removed, reported on plans scale topographic 1/1.000

th, described and sampled.

The data that were collected resulting in records of surface exploration, underground

works and surveys. Diagnoses and outcomes have been or will be carried over geological plans

drawn to scale 1/1.000 second. However all data currently available have been compiled on the

geological model (using the software SURPAC) to provide ongoing assessment of reserves,

both quantitative and qualitative. The geotechnical and hydrological information are also

compiled to provide a good image of the entire deposit, ore and waste rock formations included.

Note that the topographic information is also included which allows to establish all the

necessary floor plans, including the location of infrastructure. 03. Land 'geology of the site "

Two concepts can be considered for the mineralization in this scenario:

1. There is a copper mineralization in the form of oxides (Malachite, Chrisocole,

Azurite. ...) Contained in the bedding planes from one level of dolomitic shale in the super

group Kundelungu we believe to be the level KS1.2. It is an alternation of dolomitic shale and

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clay. It should be noted here that these are the channels that are mineralized dolomitic.

2. The presence of families of reconstructions as part of a family that has quently

bearing deposits Dikulushi. These faults are sites of enrichment of the mineralization as a result

of remobilization, but also may be due to hydrothermal input which remains to be demonstrated

by a good study of mineral parageneses. The fact of the presence of these faults that sulphide

minerals (bornite, chalcocite ...) who find themselves in principle beyond the water table is

found here has very low depths. The above shows that this deposit is in a completely different

mineralization classical copper-cobalt. It deserves further studies are planned for a later phase

04. Land "notes prospecting"

(1) Location within the concept Katanguien As was mentioned above, the area referred to in

this study is located entirely beyond the arc copper Katanguian. In addition, part of Katanga's

best known and studied remains the South (the copper arc). We say here that the area is located

in the package Katangan tabular remains after all these orogenic movements described above.

From structural point of view, the industry bears the signs of late stages of orogenesis Katangan

who gave birth to two main families of faults which are the remains sequent namely: NE-SW

and NW-SE.

These issues are often very deep, with large extensions are sometimes the seat extrusions

formations underlying the supergroup of Roan as is the case just north of this area with the

occurrence of Lufukwe . Our pool is part of recent discoveries of copper beyond the traditional

copper arc, thus complementing existing ones.

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Fig. 4.Aspect Geological of S.C. Mining PR

(2) The deposit Kitanda

Taking advantage of recent work on the perimeter PR 8569, it was revealed an area of

abnormal concentrations of copper which current knowledge enabled the development of a first

draft. What is known at this stage Tungwe''deposit''is only part of which will be used again in

evidence after a detailed field survey.

This hypothesis is supported by the existence of a family of fault in which the deposit is

found. Methods of ground geophysics as''CT''(time domain magnetic) will be a party to confirm

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the continuity fault. Soundings along this fault allow increasing the volume of reserves. At this

stage the deposit consists of an open fault of + /-50m wide and can be traced over a length of

over 1500m. This loophole was put in place in formations known as the super group of

Kundelungu some of which are also copper mineralization mainly in terms of stratification. If

that continuity is proven, this deposit will provide us with very large tonnages of copper and

cobalt (for open pit mines deeper than 100 m, a rough calculation gives 18,000,000 tons of ore,

or 400,000 tons of copper and 20,000 tonnes of cobalt #).

Fig. 5: Location of Site Kitanda on PR 8569

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A geochemical survey helped identify an anomalous zone which is the current phase of the

project. The copper geochemical anomaly has been an open window on the potential that is yet

hidden. We assume that the continuity of the fault is a blind pool.

Fig.6: anomaly map copper

This anomaly area was first explored by small pits and then by some polls destructive and

carrots that have demonstrated the vertical continuity of the anomaly.

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Fig.7: location of works

05. Land "Pathways" Katanga The region is located in the heart of Africa. It is accessible by air,

but it is also connected to the oceans by four railroads and three roads. As indicated above, the

isolation factor is a negative aspect, however important that may be better managed or

neutralized before taking advantage of modern communication and information as well as air

transport for non-bulky items. (1) Airway Lubumbashi is served by an international airport

equipped to receive commercial jets, he hosts including flights from Europe via Kinshasa and

from Southern Africa. It is the nearest airport to our site. Kolwezi (2) Railways Such transport

involves certain sections mode river or lake. Until the late 1980s, it provided almost all the

transport for export and currently he is penalized by the situation SNCC (Societe Nationale des

Chemins de ferfer Congolese) and ONATRA (National Transport). The railway is the closest to

our site is connecting Lubumbashi Likasi. (a) Route Matadi (or national route) This route is

located entirely in the territory of the Democratic Republic of Congo. Since 1993, exports by

the national route are virtually nil due to multiple fractures load (rail from Lubumbashi to Ilebo,

Ilebo barges and rail to Kinshasa from Matadi to Kinshasa) and a quality problem of logistics.

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(b) Route of Dar es Salaam (via Kalemie)

This route crosses successively the Democratic Republic of Congo and Tanzania. This pathway

knows several of reloads to Kalemie (Democratic Republic of Congo) and Kigoma (Tanzania)

for the crossing of Lake Tanganyika. Since 1993, exports are practically nil. (c) Route of Dar es

Salaam This path uses the path of ferfer TAZARATAZARA to the port of Dar-es-SalaamDar-es-

Salaam.

(d) Channel LobitoLobito This path connects directly factories KatangaKatanga Harbor

LobitoLobito (Angola). This fast track has been closed since 1981. (e) Lane South This way

allows to connect the plants to various ports in South Africa and Mozambique. The transport of

inputs and out of the site will be generally as much as possible by rail given that this mode of

transport should normally be the cheapest

3) Inland road

To overcome the difficulties of growing network of railroads in the Democratic Republic of

Congo, traders have used the road for their exports and imports. In 1993, transportation

accounted for almost all of the tonnage exported. It is clear that it will make every effort to

reduce its use. (a) Road to the south This road is known for its speed and safety. (b) direct route

to Dar es Salaam This road is called TANZAMTANZAM very fast, but often penalized by high

waiting times at the port of Dar-es-Salaam.Dar-es-Salaam (4) Lake Lane The position of this

sector of Lake Mweru closer or you can use to go to Zambia.

This position is not yet profitable because of a lack of energy that requires finishing

trade products at plants in Lubumbashi. ? Land "climatology" The region Katanga is subject to a

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subtropical climate characterized by six months of dry season (April to September inclusive)

alternating with six months of rain season (October to March inclusive).

(1) Air temperature in the shade under shelter the highest temperatures were recorded in

October and November and may reach 37 to 40 ° C. During the dry season in June and July, the

night temperature may drop to 5 ° C and may reach 0 ° C in exposed sites. The average monthly

total since they are high enough fluctuate between 16 ° C (June) and 25 ° C (October). In dry

season that variations in daily temperature are most important. The average of these differences

is around 17 ° C, with maxima around 25 ° C.

` These sudden variations in temperature give rise to significant condensation which must

be taken into account in the technical specifications for purchase of certain equipment (eg

electrical panels).

(2) Relative humidity of the air the climate is characterized by the alternation of long periods

when the humidity is low (daily minimum of about 5 to 6% during 6 months of the dry season)

and long periods of high humidity, frequently since close to saturation during the six months of

the season . The average monthly values of humidity fluctuated between 40% (September) and

82 to 84% (December to March).

(3) Wind the Katanga is subject to trade winds from the Indian Ocean. They are regular and

constant. Two periods are distinguished, corresponding to the two seasons. During the dry

season, winds are quite strong and blowing in a dominant manner the area between the east and

south. Winds from the south-east are the most frequent and they blow with an average speed of

40 km / h and peaks up to 75 km / h. exceptionally, gusts of wind speeds exceeded 120 km / h

have been recorded in the region Kolwezi.

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The structures, as well as electricity pylons and masts must be provided to withstand

"winds" of 220 km / h. During the season rain, the system is reversed. The winds are weaker

and generally blowing in the area between the north-west and south-west, with an average speed

of around 25 km / h and reaching 40 km / h. By cons important gusts over 100 km / h above the

often violent thunderstorms. In dry season, winds cause a significant amount of dust. The

construction of facilities must reflect this characteristic, because it constitutes a nuisance for

mechanical and electrical equipment. This season is marked by a generally serene sky.

(4) Rain the fall as often as stormy precipitations except January and February. The

height of water collected during a downpour of short duration, extrapolated over an hour, up to

80 mm, and exceptionally 100 mm. The average height of water collected in the entire

concession Gécamines during 6 months of rain season is approximately from 1.200 to 1.250

mm and about 1.160 mm to Tenke, the maximum monthly up to 400 mm. During this season,

cloud cover is generally high, especially late at night and at dawn. Thunderstorms are frequent

and excessively violent. Isokéraunique level is 150 (over 6 months). Effective protection against

lightning shall be provided whenever the latter is likely to disrupt or cause damage to energy

installations électriqueénergie electrical and network. The earthed should be particularly careful,

well maintained and regularly measured.

(5) Sunshine The average annual relative (compared to the maximum possible

astronomical) is around 60%. (6) Altitude The mining area of south Katanga lies at an altitude

between 1,000 and 1,500 meters above sea level altitude Kitanda is 1219 m above sea level.

(7) Earthquakes the risk of earthquake land is low and despite the relative proximity of

the fault of Tanganyika. So far, the cases have been recorded; the intensity remained below 5 on

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the Richter scale.

(8) Flood Certain Plains untrained can be seasonally flooded.

06. Land "environnement technology"

(1) Electric power A disadvantage of factors for this project is the lack of electricity.

Indeed the distribution of electricity in Katanga was made around the mine site known for

decades, leaving the greater part of the province without electricity or even without any hope of

electrification. Some companies had to compensate for this deficiency by building small

hydropower self. This is where e Manono and Mitwaba. For our site, the easiest way would be

the use of generators of industrial capacity as possible avoiding large facilities on site. (2)

Telecommunications We may use solutions of most common (earth stations of small capacity

type VSATVSAT connected to Inmarsat, the local GSM network), but less good performance,

much more costly and difficult to fit corporate communications to high traffic volume. (3)

General Arrangements As soon as the geological model will be established, it will

possibleprojet Mining define the final pit, pit the final location of landfills and tailings ore to the

desired distance of safety, as well as offices, garages, parks, vehicles, maintenance workshops

and manufacturing shops subassemblies and spare parts, fuel depots and reagents, artificières,

fixed installations (post tensionhaute high voltage, loading dock, pumping stations, ... ) and

finally social facilities (clinics, schools, canteens, sports facilities and leisure ...).

3. IMPACT STUDIES ON

ENVIRONNEMENTENVIRONNEMENT

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The new code Mining Code is quite explicit on this issue by specifying the modalities

of intervention of the service charge of environnement mining. In summary, the following:

Defines and implements mining regulations for the protection of, Defines technical terms of

mitigation and rehabilitation of environnement (PAR), the Environmental Impact Statement

(EIEEIE) and the Environmental Management Plan Project (PGEPPGEP) Monitoring the

implementation of PGEPPGEP by the owner. Particular attention will be dedicated to the

creation of mounds of rock open pit that will preserve (by moving them temporarily) the humus

layers for coating finally backfilled areas of the mine when it is exhausted. By following a rule

"first out, last in (back)" we can reconstruct the abundance and dip, the provisions relating to

rocks and land. The storage of waste metals will involve the use of storage with high vegetation

cover to prevent the pollution of rivers and groundwater once too often observed in this region,

since it uses the natural valleys with levees Monks and # to store the waste. Wherever possible,

industrial water will be used in closed circuit with a system of purification and regeneration

thereof. The provision for recovery of the site under the New Mining Code of 0.5% of sales will

be used and supported by the project.

4. STUDY AND REALIZATION

1) Program of Work and Time Frame several alternatives have been proposed to

develop the project. The most effective way would be to develop the project at once up to his

optimum size to exploit the full deposit less 15 years not to exceed a reasonable period and to

take advantage of an operation optimum size. A smaller project, requiring a call for funds less

important, however, was chosen as the initial step to demonstrate that it is possible to quickly

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start a profitable project.

The development of the total project, including its reduced phase has been designed to

reach the production stage and therefore the collection of revenue as quickly as possible and the

best market conditions. A bankable study will be conducted in order to optimize the project and

provide greater distance call. This stage is divided into two sub-steps that can be either succeed

or be undertaken simultaneously. (4) "Study bankable study bankable" This step includes pre-

feasibility study (including the campaign of exploration by pits and trenches) and the study of

faisabilitéfaisabilité (including the campaign of core drilling and completion of metallurgical

testing laboratory and pilot plant piloteusine). The term "bankable study bankable study is 24

months and its budget is estimated at 3.9 million U.S. dollars. The purpose of these independent

studies will be to reassure donors about: Geological reserves, Mine plan, Flow-sheets of metal,

In engineering, Preservation of the environment, From the study of the social fabric of market

research (5) "Project reduces project reduces" As mentioned earlier, this "project reduces

reduces project" will be profitable, without any dependence on towards anything and will have

a short repayment period (about three years). All equipment purchased and used under the

"project reduces project reduces" find a "second" use in the project finalprojet final. The

budgetary cost of the "reduced project reduces project is in the range of $ 5.0 million including

all investment and working capital required to start production and marketing. The main

objective of this step will allow to appreciate the extent of the risk by observing the actual

evolution of the project and better understand the validity of the transaction bankable by

exposure to a minimal risk because the flow cash "project reduces reduces project" will largely

cover the expenses later. This "project reduces reduces project, which has an impact on the

initial cash flow, will be used to develop operating procedures of the company with the project

27

and assist in serving living reference, the operation of lifting funds for procurement of project

finalprojet final. 07. "Finalprojet final draft" This step is of course the ultimate goal to start

production at industrial level best to exhaust the deposit within 15 years. The hypothesis to

require 24 months of time to procure equipment, carry out and start editing facilities may be

considered realistic. The budgeted cost is approximately $ 85.0 million.

08. Stages of project start.

(6) In Development "series"

All stages of the project are realized as a result of each other without overlapping. The

development time is 80 months.

28

(7) Development in "parallel"

Two stages of this project overlap. The development time is reduced to 60 months.

Table 2 Development in "parallel"

It is likely that the actual development of the project will be between the two schedules shown

above because the decision to move forward more quickly can be taken only when the "reduced

project reduces project" has shown sufficient signs positive returns.

09.

29

Total project

Table3 Project Planning

5. ESTIMATED COSTS AND ESTIMATES (BUDGET)

It is in fact first estimate the level of total investment (included studies) will be required,

as well as the initial working capital to start production. It will also then estimate the level of

operating costs to assess the profitability of the project. It is therefore to estimate the amount of

capital to be borrowed and repaid, CAPEX (capital expenditure) and OPEX (operating

expenditure) to cover all expenditure to be incurred prior to starting production. f. Expenditures

of the "due diligence" (first year) The first category of expenditure for the study phases of due

diligence due diligence, which will be part of feasibility studies and faisability. According to the

New Mining Code, these expenses can be amortized over two years since the project began. It

will be the same for engineering studies and environnementenvironnement.

At this stage the operating expenses of the type included in studies and in related

activities can be regarded as investment. The burst of spending will be in accordance with the

rules of conventional development budgets. This is a summary of expenditures for labor,

procurement of hardware, internal services and external services.

The first tranche of expenditure ( "due diligence due diligence, exploration by pits and

trenches) will be followed by a second installment on the feasibility study (exploration by core

drilling and laboratory tests and pilot plant), all of which must be completed by the end of the

third year.

g. Project Expenses reduced (first and second years)

30

these expenditures related to assembling and launching the project which will start

reducing in the middle of this year. Regarding the studies, activities long period of

implementation will be initiated at the right time to "take" to advance and ensure they are

completed by the end of the third year.

h. Expenditure of the bankable study (second and third years)

This time of intensifying phase core drilling that will certify bankable reserves and

eliminate any residual risk of geological uncertainty could derail the project.

i. Total Project Expenses (fourth and fifth years)

This makes the heavy investments that can not be determined if the handling of the

project is confirmed and guaranteed by the studies faisability. Start a large mining project in 5

years, with an initial draft of reduced performance and is therefore an objective to be necessary.

However it is important to be able to take decisions in successive and sequential knowingly so

that decisions on major investments are made only after having eliminated all the technical

uncertainties.

j. Detailed summary of expenditures by year

31

Table 8 Expenditure of the first five years

6. MINING - DEFINITION OF MINING PROJECT

k. Geological reserves (geological model).

The decision to consider the operation of a mine site is based primarily on the type of

historical information or the results of a large survey by seismic or other methods.

Once this first stage it is possible to get an idea of metallurgical treatment to implement and

how we will market the products to be extracted and recovered.

There are actually rules of thumb which can include words in terms of content and

according to specific parameters that the mining operation of a specific site can be profitable.

We launch at the time a drilling core (in general) to better define the orebody in space and

also to better know the characteristics of those ore and host rocks and the location of the water

table.

The geologist then began work compiling all data available.

Tranches CoupuresVOLUME

TOTAL d T.Minerai Teneur Moy T.Metal1250-1240 0,5 239850,00 2,00 479700 1,417069001 6797,68

1 144550,00 2,00 289100 1,630508475 4713,82 19550,00 2,00 39100 4,53657289 1773,85 10800,00 2,00 21600 6,3 1360,8

1240-1230 0,5 796500,00 2,00 1593000 2,862404269 45598,11 612500,00 2,00 1225000 3,416326531 418502 376200,00 2,00 752400 4,968532695 37383,245 275000,00 2,00 550000 5,765672727 31711,2

32

1230-1220 0,5 1112600,00 2,00 2225200 2,730669603 60762,861 938400,00 2,00 1876800 3,125539216 58660,122 581000,00 2,00 1162000 4,28292599 49767,65 278400,00 2,00 556800 5,402708333 30082,28

1220-1210 0,5 1393150,00 2,00 2786300 1,999885152 55722,81 1017000,00 2,00 2034000 2,52006883 51258,22 403700,00 2,00 807400 4,569643299 36895,35 172200,00 2,00 344400 7,090905923 24421,08

1210-1200 0,5 1256500,00 2,00 2513000 1,785142061 44860,621 920400,00 2,00 1840800 2,227470665 41003,282 233650,00 2,00 467300 4,839625508 22615,575 175000,00 2,00 350000 5,254285714 18390

1200-1190 0,5 995000,00 2,00 1990000 1,881508543 37442,021 730000,00 2,00 1460000 2,350617808 34319,022 284500,00 2,00 569000 4,264903339 24267,35 120000,00 2,00 240000 7,19 17256

1190-1180 0,5 708750,00 2,00 1417500 1,505026455 21333,751 381750,00 2,00 763500 2,138212181 16325,252 277750,00 2,00 555500 2,498586859 13879,655 21750,00 2,00 43500 7,19 3127,65

1180-1170 0,5 717750,00 2,00 1435500 1,195757576 17165,11 247000,00 2,00 494000 1,902591093 9398,82 193000,00 2,00 386000 2,06 7951,65 0,00 2,00 0 0 0

1170-1160 0,5 507300,00 2,00 1014600 0,974825547 9890,581 218500,00 2,00 437000 1,286814645 5623,382 31900,00 2,00 63800 2,04 1301,525 0,00 2,00 0 0 0

1160-1150 0,5 410500,00 2,00 821000 1,052971985 8644,91 67500,00 2,00 135000 1 13502 0,00 2,00 0 0 05 0,00 2,00 0 0 0

1150-1140 0,5 336350,00 2,00 672700 1,300267578 8746,91 206350,00 2,00 412700 1,615192634 6665,92 99600,00 2,00 199200 2,17 4322,645 0,00 2,00 0 0 0

1140-1130 0,5 42500,00 2,00 85000 0,59 501,51 0,00 2,00 0 0 02 0,00 2,00 0 0 05 0,00 2,00 0 0 0

TOTAL 0,5 8516750,00 2,00 17033500 1,86 476466,811 5483950,00 2,00 10967900 2,47 271167,752 2500850,00 2,00 5001700 4,00 200158,225 1053150,00 2,00 2106300 6,00 126349,01

33

l. Development of the mining project

This is the "pit design" or design of the mining project.

The problem is also multiple inputs and multiple outputs. It will be a series of round trips to

define the design that best corresponds to the optimization of all constraints.

A logical sequence would be to first define the products they will sell in quantity and quality. It

is actually assessing what the market can absorb. We then define the type of metal to be applied

depending on the nature of minerals and outputs.

I n this project, the annual call mine would be 25,000 tonnes of copper contained in ores

fed. It is obvious that the presence of secondary metal, cobalt, provide further enhanced.

m. Fosse final (ultimate pit.)

The call mine is fixed, we must define the final hole which should allow to

extract the maximum ore known. It never changes or at least very rarely configuring a final pit

made recarrages very important that there should be consent. Recarrages These are also difficult

to achieve because they involve usually operate under very narrow sites.

For shallower deposits, we will determine the final level based on an initial

review of floor plans.

If the reservoir becomes narrower in depth they will stop operations by ensuring that the final

level will be long and wide enough to allow the development of mining equipment chosen.

So there is already a relationship between the gear available (or buy) and the proposed quarry.

34

n. Mineral Reserves

Once the final career is drawn, we calculate the extractable mineral reserves

contained in the space of the open pit. They are only part of geological reserves and still suffer a

loss on dilution will depend mainly on the following parameters:

The size of the bucket of the shovel

-The nature of the shovel (front or retrograde),

- The nature of the mineralization and especially the nature of the ore contacts sterile

- The general slope of the deposit,

- The method of operating transverse or longitudinal

- The quality of work team’s selectivity.

For the first calculations, the angle of winding is fixed at 40 ° for the whole project and this, in

reference to known standards for types of terrain encountered. As to measuring the progress of

the project it will be possible to adjust this parameter based on geotechnical tests conducted on

samples collected on site.

o. Height and width of the mounds.

The height of mounds will depend mainly on the type of shovels that are used and whether the

35

homogeneity of the mineralization. Currently mounds 15 m are common.

 Knowing the height of mounds and the angle of slope, we automatically know the width of the

tiers. We will then conduct an initial design career by setting the slope of the most judicious

manner as stated above.

: angle de repos ou de stabilité

Lg : largeur des gradins

Hb : Hauteur des buttes

Hb

Lg = -------

tg

Figure 1 Height, width and stability of the mounds

p. Temperament.

The temperament of a career reflects the notion of "stripping ratio" (stripping ratio)

36

used in the Anglo-Saxon literature. The formula of temperament is the total excavation (in m3)

compared to the tons of ore (expressed in ts) or tons of metal (expressed in tonnes of copper or

copper equivalent tonnes). The stripping ratio "of Anglo-Saxon publications, meanwhile,

considers the ts sterile or m3 respectively reported tonne or m3 of ore, and using a report of

homogeneous units (to the point of view dimensional) contrary to the temperament it uses a

ratio of hybrid units. Both ratios, however, are insufficient to determine the economic value of a

mining project.

A time of 4 m3/ts was chosen for the initial calculations.

This figure will be determined automatically when the design phase of various pits will be

initiated.

Assumptions and key parameters geological and mining

Mining Réserves 1.000tCu 260.58

1.000tCo 16.4

Teneurs Cu % 1.86

Teneurs en Co % 0.16

Ts minerais (réserves minières) 1.000ts 10.156,56

0

tempérament 4

Volume total mines a ciel ouvert m 3 40626240

Cout minier $/m 3 3.25

37

$/ts 13.0

Table 9 Assumptions and main geological and mining parameters

q. Drainage

The drainage will be a significant problem in the final phase of the project since it will be

necessary to abate the water level to a height large enough to exploit the deposit installments are

currently located in the water table. The static head will vary between 50 and 90 meters. In a

first approximation, a total capacity of about 1100 to 1300 m3 / h is a minimum installation and

the proposed scheme is as follows: The water needs and industrial facilities are estimated

between 100 and 120 m³ / h. The water needs of the population is estimated at about 100 m³ / h.

st ? Distance transport to the excavation The transport distances are calculated based on the

simplified formula Kmst = dh + (10 x dv) + 0.5 kmst = km with standard dh = horizontal

distance dv = drop As for the waste to be transported from the quarry to fill areas for ore to be

transported from the quarry storage areas near the mill.

s. Equipment necessary for mining operations.

The recovery of mineral deposits is estimated at 80%. The sizing of the equipment

necessary to achieve the main mining operations must take into account the constraints of the

reservoir and production levels envisaged. The final choice of equipment and gear will be

38

determined on the basis of tenders. 01. Drilling and mining The usual criteria for qualifying

land according to its hardness and abrasiveness are used. The choice of mesh drilling as well as

their size will also conventionally. It is likely that he will drill and mine 60% of land throughout

the lifetime of the project. Given the size and characteristics of the ore (ore altered or

fragmented) design operating (reduced work space that will appear in the lower levels) and the

need to maximize ore recovery (minimizing the dilution sterile products) gear below will be

used: 3 face shovels with bucket emptied from the bottom (for about 6 m3 refusal): Capacity of

about 6 m3 refusal Cutting height of 6 to 8 m, Spill-turn by side (1 or 2 sides). 1 scoop

retrograde motion: Capacity of about 3 m3 refusal Cutting depth of 5 m. 2 wheel loader for

cleaning the front and manipulation in landfills: - 1 unit (220 kW) - 1 unit (170 kW) 02.

Transport career to fill the site operating The configuration of the field helped develop the

design with a width of 15 m inclined without stripping increase significantly, this design of

inclined will ensure the flow of dump 50 tons. The fleet will consist of grab buckets either rigid

frame, or hinged frame grabs or buckets of the two types. 03. Earthwork and grading Units

provided for this work are: 3 bulldozers type CAT D8R, 3 graders type CAT 14H, 4 sprinklers

12 m3. A simple dispatching not necessarily use the computer should be sufficient given the low

number of gears in motion a simultaneous manner. Communications between the control,

dispatch, help desk services and devices will be through a VHF radio network. t. Programming

mine production The actual working time on site (2 teams running at 2 am 6 posts per day) is

adapted to the habits of the country, and takes into account the particular transmission constraint

of staff (for each workstation 1 journey home place work). The number of lines to be used in the

implementation of this project was provided for a rate of excavation than 212,000 m3/month, to

extract an average of about 59,000 ts / month (given d 'mining recovery 80%). At this rate and

39

based on current geological data, the mineral deposit will be exhausted in about 15 years.

Programming mining is expected to maintain an "advance" ore concentrator. It reaches 6

months of production at the exhaustion of the project. Approximate Calculation of primary

equipment necessary.

Volume annuel 1.000

m3

2.544

Nbre de jours par an 313

Volume journalier excave 1.000

m3

8,127

Volume non foisonne par voyage m 3 35

Nbre de voyages par jour 232

Nbre heure effectives par jours 12.5

Nbre de voyage par heure 18.5

Nbre de rotation par heure par camion 3

40

Nbre de camion opperationnels 6.2

Taux de mise a disposition 80%

Nbre de camions necessaires 7

Nbre de godets par minute 2

Volume par godet m 3 2

Volume excave par pelle et par heure m 3 240

Volume excave par pelle par jour 1.000m

3

3,0

Nbre de pelles theorique 2.7

Taux de mise a disposition % 80

Nbre de pelles necessaires 2.4

soit 3

Table 10 Calculating approximate amount of gear needed primary

Applying the theory of queues has often proved inadequate to calculate the

number of loaders and transport. u. Selectivity mineral extraction To ensure the best possible

recovery of ore extraction and minimize dilution of ore with barren or pollution between classes

of ore, the following actions will be undertaken: Recognition by trenching the roof of each level

41

of 5 m, depending on transverse sections all'orientation ore, spaced 25 m or 12.5 m if necessary

and rapid analysis of ore passes, Sampling and rapid analysis of drill cuttings of blasting holes

for every level of 5 m

v. Perimeter Security

The usual guidance material safety (which may be specified in the new mining regulations)

provided around the open pit mining operation, a security perimeter extending up to 800 m from

the quarry. This area includes three zones, extending respectively:

1) 0 to 300 m or "kill zone" area prohibited for the duration of the shooting, the personnel,

machinery and equipment must be evacuated from the area;

2) From 300 to 500 meters or area of infrastructure and parking lanes, only employees involved

in mining is tolerated if taken refuge in shelters;

3) From 500 to 800 meters or traffic zone, where the fields and channels of communication are

tolerated, but not homes. However, the technique of firing ranges by priming the "NONEL"

which will be used to minimize KITANDA projections compared with conventional techniques,

as shown by various tests to Katanga in recent years and may reduce the magnitude of these

safe areas.

7. METALLURGICAL PROCESSING

w. General

Much of the copper deposits of Katanga takes the form of land which are folded

hills characterized by clearings of poisoning due to the high concentration of copper in the soil.

Contrary to this general rule, the deposit is KITANDA a wooded plain without outcrop covered

by a few yards of red clay deposits. This plain extends along the banks of the river Luvua.

42

Given the topography of the deposit mineralized, it is likely that the water level will be

approximately 10 to 20 m below the soil surface.

The limit of oxidized and sulfide zones which correspond generally to the location of

water table in second place at this level. It is likely that the oxidized surface ores are scarce and

that the sulfide minerals make their appearance very quickly. We would in this case quickly in

the presence of two classes of minerals, oxides and sulfides and confronted with two types of

conventional metallurgy, hydrometallurgy oxides and sulphides hydrometallurgy. SOUTH

CHINA MINING SPRL''society'' shall have already metallurgical plant using the latest

technologies in this field, taking into account difficulties in power supply sufficient for

industrial consumption; they will be used for the treatment of our minerals.

43

Fig.a: flow sheet gravimetric concentration

44

Treatment metallurgic classic has to envisaged previously further informed about the nature of

the mineralization.

A restatement of discharges by direct leaching was also at guests envisaged

because the deposits of this sector Gecamines are often "polluted by copper silicates such as

chrysocolla.

In metallurgical resumed on the following pages, are crits one hand metallurgistes my complete

since the extraction mining up to the site and discharges; second production of copper cathode

and carbonate cobalt carbonates , marketable products.

Treatments appropriated each category of ore finished and their cobalts and returns affa rents.

on hypothesis distribution of 40% of oxide ores and 60% of sulfide ores and serves available

about 8 0 million tonnes of ore with an average grade of 2.7% copper and 0.27% cobalt,

however, retained at this stage as a reasonable basis for simulations of proccess Metallurgy.

The metallurgy will be adapted to the geology As the accurate perception of the latter.

45

46

Table 11 Estimated quantity and quality of reserves

Figure 3 Breakdown of types of ore

KITANDA The project will start with a period of treatment of oxidized ores.

The occurrence of sulphide ores will form ore mixed 7 years after starting the project.

The classification of minerals, as described in Table 11 above, to determine both a

47

quantitatively and qualitatively, the feeding program in mineral and metallurgical facilities to

determine the number of sections needed for milling this effect. This feeding program is

described in Table 12 below.

For information a detailed table with food, year by year, has been developed for calculations of

the economic model.

48

49

GENERAL METALLURGICAL PROCESS

50

Figure 1 Process Metallurgical General 04. Description of units (8) Module crushing This

module consists of a receiving hopper, a feeder scales and a jaw crusher. This facility could be

semi-mobile because of operating facilities. In the case where the crusher is fixed, we need a

51

carrier recovery and a Dumper truck on a storage area to achieve a "bedding" to standardize the

content in the diet, which is important for the conduct of the flotation . Where is the crushing

semi-mobile and is career, the storage is fueled by dump trucks. (9) Website storage of minerals

This site will have storage capacity of at least three days to absorb production stops for

maintenance and for breakdowns and repairs crushing module without disrupting the operation

of the wet milling or cause a loss of production. The storage site of crushed ore will be covered

against the weather. Indeed, the site of Tungwe is in a subtropical zone and has a season

pluiespluies of six months per year. The wet ore "plugging" disruptive and therefore a decrease

in production. Finally the storage of minerals will be provided with equipment recovery type

gantry rotopelle spilling onto a conveyor feeding the grinder. This power is controlled by an

electronic switch for dynamic weighing of loads moving. . (10) Module wet milling This

module could be either conventional milling or by an autogenous grinding (the advantages and

disadvantages of each of the grindings are described below). Grinding classic uses a

combination of bar mills and ball mills with intermediate classification. Autogenous grinding

mill uses a semi-autogenous (SAG Mill #), followed by a second floor consisting of a ball mill

and a battery of classifiers, hydro cyclones. We will see later in the note details No. 1 that we

give preference to conventional milling. After this treatment, the pulp is sent in conditioners

before flotation. This pulp has a density of 1.25 and a particle size of 80% under 150 mesh. To

guide the process, install a hydrometer upstream of the flotation. (11) Hall of flotation,

sedimentation and filtration This entity follows the classic pattern consists of a series of

flotation machines with a capacity of 300 cubic feet with a floor of roughing and finishing a

floor and a recycling of intermediate products in the circuit head roughing. The concentrates

will be unsettled, possibly filtered and sent to the leaching. Discharges, they are sufficiently

52

exhausted are sent to the site discharges. If they are not, they will be sent to another type of

leaching densely conducted in reducing conditions to recover copper silicates that can float in

any case and recover the balance cobalt not float. x. Metallurgical parameters and assumptions

used to calculate economic The table below gives the basic parameters and assumptions that

have been selected to perform economic calculation. The parameters used by operators of other

candidates (not yet confirmed for the ores of KatangaKatanga) are represented in purple next to

those used in our case represented in yellow. The study faisabilitéfaisabilité will confirm

whether the proposed process, heap leaching or vat, may be selected for the particular category

of minerals whose siliceous gangue acid (SiO2) # does not require too much sulfuric acid to be

dissolved . It should be noted that other operators have also classified their ores by the ratio of

consumption of sulfuric acid (GACGAC) #.

Table 13 Assumptions and main metallurgical parameters

The project is feasible without major obstacle to metallurgically. From the estimated deposit to

8.000.000 ts ore at average grades respectively of 3.4% Cu and 0.30% Co (equivalent to

260,000 t Cu and 15,000 t Co) and based on performance copper recovery of 79.7% and a

53

recovery yield of 72.5% cobalt, it is possible to produce for the whole holding a quantity of

copper metal equivalent to 831,000 tons in the form of cathodes and amount of cobalt metal

equivalent to 53,000 tons in the form of carbonate to 35% cobalt content.

Yields metallurgical ore per category are listed below:

Table 14 Yields mà © by metal taste catà © gory ore

The average yield © rà © pond is included in the total column while the performance of each

catà © gory ore is © displays in the column for each class.

The food was € ™ à © tà © rà © party in Moda ¨ à © the economic, anna by anna © e © e

dà © to complete the actual production of each anna © th © basis of character tics and ore

based on flow-sheets of selected treatments.

54

y.

55

56

The rate balances resume as follows:

Table 43 Yields of the overall flow-sheet n° 1 and n ° 2

z. Metallurgical Operating Costs

05. Total operating cost and electrical energy use of the factory

(12) electrode position Copper

This need is based on Faraday's law. Depose equivalent-gram or 31.77 g of copper requires

96,500 coulombs or 26.8 Ah.

Depose a gram of copper therefore requires 26.8 / 31.77 = 0.844 Ah.

The average applied voltage to the terminals the cell wit electrolyse with plomb plomb anode is

2.28 volts. Taking a yield of the position of copper by 95% and a yield of rectifying electriques

of 96%, we encrypt the energy consumed to 0.844 Ah x 2.28 V / 0.95 x 0 , 96 = 2.11 kWh / kg.

(13) Leaching, precipitation and auxiliary precipitation

the energy requirements for these operations and for all IPOs operation auxiliary (cranes,

57

pumping, lighting) have been estimated to 20% of consumption cells of electrolyse for the

flow-sheet n° 1 and 10% for the flow-sheet n ° 2.

Table 50 Estimated cost of electricity from the smelter 06. Calculating the cost of reducing SO2

The manufacturing process of reducing SO2 from the following reaction: 2 SO3 (l) + S (s) = 3

SO2 (g) Taking into account the stoichiometry of the reaction, the reports SO3/SO2 =

2x80/3x64; S/SO2 = 32/3x64 = 0.8333 = 0.1667 Indicate that to produce 100 tons of sulfur

dioxide, it must implement 83.33 tons of SO3 and 16.67 tons of elemental sulfur. However,

83.33 t SO3 correspond to a production of 83.33 x 98/80 = 102.08 t H2SO4. In acid prices to

120 USD / t and sulfur made in situ at 180 USD / t the cost of SO2 becomes: 102.08 x 120 =

12,250 $ 16.67 x 180 = 3000 $ 15,250 The price of SO2 per ton is therefore $ 152.5. 07. Cost of

reagents and réactifsCoût processors The reagents involved in the process of hydro-

metallurgical manufacture of copper and cobalt are either produced locally (lime, acid) or

imported from abroad (carbonate and sulfur). Prices for items given in the table are formed on

the basis of data and information collected from GécaminesGécamines force.

58

Table 51 Costs of reagents leaching copper and cobalt.

ECONOMIC AND COMMERCIAL INFORMATION.

8. MARKET

a. Current market

08Copper Demand

for copper will be supported mainly by increased consumption in China and that of other parts

of Asia. This development, which comes after several years of decline, resulting from the

proliferation of electronic components in many consumer goods. If this trend were to continue,

it could have a significant positive effect on copper demand in the long term. However, several

new mining projects have emerged around the world and threaten to create a situation of

oversupply in coming years.

The projections made on the balance between production and consumption and low cost

means of production of new units (less than 50 cts / lb), leads to predict a sale price of long-

term copper around $ 1800 per tonne. We will see later that conservative assumptions have been

used to project Kitanda at $ 1,600.

59

09. Cobalt According to various experts,

global demand for cobalt is stable for several years and is estimated to average 30,000

tonnes of metal per year. World production was adjusted to the level of demand in recent

years especially after the phenomenon of exporting heterogenite.

The major uses of cobalt are found in the following areas: - Hyperalliages for the

aerospace industry, - Chemicals (catalysts, CoSO4 ...), - Magnetic steels (Alnico #) -

Carbides, ceramics, - Cutting Tools Industrial - Construction of high performance

batteries (fast growing) Applications in medical devices. Cobalt is commonly used

worldwide in fields involving other metals such as copper and nickel. So far, the

operation of the cobalt-called "fatal" or "secondary", has largely cover the needs of

global consumption, with production costs relatively low, around 2 $ / lb. The price of

cobalt to find a balance point that will be directly linked to the marginal cost of

extraction of cobalt metal fatal excess demand and marginal consumption.

Until that date, world production of cobalt remains in deficit and can be

partly achieved by reactivation of the exploitation of small deposits of cobalt

Katanga. Projections lead to predict a downward trend of the selling price of

cobalt from 30 to 20 cts / lb over the next 5 years. bb. Prospective studies 10.

Changes in copper prices and selection of hypotheses

60

The chart below shows the statistical values of current sales of copper from 1980 to

2002, the linear trend line (dotted) of these historical values and the value used in calculating

basic project is $ 1,600 per metric ton (red).

Figure 3 Changes in copper prices and selection of hypotheses

61

Evolution Course cobalt and choice of assumptions

The chart below shows the statistical values of current sales of cobalt from 1980 to

2002, the linear trend line (dotted) of these historical values and the values chosen by 6 per

pound (in red). We see at first glance that the basic assumption is comfortable. It is likely that

the trend significantly upward will not be confirmed because of the implementation of various

projects Katanga and because of the chronic underestimation of the potential reserves which

heterogenite probably a few surprises.

Figure 4 Evolution of the price of cobalt and choice of assumptions As cobalt is

produced as a carbonate containing 35% cobalt was considered, based on sales made by

companies instead, the sales formula for cobalt content is based on 65% of the course for LMB

Buyers located in RSA. It should be possible to improve the selling method by reducing

impurities (copper, nickel and manganese). The cost of transporting, placing big bags included,

is $ 110 / t. Moisture after drying will be 10%.

62

9. FLOW PRODUCTION

cc. Trade Policy

It will carry as much as possible through sales contracts with long-term end-users to

avoid traders who are just expensive middlemen. It is obvious that the sales offices will also be

reduced and efficient as possible. By focusing on transactions InternetInternet (E business) it is

certainly possible to become much more effective than were the heavy structures and isolated

pass

Hypothesis "and its parameters selected for marketing

Table 52 Hypothesis and parameters and its very successful for marketing

10. Reanalysis of the reduced project.

As noted previously the purpose of the project is launching a project that will seek to

exploit the parts very rich in cobalt ore to produce a marketable cobalt carbonate. If the project

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starts quickly, it will be possible to take advantage of being raised cobalt and get the desired

effect which is:

1) to fund the bankability study,

2) To maintain the level exposure of the lessor of a low level until the end of the bamkability

study,

3) to carry out an observation "in situ" in order to appreciate the full-scale of the political risks

and technical.

By taking advantage of all incentives of the New Mining Code will need to ensure that it

is possible to postpone the first five losses (absorbing margin operatory gross project product)

The following table shows the cash flow .Project product that is actually in the plan of Affairs.

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Table 54 Cash flow from reduced project cash ($ thousands)

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Examination of the two lines to cash flow accumulated to suggest that the investment

will be repaid between the fourth and fifth years depending on the course of cobalt. ff. ?

Definition production parameters It is based on geological knowledge, mining, metallurgy and

trade indicate the extent possible the project size in quantity and quality.

The time frame and financial holdings must also be done on this occasion. Most of

the techno-economic assumptions derived from technical analysis above. The table below is

merely a reminder of those parameters that were mentioned in each chapter. ?

gg. Definition of expenditure before production

This phase of work is to take inventory of all expenses to be incurred prior to the

production phase and especially the almost concomitant export of metal products to generate

revenue and profit which is the underlying objective of the project. Details of expenditure prior

to the start of production has been previously displayed at the project definition. These expenses

are of course spread over time in order to calculate the table of the loan (or loans that if multiple

donors).

hh. Definition of capital.

Loans and repayments As indicated in the previous table loans shall be established by

mutual agreement with one or more donors. Even if the landlord wants to be an entrepreneur or

a buyer of metals, it is advisable to separate the functions of providers of those funds contractor

seeking work or that operator on the metals market. It takes this opportunity to clarify any terms

of the loan as well as those of its recovery (grace period, annual rates, principal, interest,

deadlines ...). It should be noted that all the interest and financial costs of borrowing will be

supported as operating costs while the principal repayment will be made after calculating the

gross margin taking into account depreciation. In this first table a single donor was found with a

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single rate. The loan, which has not yet been negotiated, was broken into five tranches. The data

used are those announced by a lessor can request that the guarantee on the repayment of interest

by a bank enjoying a normal rating. It was assumed that the U.S. base rate, which acts as

reference chosen by the landlord, would remain at its current historically low and increase by

one point every two years to stabilize at 6%.

Figure 5 Evolution of interest rate and U.S. base rate of borrowing As a guide the theoretical

table that was used for loans is shown below:

Table 6 Table theoretical borrowings ($ thousands) Fund roulementFond rolling This has been

fixed at the equivalent of four months of the budget for supplies needed to operate. He

represents the working capital disbursed in the fifth year and repaid the eighteenth year (last

year of the project for purposes of calculation). The working capital required to start the project

deducted from the reduced working capital required to start the big project. Capex and Opex

and Opex Capex These amount to $ 115 million of which $ 103 million investment and $ 11

million of working capital. An unexpected $ 12 million is included in the amount of $ 103

million planned for investment. The financial costs are taken into account the level announced

by a lessor possible and are part of capexcapex. Some Various tracks that have not yet been

developed will likely reduce the financial exposure required to donors. These include call or

use:

- The various credit facilities providers,

- Opportunities to pre-sales

- The possibility of pledging of intermediate products and / or stocks of inputs,

- The possibility of deferring some expenses beyond the sixth year (it is not necessary to have

all the equipment at the beginning of the project)

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- The need to support the reimbursement by all partners.

ii. Calculation of tax included in operating costs

This is the immediate fiscal costs that are part of direct operating costs. Conversely when the

financial statements are being prepared we will determine the taxation which is not part of the

direct operating cost. The payment of all taxes is, of course, the eyes of the Government of the

Democratic Republic of Congo and those of the World Bank a deeper purposes of the project

to meet the imperative of development.

1. Surface rights (DS)

This "line" is calculated based on rates provided by the New Mining Code that is

multiplied by the estimated size of the concession concerned.

2. Admission (DE) It counts the total budget of supply (mine, metallurgy, direction,)

which is multiplied by a fee rate input means of 3%. For new projects the rates of duties

applicable under the New Mining Code are reduced and vary from 2% to 5% depending on the

types of materials or equipment concerned, provided that a complete application has been

submitted previously to the Ministry of Mines. This aspect of the New Mining Code clearly

illustrates the importance of conducting a due diligence study as thorough as possible to avoid

oversights that will be difficult to catch up later.

3. Income Tax (IPRIPR) to calculate this line must be known envelope net tax cost of

labor that is obtained by summing the net costs of all categories of labor. Then apply an average

rate of income tax of 35% for the income tax.

4. Income tax for expatriates (IPREIPRE) On the envelope net tax expatriates applying

the tax factor of 10% under the New Mining Code as a special tax rate on income expatriates in

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lieu of tax rates very important under previous legislation.

5. Contribution to turnover (CSF) The tax rate of 18% current is applied to the budget

for outside services to determine the position of the CCA business plan. The calculation block

described in this paragraph is the line 100 to line 124.

6. Synthesis tax included in direct operating costs Table 57 Direct taxes ($ thousands)

7. Total production costs (line 258) In one hand a total net costs of production and the

cost of direct tax yields production costs which we apply a contingency factor of 10%.

Table 58 Total Production Costs ($ thousands).

8. Analysis of unit costs

Table 59 Analysis of unit costs

dd. Calculation of revenue and sales The calculation of income is relatively easy

arithmetically because it knows the amount of metals produced, well enough transport costs on

exports and other marketing costs and we can choose a hypothesis underway metal products.

The choice of the progress of metal must be made with caution given that the control of markets

likely to escape the project operator. We must ensure that the costs of marketing the project are

lower than those of competitors.

kk. Productivity and Inflation

As mentioned previously the currency used is U.S. $ thousand according to the practice

of mining that has global benchmarks expressed in this unit. It is also in constant dollars

because it is recognized that the industry will continue to offset price increases in annual

productivity improvements. ll. Calculation of gross operating margin (EBITDA) Knowing the

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costs of production and net revenues of marketing costs can be determined by the difference

between these two lines the gross operating margin also called EBITDA (line 262). The

distribution of the gross operating margin is as follows:

- Provisions and charges related to net revenue of marketing

- Repayment of loan and interest incurred during and after the grace period,

- Provision related to income distribution among shareholders after payment of tax on

schedular income. A Synthesis of the distribution of the gross operating margin.

Table 61 Distribution of gross margin ($ thousands)

• The array of total loans and the repayment plan is as follows: Table 62 and loan

repayment plan The graphical representation of the borrowing and repayment plan may be as

follows:

Figure 6 Borrowing and repayment plan

mm. Maintenance capital expenditures (including replacements)

An annual budget of $ 2.0 million was provided for under investment in maintenance

since the twelfth year until the sixteenth year estimating that it will begin to replace equipment

after adaptation of metallurgical ores mixed sulfide. Maintenance capital also called TNCE #

are amortized in the year. For the adaptation of metallurgical processing of ores and sulfide

mixed an envelope of $ 50.0 million has been distributed over the years ten and eleven.

To simplify this investment is expected to flow and amortized in the year. nn. residual

value of assets and liquidation prédécouverture An appropriation of $ 23 million was made the

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eighteenth year as a residual value of asset liquidation. As discussed below it is arguable that the

project will last longer than 18 years but needs to fix the results expected by investors "must

stop" the calculation after a reasonable time. A budget of $ 1 million has been provided in the

loan to start stripping the five years preceding the supply hub. This envelope is recovered the

year eighteen.

oo. Calculation of rate Residual The rate of return "project" and "private" are also calculated

from the main form of business plan. For a value of three main parameters (price of copper,

cobalt and current rates of borrowing) are the cash flow "project" and "private" that perform

calculations corresponding IRR.

10. FIRST RESULTS OF THE CALCULATIONS

Table 65 First results of calculations (in thousands of $) One can see that the

profitability of the project as result of above calculations is acceptable even with the

assumptions voluntarily "pessimistic" that were used and what, specifically, those concerning

the progress of metal. We will see further, however, that these results are improved markedly

with a significant rise of 10% over achieving sales justifying going ahead with the project and

fund studies faisability.

11. RESULTS WITH IMPROVED DURING SALE

The table below shows (in thousands of $) the results obtained by considering the

progress of metal products will be improved by 10% compared with prices in the selected

reference case. There is a fairly significant improvement in results which leads to the

conclusion that market research is obviously important in assessing the bankability of the

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project.

Table 66 Results improved over sale of metals (in thousands of $)

These early results show it is possible to define a mining project attractive to a

private investor looking for a net profit at least equal to 20%. Faisability studies, which will

be absolutely rigorous, will not tolerate any complacency subjective assessment or choice of

parameters

pp. Area of project viability

It is actually estimate what range of values of major parameters outside the project

remains attractive to private investors. To address this concern of many simulations (36) were

conducted by varying the three major parameters between values that can be considered

reasonable against the project and the values thereof while remaining realistic are much more

favorable to the project. It is normal that all parameters are neither "bad" or "good" at the same

time, which could lead to the conclusion that the project is well within the limits that were set.

You can not borrow at high interest rates and sell the metal to bad run at the same time. The

table below shows the 36 cases analyzed, while the graph gives for his position of extreme

curves.

Table 68 Simulation Results Figure 9 Area of viability of the project for a course of cobalt at $

4 per pound For a loan at 8% the project can almost tolerate a course of cobalt at $ 4 a pound

and a copper price of $ 1200 per tonne. For a loan to 24% will require that the copper can be

sold at least $ 1800 a ton if you want to be able to repay the loan and have a profit for

distribution. Figure 10 Zone viability of the project for a course of cobalt at $ 6 a pound For a

loan at 8% the project can tolerate a course of cobalt at $ 6 a pound and a copper price of $

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1200 per tonne. For a loan to 24% will require that the copper can be sold at least $ 1,600 a ton

if you want to be able to repay the loan and have a profit for distribution. Figure 11 Zone

viability of the project for a course of cobalt at $ 8 per pound For a loan at 8% the project can

tolerate a course of cobalt at $ 8 a pound and a copper price of $ 1200 per tonne. For a loan to

24% will require that the copper can be sold at least $ 1,500 a ton if you want to be able to

repay the loan and have a profit for distribution.

The procedure of calculation and presentation of simulations dissociates compensation

function "funder" to that of "designer-developer of the project in order to pay specific function

identified. He will decide later whether this presentation of the problem is appropriate for each

circumstance. qq. Rate of Return The rate of return on the "project" and "foreign investors"

have been calculated on the basis of rent money income fixed at 5.3% per year (U.S. base rate +

1% as announced by a potential donor) to assess the soundness of the project. The returns are

calculated on the gross cash flow (EBITDA) for the project and the rate of net cash flow

accruing to the sponsor and donors alike. For the calculations whose results are represented in

the chart below, the starting rent of money is fixed at 2.0% rate offered by a donor candidate,

and the progress of cobalt is set at $ 6 / lb for the three extreme cases of progress copper.

Figure 12 Changes in the rate of return The hypothesis fixing the price of cobalt at $ 6 / lb

(which can be described as very realistic) results in rates of return quite as good partners for

each project for the donor funds necessary to achieve it. The difference between profitability

"project" and cost "private" gives a good measure of flexibility that may emerge for private

investors (especially institutional investors institutionnelsinvestisseurs) since this difference

reflects the share of state and GécaminesGécamines.

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INFORMATION ON ORGANIZATION

The project will be a general organizational structure as light as possible while avoiding

the pyramid model heavier and frozen and develop the possible labor pool and the use of

specialized task forces to avoid inflation of the number of staff positions. However the three

major functions of staff must be ensured.

13. HUMAN RESOURCES

rr. Administration and Personnel Management

These activities include the one hand: General Administration of staff including: the

development of pay (salary policy, schedules, scores, leave, travel allowances, allowances,

bonuses, ...) the development and maintenance of standards, procedures and rules,

administration of benefits "function" (housing, car, ...) promoting monetization rather than

granting them, administration of the disciplinary system, labor relations (union negotiations,

collective agreements, ...) general management of staff including: defining the framework and

the actual function of organic production programs and activities, recruitment, selection and

hiring, qualification and classification of jobs and workstations professional promotion and

monitoring of career plans, management of any system of bonuses linked to individual

performance and company performance.

The positions of execution will be defined by generally simple, inspired by the ILO

classification by as sorting criteria into groups and subgroups of business according to criteria

of skill levels (semiskilled or gestural, semi workers -skilled, skilled, highly qualified). The

74

positions of control with only two levels, the first on such functions as team leader, office

manager, ... and the second involving functions such as foreman, shop foreman, ... It will be

crucial not to confuse the description and the qualifications of the position with training and

qualification of the agent.

Similarly, the characterization and classification of jobs, directly from the organization

of work in the company remain the exclusive prerogative of the employer and are not negotiable

and can not make a collective agreement with the social partners, those it should be limited to

examining cases of blatant distortion between the profiles of the position and that of the agent.

The nuisance of the workplace will be assessed taking these into account in

calculating compensation. For cons, the risk increases the probability of occurrence of accidents

will be adequately covered by insurance. The framework will be limited to the department head

level and specific functions of management. Some top professionals with no supervisory

responsibilities will, however, given their qualifications, similar to frames. A modern method

for evaluating managerial and highly skilled as the Hay-METRA may be advantageously used

for this purpose.

The number of skill levels and coaching is limited to eight. Any bonuses for high

performance will be granted based on company performance and quality of individual services.

Again and avoid moving to a system for automatic granting, we must use effective setting

individual goals, providing performance monitoring and preferably using the technique of the

interview between assessors, all endorsed by a supervisor. ss. Jobs created directly and

indirectly At this stage of the project can be estimated that the following positions be created:

Table 72 Staff distribution by categories ? Wages must conform to the laws of the labor market,

neither more nor less. They will be set at a level sufficient to retain and motivate the workforce

75

in a sustainable manner which will require to also appeal to the traditional techniques of human

resource management to achieve professional growth of each, which can be that benefit the

employer.

Table 73 Distribution of compensation of employees

It should be noted that the average tax rate of 35% was used to assess the tax on

professional earnings (IPRIPR) employees. For expatriates the direction of New Code

MinierNouveau Mining Code have been applied taking into account the special tax of 10%

(IPRE).

14. SUPPLIES

These include inventory management, purchasing, transportation, import and the

development and maintenance of technical specifications and administrative systems. In order

not to complicate structures, consideration should be given here to use as much as possible the

use of outsourcing (freight forwarders, customs declarations, ...) and play competition. It would

also be wise to bear by some providers of administrative and financial constitution of stocks of

spare parts and subassemblies rolling.

15. FINANCE

These include:

- The general accounting,

- The preparation of financial statements and balance sheets,

- Cost accounting and accounting industry,

- The establishment of cost ratios / production

- The annual budgets and five-year investment and control,

- The annual operating budget (including recurrent budgets) and five and their control

76

- Forecasts and liquidity plans,

- Inventory management. It will specifically ensure that the cutting of the accounting

operations and the operating budget are similar to better control production costs and avoid the

use of calculations and tests outside accountants.

The Comptroller General and Treasurer General will be clearly defined and clearly

separated. We respect the prescribed course of Accounts and Congolese are aligned with

international practices in this area (GAAP) with quarterly financial statements. A small but

effective unit directly under the branch will handle the legal and tax, insurance and auditing.

In case of momentary overload of work the use of outsourcing (trust agencies, law

firms, auditing firms, ...) should be considered. Schedules and budgets that are reference tools.

All decisions affecting the company financially beyond a certain threshold can not be taken by

appropriate committees (purchases, sales, payments, subcontracting, outside services,

acquisitions or divestitures, ...). Similarly, all personal commitment can be made on a decision

by a recruitment commission documented by examination of multiple files of candidates for

each position.

INFORMATION ON SOCIAL POLICY

Traditional, large companies Katanga (all heiresses companies chartered early colonial

period have important rights and privileges but subject to high duties and charges) guarantee in

lieu of government offices or providers utilities a series of benefits such as health care,

education (at least for the primary) and frequently also the provision of basic supplies at

protected prices (corn, oil, salt fish and soap) in quantities depending on family composition.

Supervision of certain sports and cultural activities is often provided by an employer support to

ASBL # organizing them and acting under his control. This system has worked well for many

77

years as the lack of government did not cause a shift in demand for social benefits from the

general population to social services for large enterprises. This resulted in a significant

impairment of social benefits companies for their employees who often did not receive services

that purely theoretical, while these same companies attended an uncontrollable swelling budgets

of their social programs. It would be prudent to monetize and salarization certain social benefits

(which is free has no value) and preferably using a system of cooperatives and mutuals, as

envisaged and recommended by the World Bank for large current Katanga. Anyway, this sector

should be strictly controlled and precise in order to counteract its natural tendency to drift.

Costs for staff to reflect both the payroll and benefit costs and benefits, in terms of overall

budget. A reasonable estimate of total benefits (if they are not insured by the employer) is

approximately $ 150 per month per agent. On the other hand, the employer's contribution (2 / 3

of the amount owed, the remaining 1 / 3 being paid by the employee) social security

contributions due to INSS is included in the standard cost of labour - 'work.

CONCLUSION

After this preliminary study it appears that faisability Project KITANDA is a better

option than interesting. The limit of conceptualization and modélisation is reached that the

physical and quantifiable data on which to build are and will remain insufficient as long as the

deposit has not been better defined by quantity and quality of exploration.

The further investigation ( "due diligence due diligence") mentioned in the phases of the

project and introduced by this preliminary study should therefore be undertaken and funded as

soon as possible. Accurate knowledge of the field will include defining the mining and

metallurgical projects to lift then the other uncertainties of the project.

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