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Hong Kong Exchanges and Clearing Limited, The Stock Exchange of Hong Kong Limited and the Securities and Futures Commission take no responsibility for the contents of this Web Proof Information Pack, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this Web Proof Information Pack. Web Proof Information Pack of Chinalco Mining Corporation International (Incorporated under the laws of the Cayman Islands with limited liability) WARNING This Web Proof Information Pack is being published as required by The Stock Exchange of Hong Kong Limited (“HKEX”) and the Securities and Futures Commission solely for the purpose of providing information to the public in Hong Kong. This Web Proof Information Pack is in draft form. The information contained in it is incomplete and is subject to change which can be material. THIS WEB PROOF INFORMATION PACK MAY NOT BE UPDATED UNTIL A DOCUMENT REGISTERED WITH THE REGISTRAR OF COMPANIES IS ISSUED BY CHINALCO MINING CORPORATION INTERNATIONAL (the “Company”), WHICH WILL BE POSTED ON THIS WEBSITE. By viewing this document, you acknowledge, accept and agree with the Company, any of its affiliates, sponsors and advisers, and the members of the underwriting syndicate that: (a) this Web Proof Information Pack is only for the purpose of facilitating equal dissemination of information to investors in Hong Kong and not for any other purposes. No investment decision should be based on the information contained in this Web Proof Information Pack; (b) the posting of the Web Proof Information Pack or any supplemental, revised or replacement pages on the website of HKEx does not give rise to any obligation of the Company, any of its affiliates, sponsors, advisers and/or members of the underwriting syndicate to proceed with an offering in Hong Kong or any other jurisdiction. There is no assurance that the Company will proceed with any offering and no offer or invitation to the public in Hong Kong is made on the basis of the Web Proof Information Pack; (c) the contents of the Web Proof Information Pack or supplemental, revised or replacement pages may or may not be replicated in full or in part in the actual document, if any; (d) the Web Proof Information Pack is in draft form and may be changed, updated or revised by the Company from time to time and the changes, updates and/or revisions could be material but each of the Company, any of its affiliates, sponsors, advisers and members of the underwriting syndicate is under no obligation, legal or otherwise, to update any information contained in this Web Proof Information Pack; (e) this Web Proof Information Pack does not constitute a document, notice, circular, brochure, advertisement or other document offering to sell any securities to the public in any jurisdiction, nor is it an invitation to the public to make offers to subscribe for or purchase any securities, nor is it calculated to invite or solicit offers by the public to subscribe for or purchase any securities; (f) this Web Proof Information Pack must not be regarded as an inducement to subscribe for or purchase any securities, and no such inducement is intended; (g) neither the Company nor any of its affiliates, sponsors, advisers or members of the underwriting syndicate is offering, or is soliciting offers to buy, any securities in any jurisdiction through the publication of this Web Proof Information Pack; (h) neither this Web Proof Information Pack or anything contained herein shall form the basis or to be relied on in connection with any contact or commitment whatsoever; (i) neither the Company nor any of its affiliates, sponsors, advisers or members of the underwriting syndicate makes an express or implied representation or warranty as to the accuracy or completeness of the information contained in this Web Proof Information Pack; (j) each of the Company and any of its affiliates, sponsors, advisers and members of the underwriting syndicate expressly disclaims any and all liability on the basis of any information contained in, or omitted from, or any inaccuracies or errors in, this Web Proof Information Pack; (k) securities may not be offered or sold in the United States absent registration under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”) or any state securities laws of the United States, or another exemption from, or in a transaction not subject to, the registration requirements of the U.S. Securities Act or any state securities laws of the United States. The securities referred to in this Web Proof Information Pack have not been registered under the U.S. Securities Act or any state securities laws of the United States. The Company does not intend to register the securities under the U.S. Securities Act or any state securities laws of the United States or conduct a public offering in the United States. This Web Proof Information Pack is not an offer of securities for sale in the United States. You confirm that you are accessing this Web Proof Information Pack from outside the United States; and (l) as there may be legal restrictions on the distribution of this Web Proof Information Pack or dissemination of an information contained in this Web Proof Information Pack, you agree to inform yourself about and observe any such restrictions applicable to you. THIS WEB PROOF INFORMATION PACK IS NOT FOR PUBLICATION OR DISTRIBUTION TO PERSONS IN THE UNITED STATES. ANY SECURITIES REFERRED TO HEREIN HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE U.S. SECURITIES ACT OR ANY STATE SECURITIES LAWS OF THE UNITED STATES AND MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES WITHOUT REGISTRATION THEREUNDER OR PURSUANT TO AN AVAILABLE EXEMPTION THEREFROM. NO PUBLIC OFFERING OF THE SECURITIES WILL BE MADE IN THE UNITED STATES. NEITHER THIS WEB PROOF INFORMATION PACK NOR THE INFORMATION CONTAINED HEREIN CONSTITUTES OR FORMS A PART OF AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY ANY SECURITIES IN THE UNITED STATES OR IN ANY OTHER JURISDICTIONS WHERE SUCH OFFER OR SALE IS NOT PERMITTED. THIS WEB PROOF INFORMATION PACK IS NOT BEING MADE AND MAY NOT BE DISTRIBUTED OR SENT TO CANADA OR JAPAN. No offer or invitation will be made to the public in Hong Kong until after a document of the Company has been registered with the Registrar of Companies in Hong Kong in accordance with the Companies Ordinance (Chapter 32 of the Laws of Hong Kong). If an offer or an invitation is made to the public in Hong Kong in due course, prospective investors are reminded to make their investment decisions solely based on a document of the Company registered with the Registrar of Companies in Hong Kong, copies of which are distributed to the public during the offer period.

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Page 1:  · 2013. 1. 16. · Hong Kong Exchanges and Clearing Limited, The Stock Exchange of Hong Kong Limited and the Securities and Futures Commission take no responsibility for the contents

Hong Kong Exchanges and Clearing Limited, The Stock Exchange of Hong Kong Limited and the Securities and FuturesCommission take no responsibility for the contents of this Web Proof Information Pack, make no representation as to itsaccuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or inreliance upon the whole or any part of the contents of this Web Proof Information Pack.

Web Proof Information Pack of

Chinalco Mining Corporation International

(Incorporated under the laws of the Cayman Islands with limited liability)WARNING

This Web Proof Information Pack is being published as required by The Stock Exchange of Hong Kong Limited (“HKEX”) and theSecurities and Futures Commission solely for the purpose of providing information to the public in Hong Kong.

This Web Proof Information Pack is in draft form. The information contained in it is incomplete and is subject to change which can bematerial. THIS WEB PROOF INFORMATION PACK MAY NOT BE UPDATED UNTIL A DOCUMENT REGISTERED WITH THEREGISTRAR OF COMPANIES IS ISSUED BY CHINALCO MINING CORPORATION INTERNATIONAL (the “Company”), WHICHWILL BE POSTED ON THIS WEBSITE. By viewing this document, you acknowledge, accept and agree with the Company, any of itsaffiliates, sponsors and advisers, and the members of the underwriting syndicate that:

(a) this Web Proof Information Pack is only for the purpose of facilitating equal dissemination of information to investors in HongKong and not for any other purposes. No investment decision should be based on the information contained in this Web ProofInformation Pack;

(b) the posting of the Web Proof Information Pack or any supplemental, revised or replacement pages on the website of HKEx does notgive rise to any obligation of the Company, any of its affiliates, sponsors, advisers and/or members of the underwriting syndicate toproceed with an offering in Hong Kong or any other jurisdiction. There is no assurance that the Company will proceed with anyoffering and no offer or invitation to the public in Hong Kong is made on the basis of the Web Proof Information Pack;

(c) the contents of the Web Proof Information Pack or supplemental, revised or replacement pages may or may not be replicated in fullor in part in the actual document, if any;

(d) the Web Proof Information Pack is in draft form and may be changed, updated or revised by the Company from time to time and thechanges, updates and/or revisions could be material but each of the Company, any of its affiliates, sponsors, advisers and membersof the underwriting syndicate is under no obligation, legal or otherwise, to update any information contained in this Web ProofInformation Pack;

(e) this Web Proof Information Pack does not constitute a document, notice, circular, brochure, advertisement or other documentoffering to sell any securities to the public in any jurisdiction, nor is it an invitation to the public to make offers to subscribe for orpurchase any securities, nor is it calculated to invite or solicit offers by the public to subscribe for or purchase any securities;

(f) this Web Proof Information Pack must not be regarded as an inducement to subscribe for or purchase any securities, and no suchinducement is intended;

(g) neither the Company nor any of its affiliates, sponsors, advisers or members of the underwriting syndicate is offering, or issoliciting offers to buy, any securities in any jurisdiction through the publication of this Web Proof Information Pack;

(h) neither this Web Proof Information Pack or anything contained herein shall form the basis or to be relied on in connection with anycontact or commitment whatsoever;

(i) neither the Company nor any of its affiliates, sponsors, advisers or members of the underwriting syndicate makes an express orimplied representation or warranty as to the accuracy or completeness of the information contained in this Web Proof InformationPack;

(j) each of the Company and any of its affiliates, sponsors, advisers and members of the underwriting syndicate expressly disclaims anyand all liability on the basis of any information contained in, or omitted from, or any inaccuracies or errors in, this Web ProofInformation Pack;

(k) securities may not be offered or sold in the United States absent registration under the United States Securities Act of 1933, asamended (the “U.S. Securities Act”) or any state securities laws of the United States, or another exemption from, or in a transactionnot subject to, the registration requirements of the U.S. Securities Act or any state securities laws of the United States. Thesecurities referred to in this Web Proof Information Pack have not been registered under the U.S. Securities Act or any statesecurities laws of the United States. The Company does not intend to register the securities under the U.S. Securities Act or anystate securities laws of the United States or conduct a public offering in the United States. This Web Proof Information Pack is notan offer of securities for sale in the United States. You confirm that you are accessing this Web Proof Information Pack fromoutside the United States; and

(l) as there may be legal restrictions on the distribution of this Web Proof Information Pack or dissemination of an information containedin this Web Proof Information Pack, you agree to inform yourself about and observe any such restrictions applicable to you.

THIS WEB PROOF INFORMATION PACK IS NOT FOR PUBLICATION OR DISTRIBUTION TO PERSONS IN THE UNITEDSTATES. ANY SECURITIES REFERRED TO HEREIN HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE U.S.SECURITIES ACT OR ANY STATE SECURITIES LAWS OF THE UNITED STATES AND MAY NOT BE OFFERED OR SOLD INTHE UNITED STATES WITHOUT REGISTRATION THEREUNDER OR PURSUANT TO AN AVAILABLE EXEMPTIONTHEREFROM. NO PUBLIC OFFERING OF THE SECURITIES WILL BE MADE IN THE UNITED STATES.

NEITHER THIS WEB PROOF INFORMATION PACK NOR THE INFORMATION CONTAINED HEREIN CONSTITUTES ORFORMS A PART OF AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY ANY SECURITIES IN THE UNITEDSTATES OR IN ANY OTHER JURISDICTIONS WHERE SUCH OFFER OR SALE IS NOT PERMITTED. THIS WEB PROOFINFORMATION PACK IS NOT BEING MADE AND MAY NOT BE DISTRIBUTED OR SENT TO CANADA OR JAPAN.

No offer or invitation will be made to the public in Hong Kong until after a document of the Company has been registered with the Registrarof Companies in Hong Kong in accordance with the Companies Ordinance (Chapter 32 of the Laws of Hong Kong). If an offer or aninvitation is made to the public in Hong Kong in due course, prospective investors are reminded to make their investment decisions solelybased on a document of the Company registered with the Registrar of Companies in Hong Kong, copies of which are distributed to the publicduring the offer period.

Page 2:  · 2013. 1. 16. · Hong Kong Exchanges and Clearing Limited, The Stock Exchange of Hong Kong Limited and the Securities and Futures Commission take no responsibility for the contents

THIS WEB PROOF INFORMATION PACK IS IN DRAFT FORM. The information contained in it is incomplete and is subject to change. ThisWeb Proof Information Pack must be read in conjunction with the section headed “Warning” on the cover of this Web Proof Information Pack.

CONTENTS

This Web Proof Information Pack contains the following information relating to the Companyextracted from the draft document.

Contents

Summary

Definitions

Glossary of Technical Terms

Special Note Regarding Forward Looking Statements

Risk Factors

Directors

Corporate Information

Industry Overview

Laws and Regulations Relating to the Industry

History, Reorganization and Group Structure

Our Business

Financial Information

Relationship with Controlling Shareholders

Directors and Senior Management

Substantial Shareholders

Share Capital

Future Plans

Appendix I — Accountant’s Report

Appendix IV — Competent Person’s Report

Appendix V — Summary of Articles of our Company and Cayman Islands Law

Appendix VI — Statutory and General Information

YOU SHOULD READ THE SECTION HEADED “WARNING” ON THE COVER OFTHIS WEB PROOF INFORMATION PACK.

Page 3:  · 2013. 1. 16. · Hong Kong Exchanges and Clearing Limited, The Stock Exchange of Hong Kong Limited and the Securities and Futures Commission take no responsibility for the contents

THIS WEB PROOF INFORMATION PACK IS IN DRAFT FORM. The information contained in it is incomplete and is subject to change. ThisWeb Proof Information Pack must be read in conjunction with the section headed “Warning” on the cover of this Web Proof Information Pack.

SUMMARY

OVERVIEW

We are a resource development company acting as Chinalco’s core platform for the futureacquisition, investment, development and operation of non-ferrous and non-aluminum mineralresources and projects overseas. We envision capitalizing on China’s growing demand for naturalresources. Our strong growth potential is driven significantly by Chinalco’s active global expansionstrategy, which is in line with China’s initiatives in securing mineral resources overseas to satisfy itsgrowing demand, as well as by Chinalco’s proven track record, strong brand recognition and the broadrange of acquisition opportunities available to it.

Currently, we are focusing on developing the Toromocho Project, which is located in centralPeru in the core of the Morococha mining district. According to CRU, the Toromocho Project is theworld’s second largest pre-production copper project, as measured by proved and probable copper orereserves, and the third largest pre-production copper project, as measured by average planned annualproduction between 2012 and 2020, among the top 20 firm copper mining projects scheduled tocommence production of copper concentrates from 2012 to 2016. Three of these mining projects hadcommenced production as of December 31, 2012. According to the Competent Person’s Report, theproved and probable JORC-compliant reserves of the Toromocho Project deposit are estimated tocontain approximately 7.3 million tonnes of copper, 290,000 tonnes of molybdenum and 10,500 tonnesof silver. The Toromocho Project is currently our only mining asset, which we expect to rely on forsubstantially all of our revenue and cash flows for the foreseeable future. We expect to commenceproduction during the fourth quarter of 2013 and reach full production capacity in the third quarter of2014. Upon commencement of commercial production, we plan to process the copper sulphide oreson-site and sell the copper concentrates primarily to China for smelting and production of refinedcopper. We expect China to be our primary market. Subject to us receiving arm’s-length commercialterms, we may also sell our products to Chinalco and its affiliates. We have entered into four bindingofftake agreements including definitive pricing terms for the sale of an aggregate of 60% of theToromocho Project’s annual production of copper concentrates for a period of five years from thestarting date of production at the Toromocho Project, two of which will automatically continue foranother five years thereafter.

The Toromocho Project has a long estimated mine life with significant potential for furtherexploration. Based on the current estimated reserves and production plan, it is estimated that theToromocho Project can produce ores for 32 years and thus has an estimated mine life of 32 years.Based on the current design, the processing facilities will continue to process recovered ores for fouryears after the end of the mine life, thus giving the Toromocho Project a projected operating life of 36years. According to the Competent Person’s Report, there are additional resources adjacent to the

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THIS WEB PROOF INFORMATION PACK IS IN DRAFT FORM. The information contained in it is incomplete and is subject to change. ThisWeb Proof Information Pack must be read in conjunction with the section headed “Warning” on the cover of this Web Proof Information Pack.

SUMMARY

planned open pit, which are also covered by our mining concessions, and are estimated to containapproximately 2.7 million tonnes of copper, 92,000 tonnes of molybdenum and 5,200 tonnes of silverin measured, indicated and inferred JORC-compliant resources. We believe that we will be able tofurther explore and develop these resources once we complete the highway relocation plan inconnection with the Toromocho Project. We are currently in discussion with and have submitted ourproposed relocation plan to the MTC. Upon our receipt of approval from the MTC, we will commencethe detailed engineering study, which we expect to complete in approximately four months.

The following tables summarize our estimated ore reserves and mineral resources in respect ofthe Toromocho Project as detailed in “Appendix IV — Competent Person’s Report.” As our estimatedore reserves and mineral resources come from different parts of the same ore body, they are presentedseparately.

JORC OreReserve Category

Tonnes(millions)

Grade Metal Content

Copper(%)

Molybdenum(%)

Silver(grams/tonne)

Copper(million tonnes)

Molybdenum(tonnes)

Silver(tonnes)

Proved . . . . . . . 756 0.51 0.02 6.39 3.9 150,000 4,800Probable . . . . . . 784 0.434 0.018 7.31 3.4 140,000 5,700

Total . . . . . . . . 1,540 0.471 0.019 6.86 7.3 290,000 10,500

JORC Measuredand IndicatedMineral ResourcesCategory

Grade Metal Content

Tonnes(millions)

Copper(%)

Molybdenum(%)

Silver(grams/tonne)

Copper(million tonnes)

Molybdenum(tonnes)

Silver(tonnes)

Measured . . . . . 156 0.41 0.014 6.20 0.6 22,000 1,000Indicated . . . . . 364 0.36 0.012 6.06 1.3 44,000 2,200

Total . . . . . . . . 520 0.37 0.013 6.10 1.9 66,000 3,200

JORC InferredMineral ResourcesCategory (Note)

Tonnes(millions)

Grade Metal Content

Copper(%)

Molybdenum(%)

Silver(grams/tonne)

Copper(million tonnes)

Molybdenum(tonnes)

Silver(tonnes)

Inferred . . . . . . 174 0.460 0.015 11.54 0.8 26,000 2,000

Note: Measured, indicated and inferred mineral resources are not included in the economic analysis in the Competent Person’s Report.

We expect to enjoy competitive operating and mining costs as a result of the ToromochoProject’s rich ore reserves, location and favorable geology. According to the Competent Person’sReport, the Toromocho Project is estimated to have low operating cash costs after credits ofapproximately US$1,508.8 per tonne (or approximately US$0.684 per pound) of copper produced ascompared with a large number of copper mines across the globe. For example, the average operatingcash costs of the major copper mines in Peru and Chile are approximately US$3,624.0 per tonne ofcopper produced and US$3,963.0 per tonne of copper produced, respectively. Operating cash costsinclude mining costs, processing costs, general and administration costs, selling costs, environmentalprotection costs, production taxes, the resource compensation levy, other cash cost items and the by-product credit, and are generally recognized as a reliable indicator for measuring the operating andmining costs of copper mines. As a result of the geological characteristics, we are able to employ the

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THIS WEB PROOF INFORMATION PACK IS IN DRAFT FORM. The information contained in it is incomplete and is subject to change. ThisWeb Proof Information Pack must be read in conjunction with the section headed “Warning” on the cover of this Web Proof Information Pack.

SUMMARY

conventional open pit mining technique, which entails lower costs and fewer risks than undergroundmining. The Toromocho Project also has a low estimated strip ratio at 0.79:1, meaning that for everytonne of ore we mine, 0.79 tonnes of waste materials will need to be removed. As a result, we expect toincur low costs for the removal of waste materials, which results in lower per unit mining costs.

Established infrastructure support for the Toromocho Project reduces our construction andoperational costs and lowers our operational risks. The Toromocho Project is easily accessible viareadily available transportation networks, including public highways and railroads from both thePeruvian capital city of Lima and the major exporting port of Callao. Water and electricity supplies,which are essential to the mining activities, will also be available from nearby facilities developed byus. For example, water for the processing plant will be supplied to the Toromocho Project from theKingsmill Tunnel water treatment plant developed and operated by us. Electricity will be suppliedfrom the nearby Pomacocha power station, and a 220 MW transmission line will be installed betweenthe power station and the Toromocho Project, which is expected to be ready by the first quarter of2013.

Since the completion of our acquisition of the Toromocho Project in May 2008, we havedevoted substantial effort to developing the Toromocho Project into an advanced development stageand accomplished all its key pre-production milestones. We have engaged Aker Solutions, a reputableleading mining consulting firm, for EPCM services in relation to the Toromocho Project. We haveoutsourced all of our exploration engineering work and most of the Toromocho Project constructionwork to third-party contractors, including Aker Solutions. We have also secured credit facilities withan aggregate amount of US$2,118.0 million from Eximbank and China Development Bank, which webelieve, combined with our cash and cash equivalents, additional banking facilities we are negotiatingand the proceeds from other proposed corporate financing activities, will provide sufficient funding forus to bring the Toromocho Project to production. The Environmental Impact Assessment in connectionwith all the material aspects of the Toromocho Project was approved by the Peruvian government inDecember 2010 and the construction permit for the Toromocho Project was issued by the Peruviangovernment in July 2011. Furthermore, we have purchased substantially all of the key long-leadequipment and machinery, completed the construction of a new town for local resident resettlement,constructed a water treatment plant to supply and treat water for the Toromocho Project and madeinvestment in the Callao port to facilitate the transportation of the products we will produce. We planto complete the construction of all the mining and processing facilities in the fourth quarter of 2013.We believe that the comprehensive preparation work that we have done for the Toromocho Projectminimizes the risk of delay and puts us on track to achieve our target schedule for development andproduction.

We are controlled by Chinalco, a Fortune Global 500 company since 2008, and a leadingmetals and mining conglomerate based in China, which has strong brand recognition with respect to itsmining, non-ferrous metal smelting and processing activities, and international trading and engineeringservices. We believe that we will continue to benefit from our relationship with Chinalco by receivingits relevant technological, financial, operational, procurement, sales and marketing support. We believethat by leveraging our close ties with China and Chinalco, we will be able to capitalize on oursubstantial mineral reserves and the strong demand for copper and other non-ferrous metals globally,particularly in China.

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THIS WEB PROOF INFORMATION PACK IS IN DRAFT FORM. The information contained in it is incomplete and is subject to change. ThisWeb Proof Information Pack must be read in conjunction with the section headed “Warning” on the cover of this Web Proof Information Pack.

SUMMARY

As of the date of this document, we have not commenced production at the Toromocho Projectand have not recorded any revenues and our pre-production activities have not generated any positiveoperating cash flows.

OUR COMPETITIVE STRENGTHS

We believe the following competitive strengths will not only distinguish us from ourcompetitors, but also contribute to our success and potential for future growth:

Š Acting as Chinalco’s core platform for the future acquisition, development andoperation of non-ferrous and non-aluminum mineral resources and projectsoverseas

Our strong growth potential stems in significant respects from Chinalco’s active globalexpansion strategy. As Chinalco’s core platform for the future acquisition, developmentand operation of non-ferrous and non-aluminum mineral resources and projectsoverseas, we believe that a wide range of potential acquisition opportunities will beavailable to us.

Š Ability to develop acquired targets and synergistic collaboration with Chinalco

We have accumulated extensive experience in the development process of theToromocho Project. In developing the Toromocho Project, we have leveragedChinalco’s technology and management expertise. We also believe that our close tieswith Chinalco will benefit us in selling our products once production commences at theToromocho Project.

Š Substantial mineral reserves and significant exploration potential at theToromocho Project to capture the increasing demand for copper

According to CRU, the Toromocho Project is the world’s second largest pre-productioncopper project, as measured by proved and probable copper ore reserves, and the thirdlargest pre-production copper project, as measured by average planned annualproduction between 2012 and 2020, among the top 20 firm copper mining projectsscheduled to commence production of copper concentrates from 2012 to 2016. Webelieve that our substantial mineral reserves and our close ties with China position uswell to capitalize on the expected growth in demand for copper globally, particularly inChina.

Š Competitive development and operational costs of the Toromocho Project

We enjoy competitive operating and mining costs as a result of the Toromocho Project’srich ore reserves, location and favorable geology. The Toromocho Project is estimatedto have low operating cash costs after credits of approximately US$1,508.8 per tonne(or approximately US$0.684 per pound) of copper produced as compared with a largenumber of copper mines across the globe. The Toromocho Project’s close proximity toestablished infrastructure including water and power supplies and transportationnetworks, including public highways and railroads, as well as its relative closeproximity to Lima, will also lead to reduced construction and operational costs.

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THIS WEB PROOF INFORMATION PACK IS IN DRAFT FORM. The information contained in it is incomplete and is subject to change. ThisWeb Proof Information Pack must be read in conjunction with the section headed “Warning” on the cover of this Web Proof Information Pack.

SUMMARY

Š Advanced development stage of the Toromocho Project and the favorableinvestment environment

We have devoted substantial effort to developing the Toromocho Project into anadvanced development stage, minimizing the risks of delay, and have accomplished allits key pre-production milestones. We believe that the favorable investmentenvironment in Peru will also facilitate us in ensuring the timely execution of theToromocho Project.

Š Experienced and motivated international management team supported by localexecution experts with proven track record

We have an experienced management team with extensive knowledge and expertise inthe mining industry, and in particular, the development and acquisition of overseasmining projects. We have proposed to adopt an equity incentive plan designed to attract,retain and incentivize senior management and key employees with a view toencouraging the participants to commit to enhancing value for us and our shareholders,as a whole.

OUR BUSINESS STRATEGIES

We aim to become a leading diversified-resources company focusing on non-ferrous andnon-aluminum mining projects outside China by implementing the following strategies:

Š Engage in strategic and selective acquisition to drive our growth

We plan to focus on acquiring or establishing alliances with non-ferrous and non-aluminum mines that are already producing or near production. In the short-term, weplan to prioritize the acquisition of copper mining projects while assessing other non-ferrous and non-aluminum mining projects. In the mid- to long-term, we plan to expandour focus to include other non-ferrous and non-aluminum mines. Geographically, weplan to focus on South America first, and then further extend our reach to Africa andAsia (except China).

Š Ensure timely construction of mining and processing facilities at the ToromochoProject

We have started the construction of our mining and processing facilities and target tocomplete the construction of these facilities in the fourth quarter of 2013. We willcontinue to collaborate with reputable third-party contractors to ensure a timely andefficient construction process. We also plan to continue to maintain collaborativerelationships with the local government and communities to ensure a smooth projectdevelopment.

Š Optimize our operation and production capacities and further explore and developpotential mineral reserves

Our production processes are being developed and refined by our mining andtechnology experts and are expected to have low consumables and equipment costs and

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THIS WEB PROOF INFORMATION PACK IS IN DRAFT FORM. The information contained in it is incomplete and is subject to change. ThisWeb Proof Information Pack must be read in conjunction with the section headed “Warning” on the cover of this Web Proof Information Pack.

SUMMARY

improved minerals recovery rates. All of these are essential for a cost efficient miningoperation. We have also engaged in detailed feasibility studies and planning activities toefficiently utilize our potential mineral resources at the Toromocho Project. Inparticular, we plan to procure additional equipment to increase our designed oresprocessing rate by approximately 26% to 148,000 tonnes per day.

Š Further leverage on our close relationship with Chinalco

We will continue to leverage our relationship with Chinalco to obtain relevanttechnological, financial, operational, procurement, sales and marketing supportincluding its sales network and collaborative relationship with infrastructure developers,equipment suppliers and governments.

Š Attract, motivate and develop talented and experienced staff

We plan to continue to focus on the recruitment and cultivation of a high-quality andprofessional workforce, provide career development programs for our employees,provide competitive compensation packages and create a collegial culture that promotesour employees’ personal and professional development.

Š Promote corporate social responsibility

We plan to continue to undertake international safety, environmental and socialresponsibility best practices during the construction and production stage of theToromocho Project. In particular, we plan to continue our dedication in reducingpollution from our operating and mining activities, improving the living standard of theMorococha community and maintaining high workplace safety standards.

RELATIONSHIP WITH CONTROLLING SHAREHOLDERS

Chinalco, through its wholly-owned subsidiary, COH, indirectly holds 100% of our issuedshare capital.

To strengthen the delineation of business, Chinalco has confirmed that the Group will act asChinalco’s core platform for the future acquisition, investment, development and operation of non-ferrous and non-aluminum mineral resources and projects overseas. Chinalco has also provided a non-competition undertaking in favor of the Company to the effect that Chinalco itself will not, and willprocure its subsidiaries (excluding its listed subsidiaries) not to, directly or indirectly compete with ourcore business in the regions we operate and has granted the Company a right to acquire competingbusinesses engaged in by any member of the Chinalco Group (excluding listed subsidiaries ofChinalco), a right of first refusal to acquire competing business opportunities in priority to any memberof the Chinalco Group (excluding listed subsidiaries of Chinalco) and a call option over, and a furtherright of first refusal on any disposal of, any competing businesses over which our Company did notexercise the right of first refusal referred to above.

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SUMMARY

The Company has not entered into any offtake arrangements with Chinalco. Although in thecooperation agreement between Chinalco, Yunnan Copper Group and Yunnan SASAC, it was agreedthat copper concentrates shall be first offered to Yunnan Copper Group to satisfy its productionrequirements, the Company believes that this will not affect its operational independence as thedemand for copper concentrates has continued to surpass supply in recent years, the global demand forcopper is expected to grow in the next few years and Chinalco has undertaken that it will use availablemeasures to procure Yunnan Copper Group not to exercise such right.

For additional information about our relationship with our Controlling Shareholders, see“Relationship with Controlling Shareholders.”

ESTIMATED CAPITAL AND OPERATING COSTS

Our total capital cost consists of mining costs, process plant and infrastructure costs, theowner’s cost and contingency. The estimated total capital cost as disclosed in the Competent Person’sReport included in Appendix IV to this document was based on the detailed engineering studycompleted in the second quarter of 2012.

Set forth below is our estimated total capital costs based on the Competent Person’s Report andthe costs incurred as of September 30, 2012:

CompetentPerson’sReport

Costs incurredas of

September 30,2012(1)

(US$ in millions)

Mining . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 297.4 72.9Process Plant and Infrastructure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,839.5 1,208.1Owner’s Cost(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 626.2 400.7Additional Projects(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 622.6 355.4

Subtotal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,385.6 2,037.1

ContingencyMining . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.1 —Process and Infrastructure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32.4 —Owner’s Cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22.0 —

Subtotal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60.5 —Working Capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56.0 —

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,502.1 2,037.1

Notes:(1) The costs incurred were accounted as cash used in operating activities and cash used in investing activities.(2) Owner’s cost consists of costs associated with force majeure events, project insurance, social outreach, contract services, licenses and

royalties, financial costs, taxes, exchange rate fluctuations, commissioning and pre-operational costs and acquisitions of property.(3) Additional projects consist of the costs incurred in relation to the lime processing plant, Kingsmill Tunnel water treatment plant,

double circuit overhead transmission line, central highway relocation, investment in the Callao port, acquisition of certain miningconcessions from Pan American Silver with the relevant financing interest, new town construction and resettlement.

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SUMMARY

Our estimated operating cash costs for the Toromocho Project consist of mine operating costs,operating costs for the concentrator, molybdenum hydrometallurgical plant and infrastructure, generaland administrative costs and our royalty payments to Centromin. Our mine operating costs include allthe supplies, parts and labor costs associated with the mine supervision, operation and equipmentmaintenance. According to the estimation in the Competent Person’s Report, which is based on thefeasibility study in 2007 with subsequent adjustments, the estimated average annual operating cashcosts for the Toromocho Project is approximately US$444.0 million from 2013 to 2049. Over theperiod, we estimate our operating cash costs to be approximately US$16.4 billion in total.

Set forth below is a breakdown of our estimated average annual operating cash costs for theToromocho Project from 2013 to 2049. See “Appendix IV — Competent Person’s Report” in thisdocument for further details.

Average Annual Operating Cash Cost from 2013 to 2049

Per unit cost (US$) Cash cost (US$ in thousands)

Mining ores and waste . . . . . . . . . . . . . 1.66 (per tonne of material moved) 118,942Reclaim from stockpile . . . . . . . . . . . . 0.89(1) (per tonne of stockpile moved) 4,516Processing (milling) . . . . . . . . . . . . . . . 5.28 (per tonne of ores milled) 219,817Molybdenum plant . . . . . . . . . . . . . . . . 3,612 (per tonne of moly oxide produced) 18,535Processing infrastructure . . . . . . . . . . . 0.06 (per tonne of ores milled) 2,498Processing G&A . . . . . . . . . . . . . . . . . . 1.42 (per tonne of ores milled) 59,117Centromin royalty . . . . . . . . . . . . . . . . . — 20,568

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . 443,993

(1) Not applicable from 2013 to 2044.

Based on the current estimation as detailed in “Appendix IV — Competent Person’s Report,”income generated by the Toromocho Project will exceed the operating costs starting from January2014, which is the first full year of production. Based on our current estimation, we will spend anotherUS$1.5 billion for the development of the Toromocho Project for the period after September 30, 2012and before the commencement of commercial production in the fourth quarter of 2013.

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SUMMARY

SUMMARY HISTORICAL FINANCIAL INFORMATION

The following summary historical data of consolidated statements of comprehensive incomeand the consolidated statements of financial position set forth below have been derived from theAccountant’s Report included in Appendix I to this document. You should read the summary historicalfinancial information below in conjunction with our consolidated financial information included in“Appendix I — Accountant’s Report,” which have been prepared in accordance with IFRS.

Summary Consolidated Statements of Comprehensive Income

For the year ended December 31,For the nine months ended

September 30,

2009 2010 2011 2011 2012

(unaudited)(US$ in thousands, except for per share data)

Revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — — —

Other (loss)/gain, net . . . . . . . . . . . . . . . . . . . . . . . . . . (85) 317 205 130 671

Operating costsGeneral and administrative expenses . . . . . . . . . . (9,053) (11,612) (19,705) (10,396) (17,910)

Operating loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (9,138) (11,295) (19,500) (10,266) (17,239)Finance income . . . . . . . . . . . . . . . . . . . . . . . . . . 2,896 1,507 451 373 2,169Finance costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,723) (1,088) (2,744) (1,545) (1,887)

Finance income/(costs), net . . . . . . . . . . . . . . . . . . . . . 1,173 419 (2,293) (1,172) 282

Loss before income tax . . . . . . . . . . . . . . . . . . . . . . . . (7,965) (10,876) (21,793) (11,438) (16,957)Income tax benefit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,266 3,411 5,281 2,973 3,731

Loss for the year/period . . . . . . . . . . . . . . . . . . . . . . . (4,699) (7,465) (16,512) (8,465) (13,226)

Other comprehensive income for the year/period,net of tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — — —

Total comprehensive loss for the year/period . . . . . . (4,699) (7,465) (16,512) (8,465) (13,226)

Loss per share for loss attributable to the equityowners of the Company (expressed in US$ pershare)

Basic and diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — (0.001) (0.002) (0.001) (0.001)

Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — — —

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SUMMARY

Summary Consolidated Statements of Financial Position

As of December 31,As of

September 30,20122009 2010 2011

(US$ in thousands)

AssetsNon-current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 347,986 742,898 1,505,001 2,377,368Current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,723 188,959 185,627 241,809

Total Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 359,709 931,857 1,690,628 2,619,177

Equity and LiabilitiesNon-current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . 180,474 672,536 1,065,984 1,892,532Current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 157,254 189,358 246,373 361,600

Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 337,728 861,894 1,312,357 2,254,132Total equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21,981 69,963 378,271 365,045

Total Liabilities and Equity . . . . . . . . . . . . . . . . . . . . . . . . . . . 359,709 931,857 1,690,628 2,619,177

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SUMMARY

NOMATERIAL ADVERSE CHANGE

Our Directors confirmed that, as of the date of this document, there has been no materialadverse change in our financial or trading condition or prospects subsequent to the Track RecordPeriod.

DIVIDEND AND DIVIDEND POLICY

We have not declared or paid any dividends since our incorporation. We do not anticipatepaying any dividends in the foreseeable future.

Subject to the Companies Law and its Articles of Association, the Company in a generalmeeting may declare dividends in any currency but dividends may not exceed the amountrecommended by the Directors. Dividends may not be declared or paid other than out of the profits andreserves of the Company which are lawfully available for distribution.

Unless the rights attached to any Shares or the terms of issue thereof otherwise provide, alldividends shall (as regards any Shares not fully paid throughout the period in respect of which thedividend is paid) be apportioned and paid pro rata according to the amounts paid up on the Sharesduring any period or the portion of any period in respect of which the dividend is paid. See “FinancialInformation — Dividend Policy” for further details.

We are an investment holding company incorporated in the Cayman Islands. Currently, all ofour operations are in Peru. For the foreseeable future, our ability to pay dividends will dependsubstantially on the payment of dividends to us by our subsidiaries in Peru. Our Peruvian subsidiariesmay only pay dividends out of their accumulated distributable profits, if any, determined in accordancewith their articles of association, and the accounting standards and the laws and regulations of Peru.Moreover, pursuant to relevant Peruvian laws and regulations applicable to our subsidiaries in Peru,our Peruvian subsidiaries are required to set aside a certain amount of their accumulated profits eachyear, if any, as statutory reserves. These reserves may not be distributed as cash dividends. If any ofour subsidiaries incurs debt on its own behalf in the future, the instruments governing the debt mayrestrict its ability to pay dividends or make other payments to us. Furthermore, our Peruviansubsidiaries with more than 20 employees are required to distribute 8% of their profits generated in anyyear among their employees.

In addition, our dividend distribution is subject to the terms and restrictive covenants of ourexisting loans and other financing agreements and may be subject to additional terms and covenantsfrom agreements into which we enter in the future. Pursuant to the loan agreement between ChinalcoPeru and Eximbank, Chinalco Peru has agreed not to distribute dividends to its shareholders in anyform where there is any principal, interest or other sum thereunder which is unpaid after becoming dueand payable.

During the Track Record Period, we did not distribute any dividends because we did notgenerate any distributable profit.

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SUMMARY

LEGAL PROCEEDINGS

Construction of New Town

Š We filed three lawsuits against administrative resolutions surrounding the constructionpermit for the new town of Morococha.

Š We have obtained a preliminary relief that allows us to perform the construction work.The construction of the new town was completed in the third quarter of 2012.

Š We have lost one of the lawsuits at the entry level court and at the court of appeals. Wehave appealed the decisions to the Peruvian Constitutional Court.

Š Our Peruvian legal advisor is of the view that we have valid ground to obtain afavorable ruling in the appeal, and it is likely the court will follow its decision ingranting the preliminary relief and rule in favor of us for the other two cases.

Mining Council Resolution

Š We filed two lawsuits to challenge part of a resolution issued by the Mining Council ofthe MEM that requires additional assessments on the waste materials deposit. We arguethat the Mining Council does not have authority to impose requirement not required bylaw.

Š The land to be used as the waste materials deposit is named Cajoncillo and is owned byus, but there is a third party conducting underground mining activities on the land. Wehave filed a separate lawsuit to evict this third party. See “— Land Ownership.”

Š Previously, we secured a preliminary injunction that suspended the additionalrequirement by the Mining Council. However, as the injunction has been overturned,the MEM can request us to conduct the assessment before issuing the mining plan

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SUMMARY

permit. As of the Latest Practicable Date, the MEM has not initiated or requested theassessment. Meanwhile, we have engaged a third party consultant to conduct theassessment and obtained a favorable conclusion. We can deliver the assessment reportto the MEM if so requested. Based on our communication with the MEM, we stillexpect to receive the mining plan permit in the first quarter of 2013.

Š Our Peruvian legal advisor is of the view that, as it has been established that the MiningCouncil has no authority to impose a requirement not required by law, the court willrule in favor of us for both of the two cases and the contingency from these two cases isremote.

Š The local government also challenged the Mining Council’s resolution that approves theEIA, arguing that they should have been included in the approval process.

Š It has been established that the claim was filed in a restricted period during which thelocal government is not allowed to challenge the Mining Council’s resolution.

Š Our Peruvian legal advisor is of the view that this case should be dismissed onprocedural ground. Also, our Peruvian legal advisor advised us that the MiningCouncil’s resolution approving the EIA is valid, and that the Mining Council hasfollowed all the legal requirements of the approval process.

Land Ownership

Š We filed two separate lawsuits over the ownership of the land named Cajoncillo andevict the tenant of another party who claims to be the owner.

Š We plan to use this parcel of land as our waste materials deposit. The Mining Councilhas requested additional request to be conducted, and we have filed two separatelawsuits against such request. See “— Mining Council Resolution.”

Š We have obtained an injunction that prohibits further mining activities on the land.

Š Our Peruvian legal advisor is of the view that we, as the record owner, are likely toprevail in the two cases.

Š The Yauli community also filed a lawsuit claiming that the sales agreement for a parcelof land purchased by us is not legally binding as we failed to satisfy certain legalrequirements.

Š Our Peruvian legal advisor is of the view that the sales agreement is valid and that wehave satisfied all the legal requirements, and that we should be able to obtain afavorable ruling.

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SUMMARY

RISK FACTORS

There are certain risks relating to our Shares. These risks can be broadly categorized into:(i) risks relating to our business; (ii) risks relating to our industry; and (iii) risks relating to doingbusiness in Peru. We have highlighted certain of these risks below. A detailed discussion of the riskfactors is set forth in the section titled “Risk Factors.”

Š We may not be able to identify or pursue suitable acquisition opportunities of miningprojects and mineral production assets and we may not be able to fully realize thedesired benefits from any mining projects or mineral assets that we acquire.

There can be no assurance that we will benefit from our relationship with Chinalco tothe extent we expect in seeking acquisition opportunities. Moreover, we may facedifficulties in integrating the acquired assets into our operations.

Š We may not commence commercial production at the Toromocho Project as planned,our capital expenditure for the Toromocho Project may exceed our current estimates,and the Toromocho Project may not achieve the predicted economic results orcommercial viability.

The Toromocho Project is subject to design and technical risks and may not operate asexpected upon completion.

Š We expect to depend on the Toromocho Project, which is still under development, forsubstantially all of our revenue and cash flows for the foreseeable future.

The Toromocho Project is currently our only mining asset. If we fail to derive theexpected economic benefits from it, our financial condition and results of operationsmay be materially and adversely affected.

Š Failure to achieve our production estimates could have a material adverse effect on ourfuture cash flow, results of operations and financial condition.

Actual production may vary from our estimates due to certain risks and hazards.

Š Disputes about the construction permit of the new town of Morococha may result indelay of our resettlement process or materially and adversely impact our financialcondition.

If the Supreme Court rules against us in these disputes, we may need to apply for a newconstruction permit which could delay the resettlement process and our productionschedule. In addition, the local government may vacate and demolish the new town thathas been completed and require us to bear the additional cost of an alternativeresettlement plan initiated by the local government, which may materially and adverselyimpact our financial condition.

Š The additional requirement imposed by the Mining Council may delay the approvalprocess of our mining plan permit, which may result in a delay in our productionschedule.

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SUMMARY

Our receipt of the mining plan permit may be delayed by the additional requirementimposed by the Mining Council, which may in turn delay our production schedule.

Š Challenges on the Mining Council’s resolution may result in delay or suspension of ourproduction, which may have a material adverse impact on our business, results ofoperations and financial condition.

If the local government of Morococha files another judicial claim outside the restrictedperiod and the Supreme Court nullifies the Mining Council’s resolution, our productionschedule may be delayed or our production activities may be suspended.

Š We may not be able to obtain sufficient financing to fund the expansion anddevelopment of our business.

In light of current global financial condition, we may not be able to obtain sufficientfunding when it is required on commercially acceptable terms.

Š We recorded negative operating cash flow in 2009, 2010, 2011 and the nine monthsended September 30, 2012. There can be no assurance that we will record positiveoperating cash flow in the future.

We did not have any revenues during the Track Record Period. There can be noassurance that we will generate sufficient cash flow from our operations in the future.

Š Fluctuations in the market prices of copper and other non-ferrous metals that we mayproduce from time to time could materially and adversely affect our business, financialcondition, results of operations and prospects.

Historically, the market prices for copper and other non-ferrous metals have fluctuatedwidely. Their market prices may fall in the future.

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DEFINITIONS

In this document, unless the context otherwise requires, the following expressions havethe following meanings:

“Activos Mineros” Activos Mineros S.A.C., a state-owned mining company incorporated under thelaws of Peru which is an independent third party and executed the MiningConcessions Transference Agreement of the Toromocho Mining Project withthe Company

“Aker Solutions” Aker Solutions Peru S.A., a subsidiary of Jacobs Engineering Group and anindependent third party

“Argentum” Compañía Minera Argentum S.A., a company incorporated under the laws ofPeru and an independent third party to which Chinalco Peru assigned certainmining concessions

“Articles of Association” or“Articles”

the articles of association of our Company, conditionally adopted on May 8,2012 as amended from time to time, a summary of which is set out inAppendix V to this document

“AUD” Australian dollars, the lawful currency of Australia

“Austria Duvaz” Sociedad Minera Austria Duvaz S.A.C., a company incorporated under the lawsof Peru and an independent third party which executed a framework agreementwith the Company relating to certain mining concessions located near theToromocho Project and to which Chinalco Peru assigned certain miningconcessions

“Behre Dolbear” Behre Dolbear Asia, Inc., a wholly-owned subsidiary of Behre Dolbear &Company, Inc., part of Behre Dolbear Group Inc., our independent technicalconsultant

“Board” or “Board ofDirectors”

the board of directors of our Company

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DEFINITIONS

“CAD” Canadian dollars, the lawful currency of Canada

“Cal del Centro” Cal del Centro S.A.C., a company incorporated in Peru and a subsidiary of ourCompany

“Callao ConcessionAgreement”

the concession agreement relating to a specialized dock for mineral concentrateslocated in the north of the Callao port, near to Lima, Peru, entered into by andbetween Transportadora Callao and the Government of Peru, dated January 28,2011

“Centenario” Minera Centenario S.A.C., a company incorporated under the laws of Peru and asubsidiary of our Company

“Centromin” Empresa Minera del Centro del Perú S.A., a state-owned mining companyincorporated under the laws of Peru which executed the Toromocho ProjectOption Agreement with Chinalco Peru and assigned its rights and obligationsunder such agreement to Activos Mineros

“Chalco” Aluminum Corporation of China Limited ( ), a subsidiaryof Chinalco and listed on the Hong Kong Stock Exchange, New York StockExchange and Shanghai Stock Exchange

“China” or “PRC” the People’s Republic of China excluding Hong Kong, the Macau SpecialAdministrative Region of the PRC and Taiwan

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DEFINITIONS

“China Great Wall” China Great Wall Aluminum Construction Corporation, a company incorporatedunder the laws of the PRC and an indirectly wholly-owned subsidiary ofChinalco

“Chinalco” Aluminum Corporation of China ( ), a state-owned enterpriseincorporated under the laws of the PRC and our indirect controlling shareholder

“Chinalco Canada” Chinalco Canada B.C. Holdings Ltd., a company incorporated under the laws ofthe Province of British Columbia and a wholly-owned subsidiary of Chinalco

“Chinalco Group” Chinalco and its subsidiaries, excluding the Group

“Chinalco Peru” Minera Chinalco Perú S.A. (formerly known as Minera Peru Copper S.A. priorto July 25, 2008 and as Minera Peru Copper Syndicate S.A. prior to May 17,2005), a company incorporated under the laws of Peru and a subsidiary of ourCompany

“Chinalco Resources” Chinalco Mineral Resources Co., Ltd. ( ), a companyincorporated under the laws of PRC and a wholly-owned subsidiary of Chinalco

“COH” Aluminum Corporation of China Overseas Holdings Limited( ), a company incorporated in Hong Kong, and our directcontrolling shareholder

“Companies Law” the Companies Law (2012 Revision) of the Cayman Islands

“Companies Ordinance” the Companies Ordinance (Chapter 32 of the Laws of Hong Kong), as amendedfrom time to time

“Company” and “ourCompany”

Chinalco Mining Corporation International ( ) (formerly known asPeru Copper Syndicate, Ltd), an exempted company incorporated in the CaymanIslands with limited liability on April 24, 2003 under the Companies Law

“Competent Person’s Report” A technical report prepared by Behre Dolbear dated November 2012

“Controlling Shareholder(s)” COH and Chinalco

“CRU” CRU Strategies, the management consulting division of the CRU Group,providing independent and proprietary advice to the world’s leading metals,

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DEFINITIONS

mining and fertilizer companies, suppliers to the industry, governments, andfinancial institutions

“Debt ReorganizationAgreement”

the debt reorganization agreement dated September 30, 2011 between theCompany, COH and Chinalco Peru in relation to the Reorganization

“DGAAM” General Bureau of Environmental Matters in Mining Activities under the MEM

“Director(s)” the director(s) of our Company

“Environmental ImpactAssessment” or “EIA”

means the Environmental Impact Assessment relating to the Toromocho Projectapproved by the Mining Council of MEM on December 14, 2010

“Eximbank” the Export-Import Bank of China, a bank solely owned by the PRC government

“Group,” “our Group,” “we,”“our,” and “us”

our Company and any or all of its subsidiaries together or individually or, wherethe context so requires in respect of the period before our Company became theholding company of our present subsidiaries, the present subsidiaries of ourCompany and the businesses carried on by such subsidiaries

“HK$” and “cents” Hong Kong dollars and cents respectively, the lawful currency of Hong Kong

“Hong Kong” or “HK” the Hong Kong Special Administrative Region of the PRC

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DEFINITIONS

“IFRS” International Financial Reporting Standards issued by the InternationalAccounting Standards Board

“INGEMMET” the Geological, Metallurgical and Mining Institute of Peru

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DEFINITIONS

“Juanita” Sociedad Minera de Responsabilidad Limitada Juanita de Huancayo, a companyincorporated in Peru and 50% of which is currently owned by us

“Latest Practicable Date” January 11, 2013, being the latest practicable date prior to the printing of thisdocument for the purpose of ascertaining certain information contained in thisdocument

“MEM” the Ministry of Energy and Mines of Peru

“Memorandum” or“Memorandum ofAssociation”

the memorandum of association of the Company, conditionally adopted onMay 8, 2012, as amended from time to time

“MOFCOM” the Ministry of Commerce of the PRC

“MTC” the Ministry of Transportation and Communications of Peru

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DEFINITIONS

“Pembrook Mining” Pembrook Mining Corp., a company incorporated under the laws of Canada andan Independent Third Party

“Peru” the Republic of Peru (República del Perú)

“Pesares” Sociedad Minera Pesares S.A., a company incorporated in Peru and a subsidiaryof our Company

“Phongsaiy Mining” Yunnan Copper Industry (Group) Phongsaiy Mining Sloe Co, a companyincorporated under the laws of Laos and a subsidiary of Yunnan Copper Group

“Pomacocha Power” Pomacocha Power S.A.C., a company incorporated in Peru and 10% equityinterest is owned by our Company

“Proinversion” the Peruvian Governmental Committee for Private Investment (Comité de laAgencia de Promoción de la Inversión Privada)

“Proinversion StabilityAgreement”

the tax stability agreement entered into between the Company and Proinversionon November 22, 2011

“Reorganization” the reorganization of the Group, the particulars of which are described in“History, Reorganization and Group Structure” in this document

“RMB” Renminbi, the lawful currency of the PRC

“SAFE” the State Administration of Foreign Exchange of the PRC

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DEFINITIONS

“SAIC” the State Administration for Industry and Commerce of the PRC

“SASAC” State-owned Assets Supervision and Administration Commission of the PRC

“SAT” the State Administration of Taxation of the PRC

“SERNANP” State Protected Natural Areas Agency (Servicio Nacional de Areas NaturalesProtegidas por el Estado)

“Share(s)” or “ordinaryShare(s)”

ordinary share(s) with nominal value of US$0.04 each in the share capital of ourCompany

“Shareholder(s)” holder(s) of Share(s)

“Stability Agreement” the Agreement of Guarantees and Measures to Promote Investment (Contrato deGarantías y Medidas de Promoción a la Inversión) entered into on March 9,2009 between Chinalco Peru and MEM, as amended in July 2011

“S/.” or “New Peruvian Soles” nuevos soles, the lawful currency of Peru

“Tax Unit” a reference value set annually by Peruvian tax authorities to determine taxablebasis, deductions, sanctions and other tax aspects, and the tax unit for 2012 isS/.3,650 (approximately US$1,310)

“Takeovers Code” the Hong Kong Code on Takeovers and Mergers and Share Repurchases

“Toromocho Project” a porphyry copper, potentially open pittable, mineral deposit situated in theMorococha district in central Peru

“Toromocho Project OptionAgreement”

the transfer option agreement relating to the Toromocho Project entered into byand between Chinalco Peru and Centromin, dated June 11, 2003

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DEFINITIONS

“Toromocho Project TransferAgreement”

the mining concessions transfer agreement relating to the Toromocho Projectentered into by and between Chinalco Peru and Activos Mineros, dated May 2,2008

“Track Record Period” the financial period comprising the three years ended December 31, 2011 andthe nine months ended September 30, 2012

“Transportadora Callao” Transportadora Callao S.A., a company incorporated under the laws of Peru inwhich Chinalco Peru owns a 7% equity interest

“United States” or “US” or“U.S.”

the United States of America

“US dollars” or “US$” United States dollars, the lawful currency of the United States

“Uudomxay Mining” Yunnan Copper Industry (Group) Uudomxay Mining Sloe Co., Ltd., a companyincorporated under the laws of Laos and a subsidiary of Yunnan Copper Group

“VAT” value-added tax

“Yunnan Copper Australia” Chinalco Yunnan Copper Resources Limited (formerly China Yunnan CopperAustralia Limited), a company incorporated in Australia on August 24, 1995,the shares of which are listed on the Australian Securities Exchange and ownedindirectly by Yunnan Copper Group as to approximately 21.2%

“Yunnan Copper Group” Yunnan Copper Industry (Group) Co. Ltd ( ), acompany incorporated in the PRC in April 1996, and a directly ownedsubsidiary of Chinalco

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DEFINITIONS

“Yunnan SASAC” Yunnan State-owned Assets Supervision and Administration Commission

The English names of the PRC nationals, enterprises, entities, departments, facilities,certificates, titles and the like are translations of their Chinese names and are included foridentification purpose only. In the event of any inconsistency between the Chinese names and theirEnglish translations, the Chinese names shall prevail.

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GLOSSARY OF TECHNICAL TERMS

This glossary contains definitions of certain terms used in this document in connection with ourCompany and our business. Some of these may not correspond to standard industry definitions orusage of these terms.

“CAGR” compound annual growth rate

“CIF” Cost, Insurance and Freight, a trade term used when shipping goods to indicatethat the seller pays the costs, insurance and freight to bring the goods to the portof destination

“COMEX” Commodity Exchange Inc.

“concentrate” a powdery product containing an upgraded mineral content resulting from initialprocessing of mined ores to remove some waste materials. A concentrate is anintermediary product, which would still be subject to further processing, such assmelting, to effect recovery of metal

“copper concentrate” concentrate produced from copper sulphide ore, which typically containsapproximately 23% to 36% of copper

“crusher” a machine for crushing rocks to smaller grain size

“cut-off” the lowest grade of mineralized material that qualifies as ore that will meetfurther operating cost in a given deposit

“deposit” or “mineral deposit” a body of mineralization containing a sufficient average grade of metal or metalsto warrant further exploration and/or development expenditure. A deposit maynot have a realistic expectation of being mined; therefore it may not beclassified as a resource or a reserve

“dmt” dry metric tonne

“drilling” a technique or process of making a circular hole in the ground with a drillingmachine, which typically occurs to obtain a cylindrical cone as a sample of ore.Alternatively, blasthole drilling is where the drilling technique is used to createa hole to house an explosive charge in preparation for blasting a zone of rock

“EPCM” engineering, procurement and construction management, a common form ofcontracting arrangement within the construction industry

“exploration” activity to prove the location, volume and quality of an ore body

“ferrous” containing iron

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GLOSSARY OF TECHNICAL TERMS

“FOB” Free on Board, a trade term used when shipping goods to indicate that the sellerloads the goods on board the vessel nominated by the buyer and all subsequentcosts are born by the buyer

“geochemical” a prospecting technique which measures the chemical content of certain metalsin soils and rocks and defines anomalies for further testing

“grade,” “grading” or “oregrade”

the relative amount of valuable elements or minerals contained in a parcel of orematerial. For copper and molybdenum, grade is commonly expressed inpercentage; for sliver, grade is commonly expressed in grams per tonne

“in-situ ore” natural ores before being processed or transported

“indicated mineral resource(s)”or “indicated resource(s)”

as defined in JORC Code, that part of a mineral resource for which quantity,grade or quality, densities, shape and physical characteristics can be estimatedwith a level of confidence sufficient to allow the appropriate application oftechnical and economic parameters to support mine planning and evaluation ofthe economic viability of the deposit. The estimate is based on detailed andreliable exploration and testing information gathered through appropriatetechniques from locations such as outcrops, trenches, pits, workings and drillholes that are spaced closely enough for geological grade and grade continuityto be reasonably assumed

“JORC” Australasian Joint Ore Reserves Committee

“JORC Code” the Australasian Code for Reporting of Exploration Results, Mineral Resourcesand Ore Reserves, a widely used and internationally recognized resource/reserveclassification system, prepared by JORC in September 1999 and revised inDecember 2004

“kV” Kilovolt

“LBMA” The London Bullion Market Association

“limestone” a sedimentary rock composed largely of the minerals calcite and aragonite

“LME” London Metal Exchange

“measured mineral resource(s)”or “measured resource(s)”

as defined in the JORC Code, that part of a mineral resource for which quantity,grade or quality, densities, shape and physical characteristics are so wellestablished that they can be estimated with confidence sufficient to allow theappropriate application of technical and economic parameters, to supportproduction planning and evaluation of the economic viability of the deposit. Theestimate is based on detailed and reliable exploration, sampling and testinginformation gathered through appropriate techniques from locations such as

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GLOSSARY OF TECHNICAL TERMS

outcrops, trenches, pits, workings and drill holes that are spaced closely enoughto confirm both geological and grade continuity

“mineral processing” the treatment of mineral products into concentrate products

“mineral reserve” as defined in the JORC Code, the economically mineable part of a measured orindicated mineral resource demonstrated by at least a preliminary feasibilitystudy. This study must include adequate information on mining, processing,metallurgical, economic and other relevant factors that demonstrate, at the timeof reporting, that economic extraction can be justified. A mineral reserveincludes diluting materials and allowances for losses that may occur when thematerial is mined

“mineral resources” as defined in the JORC Code, a concentration or occurrence of diamonds,natural solid inorganic material, or natural solid fossilized organic materialincluding base and precious metals, coal, and industrial minerals in or on theEarth’s crust in such form and quantity and of such a grade or quality that it hasreasonable prospects for economic extraction. The location, quantity, grade,geological characteristics and continuity of a mineral resource are known,estimated or interpreted from specific geological evidence and knowledge

“mineralization” an area with discontinuous distribution belts of mineralization, including theoccurrence of deposits, mine sites and alteration of waste rock, as explorationindicators and under control of same geology conditions. It is a key zone forestimation and further planning of exploration of minerals

“molybdenum concentrate” concentrate whose main mineral content is molybdenum, usually containing45% to 53% of molybdenum

“molybdenum oxide” roasted molybdenite concentrate, also known as technical molybdenum oxide,which typically contains 56% to 58% molybdenum and no more than 0.5%copper

“MW” megawatt

“non-ferrous metals” metals other than iron and alloys that do not contain appreciable amount of iron

“open-pit mining” mining of a deposit from a pit open to surface and usually carried out bystripping of overburden materials

“operating cash costs” include mining costs, processing costs, general and administration costs, sellingcosts, environmental protection costs, production taxes, resource compensationlevy, other cash cost items and by-product credit

“ore” mineral bearing rock which can be mined and treated profitably under current orimmediately foreseeable economic conditions

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GLOSSARY OF TECHNICAL TERMS

“ore processing” or“processing”

the process which in general refers to the extraction of usable portions of ores byusing physical and chemical methods

“ore reserve(s)” the economically mineable part of a measured and/or indicated mineralresource. It includes diluting materials and allowances for losses which mayoccur when the material is mined. Appropriate assessments and studies havebeen carried out, and include consideration of and modification by realisticallyassumed mining, metallurgical, economic, marketing, legal, environmental, andsocial and government factors, as defined in the JORC Code. These assessmentsdemonstrate at the time of reporting that extraction could reasonably bejustified. Ore reserves are sub-divided in order of increasing confidence intoprobable ore reserves and proved ore reserves

“probable mineral reserve(s)”or “probable reserve(s)”

as defined in the JORC Code, the economically mineable part of an indicatedand, in some circumstances, a measured mineral resource demonstrated by atleast a preliminary feasibility study. This study must include adequateinformation on mining, processing, metallurgical, economic and other relevantfactors that demonstrate, at the time of reporting, that economic extraction canbe justified

“proved mineral reserve(s)” or“proved reserve(s)”

as defined in the JORC Code, the economically mineable part of a measuredmineral resource demonstrated by at least a preliminary feasibility study. Thisstudy must include adequate information on mining, processing, metallurgical,economic and other relevant factors that demonstrate, at the time of reporting,that economic extraction can be justified

“pyrometallurgical process” an ore-refining process, such as smelting, dependent on the action of heat

“recovery rate” the percentage of metal produced compared to the amount of metal contained inthe feed ore in the context of a processing plant, or the percentage of metalproduced compared to the amount of metal contained in the feed concentrates inthe context of a smelting plant

“refined copper,” “coppercathode” or “cathode copper”

copper produced from copper ore which can be used to produce copper productsor copper alloy

“refining” the final stage of the metallurgical process of refining crude metal products to apure or very pure end-product

“refining charge” or “RC” the price paid by a mining company to a smelter for refining the containedprecious metals (and copper) in their concentrate’s to produce a payable metal

“rehabilitation” revegetation of mining disturbed areas by planting an appropriate mixture oftrees, shrubs and ground covers

“SAG” semi-autogenous grinding, a process widely applied in copper concentrateproduction process

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GLOSSARY OF TECHNICAL TERMS

“secondary refined copper” refined copper, which is produced from copper scrap

“SHFE” Shanghai Future Exchange

“smelting” a pyrometallurgical process of separating metal by fusion from those impuritieswith which it is chemically combined or physically mixed

“strip ratio” the ratio of the volume of overburden and segregable waste to ore in an open-pitoperation

“sulphide copper” a main type of copper resource

“SXEW” solvent extraction/electrowinning

“tailing(s)” the waste materials (residue) produced after extraction of valuable minerals

“tailing dam” a storage facility for tailings

“tonne” metric ton, equivalent to 1,000 kilograms

“tpa” and “tpd” tonnes per annum and tonnes per day

“treatment charge” or “TC” the charge paid by a mining company to have their concentrate treated through asmelter to produce saleable metal

“USGS” U.S. Geological Survey

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SPECIAL NOTE REGARDING FORWARD LOOKING STATEMENTS

This document contains forward-looking statements that are, by their nature, subject tosignificant risks and uncertainties. The forward-looking statements are contained principally in thesections titled “Summary,” “Risk Factors,” “Future Plans,” “Industry Overview,” “Our Business,” and“Financial Information.” These statements relate to events that involve known and unknown risks,uncertainties and other factors, including those listed under “Risk Factors,” which may cause ouractual results, performance or achievements to be materially different from performance orachievements expressed or implied by the forward-looking statements. These forward-lookingstatements include, without limitation, statements relating to:

Š our ability to execute the current mining plan;

Š our business and operating strategies and our future business development;

Š our capital expenditure plan;

Š the development plans and schedules for our mine;

Š our future business developments, results of operations and financial condition;

Š our expectations with respect to our ability to acquire and maintain regulatoryqualifications required to operate our business;

Š changes in competitive conditions and our ability to compete under these conditions;

Š capital market development;

Š changes in the political, economic, legal, operational and social conditions in Peru andin the PRC;

Š changes in currency exchange rates; and

Š other statements in this document that are not historical fact.

The words “aim,” “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,”“plan,” “potential,” “seek,” “will,” “would” and the negative of these terms and other similarexpressions, as they relate to us, are intended to identify a number of these forward-looking statements.These forward-looking statements reflect our current views with respect to future events and are not aguarantee of future performance. Actual results may differ materially from information contained inthe forward-looking statements as a result of a number of uncertainties and factors, including but notlimited to:

Š changes in the prevailing global metal (including among others, copper, molybdenumand silver) prices;

Š any changes in the laws, rules and regulations of the central and local governments inPeru and the rules, regulations and policies of the relevant government authoritiesrelating to all aspects of our business;

Š general economic, market and business conditions in Peru;

Š changes or volatility in interest rates, foreign exchange rates, equity prices or other ratesor prices;

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SPECIAL NOTE REGARDING FORWARD LOOKING STATEMENTS

Š the effects of competition within the industry that we operate;

Š various business opportunities that we may pursue; and

Š the risk factors discussed in this document as well as other factors beyond our control.

Subject to the requirements of applicable laws, rules and regulations, we do not have anyobligation to update or otherwise revise the forward-looking statements in this document, whether as aresult of new information, future events or otherwise. As a result of these and other risks, uncertaintiesand assumptions, the forward-looking events and circumstances discussed in this document might notoccur in the way we expect, or at all. Accordingly, you should not place undue reliance on anyforward-looking information. All forward-looking statements contained in this document are qualifiedby reference to the cautionary statements set forth in this section as well as the risks and uncertaintiesdiscussed in section titled “Risk Factors” of this document.

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RISK FACTORS

We believe that there are certain risks involved in our operations, some of which are beyondour control. These risks can be broadly categorized into: (i) risks relating to our business, (ii) risksrelating to our industry; and (iii) risks relating to doing business in Peru. Additional risks anduncertainties not presently known to us, or not expressed or implied below, or that are presentlydeemed immaterial, could also harm our business, financial condition and operating results.

RISKS RELATING TO OUR BUSINESS

We may not be able to identify or pursue suitable acquisition opportunities of mining projectsand mineral production assets and we may not be able to fully realize the desired benefits fromany mining projects or mineral assets that we acquire.

Part of our future growth strategy calls for the acquisitions of additional mineral resources andprojects. We may not be able to identify or pursue suitable acquisition opportunities for a variety ofreasons, including the intense competition for mines and mineral production assets. Our inability toidentify or pursue suitable acquisition opportunities may materially and adversely affect ourcompetitiveness and growth prospects. In seeking and pursuing acquisition opportunities, we expect tobenefit from our relationship with Chinalco. However, there can be no assurance that we will benefitfrom our relationship with Chinalco to the extent that we expect. Moreover, in the event we are able tosuccessfully complete an acquisition, we may face difficulties in integrating the acquired assets intoour operations or we may fail to achieve the desired strategic purposes or results of the acquisition.Any such difficulty or failure may result in disruptions to our preexisting business or unforeseenexpenses or capital commitments, which in turn may materially and adversely affect our business,results of operations, financial condition and prospects.

We may not commence commercial production at the Toromocho Project as planned, our capitalexpenditure for the Toromocho Project may exceed our current estimates, and the ToromochoProject may not achieve the predicted economic results or commercial viability.

We intend to develop the Toromocho Project based on the geological, engineering,environmental and mine planning evaluations set forth in our feasibility study, basic engineeringreport, definitive estimate report and detailed engineering report, which were completed in 2007, 2009,2011 and 2012, respectively. According to the Competent Person’s Report, we believe that we will beable to complete the construction of all the mining and processing facilities by the fourth quarter of2013, commence production by the fourth quarter of 2013 and reach full production capacity in the

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RISK FACTORS

third quarter of 2014. We currently estimate that the total capital and operating expenditure for thedevelopment of the Toromocho Project will amount to approximately US$3.5 billion. In 2009, 2010,2011 and the nine months ended September 30, 2012, our capital expenditures paid in connection withthe Toromocho Project amounted to US$142.4 million, US$372.9 million, US$712.0 million andUS$771.5 million, respectively. As of September 30, 2012, we had incurred approximately US$2.0billion of capital and operating expenditure for the development of the Toromocho Project.

However, there can be no assurance that we will be able to adhere to our current developmentand production schedule or that our estimates of the required capital and operating expenditure willprove accurate. Our development plans may be adversely affected by a variety of factors, such as afailure to obtain necessary approvals or funding, technical or construction difficulties and other factorsthat are beyond our control, any of which may also require unforeseen capital expenditures. Goingforward, we face particular risks with respect to (i) exceeding our current estimated expenses,including for the resettlement of Morococha and (ii) delays in the completion and start-up of ourmolybdenum hydrometallurgical plant considering the nature of the process and equipment utilized andthe history of similar operations in the industry. Furthermore, the Toromocho Project is subject todesign and technical risks and may not operate as expected upon completion. For example, its tailingsystem design is based on relatively new technology which does not have an extensive track record. Asa result, there can be no assurance that our tailing system will have sufficient capacity over the longterm. If our tailing system’s capacity is exceeded, we will need to seek for alternative, which mightresult in an increase in our expenditure and disruption of our mining activities. Even if we are able tocomplete the construction of the Toromocho Project’s mining and processing facilities without delayand according to our capital expenditure estimates, production may be delayed or restricted due todesign or technical issues and we may incur unforeseen capital expenditures following the completionof the construction of its mining and processing facilities. Unforeseen development costs, decreasedoutput and/or higher operating costs due to design or technical issues may make the ToromochoProject less profitable than currently expected or not profitable at all. Any delays in the ToromochoProject’s timetable or unforeseen capital expenditures may materially and adversely affect ourbusiness, results of operations, financial condition and prospects as may design or technical issuesarising after the completion of the construction of the mining and processing facilities.

We expect to depend on the Toromocho Project, which is still under development, forsubstantially all of our revenue and cash flows for the foreseeable future.

We will rely on the Toromocho Project, currently our only mining asset, for substantially all ofour revenue and cash flows for the foreseeable future. If we fail to derive the expected economicbenefits from the Toromocho Project due to delays or difficulties encountered in its development orproduction, our business, financial condition, results of operations and prospects may be materially andadversely affected.

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RISK FACTORS

Failure to achieve our production estimates could have a material adverse effect on our futurecash flow, results of operations and financial condition.

Estimates of the future production of our mining operations are subject to assumptions anduncertainties. Therefore, there can be no assurance that we will achieve our production estimates. Theproduction estimates are based on, among other things, reserves estimates, assumptions regardingground conditions and the metallurgical characteristics of ore reserves, estimated rates and costs ofproduction. Actual production may vary from our estimates for a variety of reasons, including risks andhazards of the types discussed elsewhere in this document, and as set out below:

Š the actual ore mined varying from estimates in grade, tonnage, and metallurgical andother characteristics;

Š lower than estimated recovery rate;

Š mining dilution or losses;

Š industrial accidents;

Š technical difficulties, such as equipment or machinery failures;

Š natural phenomena, such as inclement weather conditions, floods, blizzards, droughts,rock slides and earthquakes;

Š unusual or unforeseen geological conditions;

Š changes in power costs or power shortages;

Š failure to secure adequate means of transport for our products;

Š failure to obtain necessary supplies for operation, including explosives, diesel fuel,equipment parts and lubricants;

Š labor strikes;

Š litigation; and

Š restrictions or changes in the regulatory or political environment.

Potential results of these occurrences include damage to our mining properties or the propertiesof others, interruptions in production, injury or death, monetary losses and legal liabilities. Due to anyof these factors, the production at the Toromocho Project may not achieve the current productionestimates, which could have a material and adverse effect on our business, financial condition, resultsof operations and prospects. Moreover, we may face similar difficulties in reaching our productionestimates for projects acquired in the future and our failure to achieve those estimates may alsomaterially and adversely affect our business, financial condition, results of operations and prospects.

The estimates of our reserves and mineral grades are based on a number of assumptions, and wemay have fewer reserves than currently estimated.

Our reserves estimates are based on a number of assumptions that have been made by BehreDolbear in accordance with the JORC Code. See “Appendix IV — Competent Person’s Report” in thisdocument for further details. The accuracy of these estimates depends on various factors, such as the

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RISK FACTORS

accuracy of the data provided by us, the quality of the results of exploration drilling, the analysis ofsamples of copper and other non-ferrous metals, the procedures adopted and the knowledge andexperience of the technical experts making the estimates. In particular, Behre Dolbear did notindependently verify the accuracy and completeness of the data provided by us. It also relied on thework of the technical consultants engaged by us in its preparation of the Competent Person’s Report.The inclusion of reserves estimates should not be regarded as a representation that all these amountscan be economically exploited and nothing contained in this document (including, without limitation,the estimates of mine lives) should be interpreted as assurance of the economic lives of our reservesand resources or the profitability of our future operations.

The interpretations and deductions on which our reserves estimates have been based may proveto be inaccurate and the actual mineral content of the Toromocho Project may differ from thosepredicted based upon past drilling, sampling and similar examinations, which may force us to alter ourmining plans. Additionally, variation between the predicated metallurgical quality of the reserves andthat of the actual reserves, may require us to make adjustments to our processing plans. Anyadjustments to our mining or processing plans as a result of any variation between our estimates andthe Toromocho Project’s actual reserves could materially and adversely affect our business, financialcondition, results of operations and prospects.

Disputes about the construction permit of the new town of Morococha may result in the delay ofour resettlement process or materially and adversely impact our financial condition.

In 2010 and 2011, the local government of Morococha ordered us to cease the constructionwork for the new town and the provincial government of Yauli-La Oroya denied our application for theconstruction permit of the new town of Morococha. We filed a constitutional claim and a judicial claimagainst the local government of Morococha and a judicial claim against the provincial government ofYauli-La Oroya. These claims are currently pending, and we have obtained a preliminary relief whichallows us to perform the construction work and the resettlement process. We completed theconstruction work for the new town in the third quarter of 2012. We intend to substantially completethe resettlement process and relocate all the residents who have signed the resettlement agreement bythe first quarter of 2013 and further negotiate with the remaining residents in order to complete theresettlement. However, if these claims are ultimately resolved against us, we may have to cease theresettlement process and apply for a new construction permit, which may delay the resettlementprocess. While the completion of the resettlement is not a condition precedent to the commercialproduction at the Toromocho Project, there can be no assurance that the resettlement process and ourproduction schedule will not be delayed. If our production schedule is delayed, our business, results ofoperations and financial condition may be materially and adversely affected. Furthermore, if weobtained unfavorable results for these claims, the local government may vacate the residents anddemolish the buildings. If the government wishes to demolish the new town that has been completed, itwill first have to negotiate with the residents to form a new resettlement plan. Due to the serious socialand political issues that would result, the local governments in Peru, to our knowledge, have neverordered to vacate the people in its own jurisdiction and demolish a new town that has been completed.However, there can be no assurance that the local government will not vacate the residents anddemolish the new town that has been completed. If these events occur, we may be required to bear thecost of an alternative resettlement plan initiated by the government, which may materially andadversely impact our financial condition.

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The additional requirement imposed by the Mining Council may delay the approval process ofour mining plan permit, which may result in a delay in our production schedule.

In December 2010, the Mining Council of the MEM issued a resolution approving the EIA andimposing additional requirement for the mining plan permit. Such requirement is not required by lawand we have filed a constitutional claim and a judicial claim against such resolution. Previously, wesecured a preliminary injunction that suspended the additional requirement. However, as the injunctionhas been overturned on appeal, the MEM can request us to conduct the assessment before issuing themining plan permit. While the MEM has not initiated or requested the assessment as of the LatestPracticable Date, and we have engaged a third party consultant to conduct the assessment and obtaineda favorable conclusion, there can be no assurance that our application process of the mining planpermit and production schedule will not be delayed. If our production schedule is delayed, ourbusiness, results of operations and financial condition may be materially and adversely affected.

Challenge on the Mining Council’s resolution may result in delay or suspension of ourproduction, which may have a material adverse impact on our business, results of operations andfinancial condition.

In 2011, the local government of Morococha filed a judicial claim with the district court for thenullification of the Mining Council’s resolution that approves the EIA. The claim was filed in a periodwhen the local government was precluded from challenging the Mining Council’s resolution. As aresult, as advised by Rebaza, Alcazar & De Las Casas Abogados Financieros, our Peruvian legaladvisor, we believe that such claim will be dismissed on the procedural ground. While the localgovernment of Morococha had not refiled the claim as of the Latest Practicable Date, there can be noassurance that it will not challenge the resolution again in the future. If a claim is filed outside therestriction period again and the Supreme Court of Peru nullifies the Mining Council’s resolution, wewill operate in irregularity and pending MEM’s further action. In its own discretion, the MEM mayorder us to continue our construction or mining operation under a provisional regime or cease ourconstruction or mining operation, or take other measures as it sees fit. There can be no assurance thatthe MEM would not order us to cease our construction or mining operation. If we are ordered to ceaseour construction or mining operation, our production schedule may be delayed or production activitiesmay be suspended, which in turn would result in financial loss and material adverse effect on ourbusiness, results of operations and financial condition.

Due to our limited operating history, there may not be an adequate basis for you to evaluate ourfuture operating results and prospects.

We are currently primarily engaged in mine plant and infrastructure construction at theToromocho Project and have not commenced production or sales of our products. As the ToromochoProject is at a pre-production stage, we have a limited track record that has included substantial netlosses and operating cash outflows. Accordingly, you should not rely on results of operations as anindicator of our future operating results and prospects. You should consider our business and prospectsin light of the risks, uncertainties, expenses and challenges that we will face as an early-stage company.In 2009, 2010, 2011 and the nine months ended September 30, 2012, we recorded losses for the year orperiod of US$4.7 million, US$7.5 million, US$16.5 million and US$13.2 million, respectively. Shouldwe continue to experience deficits in the future or have our cash reserves depleted, our business,financial condition and prospects may be materially and adversely affected.

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The operating costs, the cashflow and other economic and financial estimates of the ToromochoProject and other economic analysis in the Competent Person’s Report may be different from theactual results and are based on a number of factors beyond our control.

The estimates regarding the operating costs, the cashflow and other economic and financialestimates of the Toromocho Project and other economic analysis included in the Competent Person’sReport are based upon, among other things, (i) the anticipated tonnage, grades and metallurgicalcharacteristics of the ores to be mined and processed; (ii) the anticipated recovery rates of mineralsfrom the ores; (iii) the treatment and refining costs for the copper concentrates; (iv) the operating costsof comparable facilities and equipment; and (v) the anticipated geographic and climatic conditions. Ifany of those factors changes or any of the assumptions is inaccurate, the Toromocho Project’s actualoperating costs may significantly exceed our estimates, the operating costs, the cash flow and othereconomic and financial estimates and the economic analysis in the Competent Person’s Report may bedifferent from the actual results, and the mining operation at the Toromocho Project may not beprofitable. This could have a material and adverse effect on our business, financial condition, results ofoperations and prospects.

If the copper concentrates we produce contain high level of penalty elements and insol, ourbusiness and results of operation could be materially and adversely affected.

High level of penalty elements such as zinc and arsenic, and insol such as silica, may result inpenalties from the smelters who purchase our copper concentrates. Based on our understanding of theprevailing rate at smelters, smelters will view the zinc percentage above 3.0% and insol percentagesabove 10% as threshold for penalties. According to the Competent Person’s Report, the copperconcentrates we produce are estimated to contain approximately 9% of zinc and 9% of insol. Suchimpurity penalties will be deducted from the payment for metal content from the smelters. Based onthe Competent Person’s Report, the copper concentrates we produce are expected to be subject to anaverage zinc penalty deduction at US$1.00 per 1.0% above the 4.0% threshold, or US$5.00 per tonneof copper concentrates throughout the operating life of the mine. When calculating the zinc penalty, thepenalty threshold was not taken into account. We believe this is a more conservative estimationcompared to the prevailing market value. As we plan to stockpile arsenic-bearing ores separately, webelieve the arsenic values in the copper concentrates being below penalty limits. We plan to decreasethe level of insol in the molybdenum we produce through the hydrometallurgical/pressure oxidationcircuit that we plan to install. We believe that the level of insoluble will be below the penalty level.The high zinc issue is to be handled by blending on each of the production phases in the pit tominimize the amount of activated and mechanically locked sphalerite that will carry into the copperconcentrate. However, if the blending process does not reduce the quantities of zinc in the feed, theresulting amount of zinc in the copper concentrates may trigger penalties from the smelter. If the levelof zinc and insol exceeds the estimated level, our products may be sold at a lower price and becomeless marketable, which in turn will have a material and adverse effect on our business and results ofoperations.

Our failure to obtain, renew, extend or maintain required government approvals, permits,licenses and authorizations for our exploration, construction and mining activities or renewalsthereof could materially and adversely affect our business and results of operations.

Under relevant Peruvian laws and regulations, we are required to obtain certain governmentapprovals, permits, licenses and authorizations for the Toromocho Project. While we received approval

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of the EIA in connection with all the material aspects of the Toromocho Project in December 2010 andthe construction permit for the Toromocho Project in July 2011, there can be no assurance that we willobtain other required approvals, permits, licenses and authorizations in a timely manner in the future orat all. In particular, we have not obtained the mining plan approval, which is necessary for us tocommence production at the Toromocho Project. We are in the process of applying the mining planapproval with a valid term of seven years, and plan to apply for a mining plan approval covering thewhole mine life later. There can be no assurance that we will obtain the mining plan approval in time.Any failure or delay in obtaining, renewing or extending, or any failure to maintain, any requiredgovernmental approvals, permits, licenses or authorizations, or any ambiguity in the scope of therequired governmental approvals, permits, licenses or authorizations, including the EIA approval, ourconstruction permit and the mining plan permit, could subject us to a variety of administrative penaltiesor other government actions that delay or stop our development of the Toromocho Project or itsproduction, which, in turn, could have a material and adverse effect on our business, financialcondition, results of operations and prospects.

We do not insure against all risks to which we may be subject and the insurance coverage for therisks against which we are insured may prove inadequate.

Exploration, development and production operations on mineral properties involve numerousrisks, including unexpected or unusual geological conditions, pit slope stability issues, fire, floods,earthquakes and other disasters as well as political and social instability. These risks can result in,among other things, damage to and destruction of mine properties or production facilities, personalinjury, environmental damage, delays in mining and production, monetary losses and liability.

We have maintained insurance within certain ranges of coverage which we believe to beconsistent with industry practice in Peru, such as coverage of certain contract work, third partyliability, delays in the development of the Toromocho Project, comprehensive political violence, andphysical damage to marine cargo. However, in line with what we believe to be industry practice inPeru, we have elected not to insure against certain other risks as a result of high premiums or otherreasons or have agreed to policy limits on certain coverages. For further information on insurance, see“Our Business — Insurance” in this document.

Moreover, there can be no assurance that we will be able to maintain our current insurancecoverage at economically reasonable premiums or at all in the future, or that any coverage we obtainwill be adequate and available to cover the extent of any claims against us. In the event that we suffer asignificant liability for which we are not insured or our insurance coverage is inadequate to cover theentire liability, our business, financial condition, results of operations and prospects could be materiallyand adversely affected.

We depend on our senior management team to conduct our business and the loss of members ofour senior management team may disrupt our business.

Our success depends largely upon the continued service of our senior management team, manyof whom would be difficult to replace. In particular, our mining operation and future growth dependson Dr. Peng Huaisheng ( ), our chief executive officer and Mr. Huang Shanfu ( ), our vicepresident. We do not carry key person insurance on any member of our senior management team. If we

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lose the services of a substantial number of key members of our management team, it would bedifficult to find and integrate replacement personnel, which could materially and adversely affect ourbusiness.

We face risks relating to the transportation of our products to customers.

We anticipate that a substantial portion of our production from the Toromocho Project will beexported to the PRC. Therefore, our mining operations are anticipated to be highly dependent on roadand rail services in Peru and, to a lesser extent, in the PRC. There may be insufficient highway or railinfrastructure in Peru to transport our products to the Callao port for export or we may otherwiseexperience problems in relation to these transportation systems. Moreover, the Callao port may nothave sufficient capacity to process shipments of our products or may be affected by disruptions, suchas those caused by bad weather, strikes or labor disputes, the inability of shipping vessels to access theport, political disruptions or natural disasters. Uncertainty regarding transportation infrastructure mayaffect the pricing terms on which we can sell copper concentrates and other non-ferrous metals and thewillingness of potential customers to purchase copper concentrates and other non-ferrous metals fromus, which may materially and adversely affect our business, financial condition, results of operationsand prospects, as may any inability to transport products to our customers.

Furthermore, there can be no assurance that the cost of transporting our products to customerswill not increase. Any increase in the cost of transporting our products to customers, whether due toproblems with the relevant transportation networks or to increased fuel and other costs, may affect ourcompetitiveness with other non-ferrous metal producers. In particular, increases in transportation costsmay impair our ability to compete against non-ferrous metal producers in the PRC. Any increase in thecost of transporting our products to customers may materially and adversely affect our business,financial condition, results of operations and prospects.

Our reliance on infrastructure provided or operated by third-parties exposes us to a variety ofrisks.

The development and operation of the Toromocho Project depends upon the availability,capacity, reliability and security of the infrastructure owned and/or operated by third parties, includingamong others, transportation, power and warehousing at the Callao port. We have entered into long-term contracts with certain of the third party suppliers; however, there can be no assurance that theywill perform under these contracts. Additionally, there can be no assurance that we will be able to, orcontinue to, purchase these infrastructure services from third-party suppliers on commerciallyacceptable terms or at all. In addition, we rely on third-party suppliers for the operation, quality,maintenance and improvement of the infrastructure to meet our requirements as our project proceeds.If these third-party suppliers are unable or unwilling to supply or upgrade their services, we mayexperience interruptions in the development or operation of the Toromocho Project or increases incosts in seeking alternative services.

Our results of operations are subject, to a significant extent, to economic, political and legaldevelopments in the PRC.

We expect that a majority of the sales of copper concentrates and other non-ferrous metals fromour project will be made to customers based in the PRC. Accordingly, the economic, political and

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social conditions, as well as government policies, of the PRC may affect our business. The PRCeconomy differs from the economies of most developed countries in many respects, including but notlimited to: (i) structure; (ii) level of government involvement; (iii) level of development; (iv) growthrate; (v) control of foreign exchange; and (vi) allocation of resources. The PRC economy has beentransitioning from a planned economy to a more market-oriented economy. For the past three decades,the PRC government has implemented economic reform measures emphasizing the utilization ofmarket forces in the development of the PRC economy. Changes in the PRC’s political, economic andsocial conditions, laws, regulations and policies could materially and adversely affect our business andresults of operations.

Changes and uncertainties in the PRC legal system could have a material adverse effect on us.

Our Controlling Shareholder, Chinalco, is a PRC state-owned enterprise, and most of ourDirectors are located in the PRC. In addition, we expect to sell a substantial portion of our products tosmelters in China. Therefore, our corporate structure and our operations are generally subject to thePRC laws and regulations applicable to, among others, state-owned entities, securities, outboundinvestment and the copper smelting industry. The PRC legal system is generally based on writtenstatutes. Prior court decisions may be cited for reference but have limited precedential value. Since1979, PRC legislation and regulations have significantly enhanced the protections afforded to variousforms of foreign investments in China. However, since these laws and regulations are relatively newand the PRC legal system continues to rapidly evolve, the interpretations of many laws, regulations andrules are not always uniform and enforcement of these laws, regulations and rules involvesuncertainties, which may limit legal protections available to us. In addition, any litigation in China maybe protracted and result in substantial costs and diversion of resources and management attention.

Our project is located near known earthquake fault zones and the occurrence of an earthquakeor other catastrophic disaster could cause damage to our project which could require us to ceaseor curtail operations.

Substantially all of our operations are located in Peru, including the Toromocho Project. Ouroperations in Peru are located in or near known earthquake fault zones. Peru has experienced severeearthquakes in the past which have caused damage to buildings and infrastructure and have interruptedcommerce. Most recently, in 2007, a 7.5 degree Richter scale earthquake occurred in the coastal areaof Peru near the department of Ica. Accordingly, there can be no assurance that earthquakes or otherdisasters will not occur that will affect our operations in Peru, either directly or by damaging theinfrastructure on which we will rely to deliver our products to our customers. Examples of other typesof disasters that may occur include fires and flooding. We have purchased insurance against certaintypes of damage caused by earthquakes and other natural disasters, and have designed our processingfacilities based on appropriate earthquake standard applicable to the area. However, there can be noassurance that the insurance coverage will prove sufficient to reimburse us for any losses suffered as aresult of such disasters. If any such disasters occur and our insurance coverage is insufficient, ourbusiness, financial condition, results of operations and prospects may be materially and adverselyaffected.

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We may encounter operational difficulties and other risks by operating our business in a highaltitude environment.

The Toromocho Project is located in a mountainous area in Peru, which is more than 4,000meters above sea level. The high altitude may expose us to various operational difficulties, includingdifficulties related to the health and working efficiency of our employees and our contractors and theoperational efficiency of our machinery and equipment. Should we encounter any such operationaldifficulties, our production may be restricted, delayed or curtailed and our business, results ofoperations, financial condition and prospects may be materially and adversely affected.

We may not be able to obtain sufficient financing to fund the expansion and development of ourbusiness.

We are in a capital-intensive industry and have relied on a mixture of equity capital and debtfinancing to fund our acquisition, exploration and development activities related to the ToromochoProject. We have in the past funded our capital expenditures primarily by funds from COH, theissuance of equity and debt securities and through credit facilities. Following the commercialproduction of the Toromocho Project, we expect to use cash generated from our operations, togetherwith net proceeds from further financing activities, if required, to meet our business growth objectives,including future acquisitions, further development of our existing exploration, mining and processingoperations and development of new properties. However, there can be no assurance that we will beable to obtain sufficient funding or obtain funding at all when it is required or that such additionalfunding will be available on commercially acceptable terms, particularly in light of current globalfinancial condition. Continued disruptions in the global capital and credit markets as a result ofuncertainty, changing or increased regulation of financial institutions, reduced alternatives or thefailure of any significant financial institution could adversely affect our access to liquidity. If any suchadditional funding is obtained, it may be on terms that are highly dilutive or otherwise adverse to ourexisting Shareholders. Our failure to obtain additional funding or to obtain additional funding oncommercially acceptable terms when needed could have a material and adverse effect on our business,financial condition, results of operations and prospects.

We recorded negative operating cash flow in 2009, 2010, 2011 and the nine months endedSeptember 30, 2012. There can be no assurance that we will record positive operating cash flowin the future.

We recorded negative cash flow from our operating activities of US$10.5 million, US$7.0million, US$22.8 million and US$38.6 million in 2009, 2010, 2011 and the nine months endedSeptember 30, 2012, respectively. In addition, we recorded net current liabilities of US$145.5 million,US$0.4 million, US$60.7 million and US$119.8 million as of December 31, 2009, 2010 and 2011 andSeptember 30, 2012, respectively. As we have not commenced production, we did not have anyrevenues during the Track Record Period and our operating activities did not generate any cash flow.There can be no assurance that we will generate sufficient cash flow from our operations in the future.If we are unable to finance our operations continuously by funds generated by operating activities orotherwise, our results of operations and financial position could be materially and adversely affected.See “Financial Information — Liquidity and Capital Resources — Operating Activities” for furtherdetails.

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We had incurred a high level of indebtedness, which may result in significant interest expensesand risks relating to the conditions and restrictive covenants imposed on us by our financingagreements.

During the Track Record Period, we had a high level of indebtedness, which in total amountedto US$2.1 billion as of November 30, 2012. Such indebtedness may result in significant interestexpenses, which may materially and adversely affect our results of operation. We plan to continue toincur additional significant debt to fund our development and operations and to pursue our future plans.Currently, we are in the process of negotiating additional credit facilities with an aggregate amount ofUS$239.0 million with China Development Bank and additional credit facilities with an aggregateamount of US$419.0 million with Eximbank. Both China Development Bank and Eximbank haveissued memorandum to indicate their present commitment to provide the financing. We may also makefurther drawdowns under our existing credit facility. Our ability to meet regularly scheduled interestand principal payments on our indebtedness will depend on our future operating performance and cashflow, which in turn will depend on prevailing economic and political conditions and other factors,many of which may be beyond our control. Furthermore, debt financing makes us more vulnerable tochanging foreign exchange rates and interest rates. It may also require us to use a portion of our cashgenerated from operations for the repayment of our indebtedness, which could reduce the cash thatwould otherwise be available for our working capital needs, capital expenditures, acquisitions andother general requirements and restrict our flexibility to respond to changing business, regulatory andeconomic conditions.

In addition, our financing agreements include various conditions and covenants that require usto obtain lenders’ consents prior to carrying out certain activities and entering into certain transactions.For example, under the loan agreement between Chinalco Peru and Eximbank, Chinalco Peru isrequired to obtain Eximbank’s written consent prior to carrying out certain activities and entering intocertain transactions, including (i) arranging any guarantee, mortgage, pledge or other encumbrance infavor of any person; (ii) any merger; (iii) any spin-off; (iv) any equity transfer; (v) making investments;(vi) materially increasing our debt financing; (vii) decreasing Chinalco Peru’s registered capital; and(viii) amending Chinalco Peru’s articles of association. Chinalco Peru is also prohibited by the loanagreement from changing the purpose of the loan and utilizing the loan to invest in the capital marketor real property market. Our Directors confirm that we have complied with this loan agreement in allmaterial aspects, and were not involved in any dispute associated with the performance of such loanagreement as of the Latest Practicable Date and during the Track Record Period. In addition, we maybe required to comply with similar or even more restrictive covenants or other terms under any newloan or other financing agreement. Moreover, pursuant to the loan agreement between Chinalco Peruand Eximbank, Chinalco Peru is forbidden from distributing dividends to its shareholders in any formif there is any principal, interest or other sum thereunder which is unpaid after becoming due andpayable. As a result of such terms and the restrictive covenants of existing loans or other financingagreements, or any such agreements into which we may enter in the future, our ability to pay dividendsor make other distributions on the Shares may be limited. See “Financial Information — DividendPolicy” for certain specific restrictions or other conditions on our ability to distribute dividends. Wemay also be significantly restricted in our ability to raise additional capital through bank borrowingsand debt and equity issuances or to engage in some transactions that we expect to be of benefit to us.Our inability to meet these conditions and covenants or to obtain lender’s consent to carry out certainactivities could materially and adversely affect our business, financial condition, results of operationsand prospects.

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The resettlement process of the town of Morococha may delay our production schedule.

We plan to relocate the residents of the town of Morococha to a new town before wecommence production at the Toromocho Project. The construction of the new town was completed inthe third quarter of 2012. The town of Morococha is located inside the footprint of the ultimate pit andalso at the foot of the mountain where mining will commence. Currently, there are approximately3,200 residents in the town. Based on our current mining plan, our mining operation would not affectthe town of Morococha until seven years after we commence production. In response to the issue, wehave developed a resettlement plan that meets relevant regulatory requirements and satisfactory to thecommunity. We intend to substantially complete the resettlement process and relocate all the residentswho have signed the resettlement agreement by the first quarter of 2013 and further negotiate with theremaining residents in order to complete the resettlement. See “Our Business — Corporate SocialResponsibility — Community Relations and Resettlement Plan.” While our resettlement plan has beenaccepted by a majority of the population via a referendum, there can be no assurance that ourresettlement plan will be implemented without any resistance from the local community. If there is anyresistance from the local community, potential protests may occur, which may in turn result in a delayof our development plan and production schedule.

We face risks from our reliance on third-party contractors.

We have outsourced all of our exploration engineering work and most of the ToromochoProject construction work to third-party contractors. For example, we have engaged Aker Solutions toprovide the EPCM services for the Toromocho Project. We may also outsource other work to third-party contractors. Our contractors may take actions contrary to our instructions or requests, or beunable or unwilling to fulfill their obligations. In such event, we may have disputes with ourcontractors, which could lead to additional expenses, distractions for our management, delay in thecommencement of production, and loss of production time, any of which could materially andadversely affect our business and results of operations.

In addition, under the relevant Peruvian laws and regulations, an owner of mining concessionshas a statutory obligation to ensure safe production and assume all safety related costs. In the event ofany construction or production safety-related accident involving a contractor, we may be held directlyliable or liable for compensation to the extent of such contractor’s fault, regardless of any contractualprovisions to the contrary. Any such liabilities could have a material and adverse effect on ourfinancial condition and results of operations.

Foreign currency fluctuations may affect our expenses and any future earnings.

We are exposed to foreign exchange fluctuations with respect to the New Peruvian Sol, theEuro and the US dollar. Our financial results are reported in US dollars. Our loans provided byEximbank and COH are denominated in US dollars. While we recorded net foreign exchange gains onfinancing activities of US$1.3 million, US$1.4 million and US$1.6 million in 2009, 2010 and the ninemonths ended September 30, 2012, respectively, we recorded net foreign exchange loss on financingactivities of US$0.9 million in 2011. We pay the salaries for local laborers in Peru in New PeruvianSol. Procurement of certain services and equipment for our exploration, development and operationalactivities has been, and will in the future continue to be, settled in Euros and New Peruvian Sol. Salesof copper concentrates and other non-ferrous metals into the PRC may be settled in US dollars or inRMB. Furthermore, acquisitions of mining assets in the future may be settled in Euros, New PeruvianSol, US dollars or other currencies. As a result, our financial position and results of operations areimpacted and will continue to be impacted by the exchange rate fluctuations between the

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aforementioned currencies and any significant fluctuations may materially and adversely affect ourbusiness, financial condition, results of operations and prospects.

The interests of our Controlling Shareholder, COH, and ultimate beneficial owner, Chinalco,may differ from those of our other Shareholders.

Chinalco, through its direct and indirect subsidiaries, engages in a variety of businesses inChina and other countries. In particular, other than the Group, the affiliates of Chinalco engage in theexploration and mining of copper outside the PRC. While Chinalco has provided a non-competitionundertaking in our favor to maintain a clear delineation of our respective businesses going forward, thelisted subsidiaries of Chinalco are not subject to this undertaking. In particular, they may conductfuture expansion outside of China and may potentially compete with us. See “Relationship withControlling Shareholders — Our current business and the business of Chinalco” for more details. Theinterests of Chinalco and COH may conflict with the interests of our other Shareholders, and there canbe no assurance that COH will vote its Shares in a way that will benefit our minority Shareholders.COH and Chinalco may, for business considerations or otherwise, cause us to take actions, or refrainfrom taking actions, in order to benefit themselves or their other affiliates instead of our interests or theinterests of our other Shareholders and which may be harmful to our interests or the interests of ourother Shareholders. Accordingly, unless applicable laws or regulations require approval by ourminority Shareholders, COH may:

Š control our policies, management and affairs;

Š subject to applicable laws, regulations and the Articles, adopt amendments to certainprovisions of the Articles; and

Š otherwise determine the outcome of most corporate actions, including a change incontrol, merger or sale of all or substantially all of our assets.

We believe that third parties may be discouraged from making a tender offer or bid to acquireus because of this concentration of ownership. For further information on the ownership of the Shares,see the section titled “Share Capital” in this document.

Chinalco’s investment and operations in certain countries that are subject to internationaleconomic sanctions may harm our reputation.

Chinalco and its affiliates have in the past and may choose to undertake in the future, withoutour involvement, investments and operations outside of China, including in countries that are on thesanction list published and administrated by the Office of Foreign Assets Control (the “OFAC”) withinthe United States Department of Treasury or subject to other international economic sanctions. Therecan be no assurance that Chinalco and its affiliates will not be subject to any sanction due to their pastand future investments and operations in these countries. If Chinalco or its affiliates were sanctioned,we may suffer reputational harm, which may in turn have a material adverse effect on our Share.

Facts and statistics from government official publications in this document relating to theChinese and Peruvian economies and the copper industry in China and Peru may be inaccurate.

Some of the facts and official statistics in this document relating to the PRC and Peru, theeconomy of the PRC and Peru and the copper industry and related industry sectors in China and Peru

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RISK FACTORS

are derived from various government official publications that we believe to be reliable. However,there can be no assurance as to the accuracy or reliability of such source materials. Such facts andofficial statistics from government official publications have not been independently verified by us orany of their or our affiliates or advisors and, therefore, we make no representation as to the accuracy ofsuch facts and official statistics, which may not be consistent with other information compiled withinor outside the PRC or Peru. Due to possibly flawed or ineffective collection methods or discrepanciesbetween published information and market practice and other problems, the government officialpublications in this document relating to the Chinese and Peruvian economy and the copper industryand related industry sectors in China and Peru may be inaccurate or may not be comparable togovernment official publication produced for other economies and should not be unduly relied upon.Further, there can be no assurance that they are stated or compiled on the same basis or with the samedegree of accuracy as may be the case in other countries.

RISKS RELATING TO OUR INDUSTRY

Fluctuations in the market prices of copper and other non-ferrous metals that we may producefrom time to time could materially and adversely affect our business, financial condition, resultsof operations and prospects.

We expect to derive substantially all of our revenue in the foreseeable future from sales ofcopper concentrates (with silver as metal credit) and by-products including molybdenum. Therefore,our ability to raise additional financing and maintain ongoing operations, our financial condition, theprofitability and the viability of the Toromocho Project and our future projects and our results ofoperations will be directly affected by the price of such products.

Historically, the market prices for copper and other non-ferrous metals have fluctuated widelyand experienced periods of significant decline. For example, copper prices plunged to a four-year lowof approximately US$4,000 per tonne in December 2008 but recovered and reached historically highlevels above US$10,000 per tonne in February 2011. Their prices are influenced by numerous factorsand events which are beyond our control, such as world demand and supply, forward selling activities,abnormal or severe weather conditions, costs of production by other producers, and macro-economicfactors, such as expectations regarding inflation, interest rates, currency exchange rates, as well asgeneral global economic conditions and political trends. The combined effects of any or all of thesefactors and events on the prices or volumes of copper and other non-ferrous metals are impossible topredict. If their market prices should fall due to these and other factors and events, our business,financial condition, and results of operations, could be materially and adversely affected. In particular,we have incurred substantial indebtedness in connection with the development of the ToromochoProject, including loans from COH, Eximbank and China Development Bank. If the market price ofcopper and other non-ferrous metals fall significantly, the operations of the Toromocho Project maynot generate sufficient revenues to fund the repayment of our bank borrowings, and there can be noassurance that we will be able to obtain additional financing to bring the Toromocho Project toproduction or to meet our development and production goals.

In addition, an increase in the supply of copper and other non-ferrous metals in the globalmarket may also contribute to a decrease in the market price of copper and other non-ferrous metals,

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which may lead us to lower our prices, decrease our sales, and ultimately may result in a materialadverse impact on our business, financial condition and results of operations.

Competition in the copper mining industry may hinder our development plans and adverselyaffect sales of our products if we are not able to compete effectively.

Continued growth in mining and mineral exploration activities in Peru could create anincreasing demand for mining equipment, related services and human resources. Shortages of, orhigher costs for, equipment, services and skilled and experienced labor could restrict our ability tocarry out our development and production activities, increase our costs of operations and adverselyaffect our future plans.

While the Toromocho Project is located in Peru, we intend to sell our products globally,particularly in China. We believe that competition in the global copper mining industry is based onmany factors, including, among others, price, production capacity, mineral quality and characteristics,transportation capability and costs, blending capability and brand name. Some of our internationalcompetitors may have greater production capacity as well as greater financial, marketing, distributionand other resources than we do. As a result, they may be able to devote greater resources to thepromotion, development and sale of their products than we can. In addition, we may also compete withother companies that have access to the same end markets as we do and compete for mining equipmentand related services and in their recruitment and retention of qualified employees and consultants. Ourfuture success will depend on our ability to respond in an effective and timely manner to competitivepressure. In particular, China is the largest copper consuming country in the world and we intend tosell a majority of our products into the PRC. The PRC copper market is highly fragmented. Some ofthe PRC copper suppliers may have lower transportation costs than we do due to their location andother various factors.

Our prospects depend on our ability to attract, retain and train qualified employees.

Recruiting, retaining and training qualified employees is critical to our success. We depend onthe skills and efforts of our key managerial, technical and other qualified employees. As our businessactivity grows, we will require additional key financial, administrative, mining, marketing and publicrelations employees as well as additional operations staff. In particular, we compete with other miningcompanies for qualified employees and miners in Peru, where the competition for such employees andminers is intense. There can be no assurance that the qualified employees we have or will recruit in thefuture will continue to provide services to us or will honor the agreed terms and conditions of theiremployment contracts. If we are not successful in attracting qualified employees, or retaining existingemployees, our business and results of operations could be materially and adversely affected. Inaddition, our ability to train our employees, in particular, on-site operating and maintenance personnel,is a key factor for the success of our business. If we are not successful in training such personnel, ourbusiness and results of operations could be materially and adversely affected.

Labor disputes and disruptions could adversely affect our business, results of operations,financial condition and prospects.

Once we commence production, our mining operation will rely on a large number of minersand operation personnel. Other international mining companies have experienced problems from labor

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disputes and there can be no assurance that we will not experience the same. For example, in October2011, the miners at the Cerro Verde Mine in the Arequipa region of Peru, which is principally ownedby Freeport-McMoRan Copper & Gold Inc., began a strike, which resulted in decrease in output andfinancial loss for Freeport-McMoRan Copper & Gold Inc. Moreover, in connection with an acquisitionof assets from Austria Duvaz, we were subject to 46 claims from the former employees of AustriaDuvaz alleging failure to pay social benefits. The claimants asserted that we were liable for AustriaDuvaz’s failure to make social benefit payment. According to the labor law of in Peru, the acquirer ofmining assets should assume the labor obligations of the former owner of the mining assets. Inaggregate, we were exposed to monetary claim of approximately US$300,000. As of September 30,2012, we have obtained definitive favorable results for 15 of the claims while the other 31 claims arepending final resolution. As advised by Rebaza, Alcazar & De Las Casas Abogados Financieros, ourPeruvian legal advisor, we are in compliance with the applicable labor laws. Therefore, we believe thatthe likelihood of losing the 26 pending claims is remote and we have not included these claims in theprovision for legal contingencies. However, there can be no assurance that we will not be subject tolabor disputes in the future. Going forward, if there is any labor dispute, strike or disruptions, ourmining and processing operations may be interrupted, and our business, results of operations andfinancial condition may be materially and adversely affected.

We may not be able to maintain an adequate and timely supply of electricity, water, auxiliarymaterials, equipment, spare parts and other critical supplies at reasonable prices or at all.

Cost effective development and operations of the Toromocho Project depend, among otherthings, on the adequate and timely supply of electricity, water, auxiliary materials, equipment, spareparts and other critical supplies. Electricity and water are the main utilities used in our exploration,construction and mining activities. For further information on electricity and water supplies at theToromocho Project, see “Our Business — Our Exploration and Development Operations —Infrastructure — Power/Water.” While there are readily-available supplies of electricity and water forthe Toromocho Project, there can be no assurance that there will be no interruptions or shortages ofelectricity or water supplies in the future. Any such shortages or interruptions could materially andadversely affect our production and production safety systems, including our water pumping, whichcould materially and adversely affect our business and financial condition. Any increase in the costrelated to our supplies of electricity or water could also materially and adversely affect our financialcondition and results of operations. In particular, the electricity costs in Peru have risen steadily from1998 to 2010.

Major auxiliary materials, equipment and spare parts used in our construction and productioninclude explosives, diesel fuel, blast hole drills, cable shovels, wheel loaders and haul trucks. Wesource our auxiliary materials and our equipment from suppliers in the PRC and other countries. If oursupplies of auxiliary materials, equipment or spare parts are interrupted or their prices increase, or ourexisting suppliers cease to supply to us on acceptable terms, our business, financial condition andresults of operations could be materially and adversely affected.

We will obtain the majority of the water we use for our operations pursuant to licenses grantedfor an unlimited period by the Peruvian Water Management Authority to exploit our own wells, whichare generally granted based on studies of the existing and projected water supply. We expect to obtainthe water license after we completed the construction of the facilities where the water will be used.

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Water rights, including licenses, may be terminated by governmental authorities or courts under certaincircumstances. According to the Peruvian Water Law, the primary causes for termination of waterlicenses and/or authorizations for water use are: (i) the failure to efficiently use the water for thepurposes and under the terms and conditions foreseen in the corresponding licenses and/orauthorizations, (ii) the failure to pay the corresponding fees to the government under such licenses and/or authorizations and (iii) the failure to use the water infrastructure under proper maintenancestandards.

In the case of the electricity supply, the prices for and availability of energy resources may besubject to change or curtailment, respectively, due to, among other things, new laws or regulations,imposition of new taxes or tariffs, supply interruptions, equipment damage, worldwide price levels andmarket conditions. In recent years, the price of oil, gas and electricity has risen dramatically due to avariety of factors. Disruptions in energy supply or increases in costs of energy resources or increases ofother production costs could have a material adverse effect on our financial condition and results ofoperations.

Health, safety and environmental laws and other regulations may increase our costs of doingbusiness, restrict our operations, or result in the application of fines, revocation of permits orshutdown of our facilities.

Our exploration, exploitation and processing activities are or will be subject to a number ofPeruvian laws and regulations, including relating to health, safety and environmental protection, aswell as certain industry standards.

We are required to comply with occupational health, safety and environmental laws andregulations in Peru where our operations are subject to periodic inspections by the relevantgovernmental authorities. These laws and regulations govern, among others, work place conditions,use of safety equipment, workers insurance coverage, and the handling, storage and disposal ofhazardous substances. Compliance with these laws and regulations and new or existing regulations thatmay be applicable to us in the future could increase our operating costs and adversely affect ourfinancial results of operations and cash flows.

We could also be found liable for all incidental damages due to the exposure of individuals tohazardous substances or other environmental damage. We cannot assure you that our costs ofcomplying with current health, safety and environmental laws and regulations, and any liabilitiesarising from past or future releases of, or exposure to, hazardous substances will not materially andadversely affect our business, financial condition and results of operations.

Our mining operation is subject to risks related to workplace safety, including personal injury,death and legal liability.

Our mining operation is subject to risks related to workplace safety, including damage to, ordestruction of, mining equipment and processing facilities, and could also result in personal injury,death, performance delays, monetary losses and legal liability. There were two accidents in theconstruction site of the Toromocho Project, each resulted in the death of one employee of our

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contractors. In August 2010, an employee of Calls & Nicholson, one of our contractors, died while hewas collecting samples and taking measurements in a 4-meter-deep pit in the construction site as aresult of a landslide. We were found liable for this accident by an administrative resolution againstwhich we appealed. If we lose the pending appeal, we will be liable for a fine of up to approximatelyUS$140,000. In April 2011, an employee of Mantto, one of our contractors, was hit by a heavy plateand subsequently died when unloading cement at the new town construction site. We were not foundliable for that accident. In response to these accidents, we have taken various remedial actions toenhance our safety control and our supervision over the contractors’ safety control. For example, weengaged a third party to provide safety training to our on-site employees to improve their awarenessand skills of workplace safety. We and our contractors delineated the safety-related responsibilities thateach party must take. We engaged a third party to provide professional medical emergency aid to theemployees of contractors who are injured on the construction site. Furthermore, we required our on-siterepresentatives to monitor the contractors’ operations more closely. Despite these measures, minesiteconstruction, mining and mineral processing and transportation are inherently dangerous activities andthere can be no assurance that serious accidents or fatalities would not occur in the future. If we fail toprevent serious accidents or fatalities, we will be held liable for damages arising out thereof or inconnection thereof and we may be ineligible to participate in the bidding process on certain miningprojects. In addition, such accidents or fatalities could have a negative effect on our reputation and ourrelationship with local community. Any of the foregoing could have a material adverse effect on ourresults of operations, business, financial condition and prospects.

We face risks relating to delays and increased production costs and liability from environmentalhazards, industrial accidents and other factors such as severe weather conditions, naturaldisasters, community protests and civil unrest.

Our mining business, in particular, the commissioning and operating of our mining andprocessing facilities, may be disrupted by a variety of risks and hazards, including environmentalhazards, industrial accidents (including but not limited to mishandling of dangerous articles such asexplosives and toxic materials), technical or mechanical failures, processing deficiencies, labordisputes, community protests or civil unrest, unusual or unexpected geological occurrences, severeseismic activity, flooding, fire, explosions and other delays. In November 2011, violent communityprotests for environmental issues took place around the Minas Congas Project, a mining project locatedapproximately 1,000 kilometers north of the Toromocho Project in northern Peru which is principallyowned by Newmont Mining Corporation. The protests have resulted in severe social unrest and thegovernment authority has commenced an independent review before the project can continue. Theoccurrence of any of these risks, hazards and protests could result in damage to or destruction ofproduction facilities, personal injury, environmental damage, business interruption, delay inproduction, increased production costs, monetary losses and possible legal liability (includingcompensatory claims, fines and penalties), which could materially and adversely affect our business,financial condition, results of operations and prospects. In particular, although we have established awater treatment plant to treat acid wastewater from mining operations in the vicinity, we will besubject to claims for damages if we release contaminated wastewater from our operations and causeenvironmental harm.

The operations of the Toromocho Project involve substantial environmental risks and aresubject to laws and regulations relating to the environment and reclamation in Peru. The risk of

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environmental liability is inherent in the operation of our business. Claims may be asserted against usarising out of our operations in the normal course of business, including claims relating to land use,safety, health and environmental matters. We may also be subject to actions by environmentalprotection groups or other interested parties who object to the actual or perceived environmentalimpact of the Toromocho Project or other actual or perceived condition at the Toromocho Project.These claims and actions may delay or halt production or may create negative publicity related to theToromocho Project, which could materially and adversely affect our business, financial condition,results of operations and prospects.

In addition, we are subject to certain statutory reclamation requirements. See “Laws andRegulations Relating to the Industry — Regulatory Matters Regarding the Environment — MiningClosure Law.” The Toromocho Project contains a finite amount of recoverable resources and willeventually close. The EIA included conceptual plans for the closure of the major mine, plant andsupporting facilities of our project, such as the open pit, waste rock dumps, processing plant,infrastructure, and tailings impoundment. In addition, we filed a detailed closure plan with the MEM inDecember 2011. The successful execution of these closure plans is dependent on various factors whichare beyond our control, such as unforeseen environmental changes, our financial capacity and the grantof governmental approvals. If desired reclamation and closure outcomes cannot be achieved, theconsequences of a difficult closure range from increased closure costs, fines and handover delays toongoing environmental impacts and corporate reputation damage, which could materially andadversely affect our business and results of operations.

Our resources will decrease after we commence production. Failure to discover or develop newreserves, maintain or enhance existing reserves, develop new operations or expand our currentoperations could materially and adversely affect our business and results of operations.

Our resources will decline after we commence production. The Toromocho Project has anestimated mine life of 32 years and a projected operating life of 36 years. Our future growth andlong-term success of our mining operations will depend on our ability to extend the life of our existingmining operations, to discover additional and maintain existing resources and to convert such resourcesinto economically viable reserves, including: (i) whether ore bodies can be located; (ii) whether thelocation of ore bodies are economically viable to mine; (iii) whether appropriate metallurgicalprocesses can be developed and appropriate mining and processing facilities can be economicallyconstructed; and (iv) whether necessary governmental permits, licenses and consents can be obtained.

In order to maintain copper and other non-ferrous metal production beyond the life of thecurrent proved and probable ore reserves, we must identify further reserves capable of economicalexploitation. However, due to the unpredictable and speculative nature of our industry, there is noassurance that any exploration program will result in the discovery of valuable resources. If a valuableresource is discovered, it could take several years and require significant capital expenditure tocomplete the initial phases of exploration and construction before production commences, and duringthis period, the capital cost and economic feasibility may change. There is also no assurance thatreported resources can be converted into reserves. Furthermore, actual results upon production maydiffer from those anticipated at the time of discovery.

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To access additional reserves in explored areas, we will need to successfully completeadditional development projects, including extending existing mine and developing new mines. Wetypically conduct feasibility studies to determine whether to undertake significant constructionprojects. Actual results may differ significantly from those anticipated by our feasibility studies. Inaddition, there are a number of uncertainties inherent in the development and construction of any newmine or an extension to an existing mine, including: (i) the availability and timing of necessarygovernmental approvals; (ii) the timing and cost necessary to construct mining and processingfacilities; (iii) the availability and cost of labor, utilities, auxiliary materials and other supplies and theaccessibility of transportation and other infrastructure; and (iv) the availability of funds to financeconstruction and production activities.

Accordingly, there is no assurance that any future exploration activities or developmentprojects will extend the life of our mining operations or result in any new economical miningoperations. Furthermore, mineral exploration and development involves substantial expenses and ahigh degree of risk, which may not be sufficiently mitigated through any combination of experience,knowledge and careful evaluation. In addition, exploration expenses are not capitalized until thecommercial production is commenced. Increased exploration activities will increase our operationcosts and may adversely impact our margin, financial condition and results of operation.

RISKS RELATING TO DOING BUSINESS IN PERU

Changes in Peruvian tax laws may increase our tax burden.

The Peruvian government has implemented changes to its tax regime that may increase our taxburden. Furthermore, the Peruvian government frequently implements changes to its tax regimes andmay make changes in the future that increase our tax burden.

In particular, the Peruvian legislature promulgated Law 29663 (the “Capital Gains Tax Law”)pursuant to which a capital gains tax has been imposed on indirect transfers of equity interests inPeruvian companies by foreign entities or nationals, and the Peruvian company whose equity interest isbeing transferred is jointly and severally liable for such tax liability. In particular, if any of ourshareholders sells 10% or more of our Shares in aggregate in any 12-month period, there might be anindirect transfer that is subject to the capital gains tax. The Capital Gains Tax Law was enacted in 2011and no statutory interpretation or implementation measures have been issued with respect thereto. Asadvised by Rebaza, Alcazar & De Las Casas Abogados Financieros, our Peruvian legal advisor, thereare reasonable grounds to believe that Chinalco Peru would not be jointly and severally liable for thepayment of the capital gains tax due to the Stability Agreement. However, if we are held jointly andseverally liable for such tax liability, our overall tax burden will increase, which may have a materialand adverse effect on our business, financial condition, results of operations and prospects.

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Environmental regulations have become increasingly stringent in Peru over the last decade andwe have been required to dedicate more time and money to compliance and remediationactivities. We expect additional laws and regulations will be enacted over time with respect toenvironmental matters.

Environmental laws and regulations imposing environmental obligations on the mining industryhave been enacted in Peru in the last decade. Additionally, future changes to environmental laws andregulations could increase the extent of investment and work required to be performed by us in order tocomply with environmental obligations, including, but not limited to, those related to reclamation andremediation. Any such increases in future costs could materially impact the amounts charged tooperations in this regard.

Regulatory and industry response to climate change, restrictions, caps, taxes, or other controlson emissions of greenhouse gasses, including on emissions from the combustion of carbon-based fuels,controls on effluents and restrictions on the use of certain substances or materials could significantlyincrease our operating costs. A number of governments or governmental bodies have introduced or arecontemplating regulatory changes in response to the potential impacts of climate change. Theseregulatory initiatives will be either voluntary or mandatory and may impact our operations directly orthrough our suppliers or customers.

The potential impact of climate change on our operations is highly uncertain, and would beparticular to the geographic circumstances of our facilities and operations. It may include changes inrainfall patterns, water shortages, changing sea levels, changing storm patterns and intensities, andchanging temperatures. These effects may materially and adversely impact the cost, production andfinancial performance of our operations.

The development of more stringent environmental protection programs in Peru, internationalconventions and treaties, trade agreements or generally in the industry could impose constraints andadditional costs on our operations and require us to make significant capital expenditures in the future.We cannot assure you that future legislative, regulatory, international law, industry, trade or otherdevelopments will not have a material adverse effect on our business, properties, operating results,financial condition or prospects.

We face risks from potential economic and political developments in Peru.

The vast majority of our operations are conducted in Peru. As a result, our business, financialposition, results of operations and prospects may be affected by the general condition of the Peruvianeconomy, and by price instability, inflation, interest rates, banking system, regulation, taxation, socialinstability, political unrest and other developments in or affecting Peru, over which we have no control.In the past, Peru has experienced periods of weak economic activity and deterioration in economicconditions. If such conditions return it may have a material and adverse effect on our business,financial condition or results of operations.

Our financial condition and results of operations may also be adversely affected by changes inPeru’s political climate to the extent that such changes affect the nation’s economic policies, growth,stability, outlook, regulatory environment or policies with respect to the mining industry and foreign

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investment in Peru. Since President Alan García Pérez took office in 2006, he has maintained business-friendly and open-market economic policies that have sustained and fostered economic growth, whilecontrolling the inflation rate at historically low levels. On July 28, 2011, Ollanta Humala took office asPresident of Peru. It is possible that President Humala and his administration may not continue topursue business-friendly and open-market economic policies or policies that stimulate economicgrowth and social stability. Any changes in the Peruvian economy or the Peruvian government’seconomic policies may have a material and adverse effect on our business, financial condition andresults of operations.

We face risks from potential inflation in Peru.

As a result of reforms initiated in the early 1990s, Peruvian inflation has decreased significantlyfrom the triple-digit inflation during the 1980s. Over the five-year period ended on December 31, 2008,the Peruvian economy experienced annual inflation averaging approximately 3.0% per year asmeasured by the Peruvian Consumer Price Index. This index is calculated by the National Institute ofStatistics and Information (Instituto Nacional de Estadistica e Informática) and measures variations inprices of a selected group of goods and services that are typically consumed by Peruvian families.Inflation may not remain at these levels. The Peruvian Central Bank establishes annual target inflationrates for each fiscal year and announces this target rate in order to shape market expectations.

If Peru experiences substantial inflation in the future, our costs may increase. Inflationarypressures may also curtail our ability to access foreign financial markets and may lead to furthergovernment intervention in the economy, including the introduction of government policies that mayadversely affect the overall performance of the Peruvian economy. Any of these may materially andadversely affect our business, financial condition, results of operations and prospects.

We face risks from the potential implementation of certain laws and regulations by the Peruviangovernment, such as those restricting exchange rates.

Since 1991, the Peruvian economy has undergone a major transformation, from a highlyprotected and regulated system to a free-market economy. During this period, protectionist andinterventionist laws and policies have been gradually scaled back to create a more liberal economy thatis dominated by private sector and market forces. Additionally, exchange controls and restrictions onremittances of profits, dividends and royalties have been removed. Prior to 1991, Peru exercisedcontrol over the foreign exchange markets by imposing multiple exchange rates and placingrestrictions on the possession and use of foreign currencies. In 1991, the Fujimori administrationeliminated all foreign exchange controls and unified exchange rates. Currently, foreign exchange ratesare determined by market conditions, with regular operations by the Peruvian Central Bank in theforeign exchange market in order to reduce volatility in the value of Peru’s currency against the U.S.dollar. The Peruvian economy, in part due to the changes to its laws and regulations and exchangepolicies, grew at an average annual rate of over 12.4% from 2001 to 2010.

The Peruvian government may institute restrictive exchange rate policies in the future. Anysuch restrictive exchange rate policy could affect our ability to engage in foreign exchange activitiesnecessary for our operations, and could have a material adverse effect on our business, financialcondition, results of operations and prospects. In addition, the Peruvian government may, implement

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new policies, regulations and laws, in particular those aimed at enhancing environmental protection,resource conservation and community development in Morococha, that may limit our operations inPeru. The enactment of any such laws or the promulgation of any such regulations and policies mayhave a material adverse effect on our business, financial condition, results of operations and prospects.

The recent market volatility generated by distortions in the international financial markets mayaffect the Peruvian banking system.

The volatility in the international financial markets may adversely affect the Peruvian bankingsystem as well. The Peruvian banking system has not experienced any significant liquidity problems asa result of the recent international liquidity environment, primarily because the major source of fundsfor local banks is represented by the deposit base. However, there can be no assurance that futuremarket volatility will not affect the Peruvian banking system or that such volatility will not have anadverse effect on our business, financial condition or results of operations.

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DIRECTORS

DIRECTORS

Name Residential Address Nationality

Non-Executive Directors

Xiong Weiping ( ),Chairman

Apartment 32-2-901, West Guan Ying Yuan, Xicheng District,Beijing, PRC

Chinese

Ren Xudong ( ) Apartment 25-110, Chinese Academy of Agricultural Sciences,No. 12 South Zhongguancun Avenue, Haidian District, Beijing,PRC

Chinese

Xie Weizhi ( ) Apartment 6-1-1106, No. 6 Middle Zuojiazhuang Street,Chaoyang District, Beijing, PRC

Chinese

Executive Directors

Peng Huaisheng ( ) Apartment 20-10-1, No. 12 Fuxing Road, Haidian District,Beijing, PRC

Chinese

Huang Shanfu ( ) Apartment 1-1-501, Cha Hua Yuan, Beichen, Middle BeichenStreet, Panlong District, Kunming, Yunnan, PRC

Chinese

Liang Yunxing ( ) Unit B, No. 271, Fuwai North Street, Xicheng District, Beijing,PRC

Chinese

Independent Directors

Scott McKee Hand 39 Macpherson Avenue, Toronto, Ontario M5R1W7 Canada American/Canadian

Ronald Ashley Hall 3791 Sunset Blvd, North Vancouver, BC Canada, V7R 3Y3 Canadian

Lai Yat Kwong Fred( )

17G Sung Fung Court, 3 Fook Yum Road, Harbour Heights,North Point, Hong Kong

British

Francisco Augusto BaertlMontori

Ernesto Montagne 109, Urb. La Aurora-Lima 18-Perú Peruvian

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CORPORATE INFORMATION

Registered Office PO Box 309 Ugland House, Grand Cayman,KY1-1104, Cayman Islands

Headquarters No. 62, Xi Zhi Men Bei Da Jie, Haidian District,Beijing, PRC

Place of Business in Hong Kong 8th Floor, Gloucester Tower,The Landmark,15 Queen’s Road Central, Hong Kong

Website address www.chinalco-cmc.com

Joint Company Secretary Du Qiang ( )Mok Ming Wai ( )

Authorized Representatives Peng HuaishengApartment 20-10-1, No. 12 Fuxing Road, Haidian District,Beijing, PRC

Lai Yat Kwong Fred17G Sung Fung Court, 3 Fook Yum Road,Harbour Heights, North Point,Hong Kong

Alternate Authorized Representative Mok Ming WaiKCS Hong Kong Limited, 8th Floor,Gloucester Tower, The Landmark, 15 Queen’s Road Central,Central, Hong Kong

Members of the Audit Committee Lai Yat Kwong Fred (chairman)Xiong Weiping (member)Xie Weizhi (member)Scott McKee Hand (member)Ronald Ashley Hall (member)

Members of the Nomination Committee Xiong Weiping (chairman)Ren Xudong (member)Scott McKee Hand (member)Ronald Ashley Hall (member)Lai Yat Kwong Fred (member)

Members of the Remuneration Committee Scott McKee Hand (chairman)Xiong Weiping (member)Ren Xudong (member)Ronald Ashley Hall (member)Lai Yat Kwong Fred (member)

Members of the Executive Committee Xiong Weiping (chairman)Ren Xudong (member)Peng Huaisheng (member)Huang Shanfu (member)Liang Yunxing (member)

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CORPORATE INFORMATION

Members of the Technical Committee Peng Huaisheng (chairman)Scott McKee Hand (member)Ronald Ashley Hall (member)Francisco Augusto Baertl Montori (member)Huang Shanfu (member)Liang Yunxing (member)Ezio Buselli (member)David Thomas (member)

Principal Bankers Banco de Crédito

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INDUSTRY OVERVIEW

Readers should note that CRU, an independent consultant with over 40 years’experience in the metals and mining industry, has been engaged by the Company to prepare anindustry report for use, in whole or in part, in this document. CRU prepared its report based onCRU’s in-house database, independent third-party reports and publicly available data fromreputable industry organizations. Where necessary, CRU contacted companies operating in theindustry to gather and synthesize information about market, prices and other relevantinformation. CRU has exercised reasonable care in ensuring that the information and datawhich it relied on are complete and accurate.

CRU has provided part of the statistical and graphical information contained in thisIndustry Overview. CRU has advised that (i) some information in CRU’s database is derivedfrom estimates from industry sources or subjective judgments; and (ii) the information in thedatabase of other mining data collection agencies may differ from the information in CRU’sdatabase. We believe that the sources of the information are appropriate sources for suchinformation and have taken reasonable care in extracting and reproducing such information.We have no reason to believe that such information is false or misleading or that any fact hasbeen omitted that would render such information false or misleading. The information has notbeen independently verified by us or any other party involved in the preparation of thisdocument and no representation is given as to its accuracy.

SOURCE OF INFORMATION

We commissioned CRU, an independent consultant, to prepare a report to provide an overviewof the global copper industry, and an overview of the global silver and molybdenum markets. CRU hasreceived a commission of £83,000 from us for the report. CRU has compiled the report based onhistorical and forecast data from its affiliates as released, in particular, data and information compiledwith respect to projects and mines for its Copper Long Term Outlook February 2012, CopperConcentrates Service and the Copper Quarterly Report July 2012. CRU is a research and consultingcompany specializing in the international metals, mining and electricity industries.

The statistical and graphical information contained in this document was derived from CRU’sreport. CRU prepared its report based on information in its in-house database, independent third-partyreports and publicly available data from reputable industry organizations. Some information in CRU’sdatabase was derived from estimates from industry and subjective judgments. The information in thedatabases of other mining industry data collection agencies may differ from the information in CRU’sdatabase. Moreover, the copper, silver and molybdenum markets, prices and competitive conditionsdepend on a number of factors of an inherently unpredictable nature.

COPPER

Introduction to Copper

Copper is a major industrial metal used in various industries. It is usually found in the Earth’scrust in compound form as part of a sulphide or oxide based ore. Copper is malleable, ductile, waterresistant, germicidal, and possesses high thermal and electrical conductivity, being the second most

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INDUSTRY OVERVIEW

electrically conductive metal after silver. In addition, copper is the main component in alloys, such asbrass, bronze and cupronickel.

The primary copper production process consists of mining and extraction:

Mining. There are two mining methods, namely, open pit mining and underground mining.Open pit mining offers several advantages over underground mining, including less initial capitalexpenditure, better safety and other reduced risks. Compared to other non-mining participants in thecopper value chain, including the operators of smelters and refineries, and producers of semis and finalproducts, copper mining is capital intensive and typically generates higher profit margins.

Extraction. Copper is found in both sulphide and oxide based ores. Copper sulphide based ores,which account for approximately 80% of the worldwide annual copper mine output, are generallyextracted through the conventional pyrometallurgical extraction process. In contrast, copper oxidebased ores are typically processed through the SXEW process.

Set forth below is an illustration of the primary copper production processes for conventionalpyrometallurgical extraction and SXEW extraction.

Primary Copper Production Process

SXEWConventional extraction

Mining

Crushing, Grinding, Flotation

23 - 36% Cu

Smelting

AcidLeaching

Solvent ExtractionAcid

PregnantElectrolyte

97-99% Cu

Anode Casting

Blister Copper

Electrolytic RefiningFire-Refining

Fire refined Copper

Electrolytic Winning

99.99% Cu Copper Cathode

Ores

Concentrates

Source: CRU

In the conventional extraction process for sulphide based ores, ores are crushed, ground andconcentrated by froth flotation to produce a concentrate that typically contains approximately 23% to36% copper. This copper concentrate is then fed into a smelter together with oxygen, where the copperis oxidized at a high temperature to produce impure molten metallic blister copper that containsapproximately 97% to 99% copper. Blister copper is then cast into large slabs that are used as anodesin the electrolytic refining process that produces copper cathode.

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INDUSTRY OVERVIEW

The SXEW process began to be used in the 1980s. In this process, sulphuric acid is used toleach copper from oxidized ores and mine waste. The SXEW process allows copper to be recoveredfrom varying ore types, particularly oxidized minerals and sulphide copper minerals that have beenoxidized by bacterial leaching. The SXEW process also has the ability to produce LME grade copper,but it requires the use of considerably more electricity compared to the smelting process.

Many elements are frequently found in the ores in which copper is found, with some havingvalue and some being detrimental. Valuable elements, such as gold and silver, are extracted in thesmelting process, and smelter operators typically pay by-product credits for these elements if certainthreshold amounts are extracted. These credits lower the overall cash cost of the copper extractionprocess. Ores containing elements such as arsenic, antimony and bismuth may be deemed harmful orundesirable for copper recovery, if these elements exceed certain level in the copper concentrate, andcan result in deductions or penalties being applied to the price of the copper product.

Major copper raw materials and products include:

Š Copper concentrate, which is produced from mined copper sulphide ores and usuallycontains approximately 23% to 36% copper. Copper concentrate can be smelted toproduce blister copper;

Š Blister copper, LME grade or anode copper, which is extracted from copperconcentrate, typically contains approximately 97% to 99% copper and can beelectrolyzed into refined copper; and

Š Refined copper, or copper cathode, which can be used to produce copper products orcopper alloy, contains at least 99.5% copper. Primary refined copper refers to refinedcopper from copper ore and secondary refined copper refers to refined copper producedfrom copper scrap.

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INDUSTRY OVERVIEW

Global Copper Industry

Global Copper Reserves and Resources

As estimated by the USGS, world copper reserves amounted to 690 million tonnes in 2011. Setforth below are the top 10 countries, in terms of copper reserves in 2011:

Top 10 Countries by Copper Reserves in 2011(in million tonnes of copper content)

Chile UnitedStates

ChinaPeru Australia Mexico IndonesiaRussia Poland Zambia

190

90 86

38 35 30 30 26 2620

0

20

40

60

80

100

120

140

160

180

200

Source: USGS, CRU

Copper reserves are geographically concentrated. In the aggregate, Chile, Peru and Australiaaccounted for 53% of the estimated global copper reserves, and the top 10 countries accounted for 83%of total estimated reserves in 2011.

Central and South America are the most important regions in terms of estimated copperreserves. Although Chile currently has the largest estimated copper reserves, most of those reserveshave been extensively explored and most of its areas with copper mining potential are already ownedby mining companies. Peru has the second largest estimated copper reserves in the world, with90 million tonnes in 2011. Copper mines in Chile and Peru are generally larger in scale and the oresfound therein are generally more polymetallic than those in other regions. For example, copper isusually found with gold in Peru, which was the sixth largest producer of gold worldwide in 2011.Copper mining in Peru is less developed than in Chile, but the gap of mine development andproduction between Peru and Chile is expected to narrow.

China was estimated to have 30 million tonnes of copper reserves in 2011. However, the coppermines in China are relatively small in scale and scattered, with lower ore grades on average.

The in-situ grades of ores in copper mines have been declining over the years. The latest datafrom a sample of 60 mine sites that produce copper concentrates in different regions of the worldshowed an average ore grade of 0.61% copper content in 2011, which was lower than the 0.69%

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INDUSTRY OVERVIEW

copper content in 2006. Given the fact that ore grades typically decline with age, CRU expects thisdownward trend to continue. The chart below illustrates the declining copper ore grades in the 60sampled mines and projects from 2006 to 2016:

Declining Copper Ore Grades in Existing Producing Mines and Projects(% of copper content in ore)

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

0.54

0.56

0.58

0.60

0.62%

Cu

0.64

0.66

0.68

0.70

Source: CRU

Global Demand for Copper

Demand for Refined Copper

Refined copper is used in various industries. The electrical and electronic appliances industry,and building construction industry were the largest consumers of copper, which accounted forapproximately 31% and 25%, respectively, of global refined copper consumption in 2011. As anessential material in major sectors, such as electrical and electronic engineering, manufacturing,construction and infrastructure projects, demand for refined copper is closely related to fluctuations inindustrial production. The global demand for refined copper is expected to maintain a moderate growthrate from 2012 to 2016. Set forth below is a breakdown of global refined copper consumption in 2011by end-use sectors:

World Refined Copper End Use in 2011

Electric andelectronic appliances

31%

Buildingconstruction

25%

General andother products

22%

Transportationand automobiles

12%

Industrial machineryand equipment

10%

Source: CRU

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INDUSTRY OVERVIEW

Global refined copper consumption increased moderately from approximately 16.9 milliontonnes in 2006 to approximately 19.3 million tonnes in 2011. Set forth below is a breakdown of globalrefined copper consumption in 2011 by countries:

Top 10 Refined Copper Consumption Countries in 2011(in thousand tonnes of copper content)

1,0000 2,000 3,000 4,000 5,000 6,000 7,000 8,000

China

USA

Germany

Japan

S.Korea

Russia

India

Italy

Taiwan

Brazil 424

459

542

654

716

816

1,019

1,239

1,573

7,627

Source: CRU

CRU estimates that global refined copper consumption will increase to 20.7 million tonnes in2013 from 19.9 million tonnes in 2012, mainly driven by expected growth in emerging markets, andexpected restocking activity across the copper value chain since the slowdowns in growth of globalrefined copper consumption in 2008 and 2009. CRU estimates that global refined copper consumptiongrowth will grow at a CAGR of 4.4% from 2012 to 2016.

In particular, CRU expects that China will continue to be the largest consumer of refinedcopper in the world up to 2016, with its consumption of refined copper growing at a CAGR of 6.6%from 2012 to 2016. Based on the latest official data, in 2011, China’s refined copper consumptionaccounted for approximately 39.6% of global refined copper consumption. Refined copper in Chinawas principally used for domestic housing construction and infrastructural projects, which have beenthe targets of significant government investment, in addition to the electronic appliance, automotive,industrial and general consumer products sectors, which have grown significantly in recent years.

Demand for Copper Concentrate

Demand for copper concentrate is driven by demand from smelters, which is in turn driven bydemand for refined copper. Global smelting production reached 13.6 million tonnes in 2011, growingmoderately by 2.7% from 2010. China, Chile and Japan are the top three blister copper producingcountries. Global smelter production is expected to grow at a CAGR of 6.5% from 2012 to 2016,mainly driven by expansion in China, where smelter production is expected to grow at a CAGR of14.3% from 2012 to 2016.

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INDUSTRY OVERVIEW

Global Supply of Copper

Supply of Refined Copper

From 2006 to 2011, global refined copper production grew at a CAGR of 2.4% toapproximately 19.4 million tonnes. The growth was constrained by a decrease in the level of globalcopper mine output which was the result of slowdowns in the development of new copper mineprojects and capacity expansion projects due to the global financial crisis. Additionally, the productionlevel was adversely affected by a declining ore grade during that period.

According to CRU, global copper mine production is expected to grow at a CAGR of 5.9%from 2012 to 2016, as several significant copper mine projects with an estimated aggregate annualoutput of 3.5 million tonnes of copper content are expected to commence operation during that period.CRU also estimates that global refined copper production will grow at a CAGR of 5.7% from 2012 to2016.

Supply of Copper Concentrate

From 2006 to 2011, global copper concentrate production grew at a CAGR of 1.1%, reaching12.4 million tonnes of copper content in 2011. South America remains the largest copper concentrateproducing region in the world. Africa has seen the largest increase in copper concentrate productionover the past five years, due to a series of copper mine projects commencing production. On the otherhand, production has declined in Europe, North America, Argentina and Chile due to the falling oregrades and mine shutdowns. The chart below illustrates the top 10 copper concentrate producingcountries in 2011:

Top 10 Copper Concentrate Producing Countries in 2011(in thousand tonnes of copper content)

425

427

531

601

542

691

931

1,045

1,285

3,344

- 500 1,000 1,500 2,000 2,500 3,000 3,500

Canada

Poland

Zambia

Russia

USA

Australia

Peru

China

Chile

Indonesia

Source: CRU

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INDUSTRY OVERVIEW

According to CRU, in 2011, China was the world’s second largest copper concentrate producerafter Chile. The copper concentrate production of Peru is anticipated to grow at a CAGR of 11.8%from 2012 to 2016, primarily driven by expected productions from the Toromocho Project, which isowned and operated by us, and the Las Bambas Project, which is owned and operated by Xstrata.

Copper Concentrate Trade

In 2011, global copper concentrate exports reached 17.2 million gross wet tonnes of copperconcentrate, and the top 10 exporting countries in aggregate accounted for 88.3% of total copperconcentrate exports worldwide. Chile, Peru, Australia and Indonesia are the most active exportingcountries, which collectively accounted for 71.8% of global copper concentrate exports in 2011.

The copper concentrate exported from Peru increased from 1.8 million gross wet tonnes ofcopper concentrate in 2006 to 3.1 million gross wet tonnes of copper concentrate in 2011, representinga CAGR of 12.0%, primarily due to the growth in production output from domestic mining projects. In2011, 1.0 million gross wet tonnes of copper concentrate were exported from Peru to China,accounting for 32.3% of the copper concentrate exports of Peru and making China its largest tradingpartner in terms of copper concentrate. In 2011, Peru was the second largest exporter of copperconcentrates into China, representing 15.9% of China’s total imported copper concentrates.

China, as the largest copper concentrates consuming country in the world since 2008, is facingshortfalls in domestic supply and significantly relies on copper concentrate imports from its tradingpartners to meet demand. Peru is the second largest copper concentrate supplier to China after Chile.The copper concentrate imported to China from Peru grew at a CAGR of 14.3% from 2006 to 2011,outpacing that of Chile, which is 2.5%.

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INDUSTRY OVERVIEW

Japan, India and South Korea are the second, third and fourth largest copper concentrateimporting countries, respectively. Underpinned by the strong demand from Asian countries and robustoutput from South American countries, such as Peru and Chile, copper concentrate trade betweenSouth American (exports) and Asian (imports) countries have become increasingly active andimportant, and accounted for nearly 42.8% of the global copper concentrate trade in 2011. Set forthbelow is an illustration of the global trade flow for copper concentrate importing countries in 2011:

Global Copper Concentrate Trade Flows in 2011

1,963

1,402

3,951

1,384

12,344

3,002

825

2461,059

115

Copper concentrate production (in thousand tonnes of coppercontent)

Refined copper consumption (in thousand tonnes)

North America Europe

Africa

Asia

AustralasiaSouth America 4,725

648

Concentrate flows(in thousand tonnes)

To Asia 7,342

To North America 10

To Europe 2,119

To Asia 57

To Europe 172

To Europe 86To Asia 812

To Asia 1779

Source: Global Trade Information Service, Inc.

Copper Pricing

Refined Copper Pricing

There are three main copper futures exchanges in the world, namely the LME, which is basedin London, the COMEX, which is based in New York, and the SHFE, which is based in Shanghai. TheLME is the world’s premier non-ferrous metals market and normally sets the benchmark prices for therefined copper market. The SHFE and the COMEX prices usually follow the trend of LME prices, buton some occasions they diverge from each other in response to local economic and market movements.

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INDUSTRY OVERVIEW

Set forth below is a diagram of the historical refined copper price at the LME and the SHFEfrom January 2006 to October 2012 :

Refined Copper Price, January 2006 to October 2012

0

2000

4000

6000

8000

10000

12000

Jan-

06

Apr

-06

Jul-

06

Oct

-06

Jan-

07

Apr

-07

Jul-

07

Oct

-07

Jan-

08

Apr

-08

Jul-

08

Oct

-08

Jan-

09

Apr

-09

Jul-

09

Oct

-09

Jan-

10

Apr

-10

Jul-

10

Oct

-10

Jan-

11

Apr

-11

Jul-

11

Oct

-11

Jan-

12

Apr

-12

Jul-

12

Oct

-12

0

10000

20000

30000

40000

50000

60000

70000

80000

US$

/t

RM

B/t

Shanghai Futures Exchange Copper Generic Contract (RHS) LME Copper Cash Contract (LHS)

Source: CRU

Copper prices reached a four-year low in December 2008 when the global financial crisis hitthe commodity market. However, prices subsequently recovered significantly and reached historicalhigh levels above US$10,000/tonne in February 2011. This was primarily driven by growth in copperdemand from emerging markets and also influenced by investors’ interest in hedging against theweakening US dollar, as well as the eased monetary policy during the two preceding years.

In 2012, copper consumption growth is expected to continue to be outpaced by that of copperproduction. Delays in the ramp up of copper production from new mine projects are expected to keepthe market in deficit for 2012 and see stocks decline further in 2013. Modest copper supply surplusesare expected to emerge in 2013 before the balance is pushed into a deficit again in 2014. Beginning in2015, as a number of delayed mining projects are expected to come on stream, surplus will continue toincrease and a sizeable surplus is expected to develop by 2016. However, the estimation is highlydependent on the production of a number of mining projects schedule to commence production from2012 to 2016. If the productions in these projects delay, the estimated copper price will need to beadjusted upward.

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INDUSTRY OVERVIEW

Set forth below is CRU’s data and estimation on refined copper market balance and prices from2006 to 2016:

Global Market Balance and Price of Refined Copper, 2006 to 2016

2006 2007 2008 2009 2010 2011 2012E 2013E 2014E 2016E2015E

400

200

(200)

(400)

(600)

1,400

1,200

800

1,000

600

0

2,000

1,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

10,000

6,7317,126 6,951

5,164

7,539

8,8117,938

8,506 8,0527,737

7,331

304

(109)

332

1,185

124 132

(477)

25

(166)

198

570

LME Price(Cash, US $/tonne)(RHS)

Supply surplues / (Deficit) ('000t)(LHS)

Source: CRU

The other major driver of copper prices is investors’ interest. CRU anticipates that investorssentiment will remain volatile and be reflected in the actual trajectory of refined copper prices over thenext five years.

Copper Concentrate Contracts and Pricing

There is no formal exchange for copper concentrates. The prices of copper concentrates areestablished through and governed by copper concentrate smelting contracts. A copper concentratesmelting contract is an agreement between a copper mine and a smelter/refinery for the purchase of aspecified tonnage of copper concentrates over a certain timeframe.

The terms and conditions of the contracts cover payment to the mine for the metal content ofthe ore (including copper and by-products such as gold, silver and molybdenum), and also include anumber of deductions to account for certain costs incurred by the smelter during the smelting process.Benchmark prices for the metal content are agreed between the contracting parties, which are normallybased on the exchange prices, such as those of the LME, the COMEX or the SHFE. The metal contentin concentrates is usually less than 100% payable. In order to allow for handling and processing losses,the percentage level is often referred to as metal payable level. The main deductions made from thepayable metal contents are TC and RC. Additional deductions or penalties may be made for excessivelevels of impurities in the concentrate and for moisture content above a certain level. The generalpricing mechanism of copper concentrate is illustrated as follows:

(Benchmark price × copper payable level)

+ By-product credit (from elements such as gold, silver, molybdenum or others)

- Impurity penalty (from elements such as arsenic, antimony, and bismuth or others)

- TC/RC (either quoted on a spot basis or negotiated semi-annually in cases of long-termcontracts)

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- Ocean freight and insurance (assume copper concentrates are sold on CIF terms)

= the CIF price for the copper concentrate

Further information about the key components of copper concentrate smelting agreements isillustrated as below:

Š Copper payable level:

Copper concentrate pricing is typically referenced to copper content of 27%-36%. Typically,96.5% to 96.75% of the copper content is paid for, subject to a minimum deduction of 1 unit/percentage point. For concentrates with copper content of 29% or more, the percentage payableformula applies. For concentrates with copper content of less than 29%, the 1 unit/percentagededuction applies.

Š TC/RC:

The TC is a charge levied at the smelting stage that is paid by miners, and typically expressedin US dollar per tonne of copper concentrate, which results in the charge per tonne of copper contentvarying depending on the composition of the concentrate. The RC is a similar charge levied at therefining stage of production, typically expressed in US cents per pound weight of refined copper. Thereare often imbalances between concentrate production and smelter and refining capacity which causeTC/RCs to fluctuate, resulting in volatile smelter revenues.

The TC/RC is set largely by the economics of the industry. Industry costs and revenues set theupper and lower limits for TC/RCs, with the upper limit defined by mine costs and revenues and thelower limit defined by smelter costs and by-product revenues. The supply/demand balance inconcentrates will determine whether the upper or lower limits apply. Therefore, if the market is indeficit, terms will move towards the lower limit and vice versa. However, as these are agreed byannual negotiation, a number of subjective factors also come into play. For example, spot marketdevelopments can have a significant impact on the terms that are agreed in the contract negotiations aswell as longer term supply and demand factors.

Š By-product credit:

Similar to copper, by-product content must reach certain threshold before fees become payableand it depends upon the benchmark price agreed upon. Refining charges will be applied.

Š Impurity penalty:

For reasons such as health and safety concerns, as well as copper recovery and smelting costs,copper concentrate smelting contracts normally stipulate both the amount of a penalizable element thatcan be present in the concentrates before a penalty is imposed, and the scale of charges that apply if thethreshold is exceeded. Penalizable elements may include impurities such as arsenic, antimony, zinc,nickel and moisture.

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Š Freight and insurance:

Mines are always responsible for the transportation costs associated with moving concentratesfrom the mine to a sea port, as well as any costs charges that are incurred in relation to storing copperconcentrates at the sea port and the loading.

Other than auctions of individual shiploads of concentrates in the spot market on FOB terms,copper concentrates are normally sold on CIF terms, which means that the mine must pay for the costof freight and insurance.

Copper Concentrate Market Balance

The global concentrate market has experienced deficit from 2006 to 2011, primarily because ofthe rapid growth of smelter demand from China. CRU estimates that the shortfall in copper concentratesupply will continue, but strong growth in mine supply will narrow the deficit from 2012. However,such trend is dependent on strong mine supply growth, which in turn depends on mine projects beingcommissioned on time and ramping up as scheduled. Set forth below is CRU’s data and estimation oncopper concentrate market balance from 2006 to 2016:

Global Copper Concentrate Balance(in thousand tonnes of copper content)

11,712 12,051 11,983 12,321 12,409 12,396

(12,123) (12,308) (12,401) (12,563) (12,413) (12,742)

(411) (257) (418) (242) (4) (346) (238) (199) (191) (189) (97)

(20,000)

(15,000)

(10,000)

(5,000)

0

5,000

10,000

15,000

20,000

2006 2007 2008 2009 2010 2011 2012E 2013E 2014E 2015E 2016E

Forecasted copper concentrate outputForecasted primary smelter consumptionForecasted surplus/deficit of copper concentrate

Copper concentrate outputPrimary smelter consumptionSurplus/deficit of copper concentrate

Source: CRU

CRU expects that the production from new mine projects will provide a significant boost toproduction in the short and medium term. However, a number of mining projects have experienceddelays recently, primarily due to increased resource nationalism, concern over environmental issues

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and local opposition to development, as well as rising capital costs, the shortage of skilled workers andsupplies and technical challenges. Moreover, over the long term, the productions from these miningprojects will be largely offset by the effects of mine closures and declining ore grades at existingmines. According to CRU, production of copper concentrates will not be able to meet the increase indemand even if the potential production from all projects and the prospects (where exploration is at arelatively early stage) are included. Set forth below is estimation by CRU on mine production anddemand from 2005 to 2035:

World Mine Production and Demand, 2005 to 2035(in thousand tonnes of copper content)

8,000

10,000

12,000

14,000

16,000

18,000

20,000

22,000

24,000

26,000

28,000

2005 2007 2009 2011 2013 2015 2017 2019 2021 2023 2025 2027 2029 2031 2033 2035

Existing Mines

Firms projects

Probable projects

Possible projects

Prospects

New exploration

Supply gap

Source: CRU

Overview of the Global Pre-production Copper Projects

As copper prices have escalated since 2010, the incentives for mines to produce more copperhave increased. Accordingly, CRU expects the amount of mined copper to increase in the next fewyears. However, there are obstacles in relation to new projects coming on line, including the following:

Š the debt crisis in the United States and Europe as well as the tight monetary policiesworldwide could restrict funds available for project financing, which may cause projectdelays if the macro economy worsens;

Š a decrease in the availability and commercial viability of world class deposits;

Š increases in projects located in geographic areas with high political risks and profiles,such as Africa and Mongolia;

Š national interest concerns on resource ownership;

Š social and community issues;

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Š environmental concerns that lead to higher operating and capital costs; and

Š a lack of infrastructure for certain projects.

CRU’s projected copper mine production CAGR of 5.9% over the period from 2012 to 2016 isdependent on the development of firm, probable and possible greenfield projects and brownfieldexpansions.

For mining projects in general, execution risks decrease as the projects progress towardsproduction, while economics of the projects improves along the development process. CRU classifiesgreenfield projects as firm, probable and possible, as illustrated below:

Firm Projects Probable Projects Possible Projects

Feasibility Successful full / bankable/ definitive feasibility

study

Full / bankable /definitive feasibilitystudy underway

Pre-feasibility studyunderway

Environmental Permitting Granted In progress NA

Financing Granted In progress NA

Board Approval Underway NA NA

Construction Underway NA NA

Technology Modern and proven NA NA

Expected Start-up Time 2 - 4 years NA NA

According to CRU, the mining project lifecycle of a typical large copper development projectwith annual production volume of more than 200,000 tonnes of metal content consists of exploration,design, financing, and construction, as illustrated below:

3 to 10 years

Source: CRU

Exploration Design Financing Construction

Valuation creation by mining companies

Raising finance by demonstrating risk mitigations

Once committed, construction is relatively quick

• Drilling• Metallurgical testing• Preliminary environmental

Studies

• Pre-Feasibility study and Feasibility study

• Environmental assessment

• Fundraising from capital markets or other sources

• Construction and Operation

3 to 8 years 1 to 3 years 2 to 4 years

High risk business dominated by junior mining companies

High LowRISKS ASSOCIATED TO PROJECT DEVELOPMENT

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Comparisons of Global Pre-production Copper Projects

Set forth below are descriptions of the top 20 firm brownfield and greenfield projects in theworld scheduled to commence production from 2012 to 2016, ranked by their respective averageplanned annual production between 2012 and 2020:

Project Name Country Owner

PlannedAnnual

Production(1)

OreReserve

Ore Resource+ Ore Reserve

Start-upYear Mine Life

(in thousand tonnes) (in million tonnes) Years

1. Oyu Tolgoi Mongolia Rio Tinto;TurquoiseHillResources;MongolianGovernment

256.4 1,368 3,022 2013 58

2. Las Bambas Peru Xstrata 244.2 — 1,710 2014 20

3. Toromocho Peru TheCompany

192.2 1,540 2,234(2) 2013 32

4. Grasberg Block Cave Indonesia Freeport-McMoRanCopper &Gold;Rio Tinto;IndonesiaGovernment

154.5 — 1,019 2016 26

5. Antapaccay Peru Xstrata 137.6 541 731 2012(3) 22

6. Cobre Panama(Petaquilla)

Panama InmetMining,KPMC

136.2 2,319 7,916 2016 31

7. Mina Ministro Hales(MMH)

Chile Codelco 130.7 285 1,246 2013 15

8. Kamoto -KOV IV DRCongo

KatangaMining;Gecamines

126.3 138 229 2013 45

9. Konkola Deep Zambia VedantaResources;ZCCMInvestmentHoldings

122.3 21 200 2012(3) 23

10. Caserones-Regalito Chile Pan PacificCopper;Mitsui &Company

115.3 968 2,854 2013 30

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Project Name Country Owner

PlannedAnnual

Production(1)

OreReserve

Ore Resource+ Ore Reserve

Start-upYear Mine Life

(in thousand tonnes) (in million tonnes) Years

11. Glogow Gleboki-Przemyslowy

Poland KGHMPolskaMiedz

98.7 — 267 2013 30

12. Highland ValleyExtension

Canada TeckResources

96.1 623 1,553 2013 12

13. Sierra Gorda Chile KGHM,SumitomoMetals andMining;SumitomoCorporation

86.8 1,275 2,918 2014 21

14. Grasberg DMLZ Indonesia Freeport-McMoRanCopper &Gold; RioTinto;IndonesianGovernment

82.2 — 510 2015 27

15. Morencil Expansion(Concs)

USA Freeport-McMoRanCopper &Gold

71.3 — 3,199 2014 9

16. Lomas Bayas II Chile Xstrata 67.6 473 566 2012(3) 12

17. Pumpkin Hollow USA NevadaCopper

58.0 368 716 2015 18

18. Bozshakol Kazakhstan Kazakhmys 54.7 — 1,173 2015 40

19. Antuocya Chile AntofagastaMinerals

52.6 642 1,106 2014 23

20. Tsagaan Suvarga Mongolia MogolunAlt Corp.

50.9 — 240 2014 14

Source: CRUNotes:(1) Based on average planned annual production between 2012 and 2020.(2) The proved and probable reserves and the measured, indicated and inferred mineral resources are from two separate parts of the ore

body, and are presented separately in the JORC reserve and resource tables.(3) Production has commenced as of December 31, 2012.

According to CRU, based on the currently available information, the Toromocho Project ranksthird in terms of target annual production of copper content and second in terms of ore reserve.

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The Copper Market in China

China Copper Demand

Demand for Refined Copper

The top three sectors driving the demand for refined copper in China are the electrical andelectronics, general consumer products, and building construction industries. Aggregate demand forrefined copper from these sectors accounted for approximately 71% of the refined copper consumptionin China in 2011. Set forth below is a breakdown of refined copper consumption in China in 2011 byend-use sectors:

China’s Refined Copper End Use in 2011

Electrical andelectronic applications

33%

Buildingconstruction

18%

Industrial machineryand equipment

10%

Transportation &automobiles

13%

Other products6%

General consumer20%

Source: CRU

China is the world’s largest refined copper consumer and is expected to continue to drive thegrowth in demand for refined copper. From 2008 to 2011, consumption of refined copper in Chinaincreased from 5.1 million tonnes to 7.6 million tonnes, representing a CAGR of 14.7%. This wasmainly driven by the industrialization and production migration to China, which was led by heavyfixed assets investment. China is expected to consume 10.6 million tonnes of refined copper in 2016,representing a CAGR of 6.6% from 2012, accounting for 44.6% of expected global refined copperconsumption in 2016. Ongoing heavy investments in the power generation sector, railways, automobilemanufacturing, household electrical appliances and affordable housing sectors are expected to continueto drive the growth in demand for refined copper.

Š The China State Grid plans to invest RMB1.7 trillion in the power grid and RMB2.0trillion in the smart grid over the period of 2011-2015. Copper consumption is likely tobenefit from power grid construction such as the electricity distribution network.

Š Auto manufacturing and sales are set to continue growing under the 12th Five-Year Plangiven relatively low car ownership. The Ministry of Finance and Commerce announceda new trade-in scheme, which offers vouchers of between RMB11,000 and RMB18,000

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redeemable when trading in/upgrading passenger vehicles in rural areas. Energyefficiency is likely to boost use of copper in engine control/management systems.

Š Copper consumption in the railway sector will continue to grow despite the possibleslowdown of the growth rate. According to the Ministry of Railways, China’sinvestment into railways will amount to RMB2.3 trillion from 2011 to 2015, comparedto RMB2.0 trillion from 2005 to 2010. The total mileage of China’s railway operationsis expected to rise from 91,000 km in 2011 to 120,000 km by 2015. The electrificationrate will increase to 60% in 2015, compared to 46% in 2010.

Š Home appliances and consumer products, including air conditioners and washingmachines, are expected to see a strong growth since penetration levels remain low inrural areas. In June 2012, the PRC government announced a new home appliancesincentive policy that will be valid for one year. It is estimated that the policy has a totalvalue of RMB36.3 billion and is expected to stimulate consumption of home appliancesafter a decline in the first half of 2012 as the original subsidy scheme ended at the endof 2011.

Š China Housing and Urban-Rural Development plans to invest RMB1.3 trillion to build36 million units of affordable houses from 2011 to 2015. The National Developmentand Reform Commission announced that local government investment and corporatebonds issuance will give priority to the construction of affordable housing. The outlookfor the social housing project for 2012 remains unclear however, as local governmentfunding could still be a bottleneck. Commercial housing will also continue to growdespite the current tight policy on real estate market. The Ministry of Housing andUrban-Rural Development disclosed that by the end of 2009, urban housing areareached 30 square meters per capita compared to 6.7 square meters per capita in 1978,whereas rural housing area also grew from 8.1 square meters per capita to 33.6 squaremeters per capita over the same period.

Š In September 2012, the PRC government approved approximately 60 infrastructureprojects that had not yet started due to the lack of financing by the local governments.The total amount of the funding for these projects is estimated to be approximatelyRMB1.0 trillion.

Demand for Copper Concentrates

China is the largest refined copper producing country, with its smelter production from copperconcentrates growing at a CAGR of 9.5% from 2006 to 2011. According to CRU, China is expected tocontinue to drive the global demand for copper concentrates, with its smelter production from copperconcentrates expected to increase by 2.3 million tonnes at a CAGR of 14.3% from 2012 to 2016.Despite the significant smelter production from copper concentrates in China in 2011, it onlyaccounted for 56.7% of the refined copper produced in China in the year, which was lower than theglobal average of 70.3%, demonstrating potential for growth of Chinese smelter production fromcopper concentrates.

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Set forth below is the smelting production from copper concentrates in China from 2006 to2016:

China Smelter Production from Copper Concentrates(in thousand tonnes of copper content)

6,000 2012E – 2016E CAGR of 14.3%

5,000

2006 – 2011 CAGR of 9.5%

2,362 2,487 2,538

2,842 3,000

4,000

1,804 1,993

1,000

2,000

0

2006 2007 2008 2009 2010 2011 2012E 2013E 2014E 2015E 2016E

Source: CRU

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China Copper Supply

Supply of Refined Copper

While China consumed approximately 39.6% of the global refined copper in 2011, copperproduction in China has lagged behind the domestic demand. In 2011, China experienced a deficit inrefined copper of approximately 2.5 million tonnes, an increase from a deficit of 610,000 tonnes in2006. The deficit is forecasted to shrink to below 1.2 million tonnes by 2016, due to expectedexpansion of smelting capacity in China. However, if domestic raw material production does notincrease, smelting production will be constrained and overseas sourcing will increase. The table setforth below illustrates the deficit of refined copper supply in China from 2006 to 2016, taking intoaccount estimates for possible and probable projects that may come online during the forecast period:

Domestic Copper Market Balance in China(in thousand tonnes of refined copper)

2007 2008 2009 2010 2011 2012E 2013E 2014E 2016E2015E

10,000

5,0005,1404,6004,0143,7523,4852,996

(3,606)(4,775) (5,050)

(6,372)

-610 -1,290 -1,298-2,359 -2,599 -2,487 -2,404

-1,611 -1,008 -977 -1,203

-5,000

0

(7,199) (7,627)

-15,000

-10,000

2006

China production

China consumption

Surplus/Deficit of refined copper in China

Forecasted China production

Forecasted China consumption

Forecasted surplus/Deficit of refined copper in China

Source: CRU

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Supply of Copper Concentrates

Despite China being the largest copper concentrate producer in Asia and the second largestcopper concentrate producer in the world, strong domestic consumption growth in China has outpacedthe domestic concentrate supply. From 2012 to 2016, copper concentrate supply from domestic minesis expected to grow at a CAGR of 3.0%, which is lower than the estimated growth of domestic refinedcopper demand. This will likely cause a decreasing self-sufficiency rate for copper concentrates inChina.

Domestic Copper Concentrates Market Balance in China(in thousand tonnes of copper content)

6,000

4,000

5,000

1,993

2,362 2,487 2,538 2,842 3,000

1,804

785 881 991 1,011 1,146 1,285

1,000

2,000

02006 2007 2008 2009 2010 2011 2012E 2013E 2014E 2015E 2016E

Forecasted China smelter production from copper concentrate Forecasted China copper concentrate supply

China smelter production from copper concentrate China copper concentrate supply

Source: CRU

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China Copper Concentrate Imports

Due to insufficient domestic copper concentrates production, CRU expects China to remain amajor importer of copper concentrates. The chart below illustrates the domestic copper concentratessupply in China as a percentage of smelting production from copper concentrate, or self-sufficiencyrate, from 2006 to 2016:

Copper Concentrates Self-sufficiency Rate in China

2006 2007 2008 2009 2010 2011 2012E 2013E 2014E 2015E 2016E

45.0%

50.0%

35.0%

40.0%

25.0%

30.0%

20.0%

Source: CRUNote: imported copper concentrates include copper concentrates produced by mines outside China but owned by Chinese companies

China surpassed Japan to become the largest concentrate importer in 2008. In 2011, China’scopper concentrate imports amounted to 6.4 million tonnes. Chile and Peru are the largest exporters ofconcentrates to China, with Australia and Mongolia also being important sources of supply. The chartbelow illustrates China’s major copper concentrates suppliers in 2011:

China Copper Concentrate Import in 2011 byOverseas Markets

Chile22%

Peru16%

Australia9%Mongolia

8%

Others45%

Source: CRU

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China Copper Price

In general, the SHFE copper prices closely track those of the LME, but the premium ordiscount between the two depends on a number of short-term considerations, such as the metal tradeflows, exchange rates, local supply and demand, and taxation. The boundaries of the premiums ordiscounts are set by the arbitrage potential. When the SHFE and LME move too far out of line with oneanother, importing or exporting refined copper becomes attractive and is the mechanism that drives themarket to return to equilibrium.

Copper Concentrate Pricing

Prices of copper concentrates are established through negotiations between buyers (typicallysmelting factories) and sellers (typically mining companies) on an annual or bi-annual basis.

Shipping cost is an important cost component in copper concentrate trading. In 2011, the spotmarket rate for shipping commercial lots of copper concentrates from Callao to the main Chinese Ports(such as Nantong, Jiangsu Province and Qingdao, Shandong Province) was approximately US$48 perwet tonne. This rate is mainly a reflection of the current cost of chartering a bulk carrier. The oceanfreight rate in 2011 from Callao to China of US$48 per wet tonne is based on the daily hire rates plusthe current cost of bunker oil, at US$467 per tonne, which is relatively high as compared to historicalprices, and related charges.

CRU estimates the shipping cost to fall to approximately US$45 per wet tonne of concentratebetween 2012 and 2016.

SILVER

Introduction to Silver

Silver is usually found in its native form, as an alloy with other metals and in minerals such asargentite and chlorargyrite. It is soft, white, lustrous, malleable and ductile. It has the highest opticalreflectivity and the highest thermal and electrical conductivity of all metals. Silver is valued as aprecious metal and serves as an important investment tool. In addition, it is applied in various industrialapplications, including the production of mirrors, electronics, photography, musical instruments andclothing.

A large amount of silver is found in copper, gold, lead and zinc ores and produced as aby-product of the refining process of these base metals. Due to its high value, the extraction of silvercan be commercially viable even at very low concentrations in ores or concentrates. Silver is alsoreadily recyclable from sources such as photographic developing solutions and industrial catalysts.

Demand for Silver

Demand for silver comes from fabrication and investment. According to CRU, fabricationdemand accounts for 90% to 95% of total global silver demand. Such demand is mainly from the

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electrical, electronics, ornament and jewelry industries. Investment demand for silver from investorsand banks is largely determined by the commodity trading price of silver. Set forth below is abreakdown of global fabrication demand for silver in 2011 by end-use sectors:

Breakdown of Global Silver End Use in 2011

Electrical /Electronics

28%

Source: CRU

Jewellery /Silverware

24%

Photography8%

Brazing Alloys /Solders

9%

Coins & Medals14%

Other fabrication17%

From 2006 to 2008, global demand for silver increased at a modest rate of between 0.3% and1.6% per annum. In 2009, global fabrication demand for silver experienced a significant decrease of10.6% as a result of the global financial crisis. However, demand for silver increased by 13.3% in2010, returning to the pre-crisis level. In 2011, as a result of the global economic conditions, demandfor silver decreased by 1.4%.

CRU expects global silver consumption to grow at a CAGR of 2.5% from 2012 to 2016,primarily driven by growth in demand for uses in both brazing alloys and solders and electrical andelectronics applications.

Supply of Silver

The majority of silver is produced as a by-product from the production of other base metals.The largest suppliers of silver to the global market are located in South American countries, inparticular, Peru and Chile, where large-scale domestic base metal operations exist and produce silveras a by-product, followed by those located in North America, primarily in Mexico, and Asia. In 2011,the volume of silver supplied by Peru and China were 3,414 and 3,250 tonnes, accounting for 14.0%and 13.3% of the total global supply, respectively.

From 2006 to 2011, the global supply of silver increased at a CAGR of 3.2%, primarily due toincreased silver production in North America and South and Central America. CRU expects globalsilver production to reach 27,075 tonnes per annum by 2016, including production from miningprojects that are scheduled to commence production by 2016, representing a CAGR of 2.0% from 2012to 2016.

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Market Balance of Silver

The global silver market has experienced a surplus since 2006, which peaked in 2009 due to adecrease in demand which was in turn due to the financial crisis. The surplus further increased in 2011.CRU estimates that a surplus will continue to exist through 2016.

Silver can also be derived from scrap sources, with the largest amount being recovered from thephotographic, catalytic and electronic sectors. Excluding photographic scrap sources, the total supplyof silver from scrap sources has consistently increased every year since 2006 as it became moreeconomical to process silver from scrap sources due to increased silver prices. Apart from slight annualfluctuations, total global silver supply from recycled scrap sources is not expected to fall significantlythrough 2016, according to CRU.

Silver Pricing

The major trading markets for silver include the LBMA based in London, and the COMEXbased in New York. Both bullion and industrial-grade refined silver are traded at a standard 99.99%silver content as defined by the LBMA. Silver prices at the LBMA are fixed daily at 12:00 noon GMTby members of London Silver Fixing Ltd. The price of industrial-grade silver is based on either theLBMA price or the price published by Handy & Harman, one of the largest suppliers of industrialsilver in the world. The spot price for silver is determined by prevailing levels at the COMEX.

With the exception of 2009, when it fell slightly by 2.1%, the price of silver has been increasingsince 2006, with the steepest increase occurring in April 2011. These increases have been driven bystrong investment whilst fabrication demand fell slightly. Silver prices remained relatively highthroughout 2011 and decreased slightly in the first half of 2012. CRU expects silver prices to fallslightly to around US$30 per ounce by the end of 2012. CRU further estimates that silver prices willremain relatively stable from 2013 to 2015 and decrease significantly in 2016.

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INDUSTRY OVERVIEW

Set forth below is the historical price of silver from January 2006 to July 2012.

Historical Silver Price, January 2006 to July 2012

45.0

US$/oz

40.0

25.0

30.0

35.0

10.0

15.0

20.0

0.0

5.0

Jan-06 Jul-06 Jan-07 Jul-07 Jan-08 Jul-08 Jan-09 Jul-09 Jan-10 Jul-10 Jan-11 Jul-11 Jul-12Jan-12

Source: CRU

MOLYBDENUM

Molybdenum is a ductile metal with an exceptionally high melting point of 2,623°C and is usedprincipally as an alloying agent in steel, catalysts, fabricated metal and non-ferrous alloys to enhancehardness, high temperature strength, toughness and resistance to wear and corrosion.

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INDUSTRY OVERVIEW

Molybdenum may be produced from primary mines or by-product mines. In mines wheremolybdenum is the primary product, it is normally recovered in the form of sulphide concentrate whichis despatched to roasters to be turned into molybdenum oxide. In mines where molybdenum is aby-product, molybdenum ores are first leached to reduce the copper content of the concentrate toacceptable levels before they are sent for hydrometallurgical processing to produce ferromolybdenum,ammonium molybdate or molybdenum metal. The chart set forth below illustrates the primaryproduction processes of molybdenum:

Primary Production Process of Molybdenum

Mined Ores

Molybdenum sulphide concentrates

Technical grade molybdenum oxide

Crushing

Leaching

Grinding

Flotation

Roasting

Smelting

Ferro-molybdenumPure molybdenum oxide/Chemicals Powder/Briquettes

Sublimation or chemical treatment

Source: CRU

Most molybdenum is consumed in the form of technical grade molybdenum oxide or one of itsdownstream derivatives, such as ferromolybdenum or chemical grade oxide. Technical grademolybdenum oxide is produced mainly from molybdenum sulphide concentrates. Of the 573 millionpounds of contained molybdenum recovered in 2011 globally, 563 million pounds, or 98%, came fromconcentrates roasted into molybdenum trioxide. The balance was recycled from spent catalysts.

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INDUSTRY OVERVIEW

In 2011, the total global market for primary molybdenum amounted to 511 million pounds. Thesteel industry was the largest consumer of molybdenum. Stainless and other alloy steel producersconsumed approximately 60% of the world’s total consumption of molybdenum. The chemicalindustry was the third largest consumer of molybdenum. The balance was made up, in close to equalvolumes, by use in superalloys and metal fabricated products and by foundries. Set forth below is abreakdown of global molybdenum demand in 2011 by end-use sectors:

Breakdown of Global Molybdenum End Use in 2011

Source: CRU

Stainless28%

Alloy32%

Chemicals14%

Other26%

Demand for Molybdenum

According to CRU, global demand for molybdenum in 2007 reached 471 million pounds.However, it experienced a marginal decrease in 2008 and a significant decrease in 2009, to 439 millionpounds as a result of the global financial crisis. In 2010, such demand rebounded to a new high of492 million pounds and further increased to 511 million pounds in 2011.

China surpassed the United States and Western Europe in terms of molybdenum consumptionin 2007 and 2009, respectively. Molybdenum consumption in China grew at a CAGR of 25.2% from2006 to 2011. In 2011, consumption of molybdenum in China amounted to 172 million pounds,accounting for 33.7% of the world’s total molybdenum consumption. This was mainly driven by thegrowth of steelmaking in China, which has become the world’s largest stainless and alloy steelproducer.

According to CRU, growth in global demand for molybdenum is expected to remain stable in2012, while the growth in demand for molybdenum in China is expected to outpace the growth inglobal demand from 2012 to 2016, as a result of expected growth in China’s steel industry.

Supply of Molybdenum

Molybdenum concentrates are derived from two main sources: primary molybdenum mines andby-product or co-product mines, mostly copper mines. Chile, Peru and Mexico are among the main

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INDUSTRY OVERVIEW

producers of by-product or co-product molybdenum concentrates. In 2011, Peru produced 41.4 millionpounds of by-product or co-product molybdenum concentrates, representing 14.9% of the world’s totalby-product or co-product molybdenum supply. China is the largest producer of primary molybdenumconcentrates in the world, followed by other significant sources, including Russia and Armenia.

The distinction between primary and by-product mines is important in forecasting futureproduction of molybdenum. The production of by-product molybdenum is relatively insensitive tomolybdenum prices. Existing copper mines may continue to recover molybdenum as long as it remainsprofitable to continue producing copper. Molybdenum values may, at the margin, influence whether anew copper mine will start extracting and processing molybdenum, but they are not normally anoverriding factor. Decisions about mining primary molybdenum deposits are much more price-sensitive. The decision to build a primary mine or to re-open a closed primary mine will dependcritically on projections of the price of molybdenum over the life of the project. Even the productionlevels at operating primary mines may depend on molybdenum prices.

According to CRU, the production of molybdenum concentrates is expected to increase to 931million pounds in 2016 from 573 million pounds in 2011, primarily due to production from by-productmines. The largest new by-product production is expected to come from Peru, followed by the UnitedStates and Chile. It is estimated that supply from China will not change significantly, amounting to nomore than 7 million pounds per year, mainly from small-scale mines.

Market Balance of Molybdenum

According to CRU, oversupply of molybdenum began in 2008 and is expected to continuethrough 2016, and the growth in supply will continue to outpace the growth in demand.

Molybdenum Pricing

The LME began trading molybdenum futures in February 2010, providing a clear andtransparent pricing point for molybdenum producers and permitting those producers and others toengage in hedging activities. As in line with LME contracts, all prices are set in US$/tonne; but, in thecase of molybdenum, the price is per tonne of contained metal as the actual traded product is a 57% to63% concentrate. Molybdenum concentrate, molybdenum oxide and ferromolybdenum are sold,largely on a spot basis, by traders and dealers worldwide.

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European molybdenum oxide prices are key measures of molybdenum’s market price and arewidely used and commonly quoted within the molybdenum industry and by industry specialists,commodity and equity analysts as a benchmark of molybdenum’s market price. Set forth below is thehistorical European spot price for technical grade molybdenum oxide from January 2006 to July 2012.

Historical European Spot Price forTechnical Grade Molybdenum Oxide, January 2006 to July 2012

(US$/lb contained Mo)

Source: CRU

0.00

5.00

10.00

15.00

20.00

25.00

30.00

35.00

40.00

Jan-06 Jan-07Jul-06 Jul-07 Jan-08 Jul-08 Jan-09 Jul-09 Jan-10 Jul-10 Jan-11 Jul-11 Jul-12Jan-12

Based on the analysis of the historic price of molybdenum, CRU estimates that the price ofmolybdenum will slightly decrease throughout 2013 as the market surplus grows, and will begin toincrease slightly as the growth in surplus will be offset by the growth in consumption of molybdenumin the production of stainless steel starting in 2013.

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LAWS AND REGULATIONS RELATING TO THE INDUSTRY

GENERAL

The General Mining Law, as approved by Supreme Decree N° 014-92-EM of June 4, 1992 (the“General Mining Law”) is the key legislation governing all mining activities in Peru. Furthermore,the exploration for and extraction of mineral substances from the ground (with a few limitedexceptions1) is governed by a number of laws and regulations, the most important of which include:

Š the Regulation on Several Titles of the Mining Law (Supreme Decree N° 003-94-EM);

Š the Regulation on Mining Procedures (Supreme Decree N° 018-92-EM);

Š the Law regulating Health and Safety at Work (Law N° 29783);

Š the Regulation on Mining Safety and Occupational Health (Supreme DecreeN° 055-2010-EM);

Š the Regulation on Environmental Protection for Mining-Metallurgical Activities(Supreme Decree N° 016-93-EM);

Š the Environmental Regulations for Mining Exploration Activities (Supreme DecreeN° 020-2008-EM);

Š the Regulation under Title Nine of the Mining Law relating to the Guarantees andMeasures for the Promotion of Investment and Mining (Supreme DecreeN° 024-93-EM);

Š the Regulation on Mining Activities Supervision (Resolution N° 205-2009-OS-CD);

Š the Law regulating Mining Concessions in Urban and Urban Development Areas (LawN° 27015) and its Regulations (Supreme Decree N° 008-2002-EM);

Š the Mining Royalties Law (Law N° 28258) and its Regulations (Supreme DecreeN° 157-2004-EF and amendment (Law N° 29788);

Š the Mine Closure Law (Law N° 28090) and its Regulations (Supreme DecreeN° 033-2005-EM);

Š the Regulation on Public Consultation Exercises in the Mining Sector (Supreme DecreeNº 028-2008-EM);

Š the Special Mining Tax Law (Law N° 29789) and its Regulations (Supreme DecreeN° 181-2011-EF) and its amendment (Law N° 29788); and

Š the Special Mining Contribution Law (Law N° 29790) and its Regulations (SupremeDecree N° 173-2011-EF).

The Concession System

Peruvian mineral resources are the property of the Peruvian State and the private sector mayonly exploit such resources in accordance with the Peruvian concession system. Under Peruvian law,

1 Such exceptions are oil and related hydrocarbons, guano deposits, geothermal resources and mining-medical water.

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LAWS AND REGULATIONS RELATING TO THE INDUSTRY

investors are only allowed to carry out mining activities in Peru after obtaining the necessaryconcessions.

A concession is required to carry out any mining activities in Peru, except for storage2,sampling, prospecting and trading mining products and minerals. Concessions are granted forindefinite periods, subject only to termination as set out in the paragraph below headed “Terminationof Concessions.”

The General Mining Law authorizes the Mining Concessions Bureau (the “DCM”), which is apart of the INGEMMET, to grant mining concessions (as defined in the paragraph below headed“Types of Concessions”). All other types of concessions (such as Beneficiation, General Services andMining Transport Concessions, as defined in the paragraph below headed “Types of Concessions”) aregranted by the General Mining Bureau (the “DGM”), which is a part of the MEM.

Types of Concession

Under the General Mining Law, there are four types of concession which may be granted by theDGM or by the DCM:

Š Mining Concessions: This type of concession grants holders the exclusive right toexplore and exploit mineral resources within the area covered by the concession. Theseconcessions may be for exploiting metal or non-metal substances. Mining concessionsare granted by the DCM.

Š Beneficiation Concessions: This type of concession grants holders the right to process,purify, smelt and/or refine minerals. Beneficiation concessions are granted by the DGM.

Š General Service Concessions: This type of concession grants holders the right to carryout ancillary services (such as ventilation, sewerage, hoisting or underground access) totwo or more mining concessions of different holders. General service concessions aregranted by the DGM.

Š Mining Transport Concessions: This type of concession grants holders the right to masstransportation of minerals using non-conventional systems (such as conveyor belts,pipelines and/or track cables). Mining transport concessions are granted by the DGM.

Mining concessions are granted in respect of areas consisting of a minimum of 100 hectaresand a maximum of 1,000 hectares (concessions located at sea may extend to an area of 10,000hectares). However, holders of Mining concessions are able to obtain more than one Miningconcession, as well as to obtain different types of concessions over the same area.

Mining concessions are property-related rights, distinct and independent from the ownership ofthe superficial land on which they are located. Buildings and other permanent structures used in amining operation are considered real property accessories to the concession on which they are situated.

2 In accordance to Legislative Decree N° 1018, the storage of mineral concentrates in deposits located outside areas of mining activitydoes not need a concession.

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LAWS AND REGULATIONS RELATING TO THE INDUSTRY

Concessions may be transferred, assigned or mortgaged. Any such transfer, assignment ormortgage must be evidenced by public deed registered at the Registry of Mining Rights, which is a partof the National System of Public Registers, before it can be enforced against the Peruvian State or thirdparties.

Mining concessions require a number of permits and licenses to be obtained before theexploration and exploitation commence. The table below shows the key permits and licenses whichgenerally must be obtained.

# Concession, license or permit Entity that providesTime takento provide

1 PRESIDENCY OF THE REPUBLIC

1.1 Authorization for the Acquisition of Mining Properties byForeigners in Border Areas (requested when the miningproperty is located within 50 kilometers of Peru’s borders)

President of theRepublic

30 working days

2 GENERALMINING BUREAU— DGM

2.1 Authorization to Start Operating Exploitation Activities inMetal and Non Metal Mining Concessions

General Director ofthe DGM

30 working days

2.2 Authorization for Access, Ventilation and Drainage Worksin Neighboring Mining Concessions

General Director ofDGM

80 working days

2.3 Establishment of Mining Use or Easements on theSuperficial Land of Concessions

General Director ofthe DGM

80 working days

2.4 Approval of Use of Ammonium Nitrate — Fuel Oil (ANFO)for Underground Mining

General Director ofthe DGM

30 working days

2.5 Certificate of Mining Operation (COM) General Director ofthe DGM

30 working days

3 MINISTRY OF AGRICULTURE (NATIONALWATER AUTHORITY)

3.1 Water Use Authorization Manager of theNational Water

Authority

30 working days

3.2 Wastewater Use Authorization Manager of theNational Water

Authority

30 working days

4 CONTROL OF SECURITY SERVICES, ARMS, AMMUNITION AND EXPLOSIVES FORCIVILIAN USE— (DICSCAMEC)

4.1 Semester Authorization for the Use of Explosives General Director ofDICSCAMEC

23 working days

4.2 License to Import or Export Explosives and RelatedSupplies

General Director ofDICSCAMEC

20 working days

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LAWS AND REGULATIONS RELATING TO THE INDUSTRY

# Concession, license or permit Entity that providesTime takento provide

4.3 Explosives Warehouse Operation Authorization General Director ofDICSCAMEC

11 working days

4.4 Individual Manipulation of Explosives License General Director ofDICSCAMEC

2 working days

4.5 Eventual Authorization to use Explosives General Director ofDICSCAMEC

23 working days

5 DGAAM

5.1 Approval of Environmental Impact Studies for MiningExploitation Activities

General Director ofDGAAM

* If the miningproject islocated in aprotected naturalarea, a copy ofthe EIA must befiled before theSERNANP

120 working days

5.2 Approval of Environmental Impact Studies for MiningExploration Activities

General Director ofDGAAM

120 working days

5.3 Approval of Environmental Impact Statements for MiningExploration Activities — Simplified version of 5.2applicable to certain types of exploration

General Director ofDGAAM

20 days

5.4 Approval of Mining Closure Plan General Director ofDGAAM

175 working days

6 MUNICIPALITIES

6.1 If the mining activity is located in urban or urban expansionzones, it will require a favorable opinion of the ProvincialCouncil

Suitable ProvincialCouncil

It depends on eachMunicipality

7 NATIONAL PROPERTY BUREAU— SBN

7.1 Allocation of National Real Property SBN 30 working days

8 ENVIRONMENTAL HEALTH GENERAL BUREAU— DIGESA

8.1 Approval of Environment Impact Study in infrastructure,and sewage and solid waste disposal projects

General Director ofDIGESA

30 days

9 CULTURAL HERITAGE PROTECTION

9.1 Approval of the Certificate of Non Existence ofArchaeological Ruins

Ministry of Culture 40 calendar days

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# Concession, license or permit Entity that providesTerm of

the proceeding

10 FUEL STORAGE

10.1 Registry of Direct Fuel Consumers Mining and EnergyInvestment

Supervision Body

30 working days

11 CHEMICAL FEEDSTOCK (IQPF)

11.1 IQPF User Certificate IQPF General Bureauof the Ministry of

the Interior

23 working days

11.2 IQPF Registry Ministry of Production 3 working days

12 SOLID WASTE

12.1 Agreement with a company that provides solid wastemanagement duly registered with DIGESA

Private Agreement N/A

Requirements and Obligations of Concessions Holders

Requirements

Concessions may only be granted to individuals domiciled in Peru, companies incorporated inPeru whose principal business is to carry out mining activities (although such companies may bewholly-owned by foreign investors, with the exception set out in the following section), or branches offoreign companies that are established in Peru for purposes of carrying out mining activities. The lattertwo categories are required by law to be registered in the Peruvian Public Registry.

According to the General Mining Law, an applicant must file a request for a mining concessionto INGEMMET, paying 10% of one Tax Unit and the mining annual validity fee (as detailed in theparagraph below headed “Obligations”) for the first year. The applicant must indicate in the requestform the Universal Transversal Mercator (UTM) coordinates of the concession, taking intoconsideration any preexisting rights.

The INGEMMET should then deliver to the applicant notices that must be published oncewithin 30 days of delivery, in the official newspaper (El Peruano) and in a newspaper published in thecapital of the province in which the area of the requested concession is located.

Then the applicant must deliver the published notices to the INGEMMET, which in turn shallreview the documents (published notices and the request filed) and prepare a legal and technical reportin the following 30-day period. Once favorable legal and technical reports have been produced, thehead of INGEMMET grants the mining concession.

Finally, the applicant must file the resolution that grants the mining concession for itsregistration in the relevant Public Mining Registry.

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LAWS AND REGULATIONS RELATING TO THE INDUSTRY

On September 7, 2011, the Law of the Prior Consultation Right of the Indigenous Population(Law N° 29785) was issued. This law establishes a prior consultation procedure (procedimiento deconsulta previa) in favor of indigenous populations whose collective rights may be affected directly bya legislative or administrative measure (i.e. a mining concession). However, such population does nothave a veto right.

Limitations on foreign investors

Under Article 71 of the Peruvian Constitution, foreign individuals (including Peruvian-domiciled companies owned ultimately by overseas investors) must obtain permission from thePresident of the Republic and the Board of Ministers, declared by Supreme Decree, in order to holdany type of concession over property located within 50 kilometers of any of Peru’s national borders.Although this process may be time consuming, in nearly all cases the government has issued thispermission when requested.

Limitations on obtaining mining concessions in Protected Natural Areas

Protected Natural Areas are continental and/or maritime regions of the Peruvian territoryexpressly established by the government for the conservation of biodiversity and other valuesassociated with cultural, landscape and scientific interests. Protected Natural Areas are part of theNational Patrimony and fall within the public domain.

The exploitation of mineral resources within Protected Natural Areas is restricted. It can onlybe authorized if the activities are contemplated in the master plan of the Protected Natural Area and ifthey comply with environmental standards, limitations and restrictions under the Protected NaturalArea creation objectives, zoning and category. Any activity within a Protected Natural Area must beauthorized by the SERNANP.

The law secures the exercise of property or other real estate rights pre-existing to the creation ofthe relevant Protected Natural Area. However, these rights must be exercised in harmony with thegoals and purposes for which the Protected Natural Area was created.

Limitations on the development of mining concessions in archaeological sites

Mining projects cannot be developed in areas where archaeological sites are located. Therefore,before the start up of a mining project, a Certificate of Non-Existence of Archaeological Ruins(Certificado de Inexistencia de Restos Arqueológicos or CIRA) issued by the Ministry of Culture isrequired. The CIRA will either certify that on the surface of the evaluated area no archaeological sitesor features were discovered, or will identify the exact location and extent of any such sites or featuresin order to implement precautionary measures.

The CIRA is valid for an unlimited period, but will become void should any archaeologicalartifacts be discovered. In that case, the company must stop activities immediately and notify theMinistry of Culture. Failure to stop activities will generate applicable civil and criminal liabilities.

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LAWS AND REGULATIONS RELATING TO THE INDUSTRY

Under certain exceptional circumstances, Peruvian legislation allows the removal of archaeologicalsites or features when the area is required for the development of projects that are in the nationalinterest.

Obligations

Under article 39 of the General Mining Law, holders of mining concessions or those applyingfor mining concessions are required to comply with several obligations, including the payment of anannual validity fee (also known as the good standing payment) of US$3.00 per year per hectare. Failureto pay the validity fee for two consecutive years may lead to the cancellation of the mining concession.

Holders of mining concessions are also required to meet a minimum annual production targetestablished by the General Mining Law. By Legislative Decrees No. 1010 and No. 1054 published onMay 9, 2008 and June 27, 2008 respectively the minimum annual production target was modified.

Under the new regime, the target is equivalent to one Tax Unit per hectare per year in the caseof metallic mining concessions, and 10% of one Tax Unit per year per hectare in the case of non-metallic mining concessions. The obligation to meet such production targets must be fulfilled beforethe eleventh year since the year next to the granting of the mining concession.

If the holder of a mining concession cannot meet the minimum annual production target by thefirst semester of the eleventh year since the year in which the concession was granted, the holder isrequired to pay a penalty equal to the 10% of the corresponding minimum annual production target peryear per hectare (approximately US$129), until the year in which the holder meets such target. Failureto pay this penalty for two consecutive years will result in the termination of the mining concession.

In addition, failure of the holder in meeting the minimum annual production target in thefifteenth year after the concession is granted may lead to the cancellation of the concession, unless theconcession holder can prove to the MEM that the failure in meeting the minimum annual productiontarget is due to a cause not attributable to the holder. Likewise, holders may be able to avoid thecancellation of the concession by paying the corresponding penalty (as referred in the previousparagraph) and proving that they have invested an amount equivalent to at least ten times the amountof the penalty in mining activities or basic public infrastructure3. If such failure continues until theexpiration of the twentieth year since the year next to the granting of the concession, the concessionshall be automatically cancelled, without any kind of recourse.

In the case of mining concessions granted before the new regime was approved, SupremeDecree No. 054-2008-EM provides that the 10-year term for meeting the new minimum annualproduction target shall be counted from the first business day of 2009. Until then (2019), the amount ofthe mining penalty and the reasons for cancelling a mining concession will be those provided by theGeneral Mining Law, before Legislatives Decrees No. 1010 and No. 1054 were approved.

3 According to the Regulations of Several Titles of the Mining Law (Supreme Decree N° 003-94-EM), this investment may be carried outin all kind of studies and works required for initiating the exploitation stage (such as construction of roads, ports, airports andmachinery and equipment acquisition) within the concession area.

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LAWS AND REGULATIONS RELATING TO THE INDUSTRY

Under the old regime, the target is equivalent to US$100 per year per hectare in the case ofmetallic mining concessions, and US$50 per year per hectare in the case of non-metallic miningconcessions and shall be met no later than the seventh year following the year in which the concessionwas granted.

Additionally, holders of mining concessions that are in operation or production phase must fileevery year a consolidated annual statement (Declaración Anual Consolidada –DAC) to the DGM. TheDAC has to be submitted before June 30 of each year and must include information related to thetitleholder and its mining rights, its investments, the accreditation of the Annual Production Target, thesustainable development activities undertaken and other information requested by the MEM in order toproduce statistics of mining activities in Peru.

Mining Royalties Law

Pursuant to the provisions of the Mining Royalties Law in effect before the amendmentsintroduced by Law Nº 29788 (which took effect on October 1, 2011), holders of mining concessionsare also obligated to pay to the Peruvian Government an annual royalty based on a percentage over the“mineral concentrated value”4, determined in accordance with its international quotation, as follows:

Š 1% of the mineral concentrated value up to US$60 million;

Š 2% of the mineral concentrated value exceeding US$60 million and up to US$120million; and

Š 3% of the mineral concentrated value exceeding US$120 million.

As mentioned above, the Peruvian Congress has recently enacted Law N°29788 which amendsseveral provisions of the Mining Royalties Law. According to these amendments, mining royalties willnow be calculated on a company’s quarterly operating profit applying an effective rate that rangesbetween 1% and 12%. The effective rate is determined in accordance with the operating profit margin5.Pursuant to the new provisions mining royalties will be calculated and paid on a quarterly basis.

If a holder of mining concessions has signed a stability agreement (as explained further below)before the amendments introduced by Law Nº 29788 took effect, the regime in effect before thoseamendments will apply for the term of the stability agreement, regardless of whether such regime wasmodified thereafter.

As part of the modification of the mining royalties regime and along with the amendmentsintroduced by Law Nº 29788, the Peruvian Congress also enacted Law Nº 29790 which created thespecial mining contribution. Law Nº 29790 establishes that concession holders that exploit metallicminerals are obligated to pay a special contribution only with respect to projects that are subject to astability agreement in force, and provided that they enter into an agreement with the PeruvianGovernment in which they agree to voluntarily pay the special contribution. The special miningcontribution will be paid applying an effective rate between 4% and 13.12% of a company’s quarterlyoperating profits. The effective rate is determined in accordance with the operating profit margin5.Pursuant to Law Nº 29790, the special mining contribution is calculated and paid on a quarterly basis.

4 The Regulations of Mining Royalty Law defines “concentrated” as the output derived from benefit procedures through flotation,gravimetry and lixiviation.

5 Operating profit margin is determined by dividing quarterly operating profit between quarterly sales.

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LAWS AND REGULATIONS RELATING TO THE INDUSTRY

As mentioned above, since the Peruvian Government is obligated to comply with the provisionsof stability agreements entered into with concession holders, concession holders would only beobligated to pay the special mining contribution if they voluntarily enter into an agreement with thePeruvian State in which they agree to pay the contribution.

The effective amount paid for mining royalties established by the Mining Royalties Law will beconsidered as a credit to apply against the Special Mining Contribution. If the amount of royalties paidis higher than the special mining contribution, the difference will be carried forward to the nextquarterly period.

On October 28, 2011, Chinalco Peru executed an agreement with the Peruvian government andundertook to pay the special mining contribution.

Use of superficial land

Pursuant to article 9 of the General Mining Law, mining concessions are property-related rightsdistinct and independent from the ownership of the superficial land on which they are located.Therefore, in order to carry on all the activities involved in a mining concession, its holder will need toacquire sufficient rights of use over the corresponding superficial land from its owner(s) by, forexample, the lease or purchase of the superficial land.

Superficial lands might be owned by a private owner, the State or a peasant community.

Lands privately owned

If the superficial lands are privately owned, their use for mining activities requires prioragreement with the landowner.

Also, a titleholder of a mining concession is entitled to apply to the MEM for a legal miningeasement over the superficial lands. In this case, the MEM shall summon the superficial land owner inorder to facilitate a voluntary transaction. If the voluntary transaction fails, it shall organize anappraisal of the land and determine an economic compensation both for the use of the land and the lossof any installation or investment.

In the past, awarding of legal mining easements by the MEM has been a rare practice and theresult of a very complex procedure. In most cases, controversies between the mining concessionaireand the owner of the land result in a commercial transaction.

State owned lands

If the superficial land is State-owned property, it may only be acquired if the project has beenofficially declared by the authorities as a project of national interest. In such case a request to purchasethe land has to be submitted to the Public Estate Agency (Superintendencia de Bienes Nacionales).

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LAWS AND REGULATIONS RELATING TO THE INDUSTRY

Peasant communities’ lands

If the superficial land is owned by a peasant community the following rules apply in order tosell, rent, lease or perform any other act of disposal of it:

Š for peasant communities located in the coast a favorable vote of not less than 50% ofmembers attending an assembly is required; and

Š for peasant communities located in the highlands and jungle a favorable vote of at least2/3 of all members of the community is required.

Termination of Concessions

According to the General Mining Law, while other concessions such as beneficiationconcessions are revocable, mining concessions are irrevocable except in the following circumstances:

Š failure by a concession holder to pay the mining validity fee for two consecutive years;

Š failure by a concession holder to pay for two consecutive years the penalty referred to inthe section headed “Obligations” above, for not meeting the minimum annualproduction target; and

Š failure by a concession holder in meeting the minimum annual production target untilthe expiration of the twentieth year since the year next of the concession granting (as setout in the section headed “Obligations” above).

REGULATORY MATTERS REGARDING THE ENVIRONMENT

Environmental Legislation

The environmental aspects of mining activities are governed by the General Law of theEnvironment (Law N° 28611), the General Mining Law and miscellaneous mining environmentalregulations, as well as regulations governing corporate social responsibility. The MEM is thecompetent authority for the regulation of all environmental matters in the mining industry, whichincludes establishing an environmental protection policy and setting maximum allowable levels foreffluents, overseeing the impact of mining operations and imposing administrative sanctions. Withinthe MEM, the DGAAM is responsible for administration of the environmental regulations concerningmining. In addition, the supervision and monitoring of compliance with environmental regulations inthe mining industry is overseen by the Environmental Supervisory and Enforcement Agency.

Holders of mining concessions are responsible for the control of emissions, effluent dischargeand disposal of all by-products resulting from their operations, and for the control of substances thatmay impose any hazard, either due to excessive concentrations or prolonged exposure. They mustensure that those elements and/or substances that may harm the environment do not exceed themaximum levels allowed by the corresponding regulations.

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LAWS AND REGULATIONS RELATING TO THE INDUSTRY

In order to initiate exploration activities, holders of mining concessions must prepare a SemiDetailed Environmental Impact Study (EIA-SD)6 or an Environmental Impact Statement (EIS)7

illustrating the impact that the particular mining activity is likely to have on the environment of itssurroundings and how this will be managed and mitigated8. The EIA must be prepared by anenvironmental auditor registered with, and authorized by, the MEM for these purposes.

The Environmental Impact Declaration (DIA), required for activities involving less than 20drilling holes, less than 10 Ha and tunnels of up to 50 meters, is usually automatically approved uponits filing, except for some exceptional cases which will be subject to prior approval of the DGAAM.Exploration activities that are carried out in environmentally sensitive or vulnerable areas (a shortdistance away from water bodies, glaciers, forests and areas containing environmental liabilities) areusually deemed exceptional cases.

Holders of mining concessions that have completed the exploration stage, or envisage miningdevelopment and exploitation activities (including the processing of minerals), are required to prepareand obtain the approval of a detailed EIA from DGAAM, which involves a process of public hearingsin the locations where the project will be developed. This obligation is also applicable to those projectsthat seek to expand their ongoing operations by 50% or more.

In addition, according to the Regulation on Public Consultation Exercises in the Mining Sectorapproved by Supreme Decree No. 028-2008-EM, during the preparation of the DIA subject toevaluation, EIA-SD or EIA, holders of mining concessions must analyze the social and economicconcerns and issues of the population that lives or works in the areas surrounding the mining project.This public participation procedure is separate from the procedure regulated by the Law of the PriorConsultation Right of the Indigenous Population.

The EIA or the EIS, as the case may be, must be formally approved by the MEM, through theDGAAM.

Additional environmental obligations are imposed on concession holders that carry outexploitation activities by Regulation on Environmental Protection for Mining-Metallurgical Activities(Supreme Decree N° 016-93-EM), including:

Š anyone applying for a processing concession, as well as those who intend to expandtheir production or the capacity of their processing plant by more than 50% mustprepare and file an EIA for approval by the MEM;

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6 An EIA-SD must be prepared for concessions involving any of the following:Š More than 20 drilling platforms.Š An area greater than 10 hectares, considering such drilling platforms as a whole.Š The construction of tunnels longer than 50 meters.

7 An EIS must be prepared for concessions involving any of the following:Š A maximum of 20 drilling platforms.Š An area lesser than 10 hectares, considering such drilling platforms as a whole.Š The construction of tunnels of up to 50 meters-long, as a whole.

8 In case a concession has characteristics which requires both EIA and EIS, its holder must prepare an EIA in order to commenceexploration activities.

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LAWS AND REGULATIONS RELATING TO THE INDUSTRY

Š mining concession holders with ongoing operations must file annually with the MEMspecific information indicating that their mining activities comply with all applicableenvironmental regulations;

Š mining concession holders must appoint a suitably qualified person within theiroperations to monitor their environmental standards; and

Š all concession holders must carry out regular tests to check whether the amounts andconcentration of their effluents are below the maximum permitted contamination levels.

As well, those concession holders which do not comply with their obligations may besanctioned with fines up to 10,000 Tax Units (approximately US$13.1 million).

Mining Closure Law

The Mining Closure Law (Law N° 28090) and its Regulations (Supreme DecreeN° 033-2005-EM) oblige mining companies to file a mine closure plan and ensure that they have thenecessary resources to carry out such plan for the purposes of preventing, minimizing and controllingthe risks and adverse impacts on the environment once the mine has ceased operations. Miningcompanies must submit the reclamation closure plan within the next year after their EIA has beenapproved.

The mine closure plan is considered an environment management instrument which mustinclude those technical and legal actions to be taken in order to rehabilitate the area of miningconcessions. The MEM (through the DGAAM) approves, supervises and controls the fulfillment ofthese plans, as well as imposing the corresponding administrative sanctions.

According to the Mining Closure Law, the holders of mining concessions are obligated to:

Š implement a mine closure plan since the commencement of its mining activities;

Š report to the MEM, on a six month basis, the progress of the rehabilitation worksincluded in the mine closure plan; and

Š grant an environmental warranty covering the estimated costs associated with its mineclosure plan.

Stability Agreements

Holders of mining concessions may enter into stability agreements with the MEM. Stabilityagreements enable the holders of mining concessions, among others, to freeze the tax, royalties andregulatory regime applicable to their mining operations as of the date the stability agreement isexecuted.

Subject to the output capacity and the comprised investment in the relevant mine, stabilityagreements may last for up to (i) 10 years (applying for those mines with an output between 350 and

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LAWS AND REGULATIONS RELATING TO THE INDUSTRY

5,000 tonnes per day and with a comprised investment of US$2 million) or (ii) 15 years (applying forthose mines with an output greater than 5,000 tonnes per day and with a comprised investment greaterthan US$20 million if commencing operations or US$50 million if expanding operations).

In order to enter into a stability agreement, holders of mining concession must submit either amining investment program (applying for 10-year stability agreements, as referred above) or afeasibility study (applying for 15-year stability agreements, as referred above) to the MEM forapproval.

Approval by the MEM of a Mining Investment Program grants the concession holder 10 yearsof legal stability in the said areas, while approval by the MEM of a feasibility study grants theconcession holder up to 15 years stability. In both cases, the effects of the stability agreement willcome into force on the year in which the corresponding investment is carried on.

Specifically, stability agreements grant the stability to the holders of Mining Concessions overthe following rights and benefits during the period of time to which the stability agreement relates:

Š The tax regime in force as of the date the agreement is entered into is effectively frozenand will continue to apply for the duration of the agreement. Thus, any tax or anyamendment to the mechanisms to determine the applicable taxes enacted after theexecution of the stability agreement will not apply to the holders of mining concessions.

Š The mining regulatory and royalty regime is frozen as of the date the Mining InvestmentProgram or Feasibility Study, as the case may be, is approved.

Š Free marketing of the holders’ mineral products.

Š Free disposal in Peru and abroad of foreign currency generated by exports covered bythe stability agreement.

Š Free convertibility of local currency into foreign currency generated by the sale in Peruof the mining products covered by the stability agreement. A stability agreement grantsstability over this policy, so potential further amendments of the legislation regardingfree convertibility of local currency would not apply to the Company.

Š In respect of 15-year stability agreements only, extension of the annual depreciation rateon machinery, equipment and capital assets, up to a maximum annual rate of 20%,except for buildings, which will be depreciated at a maximum annual rate of 5%.

See “History, Reorganization and Group Structure — History — Toromocho Project MajorContracts” for a description of the stability agreement entered into by our Company.

SUMMARY OF PERUVIAN LAWS AND REGULATIONS REGARDING TAXATION

The following is a non-exhaustive summary of certain material Peruvian tax consequences forshareholders holding and disposing of shares. It does not purport to be a complete analysis of allpossible tax situations that may be relevant to a decision to purchase shares or with regard to the

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LAWS AND REGULATIONS RELATING TO THE INDUSTRY

taxation of our Company. Prospective purchasers should consult their own tax advisors as to theapplicable tax consequences, including Peruvian tax consequences, of the purchase, ownership anddisposal of our Shares based on their particular circumstances. No conclusions should be drawn withrespect to issues not specifically addressed by this summary. The following description of Peruvian taxlaw is based upon Peruvian law and regulations in effect at the date of this Document and is subject toany amendments in law (or in interpretation) that may be introduced later. It is not intended to be, norshould it be construed to be, legal or tax advice.

There is no double tax treaty in force between Peru and China or between Peru and Hong Kongand, thus, Peru is not limited from applying its ordinary taxation on both dividends received and capitalgains derived by foreign shareholder residents. In addition, there is no exchange of informationagreement in force between Peru and China or between Peru and Hong Kong.

Income Tax

Subject to certain exceptions, Peruvian residents (companies and individuals) are subject toPeruvian income tax on their worldwide income. Non-Peruvian companies and individuals are subjectto Peruvian income tax on only their Peruvian source income.

A company is regarded as resident in Peru if such company (i) is incorporated in Peru; or(ii) has a permanent establishment in Peru (such as offices or exploration and extraction points).

An individual is generally regarded as resident in Peru if in any 12-month period he hasordinarily resided in Peru or if he has been physically present in Peru for 183 days or more.

The corporate tax rate for Peruvian companies is generally 30%. Subject to certain exceptions,this tax rate of 30% also applies to non-Peruvian companies for income generated in Peru. In mostcases, the Peruvian company counterparty is obligated to withhold and pay the applicable income tax.

Peruvian resident individuals are subject to income tax at a rate that varies according to the typeof income and the income source. For Peruvian source income derived from capital gains a 5% tax rategenerally applies, whereas a progressive rate of 15%, 21% and 30% usually applies to Peruvian sourceincome derived from personal services, as follows:

Š A rate of 15% applies to income exceeding 7 Tax Units9 up to 27 Tax Units.

Š A rate of 21% applies to income exceeding 27 Tax Units up to 54 Tax Units.

Š A rate of 30% applies to income exceeding 54 Tax Units.

Peruvian resident individuals are also subject to a progressive tax rate of 15%, 21% and 30% onthe foreign source income they obtain (foreign source income is added onto the income derived frompersonal services and subject to tax according to these bands). This treatment also applies to foreignsource income derived from capital gains realized on the disposal of shares issued outside Peru.

9 Currently, incomes up to 7 Tax Units are exempted from taxation.

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LAWS AND REGULATIONS RELATING TO THE INDUSTRY

Non-Peruvian resident individuals are generally subject to a tax rate (on only their Peruviansource income) equivalent to the prevailing corporate tax rate, which is equal to 30%.

A preferential 5% tax rate also applies to gains derived by foreign residents (both individualsand companies) from the sale or disposition of shares provided that they are executed through the LimaStock Exchange.

In the case of capital gains derived from indirect transfers of shares of Peruvian companiesplease refer to the specific treatment explained below under the heading “Tax in Peru on capital gainsrealized on transfers of our Shares.”

Dividend Distributions

Dividends paid by a company incorporated in Peru to another company incorporated in Peru areexempted from income tax.

Dividends paid by a company incorporated in Peru to a non-Peruvian company or to anindividual (both resident and non-resident) are subject to a withholding tax of 4.1%. The Peruviancompany that pays the dividend is obligated to withhold and pay the applicable tax.

Dividends paid by a non-Peruvian company to a shareholder resident in Peru are generallytaxed in Peru (as foreign source income) at a rate that will depend on the nature of the taxpayer.

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LAWS AND REGULATIONS RELATING TO THE INDUSTRY

Value Added Tax

The sale of goods in Peru, the render or utilization of services in Peru, construction contractsand the first sale of real property by its constructors are all subject to Peruvian value added tax. The taxrate is 18%.

The sale of shares of common stock of Peruvian companies is not subject to value added tax.

Special Mining Tax Law

In accordance with the Special Mining Tax Law enacted by Law 29789, concession holdersthat exploit metallic minerals are obligated to pay a special mining tax, determined applying aneffective rate between 2% and 8.40% to a company’s quarterly operating profits. The effective rate isdetermined by reference to the operating profit margin10.

10 Operating profit margin is determined by dividing quarterly operating profit between quarterly sales.

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LAWS AND REGULATIONS RELATING TO THE INDUSTRY

If a stability agreement was signed before the Special Mining Tax Law took effect (October 1,2011), this special mining tax will not apply to the relevant company since the stabilized regime wouldnot have included such tax.

REGULATORY MATTERS REGARDING EXCHANGE CONTROLS

Pursuant to the current applicable legislation, there are no exchange control requirements orprohibition in place in Peru.

REGULATORY MATTERS REGARDING EMPLOYMENT AND LABOR LEGISLATION

Individual labor matters in Peru are primarily governed by the Labor Productivity andCompetitiveness Law, as approved by Supreme Decree N° 003-97-TR.

Peruvian law establishes that foreign employees must not exceed 20% of the total personnel ofa company and that wages paid to foreign employees must not exceed 30% of a company’s totalpayroll. However, an employer may apply exceptions to those limits, among others, in the followingcases: (a) for hiring high level professionals or high level specialized technicians, or (b) for hiring highlevel executives in a new company or corporate reorganization.

In all cases, companies are obligated to register the employment contracts entered into withforeign individuals with the labor authority. In addition, for migratory purposes, all foreign individualsare obligated to obtain a special non-immigrant resident visa before starting work.

Notwithstanding the requirements referred in the previous paragraph, the law establishes a listof cases in which companies are not bound by the aforementioned limits nor required to obtainapproval for the relevant employment agreement. These cases include the following: (a) individualshaving a Peruvian spouse, ancestors, descendents or siblings, (b) individuals with an immigrant visa,(c) citizens of a country with which Peru has negotiated a dual nationality agreement or otherreciprocation agreement.

Employment Contracts, Remuneration, Working Hours and Labor Benefits

As a general rule, employment contracts are entered into for an indefinite term with allemployees. Peruvian labor legislation imposes express restrictions on employment contracts with afixed term.

However, an employment contract may be entered into for a fixed term in the situations listedbelow:

Š The development of a new line of business, with a maximum period of 3 years.

Š The temporary increase in a company’s output caused by material variations of demand,with a maximum period of 5 years.

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LAWS AND REGULATIONS RELATING TO THE INDUSTRY

Š The substitution, increase or amendment of a company’s activities due to technological,output or administrative causes, for a maximum period of 2 years.

Š To attend temporary needs different to the activities involved in the core business of anemployer, for a maximum period of 6 months during a year.

Š To replace an employee during his or her absence due to a legal or conventional cause.

Š To attend an emergency situation derived from force majeure causes.

Š To attend specific service or work, for the period needed to fulfill such service or work.

Š To attend activities which an employer carries on permanently but not continuously, fora maximum period of 5 years.

Š To attend activities related to the corporate purpose of an employer which are cyclic andarise only at determined periods during a year, for a maximum period of 5 years.

Fixed term employment contracts must be executed and registered with the Peruvian LaborAuthority.

Regarding remuneration and labor benefits, Peruvian labor legislation currently requires aminimum wage of S/.675.00 (approximately US$205) per month. In addition, it establishes amaximum 8-hour work day or 48 hours per week for employees older than 18 years. For overtime,employers must pay at least an additional 25% and an additional 35% over the regular hourly wage forthe first two hours and for any additional hours, respectively. Employees are entitled to a minimum restof 24 consecutive hours per week.

Regardless of the type of employment contract, full-time employees are entitled to receive:(i) an additional 10% of the minimum wage, provided that they are responsible for (a) one or morechildren under the age of 18, or (b) persons who are up to 24 years of age if they are pursuing highereducation, (ii) two additional monthly salaries per year, one in July and one in December, (iii) thirtycalendar days of annual paid vacation per year, (iv) life insurance, provided they have been employedfor at least four years, (v) compensation for time of service that amounts to 1.16 times a monthly salaryand is deposited semiannually in May and November, provided they work the complete semester, (vi)benefits from the Peruvian Social Security in Health to which employers must contribute a rateequivalent to 9% of their employees’ remuneration, (vii) profit sharing, if applicable, and (viii) a riskywork insurance policy.

Termination

The reasons that justify the termination of employment are explicitly set out under Peruvianlaw. These reasons are classified as related to the ability of the employee or related to his/her conduct.

Reasons related to the ability of the employee are: (a) the deterioration in the physical or mentalfaculties of the employee, required for fulfilling his or her labor obligations, (b) inadequateperformance of the employee in relation with the employee’s capacities and average performance

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LAWS AND REGULATIONS RELATING TO THE INDUSTRY

under similar conditions, (c) the unjustified refusal of an employee to take a medical examination thatwas previously agreed or established by law.

Reasons related to the conduct of the employee are: (a) gross misconduct, (b) criminalconviction, and (c) disqualification of the employee.

If there are objective causes that justify the termination of the employment relationship and thecorrect procedure has been followed by the employer, there is no need to pay a severance or dismissalindemnity.

In the event that the termination is unjustified or did not follow the proper procedure, theemployee is entitled to a dismissal indemnity equivalent to 1.5 times his/her monthly salary (includingall the amounts paid regularly to the employee) for each year of service up to a maximum of twelvemonthly salaries. Fractions of years are paid proportionally.

When dealing with a fixed term contract the severance pay consists of 1.5 times the monthlysalary for each month until the completion of the contract up to a maximum of 12 times of the monthlysalary.

Due to decisions of the Constitutional Court of Peru, employees that are dismissed without anycause may refuse the severance payment and request their employment status to be reinstated, exceptin case of management or trust personnel hired since the beginning of their employment relationship torender such positions.

Participation in company profits

Companies engaged in trading activities (including mining) which have more than 20employees are obligated by law to distribute a percentage of the profits generated during a year amongtheir employees. Such percentage depends on the economic activity undertaken by the company. In thecase of mining companies, the rate is 8%.

Peruvian law establishes that profits must be distributed among all employees (local andforeign), proportionally to their annual wage and the number of days worked during the correspondingperiod, with a limit of 18 monthly wages per employee. The terms and conditions for distributing thisbenefit are determined by law, and employers are not able to vary such terms and conditions.

If the amount of profits which a company is obligated to distribute exceeds the limit of 18monthly wages per employee, the excess must be paid to the National Fund for Labor Training (FondoNacional de Capacitación Laboral).

Since the amount of profits distributed among employees is not fixed, this benefit should not beincluded as a part of an overall compensation package. For this reason, Peruvian law establishes thatprofit sharing cannot be included as a part of a global salary agreement.

When the number of employees varies throughout the year, the company is obligated todistribute profits only if the average number of employees is higher than 20.

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Profits are distributed among all the employees who provide services to the company in theyear in which the profits are generated, even if those employees no longer work in the company as ofthe date on which the profits are effectively distributed.

Profits must be distributed within the 30 days following the filing of the Income Tax Statementbefore the tax authority.

Safety and Occupational Health on Mining Activities

In connection to health and safety dispositions, the Law regulating the Health and Safety atWork (Law N° 29783) applies to all employers in the country notwithstanding the economic sector towhich they belong or the activities they develop. In addition, there is specific regulation on MiningSafety and Occupational Health (Supreme Decree N° 055-2010-EM) (together with Law N° 29783, the“Regulations on Mining Safety”) which is the key legislation in respect to safety and occupationhealth on mining activities.

The Regulations on Mining Safety are aimed to prevent accidents and occupational diseasesrelated to mining activities, by means of the promotion of a culture of labor risks prevention.

The MEM is in charge of establishing the policies and regulations on safety and occupationalhealth on mining activities, while the Ministry of Labor is in charge of supervising and monitoringcompliance with the Regulations on Mining Safety by all individuals involved in mining activities11.

The following main obligations are imposed on concession holders by the Regulations onMining Safety:

Š to implement a Health and Safety Management System;

Š to appoint a Health and Safety Committee, with equal numbers of members representingthe employer and the employees;

Š to train all personnel in to health and safety matters, especially in connection to risksand dangers linked to their duties;

Š to assume all costs related to safety and occupational health;

Š to appoint a Safety and Occupational Health Manager;

Š to assign to all its employees, free of charge, the proper personal safety equipmentneeded for executing his or her activities;

Š to suspend operations in those areas in which the safety of the employees is at risk; and

Š to facilitate on-site access to all supervisors and duly authorized persons in charge ofsupervising and monitoring the compliance with the Regulations on Mining Safety.

11 For the specific case of those mining activities considered as “small sized mining activities,” the supervision and monitoring of thecompliance with the Regulations on Mining Safety is in the charge of the government of the region in which the concession islocated.

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HISTORY, REORGANIZATION AND GROUP STRUCTURE

HISTORY

Our Company

Our Company was incorporated in the Cayman Islands on April 24, 2003 as an exemptedcompany under the Companies Law. On incorporation, our Company’s name was Peru CopperSyndicate, Ltd. Its authorized share capital was US$50,000 divided into 50,000 shares of a par value ofUS$1.00 each.

On April 24, 2003, a single share in our Company was issued to the initial subscriber and thentransferred to Catherine McLeod-Seltzer, 9,999 shares were issued to Catherine McLeod-Seltzer and10,000 shares were issued to each of Lowell Mineral Exploration, L.L.C., La Ermita Ltda. andSunbeam Opportunities Limited, giving an issued share capital of 40,000 shares of a par value ofUS$1.00 each. On January 23, 2004, Catherine McLeod-Seltzer transferred 6,000 of her 10,000 sharesto Fisherking Holdings Limited. On February 12, 2004, La Ermita Ltda. transferred all of its 10,000shares to Ranchu Copper Investments Limited and Sunbeam Opportunities Limited transferred3333.333 shares to Campania Holding Inc. and 3333.333 shares to Tangent International Limited.Following these issuances and transfers, our Company’s issued share capital was held as follows:

Name of shareholder No. of shares held

Percentage of issuedshare capital(approx.)

Lowell Mineral Exploration, L.L.C. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,000.000 25.00Catherine McLeod-Seltzer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,000.000 10.00Sunbeam Opportunities Limited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3333.334 8.34Fisherking Holdings Limited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,000.000 15.00Ranchu Copper Investments Limited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,000.000 25.00Tangent International Limited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3333.333 8.33Campania Holding Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3333.333 8.33

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40,000.000 100.00

On February 20, 2004, our Company’s authorized share capital was subdivided fromUS$50,000 divided into 50,000 shares of a par value of US$1.00 each to US$50,000 divided into62,500,000 shares of a par value of US$0.0008 each. All shares in issue prior to the subdivision werecancelled and new shares were issued to each shareholder in proportion to its cancelled shareholding.Following the subdivision, our Company’s issued share capital was held as follows:

Name of shareholder No. of shares heldPercentage of issued

share capital (approx.)

Lowell Mineral Exploration, L.L.C. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,500,000.000 25.00Catherine McLeod-Seltzer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,000,000.000 10.00Sunbeam Opportunities Limited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,166,667.500 8.34Fisherking Holdings Limited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,500,000.000 15.00Ranchu Copper Investments Limited . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,500,000.000 25.00Tangent International Limited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,166,666.250 8.33Campania Holding Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,166,666.250 8.33

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50,000,000.000 100.00

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HISTORY, REORGANIZATION AND GROUP STRUCTURE

On March 18, 2004, our Company issued 8,571,429 shares to Peru Copper Inc., a companyincorporated under the Canada Business Corporations Act, and on April 19, 2004, Lowell MineralExploration, L.L.C. transferred all of its 12,500,000 shares to Lowell Family Trust UA. The resultingshareholdings were as follows:

Name of shareholder No. of shares heldPercentage of issued

share capital (approx.)

Lowell Family Trust UA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,500,000.00 21.34Catherine McLeod-Seltzer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,000,000.00 8.54Sunbeam Opportunities Limited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,166,667.50 7.11Fisherking Holdings Limited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,500,000.00 12.80Ranchu Copper Investments Limited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,500,000.00 21.34Tangent International Limited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,166,666.25 7.11Campania Holding Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,166,666.25 7.11Peru Copper Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,571,429.00 14.63

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58,571,429.00 100.00

On April 30, 2004, each of the above shareholders transferred its entire shareholding in ourCompany to Peru Copper Inc., which thereby became our Company’s sole shareholder. The shares inPeru Copper Inc. were subsequently listed on the Toronto Stock Exchange (under the trading symbol“PCR”) and on the American Stock Exchange and the Lima Stock Exchange (in each case under thetrading symbol “CUP”).

On June 19, 2007, Chinalco Canada B.C. Holdings Limited, a company incorporated under thelaws of the Province of British Columbia and a wholly-owned subsidiary of Chinalco, invested in PeruCopper Inc. by acquiring 13.2 million shares in Peru Copper Inc. at a price of CAD 5.30 per share. OnJune 20, 2007 Chinalco Canada B.C. Holdings Limited made a tender offer to buy all of the issued andoutstanding common shares in Peru Copper Inc. on the basis of a cash payment of CAD 6.60 per share.The offer, unanimously recommended by the board of Peru Copper Inc., was successful and ChinalcoCanada B.C. Holdings Limited acquired all the issued and outstanding shares in Peru Copper Inc.,thereby becoming its sole shareholder. Later in 2007, the shares in Peru Copper Inc. were delisted fromthe Toronto Stock Exchange, the American Stock Exchange and the Lima Stock Exchange.

On October 1, 2007, Peru Copper Inc. was amalgamated with Chinalco Canada B.C. HoldingsLtd. to form Chinalco Canada, which thereby became our Company’s sole shareholder. On October 12,2007, Chinalco Canada transferred its entire shareholding in our Company to COH. At the date of thisdocument, COH remains the sole shareholder of our Company.

Subsequent changes to the capital structure of our Company are described under the heading“Reorganization” below.

Our Company is a holding company and operates the Toromocho Project through itssubsidiaries in Peru.

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HISTORY, REORGANIZATION AND GROUP STRUCTURE

Chinalco Peru

Chinalco Peru was incorporated on May 20, 2003 in Lima, Peru and registered at the PeruvianPublic Registry of Companies on June 5, 2003 with the name Minera Peru Copper Syndicate S.A.,which was changed to Minera Peru Copper S.A. on May 17, 2005 and to Minera Chinalco Perú S.A.on July 25, 2008.

Chinalco Peru was established as a corporation (sociedad anónima). Its corporate purpose is theexploration, exploitation and commercialization of minerals, as well as engaging in any other miningbusiness permitted under the laws of Peru.

Chinalco Peru’s initial registered share capital consisted of 1,000 shares of S/. 1.00 each, with999 shares (representing 99.9% of the equity interests in Chinalco Peru) held by our Company and oneshare (representing 0.1% of the equity interests in Chinalco Peru) held by Maria del Rosario MilagrosSilva-Santisteban Concha. Each of the above transfers of shares in Chinalco Peru was executed incompliance with all applicable Peruvian laws.

On September 26, 2004, Maria del Rosario Milagros Silva-Santisteban Concha transferred hersingle share to James David Lowell. On July 31, 2007 James David Lowell transferred that singleshare to Chinalco Canada B.C. Holdings Ltd. which, as further described under the heading “OurCompany” above, was amalgamated with Peru Copper Inc. to form Chinalco Canada on October 1,2007. On October 12, 2007 Chinalco Canada transferred the single share to COH.

By means of a shareholder meeting held on July 30, 2008, 310 shares in Chinalco Peru wereissued to our Company by means of a capitalization of certain debts of Chinalco Peru. On the samedate, 66 shares in Chinalco Peru were issued on a pro-rata basis to the then shareholders for nilconsideration, as a result of a capitalization of the inflation adjusted results of Chinalco Peru. As aresult of these issuances, the capital of Chinalco Peru increased to S/. 1,376, consisting of 1,376 sharesof S/. 1.00 each.

By means of a shareholder meeting held on July 31, 2008, 80,455,190 shares in Chinalco Peruwere issued to our Company by means of a capitalization of the capital premium of Chinalco Peru. Asa result, the capital of Chinalco Peru increased to S/. 80,456,566, consisting of 80,456,566 shares ofS/. 1.00 each.

By means of a shareholder meeting held on December 30, 2010, Chinalco Peru changed thecurrency of its capital from New Peruvian Soles to US Dollars. This change was duly authorized by thePeruvian Tax Superintendency (Superintendencia Nacional de Administración Tributaria — SUNAT)by means of Letter Nº 043-2010-SUNAT, dated March 9, 2010 and by the General Mining Bureau ofthe MEM by means of a certificate dated November 9, 2009. As a result, the capital of Chinalco Peruchanged from S/. 80,456,566.00, represented by 80,456,566 shares of S/. 1.00 each, to US$28,500,290,represented by 28,500,290 shares of US$1.00 each.

By means of a shareholder meeting held on December 30, 2010, 355,000,000 shares inChinalco Peru were issued to our Company, as a consequence of the capitalization of certain debts of

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HISTORY, REORGANIZATION AND GROUP STRUCTURE

Chinalco Peru. As a result, the capital of Chinalco Peru was increased to US$383,500,290, representedby 383,500,290 shares of US$1.00 each.

By means of a shareholder meeting held on December 30, 2011, 245,000,000 shares inChinalco Peru were issued to our Company, as a consequence of the capitalization of certain debts ofChinalco Peru. As a result, the capital of Chinalco Peru was increased to US$628,500,290 representedby 628,500,290 shares.

Following the above transfers and capital increases, the registered share capital of ChinalcoPeru at the date of this document consists of 628,500,290 shares of US$1.00 each, of which628,500,289 shares (representing approximately 99.9999999% of the equity interests in Chinalco Peru)are held by our Company and one share (representing approximately 0.0000001% of the equityinterests in Chinalco Peru) is held by COH. COH is the legal owner of this one share (and as such isthe registered owner in Chinalco Peru’s stock register), but holds the beneficial interest in it asnominee on behalf of the Company.

Chinalco Peru’s operations are currently focused on the construction and start-up of theToromocho Project.

Centenario

Centenario was incorporated on April 3, 2006 in Lima, Peru and registered with the PeruvianPublic Registry of Companies on May 5, 2006. Its corporate purpose is the exploration, exploitationand commercialization of minerals, as well as other mining activities permitted under the laws of Peru.

Centenario owns 14 of the 67 key mining concessions that comprise the Toromocho Project.See “Appendix VI — Statutory and General Information — Mining Concessions” for more details.

Centenario was established as a closed corporation (sociedad anónima cerrada). A closedcorporation is a private company in which each shareholder has pre-emptive rights on any transfer ofthe shares held by each other shareholder.

Centenario’s initial registered capital consisted of 10,000 shares of S/. 1.00 each, divided into9,900 Class “A” shares and 100 Class “B” shares. Centenario Class “A” and Class “B” shares differ inthat, generally, the quorum for a meeting of the shareholders is shareholders holding at least 75% of allshares, which must include shareholders holding at least 10% of the Class “B” shares, and thethreshold for passing shareholders’ resolutions is votes representing at least 75% of the sharesattending the meeting, which must include votes representing at least 10% of the Class “B” shares.There is a special rule governing the mandatory annual shareholders’ meeting, for which the quorum isshareholders holding at least 75% of all shares, which must include shareholders holding at least 10%of the Class “B” shares, and at which the threshold for passing shareholders’ resolutions is 75% of allshares, which must include votes representing at least 10% of the Class “B” shares. In addition, holdersof Class “A” shares have the right to appoint two directors and holders of Class “B” shares have theright to appoint one director.

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HISTORY, REORGANIZATION AND GROUP STRUCTURE

Centenario’s initial shareholders were Luis Rodríguez Mariátegui Canny holding 4,950Class “A” shares, Jaime Rodríguez Mariátegui Blume holding 4,950 Class “A” shares and ChinalcoPeru holding 100 Class “B” shares.

By means of a shareholder meeting held on September 22, 2006, Centenario underwent acorporate reorganization with Austria Duvaz. As a result of this corporate reorganization, AustriaDuvaz transferred to Centenario a corporate block of mining concessions and certain bank debts, for anegative net value of US$1,500. The corporate reorganization came into force on October 5, 2006 andwas registered before the Peruvian Public Registry of Companies on November 2, 2006. Since the netvalue of the corporate block transferred was negative, the capital of Centenario was not increased andno shares were issued in favor of Austria Duvaz.

On October 13, 2006, Luis Rodríguez Mariátegui Canny and Jaime Rodríguez MariáteguiBlume each transferred 4,950 Class “A” shares to Chinalco Peru for an aggregate consideration ofUS$8,000,000. This consideration was determined primarily through commercial negotiation with thesellers. On February 5, 2007, Chinalco Peru transferred one Class “A” share to Peru Copper Inc. forconsideration of US$10.00. On October 12, 2007 Peru Copper Inc. transferred that one Class “A” shareto Chinalco Canada as part of the amalgamation of those two companies and on the same day ChinalcoCanada transferred that one Class “A” share to COH for consideration of US$782.14, its then bookvalue. Each of these transfers of Centenario’s shares was executed in compliance with all applicablePeruvian laws.

Following the above reorganization and transfers, the registered share capital of Centenario atthe date of this document consists of 10,000 shares of S/.1.00 each, divided into 9,900 Class “A”shares and 100 Class “B” shares. Chinalco Peru holds 9,899 Class “A” shares and 100 Class “B”shares (together representing 99.99% of the equity interests in Centenario) and COH holds oneClass “A” share, representing 0.01% of the equity interests in Centenario. COH is the legal owner ofthis one “A” share (and as such is the registered owner in Centenario’s stock register), but holds thebeneficial interest in it as nominee on behalf of Chinalco Peru. As of the date of this documentCentenario has had no capital increases.

Centenario’s 9,900 Class “A” shares were pledged in favor of Luis Rodríguez MariáteguiCanny and Jaime Rodríguez Mariátegui Blume. As a result of this pledge, Luis Rodríguez MariáteguiCanny and Jaime Rodríguez Mariátegui Blume were entitled to exercise the rights attaching to theClass “A” shares. The Class “A” shares could not be transferred or made subject to any other securityinterest without their consent until full payment of the sums secured. The main purpose of the pledgewas to secure payment of US$7,000,000 of the consideration for the transfer of the “A” shares fromLuis Rodríguez Mariátegui Canny and Jaime Rodríguez Mariátegui Blume to Chinalco Peru. The finalinstallment of the consideration was paid in February 2012, the pledge has been released and theformer shareholders are no longer entitled to exercise any rights attaching to the Class “A” shares.

Under Centenario’s by-laws, no shares issued by Centenario may be transferred, or madesubject to any security interest, without the prior authorization of Centenario’s shareholders. Thisprohibition will remain in force until April 16, 2015.

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HISTORY, REORGANIZATION AND GROUP STRUCTURE

Centenario is engaged in mining exploration and in performing as a concessionaire in thedevelopment of mining concessions owned by Chinalco Peru.

Cal del Centro

Cal del Centro was incorporated as a closed corporation (sociedad anónima cerrado) onMarch 16, 2011 and registered before the Peruvian Public Registry of Companies on March 21, 2011.Its corporate purpose is the exploration, exploitation and commercialization of minerals, including theproduction of lime.

Cal del Centro’s registered and paid-up share capital equals S/.1,000.00, represented by1,000 shares of common stock with a nominal value of S/.1.00 each. Its share capital is owned byChinalco Peru, holder of 999 shares, representing 99.9% of the total share capital and Centenario,holder of 1 share, representing 0.1% of the total share capital.

Pesares

Pesares was incorporated on June 6, 1905, in Lima, Peru and registered with the PeruvianPublic Registry of Companies in the same year. Its corporate purpose is the exploration, exploitationand commercialization of minerals, as well as other mining activities permitted under the laws of Peru.

Pesares owns three of the 67 key mining concessions that comprise the Toromocho Project. See“Appendix VI — Statutory and General Information — Mining Concessions” for more details.

Chinalco Peru acquired 10.37% of Pesares in 2004 for consideration of US$60,000, anadditional 66.66% in 2008 under the Toromocho Project Transfer Agreement and a further 6.25% onDecember 4, 2011 for consideration of US$80,000, giving it a majority interest of 83.28% at the dateof this document. Under Peruvian law, such 83.28% holding gives Chinalco Peru full control ofPesares. Each of the above transfers of shares in Pesares was executed in compliance with allapplicable Peruvian laws.

Pomacocha Power

Pomacocha Power was incorporated as a closed corporation (sociedad anónima cerrado) onJanuary 17, 2011 and registered before the Peruvian Public Registry of Companies on January 26,2011. Its corporate purpose is to develop activities related to the transmission of electricity and theoperation and maintenance of power transmission networks.

Pomacocha Power’s registered share capital equals S/.1,000.00, represented by 900 Class “A”shares and 100 Class “B” shares, with a nominal value of S/. 1.00 each. Its share capital is owned byAbengoa Perú S.A.C., holder of 900 Class “A” shares, representing 90% of the total share capital andChinalco Peru, holder of 100 Class “B” shares, representing 10% of the total share capital.

Chinalco Peru has a call option over all the Class “A” shares in the capital of PomacochaPower, exercisable until February 23, 2016. The total option price is S/.1,080.00.

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Class “A” shares cannot be transferred for a period of 9 years from the date of PomacochaPower’s Articles of Incorporation (February 23, 2011), whilst the Class “B” shares are freelytransferable. The quorum for all shareholders meetings of Pomacocha Power is holders of at least 95%of all the shares, which must include holders of at least 50% of the Class “B” shares. The threshold topass resolutions in all shareholders meetings of Pomacocha Power is votes representing 95% of all theshares attending the meeting, which must include at least 50% of the votes representing the Class “B”Shares. The Class “A” shares have the right to elect 2 directors. The Class “B” shares have the right toelect 1 director, who is the president of the board and without whose presence the board is not able tomeet.

Pomacocha Power was established solely for the purpose of the construction of powertransmission lines that connect the areas of the Toromocho Project to the power grid, which is financedentirely and to be used solely by the Group. Abengoa Perú S.A.C. is a company incorporated in Lima,Peru, whose business is the design and construction of civil, mechanical and electrical engineeringworks.

Despite holding only a 10% interest, the Group controls all economic benefits and is exposed toall the risks of Pomacocha Power and accordingly Pomacocha Power is treated as a member of theGroup.

The Toromocho Project

The Toromocho Project’s key milestones are as set out in the table below.

Date Milestone

June 2003 Chinalco Peru and Centromin execute the Toromocho Project OptionAgreement.

February 2006 Toromocho Project pre-feasibility assessment completed.

March 2006 Chinalco Peru and Austria Duvaz execute a framework agreement relatingto certain mining concessions located near the Toromocho Project.

October 2006 Chinalco Peru acquires the entire capital stock of Centenario.

December 2007 Toromocho Project feasibility assessment completed.

April 2008 Chinalco Peru and Activos Mineros execute the Toromocho Project TransferAgreement.

February 2009 Toromocho Project basic engineering report completed.

March 2009 Chinalco Peru and the Peruvian government execute the StabilityAgreement.

September 2010 Transportadora Callao is incorporated. Chinalco Peru acquires a 7% stake inTransportadora Callao.

December 2010 The MEM approves the Environmental Impact Assessment.

February 2011 Toromocho Project capital cost estimate report completed.

July 2011 Chinalco Peru obtains the construction permit for the Toromocho Project.

Third quarter 2012 Construction of the new town of Morococha completed.

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Toromocho Project Assessments and Reports

In February 2006, a pre-feasibility assessment was completed for the Toromocho Project bySNC-Lavalin Chile S.A. Results demonstrated the existence of ore resources (copper and to a lesserextent molybdenum) within the Toromocho concession area.

In December 2007, a feasibility assessment was completed by Aker Solutions (formerly AkerKvaerner). The results of this assessment confirmed the technical and economic feasibility of theToromocho Project. Subsequently, basic engineering and additional studies were conducted by AkerSolutions and other subcontractors to further define the design of the plant and refine capital andoperating costs. The basic engineering report was completed in February 2009. In February 2011, AkerSolutions issued a definitive estimate report on the estimated capital cost for the Toromocho Project.

Toromocho Project Major Contracts

Toromocho Project Option Agreement

On May 14, 2003, our Company won the public bid for the Toromocho Project organized byProinversion. Proinversion authorized Chinalco Peru to execute the Toromocho Project OptionAgreement. On June 11, 2003, Chinalco Peru and Centromin executed the Toromocho Project OptionAgreement, which gave Chinalco Peru the right to acquire certain full and partial interests held byCentromin in the mineral concessions and related assets of the Toromocho Project. This purchaseoption was exercisable during a period of one year following the execution date of the ToromochoProject Option Agreement. This one year period was extended for four additional years, expiring onJune 11, 2008.

In 2006, Centromin assigned its rights and obligations under the Toromocho Project OptionAgreement to Activos Mineros.

Toromocho Project Transfer Agreement

On April 7, 2008, Chinalco Peru exercised its acquisition rights under the Toromocho ProjectOption Agreement by entering into the Toromocho Project Transfer Agreement with Activos Mineros(acting on behalf of the Peruvian Government).

Under the Toromocho Project Transfer Agreement, Activos Mineros transferred to ChinalcoPeru the title to certain mining concessions together with their surface land and buildings and waterusage rights. For details of the key mining concessions currently held by us, see “Appendix VI —Statutory and General Information — Mining Concessions.” In consideration for this transfer, ChinalcoPeru committed to pay mining royalties and to contribute US$100,000 on a semi-annual basis from thestart of commercial operations to finance community support programs. No end date is specified forthese payments. In addition, Chinalco Peru committed to invest no less than US$1.5 billion in theToromocho Project over a five year period starting on the execution date of the Toromocho ProjectOption Agreement.

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In the event that Chinalco Peru fails to comply with its investment commitments under theToromocho Project Transfer Agreement, it must pay a penalty to Activos Mineros equivalent to 30%of the unpaid investment. The terms of the Toromocho Project Transfer Agreement require ChinalcoPeru to arrange a US$30 million annually renewable bank guarantee in favor of Activos Mineros tosecure its compliance with these investment commitments.

In addition, Chinalco Peru assumed an environmental remediation liability in relation todamages caused by mining activities carried out by previous concessionaires of the ToromochoProject. As of September 30, 2012, Chinalco Peru has estimated the present value of this liability to beapproximately US$61.5 million.

On December 1, 2010, in order to fund the development of the Toromocho Project and tocomply with the investment commitments assumed under the Toromocho Project Transfer Agreement,Chinalco Peru and Eximbank executed a loan agreement under which Eximbank made available toChinalco Peru a loan facility in an aggregate amount of US$2 billion.

Environmental Impact Assessment

On December 14, 2010, by means of Director’s Resolution Nº 411-2010-MEM/AAM, issuedby the MEM, the Toromocho Project’s Environmental Impact Assessment was approved.

Stability Agreement

On March 9, 2009, Chinalco Peru and the MEM executed the Stability Agreement, under whichthe Peruvian Government granted Chinalco Peru stability in relation to its rights and benefits in thefollowing areas:

(i) the tax regime in force as of the date the Stability Agreement was entered into;

(ii) free convertibility of local currency generated by local sales into foreign currency, aswell as a regime of free foreign currency disposal;

(iii) the legal-administrative regime applicable for mining concessions and mining royaltiesas of the date the Stability Agreement was entered into;

(iv) extension of the annual depreciation rate on machinery, equipment and capital assets, upto a maximum annual rate of 20%, except for buildings, which will be depreciated at amaximum annual rate of 5%;

(v) maintaining its accounting records in US dollars; and

(vi) free marketing of its mineral products.

Under the terms of the Stability Agreement, Chinalco Peru undertook to investUS$2,152.3 million in the Toromocho Project by the end of 2012. On July 22, 2011, Chinalco Peru andthe MEM agreed to extend the period to complete the investment by December 2013. As ofSeptember 30, 2012, Chinalco Peru had invested US$2.04 billion in the Toromocho Project. This

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HISTORY, REORGANIZATION AND GROUP STRUCTURE

amount comprised the acquisition of machinery and equipment, mine and plant construction, thepayment of mining rights and commitments assumed to the Peruvian Government and to thecommunities surrounding the Toromocho Project area, as well as applicable taxes.

The guarantee regime granted by the Peruvian Government under the Stability Agreementapplies to only 38 of the 67 key mining concessions that comprise the Toromocho Project. See“Appendix VI — Statutory and General Information — Mining Concessions.” Chinalco Peru isentitled to include more mining concessions into the regime granted by the Stability Agreementprovided that the MEM approves the inclusion following the appropriate administrative procedure.Until such approval is obtained, the company must keep separate accounting for these 38 miningconcessions for all purposes related to the Stability Agreement.

The guarantee regime granted by the Peruvian Government under the Stability Agreement has a15-year term and will come into force in the year in which the investment referred to above iscompleted. Chinalco Peru may request that it comes into effect earlier in the investment stage within amaximum term of 8 years. Based on our current forecast of the Toromocho Project’s cashflow, we areconfident that the committed investment level will be reached and that the guarantee regime under theStability Agreement will come into force. As approved by the MEM, the income tax rate applicable toChinalco Peru under the Stability Agreement is 32% per annum.

Proinversion Stability Agreement

In addition to the Stability Agreement as described above, on November 22, 2011 the Companyand Proinversion entered into the Proinversion Stability Agreement, pursuant to which the Companywas granted stability in relation to its rights and benefits in the following areas:

(i) the tax regime in force as of the date the Proinversion Stability Agreement was enteredinto, which applies to tax on dividend payments made by Chinalco Peru to theCompany;

(ii) the free capital export regime; and

(iii) free convertibility of local currency.

Under the Proinversion Stability Agreement, the Company agreed to invest US$365,000,000 inthe stock capital of Chinalco Peru by April 8, 2013. This investment target has already been satisfied.This guarantee regime will be in force for a period of 10 years from the date of execution of theProinversion Stability Agreement.

Investment in Transportadora Callao S.A.

Transportadora Callao S.A. was incorporated on September 15, 2010 and registered at thePeruvian Public Registry of Companies on October 21, 2010. It was incorporated as a corporation(sociedad anónima) with an initial registered capital of S/. 10,000.00, represented by 10,000 shares ofS/.1.00 each.

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HISTORY, REORGANIZATION AND GROUP STRUCTURE

Transportadora Callao was established by our Group and four other independent investors. OurGroup contributed a total of US$3,513,000 in cash for which it received a 7% equity interest. Set outbelow is the shareholding structure of Transportadora Callao on the date of its incorporation:

Name of shareholder No. of shares heldPercentage of equity

interest

Impala Perú S.A.C. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,000 30PeruBar S.A. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,000 30Chinalco Peru . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 700 7Sociedad Minera El Brocal S.A.A. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 800 8Santa Sofia Puertos S.A. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,500 25

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,000 100

Impala Peru S.A.C., formerly known as Cormin Callao S.A.C., is a company incorporated inLima, Peru, whose business is the storage and transportation of mineral concentrates. Perubar S.A. is acompany incorporated in Lima, Peru whose business is the storage and transportation of mineralconcentrates. Sociedad Minera El Brocal S.A.A. is a company incorporated in Lima, Peru, whosebusiness is mineral exploitation and mining activities in general. Santa Sofia Puertos S.A. is a companyincorporated in Lima, Peru, whose business is the operation of ports.

By means of a shareholder meeting held on November 18, 2010, 51,800,000 shares were issuedon a pro-rata basis to the shareholders of Transportadora Callao as a result of monetary contributionsfrom the shareholders. Consequently, the capital of Transportadora Callao was increased toS/.51,810,000, represented by 51,810,000 shares of S/.1.00 each, owned by the following shareholders:

Name of shareholder No. of shares heldPercentage of equity

interest

Impala Perú SAC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15,543,000 30PeruBar S.A. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15,543,000 30Chinalco Peru . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,626,700 7Sociedad Minera El Brocal S.A.A. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,144,800 8Santa Sofia Puertos S.A. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,952,500 25

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51,810,000 100

The above capital increase was effected in order to comply with the requirements of the CallaoConcession Agreement.

Transportadora Callao was incorporated with the exclusive purpose of providing the servicesset out in the Callao Concession Agreement, which was executed by Transportadora Callao and thePeruvian Government on January 28, 2011. Under the Callao Concession Agreement, the PeruvianGovernment granted to Transportadora Callao the concession for the design, construction andoperation of a specialized transfer conveyor belt, ship loading facility and dock for mineralconcentrates located in the north of the Callao port, near to Lima. The new port is necessary in order tofacilitate the transportation of the copper concentrates that we will produce, among other products.

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HISTORY, REORGANIZATION AND GROUP STRUCTURE

Under the Callao Concession Agreement, the amount to be invested in the specialized transferconveyor belt, ship loading facility and dock is approximately US$120,330,000 (including VAT).According to the Callao Concession Agreement, Transportadora Callao granted a US$27 millionperformance bond in favor of the Peruvian Government in order to secure compliance with itsobligations thereunder. In relation to this performance bond, as of December 31, 2010 Chinalco Peruhad deposited, in proportion to its 7% equity interest in Transportadora Callao, an amount of US$1.89million into a restricted bank account.

Pursuant to the Callao Concession Agreement, Transportadora Callao is obligated to pay thePeruvian Government for the right granted to it to operate the mineral concentrate loading terminal inCallao port. This payment is equivalent to 2% of the monthly income obtained by TransportadoraCallao from providing these services in the port.

Investment in Juanita

Juanita was incorporated on July 3, 1986, in Lima, Peru and registered before the PeruvianPublic Registry of Companies on October 2, 1986. Its corporate purpose is the exploration, exploitationand commercialization of minerals, as well as other mining activities permitted under the laws of Peru.

Juanita owns 1 of the 67 key concessions that comprise the Toromocho Project. See“Appendix VI – Statutory and General Information — Mining Concessions” for further details.

On November 10, 2006, we acquired a 50% equity interest in Juanita from Austria Duvaz forconsideration of US$3,500,000. This transfer was completed in compliance with all applicablePeruvian laws. The remaining 50% interest is currently held by Volcan Compañía Minera S.A., acompany incorporated in Lima, Peru whose business is mineral exploitation and mining activities ingeneral. We are currently negotiating with Volcan Compañía Minera S.A. to acquire its remaining 50%equity interest, which would make Juanita our wholly-owned subsidiary.

Juanita has no significant business activities other than the holding of a single miningconcession.

Agreements with Austria Duvaz and Argentum

On March 16, 2006, Chinalco Peru and Austria Duvaz executed a framework agreement underwhich Chinalco Peru acquired a purchase option over certain mining concessions in the ToromochoProject and its vicinity. Subsequently, transfers of direct and indirect mining concessions were made byAustria Duvaz to Chinalco Peru in 2006, in 2010 and in 2011. For details of the key miningconcessions currently held by us see “Appendix VI — Statutory and General Information — MiningConcessions.”

Chinalco Peru and Argentum entered into several agreements in 2010, by which Chinalco Peruassigned certain mining concessions to Argentum for a period of 20 years (until 2030). On April 1,2011, Chinalco Peru and Austria Duvaz entered into an agreement pursuant to which Chinalco Peruassigned certain mining concessions to Austria Duvaz for a period of 4 years from the date of the

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HISTORY, REORGANIZATION AND GROUP STRUCTURE

public deed of this agreement (April 1, 2011). Such 4-year term can be extended for 18 more months atAustria Duvaz’s option.

The mining concessions so assigned relate to small producing mines around the core mine areaof the Toromocho Project and the purpose of Chinalco Peru’s acquisition of those mining concessionswas primarily for access to the core mine area. Argentum and Austria Duvaz are currently mining thesemining concessions.

We have been advised by our Peruvian legal advisor, Rebaza, Alcazar & De Las CasasAbogados Financieros, that under Peruvian law, the assignment contracts entered into with Argentumand Austria Duvaz referred to above comply with the terms of the Group’s mining concessions andPeruvian laws and regulations applicable to them.

Grants and Community Support

Under a 2004 addendum to the Toromocho Project Option Agreement, Chinalco Perucontributed US$1 million to a fund to improve the economic and social conditions in the areainfluenced by the Toromocho Project and a second payment of US$1 million in 2005 as an advanceagainst future royalties. Under the Toromocho Project Transfer Agreement, Chinalco Peru committedto contribute US$100,000 on a semi-annual basis from the start of commercial operations to financecommunity support programs.

On October 3, 2006, Chinalco Peru acquired from the Yauli community a three-year option topurchase 1,289 hectares of land for the construction of a tailing dam. The total consideration agreedwas US$650,000, of which US$225,000 was to be paid at the execution of the public deed and theremainder in the event of exercise of the option. This money would be used by the Yauli communityfor the implementation of community-related projects. On August 23, 2007, Chinalco Peru paid bothamounts to the Community, thereby acquiring the lands.

On October 10, 2006, in order to resolve a dispute that arose between the Pucara communityand Centromin (involving lands within the boundaries of the Toromocho Project), Chinalco Peruagreed to provide the Pucara community with land, equipment and vehicles with a total value ofUS$1.95 million and to make a payment of US$1.86 million. These commitments were fulfilled inJanuary 2007, with the result that the Pucara community ceased its legal actions against Centromin.Additionally, Chinalco Peru agreed to indemnify the Pucara community up to US$1 million in theevent that the Pucara community is sued by certain third parties in relation to this dispute. To date thePucara community has not been so sued and no claim has been made under the indemnity. TheCompany believes that the probability of the Pucara community being sued and a claim being madeunder the indemnity in future is low and therefore no provision is made in our financial statements inrelation to this indemnity.

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HISTORY, REORGANIZATION AND GROUP STRUCTURE

REORGANIZATION

COH and the Group have undertaken the Reorganization, as set out in more detail below.

Share Consolidation and Increase in Authorized Share Capital

On September 30, 2011, our Company’s shares were consolidated at a ratio of 50:1, as a resultof which its authorized share capital became US$50,000 divided into 1,250,000 ordinary shares of parvalue US$0.04 each and its issued share capital became 1,171,428.58 ordinary shares of par valueUS$0.04 each. The authorized share capital of our Company was then increased to US$1,000,000,000divided into 25,000,000,000 ordinary shares of par value US$0.04 each by the creation of an additional24,998,750,000 shares.

Assignment of Receivables and Amendment of Debt Terms

On September 30, 2011 our Company, COH and Chinalco Peru entered into the DebtReorganization Agreement, pursuant to which COH assigned approximately US$94,899,500 ofreceivables to our Company. These receivables were debts owing from Chinalco Peru. Considerationfor the assignment was US$94,899,476.88, which was left outstanding as an interest-free intercompanydebt between our Company and COH, payable on demand and in any case payable on or beforeJune 30, 2012.

As at the date of the Debt Reorganization Agreement (September 30, 2011), our Companyowed US$520,000,000 to COH under two promissory notes and a further intra-group debt ofUS$28,500,000. Under the Debt Reorganization Agreement, the terms of each of these debts wereamended to be interest-free and payable on demand, and in any case payable on or before June 30,2012.

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HISTORY, REORGANIZATION AND GROUP STRUCTURE

Capitalization

Under the Debt Reorganization Agreement, on December 31, 2011 our Company capitalizedUS$400,000,000 of the debt owing from it to COH in consideration for the issue by our Company, onFebruary 28, 2012, of 10,000,000,000 new Shares to COH, representing a price per Share equal to thepar value of US$0.04. Since the date of this share issue, the issued share capital of our Company hasbeen 10,001,171,428.58 Shares of US$0.04 par value each.

Following the capitalization referred to above, in accordance with the terms of the DebtReorganization Agreement, those debts remaining outstanding between COH and the Company bearinterest at a rate of LIBOR plus 200 basis points and are repayable ten years after the date of the DebtReorganization Agreement or on any earlier date at the Company’s option.

Change of Name

On September 30, 2011, our Company’s name was changed from Peru Copper Syndicate, Ltd.to Chinalco Mining Corporation International and was adopted as our Company’s Chinesename. On February 23, 2012, our Company’s Chinese name was changed to .

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HISTORY, REORGANIZATION AND GROUP STRUCTURE

CORPORATE STRUCTURE

Our Company is a wholly-owned subsidiary of COH, which is a wholly-owned subsidiary ofChinalco. The corporate structure of our Group at the date of this document is as follows:

COH (Hong Kong)

Our Company (Cayman)

Chinalco Peru (Peru)

Centenario (Peru)

Pesares(Peru)

Cal del Centro(Peru)

99.99% 83.28% 10%

100%

Approximately 0.0000001%

(1 share, held as nominee for our

Company)

Approximately 99.9999999%

0.01%

0.1% 99.9%(1 share)

(1 share, held as nominee for

OurGroup

OurControlling

Shareholders

Chinalco Peru

Chinalco (PRC)

100%

Pomacocha Power(Peru)

Note:Chinalco Peru also holds a stake in Transportadora Callao SA (3,626,700 shares, representing 7% of the total share capital). Centenario holdsa 50% interest in Juanita.

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OUR BUSINESS

OVERVIEW

We are a resource development company acting as Chinalco’s core platform for the futureacquisition, investment, development and operation of non-ferrous and non-aluminum mineralresources and projects overseas. We envision capitalizing on China’s growing demand for naturalresources. Our strong growth potential is driven significantly by Chinalco’s active global expansionstrategy, which is in line with China’s initiatives in securing mineral resources overseas to satisfy itsgrowing demand, as well as by Chinalco’s proven track record, strong brand recognition and the broadrange of acquisition opportunities available to it.

Currently, we are focusing on developing the Toromocho Project, which is located in centralPeru in the core of the Morococha mining district. According to CRU, the Toromocho Project is theworld’s second largest pre-production copper project, as measured by proved and probable copper orereserves, and the third largest pre-production copper project, as measured by average planned annualproduction between 2012 and 2020, among the top 20 firm copper mining projects scheduled tocommence production of copper concentrates from 2012 to 2016. Three of these mining projects hadcommenced production as of December 31, 2012. According to the Competent Person’s Report, theproved and probable JORC-compliant reserves of the Toromocho Project deposit are estimated tocontain approximately 7.3 million tonnes of copper, 290,000 tonnes of molybdenum and 10,500 tonnesof silver. The Toromocho Project is currently our only mining asset, which we expect to rely on forsubstantially all of our revenue and cash flows for the foreseeable future. We expect to commenceproduction during the fourth quarter of 2013 and reach full production capacity in the third quarter of2014. Upon commencement of commercial production, we plan to process the copper sulphide oreson-site and sell the copper concentrates primarily to China for smelting and production of refinedcopper. We expect China to be our primary market. Subject to us receiving arm’s-length commercialterms, we may also sell our products to Chinalco and its affiliates. Currently, we do not expect to sellour copper concentrates to any sole customer. We have entered into four binding offtake agreementsincluding definitive pricing terms for the sale of an aggregate of 60% of the Toromocho Project’sannual production of copper concentrates for a period of five years from the starting date of productionat the Toromocho Project, two of which will automatically continue for another five years thereafter.

The Toromocho Project has a long estimated mine life with significant potential for furtherexploration. Based on the current estimated reserves and production plan, it is estimated that theToromocho Project can produce ores for 32 years and thus has an estimated mine life of 32 years.Based on the current design, the processing facilities will continue to process recovered ores for fouryears after the end of the mine life, thus giving the Toromocho Project a projected operating life of 36years. According to the Competent Person’s Report, there are additional resources adjacent to theplanned open pit, which are also covered by our mining concessions, and are estimated to containapproximately 2.7 million tonnes of copper, 92,000 tonnes of molybdenum and 5,200 tonnes of silverin measured, indicated and inferred JORC-compliant resources. We believe that we will be able tofurther explore and develop these resources once we complete the highway relocation plan inconnection with the Toromocho Project. We are currently in discussion with and have submitted ourproposed relocation plan to the MTC. Upon our receipt of approval from the MTC, we will commencethe detailed engineering study, which we expect to complete in approximately four months.

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OUR BUSINESS

We expect to enjoy competitive operating and mining costs as a result of the ToromochoProject’s rich ore reserves, location and favorable geology. According to the Competent Person’sReport, the Toromocho Project is estimated to have low operating cash costs after credits ofapproximately US$1,508.8 per tonne (or approximately US$0.684 per pound) of copper produced ascompared with a large number of copper mines across the globe. For example, the average operatingcash costs of the major copper mines in Peru and Chile are approximately US$3,624.0 per tonne ofcopper produced and US$3,963.0 per tonne of copper produced, respectively. Operating cash costsinclude mining costs, processing costs, general and administration costs, selling costs, environmentalprotection costs, production taxes, the resource compensation levy, other cash cost items and the by-product credit, and are generally recognized as a reliable indicator for measuring the operating andmining costs for copper mines. As a result of the geological characteristics, we are able to employ theconventional open pit mining technique, which entails lower costs and fewer risks than undergroundmining. The Toromocho Project also has a low estimated strip ratio at 0.79:1, meaning that for everytonne of ores we mine, 0.79 tonnes of waste materials will need to be removed. As a result, we expectto incur low costs for the removal of waste materials, which results in lower per unit mining costs.

Established infrastructure support for the Toromocho Project reduces our construction andoperational costs and lowers our operational risks. The Toromocho Project is accessible via readilyavailable transportation networks, including public highways and railroads from both the Peruviancapital city of Lima and the major exporting port of Callao. Water and electricity supplies, which areessential to mining activities, will also be available from nearby facilities developed by us. Forexample, water for the processing plant will be supplied to the Toromocho Project from the KingsmillTunnel water treatment plant developed and operated by us. Electricity will be supplied from thenearby Pomacocha power station and a 220 MW transmission line will be installed between the powerstation and the Toromocho Project and is expected to be ready by the first quarter of 2013.

Since the completion of our acquisition of the Toromocho Project in May 2008, we havedevoted substantial effort to developing the Toromocho Project into an advanced development stageand accomplished all its key pre-production milestones. We have engaged Aker Solutions, a reputableleading mining consulting firm, for EPCM services in relation to the Toromocho Project. We haveoutsourced all of our exploration engineering work and most of the Toromocho Project constructionwork to third-party contractors, including Aker Solutions. We have also secured credit facilities withan aggregate amount of US$2,118.0 million from Eximbank and China Development Bank, which webelieve, combined with our cash and cash equivalents, the additional banking facilities we arenegotiating and the proceeds from other proposed corporate financing activities, will provide sufficientfunding for us to bring the Toromocho Project to production. The Environmental Impact Assessment inconnection with all the material aspects of the Toromocho Project was approved by the Peruviangovernment in December 2010 and the construction permit for the Toromocho Project was issued bythe Peruvian government in July 2011. Furthermore, we have purchased substantially all of the keylong-lead equipment and machinery, completed the construction of a new town for local residentresettlement, constructed a water treatment plant to supply and treat water for the Toromocho Projectand made investments in the Callao port to facilitate the transportation of the products we will produce.We plan to complete the construction of all the mining and processing facilities in the fourth quarter of2013. We believe that the comprehensive preparation work that we have done for the ToromochoProject minimizes the risk of delay and puts us on track to achieve our target schedule for developmentand production.

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OUR BUSINESS

We are controlled by Chinalco, a Fortune Global 500 company since 2008, and a leadingmetals and mining conglomerate based in China, which has strong brand recognition with respect to itsmining, non-ferrous metal smelting and processing activities, and international trading and engineeringservices. We believe that we will continue to benefit from our relationship with Chinalco by receivingits relevant technological, financial, operational, procurement, sales and marketing support. We believethat by leveraging our close ties with China and Chinalco, we will be able to capitalize on oursubstantial mineral reserves and the strong demand for copper and other non-ferrous metals globally,particularly in China.

As of the date of this document, we have not commenced production at the Toromocho Projectand have not recorded any revenues and our pre-production activities have not generated any positiveoperating cash flows.

OUR COMPETITIVE STRENGTHS

We believe that the following competitive strengths will enable us to capitalize on futuregrowth opportunities in the global mining industry.

Acting as Chinalco’s core platform for the future acquisition, development and operation ofnon-ferrous and non-aluminum mineral resources and projects overseas

We are a resource development company acting as Chinalco’s core platform for the futureacquisition, development and operation of non-ferrous and non-aluminum mineral resources andprojects overseas. Our strong growth potential is driven significantly by Chinalco’s active globalexpansion strategy, which is in line with China’s initiative in securing mineral resources overseas tosatisfy its growing demand. In the 12th 5-Year Plan for the non-ferrous industry adopted in 2011, thePRC government has also expressed the intention to establish policies to support exploration anddevelopment of overseas mineral resources, encourage qualified companies to carry out internationalcooperation, enhance the strength of the companies with overseas operations and improve the qualityof overseas investments. Meanwhile, we believe that we will also benefit from Chinalco’s proven trackrecord, strong brand recognition and the broad range of acquisition opportunities available to it.Chinalco has been actively expanding its overseas presence through acquisitions of mines and reservessince 2007. As part of its global strategy, Chinalco has engaged in the acquisition of Rio Tinto in 2009and has subsequently acquired equity interest in Rio Tinto. Recently, it has also announced a globalexpansion plan to acquire non-ferrous mining projects outside of China.

As Chinalco’s core platform for the future acquisition, development and operation ofnon-ferrous and non-aluminum mineral resources and projects overseas, we believe that a wide rangeof potential acquisition opportunities will be available to us. Chinalco has granted us preferential rightsto participate in certain future businesses, as well as rights of first refusal and call option rights foracquiring certain future businesses. See “Relationship with Our Controlling Shareholders —Non-competition Undertaking.” We also believe that Chinalco’s collaborative relationships with thegovernments of the PRC and various other countries will increase the acquisition opportunitiesavailable to us and provide support for mining projects we acquire in the future. Furthermore, byleveraging on Chinalco’s experience and expertise in acquiring mining projects outside of China, webelieve that we will be able to build a team of investment professionals that can monitor, identify andevaluate potential targets for acquisition with expertise.

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OUR BUSINESS

Ability to develop acquired targets and synergistic collaboration with Chinalco

We have devoted substantial effort to developing the Toromocho Project into an advanceddevelopment stage and minimizing the risks of delay. We have engaged Aker Solutions for EPCMservices, including various engineering studies, secured credit facilities with an aggregate amount ofUS$2,118.0 million from Eximbank and China Development Bank to fund the development, securedall the necessary licenses and approvals up to this point in the development of the Toromocho Projectand purchased substantially all of the key long-lead equipment and machinery. In particular, we haveassembled a team of execution experts with extensive experience in developing greenfield miningprojects to facilitate our development of mining projects that we will acquire in the future. Ourcollaboration with Chinalco has also been instrumental in developing the Toromocho Project. We haveleveraged Chinalco’s technology and management expertise in developing the Toromocho Project. Inparticular, Chinalco has provided us with comprehensive support in terms of mining expertise andqualified employees. We have also leveraged Chinalco’s relationships with various equipmentmanufacturers in order to procure quality equipment at what we believe to be relatively low cost.Meanwhile, we believe that our close ties with Chinalco will benefit us in selling our products onceproduction commences at the Toromocho Project. Such benefits include being able to leverageChinalco’s brand name and extensive distribution network throughout China to forge long-term andstable business relationships with clients there. Additionally, subject to us receiving arm’s-lengthcommercial terms, we may also sell our products to Chinalco and its affiliates. Going forward, webelieve we will continue to leverage our successful experience in the development of the ToromochoProject and our ability to integrate the resources and support from Chinalco to develop and operate themining projects we will acquire in the future.

Substantial mineral reserves and significant exploration potential at the Toromocho Project tocapture the increasing demand for copper

According to CRU, the Toromocho Project is the world’s second largest pre-production coppermining project, as measured by proved and probable copper ore reserves, and the third largest pre-production copper project, as measured by average planned annual production between 2012 and 2020,among the top 20 firm copper mining projects scheduled to commence production of copperconcentrates from 2012 to 2016. Three of these mining projects have commenced production as ofDecember 31, 2012. According to the Competent Person’s Report, the proved and probable reserves ofthe Toromocho Project deposit, which conform to the JORC Code, is estimated to containapproximately 7.3 million tonnes of copper, 290,000 tonnes of molybdenum and 10,500 tonnes ofsilver. Currently, the life-of-mine average production rate is estimated at approximately 1,838 tonnesof 26.5% copper concentrates per day at an ore processing rate of 117,200 tonnes per day. Based onthis estimate, the Toromocho Project can produce ores for 32 years and thus has an estimated mine lifeof 32 years. Based on the current design, processing facilities will continue to process recovered oresfor four years after the end of the mine life, thus giving the Toromocho Project a projected operatinglife of 36 years.

However, given the abundant resources already identified in the Toromocho Project and thegeological settings of the area outside the current mining plan of the Toromocho Project, we believethat the Toromocho Project and the lands covered by our mining concessions there have potential forfurther production ramp-up and future exploration success. According to the Competent Person’sReport, there are additional resources adjacent to the planned open pit, which are also covered by our

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mining concessions, and are estimated to contain approximately 2.7 million tonnes of copper, 92,000tonnes of molybdenum and 5,200 tonnes of silver in measured, indicated and inferred JORC-compliantresources. We believe that we will be able to further explore and develop these resources once wecomplete the highway relocation plan in connection with the Toromocho Project. We are currently indiscussion with and have submitted our proposed relocation plan to the MTC. Upon our receipt ofapproval from the MTC, we will commence the detailed engineering study, which we expect tocomplete in approximately four months.

We believe that our substantial mineral reserves and our close ties with China position us wellto capitalize on the expected global growth in demand for copper, particularly in China. According toCRU, China accounted for approximately 39.6% of the global refined copper consumption in 2011 andthe growth rate of China’s copper demand was among the fastest, while the supply deficit of refinedcopper in China has increased from 610,000 tonnes in 2006 to 2.5 million tonnes in 2011, representinga CAGR of 32.5%. This supply deficit is expected to continue through 2016. Meanwhile, China isexpected to continue to drive the demand for copper concentrates, with its smelter production fromcopper concentrates expected to increase at a CAGR of 14.3%, from 2012 to 2016. The global copperconcentrates market is also expected to experience structural deficit through 2016. Furthermore, webelieve that the free trade agreement between China and Peru that came into effect on March 1, 2010will facilitate the export of the copper concentrates we produce to China. Demand for the 10 non-ferrous metals in China grew at a CAGR of 15.5% from 2005 to 2010 and grow at a CAGR of 7.4% istargeted from 2010 to 2015 in the 12th 5-Year Plan for the non-ferrous metal industry.

Competitive development and operational costs of the Toromocho Project

We expect to enjoy competitive operating and mining costs as a result of the ToromochoProject’s rich ore reserves, location and favorable geology. The mine geology allows us to employconventional open pit mining technology, which is less expensive and has fewer risks thanunderground mining. The estimated strip ratio of 0.79:1 at the Toromocho Project is estimated to belower than 70% of the new mining projects scheduled to commence production from 2012 to 2016,according to CRU. The low estimated strip ratio at 0.79:1 means that, for every tonne of ores we mine,0.79 tonne of waste materials will need to be removed. As a result, we will incur lower costs forremoval of waste materials, which results in lower per-unit mining costs. Our large planned annualoutput enables us to enjoy economy of scales which lead to a lower per unit cost for the copperconcentrates we produced. Additionally, we have purchased and expect to employ large capacityequipment, which we believe results in a lower variable costs in operating and maintaining the miningequipment, particularly costs associated with labor and energy consumption. All these factorscontribute to the cost-efficiency of our mining and processing facilities at the Toromocho Project andlead to competitive mining and operational costs. According to the Competent Person’s Report, theToromocho Project is estimated to have low operating cash costs after credits of approximatelyUS$1,508.8 per tonne (or approximately US$0.684 per pound) of copper produced as compared with alarge number of copper mines across the globe. For example, the average operating cash costs of themajor copper mines in Peru and Chile is approximately US$3,624.0 per tonne of copper produced andUS$3,963.0 per tonne of copper produced, respectively. Operating cash costs include mining costs,processing costs, general and administration costs, selling costs, environmental protection costs,production taxes, resource compensation levy, other cash cost items and by-product credit, and aregenerally recognized as a reliable indicator for measuring the operating and mining costs of coppermines.

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We also believe that the Toromocho Project’s close proximity to established infrastructureincluding water and power supplies and transportation networks, including public highways andrailroads, and its relative close proximity to the capital of Peru, Lima, which is approximately 140kilometers west from the Toromocho Project, will lead to reduced construction and operational costs.We have also invested in the Callao port in order to facilitate the transportation of our products.Furthermore, we believe that our close ties with China will enable us to procure equipment frommanufacturers based in China, who are able to offer equipment of similar quality at lower costs, so asto reduce our initial construction capital expenditure and maintenance costs in the future.

Advanced development stage of the Toromocho Project and the favorable investment environment

Since the completion of our acquisition of the Toromocho Project in May 2008, we havedevoted substantial effort to developing the Toromocho Project into an advanced development stageand minimizing the risks of delay and have accomplished all its key pre-production milestones.According to CRU, the Toromocho Project is categorized as a firm project, which is generallyrecognized as the most advanced development stage for pre-production mining projects. We believethat the comprehensive preparation work that we have done for developing the Toromocho Projectpositions us well to achieve our target development and production schedule. The EnvironmentalImpact Assessment in connection with all the material aspects of the Toromocho Project was approvedby the Peruvian government in December 2010 and the construction permit for the Toromocho Projectwas issued by the Peruvian government in July 2011. For the years ended December 31, 2009, 2010,2011 and the nine months ended September 30, 2012, our capital expenditure paid in connection withthe Toromocho Project amounted to US$142.4 million, US$372.9 million, US$712.0 million andUS$771.5 million, respectively. As of September 30, 2012, we have incurred approximately US$2.0billion of capital and operating expenditure for the development of the Toromocho Project, whichrepresented approximately 58.2% of the total required capital and operating expenditure based on ourmost recent estimation. In particular, we have accomplished the following since our acquisition of theToromocho Project in 2007:

Š Feasibility Study and Engineering. We have engaged Aker Solutions, a reputableleading mining consulting firm and a subsidiary of Jacobs Engineering Group, forfeasibility study and EPCM services in connection with the Toromocho Project. AkerSolutions completed its feasibility study in December 2007, its basic engineering studyin 2009 and provided its capital cost estimate for the Toromocho Project in February2011. The detailed engineering study for the Toromocho Project was completed in thesecond quarter of 2012.

Š Financing. We have secured credit facilities with an aggregate amount of US$2,118.0million from Eximbank and China Development Bank, which combined with our cashand cash equivalents, the additional banking facilities we are negotiating and theproceeds from other proposed corporate financing activities, will provide sufficientfunding for us to bring the Toromocho Project to production.

Š Approvals. We have obtained all the necessary governmental approvals for theconstruction phase of the Toromocho Project, particularly, the Environmental ImpactAssessment in connection with all the material aspects of the Toromocho Project andthe construction permits.

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Š Resettlement. We have finished the construction work for a new town as well as theinfrastructure, including water and electricity supplies and sewage system, for theapproximately 3,200 residents of Morococha to be resettled. We intend to substantiallycomplete the resettlement process and relocate all the residents who have signed theresettlement agreement by the first quarter of 2013 and further negotiate with theremaining residents in order to complete the resettlement.

Š Infrastructure. We have constructed a water treatment plant at the Kingsmill Tunnel tosupply the water for the Toromocho Project and treat the wastewater from other minesin the adjacent area. We believe the water treatment plant will successfully resolve acontaminated water issue that has plagued the area for decades. We have also investedin the Callao port, which together with the readily available transportation network, willfacilitate our shipping of the products we will produce.

Š Procurement. We have procured substantially all of the key long-lead machinery andequipment for the mining and processing facilities, a portion of which has been shippedto Peru and installed onsite.

In addition to our comprehensive preparation work, we believe that the favorable investmentenvironment in Peru also facilitates us in ensuring the timely execution of the Toromocho Project. Theoverall investment environment for the mining industry in Peru is mature and established. For example,according to a research report issued by Business Monitor International Limited, a public policy thinktank based in London, United Kingdom, as at the fourth quarter of 2012, Peru was the third mostpopular jurisdiction in South America. Various major mining companies have made substantialinvestments in Peru.

Experienced and motivated international management team supported by local execution expertswith proven track record

We have an experienced management team with extensive knowledge and expertise in themining industry, and in particular, the development and acquisition of overseas mining projects.Dr. Peng Huaisheng, our executive Director and chief executive officer, has over 25 years ofexperience in design, research and management in non-ferrous engineering and mining industry.Mr. Huang Shanfu, our executive Director and vice president, also has over 22 years of experience inthe mining industry, particularly the copper mining industry. Our management team also includesprofessional managers with extensive experience in overseas mergers and acquisitions and relatedfinancing and risk management. Ms. Liang Yunxing, our executive Director and chief financial officer,has over 14 years of experience in financial management, risk control, investment, strategydevelopment and mergers and acquisitions. Furthermore, we also employ various experienced miningexperts to work on site to facilitate the development of the Toromocho Project. For example, Mr. LeoHilsinger, who is in charge of the construction of the ore process facilities, has substantial experiencein the mining industry and has managed and overseen the construction and EPCM services of variousmining projects across the globe. Mr. David Thomas, who is in charge of the technical development ofthe Toromocho Project, including coordination with our EPCM contractor for the feasibility study,basic engineering, detailed engineering and construction, also has over 40 years of experience in themining industry. Mr. Thomas has led or participated in the development of various mining projects inGhana, Indonesia and Australia. Mr. Ezio Buselli, who is in charge of environmental services and

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community relations, has over 15 years of experiences in coordinating mining company’s efforts inenvironmental compliance and community relations in Peru. Mr. Thomas Olsen, who is in charge ofthe operation of the Toromocho Project, has over 30 years of experience in the mining industry, andhas led or participated in the development of various mining projects in the United States, Canada,Africa, South America and Australasia.

In addition, we have proposed to adopt an equity incentive plan designed to attract, retain andincentivize senior management and key employees with a view on encouraging the participants tocommit to enhancing value for us and our shareholders, as a whole.

OUR BUSINESS STRATEGIES

We aim to become a leading diversified resources company focusing on non-ferrous andnon-aluminum mining projects outside of China by implementing the following strategies.

Engage in strategic and selective acquisition to drive our growth

We are a resource development company and intend to enhance and strengthen our existingmining portfolio through acquisitions and alliances. We plan to focus on acquiring or establishingalliances with non-ferrous and non-aluminum mines that are already producing or near production. Webelieve that investment opportunities will continue to be created by, among other things, (i) theprivatization of mining companies, primarily in emerging markets, and (ii) the rebalancing of assetportfolios by other industry players. In addition to actively monitoring global mergers and acquisitionsactivities in connection with non-ferrous mining projects outside of China, we plan on seeking referralsfrom our connections with industry players and investment banks. Furthermore, we believe that we willbe able to leverage Chinalco’s extensive experiences in identifying viable acquisition and alliancetargets. We plan on focusing on high-growth and low cost mining projects with long estimated minelives. In particular, we plan to select our targets based on the following guidelines:

Š In the short-term, we plan to prioritize on the acquisition of copper mining projectswhile assessing other non-ferrous and non-aluminum mining projects. In particular, weplan to prioritize investments in pre-feasibility mining projects with three to four milliontonnes of copper in reserves and/or resources in the next two years. Approximately threeto four years after commercial production at the Toromocho Project, we plan to focuson advanced-stage mining projects with approximately 6 million tonnes of copper inreserves and/or resources that are in or near production. We will also target miningprojects that can provide strong operating cash flows; and

Š In the mid- to long-term, we plan to expand our focus to include other non-ferrous andnon-aluminum mines with the aim to become a leading diversified mineral resourcescompany focusing on non-ferrous and non-aluminum assets outside of China.

Geographically, we plan to focus on South America in the next two years. We aim to capitalizeon our local execution team’s substantial experience in South America to create synergies. Uponcommencement of commercial production at the Toromocho Project, we aim to further extend ourreach to Africa and Asia (except China), particularly those countries or regions with whom China hasestablished relationships.

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We plan to finance our expansion and acquisition primarily through the proceeds from thecorporate financing activities as well as our future operating cash flow. In the near term, we plan topursue selective targets with the proceeds from proposed corporate financing activities. Starting in2017, when we expect the Toromocho Project will generate sufficient operating cash flow, we plan tobegin to utilize the cash flow generated from the Toromocho Project to finance our acquisition.

To maximize the synergies from our integration capability, as evidenced by the development ofthe Toromocho Project, and our collaboration with Chinalco, we intend to focus primarily on targetwhere we can actively participate in the management and development of the mining project.Meanwhile, in the acquisition process, we will follow rigorous corporate governance standard toprovide maximal protection to our shareholders, particularly our minority shareholders. In addition,compared to most other PRC companies, our overseas corporate structure allows us to access capitalmarkets or other forms of financing more quickly and efficiently to support the execution of ourgrowth strategy without having to obtain PRC regulatory approvals. While we are actively seekingsuitable acquisition targets, we had not identified any definite acquisition target for expansion purposesas of the Latest Practicable Date.

Ensure timely construction of mining and processing facilities at the Toromocho Project

We have started the construction of our mining and processing facilities and target to completethe construction of these facilities in the fourth quarter of 2013. In particular, we have started theconstruction of our SAG mill/ball mill/flotation processing plant and transportation system in July2011. We will continue to collaborate with reputable third-party contractors to ensure a timely andefficient construction process. We also plan to continue to maintain collaborative relationships with thelocal government and community to ensure a smooth project development. We believe that the furtherexecution of the Toromocho Project development and construction plan will benefit from ourcomprehensive preparation work and timely execution of the preliminary stages.

Optimize our operation and production capacities and further explore and develop potential mineralreserves

We plan to commence production in the fourth quarter of 2013 and reach full productioncapacity in the third quarter of 2014. Our production processes are being developed and refined by ourmining and technology experts and are expected to have low consumables and equipment costs andimproved minerals recovery rates. All of these are essential for a cost efficient mining operation. Wehave also engaged in detailed feasibility studies and planning activities to efficiently utilize ourpotential mineral resources at the Toromocho Project. Based on the geological conditions of theadjacent area, we believe the Toromocho Project has a strong potential for future exploration.According to the Competent Person’s Report, there are additional resources adjacent to the plannedopen pit, which are also covered by our mining concessions, and are estimated to containapproximately 2.7 million tonnes of copper, 92,000 tonnes of molybdenum and 5,200 tonnes of silverin measured, indicated and inferred JORC-compliant resources. We believe that we will be able tofurther explore and develop these resources once we complete the highway relocation plan inconnection with the Toromocho Project. We are currently in discussion with and have submitted ourproposed relocation plan to the MTC. If and when we receive approval from the MTC, we willcommence a detailed engineering study, which we expect to complete in approximately four months.

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Apart from exploration of additional mineral resources, we plan to further devote substantial resourcesto economically and efficiently developing the Toromocho Project to optimize our operation andproduction and explore potential mineral reserves. In particular, we plan to procure additionalequipment to increase our designed ore processing rate by approximately 26% to 148,000 tonnes perday.

Further leverage on our close relationship with Chinalco

As Chinalco has positioned us as its core platform for the future acquisition, investment,development and operation of non-ferrous and non-aluminum mines overseas to complement its coremining business in China, we believe we will continue to benefit from Chinalco as a result of thisrelationship in terms of relevant technological, financial, operating and sales and marketing supportfrom Chinalco. In particular, we plan to:

Š Leverage Chinalco’s extensive distribution network and enter into long-term offtakeagreements with Chinalco or its affiliates on normal commercial terms on an arm’s-length basis;

Š Capitalize on Chinalco’s strong connections in China to obtain support from its strategicpartners, including infrastructure developers and equipment vendors;

Š Benefit from Chinalco’s strong brand recognition and reputation to obtain moreacquisition opportunities;

Š Leverage Chinalco’s relationship with various equipment suppliers in China to procureour mining and processing equipment, and invite manufacturers based in China to jointhe competitive bidding process with other manufacturers to ensure a more favorablepricing;

Š Integrate technology and management expertise to develop acquired mining projects inthe future; and

Š Benefit from Chinalco’s collaborative relationships with the governments of the PRCand various other countries, which will increase the acquisition opportunities availableto us and provide support for mining projects we acquire in the future.

Attract, motivate and develop talented and experienced staff

We believe a key to our success is our ability to recruit, retain, motivate and develop talentedand experienced staff members. In particular, we intend to:

Š Continue to focus on the recruitment and cultivation of a high-quality and professionalworkforce in a competitive human resources market;

Š Provide career development programs for our employees to enhance their professionalknowledge and capabilities;

Š Provide competitive compensation packages, including equity incentive plan; and

Š Create a collegial culture that promotes our employees’ personal and professionaldevelopment.

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Promote corporate social responsibility

We plan to continue to undertake international safety, environmental and social responsibilitybest practices during the construction and production stage of the Toromocho Project. We believe thatmaintaining high standards in workplace safety, environmental protection, social responsibility andcultural sensitivity is critical to our long-term success. We have built and are currently operating awater treatment plant at Kingsmill Tunnel, which resolved the contaminated water issue caused byother mining companies that has plagued the area for decades. Meanwhile, we plan to use the treatedwastewater rather than fresh water from the Kingsmill Tunnel water treatment plant to supply the waterfor the Toromocho Project. As a result, we do not expect to utilize other water resources in the vicinityto supply the Toromocho Project. Furthermore, we completed the construction of a new town withinfrastructure and public facilities for resettlement purpose, which we believe improves the livingstandards of local residents. Going forward, we plan to continue our dedication in reducing pollutionfrom our operating and mining activities, improving the living standard of the Morococha communityand maintaining high workplace safety standards.

OUR RESOURCE ACQUISITION APPROACH

Leveraging Chinalco’s experiences and expertise in acquiring mining projects outside of China,we have access to investment professionals with relevant overseas mining projects investment andacquisition experiences. We are also able to actively monitor global mergers and acquisitions activitiesin connection with the non-ferrous and non-aluminum mining projects outside of China. In addition,we have access to acquisition opportunities referred to us through our established connections withindustry players and investment banks. In particular, we believe that as a result of our closecollaboration with Chinalco and the preferential investment rights granted by Chinalco to us, we willenjoy a wide range of potential acquisition opportunities referred by Chinalco which would otherwisenot be available.

We believe that our rigorous investment approach, extensive due diligence focus, global reach,substantial transaction and financing expertise and focus on operational oversight are all key factors inensuring success in our future acquisition, investment, development and operation of mining projectsoutside of China. The following are some of our core investment principles:

Š Large Scale Mining Projects Focus. We intend to prioritize on the acquisition of largescale mining projects with high-quality ore body and long estimated mine lives.

Š Low Cost Mining Projects. To optimize our cash flow, we will prioritize on theacquisition of mining projects that enjoy a lower development cost, particularly miningprojects that have access to readily available infrastructure, including power andelectricity supply and transportation.

Š In or Near Production Copper Mining Projects. Currently, we aim to focus on in ornear production mining projects that can generate strong operating cash flow within ashort period of time to improve our financial condition and to fund our futureacquisitions.

Š Favorable Investing Environment. To reduce operation risks and avoid excessivedevelopment costs, we will focus on South America in the short term, and expand our

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focus to include Africa and Asia (except China) later, particularly in countries orregions with whom China has established relationships and have a good backgroundknowledge of local environmental, social, taxation and legal issues.

Š Diversifying Resources Portfolio. In the long run, we intend to expand our resourceportfolio beyond copper and seek to identify other non-ferrous and non-aluminum metalmining projects, so as to capitalize on China’s growing demand for mineral resources.

OUR EXPLORATION AND DEVELOPMENT OPERATIONS

The Toromocho Project

Project Overview

The Toromocho Project is located in central Peru in the Morococha mining district of theYauli-La Oroya Province, Junin Department, and is approximately 140 kilometers east of Lima. Themining town of Morococha is roughly 2.5 kilometers away from the deposit at the Toromocho Project.A paved highway and railroad from Lima pass through Morococha. The region has steep topographywith elevations over the deposit ranging from 4,700 meters to over 4,900 meters above sea level. Thevalleys in the area are of glacial origin.

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The following diagram illustrates the location of the Toromocho Project:

History of the Toromocho Project

The Toromocho Project is located in the Morococha mining district, a traditional mining districtin Peru. There has been gold and silver mining in this area since pre-Columbian times in the 16th

century. The town of Morococha is a small Andean mining camp. A large part of the population at thetown of the Morococha district and its vicinity work in the mining industry and are a potential sourceof skilled and experienced labor for the Toromocho Project.

The earliest recorded information on the mineral deposit at the Toromocho Project dates to1928, when a low-grade copper zone was identified along the edge of the monzonite stock of the SanFrancisco peak along with several other low-grade blocks. Cerro de Pasco carried out an exploration

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program in the area from 1945 to 1955, the results of which indicated the presence of mineralization.In 1974, the properties were nationalized by the Peruvian government and transferred to Centromin, astate-owned mining company.

During the 1970’s, Centromin continued exploration, carried out a drilling program, and startedsmall-scale exploitation of the Toromocho Project deposit. In the 1990’s, Centromin began the processof privatizing all of its assets. Exploitation of the Toromocho Project by Centromin ceased in October1997.

In 2003, we began our exploration activities in the Toromocho Project and were granted theoption to acquire certain full and partial interests held by Centromin in certain of the miningconcessions and related assets of the Toromocho Project. We exercised in full the option in May 2008.See “History, Reorganization and Group Structure — History.”

On March 9, 2009, Chinalco Peru and the MEM executed a Stability Agreement under which thePeruvian government granted Chinalco Peru stability in relation to its rights and benefits in taxation,royalty, foreign exchange and free marketing of its mineral products, among other things. See “History,Reorganization and Group Structure — History — Toromocho Project Major Contracts — StabilityAgreement.”

Mineral Reserves

The majority of copper mineralization found in the Toromocho Project is in the form ofchalcopyrite and chalcocite. Molybdenum and silver are also present. The Toromocho Project ore bodyoutcrops on the surface at elevations of 4,600 meters to 4,800 meters. The copper ore body extendsdownwards to a flat “bottom” 500 meters to 600 meters below the surface.

According to the Competent Person’s Report, the Toromocho Project deposit containsapproximately 1,540 million tonnes of proved and probable ore reserves averaging 0.471% copper,0.019% molybdenum and 6.86 grams of silver per tonne, conforming to the definitions of the JORCCode. These reserves contain an estimated 7.3 million tonnes of copper, 290,000 tonnes ofmolybdenum, and 10,500 tonnes of silver. In addition, it is estimated that an additional amount ofmineral resources exist adjacent to the planned open pit consisting of approximately 520 million tonnesof measured and indicated mineral resources averaging 0.37% copper, 0.013% molybdenum, and 6.10grams of silver per tonne and 174 million tonnes of inferred mineral resources averaging 0.46%copper, 0.015% molybdenum, and 11.54 grams of silver per tonne, conforming to the JORC Code.

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The following tables summarize our estimated ore reserves and mineral resources in respect ofthe Toromocho Project, as detailed in “Appendix IV — Competent Person’s Report.” As our estimatedore reserves and mineral resources come from different parts of the same ore body, they are presentedseparately.

JORC Ore ReserveCategory

Tonnes(millions)

Grade Metal Content

Copper(%)

Molybdenum(%)

Silver(grams/tonne)

Copper(million tonnes)

Molybdenum(tonnes)

Silver(tonnes)

Proved . . . . . . . . . . . . 756 0.51 0.02 6.39 3.9 150,000 4,800Probable . . . . . . . . . . 784 0.434 0.018 7.31 3.4 140,000 5,700

Total . . . . . . . . . . . . . 1,540 0.471 0.019 6.86 7.3 290,000 10,500

JORC Measured andIndicated MineralResources Category

Tonnes(millions)

Grade Metal Content

Copper(%)

Molybdenum(%)

Silver(grams/tonne)

Copper(million tonnes)

Molybdenum(tonnes)

Silver(tonnes)

Measured . . . . . . . . . 156 0.41 0.014 6.20 0.6 22,000 1,000Indicated . . . . . . . . . . 364 0.36 0.012 6.06 1.3 44,000 2,200

Total . . . . . . . . . . . . . 520 0.37 0.013 6.10 1.9 66,000 3,200

JORC Inferred MineralResources Category (Note)

Tonnes(millions)

Grade Metal Content

Copper(%)

Molybdenum(%)

Silver(grams/tonne)

Copper(million tonnes)

Molybdenum(tonnes)

Silver(tonnes)

Inferred . . . . . . . . . . . . 174 0.460 0.015 11.54 0.8 26,000 2,000

Note: Measured, indicated and inferred mineral resources are not included in the economic analysis in the Competent Person’s Report.

The mineral reserve estimate at the Toromocho Project has been generated by IndependentMining Consultants, Inc. (“IMC”), our contractor, using a standard 3D-block model approach based onthe drill hole database for the property as of March 1, 2007. Behre Dolbear has used the 2007 resourcemodel to spot check the accuracy of the modeling work and for compliance with reporting of mineralreserves as required under the JORC Code. In the Competent Person’s Report, Behre Dolbear hasstated that it believes IMC has completed credible work in determining the resource model of themineralization at the Toromocho Project. Behre Dolbear has also stated in the Competent Person’sReport that the project’s ore reserve statement is appropriate based on its review of the mineralizedenvelopes and the grade estimation methods.

As of the date of this document, nothing has come to the attention of the Directors that wouldcause them to believe that the mineral resources and reserves vary in any material respect from thedescriptions set forth in the Competent Person’s Report included in Appendix IV to this document.

Mining Concessions and Superficial Land Rights

The Toromocho Project consists of a total of 67 key mining concessions, with registeredsuperficial land rights covering 6,702.8 hectares. We consider these 67 mining concessions to be theProject’s key mining concessions because each of them is either within the designed open pit andessential for the mining activities or is located near the designed open pit and important for futureexpansion. 38 of these key mining concessions are covered by the Stability Agreement. We currentlyplan to prioritize the mining of the 38 key concessions covered by the Stability Agreement. 66 of these

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key mining concessions are wholly-owned by members of our Group. Meanwhile, one of the keymining concessions in the Toromocho Project is owned by Juanita, in which we hold a 50% equityinterest. In April 2012, we executed a memorandum of understanding for the acquisition of theremaining 50% equity interest in Juanita, and we are in the process of negotiating a definitive contractfor the acquisition. See “Appendix VI — Statutory and General Information — Mining Concessions”for further details.

Set forth below is a map showing the key mining concessions and our planned open pit:

ID CODE CONCESSION HAS

1 010102105 SYLVANA UNO 0.0118

2 010212693 MOROCOCHA-8 34.7517

3 08000740Y01 SAN ROMAN 2.8172

4 08000848Y01 LA SOLEDAD 2.8172

5 9987.2RODAVLAS10Y72010080

6 6718.2AZNAILA10Y36010080

7 7522.4NINUJ10Y42110080

8 6061.3AISA10Y23110080

9 08001143Y01 FORTALEZA 2.8172

10 08001163Y01 JUANITA (Juanita de Hyo) 5.6348

11 08001206Y01 CONSTANCIA 0.8142

12 08001342Y01 MILAGROSA 3.0887

13 08001349Y01 EL AZUL DEL DANUBIO 5.9895

14 2128.2SERASEP10Y18310080

15 6627.1ATILREPAL10X19310080

16 08001394X01 EL MARTILLO 2.3070

17 5344.1ANICEV10Y97410080

18 9521.4ETREUS10Y59410080

19 3200.2APSIHC10Y69410080

20 4699.1OALLAC10Y43710080

21 08001757Y01 LA DEFENSA 1.4349

22 08001807Y01 LA COMISION 2.4882

23 1963.2NOPAJLE10Y11810080

24 5036.2EEKNAY10Y42810080

25 4430.4NOCNA10Y73810080

26 9599.1RAMAL10Y05810080

27 7143.1ATINELE10Y85810080

28 9726.2ATIUQNART10Y95810080

29 08001869Y01 MADAM GRIMANEZA 3.9927

30 3699.1ANIHCAL10Y38810080

31 7285.1AIROTCIV10Y44910080

32 08001996Y01 VECINA SEGUNDA 0.1147

33 9676.1NOICCILFA10Y79910080

34 0531.2OTICROLOD10Y99910080

35 08002394Y01 EL SALCHICHON 3.9835

36 08005477X01 INDEPENDENCIA 1.5848

37 08016662X01 MONTAÑA-87 2.9361

38 08020930X01 LA MADAMA 1.9963

39 1000.2AIDUALC10X01812080

40 08021948X01 DANUBIO S.R. 0.9043

41 6985.1.R.SANEIV10X67912080

42 6823.1R.S-LEBASI10X77912080

43 08021978X01 POLONIA-S.R. 2.8172

44 08022776X01 RAQUEL ELVIRA 3.0830

45 08023099X01 REBECA 90 11.9758

46 5637.11ALEBAHC10X00132080

47 0215.4ASIRALC10X40132080

48 0804354LY01 MOROCOCHA 3-C 7.4662

49 0804354MY01 MOROCOCHA 3-D 0.0513

50 0804354PY01 TOROMOCHO UNO 220.4209

51 0804354SY01 TOROMOCHO UNO - 2011 26.6967

52 0804355SY01 MOROCOCHA 4-K 0.0719

53 0804355TY01 MOROCOCHA 4-L 0.0650

54 0804355UY01 MOROCOCHA 4-M 0.0698

55 0804355VY01 MOROCOCHA 4-N 3.1841

56 0804355WY01 MOROCOCHA 4-Ñ 0.4579

57 0804355XY01 MOROCOCHA 4-O 0.8315

58 0804355ZY01 TOROMOCHO DOS 289.4048

59 0804357IY01 MOROCOCHA 6-C 2.2826

60 0804357JY01 MOROCOCHA 6-D 3.1830

61 0804357LY01 MOROCOCHA 6-F 0.2121

62 0804357MY01 MOROCOCHA 6-G 0.4663

63 0804357NY01 TOROMOCHO TRES 77.2494

64 0804358AY01 MUCHCAPATA 4 1.9454

65 0804358BY01 MUCHCAPATA 5 10.9405

66 0804358CY01 MOROCOCHA 7-A 3.3399

67 0804358EY01 TOROMOCHO CUATRO 483.0942

1300.4612TOTAL

A mining concession is required to carry out mining activities in Peru, except for sampling,prospecting and trading mining products and minerals. Concessions are granted for indefinite periods,

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subject only to termination. In particular, a mining concession grants holders the exclusive right toexplore and exploit mineral resources within the area covered by the concession. These concessionsmay be for exploiting metal or non-metal substances. Holders are required to pay an annual validity feeof US$3.00 per year per hectare. In addition, holders must meet a minimum annual productionrequirement, which is one Tax Unit per hectare per year for metal mining concessions and 10% of oneTax Unit for non-metal mining concessions prior to the eleventh year after the year of the granting ofthe mining concessions. The principal terms of the key mining concessions in connection with theToromocho Project are consistent with the statutory provisions. See “Laws and Regulations Relating tothe Industry — General — The Concession System.” We believe that the expected production volumeof the Toromocho Project will satisfy the minimum production requirements for the key miningconcessions in connection with the Toromocho Project within the time required if we commenceproduction according to the planned timetable.

Two large mining companies, Pan American Silver and Austria Duvaz, currently hold propertyand mining concessions adjacent to the Toromocho Project and operate small underground mines.There are also several smaller companies which hold concessions adjacent to the Toromocho Project.

We signed a share purchase agreement in October 2006 with Austria Duvaz, which granted usan exclusive option to acquire the Morococha mining concessions, surface area rights and assets ofAustria Duvaz. Pursuant to this agreement, we gained 100% control of Centenario and its stake in 26concessions located in the Morococha mining district.

As advised by Rebaza, Alcazar & De Las Casas Abogados Financieros, our Peruvian legaladvisor, we are entitled to explore and exploit the reserves in the areas covered by all of the key miningconcessions, provided that we pay the applicable taxes and/or royalties. We hold valid and currentrights to use, for the purpose of developing a mining concession, substantially all of the superficialland, which is required to develop the Toromocho Project and these rights cover all the superficial areaof the 67 key mining concessions. Meanwhile, any third party rights to the mining concessions orsuperficial land rights contained within the Toromocho Project will not adversely impact theCompany’s ability to explore and develop the Toromocho Project.

Rebaza, Alcazar & De Las Casas Abogados Financieros has further advised us that we haveobtained, and are in compliance with, all requisite licenses, concessions, permits, authorizations,filings, registrations or other permits necessary for the current stage of the development to conductmining activities at the Toromocho Project. We submitted to the MEM our application for the miningplan permit for the Toromocho Project on March 12, 2012 and have received feedback from the MEMin June 2012. The feedback from MEM requested us to provide additional information and makefurther clarification on the location, scope and design of the main facilities, including the open pit, thewaste dumps, the ore concentrator, the new town and the tailing dam. We do not believe these requeststo be major issues. In preparation to respond to the MEM’s requests, we have prepared additionalmaps, completed additional geological and hydrological studies and gathered additional design detailsof the main facilities. We do not believe there is any difficulty in filing a response to address theMEM’s requests. We believe that the time and effort we spent to respond to the feedback is reasonablejudging by the industry standard in Peru. In January 2013, we filed a revised mining plan with a validterm of seven years in response to the MEM’s feedback. We determined to file a mining plan for a

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shorter term instead of for the full mine life to expedite the approval process by MEM. We plan tocommence production under the mining plan permit for a shorter term and then apply for the miningplan permit covering the full mine life. We expect to receive the mining plan permit in the first quarterof 2013. This permit is required to begin our mining activities at the Toromocho Project. We intend tosubmit the application for the mining operation certificate after we obtain the mining plan permit. Themining operation certificate is required to purchase and use explosives in our mining activities. Uponthe completion of our construction activities at the Toromocho Project, we intend to submit theapplication for the production permit which is required before we commence production. We expectMEM to grant the approval within approximately four months. In addition, we are in the process ofobtaining permits in connection with (i) the use of water and (ii) inspection and verification ofconstruction of the facilities. We expect to receive these permits upon the completion of ourconstruction work. These permits are required to process the minerals mined at the Toromocho Project.As advised by Rebaza, Alcazar & De Las Casas Abogados Financieros, there are no legal impedimentsto our obtaining the necessary licenses and permits for commercial production at the ToromochoProject and we should not be required to make any significant payment to obtain these licenses andpermits.

Products

Upon commencement of production at the Toromocho Project, our principal products will becopper concentrates (with silver content as credit) and molybdenum oxide as by-product.

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Infrastructure

Current infrastructure support for the Toromocho Project includes power lines, a pavedhighway and railway connections. Buildings for administration personnel housing and office facilities,a mine truck shop, and maintenance work will be constructed to provide facilities for theadministration and maintenance staff. In addition, facilities will be constructed to house analytical andmetallurgical laboratories, reagent storage, fueling stations and explosives storage. The followingdiagram illustrates the locations of our infrastructure and mine site:

Transport. The Toromocho Project can be accessed through the paved central highway or thecentral railway, both of which connect the Morococha mining district to Lima. The center of theToromocho Project deposit is approximately 2.5 kilometers from the town of Morococha. The distancefrom Lima to Morococha is approximately 142 kilometers by highway and approximately 173kilometers by railroad. As required by Peruvian regulation, we are undertaking a relocation of thecentral highway. The central highway will need to be diverted for approximately 10 kilometers in thevicinity of the open pit to maintain a safe distance away from the pit wall. We are currently indiscussion with and have submitted our proposed relocation plan to the MTC. Our proposal to theMTC included the construction of a third ascending lane, and straightening and widening the currenthighway to support a travel velocity of 60 km/hr as compared with the 35 km/hr rate for the existinghighway. Upon our receipt of approval from the MTC, we will commence the detailed engineeringstudy, which we expect to complete in approximately four months. The current estimated cost for therelocation of the central highway is approximately US$70.0 million. As of the date of this document,we have not incurred any costs in connection with the highway relocation plan.

Copper concentrates and molybdenum oxide can be transported from the mine site to the Callaoport via the existing railroad. In its current condition, the railway is estimated to have sufficient

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capacity to transport the commodities produced by the Toromocho Project and will be used for thedelivery of consumables such as diesel fuel, mill balls, and reagents to the Toromocho Project site. Therailroad is owned by the Peruvian government but is operated under a 15-year concession agreementwith FerroCarril Central Andino S.A. A one kilometer spur connecting the Toromocho Project minesite to the existing rail line has been constructed. Another six rail lines in the yard at the mill and atraveling bridge crane for loading and unloading are to be constructed and we have included therelevant cost estimate of approximately US$10 million in our total required capital cost estimate. Weexpect the construction of these rail lines to be completed by mid 2013.

In September 2010, we invested in the newly incorporated Transportadora Callao, acquiring 7%of the equity interest in it. See “History, Reorganization and Group Structure — History — ToromochoProject Major Contracts — Investment in Transportadora Callao S.A.” We have separately contractedCormin Callao S.A.C. to receive, handle and warehouse the copper concentrates from the ToromochoProject for shipment at the Callao port. In addition, Transportadora Callao started the construction of aspecialized transfer conveyor belt, ship loading facility and dock at the port of Callao for copperconcentrates in the first quarter of 2012. Construction of these facilities is expected to last 18 months,and the specialized dock is expected to have a capacity to process approximately 3 million tonnes ofcargo per annum upon its completion. The specialized dock will contain a conveyor belt to load thecopper concentrates onto ships from various points at the Callao port, including from the Corminwarehouse where the copper concentrates from the Toromocho Project will be stored. As a result of theabove, we have secured use of the dock at the Callao port to warehouse and load our cargo fortransshipment.

Going forward, we plan to negotiate the allocation of the transportation costs of our productswith our future customers.

Power. The Morococha mining district currently has electricity supply sufficient to power thecamp and the Kingsmill Tunnel water treatment plant. The main power supply for the ToromochoProject will be from Pomacocha, which has sufficient capacity to power the Toromocho Project. Theroute from the Pomacocha substation to the main substation at the Toromocho Project parallels the RioYauli Valley on a southeast to northwest direct path to the Toromocho Project main substation. Wehave received authorization from the National Interconnected System Economic Operation Committeein April 2009 to use up to 240 MW of electricity per annum for the Toromocho Project. We havecontracted with Edegel S.A.A., a power generation company, to maintain and supply all of the electricpower from the Pomacocha substation needed by the Toromocho Project and for potential futureexpansion nearby at a price of US$0.052/kW per hour.

The Toromocho Project’s main substation will consist of a 220 kV double bus arrangement thatwill allow for primary selective redundancy and maintenance scheduling. The main transformers willhave 220 kV primary and 69 kV secondary sections. The overhead 69 kV will be distributed from themain substation via four main circuits in a primary selective scheme. Two parallel 69 kV circuits willbe routed to the concentrator and the other two 69 kV circuits will be routed to the Toromocho Project.

Electricity will be supplied through an upgraded 220 kV substation near Pomacocha. We willadd additional bays to the existing substation to accommodate new power feeders to support the

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expected power needs of the Toromocho Project. A new nine kilometer, double-circuit overheadtransmission line will be installed and routed from the Pomacocha substation to the main substation atthe mine site, and is expected to be ready in the first quarter of 2013. This new transmission line isexpected to deliver 220 MW on either circuit.

Electricity is available from Pomacocha for the Kingsmill Tunnel water treatment plant and aseparate 23 kV power line from Toromocho to the Kingsmill Tunnel will be used to supply power forthe water pumping stations.

Water. We estimate the total water needed for the Toromocho Project for an average year willbe approximately 8.65 million cubic meters. We expect to have a sufficient water supply from theKingsmill Tunnel, which was previously constructed to drain mine water from the historic mine sites inthe Toromocho peak area, and has a continuous water flow throughout the year that varies dependingon the time of the year. The Kingsmill Tunnel intercepts nearly all groundwater in the mine site area.The tunnel inlet is located near the mine pit. The tunnel currently discharges into the Rio Yauliapproximately 8 kilometers to the east of the site at an elevation of 4,000 meters above sea level. TheKingsmill Tunnel water treatment plant is expected to provide sufficient water to support theoperations at the Toromocho Project, with an estimated flow rate of approximately 3,500 cubic metersper hour and up to a designed feed rate of approximately 5,000 cubic meters per hour. As a result, wedo not expect to utilize other water sources in the vicinity to supply the Toromocho Project.

We have constructed the Kingsmill Tunnel water treatment plant to treat the tunnel discharge toreduce acidity and metal content. Wastewater from other mines in the vicinity has been diverted to thewater treatment plant. The operation of the water treatment plant is currently paid for and operated byus. The treated water will flow to the raw water pump station, which will pump it to the raw waterpond. The pond will be located in the general concentrator area, and the pond will supply water to theconcentrator plant and the fire protection system. The pond surface will be at an elevation of 4,645meters above sea level. According to our estimates, only 50% of the Kingsmill Tunnel water will berequired to meet the needs of the Toromocho Project. We have entered into an agreement with the localPeruvian government to obtain the rights to the treated water from the Kingsmill Tunnel.

We have obtained appropriate licenses and/or authorizations for the use of water from theNational Water Authority of Peru at the Toromocho Project for the current stage of its development.We intend to submit the application for the license of the water to be used in our mining andproduction activities upon the completion of our construction activities, which is the prerequisite ofapplying for the water license. We do not foresee any impediment in obtaining the license. Accordingto the Peruvian Water Law, the primary causes for termination of water licenses and/or authorizationsfor water use are (i) the failure to efficiently use the water for the purposes and under the terms andconditions foreseen in the corresponding licenses and/or authorizations, (ii) the failure to pay for twoconsecutive years the corresponding fees to the government under such licenses and/or authorizationsand (iii) the failure to use the water infrastructure under proper maintenance standards.

Sewage Treatment. Packaged sewage treatment plants have been provided for theaccommodation camp, the administration building, the mine truck shop building and the concentratorplant. Treated sewage from the construction camp will meet all discharge requirements and will be

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reused, treated sewage from the administration building and the truck shop will be disposed of onsite,treated sewage from the concentrator will be reused.

Fire Protection. Separate fire protection systems will be installed at the mine area, the processarea and the camp area. Each area will be provided with a fire fighting system consisting of a watersupply reservoir, pumping equipment, water distribution piping and hydrants. Water for the processarea will be supplied from the raw water pond by gravity flow.

Camp. A construction camp is located adjacent to the concentrator construction site. Theconstruction camp will initially house up to 6,000 construction workers.

Warehousing. Warehousing will be located in the maintenance shop building adjacent to theconcentrator. Other supply inventories will also be contained in the fuel stations, reagent building,explosives storage, and mine truck shop.

Mine Truck Shop. The mine truck shop will be located east of the open pit and contain fourdrive-through bays, each with two truck service stations, so that up to eight trucks can be serviced atany one time. The truck shop building, outside storage facilities and work areas, parking, and openspace, otherwise available for truck servicing, will cover an area adequate to house any vendorsupplied services, such as tire repair and equipment maintenance.

Diesel fueling stations will be located near their respective fuel storage tanks in the vicinity ofthe mine truck shop. The fuel storage tanks will be above ground and have berms to contain anyspillage of fuel.

The Open Pit Design

The open pit mining at the Toromocho Project has been designed to take place in 10 phases inorder to allow a practical mine production schedule. Phases are practical expansions of a pit thatincorporate proper equipment operating room, working geometries, and access roads.

The mine will never look like any single phase until mining is complete. This is becausemultiple phases will always be in progress at any point of time. For example, while ores are beingproduced from phase 1, waste stripping will be progressing on phase 2 or even phase 3 to assure thatthe ores in those phases are released prior to completion of ores mining in phase 1. The phase designsat the Toromocho Project are generally wider than 130 meters due to the large equipment sizes andhigh production rates that are contemplated. The haul road criteria for the phase designs is 10% ofgradient and a width of 30 meters, including ditch and berm.

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The size of phase 1 will be adjusted until there are roughly 18 to 20 months of ores available inthe phase. The intent behind this planning is to minimize the amount of pre-production strippingrequired but provide sufficient ores in case there are delays in advancing to phase 2. The diagram setforth below illustrates the phase sequence:

Development Plan

We expect to commence production at the Toromocho Project in the fourth quarter of 2013.The Toromocho Project will consist of an open pit mining operation with daily ore processing capacityestimated to reach approximately 117,200 tonnes and a strip ratio estimated to reach 0.79:1. We plan toemploy a SAG mill/ball mill/flotation processing plant that is standard for the industry, with a designedaverage daily production capacity of 1,838 tonnes of 26.5% copper concentrates over the 36 years lifeof the mill and a separate molybdenum hydrometallurgical plant with a designed average dailyproduction capacity of 25.1 tonnes of molybdenum per day over the life of the mill. Based on theplanned production capacities described above, the Toromocho Project has an estimated mine life of 32years and an estimated production life of 36 years.

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We started the construction of the processing mill and the transport system after we receivedthe construction permit in July 2011. We expect to complete the construction in the fourth quarter of2013.

We currently estimate that the total capital and operating expenditure for the development ofthe Toromocho Project will amount to approximately US$3.5 billion. In 2009, 2010, 2011 and the ninemonths ended September 30, 2012, our capital expenditures paid in connection with the ToromochoProject amounted to US$142.4 million, US$372.9 million, US$712.0 million and US$771.5 million,respectively. As of September 30, 2012, we had incurred approximately US$2.0 billion of capital andoperating expenditure for the development of the Toromocho Project.

Set forth below are the details of our plan as of the Latest Practicable Date to reach commercialproduction:

Activities Development Status Expected Timeline Estimated Cost

Obtainingapprovals andpermits

Š Mining Plan Permit. We submitted to the MEMour application for the mining plan permit for theToromocho Project on March 12, 2012 and havereceived feedback from the MEM in June 2012.The feedback from the MEM requested us toprovide additional information and make furtherclarification on the location, scope and design ofthe main facilities, including the open pit, thewaste dumps, the ore concentrator, the new townand the tailing dam. We do not believe theserequests to be major issues. In preparation torespond to the MEM’s requests, we have preparedadditional maps, completed additional geologicaland hydrological studies and gathered additionaldesign details of the main facilities. We do notbelieve there is any difficulty in filing a responseto address the MEM’s requests. We believe thatthe time and effort we spent to respond to thefeedback is reasonable judging by the industrystandard in Peru. We filed a revised mining planwith a valid term of seven years in January 2013in response to the feedback. We determined to filea mining plan for a shorter term instead of for thefull mine life to expedite the approval process bythe MEM. We plan to commence productionunder the mining plan permit for a shorter termand then apply for the mining plan permitcovering the full mine life. The mining planpermit is required to begin our mining activities atthe Toromocho Project.

Š Mining Operation Certificate. We intend tosubmit the application for the mining operationcertificate after we obtain the mining plan permit.This certificate is required to purchase and useexplosives in our mining activities.

Š Mining PlanPermit. MEMapproval expectedin the first quarterof 2013.

Š ProductionPermit. MEMapproval expectedin the fourthquarter of 2013.

Š We must obtain allof these approvalsand permits beforewe commencecommercialproduction.

N/A

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Activities Development Status Expected Timeline Estimated Cost

Š Production Permit. We intend to submit theapplication for the production permit upon thecompletion of our construction activities at theToromocho Project. The production permit isrequired before we commence production.

Š Water License. We intend to submit theapplication for the license for the use rights forwater to be used in our mining and productionactivities upon the completion of ourconstruction activities, which must becompleted in advance of applying for the waterlicense.

Š Inspection and verification. We expect tofinish the inspection and verification of ourfacilities upon the completion of ourconstruction work, which is a prerequisite ofapplying for the inspection and verification.

Construction ofnew town andresettlement

Š We finished the construction work for a newtown in the third quarter of 2012, for theapproximately 3,200 residents of Morococha tobe resettled, including infrastructure such as thewater delivery and electricity transmissionsystems and a sewage system.

Š The resettlement process began in the fourthquarter of 2012.

Š A series of complementary construction,including access roads, water treatment plantand other out of town infrastructure wascompleted in 2012.

Š Based on our current mining plan, the pit willnot extend to the location of the town ofMorococha until 2021. As a result, thecommencement of commercial production at theToromocho Project is not subject to thecompletion of the resettlement.

Š The resettlement plan is being carried out withparticipation by the affected community and issubject to acceptance by the community.

Š As of September 30, 2012, we had incurredapproximately US$216.5 million of expenses inrelation to the construction of the new town.

Š We intend tosubstantiallycomplete theresettlementprocess andrelocate all theresidents who havesigned theresettlementagreement by thefirst quarter of2013 and furthernegotiate with theremainingresidents in orderto complete theresettlement.

ApproximatelyUS$260million

Pre-productionstripping

Š We plan to start the stripping activities prior tothe commencement of our commercialproduction.

Š The proposed pre-stripping is estimated toexpose eight months worth of ores forproduction.

Š We intend to startpre-productionstripping in thefirst quarter of2013.

ApproximatelyUS$86 million

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Activities Development Status Expected Timeline Estimated Cost

Processing plantsand facilities

Š Our processing facilities will include a copperconcentrator and a molybdenumhydrometallurgical plant.

Š Costs related to mechanical and electricalengineering and earth works will account for themajority of the costs relating to the constructionof the processing facilities.

Š As of September 30, 2012, we had incurredexpenses of approximately US$1,208.1 millionfor the processing plant and infrastructure.

Š Mechanicalconstruction ofconcentrator andmolybdenumhydrometallurgicalplant is expectedto be completed inthe fourth quarterof 2013.

ApproximatelyUS$1,840million plus acontingency ofapproximatelyUS$33 million

Pre-commissioning

Š We expect to start to pre-commission the mainelectrical substation in the second quarter of2013.

Š We expect to start to pre-commission theconcentrator, non-processing facilities and themolybdenum hydrometallurgical plant duringthe third quarter of 2013.

Š We expect tofinish all of thepre-commissioningin the fourthquarter of 2013.

N/A

Commercialproduction

Š We expect tocommencecommercialproduction in thefourth quarter of2013.

N/A

Reach fullproductioncapacity

Š We expect to reachfull productioncapacity in thethird quarter of2014.

N/A

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Set forth below is an estimated timetable for the key milestones of the construction stage of theToromocho Project:

20112010

1Q 2Q 3Q 4Q4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q

2012 2013 2014

Permit and Approval

Obtaining Construction Permit

EIA approved by Mining Council of MEM

Obtaining Mining Plan Permit

Obtaining Production Permit

Pre-production Schedule

Completion of detailed engineering

Completion of new town

Substantial completion of resettlement

Mechanical completion of processing plants – Concentrator and Mo Hydromet

Completion of pre-commissioning

Start pre-production stripping

Start pre-commissioning

Production Schedule

Starting commercial production

Reach full production capacity

Estimated Capital Cost

Our estimated total capital costs consist of mining costs, processing plant and infrastructurecosts, the owner’s cost and contingency. Pursuant to general accounting principles, the estimated costswill not be included in our financial statements until the costs are incurred or provided for. As ofSeptember 30, 2012, we had incurred approximately US$2.0 billion of capital and operatingexpenditure for the development of the Toromocho Project. Going forward, we expect to satisfy ourcapital requirements with our credit facilities, our cash and cash equivalents, and the proceeds fromadditional corporate financing activities. As of September 30, 2012, our cash and cash equivalentsamounted to US$191.0 million, and US$320.0 million of our US$2.0 billion credit facility fromEximbank remained unused. We have also obtained a credit facility of US$83.0 million, which has notbeen utilized until October 2012, from China Development Bank. We made the first drawdown ofUS$30.0 million in October 2012 and the second drawdown of US$53.0 million in November 2012. InDecember 2012, we obtained a credit facility of US$35.0 million from China Development Bank,which was fully drawn down by us in the same month. Furthermore, we are in the process ofnegotiating additional credit facilities with an aggregate amount of US$239.0 million with ChinaDevelopment Bank and additional credit facilities with an aggregate amount of US$419.0 million withEximbank. Both China Development Bank and Eximbank have issued memorandum to indicate theirpresent commitment to provide the financing. We also plan to allocate

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certain portion of the proceeds from our proposed corporate financing activities to fund the futurecapital requirements of the Toromocho Project including commissioning the production facilities andramping up production capacity. Furthermore, we plan to allocate certain portion of the proceeds fromour proposed corporate financing activities for our working capital, part of which will be used as theworking capital in connection with the Toromocho Project. Lastly, a portion of the remaining capitalexpenditure required for the Project does not need to be made before we commence commercialproduction, and we intend to use operating cash flows from our production to fund this portion of theexpenditure. The total capital cost estimation as disclosed in the Competent Person’s Report includedin Appendix IV to this document was based on the detailed engineering study completed in the secondquarter of 2012. As of September 30, 2012, we have already contracted substantially all of the keyequipment and services.

Set forth below is our estimated total capital costs based on the Competent Person’s Report andthe costs incurred as of September 30, 2012:

CompetentPerson’sReport

Costs incurredas of

September 30,2012(1)

(US$ in millions)

Mining . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 297.4 72.9Process Plant and Infrastructure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,839.5 1,208.1Owner’s Cost(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 626.2 400.7Additional Projects(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 622.6 355.4

Subtotal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,385.6 2,037.1

ContingencyMining . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.1 —Process and Infrastructure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32.4 —Owner’s Cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22.0 —

Subtotal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60.5 —Working Capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56.0 —

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,502.1 2,037.1

Notes:(1) The costs incurred were accounted as cash used in operating activities and cash used in investing activities.(2) Owner’s cost consists of costs associated with force majeure events, project insurance, social outreach, contract services, licenses and

royalties, financial costs, taxes, exchange rate fluctuations, commissioning and pre-operational costs and acquisitions of property.(3) Additional projects consist of the costs incurred in relation to the lime processing plant, Kingsmill Tunnel water treatment plant,

double circuit overhead transmission line, central highway relocation, investment in the Callao port, acquisition of certain miningconcessions from Pan American Silver with the relevant financing interest, new town construction and resettlement.

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Mining Costs

Our estimated capital costs for mining include the cost of mine equipment and the cost ofpre-production development, pre-production stripping, as well as contingencies. Set forth below is theestimated capital costs for mining at the Toromocho Project:

(US$ in millions)

Pre-Production Stripping . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85.7Mining Equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 176.8Support Mining Equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34.9Contingency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.1

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 303.5

Our pre-production development costs include costs for the construction of the crusher accessroad, pit initial access road and roads for alluvium/tails removal and the costs for alluvium/tailsremoval. Our pre-production stripping costs include the costs for stripping of ores before wecommence production. We plan to expose eight months worth of ores for our production activities.

Our mining equipment includes blast hole drills, cable shovels, haul trucks, track dozers, wheeldozers, motor graders, water trucks and wheel loaders. Our mine equipment has been specificallyselected to meet the production requirements of the Toromocho Project. The major mining equipmentselected by us is of the highest worldwide quality, including Caterpillar mining equipment, Bucyruselectrical shovels (recently acquired by Caterpillar), LeTourneau wheel loaders, and Atlas Copco drills.The size and type of the mining equipment is consistent with the planned production scale of theToromocho Project. For example, electric cable shovels, with 35.2 cubic-meter dippers are paired with345-tonne haul trucks to meet the total annual production target of 95 to 99 million tonnes per year.

Process Plant and Infrastructure Costs

Our capital costs for process plant and infrastructure consist primarily of costs to construct theprocessing facility, including an ore crushing plant, a low grade stockpile, a grinding circuit and aconcentrate thickener. Costs related to mechanical and electrical engineering and earth workingaccount for the majority of the costs relating to the construction of the processing facility.

Owner’s Costs

The owner’s costs include costs associated with force majeure events, project insurance, socialoutreach, contract services, licenses and royalties, financial costs, taxes, exchange rate fluctuations,commissioning and pre-operational costs, as well as acquisition of property.

Additional Projects

Our estimated costs for additional projects include costs for the relocation of the centralhighway are estimated to be approximately US$70 million, and the costs associated with thedevelopment of a limestone quarry and a lime production plant are estimated to be approximatelyUS$100 million. Estimated costs for additional projects also included the costs associated with the

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development and operation of the Kingsmill Tunnel water treatment plant, the costs for theconstruction of the double circuit overhead transmission line and the costs for acquisition of certainmining concession from Pan American Silver in our estimated capital costs. In addition, to fund theadditional expenditure, we are in the process of negotiating additional credit facilities and theanticipated applicable interest from that loan has been included in our estimation.

Estimated Operating Cost

Our estimated operating cash costs for the Toromocho Project consist of mine operating costs,operating costs for the concentrator, molybdenum hydrometallurgical plant and infrastructure, generaland administrative costs and our royalty payments to Centromin. Our mine operating costs include allthe supplies, parts and labor costs associated with the mine supervision, operation and equipmentmaintenance. According to the estimation in the Competent Person’s Report, which was based on the2007 feasibility study with subsequent adjustments, the estimated average annual operating cash costsfor the Toromocho Project is approximately US$444.0 million from 2013 to 2049 and approximatelyUS$16.4 billion over that time period in total.

Set forth below is a breakdown of our estimated average annual operating cash costs for theToromocho Project from 2013 to 2049. See “Appendix IV — Competent Person’s Report” in thisdocument for further details.

Average Annual Operating Cash Costs from 2013 to 2049

Per unit cost (US$) Cash cost (US$ in thousands)

Mining ores and waste . . . . . . . . . . . . . 1.66 (per tonne of material moved) 118,942Reclaim from stockpile . . . . . . . . . . . . 0.89(1) (per tonne of stockpile moved) 4,516Processing (milling) . . . . . . . . . . . . . . . 5.28 (per tonne of ores milled) 219,817Molybdenum plant . . . . . . . . . . . . . . . . 3,612 (per tonne of moly oxide produced) 18,535Processing infrastructure . . . . . . . . . . . 0.06 (per tonne of ores milled) 2,498Processing G&A . . . . . . . . . . . . . . . . . . 1.42 (per tonne of ores milled) 59,117Centromin royalty . . . . . . . . . . . . . . . . . — 20,568

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . 443,993

(1) Not applicable from 2013 to 2044

Based on the current estimation as detailed in “Appendix IV — Competent Person’s Report,”income generated by the Toromocho Project will exceed the operating costs starting from January2014, which is the first full year of production.

Production Process and Facilities

Mining Process. The majority of copper mineralization at the Toromocho Project is in the formof chalcopyrite and chalcocite. Molybdenum and silver are also present in the mineralization. Weexpect the Toromocho Project to deliver approximately 117,200 tonnes per day, or 42,778 kilotonnesper year, of sulfide flotation ores to the primary crusher and generally move approximately 260,274tonnes per day, or 95,000 kilotonnes per year, of total material to assure sustained availability of themill ores.

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The Toromocho Project will be mined using conventional hard rock open pit methods usingdrilling, blasting, loading and hauling techniques. The extracted ores and waste will be loaded to rigidframe trucks, hauled from the open pit and processed by the primary crusher and process plant, whichincludes crushing, grinding and flotation. Auxiliary equipment, such as track dozers, wheel dozers,graders, water trucks, front-end loaders, a secondary rock drill and backhoe excavator will be deployedto maintain good working order of the Toromocho Project so that the drilling, loading, and haulingequipment can work safely and efficiently.

We also plan to employ a molybdenum processing technique that applies a hydrometallurgical/pressure oxidation circuit for molybdenum recovery. Our hydrometallurgical/pressure oxidation plantis scheduled for completion and pre-commissioning in the third quarter of 2013.

The following chart illustrates the major steps of the production process at the ToromochoProject:

U'flow

O'flow

Scav Conc

Scav TailScav Conc

Scav Tail

BallMilling

Hydrocylcones

Bulk RougherFlotation

PrimaryCrusher

Bulk RougherFlotation Tailings

Tailings Disposal

TailingsThickeners

SAGMilling Cleaning

Bulk Concentrate

Copper FlotationScavenger Tailings

Cu FlotationScavenging

Cu FlotationCleaning

Cu ConcentrateRegrind

FlotationMo Rougher

Load-out to PortCu Concentrate

Cu ConcentrateThickening

Cu ConcentrateFiltering

Mo FlotationScavengerTailings

Mo FlotationgnignevacS

Mo FlotationgninaelC

Mo ConcentrateRegrind

Mo CleanerFlotation

to Hydromet PlantMo Concentrate

ThickeningMo Concentrate

Š Mining. Explosives are used to allow ores to be mined. Large tonnage, heavy dutytrucks haul the ores to the crushing plant for crushing, to stockpiles for processing at alater date or to waste dumps for disposal.

Š Crushing. The ores are fed to a crusher where the ores are crushed at the required rateand at a size suitable for grinding in the SAG mill.

Š Grinding. Grinding is accomplished by using a SAG mill in a closed circuit with ascreen and pebble crusher, followed by closed-circuit ball milling with cyclone

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classification. The purpose of the grinding process is to reduce the size of the oreparticles which allows liberation and recovery of the sulfide minerals through flotationtechniques.

Š Flotation. Flotation processing operations consist of a number of flotation cells.Flotation cells normally have three associated slurry streams. These streams are calledfeed, concentrate, and tailings. The feed stream enters the cell and is treated to recoverthe valuable minerals. The concentrate stream is where the valuable minerals arecollected. The tailings stream contains what is left after the valuable minerals arecollected and recovered. Reagents are added to facilitate the process whereby theminerals “attach” to the bubbles produced in the flotation cell, and carry-over the celllip as a concentrate. The material that does not float is the tailing.

Š Tailings Plant. The tailing from the flotation process enter into four high-rate, pastethickeners to recover water and to produce a “paste” consistency of the solids fordisposal into a tailings storage facility.

Š Molybdenum Hydrometallurgical Plant. Hydrometallurgical techniques will be used torecover molybdenum from a low-grade concentrate to higher value added product.Pressure oxidation, following by solvent extraction and purification steps, will producea high grade molybdenum trioxide product. In addition, this plant may recover copperthat enters this plant through solvent extraction and electro winning and produce coppercathode.

Production Facilities. The main production facilities for the Toromocho Project include theopen pit, an ore crushing plant, a low grade stockpile, a grinding circuit, a concentrate thickener, aconcentrator, a waste dump, a tailing dam and a six km overland conveyor. Our processing facilitiesare designed to be environmental friendly and have a designed ore processing rate of 117,200 tonnesper day. The crushing facility is equipped with international standard crushers. Our concentrator is ofconventional design and we plan to process approximately 43.2 million tonnes of ore per annumcommencing in 2015 and to produce up to approximately 865,600 tonnes of copper concentrates(containing 9.62 million ounces of silver as metal credit in copper concentrates) and 9,300 tonnes ofmolybdenum in the form of molybdenum oxide per annum. The crushing, grinding, stockpiling, SAGmill grinding, ball mill grinding, classification, flotation, dewatering, filtration, and tailings disposalare comprehensively planned and standard for the industry. The chosen tailings deposition system isbeing designed by Golder Associates. The system envisions the production of 55% solid tailings at theconcentrator for transport to five “new generation” paste thickeners at the tailings impoundment. Thepaste thickeners will thicken to a slurry in excess of 69% solidity for deposition in thin layers on thetailings impoundment by spigotting on the periphery. In addition, we are developing our own limestonequarry and lime production plant to be used in the flotation and recovery of our ore reserves. We havesubmitted environmental impact assessment for lime quarry and lime production plant in November2012 and expect to complete the limestone quarry and lime production plant by the third quarter of2013.

There are also zones of the Toromocho Project that have elevated arsenic grades in the form ofthe mineral enargite (Cu3AsS4). In order to assure that the concentrates produced are marketable, high-

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grade arsenic material will not be sent to the plant but will be stockpiled. This material will be storedpermanently and not processed, although process options may exist for this material in the future.According to the Competent Person’s Report, the copper concentrates we will produce are expected tocontain a high level of zinc. The high zinc issue is to be handled by blending on each of the productionphases in the pit to minimize the amount of activated and mechanically locked sphalerite that will carryinto the copper concentrates.

Suppliers and Contractors

Our suppliers include suppliers for equipment, ancillary materials and infrastructure services,such as ABB Switzerland Ltd, Aker Solutions Inc. and FLSmidth Minerals Inc. In 2009, 2010, 2011and the nine months ended September 30, 2012, our five largest suppliers accounted for approximately74.4%, 55.0%, 34.6% and 34.0%, respectively, of our total purchases, while the largest supplieraccounted for 20.1%, 12.9%, 9.1% and 9.8%, respectively, of our total purchases for the same periods.During the Track Record Period, all of our suppliers and contractors were independent third parties,except for China Great Wall as disclosed in the section entitled “Connected Transactions.”

In order to secure the long-term supply of infrastructure and security services for theToromocho Project, we have entered into long-term contracts with various suppliers, such as EdegelS.A.A., Ferrocarril Central Andino S.A., Cormin Callao S.A.C. and J&V Resguardo S.A.C. See “OurBusiness — Our Exploration and Development Operations — The Toromocho Project —Infrastructure” for further details. The principle terms of these contracts include the services to besupplied, pricing, currency and payment.

In line with the industry practice, we have outsourced a substantial portion of our explorationand mine construction activities to reputable third-party contractors such as, Aker Solutions, now partof Jacobs Engineering Group, one of the world’s largest and most diverse providers of technical,professional and construction services. In 2009, we entered into an EPCM services supply agreementwith Aker Solutions. Under this agreement, Aker Solutions shall complete the detailed design, manageprocurement and transportation of the necessary materials and equipment and manage the construction,installation, pre-commissioning and support of commissioning and start-up of the equipment and thefacilities for the Toromocho Project. Our principal rights under the agreement include, among otherthings, assignment of the agreement at our election, termination of the agreement with or without causeby us, unencumbered inspection rights and discretionary rights to dismiss employees of Aker Solutionsor any subcontractors. We are required to pay Aker Solutions a base fee and disbursements for theEPCM work. We received a guarantee from Aker P&C US Inc. for the performance and paymentobligations of Aker Solutions under the agreement. Our Directors believe that these outsourcingarrangements, if managed properly, can lower our operational costs and reduce our capitalexpenditures for equipment and machinery than if we undertook the same work or made the samepurchases ourselves. See “Risk Factors — Risks Relating to Our Business — We face risks from ourreliance on third-party contractors.”

We require third-party contractors to carry out their work and keep proper documentation inaccordance with our quality standards and production safety requirements. In particular, we maintain

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quality supervision rights over their work and our user department and contract department areresponsible for conducting such supervision. We require the contractors to maintain complete andaccurate records for our inspection. We may reject any defective work at any time it is discovered. Inaddition, we require the contractors to provide monthly progress reports. Moreover, we review andapprove the contractors’ implementation procedures and our representatives monitor their practices onthe construction site to ensure compliance with the applicable laws relating to environment protection,health and safety. Furthermore, we follow established internal procedures to ensure that the contractorshave fulfilled their regulatory and contractual obligations before we approve the payment to thecontractors.

We carry insurance that covers all of our third-party contractors and their employees for legalliability for or arising out of, among others, personal injury and property damage in connection withthe Toromocho Project. In addition, we require third-party contractors to carry additional insurancepolicies, such as complementary risk work insurance policy, that cover their employees againstpersonal injury or death. We believe that our policy regarding insurance coverage of the employees ofthird-party contractors is in line with the industry practice.

Sales

We expect to commence commercial production at the Toromocho Project in the fourth quarterof 2013 and have not engaged any third-party distributors to sell our products.

Offtake Agreement with Trafigura

On August 28, 2012, we entered into a legally binding offtake agreement with ConsorcioMinero S.A. (“Cormin”), a subsidiary of Trafigura Beheer B.V., pursuant to which we are obligated tosell and Cormin is obligated to buy 25% of the Toromocho Project’s annual production of copperconcentrates for a period of five years from the starting date of production at the Toromocho Project.This five year term will automatically continue for another five years thereafter based on terms in theofftake agreement, subject to any amendment agreed between the parties during the third quarter of thefifth year from the starting date of production to reflect prevailing market terms. If the Company is notlisted at the time of the first shipment under the offtake agreement, the percentage of the annualproduction that we agree to sell under the offtake agreement will be reduced from 25% to 15%.

Under the offtake agreement, the price for each lot of copper concentrates that we sell toCormin during the first five years will be calculated through a mechanism set out in the agreement, inaccordance with normal industry practice for the supply of copper concentrates, as a percentage of anindependent benchmark price that reflects prevailing rates. The percentage applied is set under theagreement in accordance with the metal content of the concentrates. The benchmark price is averagedover a period declared by the buyer in accordance with the agreement. The price is then adjusted for

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the treatment charge and refining charge, price participation (if any) and certain penalties for impuritiesand moisture, if applicable, in each case in accordance with the agreement. Payments will be made tous in U.S. dollars in several installments after we have delivered the products secured by a stand-byletter of credit. Please refer to the section headed “Industry Overview — Copper Pricing — CopperConcentrate Contracts and Pricing” in this document for an overview of the industry standard forpricing copper concentrates.

Certain operational details, namely the first annual shipping schedule and detailed provisionsfor the loading of shipments will be negotiated and settled closer to the start of production at theToromocho Project. Either party may terminate the agreement on a default by the other party(including a breach of a material term of the agreement and certain insolvency related events) or ifthere is a long-term force majeure event affecting the other party.

Offtake Agreement with Hongfan

On November 29, 2012 we entered into a legally binding offtake agreement with HongfanInternational Limited (“Hongfan International”), pursuant to which we are obligated to sell andHongfan International is obligated to buy 10% of the annual production of copper concentrates of theToromocho Project for a period of five years from the starting date of production at the ToromochoProject. This five year term will automatically continue for another five years thereafter based on termsin the offtake agreement subject to any amendment agreed between the parties during the third quarterof the fifth year from the starting date of production to reflect prevailing market terms. If the Companyis not listed at the time of the first shipment under the offtake agreement, the parties each have theoption to renegotiate any of the terms of the offtake agreement and if agreement cannot be reached theofftake agreement will terminate.

Under this offtake agreement, the price for each lot of copper concentrates that we sell toHongfan International will be calculated through a mechanism set out in the agreement, in accordancewith normal industry practice for the supply of copper concentrates, as a percentage of an independentbenchmark price that reflects prevailing rates. The percentage applied is set under the agreement inaccordance with the metal content of the concentrates. The benchmark price is averaged over a periodspecified in the agreement. The price is then adjusted for the treatment charge and refining charge,price participation (if any) and certain penalties for impurities and moisture, if applicable, in each casein accordance with the agreement. Payments will be made to us in U.S. dollars in several installmentsafter we have delivered the products, by a irrevocable letter of credit and telegraphic transfer. Pleaserefer to the section headed “Industry Overview — Copper Pricing — Copper Concentrate Contractsand Pricing” in this document for an overview of the industry standard for pricing copper concentrates.

Certain operational details, namely the first annual shipping schedule and detailed provisionsfor the loading of shipments will be negotiated and settled closer to the start of production at theToromocho Project. The Company may terminate the agreement if the buyer fails to make a paymentunder the agreement or certain insolvency related events occur in relation to the buyer.

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Offtake Agreement with Tongling

On December 3, 2012 we entered into a legally binding offtake agreement with TonglingNonferrous Metals Group Co., Ltd. (“Tongling Group”), pursuant to which we are obligated to selland Tongling Group is obligated to buy 15% of the annual production of copper concentrates of theToromocho Project for a period of five years from the starting date of production at the ToromochoProject. This term will only be extended in limited circumstances. If the Company is not listed at thetime of the first shipment under the offtake agreement, the parties each have the option to renegotiateany of the terms of the offtake agreement and if agreement cannot be reached the offtake agreementwill terminate.

Under this offtake agreement, the price for each lot of copper concentrates that we sell toTongling Group will be calculated through a mechanism set out in the agreement, in accordance withnormal industry practice for the supply of copper concentrates, as a percentage of an independentbenchmark price that reflects prevailing rates. The percentage applied is set under the agreement inaccordance with the metal content of the concentrates. The benchmark price is averaged over a periodspecified in the agreement. The price is then adjusted for the treatment charge and refining charge,price participation (if any) and certain penalties for impurities and moisture, if applicable, in each casein accordance with the agreement. Payments will be made to us in U.S. dollars in several installmentsafter we have delivered the products, by irrevocable letter of credit and telegraphic transfer. Pleaserefer to the section headed “Industry Overview — Copper Pricing — Copper Concentrate Contractsand Pricing” in this document for an overview of the industry standard for pricing copper concentrates.

Certain operational details, namely the first annual shipping schedule and detailed proceduresfor weighing, sampling and moisture determination of concentrates for the second and subsequentyears of the term of the agreement will be negotiated during the first year of the agreement. Eitherparty may terminate the agreement on a default by the other party (including a failure to make apayment when due and a breach of a material term of the agreement) and the Company may terminatethe agreement if certain insolvency related events occur in relation to the buyer.

Offtake Agreement with LDC MS

On January 10, 2013, we entered into a legally binding offtake agreement with Louis DreyfusCommodities Metals SA (“LDC MS”), a member of the Louis Dreyfus Commodities group, pursuantto which we are obligated to sell and LDC MS is obligated to buy 10% of the annual production(excluding any project expansion) of copper concentrates of the Toromocho Project for a period of fiveyears from the starting date of production at the Toromocho Project. If the Company is not listed at orhas not been previously listed by the time of the first shipment under the offtake agreement, the partieseach have the option to renegotiate any of the terms of the offtake agreement and if agreement cannotbe reached the offtake agreement will terminate.

Under the offtake agreement, the price for each lot of copper concentrates that we sell to LDCMS will be calculated through a mechanism set out in the agreement, in accordance with normalindustry practice for the supply of copper concentrates, as a percentage of an independent benchmarkprice that reflects prevailing rates. The percentage applied is set under the agreement in accordance

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with the metal content of the concentrates. The benchmark price is averaged over a period declared bythe buyer in accordance with the agreement. The price is then adjusted for the treatment charge andrefining charge, price participation (if any) and certain penalties for impurities and moisture, ifapplicable, in each case in accordance with the agreement. Payments will be made to us in U.S. dollarsin several installments after we have delivered the products, by an irrevocable letter of credit andtelegraphic transfer. Please refer to the section headed “Industry Overview — Copper Pricing —Copper Concentrate Contracts and Pricing” in this document for an overview of the industry standardfor pricing copper concentrates.

Certain operational details, namely the first annual shipping schedule will be negotiated andsettled closer to the start of production at the Toromocho Project and certain detailed procedures forweighing, sampling and moisture determination of concentrates for the second and subsequent years ofthe term of the agreement will be negotiated during the first year of the agreement. Either party mayterminate the agreement on a default by the other party (including a breach of a material term of theagreement and certain insolvency related events).

COMPETITION

China is the largest copper consuming country in the world and we intend to sell a majority ofthe copper we produce into the PRC. Some of the PRC copper suppliers may have lower transportationcosts than we do due to their location and other various factors, such as lower expenditure on safetyand regulatory compliance. However, we believe that we will enjoy competitive production costs as aresult of our large-scale production and benefit from our superior brand name, while copper mines inthe PRC are relatively small in scale and scattered, with lower ore grades on average. More broadly,we consider Inmet, Glencore, Rio Tinto and First Quantum as main international competitorssupplying the PRC copper market. We believe competition in the global copper industry is based onmany factors, including, among others, price, production capacity, mineral quality and characteristics,transportation capacity and costs, blending capability and brand name. We believe our strong brandrecognition and relationship with Chinalco will allow us to compete successfully in both the PRC andinternational copper markets.

Some of our international competitors may have greater copper production capacity as well asgreater financial, marketing, distribution and other resources than we do. As a result, they may be ableto devote greater resources to the promotion, development and sale of their products than we can. Inaddition, we may also face competition from other companies that have access to the same end marketsas we do and for mining equipment and related services and in the recruitment and retention ofqualified employees and consultants.

CORPORATE SOCIAL RESPONSIBILITY

Compliance with Environmental Matters and Regulations

The MEM regulates environmental affairs in the mining sector of Peru, which includesestablishing an environmental protection policy and setting maximum allowable levels for effluents,signing environmental administrative stability agreements, overseeing the impact of mining operationsand imposing administrative sanctions. Within the MEM, the DGAAM is responsible for theadministration of environmental regulations relating to mining.

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Pursuant to Supreme Decree 38-98-EM approved on November 30, 1998, titleholders of minesare required to obtain an environmental permit from the Directorate for Environmental Affairs in orderto carry out exploration and development activities. Mining companies are responsible for controllingemissions, effluent discharges and disposal of all by-products resulting from their operations, andsubstances that may impose any hazard, either due to excessive concentrations or prolonged exposure.

We operate a water treatment facility at the Kingsmill Tunnel which has capacity to processapproximately 17 million cubic meter of water per annum. We also have permanent waste disposalfacilities to accommodate domestic, recyclable and hazardous waste. The management of these wastesconforms to project, municipal and regional regulations and policies. Roll-off containers are distributedthroughout the Toromocho Project areas for the discipline contractors to deposit their respective typesof waste. In addition, we have also equipped the area with portable toilets and hand wash stations.

In 2009, 2010, 2011 and the nine months ended September 30, 2012, our costs of compliancewith applicable environmental rules and regulations were approximately US$43.9 million, US$9.0million, US$9.6 million and US$11.7 million, respectively. We expect to spend additional US$18.0million in compliance with our environmental obligations in the development and operation of theToromocho Project.

As advised by Rebaza, Alcazar & De Las Casas Abogados Financieros, our Peruvian legaladvisor, as of the date of this document, we are in compliance with the relevant laws and regulationson environmental protection in all material aspects, and our pre-production activities have not causedany pollution that might have a material effect on our operation, financial condition and reputation.

Health and Safety Policy

We are committed to a target of zero accidents in all of our activities and have implementedindustry best practices in accident prevention. In particular, in response to the high altitude of the siteof the Toromocho Project, we have established a medical clinic and team to provide emergencytreatment to our employees. We plan to continue to utilize appropriate and recognized managementsystems, including documentation of all relevant accident prevention matters and compliance auditsconducted by ourselves or other third parties, if necessary. We will also continue to provide trainingand appropriate and sufficient resources and materials for employees and contractors to work safelyand effectively. As advised by Rebaza, Alcazar & De Las Casas Abogados Financieros, our Peruvianlegal advisor, as of the date of this document, we are in compliance with the relevant laws andregulations on labor and workplace safety in all material aspects.

Community Relations and Resettlement Plan

The town of Morococha is a small Andean mining camp located within the boundary of theultimate open pit at the foot of the mountain where mining activities will be conducted. Based on ourcurrent mining plan, our mining operation will not affect the town of Morococha until seven years afterwe commence production. Currently, there are approximately 3,200 residents in the town. We havedeveloped a resettlement plan that meets relevant regulatory requirements. We intend to substantially

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complete the resettlement process and relocate all the residents who have signed the resettlementagreement by the first quarter of 2013 and further negotiate with the remaining residents in order tocomplete the resettlement. However, if in any event we fail to complete the resettlement by the fourthquarter of 2014, we will have to take safety measures to protect the residents in the vicinity, such asconducting temporary evacuations. The resettlement plan was formulated with participation by theaffected residents and was subject to their acceptance. In particular, we continuously consulted withthe affected residents by way of participative workshops and the formation of the Morococha HousingAssociation on the issues. We consulted them with respect to various aspects of the resettlement plan,such as the location and design of the new town, and the design of the houses and public buildings. Wealso built a model house that served as a basis to obtain ideas from the affected residents on theelements necessary to obtain the final design of a typical house at the new town. We further conducteda survey poll regarding the relocation site and approximately 85% of the residents voted for the currentsite where we are constructing the new town. We have been negotiating agreements with the affectedresidents individually, and, subject to their execution of the agreements, we will provide the housing atthe new town free of charge, together with monetary compensation. In 2006, 92% of householdspresent in the town of Morococha have signed agreements. In December 2008, we went through legalprocedures and acquired from another local community with approximately 50 residents a parcel ofland named “Lote Hacienda Pucará 1” of 161,551 square meters as the site of the new town andanother parcel of land named “Lote Hacienda Pucará 2” of 20,040 square meters for the construction ofcomplementary infrastructure for the new town. See “— Properties” for further details. We finished theconstruction of the new town in the third quarter of 2012, which includes over 1,000 modern housesand public buildings, including churches, schools, parks and playgrounds. The new town is alsosupported by infrastructure including water supply, sewage system and electricity supply, which is asignificant improvement of the infrastructure in the old town. To construct the new town, we obtaineda preliminary relief from a court that is considered a valid construction permit for the new town,various permits for the use of water for the construction of the new town in 2010, and theenvironmental impact statement for a power line and the license for the use of water for the new townin 2012. We will apply for the authorization for a potable water plant at the new town and a favorabletechnical opinion with respect to the disposal of waste water from the new town. As of the date of thisdocument, we are not aware of any material disputes that have been brought against us by the residentsaffected by the resettlement plan.

In order to promote community relationships, we have also implemented various education,health and career development programs for the residents in the area surrounding the ToromochoProject. For example, we have sponsored the infrastructure improvements for 11 schools, provided freemeals and physical check-ups and held free career development workshops and courses. As weconsider good community relationships to be an essential part of our long-term success, we plan tocontinue our efforts in maintaining and promoting our community relationships.

Based on the estimation in the Competent Person’s Report, our cost estimates for theresettlement plan are approximately US$260 million.

As the Toromocho Project is located in a traditional mining district, our operations at theToromocho Project have not resulted in any disturbance to the indigenous community.

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INSURANCE

We have taken out insurance for risks mainly relating to certain contract work, third partyliability, comprehensive political violence, and physical damage to marine cargo. We maintain miningproperty insurance for all of our mining assets wherever located, property insurance on our officepremises and liability insurance for our Directors and officers. We also maintain insurance against thedelays in the development of the Toromocho Project. Under our current insurance policy, we areentitled to up to US$225 million of our actual loss of fixed costs incurred in 18 months after January 9,2014 if the Toromocho Project fails to commence commercial operation on January 9, 2014 or a laterdate agreed by insurers as a result of physical loss or damage indemnifiable to the Toromocho Project.

We maintain, and intend to continue to maintain, insurance within ranges of coverageconsistent with industry practice. We will continue to review and assess our risk portfolio and makenecessary and appropriate adjustments to our insurance practice. Please see “Risk Factors — RisksRelating to Our Business — We do not insure against all risks to which we may be subject and theinsurance coverage for risks against which we are insured may prove inadequate.”

INTELLECTUAL PROPERTY

We do not currently own any registered patents, trademarks or other intellectual property rights.

We are currently licensed to use six trademarks, each from Chinalco. Three of the licensedtrademarks are registered in Hong Kong and two of the licensed trademarks are registered in the PRC.An application for the registration of the remaining licensed trademark has been made in Hong Kong.Details of the licensed trademarks are set out in “Appendix VI — Statutory and General Information— Further Information about the Business — Trademarks.”

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PROPERTIES

As at the Latest Practicable Date, our Group had 387 property interests in Peru. Most of thesewill be used for the purposes of the resettlement of the town of Morococha, and 15 property interestscomprising superficial land are being or will be used to carry out the mining and production activitiesof the Toromocho Project, and their gross areas range from approximately 7.24 square meters to 1,192square meters for resettlement purposes and approximately 99 square meters to 2,598,444 squaremeters for mining and production purposes. Details of the material superficial land use rights that weown are set out below.

Description Use

Approximatearea (square

meters)Restrictions

on use EncumbrancesEnvironmental

issuesLitigation,

breaches, defects

Future plansfor construction, renovation,

improvement ordevelopment

Tunshuruco To support themining activities

1,288,990 — A lawsuit filed byComunidadCampesina deYauli against PeruCopper S.A. isregistered.

— There is a pendingclaim which wasinitiated byComunidadCampesina deYauli forannulment of thetransfer contract ofthe property

Construction of theconcentrator plant, tailingsponds and quarry dike

Lote HaciendaPucará 1

Surface land ofthe new town ofMorococha

161,551 — — — — Site of the new town ofMorococha

Lote HaciendaPucará 2

Surface land ofthe new town ofMorococha

20,040 — — — — Construction ofcomplementary infrastructurefor the new town ofMorococha

Lote ManuelMontero

To support theminingactivities

112 — — — — Gate to Kingsmill Tunnelwater treatment plant

Sub lote 2A Surface land ofmining rights

2,598,444 — MCP grantedCompañía MineraArgentum the use,usufruct andeasement of accessand transit over theproperty.

— — Construction for futuremining operations (open pit)

Sub lote 2B Surface land ofmining rights

2,507,834 — MCP grantedCompañía MineraArgentum the use,usufruct andeasement of accessand transit over theproperty.

— — Construction for futuremining operations (open pit)

Lote I Warehouse 82,134 — — — — Warehouse for the mineconstruction stage

Área Remediada-Ex LagunaMorococha

For futureminingoperations

39,171 — — — — Construction for futuremining operations (open pit)

CampamentoMorocochaAntigua

For futureminingoperations

1,584 — — — — Construction for futuremining operations (expansionof the open pit)

CampamentoMaestranza

For futureminingoperations

99 — — — — Construction for futuremining operations (expansionof the open pit)

CampamentoDolores

For futureminingoperations

302 — — — — Gate to the mine

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Description Use

Approximatearea (square

meters)Restrictions

on use EncumbrancesEnvironmental

issuesLitigation,

breaches, defects

Future plansfor construction, renovation,

improvement ordevelopment

Campamento VistaAlegre

For futureminingoperations

740 — — — — Gate to the mine

CampamentoCajoncillo

For futureminingoperations

1,840 — — — Currently there is ajudicial claimwhich was initiatedby CompañíaMinera CasapalcaS.A against MCPfor the ownershipof the land. Also,MCP initiated acounterclaimagainst CompañíaMinera LondresS.A.C. to vindicatethe land.

Construction of south westwaste dump

Real propertylocated at KM150of the PeruvianCentral Highway,in the MorocochaDistrict

Overpass to thenew town ofMorococha

2,227 There is aright of wayin favor ofElectrocentroS.A. for5.52 Ha.And 2.73Ha.

— — — Overpass to the new town ofMorococha

Lote 1 — “BombaDe Agua”

Use for theinstallment of thewater pipe to theconcentrator plant

10,000 — — — — The water pipe to theconcentrator plant is in theprocess of being installed

Lote 2 — “Pipeline” Use for theinstallment of thewater pipe to theconcentrator plant

390,000 — — — — The water pipe to theconcentrator plant is in theprocess of being installed

As at the Latest Practicable Date, our Group was leasing 17 property interests in Peru. OurGroup’s leased property interests are primarily used for offices and residential purposes. Their grossareas range from approximately 175 square meters to 1,562 square meters for office properties and sixsquare meters to 375 square meters for residential properties. One leased property interest with a grossarea of approximately 1,562 square meters is used as an office, one leased property interest with agross area of 7,949 square meters is used to carry on the mining and production activities and oneleased property interest with a gross area of approximately 5,002 square meters is used for theconstruction of a high tension power line to provide electricity to the Kingsmill water treatment plant.Details of the material leased property interests of the Company are set out below.

Description Use

Approximatearea

(squaremeters) Monthly rent

Restrictionson Use

Leaseexpiry date Encumbrances

Environmentalissues

Litigation,breaches,defects

Future plansfor

construction,renovation,

improvement ordevelopment

Lease withFerrovias CentralAndina S.A.

Water pipelinefor the miningoperations

7,949 US$10,000 tobe increasedannuallyfollowing theNew YorkConsumerPrice Index

— September 1,2017

— — — —

Lease withInversionesGranadero S.A.located in SantoToribio Av.N°121-145-151,district of SanIsidro, provinceof Lima

Office 1,562 US$27,448.27plus VAT(increasedannually at3%)

— February 28,2013

— — — —

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Description Use

Approximatearea

(squaremeters)

Monthlyrent

Restrictionson use

Leaseexpiry date Encumbrances

Environmentalissues

Litigation,breaches,defects

Future Plansfor

construction,renovation,

improvement ordevelopment

Lease withComunidadCampesina SanJuan Bautista dePachachaca

Rentedspace is tobe used fortheconstructionof a hightensionpower linethat is toprovideelectricityto theKingsmillwatertreatmentplant

5,002 ApproximatelyUS$4,560 perannum

— September 30,2014

— — — —

Our Group does not hold (directly or indirectly) or develop properties for letting or retention asinvestments, nor does it purchase or develop properties for subsequent sale or for retention asinvestments.

EMPLOYEES

We had a total of 466 full-time employees based in Peru as of September 30, 2012. None of ouremployees are unionized, and we have not entered into any collective bargaining agreements with anyof our employees.

The following table sets forth the number of individuals, directly or indirectly employed in eachof our areas of operations and as a percentage of our total workforce as of September 30, 2012.

As of September 30, 2012

Employees Percentage

(%)

Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49 10.5Mine and plant operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 171 36.7Management and administration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 206 44.2Technicians, engineers, geologists and surveyors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40 8.6

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 466 100%

More than 80% of our employees at the Toromocho Project are Peruvian citizens. In the future,we plan to hire additional employees based on the development progress of the Toromocho Project.

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The majority of our employees are employed under employment contracts which set out fully,among other things, the employee’s responsibilities, remuneration and the grounds for termination ofemployment. Our employees are not covered by any collective bargaining agreement. During the TrackRecord Period, we did not experience any major disputes with our employees and we believe wemaintain good working relationships with our employees. There has never been any interruption to ouroperations as a result of a labor dispute.

During the Track Record Period and as of the Latest Practicable Date, we have complied withthe relevant laws, regulations and requirements in relation to fair labor standards, working conditions,employment contracts and codes of conduct in respect of our employees in Peru in all materialrespects.

Employee Remuneration Policy

Our remuneration policy is designed to attract, retain and motivate highly talented individuals,to ensure the capability of our workforce to carry out our business strategy and to maximizeshareholder wealth creation. Key principles of our remuneration policy are to:

Š Set competitive rewards to attract, retain and motivate highly skilled people;

Š Provide detailed feedback to develop employees’ skills and critically analyzeemployees’ contributions to our Group;

Š Establish short and long-term incentive programs across the organization, including, butnot limited to, the equity incentive plan;

Š Ensure remuneration planning continues to be integrated within our business planningprocess; and

Š Ensure total remuneration levels and performance targets are set at appropriate levels toreflect the competitive market in which we operate, the prevailing economicenvironment and the relevant performance of similar companies.

We maintain benefit schemes for our employees as required by law in Peru and China.Moreover, our Peruvian subsidiaries with more than 20 employees are required to distribute 8% oftheir profits generated in any year among their employees. See “Laws and Regulations relating to theIndustry — Regulatory Matters Regarding Employment and Labor Legislation — Participation incompany’s profits” for additional information.

In addition, we have proposed to adopt an equity incentive plan designed to attract, retain andincentivize senior management and key employees with a view on encouraging the participants tocommit to enhancing value for us and our shareholders, as a whole.

RESEARCH AND DEVELOPMENT

As our Directors believe is typical for a mining company of our size, we currently have limitedinvolvement in any research and development initiatives.

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LEGAL, ARBITRAL AND ADMINISTRATIVE PROCEEDINGS

Construction of the New Town

Morococha

Background. In May 2010, the local government of Morococha ordered us to cease theconstruction work for the new town of Morococha through an administrative resolution on the groundsthat (i) we started the construction work without the proper permit issued by the local government;(ii) the application for the construction permit to the local government was not timely filed; and(iii) the request for the construction permit with the local government had formality defects. OnAugust 12, 2011, we obtained a preliminary relief that explicitly permits us to continue theconstruction activities.

Proceedings. We filed a constitutional revision claim in May 2010 against the localgovernment of Morococha to nullify such resolution on the ground that the resolution violates our rightto due process. In particular, we argued that the resolution was not made through proper administrativeprocedure, does not have adequate basis and the local government of Morococha is not a competentauthority to order us to cease the construction work. On August 12, 2011, we obtained a preliminaryrelief in a separate case against the provincial government of Yauli-La Oroya. The preliminary reliefexplicitly permits us to continue the construction work. On August 31, 2011, the district court ruledagainst us, ruling that the evidence showed that we did not have a construction permit at the time ofsuch order. The district court also determined that the local government was a competent authority toissue the stop order. On September 20, 2011, we appealed the decision on the grounds that (i) thedistrict court failed to adjudicate on each of our claims, (ii) the district court failed to provide anyanalysis on whether the local government was a competent authority to issue the stop order, and (iii)that the competent authority with respect to this matter was instead the provincial government ofYauli-La Oroya, and that the local government of Morococha’s resolution on this matter is invalid. Thecourt of appeals upheld the decision on procedural grounds, arguing that we should have filed ajudicial claim against the administrative action. We appealed to the Supreme Court of Peru onSeptember 29, 2012 arguing that a constitutional revision claim is a proper form of relief.

Potential Impact. We do not believe the pending litigation will impact our production schedulebecause (i) we have obtained a preliminary relief that allows us to continue the construction work and(ii) the completion of the resettlement is not a condition precedent to the commercial production at theToromocho Project.

If we obtain an adverse ruling from the Supreme Court of Peru, the preliminary relief will nolonger be effective and the local government will be able to: (i) impose a fine; (ii) order us to apply fora construction permit that takes retroactive effect; or (iii) vacate the residents and demolish thebuildings that have been constructed without proper construction permit. If the government wishes todemolish the new town that has been completed, it will have to negotiate with the residents to form anew resettlement plan before it can demolish the new town. To the best of our knowledge, the localgovernments in Peru have never ordered residents to vacate a new town or the demolition of a newtown that has been completed. Meanwhile, the claims surrounding our construction permit do notaffect our ownership of the land where we are constructing the new town. Even if we are required tobear the cost of an alternative resettlement plan initiated by the government, we believe that the

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additional costs would be substantially less than the US$260 million we expect to incur in relation toour current resettlement plan. After considering the likelihood and the consequence, we do not believethe government’s ordering us to adopt alternative plan for the new town will have a material impact onour business or financial condition.

Furthermore, if (i) the preliminary relief continues to be effective, which is deemed as a validconstruction permit; or (ii) we obtain a favorable result in any of our claims against the provincialgovernment of Yauli-La Oroya, which requires the provincial government to grant us or recognize ourconstruction permit as valid, the local government of Morococha will not be able to take any action,because the basis of its original resolution will no longer exist.

Assessment on Results. Rebaza, Alcazar & De Las Casas Abogados Financieros, our Peruvianlegal advisor, has advised us that the decision of the district court contains a number of inconsistenciesin the application of laws and that the decision of the district court should be annulled. In particular,our Peruvian legal advisor is of the view that the district court did not address each of the claims raisedby a claimant as required by Peruvian law. Additionally, our Peruvian legal advisor is of the view thatthe claims we raised in the district court would have prevailed had the district court considered each ofthe claims and gone through a proper analysis. However, in view of the adverse decision at the lowercourt, our Peruvian legal advisor considers the contingency of this case is possible.

As we believe that it is likely that this claim will be ultimately resolved in favor of us, we havenot formed any contingency plans in response to this claim.

Yauli-La Oroya

Background. In May 2011, the provincial government of Yauli-La Oroya denied ourconstruction permit in connection with the construction of the new town of Morococha, which is in thejurisdiction of Yauli-La Oroya, through a letter issued by the urban development agency. Theprovincial government confirmed the decision by an administrative resolution on the basis that theregulation that mandates the special administrative procedure for construction permits, under which wewere applying for the permit, had been abrogated (the “First Resolution”). After we challenged theFirst Resolution through a judicial claim in May 2011, the provincial government issued anotheradministrative resolution to confirm the letter that denied our construction permit (the “SecondResolution”) in August 2011.

Proceedings. In 2011, we filed a judicial claim with the district court against the provincialgovernment of Yauli-La Oroya to nullify the First Resolution on the ground that the abrogation of theregulation that mandates the special administrative procedure for construction permit should notretroactively affect an ongoing application process under the original regulation. In September 2011,we also filed a separate judicial claim against the provincial government of Yauli-La Oroya to nullifythe Second Resolution on the same ground as the case against the First Resolution. On August 12,2011, we have obtained a preliminary relief in connection with the First Resolution, which suspendsthe effect of the First Resolution and explicitly allows us to continue the construction work until theclaim is resolved. The court granted the preliminary relief on the grounds that the First Resolutionfailed to satisfy the due process required by the law, and that the First Resolution was not made on

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proper legal grounds or reasoning. In addition, the court agreed that the abrogation of the originalregulation should not retroactively apply to our application process, and after noting that we havecomplied with all the requirements under the original regulation, the court explicitly allowed us tocontinue the construction work and it suspended the effect of the First Resolution. The preliminaryrelief has been upheld by the appellate court and will remain in effect until the court makes a finaldecision in the case. Under Peruvian law, as the two cases are related to the same subject matter, thepreliminary relief is also applicable to the Second Resolution. Currently, both of these judicial claimsare pending at the district court.

Potential Impact. We do not believe the pending litigation will impact our production schedulebecause (i) we have obtained preliminary relief that allows us to continue the construction work and(ii) the completion of the resettlement is not a condition precedent to commercial production at theToromocho Project.

If we obtain a favorable ruling in either of the cases at the district court, the court will mandatethe government to issue a construction permit under the original regulation, unless the same courtsubsequently rules against us on this same subject matter in another case subsequently. Meanwhile,appeal by the provincial government will not render the construction permit invalid.

If the Supreme Court of Peru rules against us in both of the cases, the local government will beable to: (i) impose a fine; (ii) order us to apply for a construction permit that takes retroactive effect; or(iii) vacate the residents and demolish the buildings that have been constructed without a properconstruction permit. If the government wishes to demolish the new town after it has been completed, itwill have to negotiate with the residents to form a new resettlement plan before it can demolish the newtown. To the best of our knowledge, the local governments in Peru have never ordered people residentsto vacate a new town or the demolition of a new town that has been completed. Meanwhile, the claimssurrounding our construction permit do not affect our ownership of the land where we are constructingthe new town. Even if we are required to bear the cost of an alternative resettlement plan initiated bythe government, we believe that the additional costs would be substantially less than the US$260million we expect to incur in relation to our current resettlement plan. After considering the likelihoodand the consequence, we do not believe the government’s alternative plan on the new town will have amaterial impact on our business or financial condition.

If the Supreme Court of Peru rules in favor of us in one case and subsequently rules against usin another case, which we believe is highly unlikely, we will be entitled to file a constitutional claim tovacate the subsequent decision against us.

Assessment on Result. Rebaza, Alcazar & De Las Casas Abogados Financieros, our Peruvianlegal advisor, is of the view that the court will determine both judicial claims in favor of us, and thatthe contingency for both of these cases is remote, primarily because the court has issued a preliminaryrelief that allows us to continue the construction work. In particular, as to the judicial claim against theFirst Resolution, Rebaza, Alcazar & De Las Casas Abogados Financieros is of the view that the courtshould follow its ruling in granting the preliminary relief and rule in favor of us. This is primarilybecause, under Peruvian laws, a court is required to consider the merits of the substantive claim whenconsidering preliminary relief. In general, a court will not grant preliminary relief unless it concludes

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that the claimant has a strong chance to prevail on the substantive issues. In granting the preliminaryrelief, the same court and the same judge has preliminarily concluded that the abrogation of theoriginal regulation should not retroactively apply to our application process, and that we have compliedwith all of the requirements under the original regulation. Additionally, our Peruvian legal advisor is ofthe view that, as to the judicial claim against the Second Resolution, the court should determine thecase consistently with the other case where the preliminary relief was granted and rule in favor of us.This is because (i) the two cases involve the same subject matter, (ii) the two cases are based on thesame dispute and (iii) the two cases were brought before the same court and the same judge. Also, ingranting the preliminary relief, the court has preliminarily ruled in favor of our arguments.

As we are advised by our Peruvian legal advisor that the court will determine both these claimsin favor of us and the contingency from these cases are remote, we have not formed any contingencyplan in response to these claims.

Resolution by the Mining Council

Additional Requirement for Mining Plan Permit

Background. In December 2010, the Mining Council of the MEM issued a resolution toapprove the EIA in connection with the Toromocho Project. However, the resolution also provided thatfurther assessment on the waste materials deposit which is located on a parcel of land namedCajoncillo, should be conducted before the MEM can issue the mining plan permit. The mining planpermit is a prerequisite for our mining activities. The Mining Council of the MEM does not typicallyimpose any additional requirements in relation to an environmental impact assessment as it has in thisinstance. However, Compañía Minera Londres, who has underground mining activities at Cajoncillo,requested the Mining Council of the MEM to impose this requirement on us to ensure our wastematerials deposit does not affect its mining activities. Without further inquiry into the ownershipdispute, the Mining Council of the MEM assumed that Compañía Minera Londres was the rightfulowner of the land and was entitled to conducting mining activities there, and granted its request.

Proceeding. As we are the owner of record of the parcel of land, and we believe we have noobligation to perform an assessment as such is not required by law and bear the additional burden, wefiled a constitutional claim as well as a judicial claim for the nullification of such requirement in July2011, arguing that the Mining Council of the MEM has no authority to impose requirements notprovided by the law and that its administrative resolution violates the constitution as well as the lawsgoverning the Mining Council of the MEM. We have also filed separate suits to claim ownership ofCajoncillo and evict Compañía Minera Londres. See “— Ownership of Land — Cajoncillo-Casapalca”and “— Ownership of Land — Cajoncillo-Londres.” On July 26, 2011, under the constitutional claim,the district court granted a preliminary injunction to suspend the additional requirement imposed by theMining Council of the MEM. The injunction was overturned on appeal on the ground of insufficientevidence. We have also obtained an injunction that prohibits Compañía Minera Londres fromconducting any mining activities at Cajoncillo. Both claims are pending in the district court.

Potential Impact. Previously, we secured a preliminary injunction that suspended the additionalrequirement by the Mining Council of the MEM. However, as the injunction has been overturned, theMEM can request us to conduct the assessment before issuing the mining plan permit. As of the Latest

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Practicable Date, the MEM has not initiated or requested the assessment. Meanwhile, we have engageda third party consultant to conduct the assessment and obtained a favorable conclusion. We can deliverthe assessment report to the MEM if so requested. Based on our communication with the MEM, westill expect to receive the mining plan permit in the first quarter of 2013. We currently do not foreseeany impediment in obtaining the mining plan permit.

Assessment on Result. Rebaza, Alcazar & De Las Casas Abogados Financieros, our Peruvianlegal advisor, is of the view that the court will determine both the constitutional claim and the judicialclaim in favor of us, and that the contingency for both of these cases is remote, primarily because it hasbeen established that the additional requirement imposed by the MEM is not required by law.

EIA Approval

On September 16, 2011, the local government of Morococha filed a judicial claim with thedistrict court for the partial nullification of the Mining Council’s resolution that dismissed its challengeto the approval of the EIA, on the basis that they were not involved in the EIA approval process byMEM. Based on current Peruvian law, an administrative entity that issues a resolution can nullify itsown resolution within a one year period, and another administrative entity is precluded from bringing ajudicial claim to this effect within that period. The one-year period expired on June 20, 2012. As aresult, the local government of Morococha was precluded from challenging the Mining Council’sresolution within one year of the issuance of such resolution. The judicial claim is pending in thedistrict court. In this case, it has been established that the judicial claim was filed within the one yearperiod. As of the Latest Practicable Date, the local government of Morococha had not re-filed anyclaim.

Potential Impacts. If, after all of the appellate procedures, the Supreme Court of Perudetermines to nullify the Mining Council’s resolution, we will continue to operate pending MEM’sfurther action. In its own discretion, the MEM may, in that case, order us to continue our constructionor mining operations under a provisional regime or cease our construction or mining operations, or takeother measures as it sees fit. As the pending judicial claim does not suspend the effect of the MiningCouncil’s resolution and the local government of Morococha has not obtained any injunction againstus, we do not believe our production schedule will be impacted by this pending judicial claim.

Assessment on Results. As advised by Rebaza, Alcazar & De Las Casas Abogados Financieros,our Peruvian legal advisor, based on the foregoing reasons, the contingency of this case is remote,primarily because the court is likely to dismiss the claim on procedural grounds. As a result, we havenot formed any contingency plan in response to this claim.

Assessment of Substantive Claim. If the local government of Morococha files another judicialclaim after the one-year restricted period seeking the nullification of the Mining Council’s resolution,there may be a new trial on the validity of the EIA approval. Currently, the local government ofMorococha has not filed another claim, and we cannot anticipate what ground they will be using.However, as advised by Rebaza, Alcazar & De Las Casas Abogados Financieros, our Peruvian legaladvisor, the MEM complied with all the necessary procedures and legal requirements when issuing the

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resolution approving the EIA, and the resolution was supported by a proper technical report. Inparticular, the MEM has fulfilled all the requirements in connection with local participation in theapproval process, and the law does not require the MEM to involve the local government ofMorococha in the EIA approval process. As such, its opinion is that the resolution that approved theEIA is valid, and that it is not likely that the challenge to the validity of the resolution will succeed.

Ownership of Land

Cajoncillo—Casapalca

Background. In April 2009, Casapalca Mining, an independent third party, filed a judicial claimagainst us at the district court, claiming ownership of a parcel of land named Cajoncillo, alleging thatthey acquired the parcel of the land before we did. In May 2008, we purchased the parcel of land fromActivos Mineros under the Toromocho Project Transfer Agreement, and currently we are the owner ofrecord. The parcel of land does not relate to our mining activities, but is located within the boundary ofthe planned waste materials deposit. As a result, we do not consider the land to be crucial to thecommercial production of the Toromocho Project. The judicial claim is pending in the district court. Inthe district court, it has been established that we are the owner of record in the public registry.

Potential Impact. If, after all the appellate procedures, the court decides the claim against us,we may need to relocate our waste materials deposit or purchase the parcel of land from CasapalcaMining. Based on our current estimation, our maximum financial exposure in that case will beapproximately US$910,000. Currently, we are not able to predict the approximate timing for finalresolution of the claim. As the pending claim does not hinder our rights as an owner of the land and weare not subject to an injunction, we do not believe our production schedule will be impacted.

Assessment on Results. Under Peruvian laws, the owner of record for a parcel of land isassumed to be the rightful owner, unless it’s proven that the owner of record acquired the parcel ofland knowing that someone else had acquired the same parcel of land before it did. In this case, we hadno knowledge of Casapalca Mining’s alleged transaction. As a result, Rebaza, Alcazar & De Las CasasAbogados Financieros, our Peruvian legal advisor, has advised us that the likelihood that the districtcourt will rule against us is remote. Therefore, we have not made any provision for the estimatedmaximum financial exposure.

Cajoncillo—Londres

Background. In March 2011, we filed a judicial claim against Compañía Minera Londres, anindependent third party, at the district court, claiming ownership of a parcel of land named Cajoncillo.Compañía Minera Londres leased the parcel of land from Casapalca Mining. The parcel of land doesnot relate to our mining activities, but is located within the boundary of the planned waste materialsdeposit. As a result, we do not consider the land to be crucial to the commercial production of theToromocho Project. The judicial claim is pending in the district court. In this case, it has beenestablished that we are the owner of record in the public registry. On July 21, 2011, the district courtalso issued an injunction that suspended all the mining activities by Compañía Minera Londres on theparcel of land in dispute. In 2011, the Mining Council of the MEM nullified a resolution by the localgovernment that ordered Compañía Minera Londres to suspend all mining activities on the parcel ofland. In January 2012, we brought another judicial claim against the MEM to reinstate the restrictiveorder issued by the local government. This judicial claim is also pending in the district court.

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Potential Impact. If, after all the appellate procedures, the Supreme Court decides the claimagainst us, we may need to relocate our waste materials deposit or purchase the parcel of land fromCasapalca Mining. Based on our current estimation, our maximum financial exposure would beapproximately US$910,000. Currently, we are not able to predict the approximate timing of the finalresolution of this claim. As we have secured an injunction, we do not believe our production schedulewill be impacted.

Assessment on Result. Under Peruvian law, the owner of record for a parcel of land is assumedto be the rightful owner. In addition, the fact that an injunction has been granted is also an indicatorthat the court will rule in our favor on the substantive claim as courts must consider the merits of thesubstantive claims when granting an injunction. In granting the injunction here, the court preliminarilyconcluded that we are the owner of record for the parcel of land and that there is no evidence to provethat we acquired the parcel of land in bad faith. As a result, Rebaza, Alcazar & De Las CasasAbogados Financieros, our Peruvian legal advisor, advised us that the likelihood that the district courtwill rule against us in both cases is remote. Therefore, we have not made any provision for theestimated maximum financial exposure.

Yauli

Background. In 2009, the Yauli community filed a complaint in the Court of Yauli, Oroya,alleging that a land purchase agreement that we entered into with the Yauli community for a parcel ofland that we plan to use for the tailings dam, should be void and non-binding on the basis that theagreement was not approved by two-thirds of the residents of the community, and therefore violates thelaw. Currently, no monetary damages have been sought by the plaintiffs. The parcel of land does notrelate to our mining activities, but is located within the boundary of the planned tailings dam. As aresult, we do not consider the land to be crucial to the commercial production of the ToromochoProject. We have challenged the jurisdiction of the Court of Yauli and, as of the Latest PracticableDate, this claim was still pending in the Supreme Court. If the Supreme Court of Peru upholds thedecision of the lower courts in the appeal, the case will be transferred to the Courts of Lima for thereview of substantive issues.

Potential Impact. If, after all the appellate procedures, the Supreme Court decides the claimagainst us, we may need to enter into a new agreement to purchase the parcel of land from the YauliCommunity. Based on our current estimation, our maximum financial exposure in that event would beapproximately US$1.7 million. Currently, we are not able to predict the approximate timing of the finalresolution of this claim. As the pending claim does not hinder our rights as an owner of the land andwe are not subject to an injunction, we do not believe our production schedule will be impacted.

Assessment on Result. Rebaza, Alcazar & De Las Casas Abogados Financieros, our Peruvianlegal advisor, advised us that the form and substance of the agreement complies with relevant laws,and that the likelihood that the district court will rule against us on the civil claim is remote. Therefore,we have not made any provision for the estimated maximum financial exposure.

In assessing the likelihood of an adverse ruling in each of the cases disclosed above, Rebaza,Alcazar & De Las Casas Abogados Financieros, our Peruvian legal advisor, first considered theprocedural aspects of the claims, to assess whether a claim will move on from the initial stage and the

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possibility that it will be dismissed on procedural grounds. Then, Rebaza, Alcazar & De Las CasasAbogados Financieros analyzed the legal merits of the arguments behind the claims of both parties.Thirdly, Rebaza, Alcazar & De Las Casas Abogados Financieros considered whether there has beenany prior decision by the judiciary on the matter favoring either of the sides in the conflict, including alower court decision or a preliminary relief measure. Finally, Rebaza, Alcazar & De Las CasasAbogados Financieros considered its experience and expertise on similar matters.

Except as disclosed above, we are currently not a party to any material legal, arbitral oradministrative proceedings, and we are not aware of any threatened material legal, arbitral oradministrative proceedings against us. In addition, we are not a party or subject to any legal claims orproceedings that may have an influence on our rights to explore or mine. We may from time to timebecome a party to various legal or administrative proceedings arising in the ordinary course of ourbusiness.

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FINANCIAL INFORMATION

You should read the following discussion and analysis of our Group’s financialcondition and results of operations together with our consolidated financial information as ofand for each of the years ended December 31, 2009, 2010 and 2011 and the nine months endedSeptember 30, 2012 and the accompanying notes included in the Accountant’s Report set out inAppendix I to this document. Our consolidated financial information has been prepared inaccordance with IFRS. Readers should read the whole of the Accountant’s Report set out inAppendix I to this document and not rely merely on the information contained in this section.The following discussion and analysis here and in other parts of this document containforward-looking statements that are subject to substantial risks and uncertainties. Our futureresults could differ materially from those projected in such forward-looking statements. Foradditional information regarding these risks and uncertainties, please refer to the sectionheaded “Risk Factors” in this document.

OVERVIEW

We are a resource development company acting as Chinalco’s core platform for the futureacquisition, investment, development and operation of non-ferrous and non-aluminum mineralresources and projects overseas. We envision capitalizing on China’s growing demand for naturalresources.

Currently, we are focusing on developing the Toromocho Project, which is located in centralPeru in the core of the Morococha mining district. According to CRU, the Toromocho Project is theworld’s second largest pre-production copper project, as measured by proved and probable copper orereserves, and the third largest pre-production copper project, as measured by average planned annualproduction between 2012 and 2020, among the top 20 firm copper mining projects scheduled tocommence production of copper concentrates from 2012 to 2016. Three of these mining projects hadcommenced production as of December 31, 2012. According to the Competent Person’s Report, theproved and probable JORC-compliant reserves of the Toromocho Project deposit are estimated tocontain approximately 7.3 million tonnes of copper, 290,000 tonnes of molybdenum and 10,500 tonnesof silver. The Toromocho Project is currently our only mining asset, which we expect to rely on forsubstantially all of our revenue and cash flows for the foreseeable future. We expect to commenceproduction during the fourth quarter of 2013 and reach full production capacity in the third quarter of2014. Upon commencement of commercial production, we plan to process the copper sulphide oreson-site and sell the copper concentrates primarily to China for smelting and production of refinedcopper. We expect China to be our primary market. Subject to us receiving arm’s-length commercialterms, we may also sell our products to Chinalco and its affiliates. We have entered into four bindingofftake agreements including definitive pricing terms for the sale of an aggregate of 60% of theToromocho Project’s annual production of copper concentrates for a period of five years from thestarting date of production at the Toromocho Project, two of which will automatically continue foranother five years thereafter.

The Toromocho Project has a long estimated mine life with significant potential for furtherexploration. Based on the current estimated reserves and production plan, it is estimated that theToromocho Project can produce ores for 32 years and thus has an estimated mine life of 32 years.Based on the current design, the processing facilities will continue to process recovered ores for fouryears after the end of the mine life, thus giving the Toromocho Project a projected operating life of 36

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years. According to the Competent Person’s Report, there are additional resources adjacent to theplanned open pit, which are also covered by our mining concessions, and are estimated to containapproximately 2.7 million tonnes of copper, 92,000 tonnes of molybdenum and 5,200 tonnes of silverin measured, indicated and inferred JORC-compliant resources. We believe that we will be able tofurther explore and develop these resources once we complete the highway relocation plan inconnection with the Toromocho Project. We are currently in discussion with and have submitted ourproposed relocation plan to the MTC. Upon our receipt of approval from the MTC, we will commencethe detailed engineering study, which we expect to complete in approximately four months.

We expect to enjoy competitive operating and mining costs as a result of the ToromochoProject’s rich ore reserves, location and favorable geology. According to the Competent Person’sReport, the Toromocho Project is estimated to have low operating cash costs after credits ofapproximately US$1,508.8 per tonne (or approximately US$0.684 per pound) of copper produced ascompared with a large number of copper mines across the globe. For example, the average operatingcash costs of the major copper mines in Peru and Chile are approximately US$3,624.0 per tonne ofcopper produced and US$3,963.0 per tonne of copper produced, respectively. Operating cash costsinclude mining costs, processing costs, general and administration costs, selling costs, environmentalprotection costs, production taxes, the resource compensation levy, other cash cost items and the by-product credit, and are generally recognized as a reliable indicator for measuring the operating andmining costs of copper mines. As a result of the geological characteristics, we are able to employ theconventional open pit mining technique, which entails lower costs and fewer risks than undergroundmining. The Toromocho Project also has a low estimated strip ratio at 0.79:1, meaning that for everytonne of ores we mine, 0.79 tonnes of waste materials will need to be removed. As a result, we expectto incur lower costs for the removal of waste materials, which results in lower per unit mining costs.

Established infrastructure support for the Toromocho Project reduces our construction andoperational costs and lowers our operational risks. The Toromocho Project is easily accessible viareadily available transportation networks, including public highways and railroads from both thePeruvian capital city of Lima and the major exporting port of Callao. Water and electricity supplies,which are essential to the mining activities, will also be available from nearby facilities developed byus. For example, water for the processing plant will be supplied to the Toromocho Project from theKingsmill Tunnel water treatment plant developed and operated by us. Electricity will be suppliedfrom the nearby Pomacocha power station, and a 220 MW transmission line will be installed betweenthe power station and the Toromocho Project, which is expected to be ready by the first quarter of2013.

Since the completion of our acquisition of the Toromocho Project in May 2008, we havedevoted substantial effort to developing the Toromocho Project into an advanced development stageand accomplished all its key pre-production milestones. We have engaged Aker Solutions, a reputableleading mining consulting firm, for EPCM services in relation to the Toromocho Project. We haveoutsourced all of our exploration engineering work and most of the Toromocho Project constructionwork to third-party contractors, including Aker Solutions. We have also secured credit facilities withan aggregate amount of US$2,118.0 million from Eximbank and China Development Bank, which webelieve, combined with our cash and cash equivalents, the additional banking facilities we arenegotiating and the proceeds from other proposed corporate financing activities, will provide sufficientfunding for us to bring the Toromocho Project to production. The Environmental Impact Assessment inconnection with all the material aspects of the Toromocho Project was approved by the Peruviangovernment in December

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2010 and the construction permit for the Toromocho Project was issued by the Peruvian government inJuly 2011. Furthermore, we have purchased substantially all of the key long-lead equipment andmachinery, completed the construction of a new town for local resident resettlement, constructed awater treatment plant to supply and treat water for the Toromocho Project and made investment in theCallao port. We plan to complete the construction of all the mining and processing facilities in thefourth quarter of 2013. We believe that the comprehensive preparation work that we have done for theToromocho Project minimizes the risk of delay and puts us on track to achieve our target schedule fordevelopment and production.

As of the date of this document, we have not commenced production at the Toromocho Projectand have not recorded any revenues and our pre-production activities have not generated any positiveoperating cash flows.

FACTORS AFFECTING OUR FINANCIAL CONDITION AND RESULTS OF OPERATIONS

While we have not commenced commercial operation, our financial condition and results ofoperations have been and will continue to be affected by a number of factors, some of which arebeyond our control. In addition to those discussed in the section titled “Risk Factors” of this document,the principal factors affecting our financial condition and results of operations include:

Š Development costs, completion of our project and commission schedule;

Š Products pricing and demand;

Š Production and sales volume;

Š Production costs; and

Š Future exploration success and costs.

Development Costs, Completion of Our Project and Commission Schedule

Our future financial success is closely related to our ability to control our development costs atthe Toromocho Project and to timely commence production at the Toromocho Project. In 2009, 2010,2011 and the nine months ended September 30, 2012, our capital expenditure paid in connection withthe Toromocho Project amounted to US$142.4 million, US$372.9 million, US$712.0 million andUS$771.5 million, respectively. We have devoted substantial effort to developing the ToromochoProject into an advanced development stage and accomplished all its key pre-production milestones.The Environmental Impact Assessment in connection with all the material aspects of the ToromochoProject was approved by the Peruvian government in December 2010 and the construction permit forthe Toromocho Project was issued by the Peruvian government in July 2011. In addition, we havesecured credit facilities with an aggregate amount of US$2,118.0 million from Eximbank and ChinaDevelopment Bank, completed the construction of the resettlement town, purchased substantially all ofthe key long-lead equipment and machinery and engaged Aker Solutions for EPCM services. Based onour current estimation, we will spend an additional US$1.5 billion in the development of theToromocho Project for the period after September 30, 2012. We expect to commence production at theToromocho Project during the fourth quarter of 2013. The timely commencement of production at theToromocho Project is subject to various factors, including the timing of our obtaining certaingovernment approvals, the processes of resettlement and the delivery of key equipment.

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Product Pricing and Demand

Our principal product will be copper concentrates. There is no formal exchange for copperconcentrates. Prices of copper concentrates are established through and governed by copperconcentrates offtake contracts, which cover payment to the mine for the metal contents of the copperconcentrates, and include a number of deductions to account for the costs of treatment and refining ofthe copper concentrates by the smelter. Prices of copper concentrates are usually denominated in USdollars. The main deductions made from the payable metal contents are the treatment charge and therefining charge. The amounts of the treatment charge and refining charge are closely related to thequality of the copper concentrates. In addition, demand from smelters also impacts the price of copperconcentrates. According to CRU, global smelting production capacity is expected to maintain amoderate growth rate from 2012 to 2016. In particular, smelter production from copper concentrates inChina is expected to increase at a CAGR of 14.3% from 2012 to 2016.

Our by-product will be molybdenum. Meanwhile, silver will be sold with copper concentratesas credit. The spot price of silver is determined by reference to the COMEX. The price of silver is alsoaffected by the forces of supply and demand. According to CRU, the price of silver is expected toremain relatively stable from 2013 to 2015, and to decrease significantly in 2016. CRU estimated that,given non-recessionary conditions, the price of molybdenum will slightly decrease throughout 2013and will begin to increase after 2013 as the consumption of molybdenum in stainless steel grows. CRUestimated that the growth in global demand for molybdenum will accelerate beginning in 2012, and thegrowth in demand for molybdenum in China is expected to outpace the growth in global demand from2012 to 2016, as a result of expected growth in China’s steel industry. See the section titled “IndustryOverview” of this document for further details.

Production and Sales Volume

Our production volume will be primarily determined by the reserves at the Toromocho Projectand our production capacity. We expect to commence production in the fourth quarter of 2013 andreach full production capacity in the third quarter of 2014. We plan to process approximately43.2 million tonnes of ore per annum from 2015 onwards and produce up to approximately 865,600tonnes of copper concentrates (containing approximately 9.62 million ounces of silver as metal creditin copper concentrates) and approximately 9,300 tonnes of molybdenum in the form of molybdenumoxide per annum. Our sales volume will be largely dependent upon the global market demand, ourproduction capacity and the transportation capacity, as well as changes in China’s economy and marketconditions.

Production Costs

As of the date of this document, we have not commenced production and consequently, we didnot had any cost of sales during the Track Record Period. Going forward, our production costs will bea key factor affecting our profitability. Our cost of production primarily includes mining costs, oreprocessing costs, other mine operating costs, relevant taxes, and depreciation and amortization. In linewith the industry practice, we expect ore processing costs to be the largest component of our cost ofproduction at the Toromocho Project. Ore processing costs are primarily affected by utility costs,including the costs of electricity, diesel fuel and water, labor costs and costs for the repair andmaintenance of equipment and for other consumables, including chemicals and reagents. Mining costs

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are primarily affected by consumables, including explosives, utility costs, including the costs ofelectricity, diesel fuel and water. Additional capital expenditure will increase our depreciation andamortization, which will in turn increase our cost of production.

There can be no assurance that future increases in our production costs will be offset byincreases in our selling prices in the future. If the increases in our per unit production costs outpace theincreases in our realized average selling prices, such increases will have a negative impact on ourmargins and, thus, financial condition and results of operations.

Future Exploration Success and Costs

Our long-term success depends to a significant extent on our ability to locate and extractreserves at the Toromocho Project and any new mining projects that we may acquire in the future. Wemainly carry out exploration activities in order to extract mineral resources and ore reserves.Additionally, some of our exploration is undertaken to meet relevant legal requirements and ensureretention of our exploration licenses. We expect to have ongoing exploration costs that will varysignificantly due to factors including the number, location and characteristics of our projects and thelegal and regulatory requirements. Mineral exploration and development involves substantial expenseand a high degree of risk, which may not be sufficiently mitigated through any combination ofexperience, knowledge and careful evaluation. In addition, exploration expenses are not capitalizeduntil commercial production is commenced. Increased exploration activities will increase our operationcosts and may materially and adversely impact our margin, financial condition and results of operation.See “Risk Factors—Risks Relating to Our Industry—Our resources will decrease after we commenceproduction. Failure to discover or develop new reserves, maintain or enhance existing reserves,develop new operations or expand our current operations could materially and adversely affect ourbusiness and results of operations.”

PRINCIPAL STATEMENT OF COMPREHENSIVE INCOME COMPONENTS

Revenue

During the Track Record Period, our principal activities were exploration for minerals and thedevelopment and construction of the Toromocho Project. We did not generate revenue from theseactivities during this period and accordingly, no cost of sales was recorded over the Track RecordPeriod.

Operating Costs

Operating costs consist of general and administrative expenses, including but not limited toemployee benefit expenses, amortization and depreciation and other professional fees, utilities,operating lease, contract fees, travel and transportation, taxes other than income tax, advertising andsupplies.

Finance Income/Costs

Finance income consists of net foreign exchange gains and interest income. Finance costsconsist of interest expenses, bank charges and accretion of interest of asset retirement obligation aswell as net foreign exchange loss, excluding amounts capitalized on qualifying assets.

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CRITICAL ACCOUNTING POLICIES AND ESTIMATES

The discussion and analysis of our financial condition and results of operations are based onour consolidated financial statements prepared in accordance with IFRS. Our financial condition andresults of operations are sensitive to accounting methods, assumptions and estimates. The estimatesand assumptions are based on our industry experience and various factors including our Directors’expectations of future events which they believe to be reasonable. Actual results may differ from thoseestimates and assumptions. The selection of critical accounting policies, the judgments and otheruncertainties affecting application of other policies and the sensitivity of reported results to changes inconditions and assumptions are factors to be considered when reviewing our consolidated financialinformation. We believe the following critical accounting policies involve the most significantjudgments and estimates used in the preparation of our consolidated financial information.

Property, Plant and Equipment

Property, plant and equipment, including mine and plant development assets, are stated at costless accumulated depreciation and accumulated impairment losses. Costs of interest on financingsobtained for the construction or production of a qualified asset are capitalized.

Subsequent costs are included in the asset’s carrying amount or recognized as a separate asset,as appropriate, only when it is probable that future economic benefits associated with the item willflow to us and the cost of the item can be measured reliably. The carrying amount of the replaced partis derecognized. All other repairs and maintenance are charged to the consolidated statements ofcomprehensive income during the financial period in which they are incurred.

Mine and plant development assets and land related to the Toromocho Project will be, uponcommencement of production, depreciated using the unit-of-production (“UOP”) method based on theestimated economically recoverable reserves to which they relate or will be written-off if the propertyis abandoned. Land not related to Toromocho Project is not subject to depreciation. Depreciation for allother property, plant and equipment is calculated using the straight-line method to allocate their costless their residual value over their estimated useful life, as follows:

Buildings and constructions . . . . . . . . . . . . . . . . . . . . . . up to 50 yearsMachinery and equipment . . . . . . . . . . . . . . . . . . . . . . . up to 35 yearsMotor vehicles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . up to 5 yearsFurniture, fixtures and others . . . . . . . . . . . . . . . . . . . . . 4 to 10 years

Construction in progress is not depreciated until the asset is ready for its intended use.

The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at the endof each reporting period.

An asset’s carrying amount is written down immediately to its recoverable amount if the asset’scarrying amount is greater than its estimated recoverable amount.

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Gains and losses on disposals are determined by comparing the proceeds with the carryingamount and are recognized within “Other (loss)/gain, net” in our consolidated statements ofcomprehensive income.

Exploration and Evaluation Expenditure

Exploration and evaluation expenditure comprises costs which are directly attributable to:researching and analyzing existing exploration data; conducting geological studies, exploratory drillingand sampling; examining and testing extraction and treatment methods; and compiling pre-feasibilityand feasibility studies. Exploration and evaluation expenditure also includes the costs incurred inacquiring mining rights, the entry premiums paid to gain access to areas of interest and amountspayable to third parties to acquire interests in existing projects.

During the initial stage of a project, exploration and evaluation costs are capitalized as incurred.Expenditure on a project after it has reached a stage at which there is a high degree of confidence in itsviability is transferred to mine and plant development assets if the project proceeds. If a project doesnot prove viable, all irrecoverable costs associated with the project are expensed in the consolidatedstatement of comprehensive income. Exploration and evaluation assets are assessed for impairment,and any impairment loss recognized, before classification.

Exploration and evaluation assets are assessed for impairment when facts and circumstancessuggest that the carrying amount of an exploration and evaluation asset may exceed its recoverableamount. When facts and circumstances suggest that the carrying amount exceeds the recoverableamount, the asset’s carrying amount is written down immediately to its recoverable amount.

One or more of the following facts and circumstances indicate that an entity should testexploration and evaluation assets for impairment:

Š the period for which the entity has the right to explore in the specific area has expiredduring the period or will expire in the near future, and is not expected to be renewed;

Š substantive expenditure on further exploration for and evaluation of mineral resourcesin the specific area is neither budgeted nor planned;

Š exploration for and evaluation of mineral resources in the specific area have not led tothe discovery of commercially viable quantities of mineral resources and the entity hasdecided to discontinue such activities in the specific area; or

Š sufficient data exists to indicate that, although a development in the specific area islikely to proceed, the carrying amount of the exploration and evaluation asset is unlikelyto be recovered in full from successful development or by sale.

Critical Accounting Estimates and Judgments

Estimates and judgments are continually evaluated and are based on historical experience andother factors, including expectations of future events that are believed to be reasonable under thecircumstances.

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We make estimates and assumptions concerning the future. The resulting accounting estimateswill, by definition, seldom equal the related actual results. The estimates and assumptions that have asignificant risk of causing adjustment to the carrying amount of reported assets and liabilities are asfollows:

(a) Recovery of the cost of mining exploration assets of the Toromocho Project and orereserves estimates

We capitalize qualified expenditures, comprising exploration, and acquisition of goods,technical assessments and applicable taxes, directly attributable to the Toromocho Project.

In accordance to our relevant accounting policies, we evaluate, on a periodic basis, the orereserves estimates of the Toromocho Project, which is the amount of unexploited copper in the miningconcessions to which we are entitled and which may be produced and sold to generate revenues. Suchevaluations are based on engineering tests performed on samples of drilling well and other mine pitscombined with certain assumptions regarding copper market prices and production costs.

Based on Competent Person’s Report, the estimated unexploited proved and probable orereserve in the mining concessions to which we are entitled is approximately 1,540 million tonnes.Based on our projections of the future economic benefits expected from the ore reserves of theToromocho Project, we concluded that no impairment was required as at September 30, 2012.

Because the economic assumptions used to estimate the value of reserves may change fromperiod to period, and because additional geological data is generated during the course of operations,estimates of reserves may change from period to period. Changes in reported reserves may affect ourfinancial information in a number of ways, including the following:

Š asset carrying values may be affected due to changes in estimated future cash flows;

Š depreciation, depletion and amortization charged in the income statement may changewhere such charges are determined by the units of production basis, or where the usefuleconomic lives of assets change;

Š decommissioning, site restoration and environmental provisions may change wherechanges in estimated reserves affect expectations about the timing or cost of theseactivities; or

Š the carrying value of deferred tax assets may change due to changes in estimates of thelikely recovery of the tax benefits.

(b) Provision for remediation and restoration

Provision is made for environmental remediation costs when the related environmentaldisturbance occurs, based on the net present value of estimated future costs. The ultimate cost ofenvironmental disturbances are uncertain and management uses its judgment and experience to providefor these costs over the life of operations. Cost estimates can vary in response to many factors

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including changes to the relevant legal requirements, our environmental policies, the emergence of newrestoration techniques and the effects of inflation. Cost estimates are updated throughout the life of theoperation.

We engaged Walsh Peru S.A., an independent valuer, to perform a mine closure plan includingthe estimated future expenditure in relation to remediation and restoration as well as other similarobligations on the Toromocho Mining Project. We have assessed and provided for remediation andrestoration and similar obligations amounted to US$23.8 million, US$29.0 million, US$58.1 millionand US$61.5 million as at December 31, 2009, 2010 and 2011 and September 30, 2012, respectively.Please refer to Note 19 of the Accountant’s Report included in Appendix I to this document for thedetails.

The expected timing of expenditure included in cost estimates can also change, for example inresponse to changes in ore reserves, or production rates, operating license or economic conditions.Expenditure may occur before and after closure and can continue for an extended period of timedepending on the specific site requirements. Some expenditure can continue into perpetuity. Cashflows must be discounted if this has a material effect. The selection of appropriate sources on which tobase calculation of the risk free discount rate used for this purpose also requires judgment. As a resultof all of the above factors, there could be significant adjustments to the provision for close down,restoration and clean up costs which will materially and adversely affect our future financial results.

(c) Income taxes and VAT recoverable

The estimates of deferred income tax assets require estimates of future taxable profit and thecorresponding applicable income tax rates of future years. Changes in future income tax rates andtiming will affect our income tax expense or benefit, as well as deferred income tax balance. Therealization of deferred income tax assets also depends on our sufficient profitability (taxable profit).Deviation of future profitability from the estimate could result in material adjustments to the carryingamount of deferred income tax assets.

Determination of tax obligations and expenses requires interpretations of the applicable taxlaws and regulations. We seek professional legal tax counsel before making any decision on taxmatters. Our Directors consider that their estimates are prudent and appropriate; however, differencesof interpretation may arise from the interpretation made by Peruvian tax authorities that may affectfuture charges for taxes. Similarly, the recoverability of VAT recoverable is determined by ourDirectors based on past experience, taking into account existing relevant Peruvian tax rules.

(d) Going concern

As set out in Note 2.1(a) of the Accountant’s Report included in Appendix I to this document,our ability to continue operations is dependent upon obtaining the necessary financing borrowings and/or financial support from our holding companies in order to obtain sufficient cash flow to meet ourliabilities as they fall due. In the event we are unable to obtain adequate funding, there is uncertainty asto whether we will be able to continue as a going concern. Our consolidated financial statements do notinclude any adjustments related to the carrying values and classifications of assets and liabilities thatwould be necessary should we and the Company be unable to continue as a going concern.

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TAXATION

Income Tax

We were incorporated in the Cayman Islands as an exempted company with limited liabilityunder the Companies Law of Cayman Islands, and, accordingly, are exempted from payment ofCayman Islands income tax. Our principal operating subsidiaries established in Peru were subject toincome tax at a rate of 30% during the Track Record Period. As we recorded losses before taxation ineach year or period during the Track Record Period, we were entitled to an income tax benefit at thesame rate of 30%, subject to certain adjustments of other amounts. We are allowed to carry the taxbenefit forward to offset our future income tax liability in full for the next four years, or in half for anunlimited period of time. We have determined to carry our tax benefit forward in full for four years.

VAT Recoverable

On September 14, 2010, we were authorized by the MEM to refund VAT actually paid onimports and local purchases of capital assets, new intermediate input, construction contracts and otherservices provided as part of the pre-production phase. Accordingly, qualified VAT paid by us onpurchases can be used, not only to offset local sales, income taxes or any other taxes payable asrequired by the Peruvian tax authorities, but also be refunded in the form of negotiable credit notes ornon-negotiable checks.

As part of the VAT refund regime, we signed an investment agreement with the MEM on June16, 2009, which was modified under an addendum dated July 27, 2010. Under the investmentagreement, we undertook to invest US$2,053 million in the Toromocho Project by the end of 2012. Asa result, we were qualified to recover our VAT paid. On December 15, 2011, we signed an addendumto the investment agreement with the MEM to extend the period to complete our investmentcommitment until December 2013. On February 8, 2012, the MEM and the Peruvian government’sMinistry of Finance approved the addendum.

VAT recoverable represents the VAT credit to which we are entitled for VAT paid on theacquisition of goods and services related to our exploration and development activities. In 2011, wereceived a refund in the amount of US$41.3 million with respect to the balance of VAT tax recoverableas of December 31, 2010. Furthermore, in the nine months ended September 30, 2012, we receivedapproximately US$131.1 million refund with respect to the balance of VAT tax recoverable.

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RESULTS OF OPERATIONS

The following table sets forth selected financial information for the periods indicated:

For the year ended December 31,For the nine monthsended September 30,

2009 2010 2011 2011 2012

(unaudited)(US$ in thousands, except for per Share data)

Revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — — —

Other (loss)/gain, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (85) 317 205 130 671

Operating costsGeneral and administrative expenses . . . . . . . . . . . . (9,053) (11,612) (19,705) (10,396) (17,910)

Operating loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (9,138) (11,295) (19,500) (10,266) (17,239)

Finance income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,896 1,507 451 373 2,169Finance costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,723) (1,088) (2,744) (1,545) (1,887)

Finance income/(costs), net . . . . . . . . . . . . . . . . . . . . . . . . 1,173 419 (2,293) (1,172) 282

Loss before income tax . . . . . . . . . . . . . . . . . . . . . . . . . . . (7,965) (10,876) (21,793) (11,438) (16,957)Income tax benefit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,266 3,411 5,281 2,973 3,731

Loss for the year/period . . . . . . . . . . . . . . . . . . . . . . . . . . (4,699) (7,465) (16,512) (8,465) (13,226)

Other comprehensive income for the year/period, netof tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — — —

Total comprehensive loss for the year/period . . . . . . . . . (4,699) (7,465) (16,512) (8,465) (13,226)

Loss per share for loss attributable to the equityholders of the Company (expressed in US$ pershare)

Basic and diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — (0.001) (0.002) (0.001) (0.001)

Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — — —

Nine Months Ended September 30, 2012 Compared to Nine Months Ended September 30, 2011

Revenue and cost of sales. Since we were substantially engaged in construction activities at theToromocho Project’s development stage, we have not commenced commercial production. Therefore,we did not generate revenue or record any cost of sales in the nine months ended September 30, 2011and 2012.

General and administrative expenses. Our general and administrative expenses increased by72.3% from US$10.4 million for the nine months ended September 30, 2011 to US$17.9 million forthe nine months ended September 30, 2012. The increase was due primarily to an increase in theexpenses related to wages, salaries and allowances that we paid to our employees, the expenses weincurred in connection with our proposed corporate financing activities and an increase in professionalfees for consultants we hired in connection with the development of the Toromocho Project.

Finance income. Our finance income increased significantly from US$0.4 million for the ninemonths ended September 30, 2011 to US$2.2 million for the nine months ended September 30, 2012,

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primarily due to our net foreign exchange gains on financing activities for the nine months endedSeptember 30, 2012.

Finance costs. Our finance costs increased by 22.1% from US$1.5 million for the nine monthsended September 30, 2011 to US$1.9 million for the nine months ended September 30, 2012, primarilyattributable to an increase in the accretion of interest of assets retirement.

Loss before income tax. As a result of the foregoing, our loss before income tax increased by48.2% from US$11.4 million for the nine months ended September 30, 2011 to US$17.0 million forthe nine months ended September 30, 2012.

Income tax benefit. Our income tax benefit increased by 25.5% from US$3.0 million for thenine months ended September 30, 2011 to US$3.7 million for the nine months ended September 30,2012, as a result of an increase in deferred tax assets in relation to certain expenses capitalized for taxpurposes.

Loss for the period. As a result of the foregoing, our loss for the period increased by 56.2%from US$8.5 million for the nine months ended September 30, 2011 to US$13.2 million for the ninemonths ended September 30, 2012.

Year Ended December 31, 2011 Compared to Year Ended December 31, 2010

Revenue and cost of sales. Since we were substantially engaged in construction activities at theToromocho Project’s development stage, we have not commenced commercial production. Therefore,we did not generate revenue or record any cost of sales in 2010 and 2011.

General and administrative expenses. Our general and administrative expenses increased by69.7% from US$11.6 million for the year ended December 31, 2010 to US$19.7 million for the yearended December 31, 2011. The increase was due primarily to an increase in the expenses related towages, salaries and allowances that we paid to our employees as a result of increases in the number ofour employees and the per capita payment, an increase in professional fees in connection withconsultants that we hired to assist with approval applications, an increase in our utility expense, as wellas penalty and compensation expenses in connection with certain judicial claims and administrativepenalties.

Finance income. Our finance income decreased by 70.0% from US$1.5 million for the yearended December 31, 2010 to US$451,000 for the year ended December 31, 2011, as we incurred netforeign exchange loss on finance activities in 2011, which was the result of exchange rate fluctuation.

Finance costs. Our finance costs increased significantly from US$1.1 million for the yearended December 31, 2010 to US$2.7 million for the year ended December 31, 2011. The significantincrease was attributable to an increase in the bank charge and our net foreign exchange loss on financeactivities in 2011.

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Loss before income tax. As a result of the foregoing, our loss before income tax increased by100.4% from US$10.9 million for the year ended December 31, 2010 to US$21.8 million for the yearended December 31, 2011.

Income tax benefit. Our income tax benefit increased by 54.8% from US$3.4 million for theyear ended December 31, 2010 to US$5.3 million for the year ended December 31, 2011, as a result ofan increase in deferred tax assets in relation to certain expenses capitalized for tax purposes.

Loss for the year. As a result of the foregoing, our loss for the year increased significantly by121.2% from US$7.5 million for the year ended December 31, 2010 to US$16.5 million for the yearended December 31, 2011.

Year Ended December 31, 2010 Compared to Year Ended December 31, 2009

Revenue and cost of sales. Since we were substantially engaged in construction activities at theToromocho Project’s development stage, we have not commenced commercial production. Therefore,we did not generate revenue or record any cost of sales in 2009 and 2010.

General and administrative expenses. Our general and administrative expenses increased by28.3% from US$9.1 million for the year ended December 31, 2009 to US$11.6 million for the yearended December 31, 2010. The increase was due primarily to an increase in the amortization anddepreciation expenses we recognized in connection with the computer software we purchased, as wellas an increase in the expenses related to wages, salaries and allowances that we paid to our employeesas the number of our employees increased and their salary level has risen.

Finance income. Our finance income decreased by 48.0% from US$2.9 million for the yearended December 31, 2009 to US$1.5 million for the year ended December 31, 2010. The decrease wasattributable to a decrease in interest income.

Finance costs. Our finance costs decreased by 36.9% from US$1.7 million for the year endedDecember 31, 2009 to US$1.1 million for the year ended December 31, 2010. The decrease wasattributable to a decrease in accretion of interest of assets retirement.

Loss before income tax. As a result of the foregoing, our loss before income tax increased by36.5% from US$8.0 million for the year ended December 31, 2009 to US$10.9 million for the yearended December 31, 2010.

Income tax benefit. Our income tax benefit increased by 4.4% from US$3.3 million for theyear ended December 31, 2009 to US$3.4 million for the year ended December 31, 2010, as a result ofan increase in deferred tax assets in relation to certain expenses capitalized for tax purposes.

Loss for the year. As a result of the foregoing, our loss for the year increased significantly by58.9% from US$4.7 million for the year ended December 31, 2009 to US$7.5 million for the yearended December 31, 2010.

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LIQUIDITY AND CAPITAL RESOURCES

To date, our principal sources of cash have been cash flow from our financing activities. Weobtained a banking facility of US$2.0 billion from Eximbank on December 1, 2010. In September andDecember 2012, we obtained additional credit facilities of US$83.0 million and US$35.0 million,respectively, from China Development Bank. Furthermore, we are in the process of negotiatingadditional credit facilities with an aggregate amount of US$239.0 million with China DevelopmentBank and additional credit facilities with an aggregate amount of US$419.0 million with Eximbank.Both China Development Bank and Eximbank have issued memorandum to indicate their presentcommitment to provide the financing. See “— Indebtedness.” Our primary uses of cash have been tofund capital expenditure related to the exploration and development of the Toromocho Project and theacquisition of new equipment. We also use an increasing portion of cash for our working capitalrequirements in connection with increases in inventories.

As of September 30, 2012, we had cash and cash equivalents of US$191.0 million. We usebank and cash balances to finance working capital and part of our capital expenditure for ourcontinuing growth and expansion plans. We determine the appropriate amount of cash to maintain on-hand by forecasting our future working capital and capital expenditure needs. We also aim to maintaina certain level of extra cash to meet unexpected circumstances and to use in relation to businessexpansion opportunities as they arise.

Based on the current estimation as detailed in “Appendix IV — Competent Person’s Report,”income generated by the Toromocho Project will exceed the annual operating costs starting fromJanuary 2014, which is the first full year of production. Based on our current estimation, we will spendanother US$1.5 billion for the development of the Toromocho Project for the period afterSeptember 30, 2012 and before the commencement of commercial production in the fourth quarter of2013.

The following table sets forth a summary of our consolidated cash flows for the periodsindicated:

For the year ended December 31,

For the ninemonths endedSeptember 30,

20122009 2010 2011

(US$ in thousands)

Net cash used in operating activities . . . . . . . . . . . . . . . . . . . . (10,450) (7,020) (22,823) (38,601)Net cash used in investing activities . . . . . . . . . . . . . . . . . . . . (141,504) (378,526) (695,519) (687,814)Net cash generated from financing activities . . . . . . . . . . . . . . 160,000 530,000 660,000 819,882

Net increase/(decrease) in cash and cash equivalents . . . . . . . 8,046 144,454 (58,342) 93,467Cash and cash equivalents at beginning of the year . . . . . . . . . 3,392 11,438 155,892 97,550

Cash and cash equivalents, end of year/period . . . . . . . . . . 11,438 155,892 97,550 191,017

Operating Activities

Net cash used in operating activities in the nine months ended September 30, 2012 wasUS$38.6 million, which was primarily attributable to the loss before income tax for the period ofUS$17.0 million, adjusted to reflect (i) net finance income of US$0.3 million and (ii) the depreciationof US$0.6 million, and taking into account of (i) an increase in prepayment and other receivables of

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US$14.4 million; and (ii) an increase in inventories of US$13.2 million. The amount was partiallyoffset by an increase in accruals and others of US$5.6 million. Our prepayment and other receivablesincreased substantially as we purchased fuel for our contractors. The substantial increase in ourinventories was due to an increase in our supplies and spare parts as our construction progressed.

Net cash used in operating activities in 2011 was US$22.8 million, which was primarilyattributable to the loss before income tax for the period of US$21.8 million, adjusted to reflect (i) netfinance cost of US$2.3 million and (ii) the depreciation and amortization of US$1.7 million, and takinginto account of (i) an increase in prepayment and other receivables of US$8.4 million; and (ii) anincrease in inventories of US$4.4 million. The amount was partially offset by an increase in accrualsand others of US$7.7 million. Our prepayment and other receivables increased substantially as wepurchased fuel for our contractors. The substantial increase in our inventories was due to an increase inour supplies and spare parts as our construction progressed.

Net cash used in operating activities in 2010 was US$7.0 million, which was primarilyattributable to the loss before income tax for the year of US$10.9 million, adjusted to reflect (i) thedepreciation and amortization of US$1.8 million and (ii) net finance income of US$0.4 million, andtaking into account of (i) an increase in inventories of US$1.6 million and (ii) an increase inprepayment and other receivables of US$0.4 million. The amount was partially offset by an increase inaccruals and others of US$4.4 million. The substantial increase in our inventories was the result of anincrease in our supplies and spare parts used in connection with our pre-operating activities.

Net cash used in operating activities in 2009 was US$10.5 million, which was primarilyattributable to the loss before income tax for the year of US$8.0 million, adjusted to reflect (i) netfinance income of US$1.2 million and (ii) the depreciation and amortization of US$0.8 million, andtaking into account of a decrease in accruals and others of US$2.2 million.

Investing Activities

Net cash used in investing activities in the nine months ended September 30, 2012 wasUS$687.8 million, which was primarily attributable to our purchases of property, plant and equipmentof US$771.5 million, which we used for exploration and construction activities and purchase of fixedassets. The amount was partially offset by the US$131.1 million of VAT refund we received.

Net cash used in investing activities in 2011 was US$695.5 million, which was primarilyattributable to our purchases of property, plant and equipment of US$712.0 million, which we used forexploration and construction activities and purchase of fixed assets. The amount was partially offset bythe US$41.3 million of VAT refund we received.

Net cash used in investing activities in 2010 was US$378.5 million, which was primarilyattributable to our purchases of property, plant and equipment of US$372.9 million, which we used forexploration and construction activities and purchase of fixed assets.

Net cash used in investing activities in 2009 was US$141.5 million, which was primarilyattributable to purchases of property, plant and equipment of US$142.4 million, which we used forexploration and construction activities and purchase of fixed assets.

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Financing Activities

Net cash generated from financing activities in the nine months ended September 30, 2012 wasUS$819.9 million, which mainly represented the proceeds from our loans with Eximbank of US$820.0million.

Net cash generated from financing activities in 2011 was US$660.0 million, which was theproceeds from our loans with Eximbank.

Net cash generated from financing activities in 2010 was US$530.0 million, which was theproceeds from our loans with Eximbank and COH.

Net cash generated from financing activities in 2009 was US$160.0 million, which was theproceeds from borrowings from COH.

CAPITAL EXPENDITURE

We made capital expenditure of US$142.4 million, US$372.9 million, US$712.0 million andUS$771.5 million in 2009, 2010 and 2011 and the nine months ended September 30, 2012, respectively.In the past, our capital expenditure was used primarily for construction activities and purchase of fixedassets. We estimate that our capital expenditure in the fourth quarter of 2012 to be approximatelyUS$300 million, which were used primarily for the construction of the processing facilities. We mayadjust the timing and amounts of capital expenditure based on various factors such as market conditions.We funded our capital expenditures in the fourth quarter of 2012 with existing cash balances and creditlines.

We have incurred approximately US$2.0 billion of capital and operating expenditure for thedevelopment of the Toromocho Project as of September 30, 2012 and, based on our current estimation,we will spend another US$1.5 billion for the development of the Toromocho Project for the periodafter September 30, 2012. Part of expenditure will be accounted as cash used in operating activities andothers will be accounted as cash used in investing activities. As of September 30, 2012, our cash andcash equivalents amounted to US$191.0 million, and we have secured a US$2.0 billion credit facilityfrom Eximbank, of which US$320.0 million remained unused. We have also obtained a credit facilityof US$83.0 million, from China Development Bank. We made the first drawdown of US$30.0 millionin October 2012 and the second drawdown of US$53.0 million in November 2012. In December 2012,we obtained a credit facility of US$35.0 million from China Development Bank, which was fullydrawn down by us in the same month. Furthermore, we are in the process of negotiating additionalcredit facilities with an aggregate amount of US$239.0 million with China Development Bank andadditional credit facilities with an aggregate amount of US$419.0 million with Eximbank. Both ChinaDevelopment Bank and Eximbank have issued memorandum to indicate their present commitment toprovide the financing. We also plan to allocate certain portion of the proceeds from our proposedcorporate financing activities to finance our investments in the Toromocho Project. Furthermore, weplan to allocate certain portion of the proceeds from our proposed corporate financing activities as ourworking capital, part of which will be used as the working capital in connection with the ToromochoProject. Lastly, as a portion of the expenditure does not need to be made before we commencecommercial production, we intend to fund this part by the operating cash flow after commencement ofthe commercial production.

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WORKING CAPITAL

The table below sets forth the details of our current assets and liabilities at the end of eachperiod indicated:

As of December 31,As of

September 30,As of

November 30,

2009 2010 2011 2012

(unaudited)(US$ in thousands)

Current AssetsInventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93 1,647 6,024 19,196 18,474Prepayment and other receivables . . . . . . . . . . . 192 738 9,373 20,451 19,438VAT recoverable . . . . . . . . . . . . . . . . . . . . . . . . — 30,682 72,680 11,145 20,430Cash and cash equivalents . . . . . . . . . . . . . . . . . 11,438 155,892 97,550 191,017 153,168

Total current assets . . . . . . . . . . . . . . . . . . . . . . 11,723 188,959 185,627 241,809 211,510

Current LiabilitiesAccounts payable . . . . . . . . . . . . . . . . . . . . . . . . 23,988 55,177 128,152 233,351 160,116Accruals and other payables . . . . . . . . . . . . . . . . 7,766 8,681 16,301 23,573 30,568Amount due to immediate holding company . . . 2,101 2,101 1,920 2,376 2,376Borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 123,399 123,399 100,000 102,300 102,788

Total current liabilities . . . . . . . . . . . . . . . . . . . 157,254 189,358 246,373 361,600 295,848

Net Current Liabilities . . . . . . . . . . . . . . . . . . . 145,531 399 60,746 119,791 84,338

BorrowingsCurrent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 123,399 123,399 100,000 102,300 102,788Non-current . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 156,634 639,228 1,003,399 1,826,698 2,030,394

Total borrowings . . . . . . . . . . . . . . . . . . . . . . . . 280,033 762,627 1,103,399 1,928,998 2,133,185

Our net current liabilities further decreased by 29.6% to US$84.3 million as of November 30,2012 from US$119.8 million as of September 30, 2012. This was primarily attributable to a decrease inour accounts payable, as we settle them with our cash and cash equivalents as of September 30, 2012as well as the additional cash from the drawdown of our banking facilities.

Our net current liabilities increased significantly to US$119.8 million as of September 30, 2012from US$60.7 million as of December 31, 2011. This was primarily attributable to an increase inaccounts payable in connection with the continued development of the Toromocho Project, which waspartially offset by an increase in our cash and cash equivalents.

Our net current liabilities increased significantly to US$60.7 million as of December 31, 2011from US$0.4 million as of December 31, 2010. This was primarily attributable to an increase inaccounts payable as the development process of the Toromocho Project continued.

Our net current liabilities decreased significantly to US$0.4 million as of December 31, 2010from US$145.5 million as of December 31, 2009, primarily due to a substantial increase in our cashand cash equivalent consisting primarily of proceeds from our loans with Eximbank and COH, asubstantial portion of which were recorded as non-current liabilities.

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Our Directors confirm that our current cash and cash equivalents, our available bankingfacilities and the proceeds from our proposed corporate financing activities will be sufficient to meet125% of our present working capital requirements for the period ending 12 months from the date ofthis document.

Our future cash requirements will depend on many factors, including our development costs,operating income and future developments, including any investments or acquisitions we may decideto pursue. We may require additional cash to repay existing debt obligations or to re-finance ourexisting debts due to changing business conditions or other future developments. If our existing cash isinsufficient to meet our requirements, we may seek to sell additional equity securities, debt securitiesor borrow from lending institutions. We cannot assure you that financing will be available in theamounts we need or on terms acceptable to us, if at all. The sale of additional equity securities,including convertible debt securities, would dilute our shareholders’ interests in our Company. Theincurrence of debt would divert cash for working capital and capital expenditures to service debtobligations and could result in operating and financial covenants that restrict our operations and ourability to pay dividends to our shareholders. If we are unable to obtain additional equity or debtfinancing as required, our business operations and prospects may suffer.

INDEBTEDNESS

The following table sets forth a summary of our indebtedness as of the date indicated:

As of December 31,As of

September 30,As of

November 30,

2009 2010 2011 2012

(unaudited)(US$ in thousands)

CurrentBorrowings from immediate holdingcompany . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 123,399 123,399 100,000 102,300 102,788

Non-currentBorrowings from banks . . . . . . . . . . . . . . . . . . . — 200,000 860,000 1,680,000 1,883,000Borrowings from immediate holdingcompany . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 156,634 439,228 143,399 146,698 147,397

Total borrowings . . . . . . . . . . . . . . . . . . . . . . . . 280,033 762,627 1,103,399 1,928,998 2,133,185

The borrowings from our immediate holding company were unsecured. On December 31, 2011,our immediate holding company agreed not to demand the payment of the borrowings amounting toUS$400.0 million out of such US$520.0 million. Hence the US$400.0 million is considered as deemedcapital contribution from our immediate holding company. The remaining balance of US$120.0 milliontogether with borrowings from our immediate holding company of US$123.4 million as ofDecember 31, 2011, totaling US$243.4 million, shall be repaid in full on or before September 30, 2021or at any earlier date at our discretion, and bear an annual interest rate of LIBOR plus 2.00%.US$100.0 million and US$102.3 million as of December 31, 2011 and September 30, 2012,respectively, of such borrowings, which was the amount we intended to repay by January 2013, wereclassified as current liabilities.

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On December 1, 2010, we entered into an agreement with Eximbank for a banking facility ofUS$2.0 billion at an annual interest rate of 6-month LIBOR plus 1.85%, to finance the development ofthe Toromocho Project. We are required to comply with certain financial covenants related to the useof funds and other administrative resources. Our Directors confirm that we have complied with thisloan agreement in all material aspects, and were not involved in any dispute associated with theperformance of such loan agreement as of the Latest Practicable Date and during the Track RecordPeriod. The banking facility is guaranteed by Chinalco and will be secured by our property, plant andequipment in relation to the Toromocho Project if Chinalco’s credibility deteriorates or maydeteriorate. As at December 31, 2010 and 2011, undrawn banking facility available to us was US$1.8billion and US$1.14 billion which has an expiration date beyond one year, respectively. In 2012, wefurther drew down the credit facility from the Eximbank to fund our investments in the ToromochoProject. As of September 30, 2012, undrawn banking facility available to us was US$320.0 million.We made a further drawdown of US$120.0 million in November 2012.

On September 2, 2012, China Development Bank issued a memorandum indicating its presentcommitment to provide a banking facility of US$274.0 million to us for the development of theToromocho Project. On December 25, 2012, we entered into a borrowing agreement with ChinaDevelopment Bank for a banking facility of US$35.0 million, which was fully drawn down by us in thesame month. We are currently in the process of negotiating the borrowing agreement for the remainingcommitted amount of US$239.0 million.

On September 7, 2012, we entered into a borrowing agreement with China Development Bankfor a banking facility of US$83.0 million at an annual interest rate of 6-month LIBOR plus 3.5% anddue in October 2020. In addition, we are required to comply with certain financial covenants related tothe use of funds and other administrative resources. Our Directors confirm that we have complied withthis loan agreement in all material aspects, and were not involved in any dispute associated with theperformance of such loan agreement as of the Latest Practicable Date and during the Track RecordPeriod. We made the first drawdown of US$30.0 million in October 2012 and the second drawdown ofUS$53.0 million in November 2012.

In December 2012, Eximbank issued a memorandum indicating its present commitment toprovide a banking facility of US$419.0 million to us for the development of the Toromocho Project.We are currently in the process of negotiating the borrowing agreement with Eximbank.

The non-current borrowing from COH was interest free long-term loan. The liability is initiallyrecognized at its fair value which is estimated as the present value of the future cash to be paiddiscounted using the prevailing market rate for a similar instrument with a similar credit rating. Thediscount rate was LIBOR plus 1.25%. The excess of proceeds over the fair value of the carrying valueof the borrowing from COH is credited to reserve as capital contribution from COH. The borrowingfrom COH is subsequently carried at amortized cost.

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As at the dates indicated, our borrowings were repayable as follows:

As of December 31,As of

September 30,As of

November 30,

2009 2010 2011 2012

(unaudited)(US$ in thousands)

Within 1 year . . . . . . . . . . . . . . . . . . . . . . . . . . . 123,399 123,399 100,000 102,300 102,788Between 1 and 2 years . . . . . . . . . . . . . . . . . . . . — — — — —Between 2 and 5 years . . . . . . . . . . . . . . . . . . . . 12,294 198,829 232,000 282,000 459,397Over 5 years . . . . . . . . . . . . . . . . . . . . . . . . . . . . 144,340 440,399 771,399 1,544,698 1,571,000

280,033 762,627 1,103,399 1,928,998 2,133,185

Wholly repayable within 5 years . . . . . . . . . . . . 123,399 123,399 100,000 102,300 102,788Wholly repayable after 5 years . . . . . . . . . . . . . . 156,634 639,228 1,003,399 1,826,698 2,030,397

280,033 762,627 1,103,399 1,928,998 2,133,185

MAJOR LIQUIDITY RATIOS

The following table sets forth the major liquidity ratios as at the respective dates:

As of December 31,As of

September 30,20122009 2010 2011

(%)

Debt ratio(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77.8 81.8 65.3 73.6Current ratio(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.5 99.8 75.3 66.9Quick ratio(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.4 98.9 72.9 61.6

Notes:(1) Debt ratio is calculated by dividing total borrowings by total assets.(2) Current ratio is calculated by dividing current assets by current liabilities.(3) Quick ratio is calculated by dividing current assets less inventory by current liabilities.

Debt Ratio

As of December 31, 2009, 2010 and 2011 and September 30, 2012, our debt ratios wereapproximately 77.8%, 81.8%, 65.3% and 73.6%. Historically, we have funded our pre-miningoperation and capital expenditure through borrowings from banks and our immediate shareholder. Asof December 31, 2009 and 2010, our debt ratio remained relatively stable at 77.8% and 81.8%. As ofDecember 31, 2011, our debt ratio improved to 65.3%, primarily as a result of the capitalization of aportion of our loans due to COH. As of September 30, 2012, our debt ratio increased to 73.6% as weincreased our total borrowings for the development of the Toromocho Project.

Current Ratio

As of December 31, 2009, 2010 and 2011 and September 30, 2012, our current ratios wereapproximately 7.5%, 99.8%, 75.3% and 66.9%. As of December 31, 2010, our current ratio improvedsignificantly to 99.8% from 7.5% as of December 31, 2009, primarily due to a substantial increase inour cash and cash equivalent consisting primarily of proceeds from our loans with Eximbank and

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COH, a substantial portion of which were recorded as non-current liabilities. As of December 31,2011, our current ratio decreased to 75.3%, primarily due to an increase in our accounts payable and adecrease in our cash and cash equivalent, both in connection with the continued development of theToromocho Project. Our current ratio further decreased to 66.9% as of September 30, 2012, primarilydue to increases in our account payables in connection with the continued development of theToromocho Project, partially offset by proceeds from our loan with Eximbank.

Quick Ratio

As of December 31, 2009, 2010 and 2011 and September 30, 2012, our quick ratios wereapproximately 7.4%, 98.9%, 72.9% and 61.6%. As of December 31, 2010, our quick ratio improvedsignificantly to 98.9% from 7.4% as of December 31, 2009, as we received the proceeds from ourloans with Eximbank and COH, a substantial portion of which were recorded as non-current liabilities.As of December 31, 2011, our quick ratio decreased to 72.9%, primarily due to an increase in ouraccounts payable and a decrease in our cash and cash equivalent, both in connection with the continueddevelopment of the Toromocho Project. Our quick ratio further decreased to 61.6% as ofSeptember 30, 2012, primarily due to increases in our account payables in connection with thecontinued development of the Toromocho Project, partially offset by proceeds from our loan withEximbank.

COMMITMENTS AND CONTINGENCIES

Set forth below is the capital expenditure we contracted for as at the dates indicated but notrecognized:

As of December 31,As of

September 30,20122009 2010 2011

(US$ in thousands)

Property, plant and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . 300,667 157,054 828,549 747,011

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We lease various offices and warehouses under non-cancellable operating lease agreements.The future aggregate minimum lease payments under non-cancellable operating leases are as follows:

As of December 31,As of

September 30,20122009 2010 2011

(US$ in thousands)

No later than 1 year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 522 586 719 601Later than 1 year and no later than 5 years . . . . . . . . . . . . . . . . . . . . . . . . 786 429 600 610Later than 5 years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — 80 120

1,308 1,015 1,399 1,331

Under the Toromocho Project Transfer Agreement, we committed to investing not less thanUS$1,507 million over a five year term starting from May 2008. If we fail to fulfill the commitment,we will have to pay a penalty to Activos Mineros equivalent to a 30% of the unrealized investment. Asa way to secure compliance with the investment commitment and payment of penalties, we have issueda letter of credit in favor of Activos Mineros in the amount of US$30 million, renewable annually.

As part of the VAT refund regime, we have also committed to invest US$2,053 million for theToromocho Project until December 2013. See “— Taxation — VAT Recoverable.”

We have contingent liabilities in respect of legal claims and administrative procedures arisingin the ordinary course of business. However, we believe we have made adequate provision for thesecontingent liabilities, and it is not anticipated that any material liabilities will arise from the contingentliabilities other than those provided for. For the years ended December 31, 2009, 2010 and 2011 andthe nine months ended September 30, 2012, the amounts of the provision made by the Group forcontingent liabilities in respect of legal claims were nil, nil, US$4.0 million and nil, respectively.

OFF-BALANCE SHEET ARRANGEMENTS

We have not entered into, nor do we expect to enter into, any off-balance sheet arrangements.We also have not entered into any financial guarantees or other commitments to guarantee the paymentobligations of third parties. In addition, we have not entered into any derivative contracts that areindexed to our equity interests and classified as owners’ equity. Furthermore, we do not have anyretained or contingent interest in assets transferred to an unconsolidated entity that serves as credit,liquidity or market risk support to such entity. We do not have any variable interest in anyunconsolidated entity that provides financing, liquidity, market risk or credit support to us or thatengages in leasing, hedging or research and development services with us.

QUALITATIVE AND QUANTITATIVE DISCLOSURE ABOUT CERTAIN FINANCIALRISK

Foreign Exchange Risk

We mainly operate in Peru with most of the transactions denominated and settled in US dollarswhich are mainly related to the acquisition of services and loans received from related parties.

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FINANCIAL INFORMATION

Accordingly, we are exposed to foreign exchange risk that may arise from fluctuations in the exchangerate of the New Peruvian Soles. Our Directors estimate that the impact of any changes in the NewPeruvian Soles exchange rate will not have a significant impact on our financial condition and results.As a result, we do not maintain a hedging policy against our foreign exchange risk. Although wemaintain a net liability position expressed in New Peruvian Soles that, in its appreciation trend, mayhave a negative impact upon liquidation of these monetary assets and liabilities, public estimatesavailable do not anticipate a severe devaluation of the local currency in the short term that may cause amajor impact in our financial condition and results of operation.

During the Track Record Period, we have not used any financial instrument to hedge theforeign exchange risk.

For the years ended December 31, 2009 and 2010 and the nine months ended September 30,2012, if the US dollars had strengthened/weakened by 5% against the New Peruvian Soles with allother variables held constant, loss for the years and the period would have been US$65,000,US$70,000 and US$79,000 higher/lower, respectively. For the year ended December 31, 2011, if theUS dollars had strengthened/weakened by 5% against the New Peruvian Soles with all other variablesheld constant, loss for the year would have been US$47,000 lower/higher. During the past five years,the fluctuation of exchange rate between the US dollars and the New Peruvian Sols has been withinapproximately 5%.

Considering our assets and scale of operation and the historical exchange rate between the USdollars and the New Peruvian Soles, we do not believe the impact ranging from US$47,000 toUS$79,000 to be material.

Cash Flow and Fair Value Interest Rate Risk

Other than cash held in bank deposits included in cash and cash equivalents, we have nosignificant interest-bearing assets. Our operation has limited exposure to interest rate risks. Our interestrate risk arises from borrowings. See “— Indebtedness” for a detailed analysis of our borrowingstogether with their respective effective interest rates and maturity dates.

For the years ended December 31, 2009, 2010 and 2011 and the nine months endedSeptember 30, 2012, if interest rate had increased/decreased by 10 basis-point with all other variablesheld constant, interest expenditure would have been lower/higher by US$80,400, US$304,000,US$734,300 and US$1,240,000, respectively.

Credit Risk

Credit risk is managed on group basis. The carrying amounts of bank deposits (includingrestricted cash), other receivables included in the consolidated statement of financial position representour maximum exposure to credit risk in relation to our financial assets.

As of December 31, 2009, 2010 and 2011 and the nine months ended September 30, 2012, cashand cash equivalents and restricted cash, were deposited in the major financial institutions in Peru and

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FINANCIAL INFORMATION

the PRC, which our Directors believe are of good credit quality. For banks and financial institutions,we place substantially all of our cash and cash equivalent only with major international and local bankswhich are publicly listed locally and/or internationally.

Liquidity Risk

Our liquidity risk management involves maintaining sufficient cash and cash equivalents andavailability of funding through an adequate amount of committed credit facilities.

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FINANCIAL INFORMATION

The table below analyzes the financial liabilities classified into relevant maturity groupingsbased on the remaining period at the end of reporting period to the contractual maturity date. Theamounts disclosed in the table are the contractual undiscounted cash flows.

As of December 31, 2009Less than1 year

Between1 and 2 years

Between2 and 5 years

Over5 years

(US$ in thousands)

Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23,988 — — —Accruals and other payables . . . . . . . . . . . . . . . . . . . . . . . . . . 6,057 — — —Amount due to immediate holding company . . . . . . . . . . . . . 2,101 — — —Short-term borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 123,399 — — —Long-term borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — 15,000 175,000

155,545 — 15,000 175,000

As of December 31, 2010Less than1 year

Between1 and 2 years

Between2 and 5 years

Over5 years

(US$ in thousands)

Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55,177 — — —Accruals and other payables . . . . . . . . . . . . . . . . . . . . . . . . . . 6,708 — — —Amount due to immediate holding company . . . . . . . . . . . . . 2,101 — — —Short-term borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 123,399 — — —Long-term borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,273 5,273 223,835 511,375

192,658 5,273 223,835 511,375

As of December 31, 2011Less than1 year

Between1 and 2 years

Between2 and 5 years

Over5 years

(US$ in thousands)

Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 128,152 — — —Accruals and other payables . . . . . . . . . . . . . . . . . . . . . . . . . . 4,956 — — —Amount due to immediate holding company . . . . . . . . . . . . . 1,920 — — —Short-term borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100,000 — — —Long-term borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22,346 22,346 292,990 818,918

257,374 22,346 292,990 818,918

As of September 30, 2012Less than1 year

Between1 and 2 years

Between2 and 5 years

Over5 years

(US$ in thousands)

Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 233,351 — — —Accruals and other payable . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,966 — — —Amount due to immediate holding company . . . . . . . . . . . . . 2,376 — — —Short-term borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102,300 — — —Long-term borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42,969 42,969 400,355 1,445,946

389,962 42,969 400,355 1,445,946

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FINANCIAL INFORMATION

NO OTHER OUTSTANDING INDEBTEDNESS

Save as disclosed in this document, we did not have outstanding indebtedness or any loancapital issued and outstanding or agreed to be issued, bank overdrafts, loans or similar indebtedness,liabilities under acceptances (other than normal trade bills), acceptance credits, debentures, mortgages,charges, finance leases or hire purchase commitments, guarantees or other contingent liabilities as ofNovember 30, 2012. Our Directors confirm that, as at the Latest Practicable Date, there is no materialchange in the Company’s indebtedness since November 30, 2012.

DIVIDEND POLICY

We have not declared or paid any dividends since our incorporation. We do not anticipatepaying any dividends in the foreseeable future.

Subject to the Companies Law and its Articles of Association, the Company in a generalmeeting may declare dividends in any currency but dividends may not exceed the amountrecommended by the Directors. Dividend may not be declared or paid other than out of the profits andreserves of the Company which are lawfully available for distribution, including share premium.

Unless the rights attached to any Shares or the terms of issue thereof otherwise provide, alldividends shall (as regards any shares not fully paid throughout the period in respect of which thedividend is paid) be apportioned and paid pro rata according to the amounts paid up on the Sharesduring any period or the portion of any period in respect of which the dividend is paid. For thesepurposes no amount paid up on a share in advance of calls shall be treated as paid up on the share.

The Directors may from time to time pay to the members of the Company such interimdividends as appear to the Directors to be justified by the profits of the Company.

The Directors may also pay half-yearly or at other intervals to be selected by them at a fixedrate if they are of the opinion that the profits available for distribution justify the payment.

The Directors may retain any dividends or other moneys payable on or in respect of a shareupon which the Company has a lien, and may apply the same in or towards satisfaction of the debts,liabilities or engagements in respect of which the lien exists.

The Directors may also deduct from any dividend or other monies payable to any member ofthe Company all sums of money (if any) presently payable by him to the Company on account of calls,installments or otherwise.

No dividend shall carry interest against the Company.

WORKING CAPITAL SUFFICIENCY CONFIRMATION

Taking into account the financial resources available to us, including the estimated proceedsfrom our proposed corporate financing activities and our available banking facilities maintained with

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our banks and financial institutions, our Directors are of the opinion that we have sufficient workingcapital for 125% of our present requirements, which is for at least the next 12 months from the date ofthis document.

DISTRIBUTABLE RESERVES

As of September 30, 2012, we did not have any distributable reserves.

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NOMATERIAL ADVERSE CHANGE

Our Directors confirmed that, as of the date of this document, there has been no materialadverse change in our financial or trading condition or prospects since September 30, 2012, being thedate of our latest audited financial results as set out in the “Accountant’s Report” in the Appendix I tothis document.

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RELATIONSHIP WITH CONTROLLING SHAREHOLDERS

OUR CONTROLLING SHAREHOLDERS

COH, our direct Controlling Shareholder, was incorporated in Hong Kong on July 18, 2007 as alimited liability company. COH is currently an investment holding company. As of the LatestPracticable Date, Chinalco, a Chinese state-owned enterprise, held 100% of the shares of COH.

Chinalco, through COH, indirectly held 100% of our issued share capital at the date of this [Š].

Chinalco is an investment management and holding company authorized by the State Councilof the PRC. Chinalco’s sole shareholder is the SASAC. Chinalco principally engages in the mining,smelting and processing of non-ferrous metals and related trading, engineering and technologicalservices. It is currently the world’s second largest alumina producer and the third largest primaryaluminum producer. As of September 30, 2012, Chinalco’s direct and indirect holdings include 48.17%of the shares in Yunnan Copper Co., Ltd, a company listed on the Shenzhen Stock Exchange, and41.80% of the shares in Chalco, a company listed on the New York Stock Exchange, the Hong KongStock Exchange and the Shanghai Stock Exchange. Chalco, in turn, holds approximately 24% of theshares in JiaoZuo WanFang Aluminum Manufacturing Co., Ltd., a company listed on the ShenzhenStock Exchange.

As of September 30, 2012, Chinalco had total assets of approximately RMB433.7 billion. In2011, Chinalco produced approximately 430,700 tonnes of cathode copper and 3.92 million tonnes ofelectrolytic aluminum. Chinalco’s revenues for 2009, 2010 and 2011 were approximately RMB135.6billion, RMB195.4 billion and RMB231.7 billion, respectively.

The Chinalco Group principally operates within the PRC. As of the Latest Practicable Date,other than the Group, the subsidiaries and associates of Chinalco that engage in the exploration ofcopper and other non-ferrous metals outside of China include the following:

Yunnan Copper Group

As of September 30, 2012, Chinalco held 58% of the shares of Yunnan Copper Group. YunnanCopper Group principally engages in the exploration, mining, smelting, processing and trading ofcopper and related engineering and technological services in China. As of December 31, 2011, YunnanCopper Group had total assets of approximately RMB48 billion and net assets of approximatelyRMB16 billion. The total revenue of Yunnan Copper Group for the year ended December 31, 2011was approximately RMB40 billion and its net profit was approximately RMB401 million for thatperiod. The main suppliers of Yunnan Copper Group are producers of copper concentrates, blistercopper, cold copper and the relevant raw materials. The main customers of Yunnan Copper Group areusers of cathode copper and other by-products. There is no overlap between the board and seniormanagement of Yunnan Copper Group and the Group.

As at the Latest Practicable Date, Yunnan Copper Group held 48.17% of the shares of YunnanCopper Co., Ltd., which was consolidated in the accounts of Yunnan Copper Group as a subsidiary.

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RELATIONSHIP WITH CONTROLLING SHAREHOLDERS

Yunnan Copper Co., Ltd. principally engages in the production, processing and sales of non-ferrousmetals and precious metals, and mining and beneficiation of non-ferrous metals in China. As ofSeptember 30, 2012, Yunnan Copper Co., Ltd. had total assets of approximately RMB31 billion andnet assets of approximately RMB8 billion. The total revenue of Yunnan Copper Co., Ltd. for the yearended December 31, 2011 was approximately RMB35 billion. The total profit and the profit fromoperations for that period were approximately RMB1 billion and RMB991 million respectively. Thetotal revenue of Yunnan Copper Co., Ltd. for the nine months ended September 30, 2012 wasapproximately RMB30 billion. The net loss for that period was approximately RMB40 million. Thereis no overlap between the board and senior management of Yunnan Copper Co., Ltd. and the Group.

There is no material competition between the business of Yunnan Copper Group and YunnanCopper Co., Ltd. in China and the core business of the Group. The Group specializes in the mining ofcopper and the processing of ore into concentrates containing copper and other minerals for subsequentsale to refineries, not end user customers. Although Yunnan Copper Group and Yunnan Copper Co.,Ltd. also engage in mining activities, substantially all of the copper they mine is processed and refinedin the refineries owned by Yunnan Copper Group and Yunnan Copper Co., Ltd. for subsequent sale toend-user customers. Further, China, as the largest copper consuming country in the world, is facingshortfalls in domestic supply and significantly relies on copper concentrate imports from its tradingpartners to meet demand.

Other than the investment in Yunnan Copper Australia set forth below, Yunnan Copper Groupalso engages in exploration activities in Laos through its unlisted subsidiaries Phongsaiy Mining andUudomxay Mining1.

Phongsaiy Mining, a subsidiary of Yunnan Copper Group, is currently engaged in theexploration of copper in Phongsaiy, Laos. As of June 30, 2012, Phongsaiy Mining had total assets ofapproximately RMB7.1 million and net assets of approximately RMB6.7 million. Phongsaiy Mininghas not generated any revenue or profit. It has six employees. The directors and senior management ofPhongsaiy Mining were appointed by Yunnan Copper Group and there is no overlap between the boardand senior management of Phongsaiy Mining and the Group.

Uudomxay Mining, a subsidiary of Yunnan Copper Group, is currently engaged in theexploration of copper in Uudomxay, Laos. As of June 30, 2012, Uudomxay Mining had total assets ofapproximately RMB3.9 million and net assets of approximately RMB3.1 million. Uudomxay Mininghas not generated any revenue or profit. The directors and senior management of Uudomxay Miningwere appointed by Yunnan Copper Group and there is no overlap between the board and seniormanagement of Uudomxay Mining and the Group.

Yunnan Copper Australia

As at the Latest Practicable Date, Yunnan Copper Group, through its Australian subsidiary,indirectly held approximately 21.25% of the shares of Yunnan Copper Australia. Yunnan Copper

1 As of the Latest Practicable Date, (i) both Phongsaiy Mining and Uudomxay Mining were wholly-owned subsidiaries of YunnanCopper Sanmu Mining Co., Ltd ( ); (ii) the shares of Yunnan Copper Sanmu Mining Co., Ltd were held asto 65.62% by Yunnan Copper Group, 22.80% by Yunnan Copper Australia and 11.58% by Yunnan Mineral Resources Explorationand Mining Co., Ltd ( ); and (iii) Yunnan Mineral Resources Exploration and Mining Co., Ltd, inturn, was a wholly-owned subsidiary of Yunnan Copper Group.

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RELATIONSHIP WITH CONTROLLING SHAREHOLDERS

Australia is listed on the Australian Stock Exchange and engages in the exploration for and thedevelopment of minerals in Australia and elsewhere. Its principal projects include the exploration ofcopper, gold and/or uranium in Australia, Chile and Laos.

As at June 30, 2012, Yunnan Copper Australia’s total assets and net assets were approximatelyAUD17 million and AUD16.2 million respectively. The revenue of Yunnan Copper Australia for theyear ended June 30, 2012 was approximately AUD287,979 and it did not generate any profit for thatperiod. There is no overlap between the board and senior management of Yunnan Copper Australia andthe Group.

Chinalco Resources

As at the Latest Practicable Date, Chinalco held 100% of the shares of Chinalco Resources.Chinalco Resources principally engages in the exploration of copper, coal and other mineral resourcesthrough investing in the relevant companies. As at the Latest Practicable Date, Chinalco Resourcesheld 9.9% of the shares of Pembrook Mining, a preliminary exploration company, which primarilyengages in the exploration of copper, gold, nickel and other metallic ore deposits in Peru, Mexico andCanada.

As of June 30, 2012, the net assets of Pembrook Mining amounted to approximately CAD70.6million and it has not generated any revenue or profit. Pembrook Mining has around 50 employees andthere is no overlap between the board and senior management of Pembrook Mining and the Group.

Other than its interest in Pembrook Mining, Chinalco Resources does not hold any interest inany exploration or mineral companies which engages in the exploration or development of copper orother non-ferrous metals outside of China.

Chalco

As of September 30, 2012, Chinalco held 41.80% of the shares in Chalco. Chalco principallyengages in the mining of bauxite, the production and sales of alumina, primary aluminum andaluminum fabrication products, the operation of coal and iron ore businesses in China as well astrading in other non-ferrous metal products and the development of the Simandou iron ore project inGuinea jointly with Rio Tinto plc. As of September 30, 2012, Chalco had total assets of approximatelyRMB180 billion and net assets of approximately RMB58 billion. The total revenue of Chalco for theyear ended December 31, 2011 was approximately RMB146 billion. Its total profit and its profit fromoperations were approximately RMB818 million and RMB617 million respectively for that period. Thetotal revenue of Chalco for the nine months ended September 30, 2012 was approximately RMB109billion. Its total loss and its loss from operations were approximately RMB5.53 billion and RMB5.87billion respectively for that period.

The Company believes that there is no competition between the copper mining business of theCompany and the mining business of Chalco as they involve different mineral resources. As regardsChalco’s trading of non-ferrous metal products, since the Company specializes in the mining of copper

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and processing of ore into copper concentrates and other minerals and does not engage in the trading ofany mineral resources, the business of the Company and the trading business of Chalco constitutedifferent lines of businesses. There is no competition between the mineral trading business of Chalcoand the business of the Group.

Chinalco does not intend to inject the above exploration projects into the Group. The Groupcurrently focuses on developing the Toromocho Project located in central Peru, the world’s secondlargest pre-production copper project, as measured by proved and probable copper ore reserves, and thethird largest pre-production copper project, as measured by average planned annual productionbetween 2012 and 2020, among the firm copper mining projects scheduled to commence production ofcopper concentrates from 2012 to 2016. The Toromocho Project is expected to commence productionby the fourth quarter of 2013.

The exploration projects of Yunnan Copper Group, Yunnan Copper Australia and ChinalcoResources are at a preliminary stage with insufficient exploration activities to define mineral resources.The exploration projects are different in nature from the business that the Group currently focuses on,as currently they focus on exploration only, with no integral plans for exploitation or production.

There are different risks faced by exploration projects or trading businesses compared to therisks faced by the development of a pre-production copper project. In addition, exploration projects ortrading businesses require a different skill set from those required in the development and operation ofmineral resources. The Group has been operating as a separate business independent from the aboveexploration projects and trading business during the Track Record Period and it therefore wouldrequire a significant reorganization of the operations of the Group and the above exploration projectsand trading business to achieve integration with the Group, which would not be justified given the lackof, or immaterial, competition between them.

Further, as Yunnan Copper Australia is listed on the Australia Stock Exchange and Chalco islisted on the New York Stock Exchange, the Hong Kong Stock Exchange and the Shanghai StockExchange, the divestment of the exploration projects of Yunnan Copper Australia or the tradingbusiness of Chalco may require the approval of the shareholders of Yunnan Copper Australia orChalco — in Hong Kong this would constitute connected transactions. Such divestments may involvecomplicated procedures and would be difficult to complete in a cost effective or timely manner andmay not be commercially viable given public shareholders’ interests already existing in YunnanCopper Australia and Chalco.

Based on the above, Chinalco has no intention to include the above exploration projects andtrading business in our Group and the Company does not have an option to acquire the aboveexploration projects and trading business under the Non-Competition Undertaking as they are distinctfrom the core businesses of the Group.

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OUR CURRENT BUSINESS AND THE BUSINESS OF CHINALCO

We believe that our current business operations either do not compete with or do not materiallycompete with the business of Chinalco based on the following reasons:

Š Exploration and mining

We believe that there is no material competition between the above mentioned explorationactivities outside China of the Chinalco Group and the business of the Group.

We have the exclusive rights to the defined mineral resources and reserves of the ToromochoProject and will develop the Toromocho Project in accordance with our business plans. As ofthe Latest Practicable Date, none of the copper mines owned by Chinalco or its othersubsidiaries is located in Peru. Yunnan Copper Group’s operations are principally in China,with exploration projects in Laos through Phongsaiy Mining and Uudomxay Mining andYunnan Copper Australia’s principal projects are situated in Australia, Chile and Laos. As theToromocho Project and the mines of Chinalco are located in different geographical areas, ourmining activities do not compete with those of the Chinalco Group for mineral and laborresources.

The size of the above copper mines outside the PRC owned by other members of the ChinalcoGroup is relatively insignificant as compared to the size of the Toromocho Project. Theoverseas exploration projects undertaken by Yunnan Copper Group, Yunnan Copper Australiaand Chinalco Resources are currently at the exploration stage with insufficient explorationactivities to define mineral resources. There are not yet any proven reserves at these projectsnor is there any indication that there will be any significant resources at all. On the other handthe Group currently focuses on developing the Toromocho Project, with its proved andprobable reserves estimated to contain approximately 7.3 million tonnes of copper, 290,000tonnes of molybdenum and 10,500 tonnes of silver.

According to the Company’s experience in the mining industry, it would normally take eight toten years for an exploration project to move from the preliminary exploration stage into theproduction stage. Furthermore, the development of a copper mine with material resourceswould involve substantial capital expenditure in the range of billions of US dollars to reach astage where it would be competing with the Company.

Considering (i) the above timing for the exploration projects to come into any production, and(ii) the uncertainty in (a) there being any reserves, (b) the ability to raise sufficient financing,and (c) the fact that the demand for copper has continued to outstrip supply in recent years andthe global demand for copper is expected to grow in the next few years, the Company believesthat Yunnan Copper Australia, Yunnan Copper Group and Chinalco Resources will notmaterially compete with the Company in the foreseeable future after our proposed corporatefinancing activities.

Š Processing, smelting and refining operations

We specialize in the mining of copper and the processing of ores into concentrates containingcopper and other minerals for subsequent sale to smelters and refineries rather than end-usercustomers. We do not engage in any refining activities, whereas the Chinalco Group processes,smelts and refines raw materials supplied from its own mines or by third parties. Substantiallyall the copper mined by Yunnan Copper Group is processed and refined in refineries owned byYunnan Copper Group for subsequent sale to end-user customers. Thus, we believe there is no

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competition between us and the Chinalco Group for processing, smelting and refiningoperations.

Š Sale of products

Copper is a commodity product with a readily available market. Copper products are traded atprevailing international market prices determined by an open and ready market. The demandfor copper has continued to outstrip supply in recent years and the global demand for copper isexpected to grow in the next few years. Further, China, as the largest copper consuming countryin the world, is facing shortfalls in domestic supply and significantly relies on copperconcentrate imports from its trading partners to meet demand. Peru is the second largest copperconcentrate supplier to China after Chile. The copper concentrates imported into China fromPeru grew at a CAGR of 14.3% from 2006 to 2011, outpacing that of Chile at 2.5%.Furthermore, as mentioned in the above paragraph, the target customers of the Group arerefineries, whereas Yunnan Copper Group sells to end-user customers. Therefore, we face littlecompetition with the Chinalco Group in terms of sale of products.

Š Competition with listed subsidiaries of the Chinalco Group

In addition to the reasons stated above, we believe that the Chinalco Group does not competewith us through its listed subsidiaries for the following reasons:

(i) the listed subsidiaries’ business decisions are decided by their respective seniormanagement and their boards of directors, which are independent of their respectivecontrolling shareholders. The directors of such listed subsidiaries are required to act inthe best interest of the respective shareholders with respect to the affairs of the companyand to comply with the requirements of the respective rules of stock exchanges and toseek independent shareholders’ approval, if required;

(ii) after the proposed corporate financing activities, if the Company were to consider aproposal which had competing business implications for Chinalco, pursuant to theArticles of Association of the Company, the directors who have overlapping officeswith Chinalco would abstain from voting at the board meeting convened for thispurpose. Hence, all decisions in this respect would be made by the other directors of theCompany, including the independent non-executive Directors. The Company believessimilar corporate governance requirements apply to the listed subsidiaries of theChinalco Group. Without the participation in decision making by Chinalco in either theCompany or the listed subsidiaries of Chinalco in respect of a proposal which hascompeting business implications for Chinalco, the Company and the listed subsidiariesof Chinalco will be competing on a level-playing field as if they were independentparties to each other; and

(iii) as the listed subsidiaries are independent of their respective shareholders, the ChinalcoGroup is not able to control all business decisions of its listed subsidiaries simply byvirtue of its shareholding in such listed subsidiaries, including decisions on whether ornot to compete with us.

However, as the listed subsidiaries are not subject to the Non-competition Undertaking, theymay conduct future expansion and may potentially compete with the Group.

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RELATIONSHIP WITH CONTROLLING SHAREHOLDERS

We and the members of the Chinalco Group operate our respective mines independently fromeach other. We and other members of the Chinalco Group have our own respective exploration andmining rights. There is no significant overlap of directors and senior management between us and othermembers of the Chinalco Group. Accordingly, we have been conducting, and will continue to conduct,our business independently of the business of other members of the Chinalco Group.

NON-COMPETITION UNDERTAKING

In order to maintain a clear delineation of our respective businesses going forward, Chinalcohas provided a non-competition undertaking in favor of the Company (the “Non-CompetitionUndertaking”) to the effect that:

(i) it will not, and will procure its subsidiaries (excluding the Group and the listedsubsidiaries of Chinalco) will not, directly or indirectly, either on its own account orwith each other or in conjunction with or on behalf of any person, firm or company,except through a member of our Group, among other things, carry on, participate in orbe interested in or engage in, acquire or hold any business that competes with our corebusiness in the regions in which we operate (the “Restricted Business”). For thepurpose of the Non-Competition Undertaking, our core businesses are the explorationand mining of copper and other non-aluminum and non-ferrous metals outside of China.

The Non-Competition Undertaking does not apply to the following circumstances:

- engaging in the Restricted Business resulting from any business opportunitywhich is notified to the Company in accordance with paragraph (ii) below thatthe Company decides not to take up; or

- the holding of securities in a company whose shares are listed on a recognizedstock exchange which is engaged in the Restricted Business, provided that:

(a) any Restricted Business conducted or engaged in by such company (andassets relating thereto) accounts for less than 10% of that company’sconsolidated turnover or consolidated assets, as shown in that company’slatest audited accounts; or

(b) Chinalco and its associates (excluding the Group and the listedsubsidiaries of Chinalco) do not directly or indirectly hold or control thevoting rights in respect of 10% or more of the issued share capital ofsuch company; or

(c) Chinalco and its associates (excluding the Group and the listedsubsidiaries of Chinalco) do not directly or indirectly control the board ofdirectors of such company.

If Chinalco becomes aware that any member of the Chinalco Group (excluding the listedsubsidiaries of Chinalco) engages in the Restricted Business, Chinalco will notify the Companyimmediately and use commercially reasonable efforts to procure that the Company has the right toacquire the Restricted Business according to the procedure set out in paragraph (ii) below.

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(ii) Right of first refusal for competing business opportunities on acquisition by theChinalco Group

If the Chinalco Group (excluding the listed subsidiaries of Chinalco) becomes aware of abusiness opportunity which directly or indirectly competes, or may lead to competition, with theRestricted Business, Chinalco will notify the Company of such business opportunity immediately uponbecoming aware of such opportunity. Chinalco is obligated to use its best efforts to procure that suchopportunity is first offered to the Company on terms and conditions no less favorable than thoseoffered to Chinalco and/or its relevant subsidiaries. Our independent non-executive Directors willconsider whether the Company should take up the business opportunity. Within 30 days (or such otherperiod as may be agreed between the parties if Shareholders’ approval is required) after receiving thenotice, our independent non-executive Directors will notify Chinalco in writing as to whether, and theextent to which, the Company will take up the opportunity. Chinalco or any of its subsidiaries may takeup the opportunity or offer it to a third party to the extent that the Company decides not to take up suchopportunity.

(iii) Call option over competing business acquired by the Chinalco Group

Chinalco has granted to the Company options to acquire at any time any business of theChinalco Group (excluding the listed subsidiaries of Chinalco) resulting from any business opportunityreferred to in paragraph (ii) above which has been offered to, but has not been taken up by, theCompany. If the Company decides to exercise its option, the exercise price shall be determined basedon a valuation conducted by an independent valuer appointed by the Company and Chinalco jointlyand on negotiation between the Company and Chinalco in accordance with any applicable legalrequirements and procedures.

(iv) Right of first refusal for competing business on disposal by the Chinalco Group

Chinalco has also granted to the Company a right of first refusal to acquire the interests referredto in paragraph (iii) above. Where the Chinalco Group (excluding the listed subsidiaries of Chinalco)proposes to dispose of such interests, it must first offer such interests to the Company on terms no lessfavorable than those offered to third parties. The offer must be made in writing, setting out full terms ofthe proposed disposal and any information which may be required by the Company in order to make adecision as to whether the Company wishes to exercise the right of first refusal. The Company’sindependent non-executive Directors will review the terms of the offer and consider whether theCompany should or should not exercise the right of first refusal. Within 30 days after receiving theoffer (or such other period as may be agreed between the parties if Shareholders’ approval is required),the Company will notify Chinalco in writing as to whether it will exercise the right of first refusal torequire the Chinalco Group (excluding the listed subsidiaries of Chinalco) to sell its interest to theCompany. The Company will notify Chinalco if it decides not to exercise the right of first refusal, inwhich case the Chinalco Group (excluding the listed subsidiaries of Chinalco) may dispose of itsinterest to a third party, provided the terms must not be more favorable than those offered to theCompany.

The Non-Competition Undertaking will remain effective until Chinalco ceases to be aControlling Shareholder of the Company.

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The Company will adopt the following measures to manage any conflict of interests arisingfrom competing business and to safeguard the interests of our Shareholders:

(i) the Company’s independent non-executive Directors will review, on an annual basis,Chinalco’s compliance with the Non-Competition Undertaking; and

(ii) Chinalco has undertaken to provide all information requested by the Company which isnecessary for the annual review by the Company’s independent non-executive Directorsand the enforcement of the Non-Competition Undertaking.

To further enhance its support for the Company, Chinalco has provided an undertaking to theCompany that the Group will act as Chinalco’s core platform for the future acquisition, investment,development and operation of non-ferrous and non-aluminum mineral resources and projects overseas.

INDEPENDENCE FROM OUR CONTROLLING SHAREHOLDERS

Having considered the following factors, our Directors are satisfied that our Company will beable to operate independently from our Controlling Shareholders and their associates:

Financial Independence

We have established an independent finance department with a team of independent financialstaff, as well as a sound and independent audit system, a standardized financial and accounting systemand a complete financial management system. We can make financial decisions independently andChinalco does not intervene with our use of funds.

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The following table presents the details of the financial assistance provided by Chinalco to ourGroup as of the Latest Practicable Date:

Date PartiesNature and amount offinancial assistance Duration Key terms

Proposal/actual use ofproceeds

December 1, 2010 Chinalco,Eximbank

Guarantee of a loanfacility for the sumUS$2.0 billion(Note 1)

Fifteenyears

Unconditionalguarantee of the facility

To invest in theToromocho Project

September 30,2011

COH, ourCompany

Shareholder loan forthe sum ofapproximatelyUS$243.4 million

Tenyears

Interest at the rate ofLIBOR +200 basispoints per annum

Debtreorganization(Note 3)

October 16, 2012 Chinalco,ChinaDevelopmentBank

Guarantee of a loanfacility for the sum ofUS$83 million(Note 2)

Eightyears

Unconditionalguarantee of the facility

Construction,maintenance andoperation ofadditional projects

December 25,2012

Chinalco,ChinaDevelopmentBank

Guarantee of a loanfacility for the sum ofUS$35 million

Eightyears

Unconditionalguarantee of the facility

Construction,maintenance andoperation ofadditional projects

Notes:(1) As of September 30, 2012, the aggregate principal amount of drawdown under this facility was US$1.68 billion.(2) As of September 30, 2012 there were no amounts outstanding under this facility.(3) See “History, Reorganization and Group Structure — Reorganization — Assignment of receivables and amendment of debt terms.”

With respect to the financial assistance provided by Chinalco to the Group as set forth in thetable above, as of September 30, 2012,

Š the total amount of the loan facilities guaranteed by Chinalco to the Group amounted toUS$2.0 billion and the total amount of the drawdown by the Group was US$1.68billion; and

Š the total amount of loans provided by Chinalco to the Group amounted to approximatelyUS$249 million.

Eximbank facility

In respect of the guarantee provided by Chinalco to our Group for the facility from Eximbank,for the reasons set out below either replacing the guarantee from Chinalco or refinancing the existingloan facility would be impractical and not in the best interests of the Company and its shareholders.

A replacement of the parent guarantee would constitute a major change of the existing loanfacility, which would necessarily lead to re-negotiation of the existing facility agreement. Consideringthe size of the Toromocho Project, being the world’s second largest pre-production copper project, asmeasured by proved and probable ore reserves, and the third largest pre-production copper project, asmeasured by average planned annual production between 2012 and 2020, among the top 20 firm

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copper mining projects scheduled to commence production of copper concentrates from 2012 to 2016,and the amount of loan involved, it is expected that any due diligence and renegotiation of the loanfacility agreement would take several months. The renegotiation could affect the drawdown of theexisting loan facility, which would, in turn, adversely affect the normal operation of the ToromochoProject. In addition, the Group may incur substantial costs, such as the fees associated with the duediligence exercise and the legal fees, which would not be beneficial to the Company and itsshareholders. The existing loan facility was granted by Eximbank originally in 2008. Given theprevailing economic climate and more cautious lending requirements from banks in general, if theCompany were to renegotiate the terms of the facility agreement, the new terms would most likely tobe less favorable than the existing ones.

If Chinalco Peru were to terminate the guarantee, it would give rise to early terminationliabilities. In that case, according to the terms of the loan facility, Eximbank could cancel the unutilizedloan and declare all outstanding loans to be immediately due and require Chinalco Peru to immediatelyrepay all outstanding principal, interest on the loan and other sums payable, which will have a materialadverse effect on the business operation of the Group. As of November 30, 2012, the total amount ofdrawdown by the Group was approximately US$1.80 billion. In order to repay the outstanding loan toEximbank, Chinalco Peru would need to refinance the existing Eximbank loan facility with other loanfacilities from another bank. By entering into new loan facilities, Chinalco would inevitably incursubstantial costs and the costs of financing would most likely be much higher compared with the costsunder current loan policies from another bank.

Based on the above, the Company considers that it is not commercially viable to replace theguarantee or refinance the existing loan facility as the Company would need to spend a considerableamount of time, effort and costs while the terms of any new facility agreement would most likely beless favorable compared to the existing loan facility.

Chinalco Peru has received a letter of undertaking from Eximbank in December 2012 for a loanfacility amounting to an aggregate of US$419 million which is guaranteed by Chinalco. Chinalco Peruis continuing to negotiate with Eximbank and intends to enter into a facility agreement with Eximbank.

The Company has received indicative term sheets which is sufficient to cover the December 1,2010 guarantee and the December 2012 letter of undertaking referred to above, on normal commercialterms without the guarantee or other financial support from Chinalco. The indicative term sheetsalready serve as testimony presented by independent third parties without reliance on the guarantee bythe parent company.

China Development Bank facility

The Company has received a letter from China Development Bank estimating that, if theUS$83 million loan facility guaranteed by Chinalco that it has provided (and the further ChinaDevelopment Bank loan facilities currently under negotiation) were not guaranteed by Chinalco, theinterest rate would have been approximately 100 basis points higher than the interest rate with theChinalco guarantee. This letter demonstrates our ability to obtain finance without Controlling

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Shareholder support, albeit at a higher cost. Taking into account the higher cost, the Company has alsoentered into a facility agreement with China Development Bank on December 25, 2012 for a furtherUS$35 million guaranteed by Chinalco.

The Company has received indicative term sheets from China Development Bank for loanfacilities amounting to an aggregate of US$357 million (sufficient to cover the existing US$83 millionand US$35 million loan facilities from China Development Bank and the US$239 million creditfacility currently under negotiation) on normal commercial terms without the guarantee or otherfinancial support from Chinalco. The indicative term sheets already serve as testimony protected byindependent third parties without reliance on the guarantee by the parent company.

COH loan

It is expected that part of the shareholder loan provided by COH to the Group will be repaid bythe Group using a portion of the proceeds after our proposed corporate financing activities. TheCompany has received indicative terms from independent third parties without reliance on theguarantee by the parent company and such indicative terms will be sufficient to cover the outstandingamount of the COH shareholder loan after our proposed corporate financing activities.

Currently, the Company is at the pre-production stage. As of September 30, 2012, the Companyhad incurred approximately US$2.0 billion of capital and operating expenditure for the development ofthe Toromocho Project. The Company is expected to incur total capital and operating expenditure forthe development of the Toromocho Project in the amount of approximately US$3.5 billion. TheCompany plans to use existing cash, the undrawn portion of the Eximbank facility, the ChinaDevelopment Bank facility, part of our proceeds following our proposed corporate financing activitiesand additional banking facilities we are negotiating to fund such capital investment for thecommissioning and ramp-up of the Toromocho Project. Upon completion of the construction of theToromocho Project by the end of 2013, the Company does not expect any significant capitalinvestment during the production stage.

Since the completion of our acquisition of the Toromocho Project in May 2008, we havedevoted substantial effort to developing the Toromocho Project to an advanced development stage andaccomplished all its key milestones for pre-production mining. Barring unforeseen circumstances, theToromocho Project is expected to commence production in the fourth quarter of 2013 and generatesignificant positive cash flow in 2014. According to the Competent Person’s Report and based on itsassumptions, in 2014 and 2015 it is expected that the Toromocho Project will generate over US$0.9billion and US$1.1 billion net cash flow from operations, respectively, which in total exceeds theamount of the current loan facility guaranteed by Chinalco. Further, it is expected to generate overUS$4.9 billion from operations in the first 5 years of production.

While we may still choose to obtain financing with guarantees or securities provided byChinalco if the terms of such financing are in the best interest of our Shareholders, we believe that we

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are able to arrange and obtain new financings and extend existing financings from commercial bankson normal commercial terms without guarantees or security from Chinalco. Thus, we believe we willnot be financially dependent on Chinalco or its associates.

Management Independence

Our board comprises three non-executive Directors, three executive Directors and fourindependent non-executive Directors. The non-executive Directors of the Company, namely Dr. XiongWeiping (“Dr. Xiong”), Mr. Ren Xudong (“Mr. Ren”) and Mr. Xie Weizhi (“Mr. Xie”) also holdoffices as directors and senior management within the Chinalco Group. Dr. Xiong is the generalmanager of Chinalco, the chairman and chief executive officer of Chalco, the chairman of COH andthe chairman of Chinalco Finance Co., Ltd. Mr. Ren is the vice general manager of Chinalco and thedirector of Chinalco Finance Co., Ltd. Mr. Xie is the assistant to the general manager of Chinalco, anexecutive director and president of COH and an executive director of Chinalco Finance Co., Ltd. Otherthan as disclosed above, there is no overlapping senior management between the Company and theChinalco Group. Dr. Xiong, our Chairman and a non-executive Director, is principally responsible forformulating our corporate and business strategies and making our major corporate and operationaldecisions. Mr. Ren and Mr. Xie, both non-executive Directors, are involved in our high level decision-making of important strategic and policy matters. Dr. Xiong, Mr. Ren and Mr. Xie are not involved inour day-to-day management. None of our current three executive Directors will serve as a director orhold any position within the Chinalco Group. As a result, they are able to devote their time fully to themanagement and operation of the Group.

Each of the Directors is aware of his fiduciary duties as a Director of our Company whichrequire, among other things, that he acts for the benefit and in the best interests of our Company andavoids any conflict between his duties as a Director and his personal interest. In the event that there isany potential conflict of interest arising out of any transaction to be entered into between our Groupand any of our Directors or their respective associates, the interested Director(s) will abstain fromvoting at the relevant Board meetings of the Company in respect of such transaction and shall not becounted in the quorum. In addition, the interested Director(s) will abstain from participating in therelevant Board meetings of the Company in respect of such transactions, unless specifically requestedby the majority of the independent non-executive Directors. In the event that the overlapping Directorsare required to abstain from attending our Board meetings, our Board can function effectively given thequalifications, expertise and experience of the executive Directors and independent non-executiveDirectors. See “Directors and Senior Management — Independent Non-executive Directors” for detailsof international mining experience of our independent non-executive Directors.

Based on the above, we consider that our Board will function independently from Chinalco andis capable of properly discharging its duties and acting in the best interests of our Shareholders as awhole.

Operational Independence

The operation of the business of our Group is carried out at its own mining and processingfacilities, which are separate and distinct from those of the business of Chinalco. Our Company has anindependent work force to carry out its mining business and has not shared its operations team with

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RELATIONSHIP WITH CONTROLLING SHAREHOLDERS

Chinalco. Our senior management is experienced in the mining industry. We are thus capable ofoperating our mine and expanding our resource base independently of Chinalco.

Cooperation Agreement between Chinalco, Yunnan Copper Group and Yunnan SASAC

On October 30, 2007, Chinalco, Yunnan Copper Group (then a wholly-owned subsidiary ofYunnan SASAC) and Yunnan SASAC entered into the Yunnan Copper Group Strategic Cooperationand Share Subscription Agreement (the “Cooperation Agreement”) in order to enhance thecooperation between Chinalco and Yunnan Copper Group and their competitiveness so as to achievethe sustainable development of both companies. Pursuant to the Cooperation Agreement, Chinalcoagreed to acquire certain shares of Yunnan Copper Group from Yunnan SASAC and also subscribenew shares to be issued by Yunnan Copper Group. Upon completion of the Cooperation Agreement,Chinalco and Yunnan SASAC held 49% and 51% of the shares of Yunnan Copper Group, respectively.Yunnan SASAC transferred 17.4% of the shares of Yunnan Copper Group to Yunnan IndustrialInvestment Holding Group Co., Ltd. ( ) in 2008 and furthertransferred 2% and 7% of the shares of Yunnan Copper Group to Chinalco in 2010 and 2011. As of theLatest Practicable Date, Chinalco and Yunnan SASAC directly held 58% and 24.6% of the shares ofYunnan Copper Group, respectively.

Clause 3.9 of the Cooperation Agreement provides that, (i) Chinalco shall be entitled to theprimary investment in the copper resources it acquired in China or overseas (including but not limitedto the Toromocho Project); (ii) Yunnan Copper Group may invest in the above mentioned copperresources at its own option; (iii) Yunnan Copper Group may be involved in the construction andmanagement of the Toromocho Project; and (iv) copper concentrates shall be first offered to YunnanCopper Group in order to satisfy its production requirements at prevailing market prices (the“Investment Arrangements”). Thus, according to this clause, subject to Chinalco being the primaryinvestor of Yunnan Copper Group, Yunnan Copper Group has the right to invest in the copperresources Chinalco acquired in China or overseas and to be involved in the construction andmanagement of the Toromocho Project. To the best knowledge and information of the Company,Yunnan Copper Group has not indicated any intention to exercise such rights. In addition, if YunnanCopper Group were to consider whether to exercise such rights, according to the articles of associationof Yunnan Copper Group, Chinalco, being Yunnan Copper Group’s majority shareholder holding morethan one-third of its shares, can veto the relevant decision.

We believe that the Investment Arrangements under the Cooperation Agreement will not affectthe management or operational independence of the Group due to the following reasons:

(i) the Cooperation Agreement was entered into between Chinalco, Yunnan Copper Groupand Yunnan SASAC. As the Company is not a party to the Cooperation Agreement, thePRC counsel of the Company has confirmed that the Investment Arrangements cannotbe enforced against the Company directly by Yunnan Copper Group and/or YunnanSASAC;

(ii) any transaction between Yunnan Copper Group and the Group (including anyconstruction agreement and supply agreement) will be subject to the same procedures of

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the Group (including the procurement procedures) as a transaction between a third partyand the Group;

(iii) after our proposed corporate financing activities, the operation of the Company will besubject to the requirements of the [Š]. Yunnan Copper Group, being a subsidiary ofChinalco, is a connected person of the Company. Any transaction between YunnanCopper Group and the Group (including any construction agreement and supplyagreement) will, after our proposed corporate financing activities, constitute a connectedtransaction and shall be on normal commercial terms and comply with reporting,announcement and independent shareholder approval requirements. For any connectedtransaction that requires shareholders’ approval, Chinalco will abstain from voting infavor of such transaction;

(iv) the procedure for the appointment of Directors has been set out in the Articles.Appointment of Directors needs to be approved by the Shareholders of the Company.The Board has power from time to time and at any time to appoint any person as aDirector either to fill a casual vacancy or as an addition to the Board and any Directorso appointed shall hold office only until the next following annual general meeting ofthe Company and shall then be eligible for re-election at that meeting. The Companyhas also set up a nomination committee with written terms of reference. The nominationcommittee will assess and review the skills, knowledge and experience of the directorsat least annually and make recommendations to the Board on the appointment or re-appointment of Directors.

(v) we have adopted a system of corporate governance to avoid potential conflicts ofinterest. In particular, our Articles provide that, except in certain limited circumstances,a Director shall not vote on any resolution approving any contract or arrangement or anyother proposal in which such Director or any of his/her associates have a materialinterest nor shall such Director be counted in the quorum present at the meeting. In thecase of any transaction involving Yunnan Copper Group, the Directors with overlappingoffices with Chinalco will abstain from voting thereon. In addition, the Directors withoverlapping offices with Chinalco will abstain from participating in the relevant boardmeetings of the Company in respect of such transaction, unless specifically requested bythe majority of the independent non-executive Directors; and

(vi) we have appointed Scott McKee Hand, Ronald Ashley Hall, Lai Yat Kwong Fred andFrancisco Augusto Baertl Montori as our independent non-executive Directors. Ourindependent non-executive Directors account for more than one-third of the Board.Three out of the four independent non-executive Directors have substantial experiencein the mining industry. We believe our independent non-executive Directors are ofsufficient caliber and experience, are free of any business or other relationship whichcould interfere in any material manner with the exercise of their independent judgmentand will be able to provide an impartial, external opinion to protect the interests of ourpublic Shareholders.

Thus, despite the Investment Arrangements between Chinalco and Yunnan SASAC under theCooperation Agreement, after our proposed corporate financing activities, any transaction between theGroup and Yunnan Copper Group

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shall be conducted in accordance with the relevant requirements and the Group’s internal corporategovernance system.

If Yunnan Copper Group were to exercise its right under the Cooperation Agreement to investin or manage the Toromocho Project, Chinalco would still have control over the mining assets as (i) theoption granted to Yunnan Copper Group to invest in the Toromocho Project is subject to Chinalcobeing the primary investor in the Toromocho Project; and (ii) Yunnan Copper Group itself is a 58%owned subsidiary of Chinalco. If Yunnan Copper Group were to exercise its right to be involved in theconstruction of the Toromocho Project, the construction cost payable to Yunnan Copper Group wouldbe similar to the construction costs charged by the third party contractors engaged by the Company.Further, if Yunnan Copper Group were to exercise its right to purchase copper concentrates from theCompany, the purchase terms would be subject to mutual agreement after arm’s-length negotiationwith the Company with reference to prevailing prices and terms in the market.

The Company believes that the provision that copper concentrates shall be first offered toYunnan Copper Group will not affect its operational independence as the demand for copperconcentrates has continued to surpass supply in recent years and the global demand for copper isexpected to grow in the next few years.

Further, Chinalco has given an undertaking to the Company that Chinalco undertakes to useavailable measures to procure that, in respect of the Toromocho Project, Yunnan Copper Group willnot exercise the rights under the above mentioned Clause 3.9 of the Cooperation Agreement.

Jincheng Tongda & Neal, the Company’s PRC counsel (the “PRC Counsel”) has advised that:

(a) Chinalco’s provision of the undertaking would not necessarily constitute a breach of theCooperation Agreement because there are no contractual obligations under theCooperation Agreement that would prevent Chinalco from providing the undertaking tothe Company;

(b) the additional requirement for Yunnan Copper Group to obtain the Company’sindependent Shareholders’ approval to exercise its rights under the CooperationAgreement (if applicable) would not necessarily constitute a breach of the CooperationAgreement by Chinalco for the following reasons:

(i) there are no contractual obligations in the Cooperation Agreement that preventChinalco from reorganizing the Company through which the Toromocho Projectis funded, constructed, and managed;

(ii) there are no provisions in the Cooperation Agreement on how these rights areexercised. In this respect, it is the view of the PRC Counsel that the exercise ofthese rights by Yunnan Copper Group would be subject to the compliance of thecorporate governance requirements of the Company by both Chinalco andYunnan Copper Group at the time when such rights are exercised, if YunnanCopper Group were to exercise these rights, which may include independentshareholder approval, if so required by the corporate governance documents ofthe Company then effective; and

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(iii) the exercise of these rights by Yunnan Copper Group will be subject to thecompliance with laws and regulations of the applicable jurisdictions by bothChinalco and Yunnan Copper Group at the time when the rights are exercised, ifYunnan Copper Group were to exercise these rights, which, it is of the view ofthe PRC Counsel that, should include securities laws and regulations theneffective.

The Company believes that it will continue to operate independently after our proposedcorporate financing activities.

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DIRECTORS AND SENIOR MANAGEMENT

AN OVERVIEW OF OUR DIRECTORS AND SENIOR MANAGEMENT

The Board of Directors consists of ten Directors, four of whom are independent non-executiveDirectors. The Directors are elected at meetings of the Board of Directors and shall hold office until thenext following annual general meeting of the Company and shall be eligible for reelection at thatmeeting. Not less than one-third of the Directors must retire from office by rotation at the annualgeneral meeting provided that every Director is subject to retirement by rotation at least once everythree years. The functions and duties conferred on the Board of Directors include:

Š convening Shareholders’ meetings and reporting its work to Shareholders’ meetings;

Š implementing the resolutions of Shareholders’ meetings;

Š determining the Company’s business plans and investment plans;

Š formulating the Company’s annual or quarterly budget and final and interim accounts;

Š formulating the Company’s proposals for the increase or reduction of share capital, theissuance of bonds or other securities; and

Š exercising other powers, functions and duties as conferred by the Articles ofAssociation.

The table below sets forth certain information in respect of the members of the Board and oursenior management.

Name Age Position Date of appointment

Xiong Weiping ( ) . . . . . . . . . . . . . 57 non-executive Director and chairman February 28, 2012Ren Xudong ( ) . . . . . . . . . . . . . . . 60 non-executive Director April 1, 2011Xie Weizhi ( ) . . . . . . . . . . . . . . . . 48 non-executive Director February 28, 2012Peng Huaisheng ( ) . . . . . . . . . . . . 48 executive Director April 1, 2011

(appointed as Director)February 28, 2012(redesignated asExecutive Director)

chief executive officer February 28, 2012Huang Shanfu ( ) . . . . . . . . . . . . . 46 executive Director and vice president December 1, 2010Liang Yunxing ( ) . . . . . . . . . . . . . 39 executive Director and chief

financial officerNovember 22, 2012

Scott McKee Hand . . . . . . . . . . . . . . . . . 70 independent non-executive Director April 10, 2012Ronald Ashley Hall . . . . . . . . . . . . . . . . 59 independent non-executive Director April 10, 2012Lai Yat Kwong Fred ( ) . . . . . . . . 64 independent non-executive Director April 10, 2012Francisco Augusto Baertl Montori . . . . . 69 independent non-executive Director April 10, 2012Ezio Martino Buselli Canepa . . . . . . . . . 50 vice president of health, safety and

environment of Chinalco PeruMay 2008

David John Thomas . . . . . . . . . . . . . . . . 68 executive vice president and chiefoperating officer of Chinalco Peru

January 2011

Leo Leroy Hilsinger . . . . . . . . . . . . . . . . 61 construction vice president ofChinalco Peru

March 2010

Thomas Michael Olsen . . . . . . . . . . . . . 56 vice president of operations ofChinalco Peru

August 2011

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DIRECTORS AND SENIOR MANAGEMENT

NON-EXECUTIVE DIRECTORS

Xiong Weiping ( )

Dr. Xiong Weiping, aged 57, has been the general manager of Chinalco since January 2009. Hehas also been the chairman and chief executive officer of Chalco since May 2009, and is currentlyserving as the chairman of China Copper Corporation Limited* ( ), China Rare EarthCo., Ltd.* ( ), COH and Chinalco Finance Company Limited ( ).He was appointed as chairman and a non-executive Director of the Company on February 28, 2012.

From June 2006 to January 2009, Dr. Xiong was the vice chairman and general manager ofChina Travel Service (Holdings) Hong Kong Limited ( ) and was an executivedirector of China Travel International Investment Hong Kong Limited ( ), acompany listed on the Hong Kong Stock Exchange, from July 2006 to March 2009. Dr. Xiong servedas the vice general manager of Chinalco from February 2001 to June 2006, and was also an executivedirector (from September 2001 to June 2006), senior vice president (from September 2001 to May2004) and president (from May 2004 to June 2006) of Chalco. From August 2000 to February 2001, hewas a member of the organizing committee of Chinalco. From August 1999 to August 2000, Dr. Xiongserved as vice general manager of China Copper, Lead & Zinc Group Corporation*( ). Prior to that, Dr. Xiong was the standing vice-chancellor and dean of the Facultyof Management, and a professor and Ph.D. tutor of Central South University of Technology.

Dr. Xiong has been serving Chalco since September 2001, and played a key role in itsformation and initial public offering in 2001. During his time as general manager of Chinalco,Dr. Xiong developed the strategy of transforming Chinalco into a top tier global mineral company withmost growth potential. Under his leadership, Chinalco has worked towards optimizing the developmentof aluminum, prioritizing the development of copper, consolidating the development of rare earth,leading in the rapid development of coal and iron ore, endeavoring in engineering developments,selectively developing new industries, accelerating overseas development, expanding the globaltrading business and ensuring the development direction of the supply of material for the purpose ofChina’s military industry and key technological projects.

Dr. Xiong is also a professor and a Ph.D. tutor of the Guanghua School of Management, PekingUniversity. He is an expert receiving special subsidies from the State Council of the PRC and wasrecognized by the former Ministry of Personnel as a “Middle Age and Youth Expert with OutstandingContribution to the Nation.” Dr. Xiong graduated from Central South University of Technology with amaster’s degree in mineral processing in December 1983. He obtained a Ph.D. degree in mineralengineering from Central South University of Technology in February 1988 and completed post-doctoral research in economics in the Guanghua School of Management, Peking University in August1996. He has academic achievements and extensive experience in economics, corporate managementand metal mining. Dr. Xiong has over 30 years of research and management experience in the miningindustry.

Ren Xudong ( )

He was the first chairman of COH from June 2007 to January 2009 and is currently serving as adirector of COH. Mr. Ren Xudong, aged 60, has been the vice general manager of Chinalco since

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DIRECTORS AND SENIOR MANAGEMENT

February 2007. He has also been the president and a director of China Rare Earth Co., Ltd.*( ) since December 2009, and now serves as the vice chairman. He is also serving asthe vice chairman of the management committee of China National Nonferrous Metals Industry Group( ) and a director of Chinalco Finance Company Limited ( ). Hewas appointed as a Director and the Chairman of the Company on April 1, 2011. He was redesignatedas a non-executive Director of the Company on February 28, 2012.

Mr. Ren previously served as the assistant to the general manager of Chinalco from December2005 to January 2007. He was the chairman of Chinalco Luoyang Copper Co., Ltd.*( ) from April 2007 to November 2010. From May 2003 to December 2005,Mr. Ren was a director, standing vice president and the president of Sino Mining International Co.,Ltd.* ( ), which is a subsidiary of China Minmetals Corporation ( ),and an assistant to the president of China Minmetals Corporation. From March 2000 to May 2003,Mr. Ren was the vice general manager and an executive director of a company then called ChinaNonferrous Metals Group (Hong Kong) Limited ( ). From June 1998 toMarch 2000, Mr. Ren was the vice general manager of a company then called NFC Africa MiningPLC* ( ) and the vice general manager of a company then called China NonferrousConstruction Group Co., Ltd.* ( ) .

Mr. Ren is an engineer with over 35 years of experience in the mining industry. During his timeat the China Minmetals Corporation, Mr. Ren was responsible for the operation of aluminum oxideproject sponsored by China Minmetals Corporations and Alcoa Inc. in Australia. During his time atNFC Africa Mining PLC*, Mr. Ren participated in the early phase of the construction of theChambishi copper mine in Zambia. During his time at COH, he participated in the acquisition of astake in Rio Tinto and took lead in the acquisition of the Toromocho Project.

Xie Weizhi ( )

Mr. Xie Weizhi, aged 48, joined Chinalco in February 2011, serving as an assistant to thegeneral manager of Chinalco and as an executive director of Chinalco Finance Company Limited( ). He has been an executive director and the president of COH since July 2011. Hewas appointed as a non-executive Director of the Company on February 28, 2012.

From January 2002 to February 2011, Mr. Xie was the general manager of China NationalOffshore Oil Corporation (“CNOOC”) Finance Corporation Limited ( ). He wasthe general manager of the treasury department of the headquarters of CNOOC ( )from August 2001 to January 2002. From October 1996 to August 2001, he was the vice generalmanager and general manager of the finance department of the headquarters of CNOOC. From October1993 to October 1996, Mr. Xie was a deputy manager of the finance department of China Offshore OilNanhai West Corporation ( ).

Mr. Xie was appointed as the senior accountant by the headquarters of CNOOC in March 1998.He graduated from department of finance of the Xiamen University with a bachelor’s degree ineconomics (majoring in finance) in July 1986. Mr. Xie also obtained an MBA from the GuanghuaSchool of Management, Peking University in June 2001, and has been a long serving member of its

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DIRECTORS AND SENIOR MANAGEMENT

alumni council. He has worked for 26 years in energy, mining and financial management businesses,and is highly experienced in overseas investment and project management. He was engaged in severalsignificant financing projects when he was working with the headquarters of CNOOC, such as theUS$2.677 billion international syndicated loan project of CNOOC and Shell Petrochemicals CompanyLimited ( ).

EXECUTIVE DIRECTORS

Peng Huaisheng ( )

Dr. Peng Huaisheng, aged 48, has been the vice president of China Copper CorporationLimited* ( ) since June 2010. He was appointed as a Director of the Company onApril 1, 2011. He was redesignated as the chief executive officer and an executive Director of theCompany on February 28, 2012. Since January 2008, Dr. Peng has served as the chairman of ChinalcoPeru, where he has been responsible for daily management and strategy development. During thisperiod, Dr. Peng has also been the vice chairman and a director of COH. From December 2005 toJanuary 2008, Dr. Peng was the standing vice general manager of China Enfi Engineering Corporation( ) (“Enfi”).

During his time at Enfi, Dr. Peng was responsible for mining related engineering design,research and development, engineering procurement construction and management, as well as projectand company management. Dr. Peng participated in the design and construction of over 30 mines ofvarious metals located both in China and overseas, including the Chambishi copper mine in Zambia,the Ramu laterite nickel mine in Papua New Guinea, the Oyu Tolgoi copper mine in Mongolia, wherehe was involved in compiling the China version of the feasibility study report, and a copper refineryproject in Zambia. Dr. Peng also provided consultancy services to various investment companies ontechnical aspects on acquisitions of a number of mines outside China.

Dr. Peng is a senior engineer with professor qualification. He obtained a bachelor’s degree inmining engineering from Northeast Institute of Technology in July 1984 and a Ph.D. degree in miningengineering from Central South University in December 2000. He also obtained an MBA fromTsinghua University in January 2003. In 1988, he attended the advanced mining extraction techniqueprogramme organized by Lulea University of Technology in Sweden. Dr. Peng is currently a Ph.D.tutor for the mining economics major at Central South University, and a member of the overseasorganization committee of International Mining Congress & Expo. Dr. Peng has over 25 years ofexperience in design, research and management in non-ferrous engineering and the mining industry.

Huang Shanfu ( )

Mr. Huang Shanfu, aged 46, has been a director and the president and the chief executiveofficer of Chinalco Peru since December 2010, and has been in charge of the construction of theToromocho Project. He was appointed as an executive Director and the vice president of the Companyon February 28, 2012.

From February 2010 to November 2010, Mr. Huang was the general manager of the EnterpriseManagement Department of China Copper Corporation Limited* ( ), overseeing thedaily operation of the enterprise management department. Mr. Huang was the vice general manager of

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DIRECTORS AND SENIOR MANAGEMENT

Yunnan Copper Group* ( ) from December 2004 to November 2010, and wasresponsible for technology development and further processing of products. From November 2003 toDecember 2004, he was the assistant to the general manager of Yunnan Copper Group*, and wasresponsible for technology development. From May 1998 to November 2003, Mr. Huang served as adirector and vice general manager of Yunnan Copper Co., Ltd. ( ), where he was incharge of production and operation of the company. From October 2006 to January 2010, Mr. Huangwas a director, president and the chief executive officer of Chambishi Copper Smelter Limited*( ) in Zambia, where he was responsible for the construction and operation of thecompany. From January 2005 to September 2006, he was a director of P.T. Hanjaya SmeltingIndonesia* ( ) in Indonesia, where he was in charge of the company’s establishmentpreparation. He participated in the exchange program to Norddeutsche Affinerie AG ( )from December 2003 to June 2004.

Mr. Huang is a professoriate senior engineer. He graduated from Kunming Institute ofTechnology majoring in non-ferrous metallurgy and obtained a master’s degree in metallurgicalmanagement from Kunming University of Science and Technology in July 2002. Mr. Huang has over22 years of mining experience, particularly in the copper industry.

Liang Yunxing ( )

Ms. Liang Yunxing, aged 39, has been an executive Director and the chief financial officer ofthe Company since November 22, 2012.

Before joining the Company, Ms. Liang had worked for over 14 years with China NationalTravel Service (HK) Group Corporation ( ) (“HKCTSG”), which is one of China’smajor multinational state-owned enterprises headquartered in Hong Kong. During various positions inHKCTSG, Ms. Liang had worked in Hong Kong and United States of America for nine years.

From May 2009 to October 2012, Ms. Liang was a director and the chief financial officer ofHKCTS (China) Investment Limited* ( ), one of the largest property developersin mainland China focusing on developing large-scaled scenic spots, hotels, resorts, commercialproperties and residential units. During this period, Ms. Liang was responsible not only for financialmanagement and risk controls but also for project and company operation management, including costcontrols, quality controls, schedule controls and performance measurement.

From October 2006 to April 2009, Ms. Liang was the general manager of the financedepartment of China Travel International Investment Hong Kong Limited ( )(“CTII”). CTII is a red chip stock company listed on the Hong Kong Stock Exchange (Stock code:HK00308) and the flagship company of HKCTSG in travel industry. During this period, Ms. Liangreported directly to the board of directors and her main responsibilities involved financial reporting,improving the accounting information systems and internal control systems, budgetary controls andperformance measurement, mergers and acquisitions, divestment, investment management, strategydevelopment, corporate governance and other strategic issues. She also assisted the board of directorswith liaising with the investors, analysts and the Hong Kong Stock Exchange.

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From March 2004 to September 2006, Ms. Liang was the assistant general manager of thefinance department of HKCTSG. During this period, Ms. Liang assisted the chief financial officer ofHKCTSG in the financial and accounting affairs, as well as in strategy development, groupreconstruction, merger and acquisitions, investment management, divestment and other strategic andmajor business decision makings.

Ms. Liang obtained a bachelor’s degree in international accounting in July 1995 and obtained amaster’s degree in accounting in July 1998 from Renmin University of China. She is a member of theChinese Institute of Certified Public Accountants.

INDEPENDENT NON-EXECUTIVE DIRECTORS

Scott McKee Hand

Mr. Scott M. Hand, aged 70, was appointed as an independent non-executive Director of theCompany on April 10, 2012. Mr. Hand has been the executive chairman of Royal Nickel Corporation(“Royal Nickel”), a company listed on the Toronto Stock Exchange (Stock code: RNX) sinceNovember 2009. Royal Nickel is currently pursuing the development of a large nickel mining andprocessing project in the Province of Quebec in Canada.

Mr. Hand was the chairman and chief executive officer of Inco Limited (“Inco”) from April2002 until he retired from Inco in January 2007. Inco was acquired by Companhia Vale do Rio Doce(now called Vale S. A.) in late 2006. Mr. Hand joined Inco in 1973 and held various positions in law,strategic planning and business development and was the president of Inco from 1992 until 2002. Incois a major global resources enterprise and a leading producer and marketer of nickel and other metalsbased in Canada.

Mr. Hand is currently involved in a number of public and private companies, primarily in themineral resource industry. In addition to Royal Nickel, he was a member of the boards of directors ofLegend Gold Inc., a company listed on the TSX Venture Exchange (Stock code: LGN). He was also adirector of Fronteer Gold Inc., a company listed on the Toronto Stock Exchange and the New YorkStock Exchange (Stock code: FRG) from 2007 to 2011 when Fronteer was sold to Newmont MiningCorporation and Royal Coal Corp., a company formerly listed on the TSX Venture Exchange(Stock code: RDA).

Mr. Hand has over 37 years experience in all aspects of the mining industry based on hisparticipation in Inco’s mining and processing operations and projects in Canada, Indonesia, NewCaledonia and Guatemala and Inco’s processing and refining operations in the United Kingdom, Japan,China, South Korea and Taiwan. In addition to nickel, Inco was an important producer and refiner ofcopper, cobalt and the precious and platinum-group metals. Mr. Hand was also a member of the boardsof directors of the Nickel Institute and P.T International Nickel Indonesia tbk. Mr. Hand is currentlyengaged in a number of private ventures in copper, gold, oil and gas and industrial minerals.

Mr. Hand is also a member of the board of directors of Manulife Financial Corporation, a majorworldwide insurance and financial services company based in Canada listed on the Toronto StockExchange (Stock code: MFC), Boyd Technologies LLC (non-woven materials) in the United Statesand World Wildlife Fund Canada.

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Mr. Hand received a bachelor’s degree in arts from Hamilton College in the United States inJune 1964 and after spending two years in Ethiopia with the U.S. Peace Corps, he entered Cornell LawSchool in the United States and graduated with a Doctor of Jurisprudence degree in June 1969.Mr. Hand then joined a law firm based in New York City and worked there until he joined Inco in1973.

Ronald Ashley Hall

Mr. Ronald Ashley Hall, aged 59, was appointed as an independent non-executive Director ofthe Company on April 10, 2012. He is an independent consultant advising on technical and strategicissues. He has over 30 years of professional experience in the copper mining industry. He has beeninvolved in business and mining opportunities in China, India, Russia, North America and SouthAmerica.

From 2004 to 2011, Mr. Hall was a vice president of Wardrop Engineering, a privately stateowned Canadian engineering company engaged in providing engineering design and consultingservices to the mining, energy and infrastructure sectors in Canada. He started the practice withWardrop Engineering in Vancouver and grew the business to over 100 employees in Vancouver in atwo-year period. Mr. Hall became a partner in the firm in 2005 and initiated Wardrop Engineering’sinternational growth through the opening of offices in the United Kingdom, Beijing, Hong Kong andPerth over the following five years. In 2008, Wardrop Engineering was sold to Tetratech Inc., a largepublicly traded engineering company based in the United States. Mr. Hall retired from the company inApril 2011. Projects that Mr. Hall carried out with Wardrop Engineering include:

Š Minco Mining Inc. – Project manager for Fuwan silver pre-feasibility study in China;

Š Orsa Ventures, Review of Rare Earth Mill, China – Project manager and metallurgist;

Š Zao Severstal-Resurs, Pechorsky Coal Plant, Russia – Project manager for the technicalaudit and expansion study;

Š MineracaoSerra da Fortaleza S/A, Concentrator Review, Nickel Project, Brazil –Metallurgical review of the concentrator/smelter operation;

Š Continental Minerals Corporation, Xietongmen Copper Project, Tibet – Projectmanager for a conceptual scoping study;

Š Eureka Mining Plc., Miheevskoye Copper Project, Russia – Project manager for pre-feasibility study;

Š Wolfden Resources, High Lake & Ulu Project, NU, Canada – Participated in pre-feasibility study for the High Lake and Ulu deposits; and

Š Adanac Moly Corp., Ruby Creek Project, Atlin, BC, Canada – Project manager formolybdenum project pre-feasibility and feasibility studies.

From 2001 to 2004, Mr. Hall served as president and consultant of Minmet Consulting Limited.Projects that Mr. Hall carried out with Minmet Consulting Limited include:

Š Confidential Client – Metallurgical testwork development for refractory gold deposit;and

Š Northmet Mining – Scoping study for Polymet polymetallic deposit.

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From 1998 to 2001, Mr. Hall was a project manager of Hatch Associates Ltd. in Vancouver. Hewas involved in many mining projects around the globe from scoping and feasibility studies, duediligence investigations and technical support to detailed engineering design and project management.Commodities involved were copper, nickel, cobalt, gold, silver, platinum, rare earths, tungsten andmolybdenum. Projects that Mr. Hall carried out with Hatch Associates Ltd. include:

Š Expatriate Resources – Scoping study for Wolverine zinc deposit;

Š Confidential Client – Feasibility study, mine development and slurry plant design fornickel laterite project;

Š Eurozinc, Aljustrel Feasibility Study, Portugal – Zinc;

Š Glamis Gold, San Marten Project, Honduras – EPCM for 12,000 tpd gold heap leach;

Š PricewaterhouseCoopers – Monitoring of operations of Kemess copper mine;

Š Big Valley Resources – QR gold mine evaluation;

Š D’Long Development Group, Axi Gold Mine, China – Gold mine review;

Š Goldcorp, Red Lake (Expansion) Project, ON, Canada – Gold mine;

Š Peruvian Gold, Lara Copper (Scoping Study), Peru – Copper project;

Š BC Job Protection Commission – Review and assessment of Highland Valley coppermine;

Š Grayd Resources Corp., Dry Creek Project, Alaska, USA – Scoping study of gold mine;

Š Newmont Gold, Leeville Sampling Plant – Pre-feasibility cost estimate of gold mine;and

Š Southwestern Gold Corp. – Metallurgical testwork for gold project in China.

From 1997 to 1998, Mr. Hall served as a director and vice president of China Clipper GoldMines based in Vancouver, Canada, where he was responsible for the technical evaluation of numerousgold properties throughout China and established a technical office in Beijing. He conducted numerousdue diligence assignments on various existing gold mining operations in the Jilin, Yunnan, Shaanxiand Xinjiang provinces and negotiated memorandum of understanding and joint venture agreementswith various government departments. He also supervised metallurgical testwork of refractory orematerials conducted by Bactech in Perth, Australia. From 1995 to 1997, he was a project manager ofSNC Lavalin in Vancouver. Projects that Mr. Hall carried out with SNC Lavalin include:

Š Royal Oak Mines, Kemess South Project – Senior metallurgist on detailed design andengineering for 45,000 tpd cu/au concentrator;

Š Pan American Silver, Dukat Silver Project, Far East Russia – Due diligence study;

Š ABS Balkhas, Kazakhstan – Property evaluation of 1 million tpa gold heap leachoperation; and

Š Columbia Gold Mines, Yukon, Canada – Scoping study for copper/cobalt project inYukon.

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From 1991 to 1995, he served as an operations superintendent of BCL Ltd. at Botswana. From1991 until 1992, Mr. Hall was responsible for the operations of a 10,000 tpd low grade nickel/coppersulphide concentrator. Equipment consisted of crushing, ball milling, conventional flotation andthickening. From 1992 until 1995 he was in charge of the copper/nickel smelter operations whichincluded a 2,000 tpd Outokumpu flash furnace, 3 x Peirce-Smith convertors, 2,000 tpd Niro spraydrying plant, coal milling operations and gas cleaning equipment associated with smelting operations.Mr. Hall also assisted in the development and commissioning of a cobalt recovery circuit. Mr. Hall’smajor project involvement at BCL Ltd. included the supervision of testwork, design, installation andcommissioning of cobalt slag cleaning vessel into the smelter (improved cobalt recovery from copper/nickel slag).

From 1987 to 1991, Mr. Hall was an operations superintendent of RTZ Palabora Mining Co.Phalaborwa South Africa, where he was responsible for the operations of an 80,000 tpd copperconcentrator operations (crushing, autogenous milling, rod and ball milling, flotation, thickening andtailings disposal), and a 400 tpd copper smelter operation including, 1,000 tpd reverberatory furnace,3 x Peirce-Smith convertors, 2 x anode furnaces, 400 tpd sulphuric acid plant and associated gashandling equipment. Mr. Hall’s major project involvement at RTZ Palabora Mining Co. included:

Š installation and commissioning of CONTOP (continuous, top-blowing, cyclone smelter)on existing reverberatory furnace for incremental copper throughput increase, and

Š installation of naphtha poling to replace conventional wood poling on anode furnaces toremove impurities in anode refined copper.

From 1980 to 1987, he was an operations superintendent of De Beers Botswana, where he wasresponsible for diamond plant operations at the Orapa and Jwaneng diamond mines. Mr. Hall’s majorproject involvement at De Beers Botswana included testwork on use of rolls crushing for improveddiamond recovery.

Mr. Hall graduated with a bachelor of science in metallurgy with honors from University ofWales (Cardiff) in November 1976.

Lai Yat Kwong Fred ( )

Mr. Lai Yat Kwong Fred, aged 64, was appointed as an independent non-executive Director onApril 10, 2012. Mr. Lai has over 39 years of experience in accounting, auditing and companysecretarial matters. He has been an executive director and the chief financial officer of ChampionTechnology Holdings Limited, a company listed on the Hong Kong Stock Exchange (Stock code: 92)since April 1996 with responsibility for its financial and accounting policy and control after initialservice in March 1994 as company secretary. He has been the chief executive officer (acting), chieffinancial officer and an executive director of Kantone Holdings Limited, a company listed on the HongKong Stock Exchange (Stock code: 1059 ) since November 1996, where he was primarily responsiblefor overseeing the entire operation. He has served as a non-executive director ofDigitalHongKong.com, a company listed on the Hong Kong Stock Exchange (Stock code: 8007 ) sinceJanuary 2005 where he joined the board of directors to ensure the proper and profitable operation ofthe company. He has also served as an independent non-executive director of Trony Solar Holdings

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DIRECTORS AND SENIOR MANAGEMENT

Company Limited, a company listed on the Hong Kong Stock Exchange (Stock code: 2468) sinceOctober 2011 and is the chairman of the audit committee of the company.

From July 1981 to March 1994, Mr. Lai was in private practice as a certified public accountantin Hong Kong when he was involved in providing services to clients in auditing, taxation andmanagement consulting. From March 1978 to July 1981, he was an accountant of The Chartered BankHong Kong Trustee Limited. His responsibilities covered all the trustee business. From October 1976to March 1978, he was an international internal auditor of American International Group where heoversaw the operations of Southeast Asia. From July 1972 to October 1976, he served as an auditor ofPrice Waterhouse & Co. Certified Public Accountants.

He obtained a bachelor’s degree in business administration from the Chinese University ofHong Kong in July 1972. He is a fellow member of the Association of Chartered Certified Accountantsand the Hong Kong Institute of Certified Public Accountants (Practising).

Francisco Augusto Baertl Montori

Mr. Francisco Augusto Baertl Montori, aged 69, was appointed as an independent non-executive Director of the Company on April 10, 2012.

Since December 2010, he has served as a director of Golden Alliance Resources, a companylisted on the TSX Venture Stock Exchange (TSX.V: GLL). Golden Alliance Resources is active ingold, copper and silver exploration.

Since September 2007, he has been a director of Norsemont Mining Inc., which was listed onthe Toronto Stock Exchange and the Lima Stock Exchange (TSX, BVL: NOM), but was delisted afterbeing bought by Hudbay Resources in February 2011. Norsemont Mining Inc. is active in explorationof copper, molybdenum and silver.

Since July 2004, he has been a director of Alturas Minerals Corp., which is listed on the TSXVenture Stock Exchange (TSX-V: ALT). From July 2007 to March 2009, he was the chairman ofAlturas Minerals Corp. Alturas Minerals Corp. is active in mineral exploration.

Since March 2002, he has been a director of Interbank Peru, the second Peruvian commercialbank with offices in Shanghai, China and São Paulo, Brazil.

From March 2005 to March 2011 he was a director of Graña & Montero, a real estate andconstruction company listed on the Lima Stock Exchange (BVL: GRAMONC1). Since April 2001, hehas been a director of FIMA, listed on the Lima Stock Exchange (BVL: FIMA I1) and active inmanufacturing of equipment for mining and other activities.

From June 2009 to November 2010, he was a director of Dorato Resources Inc. DoratoResources Inc. is listed on the TSX Venture Stock Exchange (TSX-V: DRI) and active in gold andcopper exploration.

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DIRECTORS AND SENIOR MANAGEMENT

From May 1967 to December 1996, he served various position at Compania Minera Milpo(“Milpo”), a company listed on the Lima Stock Exchange (BVL: MILPOC1) and one of the leadingmining companies in Peru, active in the exploration and production of copper, zinc and leadconcentrates. With previous work experience as mine foreman at the San Cristobal mine of Cerro dePasco Corporation from March 1966 to April 1967, he joined Milpo as mine superintendent in its ElPorvenir underground mine in May 1967; from January 1970 to April 1982, he served as an operationsmanager at Milpo, from May 1982 to March 1994, he served as the chief operating officer at Milpo andfrom April 1994 to December 1996, he served as the president and chief executive officer at Milpo.

Mr. Baertl Montori made significant contributions to Milpo’s major exploration, developmentand operating achievements and its establishment as the largest underground mining institution in Perutoday.

From September 1997 until January 2003, he served Compania Minera Antamina(“Antamina”) as its president and chief executive officer. Antamina is active in the production ofcopper, zinc, lead and molybdenum concentrates. He led the exploration, development, constructionand establishment of this world-class project, which involved an investment of US$2,250 million.Antamina is considered as one of the biggest and most important copper and zinc skarn type deposits,with an ore processing capacity of 120,000 tpd in an open pit operation at 4,200 meters above sea levelin the Andes Cordillera, Ancash Region.

Since January 2003, he has been the chief executive officer of Gestora de Negocios eInversiones, which is engaged in promoting investments in mining and agricultural activities andoffering consulting services to various mining ventures.

He has been an active member in the Mining, Petroleum and Energy Chamber of Commercesince March 1970, having served as the chairman of its board for two terms, from April 1991 to April1993 and from April 1999 to April 2001. During his first term as the chairman, a piece of newlegislation was enacted for the promotion of investment in mining activities in Perú (DecretoLegislativo Nº 708 Ley de Promoción de Inversiones en el Sector Minero (November 1991).

He has been an active member of the Peruvian Institute of Mining Engineers. He was Chairmanof the board of the institute since April 1986 to April 1988.

Mr. Baertl Montori received a bachelor’s degree in engineering from the Mining EngineeringCollege of the Universidad Nacional de Ingeniería in December 1965. In May 1980, he completed thesenior management course at Harvard Business School. In August 1996, he completed a managementcourse at Kellogg Graduate School of Management, Northwestern University. Among the variousrecognitions and awards he has received, the most important is his nomination in February 2001 as the“Entrepreneur of the Year” by IPAE Instituto Peruano de Acción Empresarial.

SENIOR MANAGEMENT

Ezio Martino Buselli Canepa

Dr. Ezio Martino Buselli Canepa, aged 50, joined Chinalco Peru in May 2008 serving as a vicepresident of health, safety and environment in May 2008. Currently he is responsible for environmental

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DIRECTORS AND SENIOR MANAGEMENT

and government affairs, public and community relations, communications and permitting of ChinalcoPeru.

Previously, from October 1997 to May 2008, Dr. Buselli Canepa served as a director ofenvironmental services for Southern Peru Copper Corporation, a company listed on the New YorkStock Exchange and Lima Stock Exchange (NYSE, BVL: SCCO) (“Southern Peru”). Southern Peruis an integrated copper mining and metallurgical operation, consisting of two world class open pitcopper/molybdenum mines, concentrators and leaching/SXEW operations located in the lower AndeanMountains of Peru, a coastal copper smelting-refining complex, a port facility and ancillary operations.From 1997 to 2007, Dr. Buselli Canepa was responsible for Southern Peru’s environmentalmanagement and compliance program, consisting of prevention, modernization, and remediationprograms totaling over US$ 600 million. He was also responsible for corporate environmental mattersin new project development, environmental assessment, and permitting processes, including activeparticipation in corporate regulatory affairs and assisting the company to successfully obtain approvalof EIAs for a river diversion project, expansion of leach dumps and SXEW operations, and portoperations for shipment of sulphuric acid.

From February 1997 to September 1997, he served as the technical manager for Walsh PerúS.A. Environmental Scientists & Engineers (“Walsh”), a consulting firm. During this period, hemanaged projects primarily for Shell Prospecting and Development (Peru) B.V., in Camisea, Peru;EnerSur S.A. (a subsidiary of Suez Energy) — Power Plant 1, Ilo, Peru; and Southern Peru CopperCorporation, Toquepala, Cuajone and Ilo, Peru.

Before joining Walsh, from June 1995 to June 1996, he served as the chief agronomist andfrom June 1996 to January 1997, he served as the chief environmental scientist at Southern PeruCopper Corporation.

From June 1989 to December 1994, he worked as a cooperative research assistant with theUSDA Forest Service and Utah State University. Dr. Buselli Canepa was associated with the DisturbedLand Reclamation Project at the Intermountain Research Station in Logan, Utah. He developedmethods to assess bioavailability of plant nutrients and toxic elements in water, sediments, soils andmine spoils and studied release kinetics of nutrient and toxic elements from solid surfaces. His researchwas conducted primarily on abandoned mine sites in Cooke City, Montana, Hawthorne and BirchCreek, Nevada, and Soda Springs, Idaho.

He obtained a Ph.D. degree in soil physical chemistry from Utah State University in May 1995.

David John Thomas

Mr. David John Thomas, aged 68, was appointed as an executive vice president and the chiefoperating officer of Chinalco Peru in January 2011. From April 2010 through December 2010, he wasthe vice president of operations, where he was primarily responsible for the technical development ofthe Toromocho Project, including the coordination with Aker Solutions (currently known as Jacobs),EPCM contractor for the project, including feasibility study, basic engineering, detailed engineeringand construction. He served as a technical consultant of Chinalco Peru from April 2005 to March 2010.Mr. Thomas has more than 40 years of managerial experience in mine-related project development,finance, banking and advisory, engineering, construction and operations.

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DIRECTORS AND SENIOR MANAGEMENT

From January 2008 through June 2009, Mr. Thomas was a director of Rio Alto Mining Limited(listed on TSX-V (RIO), on the Lima Bolsa (RIO), on the OTCQX® (RIOAF) and on Frankfurt(MS2).), where he was responsible for general corporate development. From October 2002 to June2004, he was the managing director of Volta Aluminum Company, an aluminum smelter on the coastof Ghana at Tema, with a production capacity of 200,000 tpa, previously owned by Kaiser Aluminumand Alcoa Inc., currently owned by the government of Ghana. He was responsible for the operation ofthe facility. His responsibilities also included negotiations with the government of Ghana for the sale ofVALCO which was concluded in October 2004. From March 2003 to June 2004, he was also a directorof Anglesey Aluminium (a joint venture company of Kaiser Aluminum and Rio Tinto) in Wales, wherehe was involved in general corporate development. From October 2000 to January 2002, he was a vicepresident of technical services of PT Freeport Indonesia, the largest copper and gold mining companyin Indonesia. He was responsible for hydrology, geotechnical monitoring and control, including slope,dump stability and underground block caving, tailings management, implementing an acid rockdrainage strategy for on-going control of acid rock drainage during mining as well as the preparationsnecessary for mine closure, reclamation and post mining sustainable land use of the mine site, reviewand approval of all capital expenditures, coordination with engineering and construction group on allmajor engineering and construction projects.

From October 1997 to December 1999, he served as the vice president in charge of operationsof Southern Peru Copper Corporation, where he was responsible for various operations in Peru,including two mines, two concentrators, a smelter, a refinery and an SXEW plant; environmentalservices; technology services; administrative services; safety; liaison and coordination on all projectengineering, expansion and construction activities. His achievements during his tenure as vicepresident in charge of operation included a reduction in cash cost from US$0.57/lb to US$0.48/lb;expansion of ore processing capacity at the Cuajone mine and concentrator from 64,000 tpd to96,000 tpd; expansion of cathode production capacity at the Toquepala SXEW plant from 50,000 tpa to62,500 tpa; reduction of accident rate by 50%; reduction of workforce by 1,000; implementation ofmodernization and upgrade of mining equipment fleet. From April 1977 to June 1987, he held variousmanagerial positions in Southern Peru Copper Corporation including Assistant Mine Manager, MineManager, Chief Engineer and Area Manager, Toquepala. From April 1996 to October 1999, he alsoserved as the director of Resource Pacific Pty Ltd (Australia), where he was responsible for generalcorporate development.

Mr. Thomas obtained a bachelor’s degree in mining engineering from the University of Utah inJune 1967, and a master’s degree in mineral resources engineering from the University of Minnesota inMarch 1971.

Leo Leroy Hilsinger

Mr. Leo Leroy Hilsinger, aged 61, is the construction vice president of Chinalco Peru. He isresponsible for the construction of the Toromocho Project, processing plant, the new town ofMorococha, central highway relocation, lime plant facility and highway overpass project to the newtown of Morococha. Mr. Hilsinger joined Chinalco Peru in March 2010.

Mr. Hilsinger has substantial experience in construction engineering on domestic and overseasprojects for copper and other non-ferrous metals and minerals industry.

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DIRECTORS AND SENIOR MANAGEMENT

From July 1999 to February 2010, he held various managerial positions in Aker Solutionsincluding construction manager where he was responsible for its construction projects in SouthAmerica, and the director of construction and management board member for Kvaerner, Metals E&CDivision in San Ramon where he was responsible for the management and administration of theconstruction department. During this period, his experience included:

Š serving as the project sponsor and construction manager for the CM component for thePalmarejo Project in Chihuahua, Mexico for Coeur d’ Alene Mines Corp;

Š serving as the construction manager for Aker Kvaerner Metals’ EPCM contract for BHPBilliton’s Spence Project located in Region II, near Sierra Gorda, Chile where he was incharge of the management of construction. The Spence Project plant will produce200,000 t/y of cathode copper from a feed source of 50,000t/d of ore by open pitmining, dump leaching, crushing, agglomeration, heap leaching, solvent extraction andelectrowinning;

Š serving as the Project Manager for Aker Kvaerner Metals E & C Division for theNucleus of Excellences contract for CVRD’s Sossego Copper Project in Sossego, Canaados Carajas, Para, Brazil. The Sossego Project produces 467,000 t/y copper concentrate,from a feed of 44,000 t/d of ore by open pit mining. He was responsible for managing ateam of Aker Kvaerner engineers to monitor the detailed engineering and constructionactivities of the clients engineering and construction contractors.

Thomas Michael Olsen

Mr. Thomas Michael Olsen, aged 56, has been the vice president of operations of ChinalcoPeru since August 2011. He is a skilled professional with extensive experience in various types ofmineral processing operations. He has supervised and implemented mineral processing plant-relatedprojects in the United States, Canada, Africa, South America and Australasia and has experience incopper, nickel, palladium, gold, platinum, gallium, germanium, silver, lead and zinc. Mr. Olsen haswell over 30 years’ experience in the mining industry.

Date Company Position and Responsibility

From Jan 2008 to present Chinalco Peru Vice president of operations (from Aug2011 to present) and manager of processdevelopment (from Jan 2008 to Aug2011) primarily in support of the designof the concentrator, hydrometallurgicalplant for the Toromocho Project

From Jan 2004 to Jan 2008 Minera San Cristobal, SanCristobal, Department of Potosi,Bolivia

Operations manager (from Sep 2007 toJan 2008) and mill manager (from Jan2004 to Aug 2007) responsible for a40,000 tpd lead, zinc, silverconcentrator, and mine operations

From Oct 2003 to Dec 2004 Ok Tedi Mining Ltd. Executive manager (mill) responsiblefor a 85,000 tpd copper, goldconcentrator of Ok Tedi Mine inTabubil, Papua New Guinea

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DIRECTORS AND SENIOR MANAGEMENT

Mr. Olsen obtained a bachelor’s degree in environmental engineering in May 1978 and amaster’s degree in metallurgy in May 1980 from New Mexico Institute of Mining & Technology,Socorro, New Mexico.

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DIRECTORS AND SENIOR MANAGEMENT

JOINT COMPANY SECRETARY

Du Qiang ( )

Mr. Du Qiang, aged 42, is a director and the chief representative of the Beijing representativeoffice of Chinalco Peru. He was a director, secretary and treasurer of the Company from January 2010to February 2012. He joined the Chinalco group as a senior business manager of COH in 2009.Previously he had been a senior project manager at Kamsky Associates Inc. and, prior to that, thegeneral manager of Chinatex Leanfaith Garment Company Limited* ( ) and amanager responsible for mergers and acquisitions in the strategic department of Chinatex CorporationLimited ( ), as a result of which he had been involved in commercial negotiationsrelating to various mergers and acquisitions and joint venture projects. He has a strong professionalbackground and substantial experience in business operations and management, investment and mergerand acquisition transactions, corporate governance and risk controls. He obtained an MBA degree fromPeking University in July 2002 and is a Financial Risk Manager (FRM) certified by Global Associationof Risk Professionals in April 2010.

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DIRECTORS AND SENIOR MANAGEMENT

MOKMing Wai ( )

Ms. MOK Ming Wai, aged 41, is a director of KCS Hong Kong Limited. She has over 15 yearsof professional and in-house experience in the company secretarial field. She is a fellow member of theHong Kong Institute of Chartered Secretaries and the Institute of Chartered Secretaries andAdministrators in the United Kingdom. She currently acts as the joint company secretary of severalcompanies listed on the Hong Kong Stock Exchange, including Shanghai Pharmaceuticals HoldingCo., Ltd. (Stock code: 02607), Huaneng Renewables Corporation Limited (Stock code: 00958), NewChina Life Insurance Company Ltd (Stock code: 1336), China Hanking Holdings Limited (Stock code:03788), Haitong Securities Co., Ltd (Stock code: 6837), Huadian Fuxin Energy Corporation Limited(Stock code: 816), Xiao Nan Guo Restaurants Holdings Limited (Stock code: 3666), and Dynam JapanHoldings Co., Ltd. (Stock code: 6889), and also acts as the sole company secretary of C. bannerInternational Holdings Limited (Stock code: 01028), Tenfu (Cayman) Holdings Company Limited(Stock code: 06868), SPT Energy Group Inc. (Stock code: 1251), China Yongda Automobiles ServicesHoldings Limited (Stock code: 3669), China NT Pharma Group Company Limited (Stock code: 1011)and Kai Shi China Holdings Company Limited (Stock code: 1281).

* The names of entities marked with asterisk are for identification purpose only.

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DIRECTORS AND SENIOR MANAGEMENT

EQUITY INCENTIVE PLAN

The Company proposes to adopt an equity incentive plan designed to attract, retain andincentivize senior management and key employees with a view to encouraging the participants tocommit to enhancing value for the Company and its shareholders as a whole. On October 21, 2011, theCompany obtained an approval in principle from SASAC to proceed with the work of the equityincentive plan. As at the Latest Practicable Date, the Company has not yet adopted the equity incentiveplan. The terms of the equity incentive plan and its adoption are subject to further approvals bySASAC and Shareholders.

DIRECTORS’ REMUNERATION

Our Directors receive remuneration, including salaries, allowances and benefits in kind,including our contribution to the pension plan on their behalf.

The aggregate amount of remuneration (including basic salaries, housing allowances, otherallowances and benefits in kind, contributions to pension plans and discretionary bonuses) paid by ourCompany to the five highest paid individuals for the years ended December 31, 2009, 2010, 2011 andthe nine months ended September 30, 2012 was approximately US$2.7 million, US$3.6 million,US$2.9 million and US$2.6 million, respectively.

The aggregate remuneration (including basic salaries, housing allowances, other allowancesand benefits in kind, contributions to pension plans and discretionary bonuses) paid to our executiveDirectors by our Company for the years ended December 31, 2009, 2010, 2011 and the nine monthsended September 30, 2012 amounted to nil, nil, US$695,000 and US$576,000, respectively. Further,none of our Directors waived any remuneration during that period.

Save as disclosed above, no other payments have been paid or are payable, in respect of thethree years ended December 31, 2011 by the Company to our Directors.

We expect the annual Directors’ fee and other emoluments payable by our Company for theyear ended December 31, 2012 to be US$1,690,000.

Save as disclosed in the section headed “Relationship with Controlling Shareholders” in thisdocument, none of our Controlling Shareholders, executive Directors, non-executive Directors andtheir respective associates are interested in any business which competes or is likely to compete withour business.

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SUBSTANTIAL SHAREHOLDERS

So far as the Directors are aware, the following persons will have an interest or short position inthe Shares or underlying shares of our Company, or who will be, directly or indirectly, interested in10% or more of the nominal value of any class of share capital carrying rights to vote in allcircumstances at general meetings of our Company or any of our subsidiaries:

Name of Shareholder

Number of Sharesdirectly or indirectly

held

Approximatepercentage ofinterest in ourCompany

Chinalco(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,001,171,428.58 85.0%COH(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,001,171,428.58 85.0%

Note:(1) COH is directly wholly-owned by Chinalco. Accordingly, the interest attributable to Chinalco above represents its indirect interest in

our issued share capital through its equity interest in COH.

Save as disclosed herein, we are not aware of any other person who will be entitled to exercise,or control the exercise of 10% or more of the voting power at any general meeting of the Company.

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SHARE CAPITAL

The authorized share capital of our Company is US$1,000,000,000, divided into25,000,000,000 Shares with a nominal value of US$0.04 per Share.

As of the date of this document, the share capital of our Company was as follows:

Number ofShares

Description of Shares andshareholders

Aggregatenominal value

of Shares(US$)

Approximatepercentage ofissued share

capital

10,001,171,428.58 Shares in issue at the date of this document 400,046,857.14 100%

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SHARE CAPITAL

General Mandate to Issue New Shares

A general, unconditional mandate has been granted to our Directors authorizing them toexercise our powers to allot, issue and deal with Shares or securities convertible into Shares and tomake an offer or agreement or grant an option which would or might require such Shares to be allottedand issued, provided that the aggregate nominal value of the Shares allotted or agreed conditionally orunconditionally to be allotted shall not exceed the sum of:

(a) 20% of the aggregate nominal value of the share capital of our Company in issueimmediately following completion of certain corporate financing activities; and

(b) the aggregate nominal value of the share capital of our Company repurchased by us (ifany) pursuant to the general mandate to repurchase Shares referred to below.

This mandate does not apply to situations where our Directors allot, issue or deal with Sharespursuant to (i) a rights issue, or (ii) the exercise of rights of subscription or conversion under the termsof any warrants issued by Company or any securities which are convertible into shares of theCompany, or (iii) the exercise of options granted under any option scheme or similar arrangement forthe time being adopted for the grant or issue to officers and/or employees of the Company and/or anyof its subsidiaries of shares or rights to acquire shares of the Company, or (iv) any scrip dividend orsimilar arrangement providing for the allotment and issue of shares in lieu of the whole or part of adividend on shares of the Company.

This mandate will expire:

Š at the conclusion of our next annual general meeting; or

Š at the expiration of the period within which our next annual general meeting is requiredby any applicable law or the Articles of Association to be held; or

Š the passing of an ordinary resolution by our Shareholders in a general meeting revoking,varying or renewing such mandate,

whichever is the earliest.

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SHARE CAPITAL

Particulars of this general mandate are set forth under “Written resolutions of our soleShareholder passed on May 8, 2012 and on November 20, 2012” in Appendix VI to this document.

General Mandate to Repurchase Shares

A general unconditional mandate has been granted to our Directors authorizing them toexercise all the powers for and on behalf of our Company to repurchase Shares with an aggregatenominal value not exceeding 10% of the aggregate nominal value of the share capital of our Companyin issue immediately following our proposed corporate financing activities.

This mandate only relates to repurchases made on any approved stock exchange(s) on whichthe securities of our Company may be listed and which is recognized for this purpose, and made inaccordance with the relevant regulations. A summary of the relevant statement is set forth under“Repurchase by the Company of its own securities” in Appendix VI to this document.

This mandate will expire:

Š at the conclusion of our next annual general meeting; or

Š at the expiration of the period within which our next annual general meeting is requiredby any applicable law or the Articles of Association to be held; or

Š the passing of an ordinary resolution by our Shareholders in a general meeting revoking,varying or renewing such mandate,

whichever is the earliest.

Particulars of this general mandate are set forth under “written resolutions of our soleShareholder passed on May 8, 2012 and on November 20, 2012” in Appendix VI to this document.

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FUTURE PLANS

FUTURE PLANS

See “Our Business — Our Business Strategies” for a detailed description of our future plans.

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APPENDIX I ACCOUNTANT’S REPORT

The following is the text of a report received from the Company’s reporting accountant,PricewaterhouseCoopers, Certified Public Accountants, Hong Kong, for the purpose of incorporationin this document.

[To insert the firm’s letterhead]

[DRAFT] [date]

The DirectorsChinalco Mining Corporation International

[Š]

Dear Sirs,

We report on the financial information of Chinalco Mining Corporation International (the“Company”) and its subsidiaries (together, the “Group”) which comprises the consolidated statementsof financial position as at December 31, 2009, 2010 and 2011 and September 30, 2012, the statementsof financial position of the Company as at December 31, 2009, 2010 and 2011 and September 30,2012, and the consolidated statements of comprehensive income, the consolidated statements ofchanges in equity and the consolidated statements of cash flows for each of the years endedDecember 31, 2009, 2010 and 2011 and the nine months ended September 30, 2012 (the “RelevantPeriods”), and a summary of significant accounting policies and other explanatory information. Thisfinancial information has been prepared by the directors of the Company and is set out in Sections I toIII below for inclusion in Appendix I to the document of the Company dated [Š] (the “Document”) inconnection with [Š].

The Company was incorporated in the Cayman Islands on April 24, 2003 as an exemptedcompany with limited liability under the Companies Law of the Cayman Islands.

As at the date of this report, the Company has direct and indirect interests in the subsidiariesand a jointly controlled entity as set out in Notes 1 and 10 of Section II below. All of these companiesare private companies.

I-1

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APPENDIX I ACCOUNTANT’S REPORT

No audited financial statements have been prepared by the Company as there are no auditrequirements in its jurisdiction. All subsidiaries have adopted December 31 as their financial year enddate. The audited financial statements of the other companies now comprising the Group as at the dateof this report for which there are statutory audit requirements have been prepared in accordance withthe relevant accounting principles generally accepted in their place of incorporation. The details of thestatutory auditors of these companies are set out in Note 1 of Section II below.

The directors of the Company have prepared the consolidated financial statements of theCompany for the Relevant Periods, in accordance with International Financial Reporting Standards(“IFRSs”) issued by the International Accounting Standards Board (the “Underlying FinancialStatements”). The directors of the Company are responsible for the preparation of the UnderlyingFinancial Statements that gives a true and fair view in accordance with IFRSs. We have audited theUnderlying Financial Statements in accordance with International Standards on Auditing (the “ISAs”)issued by the International Auditing and Assurance Standards Board (“IAASB”) pursuant to separateterms of engagement with the Company.

The financial information has been prepared based on the Underlying Financial Statements,with no adjustment made thereon.

Directors’ responsibility for the financial information

The directors of the Company are responsible for the preparation of the financial informationthat gives a true and fair view in accordance with IFRSs, and for such internal control as the directorsdetermine is necessary to enable the preparation of financial information that is free from materialmisstatement, whether due to fraud or error.

Reporting accountant’s responsibility

Our responsibility is to express an opinion on the financial information and to report ouropinion to you. We carried out our procedures in accordance with the [Š] issued by the Hong KongInstitute of Certified Public Accountants (the “HKICPA”).

Opinion

In our opinion, the financial information gives, for the purposes of this report, a true and fairview of the state of affairs of the Company and the Group as at December 31, 2009, 2010 and 2011 andSeptember 30, 2012 and of the Group’s results and cash flows for the Relevant Periods then ended.

Review of stub period comparative financial information

We have reviewed the stub period comparative financial information set out in Sections I to IIbelow included in Appendix I to the Document which comprises the consolidated statements ofcomprehensive income, the consolidated statements of changes in equity and the consolidatedstatements of cash flows for the nine months ended September 30, 2011 and a summary of significantaccounting policies and other explanatory information (the “Stub Period Comparative FinancialInformation”).

I-2

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APPENDIX I ACCOUNTANT’S REPORT

The directors of the Company are responsible for the preparation and presentation of the StubPeriod Comparative Financial Information in accordance with the accounting policies set out in Note 2of Section II below.

Our responsibility is to express a conclusion on the Stub Period Comparative FinancialInformation based on our review. We conducted our review in accordance with International Standardon Review Engagements 2410, “Review of Interim Financial Information Performed by theIndependent Auditor of the Entity” issued by the IAASB. A review of the Stub Period ComparativeFinancial Information consists of making inquiries, primarily of persons responsible for financial andaccounting matters, and applying analytical and other review procedures. A review is substantially lessin scope than an audit conducted in accordance with ISAs and consequently does not enable us toobtain assurance that we would become aware of all significant matters that might be identified in anaudit. Accordingly, we do not express an audit opinion.

Based on our review, nothing has come to our attention that causes us to believe that the StubPeriod Comparative Financial Information, for the purpose of this report, has not been prepared, in allmaterial respects, in accordance with the accounting policies set out in Note 2 of Section II below.

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APPENDIX I ACCOUNTANT’S REPORT

I. FINANCIAL INFORMATION

The following is the financial information of the Group prepared by the directors of theCompany as at December 31, 2009, 2010 and 2011 and September 30, 2012 and for each of the yearsended December 31, 2009, 2010 and 2011 and the nine months ended September 30, 2011 and 2012(the “Financial Information”):

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

As at December 31,As at

September 30,

Note 2009 2010 2011 2012

US$’000 US$’000 US$’000 US$’000ASSETSNon-current assetsProperty, plant and equipment . . . . . . . . . . . . . . . . . . . . . . . 5 307,149 683,967 1,400,834 2,191,059Intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 958 1,092 547 408Deferred income tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . 8 7,240 10,651 16,292 20,919VAT recoverable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 32,545 43,907 80,302 136,845Investment in a jointly controlled entity . . . . . . . . . . . . . . . . 10 — 1,290 1,979 3,513Restricted cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 94 1,991 5,047 21,577Other receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 — — — 3,047

347,986 742,898 1,505,001 2,377,368

Current assetsInventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 93 1,647 6,024 19,196Prepayments and other receivables . . . . . . . . . . . . . . . . . . . . 12 192 738 9,373 20,451VAT recoverable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 — 30,682 72,680 11,145Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . 14 11,438 155,892 97,550 191,017

11,723 188,959 185,627 241,809

Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 359,709 931,857 1,690,628 2,619,177

EQUITYEquity attributable to the Company’s equity holdersShare capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 47 47 47 400,047Capital reserve . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 36,254 91,701 416,521 16,521Accumulated deficit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (14,320) (21,785) (38,297) (51,523)

Total equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21,981 69,963 378,271 365,045

LIABILITIESNon-current liabilitiesBorrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 156,634 639,228 1,003,399 1,826,698Deferred income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 — 4,346 4,474 4,368Provision for remediation and restoration . . . . . . . . . . . . . . . 19 23,840 28,962 58,111 61,466

180,474 672,536 1,065,984 1,892,532

Current liabilitiesAccounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 23,988 55,177 128,152 233,351Accruals and other payables . . . . . . . . . . . . . . . . . . . . . . . . . 21 7,766 8,681 16,301 23,573Amount due to immediate holding company . . . . . . . . . . . . 18 2,101 2,101 1,920 2,376Borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 123,399 123,399 100,000 102,300

157,254 189,358 246,373 361,600

Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 337,728 861,894 1,312,357 2,254,132

Total equity and liabilities . . . . . . . . . . . . . . . . . . . . . . . . . 359,709 931,857 1,690,628 2,619,177

Net current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (145,531) (399) (60,746) (119,791)

Total assets less current liabilities . . . . . . . . . . . . . . . . . . . 202,455 742,499 1,444,255 2,257,577

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APPENDIX I ACCOUNTANT’S REPORT

STATEMENTS OF FINANCIAL POSITION

As at December 31,As at

September 30,

Note 2009 2010 2011 2012

US$’000 US$’000 US$’000 US$’000

ASSETSCurrent assetsCash and cash equivalent . . . . . . . . . . . . . . . . . . . . . . . . . . — — — 2,051Amount due from a subsidiary . . . . . . . . . . . . . . . . . . . . . . 1,665 1,665 16,384 13,387Prepayments and other receivables . . . . . . . . . . . . . . . . . . — — — 641

1,665 1,665 16,384 16,079

Non-current assetsInvestment in subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . 6 218,500 548,500 628,499 628,499

Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 220,165 550,165 644,883 644,578

EQUITYEquity attributable to the Company’s equity holdersShare capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 47 47 47 400,047Capital reserve . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 36,254 91,701 416,521 16,521Accumulated deficit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (3,371) (11,412) (17,004) (26,611)

Total equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32,930 80,336 399,564 389,957

LIABILITIESNon-current liabilitiesBorrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 156,634 439,228 143,399 146,698

156,634 439,228 143,399 146,698

Current liabilitiesBorrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 28,500 28,500 100,000 102,300Accruals and other payables . . . . . . . . . . . . . . . . . . . . . . . . 21 — — — 3,247Amount due to immediate holding company . . . . . . . . . . . 18 2,101 2,101 1,920 2,376

30,601 30,601 101,920 107,923

Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 187,235 469,829 245,319 254,621

Total equity and liabilities . . . . . . . . . . . . . . . . . . . . . . . . 220,165 550,165 644,883 644,578

Net current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . (28,936) (28,936) (85,536) (91,844)

Total assets less current liabilities . . . . . . . . . . . . . . . . . . 189,564 519,564 542,963 536,655

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APPENDIX I ACCOUNTANT’S REPORT

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Year ended December 31,Nine months ended

September 30,

Note 2009 2010 2011 2011 2012

US$’000 US$’000 US$’000 US$’000 US$’000(unaudited)

Revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 — — — — —

Other (loss)/gain, net . . . . . . . . . . . . . . . . . . . . . . . 23 (85) 317 205 130 671

Operating costsGeneral and administrative expenses . . . . . . . . . . . 24 (9,053) (11,612) (19,705) (10,396) (17,910)

Operating loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . (9,138) (11,295) (19,500) (10,266) (17,239)

Finance income . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 2,896 1,507 451 373 2,169Finance costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 (1,723) (1,088) (2,744) (1,545) (1,887)

Finance income/(costs), net . . . . . . . . . . . . . . . . . . 1,173 419 (2,293) (1,172) 282

Loss before income tax . . . . . . . . . . . . . . . . . . . . . (7,965) (10,876) (21,793) (11,438) (16,957)Income tax benefit . . . . . . . . . . . . . . . . . . . . . . . . . . 28 3,266 3,411 5,281 2,973 3,731

Loss for the year/period . . . . . . . . . . . . . . . . . . . . (4,699) (7,465) (16,512) (8,465) (13,226)

Other comprehensive income for the year/period, net of tax . . . . . . . . . . . . . . . . . . . . . . . . — — — — —

Total comprehensive loss for the year/period . . . (4,699) (7,465) (16,512) (8,465) (13,226)

Loss per share for loss attributable to the equityholders of the Company (expressed in US$ pershare)

Basic and diluted . . . . . . . . . . . . . . . . . . . . . . 29 — (0.001) (0.002) (0.001) (0.001)

Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30 — — — — —

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APPENDIX I ACCOUNTANT’S REPORT

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

Sharecapital

Capitalreserve

Accumulateddeficit Total

US$’000 US$’000 US$’000 US$’000

Balance at January 1, 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47 7,184 (9,621) (2,390)

Comprehensive loss for the yearLoss for the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — (4,699) (4,699)

Transactions with ownersDeemed capital contribution (Note 17(a)) . . . . . . . . . . . . . . . . . . . — 29,070 — 29,070

Balance at December 31, 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . 47 36,254 (14,320) 21,981

Comprehensive loss for the yearLoss for the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — (7,465) (7,465)

Transactions with ownersDeemed capital contribution (Note 17(a)) . . . . . . . . . . . . . . . . . . . — 55,447 — 55,447

Balance at December 31, 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . 47 91,701 (21,785) 69,963

Comprehensive loss for the yearLoss for the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — (16,512) (16,512)

Transactions with ownersCapitalization of borrowings from immediate holding company(Note 16) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 400,000 — 400,000

Re-measurement of borrowings from immediate holdingcompany upon modification (Note 17(a)) . . . . . . . . . . . . . . . . . — (75,180) — (75,180)

Balance at December 31, 2011 . . . . . . . . . . . . . . . . . . . . . . . . . . 47 416,521 (38,297) 378,271

Nine months ended September 30, 2011 (unaudited)Balance at January 1, 2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47 91,701 (21,785) 69,963

Comprehensive loss for the periodLoss for the period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — (8,465) (8,465)

Transactions with ownersRe-measurement of borrowings from immediate holdingcompany upon modification (Note 17(a)) . . . . . . . . . . . . . . . . . — (75,180) — (75,180)

Balance at September 30, 2011 (unaudited) . . . . . . . . . . . . . . . 47 16,521 (30,250) (13,682)

Nine months ended September 30, 2012Balance at January 1, 2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47 416,521 (38,297) 378,271

Comprehensive loss for the periodLoss for the period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — (13,226) (13,226)

Transactions with ownersReclassification of capitalization of borrowings from immediateholding company (Note 16) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 400,000 (400,000) — —

Balance at September 30, 2012 . . . . . . . . . . . . . . . . . . . . . . . . . . 400,047 16,521 (51,523) 365,045

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APPENDIX I ACCOUNTANT’S REPORT

CONSOLIDATED STATEMENTS OF CASH FLOWS

Year ended December 31,Nine months ended

September 30,

Note 2009 2010 2011 2011 2012

US$’000 US$’000 US$’000 US$’000 US$’000(unaudited)

Cash flows from operating activitiesCash used in operating activities . . . . . . . . . . 31 (10,450) (7,020) (22,823) (20,749) (38,601)

Net cash used in operating activities . . . . . . (10,450) (7,020) (22,823) (20,749) (38,601)

Cash flows from investing activitiesPurchases of property, plant andequipment . . . . . . . . . . . . . . . . . . . . . . . . . . (142,396) (372,944) (712,013) (411,909) (771,512)

Interest paid . . . . . . . . . . . . . . . . . . . . . . . . . . — (2,175) (20,227) (11,440) (29,547)Purchases of intangible assets . . . . . . . . . . . . . 7 (689) (1,066) (551) (198) (338)Investment in a jointly controlled entity . . . . . 10 — (560) (1,419) (1,202) (1,534)VAT refunds received . . . . . . . . . . . . . . . . . . . — — 41,296 41,033 131,061Interest received . . . . . . . . . . . . . . . . . . . . . . . 27 1,596 116 451 373 586Increase in restricted cash . . . . . . . . . . . . . . . . 13 (15) (1,897) (3,056) (1,226) (16,530)

Net cash used in investing activities . . . . . . (141,504) (378,526) (695,519) (384,569) (687,814)

Cash flows from financing activitiesProceeds from bank loans . . . . . . . . . . . . . . . . 17 — 200,000 660,000 460,000 820,000Proceeds from amounts due to immediateholding company . . . . . . . . . . . . . . . . . . . . 17 160,000 330,000 — — —

[Š] expense paid for the issuance of shares . . — — — — (118)

Net cash generated from financingactivities . . . . . . . . . . . . . . . . . . . . . . . . . . . 160,000 530,000 660,000 460,000 819,882

Net increase/(decrease) in cash and cashequivalents . . . . . . . . . . . . . . . . . . . . . . . . . 8,046 144,454 (58,342) 54,682 93,467

Cash and cash equivalents at beginning ofthe year/period . . . . . . . . . . . . . . . . . . . . . 3,392 11,438 155,892 155,892 97,550

Cash and cash equivalents at end of theyear/period . . . . . . . . . . . . . . . . . . . . . . . . . 11,438 155,892 97,550 210,574 191,017

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APPENDIX I ACCOUNTANT’S REPORT

II. NOTES TO THE CONSOLIDATED FINANCIAL INFORMATION

1. General information

Peru Copper Syndicate, Ltd. was incorporated in the Cayman Islands on April 24, 2003 as anexempted company with limited liability under the Companies Law of the Cayman Islands. InSeptember 2011, the board of directors of Peru Copper Syndicate, Ltd. passed a resolution to changeits name to Chinalco Mining Corporation International (the “Company”). The Company’s registeredoffice is PO Box 309 Ugland House, Grand Cayman, KY 1-1104, Cayman Islands.

The Company and its subsidiaries (together, the “Group”) are principally engaged inexploration, development and production of ore resources and other mining related activities.

In May 2003, the Company was awarded by the Peruvian government a right to develop andextract ore resource in the district of Morococha, Yauli Province, the Republic of Peru (“Peru”)through a public bidding (the “Toromocho Mining Project”). In June 2003, the Company signed anassignment agreement and by which the Company was entitled to exercise a purchase option of themining concessions during a period which could be extended to June 2008. In May 2008, the Companyexercised its right and signed with Activos Mineros (an entity incorporated by the Peruviangovernment), in the name of Peruvian Government, the Mining Concessions Transference Agreementof the Toromocho Mining Project (the “Assignment Agreement”). Under the Assignment Agreement,Activos Mineros transferred to the Company the title of certain mining concessions, their surfaceproperty, buildings and water usage right pertaining to the Toromocho Mining Project.

From August 2012 to January 2013, the Company entered into four binding off-take, pursuantto which the Company agree to sell an aggregate of 60% of the annual production of copperconcentrates from Toromocho Mining Project for a period of five years starting from the first officialproduction of the Toromocho Mining Project at a price determined by reference to certain benchmarkmarket rates adjusted based on the grade of the copper concentrates, two of which will automaticallycontinue for another five years (the “Off-take Agreements”).

As at the date of this report, the Group’s operations are substantially limited to construction andstart-up activities of the Toromocho Mining Project. The Toromocho Mining Project is in itsdevelopment stage and has not commenced commercial production.

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APPENDIX I ACCOUNTANT’S REPORT

As at the date of this report, the Company had direct and indirect interests in the followingsubsidiaries, all of which are limited liability entities incorporated in Peru which are principallyengaged in mining related activities:

Name

Date ofincorporation/establishment

Registeredand fully

paid capital

Effectiveinterestheld*

US$’000 %

Minera Chinalco Perú S.A. (“MCP”) . . . . . . . . . . . . . . . . . . . . May 20, 2003 383,500 100Minera Centenario S.A.C. (“Centenario”) (Note (a)) . . . . . . . . April 3, 2006 3 100Cal del Centro S.A.C. (“Centro”) . . . . . . . . . . . . . . . . . . . . . . . March 16, 2011 — 100Sociedad Minera Pesares S.A. (“Pesares”) (Note (b)) . . . . . . . June 6, 1905 — 83.28Pomacocha Power S.A.C. (“Pomacocha”) (Note (c)) . . . . . . . . January 17, 2011 — 10

* During the Relevant Periods, except for Pesares as set out in Note (b), there is no change in effective interest held in any of theCompany’s subsidiaries.

Notes:(a) The Company had pledged its shares in Centenario as security for remaining consideration to the original owners of Centenario

pursuant to the purchase agreement between the Company and the original owners signed in 2006. In March 2012, the considerationpayable was fully settled and the pledge was released accordingly.

(b) In 2011, the Group acquired an additional 6.25% interest in Pesares from the non-controlling interest of Pesares at US$80,000.Thereafter, the Group’s interest in Pesares increased to 83.28%. The consideration paid was approximate to the fair value of the interestacquired on the date of the acquisition.

(c) Pomacocha was established by MCP and Abengoa Perú S.A.C., a third party Peruvian construction company, solely for the purpose ofthe construction of power transmission lines that connect the areas of the Toromocho Mining Project to the power grid which isfinanced entirely and to be used solely by the Group. The substance of the relationship between MCP and Pomacocha demonstrated thatthe Group controls substantially all economic benefits and exposes to the risks of Pomacocha. Accordingly, Pomacocha is considered asubsidiary of the Group.

The statutory auditor of MCP and Centro is Dongo-Soria Gaveglio y Asociados Sociedad Civilde Responsabilidad Limitada, certified public accountants registered in Peru(“PricewaterhouseCoopers Peru”). Other subsidiaries are not currently required to issue auditedfinancial statements under the statutory requirements for their respective place of incorporation as theydo not meet the assets or revenue requirements.

The Company is a wholly-owned subsidiary of Aluminum Corporation of China OverseasHoldings Limited (“Chinalco Overseas”), a company incorporated in Hong Kong with limited liability.As at the date of this report, the directors of the Company regard Aluminum Corporation of China(“Chinalco”), a state-owned enterprise incorporated in the People’s Republic of China (the “PRC”) andapproved by the State-owned Assets Supervision and Administration Commission (“SASAC”) of theState Council (the “State Council”) of the PRC, as its ultimate holding company.

2. Summary of significant accounting policies

The principal accounting policies applied in the preparation of the Financial Information are setout below. These policies have been consistently applied to all the Relevant Periods presented, unlessotherwise stated.

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APPENDIX I ACCOUNTANT’S REPORT

2.1 Basis of preparation

The Financial Information has been prepared in accordance with the International FinancialReporting Standards (“IFRS”) issued by the International Accounting Standards Board (the “IASB”).The Financial Information has been prepared under the historical cost convention.

The preparation of this Financial Information in conforming with IFRS requires the use ofcertain critical accounting estimates. It also requires management to exercise its judgment in theprocess of applying the Group’s accounting policies. The area involving a higher degree of judgmentor complexity, or areas where assumptions and estimates are significant to the Financial Informationare disclosed in Note 4.

(a) Going Concern

As of September 30, 2012, the Group has net current liabilities of approximately US$120million and accumulated deficit of US$52 million. The board of directors of the Company hasconsidered the Group’s available sources of funds as follows:

Š The Group has unutilized banking facilities from Export and Import Bank of China(“Eximbank”) and China Development Bank (“CDB”), both are banks registered in thePRC and controlled by the PRC government, totalling US$403 million (Note 17(b)) asat September 30, 2012. These facilities will not be subjected to any renewal during thenext 12 months from the date this Financial Information was approved.

Š In September and December 2012, CDB and Eximbank each issued a memorandumindicating their present commitment to lend additional US$274 million and US$419million, respectively, to the Group for the development of the Toromocho MiningProject (Note 17 (b)). Except for the agreement for loan amounting to US$35 millionfrom CDB has been signed on December 25, 2012, formal loan agreements for theremaining amounts had not been entered into as at the date of this report.

Š The Group’s immediate holding company, Chinalco Overseas has agreed not to demandrepayment of amount due from the Group amounting to US$249 million atSeptember 30, 2012 until the Group is financially capable to do so. Chinalco alsoindicated that it will provide continuing financial support to finance the futureoperations of the Group for a period of not less than 12 months from the date thisFinancial Information was approved, and will continue to provide guarantee to theGroup’s borrowings from CDB and Eximbank until the Group is able to replace orrefinance the existing loan facilities in a commercially justifiable manner.

Based on the above, the directors of the Company have a reasonable expectation that the Groupwill have adequate resources to continue in operations for the foreseeable future for a period that is notless than 12 months from the date this Financial Information was approved. The Group thereforecontinues to adopt the going concern basis in preparing this Financial Information.

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APPENDIX I ACCOUNTANT’S REPORT

(b) New accounting standards and amendment to standards

The following new standards and amendments to standards that are applicable to the Group’soperations have been issued but are not effective for the financial year beginning January 1, 2012 andhave not been early adopted:

Š IFRS 9, ‘Financial instruments’ addresses the classification, measurement andderecognition of financial assets and financial liabilities. The standard is not applicableuntil January 1, 2015 but is available for early adoption. When adopted, the standardwill affect in particular the Group’s accounting for its available-for-sale financial assets,as IFRS 9 only permits the recognition of fair value gains and losses in othercomprehensive income if they relate to equity investments that are not held for trading.Fair value gains and losses on available-for-sale debt investments, for example, willtherefore have to be recognized directly in profit or loss.

There will be no impact on the Group’s accounting for financial liabilities, as the newrequirements only affect the accounting for financial liabilities that are designated at fairvalue through profit or loss, and the Group does not have any such liabilities. Thederecognition rules have been transferred from IAS 39 ‘Financial instruments:Recognition and measurement’ and have not been changed. The Group will adoptIFRS 9 in 2015.

Š IFRS 10, ‘Consolidated financial statements’. This standard builds on existingprinciples by identifying the concept of control as the determining factor in whether anentity should be included within the consolidated financial statements. The standardprovides additional guidance to assist in determining control where this is difficult toassess. This standard is applicable to annual periods beginning on or after January 1,2013.

Š IFRS 11, ‘Joint arrangements’. This standard provides for a more realistic reflection ofjoint arrangements by focusing on the rights and obligations of the arrangement, ratherthan its legal form. There are two types of joint arrangement: joint operations and jointventures. Joint operations arise where a joint operator has rights to the assets andobligations relating to the arrangement and hence accounts for its interest in assets,liabilities, revenue and expenses. Joint ventures arise where the joint operator has rightsto the net assets of the arrangement and hence equity accounts for its interest.Proportional consolidation of joint ventures is no longer allowed. This standard isapplicable to annual periods beginning on or after January 1, 2013.

Š IFRS 13, ‘Fair value measurement’. This standard aims to improve consistency andreduce complexity by providing a precise definition of fair value and a single source offair value measurement and disclosure requirements for use across IFRSs. Therequirements, which are largely aligned between IFRSs and accounting principlesgenerally accepted in the United States of America (“US GAAP”), do not extend the useof fair value accounting but provide guidance on how it should be applied where its useis already required or permitted by other standards within IFRSs or US GAAP. Thisstandard is applicable to annual periods beginning on or after January 1, 2013.

Š IAS 27 (Revised 2011), ‘Separate financial statements’. This standard includes theprovisions on separate financial statements that are left after the control provisions of

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APPENDIX I ACCOUNTANT’S REPORT

IAS 27 have been included in the new IFRS 10. This standard is applicable to annualperiods beginning on or after January 1, 2013.

Š IAS 16 (Amendment), ‘Property, plant and equipment’. The amendment clarifies thatspare parts and servicing equipment are classified as property, plant and equipmentrather than inventory when they meet the definition of property, plant and equipment.The previous standards of IAS 16 indicated that servicing equipment should beclassified as inventory, even if it was used for more than one period. Following theamendment, this equipment used for more than one period is classified as property,plant and equipment. This standard is applicable to annual periods beginning on or afterJanuary 1, 2013.

The Group is currently evaluating the impact of the above new standards and amendments onthe Financial Information and is not expecting any impact to the Group’s financial position and results.

2.2 Consolidation

(a) Subsidiaries

Subsidiaries are all entities (including special purpose entities) over which the Group has thepower to govern the financial and operating policies generally accompanying a shareholding of morethan one half of the voting rights. The existence and effect of potential voting rights that are currentlyexercisable or convertible are considered when assessing whether the Group controls another entity.The Group also assesses existence of control where it does not have more than 50% of the votingpower but is able to govern the financial and operating policies by virtue of de-facto control.

De-facto control may arise from circumstances where it does not have more than 50% of thevoting power but is able to govern the financial and operating policies by virtue of de-facto control.

Subsidiaries are fully consolidated from the date on which control is transferred to the Group.They are de-consolidated from the date that control ceases.

The Group applies the acquisition method to account for business combinations. Theconsideration transferred for the acquisition of a subsidiary is the fair values of the assets transferred,the liabilities incurred to the former owners of the acquiree and the equity interests issued by theGroup. The consideration transferred includes the fair value of any asset or liability resulting from acontingent consideration arrangement. Identifiable assets acquired and liabilities and contingentliabilities assumed in a business combination are measured initially at their fair values at theacquisition date. The Group recognizes any non-controlling interest in the acquiree on anacquisition-by-acquisition basis, either at fair value or at the non-controlling interest’s proportionateshare of the recognized amounts of acquiree’s identifiable net assets. Acquisition-related costs areexpensed as incurred.

If the business combination is achieved in stages, the acquisition date carrying value of theacquirer’s previously held equity interest in the acquiree is re-measured to fair value at the acquisitiondate, any gains or losses arising from such re-measurement are recognized in profit or loss.

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APPENDIX I ACCOUNTANT’S REPORT

Any contingent consideration to be transferred by the Group is recognized at fair value at theacquisition date. Subsequent changes to the fair value of the contingent consideration that is deemed tobe an asset or liability is recognized in accordance with IAS 39 either in profit or loss or as a change toother comprehensive income. Contingent consideration that is classified as equity is not re-measured,and its subsequent settlement is accounted for within equity.

Goodwill is initially measured as the excess of the aggregate of the consideration transferredand the fair value of non-controlling interest over the net identifiable assets acquired and liabilitiesassumed. If this consideration is lower than the fair value of the net assets of the subsidiary acquired,the difference is recognized in profit or loss.

Transactions with non-controlling interests that do not result in loss of control are accounted foras equity transactions — that is, as transactions with the owners in their capacity as owners. Thedifference between fair value of any consideration paid and the relevant share acquired of the carryingvalue of net assets of the subsidiary is recorded in equity. Gains or losses on disposals tonon-controlling interests are also recorded in equity.

When the Group ceases to have control, any retained interest in the entity is re-measured to itsfair value at the date when control is lost, with the change in carrying amount recognized in profit orloss. The fair value is the initial carrying amount for the purposes of subsequently accounting for theretained interest as an associate, joint venture or financial asset. In addition, any amounts previouslyrecognized in other comprehensive income in respect of that entity are accounted for as if the Grouphad directly disposed of the related assets or liabilities. This may mean that amounts previouslyrecognized in other comprehensive income are reclassified to profit or loss.

(b) Separate financial statements

Investments in subsidiaries are accounted for at cost less impairment. Cost also includes directattributable costs of investment. The results of subsidiaries are accounted for by the Company on thebasis of dividend and receivable.

Impairment testing of the investments in subsidiaries is required upon receiving dividends fromthese investments if the dividend exceeds the total comprehensive income of the subsidiary in theperiod the dividend is declared or if the carrying amount of the investment in the separate financialstatements exceeds the carrying amount in the consolidated financial statements of the investee’s netassets including goodwill.

(c) Jointly controlled entities

Investments in jointly controlled entities are accounted for using the equity method ofaccounting. Under the equity method, the investment is initially recognized at cost, and the carryingamount is increased or decreased to recognize the investor’s share of the profit or loss of the investeeafter the date of acquisition. The Group’s investment in a jointly controlled entity includes goodwillidentified on acquisition.

If the ownership interest in a jointly controlled entity is reduced but significant influence isretained, only a proportionate share of the amounts previously recognized in other comprehensiveincome is reclassified to profit or loss where appropriate.

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APPENDIX I ACCOUNTANT’S REPORT

The Group’s share of post-acquisition profit or loss is recognized in the income statement, andits share of post-acquisition movements in other comprehensive income is recognized in othercomprehensive income with a corresponding adjustment to the carrying amount of the investment.When the Group’s share of losses in a jointly controlled entity equals or exceeds its interest in thejointly controlled entity, including any other unsecured receivables, the Group does not recognizefurther losses, unless it has incurred legal or constructive obligations or made payments on behalf ofthe jointly controlled entity.

The Group determines at each reporting date whether there is any objective evidence that theinvestment in the jointly controlled entity is impaired. If this is the case, the Group calculates theamount of impairment as the difference between the recoverable amount of the jointly controlled entityand its carrying value and recognizes the amount adjacent to ‘share of profit/(loss) of a jointlycontrolled entity’ in the income statement.

Profits and losses resulting from upstream and downstream transactions between the Group andits jointly controlled entity are recognized in the Group’s financial statements only to the extent ofunrelated investor’s interests in the jointly controlled entity. Unrealized losses are eliminated unless thetransaction provides evidence of an impairment of the asset transferred. Accounting policies ofassociates have been changed where necessary to ensure consistency with the policies adopted by theGroup.

Dilution gains and losses arising in investments in a jointly controlled entity are recognized inthe income statement.

2.3 Segment Reporting

Operating segments are reported in a manner consistent with the internal reporting provided tothe chief operating decision-maker. The chief operating decision-maker, who is responsible forallocating resources and assessing performance of the operating segments, has been identified as theexecutive directors and certain senior management (including the chief financial officer) togetherreferred to as the “Senior Management” that makes strategic decisions.

2.4 Foreign currency translation

(a) Functional and presentation currency

Items included in the consolidated financial statements of each of the Group’s entities aremeasured using the currency of the primary economic environment in which the entity operates (the“functional currency”). The Company and its subsidiaries’ functional and presentation currency isUnited States dollar (“US$”).

(b) Transactions and balances

Foreign currency transactions are translated into the functional currency using the exchangerates prevailing at the dates of the transactions or valuation where items are re-measured. Foreignexchange gains and losses resulting from the settlement of such transactions and from the translation at

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APPENDIX I ACCOUNTANT’S REPORT

year-end exchange rates of monetary assets and liabilities denominated in foreign currencies arerecognized in the consolidated statements of comprehensive income, except when deferred in equity asqualifying cash flow hedges and qualifying net investment hedges.

Foreign exchange gains and losses that relate to borrowings and cash and cash equivalents arepresented in the consolidated statements of comprehensive income within ‘finance income/ (cost)’. Allother foreign exchange gains and losses are presented in the consolidated statements of comprehensiveincome within ‘other (loss)/gain, net’.

Translation differences on non-monetary financial assets, such as equities classified asavailable-for-sale financial assets, are included in other comprehensive income.

(c) Group companies

The results and financial position of all the Group entities (none of which has the currency of ahyper-inflationary economy) that have a functional currency different from the presentation currencyare translated into the presentation currency as follows:

(i) assets and liabilities for each statements of financial position presented are translated atthe closing rate at the date of that balance sheet;

(ii) income and expenses for each statements of comprehensive income are translated ataverage exchange rates (unless this average is not a reasonable approximation of thecumulative effect of the rates prevailing on the transaction dates, in which case incomeand expenses are translated at the rate on the dates of the transactions); and

(iii) all resulting exchange differences are recognized in other comprehensive income.

On consolidation, exchange differences arising from the translation of the net investment inforeign operations, and of borrowings and other currency instruments designated as hedges of suchinvestments, are taken to other comprehensive income. When a foreign operation is partially disposedof or sold, exchange differences that were recorded in equity are recognized in the consolidatedstatements of comprehensive income as part of the gain or loss on sale.

2.5 Property, plant and equipment

Property, plant and equipment, including mine and plant development assets, are stated at costless accumulated depreciation and accumulated impairment losses. Costs of interest on financingsobtained for the construction or production of a qualified asset are capitalized.

Subsequent costs are included in the asset’s carrying amount or recognized as a separate asset,as appropriate, only when it is probable that future economic benefits associated with the item willflow to the Group and the cost of the item can be measured reliably. The carrying amount of thereplaced part is derecognized. All other repairs and maintenance are charged to the consolidatedstatements of comprehensive income during the financial period in which they are incurred.

Mine and plant development assets and land related to mine site will be, upon commencementof production, depreciated using the unit-of-production (“UOP”) method based on the estimated

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APPENDIX I ACCOUNTANT’S REPORT

economically recoverable reserves to which they relate or will be written-off if the property isabandoned. Land not related to mine site is not subject to depreciation. Depreciation for all otherproperty, plant and equipment is calculated using the straight-line method to allocate their cost lesstheir residual value over their estimated useful life, as follows:

Buildings and constructions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . up to 50 yearsMachinery and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . up to 35 yearsMotor vehicles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . up to 5 yearsFurniture, fixtures and others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 -10 years

Construction in progress is not depreciated until it is ready for its intended use.

The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at the endof each reporting period.

An asset’s carrying amount is written down immediately to its recoverable amount if the asset’scarrying amount is greater than its estimated recoverable amount (Note 2.8).

Gains and losses on disposals are determined by comparing the proceeds with the carryingamount and are recognized within ‘other (loss)/gain, net’ in the consolidated statements ofcomprehensive income.

2.6 Exploration and evaluation expenditure

Exploration and evaluation expenditure comprises costs which are directly attributable to:researching and analyzing existing exploration data; conducting geological studies, exploratory drillingand sampling; examining and testing extraction and treatment methods; and compiling pre-feasibilityand feasibility studies. Exploration and evaluation expenditure also includes the costs incurred inacquiring mining rights, the entry premiums paid to gain access to areas of interest and amountspayable to third parties to acquire interests in existing projects.

During the initial stage of a project, exploration and evaluation costs are capitalized as incurred.Expenditure on a project after it has reached a stage at which there is a high degree of confidence in itsviability is transferred to mine and plant development assets if the project proceeds. If a project doesnot prove viable, all irrecoverable costs associated with the project are expensed in the consolidatedstatements of comprehensive income. Exploration and evaluation assets are assessed for impairment,and any impairment loss recognized, before classification.

Exploration and evaluation assets are assessed for impairment when facts and circumstancessuggest that the carrying amount of an exploration and evaluation asset may exceed its recoverableamount. When facts and circumstances suggest that the carrying amount exceeds the recoverableamount, the asset’s carrying amount is written down immediately to its recoverable amount (Note 2.8).

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APPENDIX I ACCOUNTANT’S REPORT

One or more of the following facts and circumstances indicate that an entity should testexploration and evaluation assets for impairment.

Š the period for which the entity has the right to explore in the specific area has expiredduring the period or will expire in the near future, and is not expected to be renewed.

Š substantive expenditure on further exploration for and evaluation of mineral resourcesin the specific area is neither budgeted nor planned.

Š exploration for and evaluation of mineral resources in the specific area have not led tothe discovery of commercially viable quantities of mineral resources and the entity hasdecided to discontinue such activities in the specific area.

Š sufficient data exist to indicate that, although a development in the specific area is likelyto proceed, the carrying amount of the exploration and evaluation asset is unlikely to berecovered in full from successful development or by sale.

2.7 Intangible assets — computer software

Acquired computer software are capitalized on the basis of the costs incurred to acquire andbring to use the specific software. These costs are amortized over their estimated useful lives andrecorded in ‘amortization and depreciation’ within general and administrative expenses in theconsolidated statements of comprehensive income.

2.8 Impairment of non-financial assets

Assets that have an indefinite useful life, for example goodwill or intangible assets not ready touse, are not subject to amortization and are tested annually for impairment. Assets that are subject toamortization are reviewed for impairment whenever events or changes in circumstances indicate thatthe carrying amount may not be recoverable. An impairment loss is recognized for the amount bywhich the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is thehigher of an asset’s fair value less costs to sell and value in use. For the purposes of assessingimpairment, assets are grouped at the lowest levels for which there are separately identifiable cashflows (cash-generating units). Non-financial assets other than goodwill that suffered impairment arereviewed for possible reversal of the impairment at each reporting date.

2.9 Financial assets

(a) Classification

The Group classified its financial assets in the following categories: loans and receivables. Theclassification depends on the purpose for which the financial assets were acquired. Managementdetermines the classification of its financial assets at initial recognition.

Loans and receivables are non-derivative financial assets with fixed or determinable paymentsthat are not quoted in an active market. They are included in current assets, except for maturitiesgreater than 12 months after the end of the reporting periods. These are classified as non-current assets.The Group’s loans and receivables comprise ‘restricted cash’, ‘VAT recoverable’, ‘other receivables’

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APPENDIX I ACCOUNTANT’S REPORT

and ‘cash and cash equivalents’ in the consolidated statements of financial position. Loans andreceivables are initially recognized at fair value plus transaction costs and subsequently measured atamortized cost using the effective interest method less provision for impairment.

(b) Recognition and measurement

Regular way purchases and sales of financial assets are recognized on the trade-date — the dateon which the Group commits to purchase or sell the asset. Investments are initially recognized at fairvalue plus transaction costs for all financial assets not carried at fair value through profit or loss.Financial assets are derecognized when the rights to receive cash flows from the investments haveexpired or have been transferred and the Group has transferred substantially all risks and rewards ofownership. Loans and receivables are subsequently carried at amortized cost using the effectiveinterest method.

2.10 Offsetting of financial instruments

Financial assets and liabilities are offset and the net amount reported in the consolidatedstatements of financial position when there is a legally enforceable right to offset the recognizedamounts and there is an intention to settle on a net basis, or realize the asset and settle the liabilitysimultaneously.

2.11 Impairment of financial assets — assets carried at amortized cost

The Group assesses at the end of each reporting period whether there is objective evidence thata financial asset or group of financial assets is impaired. A financial asset or a group of financial assetsis impaired and impairment losses are incurred only if there is objective evidence of impairment as aresult of one or more events that occurred after the initial recognition of the asset (a ‘loss event’) andthat loss event (or events) has an impact on the estimated future cash flows of the financial asset orgroup of financial assets that can be reliably estimated.

Evidence of impairment may include indications that the debtors or a group of debtors isexperiencing significant financial difficulty, default or delinquency in interest or principal payments,the probability that they will enter bankruptcy or other financial reorganization, and where observabledata indicate that there is a measurable decrease in the estimated future cash flows, such as changes inarrears or economic conditions that correlate with defaults.

For loans and receivables category, the amount of the loss is measured as the differencebetween the asset’s carrying amount and the present value of estimated future cash flows (excludingfuture credit losses that have not been incurred) discounted at the financial asset’s original effectiveinterest rate. The carrying amount of the asset is reduced and the amount of the loss is recognized inthe consolidated income statement. If a loan or held- to-maturity investment has a variable interest rate,the discount rate for measuring any impairment loss is the current effective interest rate determinedunder the contract. As a practical expedient, the Group may measure impairment on the basis of aninstrument’s fair value using an observable market price.

If, in a subsequent period, the amount of the impairment loss decreases and the decrease can berelated objectively to an event occurring after the impairment was recognized (such as an improvement

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APPENDIX I ACCOUNTANT’S REPORT

in the debtor’s credit rating), the reversal of the previously recognized impairment loss is recognized inthe consolidated statement of comprehensive income.

2.12 Inventories

Inventories primarily consist of materials, supplies and spare parts. Inventories are stated at thelower of cost and net realizable value. Cost is determined using the weighted average method. Netrealizable value is the estimated selling price in the ordinary course of business, less applicablevariable selling expenses.

2.13 Trade and other receivables

Trade receivables are amounts due from customers for merchandise sold or services performedin the ordinary course of business. If collection of trade and other receivables is expected in one year orless (or in the normal operating cycle of the business if longer), they are classified as current assets. Ifnot, they are presented as non-current assets.

Trade and other receivables are recognized initially at fair value and subsequently measured atamortized cost using the effective interest method, less provision for impairment.

2.14 Cash and cash equivalents

In the consolidated statements of cash flows, cash and cash equivalents includes cash in hand,deposits held at call with banks, other short-term highly liquid investments with original maturities ofthree months or less.

2.15 Share capital

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue ofnew shares or options are shown in equity as a deduction, net of tax, from the proceeds.

2.16 Trade payables

Trade payables are obligations to pay for goods or services that have been acquired in theordinary course of business from suppliers. Accounts payable are classified as current liabilities ifpayment is due within one year or less (or in the normal operating cycle of the business if longer). Ifnot, they are presented as non-current liabilities.

Trade payables are recognized initially at fair value and subsequently measured at amortizedcost using the effective interest method.

2.17 Borrowings

Borrowings are recognized initially at fair value, net of transaction costs incurred. Borrowingsare subsequently carried at amortized cost; any difference between the proceeds (net of transaction

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APPENDIX I ACCOUNTANT’S REPORT

costs) and the redemption value is recognized in the statements of comprehensive income over theperiod of the borrowings using the effective interest method.

Fees paid on the establishment of loan facilities are recognized as transaction costs of the loanto the extent that it is probable that some or all of the facility will be drawn down. In this case, the feeis deferred until the draw-down occurs. To the extent there is no evidence that it is probable that someor all of the facility will be drawn down, the fee is capitalized as a pre-payment for liquidity servicesand amortized over the period of the facility to which it relates.

Borrowings are classified as current liabilities unless the Group has an unconditional right todefer settlements of the liabilities for at least 12 months after the end of the reporting period.

2.18 Borrowing costs

General and specific borrowing costs directly attributable to the acquisition, construction orproduction of qualifying assets, which are assets that necessarily take a substantial period of time to getready for their intended use or sale, are added to the cost of those assets, until such time as the assetsare substantially ready for their intended use or sale.

Investment income earned on the temporary investment of specific borrowings pending theirexpenditure on qualifying assets is deducted from the borrowing costs eligible for capitalization.

All other borrowing costs are recognized in profit or loss in the period in which they areincurred.

2.19 Current and deferred income tax

The tax expense for the period comprises current and deferred tax. Tax is recognized in theconsolidated statements of income, except to the extent that it relates to items recognized in othercomprehensive income or directly in equity. In this case the tax is also recognized in othercomprehensive income or directly in equity, respectively.

The current income tax charge is calculated on the basis of the tax laws enacted orsubstantively enacted at the end of the reporting period in the countries where the Company’ssubsidiaries operate and generate taxable income. Management periodically evaluates positions takenin tax returns with respect to situations in which applicable tax regulation is subject to interpretation. Itestablishes provisions where appropriate on the basis of amounts expected to be paid to the taxauthorities.

Deferred income tax is recognized, using the liability method, on temporary differences arisingbetween the tax bases of assets and liabilities and their carrying amounts in the consolidated financialinformation. However, the deferred income tax is not accounted for if it arises from initial recognitionof an asset or liability in a transaction other than a business combination that at the time of thetransaction affects neither accounting nor taxable profit or loss. Deferred income tax is determined

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APPENDIX I ACCOUNTANT’S REPORT

using tax rates (and laws) that have been enacted or substantively enacted by the end of the reportingperiod and are expected to apply when the related deferred income tax asset is realized or the deferredincome tax liability is settled.

Deferred income tax assets are recognized only to the extent that it is probable that futuretaxable profit will be available against which the temporary differences can be utilized.

Deferred income tax is provided on temporary differences arising on investments insubsidiaries and associates, except for deferred income tax liability where the timing of the reversal ofthe temporary difference is controlled by the Group and it is probable that the temporary differencewill not reverse in the foreseeable future.

Deferred income tax assets and liabilities are offset when there is a legally enforceable right tooffset current tax assets against current tax liabilities and when the deferred income taxes assets andliabilities relate to income taxes levied by the same taxation authority on either the taxable entity ordifferent taxable entities where there is an intention to settle the balances on a net basis.

2.20 Employee benefits

Group companies operate various defined contribution schemes. A defined contribution plan isa pension plan under which the Group pays fixed contributions into a separate entity. The Group has nolegal or constructive obligations to pay further contributions if the fund does not hold sufficient assetsto pay all employees the benefits relating to employee service in the current and prior periods.

The Group pays contributions to publicly or privately administered pension insurance plans ona mandatory, contractual or voluntary basis depending on the requirements in different jurisdictions.The Group has no further payment obligations once the contributions have been paid. Thecontributions are recognized as employee benefit expense when they are due. Prepaid contributions arerecognized as an asset to the extent that a cash refund or a reduction in the future payments isavailable.

In accordance with Peruvian labor law, mining companies need to pay its employee profitsharing based on 8% of its taxable income. The employee profit sharing should be paid by thecompany to its employee directly annually. Therefore, once commercial production starts, theCompany will recognize a liability and an expense for employee’s profit sharing. The employee’sprofit sharing is a deductible item for income tax purpose.

2.21 Provisions

Provisions for environmental restoration and legal claims are recognized when: the Group has apresent legal or constructive obligation as a result of past events; it is probable that an outflow ofresources will be required to settle the obligation; and the amount has been reliably estimated.

Where there are a number of similar obligations, the likelihood that an outflow will be requiredin settlement is determined by considering the class of obligations as a whole. A provision is

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APPENDIX I ACCOUNTANT’S REPORT

recognized even if the likelihood of an outflow with respect to any one item included in the same classof obligations may be small.

Provisions are measured at the present value of the expenditures expected to be required tosettle the obligation using a pre-tax rate that reflects current market assessments of the time value ofmoney and the risks specific to the obligation. The increase in the provision due to passage of time isrecognized as interest expense.

2.22 Interest income

Interest income is recognized using the effective interest method. When a loan and receivable isimpaired, the Group reduces the carrying amount to its recoverable amount, being the estimated futurecash flow discounted at the original effective interest rate of the instrument, and continues unwindingthe discount as interest income. Interest income on impaired loan and receivables are recognized usingthe original effective interest rate.

2.23 Leases

Leases in which a significant portion of the risks and rewards of ownership are retained by thelessor are classified as operating leases. Payments made under operating leases (net of any incentivesreceived from the lessor) are charged to the consolidated statements of income on a straight-line basisover the period of the lease.

2.24 Dividend distribution

Dividend distribution to the Company’s shareholders is recognized as a liability in the Group’sand the Company’s financial statements in the period in which the dividends are approved by theCompany’s shareholders.

2.25 Earnings/losses per share

Basic earnings/losses per share is determined by dividing the profit or loss attributable to equityholders of the Company by the weighted average number of participating shares outstanding during thereporting year.

Diluted earnings/losses per share is calculated by adjusting the weighted average number ofordinary shares outstanding to assume conversion of all dilutive potential ordinary shares and adjustingthe profit or loss attributable to equity holders of the Company accordingly for related amounts. Theeffect of potentially dilutive ordinary shares are included only if they are dilutive.

3. Financial risk management

3.1 Financial risk factors

The Group’s activities expose it to a variety of financial risks: market risk (including foreignexchange currency risk, fair value interest rate risk and cash flow interest rate risk), credit risk andliquidity risk.

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APPENDIX I ACCOUNTANT’S REPORT

(a) Market risk

(i) Foreign exchange risk

The Group mainly operates in Peru with most of the transactions denominated and settled inUS$ which are mainly related to the acquisition of services and loans received from related parties.Accordingly, it is exposed to foreign exchange risk that may arise from fluctuations in the exchangerate of the New Peruvian Soles (“New PEN”). Management estimates that the impact of any changes inthe New PEN exchange rate will not have a significant impact on its financial position and results.Although, as shown below, the Group maintains a net assets position expressed in New PEN that, in itsdepreciation trend, may have a negative impact upon liquidation of these monetary assets andliabilities, public estimates available do not anticipate a severe devaluation of the local currency in theshort term that may cause a major impact in the results of the Group.

During the Relevant Periods, the Group has not used any financial instrument to hedge theforeign exchange risk.

For the years ended December 31, 2009 and 2010 and the nine months ended September 30,2012, if the US$ had strengthened/weakened by 5% against the New PEN with all other variables heldconstant, loss for the years and the period would have been US$65,000, US$70,000 and US$79,000higher/lower respectively. For the year ended December 31, 2011, if the US$ had strengthened/weakened by 5% against the New PEN with all other variables held constant, loss for the year wouldhave been US$47,000 lower/higher.

(ii) Cash flow and fair value interest rate risk

Other than cash held in bank deposits included in cash and cash equivalents, the Group has nosignificant interest-bearing assets. The Group’s income and operating cash flows are substantiallyindependent of changes in market interest rates. The Group’s interest rate risk arises from borrowings.A detailed analysis of the Group’s borrowings, together with their respective effective interest ratesand maturity dates, are included in Note 17.

For the years ended December 31, 2009, 2010 and 2011 and the nine months endedSeptember 30, 2012, if interest rate had increased/decreased by 10 basis-point with all other variablesheld constant, interest expenditure would have been higher/lower by US$80,400, US$304,000 andUS$658,000 and US$1,016,000, respectively.

(b) Credit risk

Credit risk is managed on Group basis. The carrying amounts of bank deposits (includingrestricted cash), other receivables included in the consolidated statements of financial positionrepresent the Group’s maximum exposure to credit risk in relation to its financial assets.

As at December 31, 2009, 2010 and 2011 and September 30, 2012, cash and cash equivalentsand restricted cash were deposited in the major financial institutions in Peru and the PRC, which thedirectors of the Company believe are of good credit quality. For banks and financial institutions, theGroup places substantially all of its cash and cash equivalent only with major international and localbanks which are public listed locally and/or internationally.

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APPENDIX I ACCOUNTANT’S REPORT

(c) Liquidity risk

The Group’s liquidity risk management involves maintaining sufficient cash and cashequivalents and availability of funding through an adequate amount of committed credit facilities.

The table below analyses the financial liabilities classified into relevant maturity groupingsbased on the remaining period at the end of reporting period to the contractual maturity date. Theamounts disclosed in the table are the contractual undiscounted cash flows.

Group

As at December 31, 2009Less than1 year

Between1 and 2years

Between2 and 5years

Over5 years

US$’000 US$’000 US$’000 US$’000

Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23,988 — — —Accruals and other payables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,057 — — —Amount due to immediate holding company . . . . . . . . . . . . . . . . . . 2,101 — — —Short-term borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 123,399 — — —Long-term borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — 15,000 175,000

155,545 — 15,000 175,000

As at December 31, 2010Less than1 year

Between1 and 2years

Between2 and 5years

Over5 years

US$’000 US$’000 US$’000 US$’000

Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55,177 — — —Accruals and other payables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,708 — — —Amount due to immediate holding company . . . . . . . . . . . . . . . . . . 2,101 — — —Short-term borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 123,399 — — —Long-term borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,273 5,273 223,835 511,375

192,658 5,273 223,835 511,375

As at December 31, 2011Less than1 year

Between1 and 2years

Between2 and 5years

Over5 years

US$’000 US$’000 US$’000 US$’000

Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 128,152 — — —Accruals and other payables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,956 — — —Amount due to immediate holding company . . . . . . . . . . . . . . . . 1,920 — — —Short-term borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100,000 — — —Long-term borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22,346 22,346 292,990 818,918

257,374 22,346 292,990 818,918

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APPENDIX I ACCOUNTANT’S REPORT

As at September 30, 2012Less than1 year

Between1 and 2years

Between2 and 5years

Over5 years

US$’000 US$’000 US$’000 US$’000

Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 233,351 — — —Accruals and other payables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,966 — — —Amount due to immediate holding company . . . . . . . . . . . . . . . . 2,376 — — —Short-term borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102,300 — — —Long-term borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42,969 42,969 400,355 1,445,946

389,962 42,969 400,355 1,445,946

Company

As at December 31, 2009Less than1 year

Between1 and 2years

Between2 and 5years

Over5 years

US$’000 US$’000 US$’000 US$’000

Amount due to immediate holding company . . . . . . . . . . . . . . . . . . . . . 2,101 — — —Short-term borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28,500 — — —Long-term borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — 15,000 175,000

30,601 — 15,000 175,000

As at December 31, 2010Less than1 year

Between1 and 2years

Between2 and 5years

Over5 years

US$’000 US$’000 US$’000 US$’000

Amount due to immediate holding company . . . . . . . . . . . . . . . . . . . . . 2,101 — — —Short-term borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28,500 — — —Long-term borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — 74,500 445,500

30,601 — 74,500 445,500

As at December 31, 2011

Lessthan1 year

Between1 and 2years

Between2 and 5years

Over5 years

US$’000 US$’000 US$’000 US$’000

Amount due to immediate holding company . . . . . . . . . . . . . . . . . . . . . 1,920 — — —Short-term borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100,000 — — —Long-term borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — 143,399

101,920 — — 143,399

As at September 30, 2012

Lessthan1 year

Between1 and 2years

Between2 and 5years

Over5 years

US$’000 US$’000 US$’000 US$’000

Amount due to immediate holding company . . . . . . . . . . . . . . . . . . . . . 2,376 — — —Short-term borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102,300 — — —Long-term borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — 146,698

104,676 — — 146,698

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APPENDIX I ACCOUNTANT’S REPORT

3.2 Capital risk management

The Group’s objective when managing capital is to safeguard the Group’s ability to continue asa going concern in order to provide returns for shareholders and benefits for other stakeholders uponthe initiation of its operations.

During the Relevant Periods, as the Group is still at development stage, its funding is primarilyfrom the Company’s sole shareholder in the forms of capital contribution and shareholder’s loans(Note 17(a)), as well as bank loans from Eximbank (Note 17(b)).

The Group monitors capital on the basis of the debt ratio. This ratio is calculated as total debtsdivided by total assets. The debt ratios of December 31, 2009, 2010 and 2011 and September 30, 2012are as follows:

As at December 31,As at

September 30,

2009 2010 2011 2012

US$’000 US$’000 US$’000 US$’000

Total borrowings (Note 17) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 280,033 762,627 1,103,399 1,928,998

Total debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 280,033 762,627 1,103,399 1,928,998Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 359,709 931,857 1,690,628 2,619,177

Debt ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77.8% 81.8% 65.3% 73.6%

The decrease in the debt ratio during the year ended December 31, 2011 and the nine monthsended September 30, 2012 resulted primarily the capitalization of certain borrowings from theCompany’s immediate holding company (Note 17(a)(ii)).

3.3 Fair value estimation

The Company discloses fair value measurements of financial instruments by level of thefollowing fair value measurement hierarchy:

Š Quoted prices (unadjusted) in active markets for identical assets or liabilities (Level 1).

Š Inputs other than quoted prices included within level 1 that are observable for the assetor liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices)(Level 2).

Š Inputs for the asset or liability that are not based on observable market data (i.e.unobservable inputs) (Level 3).

The fair value of financial instruments traded in active markets is based on quoted marketprices at the balance sheet date. A market is regarded as active if quoted prices are readily andregularly available from an exchange, dealer, broker, industry group, pricing service, or regulatoryagency, and those prices represent actual and regularly occurring market transactions on an arm’slength basis. These instruments are included in level 1.

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APPENDIX I ACCOUNTANT’S REPORT

The fair value of financial instruments that are not traded in an active market (for example,over-the-counter derivatives) is determined by using valuation techniques. These valuation techniquesmaximize the use of observable market data where it is available and rely as little as possible on entityspecific estimates. If all significant inputs required to fair value an instrument are observable, theinstrument is included in level 2.

If one or more of the significant inputs is not based on observable market data, the instrument isincluded in level 3.

During the Relevant Periods, the Group has no financial instruments measured at fair value.

4. Critical accounting estimates and judgements

Estimates and judgments are continually evaluated and are based on historical experience andother factors, including expectations of future events that are believed to be reasonable under thecircumstances.

The Group makes estimates and assumptions concerning the future. The resulting accountingestimates will, by definition, seldom equal the related actual results. The estimates and assumptionsthat have a significant risk of causing adjustment to the carrying amount of reported assets andliabilities are as follows:

(a) Recovery of the cost of mining exploration assets of the Toromocho Mining Project and orereserves estimates

The Group capitalizes qualified expenditures, comprising exploration, and acquisition of goods,technical assessments and applicable taxes, directly attributable to the Toromocho Mining Project.

In accordance to the Group’s relevant accounting policy as set out in Note 2, the Groupevaluates, on a periodic basis, the ore reserves estimates of the Toromocho Mining Project, which isthe amount of unexploited copper in the mining concessions to which it is entitled and which may beproduced and sold to generate revenues. Such evaluations are based on engineering tests performed onsamples of drilling well and other mine pits combined with certain assumptions regarding coppermarket prices and production costs.

Based on the technical report dated November 2012 by Behre Dolbear Asia, Inc, anindependent mineral industry advisory firm, the estimated unexploited Proved and Probable ore reservein the mining concessions to which the Group entitled approximately 1,540Mt. Based on the Group’sprojections of the future economic benefits expected from the ore reserves of the Toromocho MiningProject, the Group concluded that no impairment was required as at September 30, 2012.

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APPENDIX I ACCOUNTANT’S REPORT

Because the economic assumptions used to estimate the value of reserves may change fromperiod to period, and because additional geological data is generated during the course of operations,estimates of reserves may change from period to period. Changes in reported reserves may affect theGroup’s Financial Information in a number of ways, including the following:

Š Asset carrying values may be affected due to changes in estimated future cash flows.

Š Depreciation, depletion and amortization charged in the income statements may changewhere such charges are determined by the units of production basis, or where the usefuleconomic lives of assets change.

Š Decommissioning, site restoration and environmental provisions may change wherechanges in estimated reserves affect expectations about the timing or cost of theseactivities.

Š The carrying value of deferred tax assets may change due to changes in estimates of thelikely recovery of the tax benefits.

(b) Provision for remediation and restoration

Provision for remediation and restoration included environmental remediation costs, assetsretirements obligation and similar obligation in relation to the Group’s operations. Provision is madewhen the related environmental disturbance and present obligations occur, based on the net presentvalue of estimated future costs. The ultimate cost of environmental disturbances, asset retirement andsimilar obligation are uncertain and management uses its judgment and experience to provide for thesecosts over the life of operations. Cost estimates can vary in response to many factors including changesto the relevant legal requirements, the Group’s related policies, the emergence of new restorationtechniques and the effects of inflation. Cost estimates are updated throughout the life of the operation.

The expected timing of expenditure included in cost estimates can also change, for example inresponse to changes in ore reserves, or production rates, operating license or economic conditions.Expenditure may occur before and after closure and can continue for an extended period of timedepending on the specific site requirements. Some expenditure can continue into perpetuity. Cashflows must be discounted if this has a material effect. The selection of appropriate sources on which tobase calculation of the risk free discount rate used for this purpose also requires judgment. As a resultof all of the above factors there could be significant adjustments to the provision for close down,restoration and clean up costs which would affect future financial results.

The Group currently operates mainly in Peru. The outcome of environmental and other similarobligations under proposed or future environmental legislation in Peru cannot reasonably be estimatedat present, and could be material. Under existing legislation, however, the directors of the Company arein their opinion that there are no probable liabilities, that are in addition to amounts which have alreadybeen reflected in the financial statements, that will have a materially adverse effect on the financialposition of the Group.

The Group engaged an independent valuer, namely Walsh Peru S.A. to perform a mine closureplan including the estimated future expenditure in relation to remediation and restoration costs as well

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APPENDIX I ACCOUNTANT’S REPORT

as other similar obligations on the Toromocho Mining Project and a report was issued in August 2012and was approved by the Ministry of Energy and Mines of Peru (“MEM”) on December 27, 2012 (the“Mine Closure Plan”). Taking into consideration of report issued by Walsh Peru S.A. and approval ofthe Mine Closure Plan from the MEM, the Group has assessed and provided for remediation andrestoration and similar obligations amounted to US$23,840,000, US$28,962,000 and US$58,111,000and US$61,466,000 as at December 31, 2009, 2010 and 2011 and September 30, 2012, respectively.Refer to Note 19 for details.

(c) Income taxes and VAT recoverable

The estimates of deferred income tax assets require estimates of future taxable profit and thecorresponding applicable income tax rates of future years. Changes in future income tax rates andtiming will affect income tax expense or benefit, as well as deferred income tax balance. Therealization of deferred income tax assets also depends on the realization of sufficient profitability(taxable profit) of the Group. Deviation of future profitability from the estimate could result in materialadjustments to the carrying amount of deferred income tax assets.

Determination of tax obligations and expenses requires interpretations of the applicable taxlaws and regulations. The Group seeks professional legal tax counsel before making any decision ontax matters. Management considers that their estimates are prudent and appropriate; however,differences of interpretation may arise from the interpretation made by Peruvian Tax Authorities thatmay affect future charges for taxes. Similarly, the recoverability of VAT recoverable is determined bymanagement based on past experience, taking into account existing relevant Peruvian tax rules.

(d) Going concern

As set out in Note 2.1(a), the ability of the Group to continue operations is dependent uponobtaining the necessary financing borrowings and/or financial support from its holding companies inorder to obtain sufficient cash flow to meet its liabilities as they fall due. In the event the Group isunable to obtain adequate funding, there is uncertainty as to whether the Group will be able to continueas a going concern. These financial statements do not include any adjustments related to the carryingvalues and classifications of assets and liabilities that would be necessary should the Group and theCompany be unable to continue as a going concern.

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APPENDIX I ACCOUNTANT’S REPORT

5. Property, plant and equipment — Group

Explorationand

evaluationassets

Mine and plantdevelopment

assets(Note (a))

Landand

buildings

Machineryand

equipmentMotorvehicles

Furniture,fixtures

and othersConstructionin progress Total

US$’000 US$’000 US$’000 US$’000 US$’000 US$’000 US$’000 US$’000Year ended December 31, 2009Opening net book amount . . . . . . . 181,534 — 1,133 755 363 834 15,256 199,875Additions . . . . . . . . . . . . . . . . . . . . 27,995 — 7 218 155 235 113,893 142,503Reversal . . . . . . . . . . . . . . . . . . . . . (34,591) — — — — — — (34,591)Depreciation . . . . . . . . . . . . . . . . . . — — — (370) (125) (140) — (635)Transfer (out)/in (Note (b)) . . . . . . (174,938) 150,623 (564) 547 — 17 24,315 —Disposals . . . . . . . . . . . . . . . . . . . . — — — (3) — — — (3)

Closing net book amount . . . . . . . — 150,623 576 1,147 393 946 153,464 307,149

At December 31, 2009Cost . . . . . . . . . . . . . . . . . . . . . . . . — 150,623 576 1,604 782 1,206 153,464 308,255Accumulated depreciation . . . . . . . — — — (457) (389) (260) — (1,106)

Net book amount . . . . . . . . . . . . . . — 150,623 576 1,147 393 946 153,464 307,149

Year ended December 31, 2010Opening net book amount . . . . . . . — 150,623 576 1,147 393 946 153,464 307,149Additions . . . . . . . . . . . . . . . . . . . . — 82,614 — — — — 295,187 377,801Depreciation . . . . . . . . . . . . . . . . . . — — (27) (191) (265) (484) — (967)Transfer in/(out) . . . . . . . . . . . . . . . — — 594 52 1,663 848 (3,157) —Disposals . . . . . . . . . . . . . . . . . . . . — — — — (16) — — (16)

Closing net book amount . . . . . . . — 233,237 1,143 1,008 1,775 1,310 445,494 683,967

At December 31, 2010Cost . . . . . . . . . . . . . . . . . . . . . . . . — 233,237 1,300 1,400 2,407 2,193 445,494 686,031Accumulated depreciation . . . . . . . — — (157) (392) (632) (883) — (2,064)

Net book amount . . . . . . . . . . . . . . — 233,237 1,143 1,008 1,775 1,310 445,494 683,967

Year ended December 31, 2011Opening net book amount . . . . . . . — 233,237 1,143 1,008 1,775 1,310 445,494 683,967Additions . . . . . . . . . . . . . . . . . . . . — 216,532 — — — — 505,068 721,600Depreciation . . . . . . . . . . . . . . . . . . — — (332) (3,090) (705) (592) — (4,719)Transfer in/(out) . . . . . . . . . . . . . . . — — 27,838 40,549 2,384 1,195 (71,966) —Disposals . . . . . . . . . . . . . . . . . . . . — — — — (14) — — (14)

Closing net book amount . . . . . . . — 449,769 28,649 38,467 3,440 1,913 878,596 1,400,834

At December 31, 2011Cost . . . . . . . . . . . . . . . . . . . . . . . . — 449,769 29,138 41,949 4,754 3,388 878,596 1,407,594Accumulated depreciation . . . . . . . — — (489) (3,482) (1,314) (1,475) — (6,760)

Net book amount . . . . . . . . . . . . . . — 449,769 28,649 38,467 3,440 1,913 878,596 1,400,834

Nine months endedSeptember 30, 2012

Opening net book amount . . . . . . . — 449,769 28,649 38,467 3,440 1,913 878,596 1,400,834Additions . . . . . . . . . . . . . . . . . . . . — 133,371 — — — — 663,065 796,436Depreciation . . . . . . . . . . . . . . . . . . — — (706) (4,150) (808) (536) — (6,200)Transfer (out)/in . . . . . . . . . . . . . . . — — 3,478 5,230 1,424 44 (10,176) —Disposals . . . . . . . . . . . . . . . . . . . . — — — (8) — (3) — (11)

Closing net book amount . . . . . . . — 583,140 31,421 39,539 4,056 1,418 1,531,485 2,191,059

At September 30, 2012Cost . . . . . . . . . . . . . . . . . . . . . . . . — 583,140 32,616 47,171 6,178 3,429 1,531,485 2,204,019Accumulated depreciation . . . . . . . — — (1,195) (7,632) (2,122) (2,011) — (12,960)

Net book amount . . . . . . . . . . . . . . — 583,140 31,421 39,539 4,056 1,418 1,531,485 2,191,059

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APPENDIX I ACCOUNTANT’S REPORT

Notes:(a) The Group owns 50% equity interest in Sociedad Minera de Responsabilidad Limitada Juanita de Huancayo (“Juanita”), a limited

liability company incorporated under the laws of Peru and was established for the purpose of the holding of one of the miningconcession rights of the Toromocho Mining Project (the “Metallic Mining Concession Right”). Except for the holding of the MetallicMining Concession Right, Juanita has no other significant business activities during the Relevant Periods. The directors of the Companyare in their opinion that since the sole purpose of Juanita is to hold the Metallic Mining Concession Right of the Toromocho MiningProject, the Group’s 50% share of the concession right amounting to US$3,500,000 is accounted for as a ‘mine and plant developmentassets’. There are no significant contingent liabilities relating to the Group’s interest in Juanita, and of Juanita itself.

(b) In December 2007, the feasibility assessment conducted by an independent advisory firm was completed, confirming the technical andeconomical feasibility of the Toromocho Mining Project and confirmed that its development and exploitation may be executed withoutcausing any significant damages to the environment. The directors of the Company are in their opinion that by submittingEnvironmental Impact Assessment report to the Peruvian government in December 2009, the Toromocho Mining Project had reachedthe stage that there is a high degree of confidence in its viability. Therefore, all related exploration and evaluation assets amounted toUS$150,623,000 were reclassified to “Mine and plant development assets” and development costs pertaining to the Kingsmill Tunnelwater treatment plant amounting to US$24,315,000 were reclassified to “construction in progress” in December 2009.

Included in the movement of property, plant and equipment and mine and plant developmentcost of the Group for the years ended December 31, 2009, 2010 and 2011 and the nine months endedSeptember 30, 2012 were estimated remediation and restoration obligations in relation to the property,plant and equipment and mine and plant development amounting to US$(34,591,000), US$4,120,000and US$28,031,000 and US$1,801,000, respectively (Note 19).

As at December 31, 2009, 2010 and 2011 and September 30, 2012, the Group has capitalizedfinancing costs included in the additions of property, plant and equipment of the Group amounting toUS$2,689,000, US$10,215,000 and US$25,820,000 and US$35,146,000, respectively (Note 27).

As at December 31, 2010 and 2011 and September 30, 2012, certain bank borrowingsamounting to US$200,000,000 and US$860,000,000 and US$1,680,000,000 (Note 17(b)) wereguaranteed by Chinalco, respectively. According to the borrowing agreement, in case that thecredibility or financial status of Chinalco deteriorates or has the potential to deteriorate, all theproperty, plant and equipment pertaining to the Toromocho Mining Project will be pledged asadditional security for these borrowings.

In connection with the agreement to construct and operate the Kingsmill Tunnel watertreatment plant (Note 5(b)), the Group is required to maintain certain deposits with a bank. AtDecember 31, 2011 and September 30, 2012, US$540,000 and US$540,000 bank deposits are held asperformance guarantee (Note 13).

During the Relevant Periods, depreciation expense is recognized as follows:

Year ended December 31,Nine months ended

September 30,

2009 2010 2011 2011 2012

US$’000 US$’000 US$’000 US$’000 US$’000(unaudited)

General and administrative expenses . . . . . . . . . . . . . . . . . . 635 897 641 717 576Capitalized in construction in progress . . . . . . . . . . . . . . . . . — 70 4,078 800 5,624

635 967 4,719 1,517 6,200

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APPENDIX I ACCOUNTANT’S REPORT

6. Investment in subsidiaries — Company

As at December 31,As at

September 30,

2009 2010 2011 2012

US$’000 US$’000 US$’000 US$’000

Investment, at cost, unlisted shares . . . . . . . . . . . . . . . . . . . . . . . . 28,500 383,500 628,499 628,499Amount due from a subsidiary . . . . . . . . . . . . . . . . . . . . . . . . . . . 190,000 165,000 — —

218,500 548,500 628,499 628,499

Amount due from a subsidiary is unsecured, interest-free, denominated in US$ and has no fixedrepayment term. The directors of the Company are of the opinion that the amount due from thesubsidiary would not be required to be settled and considered it as part of the equity funding to thesubsidiary.

A list of the Company’s subsidiaries is set out in Note 1.

7. Intangible assets — Group

Intangible assets represent computer software and began to amortize over their estimated usefullife upon they were put into their intended use.

As at December 31,As at

September 30,

2009 2010 2011 2012

US$’000 US$’000 US$’000 US$’000

Opening net book value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 421 958 1,092 547Addition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 689 1,066 551 338Amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (152) (932) (1,096) (477)

Net book value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 958 1,092 547 408

Cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,209 2,275 2,826 3,164Accumulated amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (251) (1,183) (2,279) (2,756)

Net book value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 958 1,092 547 408

During the Relevant Periods, amortization is recognized as follows:

Year ended December 31,Nine months ended

September 30,

2009 2010 2011 2011 2012

US$’000 US$’000 US$’000 US$’000 US$’000(unaudited)

General and administrative expenses . . . . . . . . . . . . . . . . . . 152 932 1,096 800 —Capitalized in construction in progress . . . . . . . . . . . . . . . . . — — — — 477

152 932 1,096 800 477

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APPENDIX I ACCOUNTANT’S REPORT

8. Deferred income tax — Group

Deferred income tax assets and liabilities are offset when there is a legally enforceable right tooffset current tax assets against current tax liabilities and when the deferred income taxes relate to thesame tax authority. All of the deferred income tax assets and liabilities are to be recovered or settledafter more than 12 months.

The gross movements in the deferred tax account are as follows:

As at December 31,As at

September 30,

2009 2010 2011 2012

US$’000 US$’000 US$’000 US$’000

At beginning of the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,675 7,240 10,651 16,292Credited to the consolidated statements of comprehensive income(Note 28) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,266 3,411 5,641 4,627

Effect of translation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 299 — — —

At end of the year/period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,240 10,651 16,292 20,919

Deferred income tax assets

Expensescapitalized

Provision forremediation

and restoration Others Total

US$’000 US$’000 US$’000 US$’000

At January 1, 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,157 207 311 3,675Credited/(Debited) to the consolidated statements ofcomprehensive income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,998 454 (186) 3,266

Effect of translation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — 299 299

At December 31, 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,155 661 424 7,240Credited/(Debited) to the consolidated statements ofcomprehensive income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,498 301 (388) 3,411

At December 31, 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,653 962 36 10,651Credited to the consolidated statements of comprehensiveincome . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,836 335 470 5,641

At December 31, 2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14,489 1,297 506 16,292Credited/(Debited) to the consolidated statements ofcomprehensive income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,190 467 (30) 4,627

At September 30, 2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18,679 1,764 476 20,919

The Group has not recognized deferred income tax assets of US$218,000, US$86,000, Nil andNil as at December 31, 2009, 2010 and 2011 and September 30, 2012, respectively, in respect ofaccumulated tax losses of US$728,000, US$287,000 and Nil and Nil as at those dates, respectively,that can be carried forward against future taxable income and will expire between 2012 and 2015.

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APPENDIX I ACCOUNTANT’S REPORT

9. VAT recoverable — Group

On September 14, 2010, by means of Supreme Decree No 060-2010-EM issued by the MEM,as countersigned by the Ministry of Economy and Finance, the Company is entitled to use the SpecialRegime of the Value Added Tax (“VAT”) Anticipated Refunding (RERA IGV, the Spanish acronym),in adherence to Legislative Decree 973. Accordingly, qualified VAT paid on purchases can be used toset off tax payable to local sales, income taxes or any other taxes required by the Peruvian taxauthorities or refunded in the form of negotiable credit notes or non-negotiable checks.

In order to qualify for the above entitlement under RERA IGV, the Group signed an investmentagreement with respect to the Toromocho Project (the “Investment Agreement”) on June 16, 2009 withMEM, which was modified under addendum dated July 27, 2010. Pursuant to the InvestmentAgreement, the Group agreed to invest into the Toromocho Mining Project amounting to US$2,053million by the end of 2012 (Note 32(a)(iii)). On December 15, 2011, the MEM, MCP has signed anaddendum of the Investment Agreement, which was approved by the MEM and Ministry of Finance ofthe Peruvian government on February 8, 2012, in order to extend the period of fulfilment of thecommitted investment until December 2013.

VAT recoverable represents the VAT credit entitled to the Group for VAT paid on theacquisition of goods and services related to its exploration and development activities, and issummarized as follows:

As at December 31,As at

September 30,

2009 2010 2011 2012

US$’000 US$’000 US$’000 US$’000

VAT recoverable:— to be recovered after more than 12 months . . . . . . . . . . . . . . . . . 32,545 43,907 80,302 136,845— to be recovered within 12 months . . . . . . . . . . . . . . . . . . . . . . . . — 30,682 72,680 11,145

32,545 74,589 152,982 147,990

10. Investment in a jointly controlled entity — Group

In September 2010, the Group and five other independent investors jointly establishedTransportadora Callao S.A. (“Transportadora Callao”), a company incorporated under the laws of Peru.In accordance with the investment agreement, the Group contributed US$1,290,000 for 7% equityinterest in Transportadora Callao. Transportadora Callao was established exclusively for the design,construction, financing, operation, conserve and export a specialized dock for mineral concentrates andthe corresponding conveyer belt located in the northern wave break of the Callao Port in Peruaccording to the term and conditions established in the Concession Agreement signed with thePeruvian Government. As at September 30, 2012, Transportadora Callao is at development stage andhas not commenced operation.

The statutory auditor of Transportadora Callao is Beltran, Gris y Asociados S. Civil de R.L.,certified public accountants registered in Peru (“Deloitte Peru”).

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APPENDIX I ACCOUNTANT’S REPORT

Movements of investment in a jointly controlled entity as follows:

As at December 31,As at

September 30,

2009 2010 2011 2012

US$’000 US$’000 US$’000 US$’000

At January 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — 1,290 1,979Investment in a jointly controlled entity . . . . . . . . . . . . . . . . . . . . . . — 1,290 — —Loans to a jointly controlled entity (Note) . . . . . . . . . . . . . . . . . . . . — — 689 1,534

At end of the year/period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 1,290 1,979 3,513

Note: Loans to a jointly controlled entity are unsecured and interest-free. The directors of the Company are in their opinion that no repaymentis expected and therefore, the loans are included in investment in a jointly controlled entity.

The Group’s interest in its jointly controlled entity, together with its share of the respectiveassets, liabilities, revenues and profit/loss were as follows:

Assets Liabilities Revenues Profit/(Loss) Interest held

US$’000 US$’000 US$’000 US$’000

As of and for the year ended December 31, 2010 . . . . . 22,553 4,122 — 11 7%

As of and for the year ended December 31, 2011 . . . . . 28,541 10,099 — — 7%

As of and for the period ended September 30, 2012 . . . 74,457 56,065 — (47) 7%

The Peruvian government requires Transportadora Callao to maintain a guarantee deposit ofUS$27,000,000 as performance guarantee. In this connection, the Group placed in a designated bankaccount cash amounting to US$1,890,000 and US$1,890,000 and US$1,890,000, which represents theGroup’s proportional share of the total guarantee deposit as of December 31, 2010 and 2011 andSeptember 30, 2012, respectively (Note 13).

In June 2012, Transportadora Callao borrowed US$20,000,000 from its bank in Peru. In thisconnection, the Group is required to issue a letter of credit in favor of the bank as guarantee for theborrowing amounting to US$1,400,000, representing its proportional share of the guarantee. This letterof credit is secured by cash deposit amounted to US$1,400,000 of the Group.

There are no significant contingent liabilities in relation to the Group’s interest in the jointlycontrolled entity, and no significant contingent liabilities of the joint controlled entity itself.

There are no significant commitments in relation to the Group’s interest in the jointly controlledentity, and no significant commitments of the jointly controlled entity itself.

11. Inventories — Group

As at December 31, 2009, 2010 and 2011 and September 30, 2012, inventories of the Grouprepresented mainly supplies and spare parts.

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APPENDIX I ACCOUNTANT’S REPORT

During the years ended December 31, 2009, 2010 and 2011 and for the nine months periodended September 30, 2012, the cost of inventories recognized as expense and included in ‘General andadministrative expenses’ amounted to US$154,000, US$288,000 and US$600,000 and US$368,000,respectively (Note 24).

12. Prepayments and other receivables — Group

As at December 31,As at

September 30,

2009 2010 2011 2012

US$’000 US$’000 US$’000 US$’000

Other receivablesEmployee advances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 191 342 185Amounts due from related parties (Note 33(a)) . . . . . . . . . . . . . . . . . — 77 114 144Others (Note (a)) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 211 7,677 18,357

— 479 8,133 18,686

PrepaymentsPrepaid income tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 142 149 264 1,331Others (Note (b)) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50 110 976 3,481

192 259 1,240 4,812

Total prepayments and other receivables . . . . . . . . . . . . . . . . . . . 192 738 9,373 23,498Less non-current portion (Note (a)) . . . . . . . . . . . . . . . . . . . . . . . . . . — — — 3,047

192 738 9,373 20,451

Notes:(a) As of December 31, 2011 and September 30, 2012, other receivables amounting to US$7,677,000 and US$15,310,000 represented

receivables from contractors for purchase of fuel on their behalf. As of September 30, 2012, the remaining other receivables amountingto US$3,047,000 represented loan to Ferrocarril Central Andino S.A., a Peruvian limited liability company which will provide certaintransportation services to the Group. Such loan receivable is unsecured, interest free and are due in 10 years.

(b) As of September 30, 2012, other prepayments primarily comprised prepayment for construction insurance policy relating to theToromocho Mining Project.

Aging analysis of other receivables are as follows:

As at December 31,As at

September 30,

2009 2010 2011 2012

US$’000 US$’000 US$’000 US$’000

Up to 3 months . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 423 5,687 12,3163 to 6 months . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 56 2,156 5,0806 months to 1 year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — 290 1,290

— 479 8,133 18,686

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APPENDIX I ACCOUNTANT’S REPORT

Prepayments and other receivables are denominated in the following currencies:

As at December 31,As at

September 30,

2009 2010 2011 2012

US$’000 US$’000 US$’000 US$’000

United States dollars . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50 522 7,417 7,351New Peruvian Soles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 142 216 1,956 13,100

192 738 9,373 20,451

13. Restricted cash — Group

An analysis of the Group’s restricted cash is as follows:

As at December 31,As at

September 30,

2009 2010 2011 2012

US$’000 US$’000 US$’000 US$’000

Guaranteed deposits for import of equipment into Peru . . . . . . . . . . — — 832 15,816Bank deposits held for performance guarantee (Note) . . . . . . . . . . . — 1,890 2,430 3,830Bank deposits held in escrow account (Note 21(c)) . . . . . . . . . . . . . — — 1,668 1,668Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94 101 117 263

94 1,991 5,047 21,577

Note: Bank deposits held for performance guarantee represented deposits held in banks for performance guarantee under the relevantcontracts and agreements (Notes 5 and 10).

During the Relevant Periods, except for US$35,000 and US$1 and US$1 at December 31, 2009and 2011 and September 30, 2012 were denominated in New Peruvian Soles, all other restricted cashwere denominated in United States dollars.

14. Cash and cash equivalents — Group

As at December 31,As at

September 30,

2009 2010 2011 2012

US$’000 US$’000 US$’000 US$’000

Cash at bank and on hand . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,646 155,831 97,489 190,956Short-term bank deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 792 61 61 61

Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,438 155,892 97,550 191,017

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APPENDIX I ACCOUNTANT’S REPORT

Cash and cash equivalents are denominated in the following currencies:

As at December 31,As at

September 30,

2009 2010 2011 2012

US$’000 US$’000 US$’000 US$’000

United States dollars . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,935 155,611 96,899 179,093New Peruvian Soles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 503 281 651 11,924

11,438 155,892 97,550 191,017

15. Share capital — Group and Company

The details of the ordinary share capital of the Group and the Company for the RelevantPeriods are as follows:

Number ofissued share

Sharecapital

US$’000

At January 1, 2009, December 31, 2009 and 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . 58,571,429 47Consolidation of ordinary shares (Note (a)) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (57,400,000) —

At December 31, 2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,171,429 47Issuance of ordinary shares (Note (b)) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,000,000,000 400,000

At September 30, 2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,001,171,429 400,047

Notes:(a) In September 2011, the board of directors of the Company passed a resolution to consolidate all ordinary shares at a ratio of 50:1. As a

result, the Company’s issued shares became 1,171,429 shares.

(b) In December 2011, the Company’s immediate holding company agreed to capitalize borrowings amounting to US$400 million due bythe Company for 10 billion new ordinary shares of the Company at US$0.04 per share (Note 17(a)(ii)). As at December 31, 2011, theseshares have not been issued and therefore the carrying amount of these borrowings was reclassified to capital reserve. On February 28,2012, the Company allotted and issued to its immediate holding company 10 billion ordinary shares at US$0.04 per share.

At December 31, 2009, 2010 and 2011 and September 30, 2012, the total authorized number ofordinary shares is 62.5 million, 62.5 million and 25,000 million and 25,000 million shares with a parvalue of US$0.0008, US$0.0008, and US$0.04 and US$0.04 per share, respectively. All issued sharesare fully paid.

16. Capital reserve — Group and Company

As at December 31, 2009, 2010 and 2011 and September 30, 2012, of the total capital reserveamounting to US$36,254,000, US$91,701,000 and US$416,521,000 and US$16,521,000 representedcapital contributions by the immediate holding company in connection with borrowings made availableto the Group at a preferential interest rate (Note 17 (a)). Of the total capital reserve of US$416,521,000at December 31, 2011, US$400,000,000 represented capitalization of borrowings from immediateholding company which the capitalization was completed in February 2012 (Note 15 (b)).

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APPENDIX I ACCOUNTANT’S REPORT

17. Borrowings

Group As at December 31,As at

September 30,

2009 2010 2011 2012

US$’000 US$’000 US$’000 US$’000

CurrentBorrowings from immediate holding company . . . . . . . . . . . . . 123,399 123,399 100,000 102,300

Non-currentBank borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 200,000 860,000 1,680,000Borrowings from immediate holding company . . . . . . . . . . . . . 156,634 439,228 143,399 146,698

156,634 639,228 1,003,399 1,826,698

280,033 762,627 1,103,399 1,928,998

Company As at December 31,As at

September 30,

2009 2010 2011 2012

US$’000 US$’000 US$’000 US$’000

CurrentBorrowings from immediate holding company . . . . . . . . . . . . . 28,500 28,500 100,000 102,300Non-currentBorrowings from immediate holding company . . . . . . . . . . . . . 156,634 439,228 143,399 146,698

185,134 467,728 243,399 248,998

(a) Borrowings from immediate holdings company

During the Relevant Periods, the Group’s borrowings from immediate holding company are asfollows:

Year ended December 31,Nine months ended

September 30,

2009 2010 2011 2011 2012

US$’000 US$’000 US$’000 US$’000 US$’000(unaudited)

At beginning of the year/period . . . . . . . . . . . . . . . . . . . 146,414 280,033 562,627 562,627 243,399Proceeds from borrowings (Note (i)) . . . . . . . . . . . . . . . 160,000 330,000 — — —Excess of proceeds over the fair value of the borrowing(Note (i)) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (29,070) (55,447) — — —

Re-measurement of borrowings upon modification(Note (ii)) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — 75,180 — —

Capitalization (Note (ii)) . . . . . . . . . . . . . . . . . . . . . . . . — — (400,000) — —Unwinding of discount/interest charged . . . . . . . . . . . . 2,689 8,041 5,592 5,592 5,599

At the end of the year/period . . . . . . . . . . . . . . . . . . . . . 280,033 562,627 243,399 568,219 248,998

Notes:(i) During 2009 and 2010, the Group obtained additional long-term interest-free borrowings of US$160 million and US$330 million from

the immediate holding company, respectively. At initial recognition, these borrowings were measured at fair value at the prevailing

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APPENDIX I ACCOUNTANT’S REPORT

market rate of interest available to the Group for a similar instrument (annual LIBOR plus 1.25%). The excess of proceeds over theestimated fair value amounting to US$29,070,000 and US$55,447,000 for borrowings obtained during 2009 and 2010, respectively,were credited to capital reserve as a deemed capital contribution by the immediate holding company.

(ii) In June 2011 (formalized in September 2011), the Company and its immediate holding company agreed to modify the terms of theoutstanding borrowings. According to the modification agreement, the due date of borrowings with original principal balance ofUS$520 million changed from April 2019 through December 2020 to repayable on demand on or before June 30, 2012.

In December 2011, the Company’s immediate holding company agreed to capitalize borrowings amounting to US$400 million due bythe Company for 10 billion new ordinary shares of the Company at US$0.04 per share (Note 15(b)) and changed the due date of theremaining outstanding borrowings from repayable on demand on or before June 30, 2012 to repayable in 10 years or at any time at theCompany’s discretion, from interest free to interest bearing at annual LIBOR plus 2%.

The above changes are being accounted for as a modification on borrowings and accordingly, the excess of the present value of futurepayments over the carrying value of the borrowings at the dates of modifications (re-measurement dates) totalling to US$75,180,000was charged to capital reserve.

As at December 31, 2009 and 2010, all except for borrowings from immediate holdingcompany that were classified as current liabilities which were due on demand, all other borrowingsfrom immediate holding company were unsecured, interest free and were due from April 2019 toDecember 2020.

As at December 31, 2011 and September 30, 2012, all borrowings were repayable in 10 yearsor at any time at the Company’s discretion on demand on or before June 30, 2012 at the discretionaryof the Company, bear interest at annual LIBOR plus 2% (December 31, 2011: 2.82%, September 30,2012: 3.07%).

As at December 31, 2011 and September 30, 2012, the directors of the Company approved thatborrowings due to immediate holding company amounting to US$100,000,000 and US$102,300,000will be fully repayable after our proposed corporate financing activities. Accordingly, these borrowingsare classified as current borrowings.

The estimated fair values of non-current borrowings from immediate holding company atDecember 31, 2009 and 2010 are US$165,068,000 and US$452,844,000, respectively, and areestimated based on cash flows discounted using a rate based on the borrowing rate available to theGroup of 2.23% and 2.03%, respectively. The carrying amount of non-current borrowings fromimmediate holding company at December 31, 2011 and September 30, 2012 appropriate their fair valueas they are floating rate borrowings.

(b) Bank loans

On December 1, 2010, the Group secured a banking facility amounting to US$2,000 millionfrom Eximbank for the purpose of financing the development of the Toromocho Mining Project.Pursuant to the banking facility agreement, the facility is available for drawdown within 54 monthsstarting from December 1, 2010 and due from June 2015 to December 2015.

This facility bears an annual interest rate of 6-month LIBOR plus 1.85% (December 31, 2010:2.64%; December 31, 2011:2.60%; September 30, 2012: 2.56%) and is guaranteed by Chinalco(Note 33(d)) and would be secured by all property, plant and equipment pertaining to the ToromochoMining Project if Chinalco’s credibility or financial status deteriorated (Note 5).

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APPENDIX I ACCOUNTANT’S REPORT

In addition, the Group is required to comply with certain financial covenants related to the useof funds and other administrative resources. As of the date of this report, the directors of the Companyare in their opinion that such covenants have been complied with.

As at December 31, 2010 and 2011 and September 30, 2012, outstanding balance due toEximbank amounting to US$200,000,000, US$860,000,000 and US$1,680,000,000, respectively.

The carrying amount of bank borrowings approximate their fair value as they are floating rateborrowings.

At December 31, 2009, 2010 and 2011 and September 30, 2012, all borrowings aredenominated in US$.

As at December 31, 2009, 2010 and 2011 and September 30, 2012 the borrowings wererepayable as follows:

Group As at December 31,As at

September 30,

2009 2010 2011 2012

US$’000 US$’000 US$’000 US$’000

Within 1 year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 123,399 123,399 100,000 102,300Between 1 and 2 years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — —Between 2 and 5 years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,294 198,829 232,000 282,000Over 5 years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 144,340 440,399 771,399 1,544,698

280,033 762,627 1,103,399 1,928,998

Wholly repayable within 5 years . . . . . . . . . . . . . . . . . . . . . . . . 123,399 123,399 100,000 102,300Wholly repayable after 5 years . . . . . . . . . . . . . . . . . . . . . . . . . . 156,634 639,228 1,003,399 1,826,698

280,033 762,627 1,103,399 1,928,998

Company As at December 31,As at

September 30,

2009 2010 2011 2012

US$’000 US$’000 US$’000 US$’000

Within 1 year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28,500 28,500 100,000 102,300Between 1 and 2 years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — —Between 2 and 5 years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,294 63,829 — —Over 5 years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 144,340 375,399 143,399 146,698

185,134 467,728 243,399 248,998

Wholly repayable within 5 years . . . . . . . . . . . . . . . . . . . . . . . . 28,500 28,500 100,000 102,300Wholly repayable after 5 years . . . . . . . . . . . . . . . . . . . . . . . . . . 156,634 439,228 143,399 146,698

185,134 467,728 243,399 248,998

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APPENDIX I ACCOUNTANT’S REPORT

The Group has the following undrawn borrowing facilities:

As at December 31,As at

September 30,

2009 2010 2011 2012

US$’000 US$’000 US$’000 US$’000

Floating rate, expiring beyond one year:— Eximbank (Note 17(b)) . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 1,800,000 1,140,000 320,000— China Development Bank (“CDB”) (*) . . . . . . . . . . . . . . . . — — — 83,000

— 1,800,000 1,140,000 403,000

* On September 7, 2012, the Group secured a banking facility amounting to US$83 million from CDB which bear annual interest at6-month LIBOR plus 3.5% and due in October 2020. Pursuant to the loan agreement, the Group is required to comply with certainfinancial covenants, whereby the Group is required to meet certain key performance indicators. As of the date of this report, thedirectors of the Company are in their opinion that such covenants have been complied with.

On September 2, 2012 and in December 2012, CDB and Eximbank issued a memorandumindicating their present commitment to lend additional US$274 million and US$419 million,respectively, to the Group for the development of the Toromocho Mining Project. As at the date of thisreport, formal loan agreements had not been entered into except for the Company entered into a loanagreement with CDB for US$35 million loan on December 25, 2012.

18. Amount due to immediate holding company — Group and Company

Amount due to immediate holding company are unsecured, interest free and repayable ondemand and are denominated in US$.

19. Provision for remediation and restoration — Group

Provision for remediation and restoration includes environmental remediation costs, assetsretirements obligation and similar obligation in relation to the Group’s development of the ToromochoMining Project. Movements of provision for remediation and restoration are as follows:

As at December 31,As at

September 30,

2009 2010 2011 2012

US$’000 US$’000 US$’000 US$’000

At beginning of the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56,919 23,840 28,962 58,111Additional provision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 4,120 28,031 1,801Reversal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (34,591) — — —Accretion expenses (Note 27) . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,512 1,002 1,118 1,554

At end of the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23,840 28,962 58,111 61,466

Pursuant to the Assignment Agreement of the Toromocho Mining Project (Note 1), the Groupis responsible for the remediation of the alternations of the lands given for mineral exploitation, even ifthese damages were caused before the signing of the relevant concession agreements. In addition, theGroup is also obliged to operate and maintenance certain facilities post-closure of the mines.

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APPENDIX I ACCOUNTANT’S REPORT

In August 2012, Walsh Peru S.A., an independent valuer, issued to the Company the MineClosure Plan which was approved by the MEM on December 27, 2012. Taking into consideration ofreport issued by Walsh Peru S.A. and the MEM’s approval of the Mine Closure Plan, the Company hasassessed and provided for remediation and restoration and similar obligations amounted toUS$23,840,000, US$28,962,000 and US$58,111,000 and US$61,466,000 as at December 31, 2009,2010 and 2011 and September 30, 2012, respectively.

20. Accounts payable — Group

Aging analysis of accounts payable is as follows:

As at December 31,As at

September 30,

2009 2010 2011 2012

US$’000 US$’000 US$’000 US$’000

Up to 3 months . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23,949 52,703 127,439 228,2003 to 6 months . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 2,237 464 7376 months to 1 year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37 237 249 4,414

23,988 55,177 128,152 233,351

The carrying amounts of the Group’s accounts payable are denominated in the followingcurrencies:

As at December 31,As at

September 30,

2009 2010 2011 2012

US$’000 US$’000 US$’000 US$’000

United States dollars . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23,532 50,203 90,439 216,734New Peruvian Soles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 456 4,974 37,713 16,617

23,988 55,177 128,152 233,351

The fair value of accounts payable approximated their carrying value due to their short maturityperiod.

21. Accruals and other payables

Group As at December 31,As at

September 30,

2009 2010 2011 2012

US$’000 US$’000 US$’000 US$’000

Withholding income tax (Note (a)) . . . . . . . . . . . . . . . . . . . . . . . . . . 22 480 1,679 2,654Taxes other than income tax payable (Note (b)) . . . . . . . . . . . . . . . . 585 256 417 712Payroll and welfare payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,102 1,237 5,297 7,289Payables to Austria Duvaz (Note (c)) . . . . . . . . . . . . . . . . . . . . . . . . 5,460 4,819 2,667 2,667Legal contingences provisions (Note 32 (b)) . . . . . . . . . . . . . . . . . . . — — 3,952 3,952Other accruals and other payables . . . . . . . . . . . . . . . . . . . . . . . . . . . 597 1,889 2,289 6,299

7,766 8,681 16,301 23,573

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APPENDIX I ACCOUNTANT’S REPORT

Notes:(a) Withholding income tax represents the income tax withheld for the suppliers including the finance cost withholding tax in relation to the

borrowings with Eximbank (Note 17 (b)).

(b) Taxes other than income tax payable are mainly comprised of individual income tax and other surcharges.

(c) Austria Duvaz is a Peruvian mining group, from which the Group acquired certain mining concessions and Centenario. Of the totalpayables to Austria Duvaz, US$1,668,000 represented the remaining outstanding of the total US$8 million consideration for thepurchase of Centenario. The US$1,668,000 was paid to an escrow account (Note 13) in March 2011 and will be paid to Austria Duvazafter it presenting the final report of contingencies of labor and environmental matters. The remaining balance of the payables is inrelation to the purchase of certain mining concessions.

The carrying amounts of accruals and other payables are denominated in the followingcurrencies:

As at December 31,As at

September 30,

2009 2010 2011 2012

US$’000 US$’000 US$’000 US$’000

United States dollars . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,460 5,850 10,071 13,926New Peruvian Soles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,306 2,831 6,230 9,647

7,766 8,681 16,301 23,573

The fair value of trade payables approximated their carrying value due to their short maturityperiod.

Company

As at September 30, 2012, the ‘accruals and other payables’ represented mainly accruedprofessional fees pertaining to the proposed corporate financing activities.

22. Revenue

As the Group’s operations are still under development stage and have not commencedcommercial production, no revenue was generated during the Relevant Periods.

Management determines the operating segments based on the information reported to theGroup’s chief operating decision maker. As all of the Group’s activities are engaged in the miningdevelopment and all the principal assets employed by the Group are located in Peru, the Group’s chiefoperating decision maker considers the performance assessment of the Group should be based on theresults of the Group as a whole.

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APPENDIX I ACCOUNTANT’S REPORT

23. Other (loss)/gain, net

Year ended December 31,Nine months ended

September 30,

2009 2010 2011 2011 2012

US$’000 US$’000 US$’000 US$’000 US$’000(unaudited)

Write-off of receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . (60) — — — —Income on mine concessions (Note) . . . . . . . . . . . . . . . . . . . — 300 126 91 106Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (25) 17 79 39 565

(85) 317 205 130 671

Note: Income on mine concessions represented income from third party miners for the use and mining of certain mines owned by the Group.As at December 31, 2009, 2010 and 2011 and September 30, 2012, related deferred income received amounting to Nil, US$4,346,000,US$4,474,000 and US$4,368,000, respectively.

24. General and administrative expenses

Year ended December 31,Nine months ended

September 30,

2009 2010 2011 2011 2012

US$’000 US$’000 US$’000 US$’000 US$’000(unaudited)

Employee benefit expenses— wages, salaries and allowance . . . . . . . . . . . . . . . . . . . . . 3,623 4,542 6,340 4,157 6,068Amortization and depreciation . . . . . . . . . . . . . . . . . . . . . . . 787 1,829 1,737 1,517 576Auditor’s remuneration— audit and audit related services . . . . . . . . . . . . . . . . . . . . 63 80 58 13 84— other services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69 46 8 8 9Other professional fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,462 1,274 2,118 1,308 2,572Utilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,131 993 1,557 1,125 1,197Operating lease expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . 483 522 586 405 739Contract fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 433 703 249 727Travel and transportation . . . . . . . . . . . . . . . . . . . . . . . . . . . 152 431 364 223 264Taxes other than income tax . . . . . . . . . . . . . . . . . . . . . . . . . 465 452 322 267 236Advertising and promotion . . . . . . . . . . . . . . . . . . . . . . . . . . 33 315 386 248 366Office and other supplies . . . . . . . . . . . . . . . . . . . . . . . . . . . 154 288 600 371 368Legal contingencies (Note 32(b)) . . . . . . . . . . . . . . . . . . . . . — — 3,952 — —Fines and penalties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — 328 — 7[Š] expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — — 4,007Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 631 407 646 505 690

9,053 11,612 19,705 10,396 17,910

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APPENDIX I ACCOUNTANT’S REPORT

25. Directors’ emoluments

Details of current directors’ emoluments are as follows:

Fees

Salariesallowances.

and benefits inkind

Discretionarybonuses

Retirementscheme

contributions Total

US$’000 US$’000 US$’000 US$’000 US$’000

For the year ended December 31, 2009Non-executive Director:Xiong Weiping . . . . . . . . . . . . . . . . . . . . . . . . . . — — — — —Ren Xudong . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — — —Xie Weizhi . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — — —Executive Director:Peng Huaisheng . . . . . . . . . . . . . . . . . . . . . . . . . . — — — — —Huang Shanfu . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — — —Liang Yunxing . . . . . . . . . . . . . . . . . . . . . . . . . . — — — — —Independent Non-executive Director:Scott McKee Hand . . . . . . . . . . . . . . . . . . . . . . . — — — — —Ronald (Ron) Hall . . . . . . . . . . . . . . . . . . . . . . . . — — — — —Lai Yat Kwong Fred . . . . . . . . . . . . . . . . . . . . . . — — — — —Francisco Augusto Baertl Montori . . . . . . . . . . . — — — — —

— — — — —

For the year ended December 31, 2010Non-executive Director:Xiong Weiping . . . . . . . . . . . . . . . . . . . . . . . . . . — — — — —Ren Xudong . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — — —Xie Weizhi . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — — —Executive Director:Peng Huaisheng . . . . . . . . . . . . . . . . . . . . . . . . . . — — — — —Huang Shanfu . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — — —Liang Yunxing . . . . . . . . . . . . . . . . . . . . . . . . . . — — — — —Independent Non-executive Director:Scott McKee Hand . . . . . . . . . . . . . . . . . . . . . . . — — — — —Ronald (Ron) Hall . . . . . . . . . . . . . . . . . . . . . . . . — — — — —Lai Yat Kwong Fred . . . . . . . . . . . . . . . . . . . . . . — — — — —Francisco Augusto Baertl Montori . . . . . . . . . . . — — — — —

— — — — —

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APPENDIX I ACCOUNTANT’S REPORT

Fees

Salariesallowances.

and benefits inkind

Discretionarybonuses

Retirementscheme

contributions Total

US$’000 US$’000 US$’000 US$’000 US$’000

For the year ended December 31, 2011Non-executive Director:Xiong Weiping . . . . . . . . . . . . . . . . . . . . . . . . . . — — — — —Ren Xudong . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — — —Xie Weizhi . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — — —Executive Director:Peng Huaisheng . . . . . . . . . . . . . . . . . . . . . . . . . . — 57 — — 57Huang Shanfu . . . . . . . . . . . . . . . . . . . . . . . . . . . — 378 260 — 638Liang Yunxing . . . . . . . . . . . . . . . . . . . . . . . . . . — — — — —Independent Non-executive Director:Scott McKee Hand . . . . . . . . . . . . . . . . . . . . . . . — — — — —Ronald (Ron) Hall . . . . . . . . . . . . . . . . . . . . . . . . — — — — —Lai Yat Kwong Fred . . . . . . . . . . . . . . . . . . . . . . — — — — —Francisco Augusto Baertl Montori . . . . . . . . . . . — — — — —

— 435 260 — 695

For the nine months ended September 30, 2011(unaudited)

Non-executive Director:Xiong Weiping . . . . . . . . . . . . . . . . . . . . . . . . . . — — — — —Ren Xudong . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — — —Xie Weizhi . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — — —Executive Director:Peng Huaisheng . . . . . . . . . . . . . . . . . . . . . . . . . . — 38 — — 38Huang Shanfu . . . . . . . . . . . . . . . . . . . . . . . . . . . — 283 211 — 494Liang Yunxing . . . . . . . . . . . . . . . . . . . . . . . . . . — — — — —Independent Non-executive Director:Scott McKee Hand . . . . . . . . . . . . . . . . . . . . . . . — — — — —Ronald (Ron) Hall . . . . . . . . . . . . . . . . . . . . . . . . — — — — —Lai Yat Kwong Fred . . . . . . . . . . . . . . . . . . . . . . — — — — —Francisco Augusto Baertl Montori . . . . . . . . . . . — — — — —

— 321 211 — 532

For the nine months ended September 30, 2012Non-executive Director:Xiong Weiping . . . . . . . . . . . . . . . . . . . . . . . . . . — — — — —Ren Xudong . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — — —Xie Weizhi . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — — —Executive Director:Peng Huaisheng . . . . . . . . . . . . . . . . . . . . . . . . . . — 42 — — 42Huang Shanfu . . . . . . . . . . . . . . . . . . . . . . . . . . . — 319 215 — 534Liang Yunxing . . . . . . . . . . . . . . . . . . . . . . . . . . — — — — —Independent Non-executive Director:Scott McKee Hand . . . . . . . . . . . . . . . . . . . . . . . — — — — —Ronald (Ron) Hall . . . . . . . . . . . . . . . . . . . . . . . . — — — — —Lai Yat Kwong Fred . . . . . . . . . . . . . . . . . . . . . . — — — — —Francisco Augusto Baertl Montori . . . . . . . . . . . — — — — —

— 361 215 — 576

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APPENDIX I ACCOUNTANT’S REPORT

Of the current directors as of the date of this report as set out in the above table, except forMessrs Peng Huaisheng and Huang Shanfu, no remuneration was paid to other directors during theRelevant Periods as they were appointed subsequent to the Relevant Periods and/or had not beeninvolved in the operation of the Group during the Relevant Periods.

No remuneration was paid by the Group to all past directors for the years ended December 31,2009, 2010 and 2011 and the nine months ended September 30, 2011 and 2012.

During the Relevant Periods, no emoluments were paid by the Group to the directors as aninducement to join or upon joining the Group or as compensation for loss of office. No director waivedor agreed to waive any emoluments during the Relevant Periods.

26. Five highest paid individuals

The number of director and non-director included in the five highest paid individuals for theyears ended December 31, 2009, 2010 and 2011 and the nine months ended September 30, 2011 and2012 are set forth below:

Year ended December 31,Nine months ended

September 30,

2009 2010 2011 2011 2012

(unaudited)

Director . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — 1 1 1Non-director . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 5 4 4 4

5 5 5 5 5

The emoluments of the directors are disclosed in Note 25. The aggregate of the emoluments inrespect of the remaining highest paid individuals are as follows:

Year ended December 31,Nine months ended

September 30,

2009 2010 2011 2011 2012

US$’000 US$’000 US$’000 US$’000 US$’000(unaudited)

Salaries and other emoluments . . . . . . . . . . . . . . . . . . . . . . . 1,250 2,146 1,238 964 1,279Discretionary bonuses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,280 1,426 674 562 824Retirement benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 147 — 522 522 —

2,677 3,572 2,434 2,048 2,103

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APPENDIX I ACCOUNTANT’S REPORT

The number of the individuals with the highest emoluments in Hong Kong dollar (“HK$”) iswithin the following bands:

Year ended December 31,Nine months ended

September 30,

2009 2010 2011 2011 2012

(unaudited)

HK$1,000,000 to HK$1,500,000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 — — — —HK$1,500,000 to HK$2,000,000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 — — — —HK$2,000,000 to HK$2,500,000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 2 — 1 —HK$2,500,000 to HK$3,000,000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 — — — —HK$3,000,000 to HK$3,500,000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 1 1 1 1HK$3,500,000 to HK$4,000,000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 1 — 1 1HK$4,000,000 to HK$4,500,000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — 1 1 2HK$4,500,000 to HK$5,000,000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — 1 — 1HK$5,000,000 to HK$5,500,000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — 1 1 —HK$5,500,000 to HK$6,000,000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 — — — —HK$6,000,000 to HK$6,500,000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — 1 — —HK$9,500,000 to HK$10,000,000 . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 — — — —HK$16,000,000 to HK$16,500,000 . . . . . . . . . . . . . . . . . . . . . . . . . . — 1 — — —

During the Relevant Periods, no emoluments were paid by the Group to the five highest paidindividuals as an inducement to join or upon joining the Group or as compensation for loss of office.

27. Finance income/(costs), net

Year ended December 31,Nine months ended

September 30,

2009 2010 2011 2011 2012

US$’000 US$’000 US$’000 US$’000 US$’000(unaudited)

Finance income— Interest income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,596 116 451 373 586— Net foreign exchange gains . . . . . . . . . . . . . . . . . . . . . . 1,300 1,391 — — 1,583

Total finance income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,896 1,507 451 373 2,169

Finance costs— Interest expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2,689) (10,215) (25,820) (17,033) (35,146)— Bank charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (211) (86) (685) (127) (333)— Accretion of interest on provision for remediation andrestoration (Note 19) . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,512) (1,002) (1,118) (838) (1,554)

— Net foreign exchange loss . . . . . . . . . . . . . . . . . . . . . . . — — (941) (580) —

(4,412) (11,303) (28,564) (18,578) (37,033)

Less: amounts capitalized on qualifying assets . . . . . . . . . 2,689 10,215 25,820 17,033 35,146

Total finance costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,723) (1,088) (2,744) (1,545) (1,887)

Finance income/(costs), net . . . . . . . . . . . . . . . . . . . . . . . 1,173 419 (2,293) (1,172) 282

Interest expenses capitalization rate . . . . . . . . . . . . . . . 3.35% 2.68% 2.59% 2.59% 2.64%

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APPENDIX I ACCOUNTANT’S REPORT

28. Income tax benefit

Year ended December 31,Nine months ended

September 30,

2009 2010 2011 2011 2012

US$’000 US$’000 US$’000 US$’000 US$’000(unaudited)

Current income tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — (360) — (896)Deferred income tax (Note 8) . . . . . . . . . . . . . . . . . . . . . . . . 3,266 3,411 5,641 2,973 4,627

3,266 3,411 5,281 2,973 3,731

The Company was incorporated in Cayman Islands as an exempted company with limitedliability under the Company Law of Cayman Islands and, accordingly, is exempted from payment ofCayman Islands income tax.

Subsidiaries established in Peru are subject to income tax at a rate of 30% during the RelevantPeriods.

The income tax on the Group’s loss before tax differs from the theoretical amount that wouldarise using the weighted average tax rate applicable to losses of the consolidated entities as follows:

Year ended December 31,Nine months ended

September 30,

2009 2010 2011 2011 2012

US$’000 US$’000 US$’000 US$’000 US$’000(unaudited)

Loss before income tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . (7,965) (10,876) (21,793) (11,438) (16,957)

Tax benefit calculated at basic tax rates applicable to lossin the respective countries . . . . . . . . . . . . . . . . . . . . . . . 2,390 3,263 6,538 3,431 3,885

Income not subject to taxation/(Expense notdeductible) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 972 5 (1,518) (377) (254)

Tax losses for which no deferred taxation wasrecognized . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (120) — — — —

Utilization of unrecognized tax loss . . . . . . . . . . . . . . . . . . — 132 247 — —Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 11 14 (81) 100

Income tax benefit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,266 3,411 5,281 2,973 3,731

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APPENDIX I ACCOUNTANT’S REPORT

29. Loss per share for loss attributable to the equity holders of the Company

(a) Basic

Basic loss per share is calculated by dividing the net loss attributable to equity holders of theCompany by the weighted average number of ordinary shares in issue during the year.

Year ended December 31,Nine months ended

September 30,

2009 2010 2011 2011 2012

(unaudited)

Loss attributable to equity holders of theCompany (US$’000) . . . . . . . . . . . . . . . (4,699) (7,465) (16,512) (8,465) (13,226)

Weighted average number of ordinaryshares in issue (thousands) (Note) . . . . . 10,001,171 10,001,171 10,001,171 10,001,171 10,001,171

Note: Basic earnings per share for the years ended December 31, 2009, 2010 and 2011 and the nine months ended September 30, 2011 and2012 is calculated by dividing the profit of the Group attributable to equity holders of the Company by the weighted average number ofordinary shares in issue during each year/period. In determining the weighted average number of ordinary shares in issue during each ofthese years/periods, the 10,001,171,429 shares, which were issued and allotted in connection with the Reorganization as disclosed inNote 15, has been treated as if the 10,001,171,429 shares were in issue since January 1, 2009 (Note 15).

(b) Diluted loss per share for the years ended December 31, 2009, 2010 and 2011 and nine monthsended September 30, 2011 and 2012 are the same as the basic losses per share as there are no dilutivepotential shares.

30. Dividends

No dividend has been paid or declared by the Company or the companies now comprising theGroup during each of the years ended December 31, 2009, 2010 and 2011 and the nine months endedSeptember 30, 2012.

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APPENDIX I ACCOUNTANT’S REPORT

31. Cash flows

(a) Cash flows from operating activities

Year ended December 31,Nine months ended

September 30,

2009 2010 2011 2011 2012

US$’000 US$’000 US$’000 US$’000 US$’000(unaudited)

Cash flows from operating activitiesLoss before income tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (7,965) (10,876) (21,793) (11,438) (16,957)Adjustments for:Depreciation (Note 24) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 635 897 641 717 576Amortization (Note 24) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 152 932 1,096 800 —Loss on disposal of property, plant and equipment (Note 5) . . . 3 16 14 — 11Finance (income)/costs, net (Note 27) . . . . . . . . . . . . . . . . . . . . (1,173) (419) 2,293 1,172 (282)Changes in working capital:Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (93) (1,554) (4,377) (2,107) (13,172)Prepayment and other receivables . . . . . . . . . . . . . . . . . . . . . . . . 196 (391) (8,418) (10,432) (14,360)Accruals and others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2,205) 4,375 7,721 539 5,583

Cash used in operating activities . . . . . . . . . . . . . . . . . . . . . . . (10,450) (7,020) (22,823) (20,749) (38,601)

(b) Non-cash transactions

Except for the capitalization of borrowings from immediate holding company as set out in Note16, no other significant non-cash transactions during the Relevant Periods.

32. Commitments and contingencies

(a) Commitments

(i) Capital commitments

Capital expenditure contracted for at the date of the consolidated statements of financialposition but not recognized in the consolidated statements of financial position is as follows:

As at December 31,As at

September 30,

2009 2010 2011 2012

US$’000 US$’000 US$’000 US$’000

Property, plant and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . 300,667 157,054 828,549 747,011

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APPENDIX I ACCOUNTANT’S REPORT

(ii) Operating lease commitments — where the Group is the lessee:

The Group leases various offices and warehouses under non-cancellable operating leaseagreements. The future aggregate minimum lease payments under non-cancellable operating leases areas follows:

As at December 31,As at

September 30,

2009 2010 2011 2012

US$’000 US$’000 US$’000 US$’000

No later than 1 year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 522 586 719 601Later than 1 year and no later than 5 years . . . . . . . . . . . . . . . . . . . . 786 429 600 610Later than 5 years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — 80 120

1,308 1,015 1,399 1,331

(iii) Investment commitments

(a) Pursuant to the Assignment Agreement (Note 1), as a consideration, the Group hascommitted to invest not less than US$1,507 million over a five-year term fromMay 2008. In the event that the Group failed to comply with this commitment, theGroup is required to pay a penalty to Activos Mineros in an amount equivalent to 30%of the unpaid investments. In this connection, the Group has issued a letter of creditamounting to US$30 million in favor of Activos Mineros. This letter of credit will berenewed annually.

(b) Pursuant to the Investment Agreement in connection with the VAT recoverableentitlement (Note 9), the Group is committed to invest into the Toromocho MiningProject amounting to US$2,053 million by the end of 2012.

(b) Contingencies

In May 2010, the local municipal government of Morococha issued an order to MCP to ceasethe construction work for the new town of Morococha for the purpose of relocating the local originalresidents in relation to the development of the Morococha Mining Project through an administrativeresolution on the ground that the construction was started without a proper permit. In August 2011,MCP obtained from the provincial government of Yauli-La Oroya a preliminary relief which explicitlypermits it to continue the construction. In August 2011, the district court ruled that the local municipalgovernment of Morococha is a competent authority to issue the aforementioned order and that theevidence shows that MCP did not have a relevant permit at the time of such order. In September 2011,MCP filed an appeal with the court of appeal against the decision by the district court claiming that,among others, the competent authority to supervise this matter should be the provincial government ofYauli-La Oroya of Peru and that the local municipal government of Morococha’s resolution on thismatter is invalid.

As of the date of this report, the aforementioned appeal is in progress. After consideration ofthe opinion of an independent legal counsel, the directors of the Company are of the opinion that theclaim is likely to be resolved in favor of MCP. Accordingly, no provision is considered necessary withrespect to the aforementioned claim at September 30, 2012 and during the Relevant Periods.

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APPENDIX I ACCOUNTANT’S REPORT

Apart from the above, the Group has contingent liabilities in respect of claims or other legalprocedures arising in its ordinary course of business from time to time. As at September 30, 2012, thedirectors of the Company did not anticipate that any material liabilities will arise from the contingentliabilities other than those provided for in the financial statements.

33. Related party transactions

Parties are considered to be related if one party has the ability, directly or indirectly, to controlthe other party or exercise significant influence over the other party in making financial and operationdecisions. Parties are also considered to be related if they are subject to common control. Members ofkey management and their close family member of the Group are also considered as related parties.

In accordance with IAS 24 (revised), “Related Party Disclosures”, government-related entitiesand their subsidiaries, directly or indirectly controlled, jointly controlled or significantly influenced bythe PRC government are also defined as related parties of the Group.

Saved as disclosed elsewhere in this report, the following significant transactions were carriedout with related parties of the Group:

(a) Year-end balances with related parties:

As at December 31,As at

September 30,

2009 2010 2011 2012

US$’000 US$’000 US$’000 US$’000

Included in ‘prepayments and other receivables’Amount due from ultimate holding company (Note) . . . . . . . . . . — 77 114 144

Included in ‘borrowings’Borrowings from immediate holding company (Note 33(c)) . . . . 280,033 562,627 243,399 248,998

Included in ‘amount due to immediate holding company’Amount due to immediate holding company (Note 18) . . . . . . . . 2,101 2,101 1,920 2,376

Included in ‘accounts payable’Amount due to a fellow subsidiary (Note) . . . . . . . . . . . . . . . . . . — 155 668 1,352

Note: Amount due from ultimate holding company and amount due to a fellow subsidiary are unsecured, interest free and no fixed term ofrepayment.

In addition, borrowings amounting to US$200 million, US$860 million and US$1,680 millionas at December 31, 2010 and 2011 and September 30, 2012, respectively, are borrowings payable toEximbank, a PRC incorporated bank controlled by the PRC central government (Note 17(b)).

(b) Purchases of property, plant and equipment:

During the years ended December 31, 2010 and 2011 and the period ended September 30, 2011and 2012, the Group purchased from a fellow subsidiary of certain equipment amounting to

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APPENDIX I ACCOUNTANT’S REPORT

US$2,531,000, US$4,153,000, US$1,490,000 and US$6,834,000, respectively, on prices and termsmutually agreed by the parties involved.

(c) Borrowings due to immediate holding company

During the Relevant Periods, the Group has significant outstanding borrowings due to itsimmediate holding company, details of which are disclosed in Note 17(a).

(d) Financial guarantees by ultimate holding company

As at December 31, 2010 and 2011 and September 30, 2012, the Group’s non-currentborrowings amounting to US$200 million, US$860 million and US$1,680 million (Note 17(b)),respectively, are guaranteed by Chinalco.

In addition, as at December 31, 2010 and 2011 and September 30, 2012, the Group’s undrawnborrowing facilities amounting to US$1,800 million, US$1,140 million and US$403 million(Note 17(b)), respectively, are guaranteed by Chinalco.

These guarantees will continue to be in placed after our proposed corporate financing activitiesuntil the Group is able to replace or refinance the existing loan facility in a commercially justifiablemanner.

(e) Key management compensation

Year ended December 31,Nine months ended

September 30,

2009 2010 2011 2011 2012

US$’000 US$’000 US$’000 US$’000 US$’000(unaudited)

Salaries and other emoluments . . . . . . . . . . . . . . . . . . . . . . . 1,640 2,246 4,658 3,369 4,658Discretionary bonuses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 983 824 2,568 1,750 2,444Retirement benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 328 677 713 588 —

2,951 3,747 7,939 5,707 7,102

(f) Significant transactions with state-owned enterprises except Chinalco and its subsidiaries(“Other State-owned Enterprises”)

During the Relevant Periods, significant transactions with Other State-owned Enterprises are asfollows:

Cash and cash equivalents amounted to Nil, US$4,364,000 and US$12,000 and US$11,000 atDecember 31, 2009, 2010 and 2011 and September 30, 2012 (Note 14), respectively, and borrowingsamounted to US$200 million, US$860 million and US$1,680 million at December 31, 2010 and 2011and September 30, 2012 (Note 17(b)), respectively, and the relevant interest income earned andexpenses incurred during the Relevant Periods are transacted with banks owned/controlled by the PRCgovernment.

The above transactions conducted with Other State-owned Enterprises are based on terms as setout in the underlying agreements as mutually agreed.

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APPENDIX I ACCOUNTANT’S REPORT

34. Events after the reporting period

Saved as disclosed elsewhere in this report, no other significant subsequent events took placesubsequent to September 30, 2012.

III. Subsequent financial statements

No audited financial statements have been prepared by the Company or any of the companiesnow comprising the Group in respect of any period subsequent to September 30, 2012 up to the date ofthis report. No dividend or distribution has been declared or made by the Company or any of thecompanies now comprising the Group in respect of any period subsequent to September 30, 2012.

Yours faithfully,[PricewaterhouseCoopers]Certified Public Accountants

Hong Kong

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APPENDIX IV COMPETENT PERSON’S REPORT

TOROMOCHO

TOROMOCHO INDEPENDENT TECHNICAL

REVIEW UPDATE REPORT

(BEHRE DOLBEAR PROJECT 12-284)

NOVEMBER 2012

PREPARED BY:

BEHRE DOLBEAR ASIA, INC.30 South Fiddler’s Green Circle, Suite 250

Greenwood Village, Colorado 80112(303) 620-0020

A Member of the Behre Dolbear Group Inc.© 2012, Behre Dolbear Group Inc. All Rights Reserved.

www.dolbear.com

IV-1

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APPENDIX IV COMPETENT PERSON’S REPORT

BEHRE DOLBEAR

BEHRE DOLBEAR ASIA, INC.founded 1911 MINERALS INDUSTRY ADVISORS

November 21, 2012

Mr. Charley Du TsiangDirectorPlanning DepartmentChina Copper Corporation LimitedNo. 62, North Xizhimen StreetBeijing 100082China

Email: [email protected]

Re: Behre Dolbear Project 12-284 — Toromocho Independent Technical Review Update Report

Dear Sir,

I refer to the proposed corporate financing activities of our Company. Unless otherwisespecified, terms used herein shall have the same meaning as those defined in the document of theCompany dated April 2012 (Document).

I hereby confirm that, in relation to Behre Dolbear’s report and advise (the “Expert Advice”):

Š All bases and assumptions on which the Expert Advice are founded are fair, reasonable,and complete.

Š I and the Behre Dolbear team (we) are appropriately qualified, experienced, andsufficiently resourced to give the Expert Advice.

Š The Scope of Work is appropriate to the Expert Advice given and the opinion required tobe given in the circumstances.

Š We are independent from the Group, its subsidiaries, their respective directors (includingdirectors proposed to be appointed prior to our proposed corporate financing activities ofour Company), and controlling shareholder(s), and we do not have a direct or indirectmaterial interest in the securities or assets of the Group, its connected persons, or anyassociate of the Group.

6430 South Fiddler’s Green Circle, Suite 250 Greenwood Village, CO 80112 303-620-0020 fax 303-620-0024BEIJING CHICAGO DENVER GUADALAJARA HONG KONG LONDON NEW YORK

SANTIAGO SYDNEY TORONTO ULAANBAATAR VANCOUVERwww.dolbear.com

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APPENDIX IV COMPETENT PERSON’S REPORT

Š The Document, based on Behre Dolbear’s April 2012 Independent Technical Review andthe November 2012 ITR Update, fairly represents our views and contains a fairrepresentation of the conditions set forth in the HKSE’s Chapter 18 Equity Securities.

Š After making all due and careful inquiries we have reasonable grounds to believe and dobelieve that all factual information, which we have relied on, including factual informationwhich we have stated that we have relied on, or have been believed to have relied on, andany supplementary or supporting information given by ourselves in relation to the ExpertAdvice, is true in all respects and that such factual information does not omit any materialinformation.

Š Behre Dolbear has provided and has not withdrawn its written consent of this CompetentPerson’s Report (CPR). The CPR is based on the reporting standards set forth in theVALMIN Code and Guidelines for Technical Assessment and Valuation of MineralAssets and Mineral Securities for Independent Expert Reports, as adopted by theAustralasian Institute of Mining and Metallurgy in 1995 and updated in 2005. Mineralresources and reserves defined for the Toromocho Project have been reviewed forconformity with the December 2004 Australasian Code for Reporting Exploration Results,Mineral Resources and Ore Reserves (the “JORC Code”) prepared by the Joint OreReserves Committee of the Australasian Institute of Mining and Metallurgy, AustralianInstitute of Geoscientists and Minerals Council of Australia.

I will undertake to advise you immediately, if any change of circumstances arises, thereafter,that would render any information contained in this letter misleading in any aspect. Further, weunderstand that you may rely on confirmations and undertakings provided in this letter in connectionwith our proposed corporate financing activities.

Sincerely,

BEHRE DOLBEAR ASIA, INC.

K. Marc LeVierSenior Associate (Qualified Person)

Alastair McIntyreSenior Managing Director - Asia

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APPENDIX IV COMPETENT PERSON’S REPORT

TABLE OF CONTENTS

1.0 INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-81.1 BEHRE DOLBEAR’S CONTRACT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-81.2 GENERAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-8

2.0 QUALIFICATIONS OF BEHRE DOLBEAR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-102.1 QUALIFICATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-102.2 DISCLAIMER (INDEMNITIES) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-112.3 GUARANTEE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-122.4 CONSEQUENTIAL DAMAGES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-122.5 UNITS OF MEASUREMENT AND CURRENCY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-12

3.0 ABBREVIATIONS, DEFINITIONS, AND RISK DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-133.1 ABBREVIATIONS AND DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-133.2 RISK DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-14

4.0 EXECUTIVE SUMMARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-164.1 BACKGROUND . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-164.2 PROJECT OVERVIEW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-174.3 LAND STATUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-174.4 GEOLOGY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-184.5 GEOLOGICAL DATABASE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-184.6 RESOURCES AND RESERVES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-184.7 GEOTECHNICAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-184.8 MINING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-184.9 PROCESS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-184.10 INFRASTRUCTURE AND NON-PROCESS FACILITIES . . . . . . . . . . . . . . . . . . . . . . . . . . IV-18

4.10.1 Electrical Power Supply . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-184.10.2 Water Supply . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-194.10.3 Office and Administrative Facilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-194.10.4 Material and Supply Storage and Distribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-194.10.5 Access Roads . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-194.10.6 Railroad Access . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-204.10.7 Camp Facility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-204.10.8 Town Site . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-204.10.9 Lime Supply . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-204.10.10 Conclusions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-214.10.11 Risk Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-21

4.11 ENVIRONMENTAL AND PERMITTING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-214.11.1 General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-214.11.2 Physical and Biological Environment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-214.11.3 Human (Social and Community) Environment — Current Issues . . . . . . . . . . . . . . IV-22

4.11.3.1 Communications Approach . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-234.11.3.2 Government Relations Approach . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-234.11.3.3 Local Hiring . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-244.11.3.4 Local Contracting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-244.11.3.5 Community Development . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-244.11.3.6 Town of Morococha Resettlement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-244.11.3.7 Ongoing Negotiations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-254.11.3.8 Transportation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-254.11.3.9 Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-264.11.3.10 Project Impacts and Benefits to the Community . . . . . . . . . . . . . . . . . . IV-26

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APPENDIX IV COMPETENT PERSON’S REPORT

4.11.3.11 Worker Health and Safety . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-264.11.3.12 Social Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-27

4.11.4 Permitting Status and Schedule . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-284.11.4.1 EIA and Construction Permits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-284.11.4.2 Mine Plans, Water Use, and Other Permits and Approvals . . . . . . . . . . . IV-284.11.4.3 Government Changes in Peru – Agency and Community Perceptions . . IV-29

4.12 CONCLUSIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-304.13 RISK ANALYSIS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-314.14 RECLAMATION AND CLOSURE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-314.15 ADMINISTRATION, MANPOWER, AND MANAGEMENT . . . . . . . . . . . . . . . . . . . . . . . . IV-31

4.15.1 Management and General Administration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-314.15.2 Manpower . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-324.15.3 Conclusions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-334.15.4 Risk Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-33

4.16 CAPITAL COST ESTIMATE AND IMPLEMENTATION SCHEDULE . . . . . . . . . . . . . . . IV-334.16.1 Total Capital Cost Estimate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-334.16.2 Construction Schedule . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-344.16.3 Conclusions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-364.16.4 Risks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-36

4.17 OPERATING COSTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-364.17.1 General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-364.17.2 Mine . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-374.17.3 Processing, Infrastructure, and General and Administrative (G&A) . . . . . . . . . . . . . IV-374.17.4 Conclusions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-374.17.5 Risks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-37

4.18 MARKETING AND SALES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-374.19 ECONOMIC ANALYSIS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-37

4.19.1 Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-404.19.2 Conclusions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-404.19.3 Risk Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-40

4.20 OVERALL RISK ASSESSMENT/CONSEQUENCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-415.0 REFERENCE MATERIAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-43

APPENDIX 1.0 CASH FLOW BALANCE SHEETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-44

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APPENDIX IV COMPETENT PERSON’S REPORT

LIST OF TABLES

Table 3.1 Overall Risk Assessment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-15Table 4.1 Critical Path Items . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-29Table 4.2 Mine, Concentrator, and Infrastructure Capital Cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-34Table 4.3 Broker Consensus — Copper, Molybdenum, and Silver . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-38Table 4.4 Metal Prices — Behre Dolbear April 2012 ITR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-39Table 4.5 Toromocho Project Risk Assessment Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-41Table 4.6 Additional and Updated Risks Developed in the ITR Update as of October 2012 . . . . . . . . IV-42

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APPENDIX IV COMPETENT PERSON’S REPORT

LIST OF FIGURES

Figure 1.1. Property location in Peru . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-9

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APPENDIX IV COMPETENT PERSON’S REPORT

1.0 INTRODUCTION

Behre Dolbear Asia, Inc. (Behre Dolbear) completed an Independent Technical Review (ITR)report on the Toromocho Project in Peru for Chinalco Mining Corporation International (Group). Thisreport is titled “Toromocho Project, Independent Technical Review” (Behre Dolbear Project 11-152)dated April 2012. The Group contacted Behre Dolbear in early October 2012 and requested that anupdate to the ITR be performed in order to keep the report current.

1.1 BEHRE DOLBEAR’S CONTRACT

Behre Dolbear understands that the Group is considering proposed corporate financingactivities. The original ITR is dated April 2012 and must be no more than 6 months old in order tomeet the requirements of proposed corporate financing activities. Behre Dolbear Asia, Inc., a whollyowned subsidiary of Behre Dolbear Group Inc., has been retained by the Group to perform this update.The scope of work for this task is as follows.

Š Desktop review to determine the areas of focus for the update

Š Develop a list of discussion points for a site visit and Project update review

Š Visit to the Group office in Lima and to the Project site

Š Discussions with key personnel on the Project status and relevant areas of focus

Š Preparation of the ITR update

The ITR update will follow the format of the original report and should be treated as asupplement. The report will provide comment on those areas that have progressed and/or changedsince the date of the original report and reassess the risk of that component of the Project. Thesummation of risk will be restated.

The Group has specified that the ITR update will use an effective date of September 30, 2012as the basis for all metrics, such as capital expenditures and forecasts and economic analysis.Comments on the progress of the Project and other observations are as of the Project site visit,October 16-20, 2012.

1.2 GENERAL INFORMATION

The Toromocho Project is located in central Peru, approximately 140 kilometers (km) east ofLima, Peru in the Morococha mining district, Yauli Province, Junin Department (Figure 1.1). Thepaved main highway from Lima passes through Morococha. The region has steep topography withelevations over the deposit ranging from 4,700 meters to over 4,900 meters above sea level. Thevalleys in the area are of glacial origin.

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APPENDIX IV COMPETENT PERSON’S REPORT

Figure 1.1. Property location in Peru(Source: Toromocho Project Feasibility Report, December 2007, Aker Kvaerner, OriginalBehre Dolbear ITR Report, April 2012)

The overview of the Project and rich mining history of the area were well reported in theoriginal ITR.

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APPENDIX IV COMPETENT PERSON’S REPORT

2.0 QUALIFICATIONS OF BEHRE DOLBEAR

2.1 QUALIFICATIONS

Behre Dolbear Asia, Inc. (Behre Dolbear) is an international minerals industry advisory groupthat has operated continuously in North America and worldwide since 1911. Behre Dolbear and itsparent, Behre Dolbear Group Inc., currently have offices in Beijing, Chicago, Denver, Hong Kong,Guadalajara, London, New York, Santiago, Sydney, Toronto, Ulaanbaatar, and Vancouver.

The firm specializes in performing mineral industry studies for mining companies, financialinstitutions, and natural resource firms, including mineral resource/ore reserve compilations and audits,mineral property evaluations and valuations, due diligence studies and independent expert reviews foracquisition and financing purposes, project feasibility studies, assistance in negotiating mineralagreements, and market analyses. The firm has worked with a broad spectrum of commodities,including base and precious metals, coal, ferrous metals, and industrial minerals on a worldwide basis.Behre Dolbear has acted on behalf of numerous international banks, financial institutions and miningclients and is well regarded worldwide as an independent expert engineering consultant in the mineralsindustry. Behre Dolbear has prepared numerous Independent Technical Review reports for miningprojects worldwide to support securities exchange filings of mining companies in Hong Kong, China,the United States, Canada, Australia, the United Kingdom, and other countries.

Most of Behre Dolbear’s associates and consultants have occupied senior corporatemanagement and operational roles, and are well experienced from an operational viewpoint as well asbeing independent expert consultants.

Behre Dolbear Asia, Inc. was established in 2004 to manage Behre Dolbear Group’s projects inChina and other Asian countries. Project teams of Behre Dolbear commonly consist of senior-levelprofessionals from Behre Dolbear Group’s offices in Denver, Colorado, USA; Sydney, Australia;London, United Kingdom; and other worldwide offices. Since its establishment, Behre Dolbear hasconducted over 40 technical studies for mining projects in China or mining projects located outside ofChina to be acquired by HKSE-listed Chinese companies, including preparing ITRs for the [Š] ofHunan Nonferrous Metals Corporation Limited, Zhaojin Mining Industry Company Limited, and HidiliIndustry International Development Limited and for the Shanghai Stock Exchange (SSE) IPO listing ofWestern Mining Company Limited. These four companies were successfully listed on the HKSE/SSEin 2006 and 2007.

Behre Dolbear’s primary team for the ITR update consists of a project manager and acommunity specialist. In addition, the team was supported by the original ITR team members withbackground information and collaboration.

Project Manager and Process Engineer: Mr. Marc LeVier has over 40 years of experience inengineering and the mining industry. He has worked on numerous mining projects and led multiplediscipline teams in the development of processes for precious metals, base metals, industrial minerals,uranium, coal, and iron ore. Mr. LeVier spent 22 years with Newmont Mining Corporation in severalprofessional capacities but most recently as the Senior Global Director of Metallurgical Research &Development. During this time, Marc led the world class metallurgical research team in the

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APPENDIX IV COMPETENT PERSON’S REPORT

development of processes for resources which have become Newmont’s primary producing propertiestoday. These include the development of the Gold Quarry refractory ore treatment plant (ROTP), theBatu Hijau porphyry copper-gold mine in Indonesia, the heap leach operations at Minera Yanacocha inPeru, the Ahafo operations in Ghana, the Phoenix operation in Nevada, and the Boddington operationin Australia. Additionally, Mr. LeVier led teams in the development of former operations at Minahasain Indonesia and the Zarafshan Newmont Joint Venture heap leach operation in Uzbekistan. Hiscredentials include a Bachelor of Science Degree in Metallurgical Engineering and a Master’s ofScience Degree in Metallurgical Engineering. He is a Mining and Metallurgical Society of AmericaQualified Person (QP).

Community Relations Specialist: Ms. Carol Odell has an academic background in geologyand mining engineering. She has participated in projects that assessed the social management ofmining and other natural resource projects in West Africa, throughout Central and South America,South East Asia, and Canada. She is a geologist-turned-social specialist with 12 years of professionaland research experience in the mining sector in Canada, Latin America, and Africa and 14 years in thenatural resources management area. She has acted in community relations team management andsenior advisory roles on two large and several medium scale mining projects, implementing socialmanagement systems aligned with international standards and has participated in projects that assessedthe social impact of mining. She is the author of a number of papers examining the opportunities fornatural resource companies to work in collaboration with local communities. Her expertise includesenvironmental and social impact and risk assessment, human rights and international standardsauditing, natural resources policy development, local hiring and contracting implementation,community relations, and social development strategy design and implementation.

2.2 DISCLAIMER (INDEMNITIES)

Behre Dolbear has conducted an independent technical review of the Group’s ToromochoProject mining properties and holdings. A site visit was made to the project sites by Behre Dolbearprofessionals involved in this study. Behre Dolbear has exercised all due care in reviewing the suppliedinformation and believes that the basic assumptions are factual and correct and the interpretations arereasonable. Behre Dolbear has independently analyzed the Company’s data, but the accuracy of theconclusions of the review largely relies on the accuracy of the supplied data.

Behre Dolbear has relied on the work of Aker Solutions (now Jacobs) and its subcontractorsand the Group in the preparation of this ITR. Where possible, Behre Dolbear has confirmed theinformation provided by comparison against other data sources, comparisons with other projects, or byfield verification.

Where checks and confirmations were not possible, Behre Dolbear has assumed that allinformation supplied is complete and reliable within normally accepted limits of error. During thenormal course of the review, Behre Dolbear has not discovered any reason to doubt that assumption.

Behre Dolbear has not specifically reviewed or audited the property ownership documents atToromocho. However, MPC informed Behre Dolbear that they had acquired the mineral claimsrequired for the ore body, and substantial surface holdings for plant, tailing, infrastructure, and support

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APPENDIX IV COMPETENT PERSON’S REPORT

requirements. Information regarding the property situation at Toromocho, within this report, has beenprovided by MPC. Behre Dolbear has not offered a professional opinion regarding the propertysituation.

The assessment has been conducted in accordance with the Code for the Technical Assessmentand Valuation of Mineral and Petroleum Assets and Securities for Independent Expert Reports (ValminCode) as issued in 1995 and updated in 2005. In accordance with the latter requirements, BehreDolbear has not included any consideration of Inferred resources in determining a value for thetechnical assets.

The report is provided to the Group for the purpose of assisting them in assessing the technicalissues and associated risks of the development in the context of proposed corporate financing activities.This report should not be used or relied upon for any other purpose. The report does not constitute atechnical or legal audit. Neither the whole nor any part of this report nor any reference thereto may beincluded in, or with, or attached to any document or used for any purpose without Behre Dolbear’swritten consent to the form and context in which it appears.

2.3 GUARANTEE

Consultant guarantees that it shall perform the Services in accordance with the standards ofcare and diligence normally practiced by recognized consulting firms performing services of a similarnature. All information furnished by Client is a representation or warranty by Client. Client isresponsible for the accuracy and completeness of such information and Consultant shall have the rightto rely upon such information. If, during the 6 month period following completion of Services it isshown that Consultant has failed to fulfill this guarantee and Client has promptly notified Consultant inwriting of such failure, Consultant shall perform, at Consultant’s cost, such corrective Services as maybe required to remedy such failure. Client shall release, defend, and indemnify Consultant from andagainst any further liability arising from the Services or this Agreement.

Consultant shall be liable to Client in the event Consultant is guilty of gross negligence andwillful misconduct. In no event shall Consultant’s aggregate limit of liability to Client exceed the valueof the labor fees paid to the Consultant by the Client.

2.4 CONSEQUENTIAL DAMAGES

Neither party shall be responsible or held liable to the other for consequential damagesincluding without limitation, loss of profit, loss of product, loss of investment, or business interruption.The rights and remedies provided herein are exclusive and in lieu of any other rights and remediesotherwise available at law or in equity. Indemnifications against, releases of liability and limitations ofliability, damages, and remedies shall apply in the event of the fault, negligence, strict liability, orliability arising by statute of the party indemnified, released, or whose liability is limited, or in whosefavor damages or remedies are limited.

2.5 UNITS OF MEASUREMENT AND CURRENCY

Measurement units used in this report are in the metric system. The currency used is UnitedStates dollars (US$) unless specifically stated otherwise.

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APPENDIX IV COMPETENT PERSON’S REPORT

3.0 ABBREVIATIONS, DEFINITIONS, AND RISK DEFINITIONS

3.1 ABBREVIATIONS AND DEFINITIONS

AAS Atomic Absorption SpectrometryAg SilverAMR Andes Mining ResearchARD Acid Rock DrainageAu GoldBehre Dolbear Behre Dolbear Asia, Inc.CNI Call & Nicholas, Inc.CSR Corporate Social ResponsibilityCu CopperDDH Diamond Drill HolesEIA Environmental Impact AssessmentEIS Environmental Impact StatementEMA Errol L. Montgomery & Associates, Inc.EPCM Engineering, Procurement, and Construction ManagementESA Environmental Site Assessmentg GramGolder Golder Associates Pty Limitedg/t Grams per Tonneha Hectarehr HourICAM Incident Causation Analysis MethodologyIMC Independent Mining Consultants, Inc.ITR Independent Technical ReviewJORC Joint Ore Reserve Committeekm Kilometerkm2 Square KilometerKMT WTP Kingsmill Tunnel Water Treatment PlantKP Knight Piésold Pty LimitedkV KilovoltskWh/t Kilowatt Hours per TonneL LiterLOM Life of Minem MeterM MillionMOE Ministry of EnvironmentMoO3 Molybdic OxideMozs Million OuncesMPC Minera Peru Copper S.A.m/s2 Meters per Second SquaredMt Million TonnesMtpa Million Tonnes per AnnumMW MegawattMWh Megawatt HourMWH Montogmery Watson HarzaNEPA U.S. National Environmental Policy ActNPV Net Present Value

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APPENDIX IV COMPETENT PERSON’S REPORT

OEFA Office of Environmental Evaluation and Fiscalizationozs OuncesP80 80% PassingPAF Potentially Acid FormingPCI Peru Copper Inc.PGA Peak Ground Accelerationppm Parts per MillionPTAR PT Agincourt ResourcesRI/FS Remedial Investigation/Feasibility StudyROM Run-of-MineRQD Rock Quality DesignationSAG Semi Autogenous GrindingSBN Peru National Assets AgencySNC SNC LavalinSX/EW Solvent Extraction/Electrowinningt TonneTC/RC Treatment Charges/Refining Chargestpa Tonnes per AnnumTSX Toronto Stock ExchangeV VoltVAT Value Added TaxWTP Water Treatment Plant

3.2 RISK DEFINITIONS

Risk has been classified from low, moderate, to high based on the following definitions.

Š High Risk — The factor poses an immediate danger of a failure, which if uncorrected,will have a material effect (>15% to 20%) on the project cash flow and performance andcould potentially lead to project failure.

Š Moderate Risk — The factor, if uncorrected, could have a significant effect (10% to 15%or 20%) on the project cash flow and performance unless mitigated by some correctiveaction.

Š Low Risk — The factor, if uncorrected, will have little or no effect (<10%) on projectcash flow and performance.

The likelihood of a risk must also be considered.

Š Likely—will probably occur

Š Possible —may occur

Š Unlikely— unlikely to occur

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APPENDIX IV COMPETENT PERSON’S REPORT

The degree or consequence of a risk and its likelihood are combined into an overall riskassessment, as presented in Table 3.1.

TABLE 3.1OVERALL RISK ASSESSMENT

Likelihood of Risk Consequence of Risk

(within 7 years) Low Moderate High

Likely . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Medium High HighPossible . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Low Medium HighUnlikely . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Low Low Medium

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APPENDIX IV COMPETENT PERSON’S REPORT

4.0 EXECUTIVE SUMMARY

4.1 BACKGROUND

Behre Dolbear has conducted an update for the ITR of the Chinalco Mining CorporationInternational (Group) Toromocho Project in Peru 140 km east of Lima. The update includes a site visitto Group’s office in Lima and interviews with key personnel with the Group, Project’s ownerrepresentatives, Project management, and a visit to the Project site. The trip was undertaken fromOctober 16-20, 2012. The focus of the discussions were:

Š Project Schedule

Š Capital Budget

Š Land Status

Š Procurement and Purchasing

Š Lime Plant

Š Environmental Permitting

Š Community Relations

Š Relocation of Morococha

Š Power and Water Status

Š Safety Orientation and Training

Š Recruitment, Hiring and Training

There were no or minimal discussions with regard to resource and reserves, mine plan, processdesign, geology, and geotechnical.

The Behre Dolbear team consisted of K. Marc LeVier, Project Manager, and Carol Odell, CSRSpecialist. The team was accompanied and assisted administratively by the following personnel.

Š Dr. Peng Huaisheng, Executive Director and CEO, Chinalco Mining Corp. Intl.

Š Mr. Du Qiang, Joint Company Secretary, Chinalco Mining Corp. Intl.

Š Mr. Wang Xing, Manager of Budget Division, China Copper Corp. Ltd.

Š Mr. Huang Shanfu, President and CEO, Minera Chinalco Peru S.A.

The ITR update will provide comment and update information along the reporting lines of theoriginal ITR report for ease of comparison. The list of risks are updated and summarized as before.

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APPENDIX IV COMPETENT PERSON’S REPORT

4.2 PROJECT OVERVIEW

The Toromocho Project is under construction and the management of the Project execution isthe responsibility of Jacobs. The Behre Dolbear team was not provided with detailed schedules or anyrefinement of reserves, production plans, or operating cost estimates. MCP is currently in theirbudgeting cycle for 2013 and beyond. Alternatively, Behre Dolbear was provided with copies ofpresentations made by key personnel and verbal status details. In summary, the following highlightsthe Project status reported by the Group, as of October 2012.

Š Project is estimated at 35% complete.

Š General impression/observation is that the teams of subcontractors are well organized andwell managed.

Š Area lay down yards are well laid out, established, organized, and working efficiently.

Š Project schedule reflects commissioning and start-up to commence December 15, 2013,previously October 15, 2013.

Š Capital forecast for Project completion is US$3.5 billion versus US$2.95 billion.

Š Relocation of Morococha village began October 29, 2012 and the majority of the residentswill be relocated by the end of 2012.

Š Mining Plan permit to be submitted by the end of 2012 and approval is expected in March2013, previously January 2013.

Š Lime plant design is complete and major equipment components received or shipped.

Š Lime plant is behind schedule.

Š Limestone resources have been identified in the immediate area; permitting anddevelopment initiated; however, the lime production is a critical path and temporaryacquisition of lime from alternative sources is being planned.

4.3 LAND STATUS

Three outstanding land issues were identified in the April 2012 ITR report.

Š Railroad lands — A government-owned strip of land that had previously been owned bythe railroad was in the process of being transferred to MCP and was considered to presentlow risks that were unlikely to emerge. MCP President & CEO informed Behre Dolbearthat a land transfer agreement has been signed with Peru National Assets Agency (SBN).MCP is actively providing information and technical support to the Ministry of Transportand Communication (MTC) so that the final agreement can be completed in December2012. The risk from this issue is Low Risk/Unlikely to occur.

Š Lands occupied by other mining companies — Small areas of land in the miningconcession are still occupied by infrastructure belonging to other mining companies. MCPLegal Affairs Vice President informed Behre Dolbear that agreements are in place for

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APPENDIX IV COMPETENT PERSON’S REPORT

transfer of all land to MCP on a schedule, which removes infrastructure prior to MCP’sneed for the land. Relationships with all neighboring companies were reported to be strongby the Environment and Corporate Affairs Vice President. The risk that land access relatedto neighboring companies will delay the Project schedule; thus, is Low Risk/Unlikely tooccur.

Š Highway relocation — The highway will have to be relocated due to the encroachment ofthe pit operations (blasting) toward the road. However, the safety distance regulations willnot become critical until year 5 of production. The efforts to relocate the road willcommence well after operations begin and the relocation is not critical at this time to theProject. Low Risk/Unlikely.

Additional land issues relate to the ability to access land in Morococha that will be needed laterfor pit development, easement, and the electricity tower land to enable power supply, and the ability toaccess land to enable lime supply. These issues are addressed in detail, later in the report as socio-environmental and secondary facility issues. For all three issues, contingency plans render them LowRisk/Unlikely to occur in terms of ability to delay or increase costs to the Project.

4.4 GEOLOGY

There is no new information or change to the previous report.

4.5 GEOLOGICAL DATABASE

There is no new information or change to the previous report.

4.6 RESOURCES AND RESERVES

There is no new information or change to the previous report.

4.7 GEOTECHNICAL

There is no new information or change to the previous report.

4.8 MINING

There is no new information or change to the previous report.

4.9 PROCESS

There is no new information or change to the previous report.

4.10 INFRASTRUCTURE AND NON-PROCESS FACILITIES

4.10.1 Electrical Power Supply

The electrical power supply situation remains as before; however, an additional scheduling riskissue has emerged because the Company has not yet achieved agreement with the community of Yaulifor access to the land required for the transmission line towers and easement. Because plant operation

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APPENDIX IV COMPETENT PERSON’S REPORT

and water supply to the plant rely on power supply, it will be necessary for MCP to complete the powersupply prior to commencing pre-commissioning activities in April 2013. Information provided, toBehre Dolbear by the MCP CEO, the Legal Affairs Vice President and the Environment and CorporateAffairs Vice President, all coincided in the ongoing need to obtain access to land for the 3 transmissiontowers from the community of Yauli.

Negotiations, which had been stalled due to unreasonable expectations from community, arereopening at the request of the community, which is a positive sign. Should negotiations fail, MCP willtake advantage of the government’s ability to expropriate land, a function that is exercised relativelyfrequently in the country for power-related infrastructure. In addition to providing an alternative routeto achieve land access, the expropriation process also provides incentives for community leaders tonegotiate, because the rates paid under the expropriation provisions are lower than the rates that theCompany would pay. The risk with expropriation is that it may damage the company-communityrelationship, so it will be used only as a last resort. The government process may cause delays;however, government processes are currently proceeding more expediently than they have in the recenttimes due to several large projects, which have been stalled or terminated. MCP reported thatexpropriation for electricity lines is a tried and tested process in Peru, which occurs frequently.

The outstanding risks of delayed land access are believed to be Low Risk/Unlikely to occur.

4.10.2 Water Supply

The water supply situation remains unchanged, although costing has been incorporated into theCAPEX. The primary source is from the Kingsmill Tunnel Treatment Plant and as soon as the finalland issues for right-of-way are resolved, the pipeline will be placed and the pumps installed andcommissioned. MCP will operate the water treatment plant at Kingsmill Tunnel for the life of themine; Low Risk/Unlikely to occur.

4.10.3 Office and Administrative Facilities

The office and administration support facilities situation remains unchanged, although costinghas been incorporated into the CAPEX. However, an agreement dated June 2, 2012 has been enteredinto by MCP with Inversiones Granadero S.A.C., owner of the Lima offices facilities, in order toacquire such offices before the end of year 2012 for a sum of US$4.6 million.

4.10.4 Material and Supply Storage and Distribution

Additional material and supply storage and distribution facilities have been built at the Projectand the costs have been incorporated into the CAPEX.

4.10.5 Access Roads

Negotiations with the Ministry of Transport and Communications (MTC) and with theconcessionary are ongoing for the realignment of the Central Highway so that the final road route is atleast 500 meters from the location of any blasting activity. MCP Environment and Corporate AffairsVice President informed Behre Dolbear that negotiations are proceeding well and that he expects noundue delays in the process. The Project has at least 5 years before the road re-routing would interferewith pit development. Delays for this cause are therefore Low Risk/Unlikely to occur.

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APPENDIX IV COMPETENT PERSON’S REPORT

4.10.6 Railroad Access

Railroad access to the site is nearing completion and the railroad siding at the process plant isunder construction. Studies have been initiated to look at use of the railroad for movement of personnelfrom Lima to the Toromocho Mine Site to eliminate the difficult bus ride.

4.10.7 Camp Facility

Camp facilities for workers are now operational within the Project area with a smaller camp forSodexho workers close to the Carhuacoto new town site. The Company has committed to building anoperations camp in Carhuacoto. Contractor personnel are housed in camps or billeted in rentalaccommodation in the local communities. There is considerable evidence of recent and ongoingconstruction in local communities to take advantage of economic opportunities during construction.

4.10.8 Town Site

The cost of the town site has been increased substantially from US$100 million in the originalITR to an estimate of US$260 million. This is a more realistic estimate of cost and construction isapproaching completion with 83% of the budget spent. A new drainage system, to prevent thedevelopment of damp conditions, played a substantial role in cost increases, as well as more realisticestimates of costs. Significant expansion of institutional and housing infrastructure was completed insome areas, generally at the request of the local community.

4.10.9 Lime Supply

MCP has identified both a long-term plan and short-term contingency plans to address the limesupply issue identified in the April 2012 Behre Dolbear report. The long-term plan involves building alimestone quarry to the North of the Central Highway on land belonging to the community of Pacchaand feeding a lime plant (to be constructed) on a site, owned by MCP and 20 km from the concentratorlocation, with supply from both the MCP-owned quarry and from 2 other privately-owned quarries tothe south of the Central Highway. Quarry sites were chosen according to the quality of lime and also toenable supply from different directions to reduce Project risks in case of road closure from communityblockade. Lime will be supplied to the Project by rail. MCP has no reason to believe that negotiation ofan agreement to buy land for the limestone quarry and plant will create delays in the process, and theCompany plans to submit the Environmental Impact Assessment (EIA) by the end of 2012. If the EIAproceeds expediently, construction will begin in March 2013 and the lime plant will be ready as plantcommissioning begins in October 2013.

Sufficient lime is available to operate the Kingsmill Tunnel Water Treatment Plant until limewill be available from the lime plant; however, any delays in permitting or construction could meanthat lime for the process plant is required earlier than when lime is available. MCP has assessedcontingency options for lime supply. There appears to be sufficient limestone of adequate qualityavailable in Peru, although it will need to be transported from Lurin (on the outskirts of Lima),Pacasmayo approximately 600 km North of Lima or Juliaca 1,500 km southeast of Lima. Supplierswould be responsible for transporting the lime to Chosica on the Central Highway on the outskirts ofLima and the Company would transport the lime to the site, either by road or rail. Transportationwould double or triple the cost of lime in the interim and this cost is not currently included in theProject estimates. The occurrence of additional lime costs represents a Low Risk/Unlikely to Possibleto the Project because costs are <10% of the Project costs.

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APPENDIX IV COMPETENT PERSON’S REPORT

4.10.10 Conclusions

The incorporation of secondary facilities into the CAPEX budget significantly reduces the risksidentified in the previous Behre Dolbear report of increased costs.

4.10.11 Risk Analysis

Outstanding risk issues relating to secondary facilities are:

Š The risk of Project delays from delayed implementation of electricity to the plant sitecould happen if the Company is unable to complete an agreement with the community ofYauli or is unable to facilitate government acquisition of these lands through an eminentdomain process. The incentives for achieving a negotiated solution and the relative ease ofthe eminent domain process render residual risks on this issue as Low Risk/Unlikely tooccur.

Š The Project also faces a risk of cost escalation should it need to bring lime to theToromocho site from other facilities in Lurin, Pacasmayo, or Juliaca for initial use in themineral processing. This issue is Low Risk/Possible to occur.

4.11 ENVIRONMENTAL AND PERMITTING

4.11.1 General

Lists of permits required for the Toromocho Project were provided to the Behre Dolbear team,which documented the progress of permitting since the original ITR report. The permitting activityincludes applications submitted, pending approvals, reviews in process, and permits obtained as ofOctober 18, 2012. Review of this activity has shown considerable progress with no significant issuesanticipated by the Group.

Since the time of the last ITR, a number of major projects in Peru have been dropped ordelayed, leaving the government ministries with more time and people to focus on the Minera Chinalcoapplications. The Group has noticed a more helpful attitude and more timely responses.

4.11.2 Physical and Biological Environment

The development and start-up of the water treatment plant for the Kingsmill Tunnel water (asreceived contains high levels of heavy metals) has created favorable credibility for the Group with thelocal community and the local and national government. The majority of water required on site willcome from the treatment plant discharge. The Group anticipates that 50% of the treated water will bepumped to the mine site and the remainder discharged to the river.

The tailings impoundment is under construction and all of the wet soil (bofedal) material(Phase I requirements) has been excavated and removed to the compensation area. The compensationarea is another area of bofedal, which had been degraded by peat mining carried out by local residentsas an economic activity.

There have been no changes in regulations or requirements since the last ITR. The Companyand the standards used are in compliance with the government regulations. Inspections have occurred

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APPENDIX IV COMPETENT PERSON’S REPORT

and there have been no issues or citations, as reported by the Group. MCP has acquired software tohelp manage the permit reporting requirements and management of data and information.

The biggest delays likely to occur at the Project relate to seasonal rain-induced land and mudslide risk on the route between Lima and the Toromocho Project site. An extreme slide event couldblock this route, which includes both road and rail access, for up to 10 days. As the Project heads intothe peak landslide risk season, the Company has not yet completed the permanent fuel storage facilitieson site and currently holds 7 days of fuel in reserve on site. This implies a potential risk of up to 3 daysdelay in the case of a very significant slide. This could cause an increase in Project costs but the risk isLow Risk/Unlikely to occur.

4.11.3 Human (Social and Community) Environment — Current Issues

The Toromocho Project enjoys a relatively low social risk setting compared with many otherprojects in Peru. Particularly important factors favoring the Project setting are its insertion into amining area, where most residents have migrated to work directly in mines or provide indirect servicesto mines. The absence of an important agricultural or herding community and the poor quality ofvegetation reduces the importance of water and land issues in the immediate mine vicinity. Thepolitical importance of mining in the Province and region also limits the effectiveness of anti-miningactivism. Even with these favorable factors, the Company clearly recognizes that effective socialmanagement, which enables the achievement of social acceptance at a mining project in Peru, is acritical factor for the Project’s success.

The Project has implemented a strong social management system, which is championed by theCompany President and CEO. This system is in the hands of a suitably qualified and experienced teamwith support and collaboration from the entire senior management team. In addition, MCP has investedsignificant resources to design a resettlement process that aligns with the IFC performance standards, aworld class local training program and appropriate investment in community development focused oncommunity priorities.

The community relations team consists of 8 field staff under the supervision of theEnvironment and Corporate Affairs Vice President. The team is also supported by a team, whichaverages 20 resettlement consultants from Social Capital Group, a team of lawyers reviewingresettlement property issues from Vargas Pareja, and a team from Swisscontact, focused on businessformalization and development for resettled businesses. The Teams appear well qualified andexperienced and data is documented using the Boreal-IS community relations software to provide acomprehensive and searchable database.

The Toromocho community relations approach is actively supported by the senior managementteam and championed by the Company President and CEO. Daily management meetings are held onsite and this enables the community relations team to discuss emerging issues and to managegrievances in an efficient manner. The approach includes a budget of approximately US$1.5 millionannually that is spent on community development initiatives in the education, health, productivedevelopment, and institutional strengthening areas. Meetings with key stakeholders are ongoing andare managed by the resettlement team and community relations staff. Overall, a responsive communityrelations system appears to exist. Community engagement and analysis are currently managed mainlyby consultants on the resettlement team, while the MCP team focuses on higher level negotiations andcommunity development projects.

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APPENDIX IV COMPETENT PERSON’S REPORT

4.11.3.1 Communications Approach

The Environment and Corporate Affairs Vice President leads the MCP communicationsapproach. The approach builds relationships with leading national press by providing periodic updateson the Project, while maintaining a low media profile, asking journalists not to publish stories about theProject in national media during the sensitive construction phase. In the Project areas of impacts andinfluence, the communications strategy involves regular meetings with key stakeholder groups,house-to-house visits in the resettlement area, and monthly Project newsletters reporting on Projectdevelopments and community benefits.

In light of the national and local political situations, this communications approach appears welldesigned.

4.11.3.2 Government Relations Approach

MCP employs an active engagement strategy with government officials at both the national andregional levels, across an appropriate range of agencies. MCP Environment and Corporate Affairs VicePresident reports that the reduction in the number of mining projects approaching construction phasehas greatly improved the responsiveness of the Ministry of Energy and Mines to project-related permitsand issues.

The Project negotiated a 15-year taxation stability agreement with the Peruvian government,which limits the Project’s potential exposure to changes in the legal regime governing mining for theforeseeable future.

Low levels of trust in the Project area means that the Project initially experienced high levels ofopposition, particularly over resettlement and environmental issues. The development and operation ofthe Kingsmill Tunnel Water Treatment Plant that produces water for the mine and significantlyimproves water quality to the Mantaro River agricultural area near the regional capital of Huancayohas created significant regional government support for the Project. In addition, intensive communityrelations efforts and a series of adaptations to the resettlement plan have dramatically improvedrelations at the local level.

The Mayor of Morococha continues to oppose the Project and to organize sectors of thecommunity against the resettlement process. The Company maintains communication with the mayorand his supporters through informal interaction and through a round table dialogue process involvingregional and local government, a broad range of community organizations, and MCP. The dialogue isunder the auspices of the Junin ombudsman, which recognizes the situation as a socio-environmentalconflict. The main dispute centers on documenting an MCP commitment to provide additional benefits,although a focus on monetary payments is troubling in terms of the potential for corrupt use of funds.The Company aims to avoid committing to monetary benefits for Morococha and also argues thatexisting contributions in the Kingsmill Tunnel Water Processing Plant and the high quality of the newtown facilities in Carhuacoto fully compensate the community for impacts and equal the types ofbenefits negotiated between mining companies and communities elsewhere in the country. Despitethis, it is likely that the Company will need to commit to providing additional benefits to Morococha.However, the amounts are likely to be small. This constitutes a Low Risk/Possible.

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APPENDIX IV COMPETENT PERSON’S REPORT

4.11.3.3 Local Hiring

Local hiring forms a key pillar of the social mitigation approach for any mining project.Employment is typically the most sought after benefit among mine-affected stakeholders and providingpriority access and training to enable local community members to access suitable employment createsa pool of mine-supporters in the local community. MCP has earmarked US$4 million in funding for atraining program for local community members so that they may access mining employment during theconstruction and operations phases of the operations. The local hiring program aims to fill 100% ofplant operator positions and 85% of mine operator positions with properly trained local workers. Thetraining program also includes maintenance and laboratory positions. For the construction phase, thecommunity team reports that the population of the area, directly impacted by the Project, has beeninsufficient to fill all appropriate vacancies and employment priority has been extended to the area ofindirect impacts. Contractors are currently encouraged to achieve 65% to 70% local hire, depending onthe availability of required skills.

In addition, the community team reports stakeholders have agreed to definitions of local and toa transparent distribution and merit-based process for training and employment among local areas. TheCompany should continue to seek opportunities for local prioritization and training in direct andindirect opportunities throughout the Project life if it is to manage risks effectively.

4.11.3.4 Local Contracting

MCP Contracts Manager informed Behre Dolbear that the procurement team has personnel inthe Project area dedicated to identifying opportunities for local contracting. Community stakeholders inthe closest community to the Project requested increased assistance with small business developmentand access to contracts, which the Company believes should be possible as the Project transitions to theoperations phase and the results of business development initiatives associated with resettlement bearfruit.

4.11.3.5 Community Development

The Company has dedicated a combined budget of US$1.5 million to community developmentin the districts of Morococha and Yauli, respectively. We believe that this is adequate for now butultimately will require increases to maintain the program. Program focus on four development areas:education, health, economic development, and institutional strengthening. The program focuses oncommunity priorities identified by representatives of government institutions. The programs appear tobe appreciated by community representatives.

4.11.3.6 Town of Morococha Resettlement

The Morococha town resettlement began on October 29, 2012. The Behre Dolbear team wasinformed by the Environment and Corporate Affairs Vice President that 92% of households present inMorococha, at the time of community surveys and cut-off dates in 2006, have signed agreements tomove to the new town in Carhuacoto or to receive a cash payment from the Company. In accordancewith international standards limiting the potential for impoverishment, the cash payment option is onlyavailable to households with a primary residence outside the Project impact area. The Company aimsto resettle government institutions (schools, clinics, etc.) early on in the resettlement process toencourage holdouts to move to the new community to be closer to the institutions they use daily.

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APPENDIX IV COMPETENT PERSON’S REPORT

The biggest risks associated with the resettlement stem from the mayor’s ongoing opposition,the 8% of the population who have yet to sign resettlement agreements, and from new households andcamp residents who have arrived in Morococha, since the resettlement cut-off date in 2006. Togetherthe opposition number approximately 100 households and make up around 10% of the population.

The Environment and Corporate Affairs Vice President informed Behre Dolbear that theCompany facilitated a transparent process involving a commission of local leaders to assess each caseof new arrivals (totaling about 500 households, many single men in mine camps) on a case-by-casebasis, following an updated census in May 2012. During this process, a number of additionalhouseholds were incorporated into the resettlement process. They will receive a house in the new town,but will not be compensated for construction in Morococha. This is a point of contention; however, theCompany does not want to incentivize opportunistic building in the old town.

Other resettlement issues center on fears that the Company may not go ahead with plans tobuild the operations camp in Carhuacoto and with the potential for damp problems in the new town,because the land was previously marshland. Households planning to be among the first to resettle alsocited security concerns. Residents reported that they have been threatened by opponents of the Project.

Community relations staff explained to Behre Dolbear that the initial phases of resettlementwill be overseen by a contingent of appropriately trained police officers, that an additional drainagesystem has been installed to manage damp issues in Carhuacoto, that the operations camp will be builtin Carhuacoto, and that appropriate contingency plans exist for Morococha resettlement hold-outs andrecent arrivals. Even Project opponents interviewed concurred that, if all of these issues are managed,resettlement will likely be complete by mid-2013. Because Morococha resettlement will not interferewith Project progress for over 7 years, outstanding resettlement risks are principally cost escalation.This is considered Low Risk/Likely to occur.

4.11.3.7 Ongoing Negotiations

In addition to the round table negotiations and the resettlement negotiations, the Company isalso involved in additional sets of community negotiations. Both of these risk issues are describedunder the heading of secondary facilities. The Company is in the process of restarting negotiations withthe community of Yauli over compensation for easement and 3 electricity pylons and has just begunnegotiations with the community of Paccha over purchasing lands for a limestone quarry.

4.11.3.8 Transportation

Transportation safety is one of the highest social and safety risks for the Toromocho Project,with Project access via roads that have utilization rates at approximately double their design capacityand incorporate hair-pin bends, rapid, high-elevation climbs and drops, inclement weather, and anumber of other hazard features. On one return trip to the site, the Behre Dolbear team witnessed theoutcomes of three accidents. One vehicle was a Project contractor’s vehicle. The biggest incrementaltransportation risks are to road users and to communities in the case of an accident involving hazardousmaterials. The non-governmental organization (NGO) Luz Ambar has been contracted to assist inraising road safety awareness among drivers and community members. MCP has utilized the servicesof MIQ to design, plan, and coordinate all logistics movements in an effort to minimize risk and lowerimpact on traffic flow. Additionally, these efforts are well coordinated with local authorities,specifically for the movement of oversize loads.

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APPENDIX IV COMPETENT PERSON’S REPORT

Once the rail yard at the plant site is complete and a few outstanding oversized items aredelivered, all supplies will be delivered to the mine site by rail. This will significantly reduce the risksto the communities from hazardous materials spills, as the railroad is more distant from houses, exceptin Lima. The Company aims to switch to rail transport of personnel from La Oroya and from Limaonce appropriate railcar technology is identified (described further in the worker health and safetysection).

4.11.3.9 Security

MCP has an unarmed contracted security force, which works to secure the Company personnel,facilities, and equipment and appears to use appropriate physical security and procedures. The Projectrecognizes that security incidents represent an unlikely occurrence but with potentially largereputational and human harm risks, especially during high profile events such as public hearings andthe upcoming resettlement process. For the resettlement process, the Company has made an agreementwith the Peruvian National Police for a contingent of over 500 police reinforcements to be availableshould any incidents develop. Risk assessment and incident protocols have been developed for avariety of scenarios. Following minor incidents at the public hearing for the Project, all police officers,who are available for incident management, have participated in sensitization and legal refreshercourses to encourage appropriate use of force. No tear gas or weapons will be carried by any of theofficers. With security premised on dissuasion, the security force has the potential to outnumber thoseattempting to disrupt the resettlement process and will utilize a truck with a water cannon, as a lastresort to protect property and restore order.

4.11.3.10 Project Impacts and Benefits to the Community

Project stakeholders (including Project opponents) universally recognize the economic growththat the Toromocho Project construction has brought to local communities. They are concerned thatthis economic activity should continue beyond the construction phase of the Project and have identifiedthe construction of the Toromocho mine camp within or adjacent to the Carhuacoto resettlement site,as a particularly crucial factor that will consolidate economic benefits in the area. The Company hascommitted to building the camp for the operations phase in Carhuacoto, although the constructioncamps, which are able to house over 6,000 people, are within the mine area, except for a Sodexhocamp in the Carhuacoto area.

Several community leaders recognized that the Company has also made an effort to prioritizeemployment for female heads-of-houses and has been flexible about employment requirements forparticularly vulnerable households. Negative impacts included increased intra-community conflict,related to a division between Project supporters and detractors, and struggling to cope with changerelated to the Project were mentioned by community leaders.

4.11.3.11 Worker Health and Safety

The Company is in the process of implementing a Mine Safety Health Administration (MSHA)conforming safety management system and aims to complete this process before operationscommence, with the assistance of BTS Consulting, a company of behavioral change experts. Thesystem incorporates risk assessment processes, design and implementation of appropriate protocols,and training for general activities and for identifying high risk activities, investigations of incidents

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APPENDIX IV COMPETENT PERSON’S REPORT

(using the ICAM approach), awareness campaigns, monitoring of indicators, and incentives included inbonuses and prizes. Safety training of at least 40 hours per year is a requirement for all direct andindirect employees. In 2011, the Company received a national award for best performance in minesafety in Peru, reporting incidents using Peruvian criteria, despite being in the more risky constructionphase when most other companies are exploring or operating.

Road transportation of personnel and goods to the site from Lima, local communities, La Oroyaand Huancayo, is the highest worker safety risk on the Project at present and staff reported one fatalityduring the Behre Dolbear assessment trip1. Transportation safety measures include GPS tracking forspeeding, defensive driver training for all drivers, additional presence of transport police in the Projectvicinity, bans on phone-use while driving, and random drug and alcohol testing for drivers arriving atthe site with immediate dismissal for drivers testing positive. The safety manager for MCP is in theprocess of testing fatigue-monitoring systems. Major haulage and bus contractors are a focus ofpreventive interventions.

Personnel transportation is currently coordinated by the Company and buses deliver workers tothe site from local communities, La Oroya, Huancayo, and Lima. MCP is advancing the personnel railtransportation concept and has purchased 4 self-propelled 2-car passenger units and is carrying outtests to identify appropriate technology to achieve timely ascent and descent. The planned overnighttransport of personnel appears as an enlightened approach to remove personnel from the road whereaccidents have occurred and will continue to happen. Until rail transportation is maximized, the Projecthas outstanding risks associated with road transportation that are Moderate risk/Possible to occur.

Offsite transportation incidents are not currently included in national statistics. Implementationof offsite incident monitoring and near miss incident reporting are being contemplated for theoperations phase.

Other health and safety issues include high-risk activity certification, working at high altitude,emergency response, and psychological and nutrition issues related to rotational work in mine camps.The Company has implemented appropriate training and controls in all of these areas.

4.11.3.12 Social Summary

In summary, three discrete social risk issues are identified by the Behre Dolbear team.

Š Ongoing negotiation processes through the round table process are likely to result in anagreement whereby the Company will provide funding for additional developmentinitiatives. The likely costs will amount to a Low Risk/Likely to occur either within theCAPEX or early operations period.

Š Resettlement incorporates Low Risks/Likely to result in cost escalation related tocontingency plans for resettlement of new arrivals and compensation for new structures.

Š Transportation safety risks remain a Moderate Risk/Possible to occur while personneland goods are still transported by road.

1 A contactor’s assistant (a local contracted by Jacobs) accompanying a heavy equipment load was killed while checking the loadduring the trip from Lima to the mine site. The victim was reportedly struck by another non-project related vehicle.

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APPENDIX IV COMPETENT PERSON’S REPORT

In addition, the Project also operates in an environment where expectations of communitybenefit are high and faces an overall risk that opposition to the Project will escalate. MCP recognizesthat high levels of social acceptance are required to mitigate this risk and that this, in turn, requiresstrong social management programs and systems. Current risks of extended social protest are judged tobe Low Risk/Unlikely to occur. Although over the next seven years with changes in local government,election campaigns, a reduction in employment during the construction demobilization process, and thearrival of substantial mining canon funds, the Protest represent a Low Risk (minor protest)/Likely tooccur. More significant the protest is a Moderate Risk/Unlikely to occur.

4.11.4 Permitting Status and Schedule

4.11.4.1 EIA and Construction Permits

The main EIA and construction permits were in place for the Project at the time of the April2012 Behre Dolbear report.

4.11.4.2 Mine Plans, Water Use, and Other Permits and Approvals

The MCP Vice President of Environment and Corporate Affairs informed Behre Dolbear thatthe permitting situation in Peru has improved substantially under the new government, which tookoffice at the end of July 2011. This appears to be related to the reduction in mine development projectsin the country and to a change in attitude by some government departments and to increasing supportfrom the government of the Project. While increased support reduces the risks of permit delays, MCPis managing perceptions carefully and has asked the government to refrain from intervening in severalsituations where overt government support could lead to community protest.

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APPENDIX IV COMPETENT PERSON’S REPORT

Major critical path items identified in the April Behre Dolbear report are reviewed in Table 4.1.

TABLE 4.1CRITICAL PATH ITEMS

Situation as of April 2012 Behre Dolbear Report Situation as of September 2012

A detailed hydrology and hydrogeological studyfor the mine area will be an important part of thenew pit mine plan to be submitted for approval late2011.

The Company is in the process of responding toa series of observations made by Ministryrepresentatives on the mine plan. The mostsignificant issue to be resolved is a requirementthat the Company demonstrate that resettlementis complete, prior to receiving the permit. MCPcan avoid this requirement by submitting a mineplan for a shorter (7-year) term or with thecompletion of the resettlement, submit the MinePlan for the full life of mine. MCP is monitoringthe progress of resettlement before choosingwhich Mine Plan option. The updated Mine Planwill be submitted by the end of 2012.

Water use permits for the mine and concentratorare in preparation.

Permits now in process.

Reclamation and closure plan will be detailedfurther in 2011 (conceptual) and refined asoperations progress (Section 14.0)

Closure plan and management of environmentallegacies permit in process.

Cultural resources migration permits; a few still inprocess

3 further permits obtained. 2 outstanding.

New highway alignment yet to be accomplished. Permits still in process though negotiations aremoving forwards. Not required immediately,defer to year 3-5.

New lime source to be secured with environmentalapprovals.

EIA for lime plant to be submitted by the end of2012. Consultation re. MCP lime source quarryin process. Contingency lime sources identifiedfor supply until plant comes on line.

EIA for KMT WTP: further technical certificationsneeded.

In process.

4.11.4.3 Government Changes in Peru — Agency and Community Perceptions

Capacity and resourcing issues continue to limit the role of the Agency of EnvironmentalEvaluation and Fiscalization (OEFA) under the Ministry of the Environment (MOE). MCPEnvironment and Corporate Relations Vice President informed that oversight for safety recentlyreverted to Osinergmin, the agency supervising investment in energy and mining projects, apparentlydue to capacity issues. The Project receives annual audits from OEFA, but because of capacityconstraints, these tend to focus on recycling and other low risk issues.

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APPENDIX IV COMPETENT PERSON’S REPORT

Meanwhile, MCP is implementing telemetric monitoring to enable them to track environmentaldata in real time and recently implemented legal software to track permit requirements andcommitments more systematically and the Vice President Environment and Corporate Relationsreports no significant compliance issues.

Behre Dolbear did not interview any ministry staff during this ITR update because of the tightschedule for the site visit. However, MCP’s perceptions appeared aligned with observations ongovernment positions on mining in the Peruvian media and among stakeholders.

The social specialist on the team carried out a series of 7 interviews with formal and informalcommunity leaders from Morococha, selected as representing a range of different communityperceptions. The specialist also interacted informally with stakeholders encountered in Morococha.Overall, although some opposition to the Project was noted by all interviewees, centering on the Mayorof Morococha, the relationship between MCP and the community appeared cordial with informalcommunication channels open between the Company and opponents as well as with supporters.Outstanding concerns and issues, raised by Project opponents, are known to the community relationsteam and contingency plans exist for management. Even Project opponents interviewed concurred that,if outstanding issues are managed, resettlement will likely be complete by mid-2013.

4.12 CONCLUSIONS

Additional favorable aspects noted since the April 2012 Behre Dolbear report include:

Š Environmental management of ongoing construction work appeared strong.

Š Marshland relocation from the tailings area is complete and apparently progressing well.

Š Support for the resettlement process is improving incrementally and MCP has managedmany issues and has contingency plans to manage outstanding issues and concerns.

Š The local community training programs, implemented by the Company, are world classand demonstrate a commitment to generating social acceptance by the Company.

Š The entire senior management team appear dedicated to superior HSEC management andstrong performance is championed by the MCP President and CEO.

Š Collaboration among departments on HSEC issues is ongoing and producing palpableresults.

Š The social management team includes experienced individuals and with consultant supportthat demonstrates adequate staffing and capacity.

Š The social management system is well designed and shows a number of strengthsincluding local hiring priorities, progress on local contracting, a responsive grievancemanagement system, benefits to communities through an organized communitydevelopment approach, and a commitment to collaboration and negotiation to resolveissues.

Š MCP incorporates a risk-based management approach and has developed mitigation plansand contingency plans for the most concerning scenarios.

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APPENDIX IV COMPETENT PERSON’S REPORT

Ongoing and emerging Project aspects that are unfavorable include:

Š The dangerous access route to site continues to demonstrate health and safety risks withevidence of multiple accidents and at least one death.

Š High altitude working conditions continue to pose worker health and safety risks.

Š Opposition to and concern with some aspects of the resettlement program is likely to resultin increased costs, although robust contingency plans seem likely to lead to the successfulresettlement. Resettlement will not disrupt mine implementation, even if delays extend forseveral years.

Š Project opposition and high expectations of benefit from local stakeholders is likely to leadto increased costs to the Company for community development initiatives.

Š Realignment of the Central Highway is still under negotiation between MCP, the Ministryof Transport and Communications, and the concessionary, although this does not becomecritical path for over 5 years.

4.13 RISK ANALYSIS

Š There are risks of delay stemming from inadequate fuel storage capacity and potentialdelays related to landslides on the main access routes. Low Risk/Unlikely during theconstruction timeframe.

Š Health and safety risks from transportation of workers and equipment represent aModerate Risk/Possible.

Š Ongoing negotiations through the round table process are likely to result in increased MCPcost for community development. Low Risk/Likely to occur.

Š Resettlement cost escalation risks related to new building in old Morococha, after themove, are Low Risk/Likely to occur.

Š Risk of Project disruption and delays, due to minor social protest, are Low Risk/Likely tooccur. More significant social protests are Moderate Risk/Unlikely to occur.

4.14 RECLAMATION AND CLOSURE

There is no new information or change to the previous report.

4.15 ADMINISTRATION, MANPOWER, AND MANAGEMENT

4.15.1 Management and General Administration

During the site visit, Behre Dolbear interacted with the following MCP managers andadministrators:

Š Huang Shanfu, CEO and President, MCP

Š Dr. Peng Huaisheng, Executive Director and CEO, Chinalco Mining Corp. International.

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Š Du Qiang, Company Secretary, Chinalco Mining Corp. Intl.

Š Juan Jose Mostajo, Vice President, Legal Affairs, MCP

Š Manuel Echevarria, Project Manager, MCP

Š Dai Xibao, Vice President Finance, MCP

Š Hao Xhengyu, Budget Manager, MCP

Š Ignacio Zavala, Project Control Manager, MCP

Š Ricardo Brazzini, Materials and Contracts Manager, MCP

Š David Thomas, Chief Operating Officer, MCP

Š Leo Hilsinger, Vice President, Construction, MCP

Š Tom Olsen, Vice President, Operations, MCP

Š Mario Ramirez, Construction Manager, MCP

Š Feride Legaspi, Jacobs Project Manager, MCP

Š Ezio Buselli, Vice President, Environment and Corporate Affairs, MCP

Š Carlos Cueva, Mining Safety Manager, MCP

Š Luis Valdivia, Manager of Electricity, MCP

Š Fernando Ferreyros, Vice President, Administration and Human Resources, MCP

Š Esteban Bedoya, Human Development Manager, MCP

Š Arnaldo Huanca, Community Relations Manager, MCP

Š Roger Davila, Community Relations Coordinator, MCP

Š Judith Mendoza, Community Relations Liaison, MCP

Š Cesar Delgado, Community Relations Coordinator, MCP

4.15.2 Manpower

MCP has implemented a robust human resources system, which aims to build a competitiveposition for MCP in the Peruvian mining industry as the best place to work. The approach focuses onrecruitment and selection, competitive compensation and benefits, training and capacity building, and aperformance-based incentive structure. Pressure for experienced mining professionals in Peru hasreduced slightly as a number of projects have been put on hold; however, the Project still budgets for6% to 7% annual increases in salary budgets to remain competitive and some key positions haverecently become vacant, notably the mine manager position. The Vice President of Administration andHuman Resources reported that loss of key personal is limited and largely relates to working at highaltitude or to offers that incorporate promotion or other benefits.

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APPENDIX IV COMPETENT PERSON’S REPORT

The Company is implementing significant internal training and capacity-building programsfocused on local hiring and retention of key personnel. Budgets on the Toro-Boys technical trainingprogram and on middle management training programs have been US$4.0 million and US$0.5 millioneach, respectively, so far. MCP also plans to implement a corporate university, programs with regionaluniversities, and a trainee program for top recent graduates.

4.15.3 Conclusions

Š The MCP team is being built from the ground up with the best available workforce. Thehuman resource group has created a strong strategy for hiring, compensation, retention,and development, all key to a large operation.

Š Hiring is on schedule with only senior positions with technical specialty experiencerequiring a broader search and compensation above target, i.e., HydrometallurgicalSuperintendent, Mine Superintendent.

Š The MCP operation at Toromocho is a desirable location as is only 140 km from Lima andthe Company is offering an attractive work schedule of 7 and 7 to the work force.

Š The human resource group is maximizing local workforce (Morococha) as well as localnational content. Ex-pat projection for operations was estimated between 4 and 6.

Š A key vacant position is the molybdenum hydrometallurgy plant superintendent. This is acritical part of the total operation and potentially impacts the copper production and plantthroughput. Behre Dolbear believes that this position should be filled as soon as possiblewith a highly experienced person in this area of technical expertise.

4.15.4 Risk Analysis

Project risks related to availability and ability to access highly qualified technical experts,especially in the mineral processing area, have the potential to impact Project costs, schedules, andproduction levels. This risk remains Low to Moderate/Unlikely to Possible.

4.16 CAPITAL COST ESTIMATE AND IMPLEMENTATION SCHEDULE

4.16.1 Total Capital Cost Estimate

MCP has provided an update to the total capital cost in a recently completed forecast. Acomparison is provided in Table 4.2. The main increases in the capital estimate are as follows:

Š US$260.0 million in Morococha relocation

Š US$193.0 million in secondary projects, including water treatment plant, transmissionlines, and payment to Pan American Silver

Š Increases in labor for construction due to inflation, i.e., weakened U.S. dollar

Š Unfavorable changes in currency exchange, 3%

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APPENDIX IV COMPETENT PERSON’S REPORT

TABLE 4.2MINE, CONCENTRATOR, AND INFRASTRUCTURE CAPITAL COST

(US$ × 000)

OperationsDefinitive EstimateThird Quarter 2010

Fourth Quarter2011 Estimate

Third Quarter2012 Estimate

Mine . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 303,486 312,640 297,393Process and Infrastructure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,543,586 1,673,247 1,839,503Owner’s Cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 413,461 448,191 626,151

Subtotal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,260,533 2,434,078 2,763,047

ContingencyMining . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15,169 15,169 6,094Process and Infrastructure . . . . . . . . . . . . . . . . . . . . . . . . . 123,119 133,460 32,411Owner’s Cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32,030 34,720 21,997

Subtotal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 170,318 183,349 60,502

Working Capital Subtotal . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56,000 56,000 56,000

Total Estimated Project Cost . . . . . . . . . . . . . . . . . . . . . . . . . 2,486,851 2,673,427 2,879,549

Secondary ProjectsInfrastructure1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . NA NA 192,561Relocation of Central Highway . . . . . . . . . . . . . . . . . . . . . 75,000 75,000 70,000Relocation of Morococha . . . . . . . . . . . . . . . . . . . . . . . . . . 100,000 100,000 260,000Construction of Lime Quarry and Plant . . . . . . . . . . . . . . . 75,000 100,000 100,000

Totals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,736,851 2,948,427 3,502,110

1 Includes: Port Callao, transmission lines, Kingsmill Tunnel Water Treatment Plant, Pan American Silver, contingency and interest.

Jacobs and MCP have demonstrated good management practices in controlling costs whilemaintaining flexibility in the direction of work effort with unexpected delays in delivery ofconstruction materials.

4.16.2 Construction Schedule

The previous ITR showed mechanical completion and pre-commissioning start-up occurring onOctober 15, 2013. This schedule has changed to December 15, 2013, a slippage of two months. MCPVice President Construction, Leo Hilsinger, reported that the Project, as of the visit, was approximately35% complete. MCP views the Project as essentially on schedule and sees the slippage as more relatedto obtaining the Mine Plan permit, which is scheduled to be approved in February 2013. This permitwill approve the operations and allow the immediate development of the mine with pre-strippingactivities. With a low strip ratio <1:1, MCP feels that they can easily have the mine ready forproduction, on schedule. Impacts/Issues cited were the impact of a weakened dollar. All contracts haveadjustment clauses in them to adjust for exchange rate changes, thereby causing labor rates to increase.

MCP reported that all major contracts are in place, including the tailings pipeline placementcontract.

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APPENDIX IV COMPETENT PERSON’S REPORT

MCP emphasized that the hydrometallurgy plant, for the treatment of the molybdenumconcentrate, is critical and a priority has been placed on the mechanical completion of this facility, 3 to4 months ahead of the concentrator. This will allow pre-commissioning and startup testing as well astraining of the operators.

With the exception of the lime plant, MCP reported that all major equipment has been arrivedin Peru and is either located at the site or at the port in Callao. The months of October and Novemberwill be the heaviest transportation movement from Callao to site. After this, the amount of trucktransport traffic will steadily decrease, especially when the rail spur and sidings are completed laterthis year.

The construction of the lime plant is anticipated to begin in March 2013, after approval ofpermit applications for the plant in February 2013. Components of the kilns have started shipping andall materials and equipment will arrive prior to construction.

As of the October 2012 visit, the Jacobs project management team appears to have good controlof the construction activities and is well skilled and versed in the management of large, complexprojects. The team has already demonstrated capabilities and flexibility in schedule loss recovery onseveral occasions where they were forced to quickly acquire structural steel from Peru versus theawarded contractor who was forecasting late delivery. Construction subcontractors’ efforts wereredirected and the schedule slippage was recovered.

There are many factors in a project effort of this magnitude that can impact the constructionschedule. In that the Project is still in the very early days, there is a risk for the Project schedule to slipdue to:

Š Commencement of rainy season, which has begun one month early

Š Landslides across the main supply lines

Š Delays in permits

Š Stalled negotiations on land acquisition

Š High altitude impact on worker productivity

Š Social protest

Š Workforce protest

As the Project grows in completion, the flexibility to redirect labor forces will be significantlyreduced in terms of schedule recovery. This will occur when the construction efforts shift from areafocus to trade skill/specialty focus. Behre Dolbear would assess the schedule risk as Low to ModerateRisk/Likely to occur.

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APPENDIX IV COMPETENT PERSON’S REPORT

4.16.3 Conclusions

The construction is advancing rapidly with an experienced team of professionals. Scheduleslippage has been recovered and minimized with pre-commissioning, now scheduled formid-December 2013.

The new forecast for total Project CAPEX, as of September 2012, is US$3.5 billion. Theincreases are primarily due to secondary projects and better definition of cost for these projects, such asthe town relocation, lime plant, and the Kingsmill Tunnel Water Treatment Plant.

The lime plant has been engineered and designed. Equipment is en route and permitapplications have been submitted to the Ministry of Production. Construction is scheduled to begin inMarch 2013.

The construction schedule is highly dependent on continued high worker productivity, propermanagement and scheduling of activities, and on-time delivery of materials and equipment.

4.16.4 Risks

The costs of the relocation of the town of Morococha are better defined and the total has beenescalated; thereby, reducing the risk of further increases in capital cost. There is a risk of furtherincreases but the potential increase would appear to be Low Risk/Unlikely to Possible.

There remains uncertainty with several communities on the acquisition of rights to the landaround the limestone deposits and the development of these quarries. With the notice of Morococha’srelocation and ability to see others improvements, the risk exists for escalation of the capital costsrequired to complete the acquisition and development of the quarries. Delay will cause increasedoperating costs in high cost lime and there will be leverage to resolve the issues quickly. The risk ofincreased capital costs for the lime plant is Low to Moderate Risk/Likely to occur.

The schedule slippage to date is low; however, due to the many factors involved, the potentialfor additional slippage is Low to Moderate Risk/Unlikely to Possible.

4.17 OPERATING COSTS

4.17.1 General

The operating costs for Toromocho have not been changed since the April 2012 ITR. Since thistime, all major contracts have been completed; however, costs are no better defined than the previousestimates as the pricing is dependent on the time of order in the future with escalation provisions. Ingeneral, steel consumables and fuel have reduced in price since April 2012. Therefore, Behre Dolbearbelieves that the operating cost estimates used previously are still valid and remain unchanged as ofSeptember 2012.

MCP stated that they are monitoring the inflation rate in Peru and preparing operations budgetsaccordingly. The labor rate has the potential to increase after the start of operations. As of September2012, MCP stated that the budget for labor and strategy for hiring and compensation has been strictlyadhered to in the process. Behre Dolbear believes that there is potential for increases in the future.

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APPENDIX IV COMPETENT PERSON’S REPORT

4.17.2 Mine

No changes were made to the mine operating costs as the primary design parameters have notchanged since the original ITR.

4.17.3 Processing, Infrastructure, and General and Administrative (G&A)

No changes were made to the operating costs in this area over the prior estimates of the originalITR.

4.17.4 Conclusions

The generation of the costs by IMC and Aker Solutions remain thorough and professional. Theavailable general escalators have been used by Behre Dolbear to align the estimates for the originalITR and these estimates remain unchanged.

4.17.5 Risks

The projected Toromocho operating costs, as escalated, are based on available escalationfactors and the risk is Low to Moderate/Unlikely to Possible.

4.18 MARKETING AND SALES

The Group reported that they have secured off-take agreements with traders and smelters for60% of the copper concentrate production. Terms of the agreements were not made available to BehreDolbear; however, the Group has provided the freight and treatment charges for the economic analysis.Behre Dolbear believes that the changes in the treatment charges reflect their experiences in themarketing of the Toromocho concentrates.

4.19 ECONOMIC ANALYSIS

Behre Dolbear has prepared an updated economic analysis for the Toromocho Project, using thesame model structure as used in the original ITR. No adjustments have been made to productionschedules or the grades, recoveries, or impurity assay level of the concentrates. The analysis basis is asof September 2012.

The previous ITR economic analysis was created based on the Aker Solutions DefinitiveEstimate of February 2011 and updated to fourth quarter 2011 dollars. The capital estimates for thiseconomic model have incorporated the latest forecast of total Project CAPEX prepared by MCP. MCPhas developed the forecast based on spent and committed dollars, to date, along with their estimate offunds required to complete the Project based on the Definitive Estimate of 2011 and current Projectconstruction experience and trends.

Metal prices were adjusted based on new data from consensus of brokers obtained in October2012 by the Group and provided for use in the analysis. Treatment and freight charges for theconcentrates were also provided by the Group. All other inputs to the model were unchanged.

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APPENDIX IV COMPETENT PERSON’S REPORT

Table 4.3 is the metal pricing from a consensus of brokers provided by the Group and are usedby Behre Dolbear at the Group’s request. Behre Dolbear does not make forecasts of its own, but relieson those of other companies. The forecasts are made by reputable companies, who are in the businessof providing forecasts.

For convenience of comparison, Table 4.4 is provided from the April 2012 ITR.

TABLE 4.3BROKER CONSENSUS — COPPER, MOLYBDENUM, AND SILVER

Copper US$/tonne

Broker Date 2012 2013 2014 2015 2016 LT

Standard Chartered . . . . . . . . . . . . . . . . . . . . . 08/10/12 8,093 8,875 10,500 11,000 9,000UBS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11/10/12 7,959 7,496 5,842 6,283 6,283 5,622Raymond James . . . . . . . . . . . . . . . . . . . . . . . 27/09/12 7,915 8,267 8,818 6,063Deutsche Bank . . . . . . . . . . . . . . . . . . . . . . . . 21/09/12 7,866 8,003 7,502 NACanaccord . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20/09/12 7,915 7,716 7,716 7,165 6,614 6,063RBC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17/09/12 7,826 8,267 8,267 8,267 9,370 6,063Morgan Stanley . . . . . . . . . . . . . . . . . . . . . . . . 17/09/12 7,937 8,333 7,826 7,055 6,614 6,107JP Morgan . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17/09/12 8,125 8,850 9,700 5,500BMO Capital Markets . . . . . . . . . . . . . . . . . . . 17/09/12 7,848 7,937 7,716 7,716 6,063Credit Suisse . . . . . . . . . . . . . . . . . . . . . . . . . . 13/09/12 7,747 7,950 7,500 7,000 5,500Macquarie Research . . . . . . . . . . . . . . . . . . . . 12/09/12 8,333 8,532 7,672 7,562 7,496 6,504RBS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12/09/12 8,047 8,708 8,378 6,614TD Newcrest . . . . . . . . . . . . . . . . . . . . . . . . . . 30/07/12 8,047 8,598 7,716 7,716 6,063HSBC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17/07/12 8,003 7,496 8,003 7,253 6,173Societe Generale . . . . . . . . . . . . . . . . . . . . . . . 05/07/12 8,001 7,800 7,500 7,000 6,173

Average . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,977 8,189 8,044 7,638 7,563 6,039

Molybdenum US$/tonne

Broker Date 2012 2013 2014 2015 2016 LT

Raymond James . . . . . . . . . . . . . . . . . . . . . . . 27/09/12 30,490 33,069 37,479 30,865Deutsche Bank . . . . . . . . . . . . . . . . . . . . . . . . 21/09/12 30,754 30,865 35,274 NACanaccord . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20/09/12 30,049 30,865 33,069 33,069 33,069 33,069RBC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17/09/12 28,660 33,069 38,581 33,069 24,251 27,558BMO Capital Markets . . . . . . . . . . . . . . . . . . . 17/09/12 29,652 30,865 30,865 30,865 30,865Macquarie Research . . . . . . . . . . . . . . . . . . . . 12/09/12 31,967 35,274 35,274 34,172 37,479 33,069TD Newcrest . . . . . . . . . . . . . . . . . . . . . . . . . . 30/07/12 30,292 35,274 35,274 35,274 33,069

Average . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30,266 32,754 35,116 33,290 31,600 31,416

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APPENDIX IV COMPETENT PERSON’S REPORT

TABLE 4.3BROKER CONSENSUS — COPPER, MOLYBDENUM, AND SILVER

Silver US$/oz

Broker Date 2012 2013 2014 2015 2016 LT

Standard Chartered . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 08/10/12 31.0 35.0 39.0 34.0 28.0UBS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11/10/12 32.0 36.9 31.0 20.0 19.0 22.0Raymond James . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27/09/12 30.3 34.8 32.0 19.5Deutsche Bank . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21/09/12 33.0 43.0 36.0 NACanaccord . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20/09/12 31.5 34.0 31.5 29.5 28.5 27.5RBC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17/09/12 33.0 35.0 30.0 27.5 25.0 25.0Morgan Stanley . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17/09/12 31.5 34.9 33.9 32.7 28.9 22.9TD Newcrest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17/09/12 30.5 34.0 25.0BMO Capital Markets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17/09/12 29.8 35.0 32.0 28.0 21.0Credit Suisse . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13/09/12 30.5 29.2 25.4 23.3 21.7RBS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 03/08/12 32.0 29.0 18.0HSBC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17/07/12 31.0 32.0 28.0 28.0 25.0Societe Generale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 05/07/12 33.0 30.0 28.0 27.0 19.0

Average . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31.5 34.1 31.5 27.8 25.9 22.4

TABLE 4.4METAL PRICES — BEHRE DOLBEAR APRIL 2012 ITR

Metal 2012 2013 2014 2015 Long-Term

Average of Forecasts — Made August 2011 to September 2011Copper ($/lb) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 4.53 $ 4.18 $ 3.83 $ 3.84 $ 2.57Molybdenum ($/lb) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $17.78 $18.66 $17.25 $18.50 $15.17Silver ($/oz) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $37.90 $36.94 $35.28 $32.00 $22.50

Note: Not all metals projected by all forecasters

ACTUAL HISTORICAL

Five-year Average Prices (4Q2006 through 3Q2011)Copper . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 3.22Molybdenum . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $21.08Silver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $18.77

Third Quarter 2011 Average Prices (considered “current prices” for purposes of report, since costs areestimated as of 4Q2011)

Copper . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 4.09Molybdenum . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $14.69Silver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $39.06

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APPENDIX IV COMPETENT PERSON’S REPORT

4.19.1 Results

For the base case, the life of mine cash flow (undiscounted) is US$14.840 billion. This is anincrease from April’s value of US$13.786 billion. The increased CAPEX forecast was offset by higherlong-term copper prices and lower smelter charges (increased NSR).

As demonstrated in the original ITR, mining projects are most sensitive to changes in metalprices. Sensitivities to the base case, ±10%, were performed on metal prices, initial capital and cashoperating cost. Sensitivities were not conducted in the ITR update, as the results would parallel theoriginal results. There is potential upside to the life-of-mine net cash flow with continued long-termmetal price increases.

The weakening dollar and stronger Sol have contributed to inflation in Peru in the past year andis expected to continue. Inflation is a risk to be monitored. In the economic analysis, Behre Dolbearelected to hold the operating costs to the same level as the original ITR. Although inflation is aconsideration, the recent drop in steel costs and fuel prices, two major consumable costs, potentiallyoffset any inflation increases. This, combined with on-budget hiring and no labor cost increase trendsto date for the Project and a power contract which has not escalated, suggested that the originaloperating cost estimates are within the accuracy of the estimate and have also been considered in thesensitivities run on the various parameters in the original economic analysis. Any increase in theoperating cost is well within the sensitivity analysis conducted.

4.19.2 Conclusions

The Toromocho ITR Update, as of date of September 30, 2012, reconfirms the economicviability of the Toromocho Project as projected in the April 2012 Toromocho Project ITR. However,Behre Dolbear, again, cautions that the mining industry is cyclical and when a new cycle of lowerprices will occur is not known.

4.19.3 Risk Analysis

No risk analysis is provided with the economic analysis in general, but risks for operating costs,capital investments and other items are discussed elsewhere in the report.

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APPENDIX IV COMPETENT PERSON’S REPORT

4.20 OVERALL RISK ASSESSMENT/CONSEQUENCE

A summary of the overall Toromocho Project’s risk and likelihood assessment and resultantconsequence assignment from the original ITR are provided in Table 4.5.

TABLE 4.5TOROMOCHO PROJECT RISK ASSESSMENT SUMMARY

Issue Risk LikelihoodConsequence

Rating

Land StatusFail to transfer parcel Low Unlikely LowIssues with adjacent operations Low Unlikely Low

Resources and ReservesProblems with drilling data, mine sampling data, and assays Low Unlikely LowVariography inaccurate Low Unlikely LowResource categorization unreliable Low Unlikely LowMining losses and dilution insufficient (as adjusted byBehre Dolbear) Low Unlikely Low

GeotechnicalPit slope angles unreliable Low to

ModerateUnlikely toPossible

Low toMedium

Stockpiles and waste dumps unstable (complete proposed work) Low toModerate

Unlikely toPossible

Low toMedium

MiningProduction levels not met Low to

ModerateUnlikely toPossible

Low toMedium

Operating costs exceeded Moderate Possible MediumCapital costs exceeded Low to

ModerateUnlikely toPossible

Low toMedium

ProcessCopper recovery not achieved Low to

ModerateUnlikely toPossible

Low toMedium

Concentrate grade not achieved Low Unlikely LowHigher penalties for insol Low to

ModerateUnlikely toPossible

Low toMedium

Silver recovery not achieved Moderate Unlikely toPossible

Low toMedium

Moly recovery circuit will not start-up as scheduled High Possible Mediumto High

Tailings deposition system may not work as planned Moderateto High

Unlikely toPossible

Mediumto High

Concentrates may not be as marketable as planned Low toModerate

Unlikely toPossible

Low toMedium

Infrastructure and Non-Process FacilitiesIncomplete highway relocation plans, lime quarry added scope, anduncertainties regarding the Morococha relocation may increasecosts

Low toModerate

Unlikely toPossible

Low toMedium

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APPENDIX IV COMPETENT PERSON’S REPORT

TABLE 4.5TOROMOCHO PROJECT RISK ASSESSMENT SUMMARY

Issue Risk LikelihoodConsequence

Rating

Environmental and PermittingLocation issues could impact availability of skilled labor Low to

ModerateUnlikely toPossible

Low toMedium

The large tailings area may have adverse impacts Low Unlikely LowProblems relocating Morococha residents could adversely impact theschedule

Low toModerate

Unlikely toPossible

Low toMedium

Reclamation and ClosureDust and water reclamation may not be sufficient Low Unlikely LowTailings reclamation may not be effective Low Unlikely LowClosed pit may reduce the quality of life in the area Low Unlikely Low

Administration, Manpower, and ManagementAdequate skills, expertise, training, and numbers of personnel maynot be available

Low toModerate

Unlikely toPossible

Low toMedium

Capital Cost Estimate and Implementation ScheduleThe working capital estimate appears low (See Infrastructure andNon-Process Facilities) (See Mining)

Low toModerate

Possible Low toMedium

Operating CostsThe escalation factors for 2007 to 2011 may be inaccurate Low to

ModerateUnlikely toPossible

Low toMedium

Marketing and Sales (see Process, i.e., concentrates)TC/RC charges could be more than projected in the future Low to

ModerateUnlikely toPossible

Low toMedium

It may be difficult to market MoO3 due to quality Low Unlikely Low

Additional and updated risks developed in the ITR Update, as of October 2012, are provided inTable 4.6.

TABLE 4.6ADDITIONAL AND UPDATED RISKS DEVELOPED IN THE ITR UPDATE AS OF OCTOBER 2012

Issue Risk LikelihoodConsequence

Rating

Increased Lime Plant CAPEX Low to Moderate Likely LowSchedule Delays Caused by Lime Plant, Productivity Issues Low to Moderate Likely MediumTransportation Safety Risks Impacting Schedule and Costs Moderate Possible MediumSocial Protest in Delay of Project Low Unlikely LowAdditional Development Funds Required for CommunityDevelopment Low

Likely toPossible Low

Resettlement Issues with Morococha Low Unlikely LowRailroad Lands Low Unlikely LowMining Lands and Other Companies Low Unlikely LowElectrical Power Low Unlikely LowHighway Relocation Low Unlikely LowWater Rights Acquisition Low Unlikely Low

IV-42

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THIS WEB PROOF INFORMATION PACK IS IN DRAFT FORM. The information contained in it is incomplete and is subject to change. ThisWeb Proof Information Pack must be read in conjunction with the section headed “Warning” on the cover of this Web Proof Information Pack.

APPENDIX IV COMPETENT PERSON’S REPORT

5.0 REFERENCE MATERIAL

1) Chinalco and MCP, Peru, Personal Communications with staff members involving ProjectManagement, Construction, Process, Social, Environmental, Legal, Site Tour, ExecutiveManagement and Power.

2) Behre Dolbear Asia, Inc., Toromocho Project Independent Technical Review, April 2012.

IV-43

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THIS WEB PROOF INFORMATION PACK IS IN DRAFT FORM. The information contained in it is incomplete and is subject to change. ThisWeb Proof Information Pack must be read in conjunction with the section headed “Warning” on the cover of this Web Proof Information Pack.

APPENDIX IV COMPETENT PERSON’S REPORT

APPENDIX 1.0

CASH FLOW BALANCE SHEETS

IV-44

Page 349:  · 2013. 1. 16. · Hong Kong Exchanges and Clearing Limited, The Stock Exchange of Hong Kong Limited and the Securities and Futures Commission take no responsibility for the contents

THIS WEB PROOF INFORMATION PACK IS IN DRAFT FORM. The information contained in it is incomplete and is subject to change. ThisWeb Proof Information Pack must be read in conjunction with the section headed “Warning” on the cover of this Web Proof Information Pack.

APPENDIX IV COMPETENT PERSON’S REPORTEcono

mican

alysisof

China

lcoTorom

ocho

Cop

perProject,P

eru

Prepa

redby

Behre

Dolbear

&Co.

Octob

er29,2012

Upd

ated

cash

flow

projection

ofOctob

er29,2012;

metal

prices

averageof

variou

sforecasting

compa

nies;withcopp

ercostperpo

und

Pre-produ

ction

year

-3Pre-produ

ction

year

-2Pre-produ

ction

year

-1Produ

ction

year

+1Produ

ction

year

+2Produ

ction

year

+3Produ

ction

year

+4Produ

ction

year

+5Produ

ction

year

+6Produ

ction

year

+7

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

Produ

ction

Waste(tonnes)

.........................

00

43,893,000

31,961,000

37,253,000

38,839,000

38,789,000

32,871,000

27,475,000

19,297,000

Low

-grade

mill

materialstockpiled

(tonnes).............................

00

1,208,000

11,345,000

12,686,000

12,954,000

11,671,000

18,443,000

23,739,000

32,075,000

Higharsenicmaterialstockpiled(tonnes)

....

00

3,919,000

17,452,000

1,881,000

27,000

1,360,000

506,000

606,000

448,000

High-grademillingore(tonnes)

............

00

980,000

38,245,000

43,180,000

43,180,000

43,180,000

43,180,000

43,180,000

43,180,000

totalm

aterialm

oved

(tonnes)..............

00

50,000,000

99,003,000

95,000,000

95,000,000

95,000,000

95,000,000

95,000,000

95,000,000

High-gradeoreto

mill

(tonnes)

............

00

980,000

38,245,000

43,180,000

43,180,000

43,180,000

43,180,000

43,180,000

43,180,000

Low

-grade

oreto

mill

(tonnes)

............

00

00

00

00

00

totalo

reto

mill

(tonnes)

..................

00

980,000

38,245,000

43,180,000

43,180,000

43,180,000

43,180,000

43,180,000

43,180,000

High-grad

eore

copper

(%)............................

0.0000%

0.0000%

0.4835%

0.5860%

0.5950%

0.5950%

0.6250%

0.6090%

0.6180%

0.6050%

molybdenum

(%).......................

0.0000%

0.0000%

0.0981%

0.0124%

0.0160%

0.0200%

0.0210%

0.0110%

0.0170%

0.0160%

silver

(gramspertonne)

..................

0.000

0.000

11.800

7.429

7.338

7.533

6.455

9.901

7.193

7.232

Low

-grade

ore

copper

(%)............................

0.0000%

0.0000%

0.0000%

0.0000%

0.0000%

0.0000%

0.0000%

0.0000%

0.0000%

0.0000%

molybdenum

(%).......................

0.0000%

0.0000%

0.0000%

0.0000%

0.0000%

0.0000%

0.0000%

0.0000%

0.0000%

0.0000%

silver

(gramspertonne)

..................

00

00

00

00

00

containedmetal

copper

(tonnes)

.........................

00

4,738

224,116

256,921

256,921

269,875

262,966

266,852

261,239

molybdenum

(tonnes)....................

00

961

4,742

6,909

8,636

9,068

4,750

7,341

6,909

silver

(grams)

..........................

00

11,564,000

284,122,105

316,854,840

325,274,940

278,726,900

427,525,180

310,593,740

312,277,760

metallurgical

recovery

copper

(%)............................

0.00%

0.00%

85.00%

85.00%

85.00%

85.00%

85.00%

85.00%

85.00%

85.00%

molybdenum

(%).......................

0.00%

0.00%

65.00%

65.00%

65.00%

65.00%

65.00%

65.00%

65.00%

65.00%

silver

(%).............................

0.00%

0.00%

70.00%

70.00%

70.00%

70.00%

70.00%

70.00%

70.00%

70.00%

recoveredmetal

copper

(tonnes)

.........................

00

4,028

190,498

218,383

218,383

229,394

223,521

226,825

222,053

copper

(pounds)

........................

00

8,879,228

419,976,461

481,451,199

481,451,199

505,726,049

492,779,462

500,061,917

489,542,816

molybdenum

(tonnes)....................

00

625

3,083

4,491

5,613

5,894

3,087

4,771

4,491

molybdenum

(pounds)

...................

00

1,377,660

6,795,845

9,900,331

12,375,414

12,994,185

6,806,478

10,519,102

9,900,331

silver

(grams)

..........................

00

8,094,800

198,885,474

221,798,388

227,692,458

195,108,830

299,267,626

217,415,618

218,594,432

silver

(troyou

nces)......................

00

260,254

6,394,316

7,130,983

7,320,482

6,272,894

9,621,677

6,990,074

7,027,973

IV-45

Page 350:  · 2013. 1. 16. · Hong Kong Exchanges and Clearing Limited, The Stock Exchange of Hong Kong Limited and the Securities and Futures Commission take no responsibility for the contents

THIS WEB PROOF INFORMATION PACK IS IN DRAFT FORM. The information contained in it is incomplete and is subject to change. ThisWeb Proof Information Pack must be read in conjunction with the section headed “Warning” on the cover of this Web Proof Information Pack.

APPENDIX IV COMPETENT PERSON’S REPORTEcono

mican

alysisof

China

lcoTorom

ocho

Cop

perProject,P

eru

Prepa

redby

Behre

Dolbear

&Co.

Octob

er29,2012

Upd

ated

cash

flow

projection

ofOctob

er29,2012;

metal

prices

averageof

variou

sforecasting

compa

nies;withcopp

ercostperpo

und

Pre-produ

ction

year

-3Pre-produ

ction

year

-2Pre-produ

ction

year

-1Produ

ction

year

+1Produ

ction

year

+2Produ

ction

year

+3Produ

ction

year

+4Produ

ction

year

+5Produ

ction

year

+6Produ

ction

year

+7

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

copp

er/silv

erconcentrates

concentrate(dry

tonnes)..................

00

15,198

718,862

824,086

824,086

865,637

843,476

855,942

837,936

concentrate(w

ettonnes)

.................

9.00%

00

16,566

783,559

898,254

898,254

943,544

919,389

932,976

913,351

copper

gradeof

concentrate(%

)...........

26.50%

26.50%

26.50%

26.50%

26.50%

26.50%

26.50%

26.50%

26.50%

26.50%

silver

gradeof

concentrate(gramsper

tonne)

..............................

0.00

0.00

532.61

276.67

269.14

276.30

225.39

354.80

254.01

260.87

arsenicgradeof

concentrate(%

)...........

0.08%

0.08%

0.08%

0.08%

0.08%

0.08%

0.08%

0.08%

0.08%

0.08%

zinc

gradeof

concentrate(%

).............

9.00%

9.00%

9.00%

9.00%

9.00%

9.00%

9.00%

9.00%

9.00%

9.00%

molybdenum

chem

icalgradeoxide

(tonnes).............................

00

625

3,083

4,491

5,613

5,894

3,087

4,771

4,491

molybdenum

chem

icalgradeoxide

(pounds)

............................

00

1,377,660

6,795,845

9,900,331

12,375,414

12,994,185

6,806,478

10,519,102

9,900,331

IV-46

Page 351:  · 2013. 1. 16. · Hong Kong Exchanges and Clearing Limited, The Stock Exchange of Hong Kong Limited and the Securities and Futures Commission take no responsibility for the contents

THIS WEB PROOF INFORMATION PACK IS IN DRAFT FORM. The information contained in it is incomplete and is subject to change. ThisWeb Proof Information Pack must be read in conjunction with the section headed “Warning” on the cover of this Web Proof Information Pack.

APPENDIX IV COMPETENT PERSON’S REPORTEcono

mican

alysisof

China

lcoTorom

ocho

Cop

perProject,P

eru

Prepa

redby

Behre

Dolbear

&Co.

Octob

er29,2012

Upd

ated

cash

flow

projection

ofOctob

er29,2012;

metal

prices

averageof

variou

sforecastingcompa

nies;with

copp

ercostpe

rpo

und

Produ

ction

year

+8Produ

ction

year

+9Produ

ction

year

+10

Produ

ction

year

+11

Produ

ction

year

+12

Produ

ction

year

+13

Produ

ction

year

+14

Produ

ction

year

+15

Produ

ction

year

+16

Produ

ction

year

+17

Produ

ction

year

+18

2021

2022

2023

2024

2025

2026

2027

2028

2029

2030

2031

Produ

ction

Waste(tonnes)

...................

31,851,000

43,933,000

40,429,000

38,017,000

47,649,000

51,820,000

50,916,000

50,917,000

49,892,000

49,912,000

50,962,000

Low

-grade

mill

materialstockpiled

(tonnes)

.......................

19,932,000

6,048,000

10,901,000

13,782,000

4,171,000

0903,000

837,000

1,760,000

997,000

833,000

Higharsenicmaterialstockpiled

(tonnes)

.......................

37,000

1,839,000

480,000

21,000

00

066,000

167,000

911,000

25,000

High-grademillingore(tonnes)

......

43,180,000

43,180,000

43,180,000

43,180,000

43,180,000

43,180,000

43,180,000

43,180,000

43,180,000

43,180,000

43,180,000

totalm

aterialm

oved

(tonnes)

........

95,000,000

95,000,000

94,990,000

95,000,000

95,000,000

95,000,000

94,999,000

95,000,000

94,999,000

95,000,000

95,000,000

High-gradeoreto

mill

(tonnes)

......

43,180,000

43,180,000

43,180,000

43,180,000

43,180,000

43,180,000

43,180,000

43,180,000

43,180,000

43,180,000

43,180,000

Low

-grade

oreto

mill

(tonnes)

.......

00

00

00

00

00

0totalo

reto

mill

(tonnes)

............

43,180,000

43,180,000

43,180,000

43,180,000

43,180,000

43,180,000

43,180,000

43,180,000

43,180,000

43,180,000

43,180,000

High-grad

eore

copper

(%)......................

0.5880%

0.6050%

0.5840%

0.5610%

0.5510%

0.5330%

0.4680%

0.4470%

0.4820%

0.4570%

0.4850%

molybdenum

(%).................

0.0180%

0.0280%

0.0240%

0.0230%

0.0180%

0.0220%

0.0120%

0.0160%

0.0190%

0.0210%

0.0220%

silver

(gramspertonne)

............

6.494

5.377

5.843

6.804

8.105

7.144

8.571

6.367

6.668

5.193

8.057

Low

-grade

ore

copper

(%)......................

0.0000%

0.0000%

0.0000%

0.0000%

0.0000%

0.0000%

0.0000%

0.0000%

0.0000%

0.0000%

0.0000%

molybdenum

(%).................

0.0000%

0.0000%

0.0000%

0.0000%

0.0000%

0.0000%

0.0000%

0.0000%

0.0000%

0.0000%

0.0000%

silver

(gramspertonne)

............

00

00

00

00

00

0

containedmetal

copper

(tonnes)

...................

253,898

261,239

252,171

242,240

237,922

230,149

202,082

193,015

208,128

197,333

209,423

molybdenum

(tonnes)

..............

7,772

12,090

10,363

9,931

7,772

9,500

5,182

6,909

8,204

9,068

9,500

silver

(grams)

....................

280,410,920

232,178,860

252,300,740

293,796,720

349,973,900

308,477,92

0370,095,780

274,927,060

287,924,240

224,233,740

347,901,260

metallurgical

recovery

copper

(%)......................

85.00%

85.00%

85.00%

85.00%

85.00%

85.00%

85.00%

85.00%

85.00%

85.00%

85.00%

molybdenum

(%).................

65.00%

65.00%

65.00%

65.00%

65.00%

65.00%

65.00%

65.00%

65.00%

65.00%

65.00%

silver

(%).......................

70.00%

70.00%

70.00%

70.00%

70.00%

70.00%

70.00%

70.00%

70.00%

70.00%

70.00%

recoveredmetal

copper

(tonnes)

...................

215,814

222,053

214,346

205,904

202,234

195,627

171,770

164,062

176,908

167,733

178,010

copper

(pounds)

..................

475,787,067

489,542,816

472,550,420

453,939,702

445,848,085

431,283,17

5378,687,666

361,695,270

390,015,929

369,786,887

392,443,414

molybdenum

(tonnes)

..............

5,052

7,859

6,736

6,455

5,052

6,175

3,368

4,491

5,333

5,894

6,175

molybdenum

(pounds)

.............

11,137,873

17,325,579

14,850,497

14,231,726

11,137,873

13,612,955

7,425,248

9,900,331

11,756,643

12,994,185

13,612,955

silver

(grams)

....................

196,287,644

162,525,202

176,610,518

205,657,704

244,981,730

215,934,54

4259,067,046

192,448,942

201,546,968

156,963,618

243,530,882

silver

(troyou

nces)................

6,310,794

5,225,306

5,678,159

6,612,048

7,876,345

6,942,45

68,329,198

6,187,377

6,479,885

5,046,497

7,829,699

IV-47

Page 352:  · 2013. 1. 16. · Hong Kong Exchanges and Clearing Limited, The Stock Exchange of Hong Kong Limited and the Securities and Futures Commission take no responsibility for the contents

THIS WEB PROOF INFORMATION PACK IS IN DRAFT FORM. The information contained in it is incomplete and is subject to change. ThisWeb Proof Information Pack must be read in conjunction with the section headed “Warning” on the cover of this Web Proof Information Pack.

APPENDIX IV COMPETENT PERSON’S REPORTEcono

mican

alysisof

China

lcoTorom

ocho

Cop

perProject,P

eru

Prepa

redby

Behre

Dolbear

&Co.

Octob

er29,2012

Upd

ated

cash

flow

projection

ofOctob

er29,2012;

metal

prices

averageof

variou

sforecastingcompa

nies;with

copp

ercostpe

rpo

und

Produ

ction

year

+8Produ

ction

year

+9Produ

ction

year

+10

Produ

ction

year

+11

Produ

ction

year

+12

Produ

ction

year

+13

Produ

ction

year

+14

Produ

ction

year

+15

Produ

ction

year

+16

Produ

ction

year

+17

Produ

ction

year

+18

2021

2022

2023

2024

2025

2026

2027

2028

2029

2030

2031

copp

er/silv

erconcentrates

concentrate(dry

tonnes)............

814,391

837,936

808,851

776,996

763,145

738,215

648,189

619,103

667,579

632,954

671,734

concentrate(w

ettonnes)............

9.00%

887,686

913,351

881,648

846,925

831,828

804,654

706,526

674,823

727,661

689,919

732,190

copper

gradeof

concentrate(%

)......

26.50%

26.50%

26.50%

26.50%

26.50%

26.50%

26.50%

26.50%

26.50%

26.50%

26.50%

silver

gradeof

concentrate(gramsper

tonne)

........................

241.02

193.96

218.35

264.68

321.02

292.51

399.68

310.85

301.91

247.99

362.54

arsenicgradeof

concentrate(%

).....

0.08%

0.08%

0.08%

0.08%

0.08%

0.08%

0.08%

0.08%

0.08%

0.08%

0.08%

zinc

gradeof

concentrate(%

)........

9.00%

9.00%

9.00%

9.00%

9.00%

9.00%

9.00%

9.00%

9.00%

9.00%

9.00%

molybdenum

chem

icalgradeoxide

(tonnes)

.......................

5,052

7,859

6,736

6,455

5,052

6,175

3,368

4,491

5,333

5,894

6,175

molybdenum

chem

icalgradeoxide

(pounds)

......................

11,137,873

17,325,579

14,850,497

14,231,726

11,137,873

13,612,955

7,425,248

9,900,331

11,756,643

12,994,185

13,612,955

IV-48

Page 353:  · 2013. 1. 16. · Hong Kong Exchanges and Clearing Limited, The Stock Exchange of Hong Kong Limited and the Securities and Futures Commission take no responsibility for the contents

THIS WEB PROOF INFORMATION PACK IS IN DRAFT FORM. The information contained in it is incomplete and is subject to change. ThisWeb Proof Information Pack must be read in conjunction with the section headed “Warning” on the cover of this Web Proof Information Pack.

APPENDIX IV COMPETENT PERSON’S REPORTEcono

mican

alysisof

China

lcoTorom

ocho

Cop

perProject,P

eru

Prepa

redby

Behre

Dolbear

&Co.

Octob

er29,2012

Upd

ated

cash

flow

projection

ofOctob

er29,2012;

metal

prices

averageof

variou

sforecastingcompa

nies;with

copp

ercostpe

rpo

und

Produ

ction

year

+19

Produ

ction

year

+20

Produ

ction

year

+21

Produ

ction

year

+22

Produ

ction

year

+23

Produ

ction

year

+24

Produ

ction

year

+25

Produ

ction

year

+26

Produ

ction

year

+27

Produ

ction

year

+28

Produ

ction

year

+29

2032

2033

2034

2035

2036

2037

2038

2039

2040

2041

2042

Produ

ction

Waste(tonnes)

.....................

50,539,000

50,444,000

50,719,000

48,025,000

36,505,000

25,883,000

21,752,000

18,981,000

19,880,000

13,230,000

10,488,000

Low

-grade

mill

materialstockpiled

(tonnes)

.........................

1,281,000

1,376,000

1,101,000

00

00

00

00

Higharsenicmaterialstockpiled

(tonnes)

.........................

00

00

00

00

00

0High-grademillingore(tonnes)

........

43,180,000

43,180,000

43,180,000

43,180,000

43,180,000

43,180,000

43,180,000

43,180,000

43,180,000

43,180,000

43,180,000

totalm

aterialm

oved

(tonnes)

..........

95,000,000

95,000,000

95,000,000

91,205,000

79,685,000

69,063,000

64,932,000

62,161,000

63,060,000

56,410,000

53,668,000

High-gradeoreto

mill

(tonnes)

........

43,180,000

43,180,000

43,180,000

43,180,000

43,180,000

43,180,000

43,180,000

43,180,000

43,180,000

43,180,000

43,180,000

Low

-grade

oreto

mill

(tonnes)

.........

00

00

00

00

00

0totalo

reto

mill

(tonnes)

..............

43,180,000

43,180,000

43,180,000

43,180,000

43,180,000

43,180,000

43,180,000

43,180,000

43,180,000

43,180,000

43,180,000

High-grad

eore

copper

(%)........................

0.5410%

0.4690%

0.4070%

0.3400%

0.3880%

0.3770%

0.3740%

0.4020%

0.3990%

0.4420%

0.4240%

molybdenum

(%)...................

0.0250%

0.0290%

0.0300%

0.0270%

0.0100%

0.0110%

0.0130%

0.0160%

0.0180%

0.0220%

0.0250%

silver

(gramspertonne)

..............

7.562

6.562

6.057

9.183

6.057

6.435

5.766

5.474

4.979

7.270

7.581

Low

-grade

ore

copper

(%)........................

0.0000%

0.0000%

0.0000%

0.0000%

0.0000%

0.0000%

0.0000%

0.0000%

0.0000%

0.0000%

0.0000%

molybdenum

(%)...................

0.0000%

0.0000%

0.0000%

0.0000%

0.0000%

0.0000%

0.0000%

0.0000%

0.0000%

0.0000%

0.0000%

silver

(gramspertonne)

..............

00

00

00

00

00

0

containedmetal

copper

(tonnes)

.....................

233,604

202,514

175,743

146,812

167,538

162,789

161,493

173,584

172,288

190,856

183,083

molybdenum

(tonnes)

................

10,795

12,522

12,954

11,659

4,318

4,750

5,613

6,909

7,772

9,500

10,795

silver

(grams)

......................

326,527,160

283,347,160

261,541,260

396,521,940

261,541,260

277,863,30

0248,975,880

236,367,320

214,993,220

313,918,600

327,347,580

metallurgical

recovery

copper

(%)........................

85.00%

85.00%

85.00%

85.00%

85.00%

85.00%

85.00%

85.00%

85.00%

85.00%

85.00%

molybdenum

(%)...................

65.00%

65.00%

65.00%

65.00%

65.00%

65.00%

65.00%

65.00%

65.00%

65.00%

65.00%

silver

(%).........................

70.00%

70.00%

70.00%

70.00%

70.00%

70.00%

70.00%

70.00%

70.00%

70.00%

70.00%

recoveredmetal

copper

(tonnes)

.....................

198,563

172,137

149,381

124,790

142,408

138,370

137,269

147,546

146,445

162,227

155,621

copper

(pounds)

....................

437,756,468

379,496,827

329,328,803

275,114,971

313,954,731

305,053,95

3302,626,468

325,282,995

322,855,510

357,649,462

343,084,552

molybdenum

(tonnes)

................

7,017

8,139

8,420

7,578

2,807

3,087

3,649

4,491

5,052

6,175

7,017

molybdenum

(pounds)

...............

15,469,267

17,944,350

18,563,121

16,706,809

6,187,707

6,806,47

88,044,019

9,900,331

11,137,873

13,612,955

15,469,267

silver

(grams)

......................

228,569,012

198,343,012

183,078,882

277,565,358

183,078,882

194,504,31

0174,283,116

165,457,124

150,495,254

219,743,020

229,143,306

silver

(troyou

nces)..................

7,348,664

6,376,875

5,886,122

8,923,933

5,886,122

6,253,458

5,603,332

5,319,570

4,838,534

7,064,901

7,367,128

IV-49

Page 354:  · 2013. 1. 16. · Hong Kong Exchanges and Clearing Limited, The Stock Exchange of Hong Kong Limited and the Securities and Futures Commission take no responsibility for the contents

THIS WEB PROOF INFORMATION PACK IS IN DRAFT FORM. The information contained in it is incomplete and is subject to change. ThisWeb Proof Information Pack must be read in conjunction with the section headed “Warning” on the cover of this Web Proof Information Pack.

APPENDIX IV COMPETENT PERSON’S REPORTEcono

mican

alysisof

China

lcoTorom

ocho

Cop

perProject,P

eru

Prepa

redby

Behre

Dolbear

&Co.

Octob

er29,2012

Upd

ated

cash

flow

projection

ofOctob

er29,2012;

metal

prices

averageof

variou

sforecastingcompa

nies;with

copp

ercostpe

rpo

und

Produ

ction

year

+19

Produ

ction

year

+20

Produ

ction

year

+21

Produ

ction

year

+22

Produ

ction

year

+23

Produ

ction

year

+24

Produ

ction

year

+25

Produ

ction

year

+26

Produ

ction

year

+27

Produ

ction

year

+28

Produ

ction

year

+29

2032

2033

2034

2035

2036

2037

2038

2039

2040

2041

2042

copp

er/silv

erconcentrates

concentrate(dry

tonnes)..............

749,295

649,574

563,703

470,906

537,387

522,152

517,997

556,778

552,623

612,178

587,248

concentrate(w

ettonnes)..............

9.00%

816,732

708,035

614,436

513,288

585,752

569,146

564,617

606,888

602,359

667,274

640,100

copper

gradeof

concentrate(%

)........

26.50%

26.50%

26.50%

26.50%

26.50%

26.50%

26.50%

26.50%

26.50%

26.50%

26.50%

silver

gradeof

concentrate(gramsper

tonne)

..........................

305.05

305.34

324.78

589.43

340.68

372.51

336.46

297.17

272.33

358.95

390.20

arsenicgradeof

concentrate(%

).......

0.08%

0.08%

0.08%

0.08%

0.08%

0.08%

0.08%

0.08%

0.08%

0.08%

0.08%

zinc

gradeof

concentrate(%

)..........

9.00%

9.00%

9.00%

9.00%

9.00%

9.00%

9.00%

9.00%

9.00%

9.00%

9.00%

molybdenum

chem

icalgradeoxide

(tonnes)

.........................

7,017

8,139

8,420

7,578

2,807

3,087

3,649

4,491

5,052

6,175

7,017

molybdenum

chem

icalgradeoxide

(pounds)

........................

15,469,267

17,944,350

18,563,121

16,706,809

6,187,707

6,806,47

88,044,019

9,900,331

11,137,873

13,612,955

15,469,267

IV-50

Page 355:  · 2013. 1. 16. · Hong Kong Exchanges and Clearing Limited, The Stock Exchange of Hong Kong Limited and the Securities and Futures Commission take no responsibility for the contents

THIS WEB PROOF INFORMATION PACK IS IN DRAFT FORM. The information contained in it is incomplete and is subject to change. ThisWeb Proof Information Pack must be read in conjunction with the section headed “Warning” on the cover of this Web Proof Information Pack.

APPENDIX IV COMPETENT PERSON’S REPORTEcono

mican

alysisof

China

lcoTorom

ocho

Cop

perProject,P

eru

Prepa

redby

Behre

Dolbear

&Co.

Octob

er29,2012

Upd

ated

cash

flow

projection

ofOctob

er29,2012;

metal

prices

averageof

variou

sforecastingcompa

nies;withcopp

ercostperpo

und

Produ

ction

year

+30

Produ

ction

year

+31

Produ

ction

year

+32

Produ

ction

year

+33

Produ

ction

year

+34

Produ

ction

year

+35

Produ

ction

year

+36

Produ

ction

year

+37

Produ

ction

year

+38

Produ

ction

year

+39

Produ

ction

year

+40

Total

2043

2044

2045

2046

2047

2048

2049

2050

2051

2052

2053

Produ

ction

Waste(tonnes)

...........................

9,652,000

14,187,000

14,432,000

1,161,393,000

Low

-grade

mill

materialstockpiled(tonnes)

....

00

00

00

00

00

0188,043,000

Higharsenicmaterialstockpiled(tonnes)

......

00

00

00

00

00

029,745,000

High-grademillingore(tonnes)

..............

43,180,000

43,180,000

17,715,000

1,352,340,000

totalm

aterialm

oved

(tonnes)

................

52,832,000

57,367,000

32,147,000

00

00

00

00

2,731,521,000

High-gradeoreto

mill

(tonnes)

..............

43,180,000

43,180,000

17,715,000

00

00

00

00

1,352,340,000

Low

-grade

oreto

mill

(tonnes)

...............

00

25,465,000

43,180,000

43,180,000

43,180,000

33,038,000

00

00

188,043,000

totalo

reto

mill

(tonnes)

....................

43,180,000

43,180,000

43,180,000

43,180,000

43,180,000

43,180,000

33,038,000

00

00

1,540,383,000

High-grad

eore

copper

(%)

..............................

0.3720%

0.2810%

0.1660%

0.0000%

0.0000%

0.0000%

0.0000%

0.0000%

0.0000%

0.0000%

0.0000%

molybdenum

(%).........................

0.0290%

0.0330%

0.0400%

0.0000%

0.0000%

0.0000%

0.0000%

0.0000%

0.0000%

0.0000%

0.0000%

silver

(gramspertonne)

....................

6.232

9.872

6.833

00

00

00

00

Low

-grade

ore

copper

(%)

..............................

0.0000%

0.0000%

0.3660%

0.3660%

0.3660%

0.3660%

0.3660%

0.0000%

0.0000%

0.0000%

0.0000%

molybdenum

(%).........................

0.0000%

0.0000%

0.0080%

0.0080%

0.0080%

0.0080%

0.0080%

0.0000%

0.0000%

0.0000%

0.0000%

silver

(gramspertonne)

....................

00

5.877

5.877

5.877

5.877

5.877

00

00

containedmetal

copper

(tonnes)

...........................

160,630

121,336

122,609

158,039

158,039

158,039

120,919

00

00

7,261,141

molybdenum

(tonnes)

......................

12,522

14,249

9,123

3,454

3,454

3,454

2,643

00

00

292,095

silver

(grams)

............................

269,097,760

426,272,960

270,704,400

253,768,860

253,768,860

253,768,860

194,164,326

00

00

10,559,651,311

metallurgical

recovery

copper

(%)

..............................

85.00%

85.00%

85.00%

85.00%

85.00%

85.00%

85.00%

0.00%

0.00%

0.00%

0.00%

molybdenum

(%).........................

65.00%

65.00%

65.00%

65.00%

65.00%

65.00%

65.00%

0.00%

0.00%

0.00%

0.00%

silver

(%)

...............................

70.00%

70.00%

70.00%

70.00%

70.00%

70.00%

70.00%

0.00%

0.00%

0.00%

0.00%

recoveredmetal

copper

(tonnes)

...........................

136,535

103,135

104,217

134,333

134,333

134,333

102,781

00

00

6,171,970

copper

(pounds)

..........................

301,008,144

227,374,432

229,759,941

296,153,174

296,153,174

296,153,174

226,593,529

00

00

13,606,849,070

molybdenum

(tonnes)

......................

8,139

9,262

5,930

2,245

2,245

2,245

1,718

00

00

189,862

molybdenum

(pounds)

.....................

17,944,350

20,419,433

13,073,573

4,950,166

4,950,166

4,950,166

3,787,484

00

00

418,572,725

silver

(grams)

............................

188,368,432

298,391,072

189,493,080

177,638,202

177,638,202

177,638,202

135,915,028

00

00

7,391,755,918

silver

(troyounces)........................

6,056,185

9,593,495

6,092,343

5,711,200

5,711,200

5,711,200

4,369,769

00

00

237,650,447

IV-51

Page 356:  · 2013. 1. 16. · Hong Kong Exchanges and Clearing Limited, The Stock Exchange of Hong Kong Limited and the Securities and Futures Commission take no responsibility for the contents

THIS WEB PROOF INFORMATION PACK IS IN DRAFT FORM. The information contained in it is incomplete and is subject to change. ThisWeb Proof Information Pack must be read in conjunction with the section headed “Warning” on the cover of this Web Proof Information Pack.

APPENDIX IV COMPETENT PERSON’S REPORTEcono

mican

alysisof

China

lcoTorom

ocho

Cop

per

Project,P

eru

Prepa

redby

Behre

Dolbear

&Co.

Octob

er29,2012

Upd

ated

cash

flow

projection

ofOctob

er29,2012;

metal

prices

averageof

variou

sforecasting

compa

nies;withcopp

ercost

perpo

und

Produ

ction

year

+30

Produ

ction

year

+31

Produ

ction

year

+32

Produ

ction

year

+33

Produ

ction

year

+34

Produ

ction

year

+35

Produ

ction

year

+36

Produ

ction

year

+37

Produ

ction

year

+38

Produ

ction

year

+39

Produ

ction

year

+40

Total

2043

2044

2045

2046

2047

2048

2049

2050

2051

2052

2053

copp

er/silv

erconcentrates

concentrate(dry

tonnes)....................

515,227

389,190

393,274

506,917

506,917

506,917

387,854

00

00

23,290,454

concentrate(w

ettonnes)....................

9.00%

561,597

424,217

428,668

552,539

552,539

552,539

422,760

00

00

25,386,595

copper

gradeof

concentrate(%

)..............

26.50%

26.50%

26.50%

26.50%

26.50%

26.50%

26.50%

26.50%

26.50%

26.50%

26.50%

silver

gradeof

concentrate(gramspertonne)

...

365.60

766.70

481.84

350.43

350.43

350.43

350.43

0.00

0.00

0.00

0.00

arsenicgradeof

concentrate(%

).............

0.08%

0.08%

0.08%

0.08%

0.08%

0.08%

0.08%

0.08%

0.08%

0.08%

0.08%

zinc

gradeof

concentrate(%

)................

9.00%

9.00%

9.00%

9.00%

9.00%

9.00%

9.00%

9.00%

9.00%

9.00%

9.00%

molybdenum

chem

icalgradeoxide(tonnes)

....

8,139

9,262

5,930

2,245

2,245

2,245

1,718

00

00

189,862

molybdenum

chem

icalgradeoxide(pounds)....

17,944,350

20,419,433

13,073,573

4,950,166

4,950,166

4,950,166

3,787,484

00

00

418,572,725

IV-52

Page 357:  · 2013. 1. 16. · Hong Kong Exchanges and Clearing Limited, The Stock Exchange of Hong Kong Limited and the Securities and Futures Commission take no responsibility for the contents

THIS WEB PROOF INFORMATION PACK IS IN DRAFT FORM. The information contained in it is incomplete and is subject to change. ThisWeb Proof Information Pack must be read in conjunction with the section headed “Warning” on the cover of this Web Proof Information Pack.

APPENDIX IV COMPETENT PERSON’S REPORTEcono

mican

alysisof

China

lcoTorom

ocho

Cop

per

Project,P

eru

Prepa

redby

Behre

Dolbear

&Co.

Octob

er29,2012

Upd

ated

cash

flow

projection

ofOctob

er29,2012;

metal

prices

averageof

variou

sforecasting

compa

nies;withcopp

ercostper

poun

dPre-produ

ction

year

-3Pre-produ

ction

year

-2Pre-produ

ction

year

-1Produ

ction

year

+1Produ

ction

year

+2Produ

ction

year

+3Produ

ction

year

+4Produ

ction

year

+5Produ

ction

year

+6Produ

ction

year

+7

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

metal

prices

[CONSE

NSU

SOFBROKERS

OCTOBER2012]

copper

(USdollarsperlb).................

$4.37

$3.62

$3.71

$3.65

$3.46

$3.43

$2.74

$2.74

$2.74

$2.74

silver

(USdollarspertroy

ounce)

...........

$24.18

$31.50

$34.10

$31.50

$27.80

$25.90

$22.40

$22.40

$22.40

$22.40

molybdenum

tech

oxide(U

Sdollarsperlb)...

$16.64

$13.73

$14.86

$15.93

$15.10

$14.33

$14.25

$14.25

$14.25

$14.25

chem

icalgradeoxideprem

ium

.............

10.00%

$1.66

$1.37

$1.49

$1.59

$1.51

$1.43

$1.43

$1.43

$1.43

$1.43

molychem

icalgradeprice(U

Sdollarper

lb)

.................................

$18.30

$15.10

$16.34

$17.52

$16.61

$15.77

$15.68

$15.68

$15.68

$15.68

incomefrom

sales[D

ATAFROM

E-M

AIL

OF10/24/2012

FORTREATMENT

CHARGE,P

ENALTIE

S,ANDOCEAN

FREIG

HT,O

THERWISE,D

ATAAS

PREVIO

USL

YUSE

D]

copper

paym

ent.........................

97.50%

$0

$0

$32,157,107

$1,494,059,470

$1,626,308,003

$1,610,338,757

$1,350,676,135

$1,316,098,826

$1,335,548,562

$1,307,454,499

silver

paym

ent..........................

95.00%

$0

$0

$8,430,923

$191,349,900

$188,329,262

$180,120,454

$133,487,182

$204,749,278

$148,748,769

$149,555,275

molybdenum

oxidepaym

ent...............

100.00%

$0

$0

$22,514,664

$119,071,392

$164,445,676

$195,121,784

$203,684,913

$106,692,098

$164,887,787

$155,188,505

totalp

ayment...........................

$0

$0

$63,102,694

$1,804,480,763

$1,979,082,941

$1,985,580,995

$1,687,848,230

$1,627,540,202

$1,649,185,118

$1,612,198,279

treatm

entcharge(U

S$perdrytonnecons)....

$65.00

$0

$0

$987,891

$46,726,009

$53,565,605

$53,565,605

$56,266,392

$54,825,972

$55,636,208

$54,465,867

refining

charge

perlb

copper

..............

$0.070

$0

$0

$621,546

$29,398,352

$33,701,584

$33,701,584

$35,400,823

$34,494,562

$35,004,334

$34,267,997

refining

charge

perouncesilver

............

$0.400

$0

$0

$104,102

$2,557,726

$2,852,393

$2,928,193

$2,509,158

$3,848,671

$2,796,029

$2,811,189

arsenicpena

lty

penalty

perincrem

ent................

$2.00

increm

ent..........................

0.10%

penalty

............................

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

zinc

pena

lty

penalty

perincrem

ent................

$1.00

increm

ent..........................

1.00%

penalty

............................

$0

$0

$75,992

$3,594,308

$4,120,431

$4,120,431

$4,328,184

$4,217,382

$4,279,708

$4,189,682

subtotal,treatmentand

penalties

............

$0

$0

$1,789,530

$82,276,396

$94,240,013

$94,315,812

$98,504,556

$97,386,587

$97,716,280

$95,734,736

transportand

handlin

gcopper

cons,railtoport,p

erwettonne.......$

17.90

$0

$0

$296,534

$14,025,710

$16,078,746

$16,078,746

$16,889,439

$16,457,070

$16,700,278

$16,348,977

porthandlin

g&

loading,perwettonne.......$

7.80

$0

$0

$129,216

$6,111,762

$7,006,381

$7,006,381

$7,359,644

$7,171,237

$7,277,216

$7,124,135

insurance,perdrytonne

..................

$0.74

$0

$0

$11,247

$531,958

$609,824

$609,824

$640,571

$624,173

$633,397

$620,073

oceanfreight,perwettonne

...............$

50.00

$0

$0

$828,308

$39,177,962

$44,912,699

$44,912,699

$47,177,205

$45,969,469

$46,648,820

$45,667,535

supervision&

assaying,per

drytonne

.......$

0.35

$0

$0

$5,319

$251,602

$288,430

$288,430

$302,973

$295,217

$299,580

$293,278

molyoxide,railto

port,p

ertonne...........$

17.90

$0

$0

$11,186

$55,178

$80,384

$100,480

$105,504

$55,264

$85,408

$80,384

porthandlin

g&

loading,pertonne..........

$7.80

$0

$0

$4,874

$24,044

$35,028

$43,785

$45,974

$24,081

$37,217

$35,028

insurance,of

netp

ayable

..................

0.00083

$0

$0

$18,687

$98,829

$136,490

$161,951

$169,058

$88,554

$136,857

$128,806

oceanfreight,pertonne...................$

50.00

$0

$0

$31,245

$154,127

$224,536

$280,670

$294,704

$154,369

$238,570

$224,536

subtotal,transportandhandlin

g............

$0

$0

$1,336,617

$60,431,171

$69,372,518

$69,482,966

$72,985,072

$70,839,433

$72,057,342

$70,522,752

netsmelterreturn

........................

$0

$0

$59,976,547

$1,661,773,196

$1,815,470,409

$1,821,782,216

$1,516,358,602

$1,459,314,181

$1,479,411,496

$1,445,940,792

IV-53

Page 358:  · 2013. 1. 16. · Hong Kong Exchanges and Clearing Limited, The Stock Exchange of Hong Kong Limited and the Securities and Futures Commission take no responsibility for the contents

THIS WEB PROOF INFORMATION PACK IS IN DRAFT FORM. The information contained in it is incomplete and is subject to change. ThisWeb Proof Information Pack must be read in conjunction with the section headed “Warning” on the cover of this Web Proof Information Pack.

APPENDIX IV COMPETENT PERSON’S REPORTEcono

mican

alysisof

China

lcoTorom

ocho

Cop

per

Project,P

eru

Prepa

redby

Behre

Dolbear

&Co.

Octob

er29,2012

Upd

ated

cash

flow

projection

ofOctob

er29,2012;

metal

prices

averageof

variou

sforecasting

compa

nies;withcopp

ercost

perpo

und

Produ

ction

year

+8Produ

ction

year

+9Produ

ction

year

+10

Produ

ction

year

+11

Produ

ction

year

+12

Produ

ction

year

+13

Produ

ction

year

+14

Produ

ction

year

+15

Produ

ction

year

+16

Produ

ction

year

+17

Produ

ction

year

+18

2021

2022

2023

2024

2025

2026

2027

2028

2029

2030

2031

metal

prices

[CONSE

NSU

SOF

BROKERSOCTOBER2012]

copper

(USdo

llarsperlb)...........

$2.74

$2.74

$2.74

$2.74

$2.74

$2.74

$2.74

$2.74

$2.74

$2.74

$2.74

silver

(USdollarspertroy

ounce)

.....

$22.40$

22.40$

22.40$

22.40$

22.40$

22.40$

22.40$

22.40$

22.40$

22.40$

22.40

molybdenum

tech

oxide(U

Sdollars

perlb)....

....................

$14.25$

14.25$

14.25$

14.25$

14.25$

14.25$

14.25$

14.25$

14.25$

14.25$

14.25

chem

icalgradeoxideprem

ium

.......

10.00%

$1.43

$1.43

$1.43

$1.43

$1.43

$1.43

$1.43

$1.43

$1.43

$1.43

$1.43

molychem

icalgradeprice(U

Sdollar

perlb)........................

$15.68$

15.68$

15.68$

15.68$

15.68$

15.68$

15.68$

15.68$

15.68$

15.68$

15.68

incomefrom

sales[D

ATAFROM

E-M

AIL

OF10/24/2012

FOR

TREATMENTCHARGE,

PENALTIE

S,ANDOCEAN

FREIG

HT,O

THERWISE,D

ATA

ASPREVIO

USL

YUSE

D]

copper

paym

ent...................

97.50%

$1,270

,716,108

$1,307,454,499

$1,262,071,780

$1,212,366,899

$1,190,756,080

$1,151,856,608

$1,011,386,290

$966,003,572$1,041,641,435

$987,614,390$1,048,124,681

silver

paym

ent....................

95.00%

$134,293,689$

111,194,513$

120,831,232$

140,704,382$

167,608,615$

147,735,465$

177,245,335$

131,667,372$

137,891,949$

107,389,456$

166,615,992

molybdenum

oxidepaym

ent.........

100.00%

$174,587,069$

271,579,885$

232,782,758$

223,083,477$

174,587,069$

213,384,195$

116,391,379$

155,188,505$

184,286,350$

203,684,913$

213,384,195

totalp

ayment.....................

$1,579,596,865

$1,690,228,896

$1,615,685,771

$1,576,154,758

$1,532,951,764

$1,512,976,268

$1,305,023,004

$1,252,859,450

$1,363,819,734

$1,298,688,759

$1,428,124,867

treatm

entcharge(U

S$perdrytonne

cons).........................

$65.00

$52,935,421

$54,465,867

$52,575,316

$50,504,713

$49,604,451

$47,983,979

$42,132,274

$40,241,723

$43,392,641

$41,141,985

$43,662,720

refining

charge

perlb

copper

........

$0.070

$33,305,095

$34,267,997

$33,078,529

$31,775,779

$31,209,366

$30,189,822

$26,508,137

$25,318,669

$27,301,115

$25,885,082

$27,471,039

refining

charge

perouncesilver

......

$0.400

$2,524,317$

2,090,122$

2,271,264$

2,644,819$

3,150,538$

2,776,982$

3,331,679$

2,474,951$

2,591,954$

2,018,599$

3,131,880

arsenicpena

lty

penalty

perincrem

ent..........

$2.00

increm

ent.

...................

0.10%

penalty

......................

$0$

0$

0$

0$

0$

0$

0$

0$

0$

0$

0zinc

pena

lty

penalty

perincrem

ent..........

$1.00

increm

ent.

...................

1.00%

penalty

......................

$4,071,955$

4,189,682$

4,044,255$

3,884,978$

3,815,727$

3,691,075$

3,240,944$

3,095,517$

3,337,895$

3,164,768$

3,358,671

subtotal,treatmentand

penalties

......

$92,836,789

$95,013,669

$91,969,365

$88,810,289

$87,780,082

$84,641,859

$75,213,034

$71,130,860

$76,623,606

$72,210,434

$77,624,309

transportand

handlin

gcopper

cons,railtoport,p

erwet

tonne.........................

$17.90

$15,889,585

$16,348,977

$15,781,492

$15,159,961

$14,889,730

$14,403,314

$12,646,812

$12,079,327

$13,025,136

$12,349,558

$13,106,205

porthandlin

g&

loading,perwet

tonne.........................

$7.80

$6,923,953$

7,124,135$

6,876,851$

6,606,016$

6,488,262$

6,276,304$

5,510,901$

5,263,617$

5,675,757$

5,381,372$

5,711,084

insurance,perdrytonne

............

$0.74

$602,649$

620,073$

598,550$

574,977$

564,728$

546,279$

479,660$

458,137$

494,009$

468,386$

497,083

oceanfreight,perwettonne

.........

$50.00

$44,384,315

$45,667,535

$44,082,381

$42,346,259

$41,591,424

$40,232,721

$35,326,291

$33,741,137

$36,383,061

$34,495,972

$36,609,511

supervision&

assaying,per

dry

tonne.........................

$0.35

$285,037$

293,278$

283,098$

271,948$

267,101$

258,375$

226,866$

216,686$

233,653$

221,534$

235,107

IV-54

Page 359:  · 2013. 1. 16. · Hong Kong Exchanges and Clearing Limited, The Stock Exchange of Hong Kong Limited and the Securities and Futures Commission take no responsibility for the contents

THIS WEB PROOF INFORMATION PACK IS IN DRAFT FORM. The information contained in it is incomplete and is subject to change. ThisWeb Proof Information Pack must be read in conjunction with the section headed “Warning” on the cover of this Web Proof Information Pack.

APPENDIX IV COMPETENT PERSON’S REPORTEcono

mican

alysisof

China

lcoTorom

ocho

Cop

per

Project,P

eru

Prepa

redby

Behre

Dolbear

&Co.

Octob

er29,2012

Upd

ated

cash

flow

projection

ofOctob

er29,2012;

metal

prices

averageof

variou

sforecasting

compa

nies;withcopp

ercost

perpo

und

Produ

ction

year

+8Produ

ction

year

+9Produ

ction

year

+10

Produ

ction

year

+11

Produ

ction

year

+12

Produ

ction

year

+13

Produ

ction

year

+14

Produ

ction

year

+15

Produ

ction

year

+16

Produ

ction

year

+17

Produ

ction

year

+18

2021

2022

2023

2024

2025

2026

2027

2028

2029

2030

2031

molyoxide,railto

port,p

ertonne.....$

17.90

$90,432

$140,672$

120,576$

115,552$

90,432

$110,528$

60,288

$80,384

$95,456

$105,504$

110,528

porthandlin

g&

loading,pertonne....

$7.80

$39,406

$61,298

$52,541

$50,352

$39,406

$48,163

$26,271

$35,028

$41,595

$45,974

$48,163

insurance,of

netp

ayable............

0.00083

$144,907$

225,411$

193,210$

185,159$

144,907$

177,109$

96,605

$128,806$

152,958$

169,058$

177,109

oceanfreight,pertonne.............$

50.00

$252,603$

392,938$

336,804$

322,771$

252,603$

308,737$

168,402$

224,536$

266,637$

294,704$

308,737

subtotal,transportandhandlin

g......

$68,612,887

$70,874,318

$68,325,503

$65,632,996

$64,328,593

$62,361,530

$54,542,096

$52,227,658

$56,368,260

$53,532,061

$56,803,527

netsmelterreturn

.................

$1,418,147,190

$1,524,340,910

$1,455,390,904

$1,421,711,473

$1,380,843,090

$1,365,972,880

$1,175,267,874

$1,129,500,931

$1,230,827,869

$1,172,946,263

$1,293,697,031

IV-55

Page 360:  · 2013. 1. 16. · Hong Kong Exchanges and Clearing Limited, The Stock Exchange of Hong Kong Limited and the Securities and Futures Commission take no responsibility for the contents

THIS WEB PROOF INFORMATION PACK IS IN DRAFT FORM. The information contained in it is incomplete and is subject to change. ThisWeb Proof Information Pack must be read in conjunction with the section headed “Warning” on the cover of this Web Proof Information Pack.

APPENDIX IV COMPETENT PERSON’S REPORTEcono

mican

alysisof

China

lcoTorom

ocho

Cop

per

Project,P

eru

Prepa

redby

Behre

Dolbear

&Co.

Octob

er29,2012

Upd

ated

cash

flow

projection

ofOctob

er29,2012;

metal

prices

average

ofvariou

sforecastingcompa

nies;with

copp

ercostpe

rpo

und

Produ

ction

year

+19

Produ

ction

year

+20

Produ

ction

year

+21

Produ

ction

year

+22

Produ

ction

year

+23

Produ

ction

year

+24

Produ

ction

year

+25

Produ

ction

year

+26

Produ

ction

year

+27

Produ

ction

year

+28

Produ

ction

year

+29

2032

2033

2034

2035

2036

2037

2038

2039

2040

2041

2042

metal

prices

[CONSE

NSU

SOF

BROKERSOCTOBER2012]

copper

(USdo

llarsperlb)............

$2.74

$2.74

$2.74

$2.74

$2.74

$2.74

$2.74

$2.74

$2.74

$2.74

$2.74

silver

(USdollarspertroy

ounce)

......

$22.40$

22.40$

22.40$

22.40$

22.40$

22.40$

22.40$

22.40$

22.40$

22.40$

22.40

molybdenum

tech

oxide(U

Sdollars

perlb)..........................

$14.25$

14.25$

14.25$

14.25$

14.25$

14.25$

14.25$

14.25$

14.25$

14.25$

14.25

chem

icalgradeoxideprem

ium

........

10.00%

$1.43

$1.43

$1.43

$1.43

$1.43

$1.43

$1.43

$1.43

$1.43

$1.43

$1.43

molychem

icalgradeprice(U

Sdollarper

lb)......

.......................

$15.68$

15.68$

15.68$

15.68$

15.68$

15.68$

15.68$

15.68$

15.68$

15.68$

15.68

incomefrom

sales[D

ATAFROM

E-M

AIL

OF10/24/2012

FOR

TREATMENTCHARGE,

PENALTIE

S,ANDOCEAN

FREIG

HT,O

THERWISE,D

ATA

ASPREVIO

USL

YUSE

D]

copper

paym

ent....................

97.50%

$1,169,145,262

$1,013,547,372

$879,560,299$

734,767,817$

838,499,745$

814,727,845$

808,244,599$

868,754,890$

862,271,644$

955,198,163$

916,298,690

silver

paym

ent.....................

95.00%

$15

6,379,562$

135,699,905$

125,256,679$

189,901,285$

125,256,679$

133,073,589$

119,238,899$

113,200,439$

102,964,009$

150,341,102$

156,772,475

molybdenum

oxidepaym

ent..........

100.00%

$24

2,482,040$

281,279,166$

290,978,448$

261,880,603$

96,992,816

$106,692,098$

126,090,661$

155,188,505$

174,587,069$

213,384,195$

242,482,040

totalp

ayment......................

$1,568,006,864

$1,430,526,443

$1,295,795,426

$1,186,549,705

$1,060,749,239

$1,054,493,531

$1,053,574,159

$1,137,143,835

$1,139,822,722

$1,318,923,460

$1,315,553,205

treatm

entcharge(U

S$perdrytonne

cons)...........................

$65.00

$48,704,188

$42,222,300

$36,640,674

$30,608,917

$34,930,176

$33,939,887

$33,669,809

$36,190,543

$35,920,464

$39,791,592

$38,171,120

refining

charge

perlb

copper

..........

$0.070

$30,642,953

$26,564,778

$23,053,016

$19,258,048

$21,976,831

$21,353,777

$21,183,853

$22,769,810

$22,599,886

$25,035,462

$24,015,919

refining

charge

perouncesilver

........

$0.400

$2,939,465$

2,550,750$

2,354,449$

3,569,573$

2,354,449$

2,501,383$

2,241,333$

2,127,828$

1,935,414$

2,825,961$

2,946,851

arsenicpena

lty

penalty

perincrem

ent............

$2.00

increm

ent.....................

0.10%

penalty

.......................

$0$

0$

0$

0$

0$

0$

0$

0$

0$

0$

0zinc

pena

lty

penalty

perincrem

ent............

$1.00

increm

ent.....................

1.00%

penalty

.......................

$3,746,476$

3,247,869$

2,818,513$

2,354,532$

2,686,937$

2,610,761$

2,589,985$

2,783,888$

2,763,113$

3,060,892$

2,936,240

subtotal,treatmentand

penalties

.......

$86,033,083

$74,585,697

$64,866,653

$55,791,070

$61,948,392

$60,405,808

$59,684,979

$63,872,068

$63,218,876

$70,713,907

$68,070,130

transportand

handlin

gcopper

cons,railtoport,p

erwettonne

..$17.90

$14,619,499

$12,673,835

$10,998,403

$9,187,855$

10,484,964

$10,187,710

$10,106,641

$10,863,287

$10,782,218

$11,944,212

$11,457,796

porthandlin

g&

loading,perwettonne..

$7.80

$6,370,508$

5,522,677$

4,792,600$

4,003,646$

4,568,867$

4,439,337$

4,404,011$

4,733,723$

4,698,39

7$

5,204,740$

4,992,782

IV-56

Page 361:  · 2013. 1. 16. · Hong Kong Exchanges and Clearing Limited, The Stock Exchange of Hong Kong Limited and the Securities and Futures Commission take no responsibility for the contents

THIS WEB PROOF INFORMATION PACK IS IN DRAFT FORM. The information contained in it is incomplete and is subject to change. ThisWeb Proof Information Pack must be read in conjunction with the section headed “Warning” on the cover of this Web Proof Information Pack.

APPENDIX IV COMPETENT PERSON’S REPORTEcono

mican

alysisof

China

lcoTorom

ocho

Cop

perProject,

PeruPrepa

redby

Behre

Dolbear

&Co.

Octob

er29,2012

Upd

ated

cash

flow

projection

ofOctob

er29,2012;

metal

prices

averageof

variou

sforecastingcompa

nies;with

copp

ercostpe

rpo

und

Produ

ction

year

+19

Produ

ction

year

+20

Produ

ction

year

+21

Produ

ction

year

+22

Produ

ction

year

+23

Produ

ction

year

+24

Produ

ction

year

+25

Produ

ction

year

+26

Produ

ction

year

+27

Produ

ction

year

+28

Produ

ction

year

+29

2032

2033

2034

2035

2036

2037

2038

2039

2040

2041

2042

insurance,perdrytonne................

$0.74

$554,478$

480,685$

417,140$

348,471$

397,667$

386,393$

383,318$

412,015$

408,941$

453,012$

434,564

oceanfreight,perwettonne.............

$50.00

$40,836,589

$35,401,775

$30,721,796

$25,664,400

$29,287,609

$28,457,290

$28,230,840

$30,344,378

$30,117,928

$33,363,720

$32,005,016

supervision&

assaying,per

drytonne.....

$0.35

$262,253$

227,351$

197,296$

164,817$

188,086$

182,753$

181,299$

194,872$

193,418$

214,262$

205,537

molyoxide,railto

port,p

ertonne

........

$17.90

$125,600$

145,696$

150,720$

135,648$

50,240

$55,264

$65,312

$80,384

$90,432

$110,528$

125,600

porthandlin

g&

loading,pertonne........

$7.80

$54,731

$63,488

$65,677

$59,109

$21,892

$24,081

$28,460

$35,028

$39,406

$48,163

$54,731

insurance,of

netp

ayable

...............

0.00083

$201,260$

233,462$

241,512$

217,361$

80,504

$88,554

$104,655$

128,806$

144,907$

177,109$

201,260

oceanfreight,pertonne

................

$50.00

$350,838$

406,972$

421,005$

378,905$

140,335$

154,369$

182,436$

224,536$

252,603$

308,737$

350,838

subtotal,transportandhandlin

g..........

$63,375,755

$55,155,939

$48,006,149

$40,160,211

$45,220,163

$43,975,751

$43,686,971

$47,017,030

$46,728,249

$51,824,482

$49,828,123

netsmelterreturn

.....................

$1,418,598,026

$1,300,784,807

$1,182,922,624

$1,090,598,424

$953,580,683

$950,111,972

$950,202,209

$1,026,254,736

$1,029,875,597

$1,196,385,071

$1,197,654,953

IV-57

Page 362:  · 2013. 1. 16. · Hong Kong Exchanges and Clearing Limited, The Stock Exchange of Hong Kong Limited and the Securities and Futures Commission take no responsibility for the contents

THIS WEB PROOF INFORMATION PACK IS IN DRAFT FORM. The information contained in it is incomplete and is subject to change. ThisWeb Proof Information Pack must be read in conjunction with the section headed “Warning” on the cover of this Web Proof Information Pack.

APPENDIX IV COMPETENT PERSON’S REPORTEcono

mican

alysisof

China

lcoTorom

ocho

Cop

per

Project,P

eru

Prepa

redby

Behre

Dolbear

&Co.

Octob

er29,2012

Upd

ated

cash

flow

projection

ofOctob

er29,2012;

metal

prices

averageof

variou

sforecasting

compa

nies;withcopp

ercost

perpo

und

Produ

ction

year

+30

Produ

ction

year

+31

Produ

ction

year

+32

Produ

ction

year

+33

Produ

ction

year

+34

Produ

ction

year

+35

Produ

ction

year

+36

Produ

ction

year

+37

Produ

ction

year

+38

Produ

ction

year

+39

Produ

ction

year

+40

Total

2043

2044

2045

2046

2047

2048

2049

2050

2051

2052

2053

metal

prices

[CONSE

NSU

SOF

BROKERSOCTOBER2012]

copper

(USdollarsperlb)..........

$2.74

$2.74

$2.74

$2.74

$2.74

$2.74

$2.74

$2.74

$2.74

$2.74

$2.74

silver

(USdollarspertroy

ounce)

....

$22.40$

22.40$

22.40$

22.40$

22.40$

22.40$

22.40

$22.40

$22.40

$22.40

$22.40

molybdenum

tech

oxide(U

Sdollars

perlb).......................

$14.25$

14.25$

14.25$

14.25$

14.25$

14.25$

14.25

$14.25

$14.25

$14.25

$14.25

chem

icalgradeoxideprem

ium

......

10.00%

$1.43

$1.43

$1.43

$1.43

$1.43

$1.43

$1.43

$1.43

$1.43

$1.43

$1.43

molychem

icalgradeprice(U

Sdollar

perlb).......................

$15.68$

15.68$

15.68$

15.68$

15.68$

15.68$

15.68

$15.68

$15.68

$15.68

$15.68

incomefrom

sales[D

ATAFROM

E-M

AIL

OF10/24/2012

FOR

TREATMENTCHARGE,

PENALTIE

S,ANDOCEAN

FREIG

HT,O

THERWISE,

DATAASPREVIO

USL

YUSE

D]

copper

paym

ent..................

97.50%

$803,92

2,435$

607,263,990$613,635,128

$790,955,945

$790,955,945

$790,955,945

$605,178,381

$0

$0

$0

$0

$37,386,517,792

silver

paym

ent...................

95.00%

$128,87

5,619$

204,149,568$129,645,067

$121,534,341

$121,534,341

$121,534,341

$92,988,688

$0

$0

$0

$0

$5,176,295,633$0.3804

molybdenum

oxidepaym

ent.

.......

100.00%$

281,27

9,166$

320,076,293$204,929,333

$77,594,253

$77,594,253

$77,594,253

$59,396,127

$0

$0

$0

$0

$6,585,020,931$0.4839

totalp

ayment

...................

$1,214,077

,220

$1,131,489,851

$948,209,527

$990,084,538

$990,084,538

$990,084,538

$757,536,197

$0

$0

$0

$0

$49,147,834,357

treatm

entcharge(U

S$perdrytonne

cons)....

....................

$65.00

$33,489,756

$25,297,370

$25,562,778

$32,949,599

$32,949,599

$32,949,599

$25,210,487

$0

$0

$0

$0

$1,513,879,497

refining

charge

perlb

copper

.......$0.070

$21,070,570

$15,916,210

$16,083,196

$20,730,722

$20,730,722

$20,730,722

$15,861,547

$0

$0

$0

$0

$952,479,435

refining

charge

perouncesilver

.....$0.400

$2,422,474$

3,837,398$

2,436,937$

2,284,480$

2,284,480$

2,284,480$

1,747,908

$0

$0

$0

$0

$95,060,179

arsenicpena

lty

penalty

perincrem

ent.........$

2.00

increm

ent..................

0.10%

penalty

.....................

$0$

0$

0$

0$

0$

0$

0$

0$

0$

0$

0$

0zinc

pena

lty

penalty

perincrem

ent.........$

1.00

increm

ent..................

1.00%

penalty

.....................

$2,576,135$

1,945,952$

1,966,368$

2,534,585$

2,534,585$

2,534,585$

1,939,268

$0

$0

$0

$0

$116,452,269

subtotal,treatmentand

penalties

.....

$59,558

,935

$46,996,929

$46,049,279

$58,499,386

$58,499,386

$58,499,386

$44,759,210

$0

$0

$0

$0

$2,677,871,380$0.1968

transportand

handlin

gcopper

cons,railtoport,p

erwet

tonne....

....................

$17.90

$10,052,594

$7,593,492$

7,673,159$

9,890,456$

9,890,456$

9,890,456$

7,56

7,413

$0

$0

$0

$0

$454,420,044

porthandlin

g&

loading,perwet

tonne........................

$7.80

$4,380,460$

3,308,896$

3,343,611$

4,309,808$

4,309,808$

4,309,808$

3,29

7,532

$0

$0

$0

$0

$198,015,438

IV-58

Page 363:  · 2013. 1. 16. · Hong Kong Exchanges and Clearing Limited, The Stock Exchange of Hong Kong Limited and the Securities and Futures Commission take no responsibility for the contents

THIS WEB PROOF INFORMATION PACK IS IN DRAFT FORM. The information contained in it is incomplete and is subject to change. ThisWeb Proof Information Pack must be read in conjunction with the section headed “Warning” on the cover of this Web Proof Information Pack.

APPENDIX IV COMPETENT PERSON’S REPORTEcono

mican

alysisof

China

lcoTorom

ocho

Cop

per

Project,P

eru

Prepa

redby

Behre

Dolbear

&Co.

Octob

er29,2012

Upd

ated

cash

flow

projection

ofOctob

er29,2012;

metal

prices

averageof

variou

sforecasting

compa

nies;withcopp

ercost

perpo

und

Produ

ction

year

+30

Produ

ction

year

+31

Produ

ction

year

+32

Produ

ction

year

+33

Produ

ction

year

+34

Produ

ction

year

+35

Produ

ction

year

+36

Produ

ction

year

+37

Produ

ction

year

+38

Produ

ction

year

+39

Produ

ction

year

+40

Total

2043

2044

2045

2046

2047

2048

2049

2050

2051

2052

2053

insurance,perdrytonne..........

$0.74

$38

1,268$

288,001$

291,022$

375,119$

375,119$

375,119$

287,012

$0$0

$0$0

$17,234,936

oceanfreight,perwettonne.......$

50.00

$28,079

,873

$21,210,871

$21,433,406

$27,626,971

$27,626,971

$27,626,971

$21,138,024

$0$0

$0$0

$1,269,329,732

supervision&

assaying,per

dry

tonne....

...................$

0.35

$180,329$

136,217$

137,646$

177,421$

177,421$

177,421$

135,749

$0$0

$0$0

$8,151,659

molyoxide,railto

port,p

ertonne

..$

17.90

$145,696$

165,792$

106,148$

40,192

$40,192

$40,192

$30,752

$0$0

$0$0

$3,398,523

porthandlin

g&

loading,per

tonne.......................$

7.80

$63,488

$72,244

$46,255

$17,514

$17,514

$17,514

$13,400

$0$0

$0$0

$1,480,921

insurance,of

netp

ayable

.........

0.00083

$233,462$

265,663$

170,091$

64,403

$64,403

$64,403

$49,276

$0$0

$0$0

$5,465,567

oceanfreight,pertonne

..........

$50.00

$406,972$

463,106$

296,504$

112,268$

112,268$

112,268$

85,899

$0$0

$0$0

$9,493,081

subtotal,transportandhandlin

g....

$43,924,141

$33,504,282

$33,497,844

$42,614,151

$42,614,151

$42,614,151

$32,605,056

$0$0

$0$0

$1,966,989,901$0.1446

netsmelterreturn

...............

$1,110,594,144

$1,050,988,640

$868,662,405

$888,971,001

$888,971,001

$888,971,001

$680,171,930

$0$0

$0$0

$44,502,973,076

IV-59

Page 364:  · 2013. 1. 16. · Hong Kong Exchanges and Clearing Limited, The Stock Exchange of Hong Kong Limited and the Securities and Futures Commission take no responsibility for the contents

THIS WEB PROOF INFORMATION PACK IS IN DRAFT FORM. The information contained in it is incomplete and is subject to change. ThisWeb Proof Information Pack must be read in conjunction with the section headed “Warning” on the cover of this Web Proof Information Pack.

APPENDIX IV COMPETENT PERSON’S REPORTEcono

mican

alysisof

China

lcoTorom

ocho

Cop

perProject,P

eru

Prepa

redby

Behre

Dolbear

&Co.

Octob

er29,2012

Upd

ated

cash

flow

projection

ofOctob

er29,2012;

metal

prices

averageof

variou

sforecastingcompa

nies;with

copp

ercostpe

rpo

und

Pre-produ

ction

year

-3Pre-produ

ction

year

-2Pre-produ

ction

year

-1Produ

ction

year

+1Produ

ction

year

+2Produ

ction

year

+3Produ

ction

year

+4Produ

ction

year

+5Produ

ction

year

+6Produ

ction

year

+7

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

Operating

Costs

unitcosts

miningpertonneof

material

moved

.....................

$0.000

$0.000

$1.196

$1.034$

1.114$

1.106$

1.300$

1.244$

1.383$

1.487

reclaim

stockpile

tonnagepertonne

ofstockpile

moved

...........

$0.000

$0.000

$0.000

$0.000$

0.000$

0.000$

0.000$

0.000$

0.000$

0.000

processing

(milling)

pertonneof

oremilled

..................

$0.00

$0.00

$5.28

$5.28

$5.28

$5.28

$5.28

$5.28

$5.28

$5.28

molyplantp

ertonneof

molyoxide

produced

...................

$0.00

$0.00

$3,612.00

$3,612.00

$3,612.00

$3,612.00

$3,612.00

$3,612.00

$3,612.00

$3,612.00

processing

infrastructure

pertonne

oforemilled

................

$0.00

$0.00

$0.06

$0.06

$0.06

$0.06

$0.06

$0.06

$0.06

$0.06

processing

G&Apertonneof

ore

milled

.....................

$0.00

$0.00

$1.42

$1.42

$1.42

$1.42

$1.42

$1.42

$1.42

$1.42

annu

alcost

miningoreandwaste

...........

$0

$0

$59,816,050

$102,330,788

$105,822,780

$105,030,100

$123,459,910

$118,208,405

$131,386,710

$141,295,210

reclaim

from

stockpile

..........

$0

$0

$0

$0$

0$

0$

0$

0$

0$

0milling

......................

$0

$0

$5,174,400

$201,933,600

$227,990,400

$227,990,400

$227,990,400

$227,990,400

$227,990,400

$227,990,400

molyplant

...................

$0

$0

$2,257,128

$11,134,160

$16,220,481

$20,275,601

$21,289,381

$11,151,580

$17,234,261

$16,220,481

processing

infrastructure

........

$0

$0

$58,800

$2,294,700

$2,590,800

$2,590,800

$2,590,800

$2,590,800

$2,590,800

$2,590,800

processing

G&A

...............

$0

$0

$1,391,600

$54,307,900

$61,315,600

$61,315,600

$61,315,600

$61,315,600

$61,315,600

$61,315,600

Centrom

inroyalty

.............

1.71%

$0

$0

$1,025,599

$28,416,322

$31,044,544

$31,152,476

$25,929,732

$24,954,272

$25,297,937

$24,725,588

totalcashcost

.....................

$0

$0

$69,723,577

$400,417,469

$444,984,605

$448,354,977

$462,575,823

$446,211,058

$465,815,707

$474,138,078

depreciatio

n......................

$0

$0

$0

$695,350,399

$701,199,337

$706,155,381

$717,930,545

$728,737,077

$42,188,190

$48,792,839

employee

profitsharing.............

8.00%

$0

$0

$0

$45,280,426

$53,542,917

$53,381,749

$26,868,179

$22,749,284

$77,712,608

$73,840,790

netincom

ebefore

taxes.............

$0

$0

-$9,747,030

$520,724,901

$615,743,550

$613,890,110

$308,984,055

$261,616,762

$893,694,991

$849,169,085

incometaxes

loss

carriedforw

ard

............

$0

$0

$0

$9,747,030

$0$

0$

0$

0$

0$

0federalincom

etax

.............30.00%

$0

$0

$0

$153,293,361

$184,723,065

$184,167,033

$92,695,216

$78,485,029

$268,108,497

$254,750,725

netincom

eaftertaxes...............

$0

$0

-$9,747,030

$367,431,540

$431,020,485

$429,723,077

$216,288,838

$183,131,733

$625,586,494

$594,418,359

addback

depreciatio

n...............

$0

$0

$0

$695,350,399

$701,199,337

$706,155,381

$717,930,545

$728,737,077

$42,188,190

$48,792,839

netcashflow

from

operations

........

$0

$0

-$9,747,030

$1,062,781,939

$1,132,219,822

$1,135,878,458

$934,219,384

$911,868,811

$667,774,684

$643,211,198

IV-60

Page 365:  · 2013. 1. 16. · Hong Kong Exchanges and Clearing Limited, The Stock Exchange of Hong Kong Limited and the Securities and Futures Commission take no responsibility for the contents

THIS WEB PROOF INFORMATION PACK IS IN DRAFT FORM. The information contained in it is incomplete and is subject to change. ThisWeb Proof Information Pack must be read in conjunction with the section headed “Warning” on the cover of this Web Proof Information Pack.

APPENDIX IV COMPETENT PERSON’S REPORTEcono

mican

alysisof

China

lcoTorom

ocho

Cop

perProject,P

eru

Prepa

redby

Behre

Dolbear

&Co.

Octob

er29,2012

Upd

ated

cash

flow

projection

ofOctob

er29,2012;

metal

prices

averageof

variou

sforecastingcompa

nies;with

copp

ercostpe

rpo

und

Pre-produ

ction

year

-3Pre-produ

ction

year

-2Pre-produ

ction

year

-1Produ

ction

year

+1Produ

ction

year

+2Produ

ction

year

+3Produ

ction

year

+4Produ

ction

year

+5Produ

ction

year

+6Produ

ction

year

+7

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

capitalinv

estm

ents[PEROCT2012

CAPEXFORECAST

]2011

2012

2013

2014

initialinvestments

.................

minepreproductiondevelopm

ent.

.....

$8,969,733

$14,677,005

$62,000,000

mineequipm

ent...................

$37,934,407

$82,710,928

$91,100,000

contingency,mineequipm

ent........

$0

$1,523,482

$4,570,445

processandinfrastructure,direct......

$366,427,340

$451,150,406

$443,000,000

$2,512,410

processandinfrastructure,indirect....

$182,618,520

$195,689,079

$197,500,000

$605,671

contingency,processand

infrastructure

...................

$0

$8,102,831

$24,308,493

delay,spareparts,initialfill..........

$21,851,880

$42,467,920

$68,700,000

$3,288,502

owner’scost

......................

$165,086,212

$150,054,968

$174,701,837

contingency,ow

ner’scost

...........

$3,552,000

$6,387,250

$12,057,750

IV-61

Page 366:  · 2013. 1. 16. · Hong Kong Exchanges and Clearing Limited, The Stock Exchange of Hong Kong Limited and the Securities and Futures Commission take no responsibility for the contents

THIS WEB PROOF INFORMATION PACK IS IN DRAFT FORM. The information contained in it is incomplete and is subject to change. ThisWeb Proof Information Pack must be read in conjunction with the section headed “Warning” on the cover of this Web Proof Information Pack.

APPENDIX IV COMPETENT PERSON’S REPORTEcono

mican

alysisof

China

lcoTorom

ocho

Cop

per

Project,P

eru

Prepa

redby

Behre

Dolbear

&Co.

Octob

er29,2012

Upd

ated

cash

flow

projection

ofOctob

er29,2012;

metal

prices

averageof

variou

sforecasting

compa

nies;withcopp

ercostper

poun

dProdu

ction

year

+8Produ

ction

year

+9Produ

ction

year

+10

Produ

ction

year

+11

Produ

ction

year

+12

Produ

ction

year

+13

Produ

ction

year

+14

Produ

ction

year

+15

Produ

ction

year

+16

Produ

ction

year

+17

Produ

ction

year

+18

2021

2022

2023

2024

2025

2026

2027

2028

2029

2030

2031

Operating

Costs

unitcosts

miningpertonneof

material

moved

.....................

$1.480

$1.421

$1.504

$1.599

$1.522

$1.607

$1.587

$1.604

$1.636

$1.616

$1.730

reclaim

stockpile

tonnagepertonne

ofstockpile

moved

...........

$0.000

$0.000

$0.000

$0.000

$0.000

$0.000

$0.000

$0.000

$0.000

$0.000

$0.000

processing

(milling)

pertonneof

oremilled

..................

$5.28

$5.28

$5.28

$5.28

$5.28

$5.28

$5.28

$5.28

$5.28

$5.28

$5.28

molyplantp

ertonneof

molyoxide

produced

...................

$3,612.00

$3,612.00

$3,612.00

$3,612.00

$3,612.00

$3,612.00

$3,612.00

$3,612.00

$3,612.00

$3,612.00

$3,612.00

processing

infrastructure

pertonne

oforemilled

................

$0.06

$0.06

$0.06

$0.06

$0.06

$0.06

$0.06

$0.06

$0.06

$0.06

$0.06

processing

G&Apertonneof

ore

milled

.....................

$1.42

$1.42

$1.42

$1.42

$1.42

$1.42

$1.42

$1.42

$1.42

$1.42

$1.42

annu

alcost

miningoreandwaste

...........

$140,601,615

$134,953,770

$142,865,530

$151,897,305

$144,565,015

$152,689,985

$150,805,783

$152,392,730

$155,462,729

$153,482,665

$164,382

,015

reclaim

from

stockpile

..........

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

milling.......................

$227,990,400

$227,990,400

$227,990,400

$227,990,400

$227,990,400

$227,990,400

$227,990,400

$227,990,400

$227,990,400

$227,990,400

$227,990

,400

molyplant....................

$18,248,041

$28,385,841

$24,330,721

$23,316,941

$18,248,041

$22,303,161

$12,165,360

$16,220,481

$19,261,821

$21,289,381

$22,303,161

processing

infrastructure

.........

$2,590,800

$2,590,800

$2,590,800

$2,590,800

$2,590,800

$2,590,800

$2,590,800

$2,590,800

$2,590,800

$2,590,800

$2,590,800

processing

G&A

...............

$61,315,600

$61,315,600

$61,315,600

$61,315,600

$61,315,600

$61,315,600

$61,315,600

$61,315,600

$61,315,600

$61,315,600

$61,315,600

Centrom

inroyalty

..............

1.71%

$24,250,317

$26,066,230

$24,887,184

$24,311,266

$23,612,417

$23,358,136

$20,097,081

$19,314,466

$21,047,157

$20,057,381

$22,122,219

totalcashcost

.....................

$474,996,773

$481,302,641

$483,980,235

$491,422,312

$478,322,273

$490,248,082

$474,965,024

$479,824,477

$487,668,506

$486,726,227

$500,704

,195

depreciatio

n.......................

$50,679,913

$46,543,659

$69,205,682

$75,294,140

$68,832,310

$78,084,375

$75,966,952

$49,337,109

$48,451,434

$48,573,039

$40,215,435

employee

profitsharing

.............

8.00%

$71,397,640

$79,719,569

$72,176,399

$68,399,602

$66,695,081

$63,811,234

$49,946,872

$48,027,148

$55,576,634

$51,011,760

$60,222,192

netincom

ebefore

taxes

.............

$821,072,864

$916,775,041

$830,028,588

$786,595,419

$766,993,427

$733,829,189

$574,389,027

$552,312,198

$639,131,294

$586,635,237

$692,555

,210

incometaxes

loss

carriedforw

ard.............

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

federalincom

etax..............

30.00%

$246,321,859

$275,032,512

$249,008,576

$235,978,626

$230,098,028

$220,148,757

$172,316,708

$165,693,659

$191,739,388

$175,990,571

$207,766,563

netincom

eaftertaxes...............

$574,751,004

$641,742,529

$581,020,011

$550,616,793

$536,895,399

$513,680,432

$402,072,319

$386,618,539

$447,391,906

$410,644,666

$484,788

,647

addback

depreciatio

n...............

$50,679,913

$46,543,659

$69,205,682

$75,294,140

$68,832,310

$78,084,375

$75,966,952

$49,337,109

$48,451,434

$48,573,039

$40,215,435

netcashflow

from

operations

.........

$625,430,917

$688,286,188

$650,225,693

$625,910,933

$605,727,709

$591,764,807

$478,039,270

$435,955,648

$495,843,340

$459,217,705

$525,004

,081

IV-62

Page 367:  · 2013. 1. 16. · Hong Kong Exchanges and Clearing Limited, The Stock Exchange of Hong Kong Limited and the Securities and Futures Commission take no responsibility for the contents

THIS WEB PROOF INFORMATION PACK IS IN DRAFT FORM. The information contained in it is incomplete and is subject to change. ThisWeb Proof Information Pack must be read in conjunction with the section headed “Warning” on the cover of this Web Proof Information Pack.

APPENDIX IV COMPETENT PERSON’S REPORTEcono

mican

alysisof

China

lcoTorom

ocho

Cop

per

Project,P

eru

Prepa

redby

Behre

Dolbear

&Co.

Octob

er29,2012

Upd

ated

cash

flow

projection

ofOctob

er29,2012;

metal

prices

averageof

variou

sforecasting

compa

nies;withcopp

ercostper

poun

dProdu

ction

year

+8Produ

ction

year

+9Produ

ction

year

+10

Produ

ction

year

+11

Produ

ction

year

+12

Produ

ction

year

+13

Produ

ction

year

+14

Produ

ction

year

+15

Produ

ction

year

+16

Produ

ction

year

+17

Produ

ction

year

+18

2021

2022

2023

2024

2025

2026

2027

2028

2029

2030

2031

capitalinv

estm

ents[PEROCT2012

CAPEXFORECAST

]

initialinvestments

..................

minepreproductiondevelopm

ent......

mineequipm

ent....................

contingency,mineequipm

ent.........

processandinfrastructure,d

irect......

processandinfrastructure,indirect.....

contingency,processand

infrastructure

....................

delay,spareparts,initialfill

..........

owner’scost

......................

contingency,ow

ner’scost............

IV-63

Page 368:  · 2013. 1. 16. · Hong Kong Exchanges and Clearing Limited, The Stock Exchange of Hong Kong Limited and the Securities and Futures Commission take no responsibility for the contents

THIS WEB PROOF INFORMATION PACK IS IN DRAFT FORM. The information contained in it is incomplete and is subject to change. ThisWeb Proof Information Pack must be read in conjunction with the section headed “Warning” on the cover of this Web Proof Information Pack.

APPENDIX IV COMPETENT PERSON’S REPORTEcono

mican

alysisof

China

lcoTorom

ocho

Cop

perProject,

PeruPrepa

redby

Behre

Dolbear

&Co.

Octob

er29,2012

Upd

ated

cash

flow

projection

ofOctob

er29,2012;

metal

prices

average

ofvariou

sforecastingcompa

nies;with

copp

ercostpe

rpo

und

Produ

ction

year

+19

Produ

ction

year

+20

Produ

ction

year

+21

Produ

ction

year

+22

Produ

ction

year

+23

Produ

ction

year

+24

Produ

ction

year

+25

Produ

ction

year

+26

Produ

ction

year

+27

Produ

ction

year

+28

Produ

ction

year

+29

2032

2033

2034

2035

2036

2037

2038

2039

2040

2041

2042

Operating

Costs

unitcosts

miningpertonneof

material

moved

.....................

$1.732

$1.717

$1.854

$1.854

$1.854

$1.854

$1.854

$2.105

$2.105

$2.105

$2.105

reclaim

stockpile

tonnagepertonne

ofstockpile

moved

...........

$0.000

$0.000

$0.000

$0.000

$0.000

$0.000

$0.000

$0.000

$0.000

$0.000

$0.000

processing

(milling)

pertonneof

oremilled

...................

$5.28

$5.28

$5.28

$5.28

$5.28

$5.28

$5.28

$5.28

$5.28

$5.28

$5.28

molyplantp

ertonneof

molyoxide

produced

...................

$3,612.00

$3,612.00

$3,612.00

$3,612.00

$3,612.00

$3,612.00

$3,612.00

$3,612.00

$3,612.00

$3,612.00

$3,612.00

processing

infrastructure

pertonne

oforemilled

................

$0.06

$0.06

$0.06

$0.06

$0.06

$0.06

$0.06

$0.06

$0.06

$0.06

$0.06

processing

G&Apertonneof

ore

milled

......................

$1.42

$1.42

$1.42

$1.42

$1.42

$1.42

$1.42

$1.42

$1.42

$1.42

$1.42

annu

alcost

miningoreandwaste

............

$164,580,185

$163,093,910

$176,173,130

$169,135,477

$147,772,167

$128,074,157

$120,413,407

$130,834,857

$132,727,048

$118,730,301

$112,959

,011

reclaim

from

stockpile

...........

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

milling

.......................

$227,990,400

$227,990,400

$227,990,400

$227,990,400

$227,990,400

$227,990,400

$227,990,400

$227,990,400

$227,990,400

$227,990,400

$227,990

,400

molyplant....................

$25,344,501

$29,399,621

$30,413,401

$27,372,061

$10,137,800

$11,151,580

$13,179,141

$16,220,481

$18,248,041

$22,303,161

$25,344,501

processing

infrastructure

.........

$2,590,800

$2,590,800

$2,590,800

$2,590,800

$2,590,800

$2,590,800

$2,590,800

$2,590,800

$2,590,800

$2,590,800

$2,590,800

processing

G&A

...............

$61,315,600

$61,315,600

$61,315,600

$61,315,600

$61,315,600

$61,315,600

$61,315,600

$61,315,600

$61,315,600

$61,315,600

$61,315,600

Centrom

inroyalty

..............

1.71%

$24,258

,026

$22,243,420

$20,227,977

$18,649,233

$16,306,230

$16,246,915

$16,248,458

$17,548,956

$17,610,873

$20,458,185

$20,479,900

totalcashcost......................

$506,079,512

$506,633,751

$518,711,308

$507,053,571

$466,112,997

$447,369,452

$441,737,805

$456,501,093

$460,482,762

$453,388,447

$450,680

,212

depreciatio

n.......................

$68,450,945

$69,749,355

$61,384,226

$59,302,041

$65,144,746

$35,693,942

$33,280,207

$27,718,531

$23,764,843

$20,426,566

$29,690,077

employee

profitsharing..............

8.00%

$67,525

,406

$57,952,136

$48,226,167

$41,939,425

$33,785,835

$37,363,886

$38,014,736

$43,362,809

$43,650,239

$57,805,605

$57,382,773

netincom

ebefore

taxes..............

$776,542,163

$666,449,564

$554,600,923

$482,303,387

$388,537,105

$429,684,691

$437,169,461

$498,672,303

$501,977,752

$664,764,453

$659,901

,891

incometaxes

loss

carriedforw

ard.............

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

federalincom

etax..............

30.00%

$232,962,649

$199,934,869

$166,380,277

$144,691,016

$116,561,132

$128,905,407

$131,150,838

$149,601,691

$150,593,326

$199,429,336

$197,970,567

netincom

eaftertaxes...............

$543,579,514

$466,514,695

$388,220,646

$337,612,371

$271,975,974

$300,779,284

$306,018,623

$349,070,612

$351,384,427

$465,335,117

$461,931

,324

addback

depreciatio

n...............

$68,450,945

$69,749,355

$61,384,226

$59,302,041

$65,144,746

$35,693,942

$33,280,207

$27,718,531

$23,764,843

$20,426,566

$29,690,077

netcashflow

from

operations

.........

$612,030,459

$536,264,050

$449,604,872

$396,914,412

$337,120,720

$336,473,226

$339,298,829

$376,789,143

$375,149,270

$485,761,683

$491,621

,401

IV-64

Page 369:  · 2013. 1. 16. · Hong Kong Exchanges and Clearing Limited, The Stock Exchange of Hong Kong Limited and the Securities and Futures Commission take no responsibility for the contents

THIS WEB PROOF INFORMATION PACK IS IN DRAFT FORM. The information contained in it is incomplete and is subject to change. ThisWeb Proof Information Pack must be read in conjunction with the section headed “Warning” on the cover of this Web Proof Information Pack.

APPENDIX IV COMPETENT PERSON’S REPORTEcono

mican

alysisof

China

lcoTorom

ocho

Cop

perProject,

PeruPrepa

redby

Behre

Dolbear

&Co.

Octob

er29,2012

Upd

ated

cash

flow

projection

ofOctob

er29,2012;

metal

prices

average

ofvariou

sforecastingcompa

nies;with

copp

ercostpe

rpo

und

Produ

ction

year

+19

Produ

ction

year

+20

Produ

ction

year

+21

Produ

ction

year

+22

Produ

ction

year

+23

Produ

ction

year

+24

Produ

ction

year

+25

Produ

ction

year

+26

Produ

ction

year

+27

Produ

ction

year

+28

Produ

ction

year

+29

2032

2033

2034

2035

2036

2037

2038

2039

2040

2041

2042

capitalinv

estm

ents[PEROCT2012

CAPEXFORECAST

]

initialinvestments

..................

minepreproductiondevelopm

ent......

mineequipm

ent....................

contingency,mineequipm

ent.........

processandinfrastructure,d

irect.......

processandinfrastructure,indirect.....

contingency,processand

infrastructure

....................

delay,spareparts,initialfill

..........

owner’scost.......................

contingency,ow

ner’scost

............

IV-65

Page 370:  · 2013. 1. 16. · Hong Kong Exchanges and Clearing Limited, The Stock Exchange of Hong Kong Limited and the Securities and Futures Commission take no responsibility for the contents

THIS WEB PROOF INFORMATION PACK IS IN DRAFT FORM. The information contained in it is incomplete and is subject to change. ThisWeb Proof Information Pack must be read in conjunction with the section headed “Warning” on the cover of this Web Proof Information Pack.

APPENDIX IV COMPETENT PERSON’S REPORTEcono

mican

alysisof

China

lcoTorom

ocho

Cop

perProject,

PeruPrepa

redby

Behre

Dolbear

&Co.

Octob

er29,2012

Upd

ated

cash

flow

projection

ofOctob

er29,2012;

metal

prices

average

ofvariou

sforecastingcompa

nies;with

copp

ercostpe

rpo

und

Produ

ction

year

+30

Produ

ction

year

+31

Produ

ction

year

+32

Produ

ction

year

+33

Produ

ction

year

+34

Produ

ction

year

+35

Produ

ction

year

+36

Produ

ction

year

+37

Produ

ction

year

+38

Produ

ction

year

+39

Produ

ction

year

+40

Total

2043

2044

2045

2046

2047

2048

2049

2050

2051

2052

2053

Operating

Costs

unitcosts

miningpertonneof

materialm

oved

..$

2.105$

2.164$

2.164$

0.000$

0.000$

0.000$

0.000

$0.000

$0.000

$0.000

$0.000

reclaim

stockpile

tonnagepertonneof

stockp

ilemoved

................

$0.000$

0.000$

0.889$

0.889$

0.889$

0.889$

0.889

$0.000

$0.000

$0.000

$0.000

processing

(milling)

pertonneof

ore

milled

........................

$5.28

$5.28

$5.28

$5.28

$5.28

$5.28

$5.28

$0.00

$0.00

$0.00

$0.00

molyplantp

ertonneof

molyoxide

produced

......................

$3,612.00

$3,612.00

$3,612.00

$3,612.00

$3,612.00

$3,612.00

$3,612.00

$0.00

$0.00

$0.00

$0.00

processing

infrastructure

pertonneof

oremilled

.....................

$0.06

$0.06

$0.06

$0.06

$0.06

$0.06

$0.06

$0.00

$0.00

$0.00

$0.00

processing

G&Apertonneof

ore

milled

........................

$1.42

$1.42

$1.42

$1.42

$1.42

$1.42

$1.42

$0.00

$0.00

$0.00

$0.00

annu

alcost

miningoreandwaste

..............

$111,199,420

$124,155,096

$69,573,341

$0$

0$

0$

0$

0$

0$

0$

0$4,400,870,601$0.3234

reclaim

from

stockpile

.............

$0$

0$22,629,116

$38,371,302

$38,371,302

$38,371,302

$29,358,756

$0

$0

$0

$0

$167,101,779$0.0123

milling

.........................

$227,990,400

$227,990,400

$227,990,400

$227,990,400

$227,990,400

$227,990,400

$174,440

,640

$0

$0

$0

$0

$8,133,222,240$0.5977

molyplant.

......................

$29,399,621

$33,454,741

$21,419,449

$8,110,240$

8,110,240$

8,110,240$

6,205,329

$0

$0

$0

$0

$685,780,171$0.0504

processing

infrastructure

...........

$2,590,800$

2,590,800$

2,590,800$

2,590,800$

2,590,800$

2,590,800$

1,982,280

$0

$0

$0

$0

$92,422,980

$0.0068

processing

G&A

..................

$61,315,600

$61,315,600

$61,315,600

$61,315,600

$61,315,600

$61,315,600

$46,913,960

$0

$0

$0

$0

$2,187,343,860$0.1608

Centrom

inroyalty

................

1.71%

$18,991,160

$17,971,906

$14,854,127

$15,201,404

$15,201,404

$15,201,404

$11,630,940

$0

$0

$0

$0

$761,000,840$0.0559

totalcashcost

........................

$451,487,001

$467,478,543

$420,372,833

$353,579,747

$353,579,747

$353,579,747

$270,531,905

$0

$0

$0

$0

$16,427,742,471

depreciatio

n.........................

$40,909,897

$55,481,318

$55,479,268

$45,312,703

$31,794,658

$14,879,536

$232,880

$0

$0

$0

$0

$5,030,233,555

employee

profitsharing

................

8.00%

$49,455,780

$42,242,302

$31,424,824

$39,206,284

$40,287,728

$41,640,937

$32,752,572

$0

$0

$0

$0

$1,844,379,526

netincom

ebefore

taxes................

$568,741,467

$485,786,477

$361,385,479

$450,872,267

$463,308,869

$478,870,781

$376,654,573

$0

$0

$0

$0

$21,200,617,523

incometaxes

loss

carriedforw

ard

...............

$0$

0$

0$

0$

0$

0$

0$

0$

0$

0$

0federalincom

etax

................

30.00%

$170,622,440

$145,735,943

$108,415,644

$135,261,680

$138,992,661

$143,661,234

$112,996,372

$0

$0

$0

$0

$6,360,185,257

netincom

eaftertaxes..................

$398,119,027

$340,050,534

$252,969,836

$315,610,587

$324,316,208

$335,209,546

$263,658,201

$0

$0

$0

$0

$14,840,432,266

addback

depreciatio

n..................

$40,909,897

$55,481,318

$55,479,268

$45,312,703

$31,794,658

$14,879,536

$232,880

$0

$0

$0

$0

$5,030,233,555

netcashflow

from

operations

...........

$439,028,923

$395,531,852

$308,449,104

$360,923,290

$356,110,866

$350,089,083

$263,891

,081

$0

$0

$0

$0

$19,870,665,821

IV-66

Page 371:  · 2013. 1. 16. · Hong Kong Exchanges and Clearing Limited, The Stock Exchange of Hong Kong Limited and the Securities and Futures Commission take no responsibility for the contents

THIS WEB PROOF INFORMATION PACK IS IN DRAFT FORM. The information contained in it is incomplete and is subject to change. ThisWeb Proof Information Pack must be read in conjunction with the section headed “Warning” on the cover of this Web Proof Information Pack.

APPENDIX IV COMPETENT PERSON’S REPORTEcono

mican

alysisof

China

lcoTorom

ocho

Cop

per

Project,P

eru

Prepa

redby

Behre

Dolbear

&Co.

Octob

er29,2012

Upd

ated

cash

flow

projection

ofOctob

er29,2012;

metal

prices

averageof

variou

sforecasting

compa

nies;withcopp

ercostper

poun

dProdu

ction

year

+30

Produ

ction

year

+31

Produ

ction

year

+32

Produ

ction

year

+33

Produ

ction

year

+34

Produ

ction

year

+35

Produ

ction

year

+36

Produ

ction

year

+37

Produ

ction

year

+38

Produ

ction

year

+39

Produ

ction

year

+40

Total

2043

2044

2045

2046

2047

2048

2049

2050

2051

2052

2053

capitalinv

estm

ents[PEROCT

2012

CAPEXFORECAST

]

initialinvestments

.............

minepreprodu

ction

developm

ent...............

$85,646,738

mineequipm

ent...............

$211,745,335

contingency,mineequipm

ent....

$6,093,927

processandinfrastructure,

direct

....

.................

$1,263,090,156

processandinfrastructure,

indirect

....

................

$576,413,270

contingency,processand

infrastructure

...............

$32,411,324

delay,spareparts,initialfill

.....

$136,308,302

owner’scost..

................

$489,843,017

contingency,ow

ner’scost

.......

$21,997,000

IV-67

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THIS WEB PROOF INFORMATION PACK IS IN DRAFT FORM. The information contained in it is incomplete and is subject to change. ThisWeb Proof Information Pack must be read in conjunction with the section headed “Warning” on the cover of this Web Proof Information Pack.

APPENDIX IV COMPETENT PERSON’S REPORTEcono

mican

alysisof

China

lcoTorom

ocho

Cop

perProject,

PeruPrepa

redby

Behre

Dolbear

&Co.

Octob

er29,2012

Upd

ated

cash

flow

projection

ofOctob

er29,2012;

metal

prices

average

ofvariou

sforecastingcompa

nies;with

copp

ercostpe

rpo

und

Pre-produ

ction

year

-3Pre-produ

ction

year

-2Pre-produ

ction

year

-1Produ

ction

year

+1Produ

ction

year

+2Produ

ction

year

+3Produ

ction

year

+4Produ

ction

year

+5Produ

ction

year

+6Produ

ction

year

+7

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

sustaining

capital

minesustaining

capital..............

$4,624,800

$34,095,600

$625,250

$18,532,000

$36,792,375

processsustaining

capital............

$25,897,822

$28,857,239

$24,392,770

$24,392,770

$53,019,962

$25,088,109

$25,088,109

general&

administrativesustaining

capital[SO

URCE2007

FINANCIA

LANALYSIS,

ESC

ALATEDBY

2.5%

]..........................

$118,900

$387,450

$387,450

$387,450

$387,450

$387,450

$387,450

lime.............................

$11,118,600

$19,412,400

$68,000,000

$1,469,000

kingsm

ill.........................

$44,750,000

$0

$0

$0

kingsm

ill.........................

$8,922,000

$6,948,000

$3,900,000

$1,230,000

23transm

ission

line.................

$0

$700,585

$2,300,000

$86,415

220transm

ission

line................

$0

$2,000,000

$9,000,000

$18,000

centralh

ighw

ayrelocatio

n...........

$0

$220,000

$1,800,000

$67,980,000

panam

ericaproject.................

$9,518,400

$18,145,600

$7,080,000

$5,256,000

Callaoport........................

$0

$4,356,000

$0

$0

interest

...........................

$5,788,540

$5,659,025

$8,800,000

$5,013,841

contingency.......................

$0

$10,772,252

$32,316,748

$0

relocatio

nof

Morococha

.............

$130,380,213

$123,920,577

$5,699,210

$0

working

capital....................

$56,000,000

totalcapitalinvestm

ent..............

$996,917,845

$1,144,898,308

$1,272,834,483

$118,101,361

$29,244,689

$24,780,220

$58,875,820

$54,032,662

$44,007,559

$62,267,934

netcashflow

......................

-$996,917,845

-$1,144,898,308

-$1,282,581,513

$944,680,578

$1,102,975,133

$1,111,098,238

$875,343,564

$857,836,149

$623,767,125

$580,943

,264

totalinitia

linvestment

$3,502,110,475

life-of-m

ine

netcashflow

......................

$14,840,160,231

IV-68

Page 373:  · 2013. 1. 16. · Hong Kong Exchanges and Clearing Limited, The Stock Exchange of Hong Kong Limited and the Securities and Futures Commission take no responsibility for the contents

THIS WEB PROOF INFORMATION PACK IS IN DRAFT FORM. The information contained in it is incomplete and is subject to change. ThisWeb Proof Information Pack must be read in conjunction with the section headed “Warning” on the cover of this Web Proof Information Pack.

APPENDIX IV COMPETENT PERSON’S REPORTEcono

mican

alysisof

China

lcoTorom

ocho

Cop

perProject,

PeruPrepa

redby

Behre

Dolbear

&Co.

Octob

er29,2012

Upd

ated

cash

flow

projection

ofOctob

er29,2012;

metal

prices

averageof

variou

sforecastingcompa

nies;withcopp

ercostperpo

und

Produ

ction

year

+8Produ

ction

year

+9Produ

ction

year

+10

Produ

ction

year

+11

Produ

ction

year

+12

Produ

ction

year

+13

Produ

ction

year

+14

Produ

ction

year

+15

Produ

ction

year

+16

Produ

ction

year

+17

Produ

ction

year

+18

2021

2022

2023

2024

2025

2026

2027

2028

2029

2030

2031

sustaining

capital

minesustaining

capital..................

$1,403,225

$8,132,350

$137,279,275

$33,121,850

$3,625,425

$54,142,550

$1,274,075

$1,795,800

$47,114,125

$10,410,925

$18,532,000

processsustaining

capital................

$32,424,916

$29,674,750

$29,676,050

$40,940,550

$25,945,911

$25,945,911

$25,945,911

$32,010,311

$22,519,902

$19,768,437

$19,768,437

general&

administrativesustaining

capital

[SOURCE2007

FINANCIA

LANALYSIS,

ESC

ALATEDBY2.5%

]....

$387,450

$387,450

$387,450

$387,450

$387,450

$38

7,450

$387,450

$387,450

$387,450

$387,450

$387,450

lime

........

.........................

kingsm

ill....

.........................

kingsm

ill....

.........................

23transm

ission

line.....................

220transm

ission

line....................

centralh

ighw

ayrelocatio

n...............

panam

ericaproject.....................

Callaoport............................

interest

......

.........................

contingency...........................

relocatio

nof

Morococha

.................

working

capital........................

totalcapitalinvestm

ent..................

$34,215,591

$38,194,550

$167,342,775

$74,449,850

$29,958,786

$80,475,911

$27,607,436

$34,193,561

$70,021,477

$30,566,812

$38,687,887

netcashflow

..........................

$591,215,327

$650,091,637

$482,882,918

$551,461,083

$575,768,923

$511,288,896

$450,431,834

$401,762,086

$425,821,863

$428,650,893

$486,316

,194

life-of-m

ine

netcashflow

..........................

$14,840,160,231

IV-69

Page 374:  · 2013. 1. 16. · Hong Kong Exchanges and Clearing Limited, The Stock Exchange of Hong Kong Limited and the Securities and Futures Commission take no responsibility for the contents

THIS WEB PROOF INFORMATION PACK IS IN DRAFT FORM. The information contained in it is incomplete and is subject to change. ThisWeb Proof Information Pack must be read in conjunction with the section headed “Warning” on the cover of this Web Proof Information Pack.

APPENDIX IV COMPETENT PERSON’S REPORTEcono

mican

alysisof

China

lcoTorom

ocho

Cop

perProject,P

eru

Prepa

redby

Behre

Dolbear

&Co.

Octob

er29,2012

Upd

ated

cash

flow

projection

ofOctob

er29,2012;

metal

prices

averageof

variou

sforecastingcompa

nies;with

copp

ercostpe

rpo

und

Produ

ction

year

+19

Produ

ction

year

+20

Produ

ction

year

+21

Produ

ction

year

+22

Produ

ction

year

+23

Produ

ction

year

+24

Produ

ction

year

+25

Produ

ction

year

+26

Produ

ction

year

+27

Produ

ction

year

+28

Produ

ction

year

+29

2032

2033

2034

2035

2036

2037

2038

2039

2040

2041

2042

sustaining

capital

minesustaining

capital..................

$148,629,100

$20,529,725

$47,745,525

$48,223,175

processsustaining

capital................

$19,768,437

$19,768,437

$27,808,381

$19,768,437

$19,768,437

$21,143,520

$28,229,484

$0

$0

$2,599,400

$67,471,326

general&

administrativesustaining

capital

[SOURCE2007

FINANCIA

LANALYSIS,

ESC

ALATEDBY2.5%

]...

$387,450

$387,450

$387,450

$387,450

$387,450

$387,450

$387,450

$387,450

$387,450

$387,450

$377,200

lime.................................

kingsm

ill.............................

kingsm

ill.............................

23transm

ission

line

....................

220transm

ission

line

...................

centralh

ighw

ayrelocatio

n...............

panam

ericaproject.....................

Callaoport............................

interest...............................

contingency...........................

relocatio

nof

Morococha

.................

working

capital........................

totalcapitalinvestm

ent..................

$168,784,987

$40,685,612

$28,195,831

$20,155,887

$67,901,412

$21,530,970

$28,616,934

$387,450

$387,450

$51,210,025

$67,848,526

netcashflow

..........................

$443,245,472

$495,578,438

$421,409,041

$376,758,525

$269,219,308

$314,942,257

$310,681,895

$376,401,693

$374,761,820

$434,551,658

$423,772

,875

life-of-m

ine

netcashflow

..........................

$14,840,160,231

IV-70

Page 375:  · 2013. 1. 16. · Hong Kong Exchanges and Clearing Limited, The Stock Exchange of Hong Kong Limited and the Securities and Futures Commission take no responsibility for the contents

THIS WEB PROOF INFORMATION PACK IS IN DRAFT FORM. The information contained in it is incomplete and is subject to change. ThisWeb Proof Information Pack must be read in conjunction with the section headed “Warning” on the cover of this Web Proof Information Pack.

APPENDIX IV COMPETENT PERSON’S REPORTEcono

mican

alysisof

China

lcoTorom

ocho

Cop

perProject,P

eru

Prepa

redby

Behre

Dolbear

&Co.

Octob

er29,2012

Upd

ated

cash

flow

projection

ofOctob

er29,2012;

metal

prices

average

ofvariou

sforecastingcompa

nies;with

copp

ercostpe

rpo

und

Produ

ction

year

+30

Produ

ction

year

+31

Produ

ction

year

+32

Produ

ction

year

+33

Produ

ction

year

+34

Produ

ction

year

+35

Produ

ction

year

+36

Produ

ction

year

+37

Produ

ction

year

+38

Produ

ction

year

+39

Produ

ction

year

+40

Total

2043

2044

2045

2046

2047

2048

2049

2050

2051

2052

2053

sustaining

capital...................

minesustaining

capital...............

$55,999,850

$732,629,000

processsustaining

capital.............

$84,338,833

$16,867,507

$838,890,065

general&

administrativesustaining

capital

[SOURCE2007

FINANCIA

LANALYSIS,

ESC

ALATED

BY2.5%

]........................

$377,200$

377,200$

377,200$

377,200$

258,300$

140,425$

11,275

$12,876,050

lime

..............................

$100,000,000

kingsm

ill..........................

$44,750,000

kingsm

ill..........................

$21,000,000

23transm

ission

line..................

$3,087,000

220transm

ission

line.................

$11,018,000

centralh

ighw

ayrelocatio

n.............

$70,000,000

panam

ericaproject..................

$40,000,000

Callaoport

.........................

$4,356,000

interest

............................

$25,261,406

contingency

........................

$43,089,000

relocatio

nof

Morococha

..............

$260,000,000

working

capital.....................

-$56,000,000

$0

totalcapitalinvestm

ent...............

$84,716,033

$73,244,557

$377,200$

377,200$

258,300$

140,425$

11,275

-$56,000,000

$0$0

$0$5,030,505,590

netcashflow

.......................

$354,312,891

$322,287,295

$308,071,904

$360,546,090

$355,852,566

$349,948,658

$263,879,806

$56,000,000

$0$0

$0$14,840,160,231

life-of-m

ine

........................

netcashflow

.......................$14,840,160,23

1

IV-71

Page 376:  · 2013. 1. 16. · Hong Kong Exchanges and Clearing Limited, The Stock Exchange of Hong Kong Limited and the Securities and Futures Commission take no responsibility for the contents

THIS WEB PROOF INFORMATION PACK IS IN DRAFT FORM. The information contained in it is incomplete and is subject to change. ThisWeb Proof Information Pack must be read in conjunction with the section headed “Warning” on the cover of this Web Proof Information Pack.

APPENDIX IV COMPETENT PERSON’S REPORTEcono

mican

alysisof

China

lcoTorom

ocho

Cop

per

Project,P

eruPrepa

redby

Behre

Dolbear

&Co.

Octob

er29,2012Depreciationschedu

lePre-produ

ction

year

-3Pre-produ

ction

year

-2Pre-produ

ction

year

-1Produ

ction

year

+1Produ

ction

year

+2Produ

ction

year

+3Produ

ction

year

+4Produ

ction

year

+5Produ

ction

year

+6

2011

2012

2013

2014

2015

2016

2017

2018

2019

year

-3to

-1(2011to

2013)investments

$671,730,127

$671,730,127

$671,730,127

$671,730,127

$671,730,127

year

+1investments

$23,620,272

$23,620,272

$23,620,272

$23,620,272

$23,620,272

year

+2investments

$5,848,938

$5,848,938

$5,848,938

$5,848,938

$5,848,938

year

+3investments

$4,956,044

$4,956,044

$4,956,044

$4,956,044

year

+4investments

$11,775,164

$11,775,164

$11,775,164

year

+5investments

$10,806,532

$10,806,532

year

+6investments

$8,801,512

year

+7investments

year

+8investments

year

+9investments

year

+10

investments

totalannuald

epreciation............................

$0$0

$0

$695,350,399

$701,199,337

$706,155,381

$717,930,545

$728,737,077

$42,188,190

loss

carriedforw

arddeterm

ination

netincom

ebefore

taxes.............................

$0$0

-$9,747,030

$520,724,901

$615,743,550

$613,890,110

$308,984,055

$261,616,762

$893,694,991

cumulativenetincom

ebefore

taxes

...................

$0$0

-$9,747,030

$510,977,870

$1,126,721,421

$1,740,611,530

$2,049,595,585

$2,311,212,347

$3,204,907,338

cumulativeloss

...................................

$0$0

-$9,747,030

-$9,747,030

-$9,747,030

-$9,747,030

-$9,747,030

-$9,747,030

-$9,747,030

potentialw

rite-off

.................................

$0$0

$0

$520,724,901

$615,743,550

$613,890,110

$308,984,055

$261,616,762

$893,694,991

cumulativepotentialw

rite-off

........................

$0$0

$0

$520,724,901

$1,136,468,451

$1,750,358,560

$2,059,342,615

$2,320,959,377

$3,214,654,368

trialw

rite-off

.....................................

$0$0

$0

$9,747,030

($510,977,870)

($1,126,721,421)

($1,740,611,530)

($2,049,595,585)

($2,311,212,347)

actualwrite-off

...................................

$0$0

$0

$9,747,030

$0

$0

$0

$0

$0

IV-72

Page 377:  · 2013. 1. 16. · Hong Kong Exchanges and Clearing Limited, The Stock Exchange of Hong Kong Limited and the Securities and Futures Commission take no responsibility for the contents

THIS WEB PROOF INFORMATION PACK IS IN DRAFT FORM. The information contained in it is incomplete and is subject to change. ThisWeb Proof Information Pack must be read in conjunction with the section headed “Warning” on the cover of this Web Proof Information Pack.

APPENDIX IV COMPETENT PERSON’S REPORTEcono

mican

alysisof

China

lcoTorom

ocho

Cop

perProject,P

eruPrepa

redby

Behre

Dolbear

&Co.Octob

er29,2012

Depreciationschedu

leProdu

ction

year

+7Produ

ction

year

+8Produ

ction

year

+9Produ

ction

year

+10

Produ

ction

year

+11

Produ

ction

year

+12

Produ

ction

year

+13

Produ

ction

year

+14

Produ

ction

year

+15

2020

2021

2022

2023

2024

2025

2026

2027

2028

year

-3to

-1(2011to

2013)investments

year

+1investments

$4,956,044

$11,775,164

$11,775,164

$10,806,532

$10,806,532

$10,806,532

$8,801,512$

8,801,512

$8,801,512

$8,801,512

$12,453,587

$12,453,587

$12,453,587

$12,453,587

$12,453,587

$6,843,118

$6,843,118

$6,843,118

$6,843,118

$6,843,118

$7,638,910

$7,638,910

$7,638,910

$7,638,910

$7,638,910

$33,468,555

$33,468,555

$33,468,555

$33,468,555

$33,468,555

year

+11

investments

$14,889,970

$14,889,970

$14,889,970

$14,889,970

$14,889,970

year

+12

investments

$5,991,757

$5,991,757

$5,991,757

$5,991,757

year

+13

investments

$16,095,182

$16,095,182

$16,095,182

year

+14

investments

$5,521,487

$5,521,487

year

+15

investments

$6,838,712

year

+16

investments

year

+17

investments

year

+18

investments

year

+19

investments

totalannuald

epreciation......................................................

$48,792,839

$50,679,913

$46,543,659

$69,205,682

$75,294,140

$68,832,310

$78,084,375

$75,966,952

$49,337,109

loss

carriedforw

arddeterm

ination

netincom

ebefore

taxes

......................................................

$849,169,085$

821,072,864

$916,775,041

$830,028,588

$786,595,419

$766,993,427

$733,829,189

$574,389,027

$552,312,198

cumulativenetincom

ebefore

taxes.............................................$4,054,076,423$4,875,149,286

$5,791,924,327

$6,621,952,915

$7,408,548,334

$8,175,541,760

$8,909,370,949

$9,483,759,976

$10,036,072,174

cumulativeloss

.............................................................-$

9,747,030-$

9,747,030

-$9,747,030

-$9,747,030

-$9,747,030

-$9,747,030

-$9,747,030

-$9,747,030

-$9,747,030

potentialw

rite-off

...........................................................$

849,169,085$

821,072,864

$916,775,041

$830,028,588

$786,595,419

$766,993,427

$733,829,189

$574,389,027

$552,312,198

cumulativepotentialw

rite-off

.................................................$4,063,823,453$4,884,896,317

$5,801,671,357

$6,631,699,945

$7,418,295,364

$8,185,288,791

$8,919,117,980

$9,493,507,006

$10,045,819,204

trialw

rite-off..

.............................................................($3,204,907,338)($4,054,076,423)

($4,875,149,286)

($5,791,924,327)

($6,621,952,915)

($7,408,548,334)

($8,175,541,760)

($8,909,370,949)

($9,483,759,976)

actualwrite-off

.............................................................$

0$

0$

0$

0$

0$

0$

0$

0$

0

IV-73

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THIS WEB PROOF INFORMATION PACK IS IN DRAFT FORM. The information contained in it is incomplete and is subject to change. ThisWeb Proof Information Pack must be read in conjunction with the section headed “Warning” on the cover of this Web Proof Information Pack.

APPENDIX IV COMPETENT PERSON’S REPORTEcono

mican

alysisof

China

lcoTorom

ocho

Cop

perProject,

PeruPrepa

redby

Behre

Dolbear

&Co.

Octob

er29,2012Depreciationschedu

leProdu

ction

year

+16

Produ

ction

year

+17

Produ

ction

year

+18

Produ

ction

year

+19

Produ

ction

year

+20

Produ

ction

year

+21

Produ

ction

year

+22

Produ

ction

year

+23

Produ

ction

year

+24

2029

2030

2031

2032

2033

2034

2035

2036

2037

year

-3to

-1(2011to

2013)investments

year

+1investments

$5,991,757

$16,095,182

$16,095,182

$5,521,487

$5,521,487

$5,521,487

$6,838,712

$6,838,712

$6,838,712

$6,838,712

$14,004,295

$14,004,295

$14,004,295

$14,004,295

$14,004,295

$6,113,362

$6,113,362

$6,113,362

$6,113,362

$6,113,362

$7,737,577

$7,737,577

$7,737,577

$7,737,577

$7,737,577

$33,756,997

$33,756,997

$33,756,997

$33,756,997

$33,756,997

year

+20

investments

$8,137,122

$8,137,122

$8,137,122

$8,137,122

$8,137,122

year

+21

investments

$5,639,166

$5,639,166

$5,639,166

$5,639,166

year

+22

investments

$4,031,177

$4,031,177

$4,031,177

year

+23

investments

$13,580,282

$13,580,282

year

+24

investments

$4,306,194

year

+25

investments

year

+26

investments

year

+27

investments

year

+28

investments

totalannuald

epreciation..........................................................

$48,451,434

$48,573,039

$40,215,435

$68,450,945

$69,749,355

$61,384,226

$59,302,041

$65,144,746

$35,693,942

loss

carriedforw

arddeterm

ination

netincom

ebefore

taxes

....................................

......................

$639,131,294

$586,635,237

$692,555,210

$776,542,163

$666,449,564

$554,600,923

$482,303,387

$388,537,105

$429,684,691

cumulativenetincom

ebefore

taxes.................................................

$10,675,203,468

$11,261,838,705

$11,954,393,915

$12,730,936,078

$13,397,385,643

$13,951,986,566

$14,434,289,953

$14,822,827,058

$15,252,511,750

cumulativeloss

.................................................................

-$9,747,030

-$9,747,030

-$9,747,030

-$9,747,030

-$9,747,030

-$9,747,030

-$9,747,030

-$9,747,030

-$9,747,030

potentialw

rite-off

...............................................................

$639,131,294

$586,635,237

$692,555,210

$776,542,163

$666,449,564

$554,600,923

$482,303,387

$388,537,105

$429,684,691

cumulativepotentialw

rite-off

.....................................................

$10,684,950,499

$11,271,585,736

$11,964,140,945

$12,740,683,109

$13,407,132,673

$13,961,733,596

$14,444,036,983

$14,832,574,088

$15,262,258,780

trialw

rite-off...................................................................

($10,036,072,174)($10,675,203,468)($11,261,838,705)($11,954,393,915)($12,730,936,078)($13,397,385,643)($13,951,986,566)($14,434,289,953)($14,822,827,058)

actualwrite-off

.................................................................

$0

$0

$0

$0

$0

$0

$0

$0

$0

IV-74

Page 379:  · 2013. 1. 16. · Hong Kong Exchanges and Clearing Limited, The Stock Exchange of Hong Kong Limited and the Securities and Futures Commission take no responsibility for the contents

THIS WEB PROOF INFORMATION PACK IS IN DRAFT FORM. The information contained in it is incomplete and is subject to change. ThisWeb Proof Information Pack must be read in conjunction with the section headed “Warning” on the cover of this Web Proof Information Pack.

APPENDIX IV COMPETENT PERSON’S REPORTEcono

mican

alysisof

China

lcoTorom

ocho

Cop

perProject,P

eru

Prepa

redby

Behre

Dolbear

&Co.

Octob

er29,2012

Depreciationschedu

leProdu

ction

year

+25

Produ

ction

year

+26

Produ

ction

year

+27

Produ

ction

year

+28

Produ

ction

year

+29

Produ

ction

year

+30

Produ

ction

year

+31

Produ

ction

year

+32

Produ

ction

year

+33

2038

2039

2040

2041

2042

2043

2044

2045

2046

year

-3to

-1(2011to

2013)investments

year

+1investments

$5,639,166

$4,031,177

$4,031,177

$13,580,282

$13,580,282

$13,580,282

$4,306,194

$4,306,194

$4,306,194$

4,306,194

$5,723,387

$5,723,387

$5,723,387$

5,723,387

$5,723,387

$77,490

$77,490

$77,490

$77,490

$77,490

$77,490

$77,490

$77,490

$77,490

$77,490

$10,242,005

$10,242,005

$10,242,005

$10,242,005

$10,242,005

year

+29

investments

$13,569,705

$13,569,705

$13,569,705

$13,569,705

$13,569,705

year

+30

investments

$16,943,207

$16,943,207

$16,943,207

$16,943,207

year

+31

investments

$14,648,911

$14,648,911

$14,648,911

year

+32

investments

$75,440

$75,440

year

+33

investments

$75,440

year

+34

investments

year

+35

investments

year

+36

investments

year

+37

investments

..............

totalannuald

epreciation................................................................

$33,280,207

$27,718,531

$23,764,843

$20,426

,566

$29,690,077

$40,909,897

$55,481,318

$55,479,268

$45,312,703

loss

carriedforw

arddeterm

ination

netincom

ebefore

taxes

................................................................

$437,169,461

$498,672,303

$501,977,752

$664,764,453

$659,901,891

$568,741,467

$485,786,477

$361,385,479

$450,872,267

cumulativenetincom

ebefore

taxes.......................................................$15,689,681,211

$16,188,353,514

$16,690,331,266

$17,355,095

,719

$18,014,997,610

$18,583,739,077

$19,069,525,554

$19,430,911,033

$19,881,783,300

cumulativeloss

.......................................................................-$

9,747,030

-$9,747,030

-$9,747,030-$

9,747,030

-$9,747,030

-$9,747,030-$

9,747,030

-$9,747,030

-$9,747,030

potentialw

rite-off

.....................................................................$

437,169,461

$498,672,303

$501,977,752

$664,764,453

$659,901,891

$568,741,467

$485,786,477

$361,385,479

$450,872,267

cumulativepotentialw

rite-off

...........................................................$15,699,428,241

$16,198,100,544

$16,700,078,296

$17,364,842,750

$18,024,744,641

$18,593,486,107

$19,079,272,584

$19,440,658,063

$19,891,530,331

trialw

rite-off.........................................................................($15,252,511,750)($15,689,681,211)

($16,188,353,514)($16,690,331,266)

($17,355,095,719)($18,014,997,610)

($18,583,739,077)($19,069,525,554)

($19,430,911,033)

actualwrite-off

.......................................................................$

0$

0$

0$

0$

0$

0$

0$

0$

0

IV-75

Page 380:  · 2013. 1. 16. · Hong Kong Exchanges and Clearing Limited, The Stock Exchange of Hong Kong Limited and the Securities and Futures Commission take no responsibility for the contents

THIS WEB PROOF INFORMATION PACK IS IN DRAFT FORM. The information contained in it is incomplete and is subject to change. ThisWeb Proof Information Pack must be read in conjunction with the section headed “Warning” on the cover of this Web Proof Information Pack.

APPENDIX IV COMPETENT PERSON’S REPORTEcono

mican

alysisof

China

lcoTorom

ocho

Cop

per

Project,P

eruPrepa

redby

Behre

Dolbear

&Co.

Octob

er29

,2012

Depreciationschedu

leProdu

ction

year

+34

Produ

ction

year

+35

Produ

ction

year

+36

Produ

ctionyear

+37

Produ

ction

year

+38

Produ

ction

year

+39

Produ

ction

year

+40

Total

2047

2048

2049

2050

2051

2052

2053

year

-3to

-1(2011to

2013)investments

$3,358,650,636

year

+1investments

$118,101,361

$29,244,689

$24,780,220

$58,875,820

$54,032,662

$44,007,559

$62,267,934

$34,215,591

$38,194,550

$167,342,775

$74,449,850

$29,958,786

$80,475,911

$27,607,436

$34,193,561

$70,021,477

$30,566,812

$38,687,887

$168,784,987

$40,685,612

$28,195,831

$20,155,887

$67,901,412

$21,530,970

$28,616,934

$387,450

$387,450

IV-76

Page 381:  · 2013. 1. 16. · Hong Kong Exchanges and Clearing Limited, The Stock Exchange of Hong Kong Limited and the Securities and Futures Commission take no responsibility for the contents

THIS WEB PROOF INFORMATION PACK IS IN DRAFT FORM. The information contained in it is incomplete and is subject to change. ThisWeb Proof Information Pack must be read in conjunction with the section headed “Warning” on the cover of this Web Proof Information Pack.

APPENDIX IV COMPETENT PERSON’S REPORTEcono

mican

alysisof

China

lcoTorom

ocho

Cop

per

Project,P

eruPrepa

redby

Behre

Dolbear

&Co.

Octob

er29,2012

Depreciationschedu

leProdu

ction

year

+34

Produ

ction

year

+35

Produ

ction

year

+36

Produ

ction

year

+37

Produ

ction

year

+38

Produ

ction

year

+39

Produ

ction

year

+40

Total

2047

2048

2049

2050

2051

2052

2053

$51,210,025

$67,848,526

$16,943,207

$84,716,033

$14,648,911

$14,648,911

$73,244,557

$75,440

$75,440

$75,440

$377,200

$75,440

$75,440

$75,440

$75,440

$377,200

$51,660

$51,660

$51,660

$51,660

$51,660

$258,300

$28,085

$28,085

$28,085

$28,085

$28,085

$140,425

$2,255

$2,255

$2,255

$2,255

$2,255

$11,275

$0

$0

$0

$0

$0

year

+38

investments

$0

$0

$0

$0

year

+39

investments

$0

$0

$0

year

+40

investments

$0

$0

totalannuald

epreciation

..........

$31,794,658

$14,879,536

$232,880

$157,440

$82,000

$30,340

$2,255

$5,030,505,590

loss

carriedforw

arddeterm

ination

netincom

ebefore

taxes...........

$463,308,869

$478,870,781

$376,654,573

$0

$0

$0

$0

cumulativenetincom

ebefore

taxes........................

$20,345,092,169

$20,823,962,950

$21,200,617,523

$21,200,617,523

$21,200,617,523

$21,200,617,523

$21,200,617,523

cumulativeloss

.................

-$9,747,030

-$9,747,030

-$9,747,030

-$9,747,030

-$9,747,030

-$9,747,030

-$9,747,030

potentialw

irte-off

...............

$463,308,869

$478,870,781

$376,654,573

$0

$0

$0

$0

cumulativepotentialw

rite-off

......

$20,354,839,199

$20,833,709,980

$21,210,364,553

$21,210,364,553

$21,210,364,553

$21,210,364,553

$21,210,364,553

trialw

rite-off

...................

($19,881,783,300)($20,345,092,169)($20,823,962,950)($21,200,617,523)($21,200,617,523)($21,200,617,523)($21,200,617,523)

actualwrite-off

.................

$0

$0

$0

$0

$0

$0

$0

$9,747,030

IV-77

Page 382:  · 2013. 1. 16. · Hong Kong Exchanges and Clearing Limited, The Stock Exchange of Hong Kong Limited and the Securities and Futures Commission take no responsibility for the contents

THIS WEB PROOF INFORMATION PACK IS IN DRAFT FORM. The information contained in it is incomplete and is subject to change. ThisWeb Proof Information Pack must be read in conjunction with the section headed “Warning” on the cover of this Web Proof Information Pack.

APPENDIX IV COMPETENT PERSON’S REPORT

CHINALCO MINING CORPORATION INTERNATIONAL

TOROMOCHO PROJECT

INDEPENDENT TECHNICAL REVIEW

(BEHRE DOLBEAR PROJECT 11-152)

APRIL 2012

PREPARED BY:

BEHRE DOLBEAR ASIA, INC.999 Eighteenth Street, Suite 1500

Denver, Colorado 80202(303) 620-0020

A Member of the Behre Dolbear Group Inc.© 2012, Behre Dolbear Group Inc. All Rights Reserved.

www.dolbear.com

IV-78

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THIS WEB PROOF INFORMATION PACK IS IN DRAFT FORM. The information contained in it is incomplete and is subject to change. ThisWeb Proof Information Pack must be read in conjunction with the section headed “Warning” on the cover of this Web Proof Information Pack.

APPENDIX IV COMPETENT PERSON’S REPORT

BEHRE DOLBEAR

BEHRE DOLBEAR ASIA, INC.founded 1911MINERALS INDUSTRY ADVISORS

Tony Guo, Vice President

April 18, 2012

Dr. Peng HuaishengChinalcoNo. 62 Xizhimen NorthHaidian District, Beijing, PRC 100082Email: [email protected]

Dear Sir,

Chinalco Mining Corporation International (the “Group”) —Toromocho Project Independent Technical Review

I refer to the proposed corporate financing activities. Unless otherwise specified, terms usedherein shall have the same meaning as those defined in the document of the Company dated April 2012(Document).

I hereby confirm that, in relation to Behre Dolbear’s report and advise (the “Expert Advice”):

Š All bases and assumptions on which the Expert Advice are founded are fair, reasonable,and complete.

Š I and the Behre Dolbear team (we) are appropriately qualified, experienced, andsufficiently resourced to give the Expert Advice.

Š The Scope of Work is appropriate to the Expert Advice given and the opinion required tobe given in the circumstances.

Š We are independent from the Group, its subsidiaries, their respective directors (includingdirectors proposed to be appointed prior to the proposed corporate financing activities),and controlling shareholder(s), and we do not have a direct or indirect material interest inthe securities or assets of the Group, its connected persons, or any associate of the Group.

Š The Document, based on Behre Dolbear’s April 2012 Independent Technical Review,fairly represents our views and contains a fair representation of the conditions set forth inthe HKSE’s Chapter 18 Equity Securities.

999 Eighteenth Street, Suite 1500 S Denver, CO 80202 303-620-0020 fax 303-620-0024BEIJING CHICAGO DENVER GUADALAJARA HONG KONG LONDON NEW YORK

SANTIAGO SYDNEY TORONTO ULAANBAATAR VANCOUVERwww.dolbear.com

IV-79

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THIS WEB PROOF INFORMATION PACK IS IN DRAFT FORM. The information contained in it is incomplete and is subject to change. ThisWeb Proof Information Pack must be read in conjunction with the section headed “Warning” on the cover of this Web Proof Information Pack.

APPENDIX IV COMPETENT PERSON’S REPORT

Š After making all due and careful inquiries we have reasonable grounds to believe and dobelieve that all factual information, which we have relied on, including factual informationwhich we have stated that we have relied on, or have been believed to have relied on, andany supplementary or supporting information given by ourselves in relation to the ExpertAdvice, is true in all respects and that such factual information does not omit any materialinformation.

Š Behre Dolbear has provided and has not withdrawn its written consent of this CompetentPerson’s Report (CPR). The CPR is based on the reporting standards set forth in theVALMIN Code and Guidelines for Technical Assessment and Valuation of MineralAssets and Mineral Securities for Independent Expert Reports, as adopted by theAustralasian Institute of Mining and Metallurgy in 1995 and updated in 2005. Mineralresources and reserves defined for the Toromocho Project have been reviewed forconformity with the December 2004 Australasian Code for Reporting Exploration Results,Mineral Resources and Ore Reserves (the “JORC Code”) prepared by the Joint OreReserves Committee of the Australasian Institute of Mining and Metallurgy, AustralianInstitute of Geoscientists and Minerals Council of Australia.

I will undertake to advise you immediately, if any change of circumstances arises, thereafter,that would render any information contained in this letter misleading in any aspect. Further, weunderstand that you may rely on confirmations and undertakings provided in this letter in connectionwith the proposed corporate financing activities.

Sincerely,

BEHRE DOLBEAR ASIA, INC.

Yingting “Tony” Guo, Ph.D, P.Geo.Vice President and Qualified Person

IV-80

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THIS WEB PROOF INFORMATION PACK IS IN DRAFT FORM. The information contained in it is incomplete and is subject to change. ThisWeb Proof Information Pack must be read in conjunction with the section headed “Warning” on the cover of this Web Proof Information Pack.

APPENDIX IV COMPETENT PERSON’S REPORT

TABLE OF CONTENTS

1.0 INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-881.1 BEHRE DOLBEAR CONTRACT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-881.2 GENERAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-891.3 HISTORY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-911.4 SEQUENCE OF STUDIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-93

2.0 QUALIFICATIONS OF BEHRE DOLBEAR, DISCLAIMER, (INDEMNITIES), ETC. . . . . . . . . . IV-962.1 QUALIFICATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-962.2 DISCLAIMER (INDEMNITIES) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-992.3 GUARANTEE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-1002.4 CONSEQUENTIAL DAMAGES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-100

3.0 ABBREVIATIONS, DEFINITIONS, AND RISK DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-1013.1 ABBREVIATIONS AND DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-1013.2 RISK DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-102

4.0 EXECUTIVE SUMMARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-1044.1 BACKGROUND . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-1044.2 PROJECT OVERVIEW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-1044.3 LAND STATUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-1054.4 GEOLOGY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-1054.5 GEOLOGICAL DATABASE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-1064.6 RESOURCES AND RESERVES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-107

4.6.1 General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-1074.6.2 Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-1094.6.3 Risks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-109

4.7 GEOTECHNICAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-1094.7.1 Pit Slope Design . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-1094.7.2 Stockpile and Dump Stability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-1104.7.3 Risks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-110

4.7.3.1 Pit Slope Angles — Low to Moderate/Unlikely to Possible . . . . . . . . . . . . . IV-1104.7.3.2 Stockpiles and Waste Dumps — Low to Moderate/Unlikely to Possible . . . IV-110

4.8 MINING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-1114.8.1 General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-1114.8.2 Conclusions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-1124.8.3 Risks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-113

4.8.3.1 Production . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-1134.8.3.2 Operating Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-1134.8.3.3 Capital Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-113

4.9 PROCESS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-1134.9.1 General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-1134.9.2 Conclusions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-1154.9.3 Risks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-116

4.10 INFRASTRUCTURE AND NON-PROCESS FACILITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-1164.10.1 General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-1164.10.2 Electrical Power Supply . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-1174.10.3 Water Supply . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-1174.10.4 Office and Administrative Support Facilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-1174.10.5 Material and Supply Storage and Distribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-1174.10.6 Access Roads . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-1174.10.7 Railroad Access . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-118

IV-81

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APPENDIX IV COMPETENT PERSON’S REPORT

4.10.8 Camp Facility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-1184.10.9 Town Site . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-1184.10.10 Miscellaneous Infrastructure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-1184.10.11 Conclusions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-1184.10.12 Risks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-118

4.11 ENVIRONMENTAL AND PERMITTING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-1194.11.1 General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-1194.11.2 Conclusions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-1194.11.3 Risks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-120

4.12 RECLAMATION AND CLOSURE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-1204.12.1 General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-1204.12.2 Conclusions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-1214.12.3 Risks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-121

4.13 ADMINISTRATION, MANPOWER, AND MANAGEMENT . . . . . . . . . . . . . . . . . . . . . . . IV-1214.13.1 General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-1214.13.2 Risks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-121

4.14 CAPITAL COST ESTIMATE AND IMPLEMENTATION SCHEDULE . . . . . . . . . . . . . . IV-1224.14.1 Mining . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-1224.14.2 Total Capital Cost Estimate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-1234.14.3 Sustaining Capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-1234.14.4 Working Capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-1244.14.5 Construction Schedule . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-1244.14.6 Conclusions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-1254.14.7 Risks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-125

4.15 OPERATING COSTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-1264.15.1 Mine . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-1264.15.2 Processing, Infrastructure, and General and Administrative (G&A) . . . . . . . . . . . IV-1274.15.3 Conclusions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-1274.15.4 Risks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-128

4.16 MARKETING AND SALES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-1284.16.1 General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-1284.16.2 Risks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-128

4.17 ECONOMIC ANALYSIS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-1294.18 OVERALL RISK ASSESSMENT/CONSEQUENCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-130

5.0 LAND STATUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-1326.0 GEOLOGY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-134

6.1 REGIONAL GEOLOGY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-1346.2 LOCAL GEOLOGY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-134

6.2.1 General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-1346.2.2 Geology of the Toromocho Porphyry Copper Deposit . . . . . . . . . . . . . . . . . . . . . . IV-134

6.3 GEOLOGICAL DATABASE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-1366.3.1 Database Used for the Mineral Resource Estimates . . . . . . . . . . . . . . . . . . . . . . . . IV-1366.3.2 Drilling . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-1376.3.3 Sampling, Sample Preparation, and Assaying . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-1376.3.4 Quality Assurance/Quality Control (QA/QC) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-138

6.3.4.1 PCI Data Verification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-1386.3.4.2 Old Drilling Verification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-1396.3.4.3 Nearest Neighbor Comparison — Old Drilling to PCI Drilling . . . . . . . . IV-140

6.3.5 Density Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-1406.3.6 Conclusions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-141

IV-82

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THIS WEB PROOF INFORMATION PACK IS IN DRAFT FORM. The information contained in it is incomplete and is subject to change. ThisWeb Proof Information Pack must be read in conjunction with the section headed “Warning” on the cover of this Web Proof Information Pack.

APPENDIX IV COMPETENT PERSON’S REPORT

7.0 MINERAL RESOURCE ESTIMATES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-1427.1 JORC RESOURCE AND RESERVE DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-1427.2 ELECTRONIC DATABASE USED FOR RESOURCE AND RESERVE MODELS . . . . . . IV-1437.3 BULK DENSITY MEASUREMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-1447.4 DATA VERIFICATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-1457.5 PROCEDURES AND PARAMETERS USED FOR THE RESOURCE MODELING . . . . . . IV-1457.6 PROCEDURES FOR RESERVE ESTIMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-149

7.6.1 IMC Economic Block Model . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-1507.6.2 Optimum Pit Generation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-1517.6.3 Final Pit Design . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-1527.6.4 Life-of-Mine Production Schedule . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-153

7.7 RESERVE AND RESOURCE STATEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-1537.8 CONCLUSIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-1547.9 RISK ANALYSIS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-155

8.0 GEOTECHNICAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-1568.1 OPEN PIT SLOPE ANGLES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-156

8.1.1 Slope Geometry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-1578.1.2 Design Sectors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-1578.1.3 Modes of Instability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-1598.1.4 RQD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-1608.1.5 Slope Dewatering . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-1608.1.6 Rock Mass Strength . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-1618.1.7 Seismic Investigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-1618.1.8 Design Sectors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-1618.1.9 Slope Stability Analyses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-1638.1.10 Recommended Slope Angles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-163

8.2 STOCKPILE AND DUMP STABILITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-1648.2.1 Southwest Waste Dump . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-1668.2.2 Southeast Waste Dump . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-1668.2.3 Low-grade Stockpile . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-1678.2.4 Future Work . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-167

8.3 CONCLUSIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-1678.4 RISK ANALYSIS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-167

8.4.1 Pit Slope Angles — Low to Moderate/Unlikely to Possible . . . . . . . . . . . . . . . . . . . . IV-1678.4.2 Stockpiles and Waste Dumps — Low to Moderate/Unlikely to Possible . . . . . . . . . . IV-168

9.0 MINING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-1699.1 OVERVIEW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-1699.2 OPEN PIT PHASES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-1709.3 PRODUCTION SCHEDULE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-1729.4 ROADS, STOCKPILES, ANDWASTE DUMPS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-1749.5 EQUIPMENT SELECTION AND REQUIREMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-175

9.5.1 Mine Work Schedule . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-1779.5.2 Operating Hours per Shift . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-1779.5.3 Material Characteristics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-1779.5.4 Drilling and Blasting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-1789.5.5 Loading . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-1789.5.6 Hauling . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-1799.5.7 Major Auxiliary Equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-179

9.6 2011 DEFINITIVE ESTIMATE UPDATE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-180

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APPENDIX IV COMPETENT PERSON’S REPORT

9.7 MINE MAINTENANCE AND ANCILLARY FACILITIES . . . . . . . . . . . . . . . . . . . . . . . . IV-1819.7.1 Mine Truck Shop . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-1819.7.2 Administration Building . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-1829.7.3 Maintenance Building and Warehouse . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-1829.7.4 Laboratory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-1829.7.5 Fueling Stations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-1829.7.6 Explosives Storage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-1829.7.7 Camp Facility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-1829.7.8 Mine Electric Power Distribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-182

9.8 CONCLUSIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-1839.9 RISK ANALYSIS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-184

9.9.1 Production . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-1849.9.2 Operating Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-1849.9.3 Capital Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-184

10.0 METALLURGY, CONCENTRATOR AND TAILINGS PROCESS, AND PLANT DESIGN . . . IV-18510.1 METALLURGICAL TESTING BASIS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-185

10.1.1 Mineralogy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-18510.1.2 Sampling . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-186

10.2 COPPER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-18610.2.1 Recovery . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-18610.2.2 Copper Concentrate Grade . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-188

10.3 MOLYBDENUM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-19010.3.1 Recovery . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-19010.3.2 Molybdenite Concentrate Grade . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-191

10.4 MINERAL PROCESSING FACILITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-19110.5 FINAL PRODUCT QUALITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-191

10.5.1 Copper . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-19110.5.2 Molybdenum . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-192

10.6 CONCLUSIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-19210.7 RISK ANALYSIS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-193

11.0 SMELTING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-19412.0 INFRASTRUCTURE AND NON-PROCESS FACILITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-195

12.1 GENERAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-19512.1.1 Electrical Power Supply . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-19512.1.2 Water Supply . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-19512.1.3 Office and Administrative Support Facilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-19512.1.4 Material and Supply Storage and Distribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-19512.1.5 Access Roads . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-19612.1.6 Railroad Access . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-19612.1.7 Camp Facility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-19612.1.8 Town Site . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-19612.1.9 Miscellaneous Infrastructure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-196

12.2 CONCLUSIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-19712.3 RISK ANALYSIS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-197

13.0 ENVIRONMENTAL AND PERMITTING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-19813.1 BACKGROUND . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-198

13.1.1 Environmental Setting — General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-19813.1.2 Physical and Biological Environment — Current Issues . . . . . . . . . . . . . . . . . . . . IV-20013.1.3 Human (Social and Community) Environment — Current Issues . . . . . . . . . . . . . IV-202

IV-84

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APPENDIX IV COMPETENT PERSON’S REPORT

13.2 PERMITTING STATUS AND SCHEDULE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-20613.2.1 EIA and Construction Permits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-20613.2.2 Mine Plans, Water Use, and Other Permits and Approvals . . . . . . . . . . . . . . . . . . . IV-20613.2.3 Government Changes in Peru — Agency and Community Perceptions . . . . . . . . . IV-20713.2.4 Water Management Update to December 2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-207

13.3 CONCLUSIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-20813.4 RISK ANALYSIS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-209

14.0 RECLAMATION AND CLOSURE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-21014.1 CONCEPTUAL CLOSURE PLAN . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-21014.2 DETAILED CLOSURE PLAN . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-21014.3 FINANCIAL ASSURANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-21114.4 MINE LIFE AND SUSTAINABILITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-21114.5 CONCLUSIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-21114.6 RISK ANALYSIS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-211

15.0 ADMINISTRATION, MANPOWER, AND MANAGEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-21315.1 MANAGEMENT AND GENERAL ADMINISTRATION . . . . . . . . . . . . . . . . . . . . . . . . . IV-21315.2 MANPOWER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-213

15.2.1 Administration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-21315.2.2 Mining . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-21315.2.3 Milling and Hydrometallurgical Processing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-213

15.3 CONCLUSIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-21415.4 RISK ANALYSIS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-214

16.0 CAPITAL COST ESTIMATE AND IMPLEMENTATION SCHEDULE . . . . . . . . . . . . . . . . . . . IV-21516.1 MINE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-215

16.1.1 Major Mine Equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-21616.1.2 Mine Support Equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-21716.1.3 Sustaining Capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-218

16.2 TOTAL CAPITAL EXPENDITURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-21816.2.1 Concentrator Sustaining Capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-22016.2.2 Working Capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-220

16.3 CONSTRUCTION SCHEDULE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-22016.4 CONCLUSIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-22116.5 RISK ANALYSIS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-222

17.0 OPERATING COST ESTIMATE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-22317.1 MINE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-223

17.1.1 November 2007 Feasibility Study . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-22317.1.2 February 2011 Definitive Estimate Operating Cost Update . . . . . . . . . . . . . . . . . . IV-226

17.2 PROCESSING, INFRASTRUCTURE, AND G&A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-22817.3 CONCLUSIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-22917.4 RISK ANALYSIS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-229

18.0 MARKETING AND SALES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-23018.1 CONCLUSIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-23018.2 RISK ANALYSIS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-230

19.0 ECONOMIC ANALYSIS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-23119.1 STRUCTURE OF THE SPREADSHEET . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-23119.2 METAL PRICES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-23219.3 OTHER INPUT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-23919.4 RESULTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-24019.5 SENSITIVITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-24019.6 COST COMPARISON . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-24119.7 CONCLUSIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-24319.8 RISK ANALYSIS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-243

APPENDIX 1.0 REFERENCE MATERIAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-244APPENDIX 2.0 RESUMES OF BEHRE DOLBEAR’S PROJECT TEAM PROFESSIONALS . . . . IV-246APPENDIX 3.0 CASH FLOW SPREADSHEETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-287

IV-85

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THIS WEB PROOF INFORMATION PACK IS IN DRAFT FORM. The information contained in it is incomplete and is subject to change. ThisWeb Proof Information Pack must be read in conjunction with the section headed “Warning” on the cover of this Web Proof Information Pack.

APPENDIX IV COMPETENT PERSON’S REPORT

LIST OF TABLES

Table 3.1 Overall Risk Assessment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-103Table 4.1 JORC Ore Reserves at the Toromocho Project . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-108Table 4.2 JORC Measured and Indicated Mineral Resources at the Toromocho Project . . . . . . . . . . IV-108Table 4.3 JORC Inferred Mineral Resources at the Toromocho Project . . . . . . . . . . . . . . . . . . . . . . IV-108Table 4.4 Mine, Concentrator, and Infrastructure Capital Cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-123Table 4.5 Key Milestones for the Toromocho Project . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-124Table 4.6 2007 Feasibility Study Mine Life Average Operating Costs . . . . . . . . . . . . . . . . . . . . . . . IV-126Table 4.7 Pre-production Operating Costs per Tonne Comparison . . . . . . . . . . . . . . . . . . . . . . . . . . IV-126Table 4.8 2011 Operating Costs — Concentrator, Molybdenum Hydrometallurgical Plant,

Infrastructure, and G&A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-127Table 4.9 Toromocho Project Risk Assessment Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-130Table 6.1 The Results of the Check Assays for Total Copper . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-138Table 6.2 Result Summary of the Comparison Between Calculated Composites and Pulp Weight

Composite Values . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-139Table 7.1 Drill Hole Database used for the Toromocho Project Resource Estimation . . . . . . . . . . . . IV-143Table 7.2 IMC Bulk Density Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-144Table 7.3 IMC Toromocho Block Model Definition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-146Table 7.4 Grade Estimation Parameters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-147Table 7.5 Mineral Resource Categorization Parameters for Toromocho Project . . . . . . . . . . . . . . . . IV-149Table 7.6 IMC Economic for Pit Optimization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-150Table 7.7 Behre Dolbear Modified Economics for Pit Optimization Check . . . . . . . . . . . . . . . . . . . IV-152Table 7.8 JORC Ore Reserves at the Toromocho Project . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-153Table 7.9 JORC Measured and Indicated Mineral Resources at the Toromocho Project1 . . . . . . . . . IV-154Table 7.10 JORC Inferred Mineral Resources at the Toromocho Project1 . . . . . . . . . . . . . . . . . . . . . . IV-154Table 8.1 Overall Slope Angles (OSA) for Toromocho . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-163Table 9.1 Phase Design Summary Mill Cost Only Economics — Measured and Indicated

Mineralization Only . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-172Table 9.2 Behre Dolbear Production Estimate including 2% Mining Losses and 3% Dilution . . . . . IV-173Table 9.3 Major Mine Equipment On Site . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-176Table 9.4 Material Characteristics for Equipment Calculations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-177Table 9.5 Availability and Utilization for Major Mine Equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-178Table 10.1 Toromocho Locked Cycle Laboratory Testing — Centromin . . . . . . . . . . . . . . . . . . . . . . IV-186Table 10.2 Pilot Plant Testing — Centromin Grind at < 200 Mesh Tyler . . . . . . . . . . . . . . . . . . . . . . IV-187Table 10.3 Pilot Plant Testing — Centromin . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-187Table 10.4 Locked Cycle Tests by Ore Type — METCON . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-188Table 10.5 SGS Lakefield Pilot Plant Run . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-188Table 10.6 Silver Recovery Results1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-189Table 16.1 Material Handling Quantities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-216Table 16.2 Concentrator and Infrastructure Capital Cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-219Table 16.3 Key Milestones for the Toromocho Project . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-221Table 17.1 Summary of Mine Operating Costs — Per Total Tonne . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-224Table 17.2 Pre-production Operating Costs per Tonne Comparison . . . . . . . . . . . . . . . . . . . . . . . . . . IV-228Table 17.3 Fourth Quarter 2011 Operating Costs — Concentrator, Molybdenum

Hydrometallurgical Plant, Infrastructure, G&A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-229Table 19.1 Summary of Metal Price Forecasts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-233Table 19.2 Average Metal Prices — January 1, 2006 through June 30, 2011 . . . . . . . . . . . . . . . . . . . IV-235Table 19.3 Metal Prices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-239Table 19.4 Results of Sensitivity Analyses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-240

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APPENDIX IV COMPETENT PERSON’S REPORT

LIST OF FIGURES

Figure 1.1. Property location in Peru . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-90Figure 6.1. Cross section map of the Toromocha deposit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-135Figure 8.1. Definition of bench face, interramp, and overall angles . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-158Figure 8.2. Typical failure models . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-159Figure 8.3. ISA projected to the July 2007 final pit plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-162Figure 8.4. Waste dump and final pit configuration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-165Figure 9.1. All phase designs sliced on the 4500 bench elevation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-171Figure 13.1. Local site topography and environmental setting at Toromocho is shown in this view

during winter season August 2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-198Figure 13.2. The historic mining town of Morococha is shown with reclaimed waste areas in the

foreground . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-199Figure 13.3. Initial pioneering work is occurring in the concentrator area in the southern part of the

project site . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-200Figure 13.4. Wet, marshy soils (“bofedal”) are being removed from the margin of the tailings dam

construction area in the Tunshuruco valley . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-201Figure 13.5. The Kingsmill Tunnel Water Treatment Plant facility . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-201Figure 13.6. Vista from the Central Highway to the new town at Carhuacoto and the peaks to the

west . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-203Figure 13.7. The new town at Carhuacoto . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-204Figure 13.8. Conditions on the Central Highway from Lima . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-205Figure 19.1. Copper cash operating costs — fourth quarter 2011 — after by product credits . . . . . . . . IV-242

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APPENDIX IV COMPETENT PERSON’S REPORT

1.0 INTRODUCTION

Behre Dolbear Asia, Inc. (Behre Dolbear) has undertaken an Independent Technical Report ofthe Toromocho Project in Peru for the Chinalco Mining Corporation International (Group). Some ofthe information in this Independent Technical Review (ITR) is paraphrased from the ToromochoProject Feasibility Study by Aker Kvaerner dated December 2007, the February 2009 ToromochoProject Basic Engineering Report by Aker Solutions, the February 2011 Aker Solutions DefinitiveEstimate, and the subcontractor reports, as referenced in the Appendices of these reports.

1.1 BEHRE DOLBEAR CONTRACT

It is Behre Dolbear’s understanding that Group is considering proposed corporate financingactivities. To help accomplish this important objective, the Group requires an ITR covering itsPeruvian mining project (Toromocho Project), which is presented in the December 2007 ToromochoProject Feasibility Study by Aker Kvaerner and the February 2009 Toromocho Project BasicEngineering Report by Aker Solutions, and the February 2011 Definitive Estimate. Capital, operatingcosts, and financial valuations have been adjusted to reflect a fourth quarter 2011 basis.

Behre Dolbear Asia, Inc., a wholly owned subsidiary of Behre Dolbear & Company, Inc., partof the Behre Dolbear Group Inc. has been retained by the Group to conduct an Independent TechnicalReport for their Toromocho Project in Peru. Behre Dolbear has completed the work in four tasks, asfollows.

Š Task 1—Desktop Review of Reserves and Resources

Š Task 2— Expedited Desktop Review of Technical documents

Š Task 3— Site Visit and Property Inspection

Š Task 4— Preparation of the ITR

Behre Dolbear completed Tasks 1 and 2 on June 6, 2011 and visited the site on July 25-27,2011.

Behre Dolbear will complete a technical due diligence review of the project and prepare theITR including a risk assessment.

Behre Dolbear’s review covers the geology, resource and reserve aspects, mining, processing,infrastructure, environmental, and social aspects of the project, project approvals, life of mineproduction plans, project implementation, manpower analysis, capital and operating costs, marketingand sales, an economic evaluation, and project risks.

Behre Dolbear has reviewed the project resources and reserves in accordance with the standardand in compliance with the Australasian Code for Reporting Identified Mineral Resources and OreReserves prepared by the Joint Committee of the Australasian Institute of Mining and Metallurgy,

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APPENDIX IV COMPETENT PERSON’S REPORT

Australian Institute of Geoscientists, and Minerals Council of Australia, December 2004 (the JORCCode). Behre Dolbear has not undertaken an audit of the data, re-estimation of the resources orreserves, or reviewed the tenements status with respect to any legal or statutory issues. The Groupadvised that there are not title impediments to the proposed operations and that all project tenementsare in good standing.

1.2 GENERAL INFORMATION

The Toromocho Project is located in central Peru, approximately 140 kilometers (km) east ofLima, Peru in the Morococha mining district, Yauli Province, Junin Department (Figure 1.1). Thepaved main highway from Lima passes through Morococha. The region has steep topography withelevations over the deposit ranging from 4,700 meters (m) to over 4,900m above sea level. The valleysin the area are of glacial origin.

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APPENDIX IV COMPETENT PERSON’S REPORT

Figure 1.1. Property location in PeruSource: Toromocho Project Feasibility Report, December 2007, Aker Kvaerner

Access to the Toromocho Project (previously the Pacific Project) is by both the paved CentralHighway and the Central Railway, which connects the Morococha mining district to both Lima and LaOroya. The center of the Toromocho deposit is about 2.5 km from the town of Morococha in theMorococha mining district. Lima to Morococha is about 142 km by road and about 173 km by rail. Thedistance east to La Oroya is about 32 km by road and 35 km by rail. The Doe Run Company operates acustom smelter in the town of La Oroya.

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APPENDIX IV COMPETENT PERSON’S REPORT

The climate has two well-defined seasons. The wet season is from November to April and hasfrequent hail and snowfalls with temperatures ranging from 3°C to 20°C. Total wet seasonprecipitation averages 650 millimeters (mm). The rest of the year is reasonably dry with sporadic andsudden rain squalls. Temperatures range from minus 4°C to 14°C. The wind is generally from anortherly direction with a maximum recorded speed of 30 km per hour (km/hr).

The town of Morococha is reasonably typical of a small Andean mining camp. Centrominreported in 1998 that there were 657 houses in Morococha and 20 additional units in Tuctu. Tuctu islocated just across the highway to the north from Morococha.

Corona/Pan American Silver and Austria Duvaz are currently operating small undergroundmines in the Morococha area that will be curtailed when required by the Toromocho Project. Twooperating sulfide flotation mills are operating at production levels of about 1,500 tonnes per day (tpd).

A large part of the population of the Morococha district works in the mining industry. Theneighboring areas could provide a pool of skilled and experienced labor.

Power is currently available in Morococha; however, additional power lines for the scale of theToromocho Project will be required. The power source identified in the feasibility study is the NationalInterconnected Electrical Grid and the connection will be at the 220-kV substations at Pomacocha.A 9 km single circuit transmission line will be built from Kingsmill (southeast of the project) to theproject site.

Several potential water sources are available to the project. The Kingsmill Tunnel underliesmost of the Toromocho mining area and drains most of the district to the southeast. Studies by ErrolMontgomery and Associates indicate that only 50% of the Kingsmill Tunnel water will be required tomeet the Project’s needs. MCP has negotiated an agreement with the government to obtain the rights tothe Kingsmill Tunnel discharge in return for the rights to the discharge. The Kingsmill water treatmentplant is completed and operating. Treated water, in excess of process requirements, will be dischargedto the Rio Yauli.

The area around the Toromocho pit is characterized by steep mountainous terrain with glacialvalleys. Elevations range from 4,700m to over 4,900m above sea level in the mine area. The center ofthe Toromocho deposit is in a broad valley or basin that opens to the south. Topography climbs to thewest, north, and east away from the center of the deposit.

1.3 HISTORY

The earliest recorded information on the Toromocho deposit dates from 1928 when a low-gradecopper zone was discovered on the edge of the monzonite stock compromising the San Francisco peakalong with several other low-grade blocks.

Between 1954 and 1955, Cerro de Pasco Corporation carried out an exploration program thatindicated the presence of mineralization but without recognizing the potential of the district.

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APPENDIX IV COMPETENT PERSON’S REPORT

On May 18, 1973, the Peruvian Government declared all mining rights in Toromocho asobsolete and transferred the properties to Centromin, a Peruvian government entity. From April 1974to January 1976, Centromin carried out the last phase of major exploration drilling.

During 2003, Peru Copper Inc. (PCI) and their subsidiary, Minera Peru Copper S.A. (MPC)acquired the option on the property from Centromin.

In 2007, PCI became a wholly owned subsidiary of the Group that changed the subsidiary’sname to Minera Chinalco Peru S.A. (MCP) and refers to the Project as the Toromocho Project.

Behre Dolbear’s ITR basis consists of information gained from reviewing Aker Kvaerner’sDecember 2007 Toromocho Project Feasibility Study; Aker Solutions’ February 2009 ToromochoProject Basic Engineering Report that includes basic engineering and additional studies to furtherrefine the design of the process plant and refine the capital and operating costs, and the Aker SolutionsFebruary 2011 Definitive Estimate of the Capital Cost Estimate Revision 4.

The subcontractor’s and their areas of responsibilities are:

Š Andes Mining Research (AMR)

Š Marketing

Š Buenaventura Ingenieros (work done during the pre-feasibility study)

Š Transportation of mills and heavy equipment

Š CESEL

Š Power supply study

Š Call and Nicholas, Inc. (CNI)

Š Pit slope design and waste dump design

Š Errol L. Montgomery & Associates, Inc. (EMA)

Š Hydrogeologic investigations

Š Site-wide water balance

Š Golder Associates

Š Surface water management

Š Tailings storage facility

Š Independent Mining Consultants, Inc. (IMC)

Š Mine production schedule

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APPENDIX IV COMPETENT PERSON’S REPORT

Š Mine equipment requirements

Š Mine personnel

Š Mine capital costs

Š Mine operating costs

Š Knight Piésold (KP)

Š Geotechnical investigations

Š Environmental Impact Assessment (EIA)

Š Krech Ojard

Š Railroad evaluation

Š Port of Callao

Š Transportation costs for concentrate

Š METCON

Š Metallurgical test work

Š Minerals Advisory Group (MAG)

Š Metallurgy and supervision of METCON test work

Š Montgomery Watson Harza (MWH)

Š Environmental geochemical assessment

Š Seismic investigation

Š Phoenix Engineering

Š Lime supply

Š SGS Lakefield

Š Grinding/flotation test work

Š Molybdenum hydrometallurgical test work

1.4 SEQUENCE OF STUDIES

In 1980, Kaiser Engineers performed a detailed feasibility study for Centromin. The studyproposed an open pit mine with a conventional concentrator and a heap leach operation.

In February 2006, SNC-Lavalin (SNC) completed a pre-feasibility study for MPC. The workperformed by SNC, MPC, and third parties covered site infrastructure, geology, hydrology, mining,

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APPENDIX IV COMPETENT PERSON’S REPORT

including pit slope design, concentrator, tailings disposal, heap leaching with SX/EW, environmentaland permit issues, community relations, and capital and operating costs estimates. The mine productionschedule called for a feed of 150,000 tpd of run-of-mine (ROM) ore to primary crushing. The capitalcosts were estimated to be accurate within minus 10% to plus 25%. Metallurgical test work was furtherdefined and continued.

In August 2006, MPC required Aker Kvaerner to perform a definitive feasibility study. Areasof work covered included the ones investigated by SNC. The hydrometallurgical treatment ofmolybdenum concentrate to produce molybdenum oxide was added to the scope of the study.

During the study, it became clear that processing part of the ore by heap leaching and SX/EWwould not be economic and it was decided to delete this process variation from the feasibility study. Aspart of the feasibility study, Aker Kvaerner performed trade-off studies on concentrator capacity, oreconveying, concentrator location, and concentrator enclosure. The feasibility study report was issued inDecember 2007.

The December 2007 report recommended a number of optimization and refinement studies thatwere completed by Aker Solutions in 2008 resulting in an updated capital cost, operating cost, andschedule presented in the February 2009 Toromocho Project Basic Engineering Report.

The capital cost estimate was further refined to minus 5% and plus 10% in the February 2011Definitive Estimate.

MCP in conjunction with IMC and Kvaerner/Jacobs personnel are currently updating thereserves, production plan, hydromet plant details, and related operating costs and capital costsestimates and related cash flow calculations based on:

Š Minor revisions to the pit slope angles

Š Removal of pit limit restrictions due to the commitment to move the national highway

Š New government requirements for haul road width

Š Refinements and revisions to the molybdenum hydrometallurgical plant design

Š Revisions to the Peruvian mining tax law

Š Updated consumables and equipment costs for mining and processing

Š Updated costs for capital equipment for mining and processing

Š Updating concentrate handling and processing costs and penalties

The aforementioned work was ongoing during Behre Dolbear’s investigation and was not takeninto consideration in this report.

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APPENDIX IV COMPETENT PERSON’S REPORT

The Toromocho Project feasibility study to date proposes mining and processing ore at a rate of117,200 tpd (stripping ratio of 0.79:1) producing an average of 1,838 tpd of copper concentrates at26.5% copper and 25.1 tpd of molybdenum oxide over a 36-year mine life. Initial capital costs arecurrently estimated at $2.948 billion (fourth quarter 2011 dollars) and production is scheduled to beginin the fourth quarter of 2013.

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APPENDIX IV COMPETENT PERSON’S REPORT

2.0 QUALIFICATIONS OF BEHRE DOLBEAR, DISCLAIMER, (INDEMNITIES), ETC.

2.1 QUALIFICATIONS

Behre Dolbear & Company, Inc. is an international minerals industry advisory group that hasoperated continuously in North America and worldwide since 1911. Behre Dolbear and its parent,Behre Dolbear Group Inc., currently have offices in Beijing, Denver, Guadalajara, London, New York,Santiago, Sydney, Toronto, Ulaanbaatar, Vancouver, and Hong Kong.

The firm specializes in performing mineral industry studies for mining companies, financialinstitutions, and natural resource firms, including mineral resource/ore reserve compilations and audits,mineral property evaluations and valuations, due diligence studies and independent expert reviews foracquisition and financing purposes, project feasibility studies, assistance in negotiating mineralagreements, and market analyses. The firm has worked with a broad spectrum of commodities,including base and precious metals, coal, ferrous metals, and industrial minerals on a worldwide basis.Behre Dolbear has acted on behalf of numerous international banks, financial institutions and miningclients and is well regarded worldwide as an independent expert engineering consultant in the mineralsindustry. Behre Dolbear has prepared numerous independent Technical Reports for mining projectsworldwide to support securities exchange filings of mining companies in Hong Kong, China, theUnited States, Canada, Australia, the United Kingdom, and other countries.

Most of Behre Dolbear’s associates and consultants have occupied senior corporatemanagement and operational roles, and are well experienced from an operational viewpoint as well asbeing independent expert consultants.

Behre Dolbear Asia, Inc. was established in 2004 to manage Behre Dolbear Group’s projects inChina and other Asian countries. Project teams of Behre Dolbear commonly consist of senior-levelprofessionals from Behre Dolbear Group’s offices in Denver, Colorado, USA; Sydney, Australia;London, United Kingdom; and other worldwide offices. Since its establishment, Behre Dolbear hasconducted over 40 technical studies for mining projects in China or mining projects located outside ofChina to be acquired by HKSE-listed Chinese companies, including preparing ITRs for the HKSE IPOprospectuses of Hunan Nonferrous Metals Corporation Limited, Zhaojin Mining Industry CompanyLimited, and Hildili Industry International Development Limited and for the Shanghai Stock Exchange(SSE) [Š] of Western Mining Company Limited. These four companies were successfully listed on theHKSE/SSE in 2006 and 2007.

Behre Dolbear’s primary team of minerals industry professionals has specialized capability andexperience applicable to analysis of this Project. All of the proposed team members have at least25 years of experience in the mining industry and have been involved in numerous assignments wheretheir reports were utilized by the global stock exchanges. Detailed resumes of these professionals areattached separately to this document, in Appendix 2.0 and brief resumes follow.

Project Manager and Mining Engineer: Mr. Robert R. Dimock has more than 30 years ofexperience, including over 20 years in executive level management in the mining industry, withexpertise in the areas of general management, corporate strategic planning, project development andmanagement, mining, processing, construction management, and mining engineering in base, and

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APPENDIX IV COMPETENT PERSON’S REPORT

precious metals. He is the former president of Rio Tinto’s Kennecott Copper subsidiary and wasinstrumental in the redevelopment of the Bingham Canyon mine, mill, and smelter. He has managedcopper, lead/zinc, and precious metals operations in both open pit and underground mines.Geographically, he has worked in North and South America, the Pacific Rim, and the Middle East. Hiscredentials include a Bachelor of Science Degree in Mineral Economics and a Master of ScienceDegree in Mining Engineering. He is a Mining and Metallurgical Society of America Qualified Person.

Project Geologist: Dr. Yingting “Tony” Guo, P.Geologist, is vice president of Behre DolbearAsia, Inc. and vice president of Behre Dolbear & Company, Ltd. in Canada. He has over 22 years ofprofessional experience in the mineral industries. He has worked on gold, copper, iron, industrialmineral, and coal projects/mines in China, Mongolia, Africa, United States, and Canada. His businessexpertise includes the mineral resource exploration, assessment, acquisition, and project management.He has participated and managed gold, copper, and coal exploration work in China for the last10 years. His credentials include a Bachelor of Science Degree in Geology from the NanjingUniversity as well as a Doctor Degree in Geology and Exploration from China University of Miningand Technology. He is a Registered Professional Geoscientist from the Province of British Columbiaand a Member of Mineral Exploration Association of British Columbia, Canada. He meets therequirements for “Competent Person,” as defined in the Australasian JORC Code and the requirementsfor “Qualified Person,” as defined in Canadian National Instrument 43-101 for the purpose of mineralresource/ore reserve estimation and reporting. He has recently been involved in several (independent)technical reports for the HKSE and Toronto Stock Exchange ( TSX).

Resource/Reserve Specialist: Dr. Robert Cameron has over 30 years of experience ingeostatistical analysis of ore reserves, computerized mine planning, mine design, computerized studiesfor mine production optimization, ultimate pit limit optimization, mine efficiency studies, equipmentselection and utilization, and operations research. He has completed geostatistical estimations orresource and reserve reviews or audits on over 100 properties worldwide during his career. He recentlycompleted the certification of a major copper producer's reserves at all of its copper mines. He is aMining and Metallurgical Society of America Qualified Person.

Metallurgical Processing Specialist: Mr. Mark Anderson has more than 40 years ofdiversified industry experience in both technical and managerial roles, including project feasibility,mine operations, and project due diligence. His experience includes evaluation of base and preciousmetal properties with emphasis on processing, metallurgy, project management, and feasibilityanalysis. His responsibilities have included construction, management, and operation of a 9 milliontonne (Mt) per year open pit copper/molybdenum mining operation with a 28,000 tonne per dayconcentrator, and milling and smelting operations at a 21,500 tonne per day copper ore mining andprocessing operation. During his career, he has evaluated porphyry copper operations anddevelopments throughout South America including Peru, Chile, and Argentina. He is a Mining andMetallurgical Society of America Qualified Person.

Environmental and Permitting Specialist: Dr. Scott Mernitz has over 25 years of expertisein environmental due diligence involving minerals projects, including fatal flaw and risk/liabilityanalyses, agency negotiations and conflict resolution, and sustainability issues. This work hasaddressed projects involving precious and base metals, industrial minerals, and energy fuels such as

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APPENDIX IV COMPETENT PERSON’S REPORT

uranium, coal, coal bed methane, oil and gas, and oil shale. Field reviews have been performedthroughout North, Central, and South America, the Caribbean, Africa, Australia, and the Middle East.His desktop study experience includes additional projects in Africa, Greenland, Europe, and Australia.Dr. Mernitz’s experience also consists of U.S. National Environmental Policy Act (NEPA) projectmanagement; international Environmental Impact Assessments (EIA) reviews and support documents;mining, solid, and hazardous waste management; environmental regulations and permitting; energy,mineral, and water resources planning; and environmental impact assessments. He has projectmanagement and principal investigator experience in several major interdisciplinary environmentalbaseline studies, environmental permitting, mining waste regulatory policy, and third-party EIS andEA projects under NEPA requirements. Further, he has reviewed, critiqued, summarized, andtranslated international EIAs, and served as Project Director for several supporting documents toAustralian EIAs during his term in Perth. He has other in-depth experience in Environmental SiteAssessments (ESA) for mining properties and support facilities, hazardous waste/mining wasteRemedial Investigation/Feasibility Studies (RI/FS), and technical oversight projects under UnitedStates waste management laws and regulations. He is one of Behre Dolbear’s specialists in theapplication of the Equator Principles to global mining project reviews for banks, mining companies,and governments. His credentials include a Bachelor of Arts Degree in Geography from ElmhurstCollege, Illinois; the Master of Arts Degree in Geography and Environmental Conservation from theUniversity of Colorado at Boulder; and the Doctor of Philosophy Degree in Land Resources(Mediation of Environmental Disputes) through the interdisciplinary Institute of EnvironmentalStudies, University of Wisconsin at Madison.

Financial Modeling, Economic Analysis and Valuation: Mr. William F. Jennings has over30 years of mining industry experience with consulting firms and, early in his career, with the UnitedStates Geological Survey (USGS). He has specialized in the economics and valuation of mineralproperties, with emphasis on base metals, precious metals, and coal, both in North America andinternationally. On valuation and feasibility projects, he prepares economic analysis models anddetermines taxes, cash flow, discount rate, net present value, and rate of return. On projects wherevaluation is not amenable to standard cash flow net present value analysis, he performs valuationsusing other accepted techniques. On due diligence projects, he reviews and critiques the economicanalyses prepared by others. He has provided expert witness testimony intermittently since 1978. He isa Registered Professional Engineer and a Certified Mineral Appraiser. He has been a Behre Dolbearassociate since 1989.

Project Coordinator: Mr. Jack Song has over 25 years of experience in all phases of preciousand base metal (including gold, copper and iron) exploration from grassroots reconnaissance to minedevelopment. He has worked for different western minerals companies including Ivanhoe Mines, GoldFields, and Omega Gold Investment, etc. in Australia, Mongolia, and China and has held projectmanager, senior geologist, chief geologist, and general manager positions with the companies. He hasextensive exploration and project generation activities experience for gold, base metals, iron, etc. Hehas received a Bachelor’s degree in geology and mineral exploration from Wuhan Geological Collegein August 1982. He was qualified as a Senior Geologist by the HR Department of Xinjiang UygurAutonomous Region government in October 1994.

Senior Advisor: Mr. Bernard J. Guarnera has more than 40 years of experience with miningand consulting firms in the international mineral industry focusing on the valuation of developed and

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APPENDIX IV COMPETENT PERSON’S REPORT

undeveloped mineral properties, negotiation, and structuring of mineral development and leaseagreements, and economic geology. His valuation expertise spans all commodities and geographicareas with recent emphasis on base and precious metals and past emphasis on energy minerals. He is aCertified Mineral Appraiser with the American Institute of Mineral Appraisers. He has lectured andinstructed the mining engineering group of the Internal Revenue Service (IRS) on mineral valuationtechniques and has also presented seminars and instruction on mineral valuations to the AmericanInstitute of Rural and Farm Appraisers and financial institutions. He has provided expert witnesstestimony on mineral property values on several occasions. He is a Mining and Metallurgical Societyof America Qualified Person.

2.2 DISCLAIMER (INDEMNITIES)

Behre Dolbear has conducted an independent technical review of the Group’s ToromochoProject mining properties and holdings. A site visit was made to the project sites by Behre Dolbearprofessionals involved in this study. Behre Dolbear has exercised all due care in reviewing the suppliedinformation and believes that the basic assumptions are factual and correct and the interpretations arereasonable. Behre Dolbear has independently analyzed the Company’s data, but the accuracy of theconclusions of the review largely relies on the accuracy of the supplied data.

Behre Dolbear has relied on the work of Aker Kvaerner and its subcontractors and the Group inthe preparation of this ITR. Where possible, Behre Dolbear has confirmed the information provided bycomparison against other data sources, comparisons with other projects, or by field verification.

Where checks and confirmations were not possible, Behre Dolbear has assumed that allinformation supplied is complete and reliable within normally accepted limits of error. During thenormal course of the review, Behre Dolbear has not discovered any reason to doubt that assumption.

Behre Dolbear has not specifically reviewed or audited the property ownership documents atToromocho. However, MPC informed Behre Dolbear that they had acquired the mineral claimsrequired for the orebody, and substantial surface holdings for plant, tailing, infrastructure, and supportrequirements. Information regarding the property situation at Toromocho, within this report, has beenprovided by MPC. Behre Dolbear has not offered a professional opinion regarding the propertysituation.

The valuation assessment has been conducted in accordance with the Code for the TechnicalAssessment and Valuation of Mineral and Petroleum Assets and Securities for Independent ExpertReports (Valmin Code) as issues in 1995 and updated in 2005 and in accordance with Chapter 18 ofthe HKSE. In accordance with the latter requirements, Behre Dolbear has not included anyconsideration of Inferred resources in determining a value for the technical assets.

The report is provided to the Group for the purpose of assisting them in assessing the technicalissues and associated risks of the development in the context of the proposed corporate financingactivities. This report should not be used or relied upon for any other purpose. The report does notconstitute a technical or legal audit. Neither the whole nor any part of this report nor any referencethereto may be included in, or with, or attached to any document or used for any purpose withoutBehre Dolbear’s written consent to the form and context in which it appears.

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APPENDIX IV COMPETENT PERSON’S REPORT

2.3 GUARANTEE

Consultant guarantees that it shall perform the Services in accordance with the standards ofcare and diligence normally practiced by recognized consulting firms performing services of a similarnature. All information furnished by Client is a representation or warranty by Client. Client isresponsible for the accuracy and completeness of such information and Consultant shall have the rightto rely upon such information. If, during the 6 month period following completion of Services it isshown that Consultant has failed to fulfill this guarantee and Client has promptly notified Consultant inwriting of such failure, Consultant shall perform, at Consultant’s cost, such corrective Services as maybe required to remedy such failure. Client shall release, defend, and indemnify Consultant from andagainst any further liability arising from the Services or this Agreement.

Consultant shall be liable to Client in the event Consultant is guilty of gross negligence andwillful misconduct. In no event shall Consultant’s aggregate limit of liability to Client exceed the valueof the labor fees paid to the Consultant by the Client.

2.4 CONSEQUENTIAL DAMAGES

Neither party shall be responsible or held liable to the other for consequential damagesincluding without limitation, loss of profit, loss of product, loss of investment, or business interruption.The rights and remedies provided herein are exclusive and in lieu of any other rights and remediesotherwise available at law or in equity. Indemnifications against, releases of liability and limitations ofliability, damages, and remedies shall apply in the event of the fault, negligence, strict liability, orliability arising by statute of the party indemnified, released, or whose liability is limited, or in whosefavor damages or remedies are limited.

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APPENDIX IV COMPETENT PERSON’S REPORT

3.0 ABBREVIATIONS, DEFINITIONS, AND RISK DEFINITIONS

3.1 ABBREVIATIONS AND DEFINITIONS

Term/Abbreviation Description

AAS Atomic Absorption SpectrometryAg SilverAMR Andes Mining ResearchARD Acid Rock DrainageAu GoldBehre Dolbear Behre Dolbear Asia, Inc.CNI Call & Nicholas, Inc.Cu CopperDDH Diamond Drill HolesEIA Environmental Impact AssessmentEIS Environmental Impact StatementEMA Errol L. Montgomery & Associates, Inc.EPCM Engineering, Procurement, and Construction ManagementESA Environmental Site Assessmentg GramGolder Golder Associates Pty Limitedg/t Grams per Tonneha Hectarehr HourIMC Independent Mining Consultants, Inc.ITR Independent Technical ReviewJORC Joint Ore Reserve Committeekm Kilometerkm2 Square KilometerKMT WTP Kingsmill Tunnel Water Treatment PlantKP Knight Piésold Pty LimitedkV KilovoltskWhA Kilowatt Hours per TonneL LiterLOM Life of Minem MeterM Millionm3 Cubic MeterMAG Minerals Advisory GroupMasi Meters Above Sea LevelMCP Minera Chinalco Peru S.A.mg Milligramsmg/L Milligrams per Litermm MillimeterMo MolybdenumMOE Ministry of EnvironmentMoO3 Molybdic OxideMozs Million OuncesMPC Minera Peru Copper S.A.m/s2 Meters per Second Squared

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APPENDIX IV COMPETENT PERSON’S REPORT

Term/Abbreviation Description

Mt Million TonnesMtpa Million Tonnes per AnnumMW MegawattMWh Megawatt HourMWH Montogmery Watson HarzaNEPA U.S. National Environmental Policy ActNPV Net Present ValueOEFA Office of Environmental Evaluation and Fiscalizationozs OuncesP80 80% PassingPAF Potentially Acid FormingPCI Peru Copper Inc.PGA Peak Ground Accelerationppm Parts Per MillionPTAR PT Agincourt ResourcesRI/FS Remedial Investigation/Feasibility StudyROM Run-of-MineRQD Rock Quality DesignationSAG Semi Autogenous GrindingSNC SNC LavalinSX/EW Solvent Extraction/Electrowinningt TonneTC/RC Treatment Charges/Refining Chargestpa Tonnes Per AnnumTSX Toronto Stock ExchangeV VoltVAT Value Added Tax

WTP Water Treatment Plant

3.2 RISK DEFINITIONS

Risk has been classified from low, moderate, to high based on the following definitions.

Š High Risk: The factor poses an immediate danger of a failure, which if uncorrected, willhave a material effect (>15% to 20%) on the project cash flow and performance and couldpotentially lead to project failure.

Š Moderate Risk: The factor, if uncorrected, could have a significant effect (10% to 15% or20%) on the project cash flow and performance unless mitigated by some correctiveaction.

Š Low Risk: The factor, if uncorrected, will have little or no effect (<10%) on project cashflow and performance.

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APPENDIX IV COMPETENT PERSON’S REPORT

The likelihood of a risk must also be considered.

Š Likely will probably occurŠ Possible may occurŠ Unlikely unlikely to occur

The degree or consequence of a risk and its likelihood are combined into an overall riskassessment, as presented in Table 3.1.

TABLE 3.1OVERALL RISK ASSESSMENT

Likelihood of Risk Consequence of Risk

(within 7 years) Low Moderate High

Likely . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Medium High HighPossible . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Low Medium HighUnlikely . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Low Low Medium

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APPENDIX IV COMPETENT PERSON’S REPORT

4.0 EXECUTIVE SUMMARY

4.1 BACKGROUND

Behre Dolbear has conducted an ITR of the Chinalco Mining Corporation International (Group)Toromocho Project in Peru 140 km east of Lima. The ITR includes a review of MCP’s proposeddevelopment plans, the current state of engineering and construction, and an updated financial analysis.Behre Dolbear has reviewed resource and reserve estimates, details of mining plans and productionschedules, metallurgical test work, proposed flow sheets, processing operations, infrastructure andmanpower plans, environmental aspects and approval status, implementation plans, projected operatingand capital costs, and financial analysis. A site visit was undertaken on July 25-27, 2011 anddiscussions were held with the project’s owner’s representatives, project management, and keyoperating and maintenance personnel.

4.2 PROJECT OVERVIEW

The Toromocho deposit dates from 1928 when a low-grade copper zone was discovered on theedge of the monzonite stock of the San Francisco peak. Cerrode Pasco carried out an explorationprogram during 1954-1955 that indicated the presence of mineralization. In 1973, the Peruviangovernment transferred the properties to Centromin, a Peruvian government entity. Centromincontinued exploration during the mid 1970s. In 2003, Peru Copper Inc. (PCI) and their subsidiary,Minera Peru Copper S.A. (MPC) acquired the option from Centromin. In 2007, PCI became a whollyowned subsidiary of the Group, which renamed the property, the Toromocho Project, held by itswholly owned subsidiary Minera Chinalco Peru S.A. (MCP).

The Group is considering proposed corporate financing activities.

Access to the Toromocho Project is both by the paved Central Highway (142 km from Lima)and the Central Railway (173 km from Lima). The center of the Toromocho deposit lies about 2.5 kmfrom the town of Morococha (a typical Andean mining camp) in the Morococha mining district. Smallscale operating underground mines, processing plants, and a smelter are within 30+ km. A large part ofthe population of the Morococha district works in the mining industry. The neighboring areas couldprovide a pool of skilled and experienced labor.

Power is available in Morococha but would have to be upgraded to support the ToromochoProject. Sufficient water for the proposed operations has been assured by MCP as a result ofconstructing a water treatment plant for contaminated water that was previously collected anddischarged to a local river.

A Feasibility Study for the Toromocho Project was completed by Aker Kvaerner in December2007. The project consists of an open pit mining operations supporting 117,200 tonnes per day (tpd) ofore (stripping ratio 0.79:1) to a conventional SAG mill/ball mill/flotation processing plant producing anaverage of 1,838 tpd of 26.5% copper concentrate and a separate molybdenum hydromet plant toproduce 25.1 tpd of molybdenum oxide over a plus 32 year life.

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APPENDIX IV COMPETENT PERSON’S REPORT

The original 2007 Feasibility Study was refined in February 2009 and a Definitive Estimatewas produced in February 2011. The Definitive Estimate is for a total project capital cost of $2.5billion and a plant start up in the fourth quarter of 2013.

MCP, ICM, and Kvaerner/Jacobs are currently working on updated and refined reserves,production plans, and capital and operating cost estimates to be available during the first quarter of2012. This information was not available to Behre Dolbear.

4.3 LAND STATUS

The Toromocho Project is 100% owned and operated by MCP that is wholly owned by theGroup (see Section 4.2 for owner progression).

MCP’s legal vice president notified Behre Dolbear that the mining concessions are perfectly inplace. A small strip of land, inside the pit area, that used to be owned by the railroad and is currentlygovernment controlled, is in the process of being transferred to MCP. Approval of the EIA impliesintent to complete the transfer that should be finished within 6 months — Low Risk/Unlikely.

Two other larger companies holding property and mineral concessions adjacent to theToromocho deposit and currently operating small underground mines are Pan American Silver andAustria Duvaz. Smaller companies holding concessions adjacent to Toromocho are Centenario,Pomatarea, Volcan, and Sacracancha. MPC has signed an agreement with Austria Duvaz, whichgranted the company an exclusive option to acquire the Morococha mining concessions, surface areasand assets of Austria Duvaz. In accordance with the share purchase agreement signed with AustriaDuvaz, MCP gained 100% control of Minera Centenario and its stake in 30 concessions located in theMorococha mining district — Low Risk/Unlikely.

4.4 GEOLOGY

Peru is situated in the heart of the Andés mountain range. The cordillera of the Andés forms anorthwest-trending belt that passes through Peru and is one of the most important metallogenicprovinces in South America. The historical mining district of Morococha is part of the Miocene Belt ofthe Andés in central Peru. The Toromocho copper-polymetallic deposit is a complex, mineralizedassemblage of veins, veinlets, stock works, “manto-type” bodies, and disseminated sulfides of thegeneral “porphyry copper” type mineralization hosted in both intrusive and contact metamorphic unitswith well-zoned mineralization and alteration characteristics in the Morococha mining district. Theskarn-type copper-polymetallic mineralized bodies are controlled mostly by the contacts between theTertiary-age intrusives including diorites, granodiorites, quartz, monzonites, and quartz porphyries andJurassic-age calcareous host units of the Pucara Formation. Broad areas of the deposit are brecciatedwith various levels of intensity. The breccia texture crosses all rock types in the central portion of thedeposit.

The mineralization of the Toromocho deposit is well zoned. The metal zonation crosses rocktype boundaries although the skarn units are better hosts than the intrusive. The deposit shows welldeveloped concentric silicate alteration along with the metal zoning. There is a central potassic zonewith secondary biotite, quartz, and pyrite that is surrounded by a phyllic zone with quartz and sericite.

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APPENDIX IV COMPETENT PERSON’S REPORT

The outer zone is propylitic with epidote, chorite, calcite, and sphene. The wall rocks of theToromocho deposit include several intrusive phases of the regional plutons, and at least two phases ofporphyritic stocks associated with the alteration and mineralization of the Tertiary Toromocho deposit.

The majority of copper mineralization is in the form of chalcopyrite and chalcocite.Molybdenum (moly) and silver are also present as byproduct credits. In the Toromocho deposit,chalcocite is distributed vertically over at least 250m, but some chalcopyrite remains throughout muchof this interval. Sequential assays completed by drilling have confirmed this occurrence and provide asound basis for interpretation of copper mineral species throughout the deposit.

The Toromocho ore body outcrops on the surface at elevations of 4,600m to 4,800m. Thecopper ore body extends downwards to a flat “bottom” 500m to 600m below the surface. The highestgrade part of the ore body lies within a 1.0 km by 2.0 km body of brecciated skarn, surrounding acupola-like 7-million year old feldspar porphyry and granodioritic intrusive. The ore body containsabout 2.5 billion tonnes of plus 0.3% copper resources averaging about 0.5% copper. The primary orebody is over-printed by late-stage, pyritic primary mineralization, clay and serpentine alteration, andsupergene chalcocite and covellite enrichment. Spotty and structurally controlled, moderate-to weak,chalcocite enrichment extends from the surface and from the top of dominant sulfides, downward tothe bottom of enrichment, 200m to 400m below the present surface. A sulfate zone containinganhydrite disseminations and veinlets occur several hundred meters below the bottom of enrichment.

A significant portion of the original leached capping above the enriched zone was probablystripped by Pleistocene glaciation. The upper half of the enriched zone in many places contains morethan 50% leachable copper by sequential analyses. The lower half of the enrichment blanket above thebottom of enrichment and the top of the primary zone is generally only weakly enriched and containsfrom 15% to 50% leachable copper by sequential analyses.

Metallic minerals in the deposit include chalcopyrite, chalcocite, molybdenite, tetrahedrite,galena, sphalerite, digenite, pyrite, pyrrhotite, magnetite, limonite, malachite, and azurite. Nonmetallicminerals include garnet, diopside, tremolite, epidote, quartz, feldspar, biotite, sericite, chlorite, calcite,anhydrite, chorite, calcite, and sphene.

4.5 GEOLOGICAL DATABASE

Behre Dolbear’s geologist’s observation in the field and study of the geology maps suggest thatthe Toromocho deposit is well understood by MCP. The major copper mineralization is in the form ofchalcopyrite and chalcocite. Molybdenum and silver are present as byproduct credits. The deposit hastypical porphyry copper mineralization and alteration characteristics.

Behre Dolbear has visited the primary lab for the Toromocho Project, CIMM PERU S.A. inLima, Peru. The CIMM Lab Manager explained to Behre Dolbear the sample preparation and assayprocedure used for the Toromocho Project. Behre Dolbear reviewed the lab’s qualification andcertification from both Peru and International Organizations. Behre Dolbear considers CIMM Peru as awell-qualified lab with a good reputation.

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APPENDIX IV COMPETENT PERSON’S REPORT

Behre Dolbear believes that the database used in the resource estimate by IMC for theToromocho copper deposit is well organized, in good order, and acceptable based on observation in thefield and study of the geology report. The work meets both Canadian NI 43-101 and AustralasianJORC standards.

In Behre Dolbear’s opinion, drilling efforts and sampling methods employed by PCI and MCPin their drilling efforts meet both Canadian NI 43-101 and Australasian JORC standards. The drillingof large-diameter (HQ) core using split inner tubes enhances core recovery, and also provides a largersample for assay compared to smaller diameter cores. The sawing of the core for collection of samplesfor assay is appropriate and provides for more uniform and consistent sample sizes compared tosplitting with a conventional manual or hydraulic splitter.

The sample preparation, analytical methods, and security procedures used by PCI and MCP forsamples generated by the PCI and MCP drilling meet Canadian NI 43-101 and Australasian JORCstandards. The analysis of 10m composites for accessory metals such as gold, silver, zinc,molybdenum, and arsenic is appropriate for the porphyry-style copper mineralization in theToromocho deposit.

The QA/QC procedures outlined by IMC are adequate for porphyry copper mineralization fromthe Toromocho deposit.

4.6 RESOURCES AND RESERVES

4.6.1 General

The mineral resources at the Toromocho Project were estimated by IMC of Tucson, Arizona,USA. The current model was developed in November 2007 for PCI and has been subsequently utilizedfor the feasibility study produced by Aker Kvaerner. The mineral resource estimate was generatedusing a standard 3D-block model approach based on the March 1, 2007 drill hole database for theproperty. The 2007 IMC resource model was used by Behre Dolbear to spot check the accuracy of themodeling work and for compliance with reporting of Mineral Resources as required under theAustralasian Joint Ore Reserve Committee JORC Code.

The ore reserves for the Toromocho property were estimated in November 2007 by developinga mine plan for extracting the in-situ resource contained within the resource block model. BehreDolbear believes that the overall methodology employed for reserve definition is adequate forreporting under the JORC code. However, as the feasibility work was completed in 2007, costs andeconomic assumptions were of concern to several members of the Behre Dolbear team and a moredetailed review was completed to assess their impact on the ore reserves stated in the feasibility study.This review indicated that the changes in the recoveries and economic assumptions did not affect thereserves stated for the project.

In summary, Behre Dolbear believes that the Toromocho Project, covered by this review, hasapproximately 1,540 Mt of Proved and Probable ore reserves averaging 0.471% copper, 0.019%molybdenum, and 6.86 grams of silver per tonne conforming to the definitions in the 2004 JORCCode, as shown in Table 4.1.

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APPENDIX IV COMPETENT PERSON’S REPORT

TABLE 4.1JORC ORE RESERVES AT THE TOROMOCHO PROJECT

(DECEMBER 31, 2011)

Grade

CategoryTonnes(millions)

Cu(%)

Mo(%)

Ag(g/t)

Proved . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 756 0.51 0.02 6.39Probable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 784 0.434 0.018 7.31

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,540 0.471 0.019 6.86

In addition to the estimated Proved and Probable reserves, IMC reports an additional 520 Mt ofMeasured and Indicated mineral resource averaging 0.37% copper, 0.013% molybdenum, and 6.10grams of silver per tonne (Table 4.2) and 174 Mt of Inferred mineral resources averaging 0.46%copper, 0.015% molybdenum, and 11.54 grams of silver per tonne (Table 4.3) also conforming to thedefinition in the 2004 JORC Code. These resources are not currently part of a mine plan becauseadditional engineering and design work is required.

TABLE 4.2JORC MEASURED AND INDICATED MINERAL RESOURCES

AT THE TOROMOCHO PROJECT

(DECEMBER 31, 2011)

Grade

CategoryTonnes(millions)

Cu(%)

Mo(%)

Ag(g/t)

Measured . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 156 0.41 0.014 6.20Indicated . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 364 0.36 0.012 6.06

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 520 0.37 0.013 6.10

Mineral Resources are in addition to Reserves

TABLE 4.3JORC INFERRED MINERAL RESOURCES AT THE

TOROMOCHO PROJECT

(DECEMBER 31, 2011)

Grade

CategoryTonnes(millions)

Cu(%)

Mo(%)

Ag(g/t)

Inferred . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 174 0.460 0.015 11.54

Mineral Resources are in addition to Reserves

Behre Dolbear believes the mineral resource estimation model including the database,procedures, and parameters applied by IMC to the Toromocho Project to generally be reasonable andappropriate. The geological constraints were adequately considered in their estimation of the globalresource. Behre Dolbear believes that the data density requirements used for Measured, Indicated, andInferred Mineral Resources definition are generally adequate and comparable to those used for mineralresource estimation for similar deposits.

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APPENDIX IV COMPETENT PERSON’S REPORT

4.6.2 Conclusion

Behre Dolbear believes that IMC has completed credible work in determining the resourcemodel of the mineralization at the Toromocho Project. Behre Dolbear also believes that the project’sore reserve statement is appropriate based on a review of the mineralized envelopes and the gradeestimation methods.

4.6.3 Risks

A number of risk factors for the reserve estimate are present.

Š Behre Dolbear Has Not Audited the Sampling Data or Conducted IndependentSampling: Behre Dolbear has accepted the drilling data, mine sampling data, and assays,as presented by Toromocho for this report. As both IMC and Aker Kvaerner are reputableindependent consultants having completed extensive reviews of the data, Behre Dolbearviews this as Low Risk/Unlikely.

Š Variography: The lack of identified geometric (or directional) structure in the variogramsused for estimation is not usually seen in these type of copper deposits but, not impossible.The geologic and structural complexities may mask some of this within the variography.On average it should present a very Low Risk/Unlikely to the overall reserve and theestimated metal content due to the large scale mining equipment selected for the proposedoperations.

Š Resource Categorization: Model blocks were estimated and classified into Indicated andInferred Mineral Resources under the 2004 JORC definitions. Behre Dolbear believes thatusing the kriging variance or standard deviation sometimes will tend to overestimate theconfidence of the estimate. Given the estimate split between Measured and IndicatedMineral Resource and the drill spacing, Behre Dolbear believes it represents a Low Risk/Unlikely to the ore reserve statement.

Š Mining Losses and Dilution: The original ore reserve estimate completed by IMC did notconsider mining losses and mining dilution. Behre Dolbear has adjusted the estimate toinclude these modifying factors using a 2% mining loss and 3% dilution at the averagewaste grade. This results in a very small overall adjustment to the ore reserve statementand believes this represents a very Low Risk/Unlikely to the project due to the large scalemining equipment proposed for the project.

4.7 GEOTECHNICAL

4.7.1 Pit Slope Design

The geotechnical work to establish the optimum open pit slope angles has been accomplishedby Call and Nicholas, Inc. (CNI). CNI has been an experienced, highly qualified, and reputablesupplier of geotechnical services to the mining industry for decades.

CNI developed an interramp overall slope angle model using geology maps, cross sections, anddrill hole data supplied by PCI and MCP and geotechnical and hydrologic data developed by CNI andKnight Piésold. CNI’s work was completed professionally and comprehensively and was reported

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APPENDIX IV COMPETENT PERSON’S REPORT

objectively. Their work resulted in identifying 10 distinctive design sectors within the open pit basedprimarily on wall orientation and rock type. Slope angles range from as low as 24 degrees to as steepas 46 degrees in materials including:

Š Skarn and sediments

Š Igneous rock

Š Reclaimed tailings

Š Buenaventura Lake

4.7.2 Stockpile and Dump Stability

The Toromocho Project design includes two waste dumps containing 1.6 billion tonnes and alow-grade ore stockpile containing 186 Mt. CNI and Knight Piésold carried out test drilling,geotechnical testing, and seismic refraction surveys to evaluate the stability of the proposed dumps andstockpile and determine site preparation work to enhance the stability.

Specific programs were proposed for preparing the dump and stockpile bases and for theconstruction of them to assure their stability. Given that the two waste dumps are adjacent to and abovethe open pit, it is imperative that these programs are implemented.

4.7.3 Risks

4.7.3.1 Pit Slope Angles — Low to Moderate/Unlikely to Possible

Assessment of the final pit slope angles is an ongoing process. As mining interim pitsprogresses and knowledge of the relevant structural features and rock strengths are refined, the final pitslope angles will be refined.

It is Behre Dolbear’s opinion that the work to determine the final slope angles is thorough andreliable.

The proposed interim pit slope angles appear to be somewhat conservative and the risk is low.

The low RQD index indicates that the risk of random localized slope failures is moderate tohigh. It will be important for MCP to continuously identify these localized areas of instability andmonitor them for the safety of its operators and equipment.

4.7.3.2 Stockpiles and Waste Dumps — Low to Moderate/Unlikely to Possible

The proximity and orientation of the stockpiles and waste dumps to the open pit make it criticalthat the proposed additional work and the planned excavation of undesirable materials under theproposed stockpiles and dumps be completed, as planned. The risk is low to moderate, if the work iscompleted, as proposed, and moderate to high, if it is not.

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APPENDIX IV COMPETENT PERSON’S REPORT

4.8 MINING

4.8.1 General

IMC developed a number of model and mine plan iterations over the course of the projectperiod to establish the final mine plan and cost estimate incorporated into the Aker Kvaerner December2007 feasibility report and reviewed by Behre Dolbear. Those iterations were the basis for determiningthe best overall approach to the project subject to various project constraints.

The Toromocho deposit will be mined using conventional hard rock open pit methods. Themine will deliver 117,200 tpd (42,778 kt/yr) of sulfide flotation ore to the primary crusher and willgenerally move 260,274 tpd (95,000 kt/yr) of total material to assure sustained availability of the millore.

Multiple iterations of the mine scheduling process were completed to establish the mill cutoffgrades and corresponding mill head grades that maximized the project return on investment comparedto the mine capital and operating costs required to sustain the release of the planned ore.

Within the schedule, planned cutoff grades were elevated above conventional breakeven cutofffor the first 22 years of the mine’s life. The cutoff strategy is the result of substantial effort tomaximize project return on investment. The NPV optimization effort compared the benefits ofprocessing and metal sales versus the operating costs plus the required mine capital to develop andoperate the mine. Mine equipment capacities were kept in mind during the development of the besteconomic schedule.

Low-grade material that is less than the mill breakeven cutoff grade but still potentiallyeconomic is stockpiled south of the primary crusher. Lower grade material could be considered forstockpiling, but constraints on low grade and waste storage areas around the mine limit the size of thelow-grade stockpile. The low-grade stockpile is remined during years 32 to 36 and delivered to theprimary crusher.

There are zones of the Toromocho deposit that have elevated arsenic grades in the form ofenargite (Cu3AsS4). In order to assure that the concentrate is marketable, high-grade arsenic material isnot sent to the plant but is stockpiled. This material is stored permanently and not processed, althoughprocess options may exist for this material in the future.

IMC designed 10 phases or push backs as input to the development of a practical mineproduction schedule. Phases or push backs are practical expansions of a pit that incorporate properequipment operating room, working geometries, and access roads. To the degree practical, they followthe theoretical economic extraction sequence defined by the floating cones.

Mine equipment has been selected to meet the production requirements of the mine plan. Thesize and type of mine equipment is consistent with the size of the project. Electric-cable shovels with35.2 m3 dippers are paired with 345 tonne haul trucks to meet the total annual production requirementsof 95 to 99 Mt/yr.

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APPENDIX IV COMPETENT PERSON’S REPORT

Mine personnel requirements were estimated based on the mine plan and mine equipmentrequirements. Mine personnel includes salaried supervisory and staff personnel and hourly peoplerequired to operate and maintain the drilling and blasting, loading, hauling, and mine support activities.

The Mine salaried staff requirements projected in the 2007 Feasibility Study, over the projectlife, consisted of 56 persons during most of the mine life. Mine hourly personnel requirements build upto 384 personnel in years 18 and 19. Subsequently, in 2010, IMC, in conjunction with MCP’s on sitemanagement were in the process of increasing personnel in the engineering, supervisory, and trainingareas. Based on work by IMC, Behre Dolbear’s fourth quarter 2011 adjusted operating cost reflectsthese additions.

4.8.2 Conclusions

The following work to design and/or determine the:

Š Mining sequence and annual production schedule

Š Location of haul roads, waste dumps, and low-grade ore stockpiles

Š Type, availability, productivity, quantity, and cost of major and support equipment

Š Manpower requirements and cost

Š Maintenance facilities, manpower, and training requirements

Š Capital cost for the pre-production requirements and sustaining the operation

Š Operating costs and cost per tonne of material mined

As completed by IMC, an experienced and reputable contractor is professional, thorough, andwell presented.

The potential for mining problems has been minimized for the Toromocho Project by thefollowing decisions and factors.

Š The ore grade and metallurgy are relatively consistent allowing an orderly miningsequence without excessive equipment moves to accommodate blending for the processplant.

Š The stripping ratio is low and consistent preventing random spikes in equipmentrequirements.

Š The high-arsenic ore- grade material is being stockpiled separately preventing the need forinefficient ore blending during mining and avoiding concentrate marketing issues.

Š The proposed pre-stripping exposes eight months of ore production.

Š The ore cutoff grade has been increased for the first 22 years of production to maximizenet present value.

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APPENDIX IV COMPETENT PERSON’S REPORT

Š The cutoff grade for leach ore placed in the low-grade ore stockpile is greater than breakeven due to limitations on land available for stockpiling, thus making the low-grade orequantity conservative.

Š The relative near proximity of Lima and its port and the availability of highway and railaccess should minimize the potential for equipment and consumables supply issues.

Š The general historic mining culture of the area provides a pool of understanding andsupportive residents to both support the existence of the operation and supply personnel towork in the operation.

Š Experienced and competent senior supervisory personnel in the operations, engineering,and maintenance areas are on site and are intimately involved in the manning, training,hiring, and general pre-start up activities.

4.8.3 Risks

4.8.3.1 Production

Production planning is thorough and well executed. The equipment selection and quantity isappropriate and sufficient. The projected availabilities and productivities are aggressive and theirachievement will depend on a well-run operation and well-trained operators and maintenancepersonnel — Low to Moderate Risk/Unlikely to Possible.

4.8.3.2 Operating Costs

The Definitive Estimate has resulted in numerous corrections and updates based on input fromthe recently hired senior mining operations and maintenance personnel. The increases in manpowerand equipment were necessary and appropriate. The rapidly increasing salaried and hourly labor ratesare an issue and pose some risk for higher costs. The quantity of labor, equipment, and consumablesrequired for the operation are well based and reliable. The costs for these items are in a state of fluxand future costs for these items are uncertain — Moderate Risk/Possible.

4.8.3.3 Capital Costs

The Definitive Estimate should be accurate as described and, unless the project implementationschedule slips, is a reliable estimate — Low to Moderate Risk/Unlikely to Possible.

4.9 PROCESS

4.9.1 General

The Aker Kvaerner Feasibility Study was completed in November 2007 based on open pitmining, conventional sulfide copper flotation, copper molybdenum separation, and recovery ofchemical-grade molybdic oxide (MoO3) from the copper concentrates. The feasibility study is based onmining and processing approximately 43 Mtpa of ore (117,200 tpd) at an average grade for the projectof approximately 0.46% copper, 0.019% molybdenum, and 6.88 g/t silver. Selective mining will, in thefirst 10 years, result in an average head grade of approximately 0.612% copper, producing around226,000 tpa of copper together with ±4.0 million ounces of silver. Molybdenum production is expectedto run at ±4,000 tpa as MoO3.

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APPENDIX IV COMPETENT PERSON’S REPORT

The design criteria for the Toromocho Project concentrator include the following salientprocess variables:

Š Ore Grade 0.612% copper (First 10 years of project)

Š Ore Grade 0.019% molybdenum (First 10 years of project)

Š Mill Tonnage 117,200 tpd

Š Copper Recovery 87%

Š Copper Concentrate Grade 26.5%

Š Molybdenum Recovery to MoO3 65.0%

Š Copper Concentrate Moisture 9.0%

In general, Behre Dolbear feels that the project design criteria can be met without a high degreeof risk due to the existence of the historical metallurgical testing programs. In most cases, the designcriteria have been used by Behre Dolbear to develop ore reserve and financial analysis sections of thisreview. The single questionable area is overall copper recovery that will be discussed below and in theprocessing section of this review.

The metallurgical testing regimens conducted at METCON were comprehensive and addresseda majority of the critical issues associated with processing. These issues included the highsusceptibility of the copper minerals to oxidation while in place in the resource and in the explorationdrill core storage areas, the presence of activated insoluble and talc like minerals, which impeded theproduction of molybdenite concentrates, and the high variability of metallurgical recoveries betweenlaboratory, historical operations, and contemporary pilot plant operations.

The issues exposed in metallurgical testing have been, for the most part, handled in the processdesign. In 2002, based upon historical plant operations and contemporary metallurgical testing, theMinerals Advisory Group (MAG) recommended a copper recovery for the project between 82% and88%. Behre Dolbear’s opinion is that the copper recovery is optimistic at 87% and used a moreconservative 85% in the economic analysis. Frequently, large copper concentrators will start up andachieve copper recoveries in excess of those expected from laboratory and pilot plant testing. In thiscase, the lack of contemporary laboratory locked cycle testing and pilot plant results obtained fromfresh representative ore samples have led Behre Dolbear to recommend a copper recovery lower thanthe design criteria. There is a distinct possibility the full scale milling operations may result inachieving copper recoveries at or very near the design criteria.

In a similar vein, the silver recovery of 84.4%, as shown in Section 20.0 Economic Analysis ofthe Aker-Kvaerner Feasibility Study (2007), appears overly optimistic. A review of all pilot plant andlocked cycle testing, where silver head grades and recoveries were published, confirms that all testingwas done to optimize either copper or molybdenum. No apparent efforts were made to optimize silverrecoveries. The available pilot plant results from Centromin include results for silver and these testsdemonstrated silver recoveries at or near 70%, albeit on ores with significantly higher head grades thanshown in the current mine plan.

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APPENDIX IV COMPETENT PERSON’S REPORT

A complete summary of silver metallurgical results is shown in Table 10.4. Behre Dolbearsuggests the use of a silver recovery of 70% based on the available pilot plant data and the expectationof improved silver recoveries on continuous and full sized mill circuitry.

The presence of activated insolubles and talc in the concentrates that render the production ofhigh quality molybdenum disulfide (MoS2) concentrates problematic has been dealt with through thechoice of a hydrometallurgical/pressure oxidation circuit for molybdenum recovery that will be arelatively unique installation. Only one potential operation is thought to exist internationally and it isbeing constructed at the Rio Tinto, Kennecott Utah Copper operations in Salt Lake City, Utah. Nocurrent publicly issued data has been released by Rio Tinto. The hydrometallurgical/pressure oxidationplant is scheduled for completion and pre-commissioning in the third quarter of 2013. This leaves theproduction of molybdenum as perhaps the single highest risk issue in the concentrator design.

Other significant variables that present short term problems to the Toromocho Project are thepresence of quantities of arsenic and zinc in the ore body that result in smelter penalty level quantitiesof each in certain production years. The zinc issue is to be handled with blending on each of theproduction faces in the pit to minimize the amount of activated and mechanically locked sphalerite thatwill carry into the copper concentrate.

4.9.2 Conclusions

Composites representing production years were assembled, but no locked cycle testing wasaccomplished with them. The sampling and compositing was done to a high level and is attributed byBehre Dolbear as having contributed to the high degree of confidence in most of the metallurgicalresults. A review of the historical pilot plant and lock cycle testing work, coupled with thecontemporary work at METCON and Lakefield would seem to reinforce the copper recovery with arange from 80% to 88%.

The molybdenum recovery plant does not mimic the patented Rio Tinto facility at KennecottUtah Copper operations in Salt Lake City, Utah but is similar in concept. Current plans at Rio Tintocall for a start up of the facility in 2013. It is probable that Rio Tinto is looking at a 2-year start upperiod after almost 20 years of testing and evaluation. The circuit at Toromocho is different from theRio Tinto circuit (sufficient to escape patent infringement) and is quite similar to conventional pureoxide production at the Fort Madison facility of Freeport McMoran. At the Toromocho Project, oncethe molybdenum is solubilized, the copper will be removed with SX/EW.

The concentrator is of conventional design and was designed to handle 146,500 tpd with anominal operating rate of approximately 117,200 tpd. The crushing, grinding, stockpile, SAG millgrinding, ball mill grinding, classification, flotation, dewatering, filtration, and tailings disposal arewell conceived and standard for the industry. The flow sheets, P&IDs, and basic engineering packageare complete and can be used to bring the level of accuracy of capital cost estimation to the level of±15%. A major amount of large milling equipment is at the site and in controlled storage that willmake for minimal delays in logistics for the construction period of the mill certain capital items in theprocess plant were sized or designed to substantially reduce the cost to expand the throughput to148,000 tpd in the future, if so desired.

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The process flow sheets for the molybdenum production facility are reasonable and will, in allprobability work, given the successful adaptation of the design to very unconventionalhydrometallurgical products.

Given the successful application of the pressure oxidation/hydrometallurgical plant, theToromocho Project molybdenum operations will not produce concentrates. The product will beessentially high purity MoO3.

4.9.3 Risks

Š Behre Dolbear’s opinion is that the copper recovery is optimistic at 87% and used aslightly lower recovery in the economic analysis. However, large copper concentratorsfrequently exceed the results of laboratory and pilot plant testing when in actual operation.This reduces the risk to Low to Moderate Risk/Unlikely to Possible.

Š The final copper concentrates are expected to average approximately 26.5%copper —Low Risk/Unlikely.

Š Smelters will view the insol percentages above 10% as making the concentrates refractoryand may introduce penalties for high insol levels. Behre Dolbear regards this as a risk tothe success of the Toromocho Project—Low to Moderate Risk/Unlikely to Possible.

Š The silver recovery is not backed up by a large number of tests and assays, but insteadrelies on the Behre Dolbear metallurgist’s professional judgment — Moderate Risk/Unlikely to Possible.

Š The molybdenite recovery numbers for concentrating are low risk, but the successful startup of the hydrometallurgical facility is a High Risk/Possible venture and could take wellover 2 years of start up. McNulty & Associates published a technical study indicating thathigh pressure oxidation and recovery of metals, such as copper, nickel, and probablymolybdenum, could require start up periods in excess of 5 years.

Š The chosen tailings deposition system is being designed by Golder & Associates. Thesystem envisions the production of 55% solids tailings at the concentrator for transport tofive “new generation” paste thickeners at the tailings impoundment. The installation ofunits with an unsubstantiated operating record must be regarded as high risk. On a short-term basis, the tailings impoundments can take normal tailings (50% to 60% solids) intothe maintenance dump area. Over the long term, deposition of normal tailings would resultin running out of tailings deposition room —Moderate to High Risk/Low to Possible.

Š The production of marketable copper concentrate grades is regarded as — Low toModerate Risk/Unlikely to Possible.

4.10 INFRASTRUCTURE AND NON-PROCESS FACILITIES

4.10.1 General

The need for almost all aspects of the infrastructure, to be constructed new, drives theexpanding cost of the Toromocho Project. Each of the following infrastructure requirements is a majorproject in itself.

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4.10.2 Electrical Power Supply

Š The electric power supply is described by a report prepared by CESEL Ingenieros, Peru.The electric power will be delivered from a 220-kV substation near the township ofPomacocha.

Š A new 11 km, double circuit overhead transmission line will be installed and routed fromthe Pomacocha Substation to the main substation at Toromocho. The new transmissionline can deliver 220 MW on either circuit.

Š A third 220-kV incoming power source will be provided by using the existing Mantero IIItransmission line. This line will serve as emergency back-up only.

Š The project with a triple redundant system should experience a minimum of unexpected orunscheduled delays due to power outages.

Š Emergency standby power will be installed to operate the large paste thickeners, theconventional tailings thickeners, the concentrate thickeners, camp medical facilities, etc.

4.10.3 Water Supply

The total water demand by the Toromocho plant for an average year will be 8.65 million m3.Water will be supplied from the Kingsmill Tunnel (Section 12.1.2). Only 50% of the treated flow fromthe Kingsmill Tunnel will be required for plant process water. Culinary water will be supplied to thesite from a reverse osmosis and chlorination system.

4.10.4 Office and Administrative Support Facilities

The non process buildings to house administration, mine truck shop, and maintenance will beconstructed to provide office facilities for the administration and maintenance staff. In addition,facilities will be constructed to house analytical and metallurgical laboratories, reagent storage, fuelingstations, explosives storage, and the camp facility.

4.10.5 Material and Supply Storage and Distribution

Warehousing will be located in the maintenance shop building adjacent to the concentrator.Other supply inventories will be contained in the fuel stations, reagent building, explosives storage,and mine truck shop.

4.10.6 Access Roads

Access to the site will be provided to the site by two roads.

Š The Central Highway (paved), which is to be rerouted, will feed into the north access roadto the administration area.

Š A new access road, running parallel to the rail road will provide access to the site for localpersonnel.

The new access road is being constructed, as with all other internal roadways by MCP.

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4.10.7 Railroad Access

Transportation of copper concentrate and molybdenum oxide will be from the site to the Port ofCallao via the existing rail line between Callao and La Oroya that runs by the mill site. The railroad isoperated by a Peruvian company and, per Aker Kvaerner (December 2007) in its current condition, hasthe capacity for the additional transportation of the Toromocho Project produced commodities.

The railroad is owned by the government but is operated under a 15-year concession agreementwith FerroCarril Central Andino S.A. The concessionaire will upgrade the rail line and purchase rollingstock to accommodate the Toromocho traffic and will recoup the costs in the operating fees.

A 1 km spur to connect the mill site to the existing rail line, six rail lines in the yard at the milland a traveling bridge crane for loading unloading, are to be provided by MCP. MCP will complete the1 km rail spur from the main rail line to the mill site by the end of 2012.

4.10.8 Camp Facility

Camp facilities will include a construction camp to be constructed approximately 12 km to theeast of the mine site in the vicinity of the Central Highway. The camp will have quarters for up to6,000 construction workers.

4.10.9 Town Site

The town site of Morococha, located within the pit limits, will be demolished and thepopulation moved to a new community near the mine site. The new town site is under construction and“move in” is scheduled for mid 2012. The initial capital costs could escalate substantially beyond the2007 budget.

4.10.10 Miscellaneous Infrastructure

Included in miscellaneous infrastructure are compressed air systems, sewage treatment, fireprotection, security, and communications.

4.10.11 Conclusions

Behre Dolbear has reviewed, in detail, all of the required infrastructure for the ToromochoProject and finds it complete and more than adequate for the size and complexity of the ToromochoProject.

4.10.12 Risks

Major project financial risk for infrastructure is rated as moderate due to the not yet finalizedcosts for relocation of Morococha, improvements to the Central Highway and internal site roads andsite preparation — Low to Moderate Risk/Unlikely to Moderate.

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APPENDIX IV COMPETENT PERSON’S REPORT

4.11 ENVIRONMENTAL AND PERMITTING

4.11.1 General

The environmental setting and potential impacts and permitting status of the ToromochoProject generally present a favorable situation for project development. Early attention has been givento the land position, project design, housekeeping of early land preparation, and environmental studiesto plan for success. Important environmental and construction permits have been secured and othersare well into the planning process. Mitigation plans for key impact issues have received attention.

A few unfavorable environmental and social issues could delay the project but these arereceiving proper attention and planning. Relocation of the Central Highway, development of the newvillage at Carhuacoto, water management, waste management, historic liabilities, transport alternativesto address health and safety of workers, employment, and training are all recognized as being on thecritical path to project success. In sum, these risks are generally low and receiving proper studies,funding, and attention from an environmental, social, and corporate point of view.

4.11.2 Conclusions

Reviews of environmental, social, community, permitting, and general sustainability issues forthe Toromocho Project suggest many favorable aspects going forward.

Š Permitting progress to date is good — EIA and major construction permit approved; otherimportant approvals all in process for most current project components and plans

Š Major remaining permits (water use and mine plans) well into planning process

Š Construction layout and pioneering progress — good environmental housekeeping,recognition of environmental impacts and issues

Š KMT WTP is completed and functioning well

Š Two-pronged advantage of KMT — (1) historic legacy mine sites mine water cleanup; and(2) adequate total mine water supply

Š Quality new town construction at Morococha (Carhuacoto) — apparent 80% to 90%approval rating by old town residents

Š Recognition of wetlands, wet areas in project construction regarding both environmentalcompensation and geotechnical issues (tailings dam area)

Š Land position adequate for facilities and infrastructure — mining concessions andpurchased lands

Š Legacy of mining in area and general acceptance by communities — no agricultural/wateruse competition

Š Well-developed transport route to mine from Lima — rail/air alternatives available

Š Worker H&S program apparently well in place with the contractor and sponsorcollaboration, meetings, incident response, and reporting to the government

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APPENDIX IV COMPETENT PERSON’S REPORT

A few other project aspects in these topical areas present unfavorable conditions for the projectand they are the following.

Š Unknown new final road alignment for the Central Highway in the pit vicinity will requirea new EIA and potential environmental impacts.

Š Dangerous road (H&S) aspects and access for workers and equipment truck drivers to thesite from Lima.

Š Potential requirements for extra capital costs for high-quality project components and lateroperations and maintenance (e.g., new town, tailings dam, high altitude issues, andsimilar).

Š Universal concern over full acceptance and efficient transfer of Morococha residents to thenew town — Carhuacoto.

Š High altitude working conditions — worker health and risks (e.g., lightning, rain/snowwith strong winds, fatigue).

Š Minor contaminants in historic and new mining/processing/waste management and tailings— need potential control and isolation.

4.11.3 Risks

Transport of workers and equipment to the mine site will cause logistical, cost, and H&Sproblems that affect skilled employment and project operations — Low to Moderate Risk/Unlikely toPossible.

Operation of the tailings impoundment will cause local and regional environmental effects onground and surface waters and local fauna habitat that cannot be easily remedied — Low Risk/Unlikely.

Timely and efficient re-settlement of Morococha residents to the new town, Carhuacoto, is notassured and poses some risk to the project’s schedule — Low to Moderate Risk/Unlikely to Possible.

4.12 RECLAMATION AND CLOSURE

4.12.1 General

Given a projected operating life of 36 years, the progressive and final closure of the mine andrelated facilities is planned to proceed in a steady manner with adequate time for planning. Theconceptual closure plan in the EIA will be refined and financial assurance (bond) review will occur at5-year intervals. Current estimates are that $181 million will be financed, as a guarantee.

The conceptual closure plan provides for the usual attention to progressive and final closure ofmajor facilities: pit, waste dumps, process plant area, shops, and other areas with concrete pads,limestone quarry, and access roads. It appears that all major issues are considered, at this time,including water management, plans to eliminate adverse impacts to water and air quality, and for coverand re-vegetation of areas, where feasible.

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APPENDIX IV COMPETENT PERSON’S REPORT

4.12.2 Conclusions

Planning for reclamation and closure is present in the EIA and other specialized baseline,impact and mitigation studies, and field efforts being carried out by MCP. A substantial closureexpense and bond is estimated. Operations can help to lower closure costs and will be plannedaccordingly. Bond amounts are expected to be revised and re-negotiated in 5-year intervals during the30+ years of mine life as the closure plan is refined.

4.12.3 Risks

Open pit mine, waste dumps, and other facilities will produce blowing dust that cannot beeffectively controlled and contaminated mine water than cannot be effectively piped and treated byKingsmill Tunnel during closure — Low Risk/Unlikely.

Closed tailings impoundment will produce adverse water quality and seepage down gradientthat will adversely affect ponds and wetlands and local ground water, and cannot be remedied — LowRisk/Unlikely.

Closed open pit mine, without backfill and closed waste dumps as remaining structures, willsubstantially lower the quality of life in this historic mining area — Low Risk/Unlikely.

4.13 ADMINISTRATION, MANPOWER, AND MANAGEMENT

4.13.1 General

The management, administration, and engineering/operating personnel are basically highlyrespected in the industry, experienced in their respective roles, and very dedicated to the success of theToromocho Project.

The staffing levels in the various support categories appear to be adequate.

Behre Dolbear was concerned with the levels of personnel committed to training in theDecember 2007 Aker Kvaerner Feasibility Study but the additions in the 2011 Definitive Estimateappear to resolve that issue.

4.13.2 Risks

The Toromocho Project is a highly complex project located in a remote location. It isimperative that MCP continue to retain experienced and dedicated experts in their various fieldsthrough the construction, start up period, and ongoing operations, if the projected schedules, costs, andproduction levels are to be achieved. The risk is Low to Moderate/Unlikely to Possible with thecurrent staffing but replacement with lesser personnel would raise the risk to moderate to high.

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APPENDIX IV COMPETENT PERSON’S REPORT

4.14 CAPITAL COST ESTIMATE AND IMPLEMENTATION SCHEDULE

4.14.1 Mining

The mine capital cost consists of two components:

Š Mine equipment

Š Mine pre-production development costs.

The mine equipment costs are based on the equipment requirements discussed in Section 9.0.

The pre-production costs are based on estimated mine operating costs during the pre-productionperiod (Section 17.1.2) and the material to be mined (55 Mt plus construction development).

The resultant updated mine capital costs for the Toromocho Project in fourth quarter 2011dollars are forecast to be:

Fourth Quarter 2011

(US$000)

Pre-production, Road Work, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25,019Pre-production Stripping . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65,816Mine Equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 181,801Support Mine Equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40,004Contingency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15,169

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 327,809

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APPENDIX IV COMPETENT PERSON’S REPORT

4.14.2 Total Capital Cost Estimate

A comparison of the Toromocho Project’s total capital cost between the 2007, 2010, and 2011estimates is provided in Table 4.4.

TABLE 4.4MINE, CONCENTRATOR, AND INFRASTRUCTURE CAPITAL COST

(US$ × 000)

Operations2007

Estimate

Definitive EstimateThird Quarter

2010

FourthQuarter 2011Estimate

Mine . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 294,811 303,486 312,640Process and Infrastructure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,374,056 1,543,586 1,673,247Owner’s Cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 215,180 413,461 448,191

Subtotal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,884,047 2,260,533 2,434,078

ContingencyMining . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29,841 15,169 15,169Process and Infrastructure . . . . . . . . . . . . . . . . . . . . . . . . . . . 192,575 123,119 133,460Owner’s Cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18,166 32,030 34,720

Subtotal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 240,222 170,318 183,349

Working Capital Subtotal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28,000 56,000 56,000

Total Estimated Project Cost . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,152,269 2,486,851 2,673,427

Behre Dolbear’s Suggested AdditionsInfrastructureRelocation of Central Highway1 . . . . . . . . . . . . . . . . . . . . . . . 75,000 75,000Relocation of Morococha2 . . . . . . . . . . . . . . . . . . . . . . . . . . . 100,000 100,000Construction of Lime Quarry and Plant3 . . . . . . . . . . . . . . . . 75,000 100,000

Totals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,152,269 2,736,851 2,948,427

1 Based on discussions at site visit2 Based on discussions at Jacobs and with MCP management3 Based on discussions with MCP management

As noted under “Behre Dolbear’s Suggested Additions,” in Table 4.4, the 2011 DefinitiveEstimate does not include the costs for developing a limestone mine and a burnt lime production plantnear the mine site proper. The cost for 300K tpy lime facilities is estimated by MCP management at$100 million. Relocation of the Central Highway is currently in an alternative evaluation phase but isroughly estimated at $75 million. The general opinion, in the Aker offices, was that the relocation ofMorococha could escalate up to $200 million and perhaps beyond. Although the site preparation workis underway, any further delays could significantly deteriorate the financial viability of the project. Therisk is currently rated at moderate.

4.14.3 Sustaining Capital

The mining equipment life estimates to replacement are reasonable. Sustaining capital costswere increased to reflect the purchase of a production wheeled loader more than twice as large asplanned in 2007.

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APPENDIX IV COMPETENT PERSON’S REPORT

Sustaining capital for the concentrator is limited to the costs associated with scheduled raises tothe tailings impoundment. Process improvement projects within the process plants have their ownpaybacks and most often result in operating cost reduction or improved process recoveries and productquality.

4.14.4 Working Capital

Behre Dolbear feels that up to 3 months could be required before provisional smelter paymentsare forthcoming. Behre Dolbear has calculated the initial 5-year average operating costs for mining,concentrating, infrastructure, general and administrative (G&A), and molybdenum hydrometallurgicalprocessing at $36.6 million per month.

At the request of the Client, the working capital has been maintained at the $56 million level, asshown in the 2011 Definitive Estimate, which is optimistic.

4.14.5 Construction Schedule

The construction of the concentrator, non-process facilities, and the molybdenumhydrometallurgical plant are scheduled to complete pre-commissioning during the fourth quarter of2013, work compilation of approximately 24 months. The schedule represents a low risk to the projectdue to the stockpiling of major equipment at or near the site. Given the progress of the construction todate and a forecasted drop in government intervention or non-intervention, the schedule has an aboveaverage chance of being compressed several months. The highest risk activities, in Behre Dolbear’sview, are the relocation of Morococha, relocation of the Central Highway, and construction of a limemining and burning facility.

The key milestones of the project are shown in Table 4.5.

TABLE 4.5KEY MILESTONES FOR THE TOROMOCHO PROJECT

Start Finish

Pre-Permit Activities . . . . . . . . . . . . . May 01, 2009 May 20, 2012Procurement . . . . . . . . . . . . . . . . . . . . October 02, 2008 June 28, 2011Detail Engineering . . . . . . . . . . . . . . . October 02, 2008 August 29, 2011

(Changed to June 30, 2012)Detail EngineeringHydrometallurgical Plant . . . . . . . . August 29, 2011

Contracts Formation . . . . . . . . . . . . . October 06, 2008 November 09, 2012Pre-Stripping . . . . . . . . . . . . . . . . . . . January 15, 2013Construction . . . . . . . . . . . . . . . . . . . . May 01, 2011 September 13, 2013Pre-Commissioning . . . . . . . . . . . . . . October 15, 2013Mechanical Completion . . . . . . . . . . . October 15, 2013

The schedule, as currently formed, is, in Behre Dolbear’s opinion, achievable; however, certainkey issues could delay full commissioning of the metallurgical facilities.

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APPENDIX IV COMPETENT PERSON’S REPORT

Pre-commissioning and commissioning of the molybdenite hydrometallurgical plant couldextend well past the fourth quarter 2013 date given the nature of the process and equipment utilized.Rio Tinto is projecting a 2-year start up of the Kennecott Utah Copper facility and industry expertshave gone on record predicting lengthy start ups (up to 5 years) for unproven hydrometallurgical plantstreating mineral processing products.

The risk associated with a timely completion and start up of the hydrometallurgical facility israted, by Behre Dolbear, as high. The risk associated with completing the relocation of Morococha israted as moderate. While the operating viability of the Toromocho Project would not be significantlyimpacted, the costs associated with unforeseen problems could sap some of the economic viability.

4.14.6 Conclusions

The design and engineering required to develop the mining equipment, process plant, andinfrastructure capital costs is thorough and is current. The contingency and owner’s costs are realistic.The fact that many of the high cost items have been ordered or are on site minimizes the potential forsurprises.

The uncertainty of the final designs for the Central Highway and the lime quarry and plantcould result in higher than predicted final costs.

Behre Dolbear believes that the Definitive Estimate working capital is low.

The sustaining capital estimates are based on realistic life-to-replacement predictions.

The construction and start up schedule are realistic (with the exception of the molybdenumhydrometallurgical plant) given the Group’s continuing commitment to proceed and the continuedcooperation of the government to provide timely approvals.

4.14.7 Risks

The uncertainty of the final cost for the Central Highway relocation and the lime quarry andplant could increase capital costs — Low to Moderate Risk/Unlikely to Possible.

The continuing escalating costs for the relocation of Morococha are a concern — Moderate toHigh Risk/Unlikely to Possible.

The working capital estimate is optimistic — Low to Moderate Risk/Possible.

The start-up schedule for the molybdenum hydromet plant appears to be optimistic given thehistory of similar operations —Moderate to High Risk/Possible to Likely.

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4.15 OPERATING COSTS

4.15.1 Mine

Mine operating costs were developed based on the mine plan, equipment requirements, andmanpower requirements presented in Section 9.0. The mine operating costs include all the supplies,parts, and labor costs associated with mine supervision, operation, and equipment maintenance.

Table 4.6 presents the 2007 Feasibility Study mine operating costs on a cost per tonne per yearbasis.

TABLE 4.62007 FEASIBILITY STUDY MINE LIFE AVERAGE OPERATING COSTS

US$/tonne

Drilling Blasting Loading Hauling Auxiliary G&A Total

0.037 0.049 0.055 0.756 0.143 0.091 1.131

The mine work schedule is assumed to be 2 shifts per day, 12 hours per shift.

For the February 2011 Definitive Estimate, ICM was required to update the pre-productionoperating costs including the ore and waste pre-stripping cost per tonne. The update included escalatedsalary and labor costs, a fuel price increase from $0.61/� to $0.82/�, a power cost increase from$0.047/kWh to $0.052/kWh and increased staffing, based on input from on site senior personnel. Onekey area supported by Behre Dolbear was an increased emphasis on training personnel.

The increased operations cost per tonne of material mined is best indicated by a comparison ofthe pre-production cost per tonne, as indicated in Table 4.7.

TABLE 4.7PRE-PRODUCTION OPERATING COSTS PER TONNE COMPARISON

Pre-production Period 2007 Feasibility Study 2011 Definitive Estimate

($/tonne) ($/tonne)

PPQ1 0.0 1.997PPQ2 0.961 1.016PPQ3 0.762 1.030PPQ4 0.771 0.00

Average 0.817 1.147

In Behre Dolbear’s opinion, the Definitive Estimate mining costs for the 2007 PPQ3 and PPQ4(46 Mt) and the 2011 PPQ2 and PPQ3 (48 Mt) provide the most reliable indicator of the increasedmining cost for the upgraded 2011 projected costs versus the 2007 estimate. The comparison,therefore, is an increased cost of 33.5%. This factor applied to the 2007 mine life projected a cost of

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$1.13 per tonne results in a third quarter 2010 projected mine life average cost of $1.51 per tonne thatcompares favorably with current comparable costs for existing mining operations. This cost escalatedwith CostMine® October 2011 surface mine escalators to the fourth quarter 2011 at 4.3% results in aprojection of $1.57 per tonne.

4.15.2 Processing, Infrastructure, and General and Administrative (G&A)

Behre Dolbear has escalated the 2007 operating costs for the concentrator, molybdenumhydrometallurgical plant, and G&A to the fourth quarter 2011. In order to obtain an order of magnitudeestimate, the following escalators (taken from the October 2011 Mining & Milling Cost Indices) wereused for the various work centers.

Š Labor 21% (Does not include the 8% profit sharinglabor agreement)

Š Consumables 49.6%

Š Power (Based on current contracts at $0.05169/kWhr)

Š Other 29.2%

Š Maintenance Supplies 17%

The operating costs for concentrating, hydrometallurgical plant, infrastructure, and G&A wereadequately developed in 2007. Table 4.8 represents an order of magnitude estimate by Behre Dolbearof the projected fourth quarter 2011 costs.

TABLE 4.82011 OPERATING COSTS — CONCENTRATOR, MOLYBDENUM HYDROMETALLURGICAL PLANT,

INFRASTRUCTURE, AND G&A

Unit CostsOperation (US$)

Concentrator 5.28/t ore milledMolybdenum Hydrometallurgical Plant 3,612/t MoO3 (Produced)Infrastructure 0.06/t ore milledG&A 1.42/t ore milled

The operating cost structure for the concentrator, molybdenum hydrometallurgy plant,infrastructure and G&A are reasonable for an operation this size. The risk associated with the costsshown in Table 17.3 is rated as moderate.

4.15.3 Conclusions

The generation of and backup for the operating costs is thorough and professional. Both IMCand Aker Solutions are reputable and experienced contractors.

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Behre Dolbear has based its escalation for the 2007 detailed operating cost estimate on IMC’supdate of the pre-stripping cost per tonne of material mined. IMC is in the process of providingupdated mining costs by year for the Toromocho Project production schedule.

Behre Dolbear has used currently available general escalators to escalate the 2007 processing,infrastructure, and G&A costs per tonne of ore milled and per tonne of MoO3 produced.

4.15.4 Risks

The projected 2007 Toromocho Project operating costs are based on sound engineering andpricing. Behre Dolbear’s 2011 escalated costs are based on available escalation factors — Low toModerate Risk/Unlikely to Possible.

4.16 MARKETING AND SALES

4.16.1 General

The study has delineated a composite assay for the typical copper concentrates as:

Š Copper 26.5%

Š Silver 256 g/t

Š Arsenic 0.08%

Š Zinc 2.89%

Behre Dolbear has stipulated to the copper concentrate grade in the metallurgical discussionand has adjusted the silver grade based on the discussion in Section 4.9.1.

4.16.2 Risks

The zinc assay at 2.89% appears low. A review of locked cycle testing indicates that the zincassays in the final copper concentrates could average as high as 10% (Table 10.2 and Table 10.3 of thisreview). The risk to the project for zinc penalties is Low to Moderate/Unlikely to Possible.

There is no discussion in the marketing report of concentrate flow moisture requirements,insurance, and unexplained smelter losses incurred during concentrate delivery and smeltingoperations. The concentrate treatment charges are estimated at $79 for long-term contracts with noprice participation and $10 per tonne for spot treatment charges. All of these terms are for 30% copperconcentrates. MCP may be penalized for its lower copper content when and if the market loosens upfor concentrates and will in all probability also face negotiation difficulties over its high insol levelsover 10%. Behre Dolbear has used publicly available studies and studies provided to the Group byCRU, to arrive at TC/RC costs of $70 and $0.07 for the planned copper concentrate production. Theconcentrate marketing risk is rated at Low to Moderate/Unlikely to Possible for copper concentratesdue to uncertainties in the future smelter schedules and Low/Unlikely for MoO3 product.

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APPENDIX IV COMPETENT PERSON’S REPORT

4.17 ECONOMIC ANALYSIS

Behre Dolbear has prepared an economic analysis for the Toromocho Project in Peru. TheFebruary 2011 Aker Solutions Definitive Estimate, as adjusted by Behre Dolbear (Table 4.4), has beenincorporated into the model. The Definitive Estimate capital has been updated by Behre Dolbear tofourth quarter 2011 dollars. The economic model is considered to be as of the fourth quarter 2011. Anew production schedule has been developed by Behre Dolbear incorporating dilution and mininglosses, which has been used in the analysis. Metal prices are as forecast by several forecastingcompanies in August 2011 and September 2011, and provided by the Group for use in the economicanalysis. The Behre Dolbear base case economic analysis shows a life-of-mine cash flow(undiscounted) of US$13.786 billion. Sensitivity analyses on the base case for plus 10% and minus10% on metal prices, operating costs, and initial capital investment individually show positive cashflows. Metal prices are the most sensitive item, as is typical of mining projects. Sensitivity analyseswere also performed using the 5-year average metal prices and the third quarter 2011 metal prices. Asthese prices are higher than the long-term projected prices, cash flows were higher than the base case.

Behre Dolbear economic analyses are 100% equity analyses that show the basic economics ofthe project. The analyses do not incorporate financing (interest paid and loan principal paid back). Theanalyses do not incorporate any losses carried forward for tax purposes from the construction periodand do not incorporate any refund of value-added taxes (VAT) previously or currently paid. Shouldfinancing be incorporated into an economic model, it would affect the tax situation by lowering theemployee profit-sharing tax as well as the income tax, due to the deductibility of interest. Deductibilityof losses carried forward would lower income taxes. Refund of VAT would increase cash flow in theyear of the refund.

In assessing a mineral property, it is sometimes useful to compare the property’s costs andoutput to the industry as a whole. To do this, Behre Dolbear compared the cash cost and productionfrom the Toromocho Project to the rest of the copper industry utilizing World Mine Cost DataExchange’s Dynamic Cost Curve model containing production and cash cost data for mines thatproduced at least 90% of the western world copper. The Behre Dolbear average long-term cash cost ofproducing a pound of copper from the Toromocho Project is US68.6 cents when credits for the silverand molybdenum production are included. When compared to other producers in the model, theToromocho Project’s cash cost per pound of copper is just below the 30% mark at 29.3%. Thisindicates that 70.7% of the modeled copper mines’ production cash costs are more than the ToromochoProject’s cash cost of US68.6 cents.

Behre Dolbear concludes that the project is economically viable and has the opportunity forhigher returns on investment, if prices remain at high levels. Nevertheless, it should be noted that themetal mining industry is cyclical, and when a new cycle of lower prices will occur is not known.

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APPENDIX IV COMPETENT PERSON’S REPORT

4.18 OVERALL RISK ASSESSMENT/CONSEQUENCE

Per the discussion regarding risk in Section 3.2, the overall Toromocho Project’s risk andlikelihood assessment and resultant consequence assignment are provided in Table 4.9.

TABLE 4.9TOROMOCHO PROJECT RISK ASSESSMENT SUMMARY

Issue Risk LikelihoodConsequence

Rating

Land StatusŠ Fail to transfer parcel Low Unlikely LowŠ Issues with adjacent operations Low Unlikely Low

Resources and ReservesŠ Problems with drilling data, mine sampling data, and

assaysLow Unlikely Low

Š Variography inaccurate Low Unlikely LowŠ Resource categorization unreliable Low Unlikely LowŠ Mining losses and dilution insufficient (as adjusted by

Behre Dolbear)Low Unlikely Low

GeotechnicalŠ Pit slope angles unreliable Low to

ModerateUnlikely toPossible

Low toMedium

Š Stockpiles and waste dumps unstable (complete proposedwork)

Low toModerate

Unlikely toPossible

Low toMedium

MiningŠ Production levels not met Low to

ModerateUnlikely toPossible

Low toMedium

Š Operating costs exceeded Moderate Possible MediumŠ Capital costs exceeded Low to

ModerateUnlikely toPossible

Low toMedium

ProcessŠ Copper recovery not achieved Low to

ModerateUnlikely toPossible

Low toMedium

Š Concentrate grade not achieved Low Unlikely LowŠ Higher penalties for insol Low to

ModerateUnlikely toPossible

Low toMedium

Š Silver recovery not achievedModerate

Unlikely toPossible

Low toMedium

Š Moly recovery circuit will not start-up as scheduledHigh Possible

Mediumto High

Š Tailings deposition system may not work as planned Moderateto High

Unlikely toPossible

Mediumto High

Š Concentrates may not be as marketable as planned Low toModerate

Unlikely toPossible

Low toMedium

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APPENDIX IV COMPETENT PERSON’S REPORT

TABLE 4.9TOROMOCHO PROJECT RISK ASSESSMENT SUMMARY

Issue Risk LikelihoodConsequence

Rating

Infrastructure and Non-Process FacilitiesŠ Incomplete highway relocation plans, lime quarry added

scope, and uncertainties regarding the Morococharelocation may increase costs

Low toModerate

Unlikely toPossible

Low toMedium

Environmental and PermittingŠ Location issues could impact availability of skilled labor Low to

ModerateUnlikely toPossible

Low toMedium

Š The large tailings area may have adverse impacts Low Unlikely LowŠ Problems relocating Morococha residents could adversely

impact the scheduleLow toModerate

Unlikely toPossible

Low toMedium

Reclamation and ClosureŠ Dust and water reclamation may not be sufficient Low Unlikely LowŠ Tailings reclamation may not be effective Low Unlikely LowŠ Closed pit may reduce the quality of life in the area Low Unlikely Low

Administration, Manpower, and ManagementŠ Adequate skills, expertise, training, and numbers of

personnel may not be availableLow toModerate

Unlikely toPossible

Low toMedium

Capital Cost Estimate and Implementation Schedule RatingŠ The working capital estimate appears low Low to

ModeratePossible

Low toMedium

Š (See Infrastructure and Non-Process Facilities)Š (See Mining)

Operating CostsŠ The escalation factors for 2007 to 2011 may be inaccurate Low to

ModerateUnlikely toPossible

Low toMedium

Marketing and SalesŠ (See Process, i.e., concentrates)Š TC/RC charges could be more than projected in the future Low to

ModerateUnlikely toPossible

Low toMedium

Š It may be difficult to market MoO3 due to quality Low Unlikely Low

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APPENDIX IV COMPETENT PERSON’S REPORT

5.0 LAND STATUS

The Toromocho Project is 100% owned and operated by MCP (formerly Minera Peru CopperS.A. (MPC)) which evolved from Peru Copper Inc. (PCI), which was formed in 2004 as the successorto the Peru Copper Syndicate Ltd., which had been formed in April 2003 and has subsequentlyacquired the mineral concessions to the Toromocho deposit. In August 2007, PCI received andaccepted a takeover bid from the Chinalco Overseas Holding Company Limited, a wholly ownedsubsidiary of the Group.

The Toromocho deposit is located in the core of the Morococha mining district. The history ofthe Morococha mining district dates to Inca times, when the region was explored and exploited forsilver and gold. During the Spanish Colonial Period, the area was mined for oxidized minerals withsilver, zinc, and lead content.

In 1908, the Cerro de Pasco Syndicate and the Backus & Johnston del Peru Companyincorporated the Morococha Mining Company. The Morococha Mining Company was reorganized in1915 and merged with the Cerro de Pasco Corporation. Three years later, Backus & Johnston sold itsstake in Morococha to the Cerro de Pasco Corporation. The earliest recorded information on theToromocho deposit dated from 1928, when a low-grade ore zone was identified along the edge of theSan Francisco peak monzonite stock and several other low-grade blocks were discovered. Furtherexploration was carried out by Cerro de Pasco until 1973-1974, when the property was nationalized bythe Peruvian government and transferred to Centromin.

During the 1970s, Centromin continued exploration, carried out a drilling program. In 1974,Centromin started a small-scale exploitation of the Toromocho deposit. In the 1990s, Centromin beganthe process of privatization of all its assets. Exploitation by Centromin ceased in October 1997. In1999, J. David Lowell, one of the founders of PCI, began studying potential mineable deposits ofcopper ore reserves in Latin America. Through this process, in 2002, Mr. Lowell determined thatCentromin’s Toromocho deposit had potential as a large, open pittable operation. In April 2003, PeruCopper Syndicate was formed for the purpose of making a bid for the Toromocho mineral concessions.The bid was successful, and the Company entered the Toromocho Option agreement with Centromin inJune 2003. The Toromocho Option Agreement gave the Company the right to acquire certain full andpartial interests held by Centromin in the mineral concessions and related assets of the ToromochoProject.

The Toromocho mineral concessions were held as an option agreement between MCP andCentromin. The Toromocho Option Agreement required that in order for MPC to exercise theToromocho Option, it must (1) expend up to $12 million on exploration and development on theproperty over a maximum 5-year option exercise period that commenced on June 11, 2003; (2) deliverto Centromin a feasibility study on the Toromocho Project within such option exercise period; and(3) either provide to Centromin evidence that it meets certain technical and financial requirements or,alternatively, provide evidence that a qualifying financial institution, acceptable to Centromin, iswilling to provide the financing required to develop the Toromocho Project in accordance with theterms of the feasibility study. MCP fully executed all Options through May 2008. The TransferContract between Chinalco/MCP and Centromin was executed in May 2008 and was financed byEximbank of China.

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APPENDIX IV COMPETENT PERSON’S REPORT

MCP’s legal vice president notified Behre Dolbear that the mining concessions are perfectly inplace. A small strip of land, inside the pit area, that used to be owned by the railroad and is currentlygovernment controlled, is in the process of being transferred to MCP. Approval of the EIA impliesintent to complete the transfer that should be finished within 6 months — Low Risk/Unlikely.

Two other larger companies holding property and mineral concessions adjacent to theToromocho deposit and currently operating small underground mines are Pan American Silver andAustria Duvaz. Smaller companies holding concessions adjacent to Toromocho are Centenario,Pomatarea, Volcan, and Sacracancha. MPC has signed an agreement with Austria Duvaz, whichgranted the company an exclusive option to acquire the Morococha mining concessions, surface areasand assets of Austria Duvaz. In accordance with the share purchase agreement signed with AustriaDuvaz, MCP gained 100% control of Minera Centenario and its stake in 30 concessions located in theMorococha mining district — Low Risk/Unlikely.

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APPENDIX IV COMPETENT PERSON’S REPORT

6.0 GEOLOGY

6.1 REGIONAL GEOLOGY

Peru is situated in the heart of the Andés mountain range. The cordillera of the Andés forms anorthwest-trending belt that passes through Peru and is one of the most important metallogenicprovinces in South America. The historical mining district of Morococha is part of the Miocene Belt ofthe Andés in central Peru. It is located 150 km east of Lima and covers an area of about 70 km2. Thegeology of the district consists of shale and phyllites, subordinate limestones, and lava flows of theExcelsior Group (Devonian age), continental volcanic rocks and red beds of the Mitu Group (Permianage), sedimentary carbonate, volcanic rocks, and basalts of the Pucará Group (Triassic-Jurassic-age),Goyllarisquizga Group, and Machay Group (Late Cretaceous age), cut by Miocene-age intrusions withdifferent ages.

6.2 LOCAL GEOLOGY

6.2.1 General

The Morococha district occupies a Tertiary-age intrusive center with associated skarn, hornfels,and breccia mineralization. It is developed in Jurassic Pucara calcareous sediments on the flat dipping(45 degrees to 50 degrees) western flank of a regional anticline located between a large, older,pre-mineral andesitic (diorite) intrusive to the west and Permian-Triassic (Catalina) volcanics to theeast along the axis of the regional anticline. Toromocho is located in the core of the Morococha miningdistrict. The stratigraphic unit in the immediate area of the Toromocho deposit is the Pucara group ofJurassic-age dolomites, and siliceous limestones, with intercalated basalt and trachyite flows. This unitis estimated to be 430m thick.

Porphyry mineralization in the Morococha area is hosted in both the intrusive and skarn rocktypes. The copper grade in the skarn rock types is generally higher. The drill hole logging has indicatedthat much of the mineralization is hosted in a breccia. The breccia crosses the rock type boundaries sothat clasts can be predominately intrusive, skarn, or a mixture. The work by the geologists andconsultants indicate that the breccia character of the rock mass may be due to anhydrite depletion fromthe rock matrix and subsequent partial collapse. Detailed logging indicates that the breccia can havedifferent intensity throughout the deposit. The more subtle breccia textures probably represent theanhydrite depleted zones; more intense brecciation could be mechanical contact breccia orhydrothermal breccia.

6.2.2 Geology of the Toromocho Porphyry Copper Deposit

Toromocho is a complex, mineralized assemblage of veins, veinlets, stock works, “manto-type”bodies, and disseminated sulfides of the general “porphyry copper” type. The Toromochomineralization is hosted in Jurassic limestones of the Pucara formation and in Tertiary-age intrusivesincluding diorites, granodiorites, quartz, monzonites, and quartz porphyries. Contact metamorphism isrelated to the intrusive activity. Extensive bodies of skarn are present at the contacts between intrusiveand calcareous host units. Broad areas of the deposit are brecciated with various levels of intensity.The breccia texture crosses all rock types in the central portion of the deposit.

The Toromocho deposit is a roughly vertical cylindrical shaped mass, but in detail it has acomplex shape. Intrusive bodies cut dipping limestone beds forming calc-silicate metamorphics skarns.

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APPENDIX IV COMPETENT PERSON’S REPORT

The copper grade is usually higher in the skarn forming large higher grade zones. All of the rock unitscan be brecciated to various degrees (Figure 6.1).

Figure 6.1. Cross section map of the Toromocha deposit(after the Aker Kvaerner 2007 Report)

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APPENDIX IV COMPETENT PERSON’S REPORT

At the Toromocho deposit, chalcocite is distributed vertically over at least 250m, but somechalcopyrite remains throughout much of this interval. Sequential assays completed by drilling haveconfirmed this occurrence and provide a sound basis for interpretation of copper mineral speciesthroughout the deposit.

The Toromocho ore body outcrops on the present surface at elevations of 4,600m to 4,800m.The copper ore body extends downwards to a flat “bottom” 500m to 600m below the surface. Thehighest grade part of the ore body lies within a 1.0 km by 2.0 km body of brecciated skarn, surroundinga cupola-like 7-million year old feldspar porphyry and granodioritic intrusive, and underlies on thewest side, the older regional andesitic/dioritic intrusive exposed on the surface. The ore body containsabout 2.5 billion tonnes of +0.3% copper resources averaging about 0.5% copper. The primary orebody is over-printed by late-stage, pyritic primary mineralization, clay, and serpentine alteration andsupergene chalcocite and covellite enrichment. Spotty and structurally controlled, moderate-to weak,chalcocite enrichment extends from the surface and from the top of dominant sulfides, downward tothe bottom of enrichment, 200m to 400m below the surface. A sulfate zone containing anhydritedisseminations and veinlets occur several hundred meters below the bottom of enrichment.

Deposit scale vertical zoning of copper, molybdenum, and arsenic and possibly also of verylow levels of gold, is present in the Toromocho mineralized body. The patterns of molybdenumdistribution in the central and main part of the mineralized body shown on the sections are in the formof inverted cones or shells open downwards, and plunging to the north. Spotty and weak enargite(Cu3AsS4) and tennantite [(CuFe)12As4S13] mineralization indicates the presence of arsenic atToromocho. The highest arsenic values are generally found above the 4,700m elevation and near thesurface.

Behre Dolbear’s geologist’s observation in the field and study of the geology maps suggest thatthe Toromocho deposit is well understood by MCP. The major copper mineralization is in the form ofchalcopyrite and chalcocite. Molybdenum and silver are present as byproduct credits. The deposit hastypical porphyry copper mineralization and alteration characteristics.

6.3 GEOLOGICAL DATABASE

6.3.1 Database Used for the Mineral Resource Estimates

A total of 453 DDH with 168,931.35m of core have been completed from 1966 to 2008 byprevious owners including Cerro de Pasco, Centromin, PCI, and MCP.

Drill hole data considered in IMC’s November 2007 Report and subsequently Aker Kvaerner’reports contained the drill hole data prior to April 2008. The database used in the current resourceblock model reviewed by Behre Dolbear is a combination of all historic diamond drilling completed byprevious owners including Cerro De Pasco, Centromin, PCI, and MCP. Multiple assay methods andseveral assay interval lengths are incorporated into a single database for use in the block gradeestimation within the block model. The sampling, sample preparation, and assaying techniques andprocedures for all the samples can be found in the IMC 2005 and 2006 reports and meet industrystandards.

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APPENDIX IV COMPETENT PERSON’S REPORT

6.3.2 Drilling

The history of the Toromocho drill campaigns was summarized by IMC in its 2006 report andis summarized by Behre Dolbear below.

Š The Cerro de Pasco and Centromin drilling is designated “Old Holes.”

Š The PCI drilling completed from 2003 to 2008 is designated “PCI Holes.”

Š The MCP drilling completed from 2011 is designated “MCP Holes.”

IMC indicates that all of the Old Holes provided by Centromin to PCI are DDH of variousdiameters from NX to BX (55 mm to 42 mm diameter). Core recovery was variable in the Old Holeswith average core recoveries for both programs reported as 80%. IMC personnel observed a number ofplaces in Old Holes where the adjacent from-to blocks in the core tray representing 1m to 1.5m haveno core between them. The current understanding of the Centromin and Cerro de Pasco procedures forOld Holes is summarized as below by IMC: Old Holes were split with half the core going to assay andthe other half retained in the core tray. The split core was reduced to pulps before assaying for totalcopper. Occasional assays for zinc, molybdenum, and “oxide copper” were also recorded.

The PCI holes, during 2003 through 2008, were generally HQ core (63.5 mm diameter),recovered with face discharge bits and split inner barrels. Every effort was made to maximize corerecovery. A few PCI holes are PQ diameter for metallurgical sample purposes.

Behre Dolbear has visited the core storage room and could not check the cores since all of thecore boxes are piled up together and are not accessible.

6.3.3 Sampling, Sample Preparation, and Assaying

The drill holes were sampled by splitting the core with subsequent preparation of samples forassay. The precise procedures applied by Cerro de Pasco and Centromin for splitting and sampling forthe Old Holes are not known, based on the IMC reports. PCI personnel have found 2,100 old samplepulps from Centromin and Cerro de Pasco. Those pulps have been reassayed as a check on the oldmethods. Split core is still available for many of the Old Holes in the core storage room.

The sampling of the PCI and MCP holes has been completed under the control of PCI and MCPpersonnel. Behre Dolbear visited and checked some drilling cores completed by PCI in the 2008drilling program. Behre Dolbear has reviewed the logging sheets, logging procedures, samplepreparation procedure, and interviewed MCP’s geologists.

Behre Dolbear notes that IMC reported the assay samples were milled to 150 mesh. However,Behre Dolbear has confirmed with the PCI/MCP on site geologist and CIMM Laboratory that the assaysamples were milled to 200 mesh, the preferred procedure.

Sample intervals lengths for the PCI and MCP holes are generally 1.50m to 1.55m in lengthcorresponding to a 5-foot drill run. Sample lengths for the Old Holes generally average round 1.30m inlength, although they vary significantly. Many shorter intervals are apparent in the Old Holes.

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APPENDIX IV COMPETENT PERSON’S REPORT

Sample analysis was undertaken by the CIMM Peru using the standard analytic methodsspecified in its documents such as “IC-VH-01 REV11/Resume JG-MC 2010-09-08.” Gold grades weredetermined by fire assay and atomic absorption spectroscopy (AAS) procedure. Copper grades weredetermined by AAS-Leaching (H2SO4/NaCN) and perchloric digestion (HCLO4, HNO3, and HCL)method. Lead, zinc, molybdenum, arsenic, and silver grades were determined using AAS-Multi AcidDigestion (HF,HCLO4,HNO2, and HCL) procedure.

None of the PCI or MCP employees, officers, directors, or associates were involved in the inthe CIMM Lab. Behre Dolbear considers the sample preparation procedures, analytic method, andsecurity utilized to be appropriate for this type of copper-polymetallic deposit.

6.3.4 Quality Assurance/Quality Control (QA/QC)

6.3.4.1 PCI Data Verification

Outside Checks Assays of PCI Drilling

The primary lab for PCI assaying is the CIMM Lab in Lima, Peru. Duplicate pulps are sent tothe ALS-Chemex Lab in Canada for check assays. PCI reports sending the duplicate pulps out forcheck assay on approximately a 1 out of 10 basis.

Table 6.1 presents the results of the check assays for total copper. The results indicate soundcomparison between the CIMM Lab and the outside lab for total copper assay. Table 6.1 summarizesthe results of the other mineral check assays that were run on the 1.5m assay interval basis.

TABLE 6.1THE RESULTS OF THE CHECK ASSAYS FOR TOTAL COPPER

MetalNumberof Checks

CIMMMeanGrade

ALS-ChemexMean Grade

T-Testof

MeansPaired

TBinomial

Test

KSDistribution

Test

Copper (%) . . . . . . . . . . . . . . . . . . . . 4,514 0.455 0.488 Pass Fail Fail PassMoly (%) . . . . . . . . . . . . . . . . . . . . . . 212 0.017 0.015 Pass Fail Fail PassSilver (g/t) . . . . . . . . . . . . . . . . . . . . . 560 6.302 6.084 Pass Fail Fail FailZinc (%) . . . . . . . . . . . . . . . . . . . . . . 560 0.253 0.25 Pass Pass Fail PassArsenic (%) . . . . . . . . . . . . . . . . . . . . 147 0.008 0.009 Pass Fail Pass Fail

The results for all check assay values are sound. The failures indicated on Table 6.1 are due totight variances within all the check assays. The means of the tested results are quite close as indicatedby the T-test and population tests on the means are acceptable with the KS test.

Behre Dolbear noticed that blank samples were not inserted by MCP, PCI, and previousowners. Behre Dolbear recommends that in the future MCP consider submitting blank (zero grade)samples as check samples to test for possible contamination in the crushers and pulverizationequipment.

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APPENDIX IV COMPETENT PERSON’S REPORT

PCI Drilling Pulp Weight Composites versus Calculated Composites

PCI assayed every 1.5m interval at the CIMM lab for total copper with occasional assays forarsenic, molybdenum, zinc, and silver. After preparation of the individual pulps for assay, pulp weightcomposites are made up to reflect 10m bench interval composites. In sub-horizontal holes, thecomposites are 10m downhole intervals. The pulp weight composites are then assayed at the CIMMlabs for total copper, acid soluble copper, cyanide soluble copper on the acid reject, lead, zinc,molybdenum, arsenic, silver, and gold.

IMC compared the calculated composites for copper, zinc, molybdenum, and silver that werebased on several 1.5m assays against the single 10m composite assay based on the pulp weightcomposites. This test accomplishes two goals:

1) Tests the reliability of the preparation of the 10m pulp weight composites

2) Checks the repeatability of the CIMM assay process.

Table 6.2 summarizes the results of the comparison between calculated composites and pulpweight composite values. All results comfortably pass the various statistical hypothesis tests with a95% confidence level.

TABLE 6.2RESULT SUMMARY OF THE COMPARISON BETWEEN CALCULATED COMPOSITES AND PULP

WEIGHT COMPOSITE VALUES

MetalNumberof Checks

CalculatedComposite

MeanGrade

WeightCompositeMean Grade

T-Testof

MeansPaired

TBinomial

Test

KSDistribution

Test

Copper (%) . . . . . . . . . . . . . . . . . . 8,345 0.448 0.449 Pass Pass Fail PassZinc (%) . . . . . . . . . . . . . . . . . . . . 94 0.368 0.365 Pass Pass Pass PassSilver (g/t) . . . . . . . . . . . . . . . . . . . 94 5.300 5.651 Pass Pass Pass PassMoly (%) . . . . . . . . . . . . . . . . . . . . 91 0.012 0.013 Pass Pass Pass PassArsenic (%) . . . . . . . . . . . . . . . . . . 279 0.028 0.027 Pass Pass Pass Pass

The results of the comparisons between calculated composites and pulp weight composites hasled IMC to form the opinion that the two forms of data can be commingled within the PCI drill data.When both composites are available, calculated composites are used preferentially due to theadditional assay support included within each composite mean.

6.3.4.2 Old Drilling Verification

Reassay of Old Drilling Pulps at CIMM

Over 2,000 of the original Old Drilling pulp weight composites of 10m intervals were foundwithin the archives of Centromin by PCI personnel. These pulps were reassayed at the CIMM Lab as acheck on the original assay results by Centromin and Cerro de Pasco. These reassays do not provideany information or checks on the sample collection and preparation used to prepare the pulps.

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As a result of these comparisons, IMC has formed the opinion that the Old Drilling results foracid soluble copper, silver, gold, and arsenic are not reliable for resource estimation. Arsenic could beused if the intent is to overvalue arsenic on a conservative basis for checks of potential smelter issues.IMC has chosen not to use the old values for arsenic in the resource estimate. Copper, zinc, andmolybdenum from the Old Drilling can be commingled with recent assays and used for resourceestimation.

6.3.4.3 Nearest Neighbor Comparison — Old Drilling to PCI Drilling

In order to check the sampling and assay results between the Old Drilling and the PCI Drilling,the 10m composites were paired and compared when they were close to each other within the deposit.This procedure makes sound use of the twin holes that have been drilled, but also takes advantage ofthe recent angle holes that cross Old Drilling by providing additional pairs for comparison.

The copper grade comparison between the Old Drilling with the original assays and the PCIdrilling with CIMM assays are a close comparison. The molybdenum results indicate that the OldDrilling with original assays is low when compared with PCI drilling and CIMM assays. This is likelydue to core loss causing metal loss in the Old Drilling, particularly for molybdenum. Hypothesis testsindicate that the population means and the differences between individual samples are sufficientlyclose that the data can be commingled. However, there are differences in the population distributionsas indicated by the binomial and KS tests.

6.3.5 Density Data

There were four sources of specific gravity or density information available for the ToromochoProject geology database.

1) Density data recorded by Cerro de Pasco and Centromin amounting to 27,072 densitymeasurements (Old Holes)

2) 38 PCI samples sent to CIMM for density determinations without paraffin

3) 88 PCI samples sent to CIMM for density determinations with paraffin

4) 24 PCI core samples sent to Call and Nicholas (CNI) for rock strength testing had densityvalues measured

The density data for the Old Holes were individual core samples weighed in air and weighed inwater without any coatings prior to immersion in water. The CNI densities were calculated by carefulweighing of the sample in air after preparation for geotechnical testing. Preparation for testing includessurface grinding of the core ends to assure they are parallel and careful measurement of the samplewith a micrometer to determine the volume. Comparison of the methods found that the paraffin-coatedsamples were generally lighter than those samples that did not use paraffin. This is likely due to thefractured nature of the rocks absorbing water during the immersed weight. The Old Hole data and theCIMM data were used to determine average densities by rock type, alteration, and weathering zonewithin the model. The samples without paraffin were adjusted to reflect the results of the sample withparaffin when determining the rock type and alteration zone means. CNI results were used by IMC as afinal independent comparison or check of the assignments established by IMC for each rock type.

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APPENDIX IV COMPETENT PERSON’S REPORT

The Block Density Assignments used in the resource estimation report by IMC in 2006 are asfollows:

Š Leach cap material above the 0.15% copper surface is 2.355 dry tonnes/m3

Š Everywhere else in the model is 2.57 dry tonnes/m3

6.3.6 Conclusions

Behre Dolbear’s geologist’s observation in the field and study on the geology maps suggest thatthe Toromocho deposit is well understood by MCP. The major copper mineralization is in the form ofchalcopyrite and chalcocite. Molybdenum and silver are present as byproduct credits. The deposit hastypical porphyry copper mineralization and alteration characteristics.

Behre Dolbear has visited the primary lab for the Toromocho Project, CIMM PERU S.A. inLima, Peru. The CIMM Lab Manager explained to Behre Dolbear the sample preparation and assayprocedure used for the Toromocho Project. Behre Dolbear reviewed the lab’s qualification andcertification from both Peru and International Organizations.

Behre Dolbear considers CIMM Peru as a well-qualified lab with a good reputation.

Behre Dolbear believes that the database used in the resource estimate by IMC for theToromocho copper deposit is well organized, in good order, and acceptable based on observation in thefield and study of the geology report. The work meets both Canadian NI43-101 and Australasian JORCstandards.

In Behre Dolbear’s opinion, drilling efforts and sampling methods employed by PCI and MCPin their drilling efforts meet both Canadian NI 43-101 and Australasian JORC standards. The drillingof large diameter (HQ) core using split inner tubes enhances core recovery, and also provides a largersample for assay compared to smaller diameter cores. The sawing of the core for collection of samplesfor assay is appropriate and provides for more uniform and consistent sample sizes compared tosplitting with a conventional manual or hydraulic splitter.

The sample preparation, analytical methods, and security procedures used by PCI and MCP forsamples generated by the PCI and MCP drilling meet Canadian NI 43-101 and Australasian JORCstandards. The analysis of 10m composites for accessory metals such as gold, silver, zinc,molybdenum, and arsenic is appropriate for the porphyry-style copper mineralization in theToromocho deposit.

The QA/QC procedures outlined by IMC are adequate for porphyry copper mineralization fromthe Toromocho deposit.

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APPENDIX IV COMPETENT PERSON’S REPORT

7.0 MINERAL RESOURCE ESTIMATES

The mineral resources at the Toromocho Project were last estimated by IMC. The currentmodel was developed in November 2007 for PCI and has been subsequently utilized for the feasibilitystudy produced by Aker Kvaerner. The mineral resource estimate at the Toromocho Project has beengenerated by IMC using a standard 3D-block model approach based on the March 1, 2007 drill holedatabase for the property. The 2007 IMC resource model was used by Behre Dolbear to spot check theaccuracy of the modeling work and for compliance with reporting of Mineral Resources as requiredunder the Australasian Joint Ore Reserve Committee JORC Code.

7.1 JORC RESOURCE AND RESERVE DEFINITIONS

The Australasian Code for Reporting of Exploration Results, Mineral Resources and OreReserves, prepared by the Joint Ore Reserves Committee of the Australasian Institute of Mining andMetallurgy, Australian Institute of Geoscientists and Minerals Council of Australia in September 1999and revised in December 2004 (JORC Code) is a resource/reserve classification system that has beenwidely used and is internationally recognized. The JORC Code is used by Behre Dolbear to report themineral resources at the Toromocho property in this report. Mineral resources under the JORC Codeare defined as follows:

A ‘Mineral Resource’ is a concentration or occurrence of material of intrinsic economicinterest in or on the Earth’s crust in such form, quality and quantity that there are reasonableprospects for eventual economic extraction. The location, quantity, grade, geologicalcharacteristics and continuity of a Mineral Resource are known, estimated or interpreted fromspecific geological evidence and knowledge. Mineral Resources are sub-divided, in order ofincreasing geological confidence, into Inferred, Indicated and Measured categories.

An ‘Inferred Mineral Resource’ is that part of a Mineral Resource for which tonnage, gradeand mineral content can be estimated with a low level of confidence. It is inferred fromgeological evidence and assumed but not, verified geological and/or grade continuity. It isbased on information gathered through appropriate techniques from locations such asoutcrops, trenches, pits, workings and drill holes which may be limited or of uncertain qualityand reliability.

An ‘Indicated Mineral Resource’ is that part of a Mineral Resource for which tonnage,densities, shape, physical characteristics, grade and mineral content can be estimated with areasonable level of confidence. It is based on exploration, sampling and testing informationgathered through appropriate techniques from locations such as outcrops, trenches, pits,workings and drill holes. The locations are too widely or inappropriately spaced to confirmgeological and/or grade continuity but are spaced closely enough for continuity to be assumed.

A ‘Measured Mineral Resource’ is that part of a Mineral Resource for which tonnage,densities, shape, physical characteristics, grade and mineral content can be estimated with ahigh level of confidence. It is based on detailed and reliable exploration, sampling and testinginformation gathered through appropriate techniques from locations such as outcrops,trenches, pits, workings and drill holes. The locations are spaced closely enough to confirmgeological and grade continuity.

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An ‘Ore Reserve’ is the economically mineable part of a Measured and/or Indicated MineralResource. It includes diluting materials and allowances for losses, which may occur when thematerial is mined. Appropriate assessments and studies have been carried out, and includeconsideration of and modification by realistically assumed mining, metallurgical, economic,marketing, legal, environmental, social and governmental factors. These assessmentsdemonstrate at the time of reporting that extraction could reasonably be justified. Ore Reservesare sub-divided in order of increasing confidence into Probable Ore Reserves and Proved OreReserves.

A ‘Probable Ore Reserve’ is the economically mineable part of an Indicated, and in somecircumstances, a Measured Mineral Resource. It includes diluting materials and allowances forlosses which may occur when the material is mined. Appropriate assessments and studies havebeen carried out, and include consideration of and modification by realistically assumedmining, metallurgical, economic, marketing, legal, environmental, social and governmentalfactors. These assessments demonstrate at the time of reporting that extraction couldreasonably be justified.

A ‘Proved Ore Reserve’ is the economically mineable part of a Measured Mineral Resource. Itincludes diluting materials and allowances for losses which may occur when the material ismined. Appropriate assessments and studies have been carried out, and include considerationof and modification by realistically assumed mining, metallurgical, economic, marketing, legal,environmental, social and governmental factors. These assessments demonstrate at the time ofreporting that extraction could reasonably be justified.

An ore reserve is defined in the Australasian JORC Code as that part of a Measured orIndicated Resource which could be mined and from which valuable or useful minerals could berecovered economically under conditions reasonably assumed at the time of reporting. Reserve figuresincorporate mining dilution and allow for mining losses, and are based on an appropriate level of mineplanning, mine design, and scheduling.

7.2 ELECTRONIC DATABASE USED FOR RESOURCE AND RESERVE MODELS

The electronic drill hole database supplied to Behre Dolbear contained a total of 362 diamonddrill holes (DDH) of the 371 reported to be drilled on the property. The total drilled length in thedatabase is 139,329m. The database used for the current Toromocho Project resource model issummarized in Table 7.1 by drilling campaign. Nine holes reported to be drilled between 1966 and1972 were not included in the database used for the resource estimate.

TABLE 7.1DRILL HOLE DATABASE USED FOR THE TOROMOCHO PROJECT RESOURCE ESTIMATION

Drilling Campaign Number Total Meters

1966 – 1972 Cerro de Pasco Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71 18,2641974 Centromin . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59 21,6022003 – 2007 Peru Copper . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 232 99,462

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 362 139,329

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The electronic database provided by IMC contains 93,179 assay intervals over a total of139,329m. The assays for copper, molybdenum, silver, zinc, arsenic, lead, and gold are recorded alongwith rock type codes, ore type (mineralization zones) codes, alteration codes and structure codes. IMCused a total of 18 different rock types, 7 different ore types or mineralization zones and 15 alterationcategories which are coded into the assay database. Assaying was conducted on approximately 1.5mintervals. Aker Kvaerner reports that no adjustments were made to assay intervals for changes in rocktypes or for transitions between geologic units.

The topography used for the resource estimation was provided to Behre Dolbear as anAutoCAD® file. The topography used and supplied was the current topography as of December 2006and it is specified in standard UTM coordinates: WGS-84 Zone 18-S for Peru. The historic drill holecollars were originally located in a local mine coordinate system but were translated and specified inUTM coordinates in the database supplied to Behre Dolbear. The topographic work and controlsappear adequate for mineral resource estimates.

7.3 BULK DENSITY MEASUREMENTS

IMC reports that here were four sources of specific gravity or density information available aspart of their March 2007 database. The historic drilling completed by Cerro de Pasco and Centrominreports to have 27,072 density measurements and three different sets of measurements on 150 sampleswere taken by MCP’s work at the project. IMC has analyzed and classified the density measurementand developed a table for density assignment. They have separated the densities base on the materialbelow and within the leach cap and by rock type. Table 7.2 summarizes the densities based on themajor rock types. For material below the leach cap, density was assigned rock type but was thenmodified based on alteration and RQD.

TABLE 7.2IMC BULK DENSITY SUMMARY

Density (g/cm3)

Below Leach Cap

Within Leach CapRock Type Minimum Maximum

Anhydrite . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.71 NA 2.55Volcanic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.6 NA 2.44Shale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.5 NA 2.35Calc Seds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.54 NA 2.39Basalt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.76 NA 2.53Mag Skn . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.16 NA 2.97Horn . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.61 NA 2.53Dacite . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.61 NA 2.45Skarn . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.28 3.23 2.52Quartz Porphyry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.3 2.65 2.48Felds Porphyry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.3 2.65 2.37Granodiorite . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.3 2.65 2.36Diorite . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.3 2.65 2.34

Behre Dolbear has reviewed the bulk density procedures used for the resource modeling andbelieves that sufficient work has been done to estimate tonnage at the Toromocho property accurately.

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7.4 DATA VERIFICATION

Behre Dolbear has not completed any independent sampling or data verification of theToromocho deposit but has relied upon the opinions of IMC and Aker Kvaerner. If the checks andprocedures used by these two firms have been completed as presented, Behre Dolbear believes thatsufficient data verification has been completed for a resource model and estimate.

7.5 PROCEDURES AND PARAMETERS USED FOR THE RESOURCE MODELING

The mineralization in the Toromocho area is associated with an intrusive event. It is believedthat the intrusive event created permeability in surrounding country rocks, which was then susceptibleto mineralizing fluids. The Toromocho deposit is located in the center of the Morococha mining districtwhich occupies a Tertiary-age intrusive center with associated skarn, hornfels, and brecciamineralization.

The Toromocho deposit is a copper-molybdenum porphyry system hosted in both sedimentsand contact metamorphic skarns. The deposit has been subject to secondary enrichment forming a thickzone of mixed chalcocite and chalcopyrite in the upper zones of the deposit.

The hydrothermal mineralization of the Toromocho deposit is well zoned. The metal zonationcrosses rock type boundaries although the skarn units are better hosts than the intrusives. The depositshows well developed concentric silicate alteration along with the metal zoning. There is a centralpotassic core that is surrounded by a phyllic zone and then a propylitic outer zone.

The Toromocho deposit is a roughly vertical, cylindrical-shaped mass, but in detail, it has acomplex shape. Intrusive bodies cut dipping limestone beds forming calc-silicate metamorphics. Thecopper grade is usually higher in the skarn forming large, higher grade zones. All of the rock units canbe brecciated to various degrees.

Š 3D Geologic Model: MCP geologists developed a series of cross sections aligned withdrill grid northwest-southeast and northeast-southwest relative to UTM north. Multiplesets of these sections were developed showing rock type, alteration, and mineraloccurrence. The rock type and alteration information on the sections were then transferredto plan maps. Differences between the north-south and east-west sections were resolved onthe level maps. The rock type and alteration information was then digitized on plan andassigned to the block model on a nearest whole block.

Š Behre Dolbear has examined and reviewed the level of detail entered into IMC blockmodel and the assigned rock types for the Toromocho Project. Behre Dolbear believes thatsufficient 3D geologic information and constraints have been included in the resourceblock model to achieve reasonable accuracy for a JORC-compliant mineral resource andreserve estimate.

Š Assay Statistics and Grade Populations: IMC completed a detailed classical statisticalanalysis of the sample database. IMC used this analysis to subdivided the deposit intograde population zones for the grade assignment process. Rock types, alteration zones, andgrade zones were all investigated as boundaries to the grade distribution of all the assayedmetals. The final selection of grade distribution (population boundaries) was based on

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detailed statistical hypothesis testing of the grade distribution across each of the possibleboundaries. IMC then developed an estimate of the leach cap boundary based on the first0.15% total copper composite within the surface drill hole composite database. Theresulting surface was used to code the model to differentiate the leach cap and non-leachedcopper mineralization.

IMC also investigated each combination of rock type and alteration type above and belowthe leach cap to determine what combination of geologic information should be used asgrade distribution boundaries. Each boundary was investigated by comparing the grades ofclosely spaced composites on either side of the boundary. Statistical hypothesis tests onthe mean and paired difference (T-test and Paired-T) were applied along with basicstatistics on each side of the boundary to determine population limits. Details of thisanalysis can be found in their November 2007 Feasibility Study report.

Š Behre Dolbear has reviewed the statistical work presented by IMC and ran some spot-checks on their calculations. Behre Dolbear believes that sufficient detailed analysis havebeen performed to accurately divide the resource estimation populations for JORC-compliant mineral resource and reserve reporting.

Š Compositing: Assays were composited to 10m fixed-length bench type composites. Theregularization of the intervals through compositing is Behre Dolbear believes that thecomposite length is appropriate for the modeling work.

Š Variography: Variograms models were estimated by IMC for the Toromocho area at avariety of orientations and directions. This detailed variography analysis was used to setthe search ellipsoid and variograms models to be used in grade estimation of the blockmodel. In total, the IMC variography study set the estimation parameters for 10 separatecopper estimation domains, 6 molybdenum, 6 arsenic, 9 silver, 7 zinc, 7 acid soluble,6 As+CN soluble, 6 gold, and 6 lead domains.

Š Block Model Definition: A 3D-block model with a block size of 20m × 20m × 15m wasdefined for the Toromocho block model by IMC. The estimation zones, rock types,mineralization zones, alteration codes envelopes were coded into the block model usingthe center of the block, i.e., a block is considered inside the mineralized envelope if thecenter of the block is located inside the mineralized envelope. Table 7.3 shows thedefinitions of the model used.

TABLE 7.3IMC TOROMOCHO BLOCK MODEL DEFINITION

Direction From ToLength(m)

Block Dimensions(m)

Numberof Blocks

East . . . . . . . . . . . . . . . . . . . . . . . . . . . 363,600 377,500 1,600 20 195North . . . . . . . . . . . . . . . . . . . . . . . . . . 8,714,500 8,718,700 1,500 20 210Vertical . . . . . . . . . . . . . . . . . . . . . . . . 3,870 4,995 1,420 15 75

Š Grade Estimation: Block grade estimation for both gold and copper was conducted usingthe ordinary kriging (OK) procedure. The search ellipsoid and variograms used for eachestimation domain are shown in Table 7.4. The estimates used maximum number of

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composites of 10, a minimum number of 1 with a maximum of 3 composites from a singledrill hole. Behre Dolbear has spot checked grade estimates within the ICM model based onthe above parameters and found no significant differences. Behre Dolbear believes that theestimation procedures utilized will give an acceptable risk for JORC-compliant mineralresource and reserve estimates.

Š Resource Classification: Model blocks were classified into Measured, Indicated andInferred Mineral Resources by IMC. Their procedure was based on the total copperkriging run and utilized the kriging standard deviation and the number of composites usedfor each block. Measured confidence was based on the presence of sufficient density ofPCI drilling. Holes drilled by predecessors were not used to establish the measuredcategory within the block model. The kriging standard deviation and the number of PCIcomposites were stored for the determination of the measured category. Inferred andIndicated categories used all of the accepted total copper composites from all drillingcampaigns and the kriging standard deviation and number of composites were stored. IMCnotes that the procedures establish an outside radius of about 75 to 100m for Indicatedresources around isolated or outside limit drill holes. Table 7.5 outlines the categorizationparameters used for the Toromocho deposit.

TABLE 7.4GRADE ESTIMATION PARAMETERS

Domain Rock Type Alteration Search EllipseVariogram

Nugget/CO/Sill

Copper1 Diorite Argillic

2Diorite Other 150 × 150 × 55 0.20/0.80/1.00+ Feldspar Porphyry All 150 × 150 × 55 0.20/0.80/1.00

3 Granodiorite Sericite 240 × 150 × 55 0.30/0.70/1.004 Granodiorite Other 240 × 150 × 55 0.30/0.70/1.005 Quartz Porphyry All 150 × 150 × 55 0.30/0.70/1.006 Skarn + Magnetite Skarn All 150 × 150 × 55 0.20/0.80/1.007 Hornfels/Baslats/Calc Seds/Shale/Anhydrite All 150 × 150 × 55 0.30/0.70/1.008 Volcanics All 150 × 150 × 55 0.30/0.70/1.009 Dacite Porphyry All 150 × 150 × 55 0.30/0.70/1.0010 Undefined Rock Types All 150 × 150 × 55 0.30/0.70/1.00

Molybdenum1 Feldspar Porphyry All 150 × 150 × 55 0.20/0.80/1.002 Skarn + Magnetite Skarn + Hornfels All 150 × 150 × 55 0.20/0.80/1.003 Diorite + Quartz Porph + Dacite Porph +

Granodiorite All 150 × 150 × 55 0.30/0.70/1.004 Basalt + Calc Seds + Shale + Anyhydrite All 150 × 150 × 55 0.30/0.70/1.005 Volcanics All 150 × 150 × 55 0.30/0.70/1.006 Undefined Rock Types All 150 × 150 × 55 0.30/0.70/1.00

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Domain Rock Type Alteration Search EllipseVariogram

Nugget/CO/Sill

Arsenic1 Feldspar Porphyry All 150 × 150 × 55 0.20/0.80/1.002 Skarn + Magnetite Skarn + Hornfels All 150 × 150 × 55 0.20/0.80/1.003 Diorite + Quartz Porph + Dacite Porph +

Granodiorite All 150 × 150 × 55 0.30/0.70/1.004 Basalt + Calc Seds + Shale + Anyhydrite All 150 × 150 × 55 0.30/0.70/1.005 Volcanics All 150 × 150 × 55 0.30/0.70/1.006 Undefined Rock Types All 150 × 150 × 55 0.30/0.70/1.00

Silver1 Diorite + Feldspar Porphyry All 150 × 150 × 55 0.20/0.80/1.002 Granodiorite Sericite 240 × 150 × 55 0.30/0.70/1.003 Granodiorite Other 240 × 150 × 55 0.30/0.70/1.004 Quartz Porphyry All 150 × 150 × 55 0.30/0.70/1.005 Skarn All 150 × 150 × 55 0.20/0.80/1.006 Mag Skarn + Hornfels + Basalt + Calc Seds +

Shale + Anhydrite All 150 × 150 × 55 0.20/0.80/1.007 Volcanics All 150 × 150 × 55 0.30/0.70/1.008 Dacite Porphyry All 150 × 150 × 55 0.30/0.70/1.009 Undefined Rock Types All 150 × 150 × 55 0.30/0.70/1.00

Zinc1 Diorite + Feldspar Porphyry + Quartz

Porphyry All 150 × 150 × 55 0.20/0.80/1.002 Granodiorite All 240 × 150 × 55 0.30/0.70/1.003 Skarn All 150 × 150 × 55 0.20/0.80/1.004 Mag Skarn + Hornfels + Basalt + Calc Seds +

Shale + Anhydrite All 150 × 150 × 55 0.20/0.80/1.005 Volcanics All 150 × 150 × 55 0.30/0.70/1.006 Dacite Porphyry All 150 × 150 × 55 0.30/0.70/1.007 Undefined Rock Types All 150 × 150 × 55 0.30/0.70/1.00

Acid Soluble1 Diorite + Feldspar Porph + Quartz Porph +

Granodiorite All 150 × 150 × 55 0.30/0.70/1.002 Skarn All 150 × 150 × 55 0.20/0.80/1.003 Magnetite Skarn All 150 × 150 × 55 0.20/0.80/1.004 Hornfels + Feldspar Porphyry All 150 × 150 × 55 0.20/0.80/1.005 Basalt + Calc Seds + Shale + Anhydrite All 150 × 150 × 55 0.30/0.70/1.006 Volcanics All 150 × 150 × 55 0.30/0.70/1.007 Undefined Rock Types All 150 × 150 × 55 0.30/0.70/1.00

As + CN Soluble1 Diorite + Quartz Porph + Dacite + Feldspar

Porph + Granodiorite All 150 × 150 × 55 0.30/0.70/1.002 Skarn + Hornfels All 150 × 150 × 55 0.20/0.80/1.003 Magnetite Skarn All 150 × 150 × 55 0.20/0.80/1.004 Basalt + Calc Seds + Shale + Anhydrite All 150 × 150 × 55 0.30/0.70/1.005 Volcanics All 150 × 150 × 55 0.30/0.70/1.006 Undefined Rock Types All 150 × 150 × 55 0.30/0.70/1.00

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Domain Rock Type Alteration Search EllipseVariogram

Nugget/CO/Sill

Gold1 Diorite + Quartz Porph + Dacite Porph + Feldsapr Porph

+ Grano All 150 × 150 × 55 0.30/0.70/1.002 Skarn + Magnetite Skarn All 150 × 150 × 55 0.20/0.80/1.003 Hornfels All 150 × 150 × 55 0.20/0.80/1.004 Basalt + Calc Seds + Shale + Anhydrite All 150 × 150 × 55 0.30/0.70/1.005 Volcanics All 150 × 150 × 55 0.30/0.70/1.006 Undefined Rock Types All 150 × 150 × 55 0.30/0.70/1.00

Lead1 Diorite + Quartz Porph + Dacite Porph + Granodiorite All 150 × 150 × 55 0.30/0.70/1.002 Skarn + Magnetite Skarn + Hornfels All 150 × 150 × 55 0.20/0.80/1.003 Feldspar Porphyry All 150 × 150 × 55 0.20/0.80/1.004 Basalt + Calc Seds + Shale + Anhydrite All 150 × 150 × 55 0.30/0.70/1.005 Volcanics All 150 × 150 × 55 0.30/0.70/1.006 Undefined Rock Types All 150 × 150 × 55 0.30/0.70/1.00

TABLE 7.5MINERAL RESOURCE CATEGORIZATION PARAMETERS FOR TOROMOCHO PROJECT

Resource CategoryMaximum KrigingStandard Deviation

Minimum NumberComposites

Measured1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.6 10Indicated . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.0 4Inferred . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . None 1

1 No historic drilling used was for the Measured category estimation

Behre Dolbear believes that the resource categorization methods used by IMC are sufficient foruse in JORC-compliant reporting of mineral resources and reserves.

7.6 PROCEDURES FOR RESERVE ESTIMATION

Under the JORC Code, Reserves represent that part of a Measured or Indicated Resource whichis planned to be mined, incorporating mining dilution and allowing for mining losses, and on which asufficient level of mine planning, mine design and scheduling have been carried out to demonstrateeconomic viability. Under the JORC Code, Inferred Resources are deemed to be too poorly delineatedto be transferred into a reserve category.

Ore reserves for the Toromocho property were estimated by developing a mine plan forextracting the in-situ resource contained within the resource block model. The procedures andparameters used for the reserve estimation are described in detail by IMC in their report titled “MineFeasibility Study Toromocho Project” completed in November 2007. The procedures and parametersoutlined by IMC that were used for their reserve estimation are summarized as follows:

Š generate an economic block model from the grade model

Š generate an optimum pit from the block model

Š design a final pit with ramps and access

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Š develop a life-of-mine (LOM) production schedule

Š generate a reserve summary from the production schedule

Behre Dolbear believes that the overall methodology employed for reserve definition isadequate to determine and report a JORC-compliant reserve. However, as the feasibility work wascompleted in 2007, costs and economic assumptions were of concern to several members of the BehreDolbear team and a more detailed review was completed to assess their impact on the ore reservesstated in the feasibility study.

7.6.1 IMC Economic Block Model

IMC generated their economic block model based on the parameters valid in 2007. A value wasdetermined for each block in the resource model based on grade, recovery, processing costs and miningcosts. Table 7.6 shows the economic parameters used by IMC.

TABLE 7.6IMC ECONOMIC FOR PIT OPTIMIZATION

Cost Item Cost or Recovery Units

Mining Cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $0.805 $/t total materialMine Sustaining Capital . . . . . . . . . . . . . . . . . . . . . . . . . . . $0.133 $/t total materialTotal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $0.938 $/t total materialHaulage Increment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $0.031 $ per Bench Below 4,695Bench Discount . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2% Per benchProcessing Cost per tonne . . . . . . . . . . . . . . . . . . . . . . . . . . $ 4.13 $/t of oreFlotation Process Recoveries

Copper . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87.20%Molybdenum . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54.00%Silver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52.30%Mine Site G&A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 0.50 $/t – $18 million/year based on

36,000 tpaTreatment and Refining Charges

SNC Pre-feasibility Source . . . . . . . . . . . . . . . . . . . . . $ 0.20 $/lb of copper – If No ArsenicAverage Concentrate Grade . . . . . . . . . . . . . . . . . . . . . 26.50% Copper in concentrateArsenic Penalty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 3.00 Per 0.1 As between 0.20 and 1% As

$ 4.00 Per 0.1 As greater than 1% AsZinc Penalty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2.00 Per 1% above 2.5%Molybdenum Roasting . . . . . . . . . . . . . . . . . . . . . . . . $ 0.50 $/lb molybdenumSilver Refining . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 0.50 $/oz silver

Recovery in Smelter or RefineryCopper . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95.75% 1% Smelter Deduct and 0.5%

Shipping LossMolybdenum . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99.50% 0.5% Shipping LossSilver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90.00%

Metal Prices as Basis for ScheduleCopper . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1.30 Per pound of copperMolybdenum . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $15.00 Per pound of molybdenumSilver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 8.50 Per ounce of silver

Slope Angles Variable and Averaged 36 degrees

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7.6.2 Optimum Pit Generation

IMC utilized the floating cone algorithm to provide guidance to the design of the final pit andto establish the best extraction order for the mine life. Approximate costs and recoveries weredeveloped as input to the floating cone. Table 7.6 summarizes the input information used for mill ore.IMC applies a bench discounting process to the floating cones as an approximation of the time value ofmoney. Varying metal pricing was used to produce a series of optimum pit shells, which were used forphases for pit development for the final pit design. The pit shell generation was constrained to surfaceownership and prevented mining around the national highway.

The maximum pit slope angles (see Section 8.0) used for optimum pit generation were thedetailed pit slope recommendations supplied to IMC by CNI, the project’s geotechnical consultants.All floating cones applied economic value to Measured and Indicated category mineralization only.Inferred category mineralization was treated as waste.

Behre Dolbear has reviewed and checked the optimum pit shell generation and believes thetechniques used by IMC are reasonable. However, during this review many of the economic andrecovery assumptions in the above Table 7.6 were modified by Behre Dolbear since many of theparameters have changed since the original feasibility study in 2007. To ensure that the pit design wasstill economic and that the mining schedule produced in 2007 involved mining and processingeconomic material, Behre Dolbear adjusted the economic block model and re-floated the pit based onthe economic and recovery parameters listed in Table 7.7. Behre Dolbear then visually inspected thepit shell produced and concluded that the overall pit produced in 2007 is still reasonable with theincreased metal prices and the increased cost assumptions.

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TABLE 7.7BEHRE DOLBEAR MODIFIED ECONOMICS FOR PIT OPTIMIZATION CHECK

Cost Item Cost or Recovery Units

Mining Cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1.57 $/t total materialHaulage Increment . . . . . . . . . . . . . . . . . . . . . . . None (average costs includes haulage increment)Bench Discount . . . . . . . . . . . . . . . . . . . . . . . . . . NoneProcessing Cost per tonne . . . . . . . . . . . . . . . . . . $ 5.28 $/t of oreMine Sustaining Capital . . . . . . . . . . . . . . . . . . . $ 0.27 $/t material moved; mine onlyFlotation Process Recoveries

Copper . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85%Molybdenum . . . . . . . . . . . . . . . . . . . . . . . . 65% To Tech OxideSilver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Variable Based on the formula:

AgRec = 53.44 + (13.74 × AgHead ozt)Mine Site G&A . . . . . . . . . . . . . . . . . . . . . . $ 0.00 Included in revised MiningInfrastructure Operating Costs . . . . . . . . . . $ 0.06 Per tonne of ore milledMill G&A . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1.42 Per tonne of ore milledTreatment and Refining Charges . . . . . . . . $ 70.00 Per dry tonne of concentratesAverage Concentrate Grade . . . . . . . . . . . . 26.50% Copper in concentrateArsenic Penalty . . . . . . . . . . . . . . . . . . . . . . $ 2.50 Per 0.1 As between 0.20 and 1% AsZinc Penalty . . . . . . . . . . . . . . . . . . . . . . . . $ 2.50 Per 1% above 2.5%Additional Molybdenum Costs . . . . . . . . . . $ 3,612 $/t Tech OxideSilver Refining . . . . . . . . . . . . . . . . . . . . . . $ 0.40 $/oz silver

Recovery in Smelter or RefineryCopper . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97.50%Molybdenum . . . . . . . . . . . . . . . . . . . . . . . . 100%Silver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95.00%

Metal Prices as Basis for ScheduleCopper Price . . . . . . . . . . . . . . . . . . . . . . . . $ 2.57 Per pound of copperMolybdenum . . . . . . . . . . . . . . . . . . . . . . . . $ 16.69 Per pound of molybdenum, as chemical grade

oxide; includes 10% premium over tech oxideSilver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 22.50 Per ounce of silver

Slope Angles Variable and Averaged 36 degrees

In addition, Behre Dolbear ran a rough comparison of the break even cutoff for the 2007 and2011 economics. This analysis shows that under the 2007 operating, capital cost, and metals pricingassumptions, the breakeven cutoff was approximately 0.307% copper equivalence. Using the 2011assumptions, the breakeven cutoff is approximately 0.232% copper equivalence.

7.6.3 Final Pit Design

The pit shells were used as a guide to develop a 10-phase mine design for the ToromochoProject pit. The different phases or push backs are practical expansions of the mine that attempt todevelop the highest value ore early in the mine life. All practical mining constraints such as operatingroom and access roads are incorporated into the IMC phase design and are discussed further in themining section of this report.

Behre Dolbear reviewed the series of pit designs produced by IMC and believes that they areappropriate for reserve estimation work.

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APPENDIX IV COMPETENT PERSON’S REPORT

7.6.4 Life-of-Mine Production Schedule

IMC then produced a life-of-mine production schedule based on the material to be removed forthe series of pit designs. A mining schedule was produced with some smoothing of production tonnageand then IMC summarized the direct mill feed, low grade stockpile, heap leach ores, high arsenicstockpile and waste. All Inferred material within the design was treated as waste for schedulingpurposes.

7.7 RESERVE AND RESOURCE STATEMENT

In 2007, IMC developed an ore reserve for the Toromocho Project by summarizing theproposed production schedule. They concluded that the total Proved and Probable ore reserves at theToromocho Project amounted to 1,526 Mt averaging 0.479% copper, 0.019% molybdenum, and6.88 grams of silver per tonne. No breakdown was given between Proved and Probable ore reserves.The 2006 IMC report prior to the inclusion of all of the 2006 drilling shows that the reserve isapproximately 34% Proved and 66% Probable.

However, IMC has not considered mining dilution or mining losses in their reserve summary.Behre Dolbear adjusted the production schedule to include expected mining losses and dilution. A 2%mining loss was subtracted from the milling and low-grade stockpile production and 3% miningdilution was at the average reported grade of the waste material (0.222% copper, 0.007% molybdenum,and 5.95 grams of silver per tonne). This brings the estimated Proved and Probable JORC compliantore reserve to 1,540 Mt averaging 0.471% copper, 0.019% molybdenum, and 6.86 grams of silver pertonne, as shown in Table 7.8. The slight increase in tonnes over the IMC estimate is due to the additionof the dilution. The modified production schedule, including dilution, is shown in Table 9.2 of thereport.

In addition to the estimated Proved and Probable reserves, IMC reports an additional 520 Mt ofMeasured and Indicated mineral resource averaging 0.37% copper, 0.013% molybdenum, and6.10 grams of silver per tonne (Table 7.9) and 174 Mt of Inferred mineral resources averaging 0.46%copper, 0.015% molybdenum, and 11.54 grams of silver per tonne (Table 7.10) also conforming to thedefinition in the 2004 JORC Code. These Mineral resources, while outside of the current pit design, areadjacent to the pit. Access to these additional Mineral resources will require the movement of thenational highway to allow pit expansion toward the west and north and the relocation of the stockpileand crusher on the southeast side. These resources are not currently part of a mine plan becauseadditional engineering and design work is required.

TABLE 7.8JORC ORE RESERVES AT THE TOROMOCHO PROJECT

(DECEMBER 31, 2011)

CategoryTonnes(millions)

Grade

Cu(%)

Mo(%)

Ag(g/t)

Proved . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 756 0.51 0.02 6.39Probable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 784 0.434 0.018 7.31

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,540 0.471 0.019 6.86

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APPENDIX IV COMPETENT PERSON’S REPORT

TABLE 7.9JORC MEASURED AND INDICATED MINERAL RESOURCES AT THE TOROMOCHO PROJECT1

(DECEMBER 31, 2011)

CategoryTonnes(millions)

Grade

Cu (%) Mo (%) Ag (g/t)

Measured . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 156 0.41 0.014 6.20Indicated . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 364 0.36 0.012 6.06

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 520 0.37 0.013 6.10

1 Mineral Resources are in addition to Reserves

TABLE 7.10JORC INFERRED MINERAL RESOURCES AT THE TOROMOCHO PROJECT1

(DECEMBER 31, 2011)

CategoryTonnes(millions)

Grade

Cu(%)

Mo(%)

Ag(g/t)

Inferred . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 174 0.460 0.015 11.54

1 Mineral Resources are in addition to Reserves

7.8 CONCLUSIONS

Behre Dolbear believes that IMC has completed credible work in determining the resourcemodel of the mineralization at the Toromocho Project. Behre Dolbear also believes that the project’sore reserve statement is appropriate based on our review of the mineralized envelopes and the gradeestimation methods.

Behre Dolbear believes that the Toromocho Project, covered by this review, has approximately1,540 Mt of Proved and Probable ore reserves averaging 0.471% copper, 0.019% molybdenum, and6.86 grams of silver per tonne conforming to the definitions in the 2004 JORC Code.

Behre Dolbear believes the mineral resource estimation model including the database,procedures, and parameters applied by IMC to the Toromocho Project to generally be reasonable andappropriate. The geological constraints were adequately considered in their estimation of the globalresource. Behre Dolbear believes that the data density requirements used for Measured, Indicated, andInferred Mineral Resources definition are generally adequate and comparable to those used for mineralresource estimation for similar deposits.

The reserves at the Toromocho Project are based on a pit design using the 2007 economicparameters and recovery assumptions. Behre Dolbear’s simplified breakeven analysis shows that the2007 economic and operating assumptions require a break even cutoff grade of approximately 0.307%copper equivalence while the 2011 modifications indicates that the breakeven cutoff is now around

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APPENDIX IV COMPETENT PERSON’S REPORT

0.232% copper equivalence. While Behre Dolbear believes that the current pit design completed in2007 is adequate for ore reserve estimation and reporting, our check work shows it would be prudent torework the pit design and production schedule using updated economics prior to mining production asthere maybe some upside potential.

The IMC estimation of ore reserves has not included adjustments for mining losses or miningdilution. The reserve tonnage and grades were adjusted by Behre Dolbear to conform to JORCreporting standards.

Behre Dolbear feels that IMC estimates of the contained metals in the reserves are reasonablefor the proposed large scale bulk mining operation.

7.9 RISK ANALYSIS

A number of risk factors for the reserve estimate are present.

Š Behre Dolbear Has Not Audited the Sampling Data or Conducted IndependentSampling: Behre Dolbear has accepted the drilling data, mine sampling data, and assays,as presented by Toromocho for this report. As both IMC and Aker Kvaerner are reputableindependent consultants having completed extensive reviews of the data, Behre Dolbearviews this as Low Risk/Unlikely.

Š Variography: The lack of identified geometric (or directional) structure in the variogramsused for estimation is not usually seen in these type of copper deposits but, not impossible.The geologic and structural complexities may mask some of this within the variography.On average it should present a very Low Risk/Unlikely to the overall reserve and theestimated metal content due to the large-scale mining equipment selected for the proposedoperations.

Š Resource Categorization: Model blocks were estimated and classified into Indicated andInferred Mineral Resources under the 2004 JORC definitions. Behre Dolbear believes thatusing the kriging variance or standard deviation sometimes will sometimes tend tooverestimate the confidence of the estimate. Given the estimate split between Measuredand Indicated Mineral Resource and the drill spacing, Behre Dolbear believes it representsa Low Risk/Unlikely to the ore reserve statement.

Š Mining Losses and Dilution: The original ore reserve estimate completed by IMC did notconsider mining losses and mining dilution. Behre Dolbear has adjusted the estimate toinclude these modifying factors using a 2% mining loss and 3% dilution at the averagewaste grade. This results in a very small overall adjustment to the ore reserve statementand believes this represents a very Low Risk/Unlikely to the project due to the large scalemining equipment proposed for the project.

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APPENDIX IV COMPETENT PERSON’S REPORT

8.0 GEOTECHNICAL

8.1 OPEN PIT SLOPE ANGLES

The geotechnical work to develop the recommended open pit slope angles for the ToromochoProject were conducted in two segments by Call & Nicholas, Inc. (CNI). The initial work was reportedin a December 2005 report titled Slope Design and Fragmentation Evaluation for the ToromochoDeposit. That work is superseded and updated by the November 2007 report Feasibility Slope Anglesand Fragmentation Distributions for the Toromocho Deposit. The more recent document takesadvantage of:

Š Additional geotechnical data from drilling through December 2006

Š Updated geology, alteration, and Rock Quality Distribution (RQD) models

Š Shear testing of remolded skarn material

Š Interpreted phreatic surface based on water wells and underground workings

Portions of the following narrative are extracted from the mentioned reports.

CNI has been an experienced, highly qualified, and reputable supplier of geotechnical servicesto the mining industry for decades. CNI’s charge was to develop an interramp overall slope anglemodel for the Toromocho Project open pit. The recommendations are based on an evaluation of therisk of instability in the pit walls composed mostly of intrusive and skarn rock.

MCP provided the geologic maps, geology cross sections, and drill hole RQD data used byCNI. CNI completed the following tasks as input to IMC’s open pit limit design analyses.

Š Review current rock exposures and geology interpretations and develop an engineeringgeology model for the design of the final pit walls.

Š Map cells throughout available rock outcrops in the project area.

Š Select rock core samples from drill holes for subsequent rock strength testing.

Š Collect RQD and geo-mechanical data from drill holes.

Š Test each lithology for intact rock strength and fracture shear strength.

Š Determine engineering rock-type strengths based on laboratory test values.

Š Reduce geologic structure data and drill hole geo-mechanical data.

Š Develop a geology MineSight® model for the deposit based on geology cross sections andmaps provided by MPC.

Š Develop an RQD and geo-technical rock type model for Toromocho Project based onavailable drill hole data.

Š Develop a phreatic surface based on water elevations provided by Errol Montgomery &Associates.

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Š Evaluate fragment size distribution for the deposit based on drill hole geo-mechanicaldata.

Š Perform a fabric analysis that involves processing the cell mapping database, determiningdesign structure sets and set statistics, and analyzing joint-fabric data to define structuraldomains.

Š Analyze bench scale stability of single (15m) and double (30m) bench heights.

Š Analyze multiple bench stability (overall and interramp) using the Slope/W stabilityprogram.

Š Develop a slope angle model for the Toromocho Project pit.

The geology of the Toromocho Project deposit is described in Section 6.0. The low strength,rubbleized rock mass created by the destruction of the sulfate zone of the deposit is a significantlyunfavorable condition for pit slope stability.

The work noted in the above bullets was completed professional and comprehensively and wasreported objectively. The industry practice is to select the steepest pit slope angle consistent with alevel of risk that will not have an adverse impact on the economics of the property. This angle isdetermined by performing engineering analyses to assess the stability of the benches, the interrampslope, and the overall slope.

Because of the complex geology at the Toromocho Project deposit, additional geotechnicalanalysis will need to be conducted for slope design of interim pit walls. Pit slope design in such acomplex setting should be an integral part of mine planning, and should not be considered as a separate“one time” study to be performed by consultants. As the mine is expanded and additional geologic datais collected, a better understanding of the geology within the deposit will be developed anddetermination of the optimum slope design will be refined.

8.1.1 Slope Geometry

A pit slope design has three major components: bench configuration, interramp slope angle, andoverall slope angle (Figure 8.1). The bench configuration is defined by the bench height, catch benchwidth, and bench face angle. The interramp slope angle is formed by a series of uninterrupted bencheswhile the overall slope angle is formed by a series of interramp angles separated by haul roads. At theToromocho Project, the final pit has a haul road only at the north end; therefore, the remaining slopeswill all be interramp slope geometries.

8.1.2 Design Sectors

Slope angles in an open pit are controlled by rock strength, geologic structure, groundwaterconditions, seismic events, wall orientation, and operational considerations. Design sectors are areaswhere these parameters are either the same or will have a similar impact on slope design. The primaryfactors used in defining the limits of a design sector are structural domain boundaries and wallorientation. When more than one structural domain occurs in a sector, that sector is subdivided fordesign purposes. Once the design sectors are defined, the rock strength for specific rock types andgeologic structures for use in the stability analyses can be determined.

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Figure 8.1. Definition of bench face, interramp, and overall anglesSource: Call & Nicholas, Inc., Appendix G, November 2007

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APPENDIX IV COMPETENT PERSON’S REPORT

8.1.3 Modes of Instability

A failure mechanism is an engineering term used to denote a hypothesized set of conditions thatcould result in slope displacement. Engineering analyses such as limit equilibrium methods are used toevaluate whether the displacement will actually occur, and numerical models are used to estimate themagnitude of displacement, if displacement does occur. A failure in an engineering sense occurs ifdisplacement occurs; however, this must be distinguished from failure in an operational sense in whicha failure only occurs if displacement is so great that it adversely affects operations. Typical failuremodels are depicted on Figure 8.2.

Figure 8.2. Typical failure models

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APPENDIX IV COMPETENT PERSON’S REPORT

Š Raveling. Also referred to as rock fall, raveling occurs in slopes where the geologicstructure produces a rock mass characterized by many-sided blocks that are easilydetached from the rock mass. The detached blocks can fall and accumulate as talus pileson the benches.

Š Rotational Shear Failure. The rotational shear failure model is used to assess the stabilityof slopes that are composed of material with either low rock mass strength or rock masswith closely spaced and randomly oriented rock fabric. The failure surface is generallyassumed to be in the shape of a circular or non-circular arc segment.

Š Plane Shear Failure. The plane shear failure mode may occur when a geologic structurestrikes parallel, or nearly parallel, to the strike of the face and dips into the pit at an angleflatter than the pit slope.

Š Step-Path Failure. Whereas a plane shear failure occurs along a single plane, a step-pathfailure occurs along a number of surfaces dipping out of the face (the master joint set) withseparation along either (1) a joint set oriented approximately perpendicular to the masterset (the cross joints) or (2) tensile failure through intact rock bridges separating the masterjoints.

Š Simple Wedge Failure. The simple wedge failure geometry is the result of two planar, ornearly planar, geologic structures that intersect to form a completely detached prism ofmaterial where the line of intersection daylights and dips into the pit.

Š Step-Wedge Failure. The step wedge failure model is similar to the simple wedge.However, in this case, structures that intersect to form the wedge do not need to besingular, continuous features. Rather, as with the step-path, the combination of differentstructural sets forms the failure surface.

8.1.4 RQD

Rock Quality Designation (RQD) is a measure of the degree of jointing or fracture in a rockmass, measured as a percentage of the drill core in lengths of 10 cm or more. High-quality rock has anRQD of more than 75%, low-quality of less than 50%. The RQD of the rock in and around theToromocho Deposit is generally low with 50% of the RQD values below 40%, and with an averageRQD value of 29% for the mine area. The overall low RQD results in low rock-mass-strengthparameters, resulting in flat slope angles. However, the low RQD will result in less blasting, crushing,and grinding requirements.

8.1.5 Slope Dewatering

Based on the information provided by Errol Montgomery and Associates, most of the pit wallsare already depressurized due to the drainage into the Kingsmill Tunnel. Recommended slope anglesare based on the assumption that the pit walls are depressurized. The interpreted phreatic surface showsthat the south wall will require depressurization using one or more of the following techniques:

Š Drill drain holes from underground workings

Š Pump from surface wells

Š Drill and manifold horizontal drains

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APPENDIX IV COMPETENT PERSON’S REPORT

Horizontal drains will be required throughout the pit regardless of other depressurizationmeasures taken to depressurize perched water.

8.1.6 Rock Mass Strength

The rock-mass strengths were calculated using the intact shear-strengths for the rock type, thefracture shear-strength for the rock type, and the RQD. Because the RQD for the different rock typescould have a wide range, four ranges of RQD were used to calculate the rock-mass strength; the RQDpercent groupings are: 0 to 20, 20 to 40, 40 to 60, and greater than 60.

8.1.7 Seismic Investigation

Montgomery Watson Harza (MWH) presented the expected g force due to earthquakes at theToromocho Project mine site in their report “Toromocho Project Seismic Hazard Analysis for TailingsImpoundment Feasibility Level Design” (January 2007). The g force the mine site will experience forthe 50% maximum credible earthquake for a 50 year time period is 0.21 grams.

CNI has not performed stability analyses using this g force for the Toromocho Place pit slopes.However, CNI has performed stability analyses for g forces of 0.2 in undisturbed rock and hasdetermined that with a static factor of safety (FOS) of 1.2 or higher and the ground depressurized, anearthquake will cause only bench scale stability issues.

8.1.8 Design Sectors

The Toromocho final pit plan was divided into 10 design sectors for the stability analyses andsubsequent presentations of slope design recommendations (Figure 8.3). Design sectors are areas of thepit where geotechnical conditions and pit geometry will have a similar impact on slope stability. Thedelineation of design sectors at the Toromocho Project pit were based primarily on wall orientation androck type. The rock type division was skarn and sediments in one group and igneous rock types inanother. Additional sector divisions included the reclaimed tailings, Buenaventura Lake, and thecontact zone of skarn and Catalina volcanics.

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Figure 8.3. ISA projected to the July 2007 final pit planSource: Call & Nicholas, Inc., Appendix F, November 2007

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APPENDIX IV COMPETENT PERSON’S REPORT

8.1.9 Slope Stability Analyses

Slope-stability analyses were performed to evaluate multiple-bench and overall slope stability,and the appropriate catch-bench design. Rock-mass strength values were calculated based onlaboratory rock-strengths and ranges of RQD. The multiple-bench and overall stability was evaluatedusing Spencer's Method of Slices in the Slope/W stability analysis program. To determine if themultiple-bench and overall slope angles resulted in adequate catch-bench widths in the intrusive, acatch-bench analysis based on fractures in the rock, was performed using CNI’s Backbreak analysisprogram. The recommended slope angles in most areas of the pit result from the rock-mass and overallslope analyses that were performed. The slope angles were incorporated into a block model so that asthe pit wall changed in position, the mine-planning engineer would have appropriate angles to use.

8.1.10 Recommended Slope Angles

Figure 8.3 and Table 8.1 show the recommended overall/interramp-slope angles for theToromocho final pit plan. The recommended angles are based on field data collected by CNI inNovember 2004; geotechnical drilling conducted in 2005 and 2006; RQD and geologic data providedby MPC; and rock-strength testing and slope-stability analyses performed by CNI.

An additional recommendation for designing the final pit walls is for the final wall to be at least150m from the national highway that runs along the north and northeast side of the pit. This setbackwill protect the highway, if a pit-wall failure were to occur on the north side of the pit. The plannedrelocation of the highway will make this a moot point.

TABLE 8.1OVERALL SLOPE ANGLES (OSA) FOR TOROMOCHO

Rock Type Sector Name SectorOSA

(degrees)

Sediment . . . . . . . . . . . . . . . . . . North 1 36Sediment . . . . . . . . . . . . . . . . . . East 2 36Sediment . . . . . . . . . . . . . . . . . . South 3 35Sediment . . . . . . . . . . . . . . . . . . Southwest 4 46Sediment . . . . . . . . . . . . . . . . . . West 5 34Igneous . . . . . . . . . . . . . . . . . . . North 1 42Igneous . . . . . . . . . . . . . . . . . . . East 2 44Igneous . . . . . . . . . . . . . . . . . . . Southeast 3 45Igneous . . . . . . . . . . . . . . . . . . . South 4 44Igneous . . . . . . . . . . . . . . . . . . . Southwest 1 5 46Igneous . . . . . . . . . . . . . . . . . . . Southwest 2 6 46Igneous . . . . . . . . . . . . . . . . . . . Southwest 3 7 34Igneous . . . . . . . . . . . . . . . . . . . West 8 44Igneous . . . . . . . . . . . . . . . . . . . Northwest 9 34Igneous . . . . . . . . . . . . . . . . . . . Skarn-Volcanic Contact N/A 24Sediment . . . . . . . . . . . . . . . . . . Lake Sediments and Tailings N/A 27

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APPENDIX IV COMPETENT PERSON’S REPORT

CNI is currently updating its slope angle recommendations based on drilling in 2009 and 2010.The revised slopes are incorporated in the first quarter 2012 update. Behre Dolbear has been advisedby MCP that there are plusses and minuses and the impact on reserves and production schedulesshould not be substantial.

8.2 STOCKPILE AND DUMP STABILITY

CNI provided recommendations on the stability of the proposed waste dump configuration planand guidance on the placement and long-term stability. Independent Mining Consultants (IMC) ofTucson, Arizona provided the mine plan and the annual waste dump configuration for this study.Knight-Piésold Inc. (KP) of Denver, Colorado and Lima, Peru provided the site geology andsubsurface geology and characterizations for this study. As noted previously, each of these consultingfirms has a long-term, established reputation as highly qualified in its respective area of expertise.Portions of the following narratives are extracted from:

Š CNI’s November 2007 report titled “Toromocho Project Waste Dumps and StockpileGeotechnical Assessment

Š Knight Piésold’s November 2, 2007 report titled “Toromocho Project Southwest andSoutheast Waste Dumps and Low Grade Mill Stockpile Geotechnical Investigation FinalReport”

In the final mine design, there are two proposed waste dumps (southwest and southeast) and alow-grade ore stockpile that is located south of the final pit in between the two waste dumps(Figure 8.4). Current mine design calls for approximately 1.6 billion tonnes of waste to be placed intothe two waste dumps and 186 Mt to be moved to the low-grade stockpile. The low-grade stockpile willbe placed throughout pit construction and will be processed after mining has ended.

CNI proposed 5 drill holes and 11 test pits be completed for the feasibility level investigation.For the detailed engineering stage, or before pre-production, CNI proposed an additional 28 drill holesand 12 test pits be completed to better characterize the waste dump and low-grade stockpile sites, aswell as to provide characterization of the reclaimed tailings on the northeast and east side of theproposed pit.

The feasibility study site investigation was carried out by Knight Piésold during June, July, andAugust 2007, and consisted of drilling 5 HQ-size core holes and constructing 12 test pits tocharacterize the sub-surface conditions below the waste dumps and low-grade stockpile. The purposeof the site investigations was to estimate the shape of the bedrock surface beneath the dumps and toobtain samples for strength testing of material above bedrock, if necessary.

A seismic refraction survey was completed by Arce Geofisicos of Lima, Peru, as part of thisstudy to help delineate the bedrock profile.

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Figure 8.4. Waste dump and final pit configurationSource: Call & Nicholas, Inc., 2007

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Initial recommendations are based on the characteristics of the tested samples and the configurationof the waste dumps and low-grade stockpile, with both the final pit and the existing topography.

It should be noted that the configurations of the waste dumps and the low-grade stockpile aresuch that the toes of the dumps are very close to the crest of the final pit and, in part, are sloping ontooriginal topography toward the final pit. The foundation of the low-grade stockpile appears, from drillinformation, to be very close to lying on bedrock. However, the toes of both waste dumps are, in part,on pitward sloping topography that contains fine-grained, unconsolidated sediments. It is thesesediments that will control the stability of the waste dump toes.

Both dumps and the low-grade stockpile are to be constructed using a bottom-up constructionmethod. The lift height should not exceed 40m and the overall construction slope angle should be at a2:1 slope or flatter. The face angle of each lift will be between 36 degrees and 38 degrees. Each liftshould be contoured so that water will flow back to the toe of the slope, and it should be graded at 3%to 5% to one side or the other of the edge of the dump and collected.

All dumps need the first lift, or at least part of the first lift, to be able to drain water. In general,this will require rock fill material that is at least 50 MPa in compressive strength with 80% of thematerial greater than 50 mm, and less than 10% sand-size material.

8.2.1 Southwest Waste Dump

Drilling and test pits have identified a layer of lake sediments and gravels overlaying bedrockin the basin of Buenaventura Lake. The toe of the waste dump is less than 100m from the crest of thefinal pit. The fine-grained and clayey nature of the sediments that were sampled by drill holes maycause the toe of the waste dump to settle and, possibly could cause the dump to fail along the claysediments toward the pit.

The lake sediments should be removed and backfilled to provide a stable foundation uponwhich the toe of the waste dump can be placed. Approximately, 100m to 150m of the lake sedimentsshould be removed and 25m to 50m of clean rock backfill placed so that the toe of the waste dump islying atop the backfill. This should prevent the waste dump from failing along the lake sediments andgive the toe of the dump a stable foundation.

8.2.2 Southeast Waste Dump

The southeast waste dump is similar in configuration to the southwest waste dump. The basinsediments at the toe of the waste dump is over an area that could have pyritic sands. The thickness ofthese sands could be 20m to 30m based on the seismic measurements. The risk is that the sands willliquefy during an earthquake. To mitigate this problem there are two options:

Š Place a layer of rock backfill 15m thick in front of the toe of the dump for 30m to 50m.

Š Remove pyritic sands around 30m in front of the toe of the dump and around 20m behindthe toe of the dump and replace with rock fill.

Geotechnically, either option will mitigate the possible problem of liquefying sands.

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8.2.3 Low-grade Stockpile

Figure 8.4 shows the final configuration of the low-grade stockpile before it is processed at theend of mining. The crusher location is in the area between the toe of the main dump and the pit crest. Itis recommended that the low-grade stockpile to be at least 50m from the crusher location. It is alsorecommended that a diversion structure, approximately 5m in height, be constructed to protect thecrusher location, if any sloughing of the stockpile should occur. The barrier should be constructedconcave side toward the crusher; the legs of the berm should direct any material from the stockpile outand away from the crusher pocket.

8.2.4 Future Work

Work that must be performed during the detailed engineering is listed below.

Š Better define the rock “soil” contact by drilling the detailed engineering proposed holesand using geophysics to help define the bedrock.

Š Determine or estimate the in-place density using test pits with a nuclear density gage, coresamples, or SPTs of the materials. SPT data is also needed for the earthquake evaluations.

Š Additional lab testing to better define soil characterization and shear strengths

Š Determine the water level and permeability of the solids.

Š Evaluate stability based on earthquake analyses.

8.3 CONCLUSIONS

As noted in Section 8.1, CNI has been an experienced, highly qualified, and reputable supplierof geotechnical and open pit slope design services for decades. Their work on the Toromocho Projectfor the pit slope angles and stockpile and waste dump designs appears to be thorough, representative,and adequately conservative.

Critical to the Toromocho Project slope stability and operating safety will be strict adherenceby the operator to CNI’s recommendations for ongoing work and slope, stockpile, and waste dumpconstruction. Also, critical is strict adherence to the proposed slope dewatering program.

8.4 RISK ANALYSIS

8.4.1 Pit Slope Angles — Low to Moderate/Unlikely to Possible

Assessment of the final pit slope angles is an ongoing process. As mining interim pitsprogresses and knowledge of the relevant structural features and rock strengths are refined, the final pitslope angles will be refined.

It is Behre Dolbear’s opinion that the work to determine the final slope angles is thorough andreliable.

The proposed interim pit slope angles appear to be somewhat conservative and the risk is low.

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The low RQD index indicates that the risk of random localized slope failures is moderate tohigh. It will be important for MCP to continuously identify these localized areas of instability andmonitor them for the safety of its operators and equipment.

8.4.2 Stockpiles and Waste Dumps — Low to Moderate/Unlikely to Possible

The proximity and orientation of the stockpiles and waste dumps to the open pit make it criticalthat the proposed additional work and the planned excavation of undesirable materials under theproposed stockpiles and dumps be completed, as planned. The risk is low to moderate, if the work iscompleted, as proposed, and moderate to high, if it is not.

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9.0 MINING

9.1 OVERVIEW

IMC developed a number of model and mine plan iterations over the course of the projectperiod to establish the final mine plan and cost estimate incorporated into the Aker Kvaerner December2007 feasibility report and reviewed by Behre Dolbear. Those iterations were the basis for determiningthe best overall approach to the project subject to various project constraints.

The Toromocho deposit will be mined using conventional hard rock open pit methods. Themine will deliver 117,200 tpd (42,778 kt/hr) of sulfide flotation ore to the primary crusher and willgenerally move 260,274 tpd (95,000 kt/yr) of total material to assure sustained availability of the millore.

Multiple iterations of the mine scheduling process were completed to establish the mill cutoffgrades and corresponding mill head grades that maximized the project return on investment comparedto the mine capital and operating costs required to sustain the release of the planned ore.

Within the schedule, planned cutoff grades were elevated above conventional breakeven cutofffor the first 22 years of the mine’s life. The cutoff strategy is the result of substantial effort tomaximize project return on investment. The NPV optimization effort compared the benefits ofprocessing and metal sales versus the operating costs plus the required mine capital to develop andoperate the mine. Mine equipment capacities were kept in mind during the development of the besteconomic schedule.

Low grade material that is less than the mill breakeven cutoff grade, but still potentiallyeconomic, is stockpiled south of the primary crusher. Lower grade material could be considered forstockpiling, but constraints on low grade and waste storage areas around the mine limit the size of thelow-grade stockpile. The low-grade stockpile is remined during years 32 to 36 and delivered to theprimary crusher.

There are zones of the Toromocho Project deposit that have elevated arsenic grades in the formof the mineral enargite (Cu3AsS4). In order to assure that the concentrate is marketable, high-gradearsenic material is not sent to the plant but is stockpiled. This material is stored permanently and notprocessed, although process options may exist for this material in the future.

IMC designed 10 phases or push backs as input to the development of a practical mineproduction schedule. Phases or push backs are practical expansions of a pit that incorporate properequipment operating room, working geometries, and access roads. To the degree practical, they followthe theoretical economic extraction sequence defined by the floating cones.

Mine equipment has been selected to meet the production requirements of the mine plan. Thesize and type of mine equipment is consistent with the size of the project. Electric cable shovels with35.2m3 dippers are paired with 345-tonne haul trucks to meet the total annual production requirementsof 95 to 99 Mt/yr.

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APPENDIX IV COMPETENT PERSON’S REPORT

Mine personnel requirements were estimated based on the mine plan and mine equipmentrequirements. Mine personnel includes salaried supervisory and staff personnel and hourly peoplerequired to operate and maintain the drilling and blasting, loading, hauling, and mine support activities.

The Mine salaried staff requirements projected in the 2007 Feasibility Study, over the projectlife, consisted of 56 persons during most of the mine life. Mine hourly personnel requirements build upto 384 personnel in years 18 and 19. Subsequently, in 2010, IMC, in conjunction with MCP’s on sitemanagement were in the process of increasing personnel in the engineering, supervisory, and trainingareas. Based on work by IMC, Behre Dolbear’s 2011 adjusted operating cost reflects these additions.

The mining capital costs in the third quarter 2010 dollars are estimated to be $303.5 million,including $87.1 million for pre-stripping 55 Mt, and $216.4 million for equipment. The average mineoperating costs over the mine life are predicted to be $1.51 per tonne of material mined in third quarter2010 dollars.

9.2 OPEN PIT PHASES

IMC designed 10 phases or push backs as input to the development of a practical mineproduction schedule. Phases or push backs are practical expansions of a pit that incorporate properequipment operating room, working geometries, and access roads. To the degree practical, they followthe theoretical economic extraction sequence defined by the floating cones.

The mine will never look like any single phase until mining is complete. This is becausemultiple phases are always in operation at any point in time. For example, while ore is produced fromPhase 1, waste stripping will be progressing on Phase 2 or even Phase 3 to assure that the ore in thosephases is released prior to completion of ore mining in Phase 1.

IMC phase designs at Toromocho are generally wider than 130m due to the large equipmentsizes and high productivities that are contemplated for Toromocho. Haul road criteria for the phasedesigns was:

Š Haul Road Gradient 10%

Š Haul Road Width 30m (includes ditch and berm)

The slope angles proposed by CNI for the interim and final slopes is discussed in Section 8.0.

The size of Phase 1 was adjusted by IMC until there were roughly 18 to 20 months of oreavailable in the phase. The intent was to minimize the amount of pre-production stripping but providesufficient ore for one year plus a 6 months ore cushion in case there are delays advancing to Phase 2.Figure 9.1 illustrates the phase sequence and Table 9.1 summarizes the contained Measured andIndicated mineralization and total material by phase at the approximate breakeven cutoff of $1.75 pertonne net of process.

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APPENDIX IV COMPETENT PERSON’S REPORT

Figure 9.1. All phase designs sliced on the 4500 bench elevation

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APPENDIX IV COMPETENT PERSON’S REPORT

TABLE 9.1PHASE DESIGN SUMMARY MILL COST ONLY ECONOMICS —MEASURED AND

INDICATED MINERALIZATION ONLY

Phase Ktonnes Total Copper% Molybdenum% Waste Ktonnes Total Ktonnes

1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94,894 0.546 0.012 50,358 145,2522 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67,213 0.469 0.016 28,625 95,8383 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 120,299 0.532 0.020 26,162 146,4614 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 132,630 0.523 0.017 49,798 182,4285 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 166,600 0.519 0.014 11,290 177,8906 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 117,372 0.482 0.014 13,319 130,6917 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85,057 0.549 0.016 9,868 94,9258 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 411,245 0.417 0.020 177,174 588,4199 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88,355 0.465 0.016 63,381 151,73610 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 504,730 0.377 0.018 513,161 1,017,891

Total . . . . . . . . . . . . . . . . . . . . . . . . . . 1,788,395 0.453 0.017 943,136 2,731,531

Note:Phase 1 rejects high arsenic ore at 1.1% arsenic in concentrateNo other arsenic or zinc rejects in other phasesNet of Process = NSR — Estimated Process Cost

Source: IMC, November 2007 Report, Appendix E, Table 6-1

9.3 PRODUCTION SCHEDULE

The 2007 Feasibility Study mine production schedule was developed to deliver 42,778,000tonnes of mill ore per year (117,200 tpd) to the primary crusher and process plant. Sufficient wastemining is scheduled to assure sustained release of the required mill ore throughout the mine’s life.Table 9.2 summarizes Behre Dolbear’s schedule for the Toromocho Project ITR as adjusted for mininglosses and dilution per the discussion in Section 7.7.

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APPENDIX IV COMPETENT PERSON’S REPORTTABLE9.2

BEHREDOLBEARPRODUCTIO

NESTIM

ATEIN

CLUDIN

G2%

MIN

INGLOSSESAND3%

DIL

UTIO

N

Mill

Ore

Stockp

ileHighAsStockp

ile

Ktonn

esTot

Cu%

Moly

%Silver

gm/t

Zincin

Con

%Arsenic

inCon

%Ktonn

esTot

Cu%

Moly

%Silver

gm/t

Zincin

Con

%Arsenic

inCon

%Ktonn

esTot

Cu%

As+Cn

Frac

Arsenic

inCon

%Waste

Ktonn

es

Total

Material

Ktonn

es

Prep

......

00

00

00

00

00

00

00

00

4,600

4,600

Prep

......

200.556

0.007

8.202

0.33

0.705

640.292

0.011

14.989

2.41

1.23

385

0.603

73.20%

6.31

20,181

20,650

Prep

......

960

0.482

0.010

11.785

0.696

0.846

1,144

0.281

0.012

16.173

2.61

1.55

3,534

0.500

72.50%

3.30

19,112

24,750

Yr1

Q1.....

6,397

0.526

0.010

7.377

2.562

0.388

2,641

0.340

0.008

6.979

5.22

0.37

6,773

0.433

67.10%

1.40

8,940

24,750

Yr1

Q2.....

10,256

0.558

0.011

6.581

2.549

0.346

4,368

0.347

0.009

5.290

3.46

0.27

4,958

0.616

62.40%

2.91

5,169

24,750

Yr1

Q3.....

10,796

0.586

0.013

6.620

2.477

0.25

2,681

0.355

0.010

6.086

3.85

0.31

3,754

0.805

55.60%

4.59

7,520

24,750

Yr1

Q4.....

10,796

0.649

0.015

9.076

2.281

0.25

1,655

0.324

0.012

6.814

2.97

0.39

1,967

0.782

52.10%

2.27

10,332

24,750

2.......

43,180

0.595

0.016

7.338

2.921

0.346

12,686

0.329

0.012

5.183

5.82

0.31

1,881

0.468

62.60%

3.30

37,253

95,000

3.......

43,180

0.595

0.020

7.533

4.386

0.326

12,954

0.344

0.012

5.018

6.61

0.31

270.453

58.20%

3.15

38,839

95,000

4.......

43,180

0.625

0.021

6.455

2.25

0.367

11,671

0.355

0.009

5.251

4.19

0.27

1,360

0.264

72.80%

0.70

38,789

95,000

5.......

43,180

0.609

0.011

9.901

3.96

0.367

18,443

0.380

0.006

5.649

6.97

0.20

506

0.423

54.50%

51.72

32,871

95,000

6.......

43,180

0.618

0.017

7.193

4.511

0.232

23,739

0.378

0.006

5.863

10.39

0.15

606

0.398

49.20%

42.47

27,475

95,000

7.......

43,180

0.605

0.016

7.232

4.489

0.41

32,075

0.400

0.007

6.270

8.28

0.37

448

0.450

46.10%

35.63

19,297

95,000

8.......

43,180

0.588

0.018

6.494

4.768

0.25

19,932

0.379

0.008

5.795

7.98

0.17

370.626

37.40%

14.97

31,851

95,000

9.......

43,180

0.605

0.028

5.377

2.849

0.166

6,048

0.367

0.008

7.183

9.04

0.37

1,839

0.298

67.90%

0.76

43,933

95,000

10.......

43,180

0.584

0.024

5.843

3.283

0.151

10,901

0.372

0.007

5.921

7.32

0.33

480

0.376

66.40%

1.81

40,439

95,000

11.......

43,180

0.561

0.023

6.804

4.01

0.268

13,782

0.359

0.009

6.008

8.02

0.35

211.212

65.50%

15.24

38,017

95,000

12.......

43,180

0.551

0.018

8.105

4.736

0.306

4,171

0.310

0.009

5.707

9.00

0.22

47,649

95,000

13.......

43,180

0.533

0.022

7.144

4.591

0.215

51,820

95,000

14.......

43,180

0.468

0.012

8.571

7.806

0.326

903

0.317

0.008

5.018

9.38

0.09

50,916

95,000

15.......

43,180

0.447

0.016

6.367

6.351

0.25

837

0.326

0.008

4.882

6.71

0.22

660.275

68.70%

0.03

50,917

95,000

16.......

43,180

0.482

0.019

6.668

4.514

0.346

1,760

0.332

0.007

4.513

4.63

0.11

167

1.833

70.40%

36.15

49,892

95,000

17.......

43,180

0.457

0.021

5.193

4.272

0.166

997

0.311

0.009

4.756

5.33

0.25

911

0.557

64.00%

6.57

49,912

95,000

18.......

43,180

0.485

0.022

8.057

4.673

0.123

833

0.321

0.010

5.406

7.38

0.50

250.656

53.10%

9.42

50,962

95,000

19.......

43,180

0.541

0.025

7.562

4.794

0.151

1,281

0.307

0.009

7.086

8.10

0.53

50,539

95,000

20.......

43,180

0.469

0.029

6.562

4.453

0.151

1,376

0.311

0.009

6.581

11.79

0.41

50,444

95,000

21.......

43,180

0.407

0.030

6.057

3.389

0.073

1,101

0.299

0.011

5.455

16.23

0.14

50,719

95,000

22.......

43,180

0.340

0.027

9.183

5.487

0.097

48,025

91,205

23.......

43,180

0.388

0.010

6.057

8.651

0.123

36,505

79,685

24.......

43,180

0.377

0.011

6.435

8.619

0.123

25,883

69,063

25.......

43,180

0.374

0.013

5.766

7.561

0.097

21,752

64,932

26.......

43,180

0.402

0.016

5.474

5.768

0.085

18,981

62,161

27.......

43,180

0.399

0.018

4.979

5.054

0.073

19,880

63,060

28.......

43,180

0.442

0.022

7.270

4.039

0.123

13,230

56,410

29.......

43,180

0.424

0.025

7.581

2.971

0.053

10,488

53,668

30.......

43,180

0.372

0.029

6.232

2.458

0.053

9,652

52,832

31.......

43,180

0.281

0.033

9.872

3.856

0.02

14,187

57,367

32.......

17,715

0.166

0.040

6.833

5.335

0.02

14,432

32,147

Totals.....

1,352,342

0.486

0.020

6.991

188,041

0.366

0.008

5.877

7.531

0.28

29,745

1,161,402

2,731,530

Adjustedfor2%

mininglosses

and3%

dilutio

nattheaveragewastegradeof

0.222%

Cu,

0.007%

Moand5.95

gAg/t

IV-173

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APPENDIX IV COMPETENT PERSON’S REPORT

Within the schedule, planned cutoff grades were elevated above conventional breakeven cutofffor the first 22 years of the mine’s life. The cutoff strategy is the result of substantial effort tomaximize project return on investment. The NPV optimization effort compared the benefits ofprocessing and metal sales versus the operating costs plus the required mine capital to develop andoperate the mine. Mine equipment capacities were kept in mind during the development of the besteconomic schedule.

This mine plan and schedule develops 29.7 Mt of high-arsenic material that is stockpiled andnot processed within this plan. The high-arsenic material incorporates a sufficiently high penaltyduring smelting that it is likely not marketable in concentrate. The high-arsenic stockpile is currentlystored for the mine life and not processed. Process alternatives for this material will be considered inthe future. The schedule on Table 9.2 is based on the reject of material with greater than 1.10% arsenicin concentrate from Phase 1. The resulting rejected material is included in the high-arsenic stockpilematerial. No further arsenic grade reject was required in the remaining Phases 2 through 10. Materialreject from Phases 2 through 10 was based on the net economics of that material being sufficiently low(due to calculated arsenic penalties) that it did not make mill process cutoff grade for the time period.

9.4 ROADS, STOCKPILES, AND WASTE DUMPS

The waste and low-grade storage facilities surround the mine on the southeast, south, and westsides. No material stockpiles are planned for the north or east sides of the pit (see Figure 8.4).

Early in pre-production, waste material is used to build the flat area on the 4,720m elevationdirectly east of the primary crusher location. This flat area will be used for storage of the mill oreencountered during pre-production and will be used throughout the mine life for minor tonnage ofrun-of-mine stockpile, as required.

The remaining waste is stored in the southwest and southeast waste storage areas throughoutthe mine life. Allocation to each storage area is based on the available mine road exit and shortest haulin each time period.

High-arsenic material is stored in two places:

Š Adjacent to the southwest waste storage and just west of the conveyor belt location

Š In the western limb of the bottom of the low grade stockpile

The low-grade stockpile is located south of the primary crusher and over dumps the higharsenic stockpile starting in year 1. About 14 Mt of high arsenic material are stored below thelow-grade stockpile. A component of this material would be accessible during the mine life, but theremaining portion would not be accessible until after the low-grade stockpile is remined and deliveredto the crusher. The western component of the high-arsenic stockpile is accessible throughout the minelife (15 Mt).

Waste storage areas are prepared prior to material placement by removing all surface (alluvial)materials down to bedrock for the first 100m of the toe area of the storage area, as described in

IV-174

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APPENDIX IV COMPETENT PERSON’S REPORT

Section 8.0. Waste storage areas are recontoured as lifts are completed as part of an on-goingreclamation program. Topsoil (alluvium) is spread over the recontoured slopes.

The low-grade stockpile is stacked from the bottom up at 2 to 1 overall slope (26.5 degrees).The low grade stockpile is not permanent and recontouring will not be required.

9.5 EQUIPMENT SELECTION AND REQUIREMENTS

Mine equipment has been selected to meet the production requirements of the mine planpresented in Table 9.2. The size and type of the mine equipment is consistent with the size of theproject. Electric cable shovels, with 35.2m3 dippers are paired with 345-tonne haul trucks to meet thetotal annual production requirements of 95 to 99 Mt/yr.

A summary of major mine equipment for the project is provided in Table 9.3.

The mine equipment is required to complete the following duties on site.

Š Pioneer and construct roads to the mine area, and from the mine area to the crusher,stockpiles, and waste storage areas.

Š Complete pre-production development of the mine prior to ore production.

Š Drill, blast, load, and haul ore to the crusher, low-grade to the stockpiles, and waste to thewaste storage areas throughout the planned mine life.

Š Remine the low-grade stockpile and deliver to the crusher during years 32 to 36.

Š Maintain all mine work areas, in-pit haul roads, and ex-pit haul roads. Waste and stockpilestorage areas will also be maintained by mine equipment.

Š Removal of alluvial material from the dump toes prior to construction of the waste andlow-grade storage areas.

Š Remove surface (alluvial) material from the mine area to a stockpile located east-northeast of the mine.

Š Recontour the mine waste storage areas concurrently during the mine life, as part of theon-going reclamation.

Š Remine and spread the stockpiled surface (alluvial) material over the recontoured areas ofthe waste storage, as part of the on-going reclamation.

Š Construct minor drainage structures associated with the mine, i.e., drain ditches in andaround the mine and dumps.

The major mining equipment selected by MCP is of the highest worldwide quality includingCaterpillar (CAT) mining equipment, Bucyrus electrical shovels (recently purchased by CAT),LeTourneau wheel loaders, and Atlas Copco drills.

IV-175

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APPENDIX IV COMPETENT PERSON’S REPORTTABLE9.3

MAJO

RM

INEEQUIP

MENTONSI

TE

MineMajor

Equ

ipmentFleet

OnHan

d,Pre-produ

ctionthroug

hYear9

Pre-produ

ction

Year1

Years

Equ

ipmentTyp

eQ1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

23

45

67

89

BlastHoleDrill(125,000

lbpulldown)

..............

01

23

33

33

33

33

33

33

CableSh

ovel(35.2m

3 )..............

.............

01

23

33

33

33

33

33

33

WheelLoader(17m

3 )............................

01

11

11

11

11

11

11

11

HaulT

ruck

(345

tonnes)..........................

08

1722

2222

2222

2222

2828

3135

3535

Track

Dozer

(580

horsepow

er).....................

35

66

77

77

77

77

77

77

WheelDozer

(354

horsepow

er)....................

33

34

44

44

44

44

44

44

Motor

Grader(7.3m)

............................

23

34

44

44

44

44

44

44

Water

Truck

(90,000liters)

.......................

12

34

44

44

44

44

44

44

WheelLoader(11.5m

3 )..........................

11

11

11

11

11

11

11

11

AuxiliaryHaulT

ruck

(90tonnes)

..................

33

33

55

55

55

55

55

55

AuxiliaryRockDrill,

IRECM

780

.................

11

11

11

11

11

11

11

11

AuxiliaryBackhoe

(1.6m

3 )............

............

11

11

11

11

11

11

11

11

Total

.........................................

1530

4353

5656

5656

5656

6262

6569

6969

MineMajor

Equ

ipmentFleet

OnHan

d,Years

10throug

h36

Years

Equ

ipmentTyp

e10

1112

1314

1516

1718

1920

21-25

26-30

31-32

36

BlastHoleDrill(125,000

lbpulldown)

..............

33

33

33

33

33

33

33

3CableSh

ovel(35.2m

3 )...........................

33

33

33

33

33

33

33

3WheelLoader(17m

3 )............................

11

11

11

11

11

11

11

1HaulT

ruck

(345

tonnes)..........................

3538

3839

3939

4040

4343

4343

3233

7Track

Dozer

(580

horsepow

er).....................

77

77

77

77

77

66

56

6WheelDozer

(354

horsepow

er)....................

44

44

44

44

44

44

44

4Motor

Grader(7.3m).............................

44

44

44

44

44

44

44

4Water

Truck

(90,000liters)

.......................

44

44

44

44

44

43

33

3WheelLoader(11.5m

3 )...........................

11

11

11

11

11

11

11

1AuxiliaryHaulT

ruck

(90tonnes)...................

55

55

55

53

33

33

33

3AuxiliaryRockDrill,

IRECM

780

.................

11

11

11

11

11

11

11

1AuxiliaryBackhoe

(1.6m

3 )........................

11

11

11

11

11

11

11

1

Total

............................

.............

6972

7273

7373

7472

7575

7473

6163

37

Source:

IMCNovem

ber2007

Report,AppendixE,T

able8-1

IV-176

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APPENDIX IV COMPETENT PERSON’S REPORT

9.5.1 Mine Work Schedule

The mine is planned to work 365 days per years, two shifts per day, with 12 hours per shift.There are 16 shifts per year allowed as lost days due to weather. Consequently, there are 714 shifts peryear as the basis for equipment calculation. Three crews are required to meet the shift schedule.

9.5.2 Operating Hours per Shift

Operating time per shift is the time during the shift that the equipment is actually productive.IMC has assumed that there will be 11 hours worked with a standard efficiency of 50 minutes per hourfor 550 operating minutes per shift. This term is sometimes referred to as effective time per shift. Allequipment productivities in this study are based on 550 operating minutes per shift.

9.5.3 Material Characteristics

The mine material was separated into four basic material types for equipment calculations. Thedetailed density information stored in the model and utilized in the mine plan tonnage calculationswere summarized into the four categories shown in Table 9.4. Swell factors and moisture contents forproductivity calculations are shown in Table 9.4.

TABLE 9.4MATERIAL CHARACTERISTICS FOR EQUIPMENT CALCULATIONS

Parameter OreLow Grade andHigh Arsenic

Non-CapWaste

Lch-CapWaste

Dry Bank Density (Mt/m3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.530 2.530 2.517 2.387Material Handling Swell . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35.0% 35.0% 35.0% 35.0%Moisture Content . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.5% 2.5% 2.5% 2.5%Dry Loose Density (Mt/m3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.87 1.87 1.86 1.77Wet Loose Density (Mt/m3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.92 1.92 1.91 1.81

All equipment productivities are reported in dry tonnes. The appropriate moisture content andswell factors have been applied, but the final productivity is reported in terms of dry in-situ-tonnes.This approach is used so that there is a direct match between the mine plan reported in dry tonnes andthe equipment production capacity in dry tonnes per shift.

The typical maximum values for availability and use of availability are based on typicalexperience at other operating mines for this type of equipment. The maximum values established byIMC are shown in Table 9.5.

IV-177

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APPENDIX IV COMPETENT PERSON’S REPORT

TABLE 9.5AVAILABILITY AND UTILIZATION FOR MAJOR MINE EQUIPMENT

Equipment TypeMechanicalAvailability

Use ofAvailability

Utilization forPlanning

Blast Hole Drill (125,000 lb pull down) . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.85 0.85 0.723Cable Shovel (35.2m3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.90 0.90 0.810Wheel Loader (17m3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.85 0.90 0.765Haul Truck (345 tonnes) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.85 0.95 0.808Track Dozer (580 horsepower) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.85 0.75 0.638Wheel Dozer (354 horsepower) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.85 0.75 0.638Motor Grader (7.3m) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.85 0.75 0.638Water Truck (90,000 liters) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.85 0.75 0.638Wheel Loader (11.5m3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.85 0.75 0.638Auxiliary Haul Truck (90 tonnes) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.85 0.75 0.638Auxiliary Rock Drill, IR ECM 780 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.85 0.75 0.638Auxiliary Backhoe (1.6m3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.85 0.75 0.638

9.5.4 Drilling and Blasting

Blast hole drills are planned to be 125,000 lb pull down (56,700 kt) rotary units that areelectrically powered and track mounted. Blast hole bit sizes are planned to be 12.25 inches (31 cm) butlarger bits can be configured to drills in this class.

The estimated drill shift productivity was developed based on the following assumptions.

Š All of the material in the pit will require blasting.

Š Mining will occur on 15m benches.

Š A sub-grade of 3m has been utilized.

Š A powder factor of 0.12 kg/t has been estimated based on the highly fractured and lowRQD character of the Toromocho rock mass.

Š A drill hole spacing of about 10.4m was set based on typical applications with 15m benchheights.

Š Three drills are sufficient for the mine life with one drill assigned to work with each cableshovel in the pit.

9.5.5 Loading

The primary loading fleet is planned as three 35.2m3 cable shovels. A large front-end loaderwith a 40m3 dipper is provided for loading functions in the pit (see Section 16.1.3). The loader will beused for clean up within the pit and also provides support when the crusher must be fed from thestockpile. In most years of the mine plan, the shovels are planned to load 90% of the total material andthe loader will load 10% of the total material from the mine. During years 7, 9, and 10, the loader willhandle 4%, 8%, and 8%, respectively of the total material. These adjustments were made to maintain aconsistent mine loading fleet.

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APPENDIX IV COMPETENT PERSON’S REPORT

9.5.6 Hauling

Rigid frame haul trucks of the 345-tonne class are planned for use at the Toromocho Project.Haul truck productivity was calculated based on detailed haul time simulation.

IMC measured a number of haul profiles for each period of the mine life. Profiles weremeasured to each of the following destinations from each pushback, in each time period.

Š Crusher

Š Low-grade stockpiles

Š High-arsenic stockpile

Š Southwest waste storage

Š Southeast waste storage

In total there were 298 haul profiles measured for the 36-year project life. IMC used a haul timesimulation program to calculate the truck speeds, haul time, and productivity for the 345-tonne trucksover a 12-hour shift. The downhill speed limits were based on IMC’s observations of the conservativespeeds used at a number of large open pit operations.

9.5.7 Major Auxiliary Equipment

Auxiliary equipment is those units that maintain the mine in good working order so that thedrilling, loading, and hauling equipment can work safely and efficiently. Many of the requirements forauxiliary equipment are based on experience and judgment regarding the amount of equipmentrequired.

The auxiliary equipment selected for the Toromocho Project is as follows.

Š Track Dozer (580 horsepower)

Š Wheel Dozers (354 horsepower)

Š Mold Board Grader (7.3m)

Š Water Truck (90,000 liters)

Š Front-end Loader (11.5m3)

Š Haul Truck (90 tonnes)

Š Rock Drill (secondary and support)

Š Backhoe Excavator (1.6m3)

The track dozers will be used for pioneering, road construction, and dump maintenance. Somework will be performed around the loading units as well. Typically, seven units are required. The track

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APPENDIX IV COMPETENT PERSON’S REPORT

dozers will be used in the development of pre-production access and removal of surface alluvialmaterial in the mine and waste storage areas. The waste storage areas will be recontoured by the trackdozers as they are completed and the stockpiled surface alluvial material will be spread back on to thewaste areas when complete.

The wheel dozers will be used for road clean up, and cleanup around the mine loading units.Some support work will occur on the waste dumps and stockpiles.

Graders will be used primarily for road maintenance. Graders with 7.3m (24 feet) mold boardshave been used in this study. Typically, four units are required.

Water trucks of the 90,000 liters (24,000 gallons) capacity will be required throughout the minelife for dust suppression on roads, in the pit, and on dumps. This size of unit is typically mounted on a90-tonne truck frame like the Caterpillar 77 unit. Typically, 4 units are required.

A front-end loader of the 11.5m3 class combined with three to five 90-tonne trucks will be usedfor general clean up and maintenance around the mine. Ditches, roads, berms, etc. will be constructedand maintained with these units. Surface alluvial material will be removed and hauled to stockpile withthese units. That material will be remined from the stockpile and hauled back to the waste storage areasto be spread after reclamation. Typically, 1 loader and 3 trucks are required.

A smaller rotary percussion rock drill will be required for secondary blasting, external roadpioneering, and wall control drilling. A 1.6m3 backhoe unit will be utilized for construction of drainageditches and road maintenance around the mine.

9.6 2011 DEFINITIVE ESTIMATE UPDATE

As part of the 2011 Definitive Estimate Update, IMC re-estimated the Mine’s manpowerrequirements and salaried and hourly labor rates as a function of updating the capital cost forpre-production stripping.

Behre Dolbear’s concerns regarding the supervisory, engineering, and training personnelrequirements were addressed in the updated estimate. The site senior operating and maintenancepersonnel provided new insights resulting in IMC increasing the projected salaried personnel in theaforementioned areas. The added costs for these personnel are reflected in the updated mine operatingcosts discussed in Section 16.1.

Substantitive revisions were as follows:

Š Added more salary and hourly personnel per the operations superintendent’s direction.

Š Increased the number of operations foremen during the construction period.

Š Six surveyors for LOM

Š Added more mining engineers for six total between senior engineers and miningengineers. The engineers were added to ensure enough manpower for long and shortrange planning as well as other tasks.

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APPENDIX IV COMPETENT PERSON’S REPORT

Š Added one more geologist

Š Added more laborers to fill dump spotter positions

Š Added more salaried and hourly personnel per the maintenance superintendent’srecommendations.

Š Added additional maintenance planners

Š Added salaried staff to the construction period

Š Added light vehicle mechanics earlier in the construction schedule

Š Increased the number of hourly maintenance personnel

9.7 MINE MAINTENANCE AND ANCILLARY FACILITIES

The following mining related maintenance and ancillary facilities and costs are described inSection 12.0.

9.7.1 Mine Truck Shop

The mine truck shop will be located east of the open pit. It will contain four drive-through bays,each with two truck service stations, so that up to eight trucks can be serviced at any one time. Eachbay will be 21m wide × 9m long × 21m high. The bays will have vertically lifting doors at both ends.Exhaust fume extraction fans will be provided for each service station. Ventilators for space ventilationwill be located on the roof of the building.

Two overhead traveling cranes will be provided for maintenance purposes, each having35 tonne lift capacity.

The truck shop building will contain lay down areas, an electrical shop, and storage roomsfurnished with racks and containers for storage of spare parts. Offices for operating personnel, first aidroom, lunchroom, as well as toilet, shower, and change facilities will be located in a separate wing ofthe building.

A compressor supplying compressed air, complete with air receiver/storage vessels, will behoused in its own enclosure outside the truck shop.

Located outside in a dedicated fenced enclosure will be facilities for tire storage and repair anda tire-mounting machine.

The truck shop building, outside storage facilities and work areas, parking, and open space,otherwise available for truck servicing, will cover an area of 240m × 340m. The area is adequate tohouse any vendor supplied services, such as tire repair and equipment maintenance. A truck washstation will be located within the confines of this area.

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APPENDIX IV COMPETENT PERSON’S REPORT

9.7.2 Administration Building

Mining administrative and technical personnel will be located in the whole operation commonadministrative building described in Section 12.0.

9.7.3 Maintenance Building and Warehouse

Maintenance and warehouse services, other than those provided by the truck shop, will beprovided through common shops, including the following, and are described in Section 12.0.

Š Welding Shop

Š Mechanical Shop

Š Machine Shop

Š Electrical Shop

Š Warehouse

9.7.4 Laboratory

Mine and process plant laboratory services will be provided in the common laboratorydescribed in Section 12.0.

9.7.5 Fueling Stations

Diesel fueling stations will be located near their respective fuel storage tanks in the vicinity ofthe mine truck shop. Mine haul trucks will be refueled with diesel fuel in the mine pit by a refuelingtruck.

The fuel storage tanks will be above ground and have berms to contain any spillage of fuel.Diesel fuel will be delivered to the process area site by train and then pumped through an 8 km longpipeline to the diesel storage tank.

9.7.6 Explosives Storage

Explosive storage will be located on the southwest side of the open pit in a secured area.

9.7.7 Camp Facility

A temporary construction camp will be built approximately 12 km to the east of the mine site inthe vicinity of the central highway and the second site access road. The camp will initially houseconstruction workers and will be downsized and converted at the end of construction activities to apermanent facility for some administration, mine, and plant operating personnel.

9.7.8 Mine Electric Power Distribution

Overhead 69 kV is distributed from the main substation via four main circuits in a primaryselective scheme. Two parallel 69 kV circuits are routed to the concentrator and the other two 69 kV

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APPENDIX IV COMPETENT PERSON’S REPORT

circuits are routed to the mine. Each substation is connected to both 69 kV lines. The system isdesigned so that one primary circuit can be taken out of service. A failure of one primary source allowsthe other alternate source to be switched. Both primary feeders are sized to carry full loads. Thisscheme provides increased reliability with quick restoration of service when a primary feeder hasfailed, or a transfer has overloaded or faulted.

Two of the 69 kV circuits feed the following:

Š Mine loop

Š Primary crusher

Š Paste tailings

Š Conveyor transfer stations 3 through 7

9.8 CONCLUSIONS

The following work to design and/or determine the:

Š Mining sequence and annual production schedule

Š Location of haul roads, waste dumps, and low-grade ore stockpiles

Š Type, availability, productivity, quantity, and cost of major and support equipment

Š Manpower requirements and cost

Š Maintenance facilities, manpower, and training requirements

Š Capital cost for the pre-production requirements and sustaining the operation

Š Operating costs and cost per tonne of material mined

As completed by IMC, an experienced and reputable contractor, is professional, thorough, andwell presented.

The potential for mining problems has been minimized for the Toromocho Project by thefollowing decisions and factors.

Š The ore grade and metallurgy are relatively consistent allowing an orderly miningsequence without excessive equipment moves to accommodate blending for the processplant.

Š The stripping ratio is low and consistent preventing random spikes in equipmentrequirements.

Š The high-arsenic ore grade material is being stockpiled separately preventing the need forinefficient ore blending during mining and avoiding concentrate marketing issues.

Š The proposed pre-stripping exposes eight months of ore production.

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APPENDIX IV COMPETENT PERSON’S REPORT

Š The ore cutoff grade has been increased for the first 22 years of production to maximizenet present value.

Š The cutoff grade for leach ore placed in the low-grade ore stockpile is greater than breakeven due to limitations on land available for stockpiling, thus making the low-grade orequantity conservative.

Š The relative near proximity of Lima and its port and the availability of highway and railaccess should minimize the potential for equipment and consumables supply issues.

Š The general historic mining culture of the area provides a pool of understanding andsupportive residents to both support the existence of the operation and supply personnel towork in the operation.

Š Experienced and competent senior supervisory personnel in the operations, engineering,and maintenance areas are on site and are intimately involved in the manning, training,hiring, and general pre-start up activities.

9.9 RISK ANALYSIS

9.9.1 Production

Production planning is thorough and well executed. The equipment selection and quantity isappropriate and sufficient. The projected availabilities and productivities are aggressive and theirachievement will depend on a well-run operation and well-trained operators and maintenancepersonnel — Low to Moderate Risk/Unlikely to Possible.

9.9.2 Operating Costs

The Definitive Estimate has resulted in numerous corrections and updates based on input fromthe recently hired senior mining operations and maintenance personnel. The increases in manpowerand equipment were necessary and appropriate. The rapidly increasing salaried and hourly labor ratesare an issue and pose some risk for higher costs. The quantity of labor, equipment, and consumablesrequired for the operation are well based and reliable. The costs for these items are in a state of fluxand future costs for these items are uncertain — Moderate Risk/Possible.

9.9.3 Capital Costs

The Definitive Estimate should be accurate as described and, unless the project implementationschedule slips, is a reliable estimate — Low to Moderate Risk/Unlikely to Possible.

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APPENDIX IV COMPETENT PERSON’S REPORT

10.0 METALLURGY, CONCENTRATOR AND TAILINGSPROCESS, AND PLANT DESIGN

The Aker Kvaerner Feasibility Study was completed in November 2007 based on open pitmining, conventional sulfide copper flotation, copper molybdenum separation, and recovery ofchemical grade molybdic oxide (MoO3) from the copper concentrates. The Study is based on miningand processing approximately 43 Mtpa of ore (117,200 tpd) at an average grade for the project ofapproximately 0.46% copper, 0.019% molybdenum, and 6.88 g/t silver. Selective mining will, in thefirst 10 years, result in an average head grade of approximately 0.612% copper, producing around226,000 tpa of copper together with ±4.0 million ounces of silver. Mo production is expected to run at±4,000 tpa as MoO3.

The design criteria for the Toromocho Project concentrator include the following salientprocess variables:

Š Ore Grade 0.612% copper (First 10 years of project)Š Ore Grade 0.019% molybdenum (First 10 years of project)Š Mill Tonnage 117,200 tpdŠ Copper Recovery 87%Š Copper Concentrate Grade 26.5%Š Molybdenum Recovery to MoO3 65.0%Š Copper Concentrate Moisture 9.0%

10.1 METALLURGICAL TESTING BASIS

Comprehensive metallurgical testing has been conducted at METCON facilities in Tucson,Arizona, Lakefield Research in Lakefield, Ontario, Canada, and other sub-contractors to METCON.The testing was done on bulk samples from the existing Centromin pit, preserved drill hole core,contemporary core, and composites that were assembled to represent the stages of mine production forthe first 10 plus years of the project. In general, the testing was adequate to define the metallurgicaldesign criteria used in the process design, but in Behre Dolbear’s view, does not include a sufficientquantity of locked cycle and pilot plant work on fresh samples. This resulted in a severe bias in testresults due to marginal copper recoveries due to mineral oxidation.

10.1.1 Mineralogy

The ore contains identifiable quantities of chalcopyrite, digenite (chalcocite) and covellite asthe copper mineral species. Molybdenum is present as molybdenite and zinc is present as sphalerite.The predominant non-copper or molybdenum sulfide is pyrite which is abundant and requiressignificant pH adjustment to depress in the flotation circuits. Gangue minerals include magnetite,quartz, talc, chlorite, biotite/sericite, and amphibole (hornblende). The metallurgical characteristics ofthe gangue minerals present are troublesome in themselves. The activation of insoluble and talc atother copper/molybdenum separation plants is common but historically has been dealt with by usingseveral methods including concentrate roasting, autoclaving to destroy surface coatings, passivation ofactivated silica and talc through acid bake techniques, and the recovery of molybdenum through theuse of electro-oxidation.

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APPENDIX IV COMPETENT PERSON’S REPORT

The zinc, present in the ore body as sphalerite (ZnS), is apparently carried within the coppermineralization in what is close to solid solution. (The zinc cannot be liberated from the copper mineralsat a practical comminution size.) Inordinately high zinc content in the concentrates may be mitigatedby careful blending of high zinc ores. Depression of zinc, through the use of selective reagents, isprobably impractical due to the negative effect on copper recovery.

The deposit is a typical porphyry ore body with ore types identified including intrusives(intrusivos) and skarns (tactitas). The two identified ore types behave similarly in processing with thesmall exception of increased hardness for the skarn ore types.

10.1.2 Sampling

The laboratory and pilot plant data developed for the plant design was based upon drill holecomposites that were assembled by the geological staff in order to support copper and molybdeniteproduction values for the various rock types and combinations of each. Composites representingproduction years were also assembled but no locked cycle testing was accomplished with them. Thesampling and compositing was done to a high level and is attributed by Behre Dolbear as havingcontributed to the high degree of confidence in most of the metallurgical results.

10.2 COPPER

10.2.1 Recovery

The historical and contemporary metallurgical testing included limited single cycle laboratorytesting, locked cycle laboratory testing, and pilot plant testing.

Historical metallurgical testing was completed in 1974 and 1976 by Centromin. The work wascompleted on a bulk sample containing 77% skarn and 23% intrusive ore types. The laboratory lockedcycle testing on this composite yielded the following metallurgical results, as shown in Table 10.1.

Pilot plant testing on the bulk sample taken by Centromin in 1974 and conducted in 1975-1976is summarized in Table 10.2.

TABLE 10.1TOROMOCHO LOCKED CYCLE LABORATORY TESTING — CENTROMIN

Product Wt. %

Head Analysis % Recovery %

CuCuN-S Pb Zn

Ag(opt) Mo Cu Pb Zn Ag Mo

Head . . . . . . . . . 100.0 0.77 0.04 0.10 0.33 0.71 0.016 100.0 100.0 100.0 100.0 100.0Concentrate . . . 2.7 23.6 1.7 10.1 16.5 19.0 82.3 46.2 79.1 63.3 55.3Tailing . . . . . . . 97.3 0.14 0.04 0.05 0.06 0.25 0.006 17.7 53.8 20.9 36.7 44.7

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APPENDIX IV COMPETENT PERSON’S REPORT

TABLE 10.2PILOT PLANT TESTING — CENTROMIN GRIND AT < 200 MESH TYLER

Campaign

Head Analysis % Concentrate % Recovery %

Cu ZnAg(opt) Cu Zn

Ag(opt) Cu Zn Ag

VII . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.80 0.46 0.96 24.4 16.0 21.3 69.7 82.3 58.5III . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.77 0.56 1.00 18.7 16.1 20.8 79.5 85.4 67.8IV . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.98 0.32 0.79 27.7 9.9 15.9 85.1 86.4 68.0IX . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.49 0.10 0.43 26.1 6.0 14.3 89.7 79.4 64.4

An additional pilot plant was run in 1978 on a composite of Toromocho ores that included thefollowing:

Š Skarn 59%

Š Intrusive 13%

Š Granodiorite 5%

Š Mixed Zones 21%

The average results for this pilot plant run are shown in Table 10.3.

TABLE 10.3PILOT PLANT TESTING — CENTROMIN

Head Analysis % Recovery %

Product Cu ZnAg(opt) Cu Zn Ag

Head . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.91 0.19 0.60Concentrate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.0 4.8 13.8 84.0 77.5 70.0Tailing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.15 0.04 0.18

In summary, the Centromin pilot plant data indicated an arithmetic average of:

Š Head Grade 0.79% copper

Š Concentrate 20.92% copper

Š Copper Recovery 81.7% copper

Contemporary laboratory tests were primarily rougher flotation single pass tests. The tests wereused to determine flotation kinetics, grind requirements, reagent suites, and flow sheet adaptations. Nolocked cycle tests were run on annual mine composites due to sample oxidation.1 Locked cycle testswere run on the ore type composites and summarized in Table 10.4.

1 Minerals Advisory Group, “Metallurgical Summary Report,” Section 3.0, Page 9, September 1978

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APPENDIX IV COMPETENT PERSON’S REPORT

TABLE 10.4LOCKED CYCLE TESTS BY ORE TYPE —METCON

Calculated Head Final Concentrate Recovery (%)

Ore Type%Cu Ag g/t Mo Cu % Ag g/t Mo % Insol % Cu Ag Mo

Intrusive Breccia Soluble > 20% . . 0.62 4.4 0.016 25.99 142.9 0.493 7.24 89.46 69.55 67.28Intrusive Soluble > 20% . . . . . . . . . 0.60 8.8 0.014 26.62 269.8 0.391 12.82 88.20 60.64 56.85Intrusive Soluble < 20% . . . . . . . . . 0.57 6.9 0.036 24.03 171.9 0.047 18.46 92.13 54.61Skarn Breccia Soluble > 20% . . . . . 0.54 5.5 0.011 27.03 169.9 0.043 22.48 76.52 47.85Skarn Breccia Soluble < 20% . . . . . 0.57 7.5 0.027 29.86 220.9 0.104 5.59 88.85 49.98Skarn Soluble < 20% . . . . . . . . . . . 0.57 8.3 0.014 27.07 220.6 0.025 8.35 84.04 58.60Skarn Soluble > 20% . . . . . . . . . . . 0.65 7.3 0.009 27.51 226.6 0.012 7.28 80.04 46.69Arithmetic Average . . . . . . . . . . . . 0.59 6.96 0.020 26.87 203.2 11.75 86.03 55.42

A contemporary pilot plant has been run at Lakefield Research, on a bulk sample taken fromthe Centromin pit. The purpose of the test was to obtain sufficient sample to operate a small pilot planttesting the molybdenum hydrometallurgical plant. Results for copper recovery were marginal due tothe oxidized nature of the sample. The results are illustrated in Table 10.5.

TABLE 10.5SGS LAKEFIELD PILOT PLANT RUN

Flow Sheet Product Wt. %

Grade Recovery

TotalCu %

N-SCopper

% Mo% Cu % Mo%

Standard FlowSheet

Flotation Feed . . . . . . . . . . . . . . . . . . . . . 100.0 0.59 0.12 0.014 100.0 100.0Cu Third CleanerConcentrate . . . . . . . . . . . . . . . . . . . . . . . 2.3 25.50 0.65 62.8 65.7Cu/Mo First Cleaner Scavenger Tail . . . 8.2 0.29 0.007 7.4 7.2Cu/Mo Rougher Tail . . . . . . . . . . . . . . . 89.0 0.21 0.005 30.1 27.2

The Centromin milling operations have been discounted in the feasibility study due to thesimplicity of the flow sheet, the lack of a molybdenum recovery circuit, and the absence of aconcentrate regrind circuit. A review of the historical pilot plant and lock cycle testing work, coupledwith the contemporary work at METCON and Lakefield, would seem to reinforce the copper recoverywithin a range of 80% to 88%. Behre Dolbear’s opinion is that the copper recovery is optimistic at87% and used a more conservative 85% in the economic analysis. Frequently, large copperconcentrators will start up and achieve copper recoveries in excess of those expected from laboratoryand pilot plant testing. In this case, the lack of contemporary laboratory locked cycle testing and pilotplant results obtained from fresh representative ore samples led Behre Dolbear to recommend a copperrecovery lower than design criteria. There is a distinct possibility the full-scale milling operations mayresult in achieving copper recoveries at or very near the design criteria.

10.2.2 Copper Concentrate Grade

The copper concentrate grade is included in the design criteria at 26.0% copper. The historicaland contemporary test work indicates copper concentrates in the range of from 18.7% to 30.0% copper.

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The concentrate grade appears to be a function of the amount of activated insol and pyrite rimmed withdigenite occurring in the ore body. All of the final concentrates produced in the locked cycle and pilotplant testing had relatively high insol percentages in the final concentrate. These percentages rangedfrom 5.7% to 23%. Smelters will view the insol percentages above 10% as making the concentratesrefractory and may introduce penalties for high insol levels. Behre Dolbear regards this as a moderaterisk to the success of the Toromocho Project.

Arsenic-bearing ores are planned for stockpiling with the resulting arsenic values in theconcentrates being below penalty limits. The zinc contamination in the concentrates may triggerpenalties, if blending does not reduce the quantities of zinc in the feed.

In a similar vein, the silver recovery of 84.4%, as shown in Section 20.0 — Economic Analysisof the Aker-Kvaerner 2007 Feasibility Study, appears overly optimistic. A review of all pilot plant andlocked cycle testing, where silver head grades and recoveries were published, confirms that all testingwas done to optimize either copper or molybdenum. No apparent efforts were made to optimize silverrecoveries.

The available pilot plant results from Centromin include results for silver and these testsdemonstrated silver recoveries at or near 70%, albeit on ores with significantly higher head grades thanshown in the current mine plan. The metallurgical results are illustrated in Table 10.6.

TABLE 10.6SILVER RECOVERY RESULTS1

Laboratory Test Type Ore Type

Ag HeadGrade(opt)

AgConcentrate

Grade(opt)

AgRecovery

(%)

Locked Cycle Not Given 0.71 16.5 63.3Pilot Plant VII Not Given 0.96 21.3 58.5Pilot Plant VIII Not Given 1.00 20.8 67.8

Centromin Pilot Plant IV Not Given 0.79 15.9 68.0Pilot Plant IX Not Given 0.43 14.3 64.4

1978 Not Given 0.60 13.8 70.0

Locked Cycle Intrusive Breccia 0.14 4.6 69.55Locked Cycle Intrusive 0.28 8.7 60.64Locked Cycle Intrusive 0.22 5.7 54.61

METCON Locked Cycle Skarn Breccia 0.18 5.6 47.85Locked Cycle Skarn Breccia 0.24 7.1 49.98Locked Cycle Skarn 0.27 7.1 58.60Locked Cycle Skarn 0.23 7.5 46.69

Arithmetic Average 0.22 6.8 55.42

1 The statistical analysis was run on 13 data points representing a wide range of ore samples and grades

The historic pilot plant and locked cycle testing can be expected to be improved in actual plantpractice with the advent of continuous operations and attention to improving precious metals recovery.On this basis Behre Dolbear recommends the use of a 70% silver recovery which is a reduction fromthe feasibility study recommendation and optimistic given the body of metallurgical testing to date.

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APPENDIX IV COMPETENT PERSON’S REPORT

10.3 MOLYBDENUM

10.3.1 Recovery

The Toromocho ore body contains economic quantities of molybdenum. Conventional copper/molybdenum separation techniques do not result in the production of marketable grades formolybdenite concentrates. In order to improve molybdenite recoveries and produce marketablemolybdenum products, a hydrometallurgical/pressure oxidation circuit has been proposed for the plant.

Molybdenite will be separated from low-grade copper/molybdenum concentrate by pressureautoclave conditioning to solubilize the copper and molybdenum and produce copper from a solventextraction/electro winning (SX/EW) circuit (this copper is not included in the financial analysis) andthe production of MoO3 as a final product. With 66% recovery in the copper concentrator and 95%recovery in the hydrometallurgical facility, the overall molybdenum recovery will average atapproximately 65% as MoO3.

The molybdenum recovery plant does not mimic the patented Rio Tinto facility at KennecottUtah Copper operations in Salt Lake City, Utah but is similar in concept. Current plans at Rio Tintocall for a start up of the facility in 2013. It is probable that Rio Tinto is looking at a 2-year start upperiod after almost 20 years of testing and evaluation. The circuit at the Toromocho Project is differentfrom the Rio Tinto circuit (sufficient to escape patent infringement) and is quite similar to conventionalpure oxide production at the Fort Madison facility of Freeport McMoran once the molybdenum issolubilized and copper is removed with SX/EW.

The molybdenite recovery numbers for concentrating are low risk, but the successful start up ofthe hydrometallurgical facility is a high-risk venture and could take well over 2 years. McNulty &Associates published a technical study indicating that high pressure oxidation and recovery of metals,such as copper, nickel, and probably molybdenum, could require start up periods in excess of 5 years.

Concentrate grade within the concentrator circuits are expected to average 15% to 20%molybdenum for the product fed to the autoclaves in the pressure oxidation/hydrometallurgical facility.This level of recovery is a function of mass pull in the plant and is readily achievable. Thehydrometallurgical facility is designed at approximately 95% molybdenum recovery. This could be ashigh as 98% given the experience at Freeport McMoran plants. Possible failures in thehydrometallurgical facility will probably not result from the autoclave circuit, but could result fromdesign oversights in the slurry handling, slurry rheology, filtration, thickening, heat recovery systems,etc.

A similar application of pressure oxidation by Climax Molybdenum in the 1970s resulted in thedestruction of the USAF high pressure autoclave at Tullahoma, Tennessee. Failure was attributed tomarginal choke design, lack of understanding of slurry rheology, and the inability to handle the largevolumes of elemental sulfur produced in the pressure oxidation step. Climax Molybdenum has not, toBehre Dolbear’s knowledge, returned to this technology even in the face of several mines with similarmetallurgical requirements.

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APPENDIX IV COMPETENT PERSON’S REPORT

10.3.2 Molybdenite Concentrate Grade

Given the successful application of the pressure oxidation/hydrometallurgical plant, theToromocho Project molybdenum operations will not produce concentrates. The product will beessentially high purity MoO3.

This is a moderate risk task. Pure oxide (MoO3) should warrant a premium price but this is notdiscussed in the marketing analysis. The marketing study included in the 2007 Feasibility Study, pricedmolybdenum as tech grade MoO3 or tech oxide. The hydrometallurgical molybdenum facility willproduce high purity MoO3 or chemical grade moly oxide. This product will command a premium in themarket and is likely not priced properly in the study.

10.4 MINERAL PROCESSING FACILITIES

The concentrator is of conventional design and was designed to handle 146,500 mtpd with anominal operating rate of approximately 117,200 tpd. The crushing, grinding, stockpile, SAG millgrinding, ball mill grinding, classification, flotation, dewatering, filtration, and tailings disposal arewell conceived and standard for the industry. The flow sheets, P&IDs, and basic engineering packageare complete and can be used to bring the level of accuracy of capital cost estimation to the level of±15%. A major amount of large milling equipment is at the site and in controlled storage that willmake for minimal delays in logistics for the construction period of the mill. Certain capital items in theprocess plant were sized or designed to substantially reduce the cost to expand the throughput to148,000 tpd in the future, if so desired.

The chosen tailings deposition system is being designed by Golder & Associates. The systemenvisions the production of 55% solids tailings at the concentrator for transport to five “newgeneration” paste thickeners at the tailings impoundment. The paste thickeners will thicken to a slurryin excess of 69% solids for deposition in thin layers on the tailings impoundment by spigoting on theperiphery. The large 40m diameter thickeners represent a major departure from current levels oftechnology. The installation of units with an unsubstantiated operating record must be regarded as highrisk. On a short term basis, the tailings impoundments can take normal tailings (50% to 60% solids)into the maintenance dump area. Over the long term, deposition of normal tailings would result inrunning out of tailings deposition room.

The hydrometallurgical/pressure oxidation plant has been reviewed and no obvious designflaws are apparent. The lack of operating history for the plant and the lack of bench marking plantsinternationally makes for a high-risk application. To Behre Dolbear’s knowledge, no investigation intothe autoclaving of copper/molybdenum concentrates, acid bake flotation of silica and talc, or electro-oxidation of low grade concentrates has been made. The process flow sheets for the molybdenumproduction facility are reasonable and will, in all probability work, given the successful adaptation ofthe design to very unconventional hydrometallurgical products.

10.5 FINAL PRODUCT QUALITY

10.5.1 Copper

The final copper concentrates are expected to average at approximately 26.5% copper. Giventhe test results, this is supportable. The complete analysis of copper concentrates, as expected fromproduction, is not detailed in the plethora of metallurgical tests available for review.

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APPENDIX IV COMPETENT PERSON’S REPORT

The concentrates will probably contain, in addition to copper and molybdenum, the followingcritical elements:

Š Arsenic ó0.08% (dependent on ore segregation to lower arsenic values in the feed)

Š Zinc ó9.0% (Behre Dolbear observation from majority of testing performed)Š Insol (silica) ó9%Š Silver ó256 g/t (Behre Dolbear analysis of metallurgical testing results)Š Moisture <9.0% H2O

The marketing study assigned a zinc assay of 2.89% to the copper concentrates. Behre Dolbearfeels that this is a bit unrealistic and has assigned a value of 9%. Also, no testing for concentrate flowmoisture is apparent in the literature forwarded by Aker, the marketing consultant or MCP.

The production of marketable copper concentrate grades is regarded as low to moderate risk.

10.5.2 Molybdenum

The final product from the Toromocho hydrometallurgical plant will be high puritymolybdenum oxide or chemical grade moly oxide. The molybdenum is priced in the marketing study ata recommended $12/lb molybdenum as contained in tech grade moly oxide. The molybdenum priceshould include the premium for producing the higher value product (pure molybdic oxide). Due to theopacity of the molybdenum market, no current chemical grade MoO3 pricing is readily available.

10.6 CONCLUSIONS

Composites representing production years were assembled, but no locked cycle testing wasaccomplished with them. The sampling and compositing was done to a high level and is attributed byBehre Dolbear as having contributed to the high degree of confidence in most of the metallurgicalresults. A review of the historical pilot plant and lock cycle testing work, coupled with thecontemporary work at METCON and Lakefield would seem to reinforce the copper recovery with arange from 80% to 88%.

The molybdenum recovery plant does not mimic the patented Rio Tinto facility at KennecottUtah Copper operations in Salt Lake City, Utah but is similar in concept. Current plans at Rio Tintocall for a start up of the facility in 2013. It is probable that Rio Tinto is looking at a 2-year start upperiod after almost 20 years of testing and evaluation. The circuit at Toromocho is different from theRio Tinto circuit (sufficient to escape patent infringement) and is quite similar to conventional pureoxide production at the Fort Madison facility of Freeport McMoran once the molybdenum issolubilized and copper is removed with SX/EW.

The concentrator is of conventional design and will produce at the rate of approximately117,200 tpd. The crushing, grinding, stockpile, SAG mill grinding, ball mill grinding, classification,flotation, dewatering, filtration, and tailings disposal are well conceived and standard for the industry.The flow sheets, P&IDs, and basic engineering package are complete and can be used to bring the levelof accuracy of capital cost estimation to the level of ±15%. A major amount of large milling equipmentis at the site and in controlled storage that will make for minimal delays in logistics for the constructionperiod of the mill.

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APPENDIX IV COMPETENT PERSON’S REPORT

The process flow sheets for the molybdenum production facility are reasonable and will, in allprobability work, given the successful adaptation of the design to very unconventionalhydrometallurgical products.

Given the successful application of the pressure oxidation/hydrometallurgical plant, theToromocho Project molybdenum operations will not produce concentrates. The product will beessentially high purity MoO3.

10.7 RISK ANALYSIS

Š Behre Dolbear’s opinion is that the copper recovery is optimistic at 87% and used aslightly lower recovery in the economic analysis. However, large copper concentratorsfrequently exceed the results of laboratory and pilot plant testing when in actual operation.This reduces the risk to Low to Moderate Risk/Unlikely to Possible.

Š The final copper concentrates are expected to average approximately 26.5% copper —Low Risk/Unlikely.

Š Smelters will view the insol percentages above 10% as making the concentrates refractoryand may introduce penalties for high insol levels. Behre Dolbear regards this as a risk tothe success of the Toromocho Project — Low to Moderate Risk/Unlikely to Possible.

Š The silver recovery is not backed up by a large number of tests and assays, but insteadrelies on the Behre Dolbear metallurgist’s professional judgment — Moderate Risk/Unlikely to Possible.

Š The molybdenite recovery numbers for concentrating are low risk, but the successful startup of the hydrometallurgical facility is a High Risk/Possible venture and could take wellover 2 years. McNulty & Associates published a technical study indicating that highpressure oxidation and recovery of metals, such as copper, nickel, and probablymolybdenum, could require start up periods in excess of 5 years.

Š The chosen tailings deposition system is being designed by Golder & Associates. Thesystem envisions the production of 55% solids tailings at the concentrator for transport tofive “new generation” paste thickeners at the tailings impoundment. The installation ofunits with an unsubstantiated operating record must be regarded as high risk. On a short-term basis, the tailings impoundments can take normal tailings (50% to 60% solids) intothe maintenance dump area. Over the long term, deposition of normal tailings would resultin running out of tailings deposition room —Moderate to High Risk/Low to Possible.

Š The production of marketable copper concentrate grades is regarded as — Low toModerate Risk/Unlikely to Possible.

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APPENDIX IV COMPETENT PERSON’S REPORT

11.0 SMELTING

Behre Dolbear is not aware of any ongoing smelter negotiations to determine smelter contractterms for concentrate freight to port, shipping, insurance, treatment charges, refining charges, and salescosts. The terms used in the feasibility study financial analysis appear to be standard. It must be notedthat treatment charges are highly volatile. While long-term contracts for higher grade copperconcentrates (30%+ copper) are active with charges of approximately $79, spot treatment charges arestill in evidence for less than $10.

The Toromocho Project concentrates will average at approximately 26.5% and will carry highvalues for insol and zinc. This may result in less than optimum treatment charges. MCP does not ownor operate a smelter in South America. Behre Dolbear has access to multiple sources of smelting priceprojections. These projections and the projections received by the Group from CRU yield a blendedrecommendation for TC/RC terms at $70 and $0.07, respectively.

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APPENDIX IV COMPETENT PERSON’S REPORT

12.0 INFRASTRUCTURE AND NON-PROCESS FACILITIES

12.1 GENERAL

The need for almost all aspects of infrastructure, to be constructed new, drives the expandingcost of the Toromocho Project. Each of the following infrastructure requirements is a major project initself.

12.1.1 Electrical Power Supply

Š The electric power supply is described by a report prepared by CESEL Ingenieros, Peru.The electric power will be delivered from a 220-kV substation near the township ofPomacocha.

Š A new 11 km, double circuit overhead transmission line will be installed and routed fromthe Pomacocha Substation to the main substation at Toromocho. The new transmissionline can deliver 220 MW on either circuit.

Š The project with a triple redundant system should experience a minimum of unexpected orunscheduled delays due to power outages.

Š Emergency standby power will be installed to operate the large paste thickeners, theconventional tailings thickeners, the concentrate thickeners, camp medical facilities, etc.

12.1.2 Water Supply

The total water demand by the Toromocho plant for an average year will be 8.65 million m3.Water will be supplied from the Kingsmill Tunnel (Section 12.1.2). Only 50% of the treated flow fromthe Kingsmill Tunnel will be required for plant process water. Culinary water will be supplied to thesite from a reverse osmosis and chlorination system.

12.1.3 Office and Administrative Support Facilities

The non process buildings to house administration, mine truck shop, and maintenance will beconstructed to provide office facilities for the administration and maintenance staff. In addition,facilities will be constructed to house analytical and metallurgical laboratories, reagent storage, fuelingstations, explosives storage, and the camp facility.

12.1.4 Material and Supply Storage and Distribution

Warehousing will be located in the maintenance shop building adjacent to the concentrator.Other supply inventories will be contained in the fuel stations, reagent building, explosives storage,and mine truck shop.

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APPENDIX IV COMPETENT PERSON’S REPORT

12.1.5 Access Roads

Access to the site will be provided to the site by two roads.

Š The Central Highway (paved), which is to be rerouted, will feed into the north access roadto the administration area.

Š A new access road, running parallel to the rail road will provide access to the site for localpersonnel.

The new access road is being constructed, as with all other internal roadways by MCP.

12.1.6 Railroad Access

Transportation of copper concentrate and molybdenum oxide will be from the site to the Port ofCallao via the existing rail line between Callao and La Oroya that runs by the mill site. The railroad isoperated by a Peruvian company and, per Aker Kvaerner (December 2007) in its current condition, hasthe capacity for the additional transportation of the Toromocho Project produced commodities.

The railroad is owned by the government but is operated under a 15-year concession agreementwith FerroCarril Central Andino S.A. The concessionaire will upgrade the rail line and purchase rollingstock to accommodate the Toromocho traffic and will recoup the costs in the operating fees.

A 1 km spur to connect the mill site to the existing rail line, six rail lines in the yard at the milland a traveling bridge crane for loading unloading, are to be provided by MCP. MCP will complete the1 km rail spur from the main rail line to the mill site by the end of 2012.

12.1.7 Camp Facility

Camp facilities will include a construction camp to be constructed approximately 12 km to theeast of the mine site in the vicinity of the Central Highway. The camp will have quarters for up to6,000 construction workers. The construction camp will be used for the future expansion.

12.1.8 Town Site

The town site of Morococha, located within the pit limits, will be demolished and thepopulation moved to a new community near the mine site. The new town site is under construction and“move in” is scheduled for mid 2012. The initial capital costs could escalate substantially beyond the2007 budget.

12.1.9 Miscellaneous Infrastructure

Included in miscellaneous infrastructure are compressed air systems, sewage treatment, fireprotection, security and communications.

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APPENDIX IV COMPETENT PERSON’S REPORT

12.2 CONCLUSIONS

Behre Dolbear has reviewed, in detail, all of the required infrastructure for the ToromochoProject and finds it complete and more than adequate for the size and complexity of the ToromochoProject.

12.3 RISK ANALYSIS

Major project financial risk for infrastructure is rated as moderate due to the not yet finalizedcosts for relocation of Morococha, improvements to the Central Highway and internal site roads andsite preparation — Low to Moderate Risk/Unlikely to Moderate.

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APPENDIX IV COMPETENT PERSON’S REPORT

13.0 ENVIRONMENTAL AND PERMITTING

13.1 BACKGROUND

13.1.1 Environmental Setting — General

Environmental and social baseline conditions are described thoroughly in the 2007 FeasibilityStudy and Appendices (Knight Piésold, 2007) prepared for the Toromocho Project. Summarystatements from that document are presented below to describe the general environmental setting.Overall, the setting appears little changed since 2007 except for the comments given below; and thosekey issues noted in the Environmental and Permitting discussion.

The project site is located in the high Andes of central Peru at mean elevation (altitude) of4,300 masl (meters above sea level). The site is located directly east of the spine of the CordilleraOccidentale (Western Cordillera) of the mountain range, about 115 km east of Lima and the PacificOcean. Distances are deceiving. Even on one of the best maintained mountain roads in Peru — theCarretera Central — expert local drivers are a necessity to make this 4 to 5 hour car trip from Lima,due to the heavy traffic and dangerous driving conditions. Figure 13.1 shows a view of the area duringthe site visit made in August 2011, also during the winter season. Importantly, the Central Railroadfrom Lima passes through the area. A local airstrip is not available.

Figure 13.1. Local site topography and environmental setting at Toromocho is shown in thisview during winter season August 2011Carretera Central Highway is at left

The majority of mine infrastructure is planned within the District of Morococha (the key localtown for Figure 13.2), Province of Yauli, Department of Junin, in terms of local and regionalgovernments and their permits. The mining concessions area presents a high, rugged, dry, windsweptlocal topography, above tree line, with elevations between 4,400 masl and 5,000 masl. Workingconditions for employees and equipment are thus affected.

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APPENDIX IV COMPETENT PERSON’S REPORT

Figure 13.2. The historic mining town of Morococha is shown with reclaimed waste areas in theforegroundThe Toromocho (“bull with no horns”) is prominent above the town with itsreddish nose and eyes up the slope

This is a periglacial area previously shaped by glacial advances and retreats during pre-historictimes. Soils are glaciofluvial (formed by glaciers and flowing water) and typical of the Peruvian uplandplains in formation. Geologic, geotechnical, and seismic risks are present and must be considered inmine and support facilities design. Existing environmental liabilities are present from historic miningin the Cerro de Pasco era (1920s to 1940s) in the surrounding project area, but most are reported to beoutside the Toromocho concession area. In any case, such liabilities are in play in the major projectplans of MCP, as will be discussed below.

Climate is also characterized as being cold and dry, with a wet season from October to March(summer south of the Equator). Evaporation generally exceeds precipitation, and mountain and valleywinds of moderate speed often flow up the valley to mountain tops during the day and back down theslopes as temperatures cool in the afternoon and evening.

Even with the dry conditions, the average rainfall and snowfall of 850 mm infiltrates togroundwater and further sustains area streams and high altitude lakes, some affected adversely in waterquality from domestic sewage and historic mine runoff. Other impoundments from historic and currentmining are also present. The lakes contain some planted trout and native killifish.

Air quality is generally good in the area except for occasional blowing dust from historic minewaste areas, with some elevated metals concentrations.

Flora and fauna observed were sparse during the winter but some species of regional andnational significance requiring protection have been noted in field surveys and addressed in recentmine planning.

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APPENDIX IV COMPETENT PERSON’S REPORT

The White-Bellied Cinclodes is notable among the approximately 66 bird species present.Vicunas are also present. Some sensitive habitat areas exist and will be discussed further.

The social and community setting will also be discussed further below in terms of currentmining plans and impacts.

Regarding the above existing environmental baseline conditions, as these have changed or newissues have arisen during the period 2007-2011, Behre Dolbear will comment in the Physical andBiological, and Human Environment subsections which follow.

13.1.2 Physical and Biological Environment — Current Issues

A tour of the site showed some pioneering of land areas (basic clearing and testing for sitesuitability) and initiation of quality construction activities and staging of materials. Pioneering that wasoccurring at the concentrator site (Figure 13.3) appeared to be well planned in terms of erosion andsedimentation control, runoff, and attention to the nearby rail line.

Figure 13.3. Initial pioneering work is occurring in the concentrator area in the southern partof the project site

Regarding flora and fauna issues and habitat, the planned tailings impoundment area in theTunshuruco drainage is large in footprint (approximately 790 ha and has required detailed study forgeotechnical and biological issues, as well as cultural and socio-economic conditions (these will bediscussed in the next subsection). The area contains wet soils (“bofedal”), flora, and fauna habitattotaling about 50 ha on one margin that has required excavation and removal to insure a secure tailingsarea (Figure 13.4). MCP has also designated a “compensation” area to re-establish by re-planting whatcould be termed “wetlands” on another part of their properties. This work is in process and appears tobe carefully considered with a compensation area to the north in the generally undisturbed corridor SanAntonio-Sierra Nevada.

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APPENDIX IV COMPETENT PERSON’S REPORT

Figure 13.4. Wet, marshy soils (“bofedal”) are being removed from the margin of the tailingsdam construction area in the Tunshuruco valley(Alignment of the dam is shown in the flags at the right)

Regarding land use and water management, an important point concerning this project andwater use is that no agricultural/water conflicts are present (as at a number of mining projects in LatinAmerica). Water (albeit of poor quality) is present in abundance from the Kingsmill Tunnel, previouslyconstructed to drain mine water (perhaps 90% to 100%) from historic mine workings in theToromocho peak area. This water is now effectively treated in the Kingsmill Tunnel Water TreatmentPlant (KMT WTP) which was toured by Behre Dolbear. The plant is well constructed, appears to be amodern and efficient operation, and is protected by river rock gabions from the calculated 500-yearflood (Figure 13.5).

Figure 13.5. The Kingsmill Tunnel Water Treatment Plant facility(Appears to be functioning well with quality construction to treat historic minedrainage in the Toromocho peak area and supply process water for the newmining project)

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APPENDIX IV COMPETENT PERSON’S REPORT

A steady and substantial lime resource will need to be located in the region to supply thetreatment plant, as lime is one of the chemicals used to neutralize acidic water and precipitate metals.

The MCP staff stated that process water for the new mining project will require only aboutone-half of the KMT WTP discharge. This plant could operate for decades with an estimated 32-yearmine life and possibly operate in perpetuity, if a market for the treated water (suitable for miningprocess and other industrial and livestock use) exists. Therefore, the KMT WTP provides dualenvironmental benefits of: (1) legacy and modern contaminated mine water cleanup; and (2) adequateprocess and water supply for the mining project and surrounds.

The KMT WTP has process ponds to polish the water and precipitate metals sludge before thetreated water is discharged to the river. This excess sludge is to report to the bottom of the unlinedtailings pond discussed above, after it is constructed and operating. Careful monitoring of groundwater, collection, and pump back, and other management down gradient of the tailings pond in thelake/wetland area will be necessary to insure no negative impacts occur to regional ground water anddomestic wells.

Geotechnical and seismic (earthquake) hazards do exist in this area and are being considered inongoing geotechnical studies of open pit mine slopes and other facilities planning.

Some potential for residual acid rock drainage (ARD) from historic mine openings and wastesexists from the Toromocho concessions and such will be monitored under a comprehensiveEnvironmental Management Plan presented in the Environmental Impact Assessment (EIA) as well asa detailed Water Management Plan and Water Balance for project operations. MCP has committed toregular data analysis and corrective actions so as not to affect local and regional ground and surfacewaters.

Air quality will be improved in the area as historic wastes are mined through and reprocessed,or stored in engineered waste dumps with dust control. Dust control on pit roads, other access roads,from the cleared areas of the plant, and from other mine facilities will be a key aspect of mitigation.Blowing dust and some gaseous emissions from the plant and equipment are noted as potentiallysignificant impacts from this large operation, if not carefully controlled and will receive attention.

13.1.3 Human (Social and Community) Environment — Current Issues

As noted above, this is a historical mining area dating back some centuries, with modernmining beginning in the early 1900s through 1940s during the Cerro de Pasco era. Pan American Silverhas current operations including waste dumps, process ponds, and infrastructure in the Yauli andMorococha area. Thus, some local trained miners exist, who may need upgraded training for a largeoperation. Notable small-scale historical mining (legacy) disturbance exists on the Toromocho peakand to the west; and much of this area (perhaps 80% to 90%) will be mined through with ore and somewaste reprocessed during the new project life. Considering legacy impacts from mine waste and waterquality effects due to past mining, the KMT WTP discussed above and the large new open pit minewill eliminate or mitigate many of these impacts for local residents and the environment.

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The Toromocho peak and town of Morococha, shown in Figure 13 .2, will also be minedthrough during the later years of mine life. Thus, relocation of the town is planned and a new town isbeing constructed in the Carhuacoto area east of the planned mine along the Central Highway (Figure13.6 and Figure 13.7), tobe completed in mid-2012.

Figure 13.6. Vista from the Central Highway to the new town at Carhuacoto and the peaksto the west

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APPENDIX IV COMPETENT PERSON’S REPORT

Figure 13.7. The new town at Carhuacoto(Well under construction in the foreground with a construction camp beingdeveloped in the background against the ridge)

Curiously, current local unemployment is estimated by the MCP staff and consultants to be atlow levels and it is expected that an influx of new miners, many needing training, will need to beimported from Lima, La Oroya, Huancayo, or surrounding areas or from other mining areas in Peru tosupply the workforce, especially for operations. Low unemployment is reportedly due to the harshenvironment. The opinion is that one would not live at this altitude if not subsisting on some means ofincome.

Employment of skilled workers for construction and operations remains as one of the concernsof the MCP management and human resources staff. The global mining boom has taken up many suchworkers for other projects in Peru and beyond. MCP is competing for such workers in the employmentmarket. Recruiting is active and the new town at Carhuacoto (for past and new residents of Morocochaarea), a modern mine camp, and other facilities under construction are being planned to make theproject area attractive to in-migrants. Training programs by MCP, and those with equipment suppliersand plant operations engineers, are actively planned.

Worker health and safety (H&S) is proceeding informally and will be instituted in a formalmanner as construction ramps up. Contractors have internal regulations, an H&S manual exists, regularmeetings are held with MCP and contractor staff, and corrective actions are performed.

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APPENDIX IV COMPETENT PERSON’S REPORT

The new town construction is a key attraction and appears to be of very good quality andlayout, with running water and electricity, modern toilet facilities, and a serviceable kitchen and livingareas. An “open house” of 2 to 3 large display rooms in the old town area of Morococha (currentlyabout 3,200 residents) has been open for some months to educate and promote the new facilities andshow testimonials of local residents regarding their feelings about relocation and resettlement. MCPhas retained staff and a consultant, Social Capital Group, to work with local residents and advise inthese matters. About 1,050 new residences are currently under construction. A formal communityrelations plan (with a manager and staff) and resettlement plan are being carried out.

Seismic risk has been considered in the new town construction, and protective features (e.g., alarge engineered channel to handle a dam break from Pan American Silver’s Huascacocha Lakeupstream and storm drainage) are in place. A park, municipal building, and other town features areunder construction.

Transport of other commuting workers to the mine during operations from Lima and thesurroundings is noted as a key risk and issue for MCP planning purposes. The Central Highway iswell-used and generally well-maintained from Behre Dolbear’s observations, but repairs and accidentsare common on this two-lane highway (Figure 13.8). Crowding and aggressive driving is evident.Buses transporting workers will likely be staged from selected centers. Train cars to transport workersand supplies are being considered and seem a good alternative. An airstrip for emergencies andmanagement purposes may be a consideration in the Yauli area.

Figure 13.8. Conditions on the Central Highway from Lima(Include new bridge improvements, with the red reinforcement bars under thebridge platform (barely visible below the platform at right) supplied by MCP tohandle their major shipments of equipment and supplies)

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APPENDIX IV COMPETENT PERSON’S REPORT

The Central Highway will require a new alignment for about 10 km (6 miles) in the vicinity ofthe major new open pit since the highway will be too close to the pit wall for safety purposes.Alignment alternatives are being studied and no final route has been selected.

Concerning re-settlement for construction of new mine facilities, removal has already occurredof seven beneficiaries (families) in the Tunshuruco tailings area, with compensation. Cultural resources(historical and archaeological) also remain under study in this area before construction.

In summary, the primary and nearly universal concern appears to be acceptance of the newtown by the Morococha residents. In spite of the new and improved conditions, the culture, socialnorms, folkways, traditions, festivals, and other events historically associated with the town belowToromocho will change and voluntary movement will be required soon. MCP and its consultantsbelieve about 85% of the residents generally approve and are committed to a resettlement plan, asshown in the EIA and hope for a successful result.

13.2 PERMITTING STATUS AND SCHEDULE

13.2.1 EIA and Construction Permits

Of major importance for the project going forward is recent approval of the voluminous EIA inDecember 2010, after 13 months of reviews, appeals, and modifications by the Ministry of Energy andMines of Peru (MEM). This was termed a “delay” in some project documents but is not unexpected incurrent global mining projects that require a “social license to operate” as well as the usualenvironmental protection conditions. Also of importance, a construction permit for active constructionwork at the concentrator plant and tailings area over the next 21⁄2 years was approved by MEM whileBehre Dolbear was on site during July 2011.

13.2.2 Mine Plans, Water Use, and Other Permits and Approvals

Several other permits have been obtained or are in the planning horizon. Some of these relate tonotable project changes since the EIA was first submitted in 2009. The major critical path items areassessed as follows.

Š A detailed hydrology and hydrogeologic study for the pit will be an important part of thenew pit mine plan to be submitted for approval late 2011

Š A quarry mine plan (rock for construction and haul road repair) approval was secured July2011

Š Water use permits for the mine and concentrator plant are in preparation

Š Reclamation and closure plan will be detailed further in 2011 (conceptual) and refined asoperations progress (Section 14.0)

Š Cultural resources mitigation permits; several obtained, a few still in process

Š New highway alignment EIA still to be accomplished

Š New lime source to be secured with environmental approvals

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APPENDIX IV COMPETENT PERSON’S REPORT

Š Environmental Assessment (EA) for the Kingsmill Tunnel has been completed

Š EIA for KMT WTP was completed in 2008; further technical certifications needed

After a couple of sessions of detailed technical discussions with the MCP Vice President ofEnvironment and Corporate Affairs in Lima, it is expected by Behre Dolbear that the necessary permitsand approvals can be secured in a timely manner to proceed with construction and operations, asdetailed elsewhere in this report. Assessment of Risks is presented below.

13.2.3 Government Changes in Peru — Agency and Community Perceptions

Recent legislative changes in Peru (2010) have established that the Ministry of Environment(MOE) and its Agency of Environmental Evaluation and Fiscalization (OEFA) develop a major role inenvironmental protection from mine impacts. Behre Dolbear was informed in Lima that such agencieshave not gained traction, staff, or budget to take prominence in such a role. MEM and related agenciesremain in their traditional and powerful roles as the key permitting agencies for MCP efforts and arereceiving the focus of staff attention.

A presidential election occurred just before Behre Dolbear was in Lima during July 2011. Anew president and administration took office. Therefore, key agency informants in Lima or the regionwere not deemed feasible to be contacted to confirm the MPC permitting status and any agencyperceptions of difficult issues, since the government change will likely cause new conditions.

Further, Behre Dolbear sometimes requests interviews with local community informants tocheck the progress of mining company efforts and any notable conflicts. This effort was similarly notdeemed feasible during this visit.

The uncertainty of post-election government appointees and the delicate situation in theMorococha community rendered infeasible local interviews. Behre Dolbear spent substantial time withthe MCP staff and consultants. The approved EIA and recent construction permit serve as evidence ofagency and community support.

13.2.4 Water Management Update to December 2011

An update to the water supply and water management plans review for the Toromocho Projectto November-December 2011 is pertinent because of recent events in Peru and the new administration(this new administration and agency structure is discussed in the following section).

It has been noted from internet website searches that other mining projects in Peru — as theyhave matured and conceptual plans have been formalized — have raised current community issuesregarding watershed effects (alpine lakes), competition with agricultural water uses, and potentialeffects in terms of water quality and quantity on domestic water supplies in those areas. Thesecommunity and NGO (non-governmental organizations) activities have resulted in threatened laborstrikes at the mines, lockouts, local unrest, and temporary project postponements in some areas. Theselocations are generally in the north and south of Peru, and not related to the particular area of theToromocho Project or the Cerro de Pasco/La Oroya vicinity.

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APPENDIX IV COMPETENT PERSON’S REPORT

A similar website search for Toromocho Project water management, NGO activities, agencycomments, or related matters has yielded no information that would signal controversy with the currentsituation, as depicted in the September 2010 EIA Executive Summary for the Project,

Further, the plan for water management for the Project, including water treatment by theKingsmill Tunnel of historic mine drainage, to provide more than adequate water supply for projectuses, still appears viable. The dual purposes of treating contaminated water draining from historicworkings in the planned new mine pit vicinity, and providing process water for the mine and plant,remain desirable from an environmental sustainability point of view. The overall Project water balanceis documented in detailed text and diagrams from reputable consulting firms, Knight Piésold andGolder Associates, during 2008-2009 that were discussed with Project environmental staff. WhileBehre Dolbear has not technically verified all aspects of the conceptual water balance, we have notreceived any responses from the Toromocho Project staff to denote any major changes to these plans.Therefore, we have no reason to believe the water situation has essentially changed or does not remaina valid analysis, at this time.

Further, Behre Dolbear has not contacted agency staff in the new Humala administration (sinceJuly 2011) to verify their regulatory analyses and perceptions of the Toromocho Project watermanagement plans. From the recent website news, it seems the Environment Minister now has moretraction to influence regulatory reviews, especially regarding the Minas Conga Newmont project in thenorth near Cajamarca.

13.3 CONCLUSIONS

Reviews of environmental, social, community, permitting, and general sustainability issues forthe Toromocho Project suggest many favorable aspects going forward.

Š Permitting progress to date is good — EIA and major construction permit approved; otherimportant approvals all in process for most current project components and plans

Š Major remaining permits (water use and mine plans) well into planning process

Š Construction layout and pioneering progress — good environmental housekeeping,recognition of environmental impacts and issues

Š KMT WTP is completed and functioning well

Š Two-pronged advantage of KMT: (1) historic legacy mine sites mine water cleanup; and(2) adequate total mine water supply

Š Quality new town construction at Morococha (Carhuacoto) — apparent 80% to 90%approval rating by old town residents

Š Recognition of wetlands, wet areas in project construction regarding both environmentalcompensation and geotechnical issues (tailings dam area)

Š Land position adequate for facilities and infrastructure — mining concessions andpurchased lands

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APPENDIX IV COMPETENT PERSON’S REPORT

Š Legacy of mining in area and general acceptance by communities — no agricultural/wateruse competition

Š Well-developed transport route to mine from Lima — rail/air alternatives available

Š Worker H&S program apparently well in place with the contractor and sponsorcollaboration, meetings, incident response, and reporting to the government

A few other project aspects in these topical areas present unfavorable conditions for the projectand they are the following.

Š Unknown new final road alignment for the Central Highway in the pit vicinity will requirea new EIA and potential environmental impacts.

Š Dangerous road (H&S) aspects and access for workers and equipment truck drivers to thesite from Lima.

Š Potential requirements for extra capital costs for high-quality project components and lateroperations and maintenance (e.g., new town, tailings dam, high altitude issues, andsimilar).

Š Universal concern over full acceptance and efficient transfer of Morococha residents to thenew town — Carhuacoto.

Š High altitude working conditions — worker health and risks (e.g., lightning, rain/snowwith strong winds, fatigue).

Š Minor contaminants in historic and new mining/processing/waste management and tailings— need potential control and isolation.

13.4 RISK ANALYSIS

Transport of workers and equipment to the mine site will cause logistical, cost, and H&Sproblems that affect skilled employment and project operations — Low to Moderate Risk/Unlikely toPossible.

Operation of the tailings impoundment will cause local and regional environmental effects onground and surface waters and local fauna habitat that cannot be easily remedied — Low Risk/Unlikely.

Timely and efficient re-settlement of Morococha residents to the new town, Carhuacoto, is notassured and poses some risk to the project’s schedule — Low to Moderate Risk/Unlikely to Possible.

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APPENDIX IV COMPETENT PERSON’S REPORT

14.0 RECLAMATION AND CLOSURE

14.1 CONCEPTUAL CLOSURE PLAN

Discussion in the EIA describes the conceptual plans for physical and chemical closure of themajor mine, plant, and support facilities. Passive closure is planned, if feasible, so that majormaintenance and staffing is not necessary. However, active closure will be undertaken, if needed. Inany case, post-closure monitoring, water management, and security will likely occur. Following are thekey aspects planned for major facilities during progressive and final closure.

Š Open Pit — Dismantle auxiliary services (energy, etc.) and equipment; physicallystabilize for 500-year planning horizon, chemically stabilize and limit water infiltration;pipe and treat pit water, as necessary, using the KMT WTP; construct perimeter barrierand warning signs; monitor conditions.

Š Waste Rock Dumps — Physically and chemically stabilize; compact fines to limitinfiltration, monitor ARD (acid rock drainage); control water run-on and run-off; ifnecessary pipe water to KMT WTP for treatment; construct perimeter barriers and warningsigns; monitor conditions.

Š Process Plant — Decommission, dismantle, and remove structures and equipment,salvage as feasible; sell or transfer equipment; re-grade area and re-vegetate, and remedycontaminated soils.

Š Concrete Pads and Shops, Laydown, and Equipment Areas, and OtherInfrastructure — Remove structures and equipment; demobilize, dismantle, salvage, sellor transfer equipment; closure of concrete pads in place (in situ) with soil cover and re-vegetation as feasible using topsoil stockpiles; remedy contaminated soils.

Š Tailings Impoundment — Physically and chemically stabilize; install dry cover toprevent infiltration and oxidation (acidic conditions or ARD); provide water managementand run-on, run-off control; monitor piezometers (water level indicators) in dam face andsurrounds, monitor water quality in wells downstream and ponds, wetlands; collectdownstream seepage and return as necessary; insure long-term integrity of concrete/rockdam.

Š Limestone Quarry — Remove equipment, restore to original contours as feasible, scarifytopsoil areas, and re-vegetate.

Š Access Roads — scarify, plug soils, and re-vegetate; keep open those roads needed formonitoring and water management post-closure.

14.2 DETAILED CLOSURE PLAN

A revised version of the conceptual closure plan in the 2009-2010 EIA is expected to beprepared in the third quarter 2011, given current mine planning. A detailed closure plan with costestimates may be submitted late 2011 or early 2012.

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APPENDIX IV COMPETENT PERSON’S REPORT

14.3 FINANCIAL ASSURANCE

Early estimates suggest $181 million is being considered to be financed by MCP as a guaranteeagainst future reclamation and closure. However, actions during mine planning and operations can leadto substantial cost savings at closure and will undoubtedly be considered. Therefore, this amount willlikely be revised and renegotiated as actual mining impacts are experienced, mine plans change, andprogressive reclamation proceeds. A 5-year bond review cycle is indicated.

14.4 MINE LIFE AND SUSTAINABILITY

Various aspects of sustainability are favorable for the project given the progressive workcompleted by MCP to date and other planned actions.

Š Financial — With a 36-year operating life and assuming a favorable price climate forcopper and molybdenum, prospects are good that the project will have adequate profitsand cash flow to contribute to the other sustainability aspects below.

Š Environmental — Permits, approvals, and committed mitigation are being progressivelyundertaken, and monitoring to address unforeseen conditions is planned. Environmentalprotection and enhancement post-closure appears to be adequately considered.

Š Economic — The economic sustainability of the Morococha area during operations andpost-closure is being considered regarding employment, services, training, andinfrastructure to enhance the area and surrounds during a modern, large-scale operationwith long life and potential for expansion.

Š Social — With the new village, open house, attention to the socio-cultural aspects of thishistoric mining area, and transport issues, MCP appears to be taking strong steps regardingcommunity relations, re-settlement, and future planning for quality of life in the area.

Š Governance — Transparency by MCP seems evident in the permitting documents andinformation shared with agencies and in response to inquiries during this independenttechnical review. As to the new Peruvian government, it remains to be seen regarding theirmining, economic and environmental protection policies, but a good basis for this projectseems to be in place.

14.5 CONCLUSIONS

Planning for reclamation and closure is present in the EIA and other specialized baseline,impact and mitigation studies, and field efforts being carried out by MCP. A substantial closureexpense and bond is estimated. Operations can help to lower closure costs and will be plannedaccordingly. Bond amounts are expected to be revised and re-negotiated in 5-year intervals during the30 plus years of mine life as the closure plan is refined.

14.6 RISK ANALYSIS

Open pit mine, waste dumps, and other facilities will produce blowing dust that cannot beeffectively controlled and contaminated mine water than cannot be effectively piped and treated byKingsmill Tunnel during closure — Low Risk/Unlikely.

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APPENDIX IV COMPETENT PERSON’S REPORT

Closed tailings impoundment will produce adverse water quality and seepage down gradientthat will adversely affect ponds and wetlands and local ground water, and cannot be remedied — LowRisk/Unlikely.

Closed open pit mine, without backfill and closed waste dumps as remaining structures, willsubstantially lower the quality of life in this historic mining area — Low Risk/Unlikely.

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APPENDIX IV COMPETENT PERSON’S REPORT

15.0 ADMINISTRATION, MANPOWER, AND MANAGEMENT

15.1 MANAGEMENT AND GENERAL ADMINISTRATION

During the site visit, Behre Dolbear had occasion to interact with the following MCP managersand administrators:

Š Jack Huang — President and General Manager

Š Du Tsiang — Director of the Board

Š David J. Thomas — Executive Vice President and Chief Operating Officer

Š Armando Arrieta — Vice President, Legal

Š Ezio Canepa — Vice President, Corporate and Environmental Business

Š Esteban Bedoya — Human Development Manager

Š Leo Hilsinger — Vice President of Construction

Š David Dai — Vice President, Finance

Š Dan Gurtler — Mine Manager

Behre Dolbear’s Process, Infrastructure, and Construction expert met with the MCPengineering and design personnel, Richard Rickard and Tom Olson, in Akers Solutions/JacobsEngineering offices in Tucson, Arizona.

15.2 MANPOWER

15.2.1 Administration

The proposed administration staffing is large enough to support project operations but it alsoappears to be designed to handle a large percentage of what would normally be corporate assignments.This is a low risk area but may lead to higher than anticipated costs, if recruitment proves to beproblematic.

15.2.2 Mining

The manning of the mining and process operations are discussed in Sections 9.0 and 10.0. Themanpower proposed for operations matches the equipment requirements.

15.2.3 Milling and Hydrometallurgical Processing

Behre Dolbear has reviewed the manpower staffing requirements for the concentrator,hydrometallurgical plant, and administration. Although one may argue that the staffing seems a bitexcessive, the location and availability of highly skilled workers in the immediate area is questionable.

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APPENDIX IV COMPETENT PERSON’S REPORT

15.3 CONCLUSIONS

The management, administration, and engineering/operating personnel are basically highlyrespected in the industry, experienced in their respective roles, and very dedicated to the success of theToromocho Project.

The staffing levels in the various support categories appear to be adequate.

Behre Dolbear was concerned with the levels of personnel committed to training in theDecember 2007 Aker Kvaerner Feasibility Study but the additions in the 2011 Definitive Estimateappear to resolve that issue.

15.4 RISK ANALYSIS

The Toromocho Project is a highly complex project located in a remote location. It isimperative that MCP continue to retain experienced and dedicated experts in their various fieldsthrough the construction, start up period, and ongoing operations, if the projected schedules, costs, andproduction levels are to be achieved. The risk is Low to Moderate/Unlikely to Possible with thecurrent staffing but replacement with lesser personnel would raise the risk to moderate to high.

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APPENDIX IV COMPETENT PERSON’S REPORT

16.0 CAPITAL COST ESTIMATE AND IMPLEMENTATION SCHEDULE

16.1 MINE

The mine capital cost consists of two components: mine equipment and mine pre-productiondevelopments costs. The estimated mine equipment capital cost includes the following items:

Š Mine major equipment

Š Mine support equipment

Š Shop tools and initial spare parts

Š Engineering and safety equipment

Š Equipment dispatch system

The second component of the mine capital cost is mine pre-production development costs thatare based on the estimated mine operating costs during the pre-production period. Details of thiscalculation are discussed in Section 17.1.2.

The mine equipment purchases are based on the equipment requirements calculated inSection 9.0.

Mine replacement calculations were based on the required operating hours for the majorequipment units and the operating life of each unit. Replacement calculations were adjusted forpracticality, so there are no major mine equipment purchases planned after year 32. Some minor unitsare replaced in the last few years as part of an ongoing operational requirements during the stockpilereclaim.

The basis for mining equipment pricing is:

Š Costs are shown in the third quarter 2010 US dollars in the year in which the equipment isrequired.

Š It is assumed that payment for the equipment is made at the time of delivery.

Š Equipment costs reflect 2010 dealer budget quotes for new equipment.

Š Costs are based on prices obtained by IMC during 2007, unless otherwise noted on thetable.

Š The costs shown include delivery to the site and assembly.

Š A zero salvage value was assigned for the equipment, facilities, and the spare partsinventory.

The capital cost estimate for the Toromocho Project was updated in February 2009 and again inFebruary 2011 in the Definitive Estimate.

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APPENDIX IV COMPETENT PERSON’S REPORT

The Definitive Estimate mine equipment adjustments made by IMC are listed as follows:

Š Production schedule remains unchanged from the Basic Engineering Estimate

Š Work Schedule: Set to make use of the available fleet (more time scheduled rather thanbuy more equipment)

Š Year -3 quarter 2 through year -2 quarter 3 is one shift per day 7 days per week with3 crews

Š Year -2 quarter 4 and forward is 7 days per week, 2 shifts per day with 3 crews

Š Quantities (Table 16.1):

TABLE 16.1MATERIAL HANDLING QUANTITIES

Construction BCM × 1,000

Crusher Access Road . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,325Pit Development Road Access . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 532Alluvium/Tails Access Roads . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 470Alluvium and Old Tailings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,813Total Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,140

Pit Development Tonnes × 1,000

Waste and Stockpiled Ore . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55,000

Š Major mining equipment productivities remain unchanged from the 2007 FeasibilityStudy.

Š For the construction period:

Š Reduced construction period from 8 quarters to 7 quarters

Š Realigned construction schedule to fit the 7 quarters

Š Revised quarterly equipment requirements

Š Assumed higher mechanical availability and use of availability for first year and ahalf:

Š 90% mechanical availability

Š 95% use of availability for brand new machines

16.1.1 Major Mine Equipment

Š Cost reductions due to:

Š Order only 16 — Caterpillar 797F haul trucks instead of 19 haul trucks due tooptimization of the haul cycles and larger truck body provided by Caterpillar.

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APPENDIX IV COMPETENT PERSON’S REPORT

Š Cost increases due to:

Š Equipment unit prices being higher.

Š LeTourneau wheel loader is now in Version 2, thus has a higher unit price. The wheelloader needs a high lift boom that was not included in the previous quotation.

Š Blast hole drills were based on a different drill manufacturer that did not hold up underfurther technical and MARC evaluations during the Definitive Estimate analysis.

Š The cranes for equipment assembly was assumed to be provided by the equipmentmanufacturers. The final proposals stated that MCP had to provide a majority of thecranes.

Š Equipment prices had to be increased due to the one year delay in equipment deliveries.

16.1.2 Mine Support Equipment

The mine support equipment includes support equipment vehicles, mine facilities, tools/smallequipment, and spare parts/components.

Costs increased due to:

Š Additional support equipment not forecasted that was determined to be required toperform operations and maintenance tasks in a safe and efficient manner. The additionalequipment was determined after extensive review by MCP personnel and discussions withother operations.

The tractor mover with a tow hook and trailer and spare shovel dipper were in thesustaining capital area, but MCP determined that the equipment was required earlier.

Š Additional temporary mine facilities were required in the Definitive Estimate Morocochatown relocation to Carhuacoto has been delayed. The community people located in themine truck shop area cannot be moved until housing is ready in Carhuacoto, which isforecasted for the first quarter of 2012. Thus, earthworks in the truck shop area cannotstart until the second quarter of 2012. Therefore, the temporary mine maintenance andoperations facilities had to be built to support the mine equipment fleet and the start of thepre-production mining activities until the permanent mine shop is constructed. Thetemporary mine facilities costs are forecasted to be about $2.8 million.

Š The aggregate crushing plant for road base is forecasted to cost $3.6 million more than theestimated cost.

Š The original estimate assumed that the vendors, Orica and Repsol, for the explosive areaand two fuel facilities were going to finance the facility construction and MCP wouldpurchase the facilities overtime during operations as an operating cost. During finalnegotiations, MCP determined that the vendors did not want to finance most of thefacilities; thus requiring MCP to pay for most of the facility construction. MCP decided tofund the complete construction of the facilities and not be held hostage by the vendors.

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APPENDIX IV COMPETENT PERSON’S REPORT

Š Additional tools/small equipment were not forecasted due to the equipment proposalsstating that the vendors would provide most of the tooling under the various MARCs.During the final negotiations, it was determined that MCP would not enter into most of theMARC contracts for equipment maintenance due to cost; thus, MCP needed to purchasethe required tooling for maintenance. The additional cost for the tooling is approximately$2.3 million. Additional radios are required since MCP is performing the minemaintenance itself instead of under a MARC. It was assumed that all equipment trainingsimulations would be done with the Ferreyros (Caterpillar) training simulators. It wasdictated by senior management that MCP own a training simulator with forecasted costs atabout $1.5 million.

The resultant updated mine capital costs for the Toromocho Project in fourth quarter 2011dollars are forecast to be:

Third Quarter 2010 Fourth Quarter 2011

(US$000) (US$000)

Pre-production, Road Work, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23,988 25,019Pre-production Stripping . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63,103 65,816Mine Equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 177,367 181,801Support Mine Equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39,028 40,004Contingency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15,169 15,169

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 318,655 327,809

16.1.3 Sustaining Capital

The hours of equipment life to replacement, projected by IMC in 2007, are reasonable. Areview of the current costs for mining equipment indicates that the inflation since 2007 has been offsetby the exceptionally high costs of the equipment in 2007 during a shortage of manufacturing capacity.Consequently, the projections for mining equipment sustaining capital have not been changed (exceptfor the production wheel loader) for the 2011 financial evaluation.

The one exception to the above is the production wheel loader. MCP, in the 2011 DefinitiveEstimate, has replaced the 17m3 wheel loader in the 2007 Feasibility Study with a 40m3 unit.Consequently, the sustaining capital in years 10 and 20 has been increased by $4.4 million to adjust forthe larger unit. The fourth quarter 2010 based sustaining capital in the Definitive Estimate has beenincreased by 2.5% to reflect a fourth quarter 2011 base.

16.2 TOTAL CAPITAL EXPENDITURES

The Toromocho Project capital expenditures are valued as shown in Table 16.2.

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APPENDIX IV COMPETENT PERSON’S REPORT

TABLE 16.2CONCENTRATOR AND INFRASTRUCTURE CAPITAL COST

(US$ × 000)

Operations2007

Estimate

Definitive EstimateThird Quarter

2010Fourth Quarter2011 Estimate

Mine . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 294,811 303,486 312,640Process and Infrastructure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,374,056 1,543,586 1,673,247Owner’s Cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 215,180 413,461 448,191

Subtotal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,884,047 2,260,533 2,434,078

ContingencyMining . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29,841 15,169 15,169Process and Infrastructure . . . . . . . . . . . . . . . . . . . . . . . . . . . . 192,575 123,119 133,460Owner’s Cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18,166 32,030 34,720

Subtotal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 240,222 170,318 183,349

Working Capital Subtotal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28,000 56,000 56,000

Total Estimated Project Cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,152,269 2,486,851 2,673,427

Behre Dolbear’s Suggested AdditionsInfrastructure

Relocation of Central Highway1 . . . . . . . . . . . . . . . . . . . 75,000 75,000Relocation of Morococha2 . . . . . . . . . . . . . . . . . . . . . . . . 100,000 100,000Construction of Lime Quarry and Plant3 . . . . . . . . . . . . . 75,000 100,000

Totals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,152,269 2,736,851 2,948,427

1 Based on discussions at site visit2 Based on discussions at Jacobs and with MCP management3 Based on discussions with MCP management

The current Definitive Estimate does not include the costs for developing a limestone mine anda burnt lime production plant near the mine site proper. The cost for 300K tpy lime facilities isestimated by MCP’s management at $100 million. Relocation of the Central Highway is currently in analternative evaluation phase but is roughly estimated at $75 million. The general opinion, in the Akeroffices, was that the relocation of Morococha could escalate up to $200 million and perhaps beyond.Although the site preparation work is underway, any further delays could significantly deteriorate thefinancial viability of the project. The risk is currently rated at moderate.

The February 2011 Definitive Estimate of $1,543,586,000 for the process plant andinfrastructure represents an increase of $169,530,000 over the 2007 estimate or 11%. Constructioncosts for two product concentrators have escalated at approximately 10% for the same period, ascalculated by available indexes. In as much as major additional cost was incurred in the molybdenumhydrometallurgical plant, the indicated increase for the total concentrator is questionably low. BehreDolbear has escalated the process and infrastructure capital costs to reflect an estimate as of the fourthquarter 2011. Because a high percentage of capital equipment is on site, the estimated total escalationof 10.9% in capital costs has been reduced by 22.5% (sunk cost of onsite equipment) to a value of8.4%.

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APPENDIX IV COMPETENT PERSON’S REPORT

Owner’s costs include the following:

Š Force majeure events

Š Project insurance

Š Social outreach

Š Contract services

Š Licenses and royalties

Š Financial costs

Š Taxes

Š Exchange rate fluctuations

Š Commissioning and pre-operational cost

Š Property acquisition and payments

Š The new Morococha

Š Secondary projects

16.2.1 Concentrator Sustaining Capital

Sustaining capital for the concentrator is limited to the costs associated with scheduled raises tothe tailings impoundment. Process improvement projects within the process plants have their ownpaybacks and most often result in operating cost reduction or improved process recoveries and productquality.

16.2.2 Working Capital

Behre Dolbear feels that up to 3 months of working capital could be required before provisionalsmelter payments are forthcoming. Behre Dolbear calculated the initial 5-year average operating costsfor mining, concentrating, infrastructure, general and administrative (G&A), and molybdenumhydrometallurgical processing at $36.6 million per month.

At the request of the Client, the working capital has been maintained at the $56 million level asshown in the 2011 Definitive Estimate, which is optimistic.

16.3 CONSTRUCTION SCHEDULE

The construction of the concentrator, non-process facilities, and the molybdenumhydrometallurgical plant are scheduled to complete pre-commissioning during the fourth quarter of2013, work compilation of approximately 24 months. The schedule represents a low risk to the projectdue to the stockpiling of major equipment at or near the site. Given the progress of the construction todate and a forecasted drop in government intervention or non-intervention, the schedule has an above

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APPENDIX IV COMPETENT PERSON’S REPORT

average chance of being compressed several months. The highest risk activities, in Behre Dolbear’sview, are the relocation of Morococha, relocation of the Central Highway, and construction of a limemining and burning facility.

The key milestones of the project are shown in Table 16.3.

TABLE 16.3KEY MILESTONES FOR THE TOROMOCHO PROJECT

Start Finish

Pre-Permit Activities . . . . . . . . . . . . . May 01, 2009 May, 2012Procurement . . . . . . . . . . . . . . . . . . . . October 02, 2008 June, 2012Detail Engineering . . . . . . . . . . . . . . . October 02, 2008 August 29, 2011

April, 2012Detail EngineeringHydrometallurgical Plant . . . . . . . . August 29, 2011 April, 2012

Contracts Formation . . . . . . . . . . . . . October 06, 2008 November, 2012Pre-Stripping . . . . . . . . . . . . . . . . . . . First quarter, 2013Construction . . . . . . . . . . . . . . . . . . . . July 01, 2011 September 13, 2013Pre-Commissioning . . . . . . . . . . . . . . October, 2013Mechanical Completion . . . . . . . . . . . October, 2013

The schedule as currently formed is, in Behre Dolbear’s opinion, achievable; however, certainkey issues could delay full commissioning of the metallurgical facilities.

Pre-commissioning and commissioning of the molybdenite hydrometallurgical plant couldextend well past the fourth quarter 2014 date given the nature of the process and equipment utilized.Rio Tinto is projecting a 2-year start up of the Kennecott Utah Copper facility and industry expertshave gone on record predicting lengthy start ups (up to 5 years) for unproven hydrometallurgical plantstreating mineral processing products.

The risk associated with a successful completion and start up of the hydrometallurgical facilityis rated, by Behre Dolbear, as high. The risk associated with completing the relocation of Morococha israted as moderate. While the operating viability of the Toromocho Project would not be significantlyimpacted, the costs associated with unforeseen problems could sap some of the economic viability.

16.4 CONCLUSIONS

The design and engineering required to develop the mining equipment, process plant, andinfrastructure capital costs is thorough and is current. The contingency and owner’s costs are realistic.The fact that many of the high cost items have been ordered or are on site minimizes the potential forsurprises.

The uncertainty of the final designs or outcomes for the Central Highway, relocation ofMorococha, and the lime quarry and plant could result in significantly higher than predicted final costs.

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APPENDIX IV COMPETENT PERSON’S REPORT

Behre Dolbear believes that the Definitive Estimate working capital is low.

The sustaining capital estimates are based on realistic life-to-replacement predictions.

The construction and start up schedule are realistic (with the exception of the molybdenumhydrometallurgical plant) given the Group’s continuing commitment to proceed and the continuedcooperation of the government to provide timely approvals.

16.5 RISK ANALYSIS

The uncertainty of the final cost for the Central Highway relocation and the lime quarry andplant could increase capital costs — Low to Moderate Risk/Unlikely to Possible.

The continuing escalating costs for the relocation of Morococha are a concern — Moderate toHigh Risk/Unlikely to Possible.

The working capital estimate is optimistic — Low to Moderate Risk/Possible.

The start-up schedule for the molybdenum hydrometallurgical plant appears to be optimisticgiven the history of similar operations — Moderate to High Risk/Possible to Likely.

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APPENDIX IV COMPETENT PERSON’S REPORT

17.0 OPERATING COST ESTIMATE

17.1 MINE

17.1.1 November 2007 Feasibility Study

Mine operating costs were developed based on the mine plan, equipment requirements, andmanpower requirements presented in previous sections. The mine operating costs include all thesupplies, parts, and labor costs associated with mine supervision, operation, and equipmentmaintenance.

Table 17.1 presents the 2007 Feasibility Study mine operating costs on a cost per tonne per yearbasis.

The mine work schedule is assumed to be 2 shifts per day, 12 hours per shift.

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APPENDIX IV COMPETENT PERSON’S REPORTTABLE17.1

SUMMARY

OFM

INEOPERATIN

GCOSTS—

PERTOTALTONNE

(US$

×1,000)

MiningYear

Total

Material

(kt)

Drilled/Blasted

(kt)

Drilling

Blasting

Loading

Hau

ling

Aux

iliary

General

Mine

General

Maintenan

ceG&A

Total

Total

Cost

PPQ1

...................

1,601

PPQ2

...................

4,600

4,600

0.037

0.060

0.054

0.382

0.218

0.023

0.023

0.165

0.961

4,422

PPQ3

...................

20,650

20,650

0.038

0.053

0.055

0.382

0.140

0.017

0.021

0.056

0.762

15,727

PPQ4

...................

24,750

24,750

0.038

0.053

0.057

0.423

0.116

0.016

0.021

0.048

0.771

19,089

Year1Q1................

25,721

24,750

0.038

0.051

0.056

0.385

0.124

0.016

0.020

0.045

0.735

18,908

Year1Q2................

24,750

24,750

0.039

0.053

0.055

0.371

0.129

0.016

0.021

0.046

0.731

18,085

Year1Q3................

24,750

24,750

0.039

0.053

0.055

0.378

0.130

0.016

0.021

0.046

0.738

18,275

Year1Q4................

24,750

24,750

0.039

0.053

0.055

0.410

0.130

0.016

0.021

0.044

0.767

18,990

2........

...............

95,000

95,000

0.039

0.053

0.055

0.438

0.132

0.016

0.021

0.046

0.800

76,016

3........

...............

95,000

95,000

0.039

0.053

0.055

0.432

0.132

0.016

0.021

0.046

0.794

75,387

4........

...............

95,000

95,000

0.039

0.053

0.055

0.570

0.132

0.016

0.021

0.047

0.933

88,672

5........

...............

95,000

95,000

0.039

0.053

0.055

0.532

0.132

0.016

0.021

0.046

0.894

84,968

6........

...............

95,000

95,000

0.040

0.053

0.055

0.629

0.132

0.016

0.021

0.047

0.993

94,327

7........

...............

95,000

95,000

0.040

0.053

0.053

0.706

0.132

0.016

0.021

0.047

1.068

101,444

8........

...............

95,000

95,000

0.039

0.053

0.055

0.700

0.132

0.016

0.021

0.047

1.063

101,001

9........

...............

95,000

95,000

0.039

0.053

0.054

0.658

0.132

0.016

0.021

0.047

1.020

96,893

10......

................

95,000

95,000

0.039

0.053

0.054

0.717

0.132

0.016

0.021

0.047

1.080

102,587

11......

................

95,000

95,000

0.040

0.053

0.055

0.784

0.132

0.016

0.022

0.048

1.148

109,106

12......

................

95,000

95,000

0.040

0.053

0.055

0.729

0.132

0.016

0.021

0.047

1.093

103,809

13......

................

95,000

95,000

0.039

0.053

0.055

0.790

0.132

0.016

0.022

0.048

1.154

109,618

14......

................

95,000

95,000

0.040

0.053

0.055

0.776

0.132

0.016

0.022

0.048

1.140

108,311

15......

................

95,000

95,000

0.039

0.053

0.055

0.788

0.132

0.016

0.022

0.048

1.152

109,455

16......

................

95,000

95,000

0.039

0.053

0.055

0.811

0.132

0.016

0.022

0.048

1.175

111,625

17......

................

95,000

95,000

0.039

0.053

0.055

0.796

0.132

0.016

0.022

0.048

1.160

110,239

18......

................

95,000

95,000

0.039

0.053

0.055

0.879

0.132

0.016

0.022

0.048

1.243

118,128

19......

................

95,000

95,000

0.040

0.053

0.055

0.879

0.132

0.016

0.022

0.048

1.244

118,134

20......

................

95,000

95,000

0.040

0.053

0.055

0.879

0.121

0.016

0.022

0.048

1.233

117,129

21-25....

................

399,885

399,885

0.040

0.053

0.055

0.940

0.149

0.017

0.023

0.056

1.332

532,605

26-30....

................

288,131

288,131

0.041

0.054

0.056

1.074

0.169

0.017

0.025

0.079

1.512

435,639

31-32....

................

114,742

89,514

0.031

0.043

0.055

1.126

0.179

0.017

0.025

0.077

1.554

178,271

33-36....

................

161,062

00.000

0.000

0.052

0.316

0.189

0.018

0.025

0.038

0.638

102,808

Total

....

................

2,918,791

2,731,530

0.037

0.049

0.055

0.756

0.143

0.017

0.022

0.052

1.131

3,301,274

Percent..................

3.3%

4.4%

4.9%

66.8%

12.6%

1.5%

2.0%

4.6%

100.0%

PerTonne

Drilled/Blasted

...

0.40

0.053

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APPENDIX IV COMPETENT PERSON’S REPORT

Mine operating costs include:

Š All mine labor, salaried and hourly

Š Consumables, fuel, parts, tires, etc.

Š An allowance for mine related overheads

Š An allowance for general operating expenses in the mine offices

Š Blasting supplies and loading of explosives

Š All mine functions to deliver material to the dumps, stockpiles, or crushers

Š Remining of the low-grade stockpile and delivery to the primary crusher

Š Pre-production access development to the mine and material storage areas

Š Removal and stockpiling of surface alluvial material from the mine area and the first 100mof the toe of the waste and low-grade storage areas

Š Recontouring of the waste storage areas concurrently during the mine life

Š Remining and spreading of surface alluvial material on the recontoured dumps

Mine operating costs do not include:

Š Process related or crushing costs

Š General overhead outside of the mine

Š Taxes and property holding costs, etc.

Š Contingency

Pre-production development was calculated as part of the operating costs. That cost is treated asa capital cost in the financial evaluation.

The various mine operating cost unit are described below.

Blast Hole Drilling includes the operating cost of the blast hole drills. Bits and downholeaccessories are included in the parts and consumables costs along with electric power to operate thedrills.

Blasting includes the operating costs for blasting. Blasting labor and blasting agents costs areincluded in the estimate.

Loading includes the total loading costs for both the 40m3 shovels and the 17m3 front-endloader.

Hauling includes the haulage costs for all material handled by the 345-tonne haul trucks.

Auxiliary includes the costs of all of the auxiliary equipment.

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APPENDIX IV COMPETENT PERSON’S REPORT

General Mine includes unallocated costs that are required to sustain the operations. The laborcosts in this category include the laborers. Parts and consumables costs are set at $0.015 per tonne ofmaterial to cover fuel in the minor equipment units and general supplies at the mine site.

General Maintenance includes unallocated costs that are required to sustain the maintenancegroup. The labor costs for lube, fuel, tire men, and laborers are included in this category. A componentof the maintenance labor mechanics, helpers, welders, and electricians are allocated to generalmaintenance for the light vehicle maintenance. Parts and consumables are set at $0.015 per tonne totalmaterial to cover fuel in maintenance equipment and general supplies in the shops and warehouse.

Mine General and Administration (G&A) includes the labor costs of the personnel on thesalaried list. VS&A costs are also included in the G&A category.

17.1.2 February 2011 Definitive Estimate Operating Cost Update

For the February 2011 Definitive Estimate, ICM was required to update the pre-productionoperating costs including the ore and waste pre-stripping cost per tonne.

The capitalized pre-production operating costs include:

Š Crusher Access Road — This road is from the truck shop platform to the primary crusherplatform. The road includes a 35m wide mine haulage road and a 10m wide vehicle roadto provide access to the plant area.

Š Pit Initial Access Roads — These roads are for accessing the mine, stockpile, and dumpareas for the pre-production stripping operation.

Š Roads for Alluvium/Tails Removal — These roads are for hauling the alluvium/tailsmaterial from the excavation areas to various stockpiles.

Š Alluvium/Tails Removal — Alluvium/Tails material are required to be excavated fromunder the projected dump and stockpile toes for geotechnical stability purposes.Approximately 5.14 million m3 of material is to be removed. The alluvium material will beused in dump reclamation activities at a future date.

Š Pre-production Stripping — The mine requires approximately 55 Mt to be removedbefore plant mechanical completion by using the major mine equipment fleet. The timeframe for this activity is 9 months.

The 2011 updated mine operating cost projection for pre-stripping includes the followingsubstantive revisions to the 2007 cost projection.

Š Salary and hourly labor rates increased

Š Fuel price increase to $0.824 per liter ($0.609/� in 2007) and consumption is higher due tomore operating equipment hours

Š Maintenance contract costs — $5.39 million increase

Š Power price increase to $0.05169 per kWh ($0.04706/kWh in 2007)

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APPENDIX IV COMPETENT PERSON’S REPORT

Š Updated tire prices with those from a local vendor

Š Updated all hourly repair, lube/oil, and wear part costs. There were two sources for thecosts:

Š 2010 Mine and Mill Equipment Costs — An Estimator’s Guide published byInfoMine USA, Inc.

Š The Group’s budget estimates for repairs, parts, and components

Š Added a 16M grader to the fleet

Š Revised construction period and pre-production period support equipment requirementsbased on the seven quarter construction period.

Š This revision is what set the work schedule since a finite fleet of equipment isavailable only.

Š Added more salary staff in engineering per operations superintendent’s direction

Š Increased the number of operations foremen during the construction period

Š Six surveyors for LOM

Š Added more mining engineers for six total between senior engineers and miningengineers. The engineers were added to ensure enough manpower for long and shortrange planning as well as other tasks.

Š Added one more geologist

Š Updated maintenance salaries staff per maintenance superintendents

Š Added additional maintenance planners

Š Added salaried staff to the construction period

Š Added light vehicle mechanics earlier in the construction schedule

Š Increased the number of hourly maintenance personnel

Š Add more trainers and training facilities

Š Added more laborers to fill dump spotter positions

Š Also added more supervision in the early months of construction

Š Updated explosives and accessories costs obtained by the Group

Š Updated software license costs

Š 2010 MineSite® quote from another project

Š A contingency of 8% was applied to the estimated operating costs for the LeTourneauwheel loader, since it has not been ordered and the mine support equipment. Acontingency of 2% was applied to the major mine equipment with Caterpillar, Bucyrus,and Atlas Copco equipment purchase orders to cover the variability of freight costs.

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APPENDIX IV COMPETENT PERSON’S REPORT

Š Construction start date was delayed from April 2010 to May 2011, thus the major mineequipment deliveries to the site were delayed by one year, which increased the unit pricesfor most of the major mine equipment, except the Bucyrus electric shovels.

The increased operations cost per tonne of material mined is best indicated by a comparison ofthe pre-production cost per tonne, as indicated in Table 17.2.

TABLE 17.2PRE-PRODUCTION OPERATING COSTS PER TONNE COMPARISON

Pre-production Period2007 Feasibility Study

($/t)2011 Definitive Estimate

($/t)

PPQ1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.0 1.997PPQ2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.961 1.016PPQ3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.762 1.030PPQ4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.771 0.00

Average . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.817 1.147

In Behre Dolbear’s opinion, the Definitive Estimate mining costs for the 2007 PPQ3 and PPQ4(46 Mt) and the 2011 PPQ2 and PPQ3 (48 Mt) provide the most reliable indicator of the increasedmining cost for the upgraded 2011 projected costs versus the 2007 estimate. The comparison,therefore, is an increased cost of 33.5%. This factor applied to the 2007 mine life projected a cost of$1.13 per tonne results in a third quarter 2010 projected mine life average cost of $1.51 per tonne thatcompares favorably with current comparable costs for existing mining operations. This cost escalatedwith CostMine October 2011 surface mine escalators to the fourth quarter 2011 at 4.3% results in aprojected mining cost of $1.57 per tonne of material mined.

17.2 PROCESSING, INFRASTRUCTURE, AND G&A

MCP has not escalated the Toromocho Project operating costs since the 2007 estimate. BehreDolbear has escalated the operating costs for the concentrator, molybdenum hydrometallurgical plant,and G&A to the fourth quarter of 2011. In order to obtain an order of magnitude estimate, thefollowing escalators were used for the various work centers.

Š Labor 21% (Does not include the 8% profit sharing laboragreement)

Š Consumables 49.6%

Š Power (Current costs are estimated at $0.05169 by contract)

Š Other 29.2%

Š Maintenance Supplies 17%

The operating costs for concentrator, hydrometallurgical plant, infrastructure, and G&A wereadequately developed in 2007. Table 17.3 represents an order of magnitude estimate by Behre Dolbearof the fourth quarter 2011 costs.

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APPENDIX IV COMPETENT PERSON’S REPORT

TABLE 17.3FOURTH QUARTER 2011 OPERATING COSTS — CONCENTRATOR, MOLYBDENUM

HYDROMETALLURGICAL PLANT, INFRASTRUCTURE, G&A

OperationUnit Costs

(US$)

Concentrator 5.28/t ore milledMolybdenum Hydrometallurgical Plant 3,612/t MoO3 (Produced)

Infrastructure 0.06/t ore milledG&A 1.42/t ore milled

In the 2007 Feasibility Study, the cost of burned lime was estimated at $69 per tonne deliveredto the site storage facilities. This cost appears to be derived from the in-house cost of lime, asrecommended in the Phoenix Study of $50.25 per tonne and an unknown additional sum ofapproximately $19 per tonne, perhaps the cost of rapidly escalating fuel and transportation costs. The$69 per tonne budgeted sum was escalated with the same escalator as all other consumables to arrive atthe fourth quarter 2011 costs.

If the Toromocho Project was to purchase lime from outside suppliers, the cost would be $150per tonne in 2007 dollars and, given the rapidly rising costs for fuel, could be in excess of $200 in endof fourth quarter 2011 costs.

Because no company owned limestone deposit has been identified and no facilities built, thecurrent cost for lime in Table 17.3 is a reasonable approximation of the cost of lime for operating theconcentrator facility.

The operating cost structure for the concentrator, molybdenum hydrometallurgy plant,infrastructure and G&A are reasonable for an operation this size. The risk associated with the costsshown in Table 17.3 is rated as moderate.

17.3 CONCLUSIONS

The generation of and backup for the operating costs is thorough and professional. Both IMCand Aker Solutions are reputable and experienced contractors.

Behre Dolbear has based its escalation for the 2007 detailed operating cost estimate on IMC’supdate of the pre-stripping cost per tonne of material mined. IMC is in the process of providingupdated mining costs by year for the Toromocho Project production schedule.

Behre Dolbear has used currently available Mining Cost Service general escalators to escalatethe 2007 processing, infrastructure, and G&A costs per tonne of ore milled and per tonne of MoO3

produced.

17.4 RISK ANALYSIS

The projected 2007 Toromocho Project operating costs are based on sound engineering andpricing. Behre Dolbear’s fourth quarter 2011 escalated costs are based on available escalation factors— Low to Moderate Risk/Unlikely to Possible.

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APPENDIX IV COMPETENT PERSON’S REPORT

18.0 MARKETING AND SALES

18.1 CONCLUSIONS

The study has delineated a composite assay for the typical copper concentrates as:

Š Copper 26.5%

Š Silver 256 g/t

Š Arsenic 0.08%

Š Zinc 2.89%

Behre Dolbear has stipulated to the copper concentrate grade in the metallurgical discussionand adjusted the silver grade based on the discussion in Section 10.2.2. Arsenic-bearing ores, which aredeemed problematic, will be stockpiled and treated as waste until further studies indicate otherwise.

18.2 RISK ANALYSIS

The zinc assay at 2.89% appears low. A review of locked cycle testing indicates that the zincassays in the final copper concentrates could average as high as 10% (Table 10.2 and Table 10.3). Therisk to the project for zinc penalties is Low to Moderate/Unlikely to Possible.

There is no discussion in the marketing report of concentrate flow moisture requirements,insurance, and unexplained smelter losses incurred during concentrate delivery and smeltingoperations. The concentrate treatment charges are estimated at $79 for long-term contracts with noprice participation and $10 per tonne for spot treatment charges. All of these terms are for 30% copperconcentrates. MCP may be penalized for its lower copper content when and if the market loosens upfor concentrates and will in all probability also face negotiation difficulties over its high insol levelsover 10%. Behre Dolbear has used publicly available studies and studies provided to the Group byCRU to arrive at TC/RC costs of $70 and $0.07 for the planned copper concentrate production. Theconcentrate marketing risk is rated at Low to Moderate/Unlikely to Possible for copper concentratesdue to uncertainties in the future smelter schedules and Low/Unlikely for MoO3 product quality.

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APPENDIX IV COMPETENT PERSON’S REPORT

19.0 ECONOMIC ANALYSIS

Behre Dolbear has prepared an economic analysis for the Toromocho Project in Peru. TheFebruary 2011 Aker Solutions Definitive Estimate, as adjusted by Behre Dolbear (Table 16.2), hasbeen incorporated into the model. The definitive capital investment is in third quarter 2010 dollars, andhas been updated by Behre Dolbear to the fourth quarter 2011 dollars. The economic model isconsidered to be as of the fourth quarter 2011. A new production schedule has been developed byBehre Dolbear incorporating dilution and mining losses, which has been used in the analysis. Metalprices are as forecast by several forecasting companies in August 2011 and September 2011, andprovided by the Group for use in the economic analysis.

Behre Dolbear economic analyses are 100% equity analyses that show the basic economics ofthe project. The analyses do not incorporate financing (interest paid and loan principal paid back). Theanalyses do not incorporate any losses carried forward for tax purposes from the construction periodand do not incorporate any refund of value-added taxes (VAT) previously or currently paid. Shouldfinancing be incorporated into an economic model, it would affect the tax situation by lowering theemployee profit-sharing tax as well as the income tax, due to the deductibility of interest. Deductibilityof losses carried forward would lower income taxes. Refund of VAT would increase cash flow in theyear of the refund.

19.1 STRUCTURE OF THE SPREADSHEET

Behre Dolbear has prepared a cash flow spreadsheet that shows 3 pre-production years and 36production years. It is assumed that pre-production year -3 is 2011. Production year 36 is 2049.Production is shown in the top portion of the spreadsheet (Appendix 3.0).

Tonnages of waste, ore to the mill, low-grade copper ore to a stockpile, and high arsenic copperore to a stockpile are shown. Waste is dumped and not considered again. Ore designated for the mill issent there directly; thus, the annual tonnage of mill-grade ore mined is equal to the mill-grade oremilled. Low-grade copper mineralization is stockpiled; then reclaimed in years 32 to 36. High arsenicstockpiled material is not considered again in the model, but could be processed at some point. Nodecision has been made regarding this material.

Grades for copper, silver, and molybdenum are shown for the high-grade and low-gradematerial. Annual grades for the mill ore are taken directly from the Behre Dolbear production plan.Grades for the low-grade stockpiled material are the average grades for the entire stockpile, since thereis no way to know how the material will be stacked and then reclaimed.

The total metal contained in the material sent to the mill is calculated and shown. Metalrecoveries are shown and metal recovered to concentrates (copper, silver) or to chemical grademolybdenum oxide are shown as tonnes or pounds (copper, molybdenum) or grams or troy ounces(silver). The constituents of the concentrate are shown along with the tonnage of concentrate andmolybdenum product.

Metal prices are shown next. These are the average projections for the next 5 years (2011-2015)and a long-term price projection by several price forecasting companies (2016 forward). The details ofthe price forecasts are discussed later in this section.

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APPENDIX IV COMPETENT PERSON’S REPORT

Copper, silver, and molybdenum payments are shown, along with the various treatment chargesand transportation and handling charges.

Once income is determined, the operating costs are deducted from the revenue to calculate thenet income before taxes. Operating costs considered are mining of ore, reclaim stockpiled material(years 32-36), processing in mill and molybdenum plant, and infrastructure and G&A. There is aroyalty to Centromin of 1.71% for copper prices above $1.10 per pound (lesser rates for lower prices).Depreciation for all investments is determined and entered as operating cost. Employee profit sharingis calculated as 8% of net smelter return less cash operating costs and depreciation. Net income beforetaxes is net smelter return less cash operating costs, depreciation, and employee profit sharing.

Income taxes are determined at a rate of 30%. Any losses carried forward are deducted beforedetermining income tax. Net cash flow from operations is determined from net smelter return less cashoperating costs, employee profit sharing, and income taxes.

The Peruvian taxation system modeled that is in affect on September 30, 2011. Peru revised itstaxation of mining companies with legislation passed in September 2011, but the new laws did not takeeffect until October 1, 2011. The Group had previously signed a “Tax Stabilization Agreement,” andbecause of that, is not affected by most portions of the new laws. The Group is affected by the “SpecialMining Burden,” which applies to companies that have a tax stabilization agreement and thenvoluntarily sign a further agreement regarding the “Special Mining Burden.” The Group informedBehre Dolbear that the Group has signed an agreement that they are prepared to negotiate the “SpecialMining Burden” rates as they apply to them. They do not have to accept the rates in the new law, sincethey have a tax stabilization agreement, but can negotiate the rates for the “Special Mining Burden.”Since the negotiations will not take place until 2012 and the Group will not know the rates that apply tothem, the Group has requested that the tax system in affect on September 30, 2011 be used in the cashflow analysis. Part of the purpose of the “Special Mining Burden” is to fund infrastructure by thegovernment. The Group’s position is that they are doing just that by means of the new town site andwater treatment plant. They see a credit against the “Special Mining Burden” for these expenditures asa negotiating point next year.

Capital investments are tabulated next, then net cash flow is determined and shown. Net cashflow is net smelter return, less cash operating costs, less employee profit sharing, less income taxes,less capital.

19.2 METAL PRICES

For 2016 and thereafter, the long-term prices of $2.57 per pound (copper), $22.50 per troyounce (silver), and $15.17 per pound (technical molybdenum oxide). However, the project expects toproduce chemical grade oxide, which carries a 10% premium over tech oxide, so the long-term priceused was $16.69.

Base case metal prices are the averages of price forecasts made in the period August 2011 andSeptember 2011 by reputable firms that are in the business of providing forecasts. The data werecompiled by the Group and are used by Behre Dolbear at the Group’s request. Behre Dolbear does not

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APPENDIX IV COMPETENT PERSON’S REPORT

make forecasts of its own, but relies on those of other companies. Data from the forecasts are providedas Table 19.1. Note that not all forecasters predicted all metals for all periods. Thus, the average pricesforecast are based only on the forecasts made.

TABLE 19.1SUMMARY OF METAL PRICE FORECASTS

COPPER PRICE

December 31 — Calendar Year Estimates in US$/lb

Broker Estimate Date 2011E 2012E 2013E 2014E 2015E LT

JP Morgan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2011-09-27 4.37 4.48 4.24 3.86 — 2.49Salman Partners . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2011-09-27 4.35 4.34 4.21 3.45 — 2.75Citi . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2011-09-27 — — 3.87 3.65 3.21 2.60GS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2011-09-27 4.31 4.85 4.25 — — —Morgan Stanley . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2011-09-26 4.33 4.60 3.80 — — 2.71BoA ML . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2011-09-26 4.32 4.50 4.10 — — 2.60Credit Suisse . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2011-09-26 4.28 4.45 3.80 3.70 — 2.50RBC Capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2011-09-26 — 3.50 — 3.51 3.50 —Desjardins . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2011-09-26 4.50 5.00 — — — —Canaccord . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2011-09-16 4.27 4.30 4.00 — — 2.50Macquarie Research . . . . . . . . . . . . . . . . . . . . . . . . . . 2011-09-12 4.67 5.25 3.50 — — —RBC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2011-09-12 4.20 — 4.00 4.25 4.50 —Morgan Stanley . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2011-09-12 4.40 4.60 — — — 2.71TD Newcrest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2011-09-12 4.17 4.25 — 3.50 3.00 —RBS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2011-09-09 4.37 4.65 5.23 — — 2.50Deutsche Bank . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2011-09-09 4.33 4.93 4.31 3.63 — —Credit Suisse . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2011-09-08 4.70 4.50 — 3.70 — 2.50Raymond James . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2011-08-31 4.37 4.65 5.00 5.00 5.00 2.50BMO . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2011-08-10 4.32 4.20 — — — 2.50

Analyst Mean Benchmark Prices . . . . . . . . . . . . . . . 4.37 4.53 4.18 3.83 3.84 2.57

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APPENDIX IV COMPETENT PERSON’S REPORT

TABLE 19.1SUMMARY OF METAL PRICE FORECASTS

MOLYBDENUM PRICE

December 31 — Calendar Year Estimates in US$/oz

Broker Date 2011E 2012E 2013E 2014E 2015E LT

Citigroup . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2011-09-27 15.76 15.20 15.48 — — 14.00DB . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2011-09-27 15.91 17.50 17.00 16.00 — 14.00Credit Suisse . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2011-09-26 16.92 18.00 17.50 16.50 — 15.00Canaccord . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2011-09-16 16.75 18.00 18.00 16.00 — 15.00TD Newcrest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2011-09-12 17.83 20.00 25.00 20.00 18.00 15.00Raymond James . . . . . . . . . . . . . . . . . . . . . . . . . . . 2011-08-31 16.01 18.00 19.00 19.00 19.00 14.50BMO . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2011-08-10 16.90 16.00 15.00 — — 14.00RBC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2011-08-03 17.75 20.00 25.00 — — —JP Morgan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2011-08-05 16.30 19.00 — — — 19.00Jennings Capital . . . . . . . . . . . . . . . . . . . . . . . . . . . 2011-06-22 16.25 16.13 16.00 16.00 — 16.00

Analyst Mean Benchmark Prices . . . . . . . . . . . . . 16.64 17.78 18.66 17.25 18.50 15.17

SILVER PRICE

December 31 — Calendar Year Estimates in US$/oz

Broker Date 2011E 2012E 2013E 2014E 2015E LT

JP Morgan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2011-09-27 20.24 38.52 35.73 — — 18.00Deutsche Bank . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2011-09-27 20.10 36.71 41.00 39.00 36.00 —Salman Partners . . . . . . . . . . . . . . . . . . . . . . . . . . . 2011-09-27 20.24 40.00 43.75 33.00 25.00 20.00RBC Capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2011-09-26 20.00 39.00 42.50 40.00 35.00 25.00Credit Suisse . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2011-09-26 20.34 35.50 30.00 — — 20.00BoA ML . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2011-09-26 20.17 33.77 35.60 35.70 — —Morgan Stanley . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2011-09-26 20.26 36.60 36.90 32.98 — —Canaccord . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2011-09-16 39.01 41.00 35.00 31.00 — 22.00TD Newcrest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2011-09-15 37.24 40.00 32.00 — — 30.00

Analyst Mean Benchmark Prices . . . . . . . . . . . . . 24.18 37.90 36.94 35.28 32.00 22.50

Behre Dolbear has compiled historical metal prices for the 5 years prior to September 30, 2011.These metal prices and the average metal prices for the 5-year period ending September 30, 2011 areshown on Table 19.2. The 5-year average metal prices for the period October 1, 2006 throughSeptember 30, 2011 have been used for a sensitivity analysis, as have the third quarter 2011 prices(considered “current prices” for the purposes of the analysis).

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APPENDIX IV COMPETENT PERSON’S REPORT

TABLE 19.2AVERAGE METAL PRICES — JANUARY 1, 2006 THROUGH JUNE 30, 2011

Copper(US$/lb)

Molybdenum(US$/lb)

Low, as quotedAverage of Lowand High Quotes

Molybdenum(US$/lb)

High, as quoted

Gold(US$/troyounce)

Silver(US$/troyounce)

October 2006 . . . . . . . . . . . . . . . . $3.40 $25.75 $27.13 $28.50 $580.61November 2006 . . . . . . . . . . . . . . $3.19 $25.00 $25.50 $26.00 $624.87December 2006 . . . . . . . . . . . . . . $3.02 $24.50 $25.25 $26.00 $625.634Q2006 . . . . . . . . . . . . . . . . . . . . . $12.55

January 2007 . . . . . . . . . . . . . . . . $2.57 $24.30 $24.90 $25.50 $632.34February 2007 . . . . . . . . . . . . . . . $2.46 $25.00 $25.50 $26.00 $662.53March 2007 . . . . . . . . . . . . . . . . . $2.91 $27.50 $28.88 $30.25 $653.791Q2007 . . . . . . . . . . . . . . . . . . . . . $13.27

April 2007 . . . . . . . . . . . . . . . . . . $3.53 $27.60 $28.93 $30.25 $680.80May 2007 . . . . . . . . . . . . . . . . . . . $3.48 $28.15 $29.33 $30.50 $666.87June 2007 . . . . . . . . . . . . . . . . . . . $3.38 $32.00 $33.50 $35.00 $654.292Q2007 . . . . . . . . . . . . . . . . . . . . . $13.32

July 2007 . . . . . . . . . . . . . . . . . . . $3.61 $31.75 $33.38 $35.00 $664.54August 2007 . . . . . . . . . . . . . . . . . $3.42 $31.00 $33.00 $35.00 $667.58September 2007 . . . . . . . . . . . . . . $3.48 $31.50 $33.25 $35.00 $711.543Q2007 . . . . . . . . . . . . . . . . . . . . . $12.67

October 2007 . . . . . . . . . . . . . . . . $3.62 $31.00 $33.00 $35.00 $756.20November 2007 . . . . . . . . . . . . . . $3.12 $32.75 $33.38 $34.00 $811.94December 2007 . . . . . . . . . . . . . . $3.08 $32.00 $32.93 $33.85 $808.944Q2007 . . . . . . . . . . . . . . . . . . . . . $14.27

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APPENDIX IV COMPETENT PERSON’S REPORT

TABLE 19.2AVERAGE METAL PRICES — JANUARY 1, 2006 THROUGH JUNE 30, 2011

Copper(US$/lb)

Molybdenum(US$/lb)

Low, as quotedAverage of Lowand High Quotes

Molybdenum(US$/lb)

High, as quoted

Gold(US$/troyounce)

Silver(US$/troyounce)

January 2008 . . . . . . . . . . . . . . . . $3.24 $32.75 $33.00 $33.25 $884.15February 2008 . . . . . . . . . . . . . . . $3.57 $33.00 $33.25 $33.50 $920.38March 2008 . . . . . . . . . . . . . . . . . $3.77 $33.30 $33.55 $33.80 $963.811Q2008 . . . . . . . . . . . . . . . . . . . . . $17.45

April 2008 . . . . . . . . . . . . . . . . . . $3.93 $32.80 $33.05 $33.30 $904.30May 2008 . . . . . . . . . . . . . . . . . . . $3.79 $32.00 $32.25 $32.50 $890.06June 2008 . . . . . . . . . . . . . . . . . . . $3.72 $33.20 $33.40 $33.60 $882.502Q2008 . . . . . . . . . . . . . . . . . . . . . $17.06

July 2008 . . . . . . . . . . . . . . . . . . . $3.79 $33.50 $33.75 $34.00 $932.80August 2008 . . . . . . . . . . . . . . . . . $3.46 $33.75 $33.88 $34.00 $835.19September 2008 . . . . . . . . . . . . . . $3.22 $33.75 $33.88 $34.00 $822.063Q2008 . . . . . . . . . . . . . . . . . . . . . $15.07

October 2008 . . . . . . . . . . . . . . . . $2.31 $29.50 $30.40 $31.30 $827.70November 2008 . . . . . . . . . . . . . . $1.70 $ 9.50 $10.25 $11.00 $763.25December 2008 . . . . . . . . . . . . . . $1.41 $ 9.25 $ 9.75 $10.25 $828.054Q2008 . . . . . . . . . . . . . . . . . . . . . $10.37

January 2009 . . . . . . . . . . . . . . . . $1.49 $ 9.25 $ 9.50 $ 9.75 $853.62February 2009 . . . . . . . . . . . . . . . $1.50 $ 8.75 $ 8.93 $ 9.10 $946.38March 2009 . . . . . . . . . . . . . . . . . $1.68 $ 8.50 $ 8.65 $ 8.80 $907.561Q2009 . . . . . . . . . . . . . . . . . . . . . $12.53

April 2009 . . . . . . . . . . . . . . . . . . $1.97 $ 7.70 $ 7.85 $ 8.00 $895.95May 2009 . . . . . . . . . . . . . . . . . . . $2.08 $ 8.90 $ 8.95 $ 9.00 $931.12June 2009 . . . . . . . . . . . . . . . . . . . $2.26 $10.10 $10.30 $10.50 $948.622Q2009 . . . . . . . . . . . . . . . . . . . . . $13.73

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APPENDIX IV COMPETENT PERSON’S REPORT

TABLE 19.2AVERAGE METAL PRICES — JANUARY 1, 2006 THROUGH JUNE 30, 2011

Copper(US$/lb)

Molybdenum(US$/lb)

Low, as quotedAverage of Lowand High Quotes

Molybdenum(US$/lb)

High, as quoted

Gold(US$/troyounce)

Silver(US$/troyounce)

July 2009 . . . . . . . . . . . . . . . . . . $2.37 $10.80 $11.40 $12.00 $ 934.70August 2009 . . . . . . . . . . . . . . . $2.77 $17.70 $18.00 $18.30 $ 947.81September 2009 . . . . . . . . . . . . . $2.82 $14.50 $14.75 $15.00 $ 997.203Q2009 . . . . . . . . . . . . . . . . . . . $14.70

October 2009 . . . . . . . . . . . . . . . $2.84 $13.00 $13.25 $13.50 $1,046.31November 2009 . . . . . . . . . . . . . $3.06 $10.80 $11.40 $12.00 $1,133.50December 2009 . . . . . . . . . . . . . $3.21 $10.85 $11.00 $11.15 $1,132.754Q2009 . . . . . . . . . . . . . . . . . . . $17.69

January 2010 . . . . . . . . . . . . . . . $3.36 $13.10 $13.40 $13.70 $1,118.06February 2010 . . . . . . . . . . . . . . $3.13 $15.50 $15.85 $16.20 $1,101.69March 2010 . . . . . . . . . . . . . . . . $3.41 $16.30 $16.80 $17.30 $1,137.001Q2010 . . . . . . . . . . . . . . . . . . . $17.09

April 2010 . . . . . . . . . . . . . . . . . $3.50 $17.75 $18.00 $18.25 $1,149.94May 2010 . . . . . . . . . . . . . . . . . . $3.08 $16.80 $17.00 $17.20 $1,202.38June 2010 . . . . . . . . . . . . . . . . . . $2.96 $13.40 $13.70 $14.00 $1,230.702Q2010 . . . . . . . . . . . . . . . . . . . $18.39

July 2010 . . . . . . . . . . . . . . . . . . $3.07 $13.70 $13.95 $14.20 $1,187.19August 2010 . . . . . . . . . . . . . . . $3.29 $15.10 $15.35 $15.60 $1,215.13September 2010 . . . . . . . . . . . . . $3.49 $15.10 $15.35 $15.60 $1,273.903Q2010 . . . . . . . . . . . . . . . . . . . $18.95

October 2010 . . . . . . . . . . . . . . . $3.75 $14.50 $14.88 $15.25 $1,343.88November 2010 . . . . . . . . . . . . . $3.80 $15.90 $16.10 $16.30 $1,373.50December 2010 . . . . . . . . . . . . . $4.12 $15.80 $15.95 $16.10 $1,391.834Q2010 . . . . . . . . . . . . . . . . . . . $26.59

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APPENDIX IV COMPETENT PERSON’S REPORT

TABLE 19.2AVERAGE METAL PRICES — JANUARY 1, 2006 THROUGH JUNE 30, 2011

Copper(US$/lb)

Molybdenum(US$/lb)

Low, as quotedAverage of Lowand High Quotes

Molybdenum(US$/lb)

High, as quoted

Gold(US$/troyounce)

Silver(US$/troyounce)

January 2011 . . . . . . . . . . . . . . . $4.34 $16.90 $17.15 $17.40 $1,361.69February 2011 . . . . . . . . . . . . . . $4.46 $17.75 $17.88 $18.00 $1,370.63March 2011 . . . . . . . . . . . . . . . . $4.36 $16.60 $16.78 $16.95 $1,426.701Q2011 . . . . . . . . . . . . . . . . . . . $32.12

April 2011 . . . . . . . . . . . . . . . . . $4.30 $16.80 $17.00 $17.20 $1,482.75May 2011 . . . . . . . . . . . . . . . . . . $4.06 $16.85 $16.93 $17.00 $1,517.94June 2011 . . . . . . . . . . . . . . . . . . $4.13 $16.45 $16.50 $16.55 $1,530.902Q2011 . . . . . . . . . . . . . . . . . . . $38.53

July 2011 . . . . . . . . . . . . . . . . . . $4.38 $14.45 $14.63 $14.80 $1,579.31August 2011 . . . . . . . . . . . . . . . $4.11 $14.50 $14.85 $15.20 $1,762.95September 2011 . . . . . . . . . . . . . $3.78 $14.45 $14.60 $14.75 $1,766.133Q2011 . . . . . . . . . . . . . . . . . . . $39.06

October 2006 . . . . . . . . . . . . . . . $3.40 $25.75 $27.13 $28.50 $ 580.61November 2006 . . . . . . . . . . . . . $3.19 $25.00 $25.50 $26.00 $ 624.87December 2006 . . . . . . . . . . . . . $3.02 $24.50 $25.25 $26.00 $ 625.634Q2006 . . . . . . . . . . . . . . . . . . . $12.55

January 2007 . . . . . . . . . . . . . . . $2.57 $24.30 $24.90 $25.50 $ 632.34February 2007 . . . . . . . . . . . . . . $2.46 $25.00 $25.50 $26.00 $ 662.53March 2007 . . . . . . . . . . . . . . . . $2.91 $27.50 $28.88 $30.25 $ 653.791Q2007 . . . . . . . . . . . . . . . . . . . $13.27

TABLE 19.2AVERAGE METAL PRICES — JANUARY 1, 2006 THROUGH JUNE 30, 2011

Copper(US$/lb)

Molybdenum(US$/lb)

Low, as quotedAverage of Lowand High Quotes

Molybdenum(US$/lb)

High, as quoted

Gold(US$/troyounce)

Silver(US$/troyounce)

Average Prices 4Q2006 through3Q2011 . . . . . . . . . . . . . . . . . $3.22 $21.08 $1,014.27 $18.77

Average Prices 3Q2011 . . . . . . . $4.09 $14.69 $1,702.80 $39.06

Sources:Copper — London Metal Exchange cash prices as reported in the Northern MinerGold — London Metal Exchange P.M. fix as reported in the Northern MinerMolybdenum in oxide, as quoted in the Northern Miner, one quote per month at mid-monthSilver — London Metal Exchange, as reported in the Northern Miner

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APPENDIX IV COMPETENT PERSON’S REPORT

For convenience, the data of Table 19.1 and Table 19.2 are summarized as Table 19.3.

TABLE 19.3

METAL PRICES

Metal 2012 2013 2014 2015 Long-term

Average of Forecasts — Made August 2011 to September2011

Copper ($/lb) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 4.53 $ 4.18 $ 3.83 $ 3.84 $ 2.57Molybdenum ($/lb) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $17.78 $18.66 $17.25 $18.50 $15.17Silver ($/oz) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $37.90 $36.94 $35.28 $32.00 $22.50

Note: Not all metals projected by all forecasters

ACTUAL HISTORICAL

Five-year Average Prices (4Q2006 through 3Q2011)Copper . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 3.22Molybdenum . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $21.08Silver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $18.77

Third Quarter 2011 Average Prices (considered “current prices” for purposes of report, sincecosts are estimated as of 4Q2011)

Copper . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 4.09Molybdenum . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $14.69Silver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $39.06

19.3 OTHER INPUT

Metallurgical recovery used was 85% for copper, two percentage points below the feasibilitystudy projection, as specified in Section 10.2.1. Molybdenum recovery for all processes is 65%. Silverrecovery is 70%.

The copper-silver concentrate is assumed to contain 26.5% copper. From the copper recoveredand this copper percentage in the concentrate, the tonnes of concentrates produced are calculated.Moisture is assumed to 9%, and both the dry tonnes and wet tonnes are calculated. Also shown is thesilver, arsenic, and zinc grade in the concentrates. Silver grade is calculated from the metal recoveredand the tonnes of concentrates. Silver content ranges from 194 g/t to 766 g/t of dry concentrates, butaverages 317 g/t, about 55% greater than the 205 g/t specified in the feasibility study. Arsenic grade ofthe concentrates is assumed to be 0.08% and zinc content is assumed to be 9%, as explained inSection 10.5.1.

For the most part, the smelter charges and payments were taken from the 2007 FeasibilityStudy, except for the treatment charge for concentrates and refining charge for copper (TC/RC), whichis explained in Section 18.0. The smelter payment percentage is 97.5%, based on the Group’s smeltersubsidiary, China Yunnan Copper. The payment for silver is estimated at 95%, based on a prior BehreDolbear study. From the payments for contained metals, the various charges are deducted to yield thenet smelter return, considered the annual income to the project.

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APPENDIX IV COMPETENT PERSON’S REPORT

It is assumed that initial investments are spent one-third in each of the three pre-productionyears. Initial investment is $2.948 billion, as shown in Table 16.2. Mine sustaining capital is discussedin Section 16.1.3. For the process sustaining capital and G&A sustaining capital, the data were takenfrom the 2007 Feasibility Study, but increased 30.0%.

19.4 RESULTS

For the base case, the life-of-mine cash flow (undiscounted) is $13.786 billion.

19.5 SENSITIVITY

Sensitivity analyses have been run for various changes in the base case parameters. In addition,sensitivities have been prepared for the five-year average metal prices and for the then current metalprices (third quarter 2011). Note that molybdenum prices cited are for technical grade oxide. Theproject will produce chemical grade oxide, which carries a 10% premium above the tech oxide pricescited. Results are presented in Table 19.4 (Appendix 3.0).

TABLE 19.4RESULTS OF SENSITIVITY ANALYSES

Base Case

UndiscountedLife-of-MineCash Flow($ Billions)

Metal Prices+10% . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.791Base . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.786-10% . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.780

Cash Operating Cost+10% . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.776Base . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.786-10% . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.794

Initial Capital+10% . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.599Base . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.786-10% . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.972

Price Alternatives5-Year Average Metal Prices(Molybdenum prices cited as tech oxide; chemical grade oxide carries 10% premium)

Cu ($3.22/lb)Mo( $21.08/lb) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19.590Ag ($18.77/troy oz)

Third Quarter 2011Cu ($4.09/lb)Mo ($14.69/lb) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27.935Ag ($39.06/oz)

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APPENDIX IV COMPETENT PERSON’S REPORT

For nearly all mining projects, the cash flow is most sensitive to changes in metal prices. TheToromocho Project is no exception, as the above results show. If third quarter 2011 prices were toprevail throughout the Toromocho Project, then the cash flow would be over $27 billion. This iscompared to the long-term projections by various price analysts, which is the base case. For the long-term price forecasts, the base case shows a life-of-mine cash flow of $13.786 billion. However, shouldthe long-term forecasts be increased 10%, the cash flow becomes $16.791 billion.

19.6 COST COMPARISON

In assessing a mineral property, it is sometimes useful to compare the property’s costs andoutput to the industry as whole. To do this, Behre Dolbear compared the cash cost and production fromthe Toromocho Project to the rest of the copper industry utilizing World Mine Cost Data Exchange’sDynamic Cost Curve model containing production and cash cost data for mines that produced at least90% of the western world copper (215 Mines). Mine production cash costs are based on year 2010actual input costs, prices, and exchange rates updated third quarter 2011.

Behre Dolbear’s projected average long-term cash cost of producing a pound of copper fromthe Toromocho Project is US68.6 cents. This cost includes a credit of US90.2 cents for the silver andmolybdenum production as well as cost for treatment and transportation. To ensure comparabilitybetween the Toromocho Project and copper producers, the same long-term price for silver andmolybdenum production was used, $22.50/oz and $15.17/lb, respectfully.

When compared to other producers in the model, the Toromocho Project’s cash cost per poundof copper is just below the 30% mark at 29.3%. This indicates that 70.7% of the modeled coppermine’s production cash costs are more than the Toromocho Project’s cash cost of US68.6 cents.

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APPENDIX IV COMPETENT PERSON’S REPORT

Figure 19.1 shows the Toromocho Project’s relative ranking to other 215 copper producers. TheY axis represents cash cost per pound and the X axis represents tonnes of production. Each rectanglerepresents the production of single copper producing entity and its cash costs.

Toromocho Project

020406080100

120

140

160

180

200

220

240

010

0020

0030

0040

0050

0060

0070

0080

0090

0010

000

1100

012

000

c/lb Paid Cu

Cum

Cu

kt

CO

PPER

CA

SH O

PER

ATI

NG

CO

ST 2

010

-UPD

ATE

D 3

rdQ

UA

RTE

R 2

011

–A

FTER

BYP

RO

DU

CT

CR

EDIT

Figure 19.1. Copper cash operating costs — fourth quarter 2011 — after byproduct credits(Source: www.minecost.com)

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APPENDIX IV COMPETENT PERSON’S REPORT

19.7 CONCLUSIONS

Considering the results of the 2007 Feasibility Study economic analysis, the Behre Dolbearmodel with 2011 costs and investments, the sensitivity analyses, and the relative position ofToromocho to other copper producing mines, Behre Dolbear concludes that the Toromocho Project iseconomically viable and has the opportunity for higher returns on investment, if prices remain at highlevels. Nevertheless, it should be noted that the mental mining industry is cyclical, and when a newcycle of lower prices will occur is not known.

19.8 RISK ANALYSIS

No risk analysis has been prepared for the economic analysis in general, but risks for operatingcosts, capital investments, and other items are discussed elsewhere in this report.

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APPENDIX IV COMPETENT PERSON’S REPORT

APPENDIX 1.0

REFERENCE MATERIAL

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APPENDIX IV COMPETENT PERSON’S REPORT

APPENDIX 1.0

REFERENCE MATERIAL

Minera Peru Copper S.A. Toromocho Project Feasibility Study — Report and Appendices,Aker Kvaerner, November 2007.

Minera Chinalco Peru, S.A., Basic Engineering Report, Aker Solutions, February 2009.

Minera Chinalco Peru, S.A., Toromocho Project, Definitive Estimate, Estimate RevisionNumber 4, Volume 1, Aker Solutions, February 2011.

Minera Peru S.A., 2009, Proyecto Toromocho. Estudio de Impact Ambiental (EIA ExecutiveSummary), Resumen Ejecutivo, Knight Piésold, Noviembre.

Chinalco Peru, 2011, Personal Communications with several staff members regardingEnvironmental, Social, Community, and Permitting Issues and Site Tour.

Mineral Peru Copper Syndicate, S.A., 2007, Toromocho Project, Definitive Feasibility Study,Environmental and Social Components, Knight Piésold, November.

Government of Peru, 2011, Permits and Mining Project Information, various websites.

Toromocho Project, Preliminary Metallurgical Assessment, KD Engineering Co., Inc.,October 7, 2003.

Toromocho Project, Resource Estimate Technical Report, Prepared for Peru Copper Inc.Prepared By Independent Mining Consultants Inc., August 25, 2004.

Toromocho Project, Resource Estimate Update Technical Report, Prepared For Peru CopperInc. Prepared By Independent Mining Consultants Inc., May 11, 2005.

Toromocho Project, Resource Estimate Technical Report, Prepared for Peru Copper Inc.,Prepared By Independent Mining Consultants Inc., March 22, 2006.

Miocene Magamatism and Related Porphyry and Polymetallic Mineralization in theMorococho District, Central Peru, Bendezú Aldo, Catchpole Honza, Kouzmanov Kalin, FontbotéLluís & Astorga Carlos, In: XIII, Geological Congress of Peru, Lima, 2008.

CostMine, Cost Indexes and Metal Prices, October 2011.

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APPENDIX IV COMPETENT PERSON’S REPORT

APPENDIX 2.0

RESUMES OF BEHRE DOLBEAR’SPROJECT TEAM PROFESSIONALS

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APPENDIX IV COMPETENT PERSON’S REPORT

ROBERT R. DIMOCK Mining Engineering and Operations,SENIOR ASSOCIATE, DIRECTOR, Organization, Human Resources,and PRINCIPAL Strategic Planning, and Optimization

Mr. Robert Dimock has more than 30 years of experience, including over 20 years in executivelevel management, in the mining industry, with expertise in the areas of general management,corporate strategic planning, project development and management, mining, processing, constructionmanagement, and mining engineering in base and precious metals. Mr. Dimock has also had directoversight of exploration, concentrating, smelting, refining, marketing, and sales, human relations,public and government relations, HSEQ, and legal issues. He has managed copper, lead/zinc, andprecious metals operations in both open pit and underground mines. Geographically, he has worked inNorth and South America, the Pacific Rim, and the Middle East. His credentials include a Bachelor ofScience Degree in Mineral Economics and a Master of Science Degree in Mining Engineering. He is aMining and Metallurgical Society of America Qualified Person.

Mr. Dimock’s specific project experience includes conducting:

Š Analysis for and implementation of a plus $1 billion modernization program for a majorUnited States copper producer

Š Greenfield development from discovery through permitting for a plus $700 million remotePapua New Guinea gold mining operation

Š Greenfield analysis and development of several United States-based precious metalsoperations

Š Due diligence examinations and reserve and mining operations disclosure reviews on basemetal, precious metal, and coal properties for Behre Dolbear & Company, Inc.

Š Mining operations optimization analyses

Š Valuation of major precious and base metals operations for purposes of financing, merger,or transfer of assets

Š Organizational analysis for establishment of a Middle East national mining company

CORPORATE EXPERIENCE

1997 – Present Behre Dolbear & Company (USA), Inc., Senior Associate, Director, and Principal

1994 – 1996 Kennecott Corporation, Kennecott Utah Copper Corporation, Executive VicePresident and President

1992 – 1993 Rio Tinto, Lihir Management Company Pty. Ltd., President

1963 – 1991 Kennecott Corporation (held various positions):

Š Vice President, New Mine Development and Operations

Š Director, Utah Copper Division Modernization Project

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APPENDIX IV COMPETENT PERSON’S REPORT

Š Mine Plant Superintendent, Utah Copper

Š Manager, Headquarters Mining Engineering Department

Š General Mining Operations and Engineering Positions in New Mexico andNevada

PROFESSIONAL ASSOCIATIONS

Š Society of Mining Engineers (Board of Directors 1976-1982, Mining and ExplorationDivision Chairman 1982)

Š Copper Development Association Board, 1994-1996

Š International Copper Association Board, 1994-1996

Š Mining and Metallurgical Society of America (Member, Qualified Person)

REGISTRATIONS/CERTIFICATIONS

Š Qualified Person — Mining and Metallurgical Society of America.

AWARDS

Š Society of Mining Engineers, Distinguished Member — 1991

EDUCATION

Š Penn State University, B.S. Mineral Economics — 1963

Š New Mexico School of Mining and Technology, M.S. Mining Engineering — 1971

PUBLICATIONS/PRESENTATIONS

Mr. Dimock has authored or co-authored nine papers on slope stability and drilling andblasting.

“Kennecott Utah Copper: From Shutdown to World Class Competitor,” Westminster CollegeSchool of Business, Weldon J. Taylor Executive Lecture Series. 1996.

“Copper beyond the Millennium: Challenge and Change for Industry,” University of UtahSchool of Mining, Wilson Lecture in Mining Engineering. 1996.

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APPENDIX IV COMPETENT PERSON’S REPORT

DR. TONY Y. GUO, P. GEOLOGISTSENIOR CONSULTANT Geologist

Dr. Tony Guo is the Vice President of Behre Dolbear Asia Inc and Vice President of BehreDolbear & Company, Ltd. He has over 22 year professional experience in the mineral industries. Hehas worked on gold, copper, iron, industrial mineral, and coal projects/mines in China, Mongolia,Africa, US and Canada. Dr. Guo’s business expertise includes the mineral resource exploration,assessment, acquisition, and project management. Dr. Guo has participated and managed several gold,copper, and coal exploration work in China and Mongolia for the last 10 years. His credentials includea Bachelor of Science Degree in Geology from the Nanjing University as well as a Doctor Degree inGeology and Exploration from China University of Mining and Technology. He is a registeredProfessional Geoscientist from the Province of British Columbia and a Member of Mineral Explorationof British Columbia, Canada. He meets the requirements for “Competent Person” as defined in theAustralian JORC Code and the requirements for “Qualified Person” as defined in Canadian NationalInstrument (NI) 43-101 for the purpose of mineral resource/ore reserve estimation and reporting.Dr. Guo has involved a number of (independent) technical reports for the Stock Exchange of HongKong (SEHK) and Toronto Stock Exchange (TSX) in recent years.

SUMMARY OF QUALIFICATIONS

Š 22 years mineral resource exploration and mining industry experience in Asian, NorthAmerica, and Africa

Š Professional Geoscientist registered at Professional Engineer and Geoscientist Associationof British Columbia, Canada

Š Senior Engineer Title granted by the Jiangsu Provincial Government in China in 1992

Š Proven mining and mineral exploration project management skill and experience

Š Experience in preparing Canadian National Instrument (NI) 43-101 compliant technicalreports and Chinese Geological Report; familiar with Canadian NI 43-101 and AustralianJORC Code

Š Experience with exploration Quality Assurance/Quality Control (QA/QC) programs

Š Professional in sourcing, assessing, and acquiring the mineral property

Š Proficient in geology and mining software such as MapInfo, ArcGIS, MAPGIS, andMicromine

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APPENDIX IV COMPETENT PERSON’S REPORT

CORPORATE EXPERIENCE

1/2011 – Present Behre Dolbear & Asia, Inc. and Behre Dolbear & Company, Ltd., Vice President

12/2009 – 1/2011 China Gold International Resources, Inc., Vancouver, Canada, Exploration andDevelopment Manager, Qualified Person for the Jiama Project

Responsibilities and Accomplishments

Š As an Exploration and Development Manager, coordinated and supervised, in2010, 50,000 meter drilling program in the world class Jiama Cu-Mo depositthrough the site visits and daily and weekly drilling reports. I have supervisedthe core logging and set up the core handling logging and assaying protocols.

Š Charged to coordinate with Behre Dolbear, for Jiama ITR and HaywoodSecurity, for the Jiama valuation for the proposed corporate financingactivities of the Company.

9/2006 – 1/2011 Gansu Pacific Mining Company, Gansu, China, General Manager and BoardDirector

Responsibilities and Accomplishments

Š Organized all kinds of exploration works from surface mapping, soilsampling, trenching, aditing, and drilling and responded for the JV companydaily management

Š Involved in all stages of the project including identifying, acquisition, andexploration

Š Organized and involved in the Chinese Detailed Exploration Report writingand resource estimation

Š Involved all QA/QC for a three phases drilling program. I am one of the threeauthors of the Canadian NI 43-101 exploration and resource report. Thismillion ounce gold deposit was sold to a subsidiary of China National GoldGroup last year

4/2004 – 6/2006 Jinshan Gold Mines Inc., Vancouver, British Columbia, Canada, ConsultingGeologist

Š As a consulting geologist, worked for Jinshan Gold Mines to organize thepaper, tabular and digital geological, geochemical, and geophysical datacollection, preparation, and analysis a China-wide G.I.S. databasedevelopment for exploration targeting and property evaluation in thenumerous gold belts throughout China.

Š Also charged to convert all Jinshan native copper data and projects fromArcGIS format to MapInfo format.

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APPENDIX IV COMPETENT PERSON’S REPORT

Š Organized and participated in the grass root exploration work for Au and Cuproperties in 3 different areas of Xinjiang, Tibet, and Gansu of NorthwesternChina in 2005 for Ivanhoe Mines and Jinshan Gold Mines. I had collected thegeological, geochemical, and geophysical data from all different sources;compiled and analyzed all the data in MapInfo and ArcView for the fieldworking targets selection purposes.

Š Involved in the CSH mine site facility set up and operation, processing plantfoundation and leaching pad solution pond construction.

Š Involved to get the 217 gold deposit reserve evaluation approval from theFederal Ministry of Land and Resources of China.

Š Reviewed and edited the CSH gold deposit reserve report and maps; andsubmitted them to the Bureau of Land and Resources of Inner Mongolia,China.

Š Involved in acquiring the CSH gold mine land usage certification, power lineand water pipeline route selection and negotiation with the local governmentand utility supply company.

2002 – 2010 Under Behre Dolbear, CME, Moose Mountain, and CBM Solution, Vancouver,British Columbia, Canada, Consulting Geologist

Responsibilities and Accomplishments

Š In 2010, completed a NI 43-101 Independent Technical Report (ITR) on aPeridotite Project in Henan Province, China for the Canada AffluenInvestment Group Ltd.

Š In 2010, prepared a technical review report on the First Coal Property inBritish Columbia, Canada for the Tianjing Renai Group.

Š In 2010, helped Behr Dolbear Australia to complete a technical review reporton coal washing and coke plant in Heilonjiang Province, China.

Š From 2004 to 2009, worked for the several Canadian and Chinese juniormining companies to review their gold, lithium, and poly-mental properties inXinjiang, Sichuan, Hunan and Hebei of China such as Hunan Pingcha GoldMine, China Mineral Holding Ltd., Zhong Chuan International, Tri-RiverVentures, Dejie Gold Company, etc.

Š From 2004 to 2006, worked for the Canadian Sinosun Energy Inc. as aconsultant to collect the geology data and samples for the LowerCarboniferous anthracite coal in Zhaotong City, Yunan Province and theEarly Jurassic coal in Jixi City, Heilongjiang Province. I have managed twocoal drilling projects for Sinosun Energy Inc in Xinjiang and Inner Mongolia.

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APPENDIX IV COMPETENT PERSON’S REPORT

5/1999 to 2003

Š In 2006, involved in field mapping, data collection, and compilation for theMongolian gold and coal resources and geology information using MapInfoand ArcView software and field reconnaissance

Š Involved in preparing a NI 43-101 report of a Mongolian Coal project forVancouver based Gobi Gold Inc together with Moose Mountain TechnicalService.

Š In 2005 and 2006, worked for the Calgary based CBM Solutions, Vancouverbased Ivana Ventures and Christina Ventures on their CBM and coal projectsin Canada and China.

Š Involved in the core logging and CBM desorption work both on the well siteand in the laboratory for the Coal Bed Methane projects in Calgary, Canada.

Š Reviewed, collected and translated all the geology, coal, and CBM data forthe Late Jurassic CBM project in Xinjiang, Northwestern China and thePermian-Carboniferous CBM project in Huaibei area of Anhui Province inEast China, and submitted two CBM data reviewing and field visiting reportsfor the final NI 43-101 report together with CBM solution.

Colonia Pipeline Inc., Atlanta, Georgia, USA, GIS Application Developer

Responsibilities and Accomplishments

Š Involved in the pipeline construction project from Atlanta, Georgia toNashville, Tennessee

Š Involved in route selection in the office using ArcView GIS software, fieldGPS surveying, and geo-related data collection, and pipeline construction andrisk sheet generation and pipeline data management for the Colonial PipelineCompany

1/1998 –6/1999 Geology Survey of Canada, Vancouver, British Columbia, Canada, ContractGeologist/GIS Expert

Responsibilities and Accomplishments

Š Developed a useable and easily queriable database and customized ARC/INFO interface for the Hoodoo Mountain volcano complex. I had integratedall the data sets under ARC/INFO format; built a clean ARC/INFO geologycoverage, a look up table and other related coverage and files

Š Produced the paper and digital color and white geological map to GSCstandards as Open file (GSC Open File 3321)

Š Developed TIN and Lattice three-dimensional model; draped geology andtopography on these models for view and analysis purpose

Š Submitted a project report and digital geology map for the Hoodoo Mountainvolcano complex

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APPENDIX IV COMPETENT PERSON’S REPORT

5/1996 – 1/1997 CME and Company, Inc., Vancouver, British Columbia, Canada, ConsultingGeologist

Responsibilities and Accomplishments

Š Worked on a gold mineral exploration projects in Mali as a field geologist

Š Involved core logging, sample description, mineral and alterationidentification; assay data analysis and interpretation, construct column mapsand geological sections by Excel and mining software

Š Found an anticline structure in the property based on the core logging data

Š Worked on several gold exploration projects in Shandong and Guizhou for theVancouver based junior company in China as a consulting geologist

Š Conducted the field visiting, mapping, trenching, report writing, etc.

11/1995 – 5/1997 University of British Columbia, Canada, Vancouver, British Columbia, Canada,Geology Department, Research Associate

Responsibilities and Accomplishments

Š Worked on the coal, oil-source rock and charcoal research projects usingMicro-FTIR, Rock Eva, Microscope, SEM, and microphotography, processedand analyzed chemical data under supervision of Marc Bustin.

Š Collected most coal samples, fungi decayed woods, normal woods, andlighting produced modern charcoal

Š Made all the studied charcoal using an electric oven in the laboratory

Š Polished and photographed all of the coal and charcoal pallet

Š Published 4 papers together with Marc Bustin on the well known internationaljournal of Coal Geology and presented one papers on the international coaland organic petrology conference

8/1994 – 10/1995 West Virginia University, Morgantown, West Virginia, USA, GeologyDepartment, Post-Doctoral Research Fellow

Responsibilities and Accomplishments

Š Worked on the West Virginian Pennsylvanian coal and Southern ChinaPermian coal using Micro-FTIR, X-ray, and Microscope under supervision ofJack Renton, including coal sample collection, preparation and analysis, andreport writing

Š Coordinated a joined research program on China coal geology and structurebetween China University of Mining and Technology and West VirginianUniversity

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APPENDIX IV COMPETENT PERSON’S REPORT

Š Published one papers together with Jack Renton on the well-knowninternational journal of Coal Geology and presented one papers on theinternational coal and organic petrology conference

4/1994 – 7/1995 Penn State University, University Park, Pennsylvania, USA, Geology Department,Visiting Scholar of Coal Geology

Responsibilities and Accomplishments

Š Worked on the Southern China Permian coal using Microscope and MC/GCunder supervision of Professor Alan Davis, including coal sample collection,preparation, analysis, and report writing

Š Participated in the coal sample collection, preparation, and storage, maceralidentification and statistics under microscope for Coal Sample Bank of U.S.Energy Department at Pennsylvanian State University

1/1989 – 3/1994 China University of Mining and Technology, Beijing, China, Lecture/AssociateProfessor, Director of Geology and Survey Department, Director for CoalGeologist Association of China (1993-1997)

Responsibilities and Accomplishments

Š Work on four coal geology and petroleum exploration and research projects inXinjiang, Shandong, Guizhou, Sichuan, and Yunnan Provinces in China as aprincipal investigator

Š Teaching coal geology, mine geology, and paleobotany courses to the collegeand graduate students

AWARD/HONOR

Š Young Geologist Award of Geology Association of China — 1992

EDUCATION

Š British Columbia Institute of Technology, Burnaby, British Columbia, Canada, DiplomaReceived: Advanced GIS Program —May 1998

Š China Institute of Mining and Technology, Beijing, China, PhD in Geology andExploration Engineering — December 1987

Š Nanjing University, Nanjing, China, BS in Geology — June 1982

PUBLICATIONS

The Professional Geologist System in Canada, The Symposium of New Progress of CoalGeology of China, Beijing, 2009.

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APPENDIX IV COMPETENT PERSON’S REPORT

The Detailed Exploration Report of Dadiangou Gold Deposit from Liangdang County, GansuProvince, China, 2009.

Registered Geologist System Good for the Mining Capital Market, Geological ExplorationHerald, Beijing, 2008.

Technical Report on the Phase I, Phase II, and Phase III Drilling Programs, DadiangouProperty, Gansu, China, Canadian NI 43-101 Geology Report, 2008.

Technical Report on the Phase I Drilling Programs, Dadiangou Property, Gansu, China,Canadian NI 43-101 Geology Report, 2007.

The Petrological Characteristics and Origin of Maceral Lopinite from the Late Permian Coal inSouthern China, 23rd Annual Meeting of Tsop, Beijing, 2006.

Coalbed Methane Development in Canada: Unique Challenges and Opportunities, 23rd AnnualMeeting of Tsop, Beijing, 2006.

GIS Applications in Hoodoo Mountain Volcano from North British Columbia, Canada.Guizhou Geology, 4, 2004.

Map of Geology of the Quaternary Hoodoo Mountain Volcanic Complex and AdjacentPaleozoic and Mesozoic Basement Rocks, GSC Open File 3321, May 5, 1988.

Micro-FTIR Spectroscopy, Scanning Electron Microscopy and Reflectance of ModernCharcoal and Fungal Decayed Woods: Implications for Studies of Inertinite in Coals, Inter. J. of CoalGeology, 37, 1997.

FTIR Microspectroscopy of Particular Liptinite- (Lopinite-) Rich, Late Permian Coals fromSouthern China. Inter. J. of Coal Geology, 29, 1996.

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APPENDIX IV COMPETENT PERSON’S REPORT

ROBERT E. CAMERON, Ph.D.CONSULTANT Geostatistician

Dr. Robert E. Cameron has over 30 years of experience in geostatistical analysis of orereserves, computerized mine planning, mine design, computerized studies for mine productionoptimization, ultimate pit limit optimization, mine efficiency studies, equipment selection andutilization and operations research. He has completed geostatistical estimations or resource and reservereviews or audits on over 100 properties worldwide during his career. Most recently, Dr. Cameronserved as the Vice President, Technical Services for Frontier Mining Ltd. and was responsible foroverseeing all technical, engineering, and review for project development for Frontier Mining inKazakhstan. His responsibilities also included ex-pat oversight of the day-to-day operations of theNaimanjal Mine, a heap leach gold project in Kazakhstan as well as initial geostatistical resource andreserve assessment of potential mine acquisitions for Frontier Mining in China, Indonesia, and CentralAsia. Dr. Cameron also had responsibility for supervising, reviewing and quality assurance of all orereserve work performed by Behre Dolbear as their Director and Vice President of Geostatistics andMine Planning from 1992 to 1999. Currently, Dr. Cameron is a Registered Member of the Society ofMining, Metallurgy and Exploration and a Member and Qualified Person of the Mining andMetallurgical Society of America in mining and ore reserves. He routinely reviews and auditsgeostatistical calculations, ore reserves statements, minerals resources statements, computerizedminerals models, mine designs, and their forward looking cash flow projections.

He has extensive experience in geostatistics, computerized mine planning and ore reserveestimation using classical and geostatistical ore reserve modeling, selection of mining related computersoftware, ore reserve audits, computer applications, mineral commodity studies, computer modeling ofcommodities, and remediation of abandoned mine sites. Additionally, he has a vast knowledge of thefull range of mine planning computer software including Techbase, Datamine, MedSystem, Gemcom,Surpac, Vulcan, and Whittle pit optimization. In addition, he has a wide range of knowledge incomputer applications, programming, database development and design, computer communications,web site design and network design and implementation.

Dr. Cameron holds B.S., M.S., and Ph.D. degrees in Mining Engineering from the University ofUtah and wrote his M.S. thesis on the geostatistical analysis of coal quality and his Ph.D. thesis on thedevelopment of the oil shale industry in Utah.

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APPENDIX IV COMPETENT PERSON’S REPORT

CORPORATE EXPERIENCE

1999 – Present Robert Cameron Consulting, President and CEO

2007 – 2008 Frontier Mining Ltd., Vice President, Technical Services

1992 – 1999 Behre Dolbear & Company, Inc., Vice President and Director of Geostatistics andMine Planning

1989 – 1992 Colorado School of Mines, Department of Mining Engineering, Associate Professor

1990 – 1991 U.S. Bureau of Mines, Pittsburgh Research Center, Mining Engineer (FacultyMember)

1985 – 1989 Colorado School of Mines, Department of Mining Engineering, Assistant Professor

1984 – 1985 Terra Tek, Inc., Research Engineer

1980 – 1984 Robert Cameron Consulting, Computer Consultant

1979 – 1984 The University of Utah, Computer Specialist

1978 – 1984 The University of Utah, Teaching and Research Assistant, Mining Engineering

SPECIFIC PROJECT EXPERIENCE

Client Project/Mine Description of Work

Carbones de Colombia,S.A.

Review of Carbocol Operations,ColumbiaReview of Exxon’s Resource RankingStudy

Resource and reserve reviewand mine plan optimization

Societe Generale/Buchalter, Nemer,Fields & Younger

P.W. Gillibran Aggregate and Sand,Ventura, California

Resource, Reserve, MineDesign and cash flowprojections

Ryan Lode Mines, Inc. Ryan Lode Project, Alaska Resource and ReserveReview

Jeppson and Lee Beartrack Project Litigation Resource, Reserve, MineDesign Review and CashFlow Projections

Independence Mining Jerritt Canyon Mines Resource and ReserveReview

Celebration Mining Vipont Silver Project Resource and ReserveReview

Viceroy Mining Castle Mountain Mine — Haulage Study Mine Design and HaulageOptimization

IL Minerals Doby George Project Resource and ReserveReview

Gem River Mining Dry Cottonwood Creek Sapphire Project Resource, Reserve, MineDesign review for proposedcorporate financing activities

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APPENDIX IV COMPETENT PERSON’S REPORT

Client Project/Mine Description of Work

Tennessee Mining Conrich Buffalo Mountain PeeweeJellico/Fork Mountain

Resource, Reserve andRoyalty Payment Review

Texaco McKittrick Oil Bearing DiatomiteDeposit

Mine Design, Optimizationand Resource Review

European Bank forReconstruction andDevelopment

Baia Mare Gold Tailings Project,Romania

Resource and ReserveReview

ING Capital/NevadaGoldFields

Nixon Fork, McGrath, Alaska Resource and ReserveReview

Rice, Volland and Gleason Valuation of State Lands — MentalHealth Trust, Alaska

Expert Witness on Royaltyand Minerals value

Osiris Gold Red Mountain, Silverton, Colorado Resource, Reserve, MineDesign and Cash FlowProjections

Kennecott Minerals Red Beryl Project, Utah Resource Estimate

Barclays Bank Leonor Copper Project, Chile Feasibility Study Review

International PreciousMetals Corp.

Black Rock Project, Arizona Technical assessment ofprojected processing andresource

U.S. Steel Minnesota OreOperations

U.S. Steel Resource review

Komis Gold Komis Gold Project Resource estimate

Glencore International AG Dalpolimetall Due DiligenceDalpolimetall Feasibility Study EndakoCerro De Pasco

Due Diligence, FeasibilityStudies, Resource andReserve Estimates, MineDesign Review and CashFlow Analysis Support

North American PalladiumLtd.

Lac des Iles Mines PgM Operation,Geostatistical Calculation of PlatinumGroup Metals Reserves

Resource and ReserveEstimates

Cornucopia ResourcesLtd.

Mineral Ridge Gold Resource and ReserveReview

Banque Paribas Construction Monitoring Resource and ReserveReview

Electra Gold Inc. Pine Cove Project Resource and ReserveReview

Philex Gold Inc. Reserve Review of all Gold Operations,Philippines

Resource and ReserveReview

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APPENDIX IV COMPETENT PERSON’S REPORT

Client Project/Mine Description of Work

Philippines Gold Masbate Project, Philippines Resource and Reserveestimate

Cordilleras Silver Mines El Ocote Silver Deposit, Honduras Resource and ReserveReview

Namibian Copper JointVenture (PTY) Ltd.

Haib Porphyry Copper Project, Namibia Resource and ReserveReview

Dresdner KleinwertBenson

Aginskoye Gold Project Resource and ReserveReview

Morris B Hecox, Jr. Mesquite Mine Royalty Payment Review Royalty Payment Review

Kinross Gold Corporation El Dorado ReservesFort KnoxKubakaRefugioAginskoe

Resource and ReserveEstimates, Mine DesignReview and Cash FlowAnalysis Support

Minera Las Cristinas, C.A Las Cristinas Resource and ReserveReview

Cornucopia ResourcesLtd.

Mineral Ridge Project Audit Resource and ReserveReview

Arizona Department ofRevenue

Valuation of Asarco’s Ray CopperComplex

Gold Capital/U.S. Gold Tonkin Springs Resource and ReserveReview

Canadian Imperial Bank ofCommerce

Bajo de la Alumbrera Copper/GoldDeposit, Argentina

Resource and ReserveReview

Clifton Mining Company Review of Gold Hill, Reserves andBusiness Plan

Resource and ReserveEstimates and 43-101 FilingSupport

Greater Lenora ResourcesCorporation

Greater LenoraBox MineAthona Mine

Resource and ReserveEstimates and Review

Atlas Corporation Commonwealth Mine PrefeasibilityDoby GeorgeGold Bar

Resource and ReserveEstimates and Review

American ConsolidatedMining

ACU Kiewit Zone Evaluation Resource and ReserveReview

The Toronto DominionBank

Fort Knox Resource and ReserveReview and Completion TestTechnical Support

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APPENDIX IV COMPETENT PERSON’S REPORT

Client Project/Mine Description of Work

Servicios IndustrialesPenoles

La Herradura Project, Mexico Resource and ReserveReview

CalResources LLC South Belridge Diatomite Deposit Resource and ReserveReview

TVX Bohemia Dulni A.S. Kasperske Hory Gold Project Resource and ReserveReview

Quest InternationalManagement Services

Atlanta Mine Feasibility Study Resource and ReserveReview

Cornucopia ResourcesLtd.

Mineral Ridge II — Dresner Resource and ReserveReview

U.S. Steel Minnesota OreOperation

Minntac’s East Pit — Haulage Study Haulage Study

Alumax, Inc. Venezuela Alumina Resource and Reserve

Pacific Nickel LTD NONOC Nickel Technical Due Diligence Resource and Reserve

South American Gold &Copper

El Pimenton, Chile Resource and Reserve

Royal Gold Inc Long Valley Project Review Resource and Reserve

Wheaton River MineralsLtd.

Golden Bear Mine — Due Diligence Resource and Reserve

TVX Gold Olympias Mine, Greece1997 Review1998 ReviewSkouries Mine, Greece1997 Review1998 Review

Resource and ReserveReview to Support Filings

RFC Services Inc. RFC-Soledad Mountain

Lavery Debilly,Barristers & Solicitors

Confidential Expert Witness Testimony

Apex Silver MinesCorporation

Audit of Prefeasibility Study

Banque Paribas Amayapampa

Standard Bank of London San Gregorio Mine Uruguay Resource and ReserveReview

Director Pueblo Viejo Privatization

Metallica Resources Metallica’s San Pedro Resource and ReserveReview

Mr. Marc C.H. Waaldijk Gross Rosebel, Suriname

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APPENDIX IV COMPETENT PERSON’S REPORT

Client Project/Mine Description of Work

Gold Reserve Corp Brisas de Ciyuni Resource and ReserveReview

Toronto Dominion Bank Fort Knox Completion Test

Stillwater MiningCompany

Stillwater Mine, Platinum-PalladiumReserves1995 Review1997 Review1998 Review

Resource and ReserveReview, Mine DesignReview

Francisco GoldCorporation

El Sauzal Conceptual Overview Project Concept Review

Parker, Poe, Adams, &Bernstein LLP

Valuation Review —MICA Property Valuation Review

Crowley, Haughey,Hanson, Toole & Dietrich

Crown Butte Mines, Inc. Resource and ReserveReview, Mine DesignReview and Valuation

Newmont Gold Company Review of Reserves and Valuation ofSeveral Properties

Resource and ReserveReview for SEC FilingSupport

Morgan Stanley andCompany

Mining Lectures

AMT (USA) Inc.

COEUR Kensington Project — Alaska Resource Evaluation andMine Design Review

Mayer, Brown & Platt Pegasus Gold Ore Reserve Group Resource Evaluation andSupport for Litigation

Vaminco Dominica Las Salinas Mine — Mine Planning Mine Design

Cyprus Amax Mount Emmons Resource Evaluation andMine Design

Sunshine Mining Pirquitas Resource and Mine DesignReview

US Colbalt Jefferson Mine Resource Evaluation

Frontier Mining Naimanjal, Baltemir, Yubiliny, etc. Resource and ReserveEstimates, Mine DesignReview and Cash FlowAnalysis. Managed andProvided Oversight ofKazakhstan Operations.Technical Evaluations ofPotential PropertyAcquisitions

St. GenevieveResources

Emerald Isle Resource and ReserveReview

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APPENDIX IV COMPETENT PERSON’S REPORT

Client Project/Mine Description of Work

US Energy Mount Emmons Resource and ReserveReview and Support

Kobex Luck Jack Molybdenum Resource Evaluation and43 – 101 Filing Support

Northern Dynasty Pebble Copper Project Resource and ReserveReview

Southwestern Resources Sierra Mojada Resource and ReserveReview

Duluth Metals Nokomis Deposit, Other Properties Resource and ReserveReview, Mine Design, CashFlow Projections andTechnical Review forProperty Acquisitions

PROFESSIONAL ASSOCIATIONS

Š International APCOM Executive Committee Member, 1985-1992

Š SME Book Publishing Committee, 1989-1993

Š Reviewer for SME in Geostatistics, 1989-1992

Š Reviewer for SME in Operations Research, 1987-1996

Š Society for Mining, Metallurgy and Exploration, Registered Member

Š Mining and Metallurgical Society of America, Member and Qualified Person in Miningand Ore Reserves

Š Prospectors & Developers Association of Canada, Member

EDUCATION

Š The University of Utah, Ph.D. Mining Engineering — 1985

Š The University of Utah, M.S. Mining Engineering — 1980

Š The University of Utah, B.S. Mining Engineering — 1977

ACADEMIC EXPERIENCE

Courses Taught

Š Mine Surveying Theory and Practice

Š Mine Safety

Š Mining Engineering Laboratory

Š Mine Valuation

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APPENDIX IV COMPETENT PERSON’S REPORT

Š Mine Systems Analysis

Š Geostatistical Ore Reserve Estimation

Š Microcomputers in Mining

Š Computer Graphics

Š Advanced OR Techniques in Mining

Š Geostatistical Estimation Theory

Š Advanced Mining Geostatistics

Š Advanced Ore Reserve Estimation

Š Introduction to Programming (Fortran)

Š Introduction of AutoCAD

Š Introduction to Database Design for Mining

Research Projects

Š Modified Tree Graph Algorithm for Ultimate Pit Limit Analysis

Š Dynamic Network Planning to Define Optimal Production Time Completion

Š Heuristic Nonlinear Constrained Maximization of Ore Reserve Tonnage by Blending forMultiple Mining Areas Using Cutoff Grade as the Discriminator

Š Probabilistic Risk Analysis in Evaluation of Gold Placer Deposits in Puno Peru

Š Cokriging Gold-Silver Auriferous Mineralization: A Multivariate Geostatistics Approach

Š Optical Discrimination of Ore Veins

Š Optimizing Ultimate Pit Limits by Using Transportation Algorithm

Š Development of an Automatic Time Study System for a Jeffrey 1060 Drum Miner

Š Mine Management Decision Support Using Existing Monitoring Systems

Š Development of an Underground In Situ Stope Leaching Site at the Edgar ExperimentalMine

Short Courses

Š Pit Optimization Methods

Š Introduction to Mining

Š Introduction to Reserve Estimation Methods

Š Geostatistical Ore Reserves and Mine Planning

Š Due Diligence and Project Review

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APPENDIX IV COMPETENT PERSON’S REPORT

PUBLICATIONS/PRESENTATIONS

Cameron, R.E., Geostatistical Analysis of Coal Quality in a Western Coal Seam, M.S. Thesis inMining Engineering, The University of Utah, 1980.

Cameron, R.E., Development of an Integrated Computer Package for Oil Shale InformationRetrieval and Feasibility Analysis of Public Lands, Ph.D. Dissertation in Mining Engineering, TheUniversity of Utah, 1985.

Lever, P.A.J., R.H King and R.E. Cameron, Adapting the Intelligent Decision Support Systemto Variable Mining Conditions, Preprint for 1990 AIME meeting in Salt Lake City, AIME.

Lever, P.A.J., R.H King and R.E. Cameron, “Algorithms for Adapting to a Dynamic MiningEnvironment”, Proceedings Seventh Annual Workshop, Mineral Technology Center, Mine Design andGround Control, Blacksburg, Va., 1989.

Lever, P.A.J., D.R. Schricker, R.H King and R.E. Cameron, “Electrical Transducer DataAnalysis for Coal Mine Management Reports”, Fifth Annual Technical Workplan Status Report —Generic Mineral Technology Center in Mine Systems Design and Ground Control, Blacksburg, VA.1987.

Schricker, D.R., P.J.A. Lever, R.H. King and R.E. Cameron, “Intelligent Decision-SupportSystem for Mine Managers”, Mining Engineer, New York, AIME, 1990.

Schricker, D.R., P.J.A. Lever, R.E. Cameron and R.H. King, “Pattern Classification ofContinuous Mining Duty Cycle Data for an Intelligent Decision Support System”, Proceedings of theFirst Canadian Conference on Computer Applications in the Mineral Industry, A.A. Balkema,Rotterdam, 1988.

Huttagosol, Panlop, and R.E. Cameron, Modified-Tree Graph Algorithms for Ultimate Pit LimitAnalysis, Preprint for 1989 AIME meeting in Las Vegas, AIME.

Lever, P.J.A., R.H. King, D.R. Schricker, and R.E. Cameron, “Knowledge RepresentationConcepts for an Intelligent Decision Support System”, 21st Application of Computers and OperationsResearch in the Mineral Industry, AIME, 1989

King, R.H., P.J.A. Lever and R.E. Cameron, “Intelligent Analysis of Mining Equipment SensorData, “Advances in Mining Equipment Performance Monitoring,McGill University, 1990.

Lever, P.J.A., R.H. King, D.R. Schricker, and R.E. Cameron, Pattern Recognition andKnowledge Representation Techniques for Better Management Information from Monitoring Systems,Preprint for 1989 AIME meeting in Las Vegas, AIME, 1989.

King, R.H., D.R. Schricker, P.J.A. Lever and R.E. Cameron, AI Techniques to ImproveManagement Information from Monitoring Systems, Preprint for 1989 AIME meeting in Las Vegas,AIME, 1989.

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APPENDIX IV COMPETENT PERSON’S REPORT

McCarter, M.K., D.J. Green and R.E. Cameron, “Real-Time Slope Monitoring Using aDedicated Home Computer”, Transactions of AIME, New York, AIME, 1985

Procarione, J. and R.E. Cameron, “Computer Facilities and the Education of MiningEngineers”, Proceedings of the Second Conference on the Use of Computers in the Coal Industry, NewYork, AIME, 1985.

Cameron, R.E., Idaho Springs Tunnel Detection Test Facility, CSM Mining Department,Golden, Co. 1988.

Bakhtar, K., A. Black and R. Cameron, “ Load Response of Modeled Underground Structures”,Proceedings of the 26th US Rock Mechanics Symposium, Rapid City, 1985.

Bakhtar, K., A.H. Jones, and R Cameron, “Use of Rock Simulant for Rock Mechanis Studies”,Proceedings of the 27th US Rock Mechanics Symposium, Tuscaloosa, 1986.

Bakhtar, K., A. Black and R. Cameron, Dynamic Loading Experiments on Model UndergroundStructures, Defense Nuclear Agency, Strategic Structures Division, Washington, D.C., Terra TekReport, 1985.

Bakhtar, K., A. Black and R. Cameron, Scale Model Testing of Tunnel Intersections and LargeCavities: Progress Report, Defense Nuclear Agency, Strategic Structures Division, Washington, D.C.,Terra Tek Report, 1985.

Schricker, D.R., P.J.A. Lever, R.H. King and R.E. Cameron, “Progress Toward an IntelligentDecision Support System for Mine Managers”, Sixth Annual Technical Workplan Status Report-Generic Mineral Technology Center in Mine System Design and Ground Control, Blacksburg,Va. 1988.

Cameron, R.E., Final Report for Investigation and Geophysical Testing on Excavation of aTunnel Test Site Under BRDEC Tunnel Detection Program, CSM Mining Department, Golden, Co.,1988.

Cameron, R.E. and B.E. Carlson, Mine Safety and Underground Lab Course Notes,Unpublished Text, CSM (1987-1991).

Cameron, R.E., Mine Surveying Theory and Practice Course Notes, Unpublished Text, CSM(1986-1991).

Suboleski, S.C., R.E. Cameron, E.K. Albert, “Chapter 8.3 — Systems Engineering”, MiningEngineering Handbook, SME, Littleton Co.,

In addition, R.E. Cameron has authored, co-authored or contributed to over 80 confidentialscoping studies, pre-feasibility, feasibility reports, project evaluations, reviews and assessments ofmining properties.

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APPENDIX IV COMPETENT PERSON’S REPORT

MARK A. ANDERSONSENIOR ASSOCIATE Mineral Processing

Mr. Mark A. Anderson has more than 40 years of diversified industry experience in bothtechnical and managerial roles, including project feasibility, mine operations, and project duediligence. His experience includes evaluation of base and precious metal properties with emphasis onprocessing, metallurgy, project management, and feasibility analysis. His responsibilities haveincluded construction, management, and operation of a 9 million tonne per year open pit copper/molybdenum mining operation with a 28,000 tonne per day concentrator, and milling and smeltingoperations at a 21,500 tonne per day copper ore mining and processing operation with byproduct gold.

Prior to joining Behre Dolbear, Mr. Anderson was the general manager of Asamera MineralsInc.’s U.S. operations where he had combined management responsibility for the undergroundoperations at the Cannon Gold Mine in Wenatchee, Washington and the Gooseberry Mine in Nevada,which produced gold and silver at an average annual rate of 170,000 ounces of gold and 500,000ounces of silver. He also served as vice president of operations for Marathon Oil Company/CentennialGold Corporation where he managed exploration, laboratory, and pilot plant operations associated withthe development of exploration targets in Colorado. He was also a key participant in mining financearrangements with investment houses.

Specific experience includes:

Š Evaluations of precious and base metal properties with emphasis on processing, projectmanagement, independent engineering, and feasibility analyses.

Š Operations management of copper, gold, and molybdenum mining and processingoperations.

Š Managed exploration, laboratory, and pilot plant operations associated with thedevelopment of exploration targets in Colorado. Participated in mining financearrangements with investment houses abroad.

Š Expert witness testimony for copper and molybdenum operations.

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APPENDIX IV COMPETENT PERSON’S REPORT

CORPORATE EXPERIENCE

2008 – Present Behre Dolbear & Company (USA), Inc., Senior Associate

1991 – 2008 Behre Dolbear & Company (USA), Inc., Chairman of the Board and SeniorAssociate

1986 – 1991 Asamera Minerals US, Inc., General Manager, U.S. Operations

1984 Ralph M. Parsons Company, Senior Project Manager

1980 – 1984 Anaconda Minerals Company, Project Manager and Mill Manager, Nevada MolyProject

1978 – 1980 Climax Molybdenum/AMAX, Plant manager

1964 – 1978 Kennecott Copper Corporation, Nevada Mines Division, Reduction PlantSuperintendent

1962 – 1964 Aerojet General Corporation, Development Engineer

1961 – 1962 U.S. Bureau of Mines, Research Engineer

RELEVANT EXPERIENCE

Copper/Molybdenum

Š Design responsibility for the construction of a 3,000,000 TPY copper leach andelectrowinning facility.

Š Project Manager for due diligence and independent engineer role on a Copper SX/EWoperation in Nevada.

Š Design, start up, and operation of a 28,000 TPD molybdenum/copper concentrator andconcentrate ferric chloride leach facility. Project came on-line under budget, withfavorable results in operating costs and concentrate quality.

Š Managed the operation of a multi-product molybdenite conversion plant, producing over40,000,000 pounds of moly per year. Responsible for all plant-related activities andpersonnel, including working successfully with a highly militant UAW represented workforce. Annual operating and capital budgets of over $50,000,000.

Š Mr. Anderson spent 10 years as chief metallurgist and mill superintendent for Kennecott,Nevada Mines Division where he managed ore processing operations which recoveredby-product molybdenite from 1,500 TPD of copper concentrates. He also managed thedevelopment of specific flowsheets utilizing heat treatment, cyanide, hydrogen peroxide,Noke’s reagent and sodium hydrosulfide to modify the selective flotation of molybdenite.

Š He managed the smelting and milling operations of Kennecott’s Nevada Mines Divisionfrom 1976 to 1978. Operations include a two reverberatory, three converter operation anda mill capable of processing 21,500 TPD ore.

Š From 1964 to 1976, various positions were held in Kennecott’s Nevada Mines Division,including industrial engineer in the Mines and Reduction Plants, Concentratormetallurgical engineer, and mill superintendent.

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APPENDIX IV COMPETENT PERSON’S REPORT

Š Mr. Anderson’s experience includes design and start up of a molybdenum/copperconcentrator, plant manager for a molybdenum/sulfide conversion plant, and millsuperintendent for a copper/molybdenum concentrator; project manager for a duediligence and optimization study for large underground mine using blast hole stoping withan underground concentrator. Mr. Anderson has general open pit and concentrateexperience in the design, construction, operation, and management of large copper andmolybdenite projects with mining and milling rates ranging from 21,500 to 40,000 TPD.He also has conducted due diligence analysis of ferro-moly production in the UnitedKingdom and Spain, molybdenite conversion facilities in the Netherlands, and smallboutique molybdenum production facilities in Sweden and Italy.

Š While at Anaconda, he managed the design, construction, and start up of a 22,000 TPDmolybdenum concentrator producing over 13 million pounds of molybdenum per year andby-product copper. The process operations included the production of concentrates,concentrate upgrading by ferric chloride removal of copper and lead contaminants, and thedesign of a 24 million pound multiple hearth roaster facility to receive Tonopah and Buttecopper concentrates.

Š He also served as plant manager for the operation of four, multiple hearth roastersprocessing over 40 million pounds of molybdenum per year. Products produced weremolybdic oxide, ferromolybdenum, pure sublimed oxide and lubricant grade molybdenumdi-sulfide. Mr. Anderson directed capital expansions and managed strategic planning forthe principal conversion plant of Climax Molybdenum Company/AMAX.

Precious Metals

Š Heap Leach consulting and advisory roles including recent experience on a 5,000 TPDheap leach on North Sulewiesi, Indonesia.

Š While at Behre Dolbear, Mr. Anderson has acted as independent engineer on open pit andunderground gold projects located in Alaska, Canada, Venezuela, and Chile. He hasworked with several lending institutions in developing completion criteria applicable to awide range of project sizes, complexity, and geographic locations.

Š He has managed project engineering for the design of the Aurora Gold Project of HannaMining Company (Siskon). The project was completed under budget on a fast-track basisin less than four months.

Š Mr. Anderson has extensive experience in metallurgical processing with experience in allforms of gold processing and recovery including heap leaching, flotation/concentration,cyanidation and bioleaching. Mr. Anderson has hands-on experience with the treatment ofrefractory gold ores and is unexcelled in his knowledge of processing operating and capitalcosts.

Š He was project manager responsible for the design and construction package for a goldmilling and leach circuit to accommodate ores from underground and open pit operationsin Nevada.

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APPENDIX IV COMPETENT PERSON’S REPORT

Š Mr. Anderson was project manager responsible for design and construction package for aflotation concentrate autoclave plant to treat refractory ores at a 1,500 STPD undergroundgold mining operation in Washington.

Š Mr. Anderson was general manager of operations, responsible for managing U.S.operations for an international mining company producing over 150,000 ounces of goldper year from underground operations in Washington and Nevada. As vice president ofoperations, he was responsible for managing exploration, mining, and metallurgicaloperations on a 100 square mile placer gold project utilizing gravity separation pilot planttreatment of major bulk sample tonnages in Colorado.

Š As president, Mr. Anderson directed a company buy-out team active in the pursuit of amajor U.S. mining operation producing over 150,000 ounces of gold per year. Hesuccessfully assembled a financing package consisting of equity and bank financing for a$17 million purchase. The resulting negotiations for purchase were unsuccessful.

Š Project manager responsible for metallurgical evaluation of treatment methods for use onhighly refractory gold ores containing massive sulfides and arsenic in South Carolina.

Š Mr. Anderson was project manager responsible for feasibility study to determine projectproduction capability and economics for an 11,000 STPD open pit gold operation utilizingheap leach gold recovery under arctic conditions in Alaska.

Š He was project manager responsible for feasibility study to determine project productioncapability and economics for a 2,000 STPD open pit gold operation utilizing heap leachgold recovery in Nevada.

Š As metallurgical engineer, Mr. Anderson was responsible for evaluation of design andoperating criteria for a major international bank, contemplating financing on a 14,000STPD open pit gold operation utilizing heap leaching technology in Chile.

Š Metallurgical engineer responsible for forensic metallurgical evaluation of historical goldmining operations which have been associated with a current day Superfund site inColorado.

Due Diligence

Š Mr. Anderson has extensive experience in the preparation of due diligence technical auditsand has extensive experience in the valuation of metallurgical test work, process flowsheet design, and concentrator operations in base and precious metals mines. In addition,he has extensive experience in the evaluation of capital and operating costs for plants inremote locations.

Š He is very familiar with the requirements for due diligence of feasibility studies as well asserving as an Independent Engineer in the construction of precious and base metalsprojects. He managed a due diligence review of a precious metals project in northernCanada and also acted as the Independent Engineer on the Andacollo Gold Project, LeonorCopper Project, in Chile and the Las Cristinas Project in Venezuela.

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APPENDIX IV COMPETENT PERSON’S REPORT

Feasibility Studies and Valuations

Š Mr. Anderson brings considerable diversified experience in project feasibility, mineoperations, proposal evaluation, and asset valuations. He is very familiar with the criteriafor asset valuations and has served as a third-party independent engineer and owner’sagent for property sales, joint ventures, and royalty agreements. While at Behre Dolbear,he completed a study for a mica property in Zimbabwe. He has managed similarvaluations, completion testing, and acquisition evaluation reviews of precious metalsprojects in Canada and acted as an independent engineer for the Andacollo Gold Project inChile, and the Nixon Fork gold project in Alaska.

Base Metals

Š Mr. Anderson has extensive experience in the valuation of metallurgical test work, processflow sheet design, and concentrator operations for base metal mines. He has considerableexperience in the capital and operating cost estimates for plants in remote northernlocations.

Industrial Minerals

Š Mr. Anderson has conducted project financing due diligence on projects in Zimbabwe forthe processing and sale of mica and vermiculite. In addition he was project manager on aniodine and sodium sulfate project in the north of Chile and will serve as IndependentEngineer.

SPECIFIC PROJECT EXPERIENCE

Š North Lanut Gold, Indonesia, Avocet Mining — Mr. Anderson provided projectoptimization and general consulting services for a 4,000 TPD heap leach gold operation.

Š Nui-Phau Tungsten, Vietnam, Tiberon — Mr. Anderson provided metallurgical evaluationof laboratory and pilot plant testing for the Nui-Phau copper/tungsten/bismuth/fluoriteproject in Vietnam.

Š Mesaba Project, State of Minnesota — Mr. Anderson was project manager of a completeproject due diligence involving the application of the CESL process to copper/nickel oresin northern Minnesota.

Š Butler Taconite Project, MSI — Mr. Anderson furnished process engineering advice onthe completion of an integrated iron mining, processing, direct reduction and steelproduction facility located at Nashwauk, Minnesota.

Š Leonor Copper Project, Chile, Equatorial Mining N.L. — Mr. Anderson was BehreDolbear’s Independent Engineer on Equatorial Mining N.L.’s Leonor SX-EW copperproject, which forms a significant part of the El Tesoro project.

Š Komis Gold Project, Saskatchewan, Rothschild Bank — Mr. Anderson was the duediligence Project Manager and Independent Engineer on this underground gold project.Nixon Fork, Alaska, ING Capital Corporation — Mr. Anderson served as MetallurgicalConsultant and Independent Engineer on this underground gold project.

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APPENDIX IV COMPETENT PERSON’S REPORT

Š Pimenton, South American Gold & Copper, Chile — Mr. Anderson served asmetallurgical consultant on a proposed mill expansion for this underground mine andsurface concentrator operation.

Š Equatorial/AMP Valuation — Mr. Anderson conducted a technical due diligence andevaluation of the Mineral Park and Tonopah Projects for acquisition analysis.

Š Credit Suisse/1st Boston, Minera Las Cristinas, C.A., Las Cristinas — Mr. Andersonserved as due diligence Project Manager and Independent Engineer for the Placer Dome,Las Cristinas Project. The assignment also included the development of completioncriteria.

Š Rothschild Denver Inc., Confidential Due Diligence Study, British Columbia —Mr. Anderson performed metallurgical engineering due diligence on a propose acquisitionevaluation.

Š Arizona Department of Revenue, Valuation of Asarco’s Ray Copper Complex —Mr. Anderson performed metallurgical due diligence and delivered expert witnesstestimony in this evaluation.

Š Gold Capital/U.S. Gold, Gold Capital, Tonkin Springs — Mr. Anderson performedmetallurgical due diligence on this proposed project in Nevada.

Š Woodward Clyde, Cyprus Climax Metals Risk Assessment — Mr. Anderson developedengineered risk assessment profiles for all of the active Cyprus Amax and Cyprus Climaxoperations including those in Arizona, Colorado, Iowa, Pennsylvania, Illinois, Englandand the Netherlands.

Š The Toronto Dominion Bank, Fort Knox, Alaska — Mr. Anderson developedmetallurgical due diligence information and completion criteria for the project.

Š GoldBanks Mining Co., GoldBanks Kinross, Nevada — Mr. Anderson served on a projectdue diligence team evaluating this potential open pit property in Nevada.

Š Barclays Capital/Equatorial Mining, Tonopah Project — Mr. Anderson served as ProjectManager, Metallurgical Consultant and Independent Engineer for this 20,000 ton per yearcopper SX/EW operation in Nevada.

Š ABN AMRO Bank N. V., Aguas Blancas Project — Mr. Anderson has served as ProjectManager and Independent Engineer for this iodine and sodium sulfate production facilitylocated in the Chilean Atacama desert.

Š International Precious Metals, Arizona — Mr. Anderson developed metallurgical andanalytical programs which ultimately proved the lack of economic or technicallyextractable platinum and gold from this project.

Š Royal Gold Inc., Long Valley Project Review, Nevada — Mr. Anderson provided themetallurgical engineering review of this proposed gold project. Barclays Bank, WheatonRiver Minerals Ltd., Golden Bear Mine, Due Diligence, British Columbia —Mr. Anderson provided metallurgical engineering due diligence and served as both Project

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APPENDIX IV COMPETENT PERSON’S REPORT

Manager and Independent Engineer for this open pit, heap leach gold project. GlencoreInternational AG, Endako Due Diligence — Mr. Anderson provided metallurgicalengineering due diligence on this proposed acquisition target.

Š Lavery Debilly, Barristers & Solicitors, Expert Witness Testimony — Mr. Andersonprepared expert metallurgical engineering testimony in support of this confidential project.

Š European Bank of Reconstruction and Development, Aural, Baia Mare-Romania —Mr. Anderson provided metallurgical engineering due diligence, contract review andIndependent Engineer services for this tailings reclamation project.

Š Standard Bank of London, San Gregorio Mine Uruguay — Mr. Anderson providedmetallurgical engineering due diligence on this open pit gold mining property.

Š Pueblo Viejo Privatization — Mr. Anderson provided metallurgical engineering supporton the evaluation of refractory gold recovery flow sheets for the proposed modernizationprogram.

Š Metallica Resources, San Pedro Project, San Luis Potosi, Mexico — Mr. Anderson servedas Project Manager and provided metallurgical engineering due diligence on this proposedfinancing of an open pit silver heap leach project.

Š Government of Suriname, Mr. Marc C.H. Waaldijk, Gross Rosebel, Suriname —Mr. Anderson provided metallurgical engineering and capital costs estimated services insupport of this project valuation in Suriname.

Š M.I.M. Exploration Pty, Ltd M.I.M, Venezuela — Mr. Anderson provided projectoperations, infrastructure and socio economic consulting for possible acquisitions.

Š Crowley, Haughey, Hanson, Toole & Dietrich, Crown Butte Mines, Inc. — Mr. Andersonprovided metallurgical engineering, cost estimation and infrastructure review for thisvaluation of a project being expropriated by the U.S. Government.

Š COEUR, The Precious Metals Company, Kensington Project, Alaska — Mr. Andersonserved as Project Manager and provided metallurgical engineering support for this projectevaluation and due diligence for an underground operation in Alaska.

Š Placer Dome Technical Services, Limited, Alderbaran — Mr. Anderson providedmetallurgical engineering and sampling protocol evaluations for this exploration project.

Š Saudi Arabia Government, Behre Dolbear International, Ltd., Ma’aden — Mr. Andersonprovided concentrator operations, metallurgical engineering and cost estimating services indeveloping operating procedures for government of Saudi Arabia national miningcompany, Ma’aden. Ma’aden, Operations Assessment, Mahd/Sukhay — Mr. Andersonprovided metallurgical engineering, operating cost and capital cost improvement servicesin an evaluation of the Mah’d and Sukaybarat mines in Saudi Arabia.

Š Alfers & Carver/Cyprus Amax, Mount Emmons Pre-Feasibility — Mr. Anderson servedas Project Manager and provided metallurgical engineering, capital cost, and operatingcost support in the development of a pre-feasibility study for the operation of the MountEmmons project.

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APPENDIX IV COMPETENT PERSON’S REPORT

Š Kinross Gold USA, Inc., Engineered Risk Assessment — Mr. Anderson has served on ateam evaluating the engineered risk of Kinross Gold properties in Idaho and Ontario,Canada. The assessments included tailings impoundments, waste dumps, water systems,storm water systems, water treatment plants, and special project facilities.

PROFESSIONAL AFFILIATIONS/RECOGNITION AND AWARDS

Mr. Anderson qualifies as a competent person under current Canadian security regulations ofAIME, Trustee.

Š SME, President, 1992 to 1993; Board of Directors; MPD Chairman, 1984

Š Mining and Metallurgical Society of America

Š National Society of Professional Engineers

Š Northwest Mining Association, President, 1990 to 1991; Trustee 1986 to 1992

Š Paul Harris Fellow — 1989

Š Who’s Who in the West — 1986

Š Mill Man of Distinction — 1984

EDUCATION

Š Michigan Technological University, B.S. Metallurgical Engineering — 1961

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APPENDIX IV COMPETENT PERSON’S REPORT

SCOTT MERNITZ, Ph.D.SENIOR ASSOCIATE Environmental Due Diligence

Dr. Scott Mernitz has over 25 years of expertise in environmental due diligence involvingminerals projects, including fatal flaw and risk/liability analyses, agency negotiations and conflictresolution, and sustainability issues. This work has addressed projects involving precious and basemetals, industrial minerals, and energy fuels such as uranium, coal, coal bed methane, oil and gas, andoil shale. Field reviews have been performed throughout North, Central, and South America, theCaribbean, Africa, Australia and the Middle East. His desktop study experience includes additionalprojects in Africa, Greenland, Europe, and Australia. Dr. Mernitz’s experience also consists of U.S.NEPA project management; international EIA reviews and support documents; mining, solid, andhazardous waste management; environmental regulations and permitting; energy, mineral, and waterresources planning; and environmental impact assessments.

Dr. Mernitz has project management and principal investigator experience in several majorinterdisciplinary environmental baseline studies, environmental permitting, mining waste regulatorypolicy, and third-party EIS and EA projects under U.S. National Environmental Policy Act (NEPA)requirements. Further, he has reviewed, critiqued, summarized and translated internationalEnvironmental Impact Assessments (EIAs), and served as Project Director for several supportingdocuments to Australian EIAs during his term in Perth.

He has other in-depth experience in Environmental Site Assessments (ESAs) for miningproperties and support facilities, hazardous waste/mining waste Remedial Investigation/FeasibilityStudies (RI/FSs), and technical oversight projects under U.S. waste management laws and regulations.He is one of Behre Dolbear’s specialists in the application of the Equator Principles to global miningproject reviews for banks, mining companies, and governments. His credentials include a Bachelor ofArts Degree in Geography from Elmhurst College, Illinois; the Master of Arts Degree in Geographyand Environmental Conservation from the University of Colorado, Boulder; and the Doctor ofPhilosophy Degree in Land Resources (Mediation of Environmental Disputes) through theinterdisciplinary Institute of Environmental Studies, University of Wisconsin, Madison.

Dr. Mernitz’s specific project experience includes:

Š Environmental and sustainability reviews for three coal/coke projects in Colombia, forprospective investors.

Š Environmental/social sustainability review task leader, privatization Technical Advisoryfor the Arab Potash Corporation, including eight potash, salt, brine, fertilizer, andspecialized salts production facilities on the Dead Sea and Red Sea, Jordan, for theGovernment of Jordan and Hong Kong Shanghai Bank (HSBC).

Š Principal investigator, environmental and sustainability issues, conceptual reclamation andclosure planning for revitalization of the coal industry, Nigeria, for the United States Tradeand Development Agency and the Nigeria Ministry of Solid Minerals Development.

Š Project management, environmental and sustainability technical review of field operations,environmental documentation for a gemstone mine in Brazil, and mineral resource/business plan/loan analysis for an international investment bank.

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APPENDIX IV COMPETENT PERSON’S REPORT

Š Project director, channel iron (pisolite) project development, EIA process, Phil’s Creekand Iron Valley Projects, for Iron Ore Holdings, Pilbara region, Western Australia.

Š Project director, three nickel metallurgical process modification projects, EnvironmentalScoping Studies, for BHP Billiton Nickel West: Mt. Keith, Ravensthorpe, KalgoorlieNickel Smelter, Western Australia.

Š Project director, existing gold mine data review and gap analysis, EIS forward planning,for Goldfields Mining St. Ives project, inland salt lake area, Goldfields region, WesternAustralia.

Š Project manager, initial environmental baseline studies planning, EIA forward planning,meteorology/dust monitoring for MCC (China Metallurgical Group, Beijing and Perth),Cape Lambert Iron Ore Project, northern Pilbara, Western Australia.

Š Principal investigator and environmental/risks team leader, Pre-Feasibility Study for PortEnhancement Project, Esperance Port Authority and Government of Western Australia,including iron ore and nickel commodity movements.

Š Principal investigator, Chevron Wheatstone LNG (Liquefied Natural Gas) project EIS/ERMP, sections on Environmental Consequence definitions, Cumulative Effects,Management Commitments, Relationships to Other Projects, Environmental ManagementProgram structure, and Sustainability, Onslow vicinity, Western Australia.

Š Principal investigator, BHP Billiton Yeelirrie uranium project EIA, section onEnvironmental Management Program structure, Western Australia.

Š Project director, mineral sands process plant modifications, Environmental Scoping Study,for Iluka Corp., Western Australia.

Š Project director, water supply pipeline routing, two Environmental Scoping Studies, forcoal mine and power plant projects, Western Australia.

Š Project manager and technical writer for several disciplines, coal bed methane third-partyEA for BLM and Redstone Resources, Powder River Basin, Wyoming.

Š Environmental/social sustainability review, privatization Technical Advisory for theJordan Phosphate Mining Company, including three open pit mines with processingfacilities and fertilizer and specialized production facilities on the Red Sea, for theGovernment of Jordan and Hong Kong Shanghai Bank (HSBC).

Š Fairness opinion, environmental, sustainability, and community benefits, revitalization ofcopper and cobalt mining and processing facilities, Democratic Republic of the Congo(DRC), for a mining company.

Š Environmental and water supply availability review, coal-fired power plant siting study,eight states in western United States, including Wyoming.

Š Principal investigator, definitional mission report for the United States Trade andDevelopment Agency regarding prospective mineral investments and reclamation/closureequipment and advisory opportunities in Romania and Bulgaria, including uranium mineand process plant reclamation, and coal bed/coal mine methane opportunities.

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APPENDIX IV COMPETENT PERSON’S REPORT

Š Equator Principles review and reclamation/closure SOPs development, copper project inadvanced exploration/early development stage for Penoles and a financial institution,northern Sonora State, Mexico.

Š Environmental Constraints Chapter, Jordan Oil Shale Technology Assessment, for theGovernment of Jordan and United States Trade and Development Agency.

Š Environmental Site Assessments (under ASTM guidance), and environmental permittingand liability analyses for precious metals, energy fuels, industrial minerals, and miningsupport facilities throughout the United States, including Alaska.

Š Environmental due diligence and technical review of EIA (Environmental ImpactAssessment) and SIA (Social Impact Assessment), gold project in Suriname; with a sitevisit to a comparable project in Guyana.

CORPORATE EXPERIENCE

2010 – Present Behre Dolbear & Company (USA), Inc., Senior Associate

2008 – 2009 URS Australia Pty Ltd, Perth, Principal Environmental Scientist, TerrestrialEnvironment Group

2001 – 2008 Behre Dolbear & Company (USA), Inc., Senior Associate

Jun – Dec 2000 Brown and Caldwell, Geosciences Group Leader

1997 – 2000 Behre Dolbear & Company (USA), Inc., Associate

1991 – 1996 Woodward-Clyde Consultants, Senior Project Manager and EnvironmentalPermitting Specialist

1980 – 1991 Camp Dresser and McKee Inc., Senior Project Manager and Regulatory/PermittingSpecialist

1977 – 1980 State of Colorado Department of Natural Resources, Assistant Study Coordinator,Mining Project Regulatory Coordination, Public Participation, Water Resources andEnergy Development Projects

1976 – 1977 State of Colorado Land Use Commission, Land Use Regulatory, and MediationSpecialist

1975 – 1976 State of Wisconsin Department of Natural Resources, Coastal Zone Management(Great Lakes) Specialist

1973 – 1974 University of Wisconsin Research and Development Center for Cognitive Learning,Environmental Education Specialist

1971 – 1973 United States Army Finance Service, Panama Canal Zone and Republic of Panama

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APPENDIX IV COMPETENT PERSON’S REPORT

PROFESSIONAL ASSOCIATIONS

Š Mining and Metallurgical Society of America — Qualified Professional (QP),Environmental Science and Sustainability

Š Colorado Mining Association

Š American Arbitration Association Commercial Panel

Š American Institute of Professional Geologists (Associate)

Š Society of Mining, Metallurgy, and Exploration (SME — past affiliation)

EDUCATION

Š Elmhurst College, Illinois, B.A. Geography (Earth Sciences, Climate) and History — 1969

Š University of Colorado, Boulder, M.A. Geography (Earth Sciences, EnvironmentalConservation, Historical Geography) — 1971

Š University of Wisconsin, Madison, Ph.D. Environmental Studies, Conflict Resolution(Mediation of Environmental Disputes) — 1978

PUBLICATIONS/PRESENTATIONS

Dr. Mernitz has published and presented throughout his career regarding the practice ofenvironmental impacts assessment, mining regulation and regulatory policy, conduct of mining/environmental project reviews, environmental conflict resolution, sustainability, and related topics. Afew select titles include:

Š “The Impact of Coal Mining on Marshall, Colorado, and Vicinity: An HistoricalGeography of Environmental Change.” Unpublished M.A. Thesis, Department ofGeography, University of Colorado, Boulder. 1971.

Š “Mediation of Environmental Disputes: A Sourcebook.” Praeger Publishers/CBS Inc.,New York. 202 pages, 1980.

Š “Mining Waste as Hazardous Waste: The Technical and Policy Issues.” (withD. Derkics and L. Brown), Proceedings of the 6th National Conference on HazardousWaste and Hazardous Materials. HMCRI. New Orleans, Louisiana. 12-14 April: 630-635,1989.

Š “The Complex Third-Party EIS, and How to Make it Simple.” (with R. W. Bell),Proceedings of Current and Future Priorities for Environmental Management, 18thAnnual Conference of the National Association of Environmental Professionals. Raleigh,North Carolina. 24-26 May: 298-300, 1993.

Š “Acid Mine Drainage and Political Conflicts in the Third-Party EIS.” (with R. E.Moran), Proceedings of Water Resources at Risk, Annual Conference of the AmericanInstitute of Hydrology. Denver, Colorado. 14-18 May: RA-36 to RA-39, 1995.

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APPENDIX IV COMPETENT PERSON’S REPORT

Š “Environmental Issues in Latin American Gold Projects, and a Comparison to NEPAMining Reviews in the United States.” (with G. Van Riper and K. Kloska), Proceedingsof Environment in the 21st Century, 24th Annual Meeting of the National Association ofEnvironmental Professionals, Kansas City, Missouri. 20-24 June 1999.

Š “Environmental Geology and Sustainability.” The Professional Geologist.March-April: 41-43, 2005.

Š “Strategies for Oil Shale Development in Hashemite Kingdom of Jordan.” (with T. A.Sladek and J. Jaber), Presented to 27th Oil Shale Symposium, Colorado School of Mines,Golden, CO. Prepared for U. S. Trade and Development Agency and Jordanian Ministryof Planning and International Cooperation. October 16, 2007.

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APPENDIX IV COMPETENT PERSON’S REPORT

WILLIAM F. JENNINGS, P.E. Valuation andPRINCIPAL, SENIOR ASSOCIATE Mineral Economics

Mr. William F. Jennings has over 30 years of experience with consulting firms and, early in hiscareer, with the United States Geological Survey. He has specialized in the economics and valuation ofmineral properties, with emphasis on base metals, precious metals, and coal, both in North Americaand overseas. On valuation and feasibility projects, Mr. Jennings prepares economic analysis modelsand determines taxes, cash flow, discount rate, net present value, and rate of return. On projects wherevaluation is not amenable to standard cash flow net present value analysis, he performs valuationsusing other accepted techniques. On due diligence projects, he reviews and critiques the economicanalyses prepared by others. Mr. Jennings has provided expert witness testimony intermittently since1978. He has developed cost estimates for highway and rail transportation. He has performed studies ofalternative coal supply for utilities and has edited a book on coal supply agreements. Mr. Jennings is aRegistered Professional Engineer and a Certified Mineral Appraiser. Mr. Jennings has been a BehreDolbear associate since 1989.

Mr. Jennings’ recent project experience includes:

Š Valuation of a gold mine as part of a potential takings litigation.

Š Valuation of Newmont Canada Limited (Golden Giant and Holloway Mines) forNewmont Mining Corporation.

Š Valuation of the North Rochelle coal mine in Wyoming and the Canyon Fuels mines inUtah for Arch Coal.

Š Valuation of three properties in Greece for European Goldfields.

Š Valuation of Stillwater Mining Company as part of the Norilsk transaction.

Š Valuation of numerous properties as part of the Normandy — Franco-Nevada acquisitionby Newmont Mining Corporation.

Š Valuation of Minera Yanacocha S.A. gold mining operation in Peru for Newmont MiningCorporation.

Š Valuation of Crown Butte Mines’ New World property, Montana, for a public use taking.

Š Valuation of operating mines of Pegasus Gold for a bankruptcy proceeding.

Š Valuation of three of Newmont Gold’s properties in Mexico and Indonesia, for tax basispurposes.

Š Valuation of a portion of Huntington Ready Mix gravel quarry, Indiana, for a highwaytaking.

Š Valuation of gravel quarry, Arizona, for a public use taking.

Š Valuation of a turquoise property, Colorado, for a public use taking.

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APPENDIX IV COMPETENT PERSON’S REPORT

Š Determination of project economics for feasibility of a mine in oil-bearing diatomite,California.

Š Determination of project economics for feasibility study of Cornucopia’s Mineral Ridgeproperty.

Š Determination of project economics for feasibility study of Atlanta Gold’s Atlantaproperty.

Š Due diligence review of economics of Atacama Minerals proposed iodine mine, Chile.

Š Due diligence review of Apex Silver’s proposed silver/lead/zinc mine, Bolivia.

Š Coal geology and quality study of captive deposit, and alternative fuels cost andtransportation analyses for proposed mine-mouth generating station in Wyoming.

CORPORATE EXPERIENCE

1989 – Present Behre Dolbear & Company (USA), Inc., Senior Associate

1979 – 1989 Independent Consultant

1976 – 1979 NUS Corporation, Senior Engineer

1974 – 1976 Dravo Corporation, Mining Engineer

1968 – 1974 U.S. Geological Survey, Research Technician

PROFESSIONAL AFFILIATIONS

Š Society for Mining, Metallurgy, and Exploration

Š American Institute of Mineral Appraisers

REGISTRATIONS/CERTIFICATIONS

Š Professional Engineer: Colorado

EDUCATION

Š University of Colorado, M.S., Geology — 1974

Š University of Colorado, B.S., Civil Engineering — 1969

PUBLICATIONS

“Data from Ground Magnetic Survey of the Ralston Dike, Jefferson County, Colorado,” USGSOpen File Report 75-97, 1975 (with Hasbrouck, W. P. and Botsford, M. L.).

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APPENDIX IV COMPETENT PERSON’S REPORT

“How to Negotiate and Administer a Coal Supply Agreement,” McGraw-Hill, New York,522 p., 1981.

“Mine Financial Feasibility Analysis Using Digital Computer Programs,” Colorado MiningAssociation Yearbook 1978, p. 103-112. (Paper presented at 81st National Western Mining Conferenceof the Colorado Mining Association, 1978.)

“Regional Comparison of a Miocene Geomagnetic Transition in Oregon and Nevada,” Earthand Planetary Science Letters, vol. 11, p. 391-400, 1971 (with Larson, E. E. and Watson, D. E.).

“The Effects of Contractual Structure on Coal Supply Agreements Between Utilities andProducing Companies,” NUS Corporation’s NUSletter, 1980 (with Lawton, Max R.).

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APPENDIX IV COMPETENT PERSON’S REPORT

JIANCHENG (JACK) SONG

CORPORATE EXPERIENCE

2009 – Present Minerals Companies (Western Mining, Sinom, Mylin, Jinhaoyuan etc.), IndependentSenior Geologist

Š Base in Beijing, Data review for gold projects worldwide, Evaluating goldexploration project include iron, gold and copper in Mongolia, Kirghizstan,Botswana and China etc.

2007 – 2009 Omega Gold Investment Ltd., Senior Geologist

Š Manila Philippines (holding by Australia), Project generation (metallic mineralprojects) in China, — Participated in gold exploration projects in Australia andMongolia.

2006 – 2007 Great Wall Gold, Exploration Manager

Š Verification of gold anomalies identified in the stream sediment survey in Qiubeiarea in Yunnan Province of China.

2004 – 2006 Gold Fields, General Manager

Š Responsible for due diligence (gold) in Northeastern China, Supervised a+2000m drilling program of a gold project in Shandong Province, Managed agold exploration project for the Gold Fields-Zijin Mining joint-venture in FujianProvince

2002 – 2004 Ivanhoe Mines Ltd., Senior Geologist

Š Participated in the reconnaissance with international geologists in InnerMongolia

2002 Pacific Minerals Inc., Chief Geologist

Š Managed a 5000m drilling program at 217 (“Chang Shan Hao”) gold project inInner Mongolia.

2001 – 2002 General Minerals Corp., Assistant Exploration Manager

Š Managed a +1500m drilling program, including core logging and sampling, inwestern Xinjiang of China.

1995 – 2001 Lianhui Industry Co., Deputy Director/Resource Consultant

Š Responsible for the sales and financial sections at Shanshan Sodium SulfideFactory, Supervised company’s underground mining operation at Baogutu GoldMine.

1982 – 1995 701 Geological Brigade, China National Nonferrous Metals Industry Corp. (CNNC)

Š Explored for gold and copper in the Western Tianshan Mountain Belt and inWest Jungar Basin area in Xinjiang

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APPENDIX IV COMPETENT PERSON’S REPORT

REGISTRATIONS/CERTIFICATIONS

Š Short Course — Spoken English 02/1993 — 08/1993

EDUCATION

Š China University of Geosciences (Wuhan), B.Sc (Geology) 1982

Š Beijing Foreign Studies University

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APPENDIX IV COMPETENT PERSON’S REPORT

BERNARD J. GUARNERA Mineral Property Valuation,PRESIDENT AND CHAIRMAN Mineral DevelopmentBEHRE DOLBEAR GROUP INC. and Lease Agreements

Mr. Bernard J. Guarnera has more than 40 years of experience with mining and consultingfirms in the international mineral industry, focusing on the valuation of developed and undevelopedmineral properties, negotiations for sales and acquisitions, structuring of mineral development andlease agreements, and economic geology. Mr. Guarnera’s valuation expertise spans all commoditiesand geographic areas, with recent emphasis on base and precious metals and past emphasis on energyminerals. He is a Certified Mineral Appraiser with the American Institute of Mineral Appraisers.Mr. Guarnera has lectured and instructed the mining engineering group of the Internal Revenue Serviceon mineral valuation techniques and has also presented seminars and instruction on mineral valuationsto the American Institute of Rural and Farm Appraisers and financial institutions. Mr. Guarnera hasprovided expert witness testimony on mineral property values on several occasions.

While with Behre Dolbear & Company, Inc., Mr. Guarnera has participated in numerous recentmineral property valuations, including:

Š Pebble copper-gold property, Alaska for acquisition purposes

Š Oyu Tolgoi copper-gold property, Mongolia for loan collateralization

Š Southern Peru Copper Company for resolution of a dispute

Š Copper mines and smelter of ASARCO’s Ray, Arizona complex for state tax purposes

Š Crown Butte Resources’ New World, Montana gold property for taking compensation

Š Newmont Gold Company’s acquisition of Normandy Mining Limited and Franco- NevadaMining Corporation

Š Copper mines, mills, smelter, and ancillary facilities of Exxon Coal and Mineral’sCompañía Minera Disputada, S.A., Chile

Š Arch Coal Company’s acquisition of Triton Energy

Š Baca Land Grant, New Mexico geothermal and undeveloped mineral resources forcondemnation purposes

Š Cogema, Inc.’s uranium properties in south Texas for divestiture purposes

Š McDonald Seven-up Pete gold property in Montana for royalty purposes

Š Kings Mountain, North Carolina mica property for estate division purposes

Š Royalty value of a wollastonite property in New York

Š Lega Dembi, Ethiopia gold mine for privatization purposes

Š South Inkai, Kazakhstan uranium deposits for an IPO

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APPENDIX IV COMPETENT PERSON’S REPORT

CORPORATE EXPERIENCE

2011 – Present Behre Dolbear Group Inc., Chief Executive Officer and Chairman of the Board ofDirector

2008 – 2011 Behre Dolbear Group Inc., President and Chairman

1991 – 2008 Behre Dolbear & Company, Inc., President, Chief Executive Officer, and ChiefOperating Officer

1981 – 1990 Boise Cascade Corporation, Manager, mineral resources

1976 – 1980 Dames & Moore, Principal-in-Charge, economic geology and mining group

1968 – 1976 Texaco, Inc., Manager, coal and hard mineral exploration projects

1967 Amax Exploration, Inc., Field Geologist/Party Chief

1965 – 1966 Anaconda American Brass, Ltd., Field Geologist/Party Chief

1964 Quebec Cartier Mining Company, Ltd., Geologist/Engineer

PROFESSIONAL AFFILIATIONS

Š American Institute of Mineral Appraisers

Š American Institute of Mining, Metallurgical, and Petroleum Engineers — Legion of Honor

Š Australasian Institute of Mining and Metallurgy — Chartered Professional

Š Canadian Institute of Mining, Metallurgy and Petroleum

Š Geological Society of America — Fellow

Š International Mining Professionals Society — Past President

Š Mining and Metallurgical Society of America — Qualified Professional Member

Š Mining Club of New York

Š Northwest Mining Association — Past President and Life Member

Š Society of Economic Geologists — Fellow

Š Society for Mining, Metallurgy, and Exploration — Resources and Reserves Committee

DIRECTORSHIPS

Š Colorado Mining Association

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APPENDIX IV COMPETENT PERSON’S REPORT

COURSES/SEMINARS TAUGHT

Š Valuation of Mineral Deposits — U.S. Internal Revenue Service — Mining, EngineeringSection

Š Valuation of Uranium Deposits — American Society of Farm Managers and RuralAppraisers

Š The ABCs of Ore Reserves — Seminar for Financial Community in Denver, London, NewYork, and Toronto

Š The Valuation of Mineral Properties — Seminar for Financial Community in London,New York, and Toronto

Š Economics of the Minerals Industry — Boise State University Department of Geology andGeophysics

REGISTRATIONS/CERTIFICATIONS

Š Professional Engineer: Texas #41852

Š Professional Geologist: Idaho #510, Oregon #70

Š Certified Mineral Appraiser #1995-3

Š Chartered Professional (Geologist) — Australasian Institute of Mining and Metallurgy

Š Qualified Professional Member — Mining and Metallurgical Society of America

EDUCATION

Š Michigan Technological University, B.S. Geological Engineering — 1965

Š Michigan Technological University, M.S. Economic Geology — 1967

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APPENDIX IV COMPETENT PERSON’S REPORT

APPENDIX 3.0

CASH FLOW SPREADSHEETS

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APPENDIX IV COMPETENT PERSON’S REPORTEcono

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metal

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year

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year

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year

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year

+1Produ

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year

+2Produ

ction

year

+3Produ

ction

year

+4Produ

ction

year

+5Produ

ction

year

+6Produ

ction

year

+7

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

Produ

ction

Waste(tonnes)

............................

00

43,893,000

31,961,000

37,253,000

38,839,000

38,789,000

32,871,000

27,475,000

19,297,000

Low

-grade

mill

materialstockpiled(tonnes)

.....

00

1,208,000

11,345,000

12,686,000

12,954,000

11,671,000

18,443,000

23,739,000

32,075,000

Higharsenicmaterialstockpiled(tonnes)

.......

00

3,919,000

17,452,000

1,881,000

27,000

1,360,000

506,000

606,000

448,000

High-grademillingore(tonnes)

...............

00

980,000

38,245,000

43,180,000

43,180,000

43,180,000

43,180,000

43,180,000

43,180,000

totalm

aterialm

oved

(tonnes).................

00

50,000,000

99,003,000

95,000,000

95,000,000

95,000,000

95,000,000

95,000,000

95,000,000

High-gradeoreto

mill

(tonnes)

...............

00

980,000

38,245,000

43,180,000

43,180,000

43,180,000

43,180,000

43,180,000

43,180,000

Low

-grade

oreto

mill

(tonnes)

...............

00

00

00

00

00

totalo

reto

mill

(tonnes)

.....................

00

980,000

38,245,000

43,180,000

43,180,000

43,180,000

43,180,000

43,180,000

43,180,000

High-grad

eore

copper

(%)...............................

0.0000%

0.0000%

0.4835%

0.5860%

0.5950%

0.5950%

0.6250%

0.6090%

0.6180%

0.6050%

molybdenum

(%)..........................

0.0000%

0.0000%

0.0981%

0.0124%

0.0160%

0.0200%

0.0210%

0.0110%

0.0170%

0.0160%

silver

(gramspertonne)

.....................

0.000

0.000

11.800

7.429

7.338

7.533

6.455

9.901

7.193

7.232

Low

-grade

ore

copper

(%)...............................

0.0000%

0.0000%

0.0000%

0.0000%

0.00

00%

0.0000%

0.0000%

0.0000%

0.0000%

0.0000%

molybdenum

(%)..........................

0.0000%

0.0000%

0.0000%

0.0000%

0.00

00%

0.0000%

0.0000%

0.0000%

0.0000%

0.0000%

silver

(gramspertonne)

.....................

00

00

00

00

00

containedmetal

copper

(tonnes)

............................

00

4,738

224,116

256,921

256,921

269,875

262,966

266,852

261,239

molybdenum

(tonnes).......................

00

961

4,742

6,909

8,636

9,068

4,750

7,341

6,909

silver

(grams)

.............................

00

11,564,000

284,122,105

316,854,840

325,274,940

278,726,900

427,525,180

310,593,740

312,277,760

metallurgical

recovery

copper

(%)...............................

0.00%

0.00%

85.00%

85.00%

85.00%

85.00%

85.00%

85.00%

85.00%

85.00%

molybdenum

(%)..........................

0.00%

0.00%

65.00%

65.00%

65.00%

65.00%

65.00%

65.00%

65.00%

65.00%

silver

(%)................................

0.00%

0.00%

70.00%

70.00%

70.00%

70.00%

70.00%

70.00%

70.00%

70.00%

recoveredmetal

copper

(tonnes)

............................

00

4,028

190,498

218,383

218,383

229,394

223,521

226,825

222,053

copper

(pounds)

...........................

00

8,879,228

419,976,461

481,451,199

481,451,199

505,726,049

492,779,462

500,061,917

489,542,816

molybdenum

(tonnes).......................

00

625

3,083

4,491

5,613

5,894

3,087

4,771

4,491

molybdenum

(pounds)

......................

00

1,377,660

6,795,845

9,900,331

12,375,414

12,994,185

6,806,478

10,519,102

9,900,331

silver

(grams)

.............................

00

8,094,800

198,885,474

221,798,388

227,692,458

195,108,830

299,267,626

217,415,618

218,594,432

silver

(troyou

nces).........................

00

260,254

6,394,316

7,130,983

7,320,482

6,272,894

9,621,677

6,990,074

7,027,973

copp

er/silv

erconcentrates

concentrate(dry

tonnes).....................

00

15,198

718,862

824,086

824,086

865,637

843,476

855,942

837,936

concentrate(w

ettonnes)

....................

9.00%

00

16,566

783,559

898,254

898,254

943,544

919,389

932,976

913,351

copper

gradeof

concentrate(%

)..............

26.50%

26.50%

26.50%

26.50%

26.50%

26.50%

26.50%

26.50%

26.50%

26.50%

silver

gradeof

concentrate(gramspertonne)

....

0.00

0.00

532.61

276.67

269.14

276.30

225.39

354.30

254.01

260.87

arsenicgradeof

concentrate(%

)..............

0.08%

0.08%

0.08%

0.08%

0.08%

0.08%

0.08%

0.08%

0.08%

0.08%

zinc

gradeof

concentrate(%

)................

9.00%

9.00%

9.00%

9.00%

9.00%

9.00%

9.00%

9.00%

9.00%

9.00%

IV-288

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THIS WEB PROOF INFORMATION PACK IS IN DRAFT FORM. The information contained in it is incomplete and is subject to change. ThisWeb Proof Information Pack must be read in conjunction with the section headed “Warning” on the cover of this Web Proof Information Pack.

APPENDIX IV COMPETENT PERSON’S REPORTEcono

micAna

lysisof

Torom

ocho

Project

Prepa

redby

Behre

Dolbear

&Co.

May

1,2012

metal

prices

averageof

variou

sforecastingcompa

nies;withcopp

ercostperpo

und

Pre-produ

ction

year

-3Pre-produ

ction

year

-2Pre-produ

ction

year

-1Produ

ction

year

+1Produ

ction

year

+2Produ

ction

year

+3Produ

ction

year

+4Produ

ction

year

+5Produ

ction

year

+6Produ

ction

year

+7

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

molybdenum

chem

icalgradeoxide(tonnes)

.....

00

625

3,083

4,491

5,613

5,894

3,087

4,771

4,491

molybdenum

chem

icalgradeoxide(pounds)

....

00

1,377,660

6,795,845

9,900,331

12,375,414

12,994,185

6,806,478

10,519,102

9,900,331

metal

prices

copper

(USdollarsperlb)...................

$4.37

$4.53

$4.18

$3.83

$3.84

$2.57

$2.57

$2.57

$2.57

$2.57

silver

(USdollarspertroy

ounce)

.............

$24.18

$37.90

$36.94

$35.28

$32

.00

$22.50

$22.50

$22.50

$22.50

$22.50

molybdenum

tech

oxide(U

Sdollarsperlb)

.....

$16.64

$17.78

$18.66

$17.25

$18

.50

$15.17

$15.17

$15.17

$15.17

$15.17

chem

icalgradeoxideprem

ium

...............10.00%

$1.66

$1.78

$1.87

$1.73

$1.85

$1.52

$1.52

$1.52

$1.52

$1.52

molychem

icalgradeprice(U

Sdollarperlb)....

$18.30

$19.56

$20.53

$18.98

$20.35

$16.69

$16.69

$16.69

$16.69

$16.69

IV-289

Page 594:  · 2013. 1. 16. · Hong Kong Exchanges and Clearing Limited, The Stock Exchange of Hong Kong Limited and the Securities and Futures Commission take no responsibility for the contents

THIS WEB PROOF INFORMATION PACK IS IN DRAFT FORM. The information contained in it is incomplete and is subject to change. ThisWeb Proof Information Pack must be read in conjunction with the section headed “Warning” on the cover of this Web Proof Information Pack.

APPENDIX IV COMPETENT PERSON’S REPORTEcono

micAna

lysisof

Torom

ocho

Project

Prepa

redby

Behre

Dolbear

&Co.

May

1,2012

metal

prices

averageof

variou

sforecastingcompa

nies;with

copp

ercostpe

rpo

und

Produ

ction

year

+8Produ

ction

year

+9Produ

ction

year

+10

Produ

ction

year

+11

Produ

ction

year

+12

Produ

ction

year

+13

Produ

ction

year

+14

Produ

ction

year

+15

Produ

ction

year

+16

Produ

ction

year

+17

Produ

ction

year

+18

2021

2022

2023

2024

2025

2026

2027

2028

2029

2030

2031

Produ

ction

Waste(tonnes)

.................

31,851,000

43,933,000

40,429,000

38,017,000

47,649,000

51,820

,000

50,916,000

50,917,000

49,892,000

49,912,000

50,962,000

Low

-grade

mill

materialstockpiled

(tonnes)

.....................

19,932,000

6,048,000

10,901,000

13,782,000

4,171,000

0903,000

837,000

1,760,000

997,000

833,000

Higharsenicmaterialstockpiled

(tonnes)

.....................

37,000

1,839,000

480,000

21,000

00

066,000

167,000

911,000

25,000

High-grademillingore(tonnes)

....

43,180,000

43,180,000

43,180,000

43,180,000

43,180,000

43,180

,000

43,180,000

43,180,000

43,180,000

43,180,000

43,180,000

totalm

aterialm

oved

(tonnes)

......

95,000,000

95,000,000

94,990,000

95,000,000

95,000,000

95,000

,000

94,999,000

95,000,000

94,999,000

95,000,000

95,000,000

High-gradeoreto

mill

(tonnes)

....

43,180,000

43,180,000

43,180,000

43,180,000

43,180,000

43,180

,000

43,180,000

43,180,000

43,180,000

43,180,000

43,180,000

Low

-grade

oreto

mill

(tonnes)

.....

00

00

00

00

00

0totalo

reto

mill

(tonnes)

..........

43,180,000

43,180,000

43,180,000

43,180,000

43,180,000

43,180,000

43,180,000

43,180,000

43,180,000

43,180,000

43,180,000

High-grad

eore

copper

(%)....................

0.5880%

0.6050%

0.5840%

0.5610%

0.5510%

0.5330%

0.4680%

0.4470%

0.4820%

0.4570%

0.4850%

molybdenum

(%)...............

0.0180%

0.0280%

0.0240%

0.0230%

0.0180%

0.0220%

0.0120%

0.0160%

0.0190%

0.0210%

0.0220%

silver

(gramspertonne)

..........

6.494

5.377

5.843

6.804

8.105

7.144

8.571

6.367

6.668

5.193

8.057

Low

-grade

ore

copper

(%)....................

0.0000%

0.0000%

0.0000%

0.0000%

0.0000%

0.0000%

0.0000%

0.0000%

0.0000%

0.0000%

0.0000%

molybdenum

(%)...............

0.0000%

0.0000%

0.0000%

0.0000%

0.0000%

0.0000%

0.0000%

0.0000%

0.0000%

0.0000%

0.0000%

silver

(gramspertonne)

..........

00

00

00

00

00

0

containedmetal

copper

(tonnes)

.................

253,898

261,239

252,171

242,240

237,922

230,149

202,082

193,015

208,128

197,333

209,423

molybdenum

(tonnes)

............

7,772

12,090

10,363

9,931

7,772

9,500

5,182

6,909

8,204

9,068

9,500

silver

(grams)

..................

280,410,920

232,178,860

252,300,740

293,796,720

349,973,900

308,477,920

370,095,780

274,927,060

287,924,240

224,233,740

347,901,260

metallurgical

recovery

copper

(%)....................

85.00%

85.00%

85.00%

85.00%

85.00%

85.00%

85.00%

85.00%

85.00%

85.00%

85.00%

molybdenum

(%)...............

65.00%

65.00%

65.00%

65.00%

65.00%

65.00%

65.00%

65.00%

65.00%

65.00%

65.00%

silver

(%).....................

70.00%

70.00%

70.00%

70.00%

70.00%

70.00%

70.00%

70.00%

70.00%

70.00%

70.00%

recoveredmetal

copper

(tonnes)

.................

215,814

222,053

214,346

205,904

202,234

195,627

171,770

164,062

176,908

167,733

178,010

copper

(pounds)

................

475,787,067

489,542,816

472,550,420

453,939,702

445,848,085

431,283,175

378,687,666

361,695,270

390,015,929

369,786,887

392,443,414

molybdenum

(tonnes)

............

5,052

7,859

6,736

6,455

5,052

6,175

3,368

4,491

5,333

5,894

6,175

molybdenum

(pounds)

...........

11,137,873

17,325,579

14,850,497

14,231,726

11,137,873

13,612,955

7,425,248

9,900,331

11,756,643

12,994,185

13,612,955

silver

(grams)

..................

196,287,644

162,525,202

176,610,518

205,657,704

244,981,730

215,934,544

259,067,046

192,448,942

201,546,968

156,963,618

243,530,882

silver

(troyou

nces)..............

6,310,794

5,225,306

5,678,159

6,612,048

7,876,345

6,942,456

8,329,198

6,187,377

6,479,885

5,046,497

7,829,699

IV-290

Page 595:  · 2013. 1. 16. · Hong Kong Exchanges and Clearing Limited, The Stock Exchange of Hong Kong Limited and the Securities and Futures Commission take no responsibility for the contents

THIS WEB PROOF INFORMATION PACK IS IN DRAFT FORM. The information contained in it is incomplete and is subject to change. ThisWeb Proof Information Pack must be read in conjunction with the section headed “Warning” on the cover of this Web Proof Information Pack.

APPENDIX IV COMPETENT PERSON’S REPORTEcono

micAna

lysisof

Torom

ocho

Project

Prepa

redby

Behre

Dolbear

&Co.

May

1,2012

metal

prices

averageof

variou

sforecastingcompa

nies;with

copp

ercostpe

rpo

und

Produ

ction

year

+8Produ

ction

year

+9Produ

ction

year

+10

Produ

ction

year

+11

Produ

ction

year

+12

Produ

ction

year

+13

Produ

ction

year

+14

Produ

ction

year

+15

Produ

ction

year

+16

Produ

ction

year

+17

Produ

ction

year

+18

2021

2022

2023

2024

2025

2026

2027

2028

2029

2030

2031

copp

er/silv

erconcentrates

concentrate(dry

tonnes)..........

814,391

837,936

808,851

776,996

763,145

738,215

648,189

619,103

667,579

632,954

671,734

concentrate(w

ettonnes)..........

9.00%

887,686

913,351

881,648

846,925

831,828

804,654

706,526

674,823

727,661

689,919

732,190

copper

gradeof

concentrate(%

)....

26.50%

26.50%

26.50%

26.50%

26.50%

26.50%

26.50%

26.50%

26.50%

26.50%

26.50%

silver

gradeof

concentrate(grams

pertonne)

...................

241.02

193.96

218.35

264.68

321.02

292.51

399.68

310.85

301.91

247.99

362.54

arsenicgradeof

concentrate(%

)...

0.08%

0.08%

0.08%

0.08%

0.08%

0.08%

0.08%

0.08%

0.08%

0.08%

0.08%

zinc

gradeof

concentrate(%

)......

9.00%

9.00%

9.00%

9.00%

9.00%

9.00%

9.00%

9.00%

9.00%

9.00%

9.00%

molybdenum

chem

icalgradeoxide

(tonnes)

.....................

5,052

7,859

6,736

6,455

5,052

6,175

3,368

4,491

5,333

5,894

6,175

molybdenum

chem

icalgradeoxide

(pounds)

....................

11,137,873

17,325,579

14,850,497

14,231,726

11,137,873

13,612,955

7,425,248

9,900,331

11,756,643

12,994,185

13,612,955

metal

prices

copper

(USdollarsperlb)

........

$2.57

$2.57

$2.57

$2.57

$2.57

$2.57

$2.57

$2.57

$2.57

$2.57

$2.57

silver

(USdollarspertroy

ounce)

..$

22.50

$22.50

$22.50

$22.50

$22.50

$22.50

$22.50

$22.50

$22.50

$22.50

$22.50

molybdenum

tech

oxide(U

Sdollars

perlb)......................

$15.17

$15.17

$15.17

$15.17

$15.17

$15.17

$15.17

$15.17

$15.17

$15.17

$15.17

chem

icalgradeoxideprem

ium

....

10.00%

$1.52

$1.52

$1.52

$1.52

$1.52

$1.52

$1.52

$1.52

$1.52

$1.52

$1.52

molychem

icalgradeprice(U

Sdollarperlb).................

$16.69

$16.69

$16.69

$16.69

$16.69

$16.69

$16.69

$16.69

$16.69

$16.69

$16.69

IV-291

Page 596:  · 2013. 1. 16. · Hong Kong Exchanges and Clearing Limited, The Stock Exchange of Hong Kong Limited and the Securities and Futures Commission take no responsibility for the contents

THIS WEB PROOF INFORMATION PACK IS IN DRAFT FORM. The information contained in it is incomplete and is subject to change. ThisWeb Proof Information Pack must be read in conjunction with the section headed “Warning” on the cover of this Web Proof Information Pack.

APPENDIX IV COMPETENT PERSON’S REPORTEcono

micAna

lysisof

Torom

ocho

Project

Prepa

redby

Behre

Dolbear

&Co.

May

1,2012

metal

prices

averageof

variou

sforecastingcompa

nies;with

copp

ercostpe

rpo

und

Produ

ction

year

+19

Produ

ction

year

+20

Produ

ction

year

+21

Produ

ction

year

+22

Produ

ction

year

+23

Produ

ction

year

+24

Produ

ction

year

+25

Produ

ction

year

+26

Produ

ction

year

+27

Produ

ction

year

+28

Produ

ction

year

+29

2032

2033

2034

2035

2036

2037

2038

2039

2040

2041

2042

Produ

ction

Waste(tonnes)

.................

50,539,000

50,444,000

50,719,000

48,025,000

36,505,000

25,883

,000

21,752,000

18,981,000

19,880,000

13,230,000

10,488,000

Low

-grade

mill

materialstockpiled

(tonnes)

.....................

1,281,000

1,376,000

1,101,000

00

00

00

00

Higharsenicmaterialstockpiled

(tonnes)

.....................

00

00

00

00

00

0High-grademillingore(tonnes)

....

43,180,000

43,180,000

43,180,000

43,180,000

43,180,000

43,180,000

43,180,000

43,180,000

43,180,000

43,180,000

43,180,000

totalm

aterialm

oved

(tonnes)

......

95,000,000

95,000,000

95,000,000

91,205,000

79,685,000

69,063,000

64,932,000

62,161,000

63,060,000

56,410,000

53,668,000

High-gradeoreto

mill

(tonnes)

....

43,180,000

43,180,000

43,180,000

43,180,000

43,180,000

43,180,000

43,180,000

43,180,000

43,180,000

43,180,000

43,180,000

Low

-grade

oreto

mill

(tonnes)

.....

00

00

00

00

00

0totalo

reto

mill

(tonnes)

..........

43,180,000

43,180,000

43,180,000

43,180,000

43,180,000

43,180,000

43,180,000

43,180,000

43,180,000

43,180,000

43,180,000

High-grad

eore

copper

(%)....................

0.5410%

0.4690%

0.4070%

0.3400%

0.3880%

0.3770%

0.3740%

0.4020%

0.3990%

0.4420%

0.4240%

molybdenum

(%)...............

0.0250%

0.0290%

0.0300%

0.0270%

0.0100%

0.0110%

0.0130%

0.0160%

0.0180%

0.0220%

0.0250%

silver

(gramspertonne)

..........

7.562

6.562

6.057

9.183

6.057

6.435

5.766

5.474

4.979

7.270

7.581

Low

-grade

ore

copper

(%)....................

0.0000%

0.0000%

0.0000%

0.0000%

0.0000%

0.0000%

0.0000%

0.0000%

0.0000%

0.0000%

0.0000%

molybdenum

(%)...............

0.0000%

0.0000%

0.0000%

0.0000%

0.0000%

0.0000%

0.0000%

0.0000%

0.0000%

0.0000%

0.0000%

silver

(gramspertonne)

..........

00

00

00

00

00

0

containedmetal

copper

(tonnes)

.................

233,604

202,514

175,743

146,812

167,538

162,789

161,493

173,584

172,288

190,856

183,083

molybdenum

(tonnes)

............

10,795

12,522

12,954

11,659

4,318

4,750

5,613

6,909

7,772

9,500

10,795

silver

(grams)

..................

326,527,160

283,347,160

261,541,260

396,521,940

261,541,260

277,863,300

248,975,880

236,367,320

214,993,220

313,918,600

327,347,580

metallurgical

recovery

copper

(%)....................

85.00%

85.00%

85.00%

85.00%

85.00%

85.00%

85.00%

85.00%

85.00%

85.00%

85.00%

molybdenum

(%)...............

65.00%

65.00%

65.00%

65.00%

65.00%

65.00%

65.00%

65.00%

65.00%

65.00%

65.00%

silver

(%).....................

70.00%

70.00%

70.00%

70.00%

70.00%

70.00%

70.00%

70.00%

70.00%

70.00%

70.00%

recoveredmetal

copper

(tonnes)

.................

198,563

172,137

149,381

124,790

142,408

138,370

137,269

147,546

146,445

162,227

155,621

copper

(pounds)

................

437,756,468

379,496,827

329,328,803

275,114,971

313,954,731

305,053,953

302,626,468

325,282,995

322,855,510

357,649,462

343,084,552

molybdenum

(tonnes)

............

7,017

8,139

8,420

7,578

2,807

3,087

3,649

4,491

5,052

6,175

7,017

molybdenum

(pounds)

...........

15,469,267

17,944,350

18,563,121

16,706,809

6,187,707

6,806,478

8,044,019

9,900,331

11,137,873

13,612,955

15,469,267

silver

(grams)

..................

228,569,012

198,343,012

183,078,882

277,565,358

183,078,882

194,504,310

174,283,116

165,457,124

150,495,254

219,743,020

229,143,306

silver

(troyou

nces)..............

7,348,664

6,376,875

5,886,122

8,923,933

5,886,122

6,253,458

5,603,332

5,319,570

4,838,534

7,064,901

7,367,128

IV-292

Page 597:  · 2013. 1. 16. · Hong Kong Exchanges and Clearing Limited, The Stock Exchange of Hong Kong Limited and the Securities and Futures Commission take no responsibility for the contents

THIS WEB PROOF INFORMATION PACK IS IN DRAFT FORM. The information contained in it is incomplete and is subject to change. ThisWeb Proof Information Pack must be read in conjunction with the section headed “Warning” on the cover of this Web Proof Information Pack.

APPENDIX IV COMPETENT PERSON’S REPORTEcono

micAna

lysisof

Torom

ocho

Project

Prepa

redby

Behre

Dolbear

&Co.

May

1,2012

metal

prices

averageof

variou

sforecastingcompa

nies;with

copp

ercostpe

rpo

und

Produ

ction

year

+19

Produ

ction

year

+20

Produ

ction

year

+21

Produ

ction

year

+22

Produ

ction

year

+23

Produ

ction

year

+24

Produ

ction

year

+25

Produ

ction

year

+26

Produ

ction

year

+27

Produ

ction

year

+28

Produ

ction

year

+29

2032

2033

2034

2035

2036

2037

2038

2039

2040

2041

2042

copp

er/silv

erconcentrates

concentrate(dry

tonnes)..........

749,295

649,574

563,703

470,906

537,387

522,152

517,997

556,778

552,623

612,178

587,248

concentrate(w

ettonnes)..........

9.00%

816,732

708,035

614,436

513,288

585,752

569,146

564,617

606,888

602,359

667,274

640,100

copper

gradeof

concentrate(%

)....

26.50%

26.50%

26.50%

26.50%

26.50%

26.50%

26.50%

26.50%

26.50%

26.50%

26.50%

silver

gradeof

concentrate(grams

pertonne)

...................

305.05

305.34

324.78

589.43

340.68

372.51

336.46

297.17

272.33

358.95

390.20

arsenicgradeof

concentrate(%

)...

0.08%

0.08%

0.08%

0.08%

0.08%

0.08%

0.08%

0.08%

0.08%

0.08%

0.08%

zinc

gradeof

concentrate(%

)......

9.00%

9.00%

9.00%

9.00%

9.00%

9.00%

9.00%

9.00%

9.00%

9.00%

9.00%

molybdenum

chem

icalgradeoxide

(tonnes)

.....................

7,017

8,139

8,420

7,578

2,807

3,087

3,649

4,491

5,052

6,175

7,017

molybdenum

chem

icalgradeoxide

(pounds)

....................

15,469,267

17,944,350

18,563,121

16,706,809

6,187,707

6,806,478

8,044,019

9,900,331

11,137,873

13,612,955

15,469,267

metal

prices

copper

(USdollarsperlb)

........

$2.57

$2.57

$2.57

$2.57

$2.57

$2.57

$2.57

$2.57

$2.57

$2.57

$2.57

silver

(USdollarspertroy

ounce)

..$

22.50

$22.50

$22.50

$22.50

$22.50

$22.50

$22.50

$22.50

$22.50

$22.50

$22.50

molybdenum

tech

oxide(U

Sdollars

perlb)......................

$15.17

$15.17

$15.17

$15.17

$15.17

$15.17

$15.17

$15.17

$15.17

$15.17

$15.17

chem

icalgradeoxideprem

ium

....

10.00%

$1.52

$1.52

$1.52

$1.52

$1.52

$1.52

$1.52

$1.52

$1.52

$1.52

$1.52

molychem

icalgradeprice(U

Sdollarperlb).................

$16.69

$16.69

$16.69

$16.69

$16.69

$16.69

$16.69

$16.69

$16.69

$16.69

$16.69

IV-293

Page 598:  · 2013. 1. 16. · Hong Kong Exchanges and Clearing Limited, The Stock Exchange of Hong Kong Limited and the Securities and Futures Commission take no responsibility for the contents

THIS WEB PROOF INFORMATION PACK IS IN DRAFT FORM. The information contained in it is incomplete and is subject to change. ThisWeb Proof Information Pack must be read in conjunction with the section headed “Warning” on the cover of this Web Proof Information Pack.

APPENDIX IV COMPETENT PERSON’S REPORTEcono

micAna

lysisof

Torom

ocho

Project

Prepa

redby

Behre

Dolbear

&Co.

May

1,20

12metal

prices

averag

eof

variou

sforecastingcompa

nies;w

ith

copp

ercostperpo

und

Produ

ction

year

+30

Produ

ction

year

+31

Produ

ction

year

+32

Produ

ction

year

+33

Produ

ction

year

+34

Produ

ction

year

+35

Produ

ction

year

+36

Produ

ction

year

+37

Produ

ction

year

+38

Produ

ction

year

+39

Produ

ction

year

+40

Total

2043

2044

2045

2046

2047

2048

2049

2050

2051

2052

2053

Produ

ction

Waste(tonnes)

...........................

9,652,000

14,187,000

14,432,000

1,161,393,000

Low

-grade

mill

materialstockpiled(tonnes)

...

00

00

00

00

00

0188,043,000

Higharsenicmaterialstockpiled(tonnes)

......

00

00

00

00

00

029,745,000

High-grademillingore(tonnes)

.............

43,180,000

43,180,000

17,715,000

1,352,340,000

totalm

aterialm

oved

(tonnes)

...............

52,832,000

57,367,000

32,147,000

00

00

00

00

2,731,521,000

High-gradeoreto

mill

(tonnes)

..............

43,180,000

43,180,000

17,715,000

00

00

00

00

1,352,340,000

Low

-grade

oreto

mill

(tonnes)

..............

00

25,465,000

43,180,000

43,180,000

43,180,000

33,038,000

00

00

188,043,000

totalo

reto

mill

(tonnes)

...................

43,180,000

43,180,000

43,180,000

43,180,000

43,180,000

43,180,000

33,038,000

00

00

1,540,383,000

High-grad

eore

copper

(%)..............................

0.3720%

0.2810%

0.1660%

0.0000%

0.0000%

0.0000

%0.0000%

0.0000%

0.0000%

0.0000%

0.0000%

molybdenum

(%).........................

0.0290%

0.0330%

0.0400%

0.0000%

0.0000%

0.0000%

0.0000%

0.0000%

0.0000%

0.0000%

0.0000%

silver

(gramspertonne)

...................

6.232

9.872

6.833

00

00

00

00

Low

-grade

ore

copper

(%)..............................

0.0000%

0.0000%

0.3660%

0.3660%

0.3660%

0.3660

%0.3660%

0.0000%

0.0000%

0.0000%

0.0000%

molybdenum

(%).........................

0.0000%

0.0000%

0.0080%

0.0080%

0.0080%

0.0080%

0.0080%

0.0000%

0.0000%

0.0000%

0.0000%

silver

(gramspertonne)

...................

00

5.877

5.877

5.877

5.877

5.877

00

00

containedmetal

copper

(tonnes)

..........................

160,630

121,336

122,609

158,039

158,039

158,039

120,919

00

00

7,261,141

molybdenum

(tonnes)

.....................

12,522

14,249

9,123

3,454

3,454

3,454

2,643

00

00

292,095

silver

(grams)

...........................

269,097,760

426,272,960

270,704,400

253,768,860

253,768,860

253,768,86

0194,164,326

00

00

10,559,651,311

metallurgical

recovery

copper

(%)..............................

85.00%

85.00%

85.00%

85.00%

85.00%

85.00%

85.00%

0.00%

0.00%

0.00%

0.00%

molybdenum

(%).........................

65.00%

65.00%

65.00%

65.00%

65.00%

65.00%

65.00%

0.00%

0.00%

0.00%

0.00%

silver

(%)....

...........................

70.00%

70.00%

70.00%

70.00%

70.00%

70.00%

70.00%

0.00%

0.00%

0.00%

0.00%

recoveredmetal

copper

(tonnes)

..........................

136,535

103,135

104,217

134,333

134,333

134,333

102,781

00

00

6,171,970

copper

(pounds)

..........................

301,008,144

227,374,432

229,759,941

296,153,174

296,153,174

296,153,174

226,593,529

00

00

13,606,849,070

molybdenum

(tonnes)

.....................

8,139

9,262

5,930

2,245

2,245

2,245

1,718

00

00

189,862

molybdenum

(pounds)

....................

17,944,350

20,419,433

13,073,573

4,950,166

4,950,166

4,950,166

3,787,484

00

00

418,572,725

silver

(grams)

...........................

188,368,432

298,391,072

189,493,080

177,638,202

177,638,202

177,638,202

135,915,028

00

00

7,391,755,918

silver

(troyounces).......................

6,056,185

9,593,495

6,092,343

5,711,200

5,711,200

5,711,200

4,369,769

00

00

237,650,447

IV-294

Page 599:  · 2013. 1. 16. · Hong Kong Exchanges and Clearing Limited, The Stock Exchange of Hong Kong Limited and the Securities and Futures Commission take no responsibility for the contents

THIS WEB PROOF INFORMATION PACK IS IN DRAFT FORM. The information contained in it is incomplete and is subject to change. ThisWeb Proof Information Pack must be read in conjunction with the section headed “Warning” on the cover of this Web Proof Information Pack.

APPENDIX IV COMPETENT PERSON’S REPORTEcono

micAna

lysisof

Torom

ocho

Project

Prepa

redby

Behre

Dolbear

&Co.

May

1,20

12metal

prices

averag

eof

variou

sforecastingcompa

nies;w

ith

copp

ercostperpo

und

Produ

ction

year

+30

Produ

ction

year

+31

Produ

ction

year

+32

Produ

ction

year

+33

Produ

ction

year

+34

Produ

ction

year

+35

Produ

ction

year

+36

Produ

ction

year

+37

Produ

ction

year

+38

Produ

ction

year

+39

Produ

ction

year

+40

Total

2043

2044

2045

2046

2047

2048

2049

2050

2051

2052

2053

copp

er/silv

erconcentrates

concentrate(dry

tonnes)...................

515,227

389,190

393,274

506,917

506,917

506,91

7387,854

00

00

23,290,454

concentrate(w

ettonnes)...................

9.00%

561,597

424,217

428,668

552,539

552,539

552,539

422,760

00

00

25,386,595

copper

gradeof

concentrate(%

).............

26.50%

26.50%

26.50%

26.50%

26.50%

26.50%

26.50%

26.50%

26.50%

26.50%

26.50%

silver

gradeof

concentrate(gramspertonne)

...

365.60

766.70

481.84

350.43

350.43

350.43

350.43

0.00

0.00

0.00

0.00

arsenicgradeof

concentrate(%

).............

0.08%

0.08%

0.08%

0.08%

0.08%

0.08%

0.08%

0.08%

0.08%

0.08%

0.08%

zinc

gradeof

concentrate(%

)...............

9.00%

9.00%

9.00%

9.00%

9.00%

9.00%

9.00%

9.00%

9.00%

9.00%

9.00%

molybdenum

chem

icalgradeoxide(tonnes)

...

8,139

9,262

5,930

2,245

2,245

2,245

1,718

00

00

189,862

molybdenum

chem

icalgradeoxide(pounds)

...

17,944,350

20,419,433

13,073,573

4,950,166

4,950,166

4,950,166

3,787,484

00

00

418,572,725

metal

prices

copper

(USdo

llarsperlb)..................

$2.57

$2.57

$2.57

$2.57

$2.57

$2.57

$2.57

$2.57

$2.57

$2.57

$2.57

silver

(USdollarspertroy

ounce)

............

$22.50

$22.50

$22.50

$22.50

$22.50

$22.50

$22.50

$22.50

$22.50

$22.50

$22.50

molybdenum

tech

oxide(U

Sdollarsperlb)....

$15.17

$15.17

$15.17

$15.17

$15.17

$15.17

$15.17

$15.17

$15.17

$15.17

$15.17

chem

icalgradeoxideprem

ium

..............

10.00%

$1.52

$1.52

$1.52

$1.52

$1.52

$1.52

$1.52

$1.52

$1.52

$1.52

$1.52

molychem

icalgradeprice(U

Sdollarperlb)...

$16.69

$16.69

$16.69

$16.69

$16.69

$16.69

$16.69

$16.69

$16.69

$16.69

$16.69

IV-295

Page 600:  · 2013. 1. 16. · Hong Kong Exchanges and Clearing Limited, The Stock Exchange of Hong Kong Limited and the Securities and Futures Commission take no responsibility for the contents

THIS WEB PROOF INFORMATION PACK IS IN DRAFT FORM. The information contained in it is incomplete and is subject to change. ThisWeb Proof Information Pack must be read in conjunction with the section headed “Warning” on the cover of this Web Proof Information Pack.

APPENDIX IV COMPETENT PERSON’S REPORTEcono

micAna

lysisof

Torom

ocho

Project

Prepa

redby

Behre

Dolbear

&Co.

May

1,2012

metal

prices

averageof

variou

sforecastingcompa

nies;with

copp

ercostpe

rpo

und

Pre-produ

ction

year

-3Pre-produ

ction

year

-2Pre-produ

ction

year

-1Produ

ction

year

+1Produ

ction

year

+2Produ

ction

year

+3Produ

ction

year

+4Produ

ction

year

+5Produ

ction

year

+6Produ

ction

year

+7

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

incomefrom

sales

copper

paym

ent.............

97.50%

$0$0

$36,187,295

$1,568,297,101

$1,802,553,288

$1,206,396,341

$1,267,223,048

$1,234,782,138

$1,253,030,149

$1,226,671,910

silver

paym

ent..............

95.00%

$0$0

$9,133,088

$214,311,888$

216,781,884$

156,475,298$

134,083,107$

205,663,338$

149,412,826$

150,222,933

molybdenum

oxidepaym

ent...

100.00%

$0$0

$28,277,858

$128,951,154$

201,471,738$

206,508,532$

216,833,958$

113,579,693$

175,532,252$

165,206,826

totalp

ayment...............

$0$0

$73,598,241

$1,911,560,144

$2,220,806,911

$1,569,380,171

$1,018,140,113

$1,554,025,168

$1,577,975,227

$1,542,101,668

treatm

entcharge(U

S$perdry

tonnecons)...............$

70.00

$0$0

$1,063,882

$50,320,318

$57,686,036

$57,686,036

$60,594,575

$59,043,354

$59,915,916

$58,655,549

refining

charge

perIb

copper

...$

0.070

$0$0

$621,546

$29,398,352

$33,701,584

$33,701,584

$35,400,823

$34,494,562

$35,004,334

$34,267,997

refining

charge

perounce

silver

....................

$0.400

$0$0

$104,102

$2,557,726$

2,852,393$

2,928,193$

2,509,158$

3,848,671$

2,796,029$

2,811,189

arsenicpenalty

penalty

perincrem

ent.....$

2.50

increm

ent..............

0.10%

penalty

................

$0$0

$30,397

$1,437,723$

1,648,172$

1,648,172$

1,731,274$

1,686,953$

1,711,883$

1,675,873

zinc

penalty

penalty

perincrem

ent.....$

2.50

increm

ent..............

1.00%

penalty

................

$0$0

$341,962

$16,174,388

$18,541,940

$18,541,940

$19,476,828

$18,978,221

$19,258,687

$18,853,569

subtotal,treatmentand

penalties

.................

$0$0

$2,161,889

$99,888,507

$114,430,126$

114,505,925$

119,712,658$

118,051,761$

118,686,851$

116,264,178

tran

sportan

dha

ndlin

gcopper

cons,railtoport,per

wet

tonne....................

$17.90

$0$0

$296,534

$14,025,710

$16,078,746

$16,078,746

$16,889,439

$16,457,070

$16,700,278

$16,348,977

porthandlin

g&

loading,perwet

tonne....................

$7.80

$0$0

$129,216

$6,111,762$

7,006,381$

7,006,381$

7,359,644$

7,171,237$

7,277,216$

7,124,135

insurance,perdrytonne.......$

0.74

$0$0

$11,247

$531,958$

609,824$

609,824$

640,571$

624,173$

633,397$

620,073

oceanfreight,perwettonne....

$50.00

$0$0

$828,308

$39,177,962

$44,912,699

$44,912,699

$47,177,205

$45,969,469

$46,648,820

$45,667,535

supervision&

assaying,per

dry

tonne....................

$0.35

$0$0

$5,319

$251,602$

288,430$

288,430$

302,973$

295,217$

299,580$

293,278

molyoxide,railto

port,per

tonne....................

$17.90

$0$0

$11,186

$55,178

$80,384

$100,480$

105,504$

55,264

$85,408

$80,384

porthandlin

g&

loading,per

tonne....................

$7.80

$0$0

$4,874

$24,044

$35,028

$43,785

$45,974

$24,081

$37,217

$35,028

insurance,of

netp

ayable

......

0.00083

$0$0

$23,471

$107,029$

167,222$

171,402$

179,972$

94,271

$145,692$

137,122

oceanfreight,pertonne.......$

50.00

$0$0

$31,245

$154,127$

224,536$

280,670$

294,704$

154,369$

238,570$

224,536

subtotal,transportand

handlin

g.................

$0$0

$1,341,401

$60,439,371

$69,403,250

$69,492,417

$72,995,986

$70,845,150

$72,066,177

$70,531,067

netsmelterreturn

............

$0$0

$70,094,951

$1,751,232,265

$2,036,973,535

$1,385,381,829

$1,425,431,469

$1,365,128,256

$1,387,222,200

$1,355,306,423

IV-296

Page 601:  · 2013. 1. 16. · Hong Kong Exchanges and Clearing Limited, The Stock Exchange of Hong Kong Limited and the Securities and Futures Commission take no responsibility for the contents

THIS WEB PROOF INFORMATION PACK IS IN DRAFT FORM. The information contained in it is incomplete and is subject to change. ThisWeb Proof Information Pack must be read in conjunction with the section headed “Warning” on the cover of this Web Proof Information Pack.

APPENDIX IV COMPETENT PERSON’S REPORTEcono

micAna

lysisof

Torom

ocho

Project

Prepa

redby

Behre

Dolbear

&Co.

May

1,2012

metal

prices

averageof

variou

sforecastingcompa

nies;with

copp

ercostpe

rpo

und

Pre-produ

ction

year

-3Pre-produ

ction

year

-2Pre-produ

ction

year

-1Produ

ction

year

+1Produ

ction

year

+2Produ

ction

year

+3Produ

ction

year

+4Produ

ction

year

+5Produ

ction

year

+6Produ

ction

year

+7

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

Operating

Costs

unitcosts

miningpertonneof

materialm

oved

........

$0.000

$0.000

$1.196

$1.034

$1.114

$1.106

$1.300

$1.244

$1.383

$1.487

reclaim

stockpile

tonnage

pertonneof

stockpile

moved

...............

$0.000

$0.000

$0.000

$0.000

$0.000

$0.000

$0.000

$0.000

$0.000

$0.000

processing

(milling)

per

tonneof

oremilled

.....

$0.00

$0.00

$5.28

$5.28

$5.28

$5.28

$5.28

$5.28

$5.28

$5.28

molyplantp

ertonneof

molyoxideproduced

...

$0.00

$0.00

$3,612.00

$3,612.00

$3,612.00

$3,612.00

$3,612.00

$3,612.00

$3,612.00

$3,612.00

processing

infrastructure

pertonneof

ore

milled

...............

$0.00

$0.00

$0.06

$0.06

$0.06

$0.06

$0.06

$0.06

$0.06

$0.06

processing

G&Apertonne

oforemilled

..........

$0.00

$0.00

$1.42

$1.42

$1.42

$1.42

$1.42

$1.42

$1.42

$1.42

annu

alcost

miningoreandwaste

.....

$0

$0

$59,816,050

$102,330,788

$105,822,780

$105,030,100

$123,459,910

$118,208,405

$131,386,710

$141,295,210

reclaim

from

stockpile

....

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

milling

................

$0

$0

$5,174,400

$201,933,600

$227,990,400

$227,990,400

$227,990,400

$227,990,400

$227,990,400

$227,990,400

molyplant

.............

$0

$0

$2,257,128

$11,134,160

$16,220,481

$20,275,601

$21,289,381

$11,151,580

$17,234,261

$16,220,481

processing

infrastructure

..$

0$

0$

58,800

$2,294,700

$2,590,800

$2,590,800

$2,590,800

$2,590,800

$2,590,800

$2,590,800

processing

G&A

.........

$0

$0

$1,391,600

$54,307,900

$61,315,600

$61,315,600

$61,315,600

$61,315,600

$61,315,600

$61,315,600

Centrom

inroyalty

.......

1.71%

$0

$0

$1,198,624

$29,946,072

$34,832,247

$23,690,029

$24,374,878

$23,343,693

$23,721,500

$23,175,740

totalo

peratin

gcost

...........

$0

$0

$69,896,602

$401,947,219

$448,772,308

$440,892,530

$461,020,969

$444,600,479

$464,239,270

$472,588,230

IV-297

Page 602:  · 2013. 1. 16. · Hong Kong Exchanges and Clearing Limited, The Stock Exchange of Hong Kong Limited and the Securities and Futures Commission take no responsibility for the contents

THIS WEB PROOF INFORMATION PACK IS IN DRAFT FORM. The information contained in it is incomplete and is subject to change. ThisWeb Proof Information Pack must be read in conjunction with the section headed “Warning” on the cover of this Web Proof Information Pack.

APPENDIX IV COMPETENT PERSON’S REPORTEcono

micAna

lysisof

Torom

ocho

Project

Prepa

redby

Behre

Dolbear

&Co.

May

1,2012

metal

prices

averageof

variou

sforecastingcompa

nies;with

copp

ercostpe

rpo

und

Produ

ction

year

+8Produ

ction

year

+9Produ

ction

year

+10

Produ

ction

year

+11

Produ

ction

year

+12

Produ

ction

year

+13

Produ

ction

year

+14

Produ

ction

year

+15

Produ

ction

year

+16

Produ

ction

year

+17

Produ

ction

year

+18

2021

2022

2023

2024

2025

2026

2027

2028

2029

2030

2031

incomefrom

sales

copper

paym

ent................

97.50%

$1,192,203,443

$1,226,671,910

$1,184,093,216

$1,137,459,408

$1,117,183,839

$1,080,687,815

$948,896,618

$906,317,924

$977,282,414

$926,593,492

$983,365,085

silver

paym

ent.................

95.00%

$134,89

3,214

$111,690,917

$121,370,658

$141,332,527

$168,356,868

$148,394,999

$178,036,609

$132,255,173

$138,507,538

$107,868,873

$167,359,813

molybdenum

oxidepaym

ent......

100.00%

$185,85

7,679

$289,111,945

$247,810,238

$237,484,812

$185,857,679

$227,159,385

$123,905,119

$165,206,826

$196,183,105

$216,833,958

$227,159,385

totalp

ayment..................

$1,512,954,336

$1,627,474,771

$1,553,274,112

$1,516,276,746

$1,471,398,386

$1,456,242,199

$1,250,838,346

$1,203,779,922

$1,311,973,058

$1,251,296,324

$1,377,884,283

treatm

entcharge(U

S$perdrytonne

cons).......................$

70.00

$57,007,377

$58,655,549

$56,619,571

$54,389,691

$53,420,178

$51,675,054

$45,373,218

$43,337,240

$46,730,537

$44,306,754

$47,021,391

refining

charge

perIb

copper

......$

0.070

$33,305,095

$34,267,997

$33,078,529

$31,775,779

$31,209,366

$30,189,822

$26,508,137

$25,318,669

$27,301,115

$25,885,082

$27,471,039

refining

charge

perouncesilver

....$

0.400

$2,524,317

$2,090,122

$2,271,264

$2,644,819

$3,150,538

$2,776,982

$3,331,679

$2,474,951

$2,591,954

$2,018,599

$3,131,880

arsenicpenalty

penalty

perincrem

ent........$

2.50

increm

ent.................

0.10%

penalty

...................

$1,628,782

$1,675,873

$1,617,702

$1,553,991

$1,526,291

$1,476,430

$1,296,378

$1,238,207

$1,335,158

$1,265,907

$1,343,468

zinc

penalty

penalty

perincrem

ent........$

2.50

increm

ent.................

1.00%

penalty

...................

$18,323,800

$18,853,569

$18,199,148

$17,482,401

$17,170,771

$16,609,839

$14,584,249

$13,929,827

$15,020,530

$14,241,457

$15,114,018

subtotal,treatmentand

penalties

...

$112,789,371

$115,543,111

$111,786,214

$107,846,681

$106,477,144

$102,728,128

$91,093,660

$86,298,894

$92,979,293

$87,717,798

$94,081,796

tran

sportan

dha

ndlin

gcopper

cons,railtoport,p

erwet

tonne.......................$

17.90

$15,889,585

$16,348,977

$15,781,492

$15,159,961

$14,889,730

$14,403,314

$12,646,812

$12,079,327

$13,025,136

$12,349,558

$13,106,205

porthandlin

g&

loading,perwet

tonne....

...................$

7.80

$6,923,953

$7,124,135

$6,876,851

$6,606,016

$6,488,262

$6,276,304

$5,510,901

$5,263,617

$5,675,757

$5,381,372

$5,711,084

insurance,perdrytonne..........$

0.74

$602,649

$620,073

$598,550

$574,977

$564,728

$546,279

$479,360

$458,137

$494,009

$468,386

$497,083

oceanfreight,perwettonne.......$

50.00

$44,384,315

$45,667,535

$44,082,381

$42,346,259

$41,591,424

$40,232,721

$35,326,291

$33,741,137

$36,383,061

$34,495,972

$36,609,511

supervision&

assaying,per

dry

tonne....

...................$

0.35

$28

5,037

$293,278

$283,098

$271,948

$267,101

$258,375

$226,866

$216,686

$233,653

$221,534

$235,107

molyoxide,railto

port,p

ertonne

..$

17.90

$90

,432

$140,672

$120,576

$115,552

$90,432

$110,528

$60,288

$80,384

$95,456

$105,504

$110,528

porthandlin

g&

loading,per

tonne.......................$

7.80

$39,406

$61,298

$52,541

$50,352

$39,406

$48,163

$26,271

$35,028

$41,595

$45,974

$48,163

insurance,of

netp

ayable

.........0.00083

$154,262

$239,963

$205,682

$197,112

$154,262

$188,542

$102,841

$137,122

$162,832

$179,972

$188,542

oceanfreight,pertonne

..........$

50.00

$252,603

$392,938

$336,804

$322,771

$252,603

$308,737

$168,402

$224,536

$266,637

$294,704

$308,737

subtotal,transportandhandlin

g....

$68,622

,241

$70,888,869

$68,337,975

$65,644,949

$64,337,947

$62,372,963

$54,548,333

$52,235,974

$56,378,135

$53,542,975

$56,814,960

netsmelterreturn

...............

$1,331,542

,724

$1,441,042,791

$1,373,149,922

$1,342,785,116

$1,300,583,294

$1,291,141,108

$1,105,196,353

$1,065,245,055

$1,162,615,630

$1,110,035,551

$1,226,987,527

IV-298

Page 603:  · 2013. 1. 16. · Hong Kong Exchanges and Clearing Limited, The Stock Exchange of Hong Kong Limited and the Securities and Futures Commission take no responsibility for the contents

THIS WEB PROOF INFORMATION PACK IS IN DRAFT FORM. The information contained in it is incomplete and is subject to change. ThisWeb Proof Information Pack must be read in conjunction with the section headed “Warning” on the cover of this Web Proof Information Pack.

APPENDIX IV COMPETENT PERSON’S REPORTEcono

micAna

lysisof

Torom

ocho

Project

Prepa

redby

Behre

Dolbear

&Co.

May

1,2012

metal

prices

averageof

variou

sforecastingcompa

nies;with

copp

ercostpe

rpo

und

Produ

ction

year

+8Produ

ction

year

+9Produ

ction

year

+10

Produ

ction

year

+11

Produ

ction

year

+12

Produ

ction

year

+13

Produ

ction

year

+14

Produ

ction

year

+15

Produ

ction

year

+16

Produ

ction

year

+17

Produ

ction

year

+18

2021

2022

2023

2024

2025

2026

2027

2028

2029

2030

2031

Operating

Costs

unitcosts

miningpertonneof

material

moved

..................

$1.480

$1.421

$1.504

$1.599

$1.522

$1.607

$1.587

$1.604

$1.636

$1.616

$1.730

reclaim

stockpile

tonnageper

tonneof

stockpile

moved

...

$0.000

$0.000

$0.000

$0.000

$0.000

$0.000

$0.000

$0.000

$0.000

$0.000

$0.000

processing

(milling)

pertonne

oforemilled

.............

$5.28

$5.28

$5.28

$5.28

$5.28

$5.28

$5.28

$5.28

$5.28

$5.28

$5.28

molyplantp

ertonneof

moly

oxideproduced

...........

$3,612.00

$3,612.00

$3,612.00

$3,612.00

$3,612.00

$3,612.00

$3,612.00

$3,612.00

$3,612.00

$3,612.00

$3,612.00

processing

infrastructure

per

tonneof

oremilled

........

$0.06

$0.06

$0.06

$0.06

$0.06

$0.06

$0.06

$0.06

$0.06

$0.06

$0.06

processing

G&Apertonneof

oremilled

...............

$1.42

$1.42

$1.42

$1.42

$1.42

$1.42

$1.42

$1.42

$1.42

$1.42

$1.42

annu

alcost

miningoreandwaste

........

$140,601,615

$134,953,770

$142,865,530

$151,897,305

$144,565,015

$152,689,985

$150,805,783

$152,392,730

$155,462,729

$153,482,665

$164,382

,015

reclaim

from

stockpile

.......

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

milling

...................

$227,990,400

$227,990,400

$227,990,400

$227,990,400

$227,990,400

$227,990,400

$227,990,400

$227,990,400

$227,990,400

$227,990,400

$227,990

,400

molyplant.................

$18,248,041

$28,385,841

$24,330,721

$23,316,941

$18,248,041

$22,303,161

$12,165,360

$16,220,481

$19,261,821

$21,289,381

$22,303,161

processing

infrastructure

.....

$2,590,800

$2,590,800

$2,590,800

$2,590,800

$2,590,800

$2,590,800

$2,590,800

$2,590,800

$2,590,800

$2,590,800

$2,590,800

processing

G&A

............

$61,315,600

$61,315,600

$61,315,600

$61,315,600

$61,315,600

$61,315,600

$61,315,600

$61,315,600

$61,315,600

$61,315,600

$61,315,600

Centrom

inroyalty

...........

1.71%

$22,769,381

$24,641,832

$23,480,864

$22,961,625

$22,239,974

$22,078,513

$18,898,858

$18,215,690

$19,880,727

$18,981,608

$20,981,487

totalo

peratin

gcost

..............

$473,515,836

$479,878,243

$482,573,915

$490,072,671

$476,949,830

$488,968,459

$473,766,801

$478,725,701

$486,502,077

$485,650,454

$499,563

,463

IV-299

Page 604:  · 2013. 1. 16. · Hong Kong Exchanges and Clearing Limited, The Stock Exchange of Hong Kong Limited and the Securities and Futures Commission take no responsibility for the contents

THIS WEB PROOF INFORMATION PACK IS IN DRAFT FORM. The information contained in it is incomplete and is subject to change. ThisWeb Proof Information Pack must be read in conjunction with the section headed “Warning” on the cover of this Web Proof Information Pack.

APPENDIX IV COMPETENT PERSON’S REPORTEcono

micAna

lysisof

Torom

ocho

Project

Prepa

redby

Behre

Dolbear

&Co.

May

1,2012

metal

prices

averageof

variou

sforecastingcompa

nies;with

copp

ercostpe

rpo

und

Produ

ction

year

+19

Produ

ction

year

+20

Produ

ction

year

+21

Produ

ction

year

+22

Produ

ction

year

+23

Produ

ction

year

+24

Produ

ction

year

+25

Produ

ction

year

+26

Produ

ction

year

+27

Produ

ction

year

+28

Produ

ction

year

+29

2032

2033

2034

2035

2036

2037

2038

2039

2040

2041

2042

incomefrom

sales

copper

paym

ent................

97.50%

$1,096,908

,270

$950,924,175

$825,215,649

$689,369,338

$786,692,068

$764,388,942

$758,306,272

$815,077,864

$808,995,194

$896,180,13

9$

859,684,115

silver

paym

ent.................

95.00%

$157,07

7,685

$136,305,709

$125,815,861

$190,749,059

$125,815,861

$133,667,668

$119,771,215

$113,705,798

$103,423,670

$151,012,268

$157,472,352

molybdenum

oxidepaym

ent......

100.00%$

258,135,665

$299,437,371

$309,762,798

$278,786,518

$103,254,266

$113,579,693

$134,230,546

$165,206,826

$185,857,679

$227,159,385

$258,135,665

totalp

ayment..................

$1,512,121,620

$1,386,667,255

$1,260,794,307

$1,158,904,914

$1,015,762,194

$1,011,636,302

$1,012,308,033

$1,093,990,488

$1,098,276,542

$1,274,351,792

$1,275,292,133

treatm

entcharge(U

S$perdrytonne

cons).......................$

70.00

$52,450,665

$45,470,169

$39,459,188

$32,963,449

$37,617,112

$36,550,648

$36,259,794

$38,974,431

$38,683,577

$42,852,484

$41,107,360

refining

charge

perlb

copper

......

$0.070

$30,642

,953

$26,564,778

$23,053,016

$19,258,048

$21,976,831

$21,353,777

$21,183,853

$22,769,810

$22,599,886

$25,035,462

$24,015,919

refining

charge

perouncesilver

....

$0.400

$2,93

9,465

$2,550,750

$2,354,449

$3,569,573

$2,354,449

$2,501,383

$2,241,333

$2,127,828

$1,935,414

$2,825,961

$2,946,851

arsenicpenalty

penalty

perincrem

ent........

$2.50

increm

ent.................

0.10%

penalty

...................

$1,498,590

$1,299,148

$1,127,405

$941,813

$1,074,775

$1,044,304

$1,035,994

$1,113,555

$1,105,245

$1,224,357

$1,174,496

zinc

penalty

penalty

perincrem

ent........

$2.50

increm

ent.................

1.00%

penalty

...................

$16,859,142

$14,615,412

$12,683,310

$10,595,394

$12,091,215

$11,748,423

$11,654,934

$12,527,496

$12,434,007

$13,774,013

$13,213,080

subtotal,treatmentand

penalties

...

$104,39

0,815

$90,500,257

$78,677,368

$67,328,277

$75,114,382

$73,198,535

$72,375,907

$77,513,119

$76,758,128

$85,712,276

$82,457,706

tran

sportan

dha

ndlin

gcopper

cons,railtoport,p

erwet

tonne.......................$

17.90

$14,619,499

$12,673,835

$10,998,403

$9,187,855

$10,484,964

$10,187,710

$10,106,641

$10,863,287

$10,782,218

$11,944,212

$11,457,796

porthandlin

g&

loading,perwet

tonne.......................$

7.80

$6,37

0,508

$5,522,677

$4,792,600

$4,003,646

$4,568,867

$4,439,337

$4,404,011

$4,733,723

$4,698,397

$5,204,740

$4,992,782

insurance,perdrytonne..........

$0.74

$55

4,478

$480,685

$417,140

$348,471

$397,667

$386,393

$383,318

$412,015

$408,941

$453,012

$434,564

oceanfreight,perwettonne.......$

50.00

$40,836

,589

$35,401,775

$30,721,796

$25,664,400

$29,287,609

$28,457,290

$28,230,840

$30,344,378

$30,117,928

$33,363,720

$32,005,016

supervision&

assaying,per

dry

tonne....

...................$

0.35

$262,253

$227,351

$197,296

$164,817

$188,086

$182,753

$181,299

$194,872

$193,418

$214,262

$205,537

molyoxide,railto

port,p

ertonne

..$

17.90

$125,600

$145,696

$150,720

$135,648

$50,240

$55,264

$65,312

$80,384

$90,432

$110,528

$125,600

porthandlin

g&

loading,per

tonne.......................$

7.80

$54,731

$63,488

$65,677

$59,109

$21,892

$24,081

$28,460

$35,028

$39,406

$48,163

$54,731

insurance,of

netp

ayable

.........

0.00083

$214,253

$248,533

$257,103

$231,393

$85,701

$94,271

$111,411

$137,122

$154,262

$188,542

$214,253

oceanfreight,pertonne

..........

$50.00

$35

0,838

$406,972

$421,005

$378,905

$140,335

$154,369

$182,436

$224,536

$252,603

$308,737

$350,838

subtotal,transportandhandlin

g....

$63,388,748

$55,171,010

$48,021,740

$40,174,243

$45,225,360

$43,981,468

$43,693,727

$47,025,346

$46,737,604

$51,835,916

$49,841,115

netsmelterreturn

...............

$1,344,342,057

$1,240,995,988

$1,134,095,199

$1,051,402,394

$895,422,452

$894,456,300

$896,238,399

$969,452,023

$974,780,810

$1,136,803,600

$1,142,993,312

IV-300

Page 605:  · 2013. 1. 16. · Hong Kong Exchanges and Clearing Limited, The Stock Exchange of Hong Kong Limited and the Securities and Futures Commission take no responsibility for the contents

THIS WEB PROOF INFORMATION PACK IS IN DRAFT FORM. The information contained in it is incomplete and is subject to change. ThisWeb Proof Information Pack must be read in conjunction with the section headed “Warning” on the cover of this Web Proof Information Pack.

APPENDIX IV COMPETENT PERSON’S REPORTEcono

micAna

lysisof

Torom

ocho

Project

Prepa

redby

Behre

Dolbear

&Co.

May

1,2012

metal

prices

averageof

variou

sforecastingcompa

nies;with

copp

ercostpe

rpo

und

Produ

ction

year

+19

Produ

ction

year

+20

Produ

ction

year

+21

Produ

ction

year

+22

Produ

ction

year

+23

Produ

ction

year

+24

Produ

ction

year

+25

Produ

ction

year

+26

Produ

ction

year

+27

Produ

ction

year

+28

Produ

ction

year

+29

2032

2033

2034

2035

2036

2037

2038

2039

2040

2041

2042

Operating

Costs

unitcosts

miningpertonneof

material

moved

..................

$1.732

$1.717

$1.854

$1.854

$1.854

$1.854

$1.854

$2.105

$2.105

$2.105

$2.105

reclaim

stockpile

tonnageper

tonneof

stockpile

moved

...

$0.000

$0.000

$0.000

$0.000

$0.000

$0.000

$0.000

$0.000

$0.000

$0.000

$0.000

processing

(milling)

pertonne

oforemilled

.............

$5.28

$5.28

$5.28

$5.28

$5.28

$5.28

$5.28

$5.28

$5.28

$5.28

$5.28

molyplantp

ertonneof

moly

oxideproduced

...........

$3,612.00

$3,612.00

$3,612.00

$3,612.00

$3,612.00

$3,612.00

$3,612.00

$3,612.00

$3,612.00

$3,612.00

$3,612.00

processing

infrastructure

per

tonneof

oremilled

........

$0.06

$0.06

$0.06

$0.06

$0.06

$0.06

$0.06

$0.06

$0.06

$0.06

$0.06

processing

G&Apertonneof

oremilled

...............

$1.42

$1.42

$1.42

$1.42

$1.42

$1.42

$1.42

$1.42

$1.42

$1.42

$1.42

annu

alcost

miningoreandwaste

........

$164,580,185

$163,093,910

$176,173,130

$169,135,477

$147,772,167

$128,074,157

$120,413,407

$130,834,857

$132,727,048

$118,730,301

$112,959

,011

reclaim

from

stockpile

.......

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

milling

...................

$227,990,400

$227,990,400

$227,990,400

$227,990,400

$227,990,400

$227,990,400

$227,990,400

$227,990,400

$227,990,400

$227,990,400

$227,990

,400

molyplant.................

$25,344,501

$29,399,621

$30,413,401

$27,372,061

$10,137,800

$11,151,580

$13,179,141

$16,220,481

$18,248,041

$22,303,161

$25,344,501

processing

infrastructure

.....

$2,590,800

$2,590,800

$2,590,800

$2,590,800

$2,590,800

$2,590,800

$2,590,800

$2,590,800

$2,590,800

$2,590,800

$2,590,800

processing

G&A

............

$61,315,600

$61,315,600

$61,315,600

$61,315,600

$61,315,600

$61,315,600

$61,315,600

$61,315,600

$61,315,600

$61,315,600

$61,315,600

Centrom

inroyalty

...........

1.71%

$22,988,249

$21,221,031

$19,393,028

$17,978,981

$15,311,724

$15,295,203

$15,325,677

$16,577,630

$16,668,752

$19,439,342

$19,545,186

totalo

peratin

gcost

..............

$504,809,735

$505,611,363

$517,876,359

$506,383,319

$465,118,491

$446,417,740

$440,815,024

$455,529,767

$459,540,641

$452,369,604

$449,745

,498

IV-301

Page 606:  · 2013. 1. 16. · Hong Kong Exchanges and Clearing Limited, The Stock Exchange of Hong Kong Limited and the Securities and Futures Commission take no responsibility for the contents

THIS WEB PROOF INFORMATION PACK IS IN DRAFT FORM. The information contained in it is incomplete and is subject to change. ThisWeb Proof Information Pack must be read in conjunction with the section headed “Warning” on the cover of this Web Proof Information Pack.

APPENDIX IV COMPETENT PERSON’S REPORTEcono

micAna

lysisof

Torom

ocho

Project

Prepa

redby

Behre

Dolbear

&Co.

May

1,2012

metal

prices

averageof

variou

sforecastingcompa

nies;with

copp

ercostpe

rpo

und

Produ

ction

year

+30

Produ

ction

year

+31

Produ

ction

year

+32

Produ

ction

year

+33

Produ

ction

year

+34

Produ

ction

year

+35

Produ

ction

year

+36

Produ

ction

year

+37

Produ

ction

year

+38

Produ

ction

year

+39

Produ

ction

year

+40

Total

2043

2044

2045

2046

2047

2048

2049

2050

2051

2052

2053

Incomefrom

sales

copper

paym

ent..................

97.50%

$754,251,158

$569,743,482

$575,720,972

$742,085,817

$742,085,817

$742,085,817

$567,786,735

$0$0

$0$0

$35,221,398,256

silver

paym

ent...................

95.00%

$129,450,956

$205,060,950

$130,223,839

$122,076,905

$122,076,905

$122,076,905

$93,403,816

$0$0

$0$0

$5,225,338,971

molybdenum

oxidepaym

ent........

100.00%

$299,437,371

$340,739,078

$218,158,712

$82,603,413

$82,603,413

$82,603,413

$63,201,750

$0$0

$0$0

$7,041,825,701

totalp

ayment.

...................

$1,183,139,486

$1,115,543,510

$924,103,523

$946,766,134

$946,766,134

$946,766,134

$724,392,301

$0$0

$0$0

$47,488,562,928

treatm

entcharge(U

S$perdrytonne

cons)........................

$70.00

$36

,065,891

$27,243,321

$27,529,146

$35,484,183

$35,484,183

$35,484,183

$27,149,756

$0$0

$0$0

$1,630,331,766

refining

charge

perlb

copper

.......$

0.070

$21,070,570

$15,916,210

$16,083,196

$20,730,722

$20,730,722

$20,730,722

$15,861,547

$0$0

$0$0

$952,479,435

refining

charge

perouncesilver

.....$

0.400

$2,422,474

$3,837,398

$2,436,937

$2,284,480

$2,284,480

$2,284,480

$1,747,908

$0$0

$0$0

$95,060,179

arsenicpenalty

penalty

perincrem

ent.........$

2.50

increm

ent

..................

0.10%

penalty

.....................

$1,030,454

$778,381

$786,547

$1,013,834

$1,013,834

$1,013,834

$775,707

$0$0

$0$0

$46,580,908

zinc

penalty

penalty

perincrem

ent.........$

2.50

increm

ent

..................

1.00%

penalty

.....................

$11,592,608

$8,756,782

$8,848,654

$11,405,630

$11,405,630

$11,405,630

$8,726,707

$0$0

$0$0

$524,035,211

subtotaltreatm

entand

penalties

.....

$72,181,997

$56,532,092

$55,684,480

$70,918,850

$70,918,850

$70,918,850

$54,261,625

$0$0

$0$0

$3,248,487,498

tran

sportan

dha

ndlin

gcopper

cons,railtoport,p

erwet

tonne........................

$17.90

$10

,052,594

$7,593,492

$7,673,159

$9,890,456

$9,890,456

$9,890,456

$7,567,413

$0$0

$0$0

$454,420,044

porthandlin

g&

loading,perwet

tonne........................

$7.80

$4,380,460

$3,308,896

$3,343,611

$4,309,808

$4,309,808

$4,309,808

$3,297,532

$0$0

$0$0

$198,015,438

insurance,perdrytonne

...........$

0.74

$381,268

$288,001

$291,022

$375,119

$375,119

$375,119

$287,012

$0$0

$0$0

$17,234,936

oceanfreight,perwettonne........

$50.00

$28,079,873

$21,210,871

$21,433,406

$27,626,971

$27,626,971

$27,626,971

$21,138,024

$0$0

$0$0

$1,269,329,732

supervision&

assaying,per

dry

tonne........................

$0.35

$180,329

$136,217

$137,646

$177,421

$177,421

$177,421

$135,749

$0$0

$0$0

$8,151,659

molyoxide,railto

port,p

ertonne

...$

17.90

$145,696

$165,792

$106,148

$40,192

$40,192

$40,192

$30,752

$0$0

$0$0

$3,398,523

porthandlin

g&

loading,pertonne...$

7.80

$63,488

$72,244

$46,255

$17,514

$17,514

$17,514

$13,400

$0$0

$0$0

$1,480,921

insurance,of

netp

ayable...........

0.00083

$248,533

$282,813

$181,072

$68,561

$68,561

$68,561

$52,457

$0$0

$0$0

$5,844,715

oceanfreight,pertonne

...........$

50.00

$406,972

$463,106

$296,504

$112,268

$112,268

$112,268

$85,899

$0$0

$0$0

$9,493,081

subtotal,transportandhandlin

g.....

$43,939,212

$33,521,432

$33,508,824

$42,618,309

$42,618,309

$42,618,309

$32,608,237

$0$0

$0$0

$1,967,369,049

netsmelterreturn

................

$1,067,018,276

$1,025,489,986

$834,910,219

$833,228,976

$833,228,976

$833,228,976

$637,522,439

$0$0

$0$0

$42,272,706,381

IV-302

Page 607:  · 2013. 1. 16. · Hong Kong Exchanges and Clearing Limited, The Stock Exchange of Hong Kong Limited and the Securities and Futures Commission take no responsibility for the contents

THIS WEB PROOF INFORMATION PACK IS IN DRAFT FORM. The information contained in it is incomplete and is subject to change. ThisWeb Proof Information Pack must be read in conjunction with the section headed “Warning” on the cover of this Web Proof Information Pack.

APPENDIX IV COMPETENT PERSON’S REPORTEcono

micAna

lysisof

Torom

ocho

Project

Prepa

redby

Boh

reDolbear

&Co.

May

1,2012

metal

prices

averageof

variou

sforecastingcompa

nies;with

copp

ercostpe

rpo

und

Produ

ction

year

+30

Produ

ction

year

+31

Produ

ction

year

+32

Produ

ction

year

+33

Produ

ction

year

+34

Produ

ction

year

+35

Produ

ction

year

+36

Produ

ction

year

+37

Produ

ction

year

+38

Produ

ction

year

+39

Produ

ction

year

+40

Total

2043

2044

2045

2046

2047

2048

2049

2050

2051

2052

2053

Operating

Costs

unitcosts

miningpertonneof

material

moved

.....................

$2.105

$2.164

$2.164

$0.000

$0.000

$0.000

$0.000

$0.000

$0.000

$0.000

$0.000

reclaim

stockpile

tonnagepertonne

ofstockpile

moved

...........

$0.000

$0.000

$0.889

$0.889

$0.889

$0.889

$0.889

$0.000

$0.000

$0.000

$0.000

processing

(milling)

pertonneof

oremilled

..................

$5.28

$5.28

$5.28

$5.28

$5.28

$5.28

$5.28

$0.00

$0.00

$0.00

$0.00

molyplantp

ertonneof

molyoxide

produced

...................

$3,612.00

$3,612.00

$3,612.00

$3,612.00

$3,612.00

$3,612.00

$3,612.00

$0.00

$0.00

$0.00

$0.00

processing

infrastructure

pertonne

oforemilled

................

$0.06

$0.06

$0.06

$0.06

$0.06

$0.06

$0.06

$0.00

$0.00

$0.00

$0.00

processing

G&Apertonneof

ore

milled

.....................

$1.42

$1.42

$1.42

$1.42

$1.42

$1.42

$1.42

$0.00

$0.00

$0.00

$0.00

annu

alcost

miningoreandwaste

...........

$111,199,420

$124,155,096

$69,573,341

$0

$0

$0

$0

$0

$0

$0

$0

$4,400,870,601

reclaim

from

stockpile

..........

$0

$0

$22,629,116

$38,371,302

$38,371,302

$38,371,302

$29,358,756

$0

$0

$0

$0

$167,101,779

milling

......................

$227,990,400

$227,990,400

$227,990,400

$227,990,400

$227,990,400

$227,990,400

$174,440,640

$0

$0

$0

$0

$8,133,222,240

molyplant

...................

$29,399,621

$33,454,741

$21,419,449

$8,110,240

$8,110,240

$8,110,240

$6,205,329

$0

$0

$0

$0

$685,780,171

processing

infrastructure

........

$2,590,800

$2,590,800

$2,590,800

$2,590,800

$2,590,800

$2,590,800

$1,982,280

$0

$0

$0

$0

$92,422,980

processing

G&A

...............

$61,315,600

$61,315,600

$61,315,600

$61,315,600

$61,315,600

$61,315,600

$46,913,960

$0

$0

$0

$0

$2,187,343,860

Centrom

inroyalty

.............

1.71%

$18,246,013

$17,535,879

$14,276,965

$14,248,215

$14,248,215

$14,248,215

$10,901,634

$0

$0

$0

$0

$722,863,279

totalo

peratin

gcost

.................

$450,741,854

$467,042,516

$419,795,671

$352,626,558

$352,626,558

$352,626,558

$269,802,599

$0

$0

$0

$0

$16,389,604,911

IV-303

Page 608:  · 2013. 1. 16. · Hong Kong Exchanges and Clearing Limited, The Stock Exchange of Hong Kong Limited and the Securities and Futures Commission take no responsibility for the contents

THIS WEB PROOF INFORMATION PACK IS IN DRAFT FORM. The information contained in it is incomplete and is subject to change. ThisWeb Proof Information Pack must be read in conjunction with the section headed “Warning” on the cover of this Web Proof Information Pack.

APPENDIX IV COMPETENT PERSON’S REPORTEcono

micAna

lysisof

Torom

ocho

Project

Prepa

redby

Behre

Dolbear

&Co.

May

1,2012

metal

prices

averageof

variou

sforecasting

compa

nies;with

copp

ercostpe

rpo

und

Pre-produ

ction

year

-3Pre-produ

ction

year

-2Pre-produ

ction

year

-1Produ

ction

year

+1Produ

ction

year

+2Produ

ction

year

+3Produ

ction

year

+4Produ

ction

year

+5Produ

ction

year

+6Produ

ction

year

+7

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

depreciatio

n..

...............................

$0

$0

$0

$584,613,704$

590,462,642$595,418,686

$607,193,850

$618,000,382

$42,188,190

$48,792,839

employee

profitsharing

.......................

8.00%

$0

$0

$15,868

$61,173,707

$79,819,087

$27,925,649

$28,577,332

$24,202,192

$70,463,579

$66,714,028

netincom

ebefore

taxes........................

$0

$0

$182,482

$703,497,634$

917,919,498$321,144,963

$328,639,318

$278,325,204

$810,331,161

$767,211,326

incometaxes

loss

carriedforw

ard.......................

$0

$0

$0

$0$

0$

0$

0$

0$

0$

0federalincom

etax........................

30.00%

$0

$0

$54,745

$211,049,290$

275,375,849$96,343,489

$98,591,795

$83,497,561

$243,099,348

$230,163,398

netincom

eaftertaxes.........................

$0

$0

$127,737

$492,448,344$

642,543,649$224,801,474

$230,047,523

$194,827,642

$567,231,812

$537,047,928

addback

depreciatio

n.........................

$0

$0

$0

$584,613,704$

590,462,642$595,418,686

$607,193,850

$618,000,382

$42,188,190

$48,792,839

netcashflow

from

operations

...................

$0

$0

$127,737

$1,077,062,048

$1,233,006,291

$820,220,160

$837,241,373

$812,828,025

$609,420,002

$585,840,767

capitalinv

estm

ents

initialinv

estm

ents

minepreproductiondevelopm

ent................

$12,648,243

$13,585,513

$48,644,224

major

mineequipm

ent

........................

$85,608,834

$66,123,959

$45,575,619

supportm

ineequipm

ent.......................

$18,837,698

$11,587,275

$10,028,635

contingency,mineequipm

ent...................

$5,681,326

$4,429,638

$5,058,036

processandinfrastructure

......................

$783,976,680

$471,904,249

$417,366,071

contingency,processandinfrastructure

...........

$62,531,289

$37,638,896

$33,289,815

owner’scost

................................

$209,992,423

$126,404,802

$111,793,775

contingency,ow

ner’scost......................

$16,235,507

$9,783,168

$8,701,325

sustaining

capital

minesustaining

capital........................

$4,624,800

$34,095,600

$625,250$18,532,000

$36,792,375

processsustaining

capital......................

$25,897,822

$28,857,239

$24,392,770

$24,392,770

$53,019,962

$25,088,109

$25,088,109

general&

administrativesustaining

capital........

$118,900$

387,450$

387,450$

387,450$

387,450$

387,450$

387,450

relocatio

nof

Morococha

.......................

$35,000,000

$35,000,000

$30,000,000

limequarry

andplant.........................

$30,000,000

$30,000,000

$40,000,000

relocatemainhighway

........................

$25,000,000

$25,000,000

$25,000,000

working

capital..............................

$56,000,000

totalcapitalinvestm

ent........................

$1,285,512,000

$831,457,500

$831,457,500

$30,641,522

$29,244,689

$24,780,220

$58,875,820

$54,032,662

$44,007,559

$62,267,934

netcashflow

................................

-$1,285,512,000

-$831,457,500

-$831,329,763

$1,046,420,526

$1,203,761,602

$795,439,941

$778,365,553

$758,795,363

$565,412,443

$523,572,833

life-of-m

ine

netcashflow

................................

$13,785,547,060

IV-304

Page 609:  · 2013. 1. 16. · Hong Kong Exchanges and Clearing Limited, The Stock Exchange of Hong Kong Limited and the Securities and Futures Commission take no responsibility for the contents

THIS WEB PROOF INFORMATION PACK IS IN DRAFT FORM. The information contained in it is incomplete and is subject to change. ThisWeb Proof Information Pack must be read in conjunction with the section headed “Warning” on the cover of this Web Proof Information Pack.

APPENDIX IV COMPETENT PERSON’S REPORTEcono

micAna

lysisof

Torom

ocho

Project

Prepa

redby

Behre

Dolbear

&Co.

May

1,2012

metal

prices

averageof

variou

sforecastingcompa

nies;with

copp

ercostpe

rpo

und

Produ

ction

year

+8Produ

ction

year

+9Produ

ction

year

+10

Produ

ction

year

+11

Produ

ction

year

+12

Produ

ction

year

+13

Produ

ction

year

+14

Produ

ction

year

+15

Produ

ction

year

+16

Produ

ction

year

+17

Produ

ction

year

+18

2021

2022

2023

2024

2025

2026

2027

2028

2029

2030

2031

depreciatio

n........................

$50,679,913

$46,543,659

$69,205,682

$75,294,140

$68,832,310

$78,084,375

$75,966,952

$49,337,109

$48,451,434

$48,573,039

$40,215,435

employee

profitsharing...............

8.00%

$64,587,758

$73,169,671

$65,709,626

$62,193,464

$60,384,092

$57,927,062

$44,437,008

$42,974,580

$50,212,970

$46,064,965

$54,976,690

netincom

ebefore

taxes...............

$742,759,217

$841,451,218

$755,660,699

$715,224,840

$694,417,062

$666,161,213

$511,025,593

$494,207,665

$577,449,149

$529,747,093

$632,231

,939

incometaxes

loss

carriedforw

ard..............

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

federalincom

etax...............

30.00%

$222,827,765

$252,435,365

$226,698,210

$214,567,452

$208,325,118

$199,848,364

$153,307,678

$148,262,300

$173,234,745

$158,924,128

$189,669,582

netincom

eaftertaxes

................

$519,931,452

$589,015,853

$528,962,489

$500,657,388

$486,091,943

$466,312,849

$357,717,915

$345,945,366

$404,214,404

$370,822,965

$442,562

,358

addback

depreciatio

n................

$50,679,913

$46,543,659

$69,205,682

$75,294,140

$68,832,310

$78,084,375

$75,966,952

$49,337,109

$48,451,434

$48,573,039

$40,215,435

netcashflow

from

operations

..........

$570,611,365

$635,559,512

$598,168,171

$575,951,528

$554,924,254

$544,397,223

$433,684,867

$395,282,475

$452,665,839

$419,396,004

$482,777

,792

capitalinv

estm

ents

initialinv

estm

ents

minepreproductiondevelopm

ent.......

major

mineequipm

ent................

supportm

ineequipm

ent..............

contingency,mineequipm

ent..........

processandinfrastructure

.............

contingency,processandinfrastructure

..ow

ner’scost

........................

contingency,ow

ner’scost

.............

sustaining

capital

minesustaining

capital...............

$1,403,225

$8,132,350

$137,279,275

$33,121,850

$3,625,425

$54,142,550

$1,274,075

$1,795,800

$47,114,125

$10,410,925

$18,532,000

processsustaining

capital.............

$32,424,916

$29,674,750

$29,676,050

$40,940,550

$25,945,911

$25,945,911

$25,945,911

$32,010,311

$22,519,902

$19,768,437

$19,768,437

general&

administrativesustaining

capital.

..........................

$387,450

$387,450

$387,450

$387,450

$387,450

$387,450

$387,450

$387,450

$387,450

$387,450

$387,450

relocatio

nof

Morococha

..............

limequarry

andplant.................

relocatemainhighway

................

working

capital.....................

totalcapitalinvestm

ent...............

$34,215,591

$38,194,550

$167,342,775

$74,449,850

$29,958,786

$80,475,911

$27,607,436

$34,193,561

$70,021,477

$30,566,812

$38,687,887

netcashflow

.......................

$536,395,774

$597,364,962

$430,825,396

$501,501,678

$524,965,467

$463,921,312

$406,077,431

$361,088,913

$382,644,362

$388,829,192

$444,089

,905

life-of-m

ine

netcashflow

.......................$13,785,547,060

IV-305

Page 610:  · 2013. 1. 16. · Hong Kong Exchanges and Clearing Limited, The Stock Exchange of Hong Kong Limited and the Securities and Futures Commission take no responsibility for the contents

THIS WEB PROOF INFORMATION PACK IS IN DRAFT FORM. The information contained in it is incomplete and is subject to change. ThisWeb Proof Information Pack must be read in conjunction with the section headed “Warning” on the cover of this Web Proof Information Pack.

APPENDIX IV COMPETENT PERSON’S REPORTEcono

micAna

lysisof

Torom

ocho

Project

Prepa

redby

Behre

Dolbear

&Co.

May

1,2012

metal

prices

averageof

variou

sforecastingcompa

nies;with

copp

ercostpe

rpo

und

Produ

ction

year

+19

Produ

ction

year

+20

Produ

ction

year

+21

Produ

ction

year

+22

Produ

ction

year

+23

Produ

ction

year

+24

Produ

ction

year

+25

Produ

ction

year

+26

Produ

ction

year

+27

Produ

ction

year

+28

Produ

ction

year

+29

2032

2033

2034

2035

2036

2037

2038

2039

2040

2041

2042

depreciatio

n....................

$68,450,945

$69,749,355

$61,384,226

$59,302,041

$65,144,746

$35,693,942

$33,280,207

$27,718,531

$23,764,843

$20,426,566

$29,690,077

employee

profitsharing

..........

8.00%

$61,686,510

$53,250,822

$44,386,769

$38,857,363

$29,212,737

$32,987,569

$33,771,453

$38,896,298

$39,318,026

$53,120,594

$53,084,619

netincom

ebefore

taxes...........

$709,394,866

$612,384,448

$510,447,845

$446,859,671

$335,946,478

$379,357,048

$388,371,714

$447,307,428

$452,157,300

$610,886,836

$610,473

,118

incometaxes

loss

carriedforw

ard..........

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

federalincom

etax...........

30.00%

$212,818,460

$183,715,335

$153,134,353

$134,057,901

$100,783,943

$113,807,114

$116,511,514

$134,192,228

$135,647,190

$183,266,051

$183,141,936

netincom

eaftertaxes............

$496,576,407

$428,669,114

$357,313,491

$312,801,770

$235,162,534

$265,549,934

$271,860,200

$313,115,199

$316,510,110

$427,620,785

$427,331

,183

addback

depreciatio

n............

$68,450,945

$69,749,355

$61,384,226

$59,302,041

$65,144,746

$35,693,942

$33,280,207

$27,718,531

$23,764,843

$20,426,566

$29,690,077

netcashflow

from

operations

......

$565,027,351

$498,418,469

$418,697,717

$372,103,811

$300,307,280

$301,243,876

$305,140,407

$340,833,730

$340,274,953

$448,047,351

$457,021

,260

capitalinv

estm

ents

initialinv

estm

ents

minepreproductiondevelopm

ent...

major

mineequipm

ent

...........

supportm

ineequipm

ent..........

contingency,mineequipm

ent......

processandinfrastructure

.........

contingency,processand

infrastructure

.................

owner's

cost

....................

contingency,ow

ner's

cost

.........

sustaining

capital

minesustaining

capital...........

$148,629,100

$20,529,725

$47,745,525

$48,223,175

processsustaining

capital.........

$19,768,437

$19,768,437

$27,808,381

$19,768,437

$19,768,437

$21,143,520

$28,229,484

$0

$0

$2,599,400

$67,471,326

general&

administrativesustaining

capital......................

$387,450

$387,450

$387,450

$387,450

$387,450

$387,450

$387,450

$387,450

$387,450

$387,450

$377,200

relocatio

nof

Morococha

..........

limequarry

andplant............

relocatemainhighway

...........

working

capital.................

totalcapitalinvestm

ent...........

$168,784,987

$40,685,612

$28,195,831

$20,155,887

$67,901,412

$21,530,970

$28,616,934

$387,450

$387,450

$51,210,025

$67,848,526

netcashflow

...................

$396,242,364

$457,732,857

$390,501,886

$351,947,924

$232,405,868

$279,712,906

$276,523,473

$340,446,280

$339,887,503

$396,837,326

$389,172

,734

life-of-m

ine

netcashflow

...................$13,735,547,060

IV-306

Page 611:  · 2013. 1. 16. · Hong Kong Exchanges and Clearing Limited, The Stock Exchange of Hong Kong Limited and the Securities and Futures Commission take no responsibility for the contents

THIS WEB PROOF INFORMATION PACK IS IN DRAFT FORM. The information contained in it is incomplete and is subject to change. ThisWeb Proof Information Pack must be read in conjunction with the section headed “Warning” on the cover of this Web Proof Information Pack.

APPENDIX IV COMPETENT PERSON’S REPORTEcono

micAna

lysisof

Torom

ocho

Project

Prepa

redby

Behre

Dolbear

&Co.

May

1,2012

metal

prices

averageof

variou

sforecastingcompa

nies;with

copp

ercostpe

rpo

und

Produ

ction

year

+30

Produ

ction

year

+31

Produ

ction

year

+32

Produ

ction

year

+33

Produ

ction

year

+34

Produ

ction

year

+35

Produ

ction

year

+36

Produ

ction

year

+37

Produ

ction

year

+38

Produ

ction

year

+39

Produ

ction

year

+40

Total

2043

2044

2045

2046

2047

2048

2049

2050

2051

2052

2053

depreciatio

n...................

$40,909,897

$55,481,318

$55,479,268

$45,312,703

$31,794,658

$14,879,536

$232,880

$0

$0$0

$0$4,476,550,080

employee

profitsharing..........

8.00%

$46,029,322

$40,237,292

$28,770,822

$34,823,177

$35,904,621

$37,257,830

$29,398,957

$0

$0$0

$0$1,712,524,111

netincom

ebefore

taxes..........

$529,337,203

$462,728,860

$330,864,458

$400,466,537

$412,903,139

$428,465,051

$338,088,003

$0

$0$0

$0$19,694,027,279

incometaxes

loss

carriedforw

ard.........

$0

$0

$0

$0

$0

$0

$0

$0

$0$0

$0federalincom

etax..........

30.00%

$158,801,161

$138,818,658

$99,259,337

$120,139,961

$123,870,942

$128,539,515

$101,426,401

$0

$0$0

$0$5,908,208,184

netincom

eaftertaxes...........

$370,536,042

$323,910,202

$231,605,121

$280,326,576

$289,032,197

$299,925,535

$236,661,602

$0

$0$0

$0$13,785,819,095

addback

depreciatio

n...........

$40,909,897

$55,481,318

$55,479,268

$45,312,703

$31,794,658

$14,879,536

$232,880

$0

$0$0

$0$4,476,550,080

netcashflow

from

operations

.....

$411,445,939

$379,391,520

$287,084,389

$325,639,279

$320,826,855

$314,805,072

$236,894,482

$0

$0$0

$0$18,262,369,175

capitalinv

estm

ents

initialinv

estm

ents

minepreproductiondevelopm

ent..

$74,877,979

major

mineequipm

ent...........

$197,308,413

supportm

ineequipm

ent.........

$40,453,607

contingency,mineequipm

ent.....

$15,169,000

processandinfrastructure

........

$1,673,247,000

contingency,processand

infrastructure

................

$133,460,001

owner’scost...................

$448,191,000

contingency,ow

ner’scost

........

$34,720,000

sustaining

capital

minesustaining

capital..........

$55,999,850

$732,629,000

processsustaining

capital........

$84,338,833

$16,867,507

$838,890,065

general&

administrativesustaining

capital.....................

$377,200

$377,200

$377,200

$377,200

$258,300

$140,425

$11,275

$12,876,050

relocatio

nof

Morococha

.........

$100,000,000

limequarry

andplant.

...........

$100,000,000

relocatemainhighway

..........

$75,000,000

working

capital................

-$56,000,000

$0

totalcapitalinvestm

ent..........

$84,716,033

$73,244,557

$377,200

$377,200

$258,300

$140,425

$11,275

-$56,000,000

$0$0

$0$4,476,822,115

netcashflow

..................

$326,729,906

$306,146,964

$286,707,189

$325,262,079

$320,568,555

$314,664,647

$236,883,207

$56,000,000

$0$0

$0$13,785,547,060

life-of-m

ine

netcashflow

..................

$13,785,547,060

IV-307

Page 612:  · 2013. 1. 16. · Hong Kong Exchanges and Clearing Limited, The Stock Exchange of Hong Kong Limited and the Securities and Futures Commission take no responsibility for the contents

THIS WEB PROOF INFORMATION PACK IS IN DRAFT FORM. The information contained in it is incomplete and is subject to change. ThisWeb Proof Information Pack must be read in conjunction with the section headed “Warning” on the cover of this Web Proof Information Pack.

APPENDIX IV COMPETENT PERSON’S REPORTEcono

micAna

lysisof

Torom

ocho

Project

Prepa

redby

Behre

Dolbear

&Co.

May

1,2012

Depreciation

schedu

lePre-produ

ction

year

-3Pre-produ

ction

year

-2Pre-produ

ction

year

-1Produ

ction

year

+1Produ

ction

year

+2Produ

ction

year

+3Produ

ction

year

+4Produ

ction

year

+5Produ

ction

year

+6Produ

ction

year

+7Produ

ction

year

+8

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

year

-3to

-1(2011to

2013)

investments

$578,485,400

$578,485,400

$578,485,400

$578,485,400

$578,485,400

year

+1investments

$6,128,304

$6,128,304

$6,128,304

$6,128,304

$6,128,304

year

+2investments

$5,848,938

$5,848,938

$5,848,938

$5,848,938

$5,848,938

year

+3investments

$4,956,044

$4,956,044

$4,956,044

$4,956,044

$4,956,044

year

+4investments

$11,775,164

$11,775,164

$11,775,164

$11,775,164

$11,775,164

year

+5investments

$10,806,532

$10,806,532

$10,806,532

$10,806,532

year

+6investments

$8,801,512

$8,801,512

$8,801,512

year

+7investments

$12,453,587

$12,453,587

year

+8investments

$6,843,118

year

+9investments

year

+10

investments

year

+11

investments

year

+12

investments

totalannual

depreciatio

n..

....

.$0

$0

$0

$584,613,704

$590,462,642

$595,418,686

$607,193,850

$618,000,382

$42,188,190

$48,792,839

$50,679,913

loss

carriedforw

ard

determ

ination

netincom

ebefore

taxes..

....

....

...

$0$0

$182,482

$703,497,634

$917,919,498

$321,144,963

$328,639,318

$278,325,204

$810,331,161

$767,211,326

$742,759,217

cumulativenetincom

ebefore

taxes..

....

.$0

$0

$182,482

$703,680,116

$1,621,599,614

$1,942,744,577

$2,271,383,896

$2,549,709,099

$3,360,040,260

$4,127,251,585

$4,870,010,802

cumulativeloss

....

..$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

potentialw

rite-off

....

$0$0

$182,482

$703,497,634

$917,919,498

$321,144,963

$328,639,318

$278,325,204

$810,331,161

$767,211,326

$742,759,217

cumulativepotential

write-off

....

....

..$0

$0

$182,482

$703,680,116

$1,621,599,614

$1,942,744,577

$2,271,383,896

$2,549,709,099

$3,360,040,260

$4,127,251,585

$4,870,010,802

trialw

rite-off

....

....

$0$0

$0

($182,482)

($703,680,116)

($1,621,599,614)

($1,942,744,577)

($2,271,383,896)

($2,549,709,099)

($3,360,040,260)

($4,127,251,585)

actualwrite-off..

....

.$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

IV-308

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THIS WEB PROOF INFORMATION PACK IS IN DRAFT FORM. The information contained in it is incomplete and is subject to change. ThisWeb Proof Information Pack must be read in conjunction with the section headed “Warning” on the cover of this Web Proof Information Pack.

APPENDIX IV COMPETENT PERSON’S REPORTEcono

micAna

lysisof

Torom

ocho

Project

Prepa

redby

Behre

Dolbear

&Co.

May

1,2012

Depreciationschedu

leProdu

ction

year

+9Produ

ction

year

+10

Produ

ction

year

+11

Produ

ction

year

+12

Produ

ction

year

+13

Produ

ction

year

+14

Produ

ction

year

+15

Produ

ction

year

+16

Produ

ction

year

+17

Produ

ction

year

+18

Produ

ction

year

+19

2022

2023

2024

2025

2026

2027

2028

2029

2030

2031

2032

year

-3to

-1(2011to

2013)

investments

year

+1investments

$10,806,532

$8,801,512

$8,801,512

$12,453,587

$12,453,587

$12,453,587

$6,843,118

$6,843,118

$6,843,118

$6,843,118

$7,638,910

$7,638,910

$7,638,910

$7,638,910

$7,638,910

$33,468,555

$33,468,555

$33,468,555

$33,468,555

$33,468,555

$14,889,970

$14,889,970

$14,889,970

$14,889,970

$14,889,970

$5,991,757

$5,991,757

$5,991,757

$5,991,757

$5,991,757

year

+13

investments

$16,095,182

$16,095,182

$16,095,182

$16,095,182

$16,095,182

year

+14

investments

$5,521,487

$5,521,487

$5,521,487

$5,521,487

$5,521,487

year

+15

investments

$6,838,712

$6,838,712

$6,838,712

$6,838,712

$6,838,712

year

+16

investments

$14,004,295

$14,004,295

$14,004,295

$14,004,295

year

+17

investments

$6,113,362

$6,113,362

$6,113,362

year

+18

investments

$7,737,577

$7,737,577

year

+19

investments

$33,756,997

year

+20

investments

year

+21

investments

year

+22

investments

year

+23

investments

totalannuald

epreciation

........

$46,543,659

$69,205,682

$75,294,140

$68,832,310

$78,084,375

$75,966,952

$49,337,109

$48,451,434

$48,573,039

$40,215,435

$68,450,945

loss

carriedforw

arddeterm

ination

netincom

ebefore

taxes.........

$841,451,218

$755,660,699

$715,224,840

$694,417,062

$666,161,213

$511,025,593

$494,207,665

$577,449,149

$529,747,093

$632,231,939

$709,394,866

cumulativenetincom

ebefore

taxes......................

$5,711,462,020

$6,467,122,720

$7,182,347,560

$7,876,764,622

$8,542,925,834

$9,053,951,427

$9,548,159,092

$10,125,608,241

$10,655,355,334

$11,287,587,274

$11,996,932,140

cumulativeloss

...............

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

potentialw

rite-off

.............

$841,451,218

$755,660,699

$715,224,840

$694,417,062

$666,161,213

$511,025,593

$494,207,665

$577,449,149

$529,747,093

$632,231,939

$709,394,866

cumulativepotentialw

rite-off

....

$5,711,462,020

$6,467,122,720

$7,182,347,560

$7,876,764,622

$8,542,925,834

$9,053,951,427

$9,548,159,092

$10,125,608,241

$10,655,355,334

$11,287,587,274

$11,996,982,140

trialw

rite-off

.................

($4,870,010,802)

($5,711,462,020)

($6,467,122,720)

($7,182,347,560)

($7,876,764,622)

($8,542,925,834)

($9,053,951,427)

($9,548,159,092)

($10,125,608,241)($10,655,355,334)($11,287,587,274)

actualwrite-off

...............

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

IV-309

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THIS WEB PROOF INFORMATION PACK IS IN DRAFT FORM. The information contained in it is incomplete and is subject to change. ThisWeb Proof Information Pack must be read in conjunction with the section headed “Warning” on the cover of this Web Proof Information Pack.

APPENDIX IV COMPETENT PERSON’S REPORTEcono

micAna

lysisof

Torom

ocho

Project

Prepa

redby

Behre

Dolbear&

Co.

May

1,2012

Depreciationschedu

leProdu

ction

year

+20

Produ

ction

year

+21

Produ

ction

year

+22

Produ

ction

year

+23

Produ

ction

year

+24

Produ

ction

year

+25

Produ

ction

year

+26

Produ

ction

year

+27

Produ

ction

year

+28

Produ

ction

year

+29

Produ

ction

year

+30

2033

2034

2035

2036

2037

2038

2039

2040

2041

2042

2043

year

-3to

-1(2011to

2013)

investments

year+1

investments

$14,004,295

$6,113,362

$6,113,362

$7,737,577

$7,737,577

$7,737,577

$33,756,997

$33,756,997

$33,756,997

$33,756,997

$8,137,122

$8,137,122

$8,137,122

$8,137,122

$8,137,122

$5,639,166

$5,639,166

$5,639,166

$5,639,166

$5,639,166

$4,031,177

$4,031,177

$4,031,177

$4,031,177

$4,031,177

$13,580,282

$13,580,282

$13,580,282

$13,580,282

$13,580,282

year

+24

investments

$4,306,194

$4,306,194

$4,306,194

$4,306,194

$4,306,194

year

+25

investments

$5,723,387

$5,723,387

$5,723,387

$5,723,387

$5,723,387

year

+26

investments

$77,490

$77,490

$77,490

$77,490

$77,490

year

+27

investments

$77,490

$77,490

$77,490

$77,490

year

+28

investments

$10,242,005

$10,242,005

$10,242,005

year

+29

investments

$13,569,705

$13,569,705

year

+30

investments

$16,943,207

year

+31

investments

year

+32

investments

year

+33

investments

year

+34

investments

totalannuald

epreciation

..............

$69,749,355

$61,384,226

$59,302,041

$65,144,746

$35,693,942

$33,280,207

$27,718,531

$23,764,843

$20,426,566

$29,690,077

$40,909,897

loss

carriedforw

arddeterm

ination

netincom

ebefore

taxes...............

$612,384,448

$510,447,845

$446,859,671

$335,946,478

$379,357,048

$388,371,714

$447,307,428

$452,157,300

$610,886,836

$610,473,118

$529,337,203

cumulativenetincom

ebefore

taxes......

$12,609,366,589

$13,119,814,434

$13,566,674,105

$13,902,620,583

$14,281,977,631

$14,670,349,345

$15,117,656,773

$15,569,814,073

$16,180,700,909

$16,791,174,028

$17,320,511,231

cumulativeloss

......................

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

potentialw

rite-off....................

$612,384,448

$510,447,845

$446,859,671

$335,946,478

$379,357,048

$388,371,714

$447,307,428

$452,157,300

$610,886,836

$610,473,118

$529,337,203

cumulativepotentialw

rite-off

..........

$12,609,366,589

$13,119,814,434

$13,566,674,105

$13,902,620,583

$14,281,977,631

$14,670,349,345

$15,117,656,773

$15,569,814,073

$16,180,700,909

$16,791,174,028

$17,320,511,231

trialw

rite-off

.......................

($11,996,982,140)($12,609,366,589)($13,119,814,434)($13,566,674,105)($13,902,620,583)($14,281,977,631

)($14,670,349,345)($15,117,656,773)($15,569,814,073)($16,180,700,909)($16,791,174,028)

actualwrite-off

......................

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

IV-310

Page 615:  · 2013. 1. 16. · Hong Kong Exchanges and Clearing Limited, The Stock Exchange of Hong Kong Limited and the Securities and Futures Commission take no responsibility for the contents

THIS WEB PROOF INFORMATION PACK IS IN DRAFT FORM. The information contained in it is incomplete and is subject to change. ThisWeb Proof Information Pack must be read in conjunction with the section headed “Warning” on the cover of this Web Proof Information Pack.

APPENDIX IV COMPETENT PERSON’S REPORTEcono

micAna

lysisof

Torom

ocho

Project

Prepa

redby

Behre

Dolbear

&Co.

May

1,2012

Depreciationschedu

leProdu

ction

year

+31

Produ

ction

year

+32

Produ

ction

year

+33

Produ

ction

year

+34

Produ

ction

year

+35

Produ

ction

year

+36

Produ

ction

year

+37

Produ

ction

year

+38

Produ

ction

year

+39

Produ

ction

year

+40

Total

2044

2045

2046

2047

2048

2049

2050

2051

2052

2053

year

-3to

-1(2011to

2013)

investments

year

+1investments

$2,892,427,000

$30,641,522

$29,244,689

$24,780,220

$58,875,820

$54,032,662

$44,007,559

$62,267,934

$34,215,591

$38,194,550

$167,342,775

$74,449,850

$29,958,786

$80,475,911

$27,607,436

$34,193,561

$70,021,477

$30,566,812

$38,687,887

$168,784,987

$40,685,612

$28,195,831

$20,155,887

$67,901,412

$21,530,970

$28,616,934

$387,450

$77,490

$387,450

$10,242,005

$10,242,005

$51,210,025

$13,569,705

$13,569,705

$13,569,705

$67,848,526

$16,943,207

$16,943,207

$16,943,207

$16,943,207

$84,716,033

$14,648,911

$14,648,911

$14,648,911

$14,648,911

$14,648,911

$73,244,557

$75,440

$75,440

$75,440

$75,440

$75,440

$377,200

$75,440

$75,440

$75,440

$75,440

$75,440

$377,200

$51,660

$51,660

$51,660

$51,660

$51,660

$258,300

year

+35

investments

$28,085

$28,085

$28,085

$28,085

$28,085

$140,425

year

+36

investments

$2,255

$2,255

$2,255

$2,255

$2,255

$11,275

year

+37

investments

$0

$0

$0

$0

$0

year

+38

investments

$0

$0

$0

$0

year

+39

investments

$0

$0

$0

year

+40

investments

$0

$0

totalannuald

epreciation...........

$55,481,318

$55,479,268

$45,312,703

$31,794,658

$14,879,536

$232,880

$157,440

$82,000

$30,340

$2,255

$4,476,822,115

loss

carriedforw

arddeterm

ination

netincom

ebefore

taxes

...........

$462,728,860

$330,864,458

$400,466,537

$412,903,139

$428,465,051

$338,088,003

$0

$0

$0

$0

cumulativenetincom

ebefore

taxes..

$17,783,240,092

$18,114,104,550

$18,514,571,087

$18,927,474,226

$19,355,939,276

$19,694,027,279

$19,694,027,279

$19,694,027,279

$19,694,027,279

$19,694,027,279

cumulativeloss

..................

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

potentialw

rite-off

................

$462,728,860

$330,864,458

$400,466,537

$412,903,139

$428,465,051

$338,088,003

$0

$0

$0

$0

cumulativepotentialw

rite-off.......

$17,783,240,092

$18,114,104,550

$18,514,571,087

$18,927,474,226

$19,355,939,276

$19,694,027,279

$19,694,027,279

$19,694,027,279

$19,694,027,279

$19,694,027,279

trialw

rite-off..

..................

($17,320,511

,231)

($17,783,240,092)

($18,114,104,550)

($18,514,571,087)

($18,927,474,226)

($19,355,939,276)

($19,694,027,279)

($19,694,027,279)

($19,694,027,279)

($19,694,027,279)

actualwrite-off

..................

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

IV-311

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THIS WEB PROOF INFORMATION PACK IS IN DRAFT FORM. The information contained in it is incomplete and is subject to change. ThisWeb Proof Information Pack must be read in conjunction with the section headed “Warning” on the cover of this Web Proof Information Pack.

APPENDIX V SUMMARY OF ARTICLES OF OUR COMPANYAND CAYMAN ISLANDS LAW

SUMMARY OF THE CONSTITUTION OF THE COMPANY

1 Memorandum Of Association

The Memorandum of Association was conditionally adopted on May 8, 2012 and states, interalia, that the liability of members of the Company is limited, that the objects for which the Company isestablished are unrestricted and the Company shall have full power and authority to carry out anyobject not prohibited by the Companies Law or any other law of the Cayman Islands.

The Memorandum of Association is available for inspection at the address specified inAppendix VII in the section headed “Documents Delivered to the Registrar of Companies andAvailable for Inspection”.

2 Articles Of Association

The Articles of Association were conditionally adopted on May 8, 2012 and include provisionsto the following effect:

2.1 Classes of Shares

The share capital of the Company consists of ordinary shares. The capital of the Company atthe date of adoption of the Articles of Association is US$1,000,000,000 divided into 25,000,000,000shares of par value US$0.04 each.

2.2 Directors

(a) Power to allot and issue Shares

Subject to the provisions of the Companies Law and the Memorandum and Articles ofAssociation, the unissued shares in the Company (whether forming part of its original or any increasedcapital) shall be at the disposal of the Directors, who may offer, allot, grant options over or otherwisedispose of them to such persons, at such times and for such consideration, and upon such terms, as theDirectors shall determine.

Subject to the provisions of the Articles of Association and to any direction that may be givenby the Company in general meeting and without prejudice to any special rights conferred on theholders of any existing shares or attaching to any class of shares, any share may be issued with or haveattached thereto such preferred, deferred, qualified or other special rights or restrictions, whether inregard to dividend, voting, return of capital or otherwise, and to such persons at such time and for suchconsideration as the Directors may determine. Subject to the Companies Law and to any special rightsconferred on any shareholders or attaching to any class of shares, any share may, with the sanction of aspecial resolution, be issued on terms that it is, or at the option of the Company or the holder thereof,liable to be redeemed.

(b) Power to dispose of the assets of the Company or any subsidiary

The management of the business of the Company shall be vested in the Directors who, inaddition to the powers and authorities by the Articles of Association expressly conferred upon them,

V-1

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THIS WEB PROOF INFORMATION PACK IS IN DRAFT FORM. The information contained in it is incomplete and is subject to change. ThisWeb Proof Information Pack must be read in conjunction with the section headed “Warning” on the cover of this Web Proof Information Pack.

APPENDIX V SUMMARY OF ARTICLES OF OUR COMPANYAND CAYMAN ISLANDS LAW

may exercise all such powers and do all such acts and things as may be exercised or done or approvedby the Company and are not by the Articles of Association or the Companies Law expressly directed orrequired to be exercised or done by the Company in general meeting, but subject nevertheless to theprovisions of the Companies Law and of the Articles of Association and to any regulation from time totime made by the Company in general meeting not being inconsistent with such provisions or theArticles of Association, provided that no regulation so made shall invalidate any prior act of theDirectors which would have been valid if such regulation had not been made.

(c) Compensation or payment for loss of office

Payment to any Director or past Director of any sum by way of compensation for loss of officeor as consideration for or in connection with his retirement from office (not being a payment to whichthe Director is contractually entitled) must first be approved by the Company in general meeting.

(d) Loans to Directors

There are provisions in the Articles of Association prohibiting the making of loans to Directorsand associates which are equivalent to the restrictions imposed by the Companies Ordinance.

(e) Financial assistance to purchase Shares

Subject to all applicable laws, the Company may give financial assistance to Directors andemployees of the Company, its subsidiaries or any holding company or any subsidiary of such holdingcompany in order that they may buy shares in the Company or any such subsidiary or holdingcompany. Further, subject to all applicable laws, the Company may give financial assistance to atrustee for the acquisition of shares in the Company or shares in any such subsidiary or holdingcompany to be held for the benefit of employees of the Company, its subsidiaries, any holdingcompany of the Company or any subsidiary of any such holding company (including salariedDirectors).

(f) Disclosure of interest in contracts with the Company or any of its subsidiaries

No Director or proposed Director shall be disqualified by his office from contracting with theCompany either as vendor, purchaser or otherwise nor shall any such contract or any contract orarrangement entered into by or on behalf of the Company with any person, company or partnership ofor in which any Director shall be a member or otherwise interested be capable on that account of beingavoided, nor shall any Director so contracting or being any member or so interested be liable toaccount to the Company for any profit so realized by any such contract or arrangement by reason onlyof such Director holding that office or the fiduciary relationship thereby established, provided that suchDirector shall, if his interest in such contract or arrangement is material, declare the nature of hisinterest at the earliest meeting of the board of Directors at which it is practicable for him to do so,either specifically or by way of a general notice stating that, by reason of the facts specified in thenotice, he is to be regarded as interested in any contracts of a specified description which may be madeby the Company.

V-2

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APPENDIX V SUMMARY OF ARTICLES OF OUR COMPANYAND CAYMAN ISLANDS LAW

A Director shall not be entitled to vote on (nor shall he be counted in the quorum in relation to)any resolution of the Directors in respect of any contract or arrangement or any other proposal in whichthe Director or any of his associates has any material interest, and if he shall do so his vote shall not becounted (nor is he to be counted in the quorum for the resolution), but this prohibition shall not applyto any of the following matters, namely:

(i) the giving to such Director or any of his associates of any security or indemnity inrespect of money lent or obligations incurred by him or any of them at the request of orfor the benefit of the Company or any of its subsidiaries;

(ii) the giving of any security or indemnity to a third party in respect of a debt or obligationof the Company or any of its subsidiaries for which the Director or any of his associateshas himself/themselves assumed responsibility in whole or in part and whether alone orjointly under a guarantee or indemnity or by the giving of security;

(iii) any proposal concerning an offer of shares, debentures or other securities of or by theCompany or any other company which the Company may promote or be interested infor subscription or purchase where the Director or any of his associates is/are or is/are tobe interested as a participant in the underwriting or sub-underwriting of the offer;

(iv) any proposal or arrangement concerning the benefit of employees of the Company orany of its subsidiaries including:

(A) the adoption, modification or operation of any employees’ share scheme or anyshare incentive scheme or share option scheme under which the Director or anyof his associates may benefit;

(B) the adoption, modification or operation of a pension or provident fund orretirement, death or disability benefits scheme which relates both to Directors,their associates and employees of the Company or any of its subsidiaries anddoes not provide in respect of any Director or any of his associates as such anyprivilege or advantage not generally accorded to the class of persons to whichsuch scheme or fund relates; and

(v) any contract or arrangement in which the Director or any of his associates is/areinterested in the same manner as other holders of shares or debentures or othersecurities of the Company by virtue only of his/their interest in shares or debentures orother securities of the Company.

(g) Remuneration

The Directors shall be entitled to receive by way of remuneration for their services such sum asshall from time to time be determined by the Directors, or the Company in general meeting, as the casemay be, such sum (unless otherwise directed by the resolution by which it is determined) to be dividedamongst the Directors in such proportions and in such manner as they may agree, or failing agreement,equally, except that in such event any Director holding office for less than the whole of the relevantperiod in respect of which the remuneration is paid shall only rank in such division in proportion to thetime during such period for which he has held office. Such remuneration shall be in addition to any

V-3

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APPENDIX V SUMMARY OF ARTICLES OF OUR COMPANYAND CAYMAN ISLANDS LAW

other remuneration to which a Director who holds any salaried employment or office in the Companymay be entitled by reason of such employment or office.

The Directors shall also be entitled to be paid all expenses, including travel expenses,reasonably incurred by them in or in connection with the performance of their duties as Directorsincluding their expenses of travelling to and from board meetings, committee meetings or generalmeetings or otherwise incurred whilst engaged on the business of the Company or in the discharge oftheir duties as Directors.

The Directors may grant special remuneration to any Director who shall perform any special orextra services at the request of the Company. Such special remuneration may be made payable to suchDirector in addition to or in substitution for his ordinary remuneration as a Director, and may be madepayable by way of salary, commission or participation in profits or otherwise as may be agreed.

The remuneration of an executive Director or a Director appointed to any other office in themanagement of the Company shall from time to time be fixed by the Directors and may be by way ofsalary, commission, or participation in profits or otherwise or by all or any of those modes and withsuch other benefits (including share option and/or pension and/or gratuity and/or other benefits onretirement) and allowances as the Directors may from time to time decide. Such remuneration shall bein addition to such remuneration as the recipient may be entitled to receive as a Director.

(h) Retirement, appointment and removal

The Directors shall have power at any time and from time to time to appoint any person to be aDirector, either to fill a casual vacancy or as an addition to the existing Directors. Any Director soappointed shall hold office only until the next annual general meeting of the Company and shall thenbe eligible for re-election at that meeting.

The Company may by ordinary resolution remove any Director (including a Managing Directoror other executive Director) before the expiration of his period of office notwithstanding anything inthe Articles of Association or in any agreement between the Company and such Director (but withoutprejudice to any claim for compensation or damages payable to him in respect of the termination of hisappointment as Director or of any other appointment or office as a result of the termination of hisappointment as Director). The Company may by ordinary resolution appoint another person in hisplace. Any Director so appointed shall hold office during such time only as the Director in whose placehe is appointed would have held the same if he had not been removed. The Company may also byordinary resolution elect any person to be a Director, either to fill a casual vacancy or as an addition tothe existing Directors. Any Director so appointed shall hold office only until the next following annualgeneral meeting of the Company and shall then be eligible for re-election. No person shall, unlessrecommended by the Directors, be eligible for election to the office of Director at any general meetingunless, during the period, which shall be at least seven days, commencing no earlier than the day afterthe despatch of the notice of the meeting appointed for such election and ending no later than sevendays prior to the date of such meeting, there has been given to the Secretary of the Company notice inwriting by a member of the Company (not being the person to be proposed) entitled to attend and vote

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APPENDIX V SUMMARY OF ARTICLES OF OUR COMPANYAND CAYMAN ISLANDS LAW

at the meeting for which such notice is given of his intention to propose such person for election andalso notice in writing signed by the person to be proposed of his willingness to be elected.

There is no shareholding qualification for Directors nor is there any specified age limit forDirectors.

The office of a Director shall be vacated:

(i) if he resigns his office by notice in writing to the Company at its registered office or itsprincipal office in Hong Kong;

(ii) if an order is made by any competent court or official on the grounds that he is or maybe suffering from mental disorder or is otherwise incapable of managing his affairs andthe Directors resolve that his office be vacated;

(iii) if, without leave, he is absent from meetings of the Directors (unless an alternateDirector appointed by him attends) for 12 consecutive months, and the Directors resolvethat his office be vacated;

(iv) if he becomes bankrupt or has a receiving order made against him or suspends paymentor compounds with his creditors generally;

(v) if he ceases to be or is prohibited from being a Director by law or by virtue of anyprovision in the Articles of Association;

(vi) if he is removed from office by notice in writing served upon him signed by not lessthan three-fourths in number (or, if that is not a round number, the nearest lower roundnumber) of the Directors (including himself) for the time being then in office; or

(vii) if he shall be removed from office by an ordinary resolution of the members of theCompany under the Articles of Association.

At every annual general meeting of the Company one-third of the Directors for the time being,or, if their number is not three or a multiple of three, then the number nearest to, but not less than,one-third, shall retire from office by rotation provided that every Director (including those appointedfor a specific term) shall be subject to retirement by rotation at least once every three years. A retiringDirector shall retain office until the close of the meeting at which he retires and shall be eligible forre-election thereat. The Company at any annual general meeting at which any Directors retire may fillthe vacated office by electing a like number of persons to be Directors.

(i) Borrowing powers

The Directors may from time to time at their discretion exercise all the powers of the Companyto raise or borrow or to secure the payment of any sum or sums of money for the purposes of theCompany and to mortgage or charge its undertaking, property and assets (present and future) anduncalled capital or any part thereof.

The rights of the Directors to exercise these powers may only be varied by a special resolution.

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APPENDIX V SUMMARY OF ARTICLES OF OUR COMPANYAND CAYMAN ISLANDS LAW

(j) Proceedings of the Board

The Directors may meet together for the despatch of business, adjourn and otherwise regulatetheir meetings and proceedings as they think fit in any part of the world. Questions arising at anymeeting shall be determined by a majority of votes. In the case of an equality of votes, the chairman ofthe meeting shall have a second or casting vote.

2.3 Alteration to constitutional documents

No alteration or amendment to the Memorandum or Articles of Association may be madeexcept by special resolution.

2.4 Variation of rights of existing shares or classes of shares

If at any time the share capital of the Company is divided into different classes of shares, all orany of the rights attached to any class of shares for the time being issued (unless otherwise providedfor in the terms of issue of the shares of that class) may, subject to the provisions of the CompaniesLaw, be varied or abrogated either with the consent in writing of the holders of not less than three-fourths in nominal value of the issued shares of that class or with the sanction of a special resolutionpassed at a separate meeting of the holders of the shares of that class. To every such separate meetingall the provisions of the Articles of Association relating to general meetings shall mutatis mutandisapply, but so that the quorum for the purposes of any such separate meeting and of any adjournmentthereof shall be a person or persons together holding (or representing by proxy or duly authorizedrepresentative) at the date of the relevant meeting not less than one-third in nominal value of the issuedshares of that class.

The special rights conferred upon the holders of shares of any class shall not, unless otherwiseexpressly provided in the rights attaching to or the terms of issue of such shares, be deemed to bevaried by the creation or issue of further shares ranking pari passu therewith.

2.5 Alteration of Capital

The Company in general meeting may, from time to time, whether or not all the shares for thetime being authorized shall have been issued and whether or not all the shares for the time being issuedshall have been fully paid up, by ordinary resolution, increase its share capital by the creation of newshares, such new capital to be of such amount and to be divided into shares of such respective amountsas the resolution shall prescribe.

The Company may from time to time by ordinary resolution:

(a) consolidate and divide all or any of its share capital into shares of larger amount than itsexisting shares. On any consolidation of fully paid shares and division into shares oflarger amount, the Directors may settle any difficulty which may arise as they thinkexpedient and in particular (but without prejudice to the generality of the foregoing)may as between the holders of shares to be consolidated determine which particular

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APPENDIX V SUMMARY OF ARTICLES OF OUR COMPANYAND CAYMAN ISLANDS LAW

shares are to be consolidated into each consolidated share, and if it shall happen that anyperson shall become entitled to fractions of a consolidated share or shares, suchfractions may be sold by some person appointed by the Directors for that purpose andthe person so appointed may transfer the shares so sold to the purchaser thereof and thevalidity of such transfer shall not be questioned, and so that the net proceeds of suchsale (after deduction of the expenses of such sale) may either be distributed among thepersons who would otherwise be entitled to a fraction or fractions of a consolidatedshare or shares rateably in accordance with their rights and interests or may be paid tothe Company for the Company’s benefit;

(b) cancel any shares which at the date of the passing of the resolution have not been takenor agreed to be taken by any person, and diminish the amount of its share capital by theamount of the shares so cancelled subject to the provisions of the Companies Law; and

(c) sub-divide its shares or any of them into shares of smaller amount than is fixed by theMemorandum of Association, subject nevertheless to the provisions of the CompaniesLaw, and so that the resolution whereby any share is sub-divided may determine that, asbetween the holders of the shares resulting from such sub-division, one or more of theshares may have any such preferred or other special rights, over, or may have suchdeferred rights or be subject to any such restrictions as compared with the others as thecompany has power to attach to unissued or new shares.

The Company may by special resolution reduce its share capital or any capital redemptionreserve in any manner authorized and subject to any conditions prescribed by the Companies Law.

2.6 Special resolution — majority required

A “special resolution” is defined in the Articles of Association to have the meaning ascribedthereto in the Companies Law, for which purpose, the requisite majority shall be not less than three-fourths of the votes of such members of the Company as, being entitled to do so, vote in person or, inthe case of corporations, by their duly authorized representatives or, where proxies are allowed, byproxy at a general meeting of which notice specifying the intention to propose the resolution as aspecial resolution has been duly given and includes a special resolution approved in writing by all ofthe members of the Company entitled to vote at a general meeting of the Company in one or moreinstruments each signed by one or more of such members, and the effective date of the specialresolution so adopted shall be the date on which the instrument or the last of such instruments (if morethan one) is executed.

In contrast, an “ordinary resolution” is defined in the Articles of Association to mean aresolution passed by a simple majority of the votes of such members of the Company as, being entitledto do so, vote in person or, in the case of corporations, by their duly authorized representatives or,where proxies are allowed, by proxy at a general meeting held in accordance with the Articles ofAssociation and includes an ordinary resolution approved in writing by all the members of theCompany aforesaid.

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APPENDIX V SUMMARY OF ARTICLES OF OUR COMPANYAND CAYMAN ISLANDS LAW

2.7 Voting rights

Subject to any special rights, privileges or restrictions as to voting for the time being attached toany class or classes of shares, at any general meeting on a poll every member present in person (or, inthe case of a member being a corporation, by its duly authorized representative) or by proxy shall haveone vote for each share registered in his name in the register of members of the Company.

Where any member of the Company is, required to abstain from voting on any particularresolution or is restricted to voting only for or only against any particular resolution, any votes cast byor on behalf of such member in contravention of such requirement or restriction shall not be counted.

In the case of joint registered holders of any share, any one of such persons may vote at anymeeting, either personally or by proxy, in respect of such share as if he were solely entitled thereto; butif more than one of such joint holders be present at any meeting personally or by proxy, that one of thesaid persons so present being the most or, as the case may be, the more senior shall alone be entitled tovote in respect of the relevant joint holding and, for this purpose, seniority shall be determined byreference to the order in which the names of the joint holders stand on the register in respect of therelevant joint holding.

A member of the Company in respect of whom an order has been made by any competent courtor official on the grounds that he is or may be suffering from mental disorder or is otherwise incapableof managing his affairs may vote by any person authorized in such circumstances to do so and suchperson may vote by proxy.

Save as expressly provided in the Articles of Association or as otherwise determined by theDirectors, no person other than a member of the Company duly registered and who shall have paid allsums for the time being due from him payable to the Company in respect of his shares shall be entitledto be present or to vote (save as proxy for another member of the Company), or to be counted in aquorum, either personally or by proxy at any general meeting.

At any general meeting a resolution put to the vote of the meeting is to be decided by way of apoll.

If a recognized clearing house (or its nominee) is a member of the Company it may authorizesuch person or persons as it thinks fit to act as its proxy(ies) or representative(s) at any general meetingof the Company or at any general meeting of any class of members of the Company provided that, ifmore than one person is so authorized, the authorization shall specify the number and class of shares inrespect of which each such person is so authorized. A person authorized pursuant to this provision shallbe entitled to exercise the same rights and powers on behalf of the recognized clearing house (or itsnominee) which he represents as that recognized clearing house (or its nominee) could exercise as if itwere an individual member of the Company holding the number and class of shares specified in suchauthorization.

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APPENDIX V SUMMARY OF ARTICLES OF OUR COMPANYAND CAYMAN ISLANDS LAW

2.8 Annual general meetings

The Company shall in each year hold a general meeting as its annual general meeting inaddition to any other general meeting in that year and shall specify the meeting as such in the noticecalling it; and not more than 15 months (or such longer period as may be authorized) shall elapsebetween the date of one annual general meeting of the Company and that of the next.

2.9 Accounts and audit

The Directors shall cause to be kept such books of account as are necessary to give a true andfair view of the state of the Company’s affairs and to show and explain its transactions and otherwisein accordance with the Companies Law.

The Directors shall from time to time determine whether, and to what extent, and at what timesand places and under what conditions or regulations, the accounts and books of the Company, or any ofthem, shall be open to the inspection of members of the Company (other than officers of the Company)and no such member shall have any right of inspecting any accounts or books or documents of theCompany except as conferred by the Companies Law or any other relevant law or regulation or asauthorized by the Directors or by the Company in general meeting.

The Directors shall, commencing with the first annual general meeting, cause to be preparedand to be laid before the members of the Company at every annual general meeting a profit and lossaccount for the period, in the case of the first account, since the incorporation of the Company and, inany other case, since the preceding account, together with a balance sheet as at the date at which theprofit and loss account is made up and a Director’s report with respect to the profit or loss of theCompany for the period covered by the profit and loss account and the state of the Company’s affairsas at the end of such period, an auditor’s report on such accounts and such other reports and accountsas may be required by law. Copies of those documents to be laid before the members of the Companyat an annual general meeting shall not less than 21 clear days before the date of the meeting, be sent inthe manner in which notices may be served by the Company as provided in the Articles of Associationto every member of the Company and every holder of debentures of the Company provided that theCompany shall not be required to send copies of those documents to any person of whose address theCompany is not aware or to more than one of the joint holders of any shares or debentures.

The Company shall at any annual general meeting appoint an auditor or auditors of theCompany who shall hold office until the next annual general meeting. The remuneration of the auditorsshall be fixed by the Company at the annual general meeting at which they are appointed provided thatin respect of any particular year the Company in general meeting may delegate the fixing of suchremuneration to the Directors.

2.10 Notice of meetings and business to be conducted thereat

An annual general meeting and any extraordinary general meeting called for the passing of aspecial resolution shall be called by notice of not less than 21 clear days and any other extraordinarygeneral meeting shall be called by not less than 14 clear days. The notice shall be inclusive of the day

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APPENDIX V SUMMARY OF ARTICLES OF OUR COMPANYAND CAYMAN ISLANDS LAW

on which it is served or deemed to be served and of the day for which it is given, and shall specify thetime, place and agenda of the meeting, particulars of the resolutions to be considered at the meetingand, in the case of special business, the general nature of that business. The notice convening an annualgeneral meeting shall specify the meeting as such, and the notice convening a meeting to pass a specialresolution shall specify the intention to propose the resolution as a special resolution. Notice of everygeneral meeting shall be given to the auditors and all members of the Company (other than those who,under the provisions of the Articles of Association or the terms of issue of the shares they hold, are notentitled to receive such notice from the Company).

Notwithstanding that a meeting of the Company is called by shorter notice than that mentionedabove, it shall be deemed to have been duly called if it is so agreed:

(a) in the case of a meeting called as an annual general meeting, by all members of theCompany entitled to attend and vote thereat or their proxies; and

(b) in the case of any other meeting, by a majority in number of the members having a rightto attend and vote at the meeting, being a majority together holding not less than 95 percent. in nominal value of the shares giving that right.

All business shall be deemed special that is transacted at an extraordinary general meeting andalso all business shall be deemed special that is transacted at an annual general meeting with theexception of the following, which shall be deemed ordinary business:

(a) the declaration and sanctioning of dividends;

(b) the consideration and adoption of the accounts and balance sheets and the reports of theDirectors and the auditors and other documents required to be annexed to the balancesheet;

(c) the election of Directors in place of those retiring;

(d) the appointment of auditors;

(e) the fixing of, or the determining of the method of fixing of, the remuneration of theDirectors and of the auditors;

(f) the granting of any mandate or authority to the Directors to offer, allot, grant optionsover or otherwise dispose of the unissued shares of the Company representing not morethan 20 per cent. (or such other percentage as may from time to time be specified in theapplicable laws and regulations) in nominal value of its then existing issued sharecapital and the number of any securities repurchased pursuant to sub-paragraph(g) below; and

(g) the granting of any mandate or authority to the Directors to repurchase securities of theCompany.

2.11 Transfer of Shares

Transfers of shares may be effected by an instrument of transfer in the usual common form orin such other form as the Directors may approve which is consistent with the standard form of transferas prescribed.

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APPENDIX V SUMMARY OF ARTICLES OF OUR COMPANYAND CAYMAN ISLANDS LAW

The instrument of transfer shall be executed by or on behalf of the transferor and, unless theDirectors otherwise determine, the transferee, and the transferor shall be deemed to remain the holderof the share until the name of the transferee is entered in the register of members of the Company inrespect thereof. All instruments of transfer shall be retained by the Company.

The Directors may refuse to register any transfer of any share which is not fully paid up or onwhich the Company has a lien. The Directors may also decline to register any transfer of any sharesunless:

(a) the instrument of transfer is lodged with the Company accompanied by the certificatefor the shares to which it relates (which shall upon the registration of the transfer becancelled) and such other evidence as the Directors may reasonably require to show theright of the transferor to make the transfer;

(b) the instrument of transfer is in respect of only one class of shares;

(c) the instrument of transfer is properly stamped (in circumstances where stamping isrequired);

(d) in the case of a transfer to joint holders, the number of joint holders to whom the shareis to be transferred does not exceed four;

(e) the shares concerned are free of any lien in favor of the Company; and

(f) a fee of such maximum as the relevant stock exchange may from time to time determineto be payable (or such lesser sum as the Directors may from time to time require) is paidto the Company in respect thereof.

If the Directors refuse to register a transfer of any share they shall, within two months after thedate on which the instrument of transfer was lodged with the Company, send to each of the transferorand the transferee notice of such refusal.

2.12 Power of the Company to purchase its own Shares

The Company is empowered by the Companies Law and the Articles of Association topurchase its own shares subject to certain restrictions and the Directors may only exercise this power

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APPENDIX V SUMMARY OF ARTICLES OF OUR COMPANYAND CAYMAN ISLANDS LAW

on behalf of the Company subject to the authority of its members in general meeting as to the mannerin which they do so and to any applicable requirements imposed from time to time and the Securitiesand Futures Commission of Hong Kong. Shares which have been repurchased will be treated ascancelled upon the repurchase, unless the directors resolve prior to the repurchase that upon therepurchase the shares shall be held in the name of the Company as treasury shares.

2.13 Power of any subsidiary of the Company to own Shares

There are no provisions in the Articles of Association relating to the ownership of shares by asubsidiary.

2.14 Dividends and other methods of distributions

Subject to the Companies Law and Articles of Association, the Company in general meetingmay declare dividends in any currency but no dividends shall exceed the amount recommended by theDirectors. No dividend may be declared or paid other than out of profits and reserves of the Companylawfully available for distribution, including share premium.

Unless and to the extent that the rights attached to any shares or the terms of issue thereofotherwise provide, all dividends shall (as regards any shares not fully paid throughout the period inrespect of which the dividend is paid) be apportioned and paid pro rata according to the amounts paidup on the shares during any portion or portions of the period in respect of which the dividend is paid.For these purposes no amount paid up on a share in advance of calls shall be treated as paid up on theshare.

The Directors may from time to time pay to the members of the Company such interimdividends as appear to the Directors to be justified by the profits of the Company. The Directors mayalso pay half-yearly or at other intervals to be selected by them at a fixed rate if they are of the opinionthat the profits available for distribution justify the payment.

The Directors may retain any dividends or other moneys payable on or in respect of a shareupon which the Company has a lien, and may apply the same in or towards satisfaction of the debts,liabilities or engagements in respect of which the lien exists. The Directors may also deduct from anydividend or other monies payable to any member of the Company all sums of money (if any) presentlypayable by him to the Company on account of calls, installments or otherwise.

No dividend shall carry interest against the Company.

Whenever the Directors or the Company in general meeting have resolved that a dividend bepaid or declared on the share capital of the Company, the Directors may further resolve: (a) that suchdividend be satisfied wholly or in part in the form of an allotment of shares credited as fully paid up onthe basis that the shares so allotted are to be of the same class as the class already held by the allottee,provided that the members of the Company entitled thereto will be entitled to elect to receive such

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APPENDIX V SUMMARY OF ARTICLES OF OUR COMPANYAND CAYMAN ISLANDS LAW

dividend (or part thereof) in cash in lieu of such allotment; or (b) that the members of the Companyentitled to such dividend will be entitled to elect to receive an allotment of shares credited as fully paidup in lieu of the whole or such part of the dividend as the Directors may think fit on the basis that theshares so allotted are to be of the same class as the class already held by the allottee. The Companymay upon the recommendation of the Directors by ordinary resolution resolve in respect of any oneparticular dividend of the Company that notwithstanding the foregoing a dividend may be satisfiedwholly in the form of an allotment of shares credited as fully paid without offering any right tomembers of the Company to elect to receive such dividend in cash in lieu of such allotment.

Any dividend, interest or other sum payable in cash to a holder of shares may be paid bycheque or warrant sent through the post addressed to the registered address of the member of theCompany entitled, or in the case of joint holders, to the registered address of the person whose namestands first in the register of members of the Company in respect of the joint holding or to such personand to such address as the holder or joint holders may in writing direct. Every cheque or warrant sosent shall be made payable to the order of the holder or, in the case of joint holders, to the order of theholder whose name stands first on the register of members of the Company in respect of such shares,and shall be sent at his or their risk and the payment of any such cheque or warrant by the bank onwhich it is drawn shall operate as a good discharge to the Company in respect of the dividend and/orbonus represented thereby, notwithstanding that it may subsequently appear that the same has beenstolen or that any endorsement thereon has been forged. The Company may cease sending suchcheques for dividend entitlements or dividend warrants by post if such cheques or warrants have beenleft uncashed on two consecutive occasions. However, the Company may exercise its power to ceasesending cheques for dividend entitlements or dividend warrants after the first occasion on which such acheque or warrant is returned undelivered. Any one of two or more joint holders may give effectualreceipts for any dividends or other moneys payable or property distributable in respect of the sharesheld by such joint holders.

Any dividend unclaimed for six years from the date of declaration of such dividend may beforfeited by the Directors and shall revert to the Company.

The Directors may, with the sanction of the members of the Company in general meeting,direct that any dividend be satisfied wholly or in part by the distribution of specific assets of any kind,and in particular of paid up shares, debentures or warrants to subscribe securities of any othercompany, and where any difficulty arises in regard to such distribution the Directors may settle it asthey think expedient, and in particular may disregard fractional entitlements, round the same up ordown or provide that the same shall accrue to the benefit of the Company, and may fix the value fordistribution of such specific assets and may determine that cash payments shall be made to anymembers of the Company upon the footing of the value so fixed in order to adjust the rights of allparties, and may vest any such specific assets in trustees as may seem expedient to the Directors.

2.15 Proxies

Any member of the Company entitled to attend and vote at a meeting of the Company shall beentitled to appoint another person who must be an individual as his proxy to attend and vote instead of

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APPENDIX V SUMMARY OF ARTICLES OF OUR COMPANYAND CAYMAN ISLANDS LAW

him and a proxy so appointed shall have the same right as the member to speak at the meeting. A proxyneed not be a member of the Company.

Instruments of proxy shall be in common form or in such other form as the Directors may fromtime to time approve provided that it shall enable a member to instruct his proxy to vote in favor of oragainst (or in default of instructions or in the event of conflicting instructions, to exercise his discretionin respect of) each resolution to be proposed at the meeting to which the form of proxy relates. Theinstrument of proxy shall be deemed to confer authority to vote on any amendment of a resolution putto the meeting for which it is given as the proxy thinks fit. The instrument of proxy shall, unless thecontrary is stated therein, be valid as well for any adjournment of the meeting as for the meeting towhich it relates provided that the meeting was originally held within 12 months from such date.

The instrument appointing a proxy shall be in writing under the hand of the appointor or hisattorney authorized in writing, or if the appointor is a corporation either under its seal or under thehand of an officer, attorney or other person authorized to sign the same.

The instrument appointing a proxy and (if required by the Directors) the power of attorney orother authority (if any) under which it is signed, or a notarially certified copy of such power orauthority, shall be delivered at the registered office of the Company (or at such other place as may bespecified in the notice convening the meeting or in any notice of any adjournment or, in either case, inany document sent therewith) not less than 48 hours before the time appointed for holding the meetingor adjourned meeting at which the person named in the instrument proposes to vote or, in the case of apoll taken subsequently to the date of a meeting or adjourned meeting, not less than 48 hours before thetime appointed for the taking of the poll and in default the instrument of proxy shall not be treated asvalid. No instrument appointing a proxy shall be valid after the expiration of 12 months from the datenamed in it as the date of its execution. Delivery of any instrument appointing a proxy shall notpreclude a member of the Company from attending and voting in person at the meeting or pollconcerned and, in such event, the instrument appointing a proxy shall be deemed to be revoked.

2.16 Calls on Shares and forfeiture of Shares

The Directors may from time to time make calls upon the members of the Company in respectof any moneys unpaid on their shares (whether on account of the nominal amount of the shares or byway of premium or otherwise) and not by the conditions of allotment thereof made payable at fixedtimes and each member of the Company shall (subject to the Company serving upon him at least 14days’ notice specifying the time and place of payment and to whom such payment shall be made) payto the person at the time and place so specified the amount called on his shares. A call may be revokedor postponed as the Directors may determine. A person upon whom a call is made shall remain liableon such call notwithstanding the subsequent transfer of the shares in respect of which the call wasmade.

A call may be made payable either in one sum or by installments and shall be deemed to havebeen made at the time when the resolution of the Directors authorizing the call was passed. The joint

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APPENDIX V SUMMARY OF ARTICLES OF OUR COMPANYAND CAYMAN ISLANDS LAW

holders of a share shall be jointly and severally liable to pay all calls and installments due in respect ofsuch share or other moneys due in respect thereof.

If a sum called in respect of a share shall not be paid before or on the day appointed forpayment thereof, the person from whom the sum is due shall pay interest on the sum from the dayappointed for payment thereof to the time of actual payment at such rate, not exceeding 15 per cent. perannum, as the Directors may determine, but the Directors shall be at liberty to waive payment of suchinterest wholly or in part.

If any call or installment of a call remains unpaid on any share after the day appointed forpayment thereof, the Directors may at any time during such time as any part thereof remains unpaidserve a notice on the holder of such shares requiring payment of so much of the call or installment as isunpaid together with any interest which may be accrued and which may still accrue up to the date ofactual payment.

The notice shall name a further day (not being less than 14 days from the date of service of thenotice) on or before which, and the place where, the payment required by the notice is to be made, andshall state that in the event of non-payment at or before the time and at the place appointed, the sharesin respect of which such call was made or installment is unpaid will be liable to be forfeited.

If the requirements of such notice are not complied with, any share in respect of which suchnotice has been given may at any time thereafter, before payment of all calls or installment and interestdue in respect thereof has been made, be forfeited by a resolution of the Directors to that effect. Suchforfeiture shall include all dividends and bonuses declared in respect of the forfeited shares and notactually paid before the forfeiture. A forfeited share shall be deemed to be the property of the Companyand may be sold, re-allotted or otherwise disposed of.

A person whose shares have been forfeited shall cease to be a member of the Company inrespect of the forfeited shares but shall, notwithstanding the forfeiture, remain liable to pay to theCompany all moneys which at the date of forfeiture were payable by him to the Company in respect ofthe shares, together with (if the Directors shall in their discretion so require) interest thereon at suchrate not exceeding 15 per cent. per annum as the Directors may prescribe from the date of forfeitureuntil payment, and the Directors may enforce payment thereof without being under any obligation tomake any allowance for the value of the shares forfeited, at the date of forfeiture.

2.17 Inspection of register of members

The register of members of the Company shall be kept in such manner as to show at all timesthe members of the Company for the time being and the shares respectively held by them. The registermay, on 14 days’ notice being given by advertisement published on a website, by electroniccommunication in the manner in which notices may be served by the Company by electronic means asprovided in the Articles of Association or by advertisement published in the newspapers, be closed atsuch times and for such periods as the Directors may from time to time determine either generally or inrespect of any class of shares,

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APPENDIX V SUMMARY OF ARTICLES OF OUR COMPANYAND CAYMAN ISLANDS LAW

provided that the register shall not be closed for more than 30 days in any year (or such longer periodas the members of the Company may by ordinary resolution determine provided that such period shallnot be extended beyond 60 days in any year).

Any register of members kept in Hong Kong shall during normal business hours (subject tosuch reasonable restrictions as the Directors may impose) be open to inspection by any member of theCompany without charge and by any other person on payment of such fee not exceeding HK$2.50 (orsuch higher amount as may from time to time be permitted) as the Directors may determine for eachinspection.

2.18 Quorum for meetings and separate class meetings

No business shall be transacted at any general meeting unless a quorum is present when themeeting proceeds to business, but the absence of a quorum shall not preclude the appointment, choiceor election of a chairman which shall not be treated as part of the business of the meeting.

Two members of the Company present in person or by proxy shall be a quorum providedalways that if the Company has only one member of record the quorum shall be that one memberpresent in person or by proxy.

A corporation being a member of the Company shall be deemed for the purpose of the Articlesof Association to be present in person if represented by its duly authorized representative being theperson appointed by resolution of the directors or other governing body of such corporation or bypower of attorney to act as its representative at the relevant general meeting of the Company or at anyrelevant general meeting of any class of members of the Company.

The quorum for a separate general meeting of the holders of a separate class of shares of theCompany is described in sub-paragraph 2.4 above.

2.19 Rights of minorities in relation to fraud or oppression

There are no provisions in the Articles of Association concerning the rights of minorityshareholders in relation to fraud or oppression.

2.20 Procedure on liquidation

If the Company shall be wound up, and the assets available for distribution amongst themembers of the Company as such shall be insufficient to repay the whole of the paid-up capital, suchassets shall be distributed so that, as nearly as may be, the losses shall be borne by the members of theCompany in proportion to the capital paid up, or which ought to have been paid up, at thecommencement of the winding up on the shares held by them respectively. And if in a winding up theassets available for distribution amongst the members of the Company shall be more than sufficient torepay the whole of the capital paid up at the commencement of the winding up, the excess shall bedistributed amongst the members of the Company in proportion to the capital paid up at the

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APPENDIX V SUMMARY OF ARTICLES OF OUR COMPANYAND CAYMAN ISLANDS LAW

commencement of the winding up on the shares held by them respectively. The foregoing is withoutprejudice to the rights of the holders of shares issued upon special terms and conditions.

If the Company shall be wound up, the liquidator may with the sanction of a special resolutionof the Company and any other sanction required by the Companies Law, divide amongst the membersof the Company in specie or kind the whole or any part of the assets of the Company (whether theyshall consist of property of the same kind or not) and may, for such purpose, set such value as hedeems fair upon any property to be divided as aforesaid and may determine how such division shall becarried out as between the members or different classes of members of the Company. The liquidatormay, with the like sanction, vest the whole or any part of such assets in trustees upon such trusts for thebenefit of the members of the Company as the liquidator, with the like sanction and subject to theCompanies Law, shall think fit, but so that no member of the Company shall be compelled to acceptany assets, shares or other securities in respect of which there is a liability.

2.21 Untraceable members

The Company shall be entitled to sell any shares of a member of the Company or the shares towhich a person is entitled by virtue of transmission on death or bankruptcy or operation of law if: (i) allcheques or warrants, not being less than three in number, for any sums payable in cash to the holder ofsuch shares have remained uncashed for a period of 12 years; (ii) the Company has not during that timeor before the expiry of the three month period referred to in (iv) below received any indication of thewhereabouts or existence of the member; (iii) during the 12 year period, at least three dividends inrespect of the shares in question have become payable and no dividend during that period has beenclaimed by the member; and (iv) upon expiry of the 12 year period, the Company has caused anadvertisement to be published in the newspapers, by electronic communication in the manner in whichnotices may be served by the Company by electronic means as provided in the Articles of Association,giving notice of its intention to sell such shares and a period of three months has elapsed since suchadvertisement and the relevant authorities has been notified of such intention. The net proceeds of anysuch sale shall belong to the Company and upon receipt by the Company of such net proceeds it shallbecome indebted to the former member for an amount equal to such net proceeds.

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APPENDIX V SUMMARY OF ARTICLES OF OUR COMPANYAND CAYMAN ISLANDS LAW

SUMMARY OF CAYMAN ISLANDS COMPANY LAW AND TAXATION

1 Introduction

The Companies Law is derived, to a large extent, from the older Companies Acts of England,although there are significant differences between the Companies Law and the current Companies Actof England. Set out below is a summary of certain provisions of the Companies Law, although thisdoes not purport to contain all applicable qualifications and exceptions or to be a complete review ofall matters of corporate law and taxation which may differ from equivalent provisions in jurisdictionswith which interested parties may be more familiar.

2 Incorporation

The Company was incorporated in the Cayman Islands as an exempted company with limitedliability on April 24, 2003 under the Companies Law. As such, its operations must be conductedmainly outside the Cayman Islands. The Company is required to file an annual return each year withthe Registrar of Companies of the Cayman Islands and pay a fee which is based on the size of itsauthorized share capital.

3 Share capital

The Companies Law permits a company to issue ordinary shares, preference shares,redeemable shares or any combination thereof.

The Companies Law provides that where a company issues shares at a premium, whether forcash or otherwise, a sum equal to the aggregate amount of the value of the premia on those shares shallbe transferred to an account called the “share premium account”. At the option of a company, theseprovisions may not apply to premia on shares of that company allotted pursuant to any arrangement inconsideration of the acquisition or cancellation of shares in any other company and issued at apremium. The Companies Law provides that the share premium account may be applied by a company,subject to the provisions, if any, of its memorandum and articles of association, in such manner as thecompany may from time to time determine including, but without limitation:

(a) paying distributions or dividends to members;

(b) paying up unissued shares of the company to be issued to members as fully paid bonusshares;

(c) in the redemption and repurchase of shares (subject to the provisions of section 37 ofthe Companies Law);

(d) writing-off the preliminary expenses of the company;

(e) writing-off the expenses of, or the commission paid or discount allowed on, any issue ofshares or debentures of the company; and

(f) providing for the premium payable on redemption or purchase of any shares ordebentures of the company.

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APPENDIX V SUMMARY OF ARTICLES OF OUR COMPANYAND CAYMAN ISLANDS LAW

No distribution or dividend may be paid to members out of the share premium account unlessimmediately following the date on which the distribution or dividend is proposed to be paid thecompany will be able to pay its debts as they fall due in the ordinary course of business.

The Companies Law provides that, subject to confirmation by the Grand Court of the CaymanIslands, a company limited by shares or a company limited by guarantee and having a share capitalmay, if so authorized by its articles of association, by special resolution reduce its share capital in anyway.

Subject to the detailed provisions of the Companies Law, a company limited by shares or acompany limited by guarantee and having a share capital may, if so authorized by its articles ofassociation, issue shares which are to be redeemed or are liable to be redeemed at the option of thecompany or a shareholder. In addition, such a company may, if authorized to do so by its articles ofassociation, purchase its own shares, including any redeemable shares. The manner of such a purchasemust be authorized either by the articles of association or by an ordinary resolution of the company.The articles of association may provide that the manner of purchase may be determined by thedirectors of the company. At no time may a company redeem or purchase its shares unless they arefully paid. A company may not redeem or purchase any of its shares if, as a result of the redemption orpurchase, there would no longer be any member of the company holding shares. A payment out ofcapital by a company for the redemption or purchase of its own shares is not lawful unless immediatelyfollowing the date on which the payment is proposed to be made, the company shall be able to pay itsdebts as they fall due in the ordinary course of business.

There is no statutory restriction in the Cayman Islands on the provision of financial assistanceby a company for the purchase of, or subscription for, its own or its holding company’s shares.Accordingly, a company may provide financial assistance if the directors of the company consider, indischarging their duties of care and to act in good faith, for a proper purpose and in the interests of thecompany, that such assistance can properly be given. Such assistance should be on an arm’s-lengthbasis.

4 Dividends and distributions

With the exception of section 34 of the Companies Law, there are no statutory provisionsrelating to the payment of dividends. Based upon English case law which is likely to be persuasive inthe Cayman Islands in this area, dividends may be paid only out of profits. In addition, section 34 ofthe Companies Law permits, subject to a solvency test and the provisions, if any, of the company’smemorandum and articles of association, the payment of dividends and distributions out of the sharepremium account (see 3 above for further details).

5 Shareholders’ suits

The Cayman Islands courts can be expected to follow English case law precedents. The rule inFoss v. Harbottle (and the exceptions thereto which permit a minority shareholder to commence a classaction against or derivative actions in the name of the company to challenge (a) an act which is ultravires the company or illegal, (b) an act which constitutes a fraud against the minority where the

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APPENDIX V SUMMARY OF ARTICLES OF OUR COMPANYAND CAYMAN ISLANDS LAW

wrongdoers are themselves in control of the company, and (c) an action which requires a resolutionwith a qualified (or special) majority which has not been obtained) has been applied and followed bythe courts in the Cayman Islands.

6 Protection of minorities

In the case of a company (not being a bank) having a share capital divided into shares, theGrand Court of the Cayman Islands may, on the application of members holding not less than one fifthof the shares of the company in issue, appoint an inspector to examine into the affairs of the companyand to report thereon in such manner as the Grand Court shall direct.

Any shareholder of a company may petition the Grand Court of the Cayman Islands which maymake a winding up order if the court is of the opinion that it is just and equitable that the companyshould be wound up.

Claims against a company by its shareholders must, as a general rule, be based on the generallaws of contract or tort applicable in the Cayman Islands or their individual rights as shareholders asestablished by the company’s memorandum and articles of association.

The English common law rule that the majority will not be permitted to commit a fraud on theminority has been applied and followed by the courts of the Cayman Islands.

7 Disposal of assets

The Companies Law contains no specific restrictions on the powers of directors to dispose ofassets of a company. As a matter of general law, in the exercise of those powers, the directors mustdischarge their duties of care and to act in good faith, for a proper purpose and in the interests of thecompany.

8 Accounting and auditing requirements

The Companies Law requires that a company shall cause to be kept proper books of accountwith respect to:

(a) all sums of money received and expended by the company and the matters in respect ofwhich the receipt and expenditure takes place;

(b) all sales and purchases of goods by the company; and

(c) the assets and liabilities of the company.

Proper books of account shall not be deemed to be kept if there are not kept such books as arenecessary to give a true and fair view of the state of the company’s affairs and to explain itstransactions.

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APPENDIX V SUMMARY OF ARTICLES OF OUR COMPANYAND CAYMAN ISLANDS LAW

9 Register of members

An exempted company may, subject to the provisions of its articles of association, maintain itsprincipal register of members and any branch registers at such locations, whether within or without theCayman Islands, as its directors may, from time to time, think fit. There is no requirement under theCompanies Law for an exempted company to make any returns of members to the Registrar ofCompanies in the Cayman Islands. The names and addresses of the members are, accordingly, not amatter of public record and are not available for public inspection.

10 Inspection of books and records

Members of a company will have no general right under the Companies Law to inspect orobtain copies of the register of members or corporate records of the company. They will, however,have such rights as may be set out in the company’s articles of association.

11 Special resolutions

The Companies Law provides that a resolution is a special resolution when it has been passedby a majority of not less than two-thirds (or such greater number as may be specified in the articles ofassociation of the company) of such members as, being entitled to do so, vote in person or, whereproxies are allowed, by proxy at a general meeting of which notice specifying the intention to proposethe resolution as a special resolution has been duly given. Written resolutions signed by all themembers entitled to vote for the time being of the company may take effect as special resolutions ifthis is authorized by the articles of association of the company.

12 Subsidiary owning shares in parent

The Companies Law does not prohibit a Cayman Islands company acquiring and holding sharesin its parent company provided its objects so permit. The directors of any subsidiary making suchacquisition must discharge their duties of care and to act in good faith, for a proper purpose and in theinterests of the subsidiary.

13 Mergers and Consolidations

The Companies Law permits mergers and consolidations between Cayman Islands companiesand between Cayman Islands companies and non-Cayman Islands companies. For these purposes,(a) “merger” means the merging of two or more constituent companies and the vesting of theirundertaking, property and liabilities in one of such companies as the surviving company and (b) a“consolidation” means the combination of two or more constituent companies into a consolidatedcompany and the vesting of the undertaking, property and liabilities of such companies to theconsolidated company. In order to effect such a merger or consolidation, the directors of eachconstituent company must approve a written plan of merger or consolidation, which must then beauthorized by either (a) a special resolution of each constituent company or (b) such otherauthorization, if any, as may be specified in such constituent company’s articles of association. Thewritten plan of merger or consolidation must be filed with the Registrar of Companies together with adeclaration as to the solvency of the consolidated or surviving company, a list of the assets and

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APPENDIX V SUMMARY OF ARTICLES OF OUR COMPANYAND CAYMAN ISLANDS LAW

liabilities of each constituent company and an undertaking that a copy of the certificate of merger orconsolidation will be given to the members and creditors of each constituent company and thatnotification of the merger or consolidation will be published in the Cayman Islands Gazette. Dissentingshareholders have the right to be paid the fair value of their shares (which, if not agreed between theparties, will be determined by the Cayman Islands court) if they follow the required procedures, subjectto certain exceptions. Court approval is not required for a merger or consolidation which is effected incompliance with these statutory procedures.

14 Reconstructions

There are statutory provisions which facilitate reconstructions and amalgamations approved bya majority in number representing 75 per cent. in value of shareholders or creditors, depending on thecircumstances, as are present at a meeting called for such purpose and thereafter sanctioned by theGrand Court of the Cayman Islands. Whilst a dissenting shareholder would have the right to express tothe Grand Court his view that the transaction for which approval is sought would not provide theshareholders with a fair value for their shares, the Grand Court of the Cayman Islands is unlikely todisapprove the transaction on that ground alone in the absence of evidence of fraud or bad faith onbehalf of management and if the transaction were approved and consummated the dissentingshareholder would have no rights comparable to the appraisal rights (i.e. the right to receive payment incash for the judicially determined value of his shares) ordinarily available, for example, to dissentingshareholders of United States corporations.

15 Take-overs

Where an offer is made by a company for the shares of another company and, within fourmonths of the offer, the holders of not less than 90 per cent. of the shares which are the subject of theoffer accept, the offeror may at any time within two months after the expiration of the said fourmonths, by notice require the dissenting shareholders to transfer their shares on the terms of the offer.A dissenting shareholder may apply to the Grand Court of the Cayman Islands within one month of thenotice objecting to the transfer. The burden is on the dissenting shareholder to show that the GrandCourt should exercise its discretion, which it will be unlikely to do unless there is evidence of fraud orbad faith or collusion as between the offeror and the holders of the shares who have accepted the offeras a means of unfairly forcing out minority shareholders.

16 Indemnification

Cayman Islands law does not limit the extent to which a company’s articles of association mayprovide for indemnification of officers and directors, except to the extent any such provision may beheld by the Cayman Islands courts to be contrary to public policy (e.g. for purporting to provideindemnification against the consequences of committing a crime).

17 Liquidation

A company is placed in liquidation either by an order of the court or by a special resolution (or,in certain circumstances, an ordinary resolution) of its members. A liquidator is appointed whose dutiesare to collect the assets of the company (including the amount (if any) due from the contributories(shareholders)), settle the list of creditors and discharge the company’s liability to them, rateably if

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APPENDIX V SUMMARY OF ARTICLES OF OUR COMPANYAND CAYMAN ISLANDS LAW

insufficient assets exist to discharge the liabilities in full, and to settle the list of contributories anddivide the surplus assets (if any) amongst them in accordance with the rights attaching to the shares.

18 Stamp duty on transfers

No stamp duty is payable in the Cayman Islands on transfers of shares of Cayman Islandscompanies except those which hold interests in land in the Cayman Islands.

19 Taxation

Pursuant to section 6 of the Tax Concessions Law (1999 Revision) of the Cayman Islands, theCompany obtained an undertaking from the Governor in Cabinet:

(a) that no law which is enacted in the Cayman Islands imposing any tax to be levied onprofits or income or gains or appreciation shall apply to the Company or its operations;and

(b) in addition, that no tax to be levied on profits, income, gains or appreciations or whichis in the nature of estate duty or inheritance tax shall be payable by the Company:

(i) on or in respect of the shares, debentures or other obligations of the Company;or

(ii) by way of withholding in whole or in part of any relevant payment as defined inSection 6(3) of the Tax Concession Law (1999 Revision).

The undertaking is for a period of twenty years from May 13, 2003.

The Cayman Islands currently levy no taxes on individuals or corporations based upon profits,income, gains or appreciations and there is no taxation in the nature of inheritance tax or estate duty.There are no other taxes likely to be material to the Company levied by the Government of the CaymanIslands save certain stamp duties which may be applicable, from time to time, on certain instrumentsexecuted in or brought within the jurisdiction of the Cayman Islands. The Cayman Islands are not partyto any double tax treaties that are applicable to any payments made to or by the Company.

20 Exchange control

There are no exchange control regulations or currency restrictions in the Cayman Islands.

21 General

Maples and Calder the Company’s legal advisors on Cayman Islands law, have sent to theCompany a letter of advice summarizing aspects of Cayman Islands company law. This letter, togetherwith a copy of the Companies Law, is available for inspection as referred to in the section headed“Documents Delivered to the Registrar of Companies and Available for Inspection” in Appendix VII.Any person wishing to have a detailed summary of Cayman Islands company law or advice on thedifferences between it and the laws of any jurisdiction with which he/she is more familiar isrecommended to seek independent legal advice.

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APPENDIX VI STATUTORY AND GENERAL INFORMATION

A. FURTHER INFORMATION ABOUT THE COMPANY

1. Incorporation

The Company was incorporated in the Cayman Islands as an exempted company under theCompanies Law on April 24, 2003. The Company has established a place of business in Hong Kongand has registered with the Companies Registry as a non-Hong Kong company in Hong Kong with theCompany’s principal place of business in Hong Kong at Room 4501, 45/F, Far East Finance Centre,No. 16 Harcourt Road, Admiralty, Hong Kong under Part XI of the Companies Ordinance. Ms. MokMing Wai has been appointed as the authorized representative of the Company for acceptance ofservice of process and notices on behalf of the Company in Hong Kong at our place of business.

As the Company is incorporated in the Cayman Islands, it operates subject to the relevant lawsof the Cayman Islands and to its constitutional documents comprising the Memorandum and theArticles. A summary of various provisions of its constitutional documents and relevant aspects of theCompanies Law is set out in Appendix V to this document.

2. Changes in share capital of the Company

The Company was incorporated in the Cayman Islands on April 24, 2003 with an authorizedshare capital of US$50,000 divided into 50,000 shares of US$1.00 each. On April 24, 2003 a singleshare was allotted to the initial subscriber and then transferred to Catherine McLeod-Seltzer, 9,999shares were issued to Catherine McLeod-Seltzer and 10,000 shares were issued to each of LowellMineral Exploration, L.L.C., La Ermita Ltda. and Sunbeam Opportunities Limited, giving an issuedshare capital of 40,000 shares of a par value of US$1.00 each.

On January 23, 2004 Catherine McLeod-Seltzer transferred 6,000 of her 10,000 shares toFisherking Holdings Limited. On February 12, 2004 La Ermita Ltda. transferred all of its 10,000 sharesto Ranchu Copper Investments Limited and Sunbeam Opportunities Limited transferred 3333.333shares to Campania Holding Inc. and 3333.333 shares to Tangent International Limited.

On February 20, 2004 the authorized share capital of the Company was subdivided fromUS$50,000.00 divided into 50,000 shares of a par value of US$1.00 each to US$50,000 divided into62,500,000 shares of a par value of US$0.0008 each. All shares in issue prior to the subdivision werecancelled and new shares were allotted to each shareholder in proportion to its cancelled shareholding.

On March 18, 2004, 8,571,429 shares in the Company were issued to Peru Copper Inc., acompany incorporated under the Canada Business Corporations Act.

On April 30, 2004, each of the shareholders transferred its entire shareholding in our Companyto Peru Copper Inc., which thereby became our Company’s sole shareholder. The shares in PeruCopper Inc. were subsequently listed on the Toronto Stock Exchange (under the trading symbol“PCR”) and on the American Stock Exchange and the Lima Stock Exchange (in each case under thetrading symbol “CUP”).

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APPENDIX VI STATUTORY AND GENERAL INFORMATION

On June 19, 2007, Chinalco Canada B.C. Holdings Limited, a company incorporated under thelaws of the Province of British Columbia and a wholly-owned subsidiary of Chinalco, invested in PeruCopper Inc. by acquiring 13.2 million shares in Peru Copper Inc. at a price of CAD 5.30 per share. OnJune 20, 2007 Chinalco Canada B.C. Holdings Limited made a tender offer to buy all of the issued andoutstanding common shares in Peru Copper Inc. on the basis of a cash payment of CAD 6.60 per share.The offer, unanimously recommended by the board of Peru Copper Inc., was successful and ChinalcoCanada B.C. Holdings Limited acquired all the issued and outstanding shares in Peru Copper Inc.,thereby becoming its sole shareholder. Later in 2007 the shares in Peru Copper Inc. were delisted fromthe Toronto Stock Exchange, the American Stock Exchange and the Lima Stock Exchange.

On October 1, 2007, Peru Copper Inc. was amalgamated with Chinalco Canada B.C. HoldingsLtd. to form Chinalco Canada, which thereby became our Company’s sole shareholder. On October 12,2007 Chinalco Canada transferred its entire shareholding in our Company to COH. At the date of thisdocument, COH remains the sole shareholder of our Company.

On September 30, 2011 our Company’s shares were consolidated at a ratio of 50:1, as a resultof which its authorized share capital became US$50,000 divided into 1,250,000 ordinary shares of parvalue US$0.04 each and its issued share capital became 1,171,428.58 ordinary shares of par valueUS$0.04 each. The authorized share capital of our Company was then increased to US$1,000,000,000divided into 25,000,000,000 ordinary shares of par value US$0.04 each by the creation of an additional24,998,750,000 Shares.

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APPENDIX VI STATUTORY AND GENERAL INFORMATION

On February 28, 2012, 10,000,000,000 Shares were allotted to COH.

Save as disclosed in this document, there has been no alteration in the share capital of theCompany since its incorporation.

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APPENDIX VI STATUTORY AND GENERAL INFORMATION

4. Corporate Reorganization

In preparation for our proposed corporate financing activities, COH and the Group haveundertaken the Reorganization. Details of the Reorganization undertaken and a diagram showing thecorporate structure of the Company after the Reorganization is set out in the section titled “History,Reorganization and Group Structure” in this document.

5. Changes in share capital of subsidiaries

The Company’s subsidiaries are listed in the Accountant’s Report, the text of which is set out inAppendix I to this document.

The following alterations in the share capital of a subsidiary of the Company took place withinthe two years immediately preceding the date of this document:

Chinalco Peru

On December 30, 2010, 355,000,000 shares were issued as a consequence of a capitalization ofdebts of Chinalco Peru.

By means of a shareholder meeting held on December 30, 2011, 245,000,000 shares inChinalco Peru were issued to our Company, as a consequence of the capitalization of certain debts ofChinalco Peru. As a result, the capital of Chinalco Peru was increased to US$628,500,290 representedby 628,500,290 shares.

Centenario

As of the date hereof, there has been no capital increase registered in Centenario.

Cal del Centro

As at the date hereof, there has been no capital increase registered in Cal del Centro.

Pesares

As at the date hereof, there has been no capital increase registered in Pesares.

Pomacocha Power

As at the date hereof, there has been no capital increase registered in Pomacocha Power.

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APPENDIX VI STATUTORY AND GENERAL INFORMATION

Save as disclosed in this document and except for as referred to in the paragraph headed“Corporate Reorganization” above in this Appendix, there have been no changes in the share capital ofany of the subsidiaries of the Company within the two years immediately preceding the date of thisdocument.

6. Repurchase by the Company of its own securities

This section sets out information relating to repurchases by the Company of its own securities,including information required to be included in this document concerning any such repurchase.

(c) Source of funds

Repurchases must be funded out of funds legally available for the purpose in accordance withthe relevant laws, the Memorandum and the Articles and the applicable laws and regulations of theCayman Islands. The Company may not repurchase its own securities for a consideration other thancash or for settlement otherwise than in accordance with the trading rules from time to time.

(d) Reasons for repurchases

Our Directors believe that it is in the best interests of the Company and our Shareholders as awhole for our Directors to have general authority from our Shareholders to repurchase securities in the

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APPENDIX VI STATUTORY AND GENERAL INFORMATION

market. Such repurchases may, depending on market conditions and funding arrangements at the time,lead to an enhancement of the net asset value per Share and/or earnings per Share and will only bemade when our Directors believe that such repurchases will benefit the Company and our Shareholdersas a whole.

(e) Funding of repurchases

In repurchasing securities, the Company may only apply funds legally available for suchpurpose in accordance with the Memorandum and the Articles and the applicable laws of the CaymanIslands.

On the basis of the current financial position of the Company as disclosed in this document andtaking into account the current working capital position of the Company, our Directors consider that, ifthe repurchase mandate was to be exercised in full, it might have a material adverse effect on theworking capital and/or the gearing position of the Company as compared with the position disclosed inthis document. However, our Directors do not propose to exercise the repurchase mandate to suchextent as would, in the circumstances, have a material adverse effect on the working capitalrequirements of the Company or the gearing levels which in the opinion of our Directors are from timeto time appropriate for the Company.

(f) General

None of our Directors nor, to the best of their knowledge having made all reasonable enquiries,any of their associates currently intends to sell Shares to the Company or its subsidiaries.

No connected person has notified the Company that he/she has a present intention to sell Sharesto the Company, or has undertaken not to do so, if the repurchase mandate is exercised.

No purchase of Shares has been made by the Company within six months prior to the date ofthis document.

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APPENDIX VI STATUTORY AND GENERAL INFORMATION

B. FURTHER INFORMATION ABOUT THE BUSINESS

7. Summary of material contracts

The following contracts (not being contracts entered into in the ordinary course of business)have been entered into by members of the Company within the two years preceding the date of thisdocument and are or may be material:

(a) a debt reorganization agreement dated September 30, 2011 and entered into betweenAluminum Corporation of China Overseas Holdings Limited, the Company (formerly,Peru Copper Syndicate, Ltd.) and Minera Chinalco Peru S.A., the details of which areset out in the section headed “History, Reorganization and Group Structure —Reorganization — Assignment of receivables and amendment of debt terms”;

(b) an addendum dated July 22, 2011 entered into between the Peruvian State, dulyrepresented by the Ministry of Energy and Mines of Peru and Minera Chinalco PeruS.A., amending the Agreement of Guarantees and Measures to Protect Investmentbetween the same parties dated March 9, 2009 to extend the period to complete theinvestment by Chinalco Peru in the Toromocho Project until December 2013, the detailsof such agreement are set out in the section headed “History, Reorganization and GroupStructure — History — Toromocho Project Major Contracts — Stability Agreements”;

(c) a tax stability agreement dated November 22, 2011 entered into between the Company(formerly, Peru Copper Syndicate, Ltd.) and Proinversion (namely, the PeruvianGovernmental Committee for Private Investment), the details of which are set out in thesection headed “History, Reorganization and Group Structure — History — ToromochoProject Major Contracts — Proinversion Stability Agreement”;

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APPENDIX VI STATUTORY AND GENERAL INFORMATION

(i) the non-competition undertaking dated May 8, 2012 provided by AluminumCorporation of China ( ) in favor of the Company ( ), the detailsof which are set out in the section headed “Relationship with Controlling Shareholders— Non-Competition Undertaking”;

(j) the trademark license agreement dated May 8, 2012 and entered into betweenAluminum Corporation of China ( ) and the Company ( ), thedetails of which are set out in the section headed “Connected Transactions — ExemptContinuing Connected Transactions — Trademark License Agreement”; and

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APPENDIX VI STATUTORY AND GENERAL INFORMATION

8. Mining Concessions

As at the Latest Practicable Date, the Group and Juanita owned the following key miningconcessions:

NO. NAME TYPE CODE ACQUIRED FROMDATE OF

ACQUISITION

WHETHERCOVERED BY

THESTABILITY

AGREEMENT

I. METALLIC MINING CONCESSIONS OWNED BY CHINALCO PERU

1 DANUBIO S.R. Metallic Mining Concession 08021948X01 Sociedad Minera Corona S.A. July 12, 2010 No2 ISABEL S.R Metallic Mining Concession 08021977X01 Sociedad Minera Corona S.A. July 12, 2010 No3 POLONIA S.R. Metallic Mining Concession 08021978X01 Sociedad Minera Corona S.A. July 12, 2010 No4 VIENA S.R. Metallic Mining Concession 08021976X01 Sociedad Minera Corona S.A. July 12, 2010 No5 MILAGROSA Metallic Mining Concession 08001342Y01 Heirs of Marcionelli (45%),

heirs of Ghezzi (30%) andheirs of Gore (25%)

November 19,2004

No6 ALIANZA Metallic Mining Concession 08001063Y01 Activos Mineros May 2, 2008 Yes7 CHISPA Metallic Mining Concession 08001496Y01 Activos Mineros May 2, 2008 Yes8 EL AZUL DEL

DANUBIO Metallic Mining Concession 08001349Y01 Activos Mineros May 2, 2008 Yes9 EL MARTILLO Metallic Mining Concession 08001394X01 Activos Mineros May 2, 2008 Yes10 FORTALEZA Metallic Mining Concession 08001143Y01 Activos Mineros May 2, 2008 Yes11 INDEPENDENCIA Metallic Mining Concession 08005477X01 Activos Mineros May 2, 2008 Yes12 LA COMISIÓN Metallic Mining Concession 08001807Y01 Activos Mineros May 2, 2008 Yes13 LA DEFENSA Metallic Mining Concession 08001757Y01 Activos Mineros May 2, 2008 Yes14 LA PERLITA Metallic Mining Concession 08001391X01 Activos Mineros May 2, 2008 Yes15 MADAM

GRIMANEZA Metallic Mining Concession 08001869Y01 Activos Mineros May 2, 2008 Yes16 SAN ROMÁN Metallic Mining Concession 08000740Y01 Activos Mineros May 2, 2008 Yes17 SUERTE Metallic Mining Concession 08001495Y01 Activos Mineros May 2, 2008 Yes18 VECINA Metallic Mining Concession 08001479Y01 Activos Mineros May 2, 2008 Yes19 VECINA 2da Metallic Mining Concession 08001996Y01 Activos Mineros May 2, 2008 Yes20 YANKEE Metallic Mining Concession 08001824Y01 Activos Mineros May 2, 2008 Yes21 JUNIN Metallic Mining Concession 08001124Y01 Activos Mineros May 2, 2008 Yes22 MONTAÑA-87 Metallic Mining Concession 08016662X01 Activos Mineros May 2, 2008 Yes23 MOROCOCHA 3-C Metallic Mining Concession 0804354LY01 Activos Mineros May 2, 2008 Yes24 MOROCOCHA 3-D Metallic Mining Concession 0804354MY01 Activos Mineros May 2, 2008 Yes25 MOROCOCHA 4-K Metallic Mining Concession 0804355SY01 Activos Mineros May 2, 2008 Yes26 MOROCOCHA 4-L Metallic Mining Concession 0804355TY01 Activos Mineros May 2, 2008 Yes27 MOROCOCHA 4-M Metallic Mining Concession 0804355UY01 Activos Mineros May 2, 2008 Yes28 MOROCOCHA 4-N Metallic Mining Concession 0804355VY01 Activos Mineros May 2, 2008 Yes29 MOROCOCHA 4-Ñ Metallic Mining Concession 0804355WY01 Activos Mineros May 2, 2008 Yes30 MOROCOCHA 4-O Metallic Mining Concession 0804355XY01 Activos Mineros May 2, 2008 Yes31 MOROCOCHA 6-C Metallic Mining Concession 0804357IY01 Activos Mineros May 2, 2008 Yes32 MOROCOCHA 6-D Metallic Mining Concession 0804357JY01 Activos Mineros May 2, 2008 Yes33 MOROCOCHA 6-F Metallic Mining Concession 0804357LY01 Activos Mineros May 2, 2008 Yes34 MOROCOCHA 6-G Metallic Mining Concession 0804357MY01 Activos Mineros May 2, 2008 Yes35 MOROCOCHA 7-A Metallic Mining Concession 0804358CY01 Activos Mineros May 2, 2008 Yes36 MOROCOCHA-8 Metallic Mining Concession 10212693 Activos Mineros May 2, 2008 Yes37 MUCHCAPATA 4 Metallic Mining Concession 0804358AY01 Activos Mineros May 2, 2008 Yes38 MUCHCAPATA 5 Metallic Mining Concession 0804358BY01 Activos Mineros May 2, 2008 Yes39 TOROMOCHO

CUATROMetallic Mining Concession 0804358EY01 Activos Mineros May 2, 2008

Yes40 TOROMOCHO

DOS Metallic Mining Concession 0804355ZY01 Activos Mineros May 2, 2008 Yes41 TOROMOCHO TRESMetallic Mining Concession 0804357NY01 Activos Mineros May 2, 2008 Yes42 TOROMOCHO UNO Metallic Mining Concession 0804354PY01 Activos Mineros May 2, 2008 Yes1

43 LA MADAMA Metallic Mining Concession 08020930X01 Compañía Minera ArgentumS.A.

July 12, 2010 No

44 CLAUDIA Metallic Mining Concession 08021810X01 Compañía Minera ArgentumS.A.

July 12, 2010No

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