Agata DSO Operations and Nickel Laterite Project

At a glance
Operator Agata Mining Ventures Inc. (AMVI) – Operator
Ownership of AMVI TVI Resource Development Philippines Inc. – 60%
Minimax Mineral Exploration Corporation – 25%
MRL Nickel Philippines Inc. – 15%
Location Jabonga, Santiago and Tubay Municipalities, Agusan del Norte
Business activities Development and mining of nickel laterite Direct Shipping Ore (DSO)
Resource and Reserve PMRC-compliant Resource and Reserve as at 31 July 2015:Mineral Resource: 43 million tonnes at 0.96% Ni and 19.9% Fe

Limonite Reserve: 9.6 million tonnes at 0.90% Ni and 48.2% Fe

Saprolite Reserve: 6.0 million tonnes at 1.49% Ni and 17.01% Fe
Yearly Production Shipping rate of 2.5 million wmt in 2015 and to 5.0 million in 2016
Current Manpower ~400 to date, including exploration
Transaction history Ongoing direct shipping ore (DSO) contract with offtake buyer of high iron laterite
Logistics Mining areas are within 3.5 kilometres from the port
Specification (Assay) 0.6% Ni / 48% Fe
0.6-1.0% Ni and 48-50% Fe

OVERVIEW

The Agata Direct Shipping Ore (DSO) Project is managed by joint venture company Agata Mining Ventures Inc. (AMVI) and is the third mining project that TVI Resource Development Philippines Inc. (TVIRD) brought on-stream in the past 10 years. The JV is 60% owned by TVIRD, which is also the technical service provider of AMVI. The remaining shares are held by Minimax Mineral Exploration Corporation and MRL Nickel Philippines Inc.

AMVI holds an Operating Agreement approved by the Mines and Geosciences Bureau – Department of Environment and Natural Resources. This agreement appoints AMVI as operator of the project with the mandate to develop and operate the contract area, including the extraction and sale of iron, nickel and other associated minerals, in line with applicable permits and licenses.

The project aims to move forward initially with high-iron laterite DSO operations, which will pave the way for establishing nickel laterite processing operations over the medium term.

LOCATION

The Agata DSO Project site is located in a 4,995-hectare Mineral Processing Sharing Agreement (MPSA) area located in the adjacent municipalities of Tubay, Jabonga and Santiago in Agusan del Norte province. It is accessible by land (approximately 1.5-hours driving time) from the provincial capital of Butuan.

The project mine site is located 3.5 km from AMVI’s private port, which is strategically located within proximity to main markets in Asia and bears the opportunity for shipping all year round.

The Agata DSO Project is located in the Surigao mining region – a major supplier of nickel ore to processing plants in Australia, China, Korea and Japan. The region is also a major driver of the Philippines’ leadership in nickel production.

EXPLORATION

In October 2014, AMVI commenced a detailed exploration program consisting of in-fill, data verification and step-out drilling on the Agata nickel laterite orebody to define ore extension within and outside the current pit design and to upgrade and increase the resources previously disclosed in a National Instrument (NI) 43-101 compliant mineral resource estimate released on April 10, 2013.

AMVI intends to produce a NI43-101 compliant resource update on the Agata nickel laterite project upon completion of the drill program, which is expected by mid-2015 or sooner.

RESOURCES

The table below shows results of the resource estimate at a cut-off grade of 0.5% nickel for the limonite horizon and 0.8% nickel for the saprolite horizon. This resource estimate is exclusive of the other regional nickel laterite deposits Agata South, Bolo-bolo and Karihatag.

Classification Sub-Domain kTonnes Ni Co Fe Al Mg SiO2 CaO Cr2O3 MnO
Measured Upper Limonite 211 0.98 0.11 49.7 3.11 0.5 2.8 0.03 3.67 1.01
Lower Limonite 27 1.13 0.15 35.5 2.57 5.1 21.1 0.22 2.86 0.85
Total Limonite 238 1.00 0.11 48.1 3.05 1.0 4.9 0.05 3.58 1.00
Upper Saprolite 478 1.19 0.03 11.3 0.39 17.9 41.6 0.32 0.89 0.23
Lower Saprolite
Total Saprolite 478 1.19 0.03 11.3 0.39 17.9 41.6 0.32 0.89 0.23
Measured Sub-Total 716 1.13 0.06 23.5 1.27 12.3 29.4 0.23 1.78 0.49
Indicated Upper Limonite 8,360 0.93 0.11 47.9 3.45 0.6 3.3 0.21 3.13 0.92
Lower Limonite 1,403 1.00 0.12 36.3 3.01 3.6 15.8 0.23 2.58 0.83
Total Limonite 9,764 0.94 0.11 46.3 3.39 1.0 5.1 0.22 3.05 0.90
Upper Saprolite 23,411 1.16 0.03 11.9 0.55 16.5 40.3 0.35 0.91 0.25
Lower Saprolite 48 0.84 0.02 8.9 0.35 19.4 41.1 0.33 0.70 0.18
Total Saprolite 23,459 1.16 0.03 11.9 0.55 16.5 40.3 0.35 0.91 0.25
Indicated Sub-Total 33,222 1.10 0.05 22.0 1.38 11.9 30.0 0.31 1.54 0.44
Measured & Indicated Grand Total 33,938 1.10 0.05 22.0 1.38 11.9 30.0 0.31 1.55 0.44
Inferred Upper Limonite 178 1.05 0.11 47.7 3.38 0.8 5.5 0.03 3.16 0.93
Lower Limonite 79 1.15 0.10 35.7 2.97 3.9 21.7 0.14 2.73 0.82
Total Limonite 258 1.08 0.11 44.0 3.25 1.8 10.5 0.06 3.03 0.90
Upper Saprolite 1,828 1.04 0.03 12.4 0.63 16.2 41.5 0.35 0.99 0.26
Lower Saprolite 0.02 1.11 0.02 7.3 0.21 18.9 42.7 0.28 0.65 0.16
Total Saprolite 1,828 1.04 0.03 12.4 0.63 16.2 41.5 0.35 0.99 0.26
Grand Total 2,086 1.04 0.04 16.3 0.96 14.4 37.7 0.32 1.24 0.34

The mineral resource estimates were produced by Mark Gifford MSc (Hons), who is a Fellow of the Australian Institute of Mining and Metallurgy (FAusIMM) and an independent qualified person as defined by NI 43-101, in conjunction with Quantitative Group Pty Ltd (QG) in Perth, Australia. A total of 593 drill holes were completed at Agata North for 10,851 metres, and 11,100 core samples were used in the resource estimate. The resource estimation method applied was Ordinary Kriging. Cut-off grades applied to the resource were 0.5% nickel within the Limonite zone and 0.8% nickel within the Saprolite zone.

Sample preparation and assaying were performed by Intertek Testing Services, Phils., Inc. (“ITS”). The ITS Phils. facility is among Intertek’s global network of mineral testing laboratories. Each sample is analyzed for nickel (Ni), cobalt (Co), iron (Fe), magnesium (Mg), aluminum (Al), silica (SiO2), CaO, Cr2O3, K2O, MnO, Na2O, P2O5, and TiO2. Whole rock analyses are done using X-ray Fluorescence (XRF). The samples are fused using lithium metaborate. XRF analysis determines total element concentrations that are reported as oxides. ITF mineral testing laboratories implement quality protocols. Normal Quality Control and Quality Assurance procedures were carried out, using a system of repeat analyses plus split sample analyses and the use of standard reference materials and blanks. Assay verification was carried out using standard samples and re-assaying field and pulp duplicates.

MINING OPERATIONS

Production remains steady at the Agata DSO Project. AMVI is currently planning to ramp up its nickel DSO operations from a previously stated goal of 2.5 million wet metric tonnes per year to 5 million wet metric tonnes by 2016 once it secures an amended and expanded Environmental Compliance Certificate and Declaration of Mining Project Feasibility with the Department of Environment and Natural Resources.

By doubling initially planned production capacity, AMVI expects to achieve economies of scale that would significantly enhance operating margins. Once production has been fully ramped up, the resulting shipment schedule would be approximately one to three shipments of 55,000 wmt of DSO being dispatched every week.