Behre+Dolbear+Feasibility+Studies+SOQ

7/30/2019 Behre+Dolbear+Feasibility+Studies+SOQ

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BEHRE DOLBEARGROUPINC.STATEMENT OFQUALIFICATIONS

CORPORATE OVERVIEWSCOPING, PRE-FEASIB IL IT Y, AND

FEASIBILITY STUDIES


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Behre Dolbear Group Inc.

Statement of Qualifications

Corporate Overview

Behre Dolbear2

Behre Dolbear Group Inc. (Behre Dolbear or the Company) is one of the oldest, continuously

operating, mineral industry advisory firms in the world. Since 1911, we have specialized instudies for commercial and multilateral financial institutions, mining companies, governments

and governmental agencies, legal firms, and other parties with interests in the minerals industry.Behre Dolbears global experience covers the full spectrum of technical, operational, and

financial issues in a broad range of commodities including base and precious metals, coal,industrial minerals, diamonds and gemstones, ferrous metals, and construction materials.

Our worldwide network of offices allows us to be a truly global company. Behre Dolbearoperates from offices in 12 of the mining worlds most important cities:

Denver Chicago Beijing Guadalajara Hong Kong London

New York Santiago Sydney Toronto Ulaanbaatar Vancouver

We design each project team to specifically meet our clients needs, using professionals with thespecific experience needed to successfully complete assignments. For this reason, each office can

draw upon personnel from the other offices to assure that the best-qualified professionals areassigned to a client.

Behre Dolbear is known internationally as a businessmans consultant. Our people have first-hand experience in senior management and executive-level positions, giving them practical and

insightful knowledge and skills. They are commercially experienced mineral industryprofessionals.

The Company possesses unparalleled credibility with the worlds major finance organizations

and is familiar with the intricacies of project development, financing, mergers, acquisitions, andprivatizations. The international mining and financial communities recognize our reports as

being among the most accurate and reliable documents in the industry. By engaging BehreDolbear, our clients gain access to a world-class consulting group, whose studies and reportshave international credibility and acceptability.


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Corporate Overview

Behre Dolbear3

Behre Dolbear brings to every project a breadth and depth of experience that encompasses the

technical, financial, and managerial aspects of the industry. Some examples of Behre Dolbearsadvisory and consulting services follow:

Technical Advisory

Services

Financial Advisory

Services

Management and Business

Advisory Services

Conceptual, scoping,prefeasibility, and feasibilitystudies

Planning and monitoring ofmineral exploration programs

Technical evaluations andconsulting for:

Resource and reservereports

Mine plans, includingequipment selection

Metallurgical andmineral processing flowsheets and equipment

Chemical facilities

Environmental andsustainability program

development and evaluation

Optimization reviews ofoperations to identifyopportunities for productivity

improvements and costreductions

Expert witness testimony fortechnical issues

Due diligence reviews insupport of financings,investment decisions,

acquisitions, dispositions,and mergers

Valuation of mineralproperties, reserves,mines, mineral processing

facilities, and chemicalplants

Independent and ownersengineer services

Preparation of technicaldocuments required forlistings on the various

global stock exchanges,including the U.S.,

Canadian, London, AIM,Australian, and HongKong stock exchanges

Preparation of pro-formacash flow projections

Risk assessments,including political,

financial, and technical

Privatization ofgovernment-ownedmining companies

Strategic business plansfor mining companies andindividual operations

Development ofcorporate, operating,engineering, and human

resource policies,procedures, andorganizational structures

Development andrestructuring of nationalmining laws

Market surveys formineral products

Strategy formulation inconnection withpreparation or negotiation

of contractualagreements, such as

mergers, acquisitions, andmineral sales contracts

We Know the Business ofMining


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Scoping, Pre-feasibility, and Feasibility Studies

Behre Dolbear4

Behre Dolbear and our Associates have extensive backgrounds in the management, preparation,

and review of scoping, pre-feasibility, and feasibility studies. We understand the important rolefeasibility studies play in securing both debt and equity financing, and we have a strong

understanding what the financial community requires of a bankable document. Our extensivebackground in conducting due diligence audits and technical reviews of feasibility studies also

gives us insight into the requirements of a feasibility study.

Conceptual or scoping-level studies tend to have levels of accuracy of 50 percent, while final,bankable feasibility studies tend to have levels of accuracy of 10 to 15 percent. Regardless ofthe variation in the level of accuracy between the different levels of study, each study generally

encompasses the same disciplines, which include:

geology, mineral resources and reserves; mining systems, mine plan(s), mine capital and operating costs;

processing systems, flow sheets, plant capital and operating costs; infrastructure requirements and capital costs; markets and pricing for the product(s) produced; manpower requirements and organization; environmental permits and issues; financial analysis; and risk analysis.

The accompanying table presents an outline of the level of detail for each type of study.

Behre Dolbears approach to performing feasibility studies is based on the internal capabilities

within the Company. Behre Dolbear does not claim to be an engineering and design firm;typically, that work is sub-contracted to firms that specialize in such work. Our approach,

accordingly, is to oversee and manage the feasibility effort to assure that the work performedmeets accepted industry and financing standards. A senior-level professional from Behre Dolbearis assigned to each discipline within the study to coordinate the work performed by Behre

Dolbear and sub-contracted professionals.

Recent feasibility-type studies undertaken and completed by Behre Dolbear include:

APDR Paz del Rio coal mine (851014) Mustavaara magnetite, vanadium and ilmenite mine, Finland (848928) Hollister gold mine, Nevada, United States (847943) Sutter gold mine, California, United States (847388) Anzas zinc project, Australia (846028) Avebury nickel project, Tasmania (845346) El Arco copper project, Mexico


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Behre Dolbear5

Gallatin lime mine, Kentucky, United States (845470)

Golden Grove Mine, Australia (786680) Gleneagles gold project, Australia (781181) Sydvaranger iron ore mine, British Columbia, Canada (779308) Amessmesa gold mine, Algeria (314078) Atlanta gold mine, Idaho, United States (312600) Angangueo silver, lead, zinc project, Mexico Sunshine silver mine, Idaho, United States (847511) Mount Emmons molybdenum project, Colorado, United States (845594)


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Behre Dolbear6

Potential Areas of Investigationfor Scoping, Pre-feasibility, and Feasibility Studies Property Information

Location, topography, and climate

Land ownership and royalties

Property history

Current status

Geology and Resources

Geological description

Mineralogy

Drilling, sampling, and assaying

Evaluation techniques

Mineral resource estimate

Mining

Ore reserve estimate

Mining method and plans

Mining equipment

Material handing

Material handling equipment

Historical and forecast production

Consumables

Mining capital estimatesMining operating cost estimates

Processing

Ore sampling and test work

Processing method

Other required processes

Process equipment

Historical and forecast production

Consumables

Processing capital estimates

Processing operating cost estimates

Infrastructure

Industrial infrastructure facilities

Social infrastructure facilities

Utilities, power, and water

Infrastructure capital estimates

Infrastructure operating cost estimates

Management and Labor

Management organization requirements

Labor requirements

Products, Markets, and Sales

Products

Markets

Prices

Sales

Environmental and Permitting

Permit list

Environmental impact

Compliance costs

Compliance cost timing

Reclamation expenses

Financial Issues

Taxes

Royalties

Fees

Licenses

Development Costs and Schedule

Development cost estimate

Development schedule

Development methodology

Political and Social Considerations

Economic benefits and costs

Government considerations

Other issues

Project Economics

Economic parameters

Discount rate determination

Cash flows

Investor returns

Debt analysis

Sensitivities


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Behre Dolbear7

Comparison of Scoping, Pre-feasibility, and Feasibility Study Content

Category ConceptualStudy/Scoping

Study

Pre-feasibilityStudy

Feasibility Study

Introduction

Location, Topography and

Climate

Site location map

Ownership and Royalties

Claims list

Claims map

Current Status and History

Historical chronology

Information on pastproduction, if any

Yes

No

No

No

No

Yes

No

Yes

No

No

Yes

Yes

Yes

Yes

Yes

Geology and Resources

Geological Description

Geological map

Geological cross-sections

Drilling, Sampling and Assaying

Parameters

Drill hole location map

Sampling/assaying flow

diagram and assessmentAssay check assessment

and graph

Mineral Resource Estimate

Resource methodology

determination and

approach

Geologic model limits

Lithology/tonnage

factors/code

Cumulative frequency of

samples verses gradeVariograms

Resource Estimate

Yes

No

Yes

Yes

No

No

Yes

Yes

No

No

No

Industry Standards

(SME, AUSMIN,

etc.)

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Industry Standards

(SME, AUSMIN,

etc.)

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Industry Standards

(SME, AUSMIN,

etc.)


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Behre Dolbear8



Study


Feasibility Study

Mining

Ore Reserve Estimate

Reserve and resource

calculation parameters

Cutoff grade equations

Reserve and resource

estimate

Mining Method and Plans

Mining parameters

Hydrology/geotechnical

parameters

Mining equipment list

Consumables list

Material handling systems

Material handling

equipment

Personnel list

Surface mining

Final pit and dump

outlines

Incremental pit and

dump outlines

Underground mining

General mine

development

Mining approach

(stoping, cut & fill,etc.)

Production Schedule

Historical production,

Annual ore and waste

tonnage and grade

Assumed Values

No

Industry Standards

Yes, minimal

engineering basis

No

No

No

No

No

No

Yes, simple

outline

No

Yes, general

outline

Yes, general

approach

Yes, if any

Yes, division of

total

Test-Based Values

Yes

Industry Standards

Yes, some

geotechnical data

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Yes, if any

Yes

Test-Based Values

Yes

Industry Standards

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Yes, if any

Yes


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Study


Feasibility Study

Mining Capital and Operating

Cost Estimates

Mining operating cost

estimates

Mining capital cost

estimates

Yes, factored

45%

Yes, factored

45%

Yes, 30%

Yes, from

engineering

manuals 30%

Yes, 15%

Yes, from vendor

quotes & take-offs

15%

Processing

Ore Sampling and Test work

Test work data

Processing Methods and Plans

Processing methods

Processing parameters

Equipment list

Consumables list

Personnel list

Material balance

Flow diagram

Site plan

General arrangement

drawings

Production Schedule

Historical production

Annual production

tonnage and grade

Off-site Processing Cost

EstimatesConcentration charges

Smelting and refining

charges

Other Charges

No, assumedvalues

Yes, general

approach

Yes, minimal

engineering basis

No

No

No

No

Yes, simple block

diagram

No

No

Yes, if any

Yes, division of

total

No

No

No

No, preliminarydata

Yes

Yes

Yes

No

Yes

Yes

Yes

Yes

No

Yes, if any

Yes

Yes, preliminary

estimate

Yes, preliminary

estimate

Yes, preliminary

estimate

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Yes, if any

Yes

Yes, quote

Yes, quote

Yes, quote


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Study


Feasibility Study

Material handling and

transport

Insurance and sales

charges

Processing Capital & Operating

Cost Estimates

Processing operating costestimates

Processing capital cost

estimates

No

No

Yes, factored45%

Yes, factored

45%

Yes, preliminary

estimate

No

Yes, 30%

Yes, from

engineering

manuals 30%

Yes, quote

Yes, quote

Yes, 15%

Yes, from vendor

quotes & take-offs

15%

Infrastructure

Industrial Infrastructure

Facilities

Facilities list

Power and water

parametersFull site plan

Social Infrastructure Facilities

Facilities list

Housing

Schools

Hospitals

Other

Infrastructure Capital &

Operating Cost Estimates

Consumables listPersonnel list

Infrastructure operating

cost estimates

Infrastructure capital cost

estimates

Yes, with

minimum detail

Yes, preliminary

No

Yes, with

minimum detail

No

No

No

No

NoNo

Yes, factored

45%

Yes, factored

45%

Yes

Yes

Yes

Yes

Yes, preliminary

Yes, preliminary

Yes, preliminary

Yes, preliminary

YesYes

Yes, 30%

Yes, from

engineering

manuals 30%

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Yes

YesYes

Yes, 15%

Yes, from vendor

quotes & take-offs

15%


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Behre Dolbear11



Study


Feasibility Study

Management, Labor and

Administration

Personnel

Personnel lists

Training requirements

Personnel Capital & Operating

Cost Estimates

Consumables list

Personnel operating costestimates

Personnel capital cost

No

No

No

Yes, factored45%

Yes, factored

45%

Yes

Yes

No

Yes, 30%

Yes, 30%

Yes

Yes

Yes

Yes, 15%

Yes, 15%

Markets, Products and Sales

Markets, Products & Sales

Products

Volume

Prices

Sales organization

Sales Related Capital &Operating Cost Estimates

Personnel list

Consumables list

Sales related operating

cost estimates

Sales related capital cost

estimates

Yes, preliminary

Yes, preliminary

Yes, preliminary

No

No

No

Yes, factored

45%

Yes, factored

45%

Yes

Yes

Yes

Yes, preliminary

Yes

No

Yes, 30%

Yes, 30%

Yes

Yes

Yes

Yes, preliminary

Yes

No

Yes, 15%

Yes, 15%


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Study


Feasibility Study

Environmental and Permitting

Environmental

Permit list

Environmental Impacts

Environmental Compliance Cost

Estimates

Personnel list

Environmental related

operating cost estimatesEnvironmental related

capital cost estimates

No

Yes, preliminary

No

Yes, factored

45%Yes, factored

45%

Yes

Yes

Yes

Yes, 30%

Yes, 30%

Yes

Yes

Yes

Yes, 15%

Yes, 15%

Development Schedule and

Costs

Development Schedule

Development

methodology

Development schedule

Development Costs

Personnel listDevelopment related

operating cost estimates

Development related

capital cost estimates

Yes, preliminary

Yes, preliminary

No

No

No

Yes

Yes

Yes

Yes, 30%

Yes, 30%

Yes

Yes

Yes

Yes, 15%

Yes, from vendor

quotes and take-

offs 15%


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Study


Feasibility Study

Project Economics

Financial Issues

Taxes

Royalties

Fees

Licenses

Economic Issues

Economic parameters

Discount ratedetermination

Cash flows

Investor returns

Debt analysis sensitivities

Yes, preliminary

Yes, preliminary

Yes, preliminary

Yes, preliminary

Yes, preliminary

Yes, preliminary

Yes, preliminary

Yes, preliminary

No

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Yes, preliminary

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Summary and

Recommendations

Operational Parameters

Title and ownership

GeologyOre reserves

Mining and processing

rates

Development period and

mine life

Metal/mineral recoveries

Sales

Operating cost estimates

Capital cost estimates

Financial Parameters

Cash Flows

NPV, IRR & ROI

Mostly assumed

and factored

YesYes

Yes

Yes

Yes

Yes

Yes

Yes

Mostly assumed

and factored

Yes

Some engineering

basis

YesYes

Yes

Yes

Yes

Yes

Yes

Yes

Some engineering

basis

Yes

Some engineering

basis

YesYes

Yes

Yes

Yes

Yes

Yes

Yes

Some engineering

basis

Yes


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Behre+Dolbear+Feasibility+Studies+SOQ