NI43 101 Technical Report Tujuh Bukit PDF

PRELIMINARY ECONOMIC ASSESSMENT
Tujuh Bukit Oxide Project

EAST JAVA, INDONESIA
Prepared for Intrepid Mines by Kappes, Cassiday & Associates

EFFECTIVE DATE : 1 JUNE 2011
Daniel Kappes, PEng, Kappes Cassiday and Assoc Phillip Hellman, PGeo, Hellman & Schofield Peter Allen, MAusIMM, Australian Mine Design and Development
TUJUH BUKIT PRELIMINARY ECONOMIC ASSESSMENT (PEA)
Contents
Contents .................................................................................................................................................................. 2 List of Figures ......................................................................................................................................................... 4 List of Tables ........................................................................................................................................................... 5 1.0 SUMMARY .............................................................................................................................................. 1 1.1 Project Overview...................................................................................................................................... 1 1.2 Property Description, Ownership & Location ........................................................................................... 2 1.3 Geology ................................................................................................................................................... 3 1.4 Resource Estimate .................................................................................................................................. 6 1.5 Mining and Optimized Mine Plan from Inferred Resource ....................................................................... 7 1.6 Metallurgy ................................................................................................................................................ 8 1.7 Process Description ................................................................................................................................. 8 1.8 Infrastructure............................................................................................................................................ 9 1.9 Environmental and Permitting .................................................................................................................. 9 1.10 Reclamation and Closure ...................................................................................................................... 10 1.11 Capital Costs ......................................................................................................................................... 10 1.12 Operating Costs ..................................................................................................................................... 12 1.13 Financial Analysis .................................................................................................................................. 12 1.14 Project Development Schedule ............................................................................................................. 12 1.15 Recommendations, Risks and Opportunities ......................................................................................... 13 2.0 INTRODUCTION ................................................................................................................................... 15 2.1 Qualified Persons .................................................................................................................................. 15 2.2 Effective Dates....................................................................................................................................... 15 2.3 Units and Abbreviations ......................................................................................................................... 16 2.4 Project Background ............................................................................................................................... 17 2.5 Scope of Work ....................................................................................................................................... 18 3.0 RELIANCE ON OTHER EXPERTS AND CAUTIONARY NOTES ........................................................ 19 3.1 Reliance on Other Experts ..................................................................................................................... 19 3.2 Cautionary Notes ................................................................................................................................... 20 4.0 PROPERTY DESCRIPTION AND LOCATION ..................................................................................... 21 5.0 ACCESSIBILITY, CLIMATE, LOCAL RESOURCES, AND PHYSIOGRAPHY .................................... 21 6.0 HISTORY ............................................................................................................................................... 21 GEOLOGICAL SETTING ...................................................................................................................... 21 7.0 8.0 DEPOSIT TYPES .................................................................................................................................. 21 9.0 MINERALIZATION ................................................................................................................................ 21 10.0 EXPLORATION ..................................................................................................................................... 22 10.1 Historical Exploration ............................................................................................................................. 22 10.2 Recent Exploration (2006-2010) ............................................................................................................ 23 11.0 DRILLING .............................................................................................................................................. 26 11.1 Downhole Surveys ................................................................................................................................. 27 11.2 Drill Hole Collar Survey and Topographic Survey .................................................................................. 27 11.3 Summary Results of Drilling................................................................................................................... 27 12.0 SAMPLING METHOD AND APPROACH ............................................................................................. 28 12.1 Descriptions of Method and Approach ................................................................................................... 28 12.2 Core Processing Protocol ...................................................................................................................... 29 12.3 Specific Gravity Measurements ............................................................................................................. 30 12.4 Sampling Intervals ................................................................................................................................. 30 12.5 Core Recovery Data .............................................................................................................................. 31 12.6 Comparison of Sludge Samples versus Core Samples ......................................................................... 31
KAPPES, CASSIDAY & ASSOCIATES | JUNE 2011
13.0 13.1 13.2 13.3 13.4 13.5 13.6 14.0 15.0 16.0 16.1 16.3 16.4 16.5 16.6 16.7 17.0 17.1 17.2 17.3 17.4 17.5 17.6 18.0 18.1 18.2 18.3 18.4 18.5 18.6 18.7 18.8 18.9 18.10 18.11 19.0 19.1 19.2 19.3 19.4 20.0 21.0
SAMPLE PREPARATION AND SECURITY ......................................................................................... 33 Description of Sample Preparation ........................................................................................................ 33 Procedures Employed to Ensure Sample Integrity ................................................................................ 33 Sample Security and Transport ............................................................................................................. 34 Analytical Laboratories .......................................................................................................................... 34 Analytical Methods ................................................................................................................................. 34 QA/QC Procedures Employed ............................................................................................................... 35 DATA VERIFICATION .......................................................................................................................... 37 ADJACENT PROPERTIES ................................................................................................................... 39 METALLURGY ...................................................................................................................................... 40 Summary ............................................................................................................................................... 40 Metcon Metallurgical Program ............................................................................................................... 45 KCA Metallurgical Test Program............................................................................................................ 49 Ore and Waste Acid Neutralization Potential ......................................................................................... 61 Future Work ........................................................................................................................................... 61 Ore Processing ...................................................................................................................................... 62 MINERAL RESOURCE ......................................................................................................................... 82 Description of the Database .................................................................................................................. 82 Spatial Distribution of Mineralization ...................................................................................................... 83 Mineralized Zones ................................................................................................................................. 84 Hellman & Schofield Block Model .......................................................................................................... 85 Hellman & Schofield Model Results ....................................................................................................... 85 Mineral Reserves ................................................................................................................................... 86 OTHER RELEVANT DATA AND INFORMATION ............................................................................... 88 Mining Information ................................................................................................................................. 88 Mining Operations.................................................................................................................................. 91 Pit Design .............................................................................................................................................. 91 Mining Infrastructure .............................................................................................................................. 94 Mine Operating Costs .......................................................................................................................... 106 Site Infrastructure ................................................................................................................................ 107 Environmental Considerations ............................................................................................................. 115 Reclamation and Closure .................................................................................................................... 119 Capital Costs ....................................................................................................................................... 124 Operating Costs ................................................................................................................................... 133 Financial Analysis ................................................................................................................................ 146 Interpretations, Conclusions and Recommendations .................................................................... 156 Interpretations and Conclusion ............................................................................................................ 156 Recommendations ............................................................................................................................... 156 Risks .................................................................................................................................................... 161 Opportunities ....................................................................................................................................... 162 References ......................................................................................................................................... 163 Date and Signature Page .................................................................................................................. 165
List of Figures
Figure 1 : Location of the Tujuh Bukit Project, Banyuwangi, East Java, Indonesia. .................................................................... 1 Figure 2 : IUP Production Operation outlined in red. Green areas are representations of areas of Protection Forest ................ 2 Figure 3 : IUP Exploration outlined in red. Green areas are generalised representations of areas of Protection Forest. ........... 2 Figure 4: Lithology of the Tumpangpitu Prospect ........................................................................................................................ 4 Figure 5: Lithology Section 11040mN at Tumpangpitu ................................................................................................................ 6 Figure 6 : Soil Anomalies at Tumpangpitu ................................................................................................................................. 24 Figure 7 : Aeromagnetic Survey Data ........................................................................................................................................ 25 Figure 8 : Location of Collars of completed drill holes at Tumpangpitu (20th April 2011) ........................................................... 26 Figure 9 : Plot of Sludge versus Core Assays ........................................................................................................................... 32 Figure 10 : Gold Extraction Based on Carbon Assays Versus Days of Leach .......................................................................... 57 Figure 11 : Silver Extraction Based on Carbon Assays Versus Days of Leach ......................................................................... 58 Figure 12 : Cumulative Percent Gold Recovery Versus Cumulative Tonnes of Solution per Tonne of Ore .............................. 59 Figure 13 : Cumulative Percent Silver Recovery Versus Cumulative Tonnes of Solution per Tonne of Ore ............................. 60 Figure 14 : Heap Leaching Flowsheet ....................................................................................................................................... 64 Figure 15 : Average Daily Water Balance Schematic ................................................................................................................ 74 Figure 16 : Gold Grades in the Oxide Zones ............................................................................................................................. 83 Figure 17 : Silver Grades in the Oxide Zones ............................................................................................................................ 84 Figure 18 : Pit Design Layout - Plan View ................................................................................................................................ 92 Figure 19 : Waste Disposal ........................................................................................................................................................ 94 Figure 20 : Pre-Production Haul Roads and Access Roads ...................................................................................................... 95 Figure 21 : Production Haul Roads and Access Roads ............................................................................................................. 96 Figure 22 : End of Year 1 Pit Progress ...................................................................................................................................... 98 Figure 23 : End of Year 2 Pit Progress ...................................................................................................................................... 99 Figure 24 : End of Year 3 Pit Progress .................................................................................................................................... 100 Figure 25 : End of Year 4 Pit Progress .................................................................................................................................... 101 Figure 26 : End of Year 5 Pit Progress .................................................................................................................................... 102 Figure 27 : End of Year 6 Pit Progress .................................................................................................................................... 103 Figure 28 : End of Year 7 Pit Progress .................................................................................................................................... 104 Figure 29 : End of Year 8 Pit Progress .................................................................................................................................... 105 Figure 30 : Tujuh Bukit Project Location and Access .............................................................................................................. 107 Figure 31 : Existing East Java Transmission Lines (blue: 500 kV; red: 150 kV; green: 70 kV) .............................................. 108 Figure 32 : Project Development Schedule ............................................................................................................................. 148 Figure 33 : Gold Price Sensitivity ............................................................................................................................................. 154 Figure 34 : irr vs. Operating cost, capital cost, and recovery based on bulk recovery .......................................................... 154 Figure 35 : npv @ 0% vs. Operating cost, capital cost, and recovery based on bulk recovery ............................................ 155
List of Tables
Table 1: Total Inferred Resources ............................................................................................................................................... 7 Table 2: Production Statistics ...................................................................................................................................................... 8 Table 3: Summary of Pre-Production Capital Costs .................................................................................................................. 11 Table 4 : Operating Costs .......................................................................................................................................................... 12 Table 5 : Summary of Financial Results .................................................................................................................................... 12 Table 6 : Units and abbreviations .............................................................................................................................................. 16 Table 7 : Responsible Parties .................................................................................................................................................... 19 Table 8 : Tujuh Bukit Drilling Summary...................................................................................................................................... 23 Table 9 : Core Recovery Data ................................................................................................................................................... 31 Table 10 : Laboratory Methods used for Tumpangpitu Drill Core Samples ............................................................................... 35 Table 11 : Performance Statistics for Internal Standards for Au ................................................................................................ 37 Table 12 : Internal Blanks .......................................................................................................................................................... 38 Table 13 : Field Duplicates Core and Sludge Samples ...................................................................................................... 38 Table 14 : Laboratory Repeatability Summary Report (Lab Intertek) ........................................................................................ 38 Table 15 : Summary Results of Metcon Test Program .............................................................................................................. 40 Table 16 : Tujuh Bukit Project Composite Description and Weights.......................................................................................... 41 Table 17 : Summary of KCA Test Work ..................................................................................................................................... 42 Table 18 : Summary of KCA Column and Projected Field Recoveries ...................................................................................... 43 Table 19 : KCA Core Photograph Category Summary .............................................................................................................. 44 Table 20 : Metcon Composite Samples ..................................................................................................................................... 45 Table 21 : Head Assays ............................................................................................................................................................. 46 Table 22 : Comparison of Expected, Assayed, & Average Calculated Head Grades ................................................................ 46 Table 23 : Metcon Baseline Cyanidation Test Summary ........................................................................................................... 47 Table 24 : Effect of Higher Cyanide Concentration on Residue Grades .................................................................................... 47 Table 25 : Metcon Comminution Test Summary ........................................................................................................................ 48 Table 26 : Metcon Analyses of Final Leach Solutions ............................................................................................................... 48 Table 27 : Head Analyses Gold and Silver ............................................................................................................................. 49 Table 28 : Head Screen Analyses Gold and Silver ................................................................................................................. 50 Table 29 : Summary of Bottle Roll Leach Tests Gold ............................................................................................................. 51 Table 30 : Summary of Bottle Roll Leach Tests Silver............................................................................................................ 52 Table 31 : Summary of Agglomeration Test Work ..................................................................................................................... 54 Table 32: Summary of Compacted Permeability Test Work ...................................................................................................... 55 Table 33 : Column Leach Test Parameters ............................................................................................................................... 56 Table 34 : Column Leach Test and Expected Field Recoveries ................................................................................................ 56 Table 35 : Cyanide Consumption ............................................................................................................................................... 61 Table 36 : Crushing Circuit Set Points ....................................................................................................................................... 66 Table 37 : Rainfall Data ............................................................................................................................................................. 70 Table 38 : Water Balance Average Banyuwangi Rainfall .......................................................................................................... 71 Table 39 : Water Balance Wet Year Banyuwangi ...................................................................................................................... 72 Table 40 : Indonesia Discharge Standards ................................................................................................................................ 73 Table 41 : Projected Annual Reagents and Consumables ........................................................................................................ 76 Table 42 : Raw Assay - Sorted in Decreasing Oxidation ........................................................................................................... 82 Table 43 : Summary of Mineralized Domains ............................................................................................................................ 85 Table 44 : Summary of Inferred Resource Estimates by Hellman & Schofield .......................................................................... 86 Table 45 : Block Model Field Codes .......................................................................................................................................... 89 Table 46 : Project Assumptions ................................................................................................................................................. 90 Table 47 : Conceptual Mining Fleet ........................................................................................................................................... 91 Table 48 : Mine Design Criteria ................................................................................................................................................. 92 Table 49 : Pit Characterization ................................................................................................................................................... 94 Table 50 : Annual Mine Production Schedule ............................................................................................................................ 97 Table 51 : Annual Mining Costs ............................................................................................................................................... 106 Table 52 : Heap Leach Power Demand Based on 24 hr/d and 75% utilization ....................................................................... 110 Table 53 : Summary of Rainfall and Wind Simulation Wet Season ...................................................................................... 116 Table 54 : Summary of Rainfall and Wind Simulation Dry Season ....................................................................................... 116 Table 55 : Contaminant Concentrations (mg/wet kg) in Selected Coral Samples ................................................................... 117 Table 56 : Concentrations of Dissolved Trace Elements in the Fresh Water and Sea Water Samples .................................. 118 Table 57 : Concentrations of Trace Elements in the Sediment Samples ................................................................................. 118
Table 58 : Summary of Initial Capital Costs ............................................................................................................................. 125 Table 59 : Earthwork Unit Rates .............................................................................................................................................. 127 Table 60 : Buildings ................................................................................................................................................................. 128 Table 61 : Field Indirect Costs ................................................................................................................................................. 130 Table 62 : Summary of Capital Costs by Discipline ................................................................................................................. 132 Table 63 : Estimate of Initial Fills ............................................................................................................................................. 132 Table 64 : Average Unit Operating Costs Life of Mine.......................................................................................................... 134 Table 65 : Tujuh Bukit Operating Cost Summary (US$/t) ........................................................................................................ 135 Table 66 : Tujuh Bukit Project Staffing Levels & Salary Schedules ......................................................................................... 137 Table 67 : Summary of Mine Operating Costs US$/tonne mined ......................................................................................... 139 Table 68 : Processing Power and Consumption ...................................................................................................................... 140 Table 69 : G&A Power Load and Consumption ....................................................................................................................... 140 Table 70 : Process Consumable Items .................................................................................................................................... 141 Table 71 : Support Equipment Operating Costs ...................................................................................................................... 143 Table 72 : Maintenance Supplies Process Area Cost Basis ................................................................................................. 143 Table 73 : Tujuh Bukit Power Consumption ............................................................................................................................. 145 Table 74 : Capital Cost to Completion ..................................................................................................................................... 146 Table 75 : Life-of-Mine Summary............................................................................................................................................. 147 Table 76 : General Assumptions.............................................................................................................................................. 149 Table 77 : Cash Flow Analysis................................................................................................................................................. 151
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1.0 SUMMARY
Intrepid Mines (Intrepid) commissioned Kappes, Cassiday & Associates (KCA) to prepare a Preliminary Economic Assessment (PEA) study for the Tujuh Bukit Oxide Project, located in the East Java Province, along the south coast of the island of Java, Indonesia. This project contemplates only the mining and processing of oxide and minor transition material by heap leaching. Mentions are made of ongoing exploration of the deeper sulfide material but processing of sulfide material is not considered in this report. In addition to KCA, major contributors to the report include: Hellman and Schofield Pty Ltd., who prepared the mineral resource estimate (as detailed in the previous NI 43-101 Report on 27 January 2011); Australian Mine Design & Development Pty Ltd, who prepared the mine designs, mine costs and mine schedule; Golder Associates Pty Ltd. (Golder) who prepared several environmental baseline studies for the project; and in addition to metallurgical work by KCA, Metcon, who conducted some previous grinding based metallurgical tests.
1.1
Project Overview
This report is a study of the Tujuh Bukit Oxide Project, of which Intrepid Mines holds an 80% economic interest. Tujuh Bukit is located approximately 90 kilometers due west of the island of Bali, and 200 kilometres southeast of the city of Suyabaya, East Java, Indonesia.
Figure 1 : Location of the Tujuh Bukit Project, Banyuwangi, East Java, Indonesia.
The PEA study contemplates Life of Mine production in the order of 1.29 million ounces of gold and 10.5 million ounces of silver in 57 million tonnes of heap feed material. The 63 million tonnes of waste to be mined results in a heap feed to waste ratio of 1:1.1. Metallurgical testing has demonstrated the project is amenable to cyanidation using heap leaching with projected field recoveries of 86% for gold and 17% for silver for the oxide zones and 72% of the gold and 31% of the silver for the transition Zone A.
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1.2
Property Description, Ownership & Location
The Tujuh Bukit Project comprises two adjoining IUPs (Izin Usaha Pentambangan, or Business License) an IUP Exploration of 6,623.45 hectares and an IUP Production Operation of 4,998 hectares. These IUPs were granted to PT. Indo Multi Niaga (IMN) on 25 January 2010 under decree number 185/05/KP/429.012/2007. Intrepid Mines and PT IMN have signed a joint venture agreement enabling Intrepid to hold an 80% economic interest in the Tujuh Bukit Project.
Figure 2 : IUP Production Operation outlined in red. Green areas are representations of areas of Protection Forest
Figure 3 : IUP Exploration outlined in red. Green areas are generalised representations of areas of Protection Forest.
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The property is located approximately 205 kilometers southeast of Surabaya, the capital of the province of East Java, Indonesia and 60 kilometers southwest of the regional center of Banyuwangi. The property is centered near 8 35 20.6 S and 114 01 08 N and is bound within UTM co-ordinates 163,000-179,000 E and 90420009055000 N. Surface rights in the area are held by the Department of Forestry and include farmland, production forests, protected forest areas, and some villages. The villages are located within the IUP area but not in any of the areas identified for exploration at this point. The IUPs require annual rent payments and submissions of quarterly reports regarding the companys activities on the tenement to the regional government. The tenement boundaries were located with GPS coordinates and the boundary of the tenements has subsequently been surveyed and marked with concrete pegs. The main mineralized prospect, Tumpangpitu, is located in the southeast corner of the tenement and covers an area of about 3 by 2 kilometers and is now referred to as Tujuh Bukit, the subject of this study.
1.3
Geology
The Tujuh Bukit project lies on the south coast of East Java, within the central portion of the Sunda-Banda magmatic arc which trends southeast from northern Sumatra to west Java then eastward through east Java, Bali, Lombok, Sumbawa and Flores. The Sunda-Banda arc comprises both Miocene to Quaternary volcanics. The Tujuh Bukit project is located near the southeast margin of a ~50-km wide annular zone interpreted to represent the relics of a former andesitic stratovolcanic center.
1.3.2 Local Geology A lithology map identifies a dominantly diorite and microdiorite substrate intruded by extensive granodiorite bodies east of the project area and by smaller quartz-diorite bodies in and around Tumpangpitu. The figure below shows the lithology of the Tumpangpitu prospect region These mapped sequences comprise volcanic breccias of the Batuampar Formation and more abundant Batuan Intrusives.
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Figure 4: Lithology of the Tumpangpitu Prospect
1.3.3 Deposit Geology The Tumpangpitu deposit comprises a high-sulfidation Cu-Au-Ag epithermal system that is telescoped onto a large underlying and Au-rich porphyry Cu-Au-Mo system. In general terms, the overall mineralizing system broadly comprises a deep, magnetic tonalite intrusion into an older and more extensive feldspar-hornblende diorite stock. This older diorite intrusion has in turn intruded a cover sequence of lithic and crystal-lithic volcanic breccias at shallow levels of the deposit. These volcaniclastic tuffs and breccias conformably overlie a sequence of sediments that are partly constrained to dip inward towards the tonalitic intrusive center. The interface between the tonalite stock, interpreted to be the progenitor of porphyry ore, and the overlying intrusive and extrusive country rocks is characterized by the presence of one or more extensive diatreme breccias bodies and numerous smaller hydrothermal breccias bodies. The high-sulfidation epithermal component of the Tumpangpitu mineralizing system can be divided into four subtypes based on oxidation intensity, metal grade and metal suite. Completely oxidized high-sulfidation ore (Au-Ag strongly enriched; Cu severely leached). Partially oxidized high-sulfidation mineralization (Au-Ag +/- Cu; Cu is strongly leached).
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Unoxidized but low-grade high-sulfidation mineralization (Au-Ag-Cu). Au-Ag grade is significantly lower than the overlying oxide component. Unoxidized but higher-grade high-sulfidation mineralization (Au-Ag-Cu) in deeper structural conduits and proximal to inferred upflow zones.
Porphyry Cu-Au-Mo mineralization occurs within a carapace or shell of magnetite, quartzmagnetite and quartz vein stockwork that occurs within and around the periphery of the tonalite intrusion, overprinting both the outer margins of the intrusion as well as the proximal country rock. This mineralization occurs dominantly within areas characterized byphyllic overprint of potassic alteration and lesser areas of potassic alteration within the tonalite intrusion.
1.3.3.1 High-Sulfidation Oxide Mineralization The oxide mineralization at Tumpangpitu occurs on topographic ridges, in close association with Au and Ag soil anomalies. This oxide mineralization occurs in a series of pods or pockets that are labelled as Zones A through F. These pods of oxide mineralization have two gross forms: 1. As tabular dipping shelves or ledges of mineralized and advanced argillic altered lithic tuff and hydrothermal breccia (Zones C and A). At Zone A these mineralized zones dip moderately to the southwest. At Zone C these mineralized zones dip moderately to the northwest. 2. As steep structurally controlled loads that are best defined in the Zone B area. At Zone B these mineralized zones strike north-south and dip steeply to the east. Two surfaces are defined from logging of oxidation through the upper high-sulfidation portion of the deposit, Base of Complete Oxidation (BOCO) and Base of Semi-Oxidation (BOSO). At Zones A and C, for the most part, these surfaces are relatively smooth and plunge deeply but smoothly beneath the ridge tops to depths of between 50 and 300m below surface. The mineralized dipping silica ledges described above are highly fractured and sulfide-rich, so oxidation appears to extend pervasively down into these ledges. In contrast, at Zone B where the mineralized structures are narrower and very steep, the BOCO and BOSO surfaces have complex and high relief morphologies, yielding very complex oxidation surfaces, with islands of transitional material lying above BOCO and islands of oxidized material lying below BOCO. The orientation of high-sulfidation mineralization (oxide + sulfide) at Zones E and F await further drilling to improve cross-section resolution. The character of oxide mineralization was described in detail in the reports by H&S (2008 & 2009). Au and Ag is enriched in intervals of core that exhibit increased degrees of oxidation as well as increased intensity of sulfide fracture networks, to the degree that visual inspection of the core can provide a qualitative estimate of likely Au grade (low, medium, high). Mineralization in the oxide zone mimics the form and distribution of mineralization in the underlying HS-sulfide zone except that it has an oxidation overprint which has upgraded Au and Ag grades. Mineralized intervals of core tend to be tens to locally hundreds of meters thick. The intersected thickness is believed to be close to true thickness at Zone C since drilling was perpendicular to the NE-dipping ledge. At Zone A, mineralization is thought to dip in the same direction as the larger fraction of the holes (i.e. towards the southwest), however because of the continuity of mineralization between holes and the style of mineralization
KAPPES, CASSIDAY & ASSOCIATES | JUNE 2011 SECTION ONE
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(widely dispersed fracture networks within a deep and extensive oxidation zone), the intersected widths are likely to be close to the true widths. Detailed resolution of the dip and geometry of these wide fracture networks, both in the oxide and sulfide HS zones, awaits further infill drilling.
1.3.3.2 High-Sulfidation Sulfide Mineralization As described above for the oxide zone, advanced argillic alteration at Zones A and C forms extensive and thick silica ledges which dip to the SW and NE respectively, and appear to emanate or flare upward, away from the deep porphyry tonalite core that is centered at depth below Zones A and C. These ledges are zoned perpendicular to their dip, with cores of silica and silica-alunite that zone outward to silica-alunite-clay, silica-clay, clay-silica, clay-chlorite and finally in distal areas to propylitic alteration, typical of high-sulfidation systems where neutralization of acid fluids is the dominant control on alteration patterns. The figure below shows the strongly mineralized porphyry stockwork shell is about 800 meters wide on section and about 200 meter in vertical width around the carapace of the tonalite intrusion. The green outline is the estimated 0.1% Cu grade boundary, the upper half of which comprises high-sulfi dation sulfide mineralization.
Figure 5: Lithology Section 11040mN at Tumpangpitu
1.4
Resource Estimate
Interpreted alteration zones were used in conjunction with distribution of grades to define ten mineralized domains. A block model was constructed. The block model extents were chosen to cover the mineralized domains. As drilling is currently inadequate to define indicated or measured resources, an Inferred Resource Estimate at various gold grades is presented below.
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Table 1: Total Inferred Resources
Total Inferred Resource Cut-Off (Au) 0.2 0.3 0.4 0.5 0.75 1 Cut-Off (Au) 0.2 0.3 0.4 0.5 0.75 1 Cut-Off (Au) 0.20 0.30 0.40 0.50 0.75 1.00
Notes : 1. 2. Rounding as required by reporting guidelines may result in apparent differences between tonnes, grade and contained metal content. Tonnage and grade measurements are in metric units. Ounces are reported as troy ounes.
Tonnage (Mt) 130 85 60 45 25 15 Tonnage (Mt) 95 65 45 35 20 15 Tonnage (Mt) 40 20 10 7 4 2
Au Ag (g/t) (g/t) 0.55 18 0.74 21 91 23 1.06 24 1.39 27 1.69 29 Oxide Zone Inferred Resource Au Ag (g/t) (g/t) 0.61 17 0.79 20 0.95 22 1.09 24 1.42 27 1.71 30 Transition Zone Inferred Resource Au Ag (g/t) (g/t) 0.42 20 0.57 33 0.74 27 0.91 28 1.24 27 1.53 27
M Oz Au 2.4 2 1.7 1.5 1.1 0.9 M Oz Au 1.9 1.6 1.4 1.3 1 0.8 M Oz Au 0.5 0.4 0.3 0.2 0.1 0.1
M Oz Ag 80 55 45 35 20 15 M Oz Au 50 40 35 30 20 15 M Oz Au 25 15 10 10 5 0
1.5
Mining and Optimized Mine Plan from Inferred Resource
The Tujuh Bukit Heap Leach Project is planned as an open-pit gold operation processing 20,000 t/d of oxide material. A total of up to 17.4 million tonnes of material (heap feed and waste) are scheduled to be mined per year with an average strip ratio of 1:1.1. Use of industry-proven mining practices and equipment are planned. The capital costs are developed assuming contractor mining with all new equipment maintained under maintenance and repair contracts (MARC) with the vendors. It is assumed that management of explosives will be performed by a sub contractor. The overall mineral resource, as described by Hellman and Schofield, is the basis for the pit optimization, mine design and production schedule developed by Australian Mine Design & Development Pty Ltd, which is discussed in detail in the mining chapters of Section 18.
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Mining costs include management, supervisory and mining technical staff salaries and overheads and the costs of drilling, blasting, loading, hauling, ancillary and support activities. Contractor mining is assumed, where the cost estimation for the contractor mining has been derived by AMDAD using the following methodology: Mining equipment costs include ownership costs and hourly operating costs. Ownership costs are modelled by assuming rolling leases for each item, with the capital cost repaid quarterly, plus a lease rate of 10%. An additional margin of 20% is applied to the total operating and ownership costs to arrive at an estimate of total contract mining costs.
1.6
Metallurgy
Metallurgical testing of the potentially economic material from the Tujuh Bukit project has been conducted by Metcon and KCA. Testing has demonstrated that metallurgical recovery is amenable to heap leach recovery techniques with gold estimated field recovery of 86% on oxide material and 72% on transition material. Silver recovery is lower, with estimated field recovery of 17% on the oxide and 31% on transition material.
Table 2: Production Statistics
Item Oxide Heap Feed (Mt) Oxide Gold Grade Oxide Silver Grade Transition Heap Feed (Mt) Transition Gold Grade Transition Silver Grade Total Heap Feed Tonnes Total Gold Grade Total Silver Grade 52 Mt 0.84 g/t 22.8 g/t 5 Mt 0.70 g/t 28.1 g/t 57 Mt 0.83 g/t 23.5 g/t
Recovery 86% 17% 72% 31% 84% 18%
Recoverable Ounces Metal 1.2 M oz Au 7.2 M oz Ag 0.1 M oz Au 1.4 M oz Ag 1.3 M oz Au 8.6 M oz Ag
Cyanide consumption is estimated to be 0.49 kg/t, and cement for agglomeration is estimated to be 4.5 kg/t. The cement is conservatively estimated as many tests show little or no cement required depending on clay content. Metallurgy is discussed in detail in Section 16.
1.7
Process Description
Mining will take place at a rate of 20,000 heap feed tonnes per day. Material for processing will be delivered and direct dumped to a modular-style 3-stage crushing plant nearby the pit. The targeted product size will be 100% passing 20 mm. The crushed material will be transported three kilometers via an overland conveying system to the two agglomeration drums. Cement and barren solution will be added to the material at the drums. The agglomeration drums discharge to a mobile stacking system (grass-hopper field conveyors and a mobile radial stacker). The material will be stacked on the leach pad in 10 meter lifts and irrigated for 90 days with dilute cyanide solution using sprinklers on top and dripper tubes on the side-slopes. A total of ten 10 meter lifts are planned for a maximum heap height of 100 meters in the deepest part of the heap. After percolation through the
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material, gold and silver bearing solutions collect on an HDPE plastic liner and are channeled to a pregnant solution collection pond and pumped to a Merrill Crowe plant. Zinc dust is used to precipitate the gold and silver as precious metals sludge. The precipitate is dried and smelted into dore bars onsite. The reader is referred to Section 16 for additional process details.
1.8
Infrastructure
Power for the project will be supplied via a new installation of a 31 km long, 20 kV powerline. This line connects to an existing 150 kV line to the North. It is assumed that sufficient capacity will continue to exist to support the project as the project progresses. Back-up generators will provide power to only the solution circuits in the event of power outages. Process water will be supplied with a combination of stored rainfall, groundwater wells, and seawater as required. Dedicated fire water will be stored in reserve for emergencies. Waste water treatment facilities, diesel fuel, and gasoline storage facilities will be constructed. External voice and data communications will be supplied through a dedicated satellite system. Site buildings will include: Administration Building Mine Shop Refinery Process Warehouse and Workshop Process Offices Locker Rooms Crusher Maintenance Workshop Merrill-Crowe Shed roof only Reagent Storage Area Shed roof only
A man camp is also included, for first use as a construction camp, and later portions of it can be maintained as a permanent camp. Further details of the infrastructure are described in Section 18.
1.9
Environmental and Permitting
The operation is designed to comply with Indonesian environmental requirements, Intrepid Mines corporate environmental policy, and industry best practice standards. Golder and URS have documented most environmental conditions and permit requirements for the project. Section 18 contains commentary on studies to date regarding environmental baselines. In general, regarding mining and large heap leach projects, there are four negative environmental aspects that have a high relevance to public perception: 1. The use of cyanide and the perceived potential to contaminate water resources. 2. The overall impact on the landscape created by the mine and leach facilities. 3. The generation of dust from the mine and process.
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4. The potential for acid generation from the pits, waste dumps, and leach pad capable of contaminating surface or groundwater. Conversely, there are three potentially positive aspects to perception, which are: 1. The generation of employment. 2. The generation of improved services to the communities. 3. The overall economic benefits to the communities. With due care in the design, construction, operation, monitoring, and closure of the project, as well as judicious management of community expectations it is believed that all of the identified environmental and social risks can be mitigated. Environmental and reclamation requirements are discussed in detail in Section 18.
1.10 Reclamation and Closure

Reclamation and closure will include removing the buildings, power lines, pipe lines and process components, securing the pit and waste dumps, assuring the spent leach pad and tailings storage facility are chemically and structurally stabilized, and returning the area to its previous land use. Portions of the reclamation and closure work will be completed concurrently with operations.
1.11 Capital Costs

Pre-production capital cost details are presented in Section 18 and are summarized below. All costs are in fourth quarter 2010 US dollars. Capital costs based on the design outlined in this report are considered to have accuracy of +/- 30%. The capital costs include a contingency of 20%.
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Table 3: Summary of Pre-Production Capital Costs Plant Totals Direct Costs Area 00 - Site & Utilities General Area 03 Camp Area 05 - Water Supply & Distribution Area 06 - Process Area General Area 08 - Mobile Equipment Area 10 - Crushing Area 15 Heap Feed Reclaim and Stacking Area 20 - Heap Leach and Solution Handling Area 25 - Merrill Crowe Area 35 - Refining Area 45 - Detoxification Area 50 - Electrical Area 70 - Reagents Area 75 - Laboratory Area 80 - Ancillaries Total Supply Cost
($M)
Install
($M)
Grand Total
($M)
1.2 1.9 0.7 0.2 1.5 13.9 23.4 3.5 5.4 1.4 0.7 1.7 0.5 1.2 6.3
1.2 0.2 0.1 0.1 0.1 2.8 1.9 28.2 1.0 0.1 0.1 0.2 0.1 0.1 1.0
2.4 2.1 0.8 0.3 1.5 16.6 25.3 31.6 6.4 1.6 0.8 1.9 0.5 1.4 7.3
Plant Total Direct Costs Spare Parts Contingency Plant Total Direct Costs with Contingency Indirect Field Costs Indirect Field Costs Contingency Plant Total Indirect Costs Initial Fills Owners Costs EPCM Sub Total Plant Cost Working Capital 60 Days Pre-Production Mining Provision Contractor Mobilization Provision Total Pre-Production Capital Costs VAT (Pre-Production Capital Costs) Total (Pre-Production Capital Costs inc VAT)
63.5 2.5 21.7
44.9
100.5 2.5 21.7 124.8 3.5 0.7 4.2 1.0 20.0 16.4 166.4 13.0 6.5 1.0 186.9 16.7 203.6
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1.12
Operating Costs
Operating costs details are provided in Section 18. The table below summarizes the estimated project operating costs. Operating costs are estimated to have an accuracy of +/- 30%.
Table 4 : Operating Costs Area Labor Crushing and Stacking Leaching Merrill-Crowe Plant Refinery Reagents Water Distribution Laboratory Support Total Processing G&A Mining Cost (Contractor Mining) Total Unit Cost ($/heap feed tonne) 0.499 1.237 0.165 0.177 0.075 1.938 0.028 0.088 0.072 4.279 0.800 5.76 10.84
1.13 Financial Analysis

The Table below is a summary of financial results. The complete financial analysis is presented in Section 18.
Table 5 : Summary of Financial Results
Financial Summary Long-term gold price per ounce Long-term silver price per ounce NPV - after tax @ 0% (Million) NPV - after tax @ 10% (Million) Payback (years) Mine Life (years)
$1,050 $16.50 $445 $180 3.03 9
$1,450 $38.00 $942 $446 2.70 9
1.14 Project Development Schedule

Project development is expected to require 17 months for engineering and construction. During the construction period, modular tent-style housing will be provided for the estimated 456 construction workers. A jetty/receiving port will be constructed to receive equipment and construction components. The power line will be constructed. Pioneering work on the pits and pre-production haul roads will be constructed. The administration, mine shop and other ancillary buildings will be constructed. The first phase of the leach pad and process ponds will be built. The crushing and recovery plant will be installed. It is estimated that once the mining operation begins delivering material to the operating crusher, dore metal production could be within four months.
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1.15 Recommendations, Risks and Opportunities

No fatal flaws have been discovered in the project evaluation to date. Recommendations primarily involve additional detail with respect to resources, operations, permitting and Indonesian business protocols and regulations. A number of opportunities have been identified for further evaluation during the next stage of feasibility. The recommendations, risks and opportunities are more fully discussed in Section 19, and are summarized below.
1.15.1 Recommendations After completing this PEA and the associated technical and economic review of the project, recommendations are made for additional review of the following topics: Complete drilling sufficient to convert inferred resources to measured and indicated resources; Column testing on materials that are near average mine grades; Metallurgical testing and process testing using seawater; The need for agglomeration; Determine the crushing index; Testing for mercury in the heap feed material; Collect additional site information for the water balance; Design a solution neutralization system; Full review of permit requirements; Tsunami studies; Detailed closure plan; Review and augmentation of baseline environmental studies; Continued exploration for groundwater; Additional geotechnical drilling; Earthwork contractor costs; Cyanide delivery systems; Project consumables specifics; Seaport scale and timing of construction review.
1.15.2 Risks At the present stage of evaluation of the Tujuh Bukit Project a number of risks have been identified. It is believed that most of these can be mitigated through additional metallurgical testing, further design work and advancing negotiations regarding power, water and permits. The primary risks include: Power availability and cost; Water balance;
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Tsunami design; Solution containment; Acid rock drainage; Permitting risks; Community relations.
1.15.3 Opportunities The Tujuh Bukit Project has numerous opportunities to evaluate. These include: Potential to increase overall processing rate and refinement of operating costs; Earthworks optimizations, considering mine scheduling and owner vs. contractor mining costs; Value engineering of facilities, and consideration of regenerative motors on the downhill conveyors.
The results of the PEA indicate that at a gold price of $1,050 per ounce the Tujuh Bukit heap leach concept is a robust project worthy of investment and warrants continued studies to a feasibility level.
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2.0 INTRODUCTION
Kappes Cassiday and Associates (KCA) was commissioned by Intrepid Mines Ltd (Intrepid) to provide an independent Qualified Persons Technical Report for the Tujuh Bukit Oxide Project located in East Java, Indonesia. The report has been prepared in compliance with National Instrument NI 43-101, Standards of Disclosure for Mineral Projects and documents the results of a Preliminary Economic Assessment on the project in 2010 and early 2011. The purpose of the preliminary economic assessment and this report was to determine the viability of progressing the Tujuh Bukit Oxide Project to the pre-feasibility study stage. The results of the preliminary economic assessment of the Project are encouraging and warrant the progression of the Tujuh Bukit Project to the prefeasibility study stage. The assessment has met its original objective.
2.1
Qualified Persons
The Qualified Persons (QPs), as defined in NI 43-101 and in compliance with Form 43-101F1 (the Technical Report), responsible for the preparation of the technical report include: Daniel Kappes, PEng, Kappes Cassiday and Associates, President of KCA and Project Manager Tujuh Bukit Oxide Preliminary Economic Assessment Dr Phillip Hellman, FAIG, Hellman and Schofield, Director of H&S, Mineral Resources Peter Allen, MAusIMM, Australian Mine Design and Development Pty Ltd., Senior Geologist, Mine Planning, Mine Costs, Mine Scheduling
Daniel Kappes visited the property in December 2010, and inspected drill core, orebody location, possible infrastructure locations, conditions of local access and met with project staff and other consultants. Phillip Hellman has visited the property on several occasions since November 2007. The latest visit was in December 2010 where Dr Hellman observed drilling activities, drill core and participated with on-site discussions with staff. Peter Allen visited the property in December 2010, and inspected drill core, orebody location, possible infrastructure locations, conditions of local access and met with project staff and other consultants.
2.2

Effective Dates
Two effective dates are appropriate for this report, as shown below; Effective Date of the Mineral Resources 27 January 2011; Effective Date of the Preliminary Economic Assessment 1 June 2011.
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2.3
Units and Abbreviations
All costs are in United States dollars. Units of measurement are metric. Only common and standard abbreviations were used wherever possible. A list of abbreviations used is as follows:
Table 6 : Units and abbreviations
Measurement Description Distances: mm millimeter cm centimeter m meter km kilometer Areas: m2 or sqm square meter ha hectare km2 square kilometer Weights: oz troy ounces Koz 1,000 troy ounces g grams; kg kilograms T or t tonne (1000 kg) Kt 1,000 tonnes Mt 1,000,000 tonnes Time: min minute h or hr hour op hr operating hour d day yr - year Volume/Flow: m3 or cu m cubic meter m3/h cubic meters per hour Assay/Grade: gpt or g/t grams per tonne ppm parts per million; ppb - parts per billion Other: TPD or tpd tonnes per day m3/h/m2 cubic meters per hour per square meter kWh kilowatt hour Au gold Ag silver Cu copper AuEq gold equivalent US$ or $ - United States dollar ASL Above Sea Level
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2.4
Project Background
The project area was first explored by PT. Hakman Platina Metalindo and its JV partner, Golden Valley Mines of Australia. Golden Valley Mines identified the potential of the area as a prospective target for porphyry copper type mineralization following a regional drainage and rock-chip geochemical sampling program conducted during 1997 and 1998. Subsequently, a rapid detailed surface geochemical sampling program was conducted resulting in seven targets being identified for drilling. An initial drilling program of 5 diamond drill holes was conducted during 1999. In February 2000 Placer Dome Inc. (Placer) entered into a Joint Venture with Golden Valley Mines (GVM) to earn 51% of the project and assumed operational control of the exploration program. A total of 32.75 kilometers geochemical and IP grids were completed during 2000. Strong correlation between the near-surface resistivity anomalies and outcropping vuggy silica zones was observed in the IP results. Deeper chargeability anomalies (>200-400 m below surface) were recorded in the northern portion of the grid. Placer targeted the shallow resistivity anomalies with a further 10 diamond drill holes. There is no report or record of further work being conducted on the project by Placer-GVM and the area became vacant by the time PT IMN applied for a KP General Survey in 2006 over the project area. During 2006 Hellman and Schofield Pty assisted a previous Joint Venture of PT IMN with an Australian company in assembling exploration data and designing a drilling program aimed at advancing the prospect in order to report resource estimates according to the JORC Code and Guidelines. During 2007 a Term Sheet was signed between Emperor Mines Ltd. (later to become Intrepid Mines Ltd. through the merger of Emperor Mines and Intrepid Mines) and PT IMN and IndoAust Pty. Ltd., which was followed by an Alliance Agreement between Emperor Mines Ltd, and PT IMN in April 2008. Drilling on the project by PT IMN and Intrepid Mines commenced in September 2007. Additional historical drill hole assays became available during 2007 enabling a slightly more objective view of the geological potential. The September 2007 Hellman & Schofield study of Geological Potential used ordinary block kriging of 2m composited AuEq data within polygon extrusions. At the present time the project comprises: An undeveloped oxide gold/ silver deposit An undeveloped deep sulfide Copper/Gold/Molybdenum deposit An exploration camp with little other permanent infrastructure
Intrepid has carried out five phases of diamond drilling at the Tujuh Bukit property, from September 2007 and is continuing to drill as at the date of this report. Intrepid has advanced study of the oxide portion of the project with metallurgical testing by Metcon (milling extraction testwork), and later at KCA for detailed heap leaching testwork. Due to the relatively small incremental gold recoveries seen between the heap leach testwork and milling extraction testwork, this PEA does not examine a grinding scenario, and only evaluates a 7.1 Mtpa crushing / agglomeration and heap leaching project.
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2.5
Scope of Work
Intrepid Mines Ltd. commissioned KCA to evaluate the heap leach process for the Tujuh Bukit project to Preliminary Economic Assessment (PEA) standards. In this PEA the processing details are refined sufficiently to be used as the basis for preparation of a Prefeasibility Study (PFS). The PEA is led by KCA and incorporates work from other groups including major contributors Australian Mine Design and Development (AMDAD) and Hellman and Schofield Pty Ltd (H&S). The PEA presents: Information from others to give a complete review of all parts of the project; Project design criteria; Preliminary site plans, showing all roads, buildings, facilities, access road; Preliminary drawings including flow sheets and GAs; Preliminary estimate of overall site power requirements based on similar operations; List of major equipment; Cost estimate within a 30% cost range subject to further study to resolve unknowns which will be identified in the PEA, for: Capital costs; including Owners costs and working capital; Operating costs.
It should be noted that quotes have been obtained for most of the major equipment and infrastructure items and other major capital such as earthworks. The PEA is intended to provide a view of potential project economics and to give guidance for future metallurgical testing, project design and feasibility.
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3.0 RELIANCE ON OTHER EXPERTS AND CAUTIONARY NOTES

3.1 Reliance on Other Experts
This report was prepared by Kappes, Cassiday & Associates (KCA) as a preliminary economic assessment (PEA) for Intrepid Mines Ltd. (Intrepid Mines). The information, conclusions, and estimates contained in this report are consistent with the level of effort and quality involved in KCA services, based on the information available at the time of preparation, the data supplied by outside sources, and the assumptions, conditions, and qualifications set forth in this report. This report is intended for use by Intrepid Mines subject to the terms and conditions of its contract with KCA. Any other uses of this report by any third party are at that partys sole risk. KCA has taken all reasonable care in producing the information contained in this report. No inferences or conclusions should be drawn from reading any one section or part of this report. The information in this report is not a substitute for independent professional advice before making any investment decisions. Furthermore, any information contained in this report may not be modified without permission from Kappes, Cassiday and Associates. General information and data in this report were derived from many sources including qualified person/consultants and non- QP sources including the Intrepid Mines staff and the authors of and contributors to previous reports prepared on their behalf. The following list outlines the various contributors to this report that assisted KCA and their respective responsibilities. The list also includes other groups that provided support studies that are referenced within the report and included within the appendices.
Table 7 : Responsible Parties
Metcon Hellman & Schofield Pty Ltd.
Metallurgy with respect to mill and CIL leaching testwork, Section 16, particularly with regards to pre-KCA testwork. Property location, history, geology, mineralization, exploration, resources and reserves. Sections 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, and 18 were taken from previous H&S reports on the project. Mining capital and operating costs Mining Section 18 Preliminary Flora and Fauna Environmental Section Aquatic baseline, environmental baseline
Australian Mine Design and Development Pty Ltd PT Intertech Utama Services Golder Associates
Dr Phillip Hellman is the Qualified Person for sections 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15 and 17 of this report is an Independent Qualified Person and has relied on various datasets and reports that were provided by Intrepid Mines, and project consultants to support the interpretation of exploration results discussed in this report on mineral resources. The data that was provided to Dr Hellman was deemed to be in good stead, and is considered to be reliable. Dr Hellman is not aware of any critical data that has been omitted so as to be detrimental to the
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objectives of this report. There was sufficient data provided to enable credible and well constrained interpretations to be made in respect of data. Assay data is handled by an independent database bureau that receives electronic results directly from the laboratory. The data is then directly transferred to Dr Hellman. Intrepid advises that there is no knowledge of any environmental liabilities associated with the project. A permit is required to conduct exploration activities within areas of protected and production forest and these have been issued by the Department of Forestry for work on this project. Statements regarding tenement status, legal right to mine and explore, environmental liability have been accepted in good faith from Intrepid and are outside the expertise of Hellman & Schofield Pty Ltd or Kappes Cassiday and Associates. The Indonesian Forestry Law restricts non forestry activities within protected forests and prohibits mining using an open pit method in protected forest areas. The area of the Zone A, Zone B and Zone C oxide resource estimate areas and the mining areas contemplated by the Preliminary Economic Assessment fall within a protected forest area. Intrepids Alliance partner, PT IMN, is working with relevant Indonesian authorities regarding a potential review of forest land status. There is no assurance that the forestry reclassification will take place in this instance.
3.2
Cautionary Notes
This preliminary economic assessment is preliminary in nature and includes inferred mineral resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves, and there is no certainty that the preliminary assessment will be realized. Actual results may differ significantly. Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability. Due to the uncertainty that may be attached to Inferred Mineral Resources, it cannot be assumed that all or any part of an Inferred Mineral Resource will be upgraded to an Indicated or Measured Mineral Resource as a result of continued exploration. Confidence in the estimate is insufficient to allow meaningful application of the technical and economic parameters to enable an evaluation of economic viability worthy of public disclosure, except in the case of the preliminary economic assessment. Inferred Mineral Resources are excluded from estimates forming the basis of a feasibility study.
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4.0
PROPERTY DESCRIPTION AND LOCATION
The property description and location of the Tujuh Bukit project is as stated in the Report on Mineral Resources by Phillip L. Hellman, BSC (Hons 1), Dip Ed, PhD, MGSA, MAEG, FAIG, dated January 27 2011, which is filed on SEDAR.
5.0 ACCESSIBILITY, CLIMATE, LOCAL RESOURCES, AND PHYSIOGRAPHY

The accessibility, climate, local resources and physiography of the Tujuh Bukit project is as stated in the Report on Mineral Resources by Phillip L. Hellman, BSC (Hons 1), Dip Ed, PhD, MGSA, MAEG, FAIG, dated January 27 2011, which is filed on SEDAR.
6.0 HISTORY
The history of exploration at the Tujuh Bukit project is as stated in the Report on Mineral Resources by Phillip L. Hellman, BSC (Hons 1), Dip Ed, PhD, MGSA, MAEG, FAIG, dated January 27 2011, which is filed on SEDAR.
7.0 GEOLOGICAL SETTING

The geological setting of the Tujuh Bukit project remains as stated in the Report on Mineral Resources by Phillip L. Hellman, BSC (Hons 1), Dip Ed, PhD, MGSA, MAEG, FAIG, dated January 27 2011, which is filed on SEDAR.
8.0 DEPOSIT TYPES

The deposit type of the Tujuh Bukit project remains as stated in the Report on Mineral Resources by Phillip L. Hellman, BSC (Hons 1), Dip Ed, PhD, MGSA, MAEG, FAIG, dated January 27 2011, which is filed on SEDAR.
9.0 MINERALIZATION
The mineralization of the Tujuh Bukit project remains as stated in the Report on Mineral Resources by Phillip L. Hellman, BSC (Hons 1), Dip Ed, PhD, MGSA, MAEG, FAIG, dated January 27 2011, which is filed on SEDAR.
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10.0 EXPLORATION
This section is a summary of the same NI 43-101 item from the Report on Mineral Resources by Phillip L. Hellman, BSC (Hons 1), Dip Ed, PhD, MGSA, MAEG, FAIG, dated January 27 2011, which is filed on SEDAR.
10.1 Historical Exploration

The project area was first explored by PT Hakman Platina Metalindo and its JV partner, Golden Valley Mines of Australia. Golden Valley Mines identified the potential of the Tumpangpitu and Salakan areas as prospective targets for porphyry copper type mineralization following a regional (1:50,000) drainage and rock-chip geochemical sampling program conducted during December 1997 to May 1998. Subsequently, a rapid detailed surface geochemical sampling program was conducted over Gunung Tumpangpitu resulting in seven targets being identified for drilling. An initial drilling program of 5 diamond drill holes GT-001 to GT-005 was conducted during March to June 1999. In February 2000 Placer Dome Inc. (Placer) entered into a Joint Venture with Golden Valley Mines to earn 51% of the project and assumed operational control of the exploration program. In order to better define targets for follow-up drilling on Tumpangpitu 32.75 kilometers of grid-based geochemical and IP surveys were completed between April and May 2000. Anomalous bedrock geochemistry demonstrated marked consistency with prominent ridges or topographic highs, trending to the northwest, consisting dominantly of vuggy silica altered breccia. The results of the IP survey demonstrated strong correlation between the near-surface resistivity anomalies and the outcropping vuggy silica zones. Deeper chargeability anomalies (>200-400 m below surface) were recorded in the northern portion of the grid. Placer targeted the shallow resistivity anomalies for high sulfidation style Au-Ag mineralization with a further 10 diamond drill holes GT-006 to GT-014. On the basis of the results from the second drilling program a further 14 holes were designed (2,700m). However, Placer withdrew from the project possibly due to the combined influences of the relatively low metal prices at the time (i.e., the project did not appear to meet corporate thresholds of size and grade) together with an unstable economic and political climate across much of south-east Asia (the Asian Financial Crisis). There is no report or record of further work being conducted on the project by Placer-GVM and the area became vacant by the time PT IMN applied for a KP General Survey in 2006 over the project area. In June 2006 Hellman and Schofield Pty Ltd assisted a previous Joint Venture of PT IMN with an Australian company in assembling exploration data and designing a drilling program aimed at advancing the Tumpangpitu prospect in order to report resource estimates according to the JORC Code and Guidelines. H&S were able to provide an indication of Potential Mineralization within the variably oxidized gold-silver enriched zone above the deeper copper mineralization by using the limited available drilling data along with soil sample geochemical results. This study suggested that approximately 3m oz Au Equivalent (AuEq was based on $650/Oz Au and $10/Oz Ag) was a reasonable amalgamated target size in oxide Zones A, B & C. This oxidized gold-silver enriched zone is the subject of this PEA.
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10.2 Recent Exploration (2006-2010)

Since involvement of PT IMN in the Tujuh Bukit project (2006-2010) and the involvement of Intrepid Mines (formerly Emperor Mines Ltd) in 2007-2010, the following exploration programs have been undertaken over the Tumpangpitu prospect: Re-establishment of the Tumpangpitu grid (initially established by Placer); Completion of 475 soil grid samples at a density of 200m x 25m over the Tumpangpitu prospect. The soil samples were acquired along 17 cross-lines oriented at 050-230 magnetic. Soil samples were analyzed for Au, Cu, Pb, Zn, Ag, As, Sb, Mo and Ba; Regional rock-chip sampling: A total of 1137 rockchip samples were collected by IMN or Intrepid Mines during the period 2006 to 2010 from the Tujuh Bukit project. These includes suites of rockchip samples collected at Tumpangpitu, Salakan, Katak, Gunung Manis and other regional areas in between these main prospects; Preparation for and completion of five main phases of diamond drilling at Tumpangpitu that extended from September 2007 to September 2010.
The Table below summarizes recent drilling at Tujuh Bukit since September 2007
Table 8 : Tujuh Bukit Drilling Summary
Target Zone A Oxide Zone B Oxide Zone C Oxide Zone E Oxide & Zone F Oxide Regional Oxide Holes Porphyry Holes 30 56 33 28 5 34
# of Drill Holes
Meters 9,928.87 13,047.05 8,702.1 4,483.55 788.85 28,418.85
Dates 2007-2011 2008-2011 2007-2011 2010-2011 2009 2008-2011
Extensive regional -80 mesh soil sampling was conducted in 2009 to 2010 at Tumpangpitu and east of Tumpangpitu. Soil samples were collected by both hand-operated auger and petrol-driven mechanical auger for the Tumpangpitu program. Soil samples were taken from the C-horizon in most cases, though in areas of deep saprolite clay development samples were taken from the B soil horizon. Soil samples were analyzed for Au, Cu, Pb, Zn, Ag, As, Sb, Mo and Ba at the Intertek Laboratory in Jakarta. Two types of duplicate soil samples were routinely acquired, a within hole duplicate and a duplicate located ~1 meter from the auger hole as part of the procedure to assess anomaly reproducibility. Several orientation surveys were also done whereby some auger holes were sampled at 20cm intervals from surface to ~1.4m depth to assess the behavior of metal depletion or enrichment through the soil profile. The figure below shows the Distribution of Au anomalies in -80 mesh soil samples at Tumpangpitu (southern gridded area). The principal prospects at Tumpangpitu and east of Tumpangpitu are shown by the black dotted outlines. Labels A-F refers to the naming of mineralized oxide zones at Tumpangpitu. The Au-Ag mineralized oxide zones at Tumpangpitu are clearly delineated by Au soil anomalism.
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Figure 6 : Soil Anomalies at Tumpangpitu
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In September 2009, Intrepid Mines Ltd and their partner PT Indo Multi Niaga conducted a heliborne aeromagnetic survey to cover the entire Tujuh Bukit property. The aerial survey was flown by GPX Surveys Pty Ltd (Perth). The survey was flown along 100m-spaced north-south flight lines (2530 line kilometers). Radiometric and DTM data were also acquired together with the magnetic data. The magnetic data were processed by Moore Geophysics, the data processing yielding Raw TMI, 1st-Vertical Derivative, Analytical Signal and Reduced-to-Pole imagery as well as U-count, Th-count, K-count and Total Count images for the radiometric data. The helimagnetic survey yields far more detailed magnetic data that will allow more definitive 3D modeling of magnetic anomalies and more robust interpretation of regional structure as well as confident definition of the loci of intrusive centers within the district. Ongoing soil sampling programs are progressively being undertaken to screen these new regional targets.
Figure 7 : Aeromagnetic Survey Data
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11.0 DRILLING
This section is a summary of the same NI 43-101 item from the Report on Mineral Resources by Phillip L. Hellman, BSC (Hons 1), Dip Ed, PhD, MGSA, MAEG, FAIG, dated January 27 2011, which is filed on SEDAR. Intrepid and their Joint Venture partner PT Indo Multi Niaga (IMN) have conducted an ongoing diamond drilling program at the Tumpangpitu prospect since September 2007. Drilling has progressively expanded from one drillrig to the current six operating drill rigs on this prospect. A total of 186 diamond drill holes were completed by Intrepid-IMN on the Tumpangpitu prospect between September 2007 and 18th April 2011. The total drill meterage by Intrepid-IMN on the Tumpangpitu prospect during this period was 65,369.27m. The location of these drill holes is shown below. This drilling at Tumpangpitu covers an area of approximately 2.3 km2. In positioning the drill holes, Intrepid-IMN reviewed all existing data, including surface alteration data from prior mapping by Placer, previous drilling results of Golden Valley Mines and Placer.
Figure 8 : Location of Collars of completed drill holes at Tumpangpitu (20th April 2011)
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11.1 Downhole Surveys

A total of 1479 down-hole surveys points (that include set-up collar positions at the surface) were acquired from drill holes GT-001A through to GTD-11-202 (excluding holes GTD-11-194 and GTD-11-201). Down-hole survey data existed for the historical holes GT001A through to GT014 although it is not known what type of survey tool was used for these old GVM and Placer holes (it is assumed that the survey data were recorded using the widely used Eastman single-shot system). All drill holes drilled by Intrepid Mines Ltd from 2007 to 2011 were surveyed using a REFLEX EZ-ShotTM down-hole survey instrument which recorded azimuth, inclination, roll-face angle, magnetic field strength and bore-hole temperature.
11.2 Drill Hole Collar Survey and Topographic Survey

The collar positions of drill holes at Tumpangpitu were picked up by two separate survey companies, PT GEOINDO GIRI JAYA and PT SURTECH UTAMA INDONESIA. All drill holes used in this current resource estimation were surveyed by ground-based geodetic surveying. Surface topographic data were also surveyed on the ground during a series of ongoing survey campaigns contracted initially to PT Geoindo and subsequently to PT Surtech. These data were used to construct a digital elevation model for resource estimates.
11.3 Summary Results of Drilling

The results of drilling to date have defined two preliminary shallow Au-Ag oxide resources that have been reported previously (Hellman 2008 and 2009) and a third global oxide resource that encompasses oxide zones A, B, C, E, F and intervening areas (Hellman, Jan 2011). Typical intersections for the oxide drilling were reported by Hellman (2008) as accumulated intercepts exceeding 0.3 g/t Au and accumulated intercepts exceeding 0.3 % Cu, and again by Hellman (2009) as accumulated intercepts exceeding 0.3 g/t Au, accumulated intercepts exceeding 20 g/t Ag and selections of higher grade Au intercepts from Zone A. The reader is encouraged to view these results in those reports.
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12.0 SAMPLING METHOD AND APPROACH

12.1 Descriptions of Method and Approach

All drill holes on the Tujuh Bukit project area conducted to date have been drilled by the diamond drilling method. Consequently two types of samples are collected for assay during the drill program at Tumpangpitu, half-core samples of PQ, HQ, NQ and BQ core and three-meter composite sludge samples. During 2010, critical independent reviews of data collection procedures and storage took place which has improved sampling methods and approach. In February 2010, independent data management consultant, Graham Wearing (Perth, Australia) was contracted to make recommendations for improvement of the data management processes and systems for the Tujuh Bukit project. This included recommendations for improvements that take into account an expanding number of drill rigs and therefore increased data generation and storage requirements. In June 2010, Snowden Mining Industry Consultants (Perth, Australia) were contracted to undertake an independent review of the sampling procedures and data management at the Tujuh Bukit project. The scope of work included: Assess the security of the sample handling process from drill rig to delivery of samples to the Intertek laboratory in Jakarta. Assess the sampling procedures of drill core at site (including reference to the different styles of mineralization; oxide and sulfide; high sulfidation and porphyry; disseminated and stockwork). Assess the QAQC procedures in place (blanks, standards, replicates etc). Assess the data management procedures from the logging and sampling of drill core, through to receipt of assay results from the laboratory. Compilation of geological (and related) logs, to the organizing and archiving of drill hole database. Evaluate the photographic record and additional data that is generated such as drillers logs and water table information.
From February to September 2010 various recommendations have been implemented from these two reviews and in conjunction with subsequent internal reviews of procedures. The most significant changes resulting from the reviews have been: Outsourcing data management to an independent data system specialist company IoGlobal Pty Ltd (Perth, Australia). The cost of data management through IoGlobal is approximately 40% of the cost of a full time data administrator with significantly increased confidence in data integrity. With the outsourcing to IoGlobal comes o o o o o Improved data collection systems and processes; Vastly improved handling of QAQC data; Rationalization of all data collection to uniform forms (hardcopy and digital) with field names consistent with the database; Review and rationalization of dataflow procedures including increased validation; Rationalization of data export and processing, leading to more efficient processing and interpretation and more robust datasets.
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Implementation of drill core orientation. Transport of drill core from the drill site to the coreyard and from coreyard to storage yard by helicopter. Improved boxing of core eliminating core loss during transport.
12.2 Core Processing Protocol

The drill core is acquired in a triple-tube assembly which is utilized by all drill rig models on site (MD-195, MD-350, MD-400, MD-420, MD-430, MD-440 drill rigs). Prior to sampling of the drill core, trained local core technicians measure the core recovery at the drill site (per drill run) and mark up the core trays before placing the core trays in sealed wooden boxes for transport to the core processing facility located on the prospect. The drill-rig core technicians, trained by IMN, fill out a Field Geotech Form at the drill rig. This form records run depths and core recovery data. The Field Geotech forms for each drill rig are delivered daily to the core shed supervisor by the rig-based core technician who has been rostered at the drill rig on the night shift (shift III). The forms are held at the core shed until drilling, sampling and processing of the drill hole has been completed, and then are dispatched to the site office at Pulau Merah for filing together with other relevant drill hole data at the site office. Prior to transport of core from the drill rig to the core shed, the core trays are packed with plastic bag inserts to prevent core movement during transport. Prior to June 2010, core trays were manually carried from the drill site to the core shed. Core from some holes is carried up to a kilometer in distance. Since June 2010, core is transported by helicopter. When the core boxes arrive at the core shed, a core technician fills out a Tray List. This form records the Hole ID, the Tray number (1X), From, To, Core Size (PQ, HQ, NQ, BQ) and a column to indicate if the core tray has been photographed. Following entry of details into the Tray Form, the core is carefully washed in situ and then each core tray is digitally photographed on a wooden frame. Typically 2 boxes are photographed in a single photographic frame. A label across the core box records the hole number, date and the from and to intervals for each core box. Once the core box photos have been taken, the photo column in the Tray List is marked to indicate completion of core photography. The Tray List is held on site at the core shed until sampling of the drill hole has been completed, after which it is dispatched to the site office for data entry into IMNs digital database. Digital core photographs are transferred to a USB memory module and also dispatched to the site office in Pulau Merah for archiving. Each photograph is given a file name that reflects the hole ID and the from-to interval of the photographed core in each image (e.g. GTD-08-27-39.50-45.03.jpg). Following core photography, a Geotech Log is filled in by several trained core technicians (under guidance from PT IMN geologists) at the core sampling facility. The Geotech Logs are then sent down to the site office at Pulau Merah and are key-punched into hole-specific Excel spreadsheets and also into a composite Access database called GeotechLog by a data-entry clerk. Following completion of the Geotech Log, PT. IMN geologists conduct detailed geological logging of the drillcore. Following completion of logging, the geologists mark up the core for sampling in conjunction with the core technicians. During this process the core is visually assessed to ensure that the half of the core marked for sampling is representative of the contained mineralization. In August 2010, core shed procedures were modified to improve data integrity. New data entry templates were introduced to the core shed staff including Geotech, Magsus, SG and Sampling. New Geological Log templates were also introduced to geologists. All templates are in hardcopy and digital, are in one consistent format with
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field names which more accurately represent database fields. From August 2010, corefarm staff now enters Geotech, Magsus, SG and Sampling data directly into the digital templates. Geologists data enter geology information directly into a geological log template. These templates contain automatic lookup tables, data rules acting as first pass data validation which assists data entry, increases data integrity and improves data flow efficiency.
12.3 Specific Gravity Measurements

Prior to sampling, segments of core were measured for specific gravity (SG) at the prospect site core shed. The specific gravity data were typically acquired on 10cm-long segments of whole core prior to splitting. These drill core density measurements were made on site at Tumpangpitu by trained Indonesian geotechnicians employed by IMN. A total of 6592 SG determinations have been acquired to date from holes subject to the resource calculation. The SG measurements were taken at near regular intervals of every 5 meters down-hole, equating to roughly one SG determination per tray of drill core. Where the rock interval was fractured and friable, the spacing of SG measurements was locally extended beyond 5 meter intervals. All measurements of SG on drill core from Tumpangpitu were made by Intrepid-IMN using the waxed core method. Samples were first dried for 4 hours at 100C. SG data acquired by IMN were recorded on a Specific Gravity Form which recorded Hole ID, From (m), To (m), Interval (m; = From-To; typically 0.1m), Wt_Air (weight of unwaxed core in air), Wt_Waxed _Air (weight of waxed core in air), Wt_Waxed_Water (weight of waxed core in water), SG and Comments. The completed forms for each drill hole were dispatched to the site office where the data were keypunched into hole-specific Excel databases.
12.4 Sampling Intervals

The drillholes for Tumpangpitu comprise of two zones (Zone A & C) drilled on an approximate 80 x 80m grid and Zone B on a 60 x 60m grid. Additional shallow oxide holes at Tumpangpitu occur on no fixed spacing. A total of 152 holes have been drilled, totalling 46780.4 meters which comprise of 23,775 samples. Drill core samples range from 0.03m to 4m in length but are predominantly 2m samples. The core marked for splitting was cut lengthways down the middle (irrespective of size; PQ, HQ, NQ) using a diamond core saw, and half of the core was placed into a calico bag with respective sample number tag placed inside with the core and the sample number written on the outside of the calico bag. The other half of the cut core was left in the core box (also with a sample number tag stapled to the side of the box) as a permanent physical record of the drill core.
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12.5 Core Recovery Data

Core recoveries during the diamond drilling program at Tumpangpitu are shown below. At the time of the resource calculation 11 of the 152 drill holes did not have geotech (and recovery) measurements available.
Table 9 : Core Recovery Data Recovery % 0-10 10-20 20-30 30-40 40-50 50-60 60-70 70-80 80-90 90-100 Total No. of Measurements 1,369 4 8 19 39 39 1,854 1,303 1,293 28,596 34,524 % of Measurements 4.0% 0.0% 0.0% 0.1% 0.1% 0.1% 5.4% 3.8% 3.7% 82.8% 100.0%
12.6 Comparison of Sludge Samples versus Core Samples

Comparison of assays from core versus sludge assays was undertake to check for any bias that might be induced in the assays due to circulation of drilling fluids through porous, leached, friable and oxidized rock that might preferentially flush components of the core that have a higher or lower average grade. In an attempt to gain some measure of this, samples of the sludges were collected in a sump that was designed to capture drill cuttings from the water return. Samples were collected at 3 meter intervals, coinciding with the drilling of each drill rod. This procedure is only effective as a measure of grade in the sludge material if constant water return is achieved during the drilling of the mineralized zone a difficult task given the highly porous and fractured nature of the rock. Hence plots of sludge assays versus core assays for the same intervals can be expected to have significant variance. This scatter is also partly created by the unequal sampling intervals (3m for sludges and 1-2m for cores). Due to the unequal sampling, 6m composites where created and plotted Au in the figure below. The plot is log-log with a linear 1:1 trendline (red dotted) and a regression of the data (as solid black trendline).
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Figure 9 : Plot of Sludge versus Core Assays
These plots provide some indication as to whether grade is being over-estimated or underestimated in the core. Because the weight of sludge samples is small relative to the core samples and because the grades of both are typically low, the effective gain or loss of grade between core and sludge is not likely to be materially significant. The plot on the figure above show a bias to higher Au grades in sludge samples at lower concentrations. The black regression line deviates from the red 1:1 trendline <0.1ppm Au. This suggests that the insitu drill core may be slightly higher grade than is indicated by assaying in the laboratory once the core has been drilled and sampled. However, bias to higher Au grades in sludge samples is occurring below cutoff levels impacting on the resource, so while interesting and should be further investigated, it is not materially significant with respect to the resource calculation. At higher concentrations there is a slight enrichment in Au in the residual core but the effect is minimal (i.e. 1ppm Au 0.15ppm, 1% Cu 0.15%).
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13.0
SAMPLE PREPARATION AND SECURITY
13.1 Description of Sample Preparation

During the sampling procedure, the diamond drill core is initially cut using an electric-powered, water-cooled diamond-bladed core cutter located at the core storage facility at the Tumpangpitu prospect. All core was halved for assay. During the cutting of core, intervals of significantly broken core were initially wrapped in plastic and sealed with tape prior to cutting on the core saw to minimize breakage and to prevent parts of the sample being washed away during core cutting. Intervals of core which were extremely clay-rich and broken or friable were sampled by a spatula and spoon. Split core was sampled into calico sample bags, the sample number was written with permanent marker on the outside of the sample bag and the sample number ticket-stubs were inserted into the calico bags used for sampling. The sample numbers were recorded on the Sample Number Form for core (or sludges). The bagged split-core samples were subsequently packed into rice-sacks and manually hauled (or transported by helicopter [after June 2010]) to the Pulau Merah site office at the end of each day. The beginning and end of each 2-meter sample interval in the core trays are recorded by stapling one of the three ticket stubs against the intervening partitions in the core tray, and were labelled according to sample number and depth.
13.2 Procedures Employed to Ensure Sample Integrity

The following are some of the procedures employed by Intrepid-IMN to ensure sample integrity during the diamond drilling program: Drill-rig core geotechnicians were assigned to each coring rig, on every shift, to record core recoveries and to ensure that core was appropriately handled and packed into the core boxers after each core run, and to ensure that the core boxes were appropriately labeled. They oversaw the retrieval of drill core from the core tubes, placement of core in core boxes, security strapping of the core boxes and they organized manual transport of the core to the core yard. Diamond core boxes were packed with plastic inserts during manual transport from the drill rig to the core yard to minimize breakage of the core prior to logging and sampling. All diamond core trays were photographed as routine documentation of the core samples. In the most recent drill holes, the core is photographed both in the dry state and after it has been wetted. Diamond drill core that was broken or friable was cut only when the core had been wrapped tightly in plastic and tape to ensure fragments were not lost during core splitting. Drill cores were stored in sturdy black polyurethane core boxes marked with permanent markers. IMN sample number stubs were used to label each drill sample. The core yard on the prospect site has 24 hour security, with two local employees assigned to secure the core yard from 5pm to 7am each day. Core samples that were not on the core racks were stored in a lockable building in the core storage facility. Internal sample dispatch log books were used to track samples that were sent from the core yard on the prospect site to the Pulau Merah site office. Prior to sending samples to the Intertek Laboratory, all sample bags and number strings are checked for continuity and sample bag integrity.
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The use of new digital data entry templates from August 2010 utilized data rules during data entry preventing simple keypunching errors (i.e. To must be greater than From). Use of automatic lookup tables in data entry also prevent simple keypunching errors such as spelling mistakes and incorrect format of codes.
13.3 Sample Security and Transport

Split core samples that are transported from the prospect, manually to June 2010 or by helicopter after June 2010, were received at the sample storage and dispatch area at the site office in Pulau Merah and were signed into a log-book by IMN employees to ensure complete transfer. The core sample receiving and dispatch area at Pulau Merah was kept under lock during evening hours and there were always IMN staff present during daylight hours. When an entire set of samples from a single drill hole had accumulated in the storage area and the drilling contractors supply truck was due to backload samples to Jakarta, the samples in storage were sorted and checked for completeness. The total weight of the re-packed sacks, the sack number, and the sample numbers of samples within each sack were recorded in a sample dispatch log. Certified reference standards and analytical blanks were inserted where appropriate. Samples, either drill core samples or sludge samples, were sent via truck as whole drill-hole batches to Jakarta. A PT IMN employee accompanied the samples to the laboratory.
13.4 Analytical Laboratories

The principal laboratory was: PT Intertek Utama Services (Jakarta). The Intertek laboratory generated all of the primary assay data pertinent to the drill programs that are the subject of this report. PT Intertek Utama Services is accredited for chemical testing under ISO 17025:2005. Their Accreditation Number is LP-130-IDN (renewed on 30 April 2007) and is equivalent to the NATA certification in Australia. ALS Chemex was used as an independent check on the Intertek laboratory for the diamond drilling program. Batches of check assays have been sent to ALS Chemex in Perth in May 2008, September 2008, August 2009, February 2010 and August 2010.
13.5 Analytical Methods

Samples lots received at the Intertek laboratory are checked by laboratory staff for completeness against the accompanying Sample Dispatch Sheet. Samples are initially dried (105C) for as long as it takes to achieve constant weight, and then jaw crushed to minus 5mm. The samples are then riffle split with part stored as a coarse reject. A split of 1-1.5kg was pulverized with 95% passing 75um. A 250g grab sample is taken from the pulverized pulp and used for the analysis while the remainder is stored as spare pulp. The table below summarizes the elements that were assayed for each sample, the method of analysis and the detection limit for each method.
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Table 10 : Laboratory Methods used for Tumpangpitu Drill Core Samples
Method Code FA30 GA02 GA30 XR01 XR02 ST01
Method Description Fire Assay (30g) with Atomic Adsorption Spectroscopy (AAS) Finish Double Acid: HCl/HClO4 with Atomic Adsorption Spectroscopy (AAS) Finish Triple Acid: HCl/HNO3/HClO4 with Atomic Absorption (AAS) Finish X-Ray Fluorescence (XRF) (10g Pressed Pellet) X-Ray Fluorescence (XRF) (10g Pressed Pellet) Total Sulfur by Leco
The fire assay schemes involve fusing the sample with a litharge based flux and collecting the precious metals in a lead button. After cupellation the resulting prill is dissolved in aqua regia and the gold is determined by AAS for routine samples. The assays of Ag as well as the base metals Cu, Pb and Zn were digested in a hydrochloric/perchloric acid digestion (HCL/HCLO4) followed by an atomic absorption spectroscopy (AAS). This is generally used as a first pass geochemical analysis of the samples. Silicates are only slightly digested during this procedure. Triple acid digestion (HCl/HNO3/HClO4) is used for ore-grade digestions and is followed by an accurate volumetric finish to enable high concentrations of elements to be analyzed. Limitations may still exist with silicates. Analyses of As, Sb, Mo and Ba were conducted by X-ray fluorescence on 10g pressed pellets. The laboratory code for this procedure is XR01. The recommended ranges for the XR01 method are As, 1-10,000 ppm; Sb, 1-10,000 ppm; Mo, 1-10,000 ppm and Ba, 10-10,000 ppm. Detection limits are 1 ppm for As, Sb and Mo and 10 ppm for Ba. Sulfur (S) was analyzed using a Leco analyzer with detection limits of 0.01%.
13.6 QA/QC Procedures Employed

A total of 26,430 drill core intervals and 6,505 sludge sample intervals were assayed by Intertek from the Tumpangpitu drilling conducted by Intrepid-IMN. A good QA-QC program was first implemented for the Tujuh Bukit resource during 2008. The principal QA-QC procedures undertaken by Intrepid-IMN and the external laboratories during analysis of these samples comprised: 13.6.1 Standards Standards (or certified reference materials [CRMs]) assess ACCURACY. Standards have predetermined measurements for selected chemical species and assay methods commercially purchased (OREAS). Standards are inserted at a rate of ~1% of total samples. The standards were purchased as pulps that were pre-sealed in air-tight foil packets labeled with the standard name/number. Prior to insertion of the standards into the IMN-Intrepid sample stream, the label of the CRM was erased from the foil packet using turpentine, and the CRM was then assigned a sample number consistent with the IMN sample string. The assigned sample number was also written on the calico bag in which the foil standard was inserted. These calico bags, as well as the calico bags containing the submitted blanks, were packed with the core samples into rice sacks for transport to the Intertek laboratory. A range of standards was used in order to reflect the range of mineralization types and grades associated with the Tumpangpitu prospect.
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Eight different standards have been used.
13.6.2 Blanks Blanks assess CONTAMINATION. Blanks have predetermined values of zero - commercially purchased (OREAS). Blanks are inserted at a rate of ~1% of total samples. Blanks are generally inserted for every 60 core samples and after a change in core diameter.
13.6.3 Check Assays/Umpires Check assays/Umpires assess ACCURACY. Check assays are pulps (same sample number) resubmitted to a second or third lab. Check Assays are collected at a rate of ~5% of total samples.
13.6.4 Field Duplicates Field Duplicates assess FIELD REPEATABILITY. Field Duplicates are 2 separate quarter core samples as different sample numbers for same analysis at same lab. Field Duplicates are collected at a rate of ~1% of total samples.
13.6.5 Laboratory Replicates Laboratory Replicates assess LAB REPEATABILITY. Laboratory Replicates are a second to fifth split of pulp for same analysis, same lab. Laboratory Replicates are collected at a rate of ~8% of total samples.
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14.0 DATA VERIFICATION

This section is a summary of the same NI 43-101 item from the Report on Mineral Resources by Phillip L. Hellman, BSC (Hons 1), Dip Ed, PhD, MGSA, MAEG, FAIG, dated January 27 2011, which is filed on SEDAR. Qualified person (P.Hellman) visited the Property on three occasions, for three days from 20 to 22 November 2007, and again for three days in October 2008 and three days in October, 2010. Results for re-sampling exercise were reported in Table 10 of the NI 43-101 report (Hellman, 2008). A review of QA-QC results for the Tumpangpitu diamond drilling program was made by Mr. Damien Lulofs, a geochemist from Lulofs Management Services. Relevant excerpts of the executive summary of Mr. Lulofs report are inserted below. A review of QA-QC data for the Tujuh Bukit project Global Oxide Resource was conducted during January 2011. Previous reviews have been completed over the oxide Au resources of Zones A, B & C in May 2008, Dec 2008 & Dec 2009. Samples assessed during this review include: Standards [assessing ACCURACY] - predetermined measurements for selected chemical species and assay methods - commercially purchased (OREAS). Blanks [assessing CONTAMINATION] - predetermined values of zero -commercially purchased (OREAS). Check assays/Umpires [assessing ACCURACY] - pulps (same sample number) resubmitted to a second or third lab. Field Duplicates [assessing FIELD REPEATABILITY] - 2 separate quarter core samples as different sample numbers for same analysis at same lab. Laboratory Replicates [assessing LAB REPEATABILITY] - second to fifth split of pulp for same analysis, same lab.
The internal standards [ACCURACY] for Au and Cu all fall well within accepted thresholds of 3 x standard deviation of expected values. All standards are within 6% mean bias of expected values. The Table below presents the performance statistics for the internal standards. This is supportive of appropriate analysis methodology and machine calibration.
Table 11 : Performance Statistics for Internal Standards for Au Lab: Intertek Method: FA30
Standard
Ele N 5
Exp Val 0.8410
Limit +/0.096
Mean Res 0.8700
Mean Bias 3.4483
Median Res 0.8700
Median Failed Failed Bias % 3.45 0 1 0 0 0.00% 3.13% 0.00% 0.00%
OREAS 50Pb Au OREAS 52Pb Au OREAS 53Pb Au OREAS 6Pc Au
32 307.0000 51.000 38 0.6230 6 1.5200 0.063 0.195
324.6875 5.7614 0.6376 1.5450 2.3486 1.6447
320.0000 4.23 0.6400 1.5500 2.73 1.97
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All internal blanks [CONTAMINATION] for Au fall well within accepted limits of 10 x detection limit suggesting good laboratory procedures without contamination. The performance statistics for the internal blanks are presented below.
Table 12 : Internal Blanks
Element Au
Number of Tests 16
Count Failed 0
Percent Fail .00%
Field duplicates [FIELD REPEATABILITY] commonly show field sampling often represent the biggest source of variance. In this limited dataset, it is 15-20%. There is little concern over current sample weights/lengths of half core but site duplicates should continue to be collected. Field duplicate statistics are presented below.
Table 13 : Field Duplicates Core and Sludge Samples
Chk Description 1/2 Core - Field Duplicate Sludge Field Duplicate
Method Ele FA30 FA30 Au Au Ag
Total N 145 17 263
N 60 10 34
RMS CV%
Robust CV
Limit 45.00 % 45.00 % 45.00%
Failed 1 0 3
% Failed 1.67% 0.00% 8.82%
19.4959 18.1186 13.6883 16.8215 23.9879 13.1558
1/2 Core - Field Duplicate GA02
The laboratory replicates [LAB REPEATABILITY] for Au and Cu all fall within accepted limits. Au is more variable (CV% 5 10%) and while not failing QC, is worth monitoring. Majority of the variance is occurring <0.1g/t below the zone of interest, getting closer to detection limit therefore is of less concern. Laboratory repeatability statistics are presented below.
Table 14 : Laboratory Repeatability Summary Report (Lab Intertek)
Chk Description Method Ele Total N Pulp Duplicate Second Split Pulp Duplicate Second Split FA30 FA30 GA30 GA30 Au Au Ag Ag 1298 24 12
N 536 24 12
RMS CV% Robust CV 6.8989 5.0842 2.7689 2.3061 3.4372 3.1412 1.5658 1.2453
Limit 30.00% 30.00% 30.00% 30.00%
Failed %Failed 11 1 0 0 1.00% 0.19% 0.00% 0.00%
2051 1097
Check Assays/Umpires [ACCURACY] - No bias exists between Original and Umpire Au assays although moderate variance (CV% 7%) is evident. 33% of assays exceed a bias limit of 10% and fail QC. This requires ongoing monitoring. It is worth noting that a fail threshold of 10% for Au is quite low. The QA-QC review of Au resource over the Tujuh Bukit project (Jan 11) demonstrates good sample preparation, good reproducibility of assays between batches and laboratories, no/low contamination and precise assays values leading to a high quality assay database for resource calculations.
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15.0 ADJACENT PROPERTIES

There are no mineral exploration tenements or mining properties that lie adjacent to this project at the time of the writing of this report.
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16.0 METALLURGY
16.1 Summary
Metallurgical test work has been completed on what appears to be spatially representative samples of both oxide (types A, B, and C) and transition ores. There are two bodies of work, namely a preliminary program conducted by Metcon from 2008 to 2010 with a focus on grinding, leaching, CCD, and Merrill Crowe testing, and more recently a program by KCA during 2010 dedicated to heap leach test work which included bottle roll and column tests, crushing size determination, agglomeration requirements, and compacted permeability tests. 16.1.1 Metcon Grinding Program The earlier Metcon work was conducted on a sample set of 12 samples, with two oxide samples and two transition samples from each respective ore zone (A, B, C). A global summary of this work is shown below.
Table 15 : Summary Results of Metcon Test Program
Item Au head Ag head Hg head As head Cu (CN soluble) head Ball Mill Work Index (BMWI) Abrasion Index (AI) CN consumption Lime consumption Au recovery P80 75 micron, 24 hrs Ag recovery P80 75 micron, 24 hrs
Unit g/t g/t ppm ppm ppm kWh/t kg/t kg/t % %
Oxide 0.57- 1.28 20-37 2.6-8.2 1265-3390 0-200 11.9-16.3 0.262-0.663 0.53-0.74 0.52-0.78
Transition 0.46 - 1.27 25-38 1.6-3.3 917-2820 400-3000 13.5-17.1 0.276-1.120 0.84-3.11 0.77-0.85
Remarks Grade representative Grade representative Oxide higher Oxide higher Oxide much lower Oxide lower Some transition extremely high Some transition very high Oxide lower Wide range Au recovery in transition Wide range Ag recovery, especially transition
89.2 (87 to 96) 74.5 (46 to 89) 80.0 (69 to 89) 66.6 (15 to 90)
Some other conclusions from the Metcon test results were: In the transition ore, cyanide consumption is directly proportional to the amount of cyanide soluble copper. Grind versus recovery: both gold and silver are relatively insensitive to grind size although recovery is slightly higher at finer grinds. Zone C oxide and transition ore: relatively little grade versus recovery relation (recovery was the same at both high and low grade ore). Same assumption may be valid for all ore types. Oxide thickener tests: achieved an underflow density equal to 62.2% w/w solids at a solids loading equal to 1.6 t/m2h and a flocculent dosage equal to 30 g/t.
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Zinc cementation: 2 g/L in solutions yields 99.6% to 99.8% gold and silver precipitated from solution. Although there are some deleterious other metals present (namely arsenic), results are acceptable to use zinc cementation.
16.1.2 KCA Heap Leach Program Metallurgical test work including head analyses, coarse, fine, and milled bottle roll leach test work, agglomeration and percolation test work, compacted permeability test work, and column leach test work was performed by KCA. Spatially representative core samples were delivered for this analysis and are summarized below.
Table 16 : Tujuh Bukit Project Composite Description and Weights
KCA Sample No. 45139 45140 45141 45142
Description Zone A, Oxide Zone A, Transitional Zone B, Oxide Zone C, Oxide
Weight, Kg 375.03 363.09 361.80 366.65
A summary of the head grades, bottle roll test recoveries, and column tests from the KCA metallurgical test work is presented in the table below.
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Table 17 : Summary of KCA Test Work
Test Type Head Analysis Comparison Composite - FA (g/t Au) Screen Analysis FA (g/t Au) Average All Tests FA (g/t Au) Composite FA (g/t) Ag Screen Analysis FA (g/t Ag) Average All Tests FA (g/t Ag) Cu CN Soluble (mg/kg) Total Mercury (mg/kg) Bottle Roll Tests p80%-0.075 mm Au recovery -9.5mm crush Au Recovery -25mm crush Au Recovery p80% -0.075 mm Ag Recovery -9.5mm crush Ag Recovery -25mm crush Ag Recovery Column Test - 82 day -9.5mm crush Au Recovery -25mm crush Au Recovery -9.5mm crush Ag Recovery -25mm crush Ag Recovery -9.5mm crush Cyanide Consumption (kg/MT) -25mm crush Cyanide Consumption (kg/MT)
A 0.404 0.419 0.370 9.3 11.0 10.5 7.8 <0.05 A 96% 84% 76% 84% 27% 16% A 90% 89% 33% 26% 1.16 1.27
Oxide B C 0.544 0.530 0.543 0.463 0.486 0.433 14.9 16.5 14.3 16.3 14.2 16.5 16.6 9.8 <0.05 <0.05 Oxide B C 94% 95% 81% 78% 78% 73% 66% 85% 22% 26% 14% 17% Oxide B C 86% 87% 89% 88% 29% 26% 21% 19% 1.29 1.11 1.11 1.11
Avg 0.493 0.475 0.430 13.6 13.9 13.7 11.4 <0.05 Avg 95% 81% 76% 78% 25% 16% Avg 88% 89% 29% 22% 1.19 1.16
Transition A 0.485 0.494 0.431 39.0 40.6 40.3 7.4 <0.05 Transition A 80% 64% 58% 88% 39% 21% Transition A 80% 75% 64% 36% 2.23 1.74
KCA determined the field recoveries and cyanide consumption for all four ore types. Based on field experience, KCA determined these values by reducing the column test recoveries by 3% for gold and 5% for silver for the field recoveries and by taking 33% of the column cyanide consumption for the expected field cyanide consumption. The table below shows the column test recoveries and projected field recoveries, as well as the cyanide consumptions, for the ores as determined by KCA.
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Table 18 : Summary of KCA Column and Projected Field Recoveries

-25 mm Crush Size NaCN Projected Field Consumption Recovery * kg/t Au Ag 1.27 86% 21% 1.11 86% 16% 1.11 85% 14% 1.16 1.74 86% 72% 17% 31% -9.5 mm Crush Size NaCN Projected Field Consumption Recovery * kg/t Au Ag 1.16 87% 28% 1.29 83% 24% 1.11 84% 21% 1.19 2.23 85% 77% 28% 59%
Ore zones
Oxide Zone A Oxide Zone B Oxide Zone C Oxide Zone Average Transition Zone A
Column Test Recoveries Au Ag 89% 26% 89% 21% 88% 19% 89% 75% 22% 36%
Projected Field NaCN kg/t 0.42 0.37 0.37 0.38 0.57
Column Test Recoveries Au Ag 90% 33% 86% 29% 87% 26% 88% 80% 29% 64%
Projected Field NaCN kg/t 0.38 0.43 0.37 0.39 0.74
* Field recovery for gold is discounted by 3%; Field recovery for silver is discounted by 5% ** Cyanide consumption is discounted by 33% (column cyanide consumption x 0.33)
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In addition to the laboratory tests, KCA also performed a subjective photographic analysis of several thousand meters of drill core samples for the Tujuh Bukit project (all core to date). In the analysis, photographs of the boxed core samples were categorized into one of four categories: clay, hard rock, medium broken rock, and very broken rock. The samples were also categorized as either oxides or nonoxides as evidenced by obvious reddish iron oxidation. The table below shows a summary of these results.
Table 19 : KCA Core Photograph Category Summary Classification Clay Hard Rock Medium Broken Rock Very Broken Rock Oxide Total Count 1801 7125 6457 2958 4707 18341 Percent 9.8% 38.9% 35.2% 16.1% 25.6% 100.0%
The results showed that of the pictures viewed, 9.8% were classified as clays, 38.9% were classified as hard rock, 35.2% were classified as medium broken rock, 16.1% were classified as very broken rock, and 25.6% were classified as oxides. It is noted that the ores classified as oxides are just those that are obviously oxides from a photograph and should not be interpreted in any other way. Some of the conclusions from the KCA test work were: Agglomeration with cement for solution flow control was indicated for only the Zone A oxide material when crushed to minus 9.5 mm, although flow was reduced for all minus 9.5 mm crushed composites tested without cement agglomeration. The solution from all of the composites tested without cement additions had a low pH, indicated the need for protective alkalinity. Based on KCA experience, cement addition of 4.5 kg/t has been assumed to be applied to all ore in this study for flow and pH control, but additional studies should be conducted to determine if lime could be substituted for a portion of the cement. The samples used for the KCA test work were not grade representative of the mineable resource as currently defined. The samples are in the 0.4 g/t to 0.5 g/t gold range compared to 0.95 g/t LOM grade. Metcon noted very little grade versus recovery relation in the grind test work and this may not be important for Tujuh Bukit. It is preferable however to conduct metallurgical test work with samples close to the grade of the overall deposit and effort should be taken to ensure this requirement is met on all future recovery test work. Although some recovery improvements were observed at a finer crush size of 9.5 mm, the gold recovery improvement was insignificant, but the silver recovery improvement was more pronounced, particularly in the Zone A transition ore. The transition ore is a relatively small component (9%) of the overall ore body. As such, finer crushing is not required as the additional silver revenue does not justify the additional operating cost. Based upon the column tests to date, an assumed crush size of 25 mm should be sufficient and if a slightly finer product can be easily and practically achieved through normal means a small silver bonus will be achieved. Multi-element analyses indicated the material was relatively clean and did not contain any elements detrimental to cyanide leaching. Soluble copper in the oxide samples tested does not appear to be high enough to cause any problems in the precious metals extraction circuits.
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Subjective photographic analysis shows that nearly 10% of the ore requires cement agglomeration, and an additional 16% more with a high probability of requiring cement agglomeration. This analysis is in general agreement with KCA laboratory test work.
16.2 Metcon Metallurgical Program

Metallurgical test work was performed by Metcon in 2008, 2009 and 2010. The scope of the test work performed included grinding, leaching CCD and thickening on oxide and transition ores.
16.2.1 Samples In the Metcon test work, 12 composite samples representing the four types of ore found in the exploration zones of the Tujuh Bukit project were tested. The table below presents the sample composites received by Metcon. The key results of this test work are presented in the following section.
Table 20 : Metcon Composite Samples Composite SIOXA SITRA CYOXA CYTRA SIOXB SITRB CYOXB CYTRB SIOXC SITRC CYOXC CYTRC Lithology Vuggy silica Vuggy silica Clay/silica Clay/silica Vuggy silica Vuggy silica Clay/silica Clay/silica Vuggy silica Vuggy silica Clay/silica Clay/silica Oxidation Zone Oxide Transition Oxide Transition Oxide Transition Oxide Transition Oxide Transition Oxide Transition Exploration Zone A A A A B B B B C C C C
In the study the oxide zone is defined as the zone lying above the base of complete oxidation, and the transition zone as the zone lying below the base of complete oxidation but above the completely fresh sulphide zone. 16.2.2 Head Assays A head assay was performed on each sample and are summarized in the table below.
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Table 21 : Head Assays

Au Composite SIOXA SITRA CYOXA CYTRA SIOXB SITRB CYOXB CYTRB SIOXC SITRC CYOXC CYTRC g/t 0.87 0.91 0.88 0.86 1.17 1.19 1.28 1.27 0.57 0.53 0.68 0.46 g/t 30 34 33 38 22 28 20 26 37 25 37 30 Ag Total Cu ppm 340 430 340 900 580 870 540 3540 510 1400 310 2610 CNsol Organic Cu C ppm % <100 0.03 100 0.02 <100 0.02 400 0.02 <100 0.02 500 0.02 <100 0.03 3000 0.03 200 <0.02 900 0.03 <100 <0.02 1900 0.02 Total S % 0.92 1.07 1.42 2.15 1.49 2.20 2.06 7.08 1.14 6.22 0.75 6.16 Sulphide S % 0.26 0.18 0.10 0.83 0.05 0.38 0.03 4.93 0.12 5.72 0.06 5.54 Hg ppm 5.69 1.96 2.69 2.43 6.23 1.58 8.17 2.38 2.21 3.12 3.83 3.26 As ppm 1265 2820 2360 2110 2760 1095 2870 1405 3390 1050 1950 917
Two important notes from the head assays are that some of the samples contained high mercury concentrations, as well some areas of high cyanide soluble copper. Because of the high mercury levels in some of the samples the use of a mercury retort or other mercury removal method may need to be considered. It is noted that the cyanide consumption was directly proportional to the levels of cyanide soluble copper. A comparison of expected, assayed, and calculated head grades are shown in the table below.
Table 22 : Comparison of Expected, Assayed, & Average Calculated Head Grades

Composite SIOXA SITRA CYOXA CYTRA SIOXB SITRB CYOXB CYTRB SIOXC SITRC CYOXC CYTRC Gold (g/t) Silver (g/t) Expected Assayed Calculated Expected Assayed Calculated 0.9 0.87 0.86 35.2 30 30.2 0.9 0.91 0.92 35 34 31.1 0.91 0.88 0.89 35.3 33 30.5 0.9 0.86 0.87 35.1 38 34.8 1.3 1.17 1.07 25.1 22 20.6 1.3 1.19 1.24 25 28 22.9 1.32 1.28 1.18 24.8 20 18.9 1.3 1.27 1.24 25.8 26 23.1 0.69 0.57 0.62 37 37 32.7 0.72 0.53 0.53 36.5 25 23.5 0.7 0.68 0.66 35.7 37 34.3 0.7 0.46 0.5 32.7 30 28
Agreement with expected, assayed and calculated head assays is fair.
16.2.3 Cyanidation Tests A baseline cyanidation test was performed under non-CIL conditions and is summarized below.
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Table 23 : Metcon Baseline Cyanidation Test Summary

Composite SIOXA SITRA CYOXA CYTRA SIOXB SITRB CYOXB CYTRB SIOXC SITRC CYOXC CYTRC Head assays % Extraction Cyanide Au (g/t) Ag (g/t) CNsol Cu Gold Silver (kg/t) 0.82 30.5 <100 90.2 82 0.57 0.92 30.8 100 88.6 81.3 0.79 0.86 29.9 <100 87.2 79.1 0.6 0.87 33.9 400 87.4 69 0.79 1.07 20.7 <100 87.4 71 0.56 1.22 24.3 500 85.2 72.2 1.22 1.19 19.7 <100 84.2 67 0.57 1.28 22.4 3000 60.5 15.3 4.21 0.56 32.2 200 89.2 82.1 0.73 0.55 23 900 51.1 50 2.04 0.66 33.4 <100 89.4 85 0.55 0.48 25.3 1900 51.4 30.8 3.11
The performed test work revealed several potential concerns due to cyanide soluble copper. These concerns include: A strong correlation between cyanide soluble copper and the consumption of cyanide. Samples with high cyanide soluble copper also had lower extractions for both gold and silver. High levels of copper present in Merrill Crowe process feed solutions could have severe adverse effects, including the prevention of zinc cementation occurring.
Intrepid Mines elected not to include transition Zones B and C in the scoping study due to the high cyanide soluble copper present. Performing these tests at different grind sizes showed only small improvements in recovery at finer grind sizes and slightly increased reagent consumption. Residue grades at higher cyanide concentrations were studied. The table below summarizes these results.
Table 24 : Effect of Higher Cyanide Concentration on Residue Grades

Composite SIOXA SITRA CYOXA CYTRA* SIOXB* CYOXB* SIOXC CYOXC Average Residue grades g/t Au Residue grades g/t Ag 0.100% CN 0.125% CN 0.100% CN 0.125% CN 0.08 0.065 5.5 6 0.105 0.1 5.8 4.5 0.11 0.1 6.3 7.5 0.11 0.132 10.5 6.5 0.135 0.128 6 3.5 0.188 0.192 6.5 5.5 0.06 0.068 5.8 5.5 0.07 0.065 5 5 0.107 0.106 6.4 5.5
Based on average values from these tests, there is no change in gold residue grades, but a definite drop in silver residue grade occurs at higher cyanide concentrations. Increases in cyanide concentration also resulted in higher cyanide consumptions and slightly decreased lime consumption due to the presence of more alkaline cyanide.
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16.2.4 Comminution Tests Comminution tests performed are summarized below. The results showed that the abrasion indices in the three transition zones were extremely high with the other zones being moderately high. From the high abrasion indices it is expected that liner and grinding media consumption will be high in a future mill.
Table 25 : Metcon Comminution Test Summary
Composite SIOXA SITRA CYOXA CYTRA SIOXB SITRB CYOXB CYTRB SIOXC SITRC CYOXC CYTRC Ball Mill Work Abrasion Index Index (kWh/t) 13.9 0.6632 16 0.9671 11.9 0.2616 13.5 0.4759 13.6 0.558 17.1 1.1226 14.5 0.3333 15.9 0.2762 16.3 0.4241 16.4 0.8526 16.3 0.3971 15.7 0.3957
No Crushing Work Index was performed. 16.2.5 Leach Solutions The summary of the final leach solutions analysis from the Metcon lab work is shown in the table below.
Table 26 : Metcon Analyses of Final Leach Solutions
Composite Test No. Assays in mg/l Total sulphur Sulphide sulphur Copper Copper cyanide* Antimony Arsenic Nickel Cobalt
CYOXA CYTRA SIOXA SITRA CYOXB SIOXB CYOXC SIOXC TA22 TA23 TA24 TA25 TB24 TB25 TC21 TC22 48 <0.1 10.45 19 0.3 0.92 0.68 0.08 86 <0.1 66.7 121 0.23 2.04 0.74 0.07 77.1 <0.1 8.76 16 0.04 0.43 0.91 0.07 74.8 <0.1 27.9 51 0.06 13.3 0.7 0.08 69 <0.1 13.2 24 <0.04 1.4 1.03 0.13 38.5 <0.1 6.99 13 0.05 3.22 0.51 0.08 30 <0.1 13.7 25 0.04 3.95 0.98 0.33 57.5 <0.1 44.6 81 0.12 23.9 0.8 0.28
* The copper cyanide assays are calculated from the copper assays assuming copper cyanide occurs as Cu(CN)2-1
These results show the presence of some metals that may cause some issues in the zinc cementation process. The most prominent of these metals is arsenic. Zinc cementation test work was completed by Ammtec, Perth on the Metcon final leach solutions. This test work showed that zinc cementation at 2 g/L solution resulted in 99.6% to 99.8% gold and silver precipitation. Some metals present, namely arsenic, in the leach solutions are known to be potentially detrimental to the zinc cementation process. Although arsenic is present, the results obtained in the test work were acceptable.
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16.3 KCA Metallurgical Test Program

Heap leach metallurgical test work for the Tujuh Bukit project was performed by KCA in 2010. The scope of this work included head analyses, coarse, fine and milled bottle roll leach, agglomeration and percolation, compacted permeability, and column leach test work.
16.3.1 Samples KCA received 100 boxes of split PQ, HQ, and NQ core samples. The core samples were identified as four different ore zones. The core intervals specific to an ore zone were then combined to generate four composites to be used in the metallurgical test work. 16.3.2 Head Analyses Head analyses were performed on the four composite samples. The table below shows the results for the head analyses for gold and silver, and the head screen analyses for gold and silver.
Table 27 : Head Analyses Gold and Silver
KCA Sample No. 45139 45140 45141 45142
Description Zone A, Oxide Zone A, Transitional Zone B, Oxide Zone C, Oxide
Head Assay, g/t Au 0.404 0.485 0.544 0.530

4-Acid Digestion Avg. Head Assay, g/t Ag 10.0 39.3 15.3 16.8 Overall Average Head Assay*, g/t Ag 9.3 39.0 14.9 16.5
KCA Sample No. 45139 45140 45141 45142
Fire Assay Avg. Head Description Assay, Zone A, Oxide 8.5 Zone A, Transitional 38.7 Zone B, Oxide 14.4 16.1 Zone C, Oxide
*Includes an average of both standard fire and wet chemistry (4 Note: T he detection limit for silver by fire assay gravimetric finish is 1.7 gms/t Note: T he detection limit for silver by 4-acid digestion with FAAS finish is 0.2 gms/t
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Table 28 : Head Screen Analyses Gold and Silver
KCA Sample No. Description 45139 A Zone A, Oxide 45139 B Zone A, Oxide 45140 A Zone A, Transitional 45140 B Zone A, Transitional 45141 A Zone B, Oxide 45141 B Zone B, Oxide 45142 A Zone C, Oxide 45142 B Zone C, Oxide
Avg. Head Assay, g/t Au 0.419 0.418 0.506 0.482 0.560 0.527 0.456 0.469
Avg. Head Assay, g/t Ag 11.2 10.7 40.2 41.1 12.7 16.0 16.5 16.2
Multi-element analyses indicated the Tujuh Bukit material was relatively clean and did not contain any elements detrimental to cyanide leaching.
16.3.3 Bottle Roll Leach Tests The tables below show the summaries for the bottle roll leach tests for gold and silver, respectively.
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Table 29 : Summary of Bottle Roll Leach Tests Gold

Description Zone A, Oxide Zone A, Oxide Zone A, Oxide Zone A, Oxide Zone A, Oxide Zone A, Oxide Zone A, Oxide Zone A, Oxide Zone A, Transitional Zone A, Transitional Zone A, Transitional Zone A, Transitional Zone A, Transitional Zone A, Transitional Zone A, Transitional Zone A, Transitional Zone B, Oxide Zone B, Oxide Zone B, Oxide Zone B, Oxide Zone B, Oxide Zone B, Oxide Zone B, Oxide Zone B, Oxide Zone C, Oxide Zone C, Oxide Zone C, Oxide Zone C, Oxide Zone C, Oxide Zone C, Oxide Zone C, Oxide Zone C, Oxide Est. p80 Size, mm --0.212 0.212 0.150 0.150 0.106 0.075 --0.212 0.212 0.150 0.150 0.106 0.075 --0.212 0.212 0.150 0.150 0.106 0.075 --0.212 0.212 0.150 0.150 0.106 0.075 p100 Size, mm 25.0 9.5 ------25.0 9.5 ------25.0 9.5 ------25.0 9.5 ------Head Average, g/t Au 0.404 0.404 0.404 0.404 0.404 0.404 0.404 0.404 0.485 0.485 0.485 0.485 0.485 0.485 0.485 0.485 0.544 0.544 0.544 0.544 0.544 0.544 0.544 0.544 0.530 0.530 0.530 0.530 0.530 0.530 0.530 0.530 Weighted Avg Head Screen, g/t Au 0.419 0.418 -----0.418 0.506 0.482 -----0.482 0.560 0.527 -----0.527 0.456 0.469 -----0.469 Calculated Head, g/t Au 0.366 0.354 0.340 0.445 0.357 0.395 0.420 0.359 0.402 0.416 0.480 0.441 0.415 0.436 0.470 0.377 0.523 0.479 0.440 0.511 0.438 0.496 0.510 0.484 0.386 0.390 0.500 0.459 0.383 0.483 0.520 0.410 Extracted, g/t Au 0.278 0.298 0.300 0.386 0.306 0.333 0.390 0.346 0.234 0.267 0.380 0.335 0.307 0.337 0.380 0.303 0.406 0.387 0.370 0.439 0.359 0.419 0.450 0.453 0.281 0.306 0.450 0.395 0.317 0.405 0.470 0.389 Avg. Tails, g/t Au 0.088 0.056 0.040 0.059 0.051 0.062 0.030 0.013 0.167 0.149 0.100 0.106 0.108 0.099 0.100 0.074 0.117 0.092 0.070 0.072 0.079 0.077 0.060 0.031 0.105 0.084 0.050 0.063 0.067 0.077 0.040 0.021 Au Extracted, % 76% 84% 89% 87% 86% 84% 93% 96% 58% 64% 80% 76% 74% 77% 80% 80% 78% 81% 85% 86% 82% 84% 88% 94% 73% 78% 90% 86% 83% 84% 91% 95% Tail Calc. p80, mm 18.1 6.2 ------18.6 6.1 ------18.4 6.5 ------18.2 6.3 ------Leach Consumption Addition Ca(OH)2, Time, NaCN, hours kg/t kg/t 120 0.06 1.05 120 0.08 1.10 96 0.56 1.00 96 0.45 1.00 96 0.37 1.00 96 0.53 1.00 96 0.66 1.00 96 0.59 2.50 120 120 96 96 96 96 96 96 120 120 96 96 96 96 96 96 120 120 96 96 96 96 96 96 0.53 0.97 2.00 2.20 2.49 2.72 3.08 2.95 0.11 0.11 0.40 0.53 0.51 0.69 1.16 0.40 0.11 0.14 0.64 0.61 0.58 0.76 1.09 0.38 1.45 1.60 1.00 1.00 1.00 1.00 1.00 2.50 0.70 0.80 1.00 1.00 1.00 1.00 1.00 2.50 0.80 0.90 1.00 1.00 1.00 1.00 1.00 2.50
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Table 30 : Summary of Bottle Roll Leach Tests Silver

Description Zone A, Oxide Zone A, Oxide Zone A, Oxide Zone A, Oxide Zone A, Oxide Zone A, Oxide Zone A, Oxide Zone A, Oxide Zone A, Transitional Zone A, Transitional Zone A, Transitional Zone A, Transitional Zone A, Transitional Zone A, Transitional Zone A, Transitional Zone A, Transitional Zone B, Oxide Zone B, Oxide Zone B, Oxide Zone B, Oxide Zone B, Oxide Zone B, Oxide Zone B, Oxide Zone B, Oxide Zone C, Oxide Zone C, Oxide Zone C, Oxide Zone C, Oxide Zone C, Oxide Zone C, Oxide Zone C, Oxide Zone C, Oxide Est. p80 Size, mm --0.212 0.212 0.150 0.150 0.106 0.075 --0.212 0.212 0.150 0.150 0.106 0.075 --0.212 0.212 0.150 0.150 0.106 0.075 --0.212 0.212 0.150 0.150 0.106 0.075 p100 Size, mm 25.0 9.5 ------25.0 9.5 ------25.0 9.5 ------25.0 9.5 ------Head Average, g/t Ag 9.3 9.3 9.3 9.3 9.3 9.3 9.3 9.3 39.0 39.0 39.0 39.0 39.0 39.0 39.0 39.0 14.9 14.9 14.9 14.9 14.9 14.9 14.9 14.9 16.5 16.5 16.5 16.5 16.5 16.5 16.5 16.5 Weighted Avg Head Screen, g/t Ag 11.2 10.7 -----10.7 40.2 41.1 -----41.1 12.7 16.0 -----16.0 16.5 16.2 -----16.2 Calculated Head, g/t Ag 9.2 10.6 10.6 9.7 11.4 8.8 10.9 10.5 43.4 38.8 39.8 37.0 41.1 38.3 37.6 39.3 16.7 12.4 15.1 14.0 13.8 13.7 15.9 12.7 12.8 15.2 18.2 17.5 18.9 16.0 17.0 16.9 Extracted, g/t Ag 1.5 2.9 5.6 6.2 6.5 5.9 6.8 8.8 9.2 15.1 33.1 32.3 32.5 34.9 33.5 34.4 2.3 2.7 6.3 6.3 6.8 6.7 7.5 8.3 2.1 3.9 11.1 13.6 11.3 14.0 12.5 14.4 Avg. Tails, g/t Ag 7.7 7.7 5.1 3.5 4.9 2.9 4.1 1.6 34.1 23.7 6.7 4.6 8.6 3.4 4.1 4.9 14.4 9.6 8.8 7.7 7.0 7.0 8.4 4.4 10.7 11.3 7.0 3.9 7.5 2.1 4.5 2.5 Ag Extracted, % 16% 27% 52% 64% 57% 67% 62% 84% 21% 39% 83% 87% 79% 91% 89% 88% 14% 22% 41% 45% 49% 49% 47% 66% 17% 26% 61% 78% 60% 87% 74% 85% Tail Calc. p80, mm 18.1 6.2 ------18.6 6.1 ------18.4 6.5 ------18.2 6.3 ------Leach Consumption NaCN, Time, kg/t hours 120 0.06 120 0.08 96 0.56 96 0.45 96 0.37 96 0.53 96 0.66 96 0.59 120 120 96 96 96 96 96 96 120 120 96 96 96 96 96 96 120 120 96 96 96 96 96 96 0.53 0.97 2.00 2.20 2.49 2.72 3.08 2.95 0.11 0.11 0.40 0.53 0.51 0.69 1.16 0.40 0.11 0.14 0.64 0.61 0.58 0.76 1.09 0.38 Addition Ca(OH)2 , kg/t 1.05 1.10 1.00 1.00 1.00 1.00 1.00 2.50 1.45 1.60 1.00 1.00 1.00 1.00 1.00 2.50 0.70 0.80 1.00 1.00 1.00 1.00 1.00 2.50 0.80 0.90 1.00 1.00 1.00 1.00 1.00 2.50
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The bottle roll tests indicate that gold and silver recovery increases with finer grind.
16.3.4 Agglomeration, Percolation, and Compacted Permeability Tests Agglomeration and percolation tests were performed for both material crush sizes of 9.5 mm and 25 mm. In these tests the non-agglomerated Zone A Oxide material crushed to 9.5 mm failed. All other agglomerated and non-agglomerated tests passed, which indicates that no agglomeration was required for heaps of one lift with an average height of 6 m to 8 m. Notable increases in solution flow rates were seen in the agglomerated samples. All composites at both crush sizes with no cement passed the compacted permeability test at effective heap heights of 20 m and 60 m. The tables below show the summary of the agglomeration test results and the results of the compacted permeability tests.
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Table 31 : Summary of Agglomeration Test Work

Cement Water Dry Initial Final Top Size of Dry kg/t dry Added, Column Weight, Height, Height, 2 mls Area, m ore Material, mm Ore, kg kg cm cm 25 2 0 0.0 0.005 2 38.74 38.74 25 2 4 125.5 0.005 2 36.83 36.83 25 2 8 125.9 0.005 2 38.10 38.10 25 2 130.9 2 12 0.005 40.01 40.01 9.5 2 0 0.0 0.005 2 38.10 N/A 9.5 2 4 209.5 0.005 2 41.28 41.28 9.5 2 8 198.0 0.005 2 41.28 41.28 9.5 2 207.5 2 12 0.005 41.91 41.91 25 2 0 0.0 0.005 2 34.93 34.93 25 2 4 87.5 0.005 2 36.83 36.83 25 2 8 83.0 0.005 2 35.56 35.56 25 2 84.5 2 12 0.005 36.51 36.51 9.5 2 0 0.0 0.005 2 33.02 33.02 9.5 2 4 128.5 0.005 2 37.47 37.47 9.5 2 8 124.5 0.005 2 36.83 36.83 9.5 2 129.0 2 12 0.005 38.10 38.10 25 2 0 0.0 0.005 2 39.37 39.37 25 2 4 90.0 0.005 2 39.37 39.37 25 2 8 95.0 0.005 2 41.28 41.28 25 2 91.5 2 12 0.005 41.28 41.28 9.5 2 0 0.0 0.005 2 38.10 38.10 9.5 2 4 144.0 0.005 2 40.01 40.01 9.5 2 8 139.5 0.005 2 39.37 39.37 9.5 2 155.0 2 12 0.005 40.01 40.01 25 2 0 0.0 0.005 2 45.09 45.09 25 2 4 86.5 0.005 2 42.55 42.55 25 2 8 91.5 0.005 2 42.55 42.55 25 2 89.0 2 12 0.005 42.55 42.55 9.5 2 0 0.0 0.005 2 38.10 38.10 9.5 2 4 181.5 0.005 2 41.28 41.28 9.5 2 8 190.0 0.005 2 41.28 41.28 9.5 2 194.5 2 12 0.005 41.28 41.28 pH on pH % Day 3 Comment Slump 7.3 Low 0% 10.9 Good 0% 11.3 Good 0% 11.5 Good 0% N/A N/A N/A 10.9 Good 0% 11.1 Good 0% 11.4 Good 0% 3.9 Low 0% 10.8 Good 0% 11.2 Good 0% 11.5 Good 0% 3.8 Low 0% 10.5 Good 0% 11.0 Good 0% 11.2 Good 0% 7.4 Low 0% 10.8 Good 0% 11.0 Good 0% 11.5 Good 0% 7.7 Low 0% 11.0 Good 0% 11.1 Good 0% 11.5 Good 0% 7.2 Low 0% 10.8 Good 0% 11.2 Good 0% 11.6 High 0% 7.6 Low 0% 11.0 Good 0% 11.2 Good 0% 11.6 High 0% Slump Result Pass Pass Pass Pass N/A Pass Pass Pass Pass Pass Pass Pass Pass Pass Pass Pass Pass Pass Pass Pass Pass Pass Pass Pass Pass Pass Pass Pass Pass Pass Pass Pass Apparent Bulk Flow Out, Density, t /m 1.13 1.19 1.15 1.10 1.15 1.06 1.06 1.05 1.26 1.19 1.23 1.20 1.33 1.17 1.19 1.15 1.11 1.11 1.06 1.06 1.15 1.10 1.11 1.10 0.97 1.03 1.03 1.03 1.15 1.06 1.06 1.06
3
Description Zone A, Oxide
Zone A, Oxide
Zone A, Transitional
Zone A, Transitional
Zone B, Oxide
Zone B, Oxide
Zone C, Oxide
Zone C, Oxide
l/h/m 39,668 43,418 23,024 33,313 N/A 46,773 39,628 42,194 28,471 46,141 47,601 42,431 7,815 36,234 30,116 40,063 21,038 28,971 44,602 24,432 6,960 24,051 36,550 38,957 24,472 46,259 34,734 22,774 7,486 34,142 28,971 38,918
Flow Result Pass Pass Pass Pass Fail Pass Pass Pass Pass Pass Pass Pass Pass Pass Pass Pass Pass Pass Pass Pass Pass Pass Pass Pass Pass Pass Pass Pass Pass Pass Pass Pass
Visual Estimate of % Pellet Breakdown <3 <3 <3 <3 N/A <3 <3 <3 <3 <3 <3 <3 <3 <3 <3 <3 <3 <3 <3 <3 <3 <3 <3 <3 <3 <3 <3 <3 <3 <3 <3 <3
Pellet Result Pass Pass Pass Pass N/A Pass Pass Pass Pass Pass Pass Pass Pass Pass Pass Pass Pass Pass Pass Pass Pass Pass Pass Pass Pass Pass Pass Pass Pass Pass Pass Pass
Overall Out Flow Solution, Solution Test Result Result Color and Clarity Red-brown and cloudy Fail Pass Colorless and clear Pass Pass Colorless and clear Pass Pass Colorless and clear Pass Pass N/A N/A Fail Brown and cloudy Fail Pass Colorless and clear Pass Pass Colorless and clear Pass Pass Brown and cloudy Fail Pass Brown and slighty Pass Pass Colorless and clear Pass Pass Colorless and clear Pass Pass Brown and cloudy Fail Pass Brown and cloudy Fail Pass Colorless and clear Pass Pass Colorless and clear Pass Pass Brown and cloudy Fail Pass Brown and cloudy Fail Pass Colorless and clear Pass Pass Colorless and clear Pass Pass Brown and cloudy Fail Pass Colorless and clear Pass Pass Colorless and clear Pass Pass Colorless and clear Pass Pass Brown and cloudy Fail Pass Brown and cloudy Fail Pass Colorless and clear Pass Pass Colorless and clear Pass Pass Brown and cloudy Fail Pass Colorless and clear Pass Pass Colorless and clear Pass Pass Colorless and clear Pass Pass
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Table 32: Summary of Compacted Permeability Test Work

Cement Added, kg/t 0 0 2 2 0 0 4 4 0 0 2 2 0 0 2 2 0 0 2 2 0 0 4 4 0 0 2 2 0 0 4 4 Effective Flow Rate, Crush Size, Height, 2 l/hr/m mm meters 20 7,191 25 60 6,877 25 20 7,481 25 60 6,796 25 20 777 9.5 60 697 9.5 20 6,926 9.5 60 5,390 9.5 20 7,462 25 60 7,284 25 20 7,191 25 60 6,809 25 20 6,599 9.5 60 3,750 9.5 20 7,000 9.5 60 6,124 9.5 20 7,820 25 60 7,388 25 20 7,493 25 60 7,475 25 20 5,680 9.5 60 5,224 9.5 20 6,599 9.5 60 5,458 9.5 20 7,845 25 60 7,240 25 20 7,610 25 60 7,228 25 20 4,385 9.5 60 3,114 9.5 20 7,043 9.5 60 5,877 9.5 % Pellet Breakdown N/A N/A <5 <5 N/A N/A <5 <5 N/A N/A <5 <5 N/A N/A <5 <5 N/A N/A <5 <5 N/A N/A <5 <5 N/A N/A <5 <5 N/A N/A <5 <5 % Slump 1 1 1 1 0 1 2 1 2 2 2 2 1 2 1 1 1 1 0 1 0 1 1 1 1 1 1 1 1 1 0
Description Zone A, Oxide Zone A, Oxide Zone A, Oxide Zone A, Oxide Zone A, Oxide Zone A, Oxide Zone A, Oxide Zone A, Oxide Zone A, Transitional Zone A, Transitional Zone A, Transitional Zone A, Transitional Zone A, Transitional Zone A, Transitional Zone A, Transitional Zone A, Transitional Zone B, Oxide Zone B, Oxide Zone B, Oxide Zone B, Oxide Zone B, Oxide Zone B, Oxide Zone B, Oxide Zone B, Oxide Zone C, Oxide Zone C, Oxide Zone C, Oxide Zone C, Oxide Zone C, Oxide Zone C, Oxide Zone C, Oxide Zone C, Oxide
Pass/Fail Pass Pass Pass Pass Pass Pass Pass Pass Pass Pass Pass Pass Pass Pass Pass Pass Pass Pass Pass Pass Pass Pass Pass Pass Pass Pass Pass Pass Pass Pass Pass Pass
16.3.5 Laboratory Column Leach Tests A total of eight column leach tests were completed using material from each of the four composites stage crushed to minus 25 mm and 9.5 mm. Cyanide solution was applied to the columns at a rate of 10 to 12 liters per hour per square meter of column surface. The Zone A Oxide material crushed to 9.5 mm was agglomerated with 4 kg of Portland Type II cement per tonne of material prior to column leach testing. The table below presents the column leach test parameters used.
KAPPES, CASSIDAY & ASSOCIATES | JUNE2011
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Table 33 : Column Leach Test Parameters

Description Zone A, Oxide Zone A, Oxide Zone A, Transitional Zone A, Transitional Zone B, Oxide Zone B, Oxide Zone C, Oxide Zone C, Oxide Crush Size, Column Diameter, Initial Charge Height, mm meters meters 25 9.5 25 9.5 25 9.5 25 9.5 0.152 0.152 0.152 0.152 0.152 0.152 0.152 0.152 1.695 1.600 1.575 1.473 1.683 1.549 1.727 1.600 Charge Weight, kilograms 40.15 40.20 40.01 39.98 40.07 40.11 40.15 40.21
Recoveries for the columns were calculated and expected field recoveries were determined based on these data. Expected field recoveries were estimated by reducing the column recoveries by 3% for gold and 5% for silver. The table below shows the column and expected field recoveries. It is noted that the average sample grade was less than the average resource grade used in the model. The gold and silver extractions versus days of leaching time are shown in the figures below. The cumulative percent recoveries versus the cumulative tonnes of solution per tonne of ore for gold and silver are shown in the figures following.
Table 34 : Column Leach Test and Expected Field Recoveries
-25 mm Crush Size Column Test Projected Field Recoveries Recovery Au Ag Au Ag 89% 26% 86% 21% 89% 21% 86% 16% 88% 19% 85% 14% 75% 36% 72% 31% -9.5 mm Crush Size Column Test Projected Field Recoveries Recovery Au Ag Au Ag 90% 33% 87% 28% 86% 29% 83% 24% 87% 26% 84% 21% 80% 64% 77% 59%
Ore Zones
Oxide Zone A Oxide Zone B Oxide Zone C Transition Zone A
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100%
90%
80%
Cumulative Percent Gold Extraction
70%
60%
50%
40%
30%
20%
10%
0% 0 5 10 15 20 25 30 35 40 45 50 Days of Leach 55 60 65 70 75 80 85 90
Zone A, Oxide (45252) Zone B, Oxide (45266)
Zone A, Transition (45258) Zone C, Oxide (45272)
Figure 10 : Gold Extraction Based on Carbon Assays Versus Days of Leach
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100%
90%
80%
Cumulative Percent Silver Extraction
70%
60%
50%
40%
30%
20%
10%
0% 0 5 10 15 20 25 30 35 40 45 50 Days of Leach 55 60 65 70 75 80 85 90
Figure 11 : Silver Extraction Based on Carbon Assays Versus Days of Leach
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100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 5.0 5.5 6.0 Cumulative Tonnes of Solution per Tonne of Ore
Zone A, Oxide, 25mm (45252) Zone B, Oxide, 25mm (45266) Zone A, Oxide, 9.5mm (45255) Zone B, Oxide, 9.5mm (45269) Zone A, Transitional, 25mm (45258) Zone C, Oxide, 25mm (45272) Zone A, Transitional, 9.5mm (45261) Zone C, Oxide, 9.5mm, (45278)
Figure 12 : Cumulative Percent Gold Recovery Versus Cumulative Tonnes of Solution per Tonne of Ore
Cumulative Percent Gold Recovery Based on Solution Assays
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100% Cumulative Percent Silver Recovery Based on Solution Assays 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 Cumulative Tonnes of Solution per Tonne of Ore
Zone A, Transitional, 25mm (45258) Zone C, Oxide, 25mm (45272)
4.5
5.0
5.5
6.0
Zone A, Oxide, 25mm (45252) Zone B, Oxide, 25mm (45266)
Zone A, Oxide, 9.5mm (45255) Zone B, Oxide, 9.5mm (45269)
Zone A, Transitional, 9.5mm (45261) Zone C, Oxide, 9.5mm (45278)
Figure 13 : Cumulative Percent Silver Recovery Versus Cumulative Tonnes of Solution per Tonne of Ore
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It can be seen in the figures above that most of the gold has finished leaching for all ore types around day 70. The leaching time for the silver was slightly longer with extraction rates continuing to climb gradually through the end of the testing cycle. These column tests show that there was no appreciable gain in recovery due to fine crushing, except in the transition ore, which has a slight gain in silver recovery. Because the transition ore only represents a small percent of the ore deposit it is easily demonstrated that there will be little or no advantage to finer crushing at current silver prices. The cyanide consumption for the column tests and for expected field cyanide consumptions are summarized below. From KCAs experience cyanide consumption in production heaps is usually only 25% to 33% of the laboratory column test consumptions.
Table 35 : Cyanide Consumption
25mmCrushSize Orezone
9.5mmCrushSize
Projected Field Projected Field Column Test Cyanide Column Test Cyanide Cyanide Consumption (33% ) Cyanide Consumption (33% ) Consumption (kg/t) (kg/t) Consumption (kg/t) (kg/t) 1.27 1.11 1.11 1.74 0.42 0.37 0.37 0.57 1.16 1.29 1.11 2.23 0.38 0.43 0.37 0.74
Oxide Zone A Oxide Zone B Oxide Zone C Transition Zone A
16.4 Ore and Waste Acid Neutralization Potential

Work on ANP has been planned and will be performed by Golder. Results are pending and no report was available at the time of preparing this report.
16.5 Future Work

In addition to the ANP work, several areas of future laboratory work are recommended. The scope of this work includes more column test work, especially column tests with an ore grade more representative of the predicted LOM grade. Additional test work and mercury analysis should also be performed to determine if a mercury retort or other mercury removal method will be required. The use of lime for protective alkalinity should be tested. It has been seen in some cases that the addition of strong cyanide during agglomeration resulted in faster recovery rates; for this reason it is recommended that some test work be performed to confirm if this is the case for this deposit. Additional studies on zinc cementation using sea water should also be performed to assess the potential effects on filtration and precious metals precipitation for the process. Column tests should be conducted to verify gold and silver extractions using sea water as solution makeup.
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16.6 Ore Processing
16.6.1 Process Design Test work developed by KCA has indicated that the Tujuh Bukit oxide and Zone A transition ores are both amenable to heap leaching. Based on an assumed heap leach feed of approximately 57M tonnes and an eight to nine year mine life, the ore processing rate was established at 20,000 tonnes per day. The metallurgical test work has shown very little gold recovery improvement through finer crushing. There is however a significant improvement in silver recovery by finer crushing with respect to the Zone A transition ore. The transition ore is a relatively small component (9%) of the overall ore feed and it is not of economic benefit to treat at higher capital and operating cost to recover more silver on the transition ores. Test work shows field gold recovery of 86% for oxide and 72% for transition ore, and silver recovery of 17% for oxide and 31% for transition ore at a crush size of -25 mm. A three stage plant has been selected that will nominally produce a -20 mm product at the desired throughput. Column tests from core samples supplied to date only show the need for cement agglomeration on fine crushed samples. However, a photographic analysis of thousands of meters of cores from the oxide zones indicates that 10% of all the oxide ore is high in clay and will require cement agglomeration. Another class of highly broken ore identified constitutes another 16% that will likely require cement addition to some degree. For this reason the plant has been designed with two agglomeration drums to accommodate cement addition as required. Because of the high silver content, metals recovery from the pregnant solution will be accomplished using a Merrill Crowe circuit located near the pregnant solution pond. The barren solution leaving the circuit will be recycled to the heap leach system. Tests work thus far has shown only small amounts of soluble copper are present in the ore, mostly associated with the transition material, and it is not expected to be a problem with extraction. The General Arrangement Drawings can be found in Appendix I; the Process Flowsheets can be found in Appendix II; the Design Criteria is located in Appendix III; and the Equipment List is presented in Appendix IV.
16.6.2 Process Description Summary The Project will be designed as a crushing and heap leach operation utilizing a multiple-lift, single-use leach pad. A general flowsheet of the process is shown below. Crushing will be accomplished by a three-stage, closed-circuit crushing system operating seven days per week, 12 hours per day at a rate of 20,000 tonnes per day. Feed to the main crushing circuit is by direct truck dumping, with additional front-end loader support as required to maintain continuous feed. The crushing circuit will be located between the open pits and the heap leach pad. The plant will also have a small gravel circuit to produce and stockpile sized product for use as leach pad drainage material. The final product from the crusher circuit will discharge to a small conical stockpile. The ore will be reclaimed from beneath the stockpile and cement will be added to the ore before passing through agglomeration drums. A small stream of dilute cyanide solution will be added to the agglomeration drums
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with drum discharge conveyed to mobile portable field conveyors, and ultimately a portable radial stacker, where it will be discharged onto the heap at the active stacking face. The stacked ore will be leached using a sprinkler irrigation system for solution application. After percolating through the ore the gold and silver bearing solution drains to a pregnant pond where it will be collected and pumped to a Merrill Crowe recovery plant which utilizes zinc dust to precipitate the gold and silver from solution. The precipitate will be filtered, dried, and smelted directly into dor bars using a diesel fired smelting furnace. At this time no mercury retort has been planned, however it may be required if it is found that the ore contains more mercury than is presently believed to be the case based on the limited assays to date. After metals removal the solution will be returned to the barren pond and then pumped back to the irrigation system on top of the heap.
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Figure 14 : Heap Leaching Flowsheet
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An excess solution (storm water) pond will contain leach solution in excess of that required for normal operations. Excess solution will ultimately return to the barren tank as make-up solution. Make-up water will be from a combination of reservoir stored water, wells, and sea water if required. It should be noted that additional metallurgical testing should be conducted to verify that sea water does not interfere with the Merrill Crowe process if it is determined that it is actually required. KCA is aware of at least one operation using hypersaline water in a heap leach using a carbon plant with no ill effects, however it does not utilize Merrill Crowe. Back-up generator power will be provided, capable of supplying sufficient electrical power to keep all solution circuits operating during interruptions to line power.
16.6.3 Crushing The following modular components will be included in the crushing facility: ROM bin; A primary crushing plant with apron feeder, vibrating grizzly, primary jaw crusher, and a crusher product conveyor; A rock breaker; A belt weightometer, magnet, and metal detector; A secondary crushing plant with a triple deck screen and one secondary crusher; A tertiary crushing plant with two double deck screens and two tertiary crushers; and A pad cover gravel circuit which scalps the oversize from the bottom deck of the secondary screen and conveys it to a small radial stacker and stockpile.
A flowsheet of the crushing circuit is presented in drawing 0110-11-001. A General Arrangement of the crushing area is shown on drawing 0113-13-004 also. ROM ore will be direct dumped (or fed by a front end loader from a ROM stockpile) into the ROM ore bin. Any oversize rocks or large lumps will be broken with the rock breaker. The plant crushing / processing rate has been designed for 20,000 tonnes per day. Material exiting the ROM bin will be fed to a vibrating grizzly by an apron feeder. The grizzly oversize feeds to the jaw crusher. The jaw crusher product and vibrating grizzly undersize will be recombined on the product conveyor and transferred to a conveyor which feeds a vibrating double deck screen. Screened oversize will be fed to the secondary cone crusher. Screened undersize will fall directly to the product belt. Secondary crusher discharge will be conveyed to the tertiary screens. The tertiary screen oversize will be conveyed to the tertiary crushers and the undersize falls to the product conveyor. The tertiary crusher product will be recycled back to the tertiary screens in closed circuit. The final plant product is 100% passing 20 mm and will be conveyed to a small 2,500 tonne stockpile. The secondary screen will be a triple deck screen and the bottom deck will be used to scalp off a sized product for pad cover gravel as needed for pad construction. The sized gravel product will be stockpiled with a radial stacker adjacent to the crushing plant. All of the conveyors will be interlocked so that if one conveyor trips out, all upstream conveyors and the vibrating grizzly will also trip. This interlocking will prevent large spills and equipment damage. Both of these features are considered necessary to meet the design utilization for the system.
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A modular motor control center will be housed in a separate room or container and will be located proximal to the crushing area. The table below outlines the crusher and feeder settings included in the crushing circuit design.
Table 36 : Crushing Circuit Set Points Description Vibrating Grizzly Jaw Crusher Secondary Screen Design Settings 150 mm openings CSS 225 mm 130 mm openings 75 mm openings 32 mm openings CSS 45mm 40 mm openings 20 mm openings CSS 19mm
Top Deck Middle Deck Bottom Deck Top Deck Middle Deck
Secondary Cone Crusher Tertiary Screen Tertiary Cone Crusher
16.6.4 Agglomeration The following components are included in the agglomeration facility: Two overland conveyors; A stockpile reclaim conveyor system with two vibrating pan feeders. Three 100 tonne capacity cement silos with rotary valves controlled by the weightometer output; and Two agglomeration drums (3.9 m dia. x 9 m).
The agglomeration flowsheet is included in drawing 0115-11-001. A General Arrangement of the agglomeration area is shown on drawing 0113-13-010 also. Ore will be conveyed via overland conveyors and stockpiled nearby the leach pad in a small 2,500 tonne stockpile. The crushed ore will be reclaimed from the stockpile by three vibrating pan feeders to a conveyor in a tunnel below the stockpile. Cement will be added to this conveyor, and feeds a splitter chute which splits the feed onto two separate conveyors feeding two separate agglomeration drums. Cement will be added at the rate of 4.5 kg/t or as required, depending on clay content. A small stream of dilute cyanide solution will be also added to the agglomeration drums mixing with the cement to bind the fine particles to the coarse particles and provide an early jump start to the leaching process.
16.6.5 Stacking The following components are included in the stacking system: Overland conveyor; Tripper car / shuttle conveyor; Grasshopper conveyors (30); Index feed conveyor; Horizontal Index conveyor; and
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Mobile radial stacker.
The stacking system flowsheet is included on drawing 0115-11-001. The agglomerated ore will discharge from the agglomeration drums and join a single conveyor which utilizes a moveable tripper car to transfer onto the heap stacking line. The heap stacking line will consist of 22 mobile field conveyors which transfer the ore to a horizontal index conveyor and mobile stacker conveyor. The ore will be stacked in 10 m lifts, in cells 80 m wide (at the toe), and will be stacked to a maximum total ore heap height of 100 m. The agglomerated ore will be left to cure for 48 hours prior to irrigation / leaching. It is recommended that additional compacted permeability tests be conducted to verify the suitability of stacking to 100 m, although from the data to date it is not believed this will be a problem. Once a lift of cells has finished leaching and sufficiently drained and dry, a new lift can be stacked over the top of the old lift. The old lift will be cross-ripped with a dozer prior to stacking the new ore to break up any cemented sections and to redistribute any fines that may have been winnowed by the irrigation solution or rainfall. During operations ore will be conveyed and stacked onto the pad creating flat layers, or platforms, termed lifts, so that the stacking equipment can be moved onto the previous lift for continued stacking. The whole stack advances up gradient in a stair-step manner, allowing stacking against relatively steep sidewalls of lined area at the sides and back of the heap. 16.6.6 Solution Application and Leaching 16.6.1.1 Leaching Concepts Following stacking, the crushed ore will be irrigated with leach solution and the resulting gold-bearing solutions collected into the pregnant pond. The project has been designed as a single pass system with no recycle of pregnant or intermediate solutions to the heap leach. The ore will be leached with sprinklers spaced 6 m apart, and dripper tubes will be used on sideslopes. Reusable PVC pipes (Yelomine) will be used to distribute the solutions to the sprinklers and dripper tubes on top of the heap. The primary reason for using the sprinklers will be to increase evaporation. A flowsheet of the solution handling circuits is presented in drawing 0120-11-001. To reduce the potential for scaling problems within the irrigation system, it will be necessary to continuously add an antiscalant polymer to the leach solutions. The total leach time of 90 days has been designed into the crushed ore leach system. The leach time has been based on metallurgical test work. Leach solutions will be applied to the ore at a nominal application rate of 10 L/hr/m2 with a cyanide concentration of 200 ppm to the crushed ore heap. To reduce cyanide consumption, high concentration cyanide solution will be injected directly into the suction side of the barren pumps using metering pumps. This will allow accurate control of cyanide concentration and greatly reduce losses due to natural degradation in the circuit. Crushed ore will be leached at a rate of 7.1M tonnes per year. 16.6.1.2 Leach System Description Submersible pumps at the barren pond will be used for barren solution application to the heap leach. These pumps will be mounted on slides on the pond sidewall to facilitate placement and extraction of the pump in the
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pond. Additional rough-textured liner panels and conveyor belting will be installed on the pond sidewall in the area where each of the pumps will be located to protect the pond liner. High strength cyanide and an antiscalant agent will be added to the suction side of the barren leach solution pumps by metering pumps. The nominal flowrate of barren solution is 1,200 m3/hr with a concentration of 200 ppm cyanide. A steel and High Density Poly Ethylene (HDPE) header-pipe from the barren tank pumps will supply the solution to the active irrigation areas on the leach pad. A totalizing magnetic flow meter and continuous drip solution sampler will be installed on the leach solution header for metallurgical balance calculations. The leach solution header will be installed along the north side of the leach pad area. Valved tees at the header supply leach solution to risers that distribute solution to the top of the stacked ore at the active leach cells. Reusable Yelomine risers tee off the main header every 60 m. The sprinkler lines connect directly to the risers at 6 m spacing. Pressure gauges will be included on each riser. Extra risers provide solution to drip emitters on the side slopes. Gold and silver bearing solutions draining from the leach pad will be collected at the bottom of the ore stack by a network of perforated drainage pipes within a gravel layer and directed to the pregnant pond. Installed submersible pumps in the pregnant and excess ponds will be used for solution transfer. The pumps will be mounted on slides on the pond sidewalls to facilitate placement and extraction of the pumps in the ponds. Additional rough-textured protective liner panels and conveyor belting will be installed on the pond sidewalls in the area where the pumps will be located to protect the pond liner.
16.6.2 Leach Pad and Solution Storage Ponds 16.6.2.1 Design Considerations for Tsunamis As detailed in the Design Criteria in Appendix III, the Tujuh Bukit site is along a coastline that has a history of tsunamis, with waves as high as 14 m recorded, although the average wave height has been in the 5 m to 7 m range. As such, the toe of the pad and pond area will be constructed on the natural ground 10 m above sea level, but immediately down gradient of the ponds a protection dike will be placed with a crest elevation of 14 m above sea level. A more detailed discussion of the Tsunami risks is presented in Appendix III Design Criteria. 16.6.2.2 Leach Pad Several leach pad sites were considered, and results of geotechnical drilling revealed that some of the lower drainage areas are very deep with unsuitable materials for pad foundations. The site finally selected for this study appears to be adequate, however, additional drilling investigations are warranted in the nominated pad area to advance the level of certainty regarding earthworks quantities. The final configuration of the leach pad and liner system consists of slopes ranging from 2% to 25%. A General Arrangement drawing of the leach pad and ponds area is presented in drawing 0137-13-001. An underdrain system consisting of perforated pipes will be installed below the low permeability soil (clay) liner to collect and convey any near surface underground water below the pad. In addition, the underdrains will act as an early leak detection system that will collect any solution that may leak through the composite liner system and allow it to be captured and pumped back to the circuit.
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The leach pad will consist of a composite liner system utilizing 300 mm of compacted clay underlying a 1.5 mm Low Density Polyethylene (LLDPE) welded liner (geomembrane). Textured liner will also be used as required on steeper areas to increase slope stability properties as determined in detailed design. A 600 mm layer of sized gravel over-liner will be placed on the top of the geomembrane to protect the liner and act as a basal drainage layer. Perforated collection pipes are also embedded in the gravel layer to enhance solution drainage and provide a rapid return of pregnant solution after it has passed through the ore. The piping and collection layer also minimizes the depth of solution (head) over the liner system. The collected solution will be directed to the pregnant pond and then pumped to the Merrill Crowe process plant for metal extraction. 16.6.2.3 Solution Storage Ponds
The solution containment and storage system includes the following ponds:
Pregnant Solution Pond (250,000 m3); Barren Solution Pond (40,000 m3); and Storm Water Excess Solution Pond (850,000 m3).
The ponds will be sized to insure that all the leach solutions can be managed in a controlled manner to prevent any discharges of solution. The pregnant pond will be sized to hold the 100 year maximum 24 hour storm event, plus 24 hours of heap drain down during an electrical power failure. The excess solution pond will be sized to hold the 100 year storm event plus seasonal accumulations as calculated from the annual average water balance, including the wet year rainfall. Heavy rain events will result in solution being diverted to the excess solution pond. Storm water solution in the excess pond will be returned to the barren pond as make-up as soon as practical. All pond liners will utilize a double 1.5 mm HDPE liner system on top of 300 mm of compacted clay soil. Leak detection will be provided by a geonet sandwiched between the two geomembrane liners on top of a low permeability soil liner. Also between the two HDPE liners will be a collection system to pump out any solution between the liners in the event of leakage through the primary liner. Further, there will be another identical drainage and pump back system below both HDPE liners, between the HDPE and the compacted clay liner. This type of double redundancy liner and leak detection system significantly reduces the possibility of solution entering the environment below the pond. The leak detection pumps will be checked and logged for solution each shift during operations. These leak detection systems are shown on drawing 0128-13-101. All ponds will have a freeboard of 1 m including a safety berm of 500 mm around the perimeter of the ponds.
16.6.3 Solution Management The solution management system for the heap leach has been tentatively designed to be a zero discharge facility. This will be only achievable based on assumed rainfall. Rainfall data at hand is summarized below:
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Table 37 : Rainfall Data Station Location Remarks Data Set Annual Min mm Annual Max mm Annual Average mm Monthly Max Banyuwangi 52 km to north-east On coast btwn Java and Bali 30 yrs 1950-1976, 2004-2008 686 1,770 1,177 403 Telgaldlimo 29 km to north-east 11 km inland 36 yrs 1940-1976 867 2,225 1,508 778 Sumberjambe 61 km to north-west Inland - center of island 16 yrs 1941-1975 1,482 3,935 2,593 737
At this time, rainfall data are insufficient to construct a water / solution balance with certainty. It has been suggested that the Banyuwangi data are the most comparable to the site in general, however this is far from certain, and as can be seen there is significant variation between the three data sets. There are no available humidity or evaporation data although assumed values for similar latitudes / climates are applied. For the purposes of this study a zero discharge design criteria has been assumed, however a 500 m3/hr to 1,000 m3/hr cyanide neuteralization circuit (peroxide / copper sulfate) has been included for emergencies in the capital cost estimate, but operating costs have not been included. A first-fill inventory of 30 days of neutralization chemicals has also included in the capital cost estimate. Further, incorporating additional conservatism, the excess solution pond has been tentatively sized large at 850,000 m3, and the pregnant pond has also been sized large at 250,000 m3 for the eventuality that actual rainfall will be higher than the Banyuwangi data suggest. The highest daily rainfall during the 2004 to 2008 five year data set (the only daily data available) was 137 mm at Banyuwangi. The pregnant pond has been sized to accommodate this amount plus a 24 hour heap drain down in the event of no power / pumps, with a normal working volume of 20,000 m3. As can be seen from the following tables, the average annual rainfall scenario (1,157 mm) will comfortably fall within the zero discharge assumption. However, during a wet year (1,770 mm), the ponds will hold the accumulation of the wet year, but after that there will be no allowance for another wet year, and in fact one more severe storm could force a discharge situation. The general conclusion is that the wet year rainfall does not support the zero discharge assumption with respect to ongoing annual accumulations.
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Table 38 : Water Balance Average Banyuwangi Rainfall

Tujuh Bukit Heap Leach Project Full Pad Water Balance Model Average Banuwangi Rainfall - Sprinklers Preg pond size m3 Excess size m3 Lined Pad/Ditch Collection Area (sq. m) Lined Pond Collection Area (sq. m) Total Leach Flow to Heap (cu. m/hr) Wet Season Ore Absorption (%) Dry Season Ore Absorption (%) Allowable Wet Season Accum. in Ponds
Oct Precipitation (mm) Pan Evapotranspiration (mm) Enhanced Evaporation (%) Emitter / Sprinkler Evap. (%) Idle Heap Evapotrans. Area (sq. m) Idle Heap Evapotrans. (mm) Ore Placed on Pad (tonnes) 6 776000 105 591667 60 150 Nov 90 150 15 6 776000 105 591667 Dec 134 150 15 6 776000 105 591667
250,000 850,000 1,280,000 97,778 1,200 5 7 550,000

Jan 187 150 15 6 776000 105 591667 Feb 181 150 15 6 776000 105 591667 Mar 158 150 15 6 776000 105 591667
Assumptions 0 Enhanced Evaporation System Flow Pond evap. equals 60% of pan evap. over 50%pond area Idle heap evapotranspiration equals 70% of pan evap. Maximum evapotranspiration = rainfall over idle area All sprinkler irrigation
Apr 70 150 15 6 776000 105 591667 May 75 150 15 6 776000 105 591667 Jun 65 150 15 6 776000 105 591667 Jul 62 150 15 6 776000 105 591667 Aug 37 150 15 6 776000 105 591667 Sep 41 150 15 6 776000 105 591667 7100000 Annual 1158 1800 14 6 776000
Precip. Collected (cu.m) Ore Absorption (cu. m) Enhanced Evaporation (cu. m.) Emitter Evap. (cu. m) Evapotrans. (cu. m) Pond Evaporation (cu. m)
82349 29583 0 51840 46381 4400
123629 29583 0 51840 69631 4400
184516 29583 0 51840 81480 4400
258227 29583 0 51840 81480 4400
248848 35500 0 51840 81480 4400
217689 35500 0 51840 81480 4400
96232 41417 0 51840 54201 4400
102803 41417 0 51840 57902 4400
88920 41417 0 51840 50082 4400
84998 41417 0 51840 47873 4400
50395 41417 0 51840 28384 4400
56224 41417 0 51840 31667 4400
1594831 437833 0 622080 712040 52800
Net Precip. Gain(+)/Loss(-) in HL
-49856
-31825
17213
90924
75628
44469
-55625
-52755
-58819
-60532
-75645
-73100
-229922
Excess Solution Pond Allowable Accum. in Excess Accum. into Excess Disch from Excess (need for ore) Quantity in Excess 32277 0 0 0 137093 0 0 0 293529 17213 0 17213 512460 90924 0 108137 550000 75628 0 183765 550000 44469 0 228234 550000 0 -55625 172609 550000 0 -52755 119854 550000 0 -58819 61035 550000 0 -60532 504 550000 0 -504 0 0 0 0 0 228234 -228234
Makeup Solution Required Solution to Treat/Discharge Equiv. m3/hr to discharge Precipitation (mm) Average
49856 0 0
31825 0 0
0 0 0
0 0 0
0 0 0
0 0 0
0 0 0
0 0 0
0 0 0
0 0 0
75142 0 0
73100 0 0
229922 0
60
90
134
187
181
158
70
75
65
62
37
41
1158
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Table 39 : Water Balance Wet Year Banyuwangi
Tujuh Bukit Heap Leach Project Full Pad Water Balance Model - Sprinklers Preg pond size Excess size Lined Pad/Ditch Collection Area (sq. m) Lined Pond Collection Area (sq. m) Total Leach Flow to Heap (cu. m/hr) Wet Season Ore Absorption (%) Dry Season Ore Absorption (%) Allowable Wet Season Accum. in Ponds
Oct Precipitation (mm) Pan Evapotranspiration (mm) Enhanced Evaporation (%) Emitter Evap. (%) Idle Heap Evapotrans. Area (sq. m) Idle Heap Evapotrans. (mm) Ore Placed on Pad (tonnes) 6 776000 105 608333 87 150 Nov 18 150 15 6 776000 105 608333 Dec 140 150 15 6 776000 105 608333
250,000 850,000 1,280,000 97,778 1,200 5 7 550,000

Jan 245 150 15 6 776000 105 608333 Feb 124 150 15 6 776000 105 608333 Mar 149 150 15 6 776000 105 608333
Assumptions 0 Enhanced Evaporation System Flow
Pond evap. equals 60% of pan evap. over 50%pond area
Idle heap evapotranspiration equals 70% of pan evap. Maximum evapotranspiration = rainfall over idle area All sprinkler irrigation
Apr 119 150 15 6 776000 105 608333 May 288 150 15 6 776000 105 608333 Jun 142 150 15 6 776000 105 608333 Jul 222 150 15 6 776000 105 608333 Aug 81 150 15 6 776000 105 608333 Sep 155 150 15 6 776000 105 608333 7300000 Annual 1770 1800 14 6 776000
Precip. Collected (cu.m) Ore Absorption (cu. m) Enhanced Evaporation (cu. m.) Emitter or Sprinkler Evap. (cu. m) Evapotrans. (cu. m) Pond Evaporation (cu. m)
119867 30417 0 51840 67512 4400
24800 30417 0 51840 13968 4400
192889 30417 0 51840 81480 4400
337556 30417 0 51840 81480 4400
170844 30417 0 51840 81480 4400
205289 30417 0 51840 81480 4400
163956 30417 0 51840 81480 4400
396800 30417 0 51840 81480 4400
195644 42583 0 51840 81480 4400
305867 42583 0 51840 81480 4400
111600 42583 0 51840 62856 4400
213556 42583 0 51840 81480 4400
2438667 413667 0 622080 877656 52800
Net Precip. Gain(+)/Loss(-) in HL
-34302
-75825
24752
169419
2708
37152
-4181
228663
15341
125563
-50079
33252
472464
Excess Solution Pond Allowable Accum. in Excess Accum. into Excess Discharge from Excess (need for ore) Quantity in Excess 36471 0 0 0 56675 0 0 0 213818 24752 0 24752 550000 169419 0 194171 550000 2708 0 196879 550000 37152 0 234031 550000 0 -4181 229850 550000 228663 0 458513 550000 15341 0 473854 550000 76146 0 550000 550000 0 -50079 499921 0 -499921 0 0 54260 -54260
Makeup Solution Required Solution to Treat/Discharge Equiv. m3/hr to discharge Precipitation (mm) Average m3 / hr to counter accumulation m3 / hr to empty pond in one month make up m3 / hr
34302 0 0 Oct 87 -48 0 48
75825 0 0 Nov 18 -105 0 105 Dec
0 0 0 Jan
0 0 0 Feb 245 235 270 0
0 0 0 Mar
0 0 0 Apr
0 0 0 May 119 -6 319 0
0 0 0 Jun
0 0 0 Jul 142 21 658 0
0 49418 69 Aug 222 174 764 0
0 0 0 Sep 81 -70 694 0
0 533173 741
110127 582591
Annual 155 46 0 0 1770
140 34 34 0
124 4 273 0
149 52 325 0
288 318 637 0
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In short, it appears a zero discharge scenario will be possible if the rainfall is similar to the average Banyuwangi 1,157 mm per year. If rainfall is higher (even during an occassional wet year), some form of reducing the volume of excess solutions must be considered. There are five ways to handle excess solutions: Evaporators - these are skid mounted mist/blower units that work well enough although are low efficiency especially in humid climates. Capital ($0.7M to 3M) and operating costs are not insignificant. No additional permit will be required but significant power infrastructure will be needed. Chemical neuteralization and discharge - this method works well, is high efficiency, and is typically a semi-annual activity for one to three months only. This method does not generally address other heavy metals. Capital ($0.8M) and operating costs are not insignificant. This method has been tentatively assumed for equipment selection for this project and will require a discharge permit. Membrane filters and discharge - this method works very well, is high efficiency and has the added benefit of recovering 75% of the cyanide for re-use, and significantly reduces all heavy metals. However, this method has a high capital ($12M for 500 m3/hr circuit) and operating cost (0.10 $/m3 to 0.30 $/m3). Pad Covers - plastic covers over portions of the heap to reduce rainfall influx into the lined areas. These have been used at a number of operations and can be made to work however are cumbersome and add a considerable additional operating cost. Modification to pad geometry and throughput - additional reductions in excess solution accumulation can be achieved by modifications to the overall design (smaller pad foot print, higher pad height, higher throughput to absorb more solution faster, etc.).
It is preferred to avoid discharge and the associated permits needed. However, if discharge is ultimately required, Indonesia water quality discharge specifications are shown below:
Table 40 : Indonesia Discharge Standards
Parameter pH TSS CN Cu Cd Zn Pb As Ni Cr Hg
Unit mg/L mg/L mg/L mg/L mg/L mg/L mg/L mg/L mg/L mg/L
Maximum 6-9 200 0.5 2 0.1 5 1 0.5 0.5 1 0.005
Indonesia Mining Discharge Water Standards, Minister of Environment Decree No 202 Year 2004
During the Prefeasibility Study it is recommended that a more detailed search be conducted for any local rain data that the agricultural community may have been keeping in the surrounding towns and villages as even an unofficial rainfall log from near the site would be very useful. More detailed studies should also be conducted to try and achieve zero discharge under all weather conditions. Further evaluation of risk versus preference of discharge system is also recommended. Additional information about discharge permit requirements and permit lead times should also be investigated. In the case of chemical neutralization, some metallurgical test work should be initiated to ensure effluents will meet discharge
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requirements. A trade-off study to evaluate the different risk versus cost between the different methods should also be conducted. Solution management for the system during operation is generally simple. The pregnant pond should be maintained in the mid-to-lower range of its working capacity. The excess solution pond should normally be empty whenever possible. When solution is diverted to the excess solution pond, it should be pumped back to the leach system as soon as practical. Every effort should be made to avoid storing excess solution over a long period of time. During the wet season, contaminated storm waters can be discharged directly to the excess solution pond. During the dry season, solution collected in the excess solution pond can be returned to the barren as make-up solution for evaporation losses. In the event of a major rainfall event, or a disruption of the leach system due to a major power outage or pump / pipeline failure, overflow from the pregnant pond could enter the storm water pond. The solution captured in the storm water pond under these conditions would be returned to the barren pond or to the pregnant pond after the upset conditions are under control. Following these simple rules will allow safe management of the system with adequate surge capacity and reaction time to maintain control of the system without constant emergencies during rain events. A simplified overall water balance considering daily averages for an average rain year is shown below.
Figure 15 : Average Daily Water Balance Schematic
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16.6.4 Merrill Crowe Recovery Circuit 16.6.4.1 General A Merrill Crowe circuit will be used for gold and silver recovery from the pregnant solutions draining from the heap leach pads. The circuit will be constructed on a concrete containment slab located outdoors. A shed roof covers the zinc addition and filter pre-coat circuits. Precipitation, filtration and smelting operations will be located in a separate enclosed, secure building. The motor control center will be housed in a separate room proximal to the recovery circuit. The following major equipment components are included in the Merrill Crowe circuit: Pregnant and barren tanks for surge at circuit inlets and outlets; Six parallel clarification filters operating and one standby 185 m2 filter area each (1,200 m3/hr combined operating flow nominal capacity with five operating, one standby); Filter pre-coat system; Four deaeration towers 3.6 m x 8.1 m; Two zinc addition circuits; Six precipitate filter presses (1,200 m3/hr combined operating flow nominal capacity with five operating, one standby); Precipitate handling, drying, and fluxing system; Diesel fired tilting smelting furnace with exhaust gas extraction and scrubber system, for dor bar production; and Complete slag granulation / grinding / gravity recovery circuit for treating all smelting slag.
A detailed flowsheet of the Merrill Crowe circuit is presented in drawing 0125-11-004. Pregnant solution at the nominal rate of 1,200 m3/h will be pumped to five of six 185 m2 pressure leaf type clarification filters (five operating, one on backwash / clean / pre-coat cycle). The filters remove suspended solids down to levels of less than 1 mg/L and the clear solution will be stored in the clear pregnant solution tank. The clear pregnant solution will then report to the four 3.5 m diameter by 8.1 m high deaeration towers. Liquid seal ring vacuum pumps (four operating, one standby) will provide sufficient degassing capacity to maintain oxygen levels in solution of less than 1 ppm. Deaerated clarified pregnant solution discharges from the tower and will be pumped to five of six 185 m2 filter presses. Zinc dust will be added at the press feed pump suction. Gold and silver will be precipitated by the zinc and collected in the filter presses. Solution discharging from the filter presses will be stripped of gold and silver, and will be termed barren solution. This barren solution will be stored in the barren solution tank, which acts as a surge tank and a head tank for miscellaneous uses of barren solution within the circuit (gland water, wash down, fresh cyanide solution make-up, etc.). From the barren solution tank, it will drain by gravity to the barren pond. 16.6.4.2 Smelting The smelting portion of the circuit will include the following major components: A diesel-fired, tilting crucible furnace, 227 kg red brass capacity; A smelting furnace hood and off-gas extraction blower; and
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A smelting furnace off-gas scrubber system.
The flowsheets of the refinery circuits are shown on drawing 0135-11-002. The precipitate from the Merrill Crowe recovery circuit will be transferred to the refinery. Periodically, one press will be taken off line and the empty pre-coated press put on line. The press taken off line will be then put on a compressed air blow cycle to dry the filtered precipitate. The pans empty to a bin that feeds the precipitate into a precipitate dryer, following which they will be mixed with fluxes in preparation for smelting. The precipitate and flux will be fed to a tilting diesel fired furnace. After melting, slag will be poured off into 100 kg capacity cast iron molds until the remaining molten furnace charge is mostly molten metal (dor). Dor as final product will be poured off into 40 kg bar molds, cooled, cleaned, and stored in a vault pending shipment to a third party refiner. Slag will be processed through a granulation circuit, milled, and tabled to remove metal droplets called prills. The classified slag will be recycled to the heap leach pad via the crushing circuit. A hood will collect the furnace fumes which will pass through a baghouse to remove particulates, then through an induced draft fan. The system will be designed to remove over 99.5% of the particulates present in the exhaust fumes. 16.6.4.3 Process Solution and Make-up Water Process solution will be required in the recovery circuit for reagent make-up, wash down, filter cleaning, and other uses. Process solution requirements will be met by a separate pipeline from the barren tank. Only minor amounts of fresh raw water will be required in the recovery circuit. 16.6.5 Process Reagents and Consumables 16.6.5.1 Usage and Storage Requirements A reagent contained and roofed reagent storage area has been included in the process area and shown on drawing 0134-13-005. Average estimated annual reagent and consumable consumption quantities for the Process Area are shown below.
Table 41 : Projected Annual Reagents and Consumables
As Delivered Reagent Cement Form Concentration 99% 98% 98% 99% 100% 98% Storage Capacity 300 t 240 t 60 t 120 canisters 20,000 L 10,000 L Daily Consumption Up to 90 t 8t 1-2 t 190 kg 533 L 346 kg
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Dry Solid Powder 20 t bulk truckload delivery Dry Solid Briquettes Sodium Cyanide 1,000 kg supersacks Dry Solid Powder Diatomaceous Earth (DE) 1,000 kg supersacks Zinc Dust Dry powder 50 kg canisters Diesel Liquid Bulk delivery truck Antiscalant Liquid Tote 1 m3 Bins
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Silica Borax Niter Soda Ash Hydrogen Peroxide Copper Sulfate Sulfuric Acid Crusher Liners 16.6.5.2 Cement
Dry Solid sacks Dry Solid sacks Dry Solid sacks Dry Solid sacks Liquid Tote 1 m3 Bins Liquid Dry Solid 1,000 kg super sacks Liquid Tote 1 m3 Bins Liquid Mn Steel
99% 99% 99% 99% 50% 98% 94% NA
2t 40 kg 2t 65 kg 2t 32 kg 2t 21 kg 60 t TBD 4t TBD 60 t TBD 1 set all crushers (3 month liner life)
Cement has been assumed to be delivered in 20 tonne bulk truck loads. Further studies will be required to confirm that the suppliers are able to accommodate this. Storage will be in three 100 tonne silos. Estimated consumption will be 90 t/d when cement addition is required. Generally this will require four to five truck deliveries per day with a three day supply stored onsite. The silos will be metered directly onto the conveyors through rotary valves with speed proportioned by a weightometer on the conveyor. A bin activator and dust collector will be included with each silo. As mentioned in Section 16 Metallurgy it is not certain this quantity of cement will be required all of the time. But it is almost certain that some cement or lime will always be required for pH control. 16.6.5.3 Cyanide The reagent handling systems will include equipment used to mix, store and dose sodium cyanide to the barren leach solution system. Reagent mixing and storage will be at ambient temperature and pressure. The major equipment required to perform these tasks includes: Cyanide mix tank; Cyanide transfer pump; Cyanide storage tanks (2); and Cyanide metering pumps.
A flowsheet showing the cyanide mixing area is included on drawing 0170-11-001, and is included on General Arrangement drawing 0134-13-005. Sodium cyanide will be delivered as briquettes in 1,000 kg bulk bags inside plywood crates. The sodium cyanide briquettes will be dropped into a carbon steel tank equipped with an agitator and dissolved using barren solution. A cyanide solution concentration of 25% (maximum) will be prepared in this manner. The cyanide solution will be transferred to two storage tanks. Usage requirements dictate that one or two batches will be mixed every shift. Distribution of cyanide solution to the barren pumps will be by individual metering pumps to points of use at the barren solution pump discharge piping, elution circuit, and agglomeration solution piping. All cyanide distribution lines will be double-contained, either by pipe-within-pipe or pipe-over-liner containment systems. A one month reserve supply of dry cyanide inventory will be kept onsite as contingency for supply interruptions and stored in a secure fenced and roofed area.
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16.6.5.4 Diatomaceous Earth Diatomaceous earth will be mixed every shift in the body tank to pre-coat the filters in the Merrill Crowe circuit. A one month reserve supply will be kept onsite as contingency for supply interruptions. 16.6.5.5 Zinc Dust The zinc dust will be added to the zinc cone every shift and consumption will be 190 kg/d at an assumed rate of 1.5 times metal precipitated. An inventory of 120 canisters of 50 kg each will be stored onsite (approximately one month supply). 16.6.5.6 Diesel Fuel Diesel fuel will be required for smelting. Approximately 16,000 L of diesel fuel will be consumed each month, mainly for smelting. 16.6.5.7 Antiscalant Antiscalant agents will used to prevent the build-up of scale in the process solution and heap irrigation lines. Antiscalant agent will be added to the process pump intakes, or directly into pipelines, and consumption will vary according to concentration of scale-forming species in the process stream. Delivery will be in liquid form in 1 m3 (1-tonne) bulk containers.
Antiscalant will be added directly from the supplier bulk containers into the pregnant and barren pumping systems using variable speed, chemical metering pumps. Antiscalant agent consumption will be approximately 5 g per 1,000 m3 of process solution to be treated (5 ppm) on average, which equates to 346 kg/d (pregnant and barren). An inventory minimum will be 10 tote bins. 16.6.5.8Fluxes Various fluxes will be used in the smelting process to remove impurities from the bullion in the form of a glass slag. The normal flux components consist of silica sand, borax and sodium carbonate (soda ash). The flux mix composition will be variable and will be adjusted to meet individual project smelting needs. Dry fluxes will be delivered in 25 kg or 50 kg bags. Average consumption of fluxes has been estimated to be 0.04 kg/oz to 0.1 kg/oz of gold and silver produced. 16.6.5.9 Hydrogen Peroxide An emergency system for detoxification and discharge of excess solutions has been included. As such, an emergency inventory of 60 tote bins of hydrogen peroxide has also included. The amount of hydrogen peroxide required will be strongly dependent on the cyanide concentration of the discharge solution (5.6 g H2O2 / 1 ppm CN). Typically the solution to be discharged will be contaminated storm water that has been exposed to sunlight while stored in the excess solution pond for some time. Ultraviolet radiation rapidly decomposes cyanide. Under these conditions the cyanide levels in the excess solution will be normally several ppm, and dosage rates will be typically in the range of 0.25 kg hydrogen peroxide per cubic meter of solution treated. At this addition rate, 288,000 m3 could be treated with the recommended inventory of 60 tote bins.
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16.6.5.10 Copper Sulfate Copper sulfate will be used as a catalyst with hydrogen peroxide to speed the cyanide destruction process. Only a very small amount of addition will be required, and some solutions contain enough copper naturally to eliminate the need for adding the copper sulfate. Provisionally this small system and reagent inventory has been included although it may not be utilized. 16.6.5.11 Sulfuric Acid Sulfuric acid also may be required during detoxification to lower pH sufficiently to meet discharge standards. The amount to be added can vary significantly depending on the pH of the solution to be treated. As the overall solution system pH will be largely dictated by the amount of cement added for agglomeration as well as the natural acidity of the ore, it is not uncommon to have relatively high pH solutions in operations using cement for agglomeration. Typical dosage rates at similar operations are in the range of 0.65 kg sulfuric acid per cubic meter of solution treated. At this assumed dosage rate, the recommended inventory of 60 tote bins will treat 170,000 m3 of solution. 16.6.5.12 Crusher Liners Crusher liners require replacement periodically due to abrasive wear. Replacements of liners will be expected approximately every three months and a spare set for all crushers will be kept in inventory onsite.
16.6.6 Control System / Field Instrumentation 16.6.6.1 General The instrumentation and control system will be kept to a minimum necessary to operate the various facilities safely. The degree of automation will be balanced between functionality and cost in each area. 16.6.6.2 Philosophy Each piece of equipment will have a local control station mounted sufficiently close to the equipment to enable convenient view of its operation. Sump pumps, localized pumps and other equipment utilized for local operations only will be controlled by localized stations only and connected to the control system or network system as per area requirements listed below. The local control systems will be configured for push button operation with an operating indication light.
16.6.6.3 Area Systems Crushing, Agglomeration, and Stacking These areas will operate remotely from an operator control console, one in each respective area. The crushing control system will include all of the integrated equipment operated in these areas (conveyors, crusher, feeders, cement addition system, etc.). Minor localized equipment will be operated by local start / stop only. The ancillary
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systems (such as oil injection, oil cooling and fan coolers) will be operated by localized start / stop or interlocked with the primary unit to operate when required. The system will receive motor signals (status or amps) from individual motors in the system and instrument signals from control devices such as belt speed indicators, belt scales, pull cords, misalignment switches, etc. All of the equipment will be interlocked through the circuit to provide shut down sequences in the event that an equipment item shuts down or a signal from a control device indicates a malfunction or component failure. System malfunctions will be alarmed with visual and audible alarms. Emergency stops will be hard wired and interlocked on individual equipment items. Leaching All equipment in the area will be operated by local start / stop. Pressure gauges and flow meter totalizers will be the primary components for data acquisition. Barren solution pumps will be hard wired and interlocked with the cyanide metering pumps. Barren solution pump speeds will be controlled via variable frequency drives (VFDs). System malfunctions will be alarmed with visual and audible alarms. Pregnant solution pumps and excess solution pond pumps will be operated by local start / stop. Recovery Circuit, Smelting, Water, Laboratory and Warehouse All equipment items will be operated by local stop / start only. Major equipment items in the laboratory area will be operated by local (manual) start / stop only. Packaged instrument control packages will be supplied as per manufacturers specifications and have the output alarm. Reagents The cyanide metering pumps will be interlocked with the barren solution pump. All other equipment in the area will be operated by local start / stop. System malfunctions will be alarmed with visual and audible alarms.
Emergency Generators The emergency generators will be operated as a packaged instrument control unit provided by the generator manufacturer. The generator will be brought on line by a manual start. Grid connections of the emergency system with the leaching system pumps and the recovery circuit will be done by manual switches. There will be one generator for the solution pumps in the pond area, and one generator for the Merrill Crowe circuit. 16.6.7 Closure The majority of the closure work for the leach pad and ponds will include rinsing the ore and treating the residual effluent to reduce cyanide levels to regulatory requirements. A compacted soil cover will be placed over the pad to minimize erosion and infiltration of surface and rain water, thus decreasing potential acid generation and leaching of any residual constituents. The ponds will remain in place for sediment control and to provide a place to periodically sample effluent. A more detailed closure plan will be developed once leaching operations are terminated, i.e. during final closure and post closure. During the first two years of operation in situ characterization of the heap (ore) will be done to develop a closure plan as the life of the project will be relatively short. Regular reviews and updates will be
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performed throughout the life of the project to reflect the actual construction of the heap, ore characteristics, and performance of the facility. Post closure monitoring will be implemented to verify the heap effluent quality.
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17.0
MINERAL RESOURCE
17.1 Description of the Database

The cut-off date for assay and geological data was 15 September 2010. Some minor modifications to the database were subsequently received. New assays for holes GTD-10-161, 165 & 166 on 27 were received during September 2010. Two meter length-weighted composites of assayed intervals were created with a minimum length of one meter and maximum of two meters. The two meter length was chosen on the basis of a bench height of 6m which on preliminary considerations is appropriate for a heap leach type open pit mining operation. Techbase software was the primary software used for data manipulation, compositing and resource estimation with H&S's proprietary software GS3 used for check estimation and variography. The table below presents a summary of raw assays sorted in decreasing oxidation from Oxide (3) Transition (2) and Primary (1) Zones. The oxide classification used in the table is based on the modeled base of oxide and base of transition surfaces.
Table 42 : Raw Assay - Sorted in Decreasing Oxidation
Number Mean Std Dev Maximum Minimum Coef Var Number Mean Std Dev Maximum Minimum Coef Var Number Mean Std Dev Maximum Minimum Coef Var
Au 10052 0.32 0.93 27.2 0.0025 286.6 Au 6559 0.15 0.45 18.2 0.0025 295.3 Au 9726 0.21 0.52 13.9 0.0025 244.5
Ag 10052 11.3 39.2 1770 0.5 346.3 Ag 6559 7.8 24.3 731 0.5 311.3 Ag 9726 1.8 7.5 336 0.5 418.5
As 9832 753 1619 34200 0.5 215 As 6338 390 831 14500 0.5 213 As 9476 254 805 25500 0.5 316.5
Cu% 10029 0.029 0.074 3.4 0.0005 258.1 Cu% 6532 0.076 0.2 4.18 0.0005 263.1 Cu% 9700 0.191 0.376 9.12 0.0005 196.8
S% 9038 1.60 1.66 22.9 0.005 103.4 S% 6007 3.08 2.93 30 0.005 95.3 S% 9237 5.37 4.93 41.8 0.005 91.8
Mo 9309 1.93 4.31 169 0.5 223.7 Mo 6377 2.02 5.57 123 0.5 275.1 Mo 9646 32.1 147.86 4510 0.5 460.6
OX 10058 3 0 3 3 OX 6559 2 0 2 2 OX 9728 1 0 1 1
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17.2 Spatial Distribution of Mineralization

The figures below display plan projections of gold and silver grades in the oxide and transition zones. The surface defining the base of complete oxide was modeled by plotting logged oxide intensities and then defining the base of the intervals that are predominantly "completely" (intensity = "C") or 80-99% ("S") oxidized. The base of transition was defined by the base of the intervals that have predominantly medium "M" (20-80% oxidized) or weak "W" (0-20% oxidized) oxidation. Overall, there is an increase in silver with increased oxidation together with a pronounced depletion of copper and increase in gold.
Figure 16 : Gold Grades in the Oxide Zones
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Figure 17 : Silver Grades in the Oxide Zones
17.3 Mineralized Zones

Interpreted alteration zones were used in conjunction with distribution of grades to define ten mineralized domains for control of the resource estimation. These consist mainly of either north-east steeply dipping zones or shallow dipping westerly drapes that follow the topography to the west and south-west. The domains are not grade shells defined above a cut-off but loosely define zones of mineralization.
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Table 43 : Summary of Mineralized Domains
Domain A B C CW D E F G H X Avg/Total
Au g/t 0.750 0.030 0.231 0.171 0.410 0.317 0.533 0.213 0.111 0.106 0.331
Ag g/t 1.9 12.4 9.7 14.1 12.2 14.6 8.6 7.1 3.0 4.7 12.5
As g/t 765 78 551 412 987 784 1150 618 296 552 787
Cu % 0.154 0.078 0.032 0.052 0.068 0.045 0.097 0.032 0.043 0.033 0.054
Number 278 96 220 338 2099 7054 580 631 448 87 11831
Total Interval Length (m) 556 192 438.6 675.2 4195.2 14102.5 1160 1260.7 896 174 23650.2
17.4 Hellman & Schofield Block Model

Ordinary Kriging (OK) using Techbase software was used to estimate Au, Ag, Cu and density. Search parameters relate to four passes of estimation: Pass 1 = 80x80x20m (12 to 32data); Pass 2 = 120x120x30m (10 to 32 data); Pass 3 = 120x120x30m (8 to 32 data) and Pass 4 = 160x160x60m (6 to 32 data). Estimation was in four passes though only estimates from Passes 1 & 2 were classified as Inferred provided they fall inside interpreted mineralized zones. The categorization into 1, 2, 3 and 4 is used to assist identifying areas that require more drilling. Results from Passes 3 & 4 are used to define potential mineralization which is not defined as a Resource.
17.5 Hellman & Schofield Model Results

The table below summarizes Inferred Resources at various gold cut-off grades The figure below illustrates a plan projection of the Inferred Resources that exceed 0.2 g/t Au. Preliminary studies suggest that a lower reporting grade of approximately 0.2 g/t gold is appropriate given the encouraging recoveries for gold and silver by heap leaching and the surface nature of the mineralization. It is stressed that all estimates are regarded as Inferred the meaning of which carries the understanding that the majority of the tonnage should be realized as a resource though a substantial amount may be lost with further sampling. However, the close agreement of the current resource estimates with those reported previously suggests that the estimates are robust.
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Table 44 : Summary of Inferred Resource Estimates by Hellman & Schofield
Total Inferred Resource Cut-Off Tonnage M Oz (Au) (Mt) Au (g/t) Ag (g/t) Au 0.2 130 0.55 18 2.4 0.3 85 0.74 21 2 0.4 60 0.91 23 1.7 0.5 45 1.06 24 1.5 0.75 25 1.39 27 1.1 1 15 1.69 29 0.9 Oxide Zone Inferred Resource Cut-Off Tonnage M Oz (Au) (Mt) Au (g/t) Ag (g/t) Au 0.2 95 0.61 17 1.9 0.3 65 0.79 20 1.6 0.4 45 0.95 22 1.4 0.5 35 1.09 24 1.3 0.75 20 1.42 27 1 1 15 1.71 30 0.8 Transition Zone Inferred Resource Cut-Off Tonnage M Oz (Au) (Mt) Au (g/t) Ag (g/t) Au 0.20 40 0.42 20 0.5 0.30 20 0.57 23 0.4 0.40 10 0.74 27 0.3 0.50 7 0.91 28 0.2 0.75 4 1.24 27 0.1 1.00 2 1.53 27 0.1
M Oz Ag 80 55 45 35 20 15
M Oz Ag 50 40 35 30 20 15
M Oz Ag 25 15 10 10 5 0
17.6 Mineral Reserves

Tujuh Bukit currently has no indicated or measured mineral resources estimated, therefore, no mineral reserves are reportable. Mineral resources that are not mineral reserves do not have demonstrated economic viability. A description of mining operations and an economic analysis may be found in Section 18 of this report, Other Relevant Data and Information.
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However, this is a Preliminary Economic Analysis. This assessment is preliminary in nature, it includes inferred mineral resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves, and there is no certainty that the preliminary assessment will be realized.
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18.0 OTHER RELEVANT DATA AND INFORMATION

The Tujuh Bukit oxide cap project is still in the exploration stage with all resource material being classified as Inferred. Under the standards set forth in Canadian National Instrument 43-101 Inferred mineral resources are at a level of confidence that do not allow them to be converted to a Reserve after having economic considerations applied. This study uses a scoping level of accuracy for costs and parameters estimated to generate a preliminary mine plan for the project. With these considerations there is no certainty that the presented results for the outlined mineralisation will be realised. In January 2011 Australian Mine Design and Development Pty Ltd (AMDAD) completed a mine planning study of the oxide cap as part of the Preliminary Economic Assessment evaluation for the project. Work comprised mining cost estimation, Whittle Four-X optimisation, mine design, waste emplacement concepts, and mine material scheduling.
18.1 Mining Information

The Tujuh Bukit oxide cap gold silver mineralisation comprises three discrete, moderately sized bodies at or near surface suited to open pit mining methods. Provided with a resource block model covering the oxide cap mineralisation, AMDAD conducted optimisation and analysis using Whittle Four-X software (Whittle). Inputs for the optimisation are preliminary with mining costs being generated by estimating fleet requirement, operating time for load and haul and costs associated with a truck excavator operation in the steep terrain. It has been assumed mining will be carried out using a Contractor and appropriate overheads and margins were applied. Mining cost varied according to position in the pit; pioneering costs were applied where it was thought pit establishment would be required, that is, the clearing of ground and establishment of initial benches to allow conventional open pit mining to occur. Within the pit, mining cost varied by bench (the deeper the bench, the longer the haul) and whether the material being mined was ore or waste. Metal prices and associated costs used for input into Whittle were supplied by Intrepid Mines Ltd (IML). Crushing and heap leaching costs and recoveries for gold and silver are based on the latest metallurgical test work conducted by Kappes, Cassidy and Associates in consultation with IML. At the time of the study, no geotechnical work has been undertaken on the deposit and a conceptual overall slope of 45 was applied. A geotechnical review of the project area may change the wall angles assigned for the PEA. The project is envisioned with multiple open pits and adjacent waste dumps. The oxide and transition heap feed will be mined at a rate of 20,000 tonnes per day and delivered to a central crushing facility. There are an estimated 57M tonnes of heap feed and 63M tonnes of waste in four pits, giving an average stripping ratio of 1.1:1 tonnes of waste for every tonne of heap feed. The life of mine heap feed material is estimated to have an average grade of 0.83 g/t Au and 23 g/t Ag. Mining will be by diesel powered hydraulic excavators and rubber-tired front end loaders for the primary loading units. Haul trucks will be in the 85 tonne range. Waste will be hauled to adjacent waste dumps and the ore will be hauled to a central crushing facility. The crushed heap feed will be conveyed to the leach pad for processing. The PEA considers operation of a heap leach facility and a dedicated leach pad. Oxide and transition materials will be crushed and conveyed to the leach pad. A considerable sulfide resource exists below the oxide and transition zones; however the sulfide material is outside of the scope of the current project. The resource estimations would include 5% transition material, from which Zones B and C have metallurgical recovery factors applied that could be overestimated due to the lack of metallurgical testwork in those Zones. This is not considered unreasonable, given the level of study and amount of feed assumed.
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18.1.1 Pit Design Ground surface models were supplied by IML. The level of precision is considered appropriate for the level of detail and confidence for the PEA. 18.1.2 Block Model A resource block model was provided by P. Hellman and imported into SurpacTM by AMDAD. The model used Ordinary Kriging on 2m composites. The attributes supplied with the model are listed in the table below.
Table 45 : Block Model Field Codes Field name Ag_domain_fraction Ag_whole_block Au_domain_fraction Au_whole_block Clay% Confidence_category Cu_domain_fraction Cu_whole_block Deposit Fraction_rock Oxidation_code Porphyry_zone Sg_whole_block Si% Tonnes_domain_fraction Tonnes_whole_block Type Float Float Float Float Float Integer Float Float Integer Float Integer Float Real Float Float Float Description Silver grade (g/t) within mineralised domain Silver grade (g/t) of all rock in block Gold grade (g/t) within mineralised domain Gold grade (g/t) of all rock in block Clay content of rock 3 = Inferred; 4 = Potential Copper grade (%) within mineralised domain Copper grade (%) of all rock in block 1 = C; 2 = A; 3 = B Proportion of rock below topo (1 = 100% rock) 1 = Primary; 2 = Transitional; 3 = Oxide 0 = Not porphyry; 1 = porphyry zone SG of rock in block Silica content of rock Tonnage of rock within mineralised domain Tonnage of rock in block
18.1.3 Topography Ground surface models were supplied by IML. Points and Triangles all Oct 2010.dxf from IML was used for the design phase of the work. The level of precision is considered appropriate for the level of detail and confidence for the PEA. 18.1.4 Reference Information and Assumptions The primary project assumptions for optimization supplied by IML to AMDAD are presented in the table below. No geotechnical information is available so 45 was used for the overall pit wall slopes.
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Table 46 : Project Assumptions
Whittle Input Parameter Mining Dilution Dilution grade Mining Recovery Mining rate limit Processing rate limit Processing Recovery Gold Oxidized Gold Zone A Transitional Silver Oxidized Silver Zone A Transitional Mining Slopes (overall including ramps) Mining Costs 1st Pass Processing Costs Metal Price Gold Silver Realization Costs (Selling Costs) Gold Silver Discount Rate
Unit
Value 2% Nil 98%
Mtpa Mtpa
Nil 7.0 81% 68% 19% 30% 45
$/t mined $/t heap feed $/oz $/g $/oz $/g $/g $/g
2.00 7.62 1,000 32.15 20.00 0.64 1.52 0.0303 8%
18.1.5 Mining Costs for Optimization A spreadsheet of the mining cost model was created to use as optimization inputs for the pit designs. The model matches fleet, personnel and consumables to the Whittle Four-X generated mining schedule. It creates a schedule of requirements and associated costs for these items, and considers the following: Consumables including fuel, tires and explosives; Equipment operating costs from current active mines; Haul costs from the haul profiles specific to Tujuh Bukit; Mining and technical services are included.
The mining costs are expressed as a linear function of depth. Mcost (above 371mRL) = 0.043 x RL + 0.5074;
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Mcost (below 371mRL) = -0.0025 x RL + 3.0297.
18.1.6 Selection of Cut-Off Grades Based on the heap leach recovery and cost estimates from the pit, the economic cut off grade is 0.31 g/t AuEq for oxide and 0.37g/t AuEq for transition material.
18.2 Mining Operations

Mining is based on a standard diesel hydraulic excavator and truck fleet. The conceptual mining fleet is presented below.
Table 47 : Conceptual Mining Fleet
Equipment Hitachi Zaxis 850H Excavator Hitachi AH500D Hitachi EX1900 Excavator Caterpillar 777D Trucks Atlas Copco L8 Drill Rig Caterpillar 992G Front End Loader Caterpillar 980G Front End Loader Caterpillar 330B Caterpillar D10T Dozer Caterpillar 834G Wheel Dozer Caterpillar 16H Grader Caterpillar 777D Water Cart Caterpillar 825G Compactor Komatsu HD605 Service Truck
Units 1 7 1 5 to 10 3 1 1 1 2 1 2 1 1 1
Size/Capacity 85 tonnes/4.3m3 bucket 45 tonnes 190 tonnes/12.0m3 bucket 85 tonnes
Due to the narrowness of the benches at the top of the pits, pioneering is required. A smaller and more mobile excavator (Hitachi Zaxis 850H) and articulated trucks (Hitachi AH500D) will be more suited for this work. Normal loading and haulage equipment on the lower broader benches will be the Hitachi EX1900 excavator and Caterpillar 777D 85 tonne class trucks.
18.3 Pit Design

18.3.1 Design Criteria A set of optimized pit shells was generated using the parameters described in previous sections of this report. Simple life of mine schedules were run using Whittle in order to generate indicative cash flows and discounted cash flows as the basis for selection of the optimum pit shell. The selected shell was used as a guide for the
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working pit designs. The practical pit designs must place access ramps and catch berms into the slopes while keeping as close as possible to the same volume and waste-to-heap-feed ratio as the optimized pit shell. The mine design criteria are presented below.
Table 48 : Mine Design Criteria
Design Element Face slope Berm width
Value 68 6m
Berm vertical interval

Blasting bench height Minimum ramp width including bunds and drains Material swell for load and haul 18.3.2 Pit Staging
18m
6m 25m 30%
The selected optimized pit shell and the corresponding pit design comprise four discrete pits. The staging of the four pits targeted the lowest strip ratio deposits first that also provided access to higher grade heap feed early and achieved constant feed to the crusher. The four pits as designed are presented below.
Figure 18 : Pit Design Layout - Plan View

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18.3.2.1 Zone A Pit Zone A Pit contains the largest resource and the highest and steepest relief requiring pioneering work. The pit will be 239 meters deep. The estimated quantities from Zone A Pit are: Total Material = 42.5 Mt Waste = 16.9 Mt Oxide Heap feed = 24.2 Mt @ 0.84g/t Au, 22.4 g/t Ag Transitional Heap feed = 5.0 Mt @ 0.70 g/t au, 28.1 g/t Ag
18.3.2.2 Zone B Pit As can be seen in the preceeding figure Zone B Pit straddles the ridge. The estimated quantities from Zone B Pit are: Total Material = 38.9 Mt Waste = 25.9 Mt Oxide Heap feed = 11.7 Mt @ 0.91 g/t Au, 10.1 g/t Ag Transitional Heap feed = 1.4 Mt @ 0.93 g/t au, 5.58 g/t Ag (additional testing required)
18.3.2.3 Zone C Pit Zone C is the lowest pit defined, with a depth of 178 meters. The estimated quantities from Zone C Pit are: Total Material = 36.9 Mt Waste = 19.5 Mt Oxide Heap feed = 15.1 Mt @ 0.64 g/t Au, 34.1 g/t Ag Transitional Heap feed = 2.3 Mt @ 0.56 g/t au, 27.4 g/t Ag (additional testing required)
18.3.2.4 Zone BB Pit Zone BB Pit occurs in material designated as Zone B, but falls outside of the pit limit for Zone B. It is a small shallow excavation that follows the slope of the terrain with the bottom bench day-lighting on the 335mRL contour. The estimated quantities from Zone BB Pit are: Total Material = 1.7 Mt Waste = 0.7 Mt Oxide Heap feed = 1.0 Mt @ 0.93 g/t Au, 12.2 g/t Ag Transitional Heap feed = 0 Mt
18.3.2.5 Pit Characterization The table below summarizes the general characteristics of each pit.
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Table 49 : Pit Characterization Pit From To Comment
Zone A Zone BB Zone B Zone C
Year 1, Month 1 Year 1, Month 8 Year 2, Month 1 Year 5, Month 2
Year 5, Month 11 Year 2, Month 9 Year 8, Month 2 Year 8, Month 10
Provides lowest strip ratio and increasing grade with depth. Mined early to provide waste dump capacity. Moderate grades but with highest strip ratio. Lowest grade pit.
18.4 Mining Infrastructure

18.4.1 Waste Rock Dumps Waste will be hauled to waste dumps adjacent to the pits as illustrated below. Due to the steep terrain and limited availability of waste placement areas, some of the pits will be partially backfilled during mining.
Figure 19 : Waste Disposal
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18.4.1.1 Waste Rock Characteristics The waste rock is a leached, tuffaceous material, low in sulfur and no issues are expected at this stage by IML with acid rock drainage. Further testing will have to be conducted to confirm this characterization, especially in transition zones.
18.4.2 Haul Roads 18.4.2.1 Pre-Production Haul Roads Pre-production haul roads will be constructed to access and connect the mine pits, ROM storage area and the explosives magazine as depicted below.
Figure 20 : Pre-Production Haul Roads and Access Roads
18.5.2.2 Production Haul Roads The production haul roads will connect the pits to the ROM storage areas and waste rock dumps The figure below illustrates the haul roads as currently designed.
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Figure 21 : Production Haul Roads and Access Roads
18.4.3 Production Schedule The mine production schedule was prepared with the following goals: Provide 7.1 Mtpa of heap feed; Maximize Au grades early; Develop mined-out voids as early as possible to provide waste dump areas.
18.4.3.1 Minable Resource The production schedule for the PEA is derived from a resource model and includes material which would currently be classified as Inferred Resources. These tonnes and grade do not constitute a Mineral Reserve. Work is in progress to upgrade the resource. The economic cut off grades are calculated to be 0.31g/t AuEq for oxide and 0.37g/t AuEq for transitional material The procedure for selection of heap feed uses an Au equivalence multiplier for Ag of 0.0047 in oxide and 0.0088 in transitional, based on testing of Zone A transition heap feed materials only. Zones B and C exhibit lower recoveries. The bench height is 6m and mining dilution of 5% at zero grade is applied to the reported bench grades.
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18.4.3.2 Pre-Production Mining Pre-production mining is limited to pre-production haul road development and vegetation clearing. 18.4.3.3 Production Mining The production schedule on a month to month basis was developed using Excel spreadsheets from reports generated in SurpacTM. The pit sequencing was developed to provide full production as early in the project as possible with no stockpiling of heap feed. The annual mine production schedule is presented below. The production schedule does include transition heap feed for zones B and C for which limited metallurgical testing has been done. These transition heap feeds account for 5.21% of the total scheduled heap feed. Recovery of gold and silver from these zones is expected to be lower and cyanide consumption is expected to be higher.
Table 50 : Annual Mine Production Schedule Period Oxide Mined (kt) Au g/t Ag g/t Transitional Mined (kt) Au g/t Ag g/t Total Heap feed Mined (kt) Au g/t Ag g/t Waste (kt) Total Material (kt) Waste: Heap feed Ratios Year 1 7,255 0.76 6 0 0.00 0.00 7,255 0.76 6 4,427 0.61 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 7,175 0.56 24 125 0.76 13 7,300 0.56 25 7,126 0.98 7,233 1.09 21 67 0.83 15 7,300 1.09 21 7,106 1.27 20 194 0.92 5 7,300 1.26 20 5,783 0.91 47 1,517 0.83 44 7,300 0.89 46 9,196 1.26 6,828 0.74 29 472 0.89 3 7,300 0.75 28 7,440 1.02 6,427 0.65 20 873 0.56 29 7,300 0.64 21 8,357 1.14 Year 8 4,237 0.64 18 1,731 0.58 24 5,969 0.63 20 4,141 0.69 Total 52,045 0.84 23 4,979 0.70 28 57,024 0.83 23 63,015 1.11
11,958 10,371 1.64 1.42
11,682 14,426 19,258 17,671 16,496 14,740 15,657 10,109 120,039
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The following Figures show the pit progress by year.
Figure 22 : End of Year 1 Pit Progress
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18.5 Mine Operating Costs

Contractor mining is assumed and the mining operations costs are estimated by building up the mining fleet, workforce and consumables costs against the mine schedule. Contractor mining costs are estimated by applying a contractor margin to the total mining operational expenditure. The costs cover the following: Mining operations, consisting of drill, blast, load, haul and ancillary activities IML mine management, supervisory and mining technical staff salaries and overheads,
Total mine operating cost, assuming leasing of equipment, is $274.5 million; an average of $2.37/t heap feed and $2.21/t waste. A yearly schedule of mining costs is presented in the following table.
Table 51 : Annual Mining Costs
Period Year 1 2 3 4 5 6 7 8
Operating Expenditure Unit Opex
$M $ /t mined $ /t heap
34.0 2.91 2.94
27.3 1.89 1.94
38.1 1.98 2.08
37.6 2.12 2.23
35.4 2.15 2.23
34.4 2.33 2.37
40.2 2.57 2.67
27.5 2.72 2.76
18.5.1 Equipment Costs Mining equipment costs are made up of ownership costs and hourly operating costs. Ownership costs are modeled by assuming rolling leases for each item, with the capital cost repaid quarterly plus a lease rate of 10%. Hourly operating costs are applied against the estimated fleet hours for the excavators, trucks and blast hole drills and against assumed daily hours for the support equipment. Hourly costs including insurance, maintenance parts, tires, ground engaging tools and lubricants were compiled for each machine. Operator and maintenance labor is included separately in the workforce costs. Diesel fuel is estimated separately. 18.5.2 Contractor Margin All cost items were firstly calculated as per owner operation. A contractor margin of 20% was then applied to the calculated mine operating expenditure to allow for Contractor expenditure. This is considered achievable in a competitive tender.
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18.6 Site Infrastructure

18.6.1 Access Roads The principal access to the Project site is via paved road from Genteng to Pensanggarran (34 km), and unimproved dirt roads the last few kilometers to the site. The figure below shows the location of the regional highways of East Java.
Figure 30 : Tujuh Bukit Project Location and Access
It is expected that some portions of the roads will have to be eventually improved to accommodate increased traffic from mine operations. Barges and a small jetty / port facility at site will be utilised for importing major construction equipment and later mine operating supplies. Helicopter transit from the nearby island of Bali is available and takes approximately 40 minutes.
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18.6.2 Power Supply 18.7.2.1 Existing Electrical Power Grid The electrical power supplies and distribution on the island of Java, Madura and Bali are served by an integrated electrical power system that consists of the following transmission system: 500 kV transmission system as the back bone of the entire island of Java; 150 kV transmission system; and 70 kV transmission system.
The East Java Region transmission line system consists of the 500 kV, 150 kV, and 70 kV systems as shown below. It also shows that the closest 150 kV substation to the Mining Area of Pesanggaran Sumberagung is Genteng where the closest power plant is a large coal plant Paiton. The figure below shows the exact location of the Mining Area of Pesanggaran Sumberagung relative to the 150 kV substations (Banyuwangi Genteng Jember). The distance between the closest 150 kV substation (Genteng) and Pesanggaran is about 27 km. Currently there are no plans for PT PLN (Persero) to construct a transmission line and its respective substation to the Pesanggaran Sumberagung area. At a meeting between Intrepid Mines Ltd and PLN Distribution East Java Business Unit on 27 May 2010, the following excerpts from the meeting minutes are noted: 1. Presently there is one step-down transformer 150/20 kV with installed capacity of 60 MVA and current load of 24 MVA at Pesanggaran substation. 2. Maximum loading capacity of the substation is 80% of installed capacity. There is spare capacity to take additional load of 20 MW or less.
Source: PLN Power Supply Business Plan (RUPTL) 2009 2018
Figure 31 : Existing East Java Transmission Lines (blue: 500 kV; red: 150 kV; green: 70 kV)
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Commercial Requirements and Costs Further excerpts from the meeting minutes with PLN Distribution East Java Business Unit, 27 May 2010: If less than 30 MVA, PLN can supply Intrepid Mines with double feeder Medium Voltage Transmission Line (20 kV) from the existing Genteng substation, constructed along the existing road of approximately 30 km long from Genteng to Pesanggaran. Presently there is one 20 kV feeder line from Genteng to Pesanggaran. PLN recommends using a dedicated feeder line for Intrepid for reliability and quality of power supply.
20kVdoublefeederline
TransactionMetering
20kV/220Vor6,000V Stepdown T f
PesanggaranMiningArea InstallationbyCustomer
150/20kV Genteng
PLNpreparebudgetanddesign drawings.Installationby CustomerorPLN,tobeaccounted forintheconnectingfee
Connecting fee based on 2003 Basic Electricity Tariff is Rp 250 per VA or Rp 250,000 per kVA. For 20 MVA the connecting fee is Rp 5 billion. If the installation cost is Rp. 4 billion, customers pay only Rp. 1 billion for the connecting fee. Electricity tariff will be based Multipurpose Tariff (Tarif Multiguna): During normal hours: Rp 1,380 x k (for Java-Bali k = 0.72) or Rp 993.6/kWh During peak hours from 18:00-22:00 2x Rp 993.6 or Rp 1,987.2/kWh Minimum energy utilization charge or capacity charge is based on 100 hours minimum operation of the installed capacity. For example, for 20 MW = 20,000 kW x 100 hrs = 2,000,000 kWh x Rp 993.6/kWh Reactive power charge or kVARh charge is in accordance with the Basic Electricity Tariff (2003). If the power factor is less than 85%, the difference will be charged at Rp 571 per kVARH. Customers are subject to pay street lighting tax of 3% in Banyuwangi region
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18.6.2.2 Estimated Power Demand Estimated overall power demand is shown below.
Table 52 : Heap Leach Power Demand Based on 24 hr/d and 75% utilization Area 03 Camp 05 Water Supply and distribution 10 Crushing 15 Agglomeration and Stacking 20 Heap Leach and solution handling 25 Merrill Crowe 35 Refining 45 Detoxification 50 Electrical 70 Reagents 75 Laboratory 80 Ancillaries and Buildings Total Attached kW Demand kW % kWh/day 250.0 306.8 3,093.2 3,937.8 1,253.4 1,242.4 107.4 48.7 16.5 18.2 266.5 201.5 10,743 140.6 172.6 1,712.0 2,215.0 741.1 873.9 51.2 8.7 9.0 6.1 99.9 56.8 6,087 3,375.0 2,578.9 kWh/yr 1,198,125.0 915,523.3 kWh/t Ore 0.169 0.129 1.986 2.658 0.889 1.014 0.061 0.000 0.011 0.007 0.120 0.068 7.112
39,710.3 14,097,154.7 53,159.9 18,871,762.7 17,787.0 6,314,391.4 20,273.5 7,197,093.6 1,227.9 0.0 216.0 145.6 2,398.5 1,364 142,236 435,891.0 0.0 76,680.0 51,683.0 851,467.5 484,043 50,493,815
18.6.2.3 Estimated Power Cost From the above mentioned meeting minutes of the proposed rate schedule, using currency conversion 9,000 IRs to the dollar, including the 3% streetlight tax, a weighted average of normal and peak hours over a 24 hour day equates $0.134 /kWh estimated power cost. In this study this figure has been rounded up to $0.14 /kWh for operating cost calculations. With respect to capital costs, PLN stated that they will install the 20 kV line from Genteng to site as part of the overall connection fee. This fee plus the security deposit and the 3% streetlight tax equals $833,000. Further, an allocation of $1M has been provisioned for onsite power line reticulation. Individual transformers, MCCs, site switchgear, and metering are estimated separately from this amount.
18.6.2.4 Emergency Power In the event of a power failure, diesel fired back-up generators will be used to supply emergency power for project safety and security. Back-up electric power will be supplied to the following facilities: Critical solution pumps (barren, pregnant, excess, and detox if eventually needed); and Merrill Crowe circuit. Maximum power required will be 2.6 MVA considering a power factor of 0.96;
The generator requirements will be:
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Location adjacent to the Process area; Connected to the substation bus bar; Two generators, each rated 1.35 MVA at sea level; o o One dedicated for solution ponds; One dedicated to Merrill Crow circuit;
Manual startup on power failures; and Diesel fuel and 24 hour autonomy.
18.6.3 Water Supply The project will require a water supply for the following uses: Mining operations for dust control, drilling, etc.; Crushing for dust control; Make-up water for the leach pad; Process plant and laboratory; and Accommodation camp and administration.
Make-up water will likely be required during the dry season, and particularly during abnormally dry years. This requirement will be met from three sources: Solution previously stored in the storm water excess solution pond; and, after that has been exhausted; Fresh water from the fresh water dam (reservoir); and Sea water as required.
Water demand will be highest during the dry season and has been estimated at 105 m3/hr. During the wet season, demand will likely reach approximately 69 m3/hr. The peak water demand for the leach pad will be expected only at the start up of operations for a period of one month. The design maximum daily water demand has been calculated at 125 m3/hr (35 L/sec), with demand peaks as high as 50 m3/hr during routine operations. During start-up and initial fills, approximately 125 m3/hr will be needed for initial pond filling, etc.
18.6.3.1 Water Source Geotechnical drilling and test pits show strong presence of shallow ground water in the area, which will be further assessed during the next stage of the project. It is probable that sufficient fresh water can be found and developed to supply the operation. However, in the event insufficient water can be sourced (particularly during the dry season), tentative plans to use nearby sea water will be considered. A submersible pump and pipeline from a rain collection dam will discharge to the pond area. Further, a small sump will be developed in proximity to the nearby beach and a submersible pump installed as an additional supply of sea water. This will supply water to the solution pond area via a 6-inch HDPE overland pipe.
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18.6.3.2 Potable Water Systems Potable water treatment systems will be installed in the camp area and in the process area to treat a portion of the raw water delivered to the plant site for domestic purposes.
18.6.3.3 Sewage Treatment Systems A sewage treatment system will be installed to treat waste from the camp area, the process area, and in the mine shop area. In addition, a small laundry water treatment system will be installed in the camp area.
18.6.3.2 Fire Water Fire water storage tanks and pumping systems will be installed in the process plant area, in the camp area and in the mine shop area. These systems will always hold sufficient volume in reserve for fire emergencies.
18.6.4 Project Buildings Project buildings are shown on the overall General Arrangement drawing in Appendix I.
18.6.4.1 Administration Building The administration building will be 509 m2, sized to accommodate key administration, supervisory, engineering, geology, and accounting personnel.
18.6.4.2 Mine Workshop The mine workshop will be designed to be economical utilizing a semi-open arrangement with stacked containers on three sides for storage and office space. The building has three primary work bays and an additional covered welding bay on one side and a wash bay on the other side. The shop will have concrete floors and metal siding on the back-side. The wash down drainage from equipment washing will be directed to an oil-water separator. Mobile cranes will be used for maintenance lifting in preference to an overhead crane.
18.6.4.3 Process Buildings The process area will have a number of small buildings located near the process areas: Refinery (730 m2); Process Warehouse and Workshop (698 m2); Process Offices (123 m2); Locker Rooms (107 m2); Crusher Maintenance Workshop (260 m2); Merrill Crowe shed roof only (1623 m2); and Reagent Storage Area Shed roof only (680 m2).
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These are expected to be a combination of prefabricated modular buildings and local cement block construction. Small workshops will be sea containers on a slab with truss / steel roof providing an economical roofed storage and work area. Most of the process operations will be outdoors and a boom truck and 75 ton crane are to be used for maintenance activities in preference to overhead cranes. Operator work stations will be positioned to allow unobstructed views of key operating equipment and ore feed positions.
18.6.4.4 Laboratory
A full service prefabricated modular laboratory will be installed on site to run all sample analyses required for mining and process operations. The laboratory will be 390 m2 and handle 300 samples per day.
18.6.4.5 Construction Camp Housing Modular tent style accommodation will be provided for 456 construction workers with 38 modules at 12 persons per room and all workers will share three prefabricated modular bathroom / shower units with two toilets, two urinals, and two showers allocated to each sleeping module. For some of the senior company, contractor personnel and VIP visitors, 12 prefabricated modules each with four separate rooms and private bathrooms will be provided.
18.6.4.6 Operations Staff Housing After construction all or part of the construction camp will be utilized to house full time employees as required. It is anticipated that some of the permanent workers will choose to lodge in neighbouring communities.
18.6.4.7 Dining Facilities A large tent style kitchen / cafeteria module with seating for 500 has been estimated as well as modules for laundry and storage. Following the main construction period, a portion of the dining area will be converted to training and meeting rooms and a recreation area.
18.6.5 Diesel Fuel Delivery and Storage Systems Diesel fuel and small amounts of gasoline will be delivered to the mine site via tanker trucks and stored in two 6 m x 6 m tanks with 220,000 L capacity. The storage tanks will be in placed in lined basins to assure no fuel will leak in to the subsoil. A fuel truck will be used to deliver fuel to the mine mobile equipment. A small fuel facility for gasoline light vehicles will also be included.
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18.6.6 Site Services 18.6.6.1 Security Access to the facility will be limited by fences in the process and camp areas only. A guardhouse will be staffed at the road entry to the site and will be manned 24 hours per day.
18.6.6.2 First Aid A clinic will be constructed on site. Emergency medical staff will be available on site and an ambulance will be available for emergency transport of workers. A dedicated area will be designated for emergency helicopter service.
18.6.6.3 Communications Radio and telephone communications as well as satellite internet systems will be provided for on-site and off-site communications.
18.6.6.4 Transportation Transportation will be provided for the workers from to the mine via local contractor bus service as required on scheduled shift changes.
18.6.6.5 Solid Waste Disposal Solid wastes will be disposed of in a manner complying with local regulations. Allowable products will be disposed of in a solid waste landfill constructed on site. Products not allowed to be disposed of in the landfill will be transported to appropriate facilities off site.
18.6.7 Unloading Port An unloading port has been planned for the project to facilitate delivery of equipment and consumables to the project. The jetty and port will be one of the first components constructed to allow for landing of earthmoving equipment to begin pioneering and site construction. After construction the jetty will be the main access for project consumables.
18.6.8 Fencing The process ponds, processing plant areas, reagent area, and camp areas will be fenced with security fences and access gates.
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18.7 Environmental Considerations

18.7.1 Introduction and Standards The environmental, social and permitting portions of the Project are summarized at the conceptual level in this chapter. Environmental studies on the site classification, flora, fauna, aquatic life and permitting have been performed by Golder Associates, PT Intertek Utama Services, and URS Australia Pty Limited. A gap analysis on the studies conducted to date was also performed by URS to identify any additional work that may be required. The following studies have been produced. Review of Forest Classification Criteria in Indonesia URS Australia Pty Limited: forest classification Vegetation Survey of the Tujuh Bukit Concession Area PT Intertek Utama Services: flora study Wildlife Survey of the Tujuh Bukit Concession Area PT Intertek Utama Services: fauna study Aquatic Baseline Study Golder Associates: aquatic baseline study Environmental Baseline Study at Banyuwangi, East Java Golder Associates: environment description Regulatory Approvals and Permits Intrepid Mines Tujuh Bukit Project URS Australia Pty Limited: Permitting Gaps Analysis of Project Documentation for Tujuh Bukit Project URS Australia Pty Limited: gap analysis
This chapter identifies issues and sensitivities associated with the Project, and propose some solutions for the permitting of the project and managing environmental affairs of the mine during its life cycle. 18.7.2 Description of the Environment 18.7.2.1 Baseline Program A baseline environmental study was performed by Golder Associates (Golder) on the Project in East Java. The objectives and scope of this study were to assess and document the existing natural baseline conditions as well as to identify any major environmental issues. These areas of interest included installation of instruments for climate monitoring, assessing the current coral reef status, and trace metal analysis in selected coral reef and marine species samples.
18.7.2.2 Project Description The Project is located in the south eastern section of the island of Java between the coordinates 83200 to 83800 south latitude and 1135700 to 1140500 east longitude. The Project is located at sea level, and the topography shows the area to be mostly hilly and mountainous, with many agricultural areas. The Project area also contains many streams and rivers, including the Sungai Udang and Sungai Lembu rivers; all of the rivers in the area drain into the Indian Ocean.
18.7.2.3 Climate Using a meteorological station, meteorological data was collected in the project area. Based on the Badan Meteorogi dan Geofisika data, the project site is classified as Season Zone (ZOM) 112.
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Table 53 : Summary of Rainfall and Wind Simulation Wet Season
MONTH NOVEMBER DECEMBER JANUARY FEBRUARY MARCH APRIL Source: Golder Associates, 2009
PRECIPITATION RATE (mm/Month) 150-200 250-300 300-350 200-250 200-250 200-250
WIND SPEED (m/s) 0-5 0-5 5-10 5-10 0-5 0-10
WIND DIRECTION Southeasterly Southeasterly Westerly Westerly Easterly Southeasterly
Table 54 : Summary of Rainfall and Wind Simulation Dry Season
MONTH MAY JUNE JULY AUGUST SEPTEMBER OCTOBER

Source: Golder Associates, 2009
PRECIPITATION RATE (mm/Month) 150-200 50-100 0-100 0-50 50-100 100-150
WIND SPEED (m/s) 0-5 0-5 5-10 5-10 0-5 0-5
WIND DIRECTION Southeasterly Southeasterly Southeasterly Southeasterly Southeasterly Southeasterly
18.7.2.4 Water Quality Water samples have been taken at 17 points for surface water, sea water, waste water, and well water; however, samples did not cover the areas proposed and were insufficient to draw conclusions.
18.7.2.5 Coral Reef The Golder study data showed the coral reef habitat area that was studied to be a healthy environment. Contamination studies on ten coral samples were performed, and most contaminants searched for in the samples were above the detection level, with the exception of lead, but were in low concentrations.
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Table 55 : Contaminant Concentrations (mg/wet kg) in Selected Coral Samples
METALS CR1 Arsenic, As Cadmium, Cd Chromium, Cr Copper, Cu Lead, Pb Mercury, Hg Nickel, Ni Zinc, Zn 0.38 0.4 3 1.1 3 0.021 7.4 8.4
ST 1 Candrian CR2 0.21 0.2 3 0.7 1 0.027 4.1 3.2 CR3 0.64 0.2 4 1.5 <1 0.019 7.6 4.4 CR4 0.39 0.6 2 1.2 <1 0.020 6.3 4.0 CR5 0.18 0.2 3 0.7 <1 0.027 3.7 2.7
ST 2 Pulah Merah Tidal Flat CR6 1.06 1.0 2 1.9 <1 0.014 6.9 8.3 CR7 0.098 0.2 4 1.4 <1 0.132 5.2 5.5 CR8 0.06 0.2 2 0.5 <1 0.024 0.8 1.4 CR9 1.04 0.4 2 1.5 <1 0.024 4.1 5.9 CR10 0.09 0.1 2 0.6 <1 0.019 1.2 3.2
Threats to coral mortality in the area were generally low. The coral and other ocean life are further addressed in the Aquatic Life section.
18.7.2.6 Golder Recommendations At the conclusion of the Golder Environmental Baseline Report several recommendations were made. These recommendations include: Continuing climate monitoring; Re-site weather station; Perform a complete hydrological study; Take additional tissue samples from different species and areas around the project site; and Perform sea water sampling and analysis in parallel with the study on contaminant concentrations in tissues of numerous fish and clams.
18.7.3 Flora Study In the report, Vegetation Survey of the Tujuh Bukit Concession Area, by PT Intertek Utama Service, the Flora in the Project area was reviewed. The objectives of this report were to collect basic information and data related to species diversity of trees located in the Project area, calculate the local distribution and abundance of the various tree species, and to determine the status of any tree or plant species found. 18.7.4 Fauna Study In the report, Wildlife survey of the Tujuh Bukit Concession Area, by PT Intertek Utama Service, the fauna in the Project area was reviewed. The objectives of the study were to collect basic information and data related with species diversity of wildlife, record local distribution and abundance of wildlife, and to determine the conservation status of any wildlife encountered at the study site.
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18.7.5 Aquatic Baseline Study In the report, Aquatic Baseline Study, by Golder Associates, aquatic life and base heavy metals content present in the Project area was reviewed. The objectives of the study were to describe the baseline coral reef conditions in the area around Pulau Merah by assessing the quality and characteristic of the coral reef habitats and to collect five coral samples from within the Pulau Merah area to be analyzed for arsenic, cadmium, mercury, and nickel. This study also investigated the metal content in the food chain. The table below shows heavy metals concentrations found in water samples taken from runoff waters, rivers, and coastal waters.
Table 56 : Concentrations of Dissolved Trace Elements in the Fresh Water and Sea Water Samples
No.
Trace Metals
Unit mg/l mg/l mg/l mg/l mg/l
Station Seawater Quality Standard* ST-3 / CW1 ST-4 / CW2 ST-11 / RO-3 ST-12/ RO-4 0.012 0.001 N/A 0.001 0.05 0.0012 <0.0001 0.020 0.00111 0.010 0.0010 <0.0001 0.029 0.00090 0.002 <0.0005 <0.0001 0.002 0.00008 <0.001 0.0007 <0.0001 <0.001 0.00009 <0.001
1 Arsenic, As 2 Cadmium, Cd 3 Chromium, Cr 4 Mercury, Hg 5 Nickel, Ni
*Ministry Regulation No. 51/2004 Source: Golder Associates, 2009 This data showed that the concentrations of these metals were for the most part low, except for one location where slight elevated concentrations above the sea water quality standard of mercury was observed.
18.7.5.1 Sediment Samples Sediment samples were taken from runoff, river, and coastal regions of the Project area. These results are shown in the table below.
Table 57 : Concentrations of Trace Elements in the Sediment Samples Sediment Quality Unit Standard* mg/kg mg/kg mg/kg mg/kg mg/kg 7.24 0.07 52.3 0.13 Station ST - 8 / ST - 11/ CTS -2 ROS -3 1.38 <0.1 7 0.052 9.92 <0.1 4 0.021
No. Trace Metals 1 Arsenic, As 2 Cadmium, Cd 3 Chromium, Cr 4 Mercury, Hg 5 Nickel, Ni
ST -4 / CS-1 13.5 <0.1 4.000 0.047
ST - 5 / CS - 2 2.2300 <0.1 3 0.007
ST-1 / CTS -1 42.8 <0.1 14 0.01
ST -12 / ROS-4 38.6 <0.1 6 0.008 3.9
ST -13 / ST - 14 RS -1 / RS - 2 26.6 <0.1 5 0.019 1.4 2.93 <0.1 8 0.011 4
0.900 12 4.8 5.1 0.8 * The Canadian council of ministers of the environment, 1999)
Source: Golder Associates, 2009
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18.7.5.2 Metal Content in Fish Appreciable levels of heavy metals were present in the sampled aquatic life; however there is no specific pattern of heavy metal contamination in the area. Heavy metal concentrations of mollusks and crustaceans were also studied, which showed that mollusks contained the highest concentrations of the heavy metals.
18.8 Reclamation and Closure

18.8.1 Summary The Tujuh Bukit project has been designed to meet and comply with the environmental standards of Indonesia. In accordance with Indonesian requirements, the following reclamation and closure program is proposed, and has been considered at the feasibility level. The objectives of the project closure are as follows: To protect public health and safety after the closure of the project. To ensure the short and long term physical and chemical stability of the project areas after mine closure. To rehabilitate and condition the project area to be compatible with the surrounding areas, fit for its original use or an acceptable alternative use. To provide physical stability by establishing surface drainage areas to strengthen different slopes. To restrict access to people, livestock, and wild animals to areas where risks of accidents are still present. To dismantle all project facilities.
The majority of the closure work for the leach pad and ponds will be rinsing the ore and treating the residual effluent to reduce cyanide levels down to regulatory requirements. A compacted soil cover must be placed over the pad to minimize erosion and infiltration of surface and rainwater, thus decreasing potential acid generation and leaching of any residual constituents of concern. The ponds will remain in place for sediment control and to provide a place to periodically sample effluent.
More detailed closure plans should be developed both before and at the time leaching operations are terminated, i.e. during final closure and post-closure. During the first two years of operation in situ characterization of the heap (ore) must be done to develop a closure plan, as the life of the project is relatively short. Regular reviews and updates should be performed throughout the life of the project to reflect the actual construction of the heap, ore characteristics, and performance of the facility. Post-closure monitoring will be required to verify the heap effluent quality.
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18.8.2 Temporary Closure Activities Temporary closure due to economic, political or any other reason has been considered for the Tujuh Bukit project. The main objectives of temporary closure are similar to those for final closure, which are to protect public health and safety, and to ensure both physical and chemical stability. 18.8.2.1 Demobilization of Equipment Both mobile and stationary equipment are to be cleaned and purged of all chemicals and fuels, with all containers being properly labelled. All equipment that can be stored should be and should remain in storage until the resumption of mining activities. 18.8.2.2 Closure of Access and Pathways All access roads to the project site will be closed to prevent any foreign vehicles from entering. 18.8.2.3 Physical and Chemical Stabilization The project is designed in a way to ensure both physical and chemical stability throughout the project. In the event of a temporary closure, any areas of instability will be addressed and made stable. 18.8.2.4 Restoration of Landform, Revegetation, and Rehabilitation Restoration, revegetation, and rehabilitation of the land will occur as a continuous process through the project. In the event of temporary closure, progress in these areas will be assessed and additional restoration, revegetation, and rehabilitation will be provided where required. Monitoring programs will be established to check the results. 18.8.2.5 Monitoring Monitoring will be performed during times of temporary closure to determine what actions need to be taken if there is evidence of risk. 18.8.3 Progressive Closure (Phased Concurrent Reclamation) Progressive closure, or phasing, involves the gradual closure of project areas throughout the operation of the project. As a part of this, facilities have been designed to be stable physically and chemically through the life of the project and thereafter. 18.8.3.1 Demobilization of Equipment In progressive closure any mobile or stationary equipment that is no longer necessary will be cleaned and disassembled. 18.8.3.2 Closure of Access and Pathways Access roads to parts of the project no longer in operation will be closed permanently or temporarily, depending on location and requirement of the road for future uses.
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18.8.3.3 Demolition and Disposal of Materials Facilities that are no longer in use for the project will be decommissioned. Depending on the facility, it will be dismantled and the materials will then be reused, sold, or disposed of in an environmentally safe manner. 18.8.3.4 Physical and Chemical Stabilization Physical and chemical stabilization will be monitored throughout progressive closure activities. 18.8.3.5 Restoration of Landform, Revegetation, and Rehabilitation Areas that are no longer in production and have been abandoned will be regarded, physical and chemical stability will be established and confirmed, and will be capped by a topsoil coverage. The area will be revegetated to prevent erosion and provide a habitat to the wildlife of the area that is similar to the original landscape. To the extent practical waste dumps and heaps will be designed and constructed in sequences which allow for early concurrent reclamation. Inactive and completed sideslopes of heaps and dumps will be prepared and revegatated to final closure standards. 18.8.3.6 Monitoring Monitoring of the physical and chemical stabilities of closed areas will occur through the life of the project. Items being monitored include the weather, air quality and emissions, surface water, ground water, fauna, aquatic life, and geotechnical characteristics.
18.8.4 Final Closure The final closure includes all the activities and measures required to obtain the physical and chemical stability of all components of the project. Final closure also encompasses decommissioning, demolition, salvage, reclamation, and rehabilitation. 18.8.4.1 Demobilization of Equipment During final closure, mobile and stationary equipment will be cleaned out and purged of all fuels or chemicals. All containers will be labelled. Teams will be demobilized and removed from the project area. Office, plant facilities and equipment will be sold for salvage at the close of operations. Remaining buildings will be demolished or may be donated to the community for beneficial use. 18.8.4.2 Decommissioning Authority All facilities not relevant to the local people will be dismantled and its parts will be reused or disposed of in an environmentally safe manner. 18.8.4.3 Closure of Access and Pathways All areas that are not considered to be of public utility will be closed so that no foreign vehicles are able to enter the site.
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18.8.4.4 Demolition of Infrastructure and Provision of Materials During final closure, any concrete infrastructure not declared as public interest by local authorities will be demolished, and the ground will be covered with topsoil. 18.8.4.5 Physical Stabilization Physical stabilization activities will be carried out so that slopes and foundations, and any other areas that may be affected by erosion are stable. Diversion berms and surface runoff systems will be upgraded at closure to minimize post-closure maintenance requirements. 18.8.4.6 Chemical Stabilization The chemical stability of the project components depends on its mineralogical characteristics and the presence of water and oxygen. Appropriate actions will be taken to maintain the chemical stability of the project area. 18.8.4.7 Resetting the Physiography of the Project Area and Habitat Restoration After all project infrastructure has been dismantled and removed, affected areas will be capped, re contoured, stabilized physically and chemically, and the covered with topsoil. Where feasible, native topsoil will be sequestered, at a convenient on-site location so that it can be used to establish a soil system on newly reclaimed sites during mine reclamation. The plan recognizes that there is a limited amount of available soil. Berms and fencing will be constructed around the outside perimeter of the pit high walls for safety concerns. Roads into the pit will be closed after closure activities have been completed. Other access points to the facilities will be closed off and warning signs will be placed at appropriate sites around the facilities. Waste dumps are designed with set-backs so that they can be readily re-contoured to an outer slope of 2.5 to 1 (horizontal to vertical). This slope can accommodate re-vegetation and will minimize erosion damage. Top slopes will be contoured to shed surface runoff and to avoid ponding. Dump roads will be removed, scarified, and re-vegetated. Following the completion of gold recovery, the heap will be covered, or armored, with 100 cm of run of mine waste rock to stabilize the dry stack tailings surface against erosion from rainfall. The armored heap will have a final contour at an overall slope of 3.0 to 1.0 (horizontal to vertical). The cover material may also provide sites for seeds to take hold. Any growth-supporting soil salvaged from operations will be spread as appropriate on the heap. The heap will be re-vegetated with a mixture of locally occurring seeds, grasses and plants. This will reduce rainfall infiltration into the heap by increasing the effect of evapotranspiration. Exposed berms will be re-graded and exposed liner will be either removed or buried. The quality and quantity of runoff from (and infiltration through) the tailings heap will be monitored during active closure and for a number of years post-closure to ensure that any discharge meets water quality discharge requirements. Process pond liners will be removed and buried and the retaining structures will be removed or breached to reestablish the previously existing drainage patterns.
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18.8.4.8 Revegetation Revegetation, as a part of the final closure plan, includes plant recolonization of areas affected by the project. Important considerations during revegetation are the end use of the land, plant species to use, water availability, planting practices, and surface soil stabilization. Prior to construction, native plants categorized as especially sensitive species will be recovered from areas of disturbance so they can be transplanted for storage and eventual return to the mine site or be donated to other beneficial uses. 18.8.4.9 Social Programs Final closure will have a significant impact of employment in the area of the project and in the local regional economy. Retraining programs, reconversion programs, communication and consultation of the closure activities, and a dispute resolution program will all be instigated. 18.8.4.10 Monitoring and Post-Closure Maintenance
Final closure monitoring will focus on whether environmental variables monitored during the exploration phase return to their base conditions, or in there are residual impacts and mitigation measures are necessary. Post closure monitoring will include physical and chemical stability of constituents and water quality, and if necessary, the effectiveness of revegetation activities.
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18.9 Capital Costs

18.9.1 Summary The capital cost estimate for the Project is summarized below. Costs have been based on the design outlined in this report and are considered to have an accuracy of +/-30%. The scope of these costs includes the preparation of costs for all process facilities and infrastructure for the Project. A mining contractor will be utilized for the Project and as such, the capital cost the mining fleet is accounted in the operating cost. A shop building however is included in the capital costs, as well as contractor costs for mobilization and demobilization of the mining fleet. A provision is allowed for pre-production mining. The costs presented in this report have been estimated by KCA. All equipment and material requirements have been based on the design information described in previous sections of this report. Budgetary quotes, either new quotes from a supplier or quotes in KCAs files, have been used for all major equipment items and capital items. Minor equipment costs have been based on recent quotes on file for similar equipment. In some cases quotes on file for similar equipment are proportionally factored up or down to more closely match the size of the selected equipment for this project. All capital cost estimates have been based on the purchase of new equipment quoted from the manufacturer, or estimated newly fabricated. Tables presenting the capital cost summaries are based on area and discipline, respectively. All costs are in fourth quarter 2010 US dollars (US$).
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Table 58 : Summary of Initial Capital Costs Plant Totals Direct Costs Area 00 - Site & Utilities General Area 03 Camp Area 05 - Water Supply & Distribution Area 06 - Process Area General Area 08 - Mobile Equipment Area 10 - Crushing Area 15 - Ore Reclaim and Stacking Area 20 - Heap Leach and Solution Handling Area 25 - Merrill Crowe Area 35 - Refining Area 45 - Detoxification Area 50 - Electrical Area 70 - Reagents Area 75 - Laboratory Area 80 - Ancillaries Plant Total Direct Costs Spare Parts Contingency Plant Total Direct Costs with Contingency Indirect Field Costs Indirect Field Costs Contingency Plant Total Indirect Costs Initial Fills Owners Costs EPCM Sub Total Plant Cost Working Capital 60 Days Pre-Production Mining Provision Contractor Mobilization Provision Total Pre-Production Capital Costs VAT (Pre-Production Capital Costs) Total (Pre-Production Capital Costs inc VAT) Total Supply Cost 1.2 1.9 0.7 0.2 1.5 13.9 23.4 3.5 5.4 1.4 0.7 1.7 0.5 1.2 6.3 63.5 2.5 21.7 Install 1.2 0.2 0.1 0.1 0.1 2.8 1.9 28.2 1.0 0.1 0.1 0.2 0.1 0.1 1.0 44.9 Grand Total 2.4 2.1 0.8 0.3 1.5 16.6 25.3 31.6 6.4 1.6 0.8 1.9 0.5 1.4 7.3 100.5 2.5 21.7 124.8 3.5 0.7 4.2 1.0 20.0 16.4 166.4 13.0 6.5 1.0 186.9 16.7 203.6
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18.9.2 Cost Basis 18.9.2.1 Process Plant Each facility, including crushing, agglomeration, stacking, heap leach, recovery plant, etc. in the capital cost estimate have been separated into the following disciplines, where applicable: earthworks, buildings, civils, structural steel, plate work, mechanical equipment, piping, electrical, and instrumentation. For each discipline, costs include freight, customs fees and duties, and installation. Each of these cost types are briefly discussed in the following sections. Engineering, procurement, and construction management (EPCM), contractor indirect costs, and initial inventory have been added to the total direct costs.
18.9.2.2 Freight Estimates for equipment freight costs have been based on loads as bulk freight at an average percentage of equipment cost. The cost for transport for equipment items to the project site in East Java has been estimated to average 10.0% of the equipment cost.
18.9.2.3 Duties and Customs Fees Customs fees for items imported to East Java have been assumed at 7.0% of equipment costs. Generally, Indonesia duties for industrial equipment range from 0% to 10%. It is unknown at the time of preparing this estimate if any of the equipment items for the project are exempt from duties, VAT, or income tax. As a result, 7.0% for customs fees and duties has been applied to all capital equipment. For this study, a VAT cost of 10% has been included against all capital costs and has been assumed to be subsequently refunded twelve months later.
18.9.2.4 Installation Installation estimates for the equipment have been based on the equipment type and include all installation labor and equipment usage. The hourly installation labor rates have been assumed to be $20/hr.
18.9.2.5 Earthworks Major earthworks volumes have been estimated based on the preliminary site and pad design. This includes major earthworks for providing level areas for various facilities, site roads, and the heap leach pad and ponds. Unit rates for the major earthworks for the project have been provided by PT Resindo Resources Indonesia. Table 22-2 below shows the earthworks unit rates for the project. HDPE liner costs have been estimated by KCA based on recent experience from other similar projects.
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Table 59 : Earthwork Unit Rates Major Earthworks Tree Cutting Site Preparation, Clearing Excavation - Type B Excavation - Type C Loading and Transport of unsuitable material Loose Fill Structural Fill 30 cm lifts 90-92% spread and comp. -Leach Pad Floor (Single Lined) Berms -Underliner (Clay) -Excess Pond (double Liner) -Pregnant Pond (double Liner) Pregnant and Barren Solution Pond Geonet Extra water trucks for compaction Diversion Canals Anchor Trenches Pad Liner Installed Pond Liner Installed Pad Gravel 600 mm Unit Hectares Hectares m m
3 3 3 3 3 3 3 3 2 2 2 3 3 3 2 2 3
Cost per Unit, $ 2,700 2,700 5.30 6.80 3.80 4.50 4.50 4.00 4.50 25.0 4.00 4.00 4.00 0.10 3.65 9.00 1.00 1.00 54.80
m m
m m
m m m m m m m
18.9.2.6 Civils Civils have included detailed earthworks and concrete. Concrete quantities have been estimated from takeoffs based on quantities from previous similar equipment installations, on major equipment weights, and on slab areas. Concrete costs have been estimated at $900 per m3. Concrete installation estimates have been based equipment type and include all installation labor and equipment usage. These costs include footing excavation, formwork, rebar, and all other tasks necessary to supply and place concrete.
18.9.2.7 Structural Steel Structural steel costs have mostly been incorporated into the mechanical equipment costs for this project, as much of the major equipment is either turnkey, or modular and includes the structure needed for the equipment as part of the purchasing package. 18.9.2.8 Platework All plate work for tankage, bins, and chutes have been included in the mechanical equipment costs. No additional plate work will be required.
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18.9.2.9 Mechanical Equipment Costs for all major items of new equipment have been based on budgetary quotes from vendors, or have been taken from projects recently completed by KCA. Costs for minor equipment items have been based on supplier quotes, or from KCAs in-house database. Installation estimates have been based on equipment type and include all installation labor and equipment usage.
18.9.2.10 Piping, Electrical and Instrumentation Piping, fittings, and valve costs have been estimated on a percentage basis of the mechanical equipment costs. A rate ranging from 1% to 15% has been used to estimate piping purchase costs for each area. Process pumps, and installed piping for the recovery plant have been included in the quotation for the modules. Similarly, electrical costs have also been estimated on a percentage of the mechanical equipment basis. A rate ranging from 3% to 15% of the equipment cost has been used to estimate electrical purchase costs for each area. An electrical installation man-hour estimate of 0.004 to 0.01 hours per value of the electrical purchase cost has been used, with man-hours charged at $20.00 per hour. Instrumentation costs will be minimal with a percentage range of 1% to 3% of the mechanical equipment cost being used.
18.9.3 Mining Mining cost estimates have been based on work by Australian Mine Design and Development (AMDAD), who prepared the mine plan, haul distances, and profiles.
18.9.4 Buildings A list of the buildings is provided in Table 22-3. Building costs have been based on a combination of steel building costs and site constructed buildings. An allowance of $75,000 for office furnishings has been included.
Table 60 : Buildings
Buildings Process Office Building Locker Room Building Mine Shop Bldg. Mine Shop Storage Containers Mine Shop Office Containers Admin Building Clinic Lab Module Building Refinery Building Merrill Crowe Plant Warehouse and Maintenance Workshop Bldg.
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Crusher Workshop Powder Magazine Building MCC Buildings Guard Shack Warehouse Shed A modular package has been being used for the laboratory building estimate.
18.9.5 Infrastructure Items 18.9.5.1 Access Roads A $1,000,000 allowance has been allocated for access road construction. A jetty and port cost of $3.5M has been estimated by PT Resindo Resources, Indonesia. The jetty has been designed for the unloading of all major equipment near the project site, minimizing access road construction.
18.9.5.2 Power Supply An existing 150 kV powerline and 20 kV stepdown transformer is located 34 km north of the project site. The estimate has been based on connecting to this transformer to supply 20 kV line power to the project site. Metering and circuit breakers will be present to protect the system. The site distribution will use independent transformers at each operating area. Capital costs associated with the power supply system have been provisionally estimated using quotes from other projects. Total electrical cost for the project has been estimated at $7.7M.
18.9.5.3 Raw Water Supply Capital costs for the raw water supply system include water well and pumps, storage tanks, and pipelines. These costs have been estimated with equipment costs from similar equipment and projects. A total cost for water systems has been estimated at $780,000 (excludes earthworks for water dam).
18.9.5.4 Site Fencing A $150,000 allowance has been allocated for all site fencing.
18.9.5.5 Data Management and Communications A $50,000 allowance has been made for a satellite communication system for the project. 18.9.6 Indirect Costs 18.9.6.1 Field Indirects Indirect costs include Owners costs for items such as temporary construction facilities, quality control, survey support, warehouse and fenced yards, construction office, support equipment, security, etc. These
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costs have been estimated as line item allowances as shown in Table 22-4. Costs for permits, fees, and licenses have not estimated.
Table 61 : Field Indirect Costs Indirect Field Item Construction Camp Operation (12 months) Construction Quality Control Group (12 months) Construction Equipment Rentals Survey Support (12 months) Construction Warehouse & Fenced Yards Construction Office Other Temporary Construction Facilities - ablutions etc. General Support Equipment Security Travel Costs Indirect Contingency 20% Total Value 1,095,200 425,653 585,360 257,554 210,000 150,000 100,000 100,000 462,326 136,000 704,419 4,226,511
18.9.6.2 Vendor Representatives Costs for vendor representatives for the engineering and installation supervision have been included in several vendor quotes on major equipment items. The total capital cost for these services equates to $540,000.
18.9.6.3 Spare Parts Spare parts costs not directly provided by the suppliers have been estimated at 5% of the mechanical equipment (including electrical and instrumentation) cost. 18.9.6.4 Initial Fills Inventory The initial fills consists of consumable items stored on site at the outset of operations. This inventory of initial fills is in place to insure that adequate consumables are available for the first stage of operation. The initial fills costs, including reagents and fuel, have been estimated at $966,664. This estimate has mostly been based on a supply for one month of operation and / or rounded to the nearest full truckload delivery.
18.9.7 Engineering, Procurement and Construction Management The estimated cost for engineering, procurement and construction management for the development, construction, and commissioning of the Project was calculated based on 12% of the direct costs excluding mining. The EPCM costs cover services and expenses for the following areas:
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Project Management; Detailed Engineering; Engineering Support; Procurement; Construction Management; and Commissioning.
18.9.8 Contingency Contingency has been applied at 20% for all direct and indirect costs.
18.9.10 Sustaining Capital Costs Future capital expenditures will include additional costs for the expansion of the leach pad site in the fourth year of production. The second phase capital cost accounts for a total of $8,129,509, or about 5% of the total overall project cost before VAT is applied.
18.9.11 Owners Costs Owners costs are intended to cover the following items: Land acquisition for mining, processing plant, heap leach pads, waste dumps and infrastructure Owners costs for labor, offices, vehicles, travel and consultants during construction are included in the indirect costs; Working capital for 120 days has been included in the capital costs; Work place health and safety costs during construction have been included in the indirect costs; and Taxes, permits, and license fees were not known at the time of writing this report and have not been included in estimate.
18.9.12 Exclusions The following capitals costs have been excluded from KCAs scope of supply and estimate: Finance charges and interest during construction; Escalation costs; Currency exchange fluctuations;
18.9.13 Additional Detail to Capital Cost Estimate The capital cost Tables 22-5 through 22-7 are presented below and contain additional details for the cost calculations.
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Table 62 : Summary of Capital Costs by Discipline Plant Totals Major Earthworks Civils (Supply & Install) Mechanical Equipment Piping Electrical Instrumentation Commissioning Infrastructure & Buildings Spare Parts Contingency Plant Total Direct Costs 54,893,291 5,077,194 3,575,212 1,759,459 35,374,654 2,719,670 6,177,376 1,108,422 542,547 7,211,163 694,868 496,029 3,537,469 116,277 617,738 110,842 2,476,235 92,942 432,416 77,590 Cost @ Source Freight Customs Fees & Duties Total Supply Cost 0 1,759,459 41,388,358 2,928,890 7,227,529 1,296,853 542,547 8,402,060 2,495,637 9,531,855 75,573,189 583,220 0 6,738,762 51,665,580 2,264,300 240,720 504,160 88,020 Install 41,246,398 Grand Total 41,246,398 1,759,459 43,652,658 3,169,610 7,731,689 1,417,313 542,547 8,985,280 2,495,637 21,690,991 132,691,583
Note that the table above is for life of mine capital costs which includes the expansion of the heap leach pads at a later date. The Plant Total Direct Costs of $124.8M presented in the Pre-Production Capital Cost Estimate table earlier in this chapter increases to $132.7M over life of mine.
Table 63 : Estimate of Initial Fills Item Basis Needed Weight kg or L 240,000 300,000 6,000 60,000 11,500 20,000 20,000 4,000 60,000 60,000 2,000 2,000 2,000 2,000 0.2 3.0 3.0 0.1 0.1 0.1 0.1 Truck Loads 12.0 15.0 0.3 3.0 0.6 Quantity to Order kg or L 240,000 300,000 6,000 60,000 11,500 40,000 20,000 4,000 60,000 60,000 2,000 2,000 2,000 2,000 Unit Price 2.18 0.15 3.52 1.84 2.19 1.00 1.25 2.82 0.90 0.75 0.50 0.98 1.75 1.70 1,127 5,400 4,500 Shipping 10% 0.19 . Total Cost $ 568,800 45,000 21,120 110,400 25,185 40,000 25,000 12,399 59,400 49,500 1,000 1,960 3,500 3,400 966,664
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NaCN Cement Zinc Diatomaceous Earth Antiscalant Diesel (L) - Total Gasoline (L) Copper Sulfate Hydrogen Peroxide Sulfuric Acid Flux SiO2 Borax Niter Soda Ash TOTAL
30 Days Full Silos 31 days 30 days 4 weeks Full Tank Full Tank
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18.10 Operating Costs

Overall operating costs are a combination of mining costs, process costs, and general and administrative costs (G&A). Mining operating costs were developed by Australian Mine Design and Development (AMDAD) and contemplate contractor mining. These results are presented in more detail in the mining sections of the report. Process operating costs are estimated based upon the plant designs presented in earlier sections of this report. Project specific staffing, salary, wage, and benefit requirements are used where applicable. Unit consumption of materials, supplies, power, water, and delivered supply costs are also estimated. The operating costs have been estimated and presented without any added contingency allowances. The processing, support and general and administrative operating costs are based upon information obtained from the following sources: AMDAD Mining costs; Budgetary quotations from potential suppliers of project operating and maintenance supplies and materials; Recent KCA project file data; Experience of KCA staff with other similar operations; Project metallurgical test work and process engineering.
Where specific data does not exist, cost allowances have been based upon consumption and operating requirements from other similar properties for which reliable data exists. Freight costs have been estimated where delivered prices were not available. All costs are presented in 4th quarter 2010 US dollars. These costs do not include VAT (Value Added Tax).
18.10.1 Summary The average annual operating costs and costs per tonne of ore processed for the production of gold and silver at the Tujuh Bukit project are summarized in Table 23-1 below. The estimated annual operating costs are US$ 5.08 per tonne of ore, not including mining. Mining operating costs were determined by AMDAD and were found to be $ 5.76/t including the contractor margin. Closure costs, VAT, and refining and shipping are not included in this table.
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Table 64 : Average Unit Operating Costs Life of Mine Area Labor Primary Crushing Secondary / Tertiary Crushing Agglomeration and Stacking Leaching Merrill-Crowe Plant Refinery Reagents Water Distribution Laboratory Support Total Processing G&A Mining Cost (Contract Mining) Total Unit Cost ($/heap feed tonne) 0.499 0.335 0.399 0.503 0.165 0.177 0.075 1.938 0.028 0.088 0.072 4.279 0.800 5.76 10.84
These costs are based upon ownership of all project production equipment and site facilities, as well as the Owner employing and directing all operating, maintenance, and support personnel. The VAT tax is charged at a rate of 10% and is applied against all goods and services used for the project. VAT is either exempted or refunded because the project produces a product that is exported. Table 23-2 contains the detailed operating cost summary for the Tujuh Bukit project. The following pages show the operating cost estimation details used to develop the costs presented in Tables 23-1 above and 23-2 below, based on the unit consumption of materials and supplies, and the cost allowances for items not subject to unit consumption.
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Table 65 : Tujuh Bukit Operating Cost Summary (US$/t)

Area Heap Leach Systems Power Piping/Drip tubing Maintenance Supplies SUBTOTAL Merrill-Crowe Plant Power Misc. Operating Supplies Maintenance Supplies SUBTOTAL Refinery Power Diesel (smelt furnace) Misc. Operating Supplies Maintenance Supplies SUBTOTAL Reagents Power Cyanide (Ore) DE Cement Zinc Antiscalant Fluxes Maintenance Supplies SUBTOTAL Units Qty Unit Costs, US$ Costs, US$ US$ per Tonne Ore
kWh/t lot lot
0.889
$0.140
$908,917 $219,000 $73,000 $1,200,917
$0.125 $0.030 $0.010 $0.165
kWh/t lot lot
1.014
$0.140
$1,035,976 $146,000 $109,500 $1,291,476
$0.142 $0.020 $0.015 $0.177
kWh/t L/mo lot lot
0.061 16,000
$0.140 $1.000
$62,744 $192,000 $219,000 $73,000 $546,744
$0.009 $0.026 $0.030 $0.010 $0.075
kWh/t kg/t kg/a kg/t kg/a ppm kg/oz lot
0.007 0.49 33,181 4.5 65,600 5.0 0.075
$0.140 $2.37 $1.84 $0.15 $3.52 $2.19 $1.50
$7,439 $8,493,388 $61,053 $4,927,500 $230,912 $129,402 $226,390 $73,000 $14,149,084
$0.001 $1.163 $0.008 $0.675 $0.032 $0.018 $0.031 $0.010 $1.938
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Area Water Distribution Power Maintenance Supplies SUBTOTAL Laboratory Assays, Solids Assays, Solutions Miscellaneous Supplies Power SUBTOTAL Support Services Buildings - Power Light Vehicles (5) Maintenance Trucks (2) Flatbed Truck (Warehouse) Bobcat Loader Forklifts (3) Crane (50-t) Backhoe SUBTOTAL Process Costs Total G&A Insurance, Office Supplies, Utilities, Legal & Accounting, Travel, Outside Consultants, Security Supplies, Health & Safety Supplies, Environmental, Rentals, Lease Payments, Road Maintenance, Mancamp SUBTOTAL TOTAL COST
Units
Qty
Unit Costs, US$
Costs, US$
US$ per Tonne Ore
kWh/t lot
0.129
$0.140
$131,784 $73,000 $204,784
$0.018 $0.010 $0.028
No./d No./d. lot kWh/t
175 250 0.120
$5.00 $1.50 $0.140
$315,000 $135,000 $73,000 $122,563 $645,563
$0.043 $0.018 $0.010 $0.017 $0.088
kWh/t km/d km/d km/d h/mo h/mo h/mo h/mo
0.248 500 250 500 210 360 14 66
$0.140 $0.35 $0.45 $0.45 $7.00 $7.00 $100.00 $26.00
$253,175 $63,000 $40,500 $81,000 $17,640 $30,240 $16,800 $20,592 $522,947 $31,234,431
$0.035 $0.009 $0.006 $0.011 $0.002 $0.004 $0.002 $0.003 $0.072 $4.279
$5,840,000
$0.800
$5,840,000 $37,074,431
$0.800 $5.079
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18.10.2 Personnel and Staffing Staffing requirements for process and administration personnel as well as wages, salaries, and burdens were estimated by KCA. Provisions for overtime, benefits, and taxes were included in the wage and salary data. The benefits and burdens for personnel were based on 50% of the base annual salary. Table 23-3 presents the staffing levels, salary, and wage structure for the processing and administrative portions of the project.
Table 66 : Tujuh Bukit Project Staffing Levels & Salary Schedules
Job Title Qty. Base Pay S alary Hourly Overtime Burdens Cost, US $
Total
PROCES S S upervision Process Manager (Ex-pat) S r. Technician (Ex-=pat) Process Superintendent M etallurgist M etallurgical Technician Administrative Technician Process General Foreman Shift Foreman Process M aint General Foreman Crushing Primary Crusher Operator Secondary Crusher Operator Crusher Feed Loader Operator Crusher Helper Heap Leach Heap Leach Operator Reagent Operator Stacking Operator Heap Dozer Operator Piping Crew - Heap Leach Day Laborer Shift Laborer
1 $200,000 2 $100,000 1 $50,000 1 $35,000 1 1 1 $36,000 4 $24,000 1 $36,000 8 8 4 12 8 4 12 3 16 8 9
$1,830 $1,830
$100,000 $50,000 $25,000 $17,500 $549 $915 $549 $915 $18,000 $12,000 $18,000 $1,927 $1,927 $1,927 $549 $1,927 $3,689 $1,927 $1,927 $878 $878 $878 $3,212 $3,212 $3,212 $915 $3,212 $6,149 $3,212 $3,212 $1,464 $1,464 $1,464
$300,000 $150,000 $75,000 $52,500 $3,294 $3,294 $54,000 $36,000 $54,000 $11,562 $11,562 $11,562 $3,294 $11,562 $22,136 $11,562 $11,562 $5,270 $5,270 $5,270
$300,000 $300,000 $75,000 $52,500 $3,294 $3,294 $54,000 $144,000 $54,000 $92,496 $92,496 $46,248 $39,528 $92,496 $88,543 $138,743 $34,686 $84,326 $42,163 $47,434
$6,423 $6,423 $6,423 $1,830 $6,423 $12,298 $6,423 $6,423 $2,928 $2,928 $2,928
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Job Title PROCES S (continued) Recovery Plant Operator Refining Operator Day Laborer Process Maintenance M echanic I Planner M echanic II Electrician Instrumentation Technician S ubtotal Process TOTAL PROCES S
Qty.
Base Pay S alary Hourly Overtime Burdens $6,423 $6,423 $2,928 $2,928 $6,423 $6,423 $2,928 $99,589 $1,927 $1,927 $878 $878 $1,927 $1,927 $878 $29,877 $3,212 $3,212 $1,464 $1,464 $12,000 $3,212 $3,212 $1,464 $302,294
Total $11,562 $11,562 $5,270
Cost, US $
12 4 6 16 1 $24,000 8 6 6 161 $505,000
$138,743 $46,248 $31,622
$5,270 $84,326 $36,000 $36,000 $11,562 $92,496 $11,562 $69,372 $5,270 $31,622 $936,759 $2,315,675
$2,315,675
US $/t $0.33
LABORATORY Chief Assayer Assayers Lab Technician Sample Preparation Labor S UBTOTAL LABORATORY GENERAL & ADMINIS TRATIVE
1 4 2 6 13
$42,000 $13,978 $2,080 $2,928 $18,986 $0 $0 $878 $878
$42,000
$21,000 $6,989 $1,040 $1,464 $30,493
$63,000 $20,966 $3,120 $5,270 $92,357
$63,000 $83,866 $6,240 $31,622 $184,728
General Manager (ex pat) Purchasing Manager (ex pat) Accountant Human Resources Manager Security/Safety/Training Manager Environmental Supervisor Logistics Administrator Nurse Receptionist/Secretary Accounts Payable Clerk Human Resources/Payroll Clerk Warehouseman Environmental Assistant Security Guards Driver/General Laborer Janitor
S UBTOTAL G & A TOTAL
1 $225,000 1 $100,000 2 $36,000 1 $36,000 1 $36,000 1 $24,000 1 $24,000 1 $24,000 1 1 2 5 1 12 $9,000 1 1 33 $514,000 207
$2,080 $2,080 $2,080 $12,298 $13,978 $13,978 $3,328 $49,821
$0 $0 $0 $3,689 $0 $0 $0 $3,689
$112,500 $50,000 $18,000 $18,000 $18,000 $12,000 $12,000 $12,000 $1,040 $1,040 $1,040 $6,149 $6,989 $4,500 $6,989 $1,664 $281,910
$337,500 $337,500 $150,000 $150,000 $54,000 $108,000 $54,000 $54,000 $54,000 $54,000 $36,000 $36,000 $36,000 $36,000 $36,000 $36,000 $3,120 $3,120 $3,120 $3,120 $3,120 $6,240 $22,136 $110,678 $20,966 $20,966 $13,500 $162,000 $20,966 $20,966 $4,992 $4,992 $849,420 $1,143,583 $3,643,986 $0.51
US $/t
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18.10.2.1 Salaried Employees All salaried employees with the exception of the General Manager, Process Manager, Purchasing Manager, and senior technicians are expected to be Indonesian nationals, most of which will be recruited from the nation at large. It is not expected that many local personnel will have the experience to fill the salaried and supervisory positions, at least initially.
18.10.2.2Hourly Employees The hourly employees are budgeted to come from the local town and villages. Estimates of wages are based on standard work weeks and include overtime provisions.
18.10.3 Mining Operating Costs Mining operating Costs were determined by AMDAD. It is expected that the bulk of the deposit will be able to be mined using standard drill, blast, load, and haul open pit mining methods. Owner mining, lease mining, and contract mining were considered for this project. Although the owner mining has a lower operating cost, the lease mining and contract mining options require a substantially smaller capital investment. For this reason contractor mining has been selected as the preferred mining method for the Tujuh Bukit project. Table 23-4 summarizes the total contractor mine operating costs for each operating year in US$/tonne mined.
Table 67 : Summary of Mine Operating Costs US$/tonne mined Unit Costs Mining Drilling Blasting Loading Hauling Ancillary Overheads Sub Total Tonnes moved Ore Waste Tonnes treated US$/t moved US$/t moved US$/t treated $2.91 $2.85 $4.66 $1.94 $1.84 $3.51 $2.08 $1.92 $4.93 $2.23 $2.05 $5.25 $2.23 $2.08 $5.29 $2.37 $2.29 $4.89 $2.61 $2.54 $5.55 $2.76 $2.66 $4.72 $2.37 $2.21 $4.80 Year US$/t mined US$/t mined US$/t mined US$/t mined US$/t mined US$/t mined US$/t mined 1 $0.34 $0.28 $0.46 $0.81 $0.88 $0.12 $2.89 2 $0.29 $0.26 $0.27 $0.39 $0.60 $0.09 $1.89 3 $0.23 $0.23 $0.32 $0.49 $0.63 $0.07 $1.98 4 $0.24 $0.24 $0.32 $0.58 $0.66 $0.08 $2.13 5 $0.26 $0.25 $0.27 $0.62 $0.67 $0.09 $2.15 6 $0.28 $0.26 $0.27 $0.72 $0.71 $0.10 $2.33 7 $0.27 $0.25 $0.27 $0.95 $0.74 $0.09 $2.57 8 $0.23 $0.25 $0.27 $1.04 $0.81 $0.12 $2.72 LOM $0.27 $0.25 $0.30 $0.67 $0.70 $0.09 $2.28
An additional 20% contractor margin is not shown in the table above, but is added to total costs.
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18.10.4 Process Operating Costs Operating requirements have been estimated based upon unit costs and consumption, where possible, have been broken down by area. The following sections present the assumptions and initial costs associated with the development of the operating cost estimate. Table 23-2 presented earlier in this section shows the process operating costs by area and ore type. Each area is discussed in the section. Labor has not been included in each individual area. 18.10.4.1 Power For the purposes of operating cost estimation by area, the power consumption used in a given section has been estimated based on installed power that has been factored for the operating schedule, availability, operating utilization, and load factor. The unit cost of power has been estimated to be US$ 0.140/kWh for the Tujuh Bukit project based on a national grid power supply. The total average power consumption was estimated to be approximately 7.112 kWh/tonne of ore. The average power cost was estimated to be US$ 0.996 per tonne from these data. The total attached power was estimated to be about 9.9 MW. Power costs are presented below.
Table 68 : Processing Power and Consumption Area Crushing Agglomeration/Stacking Heap Leach Systems Merrill-Crowe Plant Refinery Reagents Water Distribution Laboratory Total Attached Power (kW) 3,093.2 3,937.8 1,253.4 1,242.4 107.4 18.2 306.8 266.5 10,275 Avg. Consumption 14,097,154.7 18,871,762.7 6,314,391.0 7,197,093.6 435,891.0 51,683.0 851,467.5 851,467.5 48,734,967 Avg. Consumption 1.986 2.658 0.889 1.014 0.061 0.007 0.129 0.120 6.864
Table 69 : G&A Power Load and Consumption Area Camp Ancillaries and Buildings Total Attached Power 250.0 218.0 468.0 Avg. Consumption 1,198,125.0 560,723.0 1,758,848.0 Avg. Consumption 0.169 0.079 0.248
18.10.4.2 Consumable Items Operating supply requirements have been estimated based upon unit costs and consumption, where possible, and have been broken down by area. In the sections below the assumptions and unit costs
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associated with the development of the operating cost are presented. All freight costs have been included. Reagent consumptions are derived from test work performed by KCA and from the Design Criteria. Other costs were estimated from past KCA experience with similar operations. The table below shows the consumption of major consumables.
Table 70 : Process Consumable Items Item Jaw liners Cone Liners - Secondary and Tertiary NaCN DE Cement Zinc Antiscalent Fluxes Diesel - Smelt Furnace Consumption Unit US$/t ore US$/t ore kg/t kg/oz kg/t kg/oz ppm kg/oz L/mo Consumption $0.03 $0.10 0.49 0.028 4.5 0.056 5 0.075 16,000
Operating costs for these items have been distributed based on tonnage and gold production, or smelting batches, as appropriate.
18.10.4.3 Crusher Liners In general, there is a high variability among the ore with respect to abrasion. Overall the ore abrasion is average; however, the Transition ores abrasiveness is extremely high, resulting in greater wear costs. Based on this the liner wear projection is as follows: Primary Crushing US$ 0.03/t ore Secondary/Tertiary Crushing US$ 0.10/t ore.
18.10.4.4 Heap Leach Pipes, Fittings, and Emitters The heap pipe costs include expenses for broken pipe, fittings and valves and abandoned tubing. The heap pipe cost was estimated to be US$ 0.03/t ore, and was based on previous detailed studies conducted by KCA on similar projects.
Cement The unit consumption of cement is expected to be 4.5 kg/t (average) for the Tujuh Bukit ores. Lab tests show that less cement could possibly be used, lowering operating costs; however, additional test work is necessary to confirm this information.
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Cyanide Sodium cyanide consumption was estimated to average 0.49 kg/t based on metallurgical test work evaluations. A delivered price of US$ 2.37/kg was used based on a suppliers quote.
Antiscale Agent (Scale Inhibitor) Antiscale consumption was based on dosage rates of 5 ppm to the suctions of the barren pumps returning solution back to the heap. A delivered price of US$ 2.19/kg was used based on a suppliers quote.
18.10.4.5 Processing Diatomaceous Earth Diatomaceous Earth (DE) used in the filter presses in the Merrill-Crowe circuit is estimated to average 33,181 kg/a, at a cost of US$ 0.008/t ore. Zinc Zinc consumption for the Merrill-Crowe circuit is estimated to be 65,600 kg/a. The supply cost of zinc is US$ 3.52/kg resulting in a cost per tonne or of US $0.032. Smelting Fluxes It has been estimated that 0.075 kg of mixed fluxes per troy ounce of precious metal produced will be required. The estimated delivered cost of these fluxes, which includes borax, silica, niter, and soda ash, is US$ 1.50/kg, which is based on data from similar previous KCA projects.
19.10.4.6 Laboratory Fire assaying and solution assaying of samples will be conducted in the on-site laboratory. It was estimated that approximately 175 solids assays at US$ 5/assay and 250 solutions assays at US$ 1.50/assay will need to be performed each day.
18.10.4.7 Fuel Diesel fuel will be required for heavy equipment operation, vehicles, and for smelting operations. For both mining and processing operating cost calculations the diesel cost used is US$ 1.00/L. Gasoline price used is US $1.25/L. Mobile Equipment includes the cost for diesel fuel in the hourly operating cost for these units.
18.4.10.8 Mobile Equipment Numerous pieces of support equipment are required for the processing area of the project. These include light vehicles, maintenance trucks, a flat bed truck, Bobcat Loader, forklifts, a 50 ton crane, and a backhoe.
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The cost to operate and maintain each of these pieces of equipment has been estimated using, where possible, data sheet information. Otherwise, allowances have been made based upon experience in similar operations.
Table 71 : Support Equipment Operating Costs Service Vehicle or Equipment Light Vehicles (5) Maintenance Trucks (2) Flatbed Truck (Warehouse) Bobcat Loader Forklifts (3) Crane (50-t) Backhoe Unit km/d km/d km/d h/mo h/mo h/mo h/mo Unit Cost, US$ $0.35 $0.45 $0.45 $7.00 $7.00 $100.00 $26.00
18.10.4.9 Repair Materials The maintenance and supply costs used in this study are factored from data obtained from other operations, as applicable. Operating costs for these items have been distributed based on ore type, tonnage, gold production from ore types, or smelting batches as appropriate. It is likely that the potential for inaccuracy within the overall operating cost estimate is highest in the maintenance supply area. Based on data from other operations, the operating costs for the Tujuh Bukit project for the following areas have been factored as shown below and distributed based on tonnage.
Table 72 : Maintenance Supplies Process Area Cost Basis Area Primary Crushing Secondary/Tertiary Crushing Agglomeration/Stacking Heap Leach Systems Merrill-Crowe Plant Refinery Reagents Water Distribution Laboratory Cost US$/tonne $0.040 $0.075 $0.055 $0.010 $0.015 $0.010 $0.010 $0.010 $0.010
An allowance of US$ 0.01 per tonne has been made for incidental maintenance parts and other supplies in the laboratory, based upon operating mine data.
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18.10.5 General Administrative General and Administrative costs are assumed to average about US$ 0.80 per tonne ore, or typically a monthly cost of US$ 480,000. This amount is similar to like sized operations. The costs included in the G & A are: Insurance Office supplies Utilities Legal & accounting Travel Outside Consultants Security Supplies Health and Safety Supplies Environmental Rentals Lease payments Road maintenance Mancamp
18.10.6 Reclamation and Closure Reclamation and Closure is not accrued as a cost per tonne in the operating costs presented in this study. Closure cost is included as a line item in the financial cash flow analysis section of this report. Costs for reclamation and closure are estimated to be US$15 million for the entire project (US$ 0.125 per total tonne mined).
18.10.7 Electrical Power For the purposes of operating cost estimation by area, the power consumption used in a given area has been estimated based upon installed power factored for capacity utilization, operating schedule, and operating utilization. The table below presents this information. The average power cost was estimated to be US$ 0.14 per kWh and was used on an area by area basis to estimate the power costs. Power requirements and costs are included in each area. Total kilowatt hours of electricity consumed each year will vary depending on the type of ore processed. An average annual electrical consumption was estimated to be approximately 50.5 million kilowatt-hours per year.
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Tujuh Bukit Preliminary Economic Assessment (PEA)
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Table 73 : Tujuh Bukit Power Consumption Area 03 Camp 05 Water Supply and distribution 10 Crushing 15 Agglomeration and Stacking 20 Heap Leach and solution handling 25 Merrill Crowe 35 Refining 45 Detoxification 50 Electrical 70 Reagents 75 Laboratory 80 Ancillaries and Buildings Total Attached kW 250.0 306.8 3,093.2 3,937.8 1,253.4 1,242.4 107.4 48.7 16.5 18.2 266.5 201.5 10,743 Demand kW 140.6 172.6 1,712.0 2,215.0 741.1 873.9 51.2 8.7 9.0 6.1 99.9 56.8 6,087 Hours/Day 24 24 24 24 24 24 24 24 24 24 24 24 Utilization, % 75% 75% 75% 75% 75% 75% 75% 75% 75% 75% 75% 75% kwh/day 3,375.0 2,578.9 39,710.3 53,159.9 17,787.0 20,273.5 1,227.9 0.0 216.0 145.6 2,398.5 1,364 142,236 kwh/yr 1,198,125.0 915,523.3 14,097,154.7 18,871,762.7 6,314,391.4 7,197,093.6 435,891.0 0.0 76,680.0 51,683.0 851,467.5 484,043 50,493,815 kwh/t Ore 0.169 0.129 1.986 2.658 0.889 1.014 0.061 0.000 0.011 0.007 0.120 0.068 7.112
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18.11 Financial Analysis

18.11.1 Summary Based on the estimated production parameters, capital costs, and operating costs, a cashflow model was prepared by KCA for the financial analysis of the Tujuh Bukit project in East Java, Indonesia. All of the information used in this economic evaluation has been taken from work completed by KCA and other consultants working on this project, as described in previous sections of this report. The Tujuh Bukit project economics were evaluated using a discounted cashflow (DCF) method, which measures the net present value (NPV) of future cashflow streams. The final economic model was developed by KCA using the following assumptions: o o o o Period of Analysis of 12 years including two years of pre-production and investment, nine years of production, and one year for closure and reclamation; Long term base gold price of US$ 1,050/oz and long term base silver price of US$ 16.50/oz; Processing rate of 20,000 tpd ore; Heap leaches recoveries of 86% and 17% for gold and silver, respectively, for oxide ore and recoveries of 72% and 31% for gold and silver for the transition ore.
Capital and operating costs used for this model are detailed in the relevant sections of this report.
The project economics based on these criteria from the cashflow model are summarized in the tables below.
Table 74 : Capital Cost to Completion US$ 1000's Initial Capital Plant and Infrastructure (inc EPCM, initial fills and indirects) Owners Costs Mining Contractor Mob/Demob Preproduction Mining Sustaining Capital (Pad Expansion, Maintenance) Closure Costs Total Capital Cost 146.4 20.0 1.0 6.5 8.0 15.0 196.9
Note that the above table does not include Working Capital or VAT.
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Table 75 : Life-of-Mine Summary Financial Summary Long-term gold price per ounce Long-term silver price per ounce NPV - after tax @ 0% (millions)* NPV - after tax @ 10% (millions)* Payback (years) Mine Life (years) Production Heap Feed Production (000's of tonnes) Total Material Moved (000's of tonnes) Strip Ratio Gold Production (000's gross oz.) Average Annual Gold Production (000's gross oz.) Silver Production (000's gross oz.) Average Annual Silver Production (000's gross oz.) Mine and Process Costs (per tonne Heap Feed) Mining Cost Processing Cost General Administrative and other Total - per tonne of ore $ 5.76 $ 4.28 $ 0.80 $10.84 57,000 120,000 1:1.11 1,290 143 8,627 959 $ 1,050.00 $ 16.50 $ 445 $ 180 3.03 9 $ 1,450.00 $ 38.00 $ 942 $ 446 2.70 9
19.11.2 Methodology The Tujuh Bukit project economics are evaluated using a discounted cashflow method. The DCF method requires that annual cash inflows and outflows are projected, from which the resulting net annual cash flows are discounted back to the project evaluation date. Considerations for this analysis include the following: The cashflow model was prepared by KCA with input from Intrepid Mines Ltd. The period of analysis is 12 years including 2 years of pre-production and investment, nine years of production, and one year for closure and reclamation. The figure below shows the project development schedule for the Tujuh Bukit project. All cash flow amounts are in US dollars (US$). All costs are considered to be 4th quarter 2010 costs. Inflation is not included in this model. The Internal Rate of Return (IRR) is calculated as the discount rate that yields a zero Net Present Value (NPV). The NPV is calculated by discounting the annual cash back to year -2 at different discount rates. All annual cash flows are assumed to occur at the end of each respective year.
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The Payback Period is the amount of time, in years, required to recover the Initial Construction Capital cost. Working Capital is considered in this model. 100% equity financing is assumed.
Figure 32 : Project Development Schedule
The schedule presented assumes all financing, permits and licenses are in place. 18.11.3 General Assumptions A summary of the general assumptions for cost inputs, parameters, royalties, and taxes used in the financial analysis is shown below.
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Table 76 : General Assumptions Input Cost Values Electric Power Sodium Cyanide Diesel Cement Diatomaceous Earth Antiscalent Zinc Royalties and Taxes Royalty Gold Royalty- Silver Corporate Income Tax % % % 3.75 3.75 25 Indonesia Law Indonesia Law Indonesia Law Unit US$/kW-hr US$/kg US$/liter US$/tonne US$/kg US$/liter US$/kg Value 0.140 2.37 0.75 150 1.84 2.19 3.52 Source Intrepid KCA Intrepid Intrepid KCA KCA KCA
The gold price of US$ 1,050/oz and silver price of US$ 16.50/oz are used as the base case commodity prices. These are currently very close to the three year average price. Gold production and revenue in the model are delayed three months from the time ore is stacked. This delay reflects the time required to recover gold from the heap. The Capital Cost for the project construction is mostly spent in the first two years of development (Years -2 and 1) with all of the initial capital being spent in these years. In Year 4 of production sustaining capital is spent to increase the pad size. An eight-year straight line depreciation and standard depletion allowance are applied to the economic model; however, leach pad costs are not depreciated. The Value Added Tax (VAT) is included in this cash flow analysis as a cost representing a twelve month lag to refunding of the tax paid. VAT will be owed on the purchase of any goods or services during both construction and operation of the project; however, because the final product will be exported, the VAT is allowed to be recovered. There is a 3.75% Government Royalty on gold sales and 3.25% on silver sales. No other royalties are known to KCA at this time and are therefore not included in this model. Other taxes may be payable by the project which include property tax, municipal taxes, stamp tax, mining license fees, etc. These taxes are considered to be relatively minor and are included in the project G&A operating costs. The cash flow analysis evaluated the project on a stand-alone basis as an East Java, Indonesia project. Only Indonesian corporate tax (25%) has been considered. No withholding taxes for payment of dividends are included. No corporate costs are included for head office overheads.
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18.11.5 Capital Cost Estimates The mining costs are estimated by Australian Mine Design and Development (AMDAD). All major earthworks costs and process equipment sizes and costs were estimate by KCA. The only sustaining capital comes from the expansion of the leach pad in Year 4 of production.
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Table 77 : Cash Flow Analysis

Year from Startup ASSUMPTIONS Gold Price Silver Price Heap Leach Gold Recovery OXIDE Heap Leach Silver Recovery OXIDE Heap Leach Gold Recovery TRANS Heap Leach Silver Recovery TRANS Avg Total Gold Recovery Avg Total Silver Recovery PRODUCTION Mine Mine to Heap Leach OXIDE Mine to Heap Leach TRANS Au grade Oxide Ag grade Oxide Au grade Trans Ag grade Trans Total Heap Feed Stacked Waste Mined Total Material Mined Strip ratio Recoverable Gold Stacked OXIDE Recoverable Gold Stacked TRANS Total Recoverable Gold Stacked Total Recoverable Gold Stacked Recoverable Silver Stacked OXIDE Recoverable Silver Stacked TRANS Total Recoverable Silver Stacked Total Recoverable Silver Stacked Months recovery delay lag time Total Gold Produced Profile Total Silver Produced Profile kg kg kg k ozs kg kg kg k ozs months k ozs k ozs -2 Units US$/oz US$/oz % % % % % % -1 1 1,050 16.5 86% 17% 72% 31% 86% 17% 2 1,050 16.5 86% 17% 72% 31% 86% 17% 3 1,050 16.5 86% 17% 72% 31% 86% 17% 4 1,050 16.5 86% 17% 72% 31% 86% 17% 5 1,050 16.5 86% 17% 72% 31% 83% 20% 6 1,050 16.5 86% 17% 72% 31% 85% 18% 7 1,050 16.5 86% 17% 72% 31% 84% 19% 8 1,050 16.5 86% 17% 72% 31% 83% 20% 9 1,050 16.5 86% 17% 72% 31% 78% 25% 10 TOTAL 1,050 16.5 86% 17% 72% 31% 84% 18%
kt kt g/t g/t g/t g/t kt kt kt
7,033 0.766 5.419 0 0 7,033 4,305 11,338 0.61 4,632 4,632 149 6,479 6,479 208 3 112 156
6,991 111 0.56 24.728 0.799 12.56 7,102 6,045 13,147 0.85 3,369 64 3,433 110 29,855 432 30,287 974 3 118 765
6,982 75 1.079 22.929 0.79 16.575 7,057 10,516 17,573 1.49 6,481 43 6,523 210 27,507 385 27,893 897 3 179 901
6,916 138 1.286 25.893 0.618 41.447 7,054 10,384 17,438 1.47 7,647 61 7,709 248 31,050 1,773 32,824 1,055 3 246 1,048
5,703 1,311 0.879 43.188 0.828 47.448 7,014 10,295 17,309 1.47 4,312 781 5,093 164 51,496 19,283 70,780 2,276 3 185 1,971
6,523 470 0.781 26.347 0.899 2.849 6,993 7,677 14,670 1.1 4,384 304 4,688 151 31,321 415 31,736 1,020 3 154 1,334
6,219 851 0.632 20.125 0.661 21.324 7,070 8,187 15,257 1.16 3,378 405 3,783 122 24,188 5,625 29,814 959 3 129 974
5,438 1,671 0.704 15.55 0.61 22.297 7,109 5,231 12,340 0.74 3,292 734 4,026 129 18,792 11,550 30,342 976 3 127 971
240 352 0.578 42.349 0.499 35.98 592 373 965 0.63 119 127 246 8 4,262 3,926 8,188 263 40 507 -
52,045 4,979 0.838 22.635 0.667 25.568 57,024 63,013 120,037 1.11 37,614 2,519 40,133 1,290 224,952 43,390 268,343 8,627
1,290 8,627
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Year from Startup OPERATING COSTS Mining (Contractor Mining) All Material Heap Feed Waste Sub Total Processing Sub Total G&A Total Mining, Processing, and G&A Annual Costs Mine Operating Costs Process Operating Costs G&A
-2
-1
10
TOTAL
US$/t mined US$/t moved US$/t moved US$/t treated
3.5 3.53 3.44 5.63
2.27 2.33 2.21 4.22
2.37 2.49 2.3 5.92
2.55 2.68 2.46 6.31
2.58 2.68 2.5 6.35
2.8 2.85 2.75 5.86
3.08 3.13 3.05 6.65
3.26 3.31 3.19 5.66
2.74 2.84 2.65 5.76
US$/t treated US$/t treated
4.28 0.8
4.28 0.8
4.28 0.8
4.28 0.8
4.28 0.8
4.28 0.8
4.28 0.8
4.28 0.8
4.28 0.8
4.28 0.8
US$/t treated
10.71
9.3
11
11.38
11.42
10.94
11.73
10.74
5.08
10.84
US$ 1,000's US$ 1,000's US$ 1,000's
39,626 30,094 5,626 75,347 111,645 2,391 114,036
29,946 30,389 5,682 66,017 117,991 11,708 129,699
41,765 30,197 5,646 77,607 179,297 13,794 193,091
44,478 30,184 5,643 80,306 245,703 16,034 261,736
44,506 30,013 5,611 80,130 184,700 30,157 214,857
41,012 29,923 5,594 76,530 153,917 20,418 174,335
47,049 30,253 5,656 82,958 128,843 14,906 143,749
40,232 30,419 5,687 76,338 127,436 14,864 142,300
1,500 480 1,980 40,248 7,761 48,009
328,615 242,973 45,626 617,213 1,289,780 132,032 1,421,812
Total Annual Operating Costs US$ 1,000's Operating Revenue (inc royalties paid, refining costs) US$ 1,000's Gold US$ 1,000's Silver US$ 1,000's Total Operating Revenue
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Year from Startup CAPITAL COST Initial Plant and Infra Working Capital Vat Contractor Mob / Demob Preproduction Mining Sustaining Capital Closure costs Salvage Value Owner's Costs Total Capital Cost CASHFLOW Revenue (-) Operating Cost EBITDA Net Taxable Income (inc losses carried fwd, depreciation) Current income tax @ 25% Net Income Cash Flow After Taxes US$ 1,000's US$ 1,000's US$ 1,000's US$ 1,000's US$ 1,000's US$ 1,000's US$ 1,000's US$ 1,000's US$ 1,000's US$ 1,000's US$ 1,000's
-2 36,541 4,167
-1 109,624 12,996 12,500 1,000 6,500
10
TOTAL 146,165
-6,498 -16,666 813 -813 1,000 1,000 8,129 1,000 15,000 -8,270
6,498 2,000 6,500 10,129 15,000 -8,270 20,000
20,000 40,708 162,619 -16,666 1,000 8,942 -813 1,000 -6,498 7,730
198,022
114,036 75,347 38,689
129,699 66,017 63,682
193,091 77,607 115,484
261,736 80,306 181,431
214,857 80,130 134,727
174,335 76,530 97,805
143,749 82,958 60,791
142,300 76,338 65,962
48,009 1,980 46,029
-15,000
1,421,812 617,213 789,599
US$ 1,000's US$ 1,000's US$ 1,000's US$ 1,000's -40,708 -162,619 -
33,437 8,359
101,017 25,254 75,763 89,230
166,839 41,710 125,129 130,779
120,033 30,008 90,025 105,531
83,213 20,803 62,410 76,002
46,074 11,518 34,555 49,272
51,245 12,811 38,434 53,151
45,779 11,445 34,334 41,082 -
-14,313
633,323 161,909
24,222 55,355
40,855 55,322
-14,313 -7,730
511,414 444,668
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18.11.8.Sensitivity Analysis The financial sensitivity to several parameters including changes in gold price, operating cost, and recovery were explored. The figures below were prepared to show the effect that changes in the parameters have on the overall project economics. From these sensitivities it can be seen that in general the project is robust. The project is most sensitive to gold price, followed by recovery, and operating costs.
60.0% 50.0% 40.0% IRR 30.0% 20.0% 10.0% 0.0% $600 $800 IRR Figure 33 : Gold Price Sensitivity $1,000 $1,200 $1,400 NPV0% $1,600 GoldPrice
$1,000,000 $900,000 $800,000 $700,000 NPV0% $600,000 $500,000 $400,000 $300,000 $200,000 $100,000 $
45.0% 40.0% 35.0% 30.0% IRR 25.0% 20.0% 15.0% 10.0% 5.0% 0.0% 60% 70% 80% 90% 100% 110% 120% 130% 140% PercentofBaseline CapitalCost RecoveryBasedonBulkRecovery
OperatingCost
Figure 34 : irr vs. Operating cost, capital cost, and recovery based on bulk recovery
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$700,000 $600,000 $500,000 NPV0% $400,000 $300,000 $200,000 $100,000 $ 60% 70% 80% 90% 100% 110% 120% 130% 140% PercentofBaseline CapitalCost RecoveryBasedonBulkRecovery
OperatingCost
Figure 35 : npv @ 0% vs. Operating cost, capital cost, and recovery based on bulk recovery
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19.0 Interpretations, Conclusions and Recommendations

19.1 Interpretations and Conclusion
The drilling program associated with this report has met its objective with the definition of an Inferred Resource. There are no areas of material uncertainty in relation to the technical results that are not covered by the meaning of "Inferred". An increased density of drilling will be required to upgrade the resource to Measured and Indicated. A preliminary economic assessment of the Tujuh Bukit Oxide Project was completed in April 2011 and the results are summarized in this report. Pit optimizations were undertaken on the Inferred Mineral Resources from which mining schedules were estimated. Results from metallurgical testwork of the various ore types were used to determine metallurgical recoveries and determine the heap leach Merrill-Crowe processing flow sheet. Infrastructural and site services were estimated for the Project. An economic model and financial analysis was undertaken. The purpose of the preliminary economic assessment and this report was to determine the viability of progressing the Tujuh Bukit Oxide Project to the pre-feasibility study stage. The results of the preliminary economic assessment of the Project are encouraging and warrant the progression of the Tujuh Bukit Project to the prefeasibility study stage. The assessment has met its original objective.
19.2 Recommendations
After completing this Preliminary Economic Assessment and the associated technical and economic reviews of the project, the following areas of studies will strengthen future studies to the next level of accuracy: Geology, resources and reserves; Metallurgical testing; Site/Environmental; Capital and Operating Costs.
These recommendations for the areas of study are more fully discussed in the following sections.
19.2.1 Geology, Resources and Reserves The character of the property is of sufficient merit to justify continued drilling until the boundaries of the mineralised system have been defined. A program of infill drilling would logically follow after internal scoping studies designed at identifying the most likely areas of early production. It is recommended that the geometry of the various near-surface mineralised zones be better defined to aid resource estimation and domaining in preparation for future resource updates. Completion of Leachwell-type CN assays on physical composites should be completed to help define ore-types and to refine the nature of the variation in oxidation. The relationship of the LW CN assays to more formal heap leach recoveries may assist future modelling of metallurgical recoveries and CN consumption by Cu. Matrix-matched standard reference materials should be generated from residue samples of the copper mineralisation.
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A detailed examination of assay results from sludge samples should be carried out using sub-sets of data defined by parameters such as fracture density, RQD and oxidation. A retrospective assessment of assay batches that have standards with results that fall outside+/- 5-10% warning limits or +/- 10% failure limits should be undertaken. Assays of samples from these batches that have been subsequently re-assayed by an independent laboratory should be checked in order to determine whether a reassay of the entire assay batch is warranted. Currently, no active examination of QA/QC results is undertaken at, or near, the time of receipt of assay results. This needs to be rectified. It is recommended that warning and failure limits for standards be based on 5% and 10% levels rather than multiples of standard deviations that may have little practical relevance. A retrospective assessment of assay batches that have poor agreement with check assays needs to be undertaken. This should include an assessment of each batch's performance with respect to included "Internal Standards" in order to determine whether batch errors are present or whether disagreements have resulted from simple typographical mix-ups. Results from approximately 30% of samples sent for check assaying are excluded from statistical analysis because their results are too low for meaningful comparisons. Samples chosen for external check assaying should mainly represent mineralised samples over a range of grades. It is recommended that a drill program be initiated to convert the inferred resources to indicated and measured resources. The drill holes should be located so that the drill information will satisfy the spatial and variography requirements of the deposits as well as provide additional spatially representative metallurgical samples.
19.2.2 Metallurgy It is recommended that additional metallurgical tests be performed both to clarify and confirm current results, as well as to fill gaps in the existing metallurgical results. The specific areas of further study recommended are discussed more fully in the following sections.
Grade Representative Testing Metallurgical testing at the KCA laboratory has been on material with lower than average grades than those published in the most recent report on mineral resources. Evaluating the metallurgical characteristics of the material closer to the average grade may influence metal recovery inputs.
Seawater Although seawater has been used in some metallurgical processes elsewhere, metallurgical tests that simulate actual field conditions with the use of seawater should be conducted to investigate the effect on the process parameters such as zinc cementation and filtration. Acquiring this information will allow better prediction of operating and capital costs, and provide solid assurance that the process will work efficiently with seawater.
Agglomeration Agglomeration testing indicates that a portion of the ore body requires agglomeration with cement at finer crushing sizes. Other tests show that cement is not required. Analysis of the core samples suggests that approximately 25% of the ore will require agglomeration at the specified crush size. All of the ore tested requires a pH control
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agent to provide protective alkalinity during the leaching process. While cement will provide the protective alkalinity required for the ore, it may be possible to use lime, a possibly less expensive pH control agent for a portion of the ore treated. Additional agglomeration testing is recommended to further optimize the operation costs. Only one column test (fine crushed to minus 9.5 mm) actually required cement agglomeration. Photo analysis of drill core to date show 10% of the core with clay content that almost certainly requires cement agglomeration, and an additional 16% with a high probability of requiring cement agglomeration. For this study 4.5 kg/t of cement was assumed for all ore. Significant opportunity exists for lowering the operating cost in actual practice by adding less cement when it is not required, or replacing some of the cement with lime. The effect of strong cyanide added at agglomeration should also be tested. In some cases the addition of strong cyanide at agglomeration significantly improves the recovery rate of precious metals in the heap.
Mercury Testing Test work performed by KCA showed almost no mercury present in samples received, whereas test work performed by Metcon showed small quantities of mercury. Additional test work should be performed to determine how much mercury is present, and if a mercury retort or other method of mercury removal is necessary for the operation.
Crushing Index The crushing costs were derived using the assumed power demands for the crushing components. Although Bond ball mill work index tests have been performed, Crushing Work Index tests have not been completed to date. Samples should be submitted and tested to for this determination. This information will be used to optimize the crushing capital and operating costs.
Specific Gravity and Bulk Density Additional SG as well as bulk density determinations are recommended. The work to date may overstate the specific gravity in some of the friable clay zones of the core samples. A more refined knowledge of these parameters will allow for more precision in detailed design of the circuits and equipment.
Compacted Permeability Testing Additional compacted permeability tests are recommended to confirm that stacking to 100 meter pad height is acceptable, or to what maximum height is acceptable. Tests to date simulated up to 60 meters stacking height. It is not believed at this time that the 100 meter height will be a problem, but the confirmation work should be done.
19.2.3 Site/Environmental The initial environmental reviews have revealed several areas that warrant additional review.
Water Balance / Rainfall Data It is recommended that additional rain data be collected for the water balance calculations, which determines the quantity of annual excess solution accumulation. The current data used for design is considered insufficient for
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accurate forecasting in a tropical climate. Additional information may be obtainable from the local agricultural community, which may have unofficial but useful rain data. It is also recommended that a rain gauge and daily monitoring be set up at the project site as soon as possible. A trade-off study should be conducted to determine the mechanical equipment and operating cost required to evaporate the required amounts of excess solution. Solution Neutralization (Detoxification) / Discharge A solution neutralization process should be engineered for the project. Provisionally an emergency system is included and costed in this study. In future, a trade-off study should be performed on different discharge methods to determine which is the most appropriate for this project. These methods include different chemical neutralization processes and membrane filtration. Discharge Permits A full review of the discharge permits process, time required to obtain a permit, and other relevant regulations, concerns, etc., should be conducted.
Tsunami Studies In this project, design respects the highest reported wave on this coast (14 m). All facilities sited are above this elevation. However, tsunamis of much greater magnitude have been recorded in other areas of Indonesia (up to 80m). It is recommended that studies be performed to thoroughly assess the risks and consequences of a large tsunami. Tsunami insurance should also be investigated for cost and availability.
Closure Plan A more detailed closure plan should be developed so that a more definitive cost model can be prepared. More investigation of Indonesian closure requirements with regards to the pits, waste dumps, pads, revegetation requirements, etc. is warranted to ensure that any proposed closure plan is compatible with government and legal requirements. The exact closure requirements will ensure costs are accurately considered in cost models.
Environmental Studies Rescoping of existing environmental studies is warranted. The projects scope has changed since the release of previous environmental studies.
Ground Water It is recommended that sources of ground water, especially for process uses, be searched for within the project site.
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Geotechnical Drilling The first pass proposed leach pad site was rejected due to large quantities of unsuitable material requiring removal. The proposed new site will require additional drilling to more closely estimate earthworks quantities. 19.2.4 Capital and Operating Costs Several areas have been noted in the capital and operating costs in which improvements could be made to the economics, as well as areas of concern for the project. The areas are discussed in the following sections.
Earthworks It is recommended that more competitive bids from multiple other contractors be sought to improve earthworks cost estimates.
Cyanide Solid Liquid System (SLS) The use of a cyanide SLS system should be explored to see if this might have lower costs than those associated with onsite cyanide mixing, which is currently assumed for this project. The convenience of this type of system, where cyanide briquettes are delivered by the vendor in ISO containers to the project site, and the briquettes dissolved and transferred to a cyanide storage tank, is much preferred to daily mixing from boxed cyanide briquettes. Further, disposal of the cyanide shipping boxes is eliminated. The SLS system is not available in all areas and in many off-shore sites can cost more. In any case, further investigation is warranted.
Project Consumables Specifics A detailed review of the project consumables and the specifics of availability, delivery methods and costs should be initiated. The cost for consumables in this report is based on similar projects, but cost, delivery methods and availability can be site specific. Specific high volume consumables include cyanide, cement, lime, explosives, diesel, and truck tires.
Seaport / Jetty A detailed analysis should be made of the timing and size of the seaport to be constructed for receiving equipment and consumables for the project. A port designed to receive heavy equipment would be much larger than one designed to receive smaller shipments of consumables. The capital cost savings could be significant if a smaller port could suffice for the duration of the project. 19.2.5 Approximate Cost for Next Phase of Work The approximate cost to complete the next phase of work, being the in-fill drilling and all studies required to bring the project to pre-feasibility study level, is US$25 million.
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19.3 Risks
At the present stage of evaluation of the Tujuh Bukit Project a number of risks have been identified. It is believed that most of these can be mitigated through additional metallurgical testing, further design work, and advancing negotiations regarding power, water and permits. The primary risks include: Power availability and cost; Water balance; Solution Containment; Acid rock drainage; Permitting risks; Community relations.
These risks are more fully discussed in the following paragraphs:
19.3.1 Power Availability and Cost The Indonesia power authorities state that commercial power is available and capacity exists at the present time to allow connection to the commercial power grid via an approximately 30 km 20 kV power line. As the project progresses, efforts should be made to stay in communication with the power authorities to ensure that adequate power continues to be available for the project. If early commitment is required to reserve the needed capacity, this should be considered.
19.3.2 Water Balance Precipitation varies seasonally and within relatively short distances. The closest site with long term measurements of precipitation is Sumberjambe which is 61 km from the project site and has recorded a maximum of 737 mm in a single month and averages 2,593 mm per year for the reported years from 1941 through 1975. The next closest site with long term documentation of precipitation is Tegaldlimo, which is 29 km from the project. This site has averaged 1,508 mm for a similar period. An additional site is Banyuwangi which is 52 km from the site and receives 1.177 mm per year. No data is available for pan evaporation for the sites, however a pan evaporation of 1,500 mm per year is assumed based upon sites at similar latitudes and climates. The importance of water balance to the project cannot be understated. The project is tentatively being designed as a zero discharge facility with an assumed rainfall of 1,158 mm. Considering the environmental risk due to failure of containment or the inability to handle excess solution, the water balance is critical, and the zerodischarge assumption is risky. The assumed average annual rainfall scenario (1157 mm) is comfortably within the zero discharge assumption. However, during a wet year (1770 mm rainfall), the ponds will hold the accumulation of the wet year, but after that there is no allowance for another wet year, and in fact one more severe storm could force a discharge situation. The general conclusion is that the wet year rainfall does not support the zero discharge assumption with respect to ongoing annual accumulations. The water balance deserves additional evaluation. Options for evaporation or treatment for safely releasing excess solutions exist, and should be evaluated.
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19.3.3 Solution Containment Solution containment will be a critical item for the project to proceed through the environmental assessment process, and for the profitability of the project. The project must be designed with careful consideration of geotechnical parameters for the leach pad and pond site designs. Demonstratively functional leak detections systems must be designed and installed for this project. Careful attention to QAQC with respect to pad construction earthworks and liner installation is required. Clear solution management guidelines for operations of the process affecting the solution balance in the process system must be adhered to, with the full support of management as well as mitigation plans to deal with process upsets.
19.3.4 Acid Rock Drainage An evaluation of the ore and waste rock has been initiated in regard to acid rock drainage, however results are pending. Acid base accounting and humidity cell testing should be conducted on the ore and waste rock to predict the effluent that will result from meteoric waters contacting the leach pad, waste rock dumps and exposed pit walls after mining. The testing to date has identified relatively low sulfur and sulfide content of the oxidized material with higher sulfur and sulfide content of the transition material. If testing reveals that additional measures are required to protect the environment from acid rock drainage, then operating costs will necessarily increase.
19.3.5 Permitting Risks The Indonesian Forestry Law restricts non forestry activities within protected forests and prohibits mining using an open pit method in protected forest areas. The area of the Porphyry copper-gold resource estimate, and the Zone A, Zone B and Zone C oxide resource estimate areas and the heap leach oxide mining areas contemplated in this Preliminary Assessment fall within a protected forest area. Intrepids Alliance partner, PT IMN, is working with relevant Indonesian authorities regarding a potential review of forest land status. There is no assurance that the forestry reclassification will take place in this instance.
19.4 Opportunities
The Tujuh Bukit Project has numerous opportunities to evaluate. These include: Process optimization; Regenerative overland conveyor.
19.4.1 Process Optimization Trade off studies should be conducted to determine optimization of the processing rate. Cement consumption and operating costs can be reduced by utilizing lime for pH control in those areas of the pits that do not require cement agglomeration. This will require an additional silo and instrumentation but should be costs effective process option should the testing indicate that cement agglomeration is not required for all of the deposit.
19.4.2 Regenerative Overland Conveyor An opportunity exists to reduce the operating costs of the overland conveyor system. Considering the crusher placement at an elevation higher than the leach pad, the use of regenerative downhill conveyors will produce power and reduce the power consumption costs.
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20.0 References
Arribas, A. Jr., 1995. Characteristics of High-Sulfidation Epithermal Deposits, and their Relation to Magmatic Fluid. In: J.F.H. Thompson (Editor), Magmas, Fluids, and Ore Deposits. Mineralogical Association of Canada Short Course Series, Vol 23, pp 419-454. Campbell H.J., 2000. Second phase diamond drilling activities at the Gunung Tumpangpitu prospect (April July 2000). Golden Valley Mines Hakman Joint Venture, Bukit Hijau Project, East Java, Indonesia. Carlile, J.C. and Mitchell, A.H.G. 1994. Magmatic arcs and associated gold and copper mineralisation in Indonesia. In: T.M. van Leeuwin, J.W. Hedenquist, L.P. James and J.A.S. Dow (Editors), Indonesian Mineral Deposits Discoveries of the past 25 years. J. Geochem. Explor., 50, 91-142. Claproth, R. 1989. Magmatic Affinities of Volcanic Rocks From Ungaran, Central Java. Geol. Indones., 12, 511562. Cox, D.P. and Singer, D.A. 1988. Gold-distribution of gold in porphyry copper deposits. U.S. Geological Survey Bulletin 1877, pp. C1-C14. Daly, M.C., Cooper, M.A., Wilson, I., Smith, DF.G. and Hooper, B.G.D. 1991. Cenozoic plate tectonics and basin evolution in Indonesia. Mar. Petrol. Geol., 8, 2-21. Hedenquist, J.W., Arribas, A., Einaudi, M.T., Inan, E.E. and Sillitoe, R.H. 2002. Exploration for and assessment of epithermal precious-metal deposits: Critical characteristics, and their variations. Hellman, P. L. 2008. Intrepid Mines Limited, Tujuh Bukit Project, Report on Mineral Resources, Located in East Java, Indonesia, Technical Report for Intrepid Mines Limited. NI 43-101 report. Hellman, P. L. 2009. Intrepid Mines Limited, Tujuh Bukit Project, Report on Mineral Resources, Located in East Java, Indonesia, Technical Report for Intrepid Mines Limited. NI 43-101 report. Hellman, P. L. 2010. Intrepid Mines Limited, Tujuh Bukit Project, Report on Mineral Resources, Located in East Java, Indonesia, Technical Report for Intrepid Mines Limited. NI 43-101 report. Katili, J.A. 1989. Evolution of the Southeast Asian arc Complex. Geol. Indones., 21, 113-143. Moore, G.F., Curray, J.R. and Moore, D.G. 1980. Variations in Geologic Structure Along the Sunda Fore Arc, Northeastern Indian Ocean. In: D.E. Hayes (Editor), The Tectonic and Geologic Evolution of Southeast Asian Seas and Islands. Geophysical Monograph 23. Reyes, A.G. 1990. Journal of Volcanology and Geothermal Research, 43, pp. 279-309. Rohrlach, B., Madera, A. and Watt, R. 1999. Geology, alteration and mineralisation of the Tampakan copper deposit. PACRIM 1999, 4th Pacific Rim Congress 10-13th October 1999, Bali, Indonesia. Rohrlach, B.D. and Loucks, R.R. 2005. Multi-Million-Year Cyclic Ramp-up of Volatiles in a Lower Crustal Magma Reservoir Trapped Below the Tampakan Copper-Gold Deposit by Mio-Pliocene Crustal Compression in the Southern Philippines; in Porter, T.M. (Ed.), Super Porphyry Copper & Gold Deposits: A Global Perspective; PGC Publishing, Adelaide. Rohrlach B. and Norris M., 2006. Banyuwangi Project, East Java. Technical overview. Sillitoe, R.H., 1989. Economic Geology Monograph 6, pp. 274-291.
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Skewes, A., Arevalo, A., Floody, R., Zuniga, P., and Stern, Ch, 2005. The El Teniente Megabreccia Deposit, the worlds largest Copper deposit. In Porter, T.M. (Ed.), Super Porphyry Copper & Gold Deposits: A Global Perspective; PGC Publishing, Adelaide. 1: 83-113. Van Bemmelen, R.W. 1970. The Geology of Indonesia. Martinus Nijhoff, The Hague, 2 vols, 732 pp. White, N.C. 1991. High Sulfidation Epithermal Gold Deposits: Characteristics, and a model for their origin. Geol. Surv. Japan Report 227, 9-20.
SECTION EIGHTEEN
PAGE 165
21.0 Date and Signature Page

The effective date of this Technical Report, titled Preliminary Economic Assessment Tujuh Bukit Oxide Project, Located in East Java, Indonesia, Technical Report for Intrepid Mines Limited, is 1 June 2011.
Signed,
Daniel Kappes
Phillip Hellman
Peter Allen
SECTION EIGHTEEN
Kappes, Cassiday & Associates
INTREPID MINES LTD. TUJUH BUKIT GOLD HEAP LEACH PROJECT
APPENDIX I GENERAL ARRANGEMENTS, EARTHWORKS AND ELECTRICAL DRAWINGS
Prepared by: Kappes, Cassiday & Associates 7950 Security Circle Reno,Nevada89506
APPENDIX II FLOWSHEET DRAWINGS
APPENDIX IV EQUIPMENT LIST
Equipment Number 100 - Crushing 100 CR 01 100 CV 03 100 FE 04 100 WT 01
Description Jaw crusher Stockpile Conveyor Lime Screw feeder Stacked Ore Weightometer
Attached Power kW 141.0 18.0 1.50 0.1 4.8 160.6
Hours/Day 12 12 12 12 12
Days/Year 365 365 365 365 365
Load Factor, % 80 80 80 100 100
Lights Total 200 Ore Reclaim and Stacking
Total 300 Heap Leach and Recovery System 310 Heap Leach 310 FM 01 Barren Solution Flowmeter 310 PP 01 Barren Solution Pump 310 PP 02 Submersible Excess Solution Pump Total 320 Adsorption 320 FM 01 Pregnant Solution Flowmeter 320 PP 01 Pregnant Solution Pump 330 Elution and Gold Recovery 330 BO 01 Solution Boiler 330 PP 02 Acid Wash Pump 330 PP 03 Acid Metering Pump 330 PP 04 Acid Area Sump Pump 330 PP 05 Eluant Pump 330 PP 06 Elution Column Drain Pump 330 PP 07 Boiler Chemical Feed Pump 330 PP 08 Hot Water Recirculation Pump 340 Carbon Handling 340 AG 01 Carbon Attritioning Agitator 340 KN 01 Carbon Regeneration Kiln 340 SR 01 Carbon Dewatering Screen Lights for 310, 320, 330 and 340 areas Total 400 Smelting and Refining 400 BL 01 Electrowinning Cell Exhaust Blower 400 BL 01 Smelting Furance Exhaust Blower 400 PP 03 Electrowinning Area Sump Pump 400 RC 01 Rectifier 400 FU 01 Tilting Crucible Furnace 400 RT 01 Retort Furnace vacuum pump Lights Total 500 Detoxification 600 Water Distribution 600 PP 02 Raw Water Pump 700 - Electrical
0.0
0.1 187 22 209.1 0.1 37 320.0 0.75 0.1 3.7 15.0 2.5 0.1 15.0 1.5 100.0 0.4 14.9 511.0 3.7 1.5 3.8 30.0 0.5 11.5 1.5 52.5
24 24 24
365 365 90
100 60 90
24 24 18 6 6 2 18 3.7 18 18 12 24 5 24
365 365 235 235 235 235 235 235 235 235 18 82 235 365
100 90 80 60 90 60 60 90 90 60 80 80 80 80
18 7 18 18 7 12 24
52 52 234 234 52 52 365
80 80 80 80 80 80 80
30.0
12
365
80
Caustic Mix/Storage Tank Agitator Cyanide mix/Storage Tank Agitator Caustic Addition Pump Irrigation/barren Solution Cyanide Metering Pump Elution Cyanide Metering Pump Barren Pump Antiscalent Dosing Pump Pregnant Pond Antiscalent Dosing Pump Eluant Antiscalent Dosing Pump Excess Solution Anti-scalant Pump Total 900 - Ancillaries and Buildings 900 GN 01 Emergency Generator 900 TK 01 Diesel Storage Tank Sewage Treatment Plant
800 - Reagents 800 AG 800 AG 800 PP 800 PP 800 PP 800 PP 800 PP 800 PP 802 PP
01 03 01 05 06 07 08 09 11
0.4 0.8 0.75 0.75 0.75 0.2 0.2 0.2 0.2 4.2
24 24 4 24 4 24 24 18 10
365 365 234 365 234 365 365 234 50
80 80 60 80 80 80 80 80 80
1.5
24
365
80
808.4
APPENDIX III PROCESS DESIGN CRITERIA
Prepared by: Kappes, Cassiday & Associates 7950 Security Circle Reno, Nevada 89506
Owner Approval
Date:
REV
DATE
BY
CHK
APPROVAL
DESCRIPTION
Tujuh Bukit Design Criteria 15 Feb 2011 Rev A.docx
Appendix III
Page 2
Kappes, Cassiday & Associates Tujuh Bukit Design Criteria 15 Feb 2011 Rev A.docx
Appendix III
Page 3
1.0
INTRODUCTION The following criteria are developed to support the compilation of the feasibility study for the Tujuh Bukit gold and silver heap leach project. Tujuh Bukit is located approximately 90 kilometers due west of the island of Bali, and 200 kilometers southeast of the city of Suyabaya, East Java, Indonesia. The average ore processing rate will be 7.1 million tonnes per year. Annual metal production will be approximately 150,000 oz Au and 1,000,000 oz Ag. Open pit mining, crushing, conveyor stacking, heap leaching, metal recovery in a Merrill Crowe circuit and all associated infrastructure are included in the study. Dor bars will be exported from the project site.
2.0
INFORMATION SOURCE CODES CODE A B C E G I K M O P V SOURCE Assumed Data Calculated Client Information Data from Geotechnical Data Industry Standard KCA Recommendation Metallurgical Testwork Data Information Supplied by Others Published Information/Criteria Vendor Data
Appendix III
Page 4
3.0 Special Considerations 3.1 Earthquakes / Seismic

The island of Java is a known high risk earthquake area. Although the area has not been officially designated with respect to earthquake hazard, it has been proposed (Irsyam, Dangkua, et.al.2008 ) that East Java be designated as Zone 5, with acceleration of 0.25 g.
Notable recorded earthquakes in the area are shown below with the Mercalli intensity scale:
Tulungagung Tulungagung Bali Gresik
05 July 1859 (MMI =VI) 20 August 1896 (MMI =VII) 21 January 1917, 1500 deaths (MMI =IX) 19 June 1950 (MMI=VII)
250 km to west 110 km to northeast 215 km to northwest
Excerpts of the Mercali Intensity Scale (MMI) as defined by magnitude of damage are shown below:
VII. Very Strong Damage negligible in building of good design and construction; slight to moderate in well-built ordinary structures; considerable damage in poorly built or badly designed structures; some chimneys broken. Noticed by people driving cars. VIII. Destructive Damage slight in specially designed structures; considerable in ordinary substantial buildings with partial collapse. Damage great in poorly built structures. Fall of chimneys, factory stacks, columns, monuments, walls. IX. Violent Damage considerable in specially designed structures, well designed frame structures thrown out of plumb. Damage great in substantial buildings, with partial collapse. Buildings shifted off foundations.
It is clear that significant earthquake risk exists at Tujuh Bukit and facilities must be designed with this in mind.
Tsunamis
Just as important to note is that offshore, to the south, some 240 km, lies the Java Trench, an active plate/ subduction zone parallel to the islands southern coastline. This area generates many submarine earthquakes that sometimes cause tsunamis. The southern coastline of East Java has history of tsunamis, some 11 or more, with a maximum wave height of 14 meters, but usually in the 5-7 m range.
Appendix III
Page 5
Figure 3-1 Seismic Activity Java Trench
Figure 3-2 Tsunami Locations and Wave Heights
Appendix III
Page 6
The highest tsunami on record occurred in 1674 at Oma in the Banda Sea, Indonesia. By all accounts, it reached almost 80 m in height and killed 2,970 people. The second highest was the 1883 Krakatau tsunami, which was 36 m high and killed 36,417 people. Krakatau is also generally believed to be the most violent volcanic explosion ever recorded. The remnants of this volcanic island is 1000 km to the west of Tujuh Bukit, on the other end of the island of Java. As is well known, the most recent tsunami of massive proportions was the 2004 Indian Ocean tsunami, which had a maximum wave height of 30 m, at Loknga, Sumatra. At least 283,000 lives were lost. A list of recorded recent tsunamis is shown below. Note that two (Banyuwangi and Pangandaran) of these are relatively close to Tujuh Bukit and quite recent. Year
1992 1994 1994 1996 1996 1998 1998 2000 2004 2005 2006
Location
Flores, Nusa Tenggara Timur ,Indonesia Banyuwangi, East Java, Indonesia Mindoro, Philippines Toli-Toli, Central Sulawesi Indonesia Biak, Irian Java Indonesia Taliabu, Maluku Indonesia Aitape, PNG Papua New Guinea Banggai, Central Sulawesi Indonesia Indian Ocean Tsunami Indian Ocean Countries Nias, North Sumatra Indonesia Pangandaran, West Java Indonesia
Fatalities
1950 238 78 6 110 18 3 000 4 283 000
unknown
600
It is clear that special design considerations should be incorporated into designs at Tujuh Bukit. In particular, all pads, ponds, and site infrastructure should be at least 14 m above sea level, the level of the highest recorded wave on that coast.
Appendix III
Page 7
4.0
DESIGN CRITERIA
4.1
General Site Conditions

Code Indonesia Lat. 8o37 South Long. 114o2 East UTM 9,046,622 S, 174,517 E Genteng Surabaya East Java Banyuwangi Sea Level to 438 masl C P
Location Country Coordinates
Nearest Metropolitan Area Nearest Major City Province Port Elevation
C C C C P
Meteorology Climate Barometric Pressure (Average), kPa Temperature Range Average Minimum, C0 Average Maximum C0 Rainfall Average Annual, mm Average Wet Season (>80mm/mon) Extreme Wet Year, mm Average Dry Season (<80mm/mon) Extreme Dry Year, mm 100-year, 24-hour Storm,mm Evaporation Annual Pan, mm Monthly Pan Minimum, mm Monthly Pan Maximum, mm Prevailing Wind Direction
Tropical NA 20-34 TBC, 27 AVG TBC 23 TBC 31 TBC 1158 November through March 1770 April through October 686.0 137 1800 Est. from other tropical areas. 150 150 SSW
O, P O, P O, P O O O O O O A A A P
General Seismic Zone Tsunami Risk Highest wave height recorded Average wave height
Zone 5, 0.25g proposed

High, ~ 11 recorded in area 14 m 7m
P P P P
Appendix III
Page 8
Power
Main Incoming Distribution Medium Voltage Low Voltage
Line at 150 kV 3 ph 50 Hz Line at 20 kV, 3 ph, 50 Hz 20 kV, 3 ph, 50 Hz 20 kV , 3 ph, 50 Hz 380 V, 3 ph, 50Hz 220 V, 1 ph, 50 Hz Sea Water, Ground Water non-potable Diesel, Gasoline Diesel Generators Standard
C C A A A
Control Voltage Water Source Water Quality Fuel Emergency Backup Power Electric Motors
C A C C V
4.2
Mining
General Base Case Mineable Reserve Production Schedule
Production Rate Life of Mine, Years Average Grade Ore types In Situ Bulk Density , t/m3 Moisture content, wt% Strip Ratio, Average
57 Mt Oxide + 5Mt Transition = 62Mt 355 days/yr 7 days/wk 24 hrs/day 2 shifts/day, 12-hr/shift 7.1 million t ore per yr 20,000 t ore per day 9 Oxide 0.84 gpt Au, 22.83 gpt Ag Transition 0.70 gpt Au, 28.11 gpt Ag Volcanic Dacite Tuffs and Breccias Oxide Ore and Transition Ore 2.2 TBC 3 to 6% 1.11 : 1
C, O C
C, B B B C O A O
4.3
Crushing
General Production Schedule Overall System Availability Production Rate Conveyor Design
Same as Mining 72% 20,000 tpd Average 1,150 tph Average +20% above Crusher Design 1,380 tph Design
C K C, B K
Appendix III
Page 9
Conveyor Speed ROM Ore Bulk Density ROM Moisture ROM Size Crusher Work Index kW-hr/mt Ball Mill Work Index kW-hr/mt Oxide Transition Abrasion Index Ai Oxide Transition Final Crushed Ore Product Size No. of Crushing Stages
1.0 m/s Average (1.5 m/s Max) 1.5 t/m3 (TBC) 3 to 6% P80 of 500mm, NA 13.7 15.0 0.44 0.74 P100 20mm Three
K A A A
M M M M A V
Dust Suppression System Type Control Water Source Pressure Source
Water sprays at dust sources Manual via valves Raw water tank Distribution Pump
K A A K
Primary Crushing ROM Stockpile Capacity ROM Feed Bin Bin Feed Method Haul Truck Size Oversize Protection Rock Breaker Apron Feeder Vibrating Grizzly Feeder Primary Crusher Type Size Primary Crusher Closed-side Setting Primary Crusher Feed Crushed Ore Stockpile Type Shape Angle of Repose Angle of Reclaim Crushed Ore Bulk Density Feed Method Capacity
Minimum 3 Days Production 125 m3, 200 250 t Direct truck dump complemented with FEL. Cat or equivalent 785C No Fixed Grizzly Yes, Stationary 1.83 m x 6.7 m 1.83m x 4.88m, 150mm, @ 10 deg Jaw Telsmith 50x60 or equal 150 mm 1,150 tph Nominal
K V K O K K V V K V V V
Uncovered stockpile Conical 38 degrees 60 degrees 1.4 Fixed stacker with max inclination of 17o ~2900 m3 , 3772 t Total 500 t live
K K A A A K B,V
Appendix III
Page 10
Secondary Crushing Scalping Screen No. of Scalping Screens Size Scalping Screen Opening
Triple Deck, Vibro-King, or equal 3 8 x 24 Top Deck 130 mm Middle Deck- 75 mm Bottom Deck 30 mm To Tertiary Screen To Secondary Crusher Surge Bin Vibrating Pan feeder Under Bin 1 100 t 1 Telsmith 68SBS-SP or equal 1 Yes Yes
V V V V
Screen Undersize Screen Oversize Secondary Crusher Feed Method No. of Surge Bins Surge Bin Capacity No. of Feeders Secondary Crushing Type No. of Secondary Crushers Cross-Belt magnet Metal Detector Tertiary Crushing Scalping Screen No. of Scalping Screens Size Scalping Screen Opening Screen Undersize Screen Oversize Tertiary Crusher Feed Method Surge Bin Capacity No. of Feeders Tertiary Crushing Type No. of Tertiary Crushers Recirculating Load %
V V V V V V V V V V
Double Deck, Vibro-King, 2 8 x 24 Top Deck 40 mm Bottom Deck 20 mm To Product Conveyor To Tertiary Crusher Surge Bin Vibrating Pan feeder Under Bin 100 t x 2 = 200 t 2 Telsmith 68SBS-CC or equal 2 185
V V V V V V V V V V V V,B
Agglomeration-Stockpile Type Shape Angle of Repose Angle of Reclaim Crushed Ore Bulk Density Feed Method Capacity
Uncovered stockpile Conical 38 degrees 60 degrees 1.3 Conveyor ~2900 m3 , 3772 t Total 500 t live
A K A A A K V
Appendix III
Page 11
Pad Gravel Circuit Type Shape Angle of Repose Pad Gravel Product Size Bulk density Feed Method Capacity
Uncovered stockpile Kidney from radial Stacker 38 degrees +30 -75 mm 1.4 TBC Conveyor 7-9,000 t
A K A V,B A K B
4.4
Agglomerated Ore Reclaim

Vibrating Pan Feeder 2 1,150 tph Nominal 1,380 tph Design 575 tph Nominal V V B K
Stockpile Discharge Feeders Type Quantity Total Capacity Capacity Each Feeder
4.5
Agglomeration
Drum 3.3 m dia. x 9 m Portland Type II Cement 4.5 kg/mt 10% Barren Solution Agglo Drum 1.3 t/m3 (TBC) C K K M A A K M
Agglomeration Type Drum Size Binder Cement Addition Rate Agglomerated Ore Moisture Agglomeration Solution Agglomeration Solution Addition Agglomerated Ore Bulk Density
4.5 Conveying Agglomeration to Stacking System

Overland Conveyor +20% above Crusher Design 1,380 tph Design 450 troughing idlers Covered with inspection ports 1,380 tph Design 3.3 m/s Max (650 ft/min) K
Tripper Car / Shuttle Conveyor Conveyor Speed
K I
Appendix III
Page 12
4.6
Heap Construction
20,000 t/day 1,380 tph Design mobile grasshopper conveyors which feed a horizontal index conveyor that feeds a radial stacker. Covered, with inspection ports 1,067 mm (42) (TBC) Radial w/5 meter extendable stinger, operates on top of lift being constructed 36 43 10 m 10 Probably no- TBD 10 m front, 5 m sides and back TBD 37o 80 100 m 150 Cross Rip with LGP dozer. 1.3 t/m3 (TBC) C K
Stacking Rate Type
Width Stacker Type Stacker Length, m Lift Height Number of Lifts Inter-lift Liners or Gravel Drainage? Setback Between Lifts Angle of Repose Stacking Width Stacking Angle (Stacker Pivoting Angle) Surface Preparation After Stacking Crushed Ore Stacked Density
K,V K V K B M I A B K K A
4.7
Leach Pad
Multiple lift, single use pad 2 phases First phase 3-4 yrs Composite liner consisting of 1.5 mm geomembrane liner over a 300 mm compacted, prepared subgrade (or Geosynthetic Clay Liner (GCL) in steep zones) with permeability <10-5 cm/sec 600 mm deep over plastic liner. +32mm, -75 mm gravel I A I
Type Construction Liner System
Overliner
4.8
Heap Operation
20,000 tpd 90 Days 1 365 days/yr 24 hours/day
Ore Feed Rate Leaching Cycle No. of Leach Cycles Leaching Schedule
C M M K
Appendix III
Page 13
Tonnes Under Leach Active Leach Area Solution Application Method Solution Application Rate Total Solution Applied Gold Recovery, average LOM Oxide Transition Silver Recovery, average LOM Oxide Transition Average Gold Recovered, kg/day Average Silver Recovered, kg/day Average Pregnant Solution Grade @ 10 L/hr/m2 Nominal Pressure for Sprinklers, kPa Design Pressure for Sprinklers, kPa Pump Availability, % Barren Solution NaCN Grade, g/L
1.8 million tonnes 139,000 m2 Sprinklers on top, drippers on side-slopes 10 L/hr/m2 Average 11.67 L/hr/m2 - Design 5.5 t soln/t ore 86 % 73% 21% 34% 14 113 0.70gpt Au 5.7 gpt Ag 138 (14 m, 20 psi) 207 (21 m, 30 psi) >95 0.20 (200 ppm)
B B K M, K M M M M M B B B I I A I,M
4.9
Solution Storage
K Pond Pond Pond Sump designed into bottom liner with pipe access for pump
General Storage Type Pregnant solution Barren solution Excess solution Leak Collection
Pregnant Pond Liner
Volume Sizing Basis
1.5 mm Geomembrane upper liner and 1.5 mm secondary liner with geonet inbetween 24-hr working volume plus 24-hr draindown
Pregnant Pond Pump Type Number of Pumps Design Flow Rate, m3/hr Nominal Flow Rate, m3/hr Pump TDH Requirement, m
Submersible in Pregnant pond (TBC) 2 (1 operating + 1 standby) 1,400 1,200 40m

K K B B B
Appendix III
Page 14
Barren Solution Pond Volume Operating freeboard, meters Barren Heap Leach Pumps Type Number of Pumps VFD Pump TDH Requirement, m Agglomeration Solution Pump Type Number of Pumps Design Flow Rate, m3/hr Pump TDH Requirement, m
1:1 (10m x 10m) 0.1
B K
Submersible 4 operating, 1 warehouse spare Yes 100 m
K K K B
Centrifugal 2 (1 operating + 1 standby) 120 m3/hr 120m TBC
K K B B
Excess Solution Pond Liner Volume Sizing Basis
Pond Depth Excess Pond Pump Type Number of Pumps Design Flow Rate, m3/hr Pump TDH Requirement, m
1.5mm Geomembrane top liner and 1.5 mm bottom liner with geonet between Sufficient for 100 year, 24-hr storm event over entire lined areas plus maximum wet season accumulation TBD
I B
Submersible (TBC) 1 500 (TBC) 30 m
K K B B
4.10 Heap Leach Recovery Circuit

General Recovery Plant Type Operating Schedule Operating Availability Merrill Crowe Two, 12-hr shifts per day, 365 days per year 95% C C A
Appendix III
Page 15
Merrill-Crowe Section Flowrate Average Design Pregnant Solution Grade (Average) Au Recovery from Solution Ag Recovery from Solution Average Gold Recovered from Solution, kg/day Average Silver Recovered from Solution, kg/day
1,200 m3/hr 1,400 m3/hr 0.70 gpt Au) 5.7 gpt Ag 98% 98% 14 113
B B B A A B B
Configuration Nominal flow, m3/h Maximum flow, m3/h Average solution grade, g Au/m3 Average solution grade, g Ag/m3 Barren solution grade, g Au/m3 Barren solution grade, g Ag/m3 Clarification Filters Type Feed Turbidity average/maximum, mg/L Product Turbidity, mg/L Nominal flow per filter, m3/h Maximum flow, m3/h Design specific flow, m3/h/m2 Filter size, m2 Quantity, installed / operating / standby Time for backwash and precoat, h Typical Cycle Time on Filter, hours High Pressure Washers Location Operation Type Quantity, installed / operating / standby Diatomaceous Earth Mix System Configuration Transfer to Precoat Tank Precoat Tansfer Pump Type Precoat System
Merrill-Crowe zinc precipitation 1200 1400 0.7 5.7 0.003 to 0.03 0.01 to 0.1
C B B B B B B
pressure leaf 10/100 0.5 to 3 240 280 1.5 185 6 / 5 /1 2 12
B A A V V V V B B,K B
Merrill Crowe for Clarifier and Precip Manual, intermittent Cart mounted, electric 2/1/1
K K K K
Mix One SuperSack of DE in the Body Via Pump horizontal centrifugal
A A A
Appendix III
Page 16
Tank type Tank material Agitated, yes/no Pump type Precoat time, min Body Feed System Tank type Tank material Agitated, yes/no Pump type Pregnant Solution Sampler Type Clear Pregnant Solution Tank Capacity, min @ nominal flow Tank Dimensions, diameter x height, m (working Tank Volume, m3 Material of construction Clear Pregnant Solution Pumps Nominal flow, m3/h Maximum flow, m3/h Type Variable speed, yes/no Quantity, installed / operating / standby Deaeration Tower Nominal flow, m3/h each Maximum flow, m3/h Dimensions, diameter x height, m Material of construction Packing type Packing depth, m Maximum Dissolved Oxygen in Feed, ppm Dissolved Oxygen in Discharge, ppm Deaeration Tower Vacuum Pumps Design gas flow at standard conditions, m3/h Nominal flow, operating conditions, m3/h Standard conditions for capacity Type
Cylindrical with cone bottom carbon steel Yes horizontal centrifugal 10 15
A A K K B
Cylindrical with cone bottom carbon steel Yes diaphragm or peristaltic metering
A A K K
In-line with automatic valve
20 8.5 x 7 397 carbon steel
A A B A
1200 1400 horizontal centrifugal Yes 2/1/1
B B K K K
300 350 3.6 x 8.1 carbon steel Jaeger 3-1/2 in. polypropylene Tri-Packs 4.5 6.9 0.8
K K K K K K K K
1400 (at 16.6 kPa (2.4 psi) absolute 750 (at 5 kPa (0.7 psi) absolute) Capacity at inlet air pressure, air at 20 C, liquid seal ring
K K V K
Appendix III
Page 17
Quantity, installed / operating / standby Zinc Dust Addition Addition system configuration Press Feed Pumps Nominal flow, m3/h Maximum flow, m3/h Design head, m Type Variable speed, yes/no Quantity, installed / operating / standby Precipitate Presses Type Nominal flow, m3/h Maximum flow, m3/h Design specific flow, m3/h/m2 Precoat Filter size (per filter), m2 Quantity, installed / operating / standby Maximum Operating Pressure, kPa (psi) Blowdown Compressor Design flow, Nm3/h Design pressure, kPa Type Blow-down time, h Quantity Installed power, hp Receiver volume, m3 Barren Solution Sampler Type
4/1/1
Variable speed feeder controlled in-weight
1200 1400 80 Horizontal centrifugal Yes 2/1/1
B B C K K K
pressure, recessed plate 1200 1400 1.5 None 185 6/5/1 689 (100)
K B B K C V B B
828 (515 scfm) 760 (110 psig) screw type 4 1 150 5
A A V A B V B
In-line with automatic valve
Barren Solution Tank Capacity, min @ nominal flow Dimensions, d x h, m (working volume) Tank Volume, m3 Material of construction Clarification Backwash
20 8.5 x 7.0 397.2 carbon steel
B B B K
Appendix III
Page 18
Nominal flow, m3/h Design flow, m3/h Design head, m (psi) Clarification Sludge Pump Type Precipitate Handling Configuration Precipitate production, dry kg/d, nominal Precipitate production, dry kg/d, design Merrill-Crowe Area Sump Pump Type
215 250 124 (176)
V C V
vertical centrifugal slurry
Manually clean press into pans, load pans 127 331
A C C
Vertical centrifugal slurry w/ agitation
4.11 Refinery Section

Precipitate Dryer Capacity, days precipitate production Configuration 1.5 Precipitate pans loaded onto dryer conveyor and jogged into oven one at a time until all pans are loaded, then a 12 hour dry and cool Pans Conveyed out the end of the dryer on the dryer conveyor, one at a time, then onto roller conveyor and dumped into screw conveyors for transfer to the mixer B
Precipitate Handling from Drying Oven to Mixer
Smelting Furnace Type Metal Production, kg Au+Ag/wk Heat Input Rating, MJ/hr (MBTUs) Primary heat source Furnace working capacity, Melts per Week Bag House Dust Collector Furnace exhaust gas handling rate, Am3/h Furnace exhaust gas pressure, kPa Flux Handling Configuration Precipitate & Flux Conveying System
Tilting Crucible ~ 890 Vendor recommendation Diesel Vendor recommendation 4-10
K B V C V B, V
Vendor recommendation Vendor recommendation
V V
Fluxes manually added from bins into pans
Appendix III
Page 19
Type Operation
Bin with pan-flipper, mixer and feeder Load bin with precipitate and flux, feed
A A, V
Slag Handling Method Description Slag production, kg/wk Slag P80, mm Slag Handling Slurry Sump Pump Nominal flow, m3/h Type Slag Storage Tank Type Slag Bulk Density, t/m3 Slag Storage, tonne Slag Tank Volume, m3 Type Slag Handling Water Pump Design flow, m3/h Type Slag Mill Gravity Table
Slag Granulation followed by storage in Molten slag poured into water flushed 881 to 1275 0.90
K K A A
120 Vertical slurry pump with agitation Vertical , cylindrical with conical bottom 1.76 2 1.2 Steel
K K K K K K K
150 Horizontal centrifugal water yes yes
K K
4.12 Cyanide Neutralization (Detox) Provisional

General (TBC) Stream to be treated Method Design Capacity, m3/h CN Concentration In, ppm WAD CN Concentration Out, ppm WAD Retention Time, minutes Hydrogen Peroxide (50%), Dosing, g/g CN Hydrogen peroxide consumed kg/m3 Copper Sulfate Dose, g/m3 solution Excess solution Hydrogen Peroxide (TBC) Other options are being investigated 500-1000 (TBC) 20-40 0.5 60 5.6 0.11- 0.22 TBD A C A A P A A B B
Appendix III
Page 20
Detox Tanks (TBC) Quantity Tank Volume, m3 Material of Construction Agitated?, yes/no Detox Tank Agitators (TBC) Type
2 785 m3 Each, 1560 m3Total Carbon Steel Yes
B B K K
Single axial flow impeller
4.13 Reagents and Consumables

Cement Cement Consumption, kg/t Addition Point Addition Method Consumption, t / day, nominal Type Form Bulk density, t/m3 Cement Truck size, t Selected silo size, t Selected silo size, days 4.5 kg/t on 25% of Ore Dry fed onto conveyor Screw feeder from silo onto belt controlled by weightometer 90 t Portland type II Bulk delivery, pneumatic unload to silo 1.51 TBD 3 each, 100t each 3.3 A,M K K B K K I O B B
Zinc Dust Consumption, gZn dust/g (Au+Ag)in Pregnant Solution Consumption, kg/d, nominal Form Keg Size, kg Addition System Configuration Diatomaceous Earth Consumption, g DE/m3 pregnant solution Consumption, kg/d, nominal SuperSack Size, kg
B 190 Dry powder in steel kegs 50 Screw Feeder B A I A
TBD 1000-2000 TBC 454
K C I
Sodium Cyanide (Heap Leach) Consumption, kg/t Consumption, kg/d, nominal Form Container configuration Container size, kg
0.40 8,000 Briquettes Boxes 1,000
M M K V V
Appendix III
Page 21
Reagent storage capacity, days Cyanide Mix Tank Configuration Capacity m3 Agitated?, yes/no Cyanide Transfer Pump Pump Type Quantity, installed / operating / standby Cyanide Storage Tank Configuration Storage capacity m3 Tank Capacity, days Agitated?, yes/no Cyanide Metering Pumps- Barren Locations Pump Variable Speed Quantity, installed / operating / standby Cyanide Metering Pumps- Agglomeration Locations Pump Variable Speed Quantity, installed / operating / standby
30
Cylindrical, flat bottom open tank 5 Yes
K B K
Seal-less Horizontal centrifugal 2/1/1
K K
2 each, cylindrical, flat bottom open tank 10 ea. 0.7 No
K K K K
CN area to Barren pumps Metering Yes 2/1 /1spare
K K K K
CN area to Agglo Pump Metering Yes 2/1 /1spare
K K K K
Antiscalant Type Form Container Average Addition Rate Addition Points Consumption total, kg/t nominal Antiscalant Metering Pumps Type Variable Speed Addition Method Antiscalant dosing range , ppm Design head, m Quantity, installed / operating / standby
TBD Liquid 1 m3 Tote Bins 6 ppm Barren and pregnant pump suctions 346
C V V A K B
Diaphragm Yes Individual pumps for each pond 0 to 20 TBD 2 / 2 /0
K K K A B K
Appendix III
Page 22
Fluxes Flux ratio, kg flux/kg dry sludge Flux mix, % Silica% Borax% Fluorspar% Niter% Soda Ash% Flux reagents requirements, kg/d, nominal Silica Borax Fluorspar Niter Soda Ash
TBD 100 30 40 0 10 20 40 65 3 32 21
B E A A A A A B B B B B
Hydrogen Peroxide (DETOX) (TBC) Provisional Hydrogen Peroxide Concentration Form Specific Gravity (50% solution) Container configuration Consumption, kg/d, nominal Storage Capacity, d Hydrogen Peroxide Metering Pumps Provisional Pump Type Design Flow Rate, m3/hr Solution s.g. Quantity, installed / operating / standby Copper Sulfate (DETOX) (TBC) Provisional Consumption, nominal, kg CuSO45H2O per day Mix Concentration, % by weight Copper Sulfate solution s.g. (estimate) Container configuration Container size, kg Form Specific Gravity, t/m3 Bulk density, t/m3 Storage Capacity, days Copper Sulfate Mix Tank Provisional Configuration Material of Construction Mix capacity, t CuSO4
50% Liquid 1.20 1 m3 totes or bulk TBD 21
I I P A A A
Peristaltic xx TBD TBD
K B P B
TBD 25 1.146 Super Sacks 1000 Granules or Flake 2.28 0.83 TBD
B K B K A V P P C
Cylindrical, flat bottom covered tank LHDPE TBD

K K B
Appendix III
Page 23
Tank Capacity, days Tank volume required, m3 Agitated?, yes/no Copper Sulfate Transfer Pumps Provisional Pump Type Variable Speed Design Flow Rate, m3/hr Quantity, installed / operating / standby Copper Sulfate Storage Tank Provisional Configuration Material of Construction Storage capacity, t CuSO4 Specific gravity of 25% solution Tank Capacity, days Aspect ratio, H : D Tank volume required, m3 Additional Freeboard, m Agitated?, yes/no Copper Sulfate Metering Pump Provisional Pump Type Variable Speed Nominal flow, L/min Design flow, L/min Design head, m Quantity, installed / operating / standby Sulfuric Acid (DETOX) (TBC) Provisional Delivered Concentration, % by weight Consumption, L/day, nominal Delivery Container Configuration Sulfuric Acid Metering Pumps Provisional Pump Type Design Flow Rate, m3/hr Pump TDH Requirement, m Solution s.g. Quantity, installed / operating / standby
TBD TBD Yes
C B K
Peristaltic Yes xx 2/1/1
K K B K
Cylindrical, flat bottom covered tank LHDPE TBD TBD TBD 1.0 TBD 0.3 No
K K C P C K B K K
Peristaltic Yes x.x x.x TBD 2/1/1
K K B B B K
94 TBD 1 m3 Tote bins
A B A
Peristaltic xx xx TBD TBD
K B B P B
4.14 Utilities
Raw Water Sea Water Source
Sea Water
Appendix III
Page 24
Consumption, m3/day Raw Water Well Pump Pump Type Design Flow Rate, m3/hr Pump TDH Requirement, m Quantity, installed / operating / standby Pit Dewatering Pump (Mine Area) Pump Type Design Flow Rate, m3/hr Pump TDH Requirement, m Quantity, installed / operating / standby Raw/Fire Water Tank Tank Volume, m3 Material of Construction Raw Water Distribution Pump Pump Type Design Flow Rate, m3/hr Pump TDH Requirement, m Quantity, installed / operating / standby Fire Water Distribution Pump Pump Type Design Flow Rate, m3/hr Pump TDH Requirement, m Quantity, installed / operating / standby Crusher Area Raw Water Tank Tank Volume, m3 Material of Construction Crushing Water Spray Pump Pump Type Design Flow Rate, m3/hr Pump TDH Requirement, m Quantity, installed / operating / standby Water Truck Fill Pump Pump Type Design Flow Rate, m3/hr Pump TDH Requirement, m Quantity, installed / operating / standby
TBD
Vertical Wells TBD TBD TBD
K B B B
Submersible TBD TBD TBD
K B B B
TBD Carbon Steel
B K
Horizontal Centrifugal TBD TBD TBD
K B B B
K B B B
TBD Carbon Steel
B K
K B B B
K B B B
Appendix III
Page 25
Potable Water Source Consumption, m3/day Potable Water Treatment Pump Pump Type Design Flow Rate, m3/hr Pump TDH Requirement, m Quantity, installed / operating / standby Potable Water Treatment System Type Design Flow Rate, m3/hr Potable Water Tank Tank Volume, m3 Material of Construction Potable Water Distribution Pump Pump Type Design Flow Rate, m3/hr Pump TDH Requirement, m Quantity, installed / operating / standby
TBD TBD
A B
K B B B
Vendor Package System TBD
K B
TBD Carbon Steel
B K
K B B B
Air Crushing Plant Air Compressor Quantity Design flow, actual m3/h Design discharge pressure, kPa Type Merrill-Crowe Instrument Air Compressor Quantity Design flow, actual m3/h Design discharge pressure, kPa Type Instrument Air Dryer Design Flow, m3/hr Design Discharge Pressure, kPa Press Blow Down Compressor Compressor Type Design Flow, m3/hr
1 TBD 860 (125 psig) Two Stage In Merrill-Crowe Package 1 TBD TBD Two Stage In Merrill-Crowe Package 28.9 TBD In Merrill-Crowe Package 850
V V V V V V V V V V V V V V V V
Appendix III
Page 26
Design Discharge Pressure, kPa Blow Down Time, hr
760 (110.2 psig) 14
V K
Fuels Fuel Delivery Pump Specific Gravity of Fuel Oil Design flow, L/h Pump TDH Requirement, m Fuel Oil Day Tanks Number of Tanks Tank Working Volume, m3
0.90 TBD TBD
P B B
TBD TBD
B B
Sanitary System Type
Septic w/ leach field

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PRELIMINARY ECONOMIC ASSESSMENT

Tujuh Bukit Oxide Project

Prepared for Intrepid Mines by Kappes, Cassiday & Associates

TUJUH BUKIT PRELIMINARY ECONOMIC ASSESSMENT (PEA)

TUJUH BUKIT PRELIMINARY ECONOMIC ASSESSMENT (PEA)

KAPPES, CASSIDAY & ASSOCIATES | JUNE 2011

TUJUH BUKIT PRELIMINARY ECONOMIC ASSESSMENT (PEA)

KAPPES, CASSIDAY & ASSOCIATES | JUNE 2011

TUJUH BUKIT PRELIMINARY ECONOMIC ASSESSMENT (PEA)

TUJUH BUKIT PRELIMINARY ECONOMIC ASSESSMENT (PEA)

KAPPES, CASSIDAY & ASSOCIATES | JUNE 2011

TUJUH BUKIT PRELIMINARY ECONOMIC ASSESSMENT (PEA)

KAPPES, CASSIDAY & ASSOCIATES | JUNE 2011

TUJUH BUKIT PRELIMINARY ECONOMIC ASSESSMENT (PEA)

Property Description, Ownership & Location

KAPPES, CASSIDAY & ASSOCIATES | JUNE 2011

TUJUH BUKIT PRELIMINARY ECONOMIC ASSESSMENT (PEA)

KAPPES, CASSIDAY & ASSOCIATES | JUNE 2011

TUJUH BUKIT PRELIMINARY ECONOMIC ASSESSMENT (PEA)

Figure 4: Lithology of the Tumpangpitu Prospect

KAPPES, CASSIDAY & ASSOCIATES | JUNE 2011

TUJUH BUKIT PRELIMINARY ECONOMIC ASSESSMENT (PEA)

TUJUH BUKIT PRELIMINARY ECONOMIC ASSESSMENT (PEA)

Figure 5: Lithology Section 11040mN at Tumpangpitu

KAPPES, CASSIDAY & ASSOCIATES | JUNE 2011

TUJUH BUKIT PRELIMINARY ECONOMIC ASSESSMENT (PEA)

Table 1: Total Inferred Resources

Tonnage (Mt) 130 85 60 45 25 15 Tonnage (Mt) 95 65 45 35 20 15 Tonnage (Mt) 40 20 10 7 4 2

Mining and Optimized Mine Plan from Inferred Resource

KAPPES, CASSIDAY & ASSOCIATES | JUNE 2011

TUJUH BUKIT PRELIMINARY ECONOMIC ASSESSMENT (PEA)

Recovery 86% 17% 72% 31% 84% 18%

Recoverable Ounces Metal 1.2 M oz Au 7.2 M oz Ag 0.1 M oz Au 1.4 M oz Ag 1.3 M oz Au 8.6 M oz Ag

TUJUH BUKIT PRELIMINARY ECONOMIC ASSESSMENT (PEA)

Environmental and Permitting

KAPPES, CASSIDAY & ASSOCIATES | JUNE 2011

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1.10 Reclamation and Closure

1.11 Capital Costs

KAPPES, CASSIDAY & ASSOCIATES | JUNE 2011

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63.5 2.5 21.7

KAPPES, CASSIDAY & ASSOCIATES | JUNE 2011

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1.13 Financial Analysis

$1,050 $16.50 $445 $180 3.03 9

$1,450 $38.00 $942 $446 2.70 9

1.14 Project Development Schedule

TUJUH BUKIT PRELIMINARY ECONOMIC ASSESSMENT (PEA)

1.15 Recommendations, Risks and Opportunities

KAPPES, CASSIDAY & ASSOCIATES | JUNE 2011

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KAPPES, CASSIDAY & ASSOCIATES | JUNE 2011

TUJUH BUKIT PRELIMINARY ECONOMIC ASSESSMENT (PEA)

KAPPES, CASSIDAY & ASSOCIATES | JUNE 2011

TUJUH BUKIT PRELIMINARY ECONOMIC ASSESSMENT (PEA)

Units and Abbreviations

KAPPES, CASSIDAY & ASSOCIATES | JUNE 2011

TUJUH BUKIT PRELIMINARY ECONOMIC ASSESSMENT (PEA)

KAPPES, CASSIDAY & ASSOCIATES | JUNE 2011

TUJUH BUKIT PRELIMINARY ECONOMIC ASSESSMENT (PEA)

KAPPES, CASSIDAY & ASSOCIATES | JUNE 2011

TUJUH BUKIT PRELIMINARY ECONOMIC ASSESSMENT (PEA)

3.0 RELIANCE ON OTHER EXPERTS AND CAUTIONARY NOTES