Audits

Geology

GeoSystems International, Inc., will make a site visit to review:

Regional and local geological setting and genetic model for ore occurrence.
Exploration programs including drilling and trenching.
Location of holes and pits.
Sample collection and preparation procedures.
Assaying procedures, including check and duplicate assaying.
Core or weight recovery.
Sampling conditions, e.g. location of water table.
Density determinations.
Geological mapping and interpretation on sections and plans.
Logging procedures.
Ore and gangue mineralogy.
Mineralization controls.
Potential to add to reserves through additional exploration.
Adequacy of exploration data to support mine operations.
Procedures used to maintain mine maps and sections.
Grade control procedures.

Mineral Resources and Reserves

Sampling database construction.
Topographic and hole location surveys, including downhole surveys.
Assignment of lithological, ore type or other attributes to blocks.
Compositing methods.
Exploratory data analysis: histograms, scatterplots, etc.
Variography.
Interpolation methodology used to assign grades to blocks.
In situ mineral inventory tabulation.
Recoverable reserves, including dilution or recovery factors.
Mineable and recoverable reserves.
Reserve depletion based on exploration data in production schedule if applicable.
Blast hole reserves or planning reserves from which ore/waste selection is made if applicable.
Stockpile accounting, mine-mouth sampling and mill head sampling procedures if applicable.
Metallurgical accounting procedures used to determine received at mill quantities and grades if applicable.
Production histories for stopes, mineralized ore bodies or other major planning units in terms of in situ and recoverable reserves if applicable.
Grade versus extraction factors will be reviewed for stopes if applicable.
Sources of dilution (planned, unplanned) and ore loss if applicable.

Plan of Execution

Fatal Flaw Reviews

GeoSystems International, Inc., will make a 1-3 day site visit and will conduct a cursory review to determine the adequacy of the database and procedures used. Areas which present risks to project or mine viability will be flagged and GeoSystems will make recommendations as to additional data collection procedures or investigations which should be performed before a final decision to proceed with further investment or operations is made.

Ordinarily, the fatal flaw audit is made during preliminary discussions as to project/mine acquisition or financing, and there will be sufficient time to remedy problems before a decision is taken to proceed. It will typically last 1 to 3 weeks, depending on the size of the project.

Detailed Audits and Reviews

GeoSystems International, Inc., will normally spend one to three weeks making a thorough review of data available and procedures used. GeoSystems will make spot checks at key points in the flow of data to ensure that the procedures have been followed. GeoSystems will comment as to the adequacy of the database and procedures followed as a basis for making and investment decision. Risk areas will be identified and quantified to the extent possible by independent evaluation of the data.

Ordinarily, the audit will be performed on behalf of a financial institution at or near the completion of the feasibility study. The report will be used to support investment decision making by third parties. The audit can take 1 to 3 months, depending on size and complexity of the project.