Feasibility Study December 22, 2003

SUITE 900 - 390 BAY STREET, TORONTO ONTARIO, CANADA M5H 2Y2
Telephone (1) (416) 362-5135 Fax (1) (416) 362 5763

PROMOTORA MINERA DE GUAYANA, C.A.

CHOCO GOLD PROJECT
FEASIBILITY STUDY
VOLUME 1

NOVEMBER 2003

MICON INTERNATIONAL LIMITED

i

Table of Contents

1.0 EXECUTIVE SUMMARY .................................................................................. 1
2.0 INTRODUCTION................................................................................................. 9
2.1 PREPARATION OF THE FEASIBILITY STUDY......................................... 9
2.2 LOCATION, ACCESS AND CLIMATE....................................................... 10
2.3 OWNERSHIP................................................................................................. 13
3.0 GEOLOGY AND MINERAL RESOURCES .................................................. 15
3.1 INTRODUCTION.......................................................................................... 15
3.2 PROPERTY DESCRIPTION AND LOCATION.......................................... 16
3.3 HISTORY....................................................................................................... 16
3.3.1 Previous Exploration.............................................................................. 16
3.4 HISTORICAL MINERAL RESOURCES ..................................................... 20
3.5 GEOLOGICAL SETTING............................................................................. 21
3.6 DEPOSIT TYPES........................................................................................... 22
3.7 MINERALIZATION...................................................................................... 23
3.8 EXPLORATION............................................................................................. 23
3.9 DRILLING...................................................................................................... 24
3.10 SAMPLING METHOD.................................................................................. 25
3.11 SAMPLE PREPARATION, ANALYSES AND SECURITY....................... 26
3.12 DATA VERIFICATION ................................................................................ 28
3.13 ADJACENT PROPERTIES ........................................................................... 37
3.14 MINERAL PROCESSING AND METALLURGICAL TESTING .............. 37
3.15 MINERAL RESOURCE ESTIMATE............................................................ 38
3.15.1 Interpretation.......................................................................................... 38
3.16 SOLID MODELLING.................................................................................... 39
3.17 GRADE INTERPOLATION.......................................................................... 39
3.18 COMPARISON WITH EARLIER MINERAL RESOURCE ESTIMATES. 47
3.19 OTHER RELEVANT DATA AND INFORMATION.................................. 48
3.20 INTERPRETATION AND CONCLUSIONS................................................ 49
3.21 RECOMMENDATIONS................................................................................ 50
3.22 PROPOSED DRILLING PROGRAM........................................................... 50
4.0 MINING............................................................................................................... 55
4.1 SCOPE OF STUDY........................................................................................ 55
4.2 DATA TRANSFER AND VALIDATION .................................................... 55
4.3 GEOTECHNICAL STUDIES ........................................................................ 56
4.4 OPEN-PIT DESIGN....................................................................................... 59
4.4.1 Pit Optimization Algorithm................................................................... 59
4.4.2 Input Parameters for the Economic Model and LG 3D Optimization... 59
4.4.3 Lerchs-Grossman Pit Optimization........................................................ 60
4.4.4 Detailed Pit Design ................................................................................ 60

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4.4.5 Cut-off Grade......................................................................................... 62
4.4.6 Evaluation of Dilution............................................................................ 72
4.4.7 Final Mineable Ore Reserves................................................................. 72
4.4.8 Inferred Ore............................................................................................ 73
4.5 MINE PLANNING......................................................................................... 73
4.5.1 Objective of Mine Planning and Sequence of Mining........................... 73
4.5.2 Rate of Mining....................................................................................... 73
4.5.3 Mine Plan Description ........................................................................... 74
4.5.4 Annual Plans .......................................................................................... 74
4.6 WASTE DUMP .............................................................................................. 79
4.7 MINING EQUIPMENT REQUIREMENT.................................................... 80
4.7.1 Mining Equipment Selection Criteria .................................................... 80
4.7.2 Trucks and Shovels................................................................................ 83
4.7.3 Blast Holes Drills................................................................................... 84
4.7.4 Track Dozers.......................................................................................... 84
4.7.5 Other Pit Mining Auxiliary Equipment ................................................. 85
4.7.6 Initial Mine Equipment List................................................................... 85
4.7.7 Additional and Replacement Mine Equipment List............................... 86
4.8 MINING OPERATING COSTS..................................................................... 86
4.8.1 Drilling................................................................................................... 87
4.8.2 Blasting .................................................................................................. 87
4.8.3 Loading .................................................................................................. 88
4.8.4 Hauling................................................................................................... 89
4.8.5 Support Services and Maintenance........................................................ 89
4.8.6 Other Mining Costs................................................................................ 90
4.8.7 Mine Labour........................................................................................... 90
4.8.8 Total Mining Cost Summary ................................................................. 91
5.0 PROCESSING..................................................................................................... 92
5.1 METALLURGICAL TESTWORK AND FLOWSHEET DEVELOPMENT92
5.1.1 McClelland Testwork............................................................................. 92
5.1.2 Amdel Testwork..................................................................................... 93
5.1.3 Lakefield Testwork................................................................................ 93
5.1.4 Testwork Results.................................................................................... 93
5.1.5 Discussion of Results............................................................................. 97
5.2 PROCESS DESIGN CRITERIA.................................................................... 97
5.3 PROCESS DESCRIPTION............................................................................ 98
5.3.1 Crushing and Ore Handling (drawing A1-22072-0201-F) .................. 100
5.3.2 Grinding Circuit (drawing A1-22072-0202-F) .................................... 100
5.3.3 Leaching Circuit (drawing A1-22072-0203-F).................................... 101
5.3.4 CIP Circuit (Drawing A1-22072-0204-F) ........................................... 102
5.3.5 Carbon Stripping Circuit (drawing A1-22072-0205-F)....................... 103
5.3.6 Carbon Reactivation Circuit (drawing A1-22072-0206-F).................. 104
5.3.7 Refinery Flowsheet (drawing A1-22072-0207-F) ............................... 105
5.3.8 Reagents and Services Flowsheet (drawing A1-22072-0208-F) ......... 105
5.3.9 Water Distribution Flowsheet (drawing A1-22072-0209-F) ............... 106

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5.3.10 Water Distribution Flowsheet (drawing A1-22072-0210-F) ............... 107
5.4 EQUIPMENT LIST...................................................................................... 107
5.5 DRAWINGS................................................................................................. 107
6.0 INFRASTRUCTURE....................................................................................... 109
6.1 SUMMARY.................................................................................................. 109
6.2 POWER SUPPLY AND DISTRIBUTION.................................................. 109
6.3 GEOTECHNICAL STUDIES ...................................................................... 109
6.4 WATER SUPPLY, STORAGE AND DISTRIBUTION............................. 111
6.5 SITE FACILITIES AND OTHER SERVICES............................................ 114
6.5.1 Offices.................................................................................................. 114
6.5.2 Canteen and Kitchen Facilities ............................................................ 114
6.5.3 Services Building................................................................................. 115
6.5.4 Guard House ........................................................................................ 115
6.5.5 Warehouse............................................................................................ 115
6.5.6 Laboratory............................................................................................ 116
6.5.7 Mobile Equipment Repair Facility....................................................... 117
6.5.8 Plant Workshop.................................................................................... 117
6.5.9 Telecommunications............................................................................ 117
6.5.10 Transportation and Other Services....................................................... 118
6.6 DRAWINGS................................................................................................. 121
7.0 TAILINGS DISPOSAL AND WATER RESERVOIR ................................. 123
7.1 DESIGN BASIS............................................................................................ 123
7.2 WATER MANAGEMENT .......................................................................... 125
7.3 DRAWINGS................................................................................................. 126
8.0 ENVIRONMENTAL MANAGEMENT......................................................... 127
9.0 PROJECT SCHEDULE................................................................................... 129
10.0 CAPITAL COST ESTIMATE ........................................................................ 132
10.1 INTRODUCTION........................................................................................ 132
10.2 GENERAL.................................................................................................... 133
10.3 MINE EQUIPMENT COSTS....................................................................... 133
10.4 CONSTRUCTION LABOUR COSTS......................................................... 134
10.5 CIVIL/STRUCTURAL................................................................................. 134
10.6 MECHANICAL EQUIPMENT AND PIPING............................................ 135
10.7 ELECTRICAL AND INSTRUMENTATION............................................. 135
10.8 INFRASTRUCTURE COSTS...................................................................... 135
10.9 INDIRECT COSTS ...................................................................................... 136
10.10 SUSTAINING CAPITAL............................................................................. 136
11.0 OPERATING COSTS ...................................................................................... 148
11.1 SUMMARY.................................................................................................. 148
11.2 MINING OPERATING COSTS................................................................... 148

iv
11.2.1 Mining Labour ..................................................................................... 149
11.3 PROCESS OPERATING COSTS................................................................ 151
11.3.1 Process Labour..................................................................................... 151
11.3.2 Power ................................................................................................... 152
11.3.3 Process Consumables........................................................................... 152
11.3.4 Maintenance Supplies .......................................................................... 153
11.4 GENERAL AND ADMINISTRATION COSTS......................................... 153
11.5 OFF-SITE COSTS........................................................................................ 155
12.0 ECONOMIC EVALUATION.......................................................................... 156
12.1 SUMMARY.................................................................................................. 156
12.2 BASIS OF EVALUATION.......................................................................... 157
12.3 ROYALTIES AND TAXATION................................................................. 157
12.4 DISCOUNTED CASH FLOW ANALYSES............................................... 158
12.5 SENSITIVITY ANALYSIS ......................................................................... 158
13.0 CONCLUSIONS AND RECOMMENDATIONS.......................................... 168

v

List of Tables

Table 1.1 Resource Estimate at October 1, 2003............................................................................ 1
Table 1.2 Diluted Mineable Reserves and Stripping Estimates...................................................... 2
Table 1.3 Mine Production and Cost .............................................................................................. 2
Table 1.4 Summary of Life of Mine Average Process Unit Operating Cost .................................. 3
Table 1.5 Project Capital Cost Estimate ......................................................................................... 6
Table 1.6 Project Operating Cost, Life-of-Mine Basis................................................................... 6
Table 1.7 Project Economic Evaluation Summary......................................................................... 7
Table 2.1 Choco 4 and 10 Vertices............................................................................................... 10
Table 2.2 Concession Size and Grant Dates ................................................................................. 13
Table 3.1 Choco 4 and 10 Vertices............................................................................................... 16
Table 3.2 BHPE Measured and Indicated Mineral Resources at 0.5 g/t Au Cut-Off ................... 20
Table 3.3 Choco Gold Project Mineral Resource Estimate (As of October 1, 2002)................... 21
Table 3.4 Choco Gold Project Mineral Resource Estimate (As of October 1, 2003).................. 22
Table 3.5 Summary of Choco Drilling ......................................................................................... 24
Table 3.6 Comparison of Original and Omac Gold Assays.......................................................... 29
Table 3.7 Summary of Confirmation Drilling Results Uncut Gold Grades .............................. 30
Table 3.8 Summary of Confirmation Drilling Results Cut Gold Grades .................................. 31
Table 3.9 Summary of Analysis of Choco A Standard 0.965 g/t Au............................................ 32
Table 3.10 Summary of Analysis of Standard Blank Samples..................................................... 32
Table 3.11 Summary of Analysis of Certified Reference Material Standards ............................. 33
Table 3.12 Summary of Analysis of Replicate Core Samples from Rock.................................... 34
Table 3.13 Summary of Analysis of Replicate Core Samples from Laterite................................ 35
Table 3.14 Summary of Analysis of Duplicate Pulp Samples from Rock.................................... 35
Table 3.15 Summary of Analysis of Duplicate Pulp Samples from Laterite................................ 36
Table 3.16 Summary of Analysis of Umpire Samples from Laterite ........................................... 37
Table 3.17 Summary of Analysis of Umpire Samples from Rock ............................................... 37
Table 3.18 Summary of Block Model Limits ............................................................................... 39
Table 3.19 Summary of Assay Data ............................................................................................. 40
Table 3.20 Summary of 2.5 m Assay Composite Data................................................................. 43
Table 3.21 Choco Gold Project Mineral Resource Estimate ........................................................ 47
Table 3.22 Choco Drilling Results Published on September 30, 2003......................................... 49
Table 3.23 Summary of Proposed Definition and Exploration Programs .................................... 50
Table 4.1 Comparison of Indicated Resources Estimates............................................................. 56
Table 4.2 Lerchs Grossman 3-D Optimization Parameters .......................................................... 59
Table 4.3 Cut-off Grades by Ore Type ......................................................................................... 62
Table 4.4 Diluted Mineable Reserves and Stripping Estimates.................................................... 72
Table 4.5 Production Schedule by Ore Types .............................................................................. 75
Table 4.6 Material characteristics................................................................................................. 80
Table 4.7 Mechanical Availability................................................................................................ 83
Table 4.8 Drilling and Blasting Parameters................................................................................. 84
Table 4.9 Mine Equipment .......................................................................................................... 86
Table 4.10 102-mm Drill Operating Cost ..................................................................................... 87

vi
Table 4.11 Blasting Costs ............................................................................................................. 88
Table 4.12 7-m
3
Hydraulic Shovel Operating Cost....................................................................... 88
Table 4.13 5.7-m
3
Front-End Wheel Loader Operating Cost ........................................................ 88
Table 4.14 55-t Class Truck Operating Cost ................................................................................ 89
Table 4.15 14H Class Grader Operating Cost .............................................................................. 89
Table 4.16 Dozers Operating Costs .............................................................................................. 89
Table 4.17 Annual Mine Salary Labour Summary....................................................................... 90
Table 4.18 Mine Hourly Labour Requirement and Year 2 Cost................................................... 91
Table 4.19 Summary of Annual Mine Operating Cost ................................................................. 91
Table 5.1 Summary of Grinding Testwork Results ...................................................................... 94
Table 5.2 Summary of Gravity Testwork Results ........................................................................ 94
Table 5.3 Summary of McClelland Cyanidation Testwork Results ............................................. 95
Table 5.4 Summary of Amdel Cyanidation Testwork Results ..................................................... 96
Table 5.5 Summary of Lakefield Cyanidation Bottle Roll Testwork Results .............................. 97
Table 5.6 Summary of Key Process Design Criteria .................................................................... 98
Table 10.1 Choco Project Pre-production Capital Cost Estimate............................................... 132
Table 10.2 Construction Crew Unit Rates and Productivity Factors.......................................... 134
Table 11.1 Summary of Mining Unit Costs................................................................................ 148
Table 11.2 Annual Mining Operating Costs............................................................................... 149
Table 11.3 Annual Mining Labour Costs ................................................................................... 150
Table 11.4 Summary of Life of Mine Average Process Unit Operating Cost ............................ 151
Table 11.5 Annual Process Labour Costs................................................................................... 152
Table 11.6 General and Administration Labour Costs ............................................................... 154
Table 11.7 Annual General Costs and Expenses ........................................................................ 154
Table 12.1 Economic Evaluation Summary Gold Price $US350 Per Oz................................... 156
Table 12.2 Sensitivity of Project Life of Mine Cash Flow ($ millions) ..................................... 158

vii
List of Figures

Figure 1.1 General Site Plan Choco Project ................................................................................ 5
Figure 1.2 Sensitivity Analysis....................................................................................................... 8
Figure 2.1 Map of Venezuela........................................................................................................ 11
Figure 2.2 Choco 4 and Choco 10 Concessions ........................................................................... 12
Figure 3.1 El Callao Mining District ............................................................................................ 18
Figure 3.2 Concession Map .......................................................................................................... 19
Figure 3.2 Analysis of Blind Standard Results............................................................................. 33
Figure 3.3 Analysis of Replicate Assay Results ........................................................................... 34
Figure 3.4 Analysis of Duplicate Assay Results........................................................................... 36
Figure 3.5 Laterite Assays Grade Distribution ............................................................................. 41
Figure 3.6 Weathered Zone Assays Grade Distribution............................................................... 42
Figure 3.7 Fresh Zone Assays Grade Distribution........................................................................ 42
Figure 3.8 Block Grades versus 5 m Assay Composite Grades - Laterite.................................... 45
Figure 3.9 Block Grades versus 5 m Assay Composite Grades Rosika .................................... 45
Figure 3.9 Block Grades versus 5 m Assay Composite Grades Rosika .................................... 46
Figure 3.10 Block Grades versus 5 m Assay Composite Grades Pisolita ................................. 46
Figure 3.11 Block Grades versus 5 m Assay Composite Grades Coacia .................................. 47
Figure 3.12 Rosika Cross Section on 8595N................................................................................ 51
Figure 3.13 Pisolita Cross Section on 8220N............................................................................... 52
Figure 3.14 Coacia Cross Section on 525NW.............................................................................. 53
Figure 4.1 Mine Planning Lerchs-Grossman Pit Design ........................................................... 61
Figure 4.2 Mine Planning - Detailed Ultimate Pit Design............................................................ 63
Figure 4.3 Section View Section 615900 East........................................................................... 64
Figure 4.4 Section View Section 616450 East........................................................................... 65
Figure 4.5 Section View Section 808595 North........................................................................ 66
Figure 4.6 Section View Section 807825 North........................................................................ 67
Figure 4.7 Plan View Bench 170............................................................................................... 68
Figure 4.8 Plan View Level 200 ............................................................................................... 69
Figure 4.9 Plan View Level 220 ................................................................................................ 70
Figure 4.10 Plan View Level 235 .............................................................................................. 71
Figure 4.11 Mine Planning Year-End Plan Year 1................................................................. 76
Figure 4.14 Detailed Ultimate Pit Design and General Site Layout............................................. 81
Figure 4.15 Optimized Pit Outline - Rosika, Coacia, Pisolita North and Pisolita South.............. 82
Figure 6.1 Sketch of the Canteen and Kitchen Facilities............................................................ 118
Figure 6.2 Sketch of the Services Building ................................................................................ 119
Figure 6.3 Sketch of the Guard House Building......................................................................... 119
Figure 6.4 Sketch of the Main Warehouse Building................................................................... 120
Figure 6.5 Sketch of the Laboratory ........................................................................................... 120
Figure 6.6 Sketch of the Mobile Equipment Maintenance Facility............................................ 121
Figure 12.1 Sensitivity Analysis................................................................................................. 159

viii
LIST OF APPENDICES

Volume 1

Appendix A Selected Reference Quotations
Process Design Criteria

Volume 2

Appendix B Pit Slope Design for the Choco Project, Venezuela, Golder Associates,
October 2003

Appendix C Preliminary Design of Plant Facility Foundations, Choco Gold Project, El
Callao, Venezuela, Golder Associates, October 2003

Appendix D Preliminary Design of the Tailings Disposal Facility, Choco Gold Project,
El Callao, Venezuela, Golder Associates, December 2003

Appendix E Flow Predictions and Reservoir Requirements, Choco Gold Project, El
Callao, Venezuela, Golder Associates, November 2003

Appendix F Preliminary Water Reservoir Design, Choco Gold Project, El Callao,
Venezuela, Golder Associates, November 2003

Volume 3

Appendix G Factual Information from Geotechnical Investigations, Choco Gold
Project, El Callao, Venezuela, Golder Associates, November 2003

Appendix H An Investigation into the Recovery of Gold from Samples submitted by
Bolivar Gold Corp., LR 10586-001, Progress Report No. 1, SGS Lakefield
Research Limited, August 1, 2003

Appendix I An Investigation into the Rheological Properties of Slurry Samples,
prepared for Bolivar Gold Corp., LR 10586-002, Progress Report No. 2,
SGS Lakefield Research Limited, November 4, 2003

Appendix J An Investigation into the Recovery of Gold from Samples submitted by
Research Limited, November 25, 2003

1
1.0 EXECUTIVE SUMMARY

The two contiguous mineral concessions Choco 10 and Choco 4, are located approximately 15
km west of the mining town of El Callao in Bolivar State, Venezuela. The Venezuelan mining
exploration company Promotora Minera de Venezuela, C.A. (Promiven) held, since the early
1990s, exploration rights to these concessions through its 70 % ownership of Promotora Minera
de Guayana, C.A. (PMG), the holder of the concessions. After a program of exploration work
managed by Promiven, which ended in 1996, gold deposits were identified in the Choco 4 and
Choco 10 concessions, and resource estimates were prepared.

In 2002 Micon International Limited (Micon) was commissioned by TecnoPetrol Inc. (name
subsequently changed to Bolivar Gold Corp.) to review the existing data and advise TecnoPetrol
on a proposed acquisition of Promiven. Micon created a new mineral resource block model and
a resource estimate, referred to as the Micon Resource Estimate of October 1, 2002, prepared a
conceptual development plan, and proposed an in-fill drilling program for the main Choco 10
deposit to allow upgrading of the inferred mineralization.

Bolivar Gold Corp.(Bolivar) subsequently acquired Promiven (through Bolivars subsidiary
Carisma Corporation C.V.V.), and initiated the drilling program in February 2003. Bolivar/ PMG
commissioned the feasibility study for the Choco project, the subject of this report, in April
2003.

Results from drilling up to mid-July 2003 have been incorporated in the revised block model and
a new mineral resource estimate completed. The October 2003 estimate has utilized 39 new drill
holes totalling 3,807 m of new in-fill drilling, compared with the approximately 50,000 m of
prior drilling used for the October 2002 resource estimate. Micons Resource Estimate dated
October 1, 2003, summarized in Table 1.1, provides the following indicated and inferred
resources.

Table 1.1
Resource Estimate at October 1, 2003

Cut-Off g/t Category Tonnes Gold g/t Gold kg Gold ounces
0.5 Indicated 13,229,143 2.47 32,690 1,051,016
0.5 Inferred 2,300,254 1.93 4,443 142,842

In-fill drilling was completed and step-out exploration drilling commenced after the date for
inclusion of the results in the above resource estimate. Results from this later drilling have been
very encouraging and have been announced in recent press releases.

Based on the stated indicated resource and the accompanying resource model, an open pit mine
design has been completed using the MineSight pit optimizer program, with gold recovery and
cost parameters developed during this study. Golder conducted a geotechnical investigation in
the area of the Rosika pit, and reviewed an earlier study of the shallower saprolite, prior to
recommending pit slope design parameters. Following definition of the optimum economic pit,
detailed mine design was completed. Economic ore within the final pit design comprises the

2
mineable ore reserve. The calculated diluted ore reserve comprises a total of 12.582 million
tonnes at a gold content of 2.17 g/t, mined at an average cut-off grade of 0.5 g/t, shown in Table
1.2. A total of 33.835 million tonnes of waste and sub-grade material will be mined during the
planned life of mine, for an average stripping ratio (waste:ore) of 2.69:1.

Table 1.2
Diluted Mineable Reserves and Stripping Estimates
(0.5 g/t Au Cut-off)

Ore Grade Au-metal Inferred+Waste Strip Ratio Au
Ore Type
(000t) (g/t) (000 oz) (000t) (t/t) (%)
Laterite 2,850.52 1.400 127,883 2,465.09 - 14.5
Weathered 7,192.61 2.349 543,157 23,231.34 - 61.8
Fresh 2,549.35 2.544 208,549 8,138.97 - 23.7
Total 12,582.49 2.174 879,589 33,835.39 2.69 100.0

Included in the total tonnes of waste to be moved is an estimated 440,000 tonnes of mineralized
material currently considered as inferred, at a grade of 2.11 g/t and containing an estimated
30,000 ounces of gold. Production drilling is expected to convert much of this material to
indicated status.

Based on the mineable ore reserve and the available plant capacity for each of the ore types, a
mine production plan, fleet selection and operating costs were developed. The fleet is based on
55-tonnes capacity haul trucks (7) and 7-m excavators (2). Drilling and explosives costs will be
minimized in early years when laterite and weathered ore will be mined. The total rock
movement by year, ore grade and the calculated operating cost, are shown in Table 1.3.

Table 1.3
Mine Production and Cost

Period Ore mined( 000t) Gold (g/t) Total mined (000t) Operating cost ($/t)
Year 1 1,913.5 2.37 7,398.9 0.887
Year 2 2,084.0 2,10 7,695.9 0.857
Year 3 1,943.0 2.71 7,149.4 0.964
Year 4 1,950.0 1.82 7,058.6 1.016
Year 5 1,861.0 1.96 6,495.2 1.187
Year 6 1,831.7 2.03 6,313.6 1.212
Year 7 (1/2 year) 999.2 2.30 3,106.3 1.237
Total 12,582.5 2.17 45,217.9 1.027

Metallurgical testing, originally conducted on samples collected during the earlier Promiven
exploration program in 1994-6, and confirmed by testing during 2003 on samples from the current
program, indicates that the ore is free milling and will yield excellent gold extraction with
conventional processing. Grinding to 80 % passing 0.074 mm is proposed to ensure optimum gold
extraction from all ore types. The selected processing flowsheet follows conventional design with
SAG and ball milling and cyanide leaching followed by carbon-in-pulp gold extraction to produce
dor metal. The average gold recovery from the total ore blend is expected to attain almost 93 %.

3
Soon after commencement of this feasibility study, Bolivar identified a suitable existing processing
plant available for sale and negotiated its purchase. This is the Grouse Creek mill of Hecla Mining,
located near Challis, Idaho. After installation in 1994, it operated for less than two years and has
been idle since. The mill was designed to process an average of 5,400 t/d of medium hardness gold
ore using a SAG mill and ball mill, leaching and CIP circuits. As of November 2003 the plant has
been dismantled and prepared for shipment to the Choco site, under the supervision of Bolivar
personnel. Some processing equipment required for the Choco plant and not available from the
Grouse Creek facility will be purchased separately. The processing scheme, flowsheets, mass
balance, equipment list and general arrangement drawings prepared for this study are based on the
use of this plant.

The Choco mill production plan is configured to maximize the available mill capacity with each
ore type, ranging from the soft, fine-grained surface material to the hard, unweathered fresh ore.
The design daily processing rate for the surface ore is estimated to be 6,500 t/d, for weathered
deeper ore 5,400 t/d and for fresh ore, 4,700 t/d. The life-of-mine average milling rate is 5,300
t/d or 1.94 Mt/a, a function of the proportion (20 %) of the harder ore in the overall production
plan. The total gold production from the plant is estimated as over 814,000 ounces, based on the
current mineable reserve.

Plant operating costs are developed from reagent and material consumptions for the particular
ore types, the manning list and current local labour rates, and the quoted cost for electrical
power, shown in Table 1.4.
Table 1.4
Summary of Life of Mine Average Process Unit Operating Cost

Item Consumption
(kg/t milled)
Unit Cost
($/t milled)
Crusher liners 0.15
Mill liners 0.22
Grinding steel balls 0.67 0.46
Lime 5.86 0.54
Cyanide 0.41 0.54
Other reagents and process supplies 0.36
Total Consumables 2.26
Process labour (81 people) 0.49
Maintenance Supplies 0.62
Power (0.026 $/kWh) 22.6 kWh/t 0.59
Total 3.95

The site general and administrative (G & A) costs were developed with input by Bolivar. Head
office costs are excluded. The estimated total cost for a typical operating year is $1,474,000,
equivalent to $0.80 per tonne milled.

Project infrastructure includes industrial buildings at the mine site, staff housing in El Callao, site
power supply, a tailings storage area with retaining dams and a water storage reservoir. Golder
Associates has developed designs and quantities for the dam structures after detailed site
investigations and consideration of the site water balance and climate. A water reservoir is

4
constructed in the best local catchment area for water storage during the dry season, due to the
uncertainty of a continuous supply from the nearby Yuruari River, which also provides the El
Callao municipal supply. The tailings storage area, selected after comparing reasonable
alternatives, is located in an area north of the plant site. Three earth fill dams provide
containment between natural barriers. Initial dam design provides total storage for approximately
13 million tonnes of tailings, and the dams may be raised for additional containment. Decanted
tailings water is recycled to the plant for process use.

Figure 1.1 illustrates the proposed site plan including locations of the plant, mine, tailings and
water reservoir. The local road passing the project site and concession boundaries are shown.

Environmental baseline and impact studies have been conducted by the Venezuelan firm of
Ambioconsult C.A. This firm has also assisted in the application for construction and operating
permits, and these are expected to be granted in December 2003. An English version of the
Executive Summary of the report EIA Mining Development Choco 4 and Choco 10 dated
September 2003, was provided to Micon. No major environmental concerns were noted.

The project development schedule, after acceptance of the feasibility study and project
commitment, assumes a start date of mid-November 2003. Detailed engineering and preliminary
site work are the first tasks. Removal of the plant facilities from the Grouse Creek site has been
completed and the material will be shipped to the site once all necessary permits are in place.

The schedule shows that construction completion can be attained in August 2004 and after one
month allowed for plant start-up and commissioning, the full production rate shall be attained
during September 2004. Early completion of the tailings and water reservoir dams, by the end of
May 2004, is important to ensure adequate water supply for the start-up period, which will occur
at the end of the rainy season.

5
Figure 1.1
General Site Plan Choco Project

6
The total estimated capital cost is $37.6 million, including the purchase and dismantling of the
Grouse Creek plant and owners costs during project construction, shown in summary as Table
1.5. Costs are estimated to be precise within +/- 10 %. The pre-production stripping of the open
pit is capitalized and included in the total capital expenditure of $38.7 million.

Table 1.5
Project Capital Cost Estimate

Area Area total ($000)
Mine Equipment 7,439.8
Infrastructure 9,262.2
Process Plant 11,673.7
Light Vehicles 237.8
Indirect Costs 6,297.0
Contingency Allowance 2,680.0
Sub Total, Capital Cost 37,590.4
Pre-Production open pit stripping 1,036.4
Total Capital Expenditure 38,627.9

The total project operating cost over the life-of-mine period is estimated to average $8.44 per
tonne milled, shown in Table 1.6. Anticipated royalty payments total $13 million over the
projected project life. The resulting cash cost of gold produced is $146 per ounce averaged over
the total projected production of 814,000 ounces.

Table 1.6
Project Operating Cost, Life-of-Mine Basis

Cost Area $/t milled $/ oz
Mining ($1.03/t rock) 3.69 57.02
Processing 3.95 61.10
General and Administration 0.80 12.31
Sub total 8.44 130.45
Royalties 1.04 16.04
Total Cash Cost 9.48 146.49

The economic evaluation of the project is summarized in Table 1.7, showing results of the
discounted cash flow calculation. The evaluation is considered on a project basis and 100 %
equity financing is assumed. A gold price of $350 per ounce is used.

7
Table 1.7
Project Economic Evaluation Summary

Item Unit Value
Pre-Production capital cost $000 38,627
Sustaining capital and closure $000 4,424
Operating cost, excl royalties $000 106,215
Total royalties $000 13,079
Gold production oz 814,319
Cash operating cost $/oz 146
Gold price $/oz 350
Gold sales $000 282,816
Net revenue $000 176,602
Cash flow, before tax $000 117,722
Cash flow after tax $000 82,856
NPV@ 10 % discount rate $000 45,669
IRR % 49.62

Factors assumed in the creation of the cash flow model include:

Payment to Promiven for the acquisition, a total of $4.75 million.
Payment of applicable royalties.
Corporate taxation at 34 % of pre-tax income after exhausting tax credits of an existing $14
million plus the capital expense incurred in project development.
Working capital is equivalent to three months of total site operating cost.
The payment of VAT on operating supplies is excluded. VAT payable on the purchase of
used equipment is included in the total capital cost.
Sensitivity analysis performed on the cash flow model examined gold prices between $300 and
$400 per ounce, and 10 % +/- changes to gold production, operating and capital costs. The project
is most sensitive to gold price and least sensitive to capital cost. Figure 1.2 illustrates the
sensitivities.

8
50
60
70
80
90
100
110
120
-10% 0 10%
$300/oz $350/oz $400/oz
L
i
f
e

o
f

M
i
n
e

C
a
s
h

F
l
o
w

(
$

M
i
l
l
i
o
n
s
)
Gold production
Capex
Opex
Gold price

Figure 1.2
Sensitivity Analysis

The feasibility study demonstrates that this is a robust project and Micon recommends its
immediate development to a significant new gold producer. Micon recommends that the
following items of work be commissioned to increase the resource base and reserves, and to
ensure orderly development of the project:

Continuance of the current exploration drilling program to focus on defining the deeper
mineralization in the Rosika pit area, and possible extensions nearer surface, to define the
likely expansion of the present pit outline.
Incorporation of recent and forthcoming drilling results in an updated resource model early
in 2004, and an update of the mine design and mine planning based on this revised model.
Condemnation drilling of the selected plant site, tailings and waste dump areas.
An immediate start to detailed engineering and letting of site development contracts in
order to achieve the proposed construction schedule.
Continuance of environmental baseline studies and development of closure and
rehabilitation planning.
Throughout this study, the monetary unit used and referred to is the US Dollar. Cost estimates
are based on Third Quarter 2003 costs and quotations. Local costs, developed or quoted in
Venezuelan Bolivars, are converted at the current exchange rate of 1,600 Bolivars= $US1.00.

While this study was commissioned by PMG, the study supervision and collection of local data
was conducted mainly by technical representatives or officers of Bolivar. References to each
group throughout this study are considered to be interchangeable.

9
2.0 INTRODUCTION

2.1 PREPARATION OF THE FEASIBILITY STUDY

During mid-2002, Micon International Limited (Micon) evaluated the gold deposit of the Choco
10 Concession and prepared the Development Plan for the Choco Concessions 4 and 10 on
behalf of TecnoPetrol Inc. The Development Plan recommended an in-fill drilling program for
the Choco 10 deposit, and completion of a detailed feasibility study and other site studies.
Following the name change of TecnoPetrol Inc. to Bolivar Gold Corp. in January 2003, and
Bolivar Gold Corp.s acquisition of a 70 % interest in Promotora Minera de Guayana, C.A.
(PMG), the holder of the concessions, the feasibility study for the Choco project was
commissioned by PMG in April 2003.

This feasibility study has been prepared by Micon, based on original work by Micon and the
work of other consultants directed by Micon.

Micon prepared the resource model and estimate which incorporates results of the in-fill drilling
up to mid-July 2003, and which is the subject of a Technical Report dated October 31, 2003 by
Stanley Bartlett, Senior Geologist of Micon.

Micon provided the metallurgical testing evaluation, process design parameters, plant and
general operating costs, and the economic evaluation. Micon supervised the development by
Met-Chem Canada Inc. (Met-Chem) of the site plan, process flowsheets, plant arrangement
drawings, construction schedule and the capital cost estimate.

Met-Chem prepared the optimized open pit mine design, mine planning, mine equipment
selection and mine operating cost.

Golder Associates was responsible for the site investigations and engineering designs for the
tailings storage facility (TSF), water collection reservoir, site water management design, and
geotechnical investigations for plant foundation design and pit slope determinations.

Ambioconsult C.A. (Ambioconsult) was engaged by PMG to prepare the environmental baseline
and impact studies, and to assist in permitting.

During the initial period of this study, PMG concluded an agreement to purchase the Grouse
Creek processing plant from Hecla Mining, with the intent to remove it and to install it close to
the deposit to process the Choco 10 ore. In large part the flowsheets and plant arrangement
drawings for the Choco project are based on drawings of this plant provided by Hecla.

All currency amounts are stated in United States Dollars and Venezuelan Bolivars, expressed in
terms of constant mid-2003 value. The current official exchange rate of 1,600 Bolivars = 1.00
Dollar U.S. is employed for conversions.

10
Quantities are stated in SI units, the Canadian and international practice, including: metric tonnes
(t), kilograms (kg) for weight; kilometres (km), metres (m) and millimetres (mm) for distance;
hectares (ha) for area; grams (g) and grams per metric tonne (g/t) for gold content. Precious
metals quantities may also be reported in troy ounces (ounces, oz), a common practice in the
gold mining industry.

2.2 LOCATION, ACCESS AND CLIMATE

The Choco property is located approximately 15 km west of the mining town of El Callao which
is located between Guasipati and Tumeremo, in Bolivar State, Venezuela (see Figure 2.1, Map of
Venezuela). The Choco property comprises two contiguous mineral concessions Choco 10 and
Choco 4 as shown in Figure 2.2. They cover a total area of 7,214.51 ha. The coordinates listed
in Table 2.1 define the concessions.
Table 2.1
Choco 4 and 10 Vertices

Concession Vertices Easting (m) Northing (m) Area (ha)
Choco 10 NW 613464.61 809492.61
SW 613464.61 802982.61
NE 620002.75 809492.61
SE 620002.75 802982.61 4,256.33
Choco 4 NW 613464.61 814017.11
SW 613464.61 809492.61
NE 620002.75 814017.11
SE 620002.75 809492.61 2,958.18

Micon is not aware of any legal survey being conducted of the concessions, beyond the normal
requirements of the State, through the Ministerio de Energia y Minas (MEM) to define the
concession boundaries.

The area of the concessions is covered by gently sloping topography with elevation ranging from
200 m to 300 m above sea level. The annual rainfall of the area is about 1,260 mm and the
average temperature is 25C. The area is classified as savanna type forest, and most of the
concessions are presently covered by forest.

A paved secondary road passes through the concessions in Choco 10 and provides access to the
town of El Callao, about 15 km to the east from the concessions. El Callao has a population of
approximately 25,000 and is the centre of population in the area. It is a historic gold mining area
and a number of present and past producing mines are located nearby. The main highway,
between the important city of Puerto Ordaz to the north, and other gold mining centres to the
south (El Dorado and Kilometer 88) and the Brazilian frontier, passes El Callao.

A major high voltage 400 kV electrical supply line carrying power from the Guri dam, and
destined for Brazil, passes near El Callao. A sub-station about 5 km from the Choco concessions
supplies power to El Callao. The potential water supply is from the Yuruari River, which passes
north of the concessions, approximately 8 km distant, and from which other local mines and El
Callao municipality draw water.

11
Figure 2.1
Map of Venezuela
(after University of Texas)

1
2
Figure 2.2
Choco 4 and Choco 10 Concessions

13

The Choco concessions are mostly unused for agricultural activity and the gently sloping
topography provides suitable and adequate locations for project infrastructure and potential
waste storage and tailings storage areas. PMG, through its agreements, holds exploitation rights
to the entire concession area, which provide adequate area for potential mining and processing
operations.

2.3 OWNERSHIP

On February 1, 1988 Promotora Minera de Venezuela, C.A. (Promiven) and Corporacin
Venezolana de Guayana C.A. (CVG) entered into an association agreement pursuant to which
CVG and Promiven agreed to incorporate a joint vehicle (Promotora Minera de Guayana, C.A.
or PMG) for the development of certain mining areas (the Association Agreement), which
were to be leased by CVG to PMG, under certain Lease Agreements.

Initially, PMG was supposed to be 51 % owned by Promiven and 49 % by CVG. The
Association Agreement was amended on May 8, 1989 to provide among other things that CVG
would own 30 % of PMG and Promiven 70 % of PMG.

CVG ultimately assigned its interest in PMG to C.V.G. Ferrominera del Orinoco C.A. (FMO),
a wholly owned subsidiary of CVG.

The mining concessions that were initially granted by MEM to CVG are summarized in Table
2.2.

Table 2.2
Concession Size and Grant Dates

Concession Area (ha) Date
Bochinche 1 5,000 May, 1990
Bochinche 2 5,000 May, 1990
Choco 4 2,942 May, 1993
Choco 10 4,247 May, 1993

CVG (through the Lease Agreements) then assigned to PMG the exploration and mining rights
over the areas covered by these concessions in the manner and under the general conditions
described below.

1. The project risks were to be totally borne by Promiven. FMOs interest in Promiven is
carried through the exploration phase and FMO retains the right to participate in any
project development by funding its 30 % share.

2. If the project is successful royalties will be paid to CVG and CVG-Tecnica Minera C.A.
(Tecmin) at specified rates described below.

3. The Choco concessions are subject to royalties as follows:

14

a. Lease Agreements: royalty payable to CVG, a sliding scale royalty applied to
annual gold produced, ranging from 0.28 % at 1 g/t of ore mined, to 10.00 % at 18
g/t of ore.

b. Association Agreement: royalty payable to Tecmin, at 1 % of gross profits during
first 10 years, then 0.5 % of gross profits during subsequent years

c. Mining Law: Exploitation Tax, royalty payable to MEM, is 3 % of revenue from
gold production and may be reduced to 1 % in special circumstances

4. Mining rights are effective for 20 years and will be renewed, for 10 year periods, for a
maximum aggregate of an additional 20 years

In September 2002, Carisma Corporation A.V.V. entered into an agreement with Inmobiliaria
Valle Dos, C.A. and Cemex Venezuela, C.A. for the purchase of 100 % of the shares of
Promiven. Subsequently, Bolivar (at that time TecnoPetrol Inc.) also entered into an agreement
for the purchase of 100 % of the shares of Carisma Corporation A.V.V. (subject to regulatory
and shareholders approval).

Carisma acquired a 70 % indirect interest in the Choco 4 and 10 and Bochinche Zero, 1 and 2
mineral concessions (the Concessions) in the El Callao and Sifontes Municipalities, Bolivar
State, Venezuela, through the right to acquire all of the issued and outstanding shares of
Promiven.

Pursuant to a letter agreement dated for acceptance on October 3, 2002 (the Carisma-Cemex
Letter Agreement), in order for Carisma to acquire the Promiven shares, Carisma must pay the
following to Cemex: (a) US$300,000 upon execution of a final agreement; (b) US$1 million on
the first and second anniversaries of the execution of a final agreement; (c) US$1.2 million on
the third anniversary of the execution of a final agreement; and (d) US$750,000 on each of the
eighth and ninth anniversaries of the date that the Concessions go into production. Bolivar
would effectively assume all of these obligations once it completed the purchase of the shares of
Carisma. In May 2003, by mutual agreement the purchase cost was amended to a total of US$
4.75 million on early conclusion of payment, and the initial payment of US$ 3.25 was completed
in May 2003.

In 1998 the Ministry of the Environment granted to PMG the occupation of the Choco 4 and
Choco 10 concessions, and in 2002 granted the exploration permit. Micon is not aware of any
existing environmental liabilities to which the property is subject, and has no reason to suspect
that there are any.

15
3.0 GEOLOGY AND MINERAL RESOURCES

3.1 INTRODUCTION

The Venezuelan mining exploration company Promotora Minera de Venezuela, C.A.
(Promiven) held, since the early 1990s, exploration rights to a number of concessions in Bolivar
State, Venezuela. After a program of exploration work managed by Promiven, which ended in
1996, gold deposits were identified in the Choco 4 and Choco 10 concessions, and resource
estimates were prepared for Promiven. Bolivar Gold Corp. (Bolivar) has acquired all of the
issued and outstanding shares of Carisma Corporation A.V.V. (Carisma). Carisma owns 100
% of the issued and outstanding shares of Promiven. Promiven owns 70 % of the issued and
outstanding shares of Promotora Minera de Guayana, C.A. (PMG), which is the holder of the
Choco 4 and 10 concessions.

Stanley C Bartlett, P. Geo. Senior Geologist of Micon, visited the concessions during July 25 and
26, 2002, and also inspected the Promiven base camp to review geological mapping, drill logs,
inspect some representative core and review the sample preparation facilities. Following this
visit, Mr. Bartlett supervised the preparation of a resource estimate and authored a Technical
Report for the property which recommended a drilling program. Mr. Bartlett made a second site
visit during the recommended drilling program in the period July 9-12, 2003 and reviewed
drilling operations, core logging and sampling and the evolution of the geologic interpretation.

In 2002 Micon was commissioned by TecnoPetrol Inc. (name subsequently changed to Bolivar
Gold Corp.) to review the existing work and advise TecnoPetrol on the acquisition. Relying on
the database and geological sections provided by Promiven, Micon created a new mineral
resource block model and a resource estimate, referred to as the Micon Resource Estimate of
October 1, 2002.

In the Technical Report of November 26, 2002 and revised January 23, 2003, Micon
recommended a comprehensive in-fill drilling program. On January 24, 2003, TecnoPetrol
changed its name to Bolivar Gold Corp. and, in February 2003, commenced the drilling program.
On receipt of the majority of the assay data from the first phase of the program, Micon created an
updated mineral resource model and estimated Mineral Resources at October 1, 2003.

Micon has relied upon information, which describes the project history, the corporate structure
and acquisitions, the exploration rights and concession dimensions, as contained in the
Prospectus dated September 26, 2003 prepared by Bolivar.

In preparation of the new mineral resource evaluation, Micon has used information owned by
Bolivar and PMG, including:

Micon Technical Report dated November 26, 2002 and revised January 23, 2003.

16
Geological mapping, drill logs and drilling database prepared in part by Promiven and
revised by Bolivar, plus new drill logs and sampling and assays database compiled by
Bolivar for Concession Choco 10.
Micon Resource Model of October 1, 2002
Micon has not independently verified the statements and data contained in the above noted
information. Micon has not verified the assay data provided by Promiven, other than by
independent assay of one sample collected from the site and of twenty-one representative
crushed sample rejects taken from the Promiven sample store. Micon has independently sampled
and obtained assays for core drilling material recovered during the confirmation drilling phase in
February 2003. Micon has not independently sampled or assayed material from the current 2003
in-fill drilling program.

3.2 PROPERTY DESCRIPTION AND LOCATION

The Choco property is located approximately 15 km west of the mining town of El Callao in
Bolivar State, Venezuela. (See Figure 3.1 El Callao Mining District). The Choco property
comprises two contiguous mineral concessions Choco 10 and Choco 4 as shown in Figure 3.2.
They cover a total area of 7,214.51 ha. The coordinates listed in the Table 3.1 define the
concessions.

Table 3.1
Choco 4 and 10 Vertices

Concession Vertices Easting (m) Northing (m) Area (ha)
Choco 10 NW 613464.61 809492.61
SW 613464.61 802982.61
NE 620002.75 809492.61
SE 620002.75 802982.61 4,256.33
Choco 4 NW 613464.61 814017.11
SW 613464.61 809492.61
NE 620002.75 814017.11
SE 620002.75 809492.61 2,958.18

3.3 HISTORY

3.3.1 Previous Exploration

The exploration activity in Choco started in 1990 with a regional geochemical soil survey carried
out within the Choco 4 and 10 concessions. Geophysical techniques were utilized during 1992
starting with aeromagnetic survey within the concessions. It was followed by ground magnetic
survey, a detailed geochemical soil survey and trenching covering five prospect areas. A strong
indication for gold mineralization was obtained as a magnetic high.

During 1993, a geological survey and a semi-detailed geochemical soil survey carried out within
the concession areas disclosed a large gold anomaly (>100 ppb Au) covering an approximate

17
area of 1,500 m x 1,500 m. Targeting the large gold anomaly, a drilling program by Aircore and
HQ3 was commenced in 1993.

Over 1,200 holes, mainly Aircore, with average vertical depth of 30 m, were completed. The
drilling identified the presence of four major zones of mineralization in Choco 10, named as
Coacia, Pisolita, Rosika West and Rosika East prospects. The initial drill spacing was at a grid
density of 50 m x 50 m, followed by in-fill drilling of 50 m x 25 m and 25 m x 25 m. Validation
drill holes in Coacia and Pisolita were drilled on a grid of 12.5 m x 12.5 m.

1
8

Figure 3.1
El Callao Mining District
E L C A L L A O M i n in g D is t r i c t - G e o l o g i c
I i
E L C A L L A O M I N I N G
B O L I V A R
C H O C O G O L D P R O J E C T ,

1
9

Figure 3.2
Concession Map

CHOCO 4
CHOCO 10
Pisolita
V
i
l
la

B
a
l
a
z
o
Rosika
Coacia
Metalava and Metapyroclastic
from andesitic to dacitic
Basalt
Magnetic Feature (fault zone P)
Geological Contact
Creek
Magnetic Anomaly
Road & Trails
Prospect
Artesanal Mine
MINERALISATION
YURUARY
FORMATION
EL CALLAO
FORMATION
composition
Sodic Granite
MAFIC
INTRUSIVE
COMPLEX
SUPAMO
Metagabbro
Tonalite
INTRUSIVE
MAFIC Diabase (Laguna - Dike)
LEGEND
CHOCO GOLD PROJECT, VENEZUELA
BOLIVAR STATE - VENEZUELA
EL CALLAO MINING DISTRICT
GEOLOGY OF CHOCO 4 & 10 CONCESSIONS
Figure 3

20
Aircore drilling in Choco 4, according to Promiven, showed mineralization in a saprolite zone
and intersected gold bearing quartz veins, and Promiven suggested that lode type mineralization
is likely to exist at depth. No record of a resource estimate has been provided.

BHP Engineering (BHPE) and Snowden Associates carried out the resource evaluation studies
for the Choco 10 deposit in 1994-5, and BHPE conducted a preliminary feasibility study during
1995 and 1996.

Micon conducted an economic and technical review of the Choco project in 2002. The results of
this work are presented in the Micon report entitled Gold Resources of Concessions Choco 4
and 10, Estado Bolivar, Venezuela, originally dated November 26, 2002 and revised January
23, 2003.

3.4 HISTORICAL MINERAL RESOURCES

Promiven provided an Information Memorandum that reported the following mineral resources
for the Choco deposits. The block model that forms the basis of this estimate is described in a
January 1996-dated BHP Engineering report referred to as RE02199. The resource above a
nominal cut-off grade of 0.5 g/t, stated according to JORC Code, is shown in Table 3.2.

Table 3.2
BHPE Measured and Indicated Mineral Resources at 0.5 g/t Au Cut-Off

Zone Tonnage Grade Au Au
(Mt) Au (g/t) (kg) (oz)
Laterite 4.58 1.23 5,637 81,000
Clay 7.24 1.88 13,632 438,000
Fresh 2.64 2.07 5,465 176,000
Total 14.46 1.71 24,734 795,000
Inferred Resources 1.67 1.38 2,302 74,000

Micon reviewed the BHPE mineral resource estimate and considered that excessive sub-grade
material had been included in the mineralization outlined. Micon considered that inclusion of
material below the cut-off grade would potentially overstate the mineral resource tonnage and
underestimate the gold grade. In Micons opinion, recalculation of the Choco mineral resources
was necessary to more accurately represent the economic potential of the property.

There has been no organized production from the property. There is evidence of some surface
workings conducted prior to the recent exploration campaign but no records of production are
believed to be available. After the cessation of exploration in 1996, small areas of the property
have been worked periodically by small groups of artisanal miners (mineros), accessing the
mineralized zones either by small pits or by short vertical shafts. During the site visits in July
2002 and July 2003, these miners were producing a small amount of vein type material, for
transport to one of the local small mills, where gravity separation is employed to recover the
gold. The miners are paid on the basis of a fixed price per sack of material. No estimate of the
amount of gold recovered to date from the property by these miners has been attempted, as this is
considered to represent an insignificant quantity.

21

Micon was commissioned to undertake a review of the project in July 2002. Following a visit to
the property and review of available data Micon prepared an independent estimate of Choco
mineral resources. Micons estimate of mineral resources at October 1, 2002 is presented in
Table 3.3.
Table 3.3
Choco Gold Project Mineral Resource Estimate
(As of October 1, 2002)

Cut-Off Category
Tonnes
(t)
Grade
Au (g/t)
Gold
(kg)
Gold
(oz)
0.5 Indicated 9,584,655 2.37 22,677 729,075
0.5 Inferred 4,601,921 2.21 10,170 326,973
0.8 Indicated 8,470,000 2.59 21,937 705,284
0.8 Inferred 4,002,148 2.44 9,769 314,081
1.0 Indicated 7,501,970 2.81 21,058 677,016
1.0 Inferred 3,468,503 2.68 9,292 298,742
1.2 Indicated 6,534,429 3.06 19,995 642,851
1.2 Inferred 2,966,431 2.95 8,736 280,867
1.5 Indicated 5,350,000 3.44 18,404 591,689
1.5 Inferred 2,332,728 3.38 7,887 253,566

The report accompanying Micons October 1, 2002 mineral resource estimate included a
proposed drilling program. The program was designed to upgrade mineral resources classified as
inferred to the indicated category and to expand mineral resources by exploration beyond the
known limits of mineralization. Bolivar completed most of the in-fill drill holes proposed and
Micon utilized the holes completed before mid-July, 2003 to generate a new mineral resource
estimate. The October 2003 estimate of mineral resources is presented in Table 3.4 and was
classified according to the definitions by the Canadian Institute of Mining, Metallurgy and
Petroleum, referred to as the CIM Standards on Mineral Resources and Reserves, Definitions and
Guidelines adopted by CIM Council on August 20, 2000, and contained in National Instrument
43-101. The resource estimate was also the subject of the Technical Report Gold Resources of
Concessions Choco 4 and Choco 10, Estado Bolivar, Venezuela, dated October 31, 2003 and
authored by Stanley C Bartlett, P.Geo.

3.5 GEOLOGICAL SETTING

The Choco mineral concessions cover oxide and sulphide gold mineralization that occurs in the
western portion of the Pastora greenstone belt, which in turn forms part of the Proterozoic to
Archean Guyana Shield. The prolific Guyana Shield extends through Brazil, Guyana and the El
Callao gold belt of eastern Bolivar State, Venezuela. The project area is underlain by
metavolcanics and metasediments of the El Callao and Yuruari Formations, which have been
intruded by younger felsic to mafic stocks and sill-like bodies. A significant regional marker
unit, the late-phase Laguna diabase dyke, passes south of the currently defined mineralization.

22
Table 3.4

Cut-Off Category
Tonnage
(t)
Grade
Au (g/t)
Gold
(kg)
Gold
(oz)
0.5 Indicated 13,229,143 2.47 32,690 1,051,016
0.5 Inferred 2,300,254 1.93 4,443 142,842
0.8 Indicated 12,106,458 2.64 31,923 1,026,356
0.8 Inferred 1,873,417 2.22 4,168 133,998
1.0 Indicated 10,881,879 2.83 30,824 991,000
1.0 Inferred 1,439,833 2.63 3,783 121,619
1.2 Indicated 9,764,911 3.03 29,592 951,389
1.2 Inferred 1,226,150 2.90 3,550 114,149
1.5 Indicated 8,133,288 3.37 27,392 880,685
1.5 Inferred 985,349 3.27 3,225 103,694

The area is structurally complex and shearing is evident both within the stratigraphic sequence
and near the margins of intrusive rocks. Large-scale gabbroic intrusions present in the
concession area form topographic highs and are probably over-thrust blocks. Late dykes of
intermediate composition are present and probably indicate a deep-seated intrusion that may be
the cause of shearing. The dominant structural trends are north-south and east-west-trending
with a secondary structural trend to the northeast. A schematic geological map is presented in
Figure 3.1, included earlier.

3.6 DEPOSIT TYPES

Primary gold deposits comprise irregular lenses and pods of quartz-sericite altered metavolcanic
rock that contain up to 20 % pyrite. The orientation of these deposits is variable and ranges from
moderate to steeply dipping to flat lying and gently dipping. High grade gold generally occurs in
sulphide-rich zones although a direct correlation between gold and sulphide mineralization has
not been determined. Unweathered mineralization occurs in the Fresh zone and the average
grade of the mineralization outlined is 2.6 g/t Au.

Shearing has facilitated the deep tropical weathering observed in the region and the development
of saprolite to depths of 30 to 70 m. Quartz and sericite enriched gold mineralization is hosted
by clay and sericite altered metavolcanic rocks. These lenses occur in what is referred to as the
Clay zone. The average grade of the Clay zone mineralization is approximately 2.5 g/t Au.

Deep weathering has led to the development of lateritic surface enrichment of gold, and colluvial
and pisolitic laterite deposits in excess of 10 m thick are locally present. The distribution of
gold-bearing laterite is irregular but the deposits tend to thicken on topographic slopes in
response to gravity. Laterite is relatively unconsolidated and requires no blasting. The average
grade of the Laterite zone is 1.6 g/t Au.

23
3.7 MINERALIZATION

The mineralized zones in Choco 10 cover an area measuring approximately 1,500 m x 1,500 m
and have been subdivided into three main deposits including:

Rosika: The largest deposit, which lies in the eastern and northern portion of the
mineralized area. Rosika mineralization comprises north-south-trending steep to
moderately east-dipping altered zones.

Pisolita: The second largest deposit that comprises north-trending, shallow east and west-
dipping quartz veins that form Clay and Laterite Zone mineralization. The Pisolita
deposit is hosted in a sequence of alternating pyritic and silicified and unaltered pillow
basalt of the El Callao Formation and forms the western edge of the mineralized zone.

Coacia: The smallest of the deposits located in southeastern portion of the mineralized
area. Coacia mineralization comprises west-northwesterly-trending, steep northeasterly-
dipping Clay zone material that occurs at the contact of El Callao Formation basalt and
adjacent pyroclastic rock of the Yuruari Formation.

The gold mineralogy of the Choco deposits is relatively simple. Very fine grained gold occurs in
association with aggregates of limonite throughout the oxidized zone with gold particles
measuring about 1 m. Primary gold particles range in size to a few tens of m and occur in
fractures within pyrite grains or as isolated grains in quartz.

3.8 EXPLORATION

Promiven began exploration of the Choco concessions in 1990, initially using soil geochemistry
followed by airborne and ground geophysics. A follow-up soil survey revealed a plus 100 ppb
Au anomaly measuring 1,500 m x 1,500 m. These early exploration programs provided the
impetus to initiate the subsequent drilling campaigns that led to the discovery of the Choco
deposit. Since the importance of the results of these programs has been superseded by the
drilling results, further discussion of the procedures and parameters of the earlier exploration
programs is not warranted.

Reverse circulation (mainly Aircore with some down-the-hole hammer) and diamond drilling
(HQ3) was carried out between 1993 and 1995 during which nearly 50,000 m was drilled in
more than 1,200 holes. Drilling to date, including the 2003 drilling described below is
summarized in Table 3.5.

24
Table 3.5
Summary of Choco Drilling

Drill Campaign Number of Holes Metres Drilled
Pre-1995 983 33,868
1995 305 16,049
2003 Confirmation 10 347
2003 In-fill 39 3,807
Total 1,337 54,071

Micon has interpreted this extensive drilling database and the result of this interpretation is the
new mineral resource block model, which is described below. The drilling was conducted by an
independent contractor and was closely supervised by company geologists. While there are
inherent risks related to any drilling, sampling and assaying campaign, it is Micons opinion that
the level of supervision and the extent and nature of the quality control measures in place during
the Choco drilling campaign were of a high standard. Micon considers that the data generated
during the Choco drilling campaign are adequate for use in estimating the mineral resources of
the property.

During 2003 Majortec Perforaciones, S.A., using HQ3 diamond coring equipment, conducted a
program of confirmation drilling. The confirmation drilling involved twinning of ten holes
previously drilled to reproduce the mineral resources previously indicated. The 346.7 m of
confirmation holes drilled produced satisfactory results and in-fill drilling began.

St-Lambert Drilling, S.A., a subsidiary of the Canadian drilling contractor carried out the
subsequent in-fill drilling program also using HQ diamond coring equipment. To July 17, 2003,
the last date for inclusion in the mineral resource estimate described in this report, the total
amount of in-fill drilling completed was 3,807 m in 39 holes. Samples were prepared at the La
Camora laboratory of Triad Labs, Inc. and sub samples were sent to Chemex Labs Inc of
Mississauga, Canada for analysis.

3.9 DRILLING

During the Promiven campaign, the majority of holes were drilled using Aircore reverse
circulation equipment. Cavoex, a subsidiary company of the cement company Vencemos,
conducted the program using local personnel supervised and trained by individually contracted,
experienced Australian drillers. A Wallis 4.5 system installed on a Universal 650 multi-
purpose drilling rig was used. Where hard rock was encountered, drilling was extended using
either a reverse circulation down-the-hole hammer or HQ-sized diamond drilling equipment.
Parts of the program, and particularly diamond drilling, were let to contractors, which were: St.
Lambert (a Canadian contractor), Angostura Mining (the Venezuelan branch of Bradley
Brothers), and Rotopercusiones del Caroni (a local drilling contractor).

The area drilled measures 1,500 m north to south and 1,100 m east to west. Many holes were
drilled to a depth of only 30 m. The initial drilling was at a grid density of 50 m x 50 m. Later

25
in-fill drilling was conducted at 50 m x 25 m and 25 m x 25 m intervals. A limited amount of
validation drilling at Coacia and Pisolita was conducted on a grid of 12.5 m x 12.5 m.

Holes at Pisolita were drilled to the west at an inclination of 50
o
though a few holes were
oriented vertically or inclined to the east. The orientation of the holes was designed to provide
representative samples of the Pisolita mineralization. The first holes drilled at Rosika were
inclined 50
o
to the east but later holes were drilled to the west. Drilling at this attitude provided
the most representative samples on average. At Coacia holes were drilled at 50
o
to the
southwest on a grid oriented at 210
o
. On average, this orientation provided representative
samples. No down-hole survey data were collected for Pre-1995 holes. Holes drilled during the
1995 campaign were surveyed using a Tropari down-hole gyrocompass and inclinometer.

The 2003 confirmation drilling program was conducted by Majortec Perforaciones, S.A., a
subdivision of Major Drilling of New Brunswick, Canada, between January 20-29, 2003. The
program was completed using a Major-50 HQ3 diamond drill rig. The rig is an in-house, custom
built drill in a box with coring capabilities to a depth of 300 m. Experienced Canadian
diamond drillers working with Venezuelan assistants performed the drilling. Water for the
drilling was supplied by tanker truck provided by Promiven.

A total of 346.7 m of drilling was completed in 10 holes. The twinned holes were positioned
between 1.33 m and 3.32 m away from the collars of the original drill holes. The collar of drill
hole CO-165 could not be located and so the twin hole was collared using the same coordinates
as the original hole and was oriented at the same azimuth and dip angle as the original hole.

Overall core recovery varied from 70 to 90 percent with the lowest recovery in drill hole CO-
165T related to the intersection of local artisanal miners workings. Lower core recovery usually
occurred due to loss of soft materials adjacent to hard materials, such as lateritic material in
proximity to boulders, quartz veins or unweathered rock. Recovery was measured for each
sample run which ranged from 1 m (12 intervals) to 1.5 m (224 intervals). A Micon
representative, Patrick Anderson, supervised the drilling and sampling.

During the 2003 in-fill campaign St-Lambert used HQ coring equipment recovering 63 mm
diameter drill core. Up to three diamond drills were used to complete the program including two
track mounted S1200 drills and a skid mounted S900 unit. In-fill holes were drilled at Rosika,
Pisolita ands Coacia. The depth of the holes varied between 27.5 m and 264.5 m.

The 2003 drill holes were initially measured for dip and azimuth deviation using a Pajari
gyroscopic compass. Later a Flexit down-hole instrument, which relies on orthogonal gravity
measurements to establish the dip and azimuth of a borehole, was used. A Bolivar survey
technician using a traditional transit and stadia rod measured collar positions.

3.10 SAMPLING METHOD

During the Promiven drilling programs, Aircore samples were collected at 2 m intervals at the
Pisolita and Rosika prospects and at 1 m intervals at Coacia. A cyclone connected to the sample

26
return hose, which was directly attached to the inner tube at the drill head, was used to collect
drill cuttings. Samples weighed ranged from 15 kg to 20 kg per metre and were riffled at the
drill site to 3.5 kg. During the 2003 campaign, drill core was sampled on the basis of geology
using standard sample intervals within geologic units that varied from 1 m to 3 m but were most
commonly 1 m or 1.5 m. Intervals varied as required and ranged from 0.03 m to 6 m. A total of
some 34,590 samples have been collected during the Choco drilling campaigns, a quantity too
numerous to list individually in this report.

The following factors could contribute to contamination of the Aircore and diamond core
samples collected:

Segregation of gold and down-hole contamination of samples during sample recovery
operations.
Segregation of gold and down-hole contamination of subsequent samples by water.
Poor core samples recovered in broken ground.
Mislabelling due to poor sample administration.
Micon considers that the potential of gold segregation during either sample recovery or resulting
from water inflow is minimal, and that the impact on the mineral resource estimate is immaterial.
Micon confirmed that the drilling equipment was sufficiently powerful and adequately
maintained to remove the sample material from the hole, and that minor quantities of water were
only rarely encountered. The rate of core recovery recorded was high, and recovery in broken
ground was enhanced by use of HQ3 equipment, which utilized a triple tube core recovery
system. There is strong evidence that competent personnel managed the drilling program, and
Micon is of the opinion that the impact of any minor administration errors, that may have been
made, would be immaterial.

In addition to the samples generated during the 1995 drilling campaign a total of 854 channel
samples were collected from bulldozer trenches across the principal mineralized zones. These
sample data were not used in generating Micons mineral resource block model.

3.11 SAMPLE PREPARATION, ANALYSES AND SECURITY

All Promiven campaign samples were prepared at the companys laboratory in El Callao. Prior
to shipment to the laboratory reverse circulation samples were riffled at the drill rig to produce a
3.5 kg sub sample. Core samples were either split into two using a knife or a diamond saw was
used to cut hard intervals. Samples were dried, crushed to 6 mm and pulverized in two stages to
produce a final product of 500 g at 90 % passing 200 mesh (75 microns). In 1994, a rolls crusher
that produced a 1.5 kg sub sample of minus 200 mesh (75 microns) material replaced the initial
stage of pulverization.

Samples were shipped for analysis to Genalysis Laboratory Services Pty Ltd in Perth, Australia.
The Genalysis laboratory is accredited (No 3244) by the National Association of Testing

27
Authorities, Australia (NATA). Sample charges of 50 g were fire assayed with atomic absorption
spectrophotometry (AAS) finish. Selected check samples from the three zones (Coacia, Rosika
and Pisolita) were analyzed at Triad Laboratories in Puerto Ordaz, Venezuela. Rosika check
samples were also assayed at Bondar Clegg in Vancouver, Canada, which has ISO 9002
certification.

A comprehensive program of quality control was in place during the exploration program.
Duplicate RC samples were collected at the drill to measure the variability of gold within sample
intervals. On average one duplicate was collected for each drill hole. The duplicate samples
were inserted into the regular sample number sequence using the subsequent sample number to
the original.

Duplicate samples were collected at the pulverization stage at the rate of one sample per 30
samples processed. The duplicate samples were assigned a sample number and assayed in the
same batch. In addition three standard samples were prepared and inserted into the sample
number sequence. Thirty samples were subject to the screen fire assay method to determine the
effect of coarse gold. Samples were screened to 120 mesh to produce a pair of 60 g samples of
minus 120 mesh material plus a sample of +120 mesh. All three samples were analyzed and a
final screen assay was calculated. The quality control data demonstrated that no real bias exists
for duplicate drill sample intervals, and laboratory duplication.

Micon carried out a limited inspection of the Promiven exploration camp facilities and
interviewed some of the people involved in the past exploration programs. Micon also reviewed
some of the drilling records and examined drill core from one of the most significant holes
drilled on the property. The general organization of the data collection, the QA/QC checks that
had been put in place and the fact that the sample materials on site have been orderly maintained
all provided evidence to suggest that the administration of the exploration drill program and core
logging, sampling and assaying was conducted to a very high standard.

Samples collected from split or sawn cores during the 2003 campaign were sent to Triad Labs,
Inc. located at Heclas La Camora mine facility. Samples sent to Triad were processed in the
following manner:

1. Samples were placed in the drying oven at approximately 100
o
C until dry.

2. Dry samples were crushed in two stages: initially passed through a jaw crusher, followed
by a rolls crusher to achieve a particle size of approximately 0.5 mm.

3. Crushed sample material was homogenized and a 250 g sub sample was split using a
riffler. The remaining sample was returned to the original bag as bulk reject.

4. The working split was pulverized to minus 150 mesh using a ring and puck pulverizer for
rock samples or by disc pulverizer for saprolite samples.

5. The pulps were then placed in paper bags and sent for analysis.

28

Sample pulps were analyzed for gold at Triad and a portion were sent to ALS Chemex in
Vancouver via their Mississauga, Ontario laboratory facility.

Triads fire assay procedure is described below.

Fire Assay

1. Sample pulps were rolled 10 - 20 times on clean paper to ensure homogeneity.

2. A 30 g sub sample was then selected for fire assay.

3. The sample was placed in a ceramic pot with an appropriate amount of flux and heated in
a furnace to a temperature of approximately 1,100C.

4. The lead button derived from the smelting of the sample and flux was recovered from the
slag and cupelled.

5. The gold alloy bead derived from cupellation was dissolved in a mixture of acids, diluted
using distilled water and the solution was analyzed using an AA spectrometer.

6. Samples with gold content in excess of 2 g/t were re-assayed using gravimetric finish.
The gold alloy bead derived from cupellation was parted and annealed to remove
impurities and the gold bead was recovered and weighed.

During the in-fill drilling program sample pulps were prepared at Triad and sent to ALS Chemex
for fire assay. Samples were logged and weighed at the ALS Chemex facilities in Mississauga
prior to shipment to the ALS Chemex analytical facility in North Vancouver. The samples
shipped to North Vancouver generally varied in weight from 70 g to 200 g. A 30 g sub sample
was split from each pulp and fire assayed for gold using an AA finish. Samples assaying greater
than 10 ppm were re-analyzed by fire assay using a 30 g charge and with gravimetric finish.

3.12 DATA VERIFICATION

Micon has relied in part upon the sampling and analytical data provided by Promiven and which
was used by BHPE in the 1995-6 resource modelling. Verification of the modelling techniques
is described in the Mineral Resources Estimate section of this report.

Micon conducted preliminary independent verification of the earlier Promiven data with a
random selection of 21 drill core assay pulps, plus a large rock sample. These were submitted by
Micon, for independent analysis, to OMAC Laboratories of Galway, Ireland. OMAC
Laboratories is a member of the Alex Stewart Assayers Group, has ISO 9002 accreditation, and
is certified according to the Proficiency Testing Program for Mineral Analysis Laboratories
(PTP-MAL). The 21 sample pulps were recovered from storage on site and the single rock
sample was collected from small miners workings at the Coacia prospect. Due to the small

29
amount of sample material available, the sample cuts permitted by Promiven were small, ranging
from 15 g to 30 g. The results for duplicate samples obtained from OMAC are summarized in
Table 3.6.

Table 3.6
Comparison of Original and Omac Gold Assays

BHID Sample ID Weight From Original OMAC Variance
(g) (m) Au (g/t) Au (g/t)) (%)
PI03-03 42484 24.08g 21.80-23.80 6.20 5.76 -7.2
CO18A-02 56852 22.08g 13.00-14.00 22.50 33.90 50.7
CO18A-02 56872 19.08g 33.00-34.00 11.40 10.69 -6.2
CO18A-03 56922 22.08g 39.00-40.00 2.65 2.65 0.0
CO18A-03 56924 20.07g 41.00-42.00 7.80 7.95 2.0
PI04A-03 70597 21.06g 28.50-29.00 4.30 6.74 56.7
PI02C-10 72022 22.00g 1.40-3.40 3.20 3.37 5.3
PI02C-10 72029 20.01g 13.40-15.40 12.00 11.63 -3.0
CO274 74569 30.00g 191.45-192.38 8.00 7.60 -5.0
C0274 74579 21.02g 201.15-202.15 21.50 21.69 0.9
C0009 81131 20.09g 38.65-40.00 2.70 2.60 -3.8
C0009 81134 30.00g 43.55-44.90 3.50 3.74 6.9
C0171 81684 20.09g 25.60-27.60 5.40 5.54 2.6
C0184 81957 22.00g 5.50-7.50 18.50 15.98 -13.6
C0184 81961 16.00g 13.50-15.50 6.00 5.87 -2.2
C0194 82233 15.02g 27.50-29.50 7.20 7.01 -2.6
C0196 82269 20.01g 21.20-23.20 10.20 10.31 1.1
C0196 82270 22.05g 23.20-25.20 9.00 10.23 13.7
C0171 83069 23.06g 46.00-48.00 6.80 0.08 -98.9
C0213 83216 16.00g 22.00-24.00 17.00 16.28 -4.3
C0213 83217 15.01g 24.00-26.00 3.60 3.88 7.7

The duplicate assay results show that all but three of the 21 assay pairs demonstrate reasonable
correlation. The errors observed between assay pairs for high grade samples 56852 and 70597
can result when small samples are analyzed. The error observed for sample 83069 indicates that
an error was made by either the Promiven sampling crew or by the analytical technicians at
either one of the assay laboratories.

In addition to the above results a 1 kg grab sample from Coacia workings assayed 19.24 g/t Au at
the OMAC laboratory.

The 2003 confirmation drilling campaign was intended to reproduce the mineralized intercepts
encountered in 10 Promiven holes. A total of 346.7 m of drilling was completed in 10 holes.
The twinned holes were positioned between 1.33 m and 3.32 m away from the collars of the
original drill holes. The collar of drill hole CO-165 could not be located and so the twin hole
was collared using the same coordinates as the original hole and was oriented at the same
azimuth and dip angle as the original hole.

Overall core recovery varied from 70 to 90 percent with the lowest recovery in drill hole CO-
165T related to the intersection of local artisanal miners workings. Lower core recovery usually

30
occurred due to loss of soft materials adjacent to hard materials, such as lateritic material in
proximity to boulders, quartz veins or unweathered rock. Recovery was measured for each
sample run which ranged from 1 m (12 intervals) to 1.5 m (224 intervals).

It was evident that seven of the ten holes drilled produced longer intercepts, one hole intercepted
the exact same thickness of mineralization, and two intersections were shorter than the original
intercepts. Gold grade was higher in five of the composites and lower in the remaining five
intercepts. Overall, the average thickness of mineralization intersected in the 2003 holes was
eight percent higher and for uncut assay composites, the contained gold increased by 27 percent
over that indicated by the Promiven drilling.

The results of the confirmation program are presented in Table 3.7. Assay composites using
both cut and uncut assays are presented and demonstrate that there is reasonable correlation
between the earlier Promiven drill intercepts and the 2003 Bolivar results.

Table 3.7
Summary of Confirmation Drilling Results Uncut Gold Grades

2003 Confirmation Program Original Drill Program Variance
Drill Hole Thickness Grade Accumulation Thickness Grade Accumulation Thickness Accumulation
(m) Au (g/t) Au (g/t-m) (m) Au (g/t) Au (g/t-m) (%) (%)
RO-10-02 4.0 1.0 4 6.0 1.2 7 -33 -44
CO-216 22.0 1.3 28 23.5 1.2 28 -6 -2
CO-18-11T 40.0 12.9 516 38.5 7.0 271 4 91
CO-13A-08T 13.7 3.5 47 11.0 5.8 64 25 -26
RO-13C-03 35.0 7.9 276 33.3 8.1 270 5 2
RO-14-02 33.6 3.0 101 30.0 4.4 132 12 -23
RO-14B-03 23.2 3.9 90 23.2 3.0 71 0 28
CO-226 35.5 2.2 77 31.5 1.9 59 13 30
CO-17A-02 20.5 4.2 86 12.8 2.7 34 60 151
CO-165T 13.1 0.8 10 12.0 2.9 35 9 -72
Total 240.6 1,235 221.8 971 8 27
Average 24.1 5.1 123 22.2 4.4 97 8 27

For comparison gold assays were topcut to 35 g/t and the intercepts recalculated. It was
necessary to cut five assays from the 2003 program and one assay from the original assay data.
The results are presented in Table 3.8.

The 2003 cut assay composites were on average eight percent thicker than the original intercepts
and contained nine percent more gold. The average 2003 cut grade composite was only one
percent higher than the average grade of the original assay composites.

31
Table 3.8
Summary of Confirmation Drilling Results Cut Gold Grades

2003 Confirmation Program Original Drill Program Variance
Drill Hole Thickness Grade Accumulation Thickness Grade Accumulation Thickness Accumulation
(m) Au (g/t) Au (g/t-m) (m) Au (g/t) Au (g/t-m) (%) (%)
RO-10-02 4.0 1.0 4 6.0 1.2 7 -33 -44
CO-216 22.0 1.3 28 23.5 1.2 28 -6 -2
CO-18-11T 40.0 8.5 339 38.5 6.9 266 4 27
CO-13A-08T 13.7 3.5 47 11.0 5.8 64 25 -26
RO-13C-03 35.0 7.9 276 33.3 8.1 270 5 2
RO-14-02 33.6 3.0 101 30.0 4.4 132 12 -23
RO-14B-03 23.2 3.9 90 23.2 3.0 71 0 28
CO-226 35.5 2.2 77 31.5 1.9 59 13 30
CO-17A-02 20.5 4.2 86 12.8 2.7 34 60 151
CO-165T 13.1 0.8 10 12.0 2.9 35 9 -72
Total 240.6 1,058 221.8 967 8 9
Average 24.1 4.4 106 22.2 4.4 97 8 9

The 2003 in-fill drilling campaign was subject to a rigorous quality control program. A series of
six samples was submitted systematically to check efficiency (numbering, cleanliness and
organization) of the Triad preparation laboratory, Triad at the La Camora site, and the precision
and accuracy of the ALS/Chemex laboratory in North Vancouver. A third laboratory, XRAL
Laboratories, of Toronto, a subsidiary of Socit Gnrale de Surveillance S.A. served as the
umpire laboratory (XRAL-SGS).

The six quality control samples used included the following:

1. Choco Standard: Triad developed a Choco Standard with a grade of 0.965 g/t Au for
inclusion in the sample stream. The rate of submission of the Choco Standard was 1 in
30 samples. Standard samples were prepared by Triad and provided to Bolivar in kraft
paper bags weighing 250 g. The samples were placed in a plastic bag and inserted in the
sample sequence with the normal assay tag to avoid detection. Ten samples of the Choco
Standard were submitted to XRAL for analysis. These samples provide a check on the
precision of the ALS/Chemex laboratory.

2. Blanks: Two unmineralized blanks were prepared by Triad and submitted at a rate of 1 in
30 samples. The blank materials used included barren gabbro for fresh and weathered
rock, while barren saprolite, collected from a site 5.6 km north of Guasipati, was
submitted in the stream of laterite samples. The blanks analyses provide a check on
contamination during sample preparation and assay procedures.

3. Certified Reference Material standards: Four Certified Reference Material standards were
obtained from OREAS, Australia and submitted at a rate of 1 in 100 samples. The
samples used had gold grades of 6.81, 3.33, 0.854 and 0.101 g/t Au. The samples were
submitted in kraft bags to Triad for inclusion in the sample sequence. These samples
provide a check on the accuracy of the ALS/Chemex and XRAL-SGS laboratories.

32
4. Replicate Core Samples: Split-quarter core samples were submitted at a frequency of 1
in 30. The replicate sample was introduced into the sample sequence following the
twentieth sample to ensure that it would be analyzed in a different batch from the
original. Replicate results provide a test of the homogeneity of the rock and an estimate
of the variance attributed to the entire sample collection, preparation and assay process.

5. Pulp Duplicate: Pulverized sample duplicates were prepared for every 20 to 30 samples
and reinserted into the sample sequence 20 samples later. The samples generally
weighed 250 g and an appropriately numbered sample tag was fixed to the kraft pulp
envelope to avoid detection by ALS/Chemex. The results provide a measure of the
precision of ALS/Chemex and the variance of the sample preparation protocol at this
stage.

6. Umpire Samples: Triad was asked to retain a 30 g split of selected pulps for further
analysis as Umpire Samples. After reviewing the ALS/Chemex results samples were
selected for analysis at Triad and XRAL. The distribution of the samples selected is
representative of the actual distribution of gold grades in the mineralized zone. These
samples provide a further check on the accuracy of Chemex.

The result of the quality control analyses is summarized in the following tables and graphs.

Table 3.9
Summary of Analysis of Choco A Standard 0.965 g/t Au

Parameter Triad ALS/Chemex Variance
Number 25 51 51
Mean Au (g/t) 0.965 0.933 -0.032
Standard Deviation 0.086 0.066 0.066
Maximum 1.250 1.120 0.155
Minimum 0.750 0.750 -0.215
Positive Errors 13
Negative Errors 38

It is evident that ALS/Chemex results are on average 3 % lower than Triad assays. A
comparison of Choco Standard results is presented in Figure 3.2.

Table 3.10
Summary of Analysis of Standard Blank Samples

Parameter Laguna Dyke Guasipati Saprolite
Number 44 43* 25 23*
Mean Au (g/t) 0.044 0.020* 0.025 0.013*
Standard Deviation 0.159 0.019* 0.042 0.011*
Maximum 1.070 0.090* 0.167 0.045*
Minimum 0.004 0.004* 0.004 0.004*
* - erroneous data removed.

33
Figure 3.2
Analysis of Blind Standard Results

Table 3.10, on the previous page, summarizes the analyses of blank samples. One significant
error was noted for Laguna Dyke data and two errors were noted for the Guasipati data. The
columns on the right show summary statistics after removing the erroneous data.

Table 3.11
Summary of Analysis of Certified Reference Material Standards

Parameter 6.81 g/t Au 3.0 g/t Au 0.854 g/t Au 0.101 g/t Au
Number 3 4 3 2
Mean Au (g/t) 5.823 2.945 0.850 0.104
Standard Deviation 1.808 0.024 0.025 0
Maximum 6.980 2.960 0.878 0.104
Minimum 3.740 2.910 0.835 0.104
Positive Errors 1 0 1 2
Negative Errors 2 4 2 0

The assay data for reference standards are limited but it is evident that ALS/Chemex results are
consistently low.

Figure 3.3 demonstrates the relatively high degree of variability in the mineralization with the
majority of sample pairs varying between 10 % and 50 %. The data also show that relative error
is variable over a range of sample values and that no systematic bias is inherent in the data.

34

Table 3.12
Summary of Analysis of Replicate Core Samples from Rock

Parameter Original Au (g/t) Replicate Au (g/t) Variance (Au g/t)
Number 41 41 41
Mean Au (g/t) 1.496 1.804 0.308
Maximum 9.900 16.100 9.200
Minimum 0.004 0.005 -1.990
Positive Errors 21
Negative Errors 20

Figure 3.3
Analysis of Replicate Assay Results

35
Table 3.13
Summary of Analysis of Replicate Core Samples from Laterite

Parameter Original Au (g/t) Replicate Au (g/t) Variance (Au g/t)
Number 26 26 26
Mean Au (g/t) 0.555 0.749 0.195
Maximum 4.900 6.920 2.779
Minimum 0.004 0.004 -1.744
Positive Errors 13
Negative Errors 13

Replicate rock samples (Table 3.12) vary on average by 21 %. A large portion of the variance is
attributed to two pairs of assay data that demonstrate extreme variances. Samples 191361 and
191381 from CR03-11 assayed 0.157 and 3.450 g/t and samples 192038 and 192157 from CR03-
12 assayed 6.90 and 16.10 g/t . When these data are eliminated the average variance is reduced
to 0.25 %.

Replicate laterite samples (Table 3.13) demonstrate more variability and vary on average by 35
%. Four samples demonstrated high variances. When these assay pairs were eliminated from
the data the average variance was reduced to 15 %. The high variability in part is attributed to
the high number of samples containing very low gold contents; 12 of 26 samples assayed less
than 0.1 g/t Au.

Table 3.14
Summary of Analysis of Duplicate Pulp Samples from Rock

Parameter Original Au (g/t) Duplicate Au (g/t) Variance (Au g/t)
Number 41 41 41
Mean Au (g/t) 1.784 1.475 -0.309
Maximum 20.700 13.850 0.800
Minimum 0.004 0.004 -14.340
Positive Errors 20
Negative Errors 21

Duplicate pulp rock sample pairs varied on average by 17 %. One sample pair produced high
anomalous results. When this pair was eliminated from the data the average variance was 3 %.

36
Table 3.15
Summary of Analysis of Duplicate Pulp Samples from Laterite

Parameter Original Au (g/t) Duplicate Au (g/t) Variance (Au g/t)
Number 22 22 22
Mean Au (g/t) 0.861 0.881 0.020
Maximum 5.370 5.490 0.400
Minimum 0.004 0.004 -0.200
Positive Errors 12
Negative Errors 9

Duplicate pulp laterite samples varied on average by 2 %. No highly anomalous data were
obtained.

The duplicate pulp data, as expected, show lower variability than the replicate data and better
precision. Again as expected, variability is higher in samples assaying less than 0.1 g/t Au.

Figure 3.4
Analysis of Duplicate Assay Results

37
Table 3.16
Summary of Analysis of Umpire Samples from Laterite

Parameter Triad
Au (g/t)
ALS/Chemex
Au (g/t)
XRAL-SGS
Au (g/t)
Variance
Tri-XSG
Variance
A/Ch-XSG
Variance
A/Ch-Tri
Number 33 33 33 33 33 33
Mean Au (g/t) 0.623 0.551 0.547 0.076 0.004 0.072
Stand Deviation 1.672 1.250 1.391 0.476 0.263 0.713
Maximum 9.480 5.970 7.300 2.180 0.350 3.510
Minimum 0.010 0.004 0.004 -1.400 -1.330 -1.750
Positive Errors 26 15 24
Negative Errors 7 18 9

Table 3.17
Summary of Analysis of Umpire Samples from Rock

Parameter Triad
Au (g/t)
ALS/Chemex
Au (g/t)
XRAL-SGS
Au (g/t)
Variance
Tri-XSG
Variance
A/Ch-XSG
Variance
A/Ch-Tri
Number 43 43 43 43 43 43
Mean Au (g/t) 1.024 0.990 0.941 0.083 0.049 0.034
Stand Deviation 1.462 1.358 1.311 0.776 0.265 0.708
Maximum 6.190 4.860 4.870 2.480 1.128 2.080
Minimum 0.010 0.004 0.004 -3.260 -0.516 -3.350
Positive Errors 29 22 32
Negative Errors 14 21 11

In Tables 3.16 and 3.17 Triad and ALS/Chemex assays are compared with XRAL-SGS results.
Triad results were on average 14 % higher for laterite samples and 9 % higher for rock samples
than XRAL-SGS assays. More than 70 % of the Triad assays were higher than the XRAL-SGS
umpire assays. ALS/Chemex assays were on average 1 % higher for laterite samples and 5 %
higher for rock samples than the XRAL-SGS results. Triad results were also 13 % higher than
ALS/Chemex assays for laterite and 3 % higher for rock. When one anomalous set of assays was
removed from the data Triad results were only 4 % higher than XRAL-SGS for rock and the
average ALS/Chemex result was equal to that of Triad. Since ALS/Chemex assays compare
well with results from the umpire laboratory and only ALS/Chemex assays were used for mineral
resource calculations, Micon is satisfied that the 2003 assay data are reliable.

3.13 ADJACENT PROPERTIES

Concessions or properties adjacent to the Choco 4 and Choco 10 concessions were not examined
and are not discussed in this report.

3.14 MINERAL PROCESSING AND METALLURGICAL TESTING

Prior to 1995, metallurgical testwork for evaluation of heap leaching and gravity recovery for
gold had been completed by AMDEL Laboratories in Australia, using predominantly three
composite samples representing the main zones of soft material in the Choco 10 deposit. In
1995, four new composite samples were prepared, with total weight of some 500 kg, using
samples from the more recent drilling. The composites represented the four zones of laterite,

38
clay/schist, silicified zone/quartz veins and volcanic bedrock. The composite samples were then
used for metallurgical testing of Multiple Phase Milling/CIP Cyanidation and Heap Leach
Cyanidation. McClelland Laboratories of Nevada, USA, conducted the composite preparation
and testing.

After commencement of Bolivars activities at the site, some further confirmatory tests were
conducted. Two composite samples representing bedrock (CH-05 and CH-06) comprising core
samples from the 1996 drilling program, were submitted to Lakefield Research, Canada, for
standard grinding and bottle roll cyanidation tests.

Subsequent testing during 2003 at Lakefield Research employed specific samples selected from
individual cores from the 2003 drilling program. Fresh or unweathered mineralization was
represented by samples from cores CR03-12 (pyritic) and CR03-13 (non-pyritic). The remaining
samples represented various areas of the weathered zone.

A set of near-surface samples to represent the laterite zone was collected by pitting during
2003 and submitted to Lakefield Research for cyanide leach tests and acid-base accountability
tests.

Results of the metallurgical testing and application to the process design are discussed in Section
5 of this report.

3.15 MINERAL RESOURCE ESTIMATE

3.15.1 Interpretation

Micon created a mineral resource block model using the assay database and geological cross
sections provided by Bolivar. The assay database was updated to include assays from holes
completed prior to July 17, 2003. The block model was created using Surpac mining software
supplemented by Microsoft Access and Excel. Cross sections were generated at 25 m intervals
showing drill hole assays. Mineral resource envelopes from the Micon 2002 estimate were
updated to reflect the 2003 in-fill drilling program.

The deposit was subdivided into three sectors: Pisolita, Rosika and Coacia. Drilling in the
Pisolita and Rosika areas was presented on east-west cross sections. Coacia drilling was shown
on sections oriented on an azimuth of 210
o
. Mineral resource envelopes were outlined using a
cut-off grade of 0.5 g/t Au. The envelopes conformed to those developed during the Micon 2002
estimate except where new information or a new interpretation warranted a change. In general,
the Micon 2002 interpretation conformed to the Promiven and BHPE interpretations where it
was deemed to be reasonable. Unless information to the contrary existed intercepts were
projected either half the distance to adjacent holes, or 25 m, whichever was less.

The continuity of mineralized zones and the reasonableness of the interpretation were checked
by stacking adjacent sections in Surpac. Inconsistencies in correlating assay data from hole to
hole that were identified were corrected. In general, there is a reasonable degree of continuity

39
demonstrated by some of the mineralized zones but these can be highly variable in thickness and
grade. Other zones demonstrated very limited continuity. The continuity of several of the most
significant zones was demonstrated by the in-fill drilling program.

3.16 SOLID MODELLING

Solid models representing each of the mineralized zones were created using Surpac. Solids were
generated by linking cross sectional mineral resource envelopes on adjacent sections. Where
mineralization was absent on adjacent sections solids were extended 12.5 m from the section
lines. On a few sections, where drilling had been conducted along lines at 50 m intervals it was
necessary to project the mineral resource solids 50 m.

Choco mineralization can be broadly divided into two types: laterite (Zone 2) and non-laterite
(Zones 1 and 0), comprising weathered and fresh bedrock. Micon prefers the term Weathered
zone (Zone 1) rather than Promivens Clay zone, which does not adequately describe the
mineralization. Solid models were developed for non-laterite material in each of the three
principal deposits: Pisolita (West), Rosika (East) and Coacia. The non-laterite solids were sub
divided into weathered and fresh zones by cutting the solids with a three-dimensional surface
representing the weathered-fresh rock contact. This surface was initially obtained from Hatch
(BHPE) but was modified during 2003 using data from 2003 in-fill holes and from relogging old
drill core.

The volume of non-laterite material was estimated using two three-dimensional surfaces. First a
surface was generated representing the base and lateral limits of laterite material using a 0.5 g/t
Au cut-off grade. The limits of this surface were projected into air above the topographic
surface. The three-dimensional topographic surface was then used to truncate the laterite
surface. The volume remaining between the two surfaces represents the volume of laterite
mineral resources above a cut-off grade of 0.5 g/t Au.

To be consistent with previous calculations a block size of 12.5 m x 12.5 m x 5 m high was used.
The solid models generated were filled with regular-sized blocks and block partials were
calculated to account for the portions of blocks that straddled the contacts of the mineralized
zones. The limits of the block model are detailed in Table 3.18.

Table 3.18
Summary of Block Model Limits

Orientation Minimum Maximum Distance (m) No. of Blocks
Easting (m) 5,500 6,850 1,350 108
Northing (m) 7,275 8,800 1,525 122
Elevation (m) -60 300 300 60

3.17 GRADE INTERPOLATION

Micon utilized the solids model to extract the assay data to be used to create assay composites
for Au block grade interpolation. All assay data falling within the solids model were compiled

40
and flagged by zone and as either laterite, weathered or fresh. The compiled assay data are
summarized in Table 3.19 and illustrated by the frequency distribution plots in Figures 3.5, 3.6
and 3.7.

Table 3.19
Summary of Assay Data

Assays Rosika Laterite Rosika Weathered Rosika Fresh
Length Uncut Cut Length Uncut Cut Length Uncut Cut
Number 515 515 515 842 842 842 1,049 1,049 1,049
Mean 1.62 1.54 1.54 1.76 2.91 2.50 1.27 3.07 3.00
Wt Avg 1.58 1.58 2.95 2.50 2.94 2.22
Std Dev 0.47 1.52 1.52 0.43 13.20 3.83 0.45 5.08 3.99
COV 0.29 0.98 0.98 0.24 4.54 1.53 0.36 1.66 1.33
Max 2.40 18.50 18.50 3.00 370.00 35.00 4.39 110.00 35.00
Min 0.10 0.16 0.16 0.10 0.00 0.00 0.04 0.00 0.00
No. Cut 0 3 1

Assays Pisolita Laterite Pisolita Weathered Pisolita Fresh
Number 1,249 1,249 1,249 2,357 2,357 2,357 152 152 152
Mean 1.73 1.76 1.74 1.77 2.88 2.82 1.37 2.86 2.86
Wt Avg 1.77 1.75 2.69 2.64 2.86 2.86
Std Dev 0.42 2.91 2.61 0.47 5.01 4.49 0.54 3.17 3.17
COV 0.24 1.65 1.50 0.26 1.74 1.59 0.39 1.11 1.11
Max 2.50 58.00 35.00 6.00 80.00 35.00 2.10 19.50 19.50
Min 0.10 0.00 0.00 0.04 0.00 0.00 0.18 0.00 0.00
No. Cut 1 7 0

Assays Coacia Laterite Coacia Weathered Coacia Fresh
Number 802 802 802 1,834 1,834 1,834 246 246 246
Mean 1.03 1.89 1.89 1.05 3.15 3.09 0.94 2.68 2.68
Wt Avg 1.86 1.86 3.29 3.08 2.67 2.67
Std Dev 0.36 2.99 2.99 0.37 7.40 5.25 0.14 3.46 3.46
COV 0.35 1.58 1.58 0.36 2.35 1.70 0.15 1.29 1.29
Max 3.00 27.50 27.50 3.16 106.00 35.00 1.93 25.50 25.50
Min 0.10 0.00 0.00 0.06 0.00 0.00 0.36 0.01 0.01
No. Cut 0 13 0

High assays were cut to 35 g/t Au in order to reduce the impact of outliers in interpolating block
Au grades. Only one laterite assay was cut and the effect was to lower the Pisolita laterite grade
by 1 %. The impact on contained gold was negligible. The impact of cutting was more
significant for weathered and fresh mineralization. The weighted average Au grade of cut data
for weathered material was lower by the following amounts: Rosika 15 %, Pisolita 2 %, Coacia
7 %. Only one assay from fresh rock was cut. The weighted average grade of Rosika fresh
material was 2 % lower.

Assay composites were generated from the data extracted from the solids model. Extensive
checks were made to validate the assay data extracted. Ultimately, each mineralized drill hole

41
intercept used to define mineral resources was flagged to ensure that all appropriate assays were
utilized for grade interpolation.

A composite length of 2.5 m was utilized and laterite, weathered and fresh data were compiled
separately. All composite fragments less than 0.95 m were discarded as were 33 composites of
nil grade that were derived from unsampled intervals within the solids model. Composite data
are compiled in Table 3.20.

Figure 3.5
Laterite Assays Grade Distribution

42
Figure 3.6
Weathered Zone Assays Grade Distribution

Figure 3.7
Fresh Zone Assays Grade Distribution

43
Table 3.20
Summary of 2.5 m Assay Composite Data

Assays Coacia Laterite
Length Uncut Cut
Number 1,700 1,700 1,700
Mean Au (g/t) 2.17 1.72 1.71
Wt Avg 1.77 1.76
Std Dev 0.50 2.27 2.09
COV 0.23 1.32 1.22
Max Au (g/t) 2.50 46.98 28.58
Min Au (g/t) 1.00 0.13 0.13

Assays Rosika Weathered Rosika Fresh
Length Uncut Cut Length Uncut Cut
Number 622 622 622 561 561 561
Mean Au (g/t) 2.37 2.89 2.45 2.36 2.95 2.88
Wt Avg Au (g/t) 2.95 2.49 2.94 2.89
Std Dev 0.36 9.71 2.93 0.36 3.38 2.92
COV 0.15 3.36 1.19 0.15 1.15 1.01
Max Au (g/t) 2.50 222.76 21.76 2.50 41.66 23.03
Min Au (g/t) 1.00 0.03 0.03 1.00 0.04 0.04

Assays Pisolita Weathered Pisolita Fresh
Number 1,864 1,864 1,864 98 98 98
Mean Au (g/t) 2.20 2.66 2.61 2.07 2.91 2.91
Wt Avg Au (g/t) 2.70 2.64 2.84 2.84
Std Dev 0.46 3.86 3.44 0.50 2.74 2.74
COV 0.21 1.45 1.32 0.24 0.94 0.94
Max Au (g/t) 2.50 64.13 35.00 2.50 19.50 19.50
Min Au (g/t) 1.00 0.02 0.02 1.00 0.36 0.36

Assays Coacia Weathered Coacia Fresh
Number 957 957 957 99 99 99
Mean Au (g/t) 2.10 3.15 2.98 2.29 2.60 2.60
Wt Avg Au (g/t) 3.29 3.09 2.64 2.64
Std Dev 0.58 5.63 4.13 0.42 2.57 2.57
COV 0.28 1.79 1.39 0.18 0.99 0.99
Max Au (g/t) 2.50 98.00 35.00 2.50 15.90 15.90
Min Au (g/t) 1.00 0.00 0.00 1.00 0.01 0.01

As expected, composites derived from cut assays are lower than uncut assay composites.
Generally, the greatest reduction in grade occurred where the highest grade outliers are present.
Only one laterite assay was cut to 35 g/t Au and the average grade of the laterite composites was
reduced by 0.7 %. The highest sample obtained to date, 370 g/t Au, was recovered from the
weathered zone at Rosika. The average grade of cut grade composites from this zone is 15.5 %
lower than uncut assay composites. Cut grade composites from the weathered zone at Coacia
were 6 % lower on average and cut grade composites from the weathered zone at Pisolita were 2

44
% lower. Cut grade composites from fresh rock at Rosika were 2 % lower on average and there
was no change in the average grade of composites from Pisolita or Coacia as no outlier assays
were obtained.

Block model Au grades were interpolated using the inverse distance squared algorithm (ID
2
) in
Surpac. The strategy developed was intended to minimize the smoothing of Au assays by
restricting the search radius about each block and using a minimum number samples with which
to interpolate a block grade. The following grade interpolation protocol was used:

To Define Indicated Mineral Resources:

Search Radius: Horizontal 30 m, Vertical 10 m
Minimum Number of Drill Holes: 2
Minimum Number of Samples: 3
Maximum Number of Samples per Drill Hole: 2
Maximum Number of Drill Holes: 4 (one per quadrant)
Maximum Number of Samples: 8

To Define Inferred Mineral Resources:

Search Radius: Spherical 100 m (or maximum required)
Minimum Number of Drill Holes: 1
Minimum Number of Samples: 1
Maximum Number of Samples per Drill Hole: 2
Maximum Number of Samples: 2

Block model tonnage was calculated using a bulk density of 2.2 t/m
3
for laterite, 2.35 t/m
3
for
weathered material and 2.75 t/m
3
for fresh rock. The same bulk density values were used for
non-mineralized material of each zone.

Several tests were run to verify the October 2003 block model. Comparisons were made of the
volume of the solids model and the volume of material estimated using both the sub block model
and the regularized partials block model. The differences were found to be negligible.

To validate interpolated block grades a set of 5 m bench composites was generated. The grade of
these composites was compared with the block that was penetrated by the drill hole assay
composite. The results of the analysis are presented in Figures 3.8, 3.9, 3.10 and 3.11. The plots
show that there is reasonable correlation between block gold grades and the grade of assay
composites that fall within the blocks.

Block models were created using both cut and uncut assay composites. No significant difference
in tonnage resulted from the use of cut assay composites. However, the average grade of the cut
model was lower and the net result was that the cut model contained 2.2 % less gold at a cut-off
grade of 1 g/t Au.

45
Micons estimate of mineral resources, as of October 1, 2003, for the Choco property is
presented in Table 3.21. Micon considers that this estimate of mineral resources is classified
according to the definitions by the Canadian Institute of Mining, Metallurgy and Petroleum, as
published in the CIM Standards on Mineral Resources and Reserves, Definitions and Guidelines
adopted by CIM Council on August 20, 2000.

Figure 3.8
Block Grades versus 5 m Assay Composite Grades - Laterite

46
Figure 3.9
Block Grades versus 5 m Assay Composite Grades Rosika

Figure 3.10
Block Grades versus 5 m Assay Composite Grades Pisolita

47
Figure 3.11
Block Grades versus 5 m Assay Composite Grades Coacia

3.18 COMPARISON WITH EARLIER MINERAL RESOURCE ESTIMATES

Both tonnage and grade have increased in the Micon October 2003 mineral resource estimate
when compared with Micons October 2002 estimate that is presented in Table 3.3 above. As a
result of the 2003 in-fill drilling campaign the proportion of indicated mineral resources has
increased. The proportion of total mineral resources assigned to the indicated category has
increased to 85 % for tonnage and 88 % for contained gold.

Table 3.21

Cut-Off Category
Tonnage
(t)
Grade
Au (g/t)
Gold
(kg)
Gold
(oz)
0.5 Indicated 13,229,143 2.47 32,690 1,051,016
0.5 Inferred 2,300,254 1.93 4,443 142,842
0.8 Indicated 12,106,458 2.64 31,923 1,026,356
0.8 Inferred 1,873,417 2.22 4,168 133,998
1.0 Indicated 10,881,879 2.83 30,824 991,000
1.0 Inferred 1,439,833 2.63 3,783 121,619
1.2 Indicated 9,764,911 3.03 29,592 951,389
1.2 Inferred 1,226,150 2.90 3,550 114,149
1.5 Indicated 8,133,288 3.37 27,392 880,685
1.5 Inferred 985,349 3.27 3,225 103,694

48
A comparison of Micons October 2002 estimate and the BHPE estimate that was presented in
the Promiven Information Memorandum (PIM) (Table 3.2 above in this report) was provided in
Micons technical report entitled Gold Resources of Concessions Choco 4 and 10, Estado
Bolivar, Venezuela, originally dated November 26, 2002 and revised January 23, 2003. That
analysis is not repeated here and the reader is referred to the January 2003 report for details.

The variance between the two Micon models is attributed to the following factors:

More drilling information was available for the October 2003 estimate. The October
2003 estimate has utilized 39 drill holes totalling 3,807 m of new in-fill drilling. These
new holes have served to substantiate the earlier Micon interpretation of the mineralized
zones and some intercepts have served to modestly expand mineral resources.

A review of specific gravity data led to a revision of the bulk density used for the
Weathered zone from 2.7 t/m
3
to 2.35 t/m
3
. The bulk density of the fresh zone has been
revised from 2.7 t/m
3
to 2.75 t/m
3
. The impact of these changes within the October 2003
block model is a 13 % reduction in tonnage in the Weathered zone and a 2 % increase in
Fresh zone tonnage. The overall impact of the changes in bulk density factors used is a
7.5 % reduction in tonnage in the October 2003 block model.

3.19 OTHER RELEVANT DATA AND INFORMATION

Bolivar has continued drilling at the Choco project past the cut-off date for assay information
used for the October 2003 mineral resource estimate. A number of in-fill drill holes have been
completed since mid-July as well as several geotechnical and exploration drill holes. Bolivar
published drilling results on September 30, 2003 that were not used in the October 2003 mineral
resource estimate nor for the mine design. These are summarized in Table 3.22.

49
Table 3.22
Choco Drilling Results Published on September 30, 2003

BHID From To Length Au (g/t
CR03-49A 41.0 54.5 13.5 3.2
CR03-50 48.0 102.0 54.0 2.3
CR03-51 50.0 69.5 19.5 1.1
CR03-52 0.0 36.0 36.0 0.6
and 78.0 87.7 9.7 1.3
and 93.4 112.5 19.1 3.4
CR03-53 11.0 17.0 6.0 1.4
CR03-55 133.2 149.4 16.2 1.5
and 185.5 194.3 8.8 1.2
CR03-56 13.5 23.0 9.5 1.0
and 36.5 44.0 7.5 1.3
CR03-57 65.5 90.5 25.0 4.1
and 147.0 201.0 54.0 1.0
and 240.0 245.5 5.5 3.2
CR03-59 0.0 29.0 29.0 0.8
and 110.0 130.0 20.0 1.5
CR03-61 12.5 16.9 4.4 5.4
and 67.5 78.5 11.0 4.2
and 84.1 143.0 8.5 2.0
and 134.5 143.0 8.5 1.1
and 231.5 234.8 3.3 5.2

3.20 INTERPRETATION AND CONCLUSIONS

The area of the Choco 10 concession being explored by Bolivar since acquisition of the project
in 2003 was subjected to an in-fill drilling campaign comprising more than 3,807 m in 39 holes.
The program was designed to provide increased confidence in the interpretation of the
mineralization and to upgrade mineral resources from the inferred category to the indicated
category. The in-fill program increases the total amount drilled on the project to date to more
than 54,000 m.

At the time of preparation of the model in-fill drilling was still in progress and a number of
additional holes have been completed, the results of which were not available for preparation of
the October 2003 block model. In addition, a program of geotechnical drilling and deep
exploration was undertaken. Micon has not reviewed the geological results from these holes.

The general organization of the data collection, and the QA/QC checks that are currently in place
ensure that the drill program and core logging, sampling and assaying is conducted to a very high
standard. The current program will produce excellent quality results consistent with those
acquired in the past under the administration of Promiven.

The overall conclusion from the in-fill drilling program is that the property hosts an
economically significant gold resource that warrants further economic and technical appraisal.
The mineralization remains open in several directions, most notably at the north end of Rosika

50
where the zone is open to the north and downdip to the east. The Choco area is clearly under-
explored at depth and merits further exploration.

Representative cross sections of the Rosika, Pisolita and Coacia deposits are provided in Figures
3.12, 3.13 and 3.14.

3.21 RECOMMENDATIONS

It is Micons opinion that the Choco property is of sufficient merit to justify the drilling program
recommended in Micons technical report entitled Gold Resources of Concessions Choco 4 and
10, Estado Bolivar, Venezuela, originally dated November 26, 2002 and revised January 23,
2003. The program originally proposed has been completed in part and Micon recommends that
the remaining portion of the drilling program be executed.

3.22 PROPOSED DRILLING PROGRAM

The drilling program proposed in Micons earlier report is summarized in Table 3.23.

Table 3.23
Summary of Proposed Definition and Exploration Programs

Phase Program Description Budget (US$)
1 Definition drilling 5,100 m 315,000
2 Deep exploration drilling on identified targets 3,940 m 320,000
3 Compilation and drilling beneath known mineralization 2,000 m 175,000
4 Exploration drilling on targets to be defined 2,000 m 175,000
Due diligence confirmation drilling 1,500 m 15,000
Total US$1,000,000

At October 1, 2003 the confirmation and definition drilling portions of the proposed program
have been completed. It must be noted that not all of the definition holes originally proposed
have been drilled. Analysis of the in-fill results received during the program led to the
establishment of new priorities and diminished the need for some of the originally proposed
holes. Micon conferred with Bolivar during the in-fill program and is in agreement with the
changes that were made as the drilling program evolved.

5
1

Base of Weathering
Lithological Contact
Au values > 0.5 g/t
Shear zone
Base of Laterite
Drill Hole
LEGEND
Mafic Volcanic
Gabbro
Bolivar Gold Corp
Scale: 1: 1000 Figure 15 Date: October 2003
Choco Gold Project, Venezuela
Rosika Section 8595
Looking North
6
1
6
4
0
0
E
6
1
6
4
0
0
E
6
1
6
6
0
0
E
0 m REL
200 m REL 200 n REL
C
0
0
0
5
C
0
1
9
8
C
0
2
7
4
C
R
0
3
-
1
1
C
R
0
3
-
1
2
C
R
0
3
-
1
3
R
O
1
4
-
0
1
R
O
1
4
-0
2
R
O
1
4
-
0
3
R
O
1
4
-
0
3
A
R
O
1
4
-
0
4
R
O
1
4
-0
5
Limit of Laterite
Limit of Weathering
6
1
6
6
0
0
E
0 m REL
Figure 3.12
Rosika Cross Section on 8595N

5
2

Scale: 1:1000 Date: October 2003
Choco Gold Project, Venezuela
Looking North
6
1
6
0
0
0
E
6
1
6
0
0
0
E
6
1
6
2
0
0
E
200 m REL 200 m REL
C
0
2
3
8
C
R
0
3
-
4
4
C
R
0
3
-
4
6
C
R
0
3
-
5
1
R
O
1
0
B
-
0
1
R
O
1
0
B
-
0
2
R
O
1
0
B
-
0
6
R
O
1
0
B
-
0
6
A
R
O
1
0
B
-
0
6
B
R
O
1
0
B
-0
7
Limit of Laterite
Limit of Weathering
Figure 16
6
1
6
2
0
0
E
Pisolita Section 8220
Legend
Base of Laterite
P
1
0
3
-
2
0
Drill Hole
Base of Weathering
Au values > 0.5 g/t
Bolivar Gold Corp
Figure 3.13
Pisolita Cross Section on 8220N

5
3

Choco Gold Project Venezuela
Coacia Section 525
Looking North West
C
0
0
2
3
C
0
0
2
4
C
0
0
4
0
C
0
0
4
5
C
0
1
4
2
C
0
1
4
3
C
0
1
5
0
C
C
0
3
-2
6
C
O
1
8
A
-0
1
C
O
1
8
A
-0
2
C
O
1
8
A
-0
3
C
O
1
8
A
-0
4
C
O
1
8
A
-0
5
C
O
1
8
A
-0
5
A
C
O
1
8
A
-0
5
B
C
O
1
8
A
-0
7
C
O
1
8
A
-0
8
A
C
O
1
8
A
-0
9
R
O
0
9
A
-
0
7
Limit of Weathering
Limit of Laterite
200 m REL
Scale: 1: 1000 Figure 17 Date: October 2003
Au values > 0.5 g/t
Base of Weathering
Drill Hole
P
1
0
3
-
2
0
Base of Laterite
Legend
Bolivar Gold Corp
Figure 3.14
Coacia Cross Section on 525NW

54
In addition, several of the deep exploration (Phase 2) holes have been drilled. Approximately
five of the originally proposed holes have been drilled, plus several others that were planned to
follow up results from other Phase 1 or 2 holes. Phase 2 deep drilling, designed to follow up the
most obvious targets that warrant further work, is currently on going. Deep drilling beneath
known mineralization (Phase 3), intended to investigate targets that exist within the limits of
known mineralization, is also currently in progress. Phase 4 drilling, designed to identify and
prioritize targets that represent the best opportunity to increase gold mineral resources, has not
yet commenced. The purpose of the deep exploration program and Micons recommended
approach to conducting the program are detailed in Micons earlier report dated November 26,
2002 and revised January 23, 2003.

REFERENCES

1. Promiven Gold Project, Venezuela, Information Memorandum, June 2002.
2. BHP Engineering, Report RE02199, January 1996.
3. Micon International Limited, Gold Resources of Concessions Choco 4 and 10, Estado
Bolivar, Venezuela, Originally Dated November 26, 2002 and Revised January 23,
2003
4. Micon International Limited, Gold Resources of Concessions Choco 4 and 10, Estado
Bolivar, Venezuela, Dated October 31, 2003

55
4.0 MINING
4.1 SCOPE OF STUDY

The scope of the mining study encompasses the development of the Choco 10 mineral resource
using open-pit mining methods. It defines the pit optimization process and establishes the
detailed mine design parameters, mine sequencing and production planning of the project.

The scope includes the following aspects:

Transfer of the newly created resource model and its validation;
Calculation of the geological resources and comparison with Micons estimate;
Determination of cut-off grade;
Creation of an economic model in preparation for pit optimization;
Open-pit optimization;
Detailed pit design with access ramps and pit slope angles;
Calculation of mining reserves, grades and stripping ratio;
Preparation of annual mine plans;
Waste rock dump design;
Mine fleet requirements;
Mine operating costs.

4.2 DATA TRANSFER AND VALIDATION

Micon supplied the most recent block model and other related data to Met-Chem Canada in
various available formats as follows:

Regularized 12.5m x 12.5m x 5m geological block model in CSV text file;
Topography surface in DXF;
Rock surfaces in DXF;
Geological resources estimate.

Micon, using Surpac software, conducted all data preparation, geological work and block
modelling. Met-Chem has used MineSight/Medsystem mining software to conduct all the open-
pit optimization studies, including detailed mine design and mine planning. All data obtained
from Micon have been consolidated into MineSight and rigorously checked to ensure complete
integrity of the data.

Met-Chem has used the data as supplied by Micon in the present mining study. Met-Chem has
not audited the borehole database, reviewed the geological interpretation of the mineralized
structures, nor checked the resource estimation method.

56
Following the transfer of the geological block model in MineSight/MedSystem, in order to
ensure that the transfer was done correctly, basic statistics were carried out to compare Micons
and Met-Chems estimates of the resources in the indicated ore category. The ore classified as
indicated represents the mineralized material on which is based the economic study of the mine.
A summary of the resource comparison at 0.50 g/t is presented in Tables 4.1.

Table 4.1
Comparison of Indicated Resources Estimates
(0.50 g/t Au cut-off grade)

Source: Regularized Model Resource (ktonnes) Au (g/t) Au metal (oz)
(1) Micon
Laterite 2,963,834 1.58 150,966
Weathered 7,516,265 2.61 630,913
Fresh 2,729,832 3.05 267,857
Total 13,209,931 2.47 1,049,736
(2) Met-Chem
Laterite 2,955,652 1.58 150,180
Weathered 7,551,856 2.61 632,981
Fresh 2,732,132 3.05 268,194
Total 13,239,640 2.47 1,051,355

The differences in the resource estimates are generally less than 0.2 % for all categories,
including tonnes, grades and total Au metal. These marginal differences are well below the
industry standard in data transfer between mine modelling software and clearly confirm the
accuracy of the block model consolidation.

4.3 GEOTECHNICAL STUDIES

Golder Associates Ltd. (Golder) was retained by Micon to carry out the pit slope design for the
feasibility study of the Choco Project in Venezuela. The following text is excerpted from the
report by Golder Pit Slope Design for the Choco Project, Venezuela, October 2003, which is
provided separately as Appendix B.

The project plans to excavate three open pits, namely Rosika, Coacia and Pisolita, to estimated
depths varying from 40 m to 125 m. For reference purposes, these pits were subdivided into areas
labelled as Rosika North, Rosika South, Rosika West, Pisolita North, Pisolita and Coacia.

..the geotechnical site investigation, conducted from July to August, 2003, which was
undertaken primarily to gather geotechnical information for the rock mass at depth. This
investigation included three inclined drill holes, installation of two piezometers and collection of
rock samples for testing.

Based on the results of the previous site investigation carried out by Ingeotec in 1995, and the
current investigation, the Engineering Geology Model was formulated to define the design criteria
and to provide the geotechnical recommendations for the pit slopes.

57

The Engineering Geology Model indicates that the ultimate slope walls will be comprised of a
weathering profile, varying from residual soil to saprolite (still soil like material) to highly to
moderately weathered rock to fresh rock. For design purposes, the weathering profile is divided into
4 geotechnical units referred to as the Residual Soil (vertical depth varying from 0 to 3 m - pisolitic
laterite and up to 10 m mottled zone at Rosika), Saprolite (vertical depth varying from 3-10 m to 35
m), Weathered Rock (or Saprock) with depth varying from 35 m to 40 - 45 m), and Fresh Bedrock
(below 45 m depth). It should be noted that for the geological block model, Micon has considered
three zones labelled Laterite (which corresponds to the Residual Soil), Weathered (comprised of
Saprolite and Saprock or Weathered Rock) and Fresh Bedrock. Therefore, the thickness for the
weathered zone includes the interval from the Residual Soil to the Fresh Bedrock without taking into
account the better strength of the Weathered Rock.

The Residual Soil consists of the Colluvial Laterite, Ferruginous Zone and Mottled Zone. Based on
the previous (1995) and current (2003) site investigations, potential instability through the soil
materials within the Residual Soil and Saprolite will likely be by failure through the intact material
(i.e., rotational failure). Control of surface drainage will, therefore be key to the stability of these
slopes in soil. Possible slope instability modes within the Saprolite could also be planar, and to a
less extent wedge, failures along pre-existing discontinuities (also referred to as relict structures).
These pre-existing discontinuities may cause localized bench face instability.

Potential instability in the Weathered and Fresh rock slopes will be primarily kinematically
controlled structural failure mechanisms.

Possible failure through the intact rock mass could occur in some of the higher slopes within the
more weathered rocks of the geotechnical unit labelled Weathered Rock. However, this potential is
very low because the maximum expected depth of the weathered rocks is only about 45 m.

For the slopes within the Residual Soil and Saprolite units, the slope management strategy should
consist of steep bench faces and wide berms to control erosion and facilitate runoff control. Bench
face angles (BFA) and inter-ramp angles (IRA) for these slopes are presented in the following table.

Residual Soil Saprolite/Weathered Rock
Pit Area
BFA
()
Bench
Height (m)
Berm Width
& IRA ()
BFA
()
Bench
Height (m)
Berm
Width &
IRA ()
Pisolita North
Pisolita
Coacia
55 5 m
3 m &
IRA = 38
65 10 m
5 m &
IRA = 46
Rosika (North,
West and South)
55 5 m
3 m &
IRA = 38
60
dry
10 m
conditions
6 m &
IRA = 40

It should be noted that the shear strength of the Saprolite depends on the parent rock, being stronger
for the Basalt (within the Pisolita and Coacia pits) than for the Intermediate Volcanics (within the
Rosika North pit). Therefore, it is very important that the geology at the planned pit shells be known
(including parent rock geology), prior to excavating the final benches of the saprolite slopes.

58
These recommendations for IRA(s) assumed that the slopes within the Residual Soil and
Saprolite/Weathered Rock would have maximum heights of 45 m and 30 m for the Pisolita - Coacia
and Rosika pits, respectively. In addition, they considered the slope behaviour under dry conditions.

Based on the site investigations, no groundwater table was found within the Saprolite at the Pisolita
and Coacia planned pit areas. However, the phreatic surface was found at a depth of approximately
23 m at the Rosika North pit area, which, if confirmed by monitoring, would imply that the lower
portion of the excavated Saprolite slope may be saturated. Therefore, it will be important to
continue monitoring the groundwater table at the Rosika North area using existing and additional
piezometers (to be installed in new exploration holes) to better define its elevation and seasonal
variations. If the groundwater is confirmed to occur throughout the year, then, it is recommended
that the inter-ramp angle (IRA) be flattened to 35 and consideration be given to applying erosion
protection (e.g. rock fill) to protect the bench face from seepage effects.

For mine planning purposes, the planned rock slope configurations within the Fresh Bedrock are
described in terms of sectors, defined by their azimuth range. For example, a slope with an azimuth
of 45 is located in the NE sector of the pit (when looking in plan) and faces the SW. Stable pit
geometries have been estimated for each of the four pit sectors as shown in the following table.

SUMMARY OF RECOMMENDED ROCK SLOPES IN FRESH BEDROCK
Design
Sector
Sector
Azimuth
Range
1

()
Slope Dip
Direction
Range
()
Max
BFA
()
Maximum
Bench
Height (m)
Berm
Width
(m)
Max
IRA
()

Comment
I West 240-315 060-135 67 20 8
2
50
2

Strong kinematic
controls
II North 315-55 135-235 67 20 10 47
2

Strong kinematic
controls
III
East and
Southeast
55-180 235-360 75 20 8
3
56
3

No strong kinematic
controls
IV
South-
Southwest
180-240 000-060 75 20 8
3
56
3

No strong kinematic
controls
Notes :
1
North corresponds to Azimuth 000 or 360.

2
There are potential wedges with plunges about 41 in these sectors that may daylight locally at the bench scale for
IRA = 47 and 50. Should these wedges become problematic, wider berm widths may be required.

3
After confirming that there are no adverse joint sets dipping towards NW to North and the good quality of the rock
mass, it might be possible to steepen the IRA for the walls within these sectors (i.e. III and IV) by narrowing the
catch berm from 8m to 6m. Steepening would improve the IRAs from 56 to 60. This also assumes good blasting
control. Near critical areas such as ramps, steepening may not be advisable.

In all cases, the use of controlled blasting techniques will facilitate the achievement of the
recommended bench configurations.

Recommendations are provided for a perimeter ditch around the open pit excavation.

59
4.4 OPEN-PIT DESIGN

4.4.1 Pit Optimization Algorithm

The development of the optimum pit outlines for the Choco 10 ore body is based on the Lerchs-
Grossman 3D (LG 3D) algorithm included in the MineSight software. This pit optimization
algorithm is similar to Whittle 3D. Both are true pit optimizers based on the dynamic
programming of the graph theory to generate an optimized pit shell from the block model.

The algorithm operates on a net value calculation for all the blocks of ore in the geological
model in the indicated category. The revenue is proportional to gold price and metal recoveries
and the net value is obtained by subtracting the mining, stripping and processing costs from the
revenue.

The following sections describe the various steps in the development of the open-pit mine and
scheduling for the Choco 10 gold deposit.

4.4.2 Input Parameters for the Economic Model and LG 3D Optimization

The input parameters used in the calculation of the net value for the indicated ore in the block
model and the slope angle for the LG 3D pit optimization are summarized in Table 4.2.

Table 4.2
Lerchs Grossman 3-D Optimization Parameters

Average Mining Cost (used for LG 3D optimization only) $1.10/t
Processing plus G&A Cost
Laterite ore $5.31/t
Weathered ore $4.50/t
Fresh ore $4.97/t

Gold Recovery from Ore Types
Laterite 95 %
Weathered 93 %
Fresh 90 %
General Expenses
Mine $841,00/yr
Mill- included in processing cost above $1,600,000/yr
Gold Price $350/oz
Refining Cost $2.0 /oz
Gold Payment 99.8 %
Block Grade (g/t Au) As per block model
Overall Slope Angle (for LG 3D optimization only) 40
o

Incremental cost per tonne per bench Not used

The result of the LG 3D pit is a theoretical pit, which does not include access ramps nor the final
pit slopes or benching configurations.

60
4.4.3 Lerchs-Grossman Pit Optimization

Using the cost and revenue data and design parameters presented in Table 4.2, computerized pit
optimization was carried out using the LG 3D algorithm. The resulting pit is shown in
Figure 4.1. As can be seen in the drawing, the optimization process has clearly outlined the four
mining zones known as Rosika, Coacia, Pisolita North and Pisolita South. The individual
economic bench outlines and the final pit floor obtained for these four pits are only conceptual
and are not useable for mining as their irregular shapes are defined by the 12.5 m x 12.5 m x 5 m
block size in the model. Once this optimized conceptual pit design process has been completed,
the design of smoothed pit contours with proper slope stability, practical mining shapes and haul
roads must still be carried out.

4.4.4 Detailed Pit Design

The final pit design for the four mining zones has been carried out using the LG 3D bench
outlines to serve as guides. In the final design, the pit floors and walls are smoothed and adjusted
to include haul roads and slope angles.

The final operating pits were developed based on the following main design criteria:

Slope Angle and Bench Configuration.

The slope angles and bench configurations are based on recommendations made by
Golder, as discussed in Section 4.3. A range of ultimate pit slope angles and bench
configurations have been used for each rock types and for various pit sections. Single
5 m benching is generally proposed in the residual laterite soil, while 10 m double-
benching and 20 m quadruple-benching are recommended for weathered and fresh
bedrock, respectively.

Final Ramp.

The designed final ramp is 14 m wide as measured from the toe of the inside bench to the
crest of the next bench. The width of the ramp was selected based on the use of 50-t
payload class trucks (Terex TR-60) having an overall operating width of 4.06 m to
support 2-way traffic and to maintain an uninterrupted haulage cycle. The final ramp
width in Rosika, Coacia and Pisolita North was narrowed down to single-lane traffic in
the last 4 benches towards the pit bottom in order to reduce the waste stripping.
Allowance for a drainage ditch along the ramp as well as an external safety berm is
provided in the design. The grade of the ramp is 10 %. Due to its shallow shape and large
size, no permanent access road is provided for Pisolita South as a series of temporary
ramps will be built as required.

6
1
Figure 4.1
Mine Planning Lerchs-Grossman Pit Design

62
Additional ore

While the LG 3D geometry has optimized the recovery of the economical mineral
resources, it has left deep high grade material in Rosika and Coacia and in areas between
Pisolita North and Pisolita South, since this material cannot support the strip ratio
required to mine it. Some ore blocks within the optimized shell were also excluded
during the development of the initial pit outline, due to bench or ramp design. The
marginally economical material and certain material impacted by initial automated design
have been manually incorporated in the final mine design.

The general layout of the detailed pit design is shown in Figure 4.2. This design has attempted to
closely follow the economic bench outlines shown in the LG 3D pit shell for all of the four
mining areas. Single roads are proposed to access the deep ore on the hanging-wall side, with the
roads exiting in-line with the crushers proposed location and the main waste rock dump, in order
to minimize hauling distance.

The ultimate pit elevation in Rosika is 50 m, representing a total vertical pit of 155 m or 31
benches.

Four typical N-S cross-sections through the pit, showing the final pit, the LG 3D profiles and the
ore blocks, are presented in Figures 4.3 to 4.6. Four bench plans with ore blocks and pit
optimization outlines are shown in Figures 4.7 to 4.10.

4.4.5 Cut-off Grade

In open-pit design, it is important to determine the cut-off grade in the assessment of the level of
the economically mineable reserves. The cut-off grade, or the pit-rim cut-off grade, is the grade
of ore which, when processed, will pay for the mining, milling and other associated costs. The
cut-off grade determines whether the material being excavated will be milled or discarded on the
waste dump as uneconomical under prevailing current economic conditions. Based on the
operating costs and revenue data and other metallurgical factors presented in Table 4.3, the cut-
off grade has been established at 0.5 g/t Au for all ore types.

Table 4.3
Cut-off Grades by Ore Type

Items Units Laterite Weathered Fresh
Processing Cost
(1)
$/t milled 5.31 4.50 4.97
Price of gold $/g 11.25 11.25 11.25
Recovery % 95.00 93.00 90.00
Gold value $/g 10.69 10.47 10.13
Refining $/g 0.06 0.06 0.06
Gold payment % 99.80 99.80 99.80
Net gold value $/g 10.63 10.41 10.07
Cut-off grade g/t 0.50 0.43 0.49
Used g/t 0.50 0.50 0.50
1
Including G&A

63
Figure 4.2
Mine Planning - Detailed Ultimate Pit Design

64
Figure 4.3
Section View Section 615900 East

65
Figure 4.4
Section View Section 616450 East

66
Figure 4.5
Section View Section 808595 North

67
Figure 4.6
Section View Section 807825 North

68
Figure 4.7
Plan View Bench 170

69
Figure 4.8
Plan View Level 200

70
Figure 4.9
Plan View Level 220

71
Figure 4.10
Plan View Level 235

72
4.4.6 Evaluation of Dilution

During the excavation and loading of ROM ore, dilution with a certain amount of low-grade
material or waste cannot be avoided. In this study, the dilution is realistically evaluated at 20 %,
and assumes rigorous grade control measures are used, including:

Grade control drilling to define ore and waste boundaries ahead of the mining operation;
Sampling at, and operation at, a bench height of 2.5m when necessary;
Control of level pit floors using laser levelling techniques;
Controlled blasting techniques;
Ore mining during day shift only;
Presence of a geologist during excavation and loading.

4.4.7 Final Mineable Ore Reserves

The mineable reserves in all pits, using a 0.50 g/t Au cut-off and stripping estimates contained in
the ultimate pit design, have been calculated and summarized by ore types in Table 4.4.

Table 4.4
Diluted Mineable Reserves and Stripping Estimates
0.5 g/t Au Cut-off)
1

Inferred+Waste Strip ratio Au Ore Type Ore
(kt)
Grade
(g/t)
Au-metal
(k oz) (kt) (t/t) (%)
Laterite 2,850.52 1.400 127,883 2,465.09 - 14.5
Weathered 7,192.61 2.349 543,157 23,231.34 - 61.8
Fresh 2,549.35 2.544 208,549 8,138.97 - 23.7
Total 12,582.49 2.174 879,589 33,835.39 2.69 100.0
1
Figures may vary slightly due to rounding effects and the number of decimal places used.

The total mineable reserves, including all the pits, amount to a total of 12.58 million tonnes at an
average diluted gold grade of 2.174 g/t, based on a cut-off grade of 0.50 g/t for all ore types,
representing contained gold of 879,600 oz. Approximately 85.5 % of the gold is contained in the
weathered and fresh rocks, with the weathered group having the most significant share with 61.8
%. The total of waste rock and inferred ore is 33.84 million tonnes and the overall waste to ore
ratio of 2.69.

The current mine design, with a total laterite equivalent of more than 15.05 million tonnes,
contains sufficient ore to sustain a mine life of 6.5 years, based on an annual mining rate of 2.3
million laterite equivalent tonnes.

73
4.4.8 Inferred Ore

A total of 439,985 tonnes of inferred material at an average grade of 2.108 g/t Au, representing
29,797 oz Au, fall within the limits of the detailed pit design. Production drilling is expected to
ultimately convert this tonnage into indicated category.

4.5 MINE PLANNING

4.5.1 Objective of Mine Planning and Sequence of Mining

The objective of mine planning is to develop a long-range sequencing strategy, which ensures
the maximization of discounted cash flows generated by the mining operations. This is achieved
by mining the highest grade in the early years of operation while delaying unnecessary stripping
until the later years.

The 3 selection criteria for priority mining between the 4 mining zones are:

The grade of the ore;
The accessibility;
The stripping ratio.

Based on these criteria, the preferred sequence of mining envisaged for the development of the
Choco 10 pits is as follows:

Coacia;
Pisolita South;
Rosika;
Pisolita North.

4.5.2 Rate of Mining

The determination of the rate of mining depends on the ore blend from each of the 3 ore types.
Each of these ore types has the following different maximum milling rates:

Laterite: 6,500 t/d or 2.37 Mt/a;
Weathered: 5,400 t/d or 1.97 Mt/a;
Fresh: 4,700 t/d or 1.72 Mt/a.

The rate of mining will not exceed the maximum limit of 2.37 Mt/a of ore in terms of equivalent
laterite tonnes for the categories of weathered and the fresh rock. As for the amount of annual
stripping, the production has been optimized over the life of the project in order to maintain a
constant fleet of mining equipment, taking into account the increasing haulage distances as the
pit goes deeper and further from the waste dump.

74
4.5.3 Mine Plan Description

Mining will follow the normal practice of a conventional open-pit operation utilizing a fleet of
hydraulic shovels and trucks. In order to reduce the mining dilution, the ore will be extracted
using 2.5 to 5 m mining faces starting with a slot, or sinking cut, developed at the appropriate
bench entry point on the ultimate pit plan, or as a temporary access. At this stage, it seems
appropriate that 2 or 3 ore faces will be developed concurrently in order to allow flexibility and
blending to provide a constant feed quality to the mill. The waste will be developed using 10 m
high benches. Waste stripping faces will be additional to the ore faces and will be advanced
ahead of the ore.

Two ROM stockpiles for both high grade and low grade will be maintained at an appropriate site
near the crusher. These stockpiles will be sized to store 10 days of production. The purpose of
these stockpiles is to permit blending to provide reasonably constant feed quality to the plant and
also to allow for mine shutdowns due to heavy rainfalls, equipment breakdown or other
unforeseen circumstances.

4.5.4 Annual Plans

A set of conceptual annual mining plans has been developed based on the mining criteria
presented in Section 4.4.1. Priority mining is in the high-grade weathered ore in Coacia with a
total of 1.29 million tonnes at an average grade of 3.422 g/t Au before dilution.

A summary of the annual production schedule by ore types is presented in Table 4.5. Figures
4.11 through 4.13 show the year-end plans for years 1, 2 and 3, respectively. The production
schedule was developed to insure that there is adequate access to ore, and sufficient operating
space for the equipment. This mining schedule is a combination of several periods and mining
zones, and the mine will never look like any individual single period as there is a transition
phase between both the periods and the mining areas, i.e. a new period can be started before
the current period is depleted.

A summary of the 6.5-year mine plan is described below:

Pre-production period

During the pre-production period, a total of 1.2 million tonnes of waste will be moved to
provide maximum access to the ore at the beginning of the production period. All mining
activity in the pre-production period will be in the upper benches in the Coacia pit.

Year 1

Mining in Year 1 is all in Coacia starting on bench 250 m. Mining is on bench 180 m by
the end of Year 1. The South end of Rosika having a breakthrough with Coacia North is
also developed to reach bench 225 m.

75
Table 4.5
Production Schedule by Ore Types

Ore Au
Waste &
Inferred Total Moved
Stripping
Ratio
Laterite
Equivalent Au (oz)
(tonnes) (g/t) (tonnes) (tonnes) (tonne/tonne) (tonnes)
Pre-Production
Laterite - - 350,000 350,000 - - -
Weathered - - 850,000 850,000 - - -
Fresh - - - - - - -
Total - - 1,200,000 1,200,000 - - -
Year 1
Laterite 533,705 1.360 410,732 944,437 - 533,705 23,336
Weathered 1,325,807 2.720 4,989,621 6,315,428 - 1,597,358 115,942
Fresh 54,002 3.648 85,026 139,028 - 75,003 6,334
Total 1,913,514 2.367 5,485,379 7,398,893 2.87 2,206,066 145,612
Year 2
Laterite 1,084,280 1.512 768,935 1,853,215 - 1,084,280 52,709
Weathered 988,909 2.720 4,816,652 5,805,561 - 1,191,457 86,480
Fresh 10,800 3.648 26,353 37,153 - 15,000 1,267
Total 2,083,989 2.096 5,611,940 7,695,929 2.69 2,290,737 140,456
Year 3
Laterite 276,775 1.440 228,241 505,016 - 276,775 12,814
Weathered 1,500,000 2.888 4,631,430 6,131,430 - 1,807,229 139,277
Fresh 166,250 3.168 346,693 512,943 - 230,903 16,933
Total 1,943,025 2.706 5,206,364 7,149,389 2.68 2,314,907 169,024
Year 4
Laterite 300,000 1.200 239,647 539,647 - 300,000 11,574
Weathered 1,400,000 1.816 3,664,122 5,064,122 - 1,686,747 81,740
Fresh 250,000 2.568 1,204,802 1,454,802 - 347,222 20,641
Total 1,950,000 1.818 5,108,571 7,058,571 2.62 2,333,969 113,955
Year 5
Laterite 361,044 1.327 334,311 695,355 - 361,044 15,404
Weathered 825,000 2.045 1,583,610 2,408,610 - 993,976 54,242
Fresh 675,000 2.188 2,716,254 3,391,254 - 937,500 47,483
Total 1,861,044 1.958 4,634,175 6,495,219 2.49 2,292,520 117,129
Year 6
Laterite 284,716 1.316 133,222 417,938 - 284,716 12,046
Weathered 775,405 1.846 1,735,788 2,511,193 - 934,223 46,020
Fresh 771,548 2.476 2,612,879 3,384,427 - 1,071,594 61,419
Total 1,831,669 2.029 4,481,889 6,313,558 2.45 2,290,533 119,486
Year 7 (6 months)
Laterite - - - - - -
Weathered 377,491 1.603 960,114 1,337,605 - 454,808 19,455
Fresh 621,754 2.725 1,146,959 1,768,713 - 863,547 54,472
Total 999,245 2.301 2,107,073 3,106,318 2.11 1,318,356 73,927
Total Pit Reserves
Laterite 2,840,520 1.400 2,465,088 5,305,608 - 2,840,520 127,883
Weathered 7,192,612 2.349 23,231,337 30,423,949 - 8,665,798 543,157
Fresh 2,549,354 2.544 8,138,966 10,688,320 - 3,540,769 208,549
Total 12,582,486 2.174 33,835,391 46,417,877 2.69 15,047,087 879,589
Notes: Including 20 % assumed dilution @ 0 g/t Au
Figures may vary slightly due to rounding effects and the number of decimal places used.

Year 2

The mining of the remaining ore in the pit bottom of Coacia, from benches 180 m to
165 m, is completed. Mining begins in Pisolita South from bench 270 m down to bench
230 m. A wide berm is left on bench 240 m. Mining also starts in the North end of
Rosika, from benches 215 m down to 190 m.

76
Figure 4.11
Mine Planning Year-End Plan Year 1

77
Figure 4.12

78
Figure 4.13

79
Year 3

Mining of the main pit in Pisolita South down to bench 195 m is complete during the
year. In the mean time, mining at Rosika advances on benches 190 m to 170 m to
establish access to the deep high-grade fresh ore.

Year 4

During Year 4, the primary source of ore is in Rosika. The South zone of Rosika is
started to connect with the main pit on bench 165 m. Mining in the North zone is
progressing from bench 170 m down to bench 135 m. Only portions of benches 145 m,
140 m and 135 m are excavated during Year 4.

Years 5 6.5

The Rosika pit is completed in Year 5 with the depletion of the last bench on 50 m
elevation and backfilling in the mined-out pit. During this period, all mining zones in
Pisolita North and all the small satellite pits between Pisolita North and Pisolita South are
depleted.

4.6 WASTE DUMP

The open-pit operation will require a significant area available for the disposal of 33.8 million
tonnes of waste removed from the ultimate pits throughout the 6.5 years mine life. The location
of the waste dumps involves the consideration of several factors, which must be balanced against
each other. However, the two main design objectives are as follows:

Long-term stability;
Optimization of the haulage distance.

At the Choco 10 mine site, the other aspects to be considered include potential expansion of the
mine as a result of continued exploration, interference with the drainage system and the
environmental requirements. Early in the development of this study, examination of the surface
topography of the area indicated that a suitable waste dump site lies in the East of the Rosika pit,
following the usual clearance from condemnation drilling. As yet, condemnation drilling has not
been conducted and the most recent drilling results have indicated significant gold values to the
east of the present outline of the Rosika pit. Results of the current drilling program and
condemnation drilling will need to be evaluated prior to selection of the final dump site. An
alternative suitable area for some or all of the waste rock could be considered to the west of the
deposit.

The dump will have a capacity of 17 million bank m
3
in 7 lifts of 10 m each. The overall slope is
25
o
with a 10-m safety berm between each lift. The width of the access ramp is 14 m with a

80
gradient of 10 %. Figure 4.14 shows the general layout and location of the waste rock disposal
area. Figure 4.15 is a 3D model of the final pit outline.

The waste dump final design criteria, supported by geotechnical work, are required for
determination of lifts heights and slope stability.

4.7 MINING EQUIPMENT REQUIREMENT

4.7.1 Mining Equipment Selection Criteria

The sizing and calculation of the fleet of mine mobile equipment were based on 4 main factors:

1. The Production Requirement.

The annual production plan is presented in Table 4.5. The nominal ore production rate is
based on the ore blend with the milling capacity for the following individual ore types:

Laterite: 2.37 Mt/yr.
Weathered: 1.97 Mt/yr.
Fresh: 1.72 Mt/yr.

The operating stripping ratio varies from 2.87 tonnes of waste and stockpile per tonne of
ore in Year 1 to 2.45 in Year 6.

2. The Work Schedule

The work schedule for the mine is based on 3 shifts of 8 hours per day, 6 days per week,
including the following operating fixed delays per shift:

Shift change: 15 min.
Inspection and fuelling: 15 min.
Lunch/coffee break per shift: 30 min.

3. Material Characteristics

The material characteristics used for the calculation of the productivity of the mine
mobile equipment are summarized Table 4.6.

Table 4.6
Material characteristics

Rock Type Bulk Density Swell (%)
Laterite 2.20 40
Weathered 2.35 42
Fresh 2.75 45

81
Figure 4.14
Detailed Ultimate Pit Design and General Site Layout

8
2

Figure 4.15
Optimized Pit Outline - Rosika, Coacia, Pisolita North and Pisolita South

83
4. Equipment Performance

The calculation of the open-pit equipment requirements is based on 3 factors:

a. Mechanical availability (MA), representing the total amount of time averaged over
the equipments life during which the unit is mechanically able to work.

b. Use of availability (UA) refers to the percentage of time that the equipment is
effectively utilized when it is mechanically able to work.

c. Fleet utilization (FU) is equal to the product of MA x UA and represents the
maximum fleet utilization rate.

The mechanical availability, use of availability and fleet utilization rates used in the calculation
of the requirements for major equipment are given in Table 4.7.

Table 4.7
Mechanical Availability

Equipment Type MA(%) UA(%) FU(%)
Hydraulic Shovel 85 85 72
Haul Truck 85 85 72
Hydraulic Drill 85 85 72
Wheel Loader 80 85 68
Dozer 80 85 68
Grader 80 85 68

The maximum fleet utilization rate does not exceed 72 % and 68 % of the working hours
respectively for the major production equipment and 68 % for the support equipment.

4.7.2 Trucks and Shovels

The selection and the calculation for the loading and hauling fleet is for an average combined
mining rate of 7.3 million tonnes of ore and waste in the first 4 years of operation. The nominal
working bench height is 5 m. Without a detailed analysis, the most efficient and cost effective
equipment envisaged for mining at Choco 10 is the 7-m
3
RH-40 hydraulic shovel by O&K or
equivalent, matched with 55-t Terex TR-60 trucks or equivalent. This size of equipment will
enable a flexible mining advance and operation. The initial capital investment for smaller size
trucks and loaders will be compensated by far by competitive local salaries for lower operating
cost.

The fleet requirement is based on cycle time and the annual production rate. For each year, haul
distances - divided into segments based on percent grade - to the crusher and dump for ore and
waste respectively, are measured on the annual mine plan and used to calculate the average haul
cycle times. A computer program, using proper production factors, truck gradability and braking

84
curves for both loaded and empty conditions along the average haul distance, calculates the
number of trucks and loaders required to meet the production target.

The industry standard for equipment replacement is based on a truck life of 70,000 operating
hours, and a hydraulic shovel life of 35,000 hours.

4.7.3 Blast Holes Drills

Drilling and blasting requirements were estimated according to the rock types. For the purpose
of estimating these requirements, it is assumed that that all material in the ore zones and only
40 % of waste rock in both laterite and transition material will be drilled for delineating the ore
limits and quality control. Soft rock does not require blasting. It has also been assumed that all
hard fresh rock and a quantity estimated at 40 % of transition rock in both ore and waste will be
blasted to ensure proper fragmentation before loading. The major drilling and blasting
parameters are based on relevant experience in the mining of similar or equivalent material in
other projects. Table 4.8 summarizes the drilling and blasting parameters used in weathered and
fresh rocks.

The model of drill selected for Choco is the IR-ECM660 hydraulic crawler drill or equivalent
size, capable of drilling from 89 mm to 127 mm diameter holes. Based on a drilling schedule of
3 shifts per day and 6 days per week, one blasthole drill is able to maintain the production
requirement in the initial 3 years of operation.

Drilling rig replacement is based on a machine life of 40,000 hours.

Table 4.8
Drilling and Blasting Parameters

Weathered Rock Fresh Rock
Bench height (m) 5 5
Sub-grade depth (%) 10 10
Hole diameter (mm) 102 102
Burden (m) 4 3.1
Spacing (m) 4 3.1
Provision for re-drill (%) 15 15
Penetration rate (m/hr) 65 45
Effective hole tonnage (t) 188 132
Tonnes/gross op. hr (t) 1,041 590
Stemming (m) 2.2 1.8
Explosives/hole (kg) 21.6 24.2
Explosive/t blasted (kg/t) 0.12 0.18

4.7.4 Track Dozers

Dozers are necessary for various support activities at the mine, including:

Haul road construction and maintenance such as drill road preparation and levelling;

85
Mining face clean-up, boulder removal;
Development and maintenance of waste dumps ;
Construction and maintenance of retention dams (tailings).

A total of two units of Komatsu D155 (320 HP) and one unit of the more powerful D275 (405
HP) or equivalent are included in the mine fleet. One unit of D155 could be replaced by a wheel
dozer for its capability to move quickly from one working place to another.

Dozer replacement is based on a machine life of 40,000 hours.

4.7.5 Other Pit Mining Auxiliary Equipment

Major auxiliary equipment is used to support the production fleet for safe and clean working
conditions, such as good road maintenance essential for an efficient mining operation. Road
surfaces must be constantly wetted by water trucks and reworked by the dozers and graders to
maintain good truck traction.

Auxiliary mine equipment includes:

Komatsu WA600 wheel loader (5.7m
3
) for stockpile operation and back-up;
Komatsu GD670A-2 grader (204 HP) to maintain pit roads and site accesses;
Mack Water truck (18,000 20,000 litres);
Komatsu PC400-6 excavator (2.2 m
3
);
Mechanics field service truck;
Explosives truck;
Mobile crane (60-t);
Portable diesel light plants for night operations.

Determination of the auxiliary equipment requirement is based on the required operating shifts
and fleet utilization rate.

Machine life varies between 35,000 hours and 75,000 hours for a grader and water truck
respectively.

4.7.6 Initial Mine Equipment List

Based on the feasibility study project requirement and the annual mine plan calculations, a
complete list for the initial quantities of each type of equipment is shown in Table 4.9.

86
Table 4.9
Mine Equipment

Equipment Description
Machine Life
(hrs)
Initial
Quantity
Terex TR-60 Haul Trucks 55-t capacity 70,000 7
O&K RH-40 Hydraulic Shovels 7-m 35,000 2
IR ECM660 Hydraulic Drill 89 mm-127 mm 40,000 1
Komatsu D155 Dozer 320 HP 40,000 2
Komatsu D275 Dozer 405 HP 40,000 1
Komatsu WA600 Wheel Loader 5.7-m
3
45,000 1
Komatsu GD670A-2 Grader 204 HP 35,000 1
Komatsu PC400-6 Excavator 2.2-m
3
40,000 1
Water Truck 18,00020,000 litres 75,000 1
Mobile Field Service/Lube Truck 1
Microbus 15 seats 1
Pick-ups Personnel vehicle 10
Submersible pumps 75 HP 2

4.7.7 Additional and Replacement Mine Equipment List

According to the mining plan, the quantity of fresh material mined increases to 1.5 million
tonnes in Year 4 and to 3.4 million tonnes in Year 5 and 6, resulting in the addition of one drill to
the fleet.

One new truck will be added to the fleet in Year 3 due to the longer haulage distance to the
crusher and to the waste dump.

Initially, haul-truck requirement amounts to seven operating trucks out of a fleet of eight units in
Year 1. However, the fleet has been kept at seven units to reduce capital costs. It has been
assumed that a fleet of two lower operating cost scrapers will be hired on a contract-mining basis
to compensate for the production.

Based on the useful machine life presented above and a mine life of 6.5 years according to the
present level of mining reserves, no major equipment overhaul is anticipated for the major units
of mining equipment..

4.8 MINING OPERATING COSTS

Mine operating costs have been developed for the unit operations of drilling and blasting,
loading and hauling, auxiliary equipment, general mine and general maintenance services.

Equipment operating costs and work force requirements are calculated on the basis of the
equipment list described above. The mine operating and maintenance costs were developed in

87
collaboration with suppliers of equipment of similar size on a cost per gross operating hour
($/GOH) over the equipment life.

The following local factors have been used to estimate the mine operating costs for Choco:

Diesel fuel cost at $0.041 per litre;
Explosives and blasting accessories from local suppliers;
Local salary and hourly labour rates including overhead costs such as shift premium,
fringe benefits and other allowances;
The number of operators of heavy vehicles is based on the fleet of equipment, the number
of productive hours and the operating hours. For the purpose of estimating the number of
personnel for continuous jobs requiring 24 hrs/day of operators coverage, the manning
estimates are based on an average of 4 operators per unit of equipment;
Maintenance and other personnel are based on experience.
4.8.1 Drilling

Drilling costs are developed based on single-pass drilling using a 102 mm hole diameter on a
bench height of 5 m to 10 m and a sub-grade depth of 10 %. The proposed drill pattern is 4 m x
4 m in weathered rock and 3.1 m x 3.1 m for fresh rock. Provision for re-drilling of collapsed
holes in the amount of 10 % is also included in the cost estimate.

The drill operating cost, excluding manpower, is presented in Table 4.10.

Table 4.10
102-mm Drill Operating Cost

Elements Details $/GOH
Fuel 43.6 l/h @ $0.041/l 1.79
Bits and Consumables 20.59
Repairs and Reserve 15.42
Total 37.80

4.8.2 Blasting

For the material requiring blasting, the consumption of explosives is directly related to the rock
properties in the open-pit mine. Assumptions with respect to the rock strength parameters were
made based on experience and studies in the mining of such material in similar projects.
Budgetary pricing for blasting has been obtained from local suppliers based on the assumption
that the mine operator will execute all the blasting procedures. Blasting accessories, such as
ignition devices, connectors, detonators, etc. are also included in the operating cost estimate.

88
The estimated cost of blasting presented in Table 4.11 is based on parameters previously
presented in Table 4.8.

Table 4.11
Blasting Costs

Item Weathered Rock
($/hole)
Fresh Rock
($/hole)
Anfo 25.93 29.07
Ignition device 11.12 11.12
Detonator 8.36 8.36
Detonating Cord 6.24 6.24
Surface Connector 1.73 1.73
Sub-Total 53.38 56.52
Tonnes/blasthole 188 132
$/tonne blasted 0.28 0.43

As presented in Table 4.8, the powder factor is 0.12 kg/t and 0.18 kg/t in weathered rock and
fresh rock respectively.

4.8.3 Loading

The primary loading costs per GOH are based on the 7-m
3
class hydraulic shovel. The
requirement for loading at Choco is slightly more than two units of hydraulic shovels in the first
3 years of operation. Two units of these shovels and two units of 5.7-m
3
front-end wheel loaders
for moving flexibility will be purchased for both the mine and the stockpile operations. The
loading operating cost per GOH is summarized Tables 4.12 and 4.13 for the 7-m
3
hydraulic
shovel and the 5.7-m
3
wheel loader, respectively.

Table 4.12
7-m
3
Hydraulic Shovel Operating Cost

Fuel 105 l/h @ $0.041/l 4.31
Lube Oil and Filters 3.20
Undercarriage 11.70
Other Items (GED, Wear) 40.00
Total 80.87

Table 4.13
5.7-m
3
Front-End Wheel Loader Operating Cost

Fuel 66 l/h @ $0.041/l 2.71
Tires $30,000/set @ 4,500 hrs 6.67
Total 43.45

89
4.8.4 Hauling

Hauling costs are developed using the cost per GOH of 55-t class trucks with the support of
320 HP and 405 HP track dozers and 14H class graders. Operating costs for trucks, grader and
dozers are presented in Tables 4.14, 4.15 and 4.16.

Table 4.14
55-t Class Truck Operating Cost

Fuel 70 l/h @ $0.0.41/l 2.87
Tires 3.32
Repairs and Reserve $ 28,500/set @ 4,000 hrs 10.28
Body and Liners 1.00
Total 24.59

Table 4.15
14H Class Grader Operating Cost

Fuel 28 l/h @ $0.041/l 1.15
Tires $ 9,100/set @ 3,500 hrs 2.60
Total 24.59

Table 4.16
Dozers Operating Costs

320 HP Track Dozer 405 HP Track Dozer
Elements Details $/GOH Details $/GOH
Fuel 45 l/h @ $0.041/l 1.85 66 l/h @ $0.041/l 2.71
Lube Oil and Filters 2.94 2.76
Undercarriage 15.30 18.02
Repairs and Reserve 14.19 16.82
Other Items (GED, Wear) 8.00 11.00
Total 42.28 51.31

4.8.5 Support Services and Maintenance

Mine services include all support activities for the mining operations as follows:

Water truck at $8.71/GOH;
Tire dozer at $15.00/GOH;
Small excavator at $10.00/GOH;
Mobile crane at $20.00/GOH;

90
Explosive truck at $10.00/GOH;
All other service trucks at an average of $8.00/GOH.

4.8.6 Other Mining Costs

Other miscellaneous costs not accounted for in the above are included in this category. These
costs represent such items as mine dewatering, general survey equipment software and mine
supplies. A lump sum of $70,000/year was budgeted for other mining costs.

4.8.7 Mine Labour

The mine labour estimate includes all mine, engineering and maintenance supervisory and staff
personnel and the hourly equipment operators. The mine salary staff requirement for both
expatriates and nationals and typical annual labour costs including fringe benefits are shown in
Table 4.17. The number of mine salary staff has been kept constant over the project life.

Table 4.17
Annual Mine Salary Labour Summary

Number Salary ($k)
Expatriates
Mine Superintendent/Chief Engineer 1 150.0
Maintenance Superintendent 1 127.5
Chief Geologist 1 127.5
General Foreman 1 127.5
Overheads 1 lot 52.4
Sub-total Expatriates 4 584.90
National Staff
Mine Planner 1 9.9
Geologist 2 20.8
Mine Planning Technician 1 8.5
Surveyor 2 19.8
Surveyor Helper 2 14.3
Grade Control Technician 4 33.6
Blastholes Samplers 4 30.3
Mine Production Foreman 4 38.5
Maintenance Shift Foreman 4 38.8
Utility Drivers 2 15.2
Mine/Maintenance Clerks 2 14.3
Overtime 5 % 12.2
Sub-total National Staff 28 256.2
Total Expatriates and National Staff 32 841.1

The recommended number of national hourly operators working in the mine operations,
maintenance and support activities and the typical annual mining cost in Year 2 are presented in
Table 4.18.

91
Table 4.18
Mine Hourly Labour Requirement and Year 2 Cost

Number Salary ($k)
National Workers
Excavator Operators 8 71.2
Truck Drivers 28 238.9
Dozer Operator (D155) 8 70.7
Dozer Operator (D275) 4 35.4
Front End Loader Operator 8 71.3
Grader Operator 4 35.4
Tire Handler Operator 4 35.4
Water Truck Operator 4 35.4
Small Backhoe Operator 3 26.5
Drill Operator 4 35.4
General Labour/Trainees 9 56.7
Mechanics 1 12 128.1
Mechanics 2 12 96.8
Welder 6 49.8
Electrician 9 85.5
Crane Operator 3 26.5
Others (service trucks, etc.) 6 53.0
Explosive Truck Driver 2 17.7
Utility Drivers 6 40.7
Total Hourly Labour Cost 140 1,210.3

4.8.8 Total Mining Cost Summary

The total mining cost per year is summarized in Table 4.19. The average mine operating cost
over the mine life is $1.027/tonne mined, excluding capitalized pre-production cost.

Table 4.19
Summary of Annual Mine Operating Cost

Annual Operating Cost ($) Production
(ktonnes) Salary Equipment Drill Blast Other Total
Unit Cost
($/tonne)
Year 1 7,398.9 2,051.4 3,502.1 156.6 767.1 70.0 6,565.2 0.887
Year 2 7,695.9 2,051.4 3,647.6 162.3 666.2 70.0 6,597.4 0.857
Year 3 7,149.4 2,085.5 3,661.3 168.9 907.3 70.0 6,893.0 0.964
Year 4 7,058.6 2,085.5 3,612.6 212.6 1,192.7 70.0 7,173.5 1.016
Year 5 6,495.2 2,085.5 3,535.6 289.4 1,728.0 70.0 7,173.5 1.187
Year 6 6,313.6 2,085.5 3,479.1 283.3 1,736.6 70.0 7,654.4 1.212
Year 6.5 3,106.3 1,042.7 1,772.6 141.0 910.4 25.0 3,814.7 1.237
Total 45,217.9 13,487.5 23,179.0 1,414.1 7,908.3 445.0 46,433.8 1.027

92
5.0 PROCESSING

The process flowsheet development, metallurgical balance, water balance, process equipment
selection and sizing are based on process design criteria, which were developed from the
metallurgical testwork results.

The flowsheet selected comprises primary crushing, semi-autogenous grinding (SAG) and ball
milling, cyanide leaching, carbon in pulp (CIP) gold extraction and gold recovery using a Zadra
carbon elution circuit. The process flowsheets are presented in Section 5.3.

5.1 METALLURGICAL TESTWORK AND FLOWSHEET DEVELOPMENT

A program of metallurgical testing has been completed using samples characterizing each major
mineralized zone identified at Choco. The purpose of the metallurgical testwork was to provide
data to select metallurgical unit operations, develop an efficient process flowsheet and obtain
design criteria for the process engineering and associated operating and capital cost estimating.

The process design was based mainly on metallurgical tests conducted at McClelland
Laboratories, Inc (McClelland), Nevada in 1995. This testwork program used composite
samples that represent the main zones of mineralization occurring at Choco.

Additional metallurgical testwork programs include work conducted by Amdel Limited (Amdel),
Australia in 1994 and at Lakefield Research Laboratories (Lakefield), Lakefield, Canada in
2003. The Amdel laboratory testwork was conducted on a range of samples representing near
surface and weathered mineralization. The Lakefield program used individual mineralized
samples of split drill core that represent a range of deposit mineralization. The objective of these
tests was to confirm the results obtained from the McClelland work and to assess the potential
variability of metallurgical results for different areas within the mining plan.

5.1.1 McClelland Testwork

Four composite samples representing the main mineralized zones were submitted to McClelland
for testing in 1995. These samples were designated as follows:

Sample Description Designation
CH01 Laterite Surface
CH02 Clay/schist Weathered
CH03 Silicified zone/quartz Weathered
CH04 Volcanic bedrock Fresh

The McClelland testing program comprised four stages. The initial stage included mineralogical
examinations, Bond work index determinations and CIP cyanidation tests. The second stage
comprised coarse bottle roll leach tests and the third stage consisted of heap leach column tests
and agglomeration studies. The final stage of testing comprised detailed milling/cyanidation

93
studies and included Abrasion index tests, CIP kinetic tests, slurry viscosity determinations and
settling tests.

5.1.2 Amdel Testwork

The Amdel testwork was conducted on six samples and included coarse bottle roll cyanide
leaching, gravity concentration, agitation cyanide leaching and Bond ball mill work index
determinations. These tests provided an indication of the metallurgical performance, with regard
to gold recovery, of the near surface mineralization.

The six composite samples used in the Amdel test program were designated as follows:

Sample Description Designation

CL1 Pisolitic laterite Surface
PL1 Dicolite laterite Surface
PV1 Clay/quartz vein Weathered
CA1 Silicified/kaolinitic clay Weathered
CSI1 Silicified alteration zone Weathered
PA1 Geothitic clay, quartz veining Weathered

Samples CA1, CSI1 and PA1 received by Amdel were too fine to undertake coarse ore
cyanidation bottle roll tests, and CA1 and PA1 were too fine to determine Bond work indices.

5.1.3 Lakefield Testwork

The first phase of confirmatory tests conducted by Lakefield in May 2003 comprised Bond rod
and ball mill work index determinations, and gravity and cyanidation gold recovery tests. The
samples used for these tests consisted of composite samples CH05 and CH06, which represent
fresh unoxidized bedrock from the southern and northern sectors of the Rosika deposit.

A second phase of work at Lakefield included an additional 10 cyanidation bottle roll tests,
undertaken on samples of fresh hard rock and soft, weathered mineralized material. A third
series of tests conducted at Lakefield comprised 18 cyanidation bottle roll tests using standard
conditions. These tests included 16 variability tests using individual samples of near surface
material.

The 2003 Lakefield test program reports are included as Appendix H, I and J.

5.1.4 Testwork Results

5.1.4.1 Grinding

The McClelland, Amdel and Lakefield Bond work index results are presented in Table 5.1.

94
Table 5.1
Summary of Grinding Testwork Results

Laboratory Sample Mineralization Product Size
P
80
(m)
Work Index
(Metric)
McClelland CH01 Surface 75 13.1
McClelland CH02 Weathered 75 7.5
McClelland CH03 Weathered 75 14.4
McClelland CH04 Fresh 75 13.6
Amdel CL1 Surface 72 5.4
Amdel PL1 Surface 94 10.0
Amdel PV1 Weathered 78 11.5
Amdel CSI1 Weathered 70 9.7
Lakefield CH05-rod Fresh 885 17.8
Lakefield CH05-ball Fresh 78 14.1
Lakefield CH06-rod Fresh 878 16.7
Lakefield CH06-ball Fresh 80 13.7

5.1.4.2 Gravity Concentration

Gravity concentration tests were conducted at Amdel and Lakefield. These tests were
undertaken to determine the potential recovery of liberated gold prior to cyanide leaching. The
gravity concentration tests at Amdel were conducted using a Wilfley shaking table while the tests
at Lakefield used a Knelson concentrator and Mozley mineral separator.

The gravity testwork results are summarized in Table 5.2.

Table 5.2
Summary of Gravity Testwork Results

Laboratory Sample Mineralization Gold Recovery
(%)
Amdel CL1 Surface 30.0
Amdel PL1 Surface 11.5
Amdel PV1 Weathered 25.9
Amdel CA1 Weathered 7.2
Amdel CSI1 Weathered 3.5
Amdel PA1 Weathered 16.7
Lakefield CH05/06 blend Fresh 19.1

5.1.4.3 Cyanide Leaching

A summary of the McClelland testing results is presented in Table 5.3. This table includes
results from 120-hour coarse bottle roll cyanidation tests and 48-hour conventional bottle roll
tests conducted on all four samples. Results from 48-hour agitated leach tests on CH01, CH02
and CH03 are also included. The grind size used for all the conventional bottle roll and agitated
leach tests was 80 % passing 75 microns.

95
Table 5.3
Summary of McClelland Cyanidation Testwork Results

Sample Feed Size
(80 % passing)
Gold Head
(g/t)
Gold
Recovery
(%)
Lime Added
(kg/t)
CN Consumed
(kg/t)
Coarse Bottle Roll Cyanidation Tests
CHO1 25 mm 1.58 86.9 14.6 0.41
CHO1 6.3 mm 1.65 91.7 14.8 0.46
CHO2 25 mm 4.39 87.5 14.1 0.16
CHO2 6.3 mm 3.84 91.1 11.4 0.18
CHO3 25 mm 2.81 65.8 4.1 0.15
CHO3 6.3 mm 2.23 80.0 3.8 0.14
CH04 25 mm 2.09 39.3 2.4 0.15
CH04 6.3 mm 1.71 44.0 1.8 0.37
Conventional Bottle Roll Cyanidation Tests
CHO1 75 m 1.75 94.1 16.0 1.00
CHO2 75 m 3.87 96.5 11.0 0.77
CHO3 75 m 2.69 91.9 4.2 1.09
CH04 75 m 2.25 88.3 3.4 0.83
Agitation Cyanidation Leach Tests
CHO1 75 m 1.89 96.3 13.3 0.24
CHO2 75 m 3.39 96.0 4.9 0.30
CHO3 75 m 2.67 94.9 3.2 0.18

The results from the McClelland testwork program indicated that all of the different types of
mineralization at Choco are amenable to conventional carbon-in-pulp (CIP) cyanidation at a
grind size of 80 % passing 75 micons, although gold recoveries for sample CH04 (fresh ore)
were typically lower than the other samples.

The McClelland coarse ore bottle roll tests indicated that the surface and weathered samples
(CH01, CH02 and CH03) were also amenable to heap leaching although CH03 was sensitive to
crush size with respect to gold recovery. Heap leach testing of the fresh ore composite sample
(CH04) was not successful with regard to gold recovery. Coarse bottle roll gold recoveries of
less than 45 % were reported with a fine crush size of less than 6.3 mm.

The gold kinetic extraction profile for the agitation leach tests performed on the surface and
weathered ore samples, CH01, CH02 and CH03, showed that the extraction was substantially
complete in less than 24 hours.

A summary of the Amdel cyanidation test results is presented in Table 5.4. This table includes
results from 7-day coarse (-12.5 mm) bottle roll tests and 48-hour agitated leach tests. The
agitated leach tests were undertaken on ground samples of gravity test tailings. The comparative
grind sizes used for the agitated leach tests were 80 % passing 150, 106 and 75 microns.

96
Table 5.4
Summary of Amdel Cyanidation Testwork Results

Sample Feed Size
(80 % passing)
Gold Head
(g/t)
Gold Recovery
(%)
Lime Added
(kg/t)
CN
Consumed
(kg/t)
Coarse Bottle Roll Cyanidation Tests
CL1 12.5 mm 2.47 86 6.2 0.8
PL1 12.5 mm 3.04 92 5.8 1.1
PV1 12.5 mm 8.30 66 5.2 0.9
Agitation Cyanidation Leach Tests (Gravity Tails) Leach G+ L
1

Surface Ave
2
150 m 2.02 95.50 97.00 6.4 1.9
Surface Ave
2
106 m 2.02 95.00 96.50 6.3 1.8
Surface Ave
2
75 m 1.94 97.50 98.50 6.5 1.9
Weathered Ave
3
150 m 6.85 87.50 89.50 3.4 2.0
Weathered Ave
3
106 m 6.52 94.00 95.00 3.5 1.9
Weathered Ave
3
75 m 6.54 92.50 93.50 3.4 1.9
Weathered Ave
4
75 m 5.02 93.00 93.75 4.1 1.6
1
Total gravity plus leach recovery
2
Average results from tests conducted on two surface samples, CL1 and PL1.
3
Average results from tests conducted on two weathered rock samples, PV1 and CSI1.
4
Average results from tests conducted on four weathered rock samples, PV1, CA1, CSI1 and PA1.

The relatively high gold recoveries achieved in the coarse bottle roll tests could partly be
attributed to the considerable amount of comminution that occurred during the 7-day period.
Nevertheless, these results indicate that the mineralization tested could be amenable to heap
leaching.

The gold extractions achieved by the Amdel agitation leach tests were generally high. The
average gold recoveries after 48 hours leaching time, for material ground to 80 % passing 75
microns, were 98 % and 94 % for surface and weathered material, respectively. The comparative
leaching tests performed at different grind sizes indicated that gold recovery improved with a
finer grind size for both surface and weathered material.

Generally the gold extraction during the agitation leach tests was complete within 24 hours. The
exceptions were the tests conducted on surface sample CL1 and the weathered sample CSI1,
which both exhibited relatively slow leach kinetics.

The 48-hour cyanide gold extraction was about 90 % in all the Lakefield cyanidation bottle roll
tests conducted on the fresh ore composite samples, CH05 and CH06. A gravity separation test
using a bench scale Knelson separator realized 19 % gold recovery, but this additional process
step did not significantly impact the overall (gravity plus leach) gold recovery. The average
results from these tests, together with the average of 10 bottle rolls conducted in the second
phase of Lakefield testwork, and the average of 16 leaching tests conducted on samples of near
surface material, are summarized in Table 5.5. Details of these tests are included in the
Appendices.

97
Table 5.5
Summary of Lakefield Cyanidation Bottle Roll Testwork Results

Sample Feed Size
(80 % passing)
Gold Head
(g/t)
Gold Recovery
(% - 48Hrs)
Lime Consumed
(kg/t)
CN Consumed
(kg/t)
CH05/06 Ave. 80 m 2.97 90.0 0.54 0.35
Fresh Ave
1
70 m 4.35 90.5 0.74 0.83
Weathered Ave
2
66 m 2.68 95.7 2.34 0.37
Surface Ave
3
~35 m 2.35 89.6 4.67 0.48
1
Average results from tests conducted on three fresh rock samples, CR03-12/13 and 17.
2
Average results from tests conducted on six weathered rock samples, CR03-19/20/24/24B/34 and 46.
3.
Average results from tests conducted on sixteen surface samples.

5.1.5 Discussion of Results

The design metric Bond work indices selected for surface, transition and fresh ore, based on the
testwork results, are 7.0, 12.0 and 14.0, respectively.

Gravity concentration tests suggested that a gravity circuit incorporated in the milling circuit
might be able to recover up to 30 % of the gold from certain feed types. However, there may be
no net gain in overall (gravity plus leach) gold recovery by installing a gravity circuit prior to the
cyanidation circuit.

The ground ore cyanide leaching testwork showed that all of the ore types tested are amenable to
conventional cyanide leaching at a grind size of 80 % passing 75 micons. For the majority of
samples, the leaching kinetics were relatively good with the gold extraction generally complete
within 24 hours.

The gold extractions achieved during the ground ore cyanide leaching testwork were typically 90
to 98 % for surface samples, 93 to 96 % for weathered samples and about 90 % for fresh
samples. Lime consumption was generally high, moderate and low for surface, weathered and
fresh mineralization, respectively. Cyanide consumption was relatively moderate for surface and
weathered material but tended to be higher for fresh samples.

The results from the coarse ore bottle roll tests conducted by both McCelland and Amdel
indicated that the surface and weathered material could be amenable to heap leaching, although
the fresh ore was not. However, considering the likely problems associated with the heap leach
solution permeability of lateritic and clay type material, the process route selected for the
recovery of gold from all types of material occurring within the Choco mineral resource is
grinding followed by cyanide leaching and CIP.

5.2 PROCESS DESIGN CRITERIA

The design criteria were developed from metallurgical testwork conducted on samples
representing the main mineralized zones at Choco. Table 5.6 provides a summary of key process
design criteria for the three ore types; namely laterite, weathered and fresh. The definition for

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these three designations can be found in the Geology section of this report. A detailed list of
process design criteria is included in Appendix A.

Table 5.6
Summary of Key Process Design Criteria

Criterion Units Laterite Weathered Fresh
Total life of mine ore feed kt 2,841 7,193 2,549
Life of mine ore type distribution % 23 57 20
Average life of mine feed grade, gold g/t 1.40 2.35 2.54
Nominal throughput rate t/d 6,500 5,400 4,700
Ore specific gravity 2.2 2.5 2.7
Ore average moisture content %wt 15 12 10
Mill operating regime d/w 7 7 7
Mill operating regime h/d 24 24 24
Operational availability mill % 90 90 92
Nominal mill feed rate t/h 301 250 213
Grinding product size (80 % passing) m 74 74 74
Design leach circuit gold recovery % 95 93 90
Leach residence time (design minimum) h 24 24 24
Leach residence time (design actual) h 23 31 37
CIP residence time (design actual) h 5.4 7.4 8.8
Average carbon loading, gold g/t 3,920 3,920 3,920
Average daily loaded carbon t/d 2.22 3.05 2.70
Average annual gold production oz/a 101,000 138,000 126,000

5.3 PROCESS DESCRIPTION

The process flowsheets, metallurgical balance, process equipment selection and sizing are based
on process design criteria and adapted for the specific plant purchased for the project, the former
Grouse Creek plant from Hecla Minings Idaho project.

The process (depicted by the Simplified Flowsheet D-22072-0200F) is summarized below and is
detailed in the following sections (5.3.1 to 5.3.10).

Ore is delivered from the mine by truck and either dumped directly into the jaw crusher
feed hopper (150-tonnes) or stockpiled nearby to be fed by a front-end loader. An apron
feeder is used to feed ore from the hopper at a controlled rate to the jaw crusher. The jaw
crusher discharges to a conveyor belt, which feeds a 300-tonne capacity coarse ore
storage bin. A belt feeder is used to withdraw the ore from the coarse ore bin at a
controlled rate to feed the SAG mill conveyor.

Provision is made to divert crushed ore to a stockpile by using a two-way chute located
on top of the coarse ore bin. Stockpiled crushed ore can be fed into the process by using
the reclaim feed hopper.

Alternatively, soft or sticky lateritic or saprolitic ore is stockpiled close to the reclaim
feed hopper and fed into the hopper by a front-end loader, bypassing the crushing circuit.

99
A belt feeder withdraws the ore at a controlled rate from the hopper to feed the SAG mill
feed conveyor.

The grinding circuit consists of a SAG mill in closed circuit with Dutch State Mine
(DSM) screens and a ball mill in closed circuit with hydrocyclones. The DSM screen
undersize combines with the ball mill discharge and is fed to the ball mill classifying
hydrocyclones.

Cyanide solution is fed to the grinding circuit in order to promote gold dissolution and
minimize the retention time needed in the leach circuit.

The hydrocyclone overflow stream feeds the leach circuit at a maximum slurry density of
40 % solids when processing lateritic ore (to minimize problems associated with high
viscosity with this ore type) and 45 % solids when processing hard rock. A linear screen
is used to remove trash from the leach feed, which would interfere with the carbon
screens used in the CIP circuit.

The leaching circuit comprises 5 agitated tanks. The first tank is used as a surge tank,
with slurry pumped from the tank at a controlled rate to feed the following tank.
Subsequent flow between tanks is by overflow.

Loaded carbon is recovered 4-5 times a week from the CIP circuit and processed in a
conventional pressurized Zadra stripping/electrowinning circuit. The carbon is acid
washed prior to gold removal by elution. Stripped carbon is thermally regenerated prior
to its return to the CIP circuit.

Gold is recovered and refined in a central, secure gold room which houses the
electrowinning cells, the mercury retort furnace, the refining furnace and gold pouring
area.

Expected high lime consumption for the lateritic ore requires the use of two lime addition
systems. Dry lime is added directly to the SAG mill feed conveyor to satisfy above
average demand periods and a lime slurry (prepared using a slaking system) is pumped to
the grinding and leaching circuits.

A reagent mixing system is provided for the cyanide. Reagents are received in 1-tonne
bags for lime, cyanide and carbon; acid is received in drums and caustic is received in 25-
kg bags. Lime is stored in a dedicated warehouse; all other reagents are stored in sea
containers.

Process water consists of recycled tailings water and is supplemented by fresh water
collected by a catchment dam and pumped to the fresh water storage pond next to the
mill. Fresh water is used for water-cooling, reagents preparation and the fire system. A
separate supply of water from wells provides feed to the potable water system and the
gland service pumps.

100

5.3.1 Crushing and Ore Handling (drawing A1-22072-0201-F)

Run of mine (ROM) ore is delivered from the mine in 55-tonne capacity dump trucks. During
day shift, the ore is either discharged directly on a 5,000 mm x 6,000 mm (60 in. x 72 in.)
grizzly, which covers a 150-tonne capacity feed hopper, or to a stockpile (3,500-tonnes).
Stockpiled material will be reclaimed by a front end loader and crushed during the night shift.
Provision is made for a hydraulic rock breaker to break oversize rocks. Ore is withdrawn from
the hopper by a 1,524 mm (60 in.) x 6,705 mm (22 ft) apron feeder equipped with a 20 HP
motor. The apron feeder feeds a 1,065 mm x 1,245 mm (42 in. x 49 in.) jaw crusher fitted with a
250 HP motor.

The jaw crusher product discharges onto a 1,220 mm (48 in.) x 53 m (175 ft) conveyor belt
feeding a 300-tonne capacity coarse ore bin. When the 300-tonne bin is full the crushed ore is
fed to a stockpile; this is accomplished by using a mobile chute located on top of the bin.
Crushed ore is withdrawn from the bin by a 1,219 mm (4 ft) x 10,500 mm (34.5 ft) belt feeder
which discharges onto the 914 mm x 99 m SAG mill feed conveyor.

The jaw crusher area (jaw crusher and apron feeder) is serviced by a mobile crane for
maintenance. Compressed air (100 PSI) is provided for the area, as well as water for dust
suppression sprays. Also provided are the required crusher and apron feeder lubrication units.

The stockpiled crushed ore and soft or sticky lateritic material (stockpiled nearby) can be fed
onto the SAG mill feed conveyor using a feed hopper and a front-end loader. Ore is withdrawn
from the feed hopper by a 1,830 mm x 14,020 mm (46 ft) heavy duty belt feeder and discharged
onto the SAG mill feed conveyor.

Dry lime can be fed directly onto the SAG mill feed belt from a nearby silo using a screw
conveyor. This additional lime will be needed when processing a high proportion of lateritic ore.

The SAG mill feed belt conveyor is equipped with a weigh scale to monitor and control the ore
addition into the SAG mill and to control the water addition to the mill (water to ore ratio
control).

5.3.2 Grinding Circuit (drawing A1-22072-0202-F)

The ore is retrieved at a design rate of 300 tonnes/hour (lateritic ore) and is fed into a 5,334 mm
diameter x 6,096 mm long (17.5 ft dia. x 20 ft long) SAG mill, driven by a 3,000 HP motor. The
belt conveyor weight scale controls ore and water additions to the SAG mill.

The SAG mill operation and maintenance are facilitated by the installation of a trommel screen,
ball feed hopper, a retractable feed chute, an overhead 20/5 tonne crane, a liner handler system,
an inching drive, a mill lubrication unit and an automatic gear spray system.

101
The SAG mill is operated in closed circuit with DSM screens. The mill product, with a slurry
density of 55 % solids by weight (when processing lateritic ore), discharges into a pump box.
Process water is added into the pump box to reduce the slurry density to about 45 % solids.
From the pump box, the slurry is pumped by one of two variable speed pumps (10 in. x 8 in.
200 HP) to the DSM screens.

The DSM screens oversize returns to the SAG mill; the design circulating load is 50 %. The
DSM screen undersize is combined with the ball mill discharge to feed the primary cyclones.
The SAG mill feeds a trommel screen; the trommel oversize pebbles discharge onto the oversize
conveyor (760 mm (30 in.) wide x 6,635 mm (21.8 ft) long). The oversize conveyor feeds the
SAG mill recycle conveyor (610 mm (24 in.) wide x 48 m (157.5 ft) long), which discharges the
pebbles onto the SAG mill feed conveyor.

The ball mill receives its feed from the cyclone underflow, with the cyclone feed being the
combination of the SAG mill DSM screen undersize and the ball mill discharge. When
processing lateritic ore, it is estimated that the feed to the ball mill will be 600 tonnes/hour for a
circulating load of 100 %. The ball mill has a diameter of 4,115 mm and a length of 6,706 mm
(13.5 ft dia. x 22 ft length) and has 2,750 HP installed power.

The ball mill circuit classification is provided by a cluster of 7 (5 operating with laterites, 6 with
hard rock) G-Max 15 inch Krebs cyclones. The design internal diameter of the cyclone vortex
finders, based on lateritic ore, is 133 mm (5.25 in.) and the apex is 89 mm (3.5 in.). Cyclones are
designed to operate at about 15 PSI with a feed density of 46 % solids; process water is added to
the ball mill discharge pump box as needed to maintain the appropriate cyclone feed density.

The cyclone overflow is gravity fed to a 12 m
2
Delkor trash screen unit. The trash screen chute
directs oversize to a concrete containment area from which the trash is removed periodically by a
front end loader for disposal. The screened slurry discharges into the leach circuit feed surge
tank.

The ball mill operation and maintenance area includes a trommel screen, a ball feed hopper, a
mill lubrication unit and an automatic gear spray system.

The grinding area is serviced by a sump pump and a 20-tonne capacity overhead crane equipped
with a 5-tonne capacity auxiliary hoist.

5.3.3 Leaching Circuit (drawing A1-22072-0203-F)

The trash screen undersize discharges into the leach circuit surge tank, which is designed to
provide stable feed conditions to the leach circuit and the downstream CIP circuit. The leach
surge tank is 17.1 m (56 ft) in diameter and 15.5 m (51 ft) high and is equipped with a 125 HP
single blade agitator. The slurry from the surge tank is pumped to the first of four leach tanks in
series. The outtake from the surge tank is located 800 mm from the bottom of the tank and feeds
one of two 8 in. x 6 in. pumps with 100 HP motors. A flowmeter and density gauge, installed on

102
the common line to the first leach tank, will control the pump variable frequency drives to
maintain the tonnage at a set value.

The leach circuit consists of 4 tanks in series. Each tank is the same size as the leach surge tank
and includes the same sized agitator. Air is fed to each leach tank at a rate of 340 m
2
/h (200 cfm)
through the agitator central shaft. A cyanide dosage system is set up so that cyanide can be
added to each of the leach tanks. Cyanide is titrated manually and adjustments are made locally
to control the level of free cyanide to a set value.

To minimize short-circuiting, slurry feeds each tank through a down comer and discharges to the
next tank through an up comer. At the end of the leach circuit the slurry flows by gravity to the
CIP circuit.

5.3.4 CIP Circuit (Drawing A1-22072-0204-F)

The CIP circuit consists of seven identical tanks measuring 8.5 m (28 ft) diameter x 8.5 m (28
ft) high. Each of the tanks is equipped with a 60 HP twin blade agitator, two 4 m
2
NKM carbon
screens and an inter stage carbon pump. The tanks are installed in a zigzag pattern to
accommodate the flow of slurry with the NKM screens.

The slurry discharging from each tank passes through the NKM carbon screen and into the
following tank while the carbon is retained in the tank. Carbon flow is controlled by using the
inter stage carbon pumps, which transfer carbon and slurry to the adjacent tank countercurrent to
the general process flow. The design carbon concentration in each tank is 20 g/L.

Once the carbon in the first CIP tank (tank #1) has a sufficient gold loading, the inter stage
carbon pump transfers loaded carbon and slurry to the loaded carbon screen (See Section 5.3.5,
Carbon Stripping). The carbon is captured by the screen and discharged into the loaded acid
wash tank while the slurry is pumped back to CIP tank # 1. Once a 4-tonne batch of carbon has
been removed from CIP tank # 1 the carbon transfer pump is stopped. The inter stage carbon
pump from CIP tank # 2 is then started to transfer enough carbon to CIP tank # 1 to maintain a
concentration of 20 g/L carbon. The process continues sequentially down the CIP circuit until
tank # 7. Once the inter stage carbon transfer is completed, reactivated carbon (and fresh carbon
as needed for make-up) is pumped to CIP tank # 7, the last CIP tank in the train.

The CIP circuit tails discharge to the tailings pump box via two carbon safety screens. Carbon
recovered by the safety screens is collected in a bin and then recycled back into the process.

Tailings are pumped to the tailings pond located 3.5 km to the north of the plant using one of two
pumping systems, each comprising two 8 in. x 6 in. pumps in series with 300 HP motors. The
tailings are pumped through a 406 mm (16 in.) diameter HDPE slurry pipeline to the discharge
point at the tailings pond. The tailings line is buried as a protection against fires. The tailings line
consists of 2,100 m of type DR9 HDPE pipe and 1,400 m of type DR13.5 HDPE pipe.

103
5.3.5 Carbon Stripping Circuit (drawing A1-22072-0205-F)

Slurry and loaded carbon from CIP tank # 1 are pumped to a 1.2 m (48 in.) circular screen (24
mesh). The carbon screen deck, spray nozzles, piping, valves and fittings are made from PVC.
The screen retains the carbon and discharges it to the acid wash tank, which has a capacity of 4
tonnes of carbon (working volume is 8 m
3
). The acid wash tank is of FRP construction. The
slurry that passes through the screen discharges into a floor sump where the sump pump transfers
it back to CIP tank # 1. The acid wash tank has a 60 degree conical bottom and dimensions of
1,525 mm (5 ft) in diameter and 5,000 mm (16.4 ft) in height. Water sprays on the screen are
used to wash the carbon. Whilst filling of the acid washing tank with carbon, water drains
through screens fitted at the bottom of the vessel, and is pumped to the tailings pump box using a
sump pump.

A solution of 3 percent by volume hydrochloric acid is prepared by pumping concentrated acid
from drums (or totes) into the acid holding tank, which contains water. The capacity of the
holding tank is equivalent of one bed-volume (BV) or 8 m
3
. The tank is 2,440 mm (8 ft)
diameter by 2,440 mm (8 ft) high. The solution is pumped into the bottom of the acid wash tank
by a 75 mm x 38 mm acid-resistant FRP chemical pump. Excess acid solution flows out through
a side-mounted screen and is returned to the acid holding tank. During acid circulation, the pH is
monitored and fresh acid added when necessary. After the acid wash cycle, the spent acid is
neutralized by manually adding caustic. The solution in the acid wash tank is then drained into a
sump and pumped by the 50 mm diameter vertical sump pump to the tailings pumpbox for
disposal. A polypropylene exhaust fan connected to the acid wash pump box and the acid wash
vessel is used to evacuate fumes to the atmosphere.

After acid treatment the carbon is washed with water and then rinsed with a small amount of
caustic solution to insure neutralization. Wash solution is discarded to the floor sump and
transferred to the tailings pumpbox. Following washing, the tank drain line to a 5-HP Hydrostal
carbon transfer pump is opened and the carbon is pumped to the carbon elution (stripping)
vessel. During carbon transfer to the stripping vessel, transport water together with entrained
fine carbon particles is drained through screens connected to the stripping vessel, to the acid
wash area sump pump to be transferred to final tailings.

The stripping vessel, which has a 60 degree conical bottom, has a 4-tonne carbon capacity. Its
dimensions are 1,525 mm (5 ft) in diameter by 4,515 mm (14.8 ft) side height. Material of
construction is carbon steel (ASME Section VIII stamped vessel rated at 100 PSI @ 150 C).
The pressure safety system consists of a Tattletale rupture disc backed-up by a pressure release
valve. Screens for drain and overflow are wedge-wire type. Overflow screens are installed to
prevent carbon flow out of the vessel during the upflow elution.

The elution system comprises a solution storage tank, elution feed pumps (one on-line plus one
standby), a diesel-fired boiler in a closed loop with a plate heat exchanger for solution heating, a
plate heat exchanger for heat recovery and a tube and shell heat exchanger for cooling the eluate
below the boiling point. The elution is conducted with incoming solution at a temperature of
125 C under pressure, at a nominal flowrate of 1.5 bed volumes per hour (12 m
3
/h). Pressure in

104
the system is maintained at about 370 kPa by means of an automatically controlled choke valve
located on the eluate pipe downstream of the cooling heat exchanger. The strip solution consists
of barren solution recovered from the electrowinning operation. Reagents are added as required
to maintain a solution concentration of 1.0 % caustic and 0.2 % cyanide. The mild steel eluate
(loaded strip solution) holding tank has a 12 bed-volume capacity (96 m
3
), and operates in a
closed loop with the electrowinning cells.

The strip feed solution is kept at ambient temperature in the storage tank between stripping
cycles. The solution is circulated through the boiler heat exchanger loop to raise the temperature
to 115 C prior to the stripping cycle. In the course of a normal strip cycle, the solution is
pumped through the boiler heat exchanger and the recovery heat exchanger, then into the
stripping vessel, to warm up the carbon prior to elution at full flow. Once the strip vessel and
contents have reached close to operating temperature, the recovery of heat from the exit solution,
transferred in the heat exchanger to the incoming solution, will be at a maximum. Strip solution
exiting the system passes a third heat exchanger where a nominal fresh water flow of 11 m
3
/h
provides cooling to a temperature below boiling point, allowing the pressure to be released from
the solution. The cooled solution at about 80 C flows directly to the electrowinning cells. The
first two heat exchangers are plate type while the cooling unit is of the shell and tube type.

At the conclusion of the stripping cycle, after about 10 bed volumes of solution have been
circulated through the stripping vessel, a rinse is conducted by adding fresh water to the inlet of
the stripping feed pump and turning off the boiler system. The water flushes out the remaining
eluate containing gold and also cools the vessel and contents so that the pressure can be released.
The solution continues to flow to the electrowinning cells. Following the rinse cycle, the
remaining solution in the strip vessel is drained to the strip solution storage tank. The carbon is
then transferred to the reactivation system.

5.3.6 Carbon Reactivation Circuit (drawing A1-22072-0206-F)

Carbon slurry is pumped from the stripping circuit to a circular 1,219 mm dewatering screen
fitted with 24 mesh cloth installed ahead of the reactivation kiln. Water used to pump the carbon
slurry to the screen drains to the area sump and from there is pumped to final tails. The
dewatered carbon from the screen is stored in a 8-tonne capacity surge bin, from which carbon is
fed at a steady rate to the regeneration kiln. A steam-rich reducing atmosphere is maintained in
the kiln to prevent burning of the carbon. The regenerated carbon discharges from the kiln into a
quench tank, which is filled with water to simultaneously cool and wet the carbon.

The vertical type regeneration kiln has a capacity of 320 kg/h (700 lb/h). The kiln is diesel fired
and is equipped with a 2-HP 6,950 nm
3
/h (4,055 scfm) fan in the pre-drier zone and a 3-HP
16,230 m
3
/h (9,550 acfm) fan in the regeneration zone. A low differential pressure controlled
exhaust fan removes reactivation products while maintaining close to atmospheric pressure
inside the tube.

The 2,000 mm (6.6 ft) diameter by 1,550 mm (5.1 ft) high side walls quench tank, with nominal
carbon holding capacity of 4.5 m
3
, has a 60 degree conical bottom. The reactivated carbon is

105
pumped from the quench tank to the last CIP tank after the carbon transfer sequence has been
completed.

Fresh carbon required to make up for losses of fine carbon must be conditioned prior to use, to
remove entrained fines, remove sharp edges and to thoroughly wet the particles. This is
achieved in an attrition tank where fresh carbon and water are mixed using a propeller type
agitator. A nominal slurry density of 20 % solids by weight is used. The attrition tank provides
capacity to condition two bags of carbon, equivalent to 1,000 kg, at one time.

5.3.7 Refinery Flowsheet (drawing A1-22072-0207-F)

Loaded eluate is pumped to the electrowinning cells for recovery of the gold. The two 3.5 m
3

(125 ft
3
) cells, situated in the gold room, are connected to 0-9 volt and 0-2000 amp rectifiers. The
cells are fitted with stainless steel cathodes designed for cleaning by high-pressure sprays. The
cells can be operated in series or in parallel and it is also possible to by-pass either of them. The
electrowinning cell eluate discharge is collected in a pumpbox and pumped to the barren solution
storage tank. Following a stripping cycle, a small amount of solution is bled to tailings in order
to control solution quality and the addition of fresh reagents (caustic and cyanide solution) is
made prior to the next stripping cycle.

The electrowinning cells are cleaned to recover gold about once a week. The loaded cathodes
and the sludge accumulated at the bottom of the cells are cleaned in-situ with a high-pressure
washer. The sludge is directed to a sludge pump, which feeds a 0.12 m
3
recessed plate filter;
once pumping is completed, compressed air is introduced to the filter to further dry the filtered
solids.

The filtered solids are discharged from the plate filter and placed into trays. The trays are placed
in the mercury retort furnace to remove mercury and also to dry the material. The dry solids are
then cooled and mixed with an appropriate amount of flux and refined. The refining furnace is
diesel-fired. The furnace is supplied with hydraulic tilting, and the necessary dry exhaust
scrubber. Refined gold is poured to a series of molds and the slag produced is poured into slag
molds. The slag, after cooling, is broken up and recycled via the grinding circuit.

Spillage and clean up water in the gold room is directed to a sump from where it is pumped to
the CIP circuit, via a small in-line filter to recover any solid particles. The filter contents are
removed periodically, dried and refined.

Small equipment items included in this area comprise a high-pressure washer to assist in cathode
cleaning, flux mixing scale, gold balance, molds and cascade stands.

A free standing safe is provided for short term storage of intermediate products as well as dor.
A security system is provided and is described in more detail in the accompanying appendices.

5.3.8 Reagents and Services Flowsheet (drawing A1-22072-0208-F)

106
Sodium cyanide is received in 1-tonne bags and is stored in containers in proximity to the mixing
area. The cyanide solution is prepared in a closed tank (2.4 m diameter x 3.0 m high) equipped
with an agitator. The tank is filled to about 60 % level with fresh water, then one 25-kg bag of
caustic (sodium hydroxide) is added to ensure alkaline conditions. Two bags of cyanide are
lifted onto the top of the tank using a monorail and winch and lowered on top of a bag splitter.
After the cyanide is added, the water level in the mixing tank is topped up to 90 % resulting in a
22 % cyanide solution. After 2 hours of mixing, the solution is transferred to the cyanide storage
tank (3.7 m diameter x 3.7 m high) using one of two 3 in. x 2 in., 15 HP pumps. The cyanide
solution is fed to the grinding and leach circuits in a closed loop, using one of two peristaltic
pumps.

Lime is received in 1-tonne bags and is stored in a closed building located near the mixing
system (to the south of the SAG feed belt). The lime is fed to a double duty storage hopper from
which it is withdrawn by two screw feeders: One feeder adds dry lime to the SAG feed conveyor
belt and the other feeds the slaker. The slaking system consists of a ball mill in closed circuit
with a small cyclone: The cyclone overflow (lime solution) is transferred to the lime holding
tank (4.9 m diameter x 4.9 m high) equipped with an agitator. The lime solution is pumped to a
closed loop that feeds the grinding and leach circuits using one of two SLR pumps (2 in.x 1.5 in.)
through a 2.5 in. diameter ABS line.

When processing high lime consumption ore, such as laterite, the bulk of the lime will be fed to
the conveyor and the lime solution will be used as a control make-up in the circuit.

Caustic (sodium hydroxide flakes) is received in 25-kg bags and is stored in containers. Caustic
addition to the strip solution is done manually. Caustic is also added manually to the spent
hydrochloric acid for neutralization.

Hydrochloric acid is received in plastic drums and is stored in containers. Acid addition is
achieved by using a drum pump to make up a 3 % HCl solution for the carbon acid washing.
One drum of hydrochloric acid is added to water in the acid wash pump box (about 8 m
3
or one
bed-volume).

5.3.9 Water Distribution Flowsheet (drawing A1-22072-0209-F)

Reclaim water is pumped from the tailings dam (4.7 km to the north of the plant) to the process
water tank (8 m dia. x 10 m high) using one of two barge mounted 100 HP vertical turbine
pumps. The reclaim water line consists of 4,700 m of 10-inch diameter, HDPE pipe (DR21) and
will be buried as a protection against fires.

The process water will be distributed to the process using one of two 150 HP 8 in. x 6 in. SLR
pumps at a pressure of 345 kPa (50 PSI). The process water will be complemented as required
with fresh water from the storage pond.

Fresh water is pumped to the lined storage pond from a containment dam located about 2.4 km to
the south of the plant using one of two 100 HP 8 in. x 6 in. SRL pumps. The pumps are installed

107
in a pumping well accessible from the top of the dam using a 30 m bridge which is designed to
be used as both an access way and a pipe support. Water is pumped from the dam through a
buried 10-inch HDPE (DR21) line to the plant storage pond. The lined pond (40 m wide x 50 m
long x 5 m deep) has a sufficient storage capacity to provide make-up water to the plant for a
period of 3 days. The fresh water is used for the following applications:

Process water make-up.
Reagent preparation.
Fire water system.
Mill lube system cooling.
Strip circuit eluent cooling.

Water is pumped from the storage pond using one of two 60 HP vertical turbine pumps to an 8-
inch diameter steel pipe. The fresh water line feeds the fire system storage tank 6,000 mm (19.7
ft) diameter x 6,000 mm (19.7 ft) high, the process water tank and the reagent mixing area (lime
and cyanide). Fresh water is also used as coolant for the grinding lube systems and the cooling
heat exchanger (stripping).

The fire water system consists of a 6 in. x 4 in. pump, a 3 in. x 1-1/2 in. jockey pump and a 6 in.
x 4 in. diesel powered pump feeding about 680 m of main line with 18 hydrant stations and 220
m of sprinkler lines for the conveyors.

Two wells, located in a suitable location near to the plant, have been included in the design. The
well water is pumped using 100 HP pumps to a dedicated storage tank (250 m
3
) at the plant and
is used to feed the potable water plant. One of two 1.5 in. x 1 in. pumps feeds the potable water
system and the cooling water lines. Gland (seal) water is also taken from the same tank using
one of two pumps (3 in. x 2 in.) providing a pressure of 690 kPa (100 PSI).

The design provides for site run-off to be collected in a small pond located to the southeast of the
plant from which it will be pumped by a submersible pump to the tailings pumpbox.

5.3.10 Water Distribution Flowsheet (drawing A1-22072-0210-F)

Drawing 22072-0209 shows the typical water balance for the concentrator. The water
distribution is based on the material balance prepared with MetSim, a process simulation
program.

5.4 EQUIPMENT LIST

A complete equipment list is provided at the end of this section.

5.5 DRAWINGS

The following process flowsheets and the mass balance calculation are included at the end of this
section.

108
Drawing No. Title

D-22072-0200-B Simplified Flowsheet
A1-22072-0201-F Crushing and Ore Handling Flowsheet
A1-22072-0202-F Grinding Circuit Flowsheet
A1-22072-0203-F Leach Circuit Flowsheet
A1-22072-0204-F CIP Circuit Flowsheet
A1-22072-0205-F Carbon Stripping Flowsheet
A1-22072-0206-F Carbon Reactivation Flowsheet
A1-22072-0207-F Refinery Flowsheet
A1-22072-0208-F Reagents and Services Flowsheet
A1-22072-0209-F Process and Fresh Water Flowsheet
A1-22072-0210-F Water Balance

PROJECT: CHOCO
CLIENT: BOLIVAR GOLD CORP Revision: 2
PROJECT NO.: 22072 Issue Date: 3-Oct-03
Rev.N
o.
Equipment
Number
Specification
Number
Source Description of Equipment Qty Size/Model Supplier
Installed
kW/hp
Load
Type
Rev Drawing No. Remarks
CRUSHING
2 201-GRZ-01 4295 PURCHASE Grizzly - Primary Feed System 1 6.0 m x 5.0 m 0201-F
2 201-HOP-01 4238 PURCHASE Feed Hopper - Primary Feed System 1 0201-F
2 201-APF-01 4280 HECLA Apron Feeder - Primary Feed Sytem 1 1.524 m x 6.705 m 20 HP 0201-F
2 201-CHU-01 4226 PURCHASE Apron Feeder Fines Chute to Conveyor 1 0201-F
2 201-CHU-02 4226 PURCHASE Chute to J aw Crusher - Primary Feed System 1 0201-F
2 201-J CR-01 4188 PURCHASE J aw Crusher - Primary Feed System 1 42 in. x 49 in. Birdsboro 250 HP est 0201-F
2 201-LOU-01 4549 PURCHASE J aw Crusher Lube Oil Unit 1 5 HP 0201-F
2 201-RBR-01 4600 HECLA Rock Breaker 1 50 HP 0201-F
2 201-CHU-03 4226 PURCHASE Chute to Primary Conveyor - Primary Feed Sytem 1 0201-F
2 201-CVO-01 4370 HECLA Primary Feed Conveyor 1 175 ft x 48" 20 HP est 0201-F
2 201-BIN-01 PURCHASE Feed Bin 300 tonnes live 1 HP 0201-F
2 201-CHU-07 4226 PURCHASE Mobile Chute 1 10 est 0201-F
2 201-CHU-08 4226 PURCHASE By-pass chute 0201-F
2 201-BLF-01 4370 PURCHASE Feed Bin Belt Feeder 1 42 " wide x 8 m long 15 HP 0201-F
2 201-CHU-05 4226 PURCHASE Chute to conveyor CVO-01 1 0201-F
2 201-CHU-06 4226 PURCHASE Conveyor CVO-01 discharge chute 1 0201-F
2 201-GRZ-02 4295 HECLA Grizzly -Soft Ore Feed System 1 0201-F
2 201-HOP-02 4238 HECLA Feed Hopper - Soft Ore Feed System 1 0201-F
2 201-BLF-02 4370 HECLA Transfer Conveyor - Soft Ore Feed System 1 20 est 0201-F
2 201-CHU-04 4226 HECLA Chute to Main Feed Conveyor - Soft Ore Feed Sytem 1 0201-F
2 201-CVO-02 4370 HECLA Main Conveyor - SAG Feed 1 325' x 36" 50 HP 0201-F
2 201-BSC-01 HECLA Belt Scale 1 0201-F
GRINDING
1 202-SAM-01 4409 HECLA SAG Mill 1 17.5' Dia. X 20' Dominion Engineering 3000 HP 0202-F
1 202-LOU-02 4549 HECLA SAG Mill Lube Oil Unit 1 Howard Marten 5 HP 0202-F
1 202-GSU-01 4516 HECLA Gear Lubrication System 1 Trabon/Marten 5 HP 0202-F
1 202-CHU-05 4226 HECLA Feed Conveyor Discharge Chute 1 0202-F
1 202-CHU-06 4226 HECLA SAG Mill Feed Chute (retractable Chute) 1 0202-F
1 202-MLH-01 HECLA SAG Mill Liner Handler 1 0202-F
1 202-CHU-07 4226 HECLA SAG Mill Discharge Chute 1 0202-F
1 202-CHU-08 4226 HECLA SAG Mill Trommel Discharge Chute 1 0202-F
2 202-CVO-02 4370 HECLA SAG Mill Trommel Discharge Conveyor (Oversize) 1 21.7' x 30" 10 HP 0202-F
2 202-BMA-01 HECLA Belt magnet 1
2 202-CHU-09 4226 HECLA SAG Oversize Conveyor Feed Chute 1 0202-F
2 202-CVO-03 4370 PURCHASE SAG Mill Recycle Conveyor 1 159' x 24" 10 HP 0202-F
2 202-CHU-10 4226 PURCHASE SAG Mill Recycle Conveyor Discharge Chute 1 0202-F
2 202-CHU-12 4226 HECLA SAG Mill Grinding Balls Feed Chute 1 0202-F
2 202-HOP-03 4238 HECLA SAG Mill Ball Feed Hopper 0202-F
2 HECLA SAG Mill Motor Cooling Fan & Duct 1 10 HP 0202-F
2 202-ARE-01 4119 HECLA SAG Mill Clutch Air Receiver 1 0202-F
2 HECLA SAG Mill Clutch 1 0202-F
2 202-OCR-01 4159 HECLA Grinding Area Bridge Crane 1 20/5 ton 50 HP 60A 0202-F
2 202-PBO-01 6840 HECLA Sieve Bend Screens Feed Pump Box 1 0202-F
2 202-SLP-01 6850 HECLA Sieve Bend Screens Feed Pump (SAG discharge) 1 10" x 8" 200 HP 0202-F
2 202-SLP-02 6850 HECLA Sieve Bend Screens Feed Pump (SAG discharge) 1 10" x 8" 0202-F
2 202-DIS-01 4229 HECLA Sieve Bend Screens Feed Distributor 1 0202-F
2 202-SBS-01/02 HECLA Sieve Bend Screens 2 0202-F
2 202-IND-01 NA HECLA SAG Mill Inching Drive 1 0202-F
2 202-BAM-01 4400 HECLA Ball Mill 1 13.5' Dia. X 22' Dominion Engineering 2750 HP 0202-F
2 202-HOP-04 4238 HECLA Ball Mill Feed Hopper 1 0202-F
2 202-CHU-14 4226 HECLA Ball Mill Discharge Chute 1 0202-F
2 202-CHU-13 4226 HECLA Ball Mill Grinding Balls Feed Chute 1 0202-F
MECHANICAL EQUIPMENT LIST
QPF-004-12/A
Page 1 of 6
PROJECT: CHOCO
Rev.N
o.
Equipment
Number
Specification
Number
Installed
kW/hp
Load
Type
2 202-GSU-02 4516 HECLA Gear Lubrication System 1 Trabon 5 HP 0202-F
2 202-LOU-03 4549 HECLA Ball Mill Lube Oil Unit 1 Howard Marten 5 HP 0202-F
2 202-ARE-02 4119 HECLA Ball Mill Clutch Air Receiver 1 0202-F
2 HECLA Ball Mill Clutch 1 0202-F
2 HECLA Ball Mill Motor Cooling Fan & Duct 1 10 HP 0202-F
2 202-PBO-02 6840 HECLA Cyclones Feed Pump Box (Ball Mill Discharge) 1 modify for 12" outlets 0202-F
2 202-SLP-03 6849 HECLA Cyclones Feed Pump 1 relocate 250 HP was 250 0202-F
2 202-SLP-04 6850 HECLA Cyclones Feed Pump 1 relocate HP same 0202-F
2 202-DIS-02 4229 HECLA Cyclones Feed Header 1 0202-F
2 202-CYC-01-07 4483 PURCHASE Cyclones 7 15" Krebs 0202-F
2 202-SUP-02 6870 HECLA Grinding Area Sump Pump 1 4" 15 HP 0202-F
2 PURCHASE Feed box (Delkor Screen) 1 0202-F
2 202-SCN-01 NA PURCHASE Trash Screen (Delkor Linear Screen) 1 12 m
2
10 HP 0202-F
2 202-CHU-15 PURCHASE Trash Screen Oversize Chute 1 0202-F
LEACH
2 203-SMP-01 PURCHASE Leach Feed Sampler 1 H&S 0203-F
2 203-TAK-01 6245 HECLA Leach Feed Surge Tank 1 56' Dia. X 51' 0203-F
2 203-AGI-01 4420 HECLA Leach Feed Surge Tank Agitator 1 125 HP 0203-F
2 203-SLP-01 6850 HECLA Leach Feed Pumps 1 8' x 6' 100 HP 0203-F
2 203-SLP-02 6850 HECLA Leach Feed Pumps 1 8' x 6' HP same 0203-F
2 203-SUP-01 6870 HECLA Leach Area Sump Pump 1 4" SALA 20 HP 0203-F
2 203-TAK-02 6245 HECLA Leach Tank #2 1 56' Dia. X 51' 0203-F
2 203-AGI-02 4420 HECLA Leach Tank #2 Agitator 1 125 HP 0203-F
2 Emergency Valve Air Receiver Leach #5 0203-F
C.I.P.
2 204-TAK-01 6245 HECLA CIP Tank #1 1 28' Dia. X 27' 0204-F
2 204-AGI-01 4420 PURCHASE CIP Tank #1 Agitator 1 Mixtec 60 HP 0204-F
2 Emergency Valve Air Receiver CIP #7 0204-F
2 204-DIS-01 4229 HECLA Safety Screens Distributor 1 0204-F
2 204-VIS-01 NA HECLA Safety Screen 1 4' x 9' Sizetec 4 HP 0204-F
2 204-VIS-02 NA HECLA Safety Screen 1 4' x 9' Sizetec 4 HP 0204-F
2 204-CHU-01 4226 PURCHASE Safety Screens Discharge Chute 1 0204-F
2 204-BIN-01 PURCHASE Safety Screens Discharge Bin 1 0204-F
2 204-SMP-01 PURCHASE CIP Tails Sampler 1 H&S 0204-F
2 204-PBO-01 6840 PURCHASE CIP Tails Pump Box (Plant Tails) 1 0204-F
QPF-004-12/A
Page 2 of 6
PROJECT: CHOCO
Rev.N
o.
Equipment
Number
Specification
Number
Installed
kW/hp
Load
Type
2 204-SUP-01 6870 HECLA CIP sump pump 1 4" SALA 20 HP 0204-F
2 204-SLP-01/02 6850 PURCHASE Tailings Pump 2 8 x 6 Warman 600 2 x 300 HP 0204-F
2 204-SLP-03/04 6850 PURCHASE Tailings Pump 2 8 x 6 Warman same 0204-F
2 204-SUP-02 6870 PURCHASE Tailings Area Sump Pump 1 4" SALA 20 HP 0204-F
2 PURCHASE Emergency Valve Air Receiver Tails Line 0204-F
2 204-CIS-01 4640 PURCHASE Interstage Carbon Screen #1 Tank #1 1 NKM 4 (4 m2) 0204-F
2 204-CIS-14 4640 PURCHASE Interstage Carbon Screen #2Tank #7 1 NKM 4 (4 m2) 0204-F
2 PURCHASE Interstage Carbon Screens Outer Cage Motors 14 included in above 140 HP 0204-F
1 204-ITP-01 NA HECLA Interstage Carbon Transfer Pump #1 1 3" dia. Denver Sala 7.5 HP 0204-F
1 204-VIS-03 NA HECLA Reactivated Carbon Dewatering Screen 1 4' x 9' Sizetec 4 HP 0204-F
1 204-CHU-02 4226 PURCHASE Reactivated Carbon Chute to CIP Tank #7 1 0204-F
1 204-CHU-03 4226 PURCHASE Fines Carbon Chute to Final Tails Pump Box 1 0204-F
1 204-HPW-01 NA PURCHASE High Pressure Washer 1 0204-F
2 204-MON-01 4156 HECLA CIP Circuit Monorails +hoists 1 5 0204-F
ACID WASH
2 205-VIS-01 NA PURCHASE Loaded Carbon Screen (Carbon Sizing Screen) 1 48 " circular 1.5 5 0205-F
2 205-CHU-01 4226 PURCHASE Loaded Carbon Chute to Acid Wash Vessel 1 0205-F
2 205-CHU-02 4226 PURCHASE Loaded Carbon Screen Undersize Chute 1 0205-F
2 205-TAK-01 6245 PURCHASE Acid Wash Vessel 1 4 mt capacity 1.5 m dia x 4.6 m H NEW 0205-F
2 205-FAN-01 4128 PURCHASE Acid Wash Tank Vent Fan 1 1 HP 0205-F
2 205-PBO-01 6840 PURCHASE Acid Wash Pump Box (dilute HCl) 1 3 m dia. X 3 m dia 0205-F
2 205-SOP-01 6860 PURCHASE Acid Wash Pump 1 3 HP 0205-F
2 205-MON-01 Acid Wash and Stripping Area Monorail 1 0205-F
2 205-SUP-01 6890 HECLA Acid Wash Area Sump Pump 1 2" SALA 7.5 HP 0205-F
2 205-SLP-01 6850 PURCHASE Acid Wash Carbon Transfer Pump 1 5 HP 0205-F
STRIPPING 0205-F
1 205-STV-01 4262 PURCHASE Strip Vessel 1 4 mt capacity 0205-F
1 205-TAK-02 6245 PURCHASE Barren Solution Tank (Strip Feed Solution) 1 0205-F
1 205-FAN-02 4128 PURCHASE Barren Solution Tank Vent Fan 1 2 HP 0205-F
1 205-SOP-02 6860 PURCHASE Strip Solution Feed Pump 1 30 HP 0205-F
1 205-SOP-03 6860 PURCHASE Strip Solution Feed Pump 1 HP same 0205-F
1 205-SLP-02 6850 PURCHASE Stripped Carbon Transfer Pump 1 5 HP 0205-F
1 205-BOL-01 4450 PURCHASE Diesel Fired Boiler (Strip Solution) 1 4MM BTU/h 0205-F
QPF-004-12/A
Page 3 of 6
PROJECT: CHOCO
Rev.N
o.
Equipment
Number
Specification
Number
Installed
kW/hp
Load
Type
1 PURCHASE Boiler Water Recirculation Pump 1 1.5 HP 0205-F
2 205-PHE-01 4522 PURCHASE Strip Solution Feed Heat Exchanger (plate) 1 0205-F
2 205-PHE-02 4522 PURCHASE Strip Solution Discharge Heat Exchanger (plate) 1 0205-F
1 205-SMP-01 NA PURCHASE Pregnant Solution Sampler 1 0205-F
1 205-SMP-02 NA PURCHASE Barren Solution Sampler 1 0205-F
2 205-SUP-02 6870 HECLA Stripping Area Sump Pump 1 3" SALA 20 HP 0205-F
2 205-THE-01 PURCHASE Solution cooling heat exchanger (tube and shell) 1 0205-F
CARBON REACTIVATION
1 206-VIS-01 NA PURCHASE Stripped Carbon Dewatering Screen 1 48 " circular 1 0206-F
1 206-CHU-01 4226 PURCHASE Chute to Kiln Feed Bin 0206-F
1 206-SCC-01 PURCHASE Kiln Screw Feeder 1 5 est HP 0206-F
1 206-BIN-01 PURCHASE Reactivation Kiln Feed Bin 1 0206-F
2 206-REK-01 4363 PURCHASE Vertical diesel fired kiln 1 MM BTU/h HP 0206-F
2 206-FAN-01 4128 PURCHASE Reactivation Kiln Exhaust Fan-preheat 1 ? 1.5 HP 0206-F
2 206-FAN-02 4128 PURCHASE Reactivation Kiln Exhaust Fan 1 ? 1.5 HP 0206-F
2 206-CHU-02 4226 PURCHASE Reactivated Carbon Chute to Quench Tank 1 0206-F
2 206-TAK-01 6245 PURCHASE Quench Tank 1 2.4 m dia x 2.4 m H 0206-F
2 206-SLP-01 NA PURCHASE Quenched Carbon Pump 1 5 HP est 0206-F
2 206-MON-02 Reactivation Area Monorail 1
CARBON ATTRITION
2 206-TAK-02 6245 PURCHASE Carbon Attrition Tank 1 1.8 m dia x 2.8 m H 0206-F
2 206-AGI-01 4420 PURCHASE Carbon Attrition Tank - Agitator 1 5 HP 0206-F
2 206-HOP-02 4238 PURCHASE Carbon Loading Hopper 1 0206-F
2 206-SLP-02 NA PURCHASE Fresh Carbon Distribution Pump (Attrition Disch pump) 1 5 HP 0206-F
2 206-J IB-01 HECLA Attrition Area J ib Crane 1 0206-F
2 206-SUP-01 6870 HECLA Reactivation Area Sump Pump 1 3" SALA 7.5 HP 0206-F
ELECTROWINNING AND REFINING
2 207-MRF-01 HECLA Mercury Retort Furnace 1 0207-F
2 207-FAN-03 4128 HECLA Mercury Retort Furnace Exhaust Fan 1 3 HP 0207-F
2 207-CDN-01 HECLA Mercury Condenser 1 0207-F
2 207-MCL-01 HECLA Mercury Collector 1 0207-F
2 207-ARE-01 4119 HECLA Vacuum Receiver 1 0207-F
2 207-VAP-01 6880 HECLA Vacuum Pump 1 2.5 est 0207-F
2 207-EWC-01 4498 PURCHASE Electrowinning Cell #1 1 125 ft
3
0207-F
2 207-EWC-02 4498 PURCHASE Electrowinning Cell #2 1 125 ft
3
0207-F
2 207-RCT-01 NA PURCHASE Electrowinning Cell Rectifier #1 1 2000 A 0207-F
2 207-RCT-02 NA PURCHASE Electrowinning Cell Rectifier #2 1 2000 A 0207-F
2 207-FAN-01 4128 PURCHASE Electrowinning Cells Exhaust Fan 1 7.5 HP 3000 CFM 0207-F
2 207-FPR-01 4329 PURCHASE E/W Sludge Filter Press (Recessed Plate Filter) 1 0207-F
2 207-PBO-02 6840 PURCHASE Electrowinning Cells Discharge Pumpbox (solution) 1 0207-F
2 207-SOP-02 6860 PURCHASE Electrowinning Cells Discharge Pump (solution) 1 1.5 HP 0207-F
2 207-PBO-01 6840 PURCHASE Filter Press Feed Pump Box 1 0207-F
2 207-SLP-01 6850 PURCHASE Filter Press Feed Pump 1 air pump 0207-F
2 207-FFF-01 NA PURCHASE Diesel-Fired Crucible Furnace (Package) 1 0207-F
2 207-SCR-01 4131 PURCHASE Dry Exhaust Scrubber 1 7.5 HP 0207-F
2 PURCHASE Furnace Control Panel 1 included w/furnace 0207-F
2 PURCHASE Furnace Hydraulic Tilting Pump 1 included w/furnace 5 0207-F
2 207-HPW-01 NA PURCHASE High Pressure Washer (for Electrowinning Cells) 1 0207-F
2 207-FAN-02 4128 PURCHASE Refinery area exhaust fan 1 0207-F
2 207-SUP-01 6870 HECLA Refinery Area Sump Pump 1 10 HP 0207-F
2 207-ILF-01 PURCHASE In-Line filter (for sump pump) 1 0207-F
REAGENTS AND SERVICES
2 208-COM-01 4125 PURCHASE Process Air Compressor 1 60 HP 0208-F
QPF-004-12/A
Page 4 of 6
PROJECT: CHOCO
Rev.N
o.
Equipment
Number
Specification
Number
Installed
kW/hp
Load
Type
2 208-COM-02 4125 PURCHASE Process Air Compressor 1 HP same 0208-F
2 208-ARE-01 4119 HECLA Plant Air Receiver 1 0208-F
2 208-ARE-02 4119 HECLA Instrument Air Receiver 1 0208-F
2 208-ADR-01 4110 HECLA Instrument Air Dryer 1 0208-F
2 208-COM-03 4122 PURCHASE Low Pressure Air Compressor ("blower") 1 350 HP est 0208-F
2 208-COM-04 4122 PURCHASE Low Pressure Air Compressor ("blower") 1 HP same 0208-F
2 208-COM-05 4122 PURCHASE Low Pressure Air Compressor ("blower") 1 HP same 0208-F
2 208-BIN-02 PURCHASE Double Duty Lime Hopper 1 30 tonnes 0208-F
2 208-SCC-02 4385 PURCHASE Lime Screw Feeder 1 dry lime system 3 est HP 0208-F
2 208-CHU-02 4226 PURCHASE Chute to SAG Feed Conveyor 1 dry lime system 0208-F
2 HECLA Bin Activator 1 0.75 0208-F
2 208-DUC-01 6600 HECLA Lime Bin Dust Collector 1 5 HP 0208-F
2 208-SCC-01 4385 PURCHASE Lime screw feeder (to slaking ball mill) 1 0208-F
2 208-CHU-01 4226 PURCHASE Chute to ball mill slaker 1 0208-F
2 208-LIS-01 4540 PURCHASE Lime slaker (ball mill) 1 ? 2' x 6' 50 0208-F
2 208-PBO-01 6840 PURCHASE Lime slaker pump box 1 0208-F
2 208-SLP-01 6850 PURCHASE Lime slaker pump (cyclone feed) 1 3" x 2 " 20 HP 0208-F
2 208-CYC-01 4483 PURCHASE Lime slaker cyclone 1 4 " 0208-F
2 208-TAK-02 6245 HECLA Lime Slurry Holding Tank 1 16' Dia. X 16' 0208-F
2 208-AGI-02 4420 HECLA Lime Slurry Holding Tank Agitator 1 15 HP est 0208-F
2 208-SLP-02 6850 HECLA Lime Slurry Distribution Pump 1 2 x 1.5 10 HP 0208-F
2 208-SLP-03 6850 HECLA Lime Slurry Distribution Pump 1 2 x 1.5 HP same 0208-F
2 208-MON-02 4156 PURCHASE Lime Handling Monorail 1 0208-F
2 208-TAK-03 6245 PURCHASE Cyanide Mixing Tank 1 8' x 10' 0208-F
2 208-AGI-03 4420 PURCHASE Cyanide Mixing Tank Agitator 1 15 HP est 0208-F
2 208-SOP-05 6860 PURCHASE Cyanide Transfer Pump 1 3" x 2" 15 HP est 0208-F
2 208-TAK-04 6245 PURCHASE Cyanide Holding Tank 1 3.7 m D. X 3.7 m H. 0208-F
2 208-SUP-02 6870 PURCHASE Cyanide Area Sump Pump 1 2" 5 HP 0208-F
2 208-FAN-01 4128 PURCHASE Cyanide Tanks Exhaust Fan 1 2.5 HP 0208-F
2 208-SOP-07 6860 PURCHASE Cyanide Circulation/Distribution Pumps 1 peristaltic 0.75 HP 0208-F
2 208-SOP-08 6860 PURCHASE Cyanide Circulation/Distribution Pumps 1 peristaltic 0.75 HP 0208-F
2 208-HOP-01 4238 PURCHASE Cyanide Mixing Feed Hopper 1 0208-F
2 208-MON-01 4156 PURCHASE Cyanide Mixing Area Monorail 1 0208-F
2 208-TAK-07 6245 PURCHASE Fuel Storage Tank (boiler and refinery) 1 1000 gallons 0208-F
2 208-FOP-01 NA PURCHASE Fuel Circulation Pump (boiler/furnace loop) 1 1.5 HP 0208-F
2 208-FOP-02 NA PURCHASE Fuel Circulation Pump (boiler/furnace loop) 1 HP same 0208-F
WATER SYSTEMS
2 209-WAP-01 6890 PURCHASE Well Pump 1 100 HP est 0209-F
2 209-WAP-02 6890 PURCHASE Well Pump 1 HP same 0209-F
2 209-TAK-01 6245 PURCHASE Fresh Water Tank (for well water) 1 250 m3 (7 x 7 m) 0209-F
2 209-WAP-03 6890 PURCHASE Water Treatment System Feed Pump 1 3 x 2 Warman AH 15 HP 0209-F
2 209-WAP-04 6890 PURCHASE Water Treatment System Feed Pump 1 same HP same 0209-F
2 209-WAP-05 6890 PURCHASE Gland Water Pump 1 3 x 2 Warman AH 40 HP 0209-F
2 209-WAP-06 6890 PURCHASE Gland Water Pump 1 same HP same 0209-F
2 209-WAP-07 6890 PURCHASE Cooling Water Pump 1 15 HP 0209-F
2 209-WAP-08 6890 PURCHASE Cooling Water Pump 1 HP same 0209-F
2 209-WAP-20 6890 PURCHASE "Catchment" Water Pump to make-up pond 1 8 x 6 Warman AH 100 HP 0209-F
2 209-WAP-21 6890 PURCHASE "Catchment" Water Pump to make-up pond 1 same 2400 m 10" DR26 HP same 0209-F
2 209-WAP-09 6890 PURCHASE Reclaim Water Pump (from tailings area) 1 Floway Vertical turbine 100 HP 0209-F
2 209-WAP-10 6890 PURCHASE Reclaim Water Pump (from tailings area) 1 same 3500 m 10" DR26 HP same 0209-F
1 209-BRG-01 NA PURCHASE Reclaim Water Barge 1 0209-F
2 209-WAP-11 6890 PURCHASE Process Water Pump 1 8 x 6 Warman AH 150 HP 0209-F
2 209-WAP-12 6890 PURCHASE Process Water Pump 1 same HP same 0209-F
1 209-TAK-03 6245 PURCHASE Process Water Tank 1 8 m D. x 10 H. 0209-F
QPF-004-12/A
Page 5 of 6
PROJECT: CHOCO
Rev.N
o.
Equipment
Number
Specification
Number
Installed
kW/hp
Load
Type
2 209-TAK-04 6246 PURCHASE Fire Water Tank 3.6 m D. x 3.6 H. 0209-F
2 209-WAP-13 6890 HECLA Fire Water Pump 1 6" x 4" HP 0209-F
2 209-WAP-14 6890 HECLA Fire Water Pump (J ockey pump) 1 3" x 1 1/2" HP 0209-F
2 209-WAP-15 6890 HECLA Fire Water Pump (diesel) 1 6" x 4" 0209-F
1 209-GNR-01 NA HECLA Diesel Generator 1 included with 209-WAP-15 0209-F
1 209-TAK-05 6245 HECLA Diesel Tank 1 included with 209-WAP-15 0209-F
1 209-FOP-01 NA HECLA Diesel Fuel Pump 1 included with 209-WAP-15 0209-F
1 209-TAK-02 6245 HECLA Potable Water Storage Tank 1 3.65 m dia. X 4.5 m H 0209-F
2 209-WAP-16 6890 HECLA Potable Water Distribution Pump 1 1 1/2" x 1" 20 HP est 0209-F
2 209-WAP-17 6890 HECLA Potable Water Distribution Pump 1 1 1/2" x 1" same 0209-F
2 209-WAP-18 6890 PURCHASE Make-up Pond Pump (fresh water pumps) 1 Floway Vertical turbine 60 HP 0209-F
2 209-WAP-19 6890 PURCHASE Make-up Pond Pump (fresh water pumps) 1 same 0209-F
2 209-WAP-20 6890 HECLA Site run-off Collection pond pump 1 submersible HP 0209-F
Installed HP continuous operation) 10084 HP
KW 7525
Max demand 90% 6773
Expected demand 80% 6020
(for operating costs)
QPF-004-12/A
Page 6 of 6
Choco Gold Project MASS BALANCE CALCULATION METCHEM
% Solids Spec Grav
Solids Carbon Water TOTAL (wt/wt) Slurry Slurry Slurry
t/h t/h t/h t/h % m3/h usgpm S.G.
Stream Description
1 FINES ORES-APRON FEED 3.5 0.0 0.4 3.9 90.0 1.7 7.4 2.34
2 J AW CRUSHER FEED 246.5 0.0 27.4 273.9 90.0 117.0 515.2 2.34
3 SAG FRESH FEED 250.0 0.0 27.8 277.8 90.0 118.7 522.6 2.34
4 PEBBLE LIME 0.0 0.0 2.0 2.0 0.0 2.0 8.8 1.00
5 PROCESS WATER TO SAG MILL 0.0 0.0 194.4 194.4 0.0 194.4 856.1 1.00
6 PEBBLE RECIRCULATION 11.6 0.0 9.5 21.1 55.0 13.7 60.3 1.54
7 SAG PRODUCT 374.8 0.0 306.7 681.5 55.0 443.0 1950.5 1.54
8 DSM SCREEN FEED 374.8 0.0 458.1 832.9 45.0 594.4 2617.3 1.40
9 WATER IN DSM PUMPBOX FEED 0.0 0.0 144.4 144.4 0.0 144.4 635.7 1.00
10 OVERSIZE DSM SCREEN 124.8 0.0 82.5 207.3 60.2 127.8 562.9 1.62
11 UNDERSIZE DSM SCREEN 250.0 0.0 375.6 625.6 40.0 466.6 2054.4 1.34
12 DSM SCREEN FEED PUMP GLAND W. 0.0 0.0 5.0 5.0 0.0 5.0 22.0 1.00
13 CYCLONE FEED 500.0 0.0 586.0 1086.0 46.0 767.8 3380.9 1.41
14 CYCLONE OVERFLOW 250.0 0.0 380.9 630.9 39.6 471.8 2077.5 1.34
15 CYCLONE UNDERFLOW 250.0 0.0 205.1 455.1 54.9 296.0 1303.4 1.54
16 BALL MILL PRODUCT 250.0 0.0 205.1 455.1 54.9 296.0 1303.4 1.54
17 WATER IN BALL MILL 0.0 0.0 0.0 0.0 0.0 0.0 0.0 1.00
18 WATER IN CYCL. PUMPBOXE FEED 0.0 0.0 0.0 0.0 0.0 0.0 0.0 1.00
19 CYCLONE FEED PUMP GLAND WATER 0.0 0.0 5.0 5.0 0.0 5.0 22.0 1.00
20 UNDERSIZE TRASH SCREEN 250.0 0.0 380.9 630.9 39.6 471.8 2077.5 1.34
21 OVERSIZE TRASH SCREEN 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.00
22 LEACH SURGE TK PUMP GLAND WATER 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.00
23 WATER IN TRASH SCREEN 0.0 0.0 0.0 0.0 0.0 0.0 0.0 1.00
24 LEACH SURGE TANK FEED 250.0 0.0 380.9 630.9 39.6 471.8 2077.5 1.34
25 CYANIDE IN GRINDING 0.0 0.0 0.2 0.2 0.0 0.2 1.1 1.00
26 WATER COOLING SAG MILL LUBE SYST 0.0 0.0 2.1 2.1 0.0 2.1 9.1 1.00
27 0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.00
28 0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.00
29 0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.00
30 0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.00
31 0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.00
32 0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.00
33 0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.00
34 0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.00
35 LIME SOLUTION IN LEACH 0.0 0.0 38.1 38.1 0.0 38.1 167.8 1.00
36 CYANIDE IN LEACH 0.0 0.0 0.2 0.2 0.0 0.2 1.1 1.00
37 LEACH FEED PUMP GLAND WATER 0.0 0.0 5.0 5.0 0.0 5.0 22.0 1.00
38 CIP FEED 250.0 0.0 424.2 674.2 37.1 515.2 2268.4 1.31
39 0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.00
40 0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.00
41 0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.00
42 0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.00
43 0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.00
44 0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.00
45 LOADED CARBON SCREEN FEED 13.9 0.1 23.8 37.8 36.9 28.9 127.2 1.31
46 LOADED CARBON SCREEN RETURN 13.9 0.0 28.8 42.6 32.5 33.8 148.9 1.26
47 CIP TAIL 250.0 0.0 430.2 680.2 36.8 521.1 2294.5 1.31
48 WATER TO SIZING CARBON SCREEN 0.0 0.0 5.0 5.0 0.0 5.0 22.0 1.00
49 WATER TO SAFETY SCREEN 0.0 0.0 5.0 5.0 0.0 5.0 22.0 1.00
50 TAILING PUMP DISCHARGE 250.0 0.0 455.9 705.9 35.4 546.8 2407.9 1.29
51 TAILING PUMP GLAND WATER 0.0 0.0 10.0 10.0 0.0 10.0 44.0 1.00
52 SIZING CARBON SCREEN FEED 0.0 0.1 0.4 0.5 20.9 0.5 2.0 1.13
53 CARBON TO CIL 0.0 0.1 0.3 0.4 28.4 0.3 1.4 1.19
54 SIZING SCREEN TAIL 0.0 0.0 5.1 5.1 0.0 5.1 22.6 1.00
55 0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.00
56 0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.00
57 0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.00
58 0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.00
Mass Flow
59 0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.00
60 0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.00
61 0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.00
62 0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.00
63 0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.00
64 0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.00
65 WATER TO LOADED CARBON SCREEN 0.0 0.0 5.0 5.0 0.0 5.0 22.0 1.00
66 U/S LOADED CARB. SCR. GLAND WATER 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.00
67 O/S LOADED CARB. SCREEN 0.0 0.1 0.0 0.1 78.8 0.1 0.3 1.78
68 ACID FLOW TO WASHING VESSEL 0.0 0.0 1.0 1.0 0.0 1.0 4.4 1.00
69 ACID DILUTION WATER 0.0 0.0 1.0 1.0 0.0 1.0 4.4 1.00
70 ACID SOLUTION USED, DISCHARGED 0.0 0.0 0.6 0.6 0.0 0.6 2.7 1.00
71 STRIP SOLUTION 0.0 0.0 3.1 3.1 0.0 3.1 13.7 1.00
72 BARREN SOLUTION FROM E/W CELL 0.0 0.0 3.1 3.1 0.0 3.1 13.7 1.00
73 CARBON SLURRY TO REACTIVATION 0.0 0.1 0.4 0.5 20.7 0.5 2.0 1.13
74 STRIP COOLER WATER 0.0 0.0 4.2 4.2 0.0 4.2 18.7 1.00
75 STRIP SOLUTION BLEED 0.0 0.0 #REF! #REF! #REF! #REF! #REF! #REF!
76 STRIP SOLUTION MAKE UP 0.0 0.0 #REF! #REF! #REF! #REF! #REF! #REF!
77 STRIP RINSE WATER 0.0 0.0 0.7 0.7 0.0 0.7 2.9 1.00
78 CARBON TRANSPORT DRAIN STRIP VES. 0.0 0.0 0.7 0.7 0.0 0.7 2.9 1.00
79 0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.00
80 0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.00
81 0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.00
82 0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.00
83 0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.00
84 0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.00
85 WATER TO STRIP. CARBON DEW.SCR. 0.0 0.0 5.0 5.0 0.0 5.0 22.0 1.00
86 O/S CARBON DEW. SCREEN 0.0 0.1 0.4 0.5 20.9 0.5 2.0 1.13
87 FINES CARBON TO TAILING BOX 0.0 0.0 5.0 5.0 0.0 5.0 22.0 1.00
88 0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.00
89 0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.00
90 0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.00
91 0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.00
92 0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.00
93 0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.00
94 0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.00
95 COOLING WATER RETORT SYSTEM 0.0 0.0 0.7 0.7 0.0 0.7 3.0 1.00
96 0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.00
97 0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.00
98 0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.00
99 0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.00
100 COOLING WATER COMPRESSOR 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.00
101 FRESH WATER - LIME DILUTION 0.0 0.0 40.1 40.1 0.0 40.1 176.6 1.00
102 FRESH WATER - CYANIDE DILUTION 0.0 0.0 0.5 0.5 0.0 0.5 2.2 1.00
103 0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.00
104 0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.00
105 0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.00
106 0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.00
107 0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.00
108 0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.00
109 0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.00
110 RECLAIM WATER 0.0 0.0 273.6 273.6 0.0 273.6 1204.6 1.00
111 FRESH WATER FROM POND 0.0 0.0 133.8 133.8 0.0 133.8 589.3 1.00
112 TOTAL GLAND WATER 0.0 0.0 25.0 25.0 0.0 25.0 110.1 1.00
113 FRESH WATER - SERVICES/SCREENS 0.0 0.0 68.6 68.6 0.0 68.6 302.1 1.00
114 PROCESS WATER 0.0 0.0 338.8 338.8 0.0 338.8 1491.8 1.00
115 FRESH WATER MAKE-UP TO PROCESS 0.0 0.0 65.2 65.2 0.0 65.2 287.3 1.00
116 FRESH WATER TO REAGENTS 0.0 0.0 41.6 41.6 0.0 41.6 183.2 1.00
117 FRESH WATER TO SCREENS 0.0 0.0 20.0 20.0 0.0 20.0 88.1 1.00
118 WATER TO COOLING 0.0 0.0 7.0 7.0 0.0 7.0 30.8 1.00

109
6.0 INFRASTRUCTURE

6.1 SUMMARY

The selected Choco site is a greenfields site without any existing infrastructure except the second
class road between El Callao and El Manteco, which passes through the Choco 4 Concession.
The proposed infrastructure will support the mine and plant operation. Housing or
accommodation at the site is not considered due to the close proximity to El Callao, but a dining
facility at the site will supply a daily meal to workers in accordance with local practice. Workers
will be bussed from El Callao to the site for each shift. Accommodation will be provided in El
Callao for senior staff in a group of new houses.

6.2 POWER SUPPLY AND DISTRIBUTION

A major high voltage 400 kV electrical supply line carrying power from the Guri dam, and
destined for Brazil, passes near El Callao. A sub-station, located about 5 km from the Choco 4
and 10 concessions, contains switching and transformation equipment for a 115 kV supply to El
Callao. PMG has conducted discussions with the local utility company, Edelca, regarding
possible use of the same sub-station for a new supply to the Choco site.

Edelca has recommended two alternatives. One will provide a separate 115kV supply to the site
but will require PMG to purchase a 440/115 kV transformer. Alternatively, Edelca offered to
supply power from the existing equipment at a line voltage of 13.8 kV, and limit demand to 8
MW. PMG has selected the second alternative. The anticipated demand of the site is
approximately 6 MW.

Edelca has confirmed the intent to provide such a system and supply power at a cost of
$0.026/kWh, in a letter dated October 2, 2003. PMG will pay for the power line to the site and
the sub-station, switches and transformers at the site to convert line power to site voltages of 4.16
KV and 460V.

All electrical consumers at the site will be supplied from this sub-station except for the pumps
and minor users at the water reservoir. It is planned to supply these from the existing rural power
line, which runs along the road and close to the dam.

A single line diagram showing the electrical distribution system at the main plant and an
additional electrical single line diagram indicating the low voltage motor control centres (MCCs)
are included at the end of this section.

6.3 GEOTECHNICAL STUDIES

Golder was retained by Micon to investigate the soils characteristics in the proposed plant site
area and to advise on requirements for foundation design. The following text is excerpted from
the complete report Preliminary Design of Plant Facility Foundations, Choco Gold Project
included separately in Appendix C.

110

The project plans to locate the process plant southeast of the mine pits and south of the waste
stockpile in an area of approximately 250 m x 350 m

.The plant facility investigation included the drilling and sampling of five (5) vertical boreholes,
installation of one (1) piezometer and the excavation and sampling of seven (7) test pits. The details
of the factual information obtained during this investigation are contained in the Golder (2003)
Factual Information from Geotechnical Investigations Report.

Based on the results of the recent investigation performed by Golder and the results of the previous
site investigation carried out by Ingeotec Consultores (Ingeotec) in 1995, a geotechnical model was
established for defining the soil properties and design parameters in order to provide the
geotechnical recommendations for foundation design.

For the geotechnical model, it was considered that the foundation soils are comprised of a
weathering profile, varying from surficial residual soils to saprolite to weathered to fresh bedrock.
The weathering profile is composed of three geotechnical units referred to as the Residual Soil
(vertical depth varying from 0 to 3 m) and Saprolite (vertical depth varying from 3 m to 35 m), and
Weathered to Fresh Bedrock (below 35 m depth). For foundation design purposes, the properties of
the Residual Soil and Saprolite are considered to be similar.

The geotechnical properties of the Residual Soil and Saprolite will govern the allowable bearing
pressure and settlement/deformation of the new structures constructed for the plant site. Due to the
potential for swelling and softening of some the weathered soils on exposure to water, control of
surface drainage (i.e. intercepting and diverting surface run-off away from the plant facility) will be
an important aspect of the surface grading/drainage ditch design.

For raft foundations and spread footings founded on the native subsoils, a maximum allowable
bearing pressure of 225 kPa is recommended for structures in the plant site area assuming that all
footings are founded 1 m below the final ground surface. Estimates of settlement of the foundations
for the main structures in the plant are included in the report.

For footings founded on clayey silt engineered fill, a maximum allowable bearing pressure of
150 kPa is recommended. It should be noted that swelling pressures ranging from 40 kPa to 80 kPa
were measured on specimens of compacted saprolite material composed of high plasticity clays and
silts. As such, heave of lightly loaded footings and slabs constructed on engineered fill composed of
this type of material and exposed to wetting should be expected. Additional testing to quantify the
expected magnitudes of heave could be carried out at the detail design stage. For preliminary
design, construction of lightly loaded, settlement sensitive structures on compacted saprolite fill
composed of high plasticity clays and silts should be avoided. In all cases, proper management of
surface water will be necessary to divert run-off away from foundations.

The recommendations summarized above assume that the groundwater table is located at a depth
greater than 20 m below the ground surface in the area of the plant site based on the conditions
noted during our recent investigation. The groundwater table could be subject to seasonal variations
and if the level is closer to the ground surface than assumed, the foundation recommendations may

111
change. As such, it is important that monitoring of the installed piezometer and adjacent piezometers
continue to better define the seasonal (and yearly) variation of the groundwater table.

6.4 WATER SUPPLY, STORAGE AND DISTRIBUTION

A description of the Choco project water supply, storage and distribution facilities, as they relate
to the plant and infrastructure systems, is included in Sections 5.3.9 and 5.3.10. Overall aspects
of the site water balance and supply have been studied by Golder.

Golder was retained by Micon to evaluate the site water balance and to develop a strategy for
water management. The results of this study are reported in full in Flow Predictions and
Reservoir Requirements, Choco Gold Project included as Appendix E. A summary of the
investigation and recommendations is excerpted from the report as follows:

This section outlines the results of the water balance for the site. It includes a discussion of make-
up water demands for the ore processing, the storage available in the tailings area and the fresh
water storage requirements necessary under a range of climate conditions.

The water balance spreadsheet and output data for each flow component related to four selected
cases (scenarios) are quantified .. . For each tested case (scenario), a complete Spreadsheet
Water Balance model including seven linked sheets are presented

Water Demand for Ore Processing

Water supply to the mill is the single most significant water demand for the project. The total slurry
water used for the ore processing is about 300,000 m3/month (based on a mill production rate of
5,400 t/day). Water from the Tailings Area will be recirculated to the process plant at an average
rate of 254,000 m3/month. The rate of recirculation will be capped at 85 % of the slurry water
discharged to the Tailings Area. Approximately 15 % of the total water demand will come from
water in ore and fresh water from the Water Reservoir. This flow equals to an average fresh water
supply of 45,000 m3/month.

The recirculation water demand will be satisfied first by use of the water in the tailings area. The
demand for fresh water will be supplied from the fresh water reservoir. Under dry climate
conditions, the demand for recirculation water may exceed the water available in the tailings area.
Under these conditions, the remaining water demand will be supplied from the Water Reservoir.

The water balance was assessed for four different combinations of operating and climate conditions.
Both the scenarios and water balance results are described ..

The [table] also provides a summary of the net inflows to the Tailings Area on a monthly basis and
tracks the net storage available in both the tailings Area and the Water Reservoir. It can be seen
that, for the driest combination of conditions modelled (scenario 1), a Water Reservoir capacity of
1.2 M-m
3
would provide sufficient fresh water to ensure that the Process Water demand is satisfied.
The estimated lowest water storage volume in the Water Reservoir is approximately 273,000 m
3
at
the end of the dry season (April) for the 1 in a 100 year dry period.

112
Sizing of the Water Reservoir

The main function of the Water Reservoir is to provide fresh water to the process plant under normal
operating periods, and also to contribute to supplement the demand for recirculation water during
the extreme dry conditions. Since the water collected in the Water Reservoir will not likely have any
contact with any mine waste materials, it is assumed that the water quality is not an issue and that
frequent discharge is acceptable.

[Table] summarizes the water balance results for a range of operating conditions and climate
conditions and assumptions. The results track the stored water available in the tailings area for each
of the outlined scenarios. The availability of water within the tailings area is then used to determine
the demand for fresh water from the Water Reservoir.

The results indicated that a reservoir volume of approximately 1.2 M-m
3
will be adequate to support
a nominal tailings production rate of 5,985 t/d in a dry year with a recurrence interval of 100 years.
The assessment also assumes that there is a 243,000 m
3
inventory (i.e. surplus water from the
previous year) in the Tailings Area and the Water Management Area at the end of the rainy season
(September). The results also indicated that the reservoir volume could be reduced by approximately
300,000 m
3
if the design criterion is reduced to a dry period with a recurrence interval of 50 years.

Start-up Water Inventory

In the first year of operation, the risk of water shortage is higher because there is less water
available for recirculation in the initial two months of operation and because of the limited time
available for the collection of water prior to start-up.

The initial water storage required at the start-up of `the mine is affected by a number of key
parameters including the following:

Start-up production rate (5,400 t/d, Micon);
Water content in ore (approximately 10 % by weight, Micon);
Month of start-up July (Micon);[note: now revised to August earliest]
Assumed run-off coefficient;
Seepage loss from the Reservoir (30,000 m
3
/month); and
Acceptable risk levels.

The first three parameters have been determined as part of the project work (Personal
communication with Micon and Bolivar, September 29, 2003) and a range of run-off coefficients and
precipitation scenarios were considered to evaluate the risk of a water shortage in the first year of
operation. The seepage rate from the water reservoir was based on the SeepW analysis
documented in the report on Preliminary Water Reservoir Design (Golder, 2003b).

The modelling approach required to quantify the risk level associated with start-up must address the
joint probability of monthly variation in precipitation inputs through both the wet and dry period. As
discussed in [Section], the dynamic probabilistic simulation model Goldsim was utilized to achieve
the objective.

113

The model was initially used to determine the volume of water necessary at start-up to satisfy the
demand through the first year of production for range of risk levels and run-off coefficients.
Subsequent to this, the model was used to determine the volume of water available in the water
reservoir at start-up assuming that the reservoir is constructed and available to collect water
starting in May. The difference between the water available and the water required was used to
determine the external water supply requirement for the range of risk levels.

The outcome of the analysis and a 1 % risk level is presented in [Table]. The results for the -25 %
base runoff coefficient indicate that water required from other sources would be in the order of 0.1
Mm
3
. The results also indicate that the deficit could be as large as 0.6 Mm
3
for a 1% risk level and a
-50 % base runoff coefficient.

It is important to note that the results . are sensitive to the selected start-up date and may vary
significantly depending on the selected start-up month. It should also be noted that the quantified
external water supply requirement is based on the water volume required in the reservoir at start-up
and includes the volume required to offset evaporation and seepage losses over the subsequent year
of operation. Depending on the external water source and the timing of its availability it may be
possible to reduce the volume of external water required.

Conclusions

Based on the foregoing analysis and assumptions, the following conclusions were drawn:

The lack of site specific stream flow and the meteorological data results in uncertainty
associated with the water balance quantities.
The volume of freshwater storage required for operation is in the order of 1.2 Mm
3
based on
the driest scenario modelled. This volume could be reduced if a higher risk of water supply
failure were considered acceptable.
In the first year of operation, the risk of water shortage is higher because there is less water
available for recirculation in the initial two months of operation and because the depth and
area of the open pit in the initial year of operation limits the volume of water available to
pump to the Tailings Area.
Under average conditions, the freshwater make-up requirement to the Process Plant will be
about 45,000 m
3
/month, based on the average nominal production rate of 5,400 tonnes per
day (for years 5 to 6). Under average conditions, there is sufficient water available in the
tailings facility for recirculation to meet the mills requirement. The demand for external
water is entirely based on the need for fresh make-up water to the mill for specific purposes.
Under the 1 in 100 dry year conditions (which also includes a 1 in 100 dry season), the
freshwater make-up requirement to the Process Plant will range from 48,000 m
3
/month up to
147,000 m
3
/month, based on the average nominal production rate of 5,985 t/d (Scenario 1).

114
Recommendations

Based on the foregoing analysis, assumptions and conclusions, the following recommendations are
provided to optimize the current design of tailings management facility and Water Reservoir in the
feasibility study.

A climate and stream flow monitoring program should be implemented to confirm the findings and
assumptions outlined in this report, and to refine the water balance as part of the project
implementation.

Further opportunity exists to optimize the design of the water management system to reduce the
freshwater volume requirements from the Water Reservoir. This opportunity should be explored
further as the project elements are refined and implemented.

The design of the recommended Water Reservoir is included in the report by Golder,
Preliminary Water Reservoir Design, Choco Gold Project, contained in Appendix F and
summarized in Section 7 of this study.

6.5 SITE FACILITIES AND OTHER SERVICES

The design of the site buildings is based on experience gleaned by Bolivar and PMG principals
from running a similar operation in the same district of Venezuela. The intent will be to arrange
the facilities with as compact an arrangement as possible, taking into account noise and dust
emissions from certain units on the site, and efficient personnel movement.

6.5.1 Offices

The office building will be a centralized unit, covering about 326 m
2
, exclusive of corridors. This
building will house most of the senior personnel at site; exceptions will be the maintenance
foremen for the mobile equipment and plant workshops, who will have offices in the workshops,
the doctor who will be located in the medical/services building, and the plant manager,
maintenance engineer and metallurgist who will be located in the plant offices.

The office building will be typical for the area. It will include a concrete slab foundation,
exterior wall sidings or finishing, standard roofing materials, and central washrooms. The
interior finishing will comprise suspended tile ceilings, tile flooring, ventilation/air conditioning,
necessary plumbing for fresh/potable water, waste water drains and all electrical wiring to
individual offices including one grounded/filtered electrical outlet in each office for computers.
Furnishings provided by the contractor will include workstations.

6.5.2 Canteen and Kitchen Facilities

A sketch showing a plan of the canteen and kitchen facilities is included as Figure 6.1 at the end
of this section.

115
This canteen will have a seating area for a maximum of 100 persons at any one time and will
have an area of approximately 216 m
2
. The construction of the building will include concrete
slab foundation and typical construction materials for the area (exterior wall sidings or
finishings, standard roofing materials). The interior finishings will include walls, standard
ceilings, tile or equivalent flooring, appropriate ventilation/air conditioning, electrical wiring to
provide lighting and emergency lighting. The ceiling will be about 4 m high to provide efficient
ventilation.

Kitchen facilities covering an additional 40 m
2
will be annexed to the canteen. This will be
erected on the same concrete slab as the seating area. The kitchen interior will include suitable
electrical wiring, full kitchen equipment, plumbing, lighting and emergency lighting.

6.5.3 Services Building

The services building will provide certain employee facilities, including change rooms/showers
(68 m
2
), toilets (20 m
2
) and a medical room (20 m
2
). There will be covered parking adjacent to
the medical room for an ambulance.

The construction of the building will include a concrete slab foundation, and typical construction
materials for the area (exterior wall siding or finishing, standard roofing materials). All interior
finishings will be included; the quality of these finishings will be appropriate for the duty (tile
walls and ceiling for the shower area, typical walls for the other areas). Appropriate ventilation,
electrical wiring, plumbing for fresh/potable water feed and for waste water draining for the
showers, toilet area, and medical room, will also be included.

A packaged sewage treatment plant will be installed separate from the building and located to
collect drainage from all site sewer lines. Treated effluent will flow to a tile drain system.

Figure 6.2 provides a plan view of the services building.

6.5.4 Guard House

A guard house will be situated at the main gate, and will house the employee time clock and the
weigh bridge terminal, as well as the security guards. The area of the guard house is
approximately 16 m
2
and will be of typical local construction. The building, which houses the
time clock, will have separate entrance and exit doors. A small washroom with toilet and sink
will be provided. Exterior and interior finishings will include all the required and necessary
plumbing and electrical wiring.

A sketch showing a plan of the guard house is included in Figure 6.3.

6.5.5 Warehouse

The main warehouse will have an area of 300 m
2
, an eve height of 5 m, will be totally enclosed
for security purposes, and will be provided with appropriate ventilation and lighting. The main

116
store will be fitted with one garage door used to enter supplies with a fork lift and 2 personnel
doors. A rack system will be provided for material storage, with aisles wide enough for forklift
access. A closed internal storeroom, with further controls on access, will be provided for such
items as stationary, electronic parts and hand tools.

A sketch showing a plan layout of the main store building is included in Figure 6.4.

A fenced concrete lay-down area of about 400 m
2
will be provided for items such as off-road
tires, crusher linings, mill linings etc.

A separate open and enclosed chemical storage area of 200 m
2
, located near the grinding area of
the plant, will be provided for the storage of cyanide and other process chemicals, which
generally will remain in their shipping containers until required for use.

A dedicated building will be used for the storage of lime, which will be received in large bulk
bags. This building will measure approximately 31 m long, 15 m wide, 4.5 high at the walls and
5.5 m high at the centre. The lime store will be erected on a concrete slab, which will have a 1.5
slope. The building will be covered with siding on all sides and have garage doors (4 m x 4 m) at
each end of the building. Appropriate lighting and exhaust ventilation will be included.

Storage for diesel fuel will comprise two main tanks of 25 m
3
each and a fuel pump equipped
with a computer record system, located near the mine vehicle repair shop. A smaller day tank
will be installed to supply fuel to the plant users, the carbon reactivation kiln and the gold
furnace.

6.5.6 Laboratory

A plan of the laboratory building is included in the sketch, Figure 6.5. The area of the building
footprint is approximately 300 m
2
. The laboratory design includes ventilation and air
conditioning for the fire assay preparation room, the wet chemical laboratory, the balance room
and the office. Ventilation and dust collection have been included for the sample receiving and
preparation room.

Construction of the laboratory will be similar to the other site buildings. It will be erected on a
concrete slab and will be constructed using standard construction materials, typical for the area.
As with the other buildings, appropriate plumbing and electrical wiring will be included.

The laboratory is designed to handle all samples from the plant and mine. Production samples
from the plant containing solids (head and tailings composites, carbon from each adsorption
tank) will amount to a maximum of some 50 samples per day. These will be analyzed for gold by
using fire assay. A similar number of production liquid samples will be analyzed for gold each
day using a solvent extraction/atomic adsorption (AA) method. Bullion will also be assayed as
required using fire assay, up to a maximum of 10 assays a week.

117
PMG is reviewing an alternative assaying method for mine grade control samples, which
employs large samples, and accelerated cyanide leaching with AA finish, and which has been
employed at a number of other gold operations. The method appears to be appropriate for mining
control where a fast turn-around, less than optimum precision and efficiency in handling multiple
samples is expected. Several companies offer equipment for carrying out a large number of leach
assays, which will likely offer economies in cost and time.

6.5.7 Mobile Equipment Repair Facility

The mobile equipment maintenance shop will have an area of 646 m
2
(17 m x 38 m) and a total
height of 11 m. A sketch showing a plan of the maintenance facility is included in Figure 6.6.
The building is designed to accommodate three typically 60-tonne capacity trucks.

The main maintenance area will be serviced with an overhead crane (10-ton) supported at 10 m
height. An area, adjacent to the main repair shop, of 4 m x 17 m with a height of 4 m has been
included and will house an office, a washroom, and 2 storage areas (tool room and lubricant
store).

Siding will be installed on the sides and back of the main maintenance area, the front will be left
open. The smaller administration section of the building with the storage area will be enclosed on
all sides. The office and washroom will be equipped with appropriate plumbing and electrical
wiring.

The truck wash bay provided with high-pressure wash systems will be outside and adjacent to
the maintenance building apron. Wash water will drain to a catchment sump fitted for oil
retention and recovery.

6.5.8 Plant Workshop

The plant workshop facilities will be located in the plant building. These maintenance facilities
will include a welding area, electrical and instrumentation shop, basic machine tool area (with a
lathe, drilling machine, and power hacksaw) and a general repair area.

6.5.9 Telecommunications

A traditional telecommunication system will be installed for the mining operation, comprising
PBX switchboard and distribution to individual handsets and to several Fax machines.

Each work station will include a networked computer system to provide e-mail and Internet
service. High speed or cable service is not presently available in El Callao.

In the El Callao area cellular phone service is available.

118
6.5.10 Transportation and Other Services

Transportation between El Callao and the mine site, for all employees, will be provided by the
company, for both steady days and for shift workers. It is expected that a contracted bus service
will be used. The company will also provide selected work clothing in addition to required safety
equipment, and will provide a daily meal for employees when they are at the site.

There is frequent bus service between El Callao and towns to the north and south, including the
regional centre of Puerto Ordaz. The closest commercial airport is in Puerto Ordaz, although
there are airstrips for private use in Guasipati and Tumeremo.

Figure 6.1
Sketch of the Canteen and Kitchen Facilities

5

m
8 m
1
2

m
18 m
Canteen and Kitchen
Kitchen
Total Area: 216+40 = 256 m2

119
Figure 6.2
Sketch of the Services Building

Figure 6.3
Sketch of the Guard House Building

Washroo m
Punch
Cloc k
Des k
Wei gh Scale
Contro ls
4 m
4 m
First Aid/
Doctor
Toilets
Change Room
Showers
5 m
4 m
4 m
9 m
1
2

m
4

m
4

m
4

m
8

m
4

m

120

Sample
Receiving and
Preparation
Fire Assay
Sample Prep
Processing
Weigh
Room
Office
AA/Wet Lab/
Environment
1
2
3
4
5
10 m
10 m
12
m
6 m
8 m
10
m
8 m 6 m
Total Area: 300 m
2
Laboratory
Figure 6.4
Sketch of the Main Warehouse Building

Figure 6.5
Sketch of the Laboratory

1 5
2 0
m
C l o s e d
S t o r e r o o m
Shelves
3 m high

121
Patio
(Lay Down # 1)
14 m
1
4

m
Truck
Shop
(646 m
2
)
17 m

60 t Truck
60 t Truck
60 t Truck
Office
Tool
Room
Lube
Store
Figure 6.6
Sketch of the Mobile Equipment Maintenance Facility

6.6 DRAWINGS

The following layout, general arrangement and schematic drawings are included at the end of
this section.

Drawing No. Title

D-22072-0001-L Rev E General Site Layout
D-22072-0002-L Rev G Process Plant Site Layout
D-22072-0003-L Rev E Crushing Area Layout
D-22072-0004-L Rev D Grinding Area Ground Floor Plan
D-22072-0005-L Rev D Grinding Area Operating Floor Plan
D-22072-0006-L Rev D Grinding Area Miscellaneous Floor Plans
D-22072-0007-L Rev D Grinding Area Sections A-A and B-B
D-22072-0008-L Rev D Grinding Area Sections C-C and D-D
D-22072-0009-L Rev E Stripping, Reactivation and Refining, Ground Floor Plan
D-22072-0010-L Rev E Stripping, Reactivation and Refining, Plan @ 7297-8
D-22072-0011-L Rev E Stripping, Reactivation and Refining, Plan @ 7306 and 7310
D-22072-0012-L Rev E Stripping, Reactivation and Refining, Plan @ 7315 and 7323

122
D-22072-0013-L Rev E Stripping, Reactivation and Refining, Sections A-A and B-B
D-22072-0014-L Rev E Stripping, Reactivation and Refining, Sections C-C and D-D
D-22072-0015-L Rev C CIP and Tailings Area Plan Views
D-22072-0016-L Rev B Fresh Water Pumphouse Plan and Elevation
D-22072-0017-L Rev B General Site Layout, Pipeline Elevations
D-22072-0018-L Rev B General Site, Road Layout
A1-22072-7001-E Rev C Main Single Line Diagram, Alternative 13.8 kV
A1-22072-7002-E Rev C Single Line Diagram Low Voltage MCCs
A1-22072-8050-Y Rev B Control System Architecture

123
7.0 TAILINGS DISPOSAL AND WATER RESERVOIR

7.1 DESIGN BASIS

As part of the feasibility study for the Choco project in Venezuela, Micon retained Golder to
carry out geotechnical subsurface investigations and preliminary design of a tailings disposal
facility for the Choco project. The report Preliminary Design of the Tailings Disposal Facility,
Choco Gold Project, El Callao, Venezuela, dated December 2003 and contained in Appendix D
addresses the tailings disposal facility design and provides material quantities to allow estimation
of the capital cost for the facility. Reference Figure 2 from the report is included in this section.
The following text is an excerpted summary of the Golder report:

The current project is based on gold extraction, both from the oxide (saprolite) zone and the deeper
fresh rock zone, with the future potential to extend the project by increasing the amount of ore after
additional exploration drilling. Gold will be extracted from mineable reserves of about 13 million
tonnes using a conventional cyanidation and carbon-in-pulp process. The nominal milling rate is
5,400 tonnes per day over a mine life of 6.7 years. Mill tailings will be conveyed in slurry form to the
tailings storage facility located 2 km north of the plant site. Process water and natural run-off will be
re-circulated from the tailings facility to the mill, with make-up water obtained from a reservoir
located approximately 2 km south-east of the mill.

Construction of the tailings facility involves building four dams (Dams A, B, C and D) and ancillary
structures including an emergency spillway and watershed diversions. The crest level of the dams
required for commissioning the facility is elevation 225 m (AMSL). Subsequently, as the tailings
level rises, these starter structures will be raised progressively as the tailings level rises by the
upstream method with locally borrowed fill founded on the deposited tailings beach. The current
design proposed two raises with a final crest elevation of 240 m. Expansion of the storage capacity
(to include tailings from potential ore) is possible by raising the crest level up to about elevation 250
m. This would increase the total storage volume more than enough to contain tailings from a total of
20 million tonnes of ore.

The dams will be constructed generally with locally borrowed materials, supplemented by processed
or imported materials for filter and drain zones. The downstream and upstream slopes of the starter
dams are 3:1 and 2:1 (horizontal:vertical), respectively. Dam stability analyses indicate the dams
will remain stable under extreme loading conditions including the flood and earthquake conditions.
An emergency spillway will be provided in Dam D to pass flows from a 1,000-year return storm.
Dam raises will have a downstream slope of 3:1 to limit erosion and to facilitate re-vegetation for
closure. Accounting for access benches to assist with slope maintenance, the overall slope angle will
be about 3.3:1. Routine maintenance of the slopes will be required during operations; armouring of
the slopes with granular erosion protection could be implemented to reduce maintenance.

The design requires the diversion of two watersheds each having an area of about 169 hectares.
These are the watershed containing Ponds 1 and 2 located to the south and east of Dams B and C;
and the Water Management Pond located to the north of Dam D. Diverting clean run-off from these
watershed reduces the catchment area contributing to the tailings pond from the original 469
hectares down to 123 hectares. This is important to keep the tailings pond operation in balance.

124
The deposition plan provides flexibility and inherent safety to tailings disposal operations. Tailings
will be spigotted from three of the perimeter dams to control the location of the tailings pond, to
enhance dam stability, and to reduce risk. In this way variations in operational parameters
(production rate, slurry density, deposited void ratio, etc.) are easily accommodated provided the
dams are maintained sufficiently above the tailings beach. As a contingency, the Water Management
Pond can be used to provide contingency water storage capacity to minimize the chances of
releasing cyanide-impacted water to the environment. Hydrologic studies done for the detailed
design or observations early in operations will indicate whether or not this contingency is necessary.

To assist in dam raising by the upstream method, the upper 50 m of the beach will be nominally
compacted using bulldozers in the dry season to maximize the benefit of tailings desiccation (drying)
by sun and wind (possibly in conjunction with cycling of the tailings discharge location). This
compaction will densify the tailings on which the raises will be founded to reduce equipment access
problems and to limit the pore pressures that will be generated in the beach during construction.

A key consideration in the design is providing operational flexibility for the management of the
tailings pond (which will contain cyanide). Cyanide degrades naturally and volatilizes into the
atmosphere. A flexible water management system is necessary to prevent unintended discharges to
the environment. Tailings slurry water will be managed entirely within the tailings disposal area.
To maintain the pond volume in balance year over year, re-circulation of process water from the
tailings disposal area to the mill has to be maximized. It has been calculated that total possible mill
water consumption of recycled water would annually average an amount equivalent to
approximately 85 % of the tailings slurry water discharged into the pond. For each tailings
deposition stage an operating range is given for the tailings pond. This range consists of normal and
maximum operating water levels, (NOWL and MOWL, respectively) which are based on the expected
fluctuations in average and 20-year return high precipitation years, respectively. Freeboard is
provided above the MOWL to the Dam D spillway invert to contain an environmental design storm
(EDS), which is taken to be a 100-year return 24-hour precipitation event. (The EDS is defined as the
maximum storm that can be stored without discharge to the environment).

The design assumes that no significant acid production or metal leaching will occur from the tailings
in the short or long terms. The results of previous geochemical test work indicates tailings from the
oxide zone are non acid generating but fresh rock tailings may be potentially acid generating. This
assumption should be verified by on-going test work. Future tailings deposition plans can be
adjusted according to these results to minimize risks associated with mitigation and closure works
and the related costs.

Items that that should be addressed in the detailed design stage include:

Water balance planning has been done using the limited hydrological data available. As
such, the actual water volumes may vary from those predicted. To clarify the risks
associated with the release of effluent to the environment, it is recommended that site-specific
hydrologic data be obtained for finalizing the design.
Upstream raising of the dams is proposed because it requires the least amount of dam fill
(relative to centreline or downstream raising). Geotechnical laboratory testing should be
done on the tailings to determine the consolidation characteristics to ensure the required

125
dam raising rate can be achieved. Observations made during early operations will also be
important in this regard.
Laboratory test work for the dam foundation and borrow material investigations indicates
that some of the saprolite and residual soils are potentially dispersive. The dispersion
potential of all proposed fill materials should be evaluated on an on-going basis to ensure
adequate dam safety. (The use of dispersive clays as dam fill would require that a fine sand
filter zone be incorporated upstream of the chimney drain to prevent potential piping of the
dam fill).
7.2 WATER MANAGEMENT

Micon retained Golder to conduct a water management assessment for the site when in
operation. This work has been provided in the Golder report Flow Predictions and Reservoir
Requirements, Choco Gold Project, El Callao, Venezuela, dated November 2003 and contained
in Appendix E.

Golder identified the potential shortage of process water during initial years of the project if drier
than normal years were encountered and recycle from the tailings area was reduced. A potential
source of process make-up water is the Yuruari River which flows through El Callao and to the
north of the Choco project. However, the river has exhibited very little flow during recent dry
seasons and El Callao depends upon it for domestic supply.

Golder was commissioned to develop an alternative scheme for collection of fresh water and its
storage for use during dry seasons. After examination of suitable catchment areas, Golder
recommended construction of a dam and reservoir to the south of the Choco plant site. Site
investigations and preliminary design of the dam followed. The results of this work are
presented in the Golder report Preliminary Water Reservoir Design, Choco Gold Project, El
Callao, Venezuela dated November 2003, and contained in Appendix F.

The following text is excerpted from the complete report:

The water storage reservoir, which will be located approximately 2 km south-east of the plant site,
is required to provide made-up water in dry periods.

The average nominal milling rate is 5,400 tonnes per day over a mine life of 6.7 years. The peak
nominal rate is 5,985 tonnes per day in Years 2 through 4. To meet the water demand at this peak
planned production, the reservoir design comprises an impounded volume of 1.2 million cubic metres
at the full supply level. During wet periods, excess water will spill to the environment however water
within the impoundment will not be impacted by mining or milling operations. It is suggested that
this required volume could be reduced somewhat by making use of potential storage in the Water
Management Pond located immediately adjacent to the Tailings Area (Golder 2003b). In this case,
the dam height and costs would be correspondingly reduced.

The Water Reservoir Dam will be constructed in a single stage to a crest elevation of 222 m,
generally using locally borrowed materials. Processed or imported materials are required for filter,

126
drain and erosion protection zones. The crest of the dam will be 10 m wide with downstream and
upstream slopes of 2.5:1 (horizontal:vertical). A 30 m wide upstream berm constructed of relatively
low permeability soil will be provided to reduce seepage through the dam foundation. Pumping to
the mill will be from fixed pumping station or barge-mounted pumps..

Foundation preparation will be a critical aspect of the construction to ensure the dam performs
adequately. As a minimum, excavation to and cleaning of the bedrock surface is required to allow
for inspection and mapping of geologic conditions. It is recommended that provisions be made such
that bedrock foundation grouting can be performed, if required, based on the results of the
conditions encountered. It is estimated that seepage losses through and beneath the dam will be
about 2,000 cubic metres per month (0.8 L/s) with the reservoir at full supply level; however, this
rate is sensitive to the hydraulic conductivity of the upper (fractured) bedrock. ... A seepage
rate of 10,000 cubic metres per month was used in the water supply balance planning (Golder
20003c). Due to the sensitivity to this seepage rate, additional substance investigation is
recommended at the detailed design stage.

7.3 DRAWINGS

The following drawings were prepared by Golder for the individual reports contained in the
Appendices, and are included here for reference.

General Site Plan
Watershed Map
Water Reservoir Plan
Tailings Disposal Facility Plan

127
8.0 ENVIRONMENTAL MANAGEMENT

PMG has contracted all environmental studies and permitting assistance to the firm of
Ambioconsult C.A. with offices in Caracas. During the course of the feasibility study,
Ambioconsult has completed environmental baseline studies for the Choco project and an
environmental impact assessment. With the assistance of Ambioconsult, PMG has submitted
applications for permits necessary to start construction and to operate the facilities. It is stated
by PMG that the granting of the permits is expected in December 2003.

Reports prepared by Ambioconsult (in Spanish) are available in Bolivar Gold Corp. and PMG
offices.

Ambioconsult has provided a translation in English of the executive summary of the report EIA
Mining Development Choco4 and Choco 10, dated September 2003. The main points of this
summary are:

Introduction, Background and Legal Framework, Project Description. These contain
information already discussed in other parts of this feasibility study. Additional
discussion is provided on:
o Project closure, which describes objectives of restoring vegetation and preventing
erosion
o Generation, handling and disposal of effluents and wastes. Typical methods for
treatment and disposal of domestic and industrial wastes and effluents are listed,
and methods to mitigate the effects of dust and noise are discussed.
o Employment creation, describes the expected workforce during construction and
operation.
o Consumables and Services, including the methods of transportation of materials
to the site.
Environmental Characterization. The existing Physical, Biological and Socioeconomic
Environments are described.
Baseline. Ambioconsult collected samples of surface water, groundwater and sediments
to assess their physical-chemical characteristics. The summary states that assessment
parameters were selected according to the specific type of each environmental
component and considering the environmental legislation in effect. Analysis was made
to establish the contributions made by communities and small miners. Metal
concentrations in the samples corresponded to that of the parental material that
originated formation.
Environmental Sensitivity. Areas with sensitive physical environment, regarding
erosion, are identified in the north of Choco 4 Concession and the south and central parts
of Choco 10 Concession. Areas with sensitive socio-economic environment are
identified along the streams Quebrada Cuasia and Quebrada El Choco, which are in the
south part of Choco 10, due to existing communities and agricultural activity.
Impact Identification and Assessment. Potential impacts are identified and listed in order
of importance. Those of highest importance are:

128
o Alteration of the quality of superficial and ground waters due to excavation of
open pit
o Alteration of the superficial drainage pattern due to open pit and waste dump
o Activation of erosion processes
o The effect on soils
o The effect on vegetation in areas of the tailings basin and water reservoir
o Alteration of the superficial drainage pattern due to infrastructure
o Alteration of the quality of superficial and ground waters due to processing plant,
tailings, water storage and roads and pipelines
Natural Resources Affectation is quantified for each area and activity of the project site,
and listed according to Vegetation, Soil and Water Resources.
Proposal of Measures lists measures and estimated costs for protecting the environment
during construction and operation and for its restoration on closure. Ongoing studies are
included. The total cost is stated as 580 million Bs.
Monitoring Program and Environmental Supervision Plan. Tables and schedules are
provided, listing monitoring locations, type of work and a schedule for environmental
work during the project life and closure.

129
9.0 PROJECT SCHEDULE

Development of the project, after acceptance of the feasibility study, and culminating in project
operation, is illustrated by the attached Project Schedule produced in MS Project.

The project commitment date in mid-November 2003 is assumed, at which time detailed
engineering and preliminary site work should commence. Removal of the plant facilities from
the Grouse Creek site has been completed and the material will be shipped to the site once all
necessary permits are in place.

The schedule shows that construction completion can be attained in August 2004 and after one
month allowed for plant start-up and commissioning, full production rate shall be attained during
September 2004.

Early completion of the tailings and water reservoir dams, by the end of May 2004, is important
since collection of water for the plant start-up period is required during the rainy season of May-
September.

1
3
0

1
3
1

132
10.0 CAPITAL COST ESTIMATE

10.1 INTRODUCTION

The estimated total pre-production capital cost for the project is $ 37.590 million, excluding the
cost of pre-production waste removal in the mine. All costs are in third quarter 2003 US dollars
and include supply, transport, erection, and VAT on used equipment. Excluded from the costs
are provisions for inflation or fluctuations in currency. The estimate is judged to be accurate
within +/- 10 % and is summarized in Table 10.1. Details of the capital cost are included at the
end of this section.

Table 10.1
Choco Project Pre-production Capital Cost Estimate

Description Cost (US$)
Mining 7,439,812
Major Equipment 7,121,812
Mine Support Equipment 318,000

Infrastructure 9,262,199
Management Housing 695,000
Mine Infrastructure 1,217,022
Site Infrastructure 2,457,375
Dams and Reservoirs 4,892,802

Process 11,673,661
Civil 3,790,168
Equipment 5,360,224
Piping 1,424,540
Electricity/Instrumentation 1,098,729

Light Vehicles 237,778
TOTAL DIRECT COSTS 28,613,450

Permits and Facilities 75,000
Engineering 543,731
Vendor Assistance 30,000
Spares and First Fill 785,000
Grouse Creek - dismantling and transportation 2,227,000
Potential Water Line from River 291,000
VAT 534,844
Owner's Costs 1,810,400
Contingency 2,680,000
TOTAL INDIRECT COSTS 8,976,975

TOTAL PROJECT 37,590,425

133
10.2 GENERAL

In this project a significant portion of the process equipment is previously used, with the vast
majority obtained from Bolivars purchase for $US1.5 million of the Grouse Creek mill in Idaho,
the extent of which includes the following:

Plant feed conveyors and feed systems.
Grinding circuit process equipment.
Main process building (c/w structural steel, roofing, rubber lined pipe and fittings,
electrical cable and trays, switchgear etc).
Leach and CIP tanks.
Lime holding tank and agitator.
Sump pumps.
Service pumps and fire system.
Other major items not obtained through the purchase of the Grouse Creek plant, for which used
equipment quotations were obtained, include the apron feeder, jaw crusher, rock breaker, the
interstage carbon screens, and the process air compressors. The amount shown for each piece of
used equipment includes additional costs for the refurbishing of known elements, such as a new
belt for the feed conveyor. Met-Chem has not been able to independently verify the condition of
used equipment that is outside of the Grouse Creek scope of supply. As for the Grouse Creek
equipment, an amount of $200,000 has been allocated for the refurbishment of the horizontal
slurry pumps, some of which require new impellers and variable frequency drives.

The capital cost estimate has been structured to uniquely identify used items with the addition of
two columns. All used equipment or infrastructure costs appear in the EQUIPMENT (USED)
group of columns. Each Grouse Creek piece of equipment has been identified with the following
label: incl in G.C..

The capital cost estimate was prepared, to a large extent, based on client supplied documentation
in the form of quotations or firm price bids. All costs provided by Bolivar were accompanied by
documentation, which has been compiled by Met-Chem.

10.3 MINE EQUIPMENT COSTS

The cost for pre-production mine capital equipment is estimated at $7,440,000. This cost
includes all major mining equipment and mine support equipment required for the project. This
cost excludes costs for mine site infrastructure, which are included elsewhere in the estimate.

134
10.4 CONSTRUCTION LABOUR COSTS

Construction costs for unit quantities of earthworks, concrete and structural steel were provided
by Vinccler C.A., which is one of the largest contractors in Venezuela. Vinccler also provided
unit crew rates for various construction disciplines including concrete, structural steel,
mechanical equipment installation, and piping. These are all-inclusive rates which include direct
labour wages and all social benefits, construction equipment rentals and indirect expenses
(including temporary facilities, indirect labour, mobilization, consumables, national and
municipal taxes, risk penalties and bonds, overhead and profit). These unit rates were used in the
estimate as the basis of labour unit rates, after being adjusted slightly to reflect a more typical
portion for the equipment rental component of the crew cost.

Labour costs in the estimate were derived by multiplying the equivalent North American man-
hours required for the installation or erection of each cost element by an appropriate factor to
reflect local productivity. These factors were obtained from information received from
contractors in Venezuela and neighbouring countries in past projects that are typical of the
region. The unit rates and productivity factors used for each crew are presented in Table 10.2.

Table 10.2
Construction Crew Unit Rates and Productivity Factors

Crew Description
Unit
Rate
Productivity
Equipment $18.00 2.0
Electrical $18.00 2.0
Piping $18.00 2.0
Structural Steel $14.00 2.0
Tanks $18.00 3.0
Architectural $18.00 2.0
Civil (earthworks) $16.00 2.0
Concrete $24.00 2.0

Equivalent North American man-hours were multiplied by the unit rate and productivity
associated with a particular crew to arrive at a total labour cost for each cost element.

10.5 CIVIL/STRUCTURAL

All civil and structural quantities were derived from layout and general arrangement drawings.
For the grinding and leach/CIP areas, Grouse Creek concrete drawings were used to obtain
concrete quantities. Structural steel, both external and internal, for the grinding area will be
reused from the Grouse Creek plant as the new layout basically mirrors the Grouse Creek
footprint. An allowance was made for the site painting of the existing Grouse Creek steel after
erection at the Choco site. All additional steel will be of local origin.

135
10.6 MECHANICAL EQUIPMENT AND PIPING

Costs for new equipment were obtained from budgetary quotations based on information
supplied from data sheets. Costs for most of the minor equipment were developed from a variety
of in-house sources including quotations from recent projects. All of the mechanical equipment
found in the estimate comes from a detailed equipment list derived from existing documentation.
The costs, as reported in the estimate, have no provisions for inflation or escalation. Installation
costs were derived by first determining the number of North American man-hours required to
install each piece of equipment, based on the experience of Met-Chem and in-house reference
materials. These hours were then multiplied by 2.0, to reflect local productivity, and then
multiplied by the crew rate of $18 per hour to obtain the installation cost. Finally, inland freight
costs were added to arrive at a total cost for each piece of equipment. The cost for dismantling
of the Grouse Creek plant and the ocean freight transportation to Venezuela are found in the
Indirect Cost portion of the capital cost estimate. These costs are based on quotes obtained by
Bolivar.

Piping take-offs were not performed to calculate the cost of process pipe. Based on information
provided by Bolivar, it was established that approximately 80 % of the rubber lined process pipe
was available from Grouse Creek. The remaining 20 % was calculated based on a percentage of
the projected installed cost of mechanical equipment.

The tailings, reclaim, catchment, and fresh water pipeline costs reflect the use of buried high
density polyethylene (HDPE) pipe, based on preliminary routing. The type and length of each
pipeline has been identified in the description column. The total cost includes the rental of the
fusion machine and the cost of burying the pipe.

10.7 ELECTRICAL AND INSTRUMENTATION

These costs were derived from an electrical and instrument list comprising each piece of
equipment found in the mechanical list. Quantities for cables and trays were developed after first
identifying available stock from Grouse Creek. Unit costs for instruments and materials were
obtained from in-house sources based on recent quotations and or other reference materials.
Installation man-hours are based on North American productivity multiplied by 2.0 to reflect
local productivity. The cost for the sub station is based on a quote provided by Bolivar for a
used sub station.

10.8 INFRASTRUCTURE COSTS

The total cost of infrastructure for the project is $9.3 million and includes such main items as site
preparation, roads, transmission lines, water retention dam, tailings dam, and site buildings.

The costs of buildings are based on all-inclusive quotations received by Bolivar from a local
contractor. This information was given to Met-Chem in spreadsheet format with little detail and
no break down of quantities. An independent assessment of building costs was performed based
on typical quantities of steel and concrete per unit volume of building space using unit rate data

136
provided by Vinccler. The costs obtained by Bolivar for these buildings appear low in
comparison with cost information provided by Vinccler. Nonetheless, Bolivar was able to
provide a letter of intent addressed to a local contractor for the construction of site buildings with
these same costs. The cost of the tailings dam is based on quantities provided by Golder, and unit
rates for each task by Vinccler. The purchase cost of certain raw materials (gravel, sand, rock
fill) is excluded from the Vinccler quotation and is estimated as owner supplied materials, based
on quotations from local sources. Other smaller cost elements such as site fencing are based on a
combination of quotations and in-house pricing.

10.9 INDIRECT COSTS

The indirect costs are estimated at $9 million. These costs include items such as engineering,
first fill, capital spares, owners costs, and contingency.

Detail engineering will be performed locally based on an average quoted cost of $25 per hour.
The cost for first fill includes the ball charge for the SAG and ball mills, and one months supply
of reagents. This cost total is estimated at $285,000.

An amount of $1,810,000 has been allocated for Owners Costs, which include such things as
salaries for operating and project personnel, temporary site facilities, training and insurance.

Finally, an amount of $2,680,000 has been estimated for contingency based on 10 % of all costs
but excluding the mining equipment.

The contingency is an integral part of the capital cost estimate. It is an allowance for undefined
items or cost elements that will be incurred, within the defined project scope, but that can not be
explicitly foreseen due to a lack of detailed or accurate information. It should not be considered
as a compensation for estimating inaccuracy, nor is it intended to cover any costs due to potential
scope changes, Acts of God, labour strikes, labour disruptions or other events outside the
control of the project manager, fluctuations in currency, or cost escalation beyond the predicted
rates.

10.10 SUSTAINING CAPITAL

The sustaining capital requirement comprises a modest increase to the mine fleet and post-start
up lifts of the tailings dams. The additional mining equipment is one truck required in Year 3 and
one additional drill required in Year 4. Dam raising during Years 2 and 3 is required. The total
estimated cost is $3.424 million. In addition, a closure cost allowance is provided at $1.0 million.
An allowance for salvage value of $2.0 million is provided in the cash flow calculation.

1
3
7

1
3
8

1
3
9

1
4
0

1
4
1

1
4
2

1
4
3

1
4
4

1
4
5

1
4
6

1
4
7

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11.0 OPERATING COSTS
11.1 SUMMARY

Direct operating costs are estimated to average approximately US$8.44/t milled over the life of
the mine. On a year to year basis, operating costs are expected to range between US$7.70 and
US$9.10/t milled. The on-site unit costs for individual operations have been estimated at the
following average levels:

Mining cost : US$1.03/t mined
Processing cost : US$3.95/t milled
General and Administration : US$0.80/t milled

The life-of-mine average cost of producing gold is estimated at US$146/oz. This includes
applicable royalties. Royalties are payable on gold production to CVG at a rate of 1 %, on gross
profits to Tecmin at a rate of 1 %, and on gold revenue to the Venezuelan government at a rate of
3 % (exploitation tax).

The off-site costs include the refinery payment of 99.80 % of the gold produced and the refining
costs, estimated at US$2.00/oz, which includes insurance and transportation.

11.2 MINING OPERATING COSTS

The life of mine unit mining operating cost is $1.03/t mined. The average unit mining costs for
laterite, weathered and fresh rock (ore and waste) are $0.82, $0.94 and $1.37/t mined,
respectively. Table 11.1 provides a summarized breakdown of the average mining unit costs for
the life of the mine. These costs exclude the cost of waste mining during the pre-production year.

Table 11.1
Summary of Mining Unit Costs

Item Unit Cost
(US$/t mined)
Equipment 0.513
Drilling 0.031
Blasting 0.175
Dewatering 0.007
Supplies+computer+survey+software 0.003
Labour 0.298
Total 1.027

The mining equipment cost is the major cost item, accounting for approximately 50 % of the
total mining operating costs. Details of these costs are included in the appendices.

Table 11.2 provides a summary of the estimated annual mining operating costs.

149
Table 11.2
Annual Mining Operating Costs

Year Ore Type and Waste Unit Cost
($ per tonne mined)
Total Cost
($)
Pre-production Laterite
Weathered
Fresh
Total
0.79
0.89

0.86
276,906
759,540

1,036,447
Year 1 Laterite
Weathered
Fresh
Total
0.79
0.89
1.26
0.89
747,202
5,643,320
174,695
6,565,217
Year 2 Laterite
Weathered
Fresh
Total
0.78
0.88
1.24
0.86
1,443,208
5,108,007
46,206
6,597,422
Year 3 Laterite
Weathered
Fresh
Total
0.84
0.95
1.31
0.96
425,172
5,797,069
670,766
6,893,007
Year 4 Laterite
Weathered
Fresh
Total
0.85
0.95
1.31
1.02
456,350
4,809,524
1,907,603
7,173,477
Year 5 Laterite
Weathered
Fresh
Total
0.90
1.01
1.37
1.19
628,470
2,433,141
4,646,919
7,708,503
Year 6 Laterite
Weathered
Fresh
Total
0.92
1.03
1.39
1.21
386,107
2,575,740
4,692,575
7,654,422
Year 7 Laterite
Weathered
Fresh
Total
-
1.03
1.39
1.24
-
1,379,028
2,462,690
3,841,718
Total life of mine
(including Pre-
production)
Laterite
Weathered
Fresh
Total
0.82
0.94
1.37
1.02
4,363,416
28,505,370
14,601,454
47,470,240

Excluding the pre-production period, the total operating cost is $46,434,000, equivalent to $1.03
per tonne mined. The cost of pre-production stripping ($1.036 million) is included as a capital
expenditure in the financial analysis discussed in Section 12.

11.2.1 Mining Labour

The labour portion of the total mining operating cost is approximately 29 %. The average
mining labour complement is 172 full time employees, increasing to 176 from Year 3 to the end
of mine life. Four expatriates have been included in the mining complement. The labour

150
requirements and associated costs are based on an organizational structure developed by Bolivar,
comparable local mining industry salaries and payroll burdens. Table 11.3 provides a summary
of the mining labour requirements and associated costs.

Table 11.3
Annual Mining Labour Costs

Designation Number
Basic Salary
(US$/month)
Overhead
Factor
Total Cost
(US$/year/person)
Total Cost
(US$/year)
Mine superintendent 1 10,000 1.25 150,000 150,000
Maintenance superintendent 1 8,000 1.25 127,000 127,000
Chief geologist 1 8,000 1.25 127,000 127,000
General foreman 1 8,000 1.25 127,000 127,000
Overheads (travel/housing) 8,100 52,000
Sub total expatriates 4 584,000
Mine planner 1 417 1.98 9,900 9,900
Geologist 2 438 1.98 10,415 20,830
Mine planning technician 1 358 1.98 8,514 8,514
Surveyor 2 417 1.98 9,900 19,800
Surveyor helper 2 300 1.98 7,128 14,256
Grade control tech 4 317 2.21 8,398 33,592
Blastholes samplers 4 286 2.21 7,580 30,321
Mine production foreman 4 405 1.98 9,623 38,491
Maintenance shift foreman 4 408 1.98 9,702 38,808
Utility drivers 2 286 2.21 7,580 15,161
Mine/Mtce planner clerks 2 300 1.98 7,128 14,256
Overtime allowance (5 %) 12,196
Sub total mine admin. 28 256,125
Excavator operator 8 336 2.21 8,906 71,250
Truck drivers 28 322 2.21 8,531 238,857
Dozer operator (D155) 8 333 2.21 8,840 70,720
Dozer operator (D275) 4 333 2.21 8,840 35,360
F E loader operator 8 336 2.21 8,906 71,250
Grader operator 4 333 2.21 8,840 35,360
Tire dozer operator 4 333 2.21 8,840 35,360
Water truck operator 4 333 2.21 8,840 35,360
Small back hoe 3 333 2.21 8,840 26,520
Drill operator 4 333 2.21 8,840 35,360
Drill helper 0 267 2.21 7,072 0
General labour/trainees 9 238 2.21 6,299 56,687
Mechanics 1 12 403 2.21 10,674 128,092
Mechanics 2 12 304 2.21 8,067 96,798
Welder 6 313 2.21 8,310 49,858
Electrician 9 358 2.21 9,503 85,527
Crane operator 3 333 2.21 8,840 26,520
Others (service truck...) 6 333 2.21 8,840 53,040
Explosive truck driver 2 333 2.21 8,840 17,680
Utility driver 6 286 1.98 6,791 40,748
Sub total mine operators 140 1,210,347
Total Mine Labour 172 2,051,372

151
11.3 PROCESS OPERATING COSTS

Table 11.4 summarizes the average life of mine process unit operating costs.

Table 11.4
Summary of Life of Mine Average Process Unit Operating Cost

Item Consumption
(kg/t milled)
Unit Cost
(US$/t milled)
Crusher liners 0.15
Mill liners 0.22
Grinding steel balls 0.67 0.46
Lime 5.86 0.54
Cyanide 0.41 0.54
Other reagents and process supplies 0.36
Total Consumables 2.26
Process labour (81 people) 0.49
Maintenance Supplies 0.62
Power (0.026 $/kWh) 22.6 kWh/t 0.59

Total 3.95

The estimated life of mine average process unit operating cost is $3.95/t of ore processed. The
annual unit process costs vary between a low of $3.83/t and a high of $4.12/t. The main cost
items are maintenance supplies, power, lime and cyanide.

11.3.1 Process Labour

The labour portion of the total process operating cost is approximately 12 %. The average
process labour complement is 81 full time employees, including three expatriates. The annual
salaries and appropriate payroll burdens included in the labour costs are based on comparable
local mining industry rates. Table 11.5 provides a summary of the average process labour
requirements and associated costs.

152
Table 11.5
Annual Process Labour Costs

Designation Number
Basic Salary
(US$/month)
Overhead
Factor
Total Cost
(US$/year/person)
Total Cost
(US$/year)
Plant superintendent 1 8,000 1.25 120,000 120,000
Plant metallurgist 1 5,000 1.25 75,000 75,000
Maintenance engineer 1 6,000 1.25 90,000 90,000
Expatriate travel 5,000 5,000
Expatriate housing 10,000 10,000
Sub total expatriates 3 300,000 300,000
Lab superintendent 1 2,000 1.98 47,520 47,520
Assayers 12 250 2.21 6,630 79,560
Sample prep 12 220 2.21 5,834 70,013
Sampler 4 230 2.21 6,100 24,398
Production foreman 4 350 2.21 9,282 37,128
Loader operator 4 250 2.21 6,630 26,520
Crusher operator 4 230 2.21 6,100 24,398
Grinding operator 4 230 2.21 6,100 24,398
Leach/adsorption operator 4 230 2.21 6,100 24,398
Desorption operator 4 250 2.21 6,630 26,520
Reagents operator 2 230 1.98 5,465 10,930
General labour 4 220 2.21 5,834 23,338
Cover for holidays/sick 4 230 2.21 6,100 24,398
Foreman electrician 1 500 1.98 11,880 11,880
Mechanic 10 300 2.21 7,956 79,560
Electrician 4 300 2.21 7,956 31,824
Sub total local, labour cost 78 152,117 566,783
Transport cost 317 25,650
Cost of meals 625 50,625
Grand total labour cost 81 453,059 943,058

11.3.2 Power

The average process unit power cost is $0.59/t milled, which corresponds to about 15 % of the
total processing costs. A rate of $0.026/kWh is used in the calculation of power cost, which is
based on a quote received from Edelca to supply power from the local El Callao substation. The
average estimated power consumption of 22.6 kWh/t processed is based on the annual average
power load, which is estimated from the equipment load list and the operational utilization for
the various plant areas.

11.3.3 Process Consumables

The cost of plant consumables makes up about 57 % of the total processing costs. These costs
include all reagents, crusher liners, mill liners and grinding balls used in the process. The unit

153
consumption rates are based on metallurgical testwork results and the unit supply costs are based
on quotes from local suppliers. Unit reagent consumption rates were estimated for each of the
three main types of mineralization, laterite, weathered and fresh. Details of these consumption
rates are included in the process design criteria, which can be found in the appendices.

11.3.4 Maintenance Supplies

The annual maintenance supply cost is estimated as a percentage of the direct capital costs. The
direct capital cost used is based on an estimate of capital required for the supply and installation
of new equipment. The average annual maintenance supply cost is estimated at $1.2 million.

11.4 GENERAL AND ADMINISTRATION COSTS

The general and administrative (G & A) costs for the Choco project were developed with input
by Bolivar. The estimated cost for a typical operating year is $653,750 for general expenses and
$820,526 for labour.

Tables 11.6 and 11.7 include summaries of the G & A labour costs and general expenses,
respectively.

The G & A personnel structure consists of the management, accounting, cost control, purchasing,
human resources, legal, canteen and medical departments.

The administration department is responsible for public, government, community and employee
relations along with the payroll and security departments. The security department is responsible
for guarding the gold room and the main entrance to the site.

The G & A general expense component comprises of miscellaneous items as described in Table
11.7. The miscellaneous items include office and administrative related costs such as:

Office supplies.
Consultants.
Travel, meetings and conferences located off site.
Training.
First aid.
Safety equipment and supplies.
Insurance.
Legal expenses.
Warehouse expenses.
Software and hardware upgrades.
Licenses and permits.

154
Table 11.6
General and Administration Labour Costs

Position Number
Basic Salary
(US$/month)
Overhead
Factor
Total Cost
(US$/year/person)
Total Cost
(US$/year)
General Manager 1 12,000 1.25 180,000 180,000
Controller 1 7,000 1.25 105,000 105,000
Administration manager 1 2,000 1.98 47,520 47,520
Senior accountant 1 2,000 1.98 47,520 47,520
Book keepers 3 300 1.98 7,128 21,384
Wages clerk 2 300 1.98 7,128 14,256
Personnel administrator 1 300 1.98 7,128 7,128
Security officer 1 500 1.98 11,880 11,880
Deputy security officer 1 300 1.98 7,128 7,128
Lawyer 1 2,000 1.98 47,520 47,520
Computer technician 1 400 1.98 9,504 9,504
Receptionist 1 200 1.98 4,752 4,752
Buyer 1 500 1.98 11,880 11,880
Secretary 2 250 1.98 5,940 11,880
Assistant buyer 3 250 1.98 5,940 17,820
Storekeeper 6 250 1.98 5,940 35,640
Drivers 2 250 1.98 5,940 11,880
Doctor 1 500 1.98 11,880 11,880
Nurse 4 220 2.21 5,834 23,338
Cleaners 4 Contract 5,400 21,600
Kitchen staff 6 Contract 5,400 32,400
Security guards 14 Contract 6,000 84,000
Transport and meal cost 54,617
58 820,526

Table 11.7
Annual General Costs and Expenses

General Expense US$/Year
Office rental 21,250
Utilities 7,500
Telephone 37,500
Other communications 6,250
Office supplies 31,250
Vehicle costs 12,500
Safety supplies 3,125
Outsource services 12,500
Legal services 26,250
Accounting, audits 35,000
Travel expenses 57,500
Accident, life insurance 15,625
Insurance 375,000
Licenses and permits 12,500
Total general costs 653,750

155
11.5 OFF-SITE COSTS

The estimated costs for transportation, security, insurance and refining of the gold dor produced
at Choco is US$2.00/oz of payable gold. It is assumed that the refinery contract allows for the
payment of 99.8 % of the gold produced.

156
12.0 ECONOMIC EVALUATION

12.1 SUMMARY

Based on the newly estimated resource and block model, Micon has developed a mine plan and
processing plant design to mine and treat an average of 1.94 million tonnes per year from the
group of open pits. A mine life of 6.5 years is proposed, based on the total of 12.582 million tonnes
contained in the mineable reserve, with an average stripping ratio of 2.7 tonnes of waste per tonne
of ore mined. Micons estimates of gold production, capital costs and operating costs are combined
in the discounted cash flow evaluation. The economic evaluation is treated on a project basis,
assuming 100 % equity financing, and uses a gold price of US$350 per ounce.

The results of the cash flow evaluation are summarized in the following table showing life of mine
totals.

Table 12.1
Economic Evaluation Summary
Gold Price $US350 Per Oz

Item Unit Value
Pre-production and Pre-strip capital cost $000 38,627
Sustaining capital and closure $000 4,424
Operating cost, excl royalties $000 106,215
Total royalties $000 13,079
Gold production oz 814,319
Cash operating cost $/oz 146
Gold sales $000 282,816
Net revenue $000 176,602
Cash flow, before tax $000 117,722
Cash flow after tax $000 82,856
NPV@ 10 % discount rate $000 45,669
IRR % 49.62

Factors assumed in the creation of the cash flow model include:

Payment to Promiven for the acquisition, a total of $4.75 million, consisting of $3.25
million which was completed in May 2003 and $1.5 million during last two years of the
projected mine life.

Payment of applicable royalties.

Corporate taxation at 34 % of pre-tax income after exhausting tax credits of an existing $14
million plus the capital expense incurred in project development.

Working capital is provided, equivalent to three months of total site operating cost, to cover
the period of initial production before revenue from gold sales is received.

157
The payment of VAT on operating supplies is excluded from this model as it is expected
that this cost can be recovered in accordance with gold sales. VAT payable on the
purchase of used equipment is included in the total capital cost.

A gold price of US$ 350 per ounce.

Exchange rate of 1,600 Bolivars = US$ 1.00.

12.2 BASIS OF EVALUATION

The capital costs are derived from the definitive capital cost estimate, which combines the
purchase and removal of the Grouse Creek plant (recently completed) with the purchase of
additional equipment and infrastructure, and the estimated cost of erection and installation of all
required facilities for the project.

The total capital cost includes Owners cost during the pre-production period and the estimated
cost of detailed engineering, commissioning costs and contingency allowance. The capital cost is
considered to be within +/- 10 % precision.

The operating costs are derived from the detailed build up of personnel, supplies and services
required to maintain continuous operation of the facility. Personnel salary and overhead rates
applied are considered to be current for the El Callao area and compare closely to those rates in
effect at other mining operations in the district. All unit rates for significant operating supplies
have been verified by recent quotations.

The production rates and gold content are based upon the detailed mine plan, processing plant
design and recovery rates for gold which are supported by recent testing.

Excluded from the base case model is the potential production of approximately 30,000 ounces
of gold currently in the inferred category in the resource estimate, and which would be mined
from within the optimized pit shell. Due to its inferred category, it is not included in the reserves
and is treated as waste rock in the evaluation. It is expected that most of this material could be
upgraded to the indicated category during the mine life and included in the future mineable
reserve total. This material, when confirmed, would have an average grade of 2.1 g/t and would
support processing and G&A costs.

12.3 ROYALTIES AND TAXATION

The current application of taxes and royalties in Venezuela is understood to be as follows:

Under the Venezuelan law, the maximum corporate tax rate is 34 %; a 1 % tax on
productive assets also exists, and the higher of the two will be applied. The 34 % rate is
applied in the model.

158
Municipal Tax: 0.08 % on gold production. In practice, the actual amount and form of tax
payable is normally negotiated with the local council. Public work undertaken by the
mining company can be offset against the tax payment. The model assumes that this rate
is zero.

Lease Agreements: royalty payable to CVG, a sliding scale royalty applied to annual gold
produced, ranging from 0.28 % at 1.00 g/t of ore mined, 0.60 % at 2.00 g/t, 0.98 % at
3.00 g/t, and up to 10.00 % at 18 g/t. The model uses 1 % of gold revenue.

Association Agreement: royalty payable to Tecmin, at 1 % of gross profits during first 10
years, then 0.5 % of gross profits during subsequent years. The model uses 1 % of gross
profits in all years.

Mining Law: Exploitation Tax, royalty payable to MEM, is 3 % of revenue from gold
production and may be reduced to 1 % in special circumstances. The model uses 3 % of
gold revenue.

12.4 DISCOUNTED CASH FLOW ANALYSES

The base case discounted cash flow is presented at the end of this section, assuming a gold price
of $US350 per ounce. The build up through mining, processing and G&A annual costs is
included in the total of 8 pages.

Alternative cases examined are presented in the following sensitivity analysis.

12.5 SENSITIVITY ANALYSIS

Table 12.2 and Figure 12.1 present the sensitivity of the Choco project life of mine cash flow to
gold price, gold production, operating costs and capital costs. The gold prices used are $300 /oz,
$350 /oz (base case) and $400 /oz. The scope of variances used for the other parameters are
minus 10 % to plus 10 %.

Table 12.2
Sensitivity of Project Life of Mine Cash Flow ($ millions)

Parameters Low Value Base Case High Value
Sensitivity 300 $/oz 350 $/oz 400 $/oz
Gold price 57 83 108
Sensitivity -10 % 0 10 %
Gold production 65 83 101
Capital cost 85 83 80
Operating Cost 90 83 76

159
50
60
70
80
90
100
110
120
-10% 0 10%
$300/oz $350/oz $400/oz
L
i
f
e

o
f

M
i
n
e

C
a
s
h

F
l
o
w

(
$

M
i
l
l
i
o
n
s
)
Gold production
Capex
Opex
Gold price
Figure 12.1
Sensitivity Analysis

It is apparent that the project is highly sensitive to gold price, and slightly less to gold production
(basically ore grade). The project is least sensitive to capital cost, and similarly to operating cost.

1
6
0

1
6
1

1
6
2

1
6
3

1
6
4

1
6
5

1
6
6

1
6
7

168
13.0 CONCLUSIONS AND RECOMMENDATIONS

The main conclusions developed in this study are:

Micon has developed the current geological resource estimate from the previous resource
estimate by Micon dated October 31, 2002, together with incorporation of the results of in-
fill drilling conducted during the 2003 exploration program. The current resource estimate,
dated October 1, 2003, includes 13.229 million tonnes of indicated resource at a gold grade
of 2.47 g/t for a total indicated gold content of 1,051,000 ounces, at a cut-off grade of 0.5
g/t. Inferred resources are estimated as 2.30 million tonnes at a grade of 1.93 g/t for a total
inferred gold content of 143,000 ounces, also at the cut-off grade of 0.5 g/t.

At the time of preparing the resource estimate stated above, assay results from some of the
last completed in-fill holes had not been received, and later exploration drilling has
intersected significant gold mineralization. These results have been recently published by
Bolivar. Micon anticipates that inclusion of these results in future resource estimates will
add significantly to the resource.

Based on the stated indicated resource and the accompanying resource model, an open pit
mine design has been completed using the MineSight pit optimizer program with cost
parameters developed during this study. Economic ore contained within the final pit design
comprises the mineable ore reserve. The calculated diluted ore reserve comprises a total of
12.582 million tonnes at a gold content of 2.17 g/t, providing 880,000 oz of contained gold,
mined at an average cut-off grade of 0.5 g/t. A total of 33.835 million tonnes of waste and
sub-grade material will be mined during the planned life of mine, for an average stripping
ratio (waste:ore) of 2.69:1. Included in the total waste to be moved is an estimated 440,000
tonnes of mineralized material considered as inferred, at a grade of 2.11 g/t and containing
an estimated 30,000 ounces of gold. Production drilling is expected to convert much of this
material to indicated status.

The mine fleet is sized to accommodate the total rock movement, including waste, of
approximately 46 million tonnes over the mine life. The purchase of new mining
equipment is considered in this study.

Metallurgical testing, originally conducted on samples collected during the earlier
Promiven exploration program in 1994-6, and confirmed by testing during 2003 on samples
from the current program, indicates that the ore is free milling and will yield excellent gold
extraction with conventional processing. While heap leaching at a coarser size could be
considered for the near surface weathered ore, finer grinding is required to allow acceptable
gold recovery from the fresh ore. A grind size to nominally 80 % passing 0.074 mm
liberates the majority of the gold from the harder fresh rock zone. The selected processing
flowsheet follows conventional design with SAG and ball milling and cyanide leaching
followed by carbon-in-pulp gold extraction. The average gold recovery from the total ore
blend is expected to attain almost 93 %.

169

Early in the course of this study Bolivar became aware of a suitable existing processing
plant available for sale. This is the Grouse Creek mill of Hecla Mining, located near
Challis, Idaho. After installation in 1994 it operated for less than two years and has been
idle since. The mill was designed to process an average of 5,400 t/d of medium hard gold
ore using a SAG mill and ball mill, leaching and CIP circuits. Bolivar successfully
negotiated the purchase of the facility and some of the existing peripheral equipment, and
commenced to disassemble it in July 2003. After removal of the plant to Venezuela it will
be erected at the Choco site. Some processing equipment required for the Choco plant and
not available from the Grouse Creek facility will be purchased separately. The processing
scheme, flowsheets, mass balance, equipment list and general arrangement drawings
prepared for this study are based on the use of this plant.

The Choco mine and mill production plan is configured to maximize the available mill
capacity with each ore type, ranging from the soft, fine-grained surface material to the hard,
unweathered fresh ore. The design daily processing rate for the surface ore is estimated to
be 6,500 t/d, for weathered deeper ore 5,400 t/d and for fresh ore, 4,700 t/d. The production
plan is developed on the basis of the blend of these types available during the mining cycle,
and the expected subsequent milling rates possible during each year. The life-of-mine
average milling rate is 5,300 t/d or 1.94 Mt/a, a function of the proportion (20 %) of the
harder ore in the overall production plan. The total gold production from the plant is
estimated as 814,000 ounces.

Project infrastructure includes industrial buildings at the mine site, staff housing in El
Callao, site power supply, a tailings storage area with retaining dams and a water storage
reservoir. Golder has developed designs and quantities for the dam structures after detailed
site investigations and consideration of the site water balance and climate.

The development schedule shows that with a project commitment in mid-November 2003,
construction can be completed by August 2004. The completed disassembly of the Grouse
Creek plant obviously assists greatly in the schedule for completion. Site work can
commence as soon as environmental and construction permits are granted, and Bolivar has
indicated that these may be granted during November-December 2003.

Average operating costs are developed for the mine, plant and administration areas. Labour
and local material costs are developed using locally prevalent rates in Bolivars, converted
to $US at the current official rate of 1,600 Bolivars= $US 1.00. The total estimated
operating cost, averaged during the mine life, is equivalent to $8.44 per tonne processed, or
$130 per ounce of gold produced. With the inclusion of royalty payments, the average cash
cost of gold production is estimated as $146 per ounce.

Capital costs, to an assessed precision of +/- 10 %, are estimated for the mine, plant and
infrastructure. Construction labour and equipment rates are based on quotations received
from a major Venezuelan contractor. Infrastructure costs are developed from quotations
received from a local contractor for supply and installation of buildings and services. Based

170
on the purchase of new major mine equipment, and used plant equipment sourced mainly in
North America, a total pre-production capital cost, including mine pre-stripping, is $38.6
million. Suitable allowances for contingency are included.

Sustaining capital during the planned mine life of 6.5 years is required for purchase of an
additional mine drill, haulage truck and for two lifts of the tailings dams.

A project cash flow schedule is presented, assuming 100 % equity financing for the project.
A gold price of $350 per ounce is used. The indicated NPV at 10 % discount rate shows a
value of $45.7 million and IRR of 49.62 %. Sensitivity analysis within a range of +/- 10 %
shows that the project is highly sensitive to gold price and gold production (ore grade and
recovery), and least sensitive to capital cost.

The feasibility study demonstrates that this is a robust project and Micon recommends its
immediate development. There is an excellent potential for increasing the resource in the
known area of the deposit and in adjacent areas, and with optimization of the mine design
and production plan, development of a significant gold producing facility can be expected.

Recommendations

Micon recommends that the following items of work be commissioned to improve the resource
base and reserves, and to ensure orderly development of the project:

Condemnation drilling of the selected plant site, tailings site and area provisionally selected
for the waste rock dump. The waste dump could be relocated to the west side of the mine.

Continuance of the current exploration drilling program to focus on defining the deeper
mineralization in the Rosika pit area, and possible extensions nearer surface, to define the
likely expansion of the present pit outline.

Incorporation of recent and forthcoming drilling results in an updated resource model early
in 2004, and an update of the mine design and mine planning based on this revised model.
The revised mine plan will be the basis for the start of mining.

An immediate start to detailed engineering and letting of site development contracts in
order to achieve the proposed construction schedule.

Selection of a water source for the start-up water quantity required before adequate return
from the tailings area can be assured. The quantity of precipitation to be received during
the next rainy season (May-September 2004) will determine the need for this water. A
wetter than average year will allow adequate supply to be collected in the water reservoir
thus reducing the requirement for another source.

Continuance of environmental studies and development of closure and rehabilitation
planning.

Appendix A

Selected Reference Quotations

1. Vinccler C.A., civil construction
2. Edelca, power cost
3. Bolivar Gold Substation Construction Estimate
4. Draft letter Bolivar Gold to WYKY, housing and infrastructure
5. Consumable quotations
6. Horse Venezolana de Combustible C.A., fuel quotation
7. Lubrication oil quotation

Process Design Criteria
Pg. 1 de 4
November 11, 2003
1600
ITEM NO. DESCRIPTION UNIT
ESTIMATE
D
QUANTITIE
S
UNIT PRICES
US$/Unit TOTAL US$ COMMENTS
A SITE PREPARATION
1,2,3,4,5,6,7,8
CLEARING OF TREE IMPOUNDED AREA - TAILING AREA-WATER
MANAGEMENT POND-POND 1 & 2- DAMA/B,B/C, C/D &
DIVERSION DITCH ACCESS ROADS.
HA 98,90 1.632,09 161.413,61
HAULING DISTANCE NOT GREATER THAN 300 MTS. - WE HAVE
ASSUMED THAT 20% WILL BE CUT BY HAND AND 80% WITH TRACTOR-
HAULING 300 MTS.
9,12,13
SITE CLEARING , GRUBBING AND DISPOSAL OF MATERIAL-
GENERAL FILL BORROW AREA (DICTH 1 AND WMP DITCH) -
POND 1 DIVERSION CHANNEL (DITCH 1)- POND 2 DIVERSION
CHANNEL ( DITCH 2)
HA 6,60 1.904,16 12.567,43 LOAD AND HAULING 1000 MTS.
10, 11
SITE CLEARING , GRUBBING AND DISPOSAL OF MATERIAL- (10)
DAMS A-D FOUNDATION PREPARATION - (11) EMERGENCY
SPILLWAY AND CHANNEL
M3 9.300,00 1,49 13.883,04
LOAD AND HAULING TO BE CHARGED IN ITEM 30 - ONLY EXCAVATION -
TO ME MEASURED ON BANK CONDITIOS
14, 15
EXCAVATION AND DISPOSAL OF TOPSOIL AND UNSUITABLE
MATERIAL - ( 14)DAM A-D FOUNDATION - (15) EMERGENCY
SPILLWAY CONTROL STRUCTURE
M3 65.000,00 1,81 117.696,72 EXCAVATION ONLY- DISTANCE NOT GREATER THAN 300 MTS.
16, 17
MATERIAL - ( 16)POND 1 CONTROL STRUCTURE - (17) POND 2
CONTROL STRUCTURE
M3 100,00 12,79 1.279,01 HAULING DISTANCE NOT GREATER THAN 1 KMS
WATERSHED DIVERSION
18 EXCAVATE CHANNEL (2 CHANNEL) M3 18.000,00 2,55 45.828,56
EXCAVATION WITH TRACTOR -, LOAD & HAULING TO BE CHARGED ON
ITME 30 - MATERIAL TO BE USED FOR EMBANKMENT FILL PLACEMENT,
LOCAL EXCAVATION - TO BE MEASURED ON BANK
CONDITION.
19
REINFORCED CONCRETE CONTROL STRUCTURE ( 2
STRUCTURES)
M3 6,00 410,26 2.461,54
THE WORK COVER, SUPPLY OF CONCRETE Rcc 210 KG/CM2,
FORMWORK & REBAR, PLACING, CURING - DO NOT INCLUDE
EXCAVATION, HAULING AND BACKFILLING.
20 GEOTEXTILE ( TO BE PROVIDED BY OWENER) M2 1.000,00 5,50 5.500,03
THE WORK COVER ONLY PLACEMENT OF GEOTEXTILE - MATERIAL TO
BE PROVIDED BY OWNER, DELIVER AT THE SITE ALSO BY THE OWNER
PRELIMINAR PROPOSAL
TAILING DISPOSAL FACILITY, CHOCO GOLD PROJECT, EL CALLAO, VENEZUELA.
CLIENT: BOLIVAR GOLD CORP.
C:\NORIS ANA PIAZZA 2003\OFERTAS\BOLIVAR GOLD EL CHOCO\TAILINGS DISPOSAL FACILITY\
TAILINGS DISPOSAL PROPOSAL rev 01.xls
TAILINGS (2)
Pg. 2 de 4
November 11, 2003
1600
ESTIMATE
D
QUANTITIE
S
UNIT PRICES
PRELIMINAR PROPOSAL
21 BEDDING (ZONE XXX) ( 15 cm) M2 500,00 2,04 1.017,84
FIGURE 2, PROVIDES A DETAIL OF CHANNEL EROSION PROTECCION-
COARSE SAND AND GRAVEL 0.15 CM THIK. OR NONWOVEN
GEOTEXTILE.- MATERIAL TO BE PROVIIDED AT THE SITE BY THE
CLIENT.
27 EROSION PROTECCION ( Zone xx)- RIPRAP M2 500,00 4,50 2.248,76
RIP RAP D 150 M, 0.30 M THIK. - MATERIAL TO BE PROVIDED BY THE
CLIENT AT THE SITE.
WATER MANAGEMENT POND EMERGENCY SPILLWAY
23 EXCAVATE CHANNEL M3 49.000,00 2,55 124.755,53
CONDITION.
24 REINFORCED CONCRETE CONTROL STRUCTURE M3 5,00 413,34 2.066,68
25 GEOTEXTILE ( TO BE PROVIDED BY OWENER) M2 500,00 5,50 2.750,02
26 BEDDING (ZONE XXX) ( 15 cm) M2 200,00 2,04 407,14
GEOTEXTILE.- MATERIAL TO BE PROVIIDED AT THE SITE BY THE
CLIENT.
RIP RAP D 150 M, 0.30 M THIK. - MATERIAL TO BE PROVIDED BY THE
CLIENT AT THE SITE.
EMBACKMENT FILL PLACEMENT
TAILINGS (2)
Pg. 3 de 4
November 11, 2003
1600
ESTIMATE
D
QUANTITIE
S
UNIT PRICES
PRELIMINAR PROPOSAL
T28
EXCAVATION FOR GENERAL FILL (ZONE 1 OR 2 ) (SOPRALITE
OR RESIDUAL SOIL)AT MINE FROM PRE-STRIPPING, LOAD AND
HAULING UP TO 2 KMS
M3B 6,19
ZONE (1) SOPRALITE OR ZONE (2) RESIDUAL SOIL- THE WORKS
INCLUDE EXCAVATION AT THE MINE PRESTRIPPING, LOAD AND HAUL
UP TO 2 KMS, - MEASURED ON BANK CONDITIONS - THE CLIENT WILL
SUPPLY THE MATERIAL WHERE REQUIRED AT THE DAMS
T29
EXCAVATION FOR GENERAL FILL (ZONE 1 OR 2 ) (SOPRALITE
OR RESIDUAL SOIL)AT BORROW PIT 1 AND 2 , LOAD AND
HAULING UP TO 800 MT.
M3B 237.400,00 2,90 688.869,52
ZONE (1) SOPRALITE OR ZONE (2) RESIDUAL SOIL- THE WORKS
INCLUDE EXCAVATION AT THE BORROW PIT I &2, LOAD AND HAUL UP
TO 800 MTS, PLACEMENT AND COMPACTION - MEASURED ON BANK
CONDITIONS - INCLUDE THE EXCAVATION FOR THE MATERIAL TO BE
PLACED AS ROAD SURFACING (5400 m3)
30
LOAD AND HAULING ( 700 mts AVERAGE) OF MATERIAL FROM
EXCAVATION OF CHANNELS, DITCHES, DAMS FOUNDATIONS
M3L 193.050,00 3,10 598.576,86
IT COVERS ONLY LOAD AND HAUL - MATERIAL COMMING FROM THE
EXCAVATION OF DITCH, DAM FOUNDATION, LOAD AND HAULING UP TO
700 MTS. TO BE MEASURED LOOSE.
T31
GENERAL FILL OF MATERIALS FROM PRESTRIPPING MINE,
BORROW PITS, DICHT, CHANNELS, DAMS FOUNDATIONS, ETC.
M3C 477.000,00 1,90 904.350,26
ZONE (1) SOPRALITE OR ZONE (2) RESIDUAL SOIL-MATERIAL FROM
MINE PRESTRIPPING AND BORROW PITS THE WORKS INCLUDE ONLY
PLACEMENT AND COMPACTION - MEASURED ON COMPACTED
CONDITIONS
31 ROCKFILL (3B) M3C 7.000,00 12,02 84.120,40 ZONE 3B, IN SITU EXCAVATION, PLACEMET. LOAD AND HAULING 300
MTS - TO BE MEASURED ON COMPACTED CONDITIOS.
32 PROCESSED GRAVEL DRAIN (6) M3C 13.200,00 9,49 125.303,06
PROCESS GRAVEL DRAIN - ZONE 6, PLACEMENT AND COMPACTION- -
TO BE MEASURED ON COMPACTED CONDITIOS - MATERIAL TO BE
SUPPLIED AT THE DAM BY THE CLIENT
33
FILTER (SAND WITH LESS THAN 7% FINER THAN 75 MICROS)
(ZONE 5)
M3C 12.600,00 7,54 94.982,42
FILTER MATERIAL - ZONE 5, PLACEMENT AND COMPACTION- -
MATERIAL TO BE SUPPLIED AT THE SITE BY THE CLIENT.
34 EROSION PROTECCION BEDDING (ZONE 7) M3C 5.400,00 9,05 48.878,61
BEDDING MATERIAL TO BE SUPPLIED AT THE SITE BUY THE CLIENT, -
PLACEM,ENT AND COMPACTION- TO BE MEASUED ON COMPACT
CONDITION.
35 UPSTREAM EROSION PROTECCION (ZONE 8) M3C 5.400,00 9,14 49.381,28
EROSION PROTECCION MATERIAL TO BE SUPPLIED AT THE SITE BUY
THE CLIENT, - PLACEM,ENT AND COMPACTION- TO BE MEASURED ON
COMPACT CONDITION.
36 DOWNSTREAM EROSION PROTECCION (ZONE 8) M3C 5.400,00 9,14 49.381,28
EROSION PROTECCION MATERIAL TO BE SUPPLIED AT THE SITE BUY
THE CLIENT, - PLACEM,ENT AND COMPACTION- TO BE MEASURED ON
COMPACT CONDITION.
37 ROAD SURFACING (ZONE 4) M3C 5.400,00 3,57 19.301,83
SOPRALITE - MATERIAL TO BE EXCAVATED, LOAD AND HAUL IN ITEMAS
T39 AND 30 - COMPACTION ONLY TO BE MEASURED ON COMPACT
CONDITION.
66 S/C-03
IVA (16%) S.G
TAILINGS (2)
Pg. 4 de 4
November 11, 2003
1600
ESTIMATE
D
QUANTITIE
S
UNIT PRICES
PRELIMINAR PROPOSAL
US$ 3.159.270,17 SUB TOTAL TAILING.:
TAILINGS (2)
Pg. 1 de 3
November 11, 2003
1600
ITEM
NO. DESCRIPTION UNIT
ESTIMATED
QUANTITIES
UNIT PRICES
US$/Unit TOTAL US$
A SITE PREPARATION
1 CLEARING OF TREE FROM IMPOUNDED AREAS HA 10,00 1.632,09 16.320,89
HAULING DISTANCE NOT GREATER THAN 300 MTS. - WE HAVE
ASSUMED THAT 20% WILL BE CUT BY HAND AND 80% WITH TRACTOR-
HAULING 300 MTS.
2,3
SITE CLEARING , GRUBBING AND DISPOSAL OF MATERIAL-
BORROW AREA, DAM FOOTPRINT
HA 10,00 1.904,16 19.041,56 LOAD AND HAULING 1000 MTS.
4
MATERIAL - DAM FOOTPRINT - SPILLWAY CHANNEL
M3 10.300,00 1,81 18.650,40
LOAD AND HAULING TO BE CHARGED IN ITEM 30 - ONLY EXCAVATION -
TO ME MEASURED ON BANK CONDITIOS
SPILLWAY
5 CHANNEL EXCAVATION, ( WEATHER ROCK) M3B 5.000,00 2,55 12.730,16
CONDITION.
6
REINFORCED CONCRETE CONTROL STRUCTURE ( SUPPLY,
FORM AND CURE)
M3 15,00 410,26 6.153,86
7
GEOTEXTILE ( TO BE PROVIDED BY OWENER)- OUTLET
CHANNEL
M2 1.000,00 5,50 5.500,03
8 BEDDING (ZONE XXX) ( 15 cm) M2 300,00 2,04 610,70
GEOTEXTILE.-- MATERIAL TO BE PROVIDED AT THE SITE BY THE CLIENT.
RIP RAP D 150 M, 0.30 M THIK. - MATERIAL TO BE SUPPLIED BY THE
CLIENT AT THE SITE
FOUNDATION PREPARATION
PRELIMINAR PROPOSAL
WATER RESERVOIR
RESERVOIR
Pg. 2 de 3
November 11, 2003
1600
ITEM
ESTIMATED
QUANTITIES
UNIT PRICES
US$/Unit TOTAL US$
PRELIMINAR PROPOSAL
WATER RESERVOIR
R10 PROFF ROLL SOIL SUBGRADE M2 10.000,00 0,44 4.414,56
FURNISHING AND OPERATING OF HEAVY PNEUMATIC TIRED
EQUIPMENT, BALLAST LOADING WITH GROSS LOAD CAPACITY FROM 48
TO 50 TONS., EQUIPMENT OPERATING AT 225 AND 300 FT/MIN-
CORRECTIVE WORK WILL BE PAID FOR AT THE APPLICABLE CONTRACT
R11 BEDROCK CLEANING AND SLUSH GROUTING M2 2.400,00 20,91 50.182,37 SLUSH FLUSHING, 3" AVERAGE THK.
R12 DENTAL CONCRETE M3 100,00 227,74 22.773,81
THE WORK COVER, SUPPLY OF CONCRETE Rcc 180 KG/CM2 - DO NOT
INCLUDE EXCAVATION, HAULING AND BACKFILLING.
R13
BEDROCK PREASSURE GROUTING - DRILLING AND WASHING (
ROTATION -PERCUSSIVE DRILLING )
LM 2.250,00 42,34 95.256,00 ROTATION- PERCUSSIVE DRILLING METHOD
R13,1 BEDROCK PREASSURE GROUTING - INJECCION BAG 4.117,50 19,40 79.895,97 TO ME MEASURED PER BAGS CEMENT USED.
EMBACKMENT FILL PLACEMENT
14
LOAD AND HAULING ( 300 MTS AVERAGE) OF MATERIAL FROM
THE SPILLWAY EXCAVATION
M3L 8.150,00 3,55 28.951,60
MATERIAL FROM THE SPILLWAY EXCAVATION - ,THE WORKS COVER
ONLY LOAD AND HAULING UP TO 300 MTS. TO BE MEASURED LOOSE.- -
EXCAVATION TO BE CHARGED IN ITEM 5.
R15
EXCAVATION FOR GENERAL FILL (SOPRALITE/SILTY CLAY)-
FROM BORROW AREA , LOAD AND HAULING UP TO 300 MT.
M3B 171.200,00 2,64 452.454,85
SOPRALITE OR SILTY CLAY- THE WORKS INCLUDE EXCAVATION AT THE
BORROW PIT AREA, LOAD AND HAUL UP TO 300 MTS, - MEASURED ON
BANCK CONDITIONS
15
GENERAL FILL OF MATERIALS EXCAVATIONS AND BORROW
AREA
M3C 175.000,00 1,90 331.784,69
SOPRALITE - SILTY CLAY / ROCK- THE WORKS INCLUDE ONLY
PLACEMENT AND COMPACTION - MEASURED ON COMPACTED
CONDITIONS - INCLUDES GENERAL FILL FROM EXCAVATION (25,000 CM )
AND 150000 3M FROM BORROW AREA PIT.
32 PROCESSED GRAVEL DRAIN (CLEAR STONE) M3C 10.000,00 9,49 94.926,56
SUPPLY, LOAD AND HAUL BY THE CLIENT- THE WORKS INCLUDE
PLACEMENT AND COMPACTION- - TO BE MEASURED ON COMPACTED
CONDITINS
33 FILTER SAND (CONCRETE SAND) M3C 8.000,00 7,54 60.306,30
SUPPLY, LOAD AND HAUL BY THE CLIENT - PLACEMENT AND
COMPACTION, TO BE MEASURED ON COMPACT CONDITION.
RESERVOIR
Pg. 3 de 3
November 11, 2003
1600
ITEM
ESTIMATED
QUANTITIES
UNIT PRICES
US$/Unit TOTAL US$
PRELIMINAR PROPOSAL
WATER RESERVOIR
34 EROSION PROTECCION BEDDING (GRAVEL AND COBBLES) M3C 3.600,00 9,05 32.585,74
35 EROSION PROTECCION (COBBLES AND BOULDERS) M3C 5.400,00 9,14 49.381,28
37 ROAD SURFACING M3C 1.200,00 3,57 4.289,30
SOPRALITE - MATERIAL TO BE EXCAVATED, LOAD AND HAUL IN ITEMAS
14 AND R15 - COMPACTION ONLY TO BE MEASURED ON COMPACT
CONDITION.
66 S/C-03
IVA (16%) S.G 16%
US$ 1.388.459,38
US$ 3.159.270,17
US$ 4.547.729,56
SUB TOTAL RESERVOIR :
SUB TOTAL TAILING :
TOTAL RESERVOIR & TAILING :
RESERVOIR
BOLIVAR GOLD
Substation Construction Estimate- US Dollars
Cost per Unit
Contract Other
Item Description Unit Material Labor Labor Quanity Item Cost
A1 Structural Steel Lb. $1.30 $1.00 18,000 $41,400
A2 Electrical Bus - Complete with Hardware Lot $3,500 $5,500 1 $9,000
A3 13.8 kV Line Construction Mtr. $12 $7 7,000 $133,000
A4 Insulators - 5kV Station Post Ea. $45 $30 6 $450
A5 13.8 kV Disconnect Switches Ea. $600 $150 18 $13,500
A6 13.8 kV Grounding Transformer & Protection Ea. $50,000 $10,000 1 $60,000
A7 4160 Volt Disconnt Switches Ea. $800 $150 30 $28,500
C1 Surge Arrestors - 13.8 kV MCOV Ea. $1,200 $150 3 $4,050
C2 Surge Arrestors - 5 kV MCOV Ea. $150 $40 9 $1,710
C3 Control Cable Mtr $4.00 $3.00 1000 $7,000
C4 Cable Termination kits Ea. $100 $60 24 $3,840
E1 13.8 Kv Circuit Breaker Ea. $15,000 $6,000 3 $63,000
E2 5/6.25 MVA, 13.8kV/4160 Transformer Ea. $52,000 $5,000 3 $171,000
G1 Revenue Metering CT's and PT's Lot $8,000 $2,000 1 $10,000
G2 Meters and Relays Lot $20,000 $5,000 1 $25,000
H1 4160 Volt Circuit Breakers Ea. $12,000 $4,000 5 $80,000
K1 Above Grade Conduit System Lot $1,000 $2,000 1 $3,000
K2 5 kV Conduit and Cable Mtr $120 $45 100 $16,500
L1 Concrete Foundations Cu Mtr. $100 $475 35 $20,125
M1 Site Preparation Lot $10,000 1 $10,000
M2 Station Gravel Cu Mtr. $25 $20 30 $1,350
O1 Station Grounding Sq Mtr $15.00 $13.00 300 $8,400
P1 New Control Building Lot $10,000 $3,500 1 $13,500
P2 Accessories for Control Building Lot $5,000 $3,500 1 $8,500
P3 Foundation for Control Building Cu Mtr. $100 $475 20 $11,500
R1 Fence and Gate Mtr $75 Included 100 $7,500
R2 Station Lighting Ea. $500 $150 4 $2,600
Energization & Startup Services Lot $15,000 1 $15,000

R3 Contract Engineering Lot $60,000 1 $60,000
Total Costs $829,425
Bolivar Gold Substation Estimate.XLS printed 03 AUG 03 ESTIMATE ONLY
Dear Mr. Albornoz,

We wish to confirm our intention to use your company for the construction of a housing
complex in El Callao and infrastructure buildings at the Choco mine site.

Referring to your proposal dated J une 20, we confirm that the price for 10 houses in El
Callao, with the proposed services will be that proposed, less 10%, which gives a value of
Bs. 535,500,000 (US$334,687). The equipment for the houses will be chosen by our
company at a later date and it is understood that you will supply the chosen equipment at
the suppliers price plus a 10% handling fee. The initial estimate for this equipment is Bs.
250,000,000 ($156,250). The cost of preparing the project will be Bs. 17,850,000
($11,156). The value of urbanismo and outside works will be calculated based on the
project and a large reduction in this cost is expected ( Bs. 949,550,000 or $593,468 in
your proposal ).

The mine infrastructure, consisting of an office block, employee facilities, guard house,
mine stores, laboratory, mining equipment maintenance shop and lime store will be
priced as shown in your proposal, less 10%. Please note that we have eliminating the
reagent store (we will fence off an area as shown on the plan and store in containers) and
the control hut for the weigh scale will be eliminated, the equipment will be placed in the
guard house. This will give a price for the buildings of Bs. 1,104,390,400 ($690,244).
The cost of the services (Bs.200,498,128 or $125,311.33) will be reduced if possible by
using wetland treatment of sewage instead of the mechanical plant envisaged (please
discuss with Enrique Valero). The price for preparing the project for the buildings is
accepted (Bs. 27,960,000 or $17,475). As with the housing complex, a more detailed
analysis of exterior works is required and a considerable reduction from the proposed
sum of Bs. 823,680,000 ($514,800) is expected.
The equipment for the employee facilities will chosen from information provided by you,
and a 10% handing fee will be accepted for this. It is possible that we will ask you to
provide office equipment as well, under the same terms.

Provided the above conditions are acceptable to you, I would request that you start the
preparation of the projects for the above and summit them for our final approval as soon
as possible. The costs of external works should also be submitted at this time. You should
also include a schedule for carrying out the work and the conditions of payment.

I look forward to hearing from you,

Yours truly,

Choco Gold Project List of consumables quoted Provided by Bolivar Gold, 7/1/2003
For the purpose of estimated annual quantities, the tonnage will be taken as 6,000 tons/day
or 2,100,000 tons/year
Grinding Balls
SAG mill Ball size 5 inch Consumption 0.5 kg/ton
Total requirement 1050 tons per year
Ball Mill Ball size 2 inch Consumption 1.5 kg/ton
Total requirement 3150 tons per year
Contact Magotteaux Andino, Mr. Leon Hennen, fax 56 2 6335725
Duty Total
code 7207.20.00 cost at site
Price CF Matanzas 5" US$/ton 700 5% add freight 33 768 US$/t
Price CF Matanzas 2" US$/ton 600 5% add freight 33 663 US$/t
to Choco
Cyanide Consumption 0.5 kg/ton
Total annual requirement 1050 tons per year
Contact Dupont Venezuela, Ramcys Feo, tel./fax 58 (0) 71 6466 and 5592
Price US$/t 1200 CIF Matanzas
Duty (code 2837.11.00) 5%
add freight 50 1310 US$/t at site
Carbon Consumption 80 g/ton
Total annual requirement 168 tons per year
Supplier - Calgon Carbon, Pittsburg
GRC 22 carbon, 6 to 12 mesh.
Cost per pound, Thailand $0.68
Cost of 20,000 lb. Container $13,600
With freight to P. Caballo $16,900
Cost per pound, P. Caballo $0.85
Cost per kg P. Caballo $1.86
Duty (code 3802.10.00) 5%
Add freight to site $0.06 per kg
Total cost delivered to site $2.02 US$/kg
Lime Consumption Up to 14kg/ton of ore
29400 tons per year
Contact - C.A. Calidrat. Mr. Carlos Reitze, tel. 58 (0) 212 761 7672
Quick lime in big bags 112,000 Bs. Per ton
74.67 US$ per ton at 1500 Bs./US$
Freight to Choco 800,000 Bs. Per 30 ton load
17.78 US$ per ton freight cost
Total cost delivered to site 92.44 US$ per ton
Hydrochloric Acid
Price in Puerto Ordaz 0.62 US$ per kg
Freight 0.05 Allow $50 per ton for small volume, hazardous cargo
Total cost at site 0.67 US$ per kg
Supplier: Hollanda de Venezuela (Puerto Ordaz). J ose Luis Quiroba. Tel 0286 9945655
Sodium Hydroxide
Borax
Sodium Carbonate

Pto. Ordaz 28 de J ulio de 2003.

Seores
PROMOTORA MI NERA DE GUAYANA, C.A.
El Callao
Presente.-

Estimado Sr. J orge Saud.

Horse Venezolana de Combustible, C.A. agradece la oportunidad de presentarles
nuestra propuesta de productos y servicios en el rea de combustibles a tan
prestigiosa empresa.

Uno de los principales objetivos de cualquier compaa es el manejo optimo de su
presupuesto, por lo que nuestro inters es ahorrarles dinero en los costos de
mantenimiento de sus maquinarias y equipos y que obtengan beneficios a travs de
nuestros servicios de distribucin y asesora .

En tal sentido, Horse se compromete a lograr el desempeo eficiente de sus
operaciones a travs de una excelente relacin que apoye el crecimiento y rentabilidad
de su negocio. Para ello utilizaremos las mejores tcnicas de suministro, el mejor
equipo humano, y promoveremos una mejor calidad de vida para la sociedad de la que
ambos formamos parte.

A continuacin detallamos algunos de los beneficios directos que Horse, puede
ofrecer como su proveedor de combustible

Propuesta de Beneficios:

1. Soporte Tcnico Directo .
Conocer las necesidades de nuestros Clientes es de vital importancia para poder ofrecer
el mejor servicio, para lograr este objetivo, HORSE asignar personal del
Departamento Tcnico y de Ventas para coordinar todas las actividades en forma
directa , en su base de operaciones ubicada en Pto. Ordaz.

2. Logstica.

Con una llamada telefnica nuestro personal de atencin al cliente le tomar su pedido,
y en mximo 24 horas despus de haber tomado su orden tendr el producto en su
empresa. Los pedidos podrn ser realizados antes de las 10:30 am, para garantizar
el despacho al da siguiente.

Estamos en capacidad de responder de manera inmediata, ya que realizaremos una
proyeccin de consumo con cada uno de sus equipos para cumplir siempre con sus
requerimientos.

3. Monitoreo regular de la operacin de los equipos.

Un equipo comercial y tcnico visitar peridicamente sus instalaciones con la finalidad
de asesorarlo en:

Mantenimiento de Instalaciones y Equipos
Manipulacin del Combustible
Medidas de Seguridad

4. HSE (Salud, Seguridad y Ambiente)

Nuestra poltica de HSE asegura que: toda persona que trabaje para HORSE es
responsable por obtener los mejores resultados en materia de HSE. La meta es muy
clara, eliminar los accidentes, el riesgo para el personal y el dao al ambiente.
Continuaremos minimizando el impacto a la salud y al ambiente efectuado por nuestras

operaciones reduciendo los desechos y emisiones y utilizando la energa mas
eficientemente.

En todo lo que hacemos, las responsabilidades con la salud, seguridad y ambiente
(Health, Safety and Environment) son la punta de lanza de nuestra conducta y de
nuestros planes. Nuestro servicio de soporte de HSE le ofrece acceso a nuestros
consultores profesionales quienes le ayudarn en materias tales como, asistencia y
entrenamiento en todas las facetas de la cadena de uso de los hidrocarburos, desde el
riesgo en el uso de substancias peligrosas, regulaciones y cumplimiento legal, hasta
los procedimientos de emergencia en caso de accidentes, prcticas de trabajo seguras,
proteccin y seguridad contra incendios y limpieza de derrames y terrenos
contaminados.

5.- Comunicacin

Nuestro mtodo de preferencia para comunicarnos con nuestros clientes dentro y fuera
de la compaa son los encuentros personales, si esto no es posible entonces las
discusiones se realizarn por medio de llamadas telefnicas, correos electrnicos y
faxes entre las partes interesadas, asegurando as que todos aquellos involucrados
estn informados. Tambin es prctica comn programar encuentros con los equipos
de trabajo para discutir los ltimos resultados.

6.- Nuestra Gente

HORSE se compromete a proveer total satisfaccin al cliente. El foco de este
compromiso es nuestra gente de primera lnea quienes estn dedicados a responder a
sus necesidades, de esta manera todos los contactos que tenga con HORSE resultarn
positivos.

Nuestros equipos de respaldo: Gerentes, chferes, tcnicos, mercadeo y
administracin, han sido escogidos por su dedicacin y experticia.

Ellos tambin forman parte del enfoque innovador y creativo que HORSE toma para
mejorar la manera en que hacemos negocios y para mejorar el beneficio a nuestros
clientes.

Las habilidades de nuestra gente las aprovechamos en el desarrollo de nuevos
productos y sistemas en conjuncin con la ltima tecnologa. Desde lo mas sencillo
hasta lo mas complejo.

7.- Nuestra Visin

Para nosotros existen seis elementos esenciales para proveer total satisfaccin al
cliente. Esta es el visin es por la que HORSE y su gente trabajan.

Construir una relacin de sociedad con nuestros clientes
Tocar los temas estratgicos en conjunto
Eficiencia en conjunto
Desarrollar ventajas competitivas a largo plazo para nuestros clientes y para
HORSE
Acuerdos basados en el rendimiento general
Divisin de los servicios. Proveer un mayor rango de servicios de valor agregado

8.- El trabajo de nuestro Gerente de rea ser:

Ser su primer punto de contacto para todos los temas operativos
Facilitar la creacin, identificacin e implementacin de iniciativas de mejoras al
negocio
Asegurar que los canales de comunicacin estn siempre abiertos
Facilitar cualquier accin a tomar con respecto a la mejora de las comunicaciones
Asistir en la coordinacin de rdenes y entregas
Asegurar la entregas a tiempo desde la primera vez y siempre
Coordinar las inspecciones a equipos y planta
Visitar rpidamente las instalaciones en caso de una situacin de emergencia
Organizar cualquier plan necesario para la implementacin de nuevos
procedimientos tendientes a realizar una suave transicin hacia el nuevo contrato

A tales efectos a continuacin le presentamos nuestra propuesta:
1. Combustible Diesel : 61,00 Bs./ Lts.
2. Entrega en calidad de comodato dos (2) tanques con una capacidad
individual de 36.000 lts., para el almacenamiento del combustible en sus
instalaciones.
3. Los precios incluyen el transporte y descarga del Combustible en sus
instalaciones ubicadas en el Callao.
4. Perodo de pago: 30 das fecha factura.

Esperamos que esta propuesta sea de su agrado y as poder comenzar una relacin
comercial con visin de largo plazo que beneficie a ambas partes.

Sin ms que hacer referencia y esperando su pronta respuesta,
Atentamente,

Alejandro Saatdjian
Dpto. de Mercadeo y Ventas
Celular: 0414-8682720
Ofic. 0286-9940663-0780

ANEXO 1 (Lista de precios)

1) Precios de Combustible:

Combustible Diesel:

Bs. 50,00 CREDITO 15 DIAS

Estos precios incluyen transporte y descarga del combustible.
Los pedidos de combustibles se realizaran con 24 horas de anticipacin.

Main Identity
From: "J ohn A Thomas" <john_a_thomas1@yahoo.com>
To: "Ian Ward" <iward@micon-international.com>; <DRunnels@Met-Chem.com>
Sent: Wednesday, J uly 30, 2003 1:01 PM
Subject: Fw: COTIZACION ACEITES
Page 1of 2
1/6/2004
Here are quotes for lub oil

Regards, J ohn Thomas

----- Original Message -----
From: Enrique Valero
To: Thomas, J ohn ; Thomas, J ohn A
Sent: Wednesday, J uly 30, 2003 9:41 AM
Subject: Fw: COTIZACION ACEITES

----- Original Message -----
From: Gianfranco Pompermaier
To: evalo1@cantv.net
Sent: Wednesday, J uly 30, 2003 10:54 AM
Subject: COTIZACION PROMOTORA MINERA DE GUAYANA

Puerto Ordaz , 25 de J ulio de 2003

Seores
PROMOTORA MINERA DE GUAYANA, C.A.
El Callao.

Atn. Sr. J orge Saud

Por medio de la presente le nos permitimos cotizarles de acuerdo a su cotizacin y puesto en sus
instalaciones:

PRECIOS NO INCLUYEN IVA
No Cantidad Descripcin P. x L
01 01 TBS. ACEITE VANELLUS C6 15W40 CH-4/SJ 653.074,00
02 01 TBS. ACEITE VANELLUS C4 15W40 CF-4 592.419,00
03 01 TBS. ACEITE ENERGOL HLP-HM 68 360.394,00
04 01 TBS. ACEITE ENERGEAR 140 461.725,00
05 01 TBS. ACEITE ENERGEAR 80 W 90 469.394,00
06 01 TBS. ACEITE VANELLUS C3-50 / 40/ 30/ 10W 592.419,00
07 01 TBS. GRASA ENERGREASE LS-EP 2 700.504,00

CONDICIONES: +

Dndole las gracias por su atencin, y en espera de poder seguir sirvindoles, queda de ustedes.

Atentamente,

Gianfranco Pompermaier
Coordinador de Ventas
E-mail: gianfpbp@cantv.net
Cel: 0414-8774121
ENTREGA INMEDIATA O DE
ACUERDO A ASUS
REQUERIMIENTOS
SITIO DE ENTREGA SUS ALMACENES
FORMA DE PAGO CONTADO
Page 2of 2
1/6/2004
Parameter units Surface Weathered Fresh Source
Ore tonnes processed per year, if alone t/a 2,372,500 1,971,000 1,715,500 D
Operating days d/a 365 365 365 S
Ore tonnes processed per day t/d 6,500 5,400 4700 B1
Plant availability % 90 90 92 M
Ore tonnes processed daily design rate t/d 7,222 6,000 5,109 D
Ore tonnes processed hourly design rate t/h 301 250 213 D
Ore feed proportions, LOM average % 22 58 20 F
Ore average SG sg 2.2 2.5 2.7 M
Ore moisture content % 15 12 10 M
Water SG 1.0 1.0 1.0 S
Ore feed system top size, passing grizzly mm 200 200 200 F
Ore feed, 80% passing size F80 mm 3.0 75.0 150 M
SAG mill discharge size, 80% passing microns 500 350 350 M
Finished grind size, 80% passing, P80 microns 74 74 74 R1
Ore work index, metric kWh/ton 7.00 12.00 14 R1
Ore SAG grinding work required, theoretical kWh/t 1.85 3.18 3.70 D
Ore Ball mill grinding work required, theoretical kWh/t 5.01 7.54 8.79 D
SAG inefficiency factor % 120 120 120 M
SAG power required kW 669 953 946 D
SAG power required hp 897 1,278 1,269 D
SAG mill motor existing hp 3,000 3,000 3,000 GC
SAG mill slurry density %sols 55 70 80 M
SAG mill steel ball consumption kg/t 0.12 0.21 0.24 M,D
Ball mill inefficiency factor % 105 105 105 M
Ball mill power required kW 1,582 1,978 1,965 D
Ball mill power required hp 2,121 2,653 2,635 D
Ball mill motor existing hp 2,750 2,750 2,750 GC
Ball mill slurry density %sols 60 75 82 M
Ball mill steel ball consumption kg/t 0.33 0.49 0.57 M,D
Combined ore, total mill power required kW 2,251 2,931 2,911 D
Combined ore, total mill power required hp 3,019 3,930 3,904 D
Available Grouse Creek mills, power available hp 5,750 5,750 5,750 GC
Leach gold recovery from leach feed % 95 93 90 R1, R2
Average gold content in ore g/t 1.40 2.35 2.54 F
Average annual gold quantity in plant feed g/a 3,321,500 4,631,850 4,357,370 D
Gold grams to ounces conversion g/oz 0.032151 0.032151 0.032151 S
Average annual gold quantity in plant feed oz/a 106,789 148,917 140,093 D
Annual average Gold recovered in leach circuit g/a 3,155,425 4,307,621 3,921,633 D
Annual average Gold recovered in leach circuit oz/a 101,449 138,493 126,083 D
Gold content of tailings solids g/a 166,075 324,230 435,737 D
Gold content of tailings solids g/t 0.070 0.165 0.254 D
Total gold recovered annually, average ounces oz/a 101,449 138,493 126,083 D
Bolivar Gold Corp. - Choco Project Feasibility Study
Plant Design Criteria (metric units, dry basis)
November 2003 Page 1 of 5
Design Peak gold content 1.540 2.585 2.794 M
Design peak based on, expected grade variation 110% avge 110% avge 110% avge M
Design annual gold quantity in plant feed g/a 3,653,650 5,095,035 4,793,107 D
Design annual Gold recovered in leach circuit g/a 3,470,968 4,738,383 4,313,796 D
Design annual Gold content of tailings solids g/a 182,683 356,652 479,311 D
Design Gold content of tailings solids g/t 0.077 0.181 0.279 D
Design Total gold recovered annually ounces oz/a 111,594 152,342 138,692 D
Process Design
SAG pebbles circulating load % 3 10 15 M
SAG screen circulating load % 50 50 100 M
SAG screen u/s density % 40 50 50 M
SAG screen o/s density % 60 70 70 M
Ball mill cyclone circulating load % 100 150 200 M
Ball mill cyclone u/f density % 55 60 65 M
Ball mill cyclone o/f density % 40 42 45 B1
Leach feed slurry density %sols 40 45 47 D
Leach feed solids SG t/m3 2.2 2.5 2.7
CIP feed slurry density %solids 40 43.0 43.0 D
Leach feed slurry flow t/h 301 250 213 D
Leach feed slurry volume flow m3/h 588 431 361 D
Total leach retention time, design minimum h 24 24 24 B1
Total leach volume required m3 14,116 10,353 8,664 D
Leach tank size m dia m 17.07 17.07 17.07 GC
Leach tank height incl. 1000mm freeboard m 15.54 15.54 15.54 GC
Leach tank volume m3 3,332 3,332 3,332 D
Leach tanks required qty 4.2 3.1 2.6 D
Leach tanks provided, not incl surge tank qty 4 4 4 GC
Leach volume actual provided m3 13,329 13,329 13,329 D
Actual leach retention time provided h 22.7 30.9 36.9 D
CIP tank size m dia m 8.534 8.534 8.534 GC
CIP tank height incl. 600mm freeboard (average of 7) m 8.534 8.534 8.534 GC
CIP tank volume m3 454 454 454 D
Residence time per tank, average h 0.77 1.05 1.26 D
Total CIP residence time h 5.41 7.37 8.81 D
CIP tanks provided 7 7 7 GC
CIP volume provided m3 3,181 3,181 3,181 D
Carbon concentration in CIL, average g/L 15.0 15.0 15.0 M
Daily gold recovered in leach, design g/d 9510 12982 11819 D
Design carbon loading g Au/t 4000 4000 4000 B1
Design barren carbon loading g/t 80 80 80 B1
Design adsorption per tonne carbon g/t 3,920 3,920 3,920 D
Carbon loaded per day, design t/d 2.43 3.31 3.01 D
Carbon loaded per day, average based on annual avge grade t/d 2.21 3.01 2.74 D
Selected strip vessel capacity, tonnes carbon t 4 4 4 D
Design strips per week qty 4.25 5.80 5.28 D
Required number of strip vessels qty 1 1 1 M
Carbon particle SG when wetted SG 1.1 1.1 1.1 S
Carbon density in vessel kg/t 0.5 0.5 0.5 S
Carbon Bed Volume (BV) in 4t vessel m3 8.0 8.0 8 M
Elution flow total incl rinse BV 12 12 12 M
Eluate total per strip m3 96 96 96 C2
Eluate tank capacity minimum m3 96 96 96 C2
Eluate tank design for overlapping strips % 115 115 115 D
Eluate tank volume required m3 110 110 110 D
Barren bleed assumed per strip cycle, 5% of total eluate m3 5 5 5 M
Elution flow rate BV/h 1.5 1.5 1.5 D
Elution flow rate m3/h 12.0 12.0 12.0 C2
Elution temperature deg C 135.0 135.0 135.0 M
Strip solution temperature at inlet deg C 145.0 145.0 145.0 D
Barren solution holding temperature deg C 85.0 85.0 85.0 M
Electrowinning cells availability % 90.0 90.0 90.0 M
Electrowinning cells design feed flow, average over week m3/h 12.0 12.0 12.0 B1
Strip solution caustic content %NaOH 1.0 1.0 1.0 M
Caustic lost with barren bleed , two bleeds daily kg/day 96 96 96 D
Caustic lost with barren bleed , two bleeds daily kg/tonne 0.015 0.018 0.020 D
Strip solution cyanide content %NaCN 0.2 0.2 0.2 M
Cyanide lost with barren bleed , two bleeds daily kg/day 19.2 19.2 19.2 D
Cyanide lost with barren bleed , two bleeds daily kg/tonne 0.003 0.004 0.004 D
Strip exit temp deg C 125.0 125.0 125.0 M
Intercooler exit temp deg C 105.0 105.0 105.0 M
Temp fall deg C 20.0 20.0 20.0 D
Temp rise for barren, available deg C 20.0 20.0 20.0 D
Approach temp rise (-5) deg C 15.0 15.0 15.0 D
Barren temp after intercooler deg C 100.0 100.0 100.0 D
Heating rise required deg C 45.0 45.0 45.0 D
Heat input required kW 627.5 540.0 540.0 D
Heater capacity, selected kW 750.0 750.0 750.0 M
Starting strip temp rise, without intercooler heat recovery deg C 60.0 60.0 60.0 D
Max. flow through heater, without intercooler heat recovery m3/h 12.5 12.5 12.5 D
Preg solution temp after cooler deg C 80.0 80.0 80.0 M
Cooling water temperature, average deg C 25 25 25 C2
Preg cooling, at 5 degree approach deg C 30.0 30.0 30.0 D
Cooling capacity of water required kcal/h 360 360 360 D
Cooling water temp rise selected deg C 30 30 30 M
Cooling water flow m3/h 12 12 12 D
Elution time on line h 8.0 8.0 8.0 C2
Vessel fill, warmup and empty time h 6.0 6.0 6.0 C2
Elution cycle time h 14.0 14.0 14.0 D
Carbon regenerated portion % 100 100 100 M
Design carbon regenerated t/d 2.43 3.31 3.01 D
Eductor (75mm dia) motive water consumption, typical m3/h 16 16 16 M
Carbon eduction, typical slurry wt% solids %sols 7.00 7.00 7.00 M
Carbon eduction, typical solids transfer rate t/h 1.20 1.20 1.20 C2
Carbon pumping, typical transfer rate t/h 2.50 2.50 2.50 C2
Carbon pumping, typical wt% solids %sols 15.00 15.00 15.00 M
Reagents and Consumables
Grinding Media
SAG Mill ball consumption kg/t 0.12 0.21 0.24 M,D
SAG Mill ball consumption per day kg/d 783 1115 1132 D
SAG Mill ball consumption per annum t/a 286 407 413 D
Ball mill ball consumption kg/t 0.33 0.49 0.57 D
Ball mill ball consumption per day kg/d 2,115 2,645 2,686 D
Ball mill ball consumption per annum t/a 772 965 980 D
Carbon
Carbon consumption rate, per tonne ore g/t 50.00 50.00 50.00 C2
Carbon make-up required, daily average kg/d 325 270 235 D
Carbon make-up required - annual t/a 119 99 86 D
Carbon fines recovered, assumed 50% of new makeup kg/d 163 135 118 D
Sodium Cyanide
Ore cyanide consumption kg/t 0.30 0.30 0.60 R1,R2
Overall cyanide consumption kg/t 0.30 0.30 0.60 D
Residual cyanide level, assumed lost g/t 50.00 50.00 50.00 M
Overall cyanide addition kg/t 0.35 0.35 0.65 D
Cyanide consumption, daily average kg/d 2,275 1,890 3,055 D
Annual cyanide consumption t/a 830 690 1,115 D
Cyanide solution strength % 22 22 22 C1
Cyanide solution SG kg/L 1.1 1.1 1.1 S
Total cyanide solution consumption L/t 1.59 1.59 2.95 D
Cyanide solution to grinding, % of total addition % 50.00 50.00 50.00 M
Cyanide solution to leaching, % of total addition % 50.00 50.00 50.00 M
Cyanide delivery vessel capacity, tonnes cyanide t 20 20 20 C1
Cyanide solution volume mixed m3 82.6 82.6 82.6 D
Cyanide Storage tank design basis % of min 120 120 120 M
Cyanide Storage tank design volume m3 99.2 99.2 99.2 D
Lime
Ore lime consumption kg/t 9.50 3.88 3.00 R1,R2
Overall lime consumption kg/t 9.50 3.88 3.00 D
Residual lime level, assumed lost kg/t 0.50 0.25 0.25 M
Overall lime addition kg/t 10.00 4.13 3.25 D
Daily lime consumption t/d 65 22 15 D
Annual lime consumption t/a 23,725 8,130 5,575 D
Slaked lime (Ca(OH)2) consumption at 1.32 factor kg/t 13.20 5.45 4.29 D
Slaked lime slurry strength g/L 200 200 200 C2
Slaked lime slurry SG kg/L 1.12 1.12 1.12 D
Slaked lime slurry addition total L/t 66.00 27.23 21.45 D
Slaked lime daily consumption, at design tonnage m3/day 477 163 110 D
Lime slurry portion to grinding % 75 75 75 M
Lime slurry portion to leaching, thickener % 25 25 25 M
Slaked lime solids SG t/m3 2.4 2.4 2.4 S
Slaking time per day h/day 8 8 8 C1
Lime slurry storage required hours 20 20 20 C1
Slurry storage volume required m3 397 136 91 D
Flocculant
Overall flocculant consumption kg/t 0 0 0 C2
Flocculant mix strength % 0.05 0.05 0.05 M
Sodium Hydroxide
Caustic consumption, strip/ CN, per tonne ore kg/t 0.04 0.03 0.02 C2
Caustic consumption, acid wash neutralization, per tonne ore kg/t 0.02 0.02 0.02 M
Caustic consumption, total, per tonne ore kg/t 0.06 0.05 0.04 M
Caustic consumption, daily average kg/d 390 270 188 D
Caustic consumption, daily per annum t/a 142 99 69 D
Caustic solution dilution % 25 25 25 C2
Hydrochloric Acid
Acid consumption, per tonne ore kg/t 0.08 0.05 0.03 C2
Acid consumption, daily average kg/d 520 270 141 D
Acid consumption, daily per annum t/a 190 99 51 D
Acid solution delivered, strength % 62 62 62 S
Acid dilution % 5 5 5 C2
Acid recycle flow (2 BV/h) m3/h 16 16 16 M
Air
Compressed air to leach, unit flow Nm3/h/m3 0.33 0.33 0.33 M
Compressed air to leach, total flow 2 tanks Nm3/h 4399 4399 4399 D
Compressed air to CIL, unit flow Nm3/h/m3 0.25 0.25 0.25 M
Compressed air to CIL, total flow 6 tanks Nm3/h 795 795 795 D
Total compressed air required Nm3/h 5,194 5,194 5,194 D
Compressor size each, 2 running Nm3/h 2,597 2,597 2,597 D
Compressor selection minimum, each, 2 running scfm 1,515 1,515 1,515 D
Compressor selection size scfm 2,200 2,200 2,200 D
DataSources
Bolivar instruction or agreed at kickoff B1
Bolivar experience B2
Test work with Choco samples, McClellan R1
Test work with Choco samples, Lakefield R2
Metchem, gold mill typical standards M
Derived by calculation in this worksheet D
Standard values S
Established during feasibility Study F
GrouseCreek equipment GC

Appendix B

Pit Slope Design for the Choco Project, Venezuela, Golder
Associates,October 2003

Appendix C

Preliminary Design of Plant Facility Foundations, Choco Gold Project, El
Callao, Venezuela, Golder Associates, October 2003

Appendix D

Preliminary Design of the Tailings Disposal Facility, Choco Gold Project, El
Callao, Venezuela, Golder Associates, December 2003

Appendix E

Flow Predictions and Reservoir Requirements, Choco Gold Project, El
Callao, Venezuela, Golder Associates, November 2003

Appendix F

Preliminary Water Reservoir Design, Choco Gold Project, El Callao,
Venezuela, Golder Associates, November 2003

Appendix G

Factual Information from Geotechnical Investigations, Choco Gold Project,
El Callao, Venezuela, Golder Associates, November 2003

Appendix H

An Investigation into the Recovery of Gold from Samples submitted by
Research Limited, August 1, 2003

Appendix I

An Investigation into the Rheological Properties of Slurry Samples, prepared
for Bolivar Gold Corp., LR 10586-002, Progress Report No. 2, SGS Lakefield

Appendix J

An Investigation into the Recovery of Gold from Samples submitted by

Feasibility Study December 22, 2003

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