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FERRUM CRESCENT LIMITED - The Moonlight Project Updated Mineral Resource estimate

Release Date: 29/04/2014 09:30
Code(s): FCR     PDF:  
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The Moonlight Project – Updated Mineral Resource estimate

FERRUM CRESCENT LIMITED
(Previously Washington Resources Limited)
(Incorporated and registered in Australia and registered as an external company in the Republic of
South Africa)
(Registration number A.C.N. 097 532 137)
(External company registration number 2011/116305/10)
Share code on the ASX: FCR
Share code on AIM: FCR
Share code on the JSE: FCR      ISIN: AU000000FCR2
(“Ferrum Crescent” or “the company” or “the group”)



       The Moonlight Project – Updated Mineral Resource estimate in terms of JORC (2012)

Highlights
 - Mineral Resource estimate for the Moonlight Project, previously stated in terms of JORC
        (2004), has been updated in terms of the requirements of JORC (2012);
 - The updated Mineral Resource provides a firm foundation for the re-commencement of the
        Bankable Feasibility Study for the Moonlight Project;
 - The grade and tonnage estimates within each classification category remain unchanged, but
        the assumptions used in the previous estimates have been updated and explicitly reported,
        as required in JORC (2012);
 - The Total Mineral Resource is estimated as 307Mt at 26.9% Fe, including:
            o 172.1Mt Inferred at 25.3% Fe, 83.0Mt Indicated at 27.4% Fe and 52.6Mt Measured
                at 31.3% Fe
  - Geological losses of 5%, Fe cut-off of 16% and a variable depth constraint from surface to
        100m and 250m, depending on the geometry of the mineralization.

Ferrum Crescent, the ASX, AIM and JSE quoted iron ore developer today announces the completion
of an update to the Mineral Resource estimate for the Moonlight Iron Ore Project (“Moonlight” or
“the Project”). The Mineral Resource estimate is now stated in terms of JORC (2012) and hence can
inform the re-commencement of the Project’s Bankable Feasibility Study (“BFS”).

Mineral Corporation Consultancy Pty Ltd (“The Mineral Corporation”) undertook the update of the
Mineral Resource estimate, which was previously stated in terms of JORC (2004). The Mineral
Corporation updated all of the assumptions used in determining the previous estimate, with respect
to the requirements of JORC (2012). It determined that the Mineral Resource classification criteria
imposed in the previous estimate was still valid. Furthermore, the additional reporting requirements
contained in JORC (2012) have been complied with in the updated Mineral Resource estimate
report.

Within a cut off grade of 16% Fe, geological losses of 5% and a depth constraint of between 100m
and 250m from surface, (depending upon dip and the number of zones present), The Mineral
Corporation has determined that there are reasonable prospects for eventual economic extraction,
and hence estimate the Mineral Resource as follows:
 Category                                   Gross                                      Net (attributable to Ferrum Crescent at 97%)

                 Tonne        Fe (%)       SiO2       Al2O3        Contained            Tonne        Fe       SiO2        Al2O3       Contained Fe
                  (Mt)                     (%)         (%)          Fe (Mt)                         (%)       (%)          (%)            (Mt)
                                                                                         (Mt)

 Inferred        172.1         25.3        51.2         4.8            43.5             166.9       25.3      51.2         4.8              42.2

 Indicated        83.0         27.4        50.1         4.0            22.7              80.5       27.4      50.1         4.0              22.1

 Measured         52.6         31.3        47.3         2.5            16.5              51.0       31.3      47.3         2.5              16.0

 Total           307.7         26.9        50.3         4.2            82.8             298.5       26.9      50.3         4.2              80.3

*Tonnes are rounded

A summarised description of the Mineral Resource estimation criteria, as provided in JORC (2012), is
included as an appendix to this release.

Commenting today Tom Revy, Managing Director, said: “The updated JORC (2012) resource
announced today forms an important part of our plans to progress the Moonlight BFS in 2014. Not
only is the Mineral Resource stated in terms of JORC (2012), and hence suitable to inform the more
detailed Feasibility Study work to come, but the up to date assessment of ‘reasonable prospects for
eventual economic extraction’ give us further confidence in the Project’s potential. What is
interesting about Moonlight is that the Project is about a premium, high value product, with the
potential to be mined at a low stripping ratio”.

The information in this statement that relates to Exploration Targets, Exploration Results and Mineral
Resources has been compiled by Stewart Nupen, a Competent Person who is a Fellow of the Geological Society
of South Africa and a registered Professional Natural Scientist with the South African Council for Natural
Scientific Professionals. Stewart Nupen is employed by The Mineral Corporation, an independent consulting
firm to Ferrum Crescent Limited.

Stewart Nupen has sufficient experience that is relevant to the style of mineralisation and type of deposit under
consideration and to the activity being undertaken to qualify as a Competent Person as defined in the 2012
Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’.
Stewart Nupen consents to the inclusion in this statement of the matters based on his information in the form
and context in which it appears.

Appendix: Checklist of assessment and reporting criteria (from Table 1 in JORC (2012))
 Criteria               Explanation                                                      Observations
 Section 1: Sampling techniques and Data
 Sampling                Nature and quality of sampling (eg cut channels,                Limited information on the sampling techniques for the
 techniques              random chips, or specific specialised industry standard         KIOL data is known.
                         measurement tools appropriate to the minerals under
                         investigation, such as down hole gamma sondes, or               For the FCL exploration, sampling was limited to the
                         handheld XRF instruments, etc). These examples should           sampling of RC chips and diamond core.
                         not be taken as limiting the broad meaning of sampling.
                         Include reference to measures taken to ensure sample            Limited information on the sampling techniques for the
                         representivity and the appropriate calibration of any           KIOL data is known.
                         measurement tools or systems used.
                                                                                         For the FCL exploration, representivity was ensured by
                                                                                         appropriate sub-sampling protocols.
                         Aspects of the determination of mineralisation that are         Limited information on the sampling techniques for the
                         Material to the Public Report. In cases where „industry         KIOL data is known.
                         standard? work has been done this would be relatively
                         simple (eg „reverse circulation drilling was used to obtain     For the FCL exploration, industry standard sampling
                         1 m samples from which 3 kg was pulverised to produce           techniques were adopted. RC samples (1m-2m) were
                         a 30 g charge for fire assay?). In other cases more             riffle split on site and diamond core samples were
                         explanation may be required, such as where there is             halved with a diamond saw.
                         coarse gold that has inherent sampling problems.
                         Unusual commodities or mineralisation types (eg
                         submarine nodules) may warrant disclosure of detailed
                         information.
Criteria              Explanation                                                  Observations
Drilling techniques   Drill type (eg. core, reverse circulation, open-hole         Drilling data from KIOL and three phases of FCL
                      hammer, rotary air blast, auger, Bangka etc.) and            exploration inform the estimates.
                      details (eg. core diameter, triple or standard tube, depth
                      of diamond tails, face-sampling bit or other type,           The drilling comprised open hole, RC and diamond core
                      whether core is oriented and if so, by what method, etc.     drilling and was all vertical. A total of 122 RC holes and
                                                                                   89 diamond core holes were accepted for the estimates.
Drill sample          Method of recording and assessing core and chip sample       Limited information on the sample recovery for the KIOL
recovery              recoveries and results assessed.                             data is known.
                      Measures taken to maximise sample recovery and               With the exception of surficial rubble, the sample
                      ensure representative nature of the samples.                 recovery through the mineralised zones for the FCL
                                                                                   exploration was acceptable.
                      Whether a relationship exists between sample recovery        No recovery information for the KIOL database is
                      and grade and whether sample bias may have occurred          known. Due to the generally high sample recovery, this
                      due to preferential loss/gain of fine/coarse material.       relationship was not investigated.

Logging               Whether core and chip samples have been geologically         The KIOL data included electronic codes for the main
                      and geotechnically logged to a level of detail to support    lithological unit, certain sub-units, and the core bedding
                      appropriate Mineral Resource estimation, mining studies      angles.
                      and metallurgical studies.
                      Whether logging is qualitative or quantitative in nature.    All geological information during FCL exploration was
                      Core (or costean, channel, etc) photography.                 logged in acceptable detail, and stored in an MS Access
                                                                                   database. This included lithological, structural and
                                                                                   geotechnical information.
                      The total length and percentage of the relevant              In both KIOL and FCL exploration, all drilling was
                      intersections logged.                                        logged.
Sub-sampling          If core, whether cut or sawn and whether quarter, half       No information regarding sub-sampling is known for the
techniques and        or all core taken.                                           KIOL holes.
sample preparation
                                                                                   For the FCL data, core was cut.
                      If non-core, whether riffled, tube sampled, rotary split     No information regarding sub-sampling is known for the
                      etc. and whether sampled wet or dry.                         KIOL holes.

                                                                                   For FCL data, RC samples were split by rotary or riffle
                                                                                   splitters.
                      For all sample types, the nature, quality and                No information regarding sub-sampling is known for the
                      appropriateness of the sample preparation technique.         KIOL holes.

                                                                                   For the FCL data, the protocols are considered
                                                                                   acceptable for the style of mineralisation
                      Quality control procedures adopted for all sub-sampling      No information regarding sub-sampling is known for the
                      stages to maximise representivity of samples.                KIOL holes.

                                                                                   For the FCL data, the protocols are considered
                                                                                   acceptable for the style of mineralisation
                      Measures taken to ensure that the sampling is                No information regarding sub-sampling is known for the
                      representative of the in situ material collected.            KIOL holes.

                                                                                   For the FCL data, the protocols are considered
                                                                                   acceptable for the style of mineralisation
                      Whether sample sizes are appropriate to the grain size       No information regarding sub-sampling is known for the
                      of the material being sampled.                               KIOL holes.

                                                                                   For the FCL data, the protocols are considered
                                                                                   acceptable for the style of mineralisation
Quality of assay      The nature, quality and appropriateness of the assaying      No information on the quality of assay data for the KIOL
data and laboratory   and laboratory procedures used and whether the               data was obtained.
tests                 technique is considered partial or total.
                                                                                   Primary samples and quality control samples were
                                                                                   submitted for analysis to Genalysis Laboratory Services
                                                                                   (Johannesburg) for analysis by Intertek Utama Services
                                                                                   (Jakarta).
                      For geophysical tools, spectrometers, handheld XRF           No non-laboratory techniques have been applied.
                      instruments, etc, the parameters used in determining
                      the analysis including instrument make and model,
                      reading times, calibrations factors applied and their
                      derivation, etc.
                      Nature of quality control procedures adopted (eg             No information on the quality of assay data for the KIOL
                      standards, blanks, duplicates, external laboratory           data was obtained.
                      checks) and whether acceptable levels of accuracy (ie
                      lack of bias) and precision have been established.           The FCL samples were analysed at an accredited
                                                                                   laboratory (Genalysis / Intertek), and appropriate
                                                                                   standards, blanks and duplicates inserted in the sample
                                                                                   stream. The Mineral Corporation has reviewed the
                                                                                   results from these control samples and considers the
                                                                                   accuracy and reliability of the analyses to be acceptable.
Verification of       The verification of significant intersections by either      The KIOL data was verified by means of the
sampling and          independent or alternative company personnel.                identification and re-surveying of borehole collars in the
assaying                                                                           field, and by means of twin-drilling.
Criteria               Explanation                                                       Observations
                       The use of twinned holes                                          On the basis of the twinning, the open-hole data from
                                                                                         KIOL (142 holes) was considered unacceptable for
                                                                                         Mineral Resource estimation. The remaining RC and
                                                                                         diamond core drilling showed reasonably good
                                                                                         correlation of mineralisation depth and abundance, and
                                                                                         was considered acceptable.
                       Documentation of primary data, data entry procedures,             No access to the core, nor the raw geological logs for
                       data verification, data storage (physical and electronic)         the KIOL data is possible and the accuracy of the input
                       protocols.                                                        of this data into the FCL database cannot be verified.
                                                                                         The procedures adopted by those executing FCL?s 2008
                                                                                         and 2009 exploration campaigns are well documented
                                                                                         and the data entry and validation for those phases of
                                                                                         exploration is considered to be acceptable. The Mineral
                                                                                         Corporation supervised the 2011 exploration and
                                                                                         considers that portion of the database to be acceptable.
                       Discuss any adjustment to assay data.                             No adjustments to assay data were made

Location of data       Accuracy and quality of surveys used to locate drill holes        All FCL boreholes were surveyed by a registered
points                 (collar and down-hole surveys), trenches, mine workings           surveyor. Of the KIOL holes, 127 collars were re-
                       and other locations used in Mineral Resource estimation.          surveyed by a registered surveyor, and good correlation
                                                                                         between the historical and FCL survey locations were
                                                                                         found.
                       Specification of the grid system used.                            The co-ordinate system applied for the survey was the
                                                                                         South African Local Grid (Lo29) using the
                                                                                         Hartebeeshoek 1994 datum.
                       Quality and adequacy of topographic control.                      The topographic control is derived from LiDAR data and
                                                                                         is considered adequate.
Data spacing and       Data spacing for reporting of Exploration Results.                The combination of Ferrum Crescent?s exploration and
distribution.                                                                            the KIOL data has provided a drillhole spacing which
                                                                                         ranges from 100m x 100m to 200m x 300m.
                       Whether the data spacing and distribution is sufficient to        The data spacing and distribution is sufficient to
                       establish the degree of geological and grade continuity           establish the degree of continuity appropriate for the
                       appropriate for the Mineral Resource and Ore Reserve              Mineral Resources, as classified.
                       estimation procedure(s) and classifications applied.
                       Whether sample compositing has been applied                       Sample compositing has been applied in the Mineral
                                                                                         Resource estimates.
Orientation of data    Whether the orientation of sampling achieves unbiased             Vertical intersections are not “true” thicknesses, normal
in relation to         sampling of possible and the extent to which this is              to the dip of the mineralised zones;
geological             known, considering the deposit type.
structures
                       If the relationship between the drilling orientation and          As the dip is relatively shallow, and the block model was
                       the orientation of key mineralised structures is                  built in 3-dimensions, the use of vertical composites did
                       considered to have introduced a sampling bias, this               not bias the volumetric estimates.
                       should be assessed and reported if material.
Sample security        The measures taken to ensure sample security.                     No information regarding sample security is known for
                                                                                         the KIOL holes. For the FCL data, samples were stored
                                                                                         in a locked core facility until being collected for delivery
                                                                                         to the laboratory by courier.
Audits or reviews      The results of any audits or reviews of sampling                  No audits of the KIOL exploration results, with the
                       techniques and data.                                              exception of the verification described above have been
                                                                                         undertaken.

                                                                                         The Mineral Corporation reviewed the results of the first
                                                                                         two phases of Ferrum Crescent?s drilling prior to
                                                                                         carrying out the estimates. Phase 3 of Ferrum
                                                                                         Crescent?s exploration was carried out by The Mineral
                                                                                         Corporation.
Section 2: Reporting of Exploration Results
Mineral tenement       Type, reference name/number, location and ownership               FCL has an effective 97% share, in Ferrum Iron Ore
and land tenure        including agreements or material issues with third                (Pty) Limited, the holder of Mining Right
status                 parties such as joint ventures, partnerships, overriding          LP30/5/1/2/2/201. The Project?s Mineral Resources are
                       royalties, native title interests, historical sites, wilderness   entirely contained within this Mining Right. A legal due
                       or national park and environmental settings.                      diligence on the mineral title has not been conducted by
                                                                                         The Mineral Corporation, but The Mineral Corporation is
                                                                                         not aware of any issues that may prejudice the Mining
                                                                                         Right and the title circumstances are understood to be
                                                                                         sound.
                       The security of the tenure held at the time of reporting          The Project is covered by a Mining Right that was
                       along with any known impediments to obtaining a                   executed on 10 October 2012. The Mining Right is valid
                       licence to operate in the area.                                   for 30 years commencing 10 October 2012 to 9 October
                                                                                         2042.
Exploration done by    Acknowledgment and appraisal of exploration by other              Previous exploration by KIOL has been documented and
other parties          parties.                                                          integrated into the FCL database.
Geology.               Deposit type, geological setting and style of                     Rocks of the Mount Dowe Group, within the Central
                       mineralisation.                                                   Zone of the Limpopo Mobile Belt, are interpreted to
                                                                                         have been tightly-folded, parallel to the east-northeast
                                                                                         to west-southwest orientation of the Limpopo Mobile
                                                                                         Belt.

                                                                                         Magnetite mineralisation is identified in five mineralised
Criteria                  Explanation                                                    Observations
                                                                                         zones, which are interpreted to be the result of the
                                                                                         duplication by folding of one or more magnetite-bearing
                                                                                         layers. The mineralised zones are cut by younger faults,
                                                                                         which have two dominant orientations, broadly parallel
                                                                                         to and orthogonal to, the trend of the Limpopo Mobile
                                                                                         Belt.

                                                                                         Magnetite concentrations within the mineralised zones
                                                                                         are interpreted to be parallel with the contacts with the
                                                                                         host rocks and zones of unmineralised material are
                                                                                         found within the mineralised zones.
Drill hole                A summary of all information material to the                   A summary of all material intersections is provided in
Information               understanding of the exploration results including a           Appendix 3.
                          tabulation of the following information for all Material
                          drill holes:easting and northing of the drill hole collar
                          elevation or RL (Reduced Level – elevation above sea
                          level in metres) of the drill hole collar dip and azimuth of
                          the hole down hole length and interception depth
                          hole length.
                          If the exclusion of this information is justified on the       This information has not been excluded.
                          basis that the information is not Material and this
                          exclusion does not detract from the understanding of
                          the report, the Competent Person should clearly explain
                          why this is the case
Data aggregation          In reporting Exploration Results, weighting averaging          5m vertical borehole composites were utilised, informed
methods.                  techniques, maximum and/or minimum grade                       by an assumed minimum mining height.
                          truncations (eg. cutting of high grades) and cut-off
                          grades are usually material and should be stated.
                          Where aggregate intercepts incorporate short lengths of        Not applicable to this grade distribution
                          high grade results and longer lengths of low grade
                          results, the procedure used for such aggregation should
                          be stated and some typical examples of such
                          aggregations should be shown in detail.
                          The assumptions used for any reporting of metal                No metal equivalent values were considered
                          equivalent values should be clearly stated.
Relationship              These relationships are particularly important in the          These composites were not at right angles to the
between                   reporting of Exploration Results. If the geometry of the       mineralised zones,
mineralisation            mineralisation with respect to the drill hole angle is
widths and intercept      known, its nature should be reported.
lengths                   If it is not known and only the down-hole lengths are          As the dips are shallow (7° to 30° and typically less than
                          reported, there should be a clear statement to this            20°) and a 3-dimensional block model was used, the
                          effect (eg. „downhole length, true width not known?).          use of vertical composites is unlikely to introduce any
                                                                                         bias.
Diagrams.               Appropriate maps and sections (with scales) and                  Plans and sections of the interpretive geological model
                        tabulations of intercepts should be included for any             are provided.
                        significant discovery being reported These should
                        include, but not be limited to a plan view of drill hole
                        collar locations and appropriate sectional views.
Balanced reporting      Where comprehensive reporting of all Exploration                 All material intercepts are reported Appendix 3
                        Results is not practicable, representative reporting of
                        both low and high grades and/or widths should be
                        practised to avoid misleading reporting of Exploration
                        Results.
Other substantive       Other exploration data, if meaningful and material,              All know material exploration data, or summaries
exploration data        should be reported including (but not . limited to):             thereof, have been provided.
                        geological observations; geophysical survey results;
                        geochemical survey results; bulk samples – size and
                        method of treatment; metallurgical test results; bulk
                        density, groundwater, geotechnical and rock
                        characteristics; potential deleterious or contaminating
                        substances.
Further work            The nature and scale of planned further work (eg. tests          Recommendations for further work are provided.
                        for lateral extensions or depth extensions or large-scale
                        step-out drilling).
                        Diagrams clearly highlighting the areas of possible              A figure showing possible extensions is included
                        extensions, including the main geological interpretations
                        and future drilling areas, provided this information is not
                        commercially sensitive.
Section 3: Reporting of Mineral Resources
Database integrity        Measures taken to ensure that data has not been                The compiled database for the estimates was housed in
                          corrupted by, for example, transcription or keying             an MS Access database.
                          errors, between its initial collection and its use for
                          Mineral Resource estimation purposes.

                          Data validation procedures used.                               In addition to the verification and QA/QC already
                                                                                         described, validation of the sampling data for over-
                                                                                         lapping sampling intervals, duplicate samples and
                                                                                         spurious data was carried out.
Site visits               Comment on any site visits undertaken by the                   Stewart Nupen has undertaken two site visits to the
Criteria             Explanation                                                Observations
                     Competent Person and the outcome of those visits.          Project, to inspect outcrop, observe RC and diamond
                     If no site visits have been undertaken indicate why this   drilling and sampling activities and view all of the
                     is the case.                                               available diamond core. These site visits were
                                                                                undertaken during the first quarter of 2012.
Geological           Confidence in (or conversely, the uncertainty of) the      The geological interpretation is considered appropriate
interpretation       geological interpretation of the mineral deposit.          for the level of estimates, and the Mineral Resource
                                                                                classification takes the confidence in the interpretation
                                                                                into account.
                     Nature of the data used and of any assumptions made.       Borehole data was used for the geological
                                                                                interpretation. The regional structural framework was
                                                                                applied.
                     The effect, if any, of alternative interpretations on      No alternative interpretation was considered.
                     Mineral Resource estimation.

                     The use of geology in guiding and controlling Mineral      A thorough re-interpretation of the geological structure
                     Resource estimation.                                       and correlation between mineralised zones was carried
                                                                                out.
                     The factors affecting continuity both of grade and         Grade continuity within zones is high. Continuity of
                     geology                                                    zones is affected by geological structures

Dimensions           The extent and variability of the Mineral Resource         D Zone is approximately 200m x 400m x 30m
                     expressed as length (along strike or otherwise), plan      C Zone (West) is approximately 1400m x 250m x 35m
                     width, and depth below surface to the upper and lower      C Zone (East) is approximately 1100m x 700m x 30m
                     limits of the Mineral Resource.                            B Zone is approximately 1500m x 800m x 25m
                                                                                A Zone is approximately 1600m x 1200m x 17m
Estimation and       The nature and appropriateness of the estimation           Variograms parallel to the dip of the mineralised zones
modelling            technique(s) applied and key assumptions, including        were calculated and modelled. Vertical grade
techniques           treatment of extreme grade values, domaining,              distribution utilised downhole variograms. Variograms of
                     interpolation parameters, maximum distance of              between 150m and 250m were obtained in the plane of
                     extrapolation from data points. If a computer assisted     the mineralised zone and between 7m and 30m
                     estimation method was chosen include a description of      downhole.
                     computer software and parameters used.
                     The availability of check estimates, previous estimates    No check estimates or production records were available
                     and/or mine production records and whether the Mineral
                     Resource estimate takes appropriate account of such
                     data.
                     The assumptions made regarding recovery of by-             No by-products are expected
                     products.
                     Estimation of deleterious elements or other non-grade      All zones show low abundance of Mn, P and TiO2.
                     variables of economic significance (eg sulphur for acid    Abundance of base metals, such as Cu, are insignificant
                     mine drainage characterisation).
                     In the case of block model interpolation, the block size   Horizontal block dimensions were 50m x 50m and 5m in
                     in relation to the average sample spacing and the search   the vertical, informed by borehole spacing and a. The
                     employed.                                                  block model was rotated to the average dip (12°).
                     Any assumptions behind modelling of selective mining       Conceptual minimum mining unit had a minimum height
                     units.                                                     of 5m
                     Any assumptions about correlation between variables.       No correlation between variables was assumed or
                                                                                modeled
                     Description of how the geological interpretation was       Wireframes representing the geological interpretation
                     used to control the resource estimates.                    were generated to constrain the block model. Ordinary
                                                                                Kriging was employed for grade estimates. A three
                                                                                stage search strategy was employed. A minimum of 5
                                                                                and a maximum of 20 samples was used within the
                                                                                range of the variogram for the first search. The second
                                                                                search was twice the volume of the first, and the third
                                                                                extended to the limits of the mineralised zones. The
                                                                                search and variogram ellipse were oriented to local dip
                                                                                and strike variations using “Dynamic Anisotropy” in
                                                                                Datamine Studio v3.
                     Discussion of basis for using or not using grade cutting   No cutting or capping was applied, as the composite
                     or capping.                                                grades were normally distributed, and no outliers were
                                                                                identified.
                     The process of validation, the checking process used,      Plan and section plots were analysed to evaluate the
                     the comparison of model data to drillhole data, and use    adherence of the estimation methodology to the
                     of reconciliation data if available.                       geological model. The methodology was found to
                                                                                honour the grade continuity trends, which are assumed
                                                                                to be parallel to the dip of the mineralised zones.
Moisture             Whether the tonnages are estimated on a dry basis or       Tonnage was calculated on a dry basis.
                     with natural moisture, and the method of determination
                     of the moisture content.
Cut-off parameters   The basis of the adopted cut-off grade(s) or quality       A cut-off of 16% Fe and a maximum depth of between
                     parameters applied                                         250m and 100m depending upon dip and the number of
                                                                                mineralised zones was applied.
Mining factors or    Assumptions made regarding possible mining methods,        A minimum mining unit of 50m x 50m x 5m aided in the
assumptions          minimum mining dimensions and internal (or, if             selection of block size. Approximate stripping ratios
                     applicable, external) mining dilution. It is always        were calculated to inform the maximum depth
                     necessary as part of the process of determining            constraint for the Mineral Resources.
Criteria                Explanation                                                    Observations
                        reasonable prospects for eventual economic extraction
                        to consider potential mining methods, but the
                        assumptions made regarding mining methods and
                        parameters when estimating Mineral Resources may not
                        always be rigorous. Where this is the case, this should
                        be reported with an explanation of the basis of the
                        mining assumptions made.
Metallurgical factors   The basis for assumptions or predictions regarding             On the basis of preliminary test work, The Mineral
or assumptions          metallurgical amenability. It is always necessary as part      Corporation has assumed that the Fe can be extracted
                        of the process of determining reasonable prospects for         by means of comminution and magnetic separation to
                        eventual economic extraction to consider potential             form a magnetite concentrate.
                        metallurgical methods, but the assumptions regarding
                        metallurgical treatment processes and parameters made
                        when reporting Mineral Resources may not always be
                        rigorous. Where this is the case, this should be reported
                        with an explanation of the basis of the metallurgical
                        assumptions made.
Environmental           Assumptions made regarding possible waste and                  Environmental commitments made in the Mining Right
factors or              process residue disposal options. It is always necessary       do not materially change the economics of the Project,
assumptions             as part of the process of determining reasonable               and hence the reasonable prospects for eventual
                        prospects for eventual economic extraction to consider         economic extraction.
                        the potential environmental impacts of the mining and
                        processing operation. While at this stage the
                        determination of potential environmental impacts,
                        particularly for a greenfields project, may not always be
                        well advanced, the status of early consideration of these
                        potential environmental impacts should be reported.
                        Where these aspects have not been considered this
                        should be reported with an explanation of the
                        environmental assumptions made.
Bulk density.           Whether assumed or determined. If assumed, the basis           The KIOL data included density measurements for all
                        for the assumptions. If determined, the method used,           diamond core holes. No information was provided on
                        whether wet or dry, the frequency of the                       the methodology used to obtain these density data.
                        measurements, the nature, size and representativeness
                        of the samples.                                                The diamond core data from FCL exploration included
                                                                                       density measurements obtained by the „water
                                                                                       immersion? method. A strong correlation between
                                                                                       density and Fe was observed, and used to estimate
                                                                                       block density after grade estimation.
                        The bulk density for bulk material must have been              The density data from the FCL adequately accounted for
                        measured by methods that adequately account for void           void spaces, and as the regression based on the KIOL
                        spaces (vugs, porosity, etc), moisture and differences         data was almost identical to the regression based on the
                        between rock and alteration zones within the deposit.          FCL data, it has been assumed that the KIOL method
                                                                                       also accounted for the same.
                        Discuss assumptions for bulk density estimates used in
                        the evaluation process of the different materials
Classification          The basis for the classification of the Mineral Resources      The borehole spacing, surface mapping, structural
                        into varying confidence categories.                            interpretation, variography and kriging error estimates
                                                                                       inform Mineral Resources which are classified as
                        Whether appropriate account has been taken of all              Inferred, Indicated and Measured. In areas of well-
                        relevant factors (ie relative confidence in tonnage/grade      defined geological structure and modest grade
                        estimations, reliability of input data, confidence in          variability, the 100m x 100m grid is sufficient for
                        continuity of geology and metal values, quality, quantity      Measured Mineral Resources.
                        and distribution of the data).

                        Whether the result appropriately reflects the Competent
                        Person?s view of the deposit.
Audits or reviews       The results of any audits or reviews of Mineral Resource       No audits have been undertaken as yet
                        estimates
Discussion of           Where appropriate a statement of the relative accuracy         Kriging Efficiency (KE) was used as a guide to Mineral
relative                and/or confidence in the Mineral Resource estimate             Resource classification. Regions of blocks where KE is
accuracy/confidence     using an approach or procedure deemed appropriate by           generally >0.5 are considered for the Measured
                        the Competent Person. For example, the application of          category, while regions of blocks where KE >0.25 are
                        statistical or geostatistical procedures to quantify the       considered for the Indicated category and regions with a
                        relative accuracy of the resource within stated                KE<0.25 are considered for the Inferred category
                        confidence limits, or, if such an approach is not deemed       (Mwasinga, 2001). The mean KE of classified as
                        appropriate, a qualitative discussion of the factors which     Measured in this Mineral Resource estimate is 0.47 and
                        could affect the relative accuracy and confidence of the       those classified as Indicated is 0.26.
                        estimate.
                        The statement should specify whether it relates to             The estimates are local estimates. Blocks are
                        global or local estimates, and, if local, state the relevant   categorized as Measured, Indicated or Inferred, and
                        tonnages or volumes, which should be relevant to               their use in technical or economic evaluation should be
                        technical and economic evaluation. Documentation               determined by the relevant code.
                        should include assumptions made and the procedures
                        used.
                        These statements of relative accuracy and confidence of        No production data is available.
                        the estimate should be compared with production data,
                        where available

29 April 2014

Sponsor
Sasfin Capital
(a division of Sasfin Bank Limited)

Date: 29/04/2014 09:30:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
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