Brief on Kuabini Gold Project Gold Project, Southern Highlands Project,

PNG

In the mining industry Papua New Guinea commands the respect of international companies and investors. PNG is
still seen as a prospective country, with the potential to host new world class mines to its portfolio of existing world
class mines in Bougainville, Lihir, Ok Tedi, Porgera, Ramu, and in world class advance exploration projects. World-class
mining companies as Barrick Gold, Newcrest Mining, Xstrata copper, Rio Tinto etc are active in exploration & mining
projects in PNG.

In PNG, the mineralised regions are dominated by copper and gold, but they also have other commodities of
significance to the global economy, such as nickel, cobalt, chromium, molybdenum, iron and platinum. Within the
intrusive centres and volcanic edifices are porphyry copper-gold ores and epithermal deposits of gold and silver, on
which are based several globally important mines. Between 60,000 and 80,000 small scale miners, earn a living out of
alluvial mining by commonly using non-mechanical methods thereby making a contribution to Papua New Guinea’s
gold production.

The present project, EL 2386 is located in Kuabini in Highlands Province. The location is surrounded by couple of
small-scale artisanal mines. The exploration license covers 510.5 sq km area. The area has record of previous
exploration activities. Harmony Gold Ltd (PNG) is last owner of the tenement. Before Harmony Gold Ltd (PNG),
Kennecott-Nuigini Mining JV worked in the area in 1980’s.

The exploration activities between 1990 to 1993, included surface sampling, trenching, mapping, geophysical surveys
and diamond drilling (3 holes for 745.3 m). Based on soil sample anomaly and geophysical survey results, boreholes
were drilled and those were intercepted with some high values of gold at depth.

High grade silver was intercepted in borehole PU01 at different depths. 2 zones of; 28.0 m @241 g/t Ag (from 61 m
to 89 m) and 26.0 m @99 g/t Ag (from 100 m to 126 m, and a zone of 46.7 m @1.22 g/t gold was intersected in
borehole PU02 from the depth of 261.0 m to 307.7 m depth.

Detailed Geological mapping and geochemical sampling (trench sampling), was done by Wantok Mining in 1995.
During the exploration phase 253 rock chip samples, 204 wall samples from trenches were collected.

In 2017, 39 rock chip and 132 soil samples were analysed. For rock chip samples, only 2 samples were showing assays
close to 1 ppm and for soil samples, only 2 can consider as positive. Rest assays are less than 10 ppb. Though the
values are continuous, which shows the indications of mineralization. Apart from gold, several of the rock hip and soil
samples are showing positive indications for copper and some Rare Earth Elements.

The region comprises thick Mesozoic sediments, commonly metamorphosed, faulted against ultramafic rocks and
ophiolite, volcanic rocks and Cenozoic clastic sediments, and intruded by dioritic stocks. The region is extensively
faulted. Younger sediments overlie the strongly faulted rocks.

Gold mineralisation in the region is controlled by structures (specially lineaments which are developed due to
faulting) and lithology (metasediments and volcanic assemblage). Gold rich zone is showing intense sericite and/or K-
feldspar alteration.

Conclusion:

Papua New Guinea is a highly prospective area for mineral discoveries. The presence of three world-class mines;
several advanced projects and their underexplored surrounds, and many geochemical anomalies within vast tracts of
geologically favourable rocks support the notion that Papua New Guinea is a promising country for gold and copper.
In addition, silver is a commercial by-product from most of the mines. Other potential minerals are nickel, cobalt,
manganese and zinc. Most of the project for gold in PNG, are medium grade (0.8-1.0 g/t), but with big reserves.
Hence with keeping production at higher side, mining companies are successfully working with profit.
For Kuabini project, we have very limited exploration data to prove it economically potential. Based on regional data
and the available data for the project, it can be considered same project as other projects in region (low to medium
grade with big reserve).
We have assay data of 132 soil samples and 39 rock chip samples. Total numbers of the samples collected &
analysed, are very less for such big area of over 500 sq km.

The geophysical surveys were done in past, but what was the conclusion about findings from those surveys, it was
not mentioned in report.

Only 2 boreholes were drilled which came with potential values for gold and silver (with some other base metals as
Pb & Zn) at depth. But only 2 boreholes are not sufficient to conclude about the deposit. Incomplete information can
mislead the interpretation. As gold is detected in only 1 borehole and the other hole is showing high values for silver.
But it is difficult to correlate the results obtained from both holes.