AN INDEPENDENT TECHNICAL REPORT ON EXPLORATION …

Report Prepared by

SRK Exploration Services Ltd ES7538

AN INDEPENDENT TECHNICAL REPORT ON EXPLORATION LICENCES EL48/2011, EL49/2011

AND EL50/2011 IN THE LOKO HILS AREA, SIERRA LEONE

Prepared For

AMR Gold (SL) Ltd

SRK ES Loko Hills ITR

SRK ES_Loko Hills ITR_110713_IMAGES COMPRESSED July 2013

COPYRIGHT AND DISCLAIMER

Copyright (and any other applicable intellectual property rights) in this document and any

accompanying data or models is reserved by SRK Exploration Services Limited ("SRK ES") and

is protected by international copyright and other laws. The use of this document is strictly subject

to terms licensed by SRK ES to its client as the recipient of this Proposal and unless otherwise

agreed by SRK ES, this does not grant rights to any third party. This document may not be

reproduced or circulated in the public domain (in whole or in part) or in any edited, abridged or

otherwise amended form unless expressly agreed by SRK ES. This document may not be

utilised or relied upon for any purpose other than that for which it is stated within and SRK ES

shall not be liable for any loss or damage caused by such use or reliance.

SRK ES respects the general confidentiality of its clients’ confidential information whether formally

agreed with clients or not. See the attached Terms and Conditions as included in the

Commercial Appendices contain mutual confidentiality obligations upon SRK ES and the Client.

The contents of this Proposal should be treated as confidential by the Client. The Client may not

release the technical and pricing information contained in this Proposal or any other documents

submitted by SRK ES to the Client, or otherwise make it available to any third party without the

express written consent of SRK ES.

© SRK Exploration Services Ltd 2013

SRK ES Legal Entity: SRK Exploration Services Ltd

SRK ES Address: 12 St Andrew’s Crescent Cardiff

CF10 3DD

Date: 04/07/2013

Project Number: ES7538

SRK ES Project Manager: Jon Russill Senior Exploration Geologist

Client Legal Entity: AMR Gold (SL) Ltd

Client Address: 11 Fifth Street Juba Hills Freetown

Sierra Leone Version: 24/01/2012 13:25

SRK ES Loko Hills ITR – Executive Summary

Registered Address: 21 Gold Tops, City and County of Newport, NP20 4PG,

Wales, United Kingdom. SRK Exploration Services Ltd Reg No 04929472 (England and Wales)

Group Offices: Africa Asia

Australia Europe

North America South America

AN INDEPENDENT TECHNICAL REPORT ON EXPLORATION LICENCES EL48/2011, EL49/2011 AND EL50/2011 IN THE

LOKO HILS AREA, SIERRA LEONE

EXECUTIVE SUMMARY

SRK Exploration Services Ltd. (“SRK ES”) is an associate company of the international group holding company, SRK Consulting (Global) Limited (the “SRK Group”). SRK ES has been requested by AMR Gold (SL) Ltd. (“AMRG”, hereinafter also referred to as the “Company” or the “Client”) to prepare an Independent Technical Report (“ITR”) on the mineral potential of the Company’s three exclusive mineral exploration licences in the Loko Hills area of the Bombali District, northern Sierra Leone.

The purpose of the ITR is to summarise the geology and mineral potential of AMRG’s licence areas, present SRK ES' opinion of the areas’ prospectivity for gold, tantalite-columbite

(hereafter termed “coltan”) and diamond mineralisation and provide prioritised exploration

recommendations. Another focus of the report will be to identify any opportunities to generate

early cash flow for the Company in foreseeable future through mineral production.

The Company’s original exploration objective was to identify greenstone belt-hosted lode gold

deposits that showed the potential to contain in excess of 1 Moz gold grading at least 2.5 g/t

gold. Three exploration licences were selected based on the occurrences of Pre-Leonean

Loko Hills Greenstone Belt units in the Loko Hills, the concept that greenstone belts are host

to major economic lode gold deposits within the West African Craton, and the fact that alluvial

gold has been mined in significant quantities in the Loko Hills for more than 70 years from

drainages that have a captive source in the greenstone belt units.

AMRG’s licences were granted by the Ministry of Mines and Mineral Resources in August 2011 and form three contiguous areas that total 735.7 km

2. The licence numbers are

EL48/2011, EL49/2011 and EL50/2011. Licences EL 48 and EL 50 are within the Sanda

Loko Chiefdom, whilst licence EL 49 is within the Sella Limba Chiefdom. There are numerous

rural villages throughout the licences, with the largest town in the area, Kamakwie, being

located in the south-western part of EL 49.

AMRG reviewed archive reports and historical exploration data prior to initial exploration work

in the three licence areas. Exploration included soil geochemistry, mapping and stream

sediment sampling. This work identified five target areas named Kadabi, Khatanta, Kindia,

Laminaia North and Laminaia South. All of these include greenstone belt occurrences of the

Loko Hills Group.

The Laminaia South target was selected as an exploration priority based on the presence of

an 8 km long coherent >50 ppb gold anomaly in soil samples and coincident prospective

greenstone geology along what is locally named the Ranongo Ridge. In 2012, detailed

mapping and IP surveys within the soil anomalies defined a >7 km long exploration target

interpreted to be on or close to an amphibolite – mica schist contact, and this was tested by

trenching and an initial 1200 m scout diamond drilling programme.

In SRK ES’ opinion ARMG’s exploration data was of excellent quality, but the targeted scale of mineralisation was not identified in this initial phase of work. However, the programme

identified the potential for bedrock gold mineralisation in mica- and magnetite-rich schist units

SRK Exploration Services Limited SRK ES Loko Hills ITR – Executive Summary

SRK ES_Loko Hills ITR_110713_IMAGES COMPRESSED July 2013 Page ii of iv

within the greenstone belt where gold mineralisation may be hosted by a shear zone, often in

association with pegmatite dykes. Notable intersections in these lithologies included 4.9 g/t

gold over 1 m in trench 1042800 and 1.72 g/t gold over 7 m in drill hole LMSDH008.

Furthermore, these lithologies are associated with significant in-situ eluvial gold mineralisation

in weathered bedrock, as well as large alluvial gold deposits in streams draining these

lithologies that have a long mining history.

Following reviews of AMRG’s exploration data and visits to the licences areas in January and

May 2013, SRK ES considers that the licence areas show strong potential to host the

following types of mineralisation in economic quantities:

Structurally controlled bedrock gold mineralisation within and at the margins of the

greenstone belts, with overlying eluvial gold mineralisation and associated alluvial

gold in rivers and streams;

Coltan, hosted by zones of mineralised pegmatite veins and overlying eluvial

mineralisation within and near the margins of greenstone belt units and also in

potentially extensive colluvial and alluvial settings; and,

Alluvial diamond mineralisation and diamondiferous kimberlite pipes or dykes within

basement lithologies.

Currently, AMRG is continuing gold exploration, specifically targeting eluvial mineralisation

that potentially can be exploited at relatively low cost, plus, as a priority, evaluating the area’s coltan potential.

Coltan

During the course of their gold exploration, AMRG became aware of an ever-growing and

thriving trade of coltan within its licences; this has been a recent development during 2012

and 2013. This trading is illegal and, according to local sources, the scale of production

suggests that artisanal miners, exploiting both alluvial and eluvial coltan, have sold over 250

tonnes of coltan to foreign and local traders over the past 18 months (verbal estimates of

monthly production vary from 20 to 30 tonnes). The coltan is sold at local markets as well as

directly to local agents acting on behalf of trading companies.

Due to the high value (tantalite (minimum 30% Ta2O5) is currently priced at about $125/lb

compared to about $40/lb in 2007) and increasing demand for this mineral from conflict-free

sources, plus the potential to exploit it at relatively low cost, SRK ES is of the opinion that

coltan represents the fastest option to provide AMRG with a revenue stream and as such

should be considered an exploration priority. The Company is making good progress in terms

of taking control of trading activities and will bring about improvements to local miners’ working conditions, a greater degree of mining organisation and mine site rehabilitation. This

approach is being well received by the communities in the area.

AMRG generates coltan exploration targets firstly by identifying areas in which there is

intense artisanal mining activity and, secondly, using tin-tungsten-beryllium pathfinder soil

geochemistry from their extensive early exploration database. The main areas that show

coltan mineralisation based on the presence and intensity of artisanal mining activity are the

Khatanta and Kindia prospects. Within these areas, and within the greater licence areas,

geochemical data has further constrained potential targets.

AMRG’s coltan exploration has made rapid progress in the Khatanta area and many of the

valleys have been investigated at a reconnaissance level via pitting and sampling in alluvial

material. The results indicate that alluvial coltan mineralisation is very widespread, albeit at


SRK ES_Loko Hills ITR_110713_IMAGES COMPRESSED July 2013 Page iii of iv

sporadic grades in terms of both its chemical content and its quantity within sampled material.

The next phase will be to target the headwaters and valley flanks of catchment areas and

higher alluvial terraces where SRK ES suspects that greater potential may exist.

Geochemical analysis on coltan concentrates confirm that it contains tantalum and niobium at

high grades, sometimes over 30% Ta2O5; this mineral is very likely to be of interest to the

international market and AMRG may be able to secure contracts to supply coltan fairly easily.

Another advantage is that the coltan contains low levels of uranium and thorium; in higher

concentrations, these radioactive elements can cause difficulties when shipping or processing

the mineral. Furthermore, coltan exports from Sierra Leone are likely to be of additional

interest since they will conform to recently-passed legislation (e.g. the Dodd Frank Act, 2009)

that requires coltan to be traceable and not sourced from conflict areas.

Exploration has shown the presence of potentially extensive zones of pegmatites associated

with late stage granites within the Khatanta area and these are thought to be the source of the

alluvial and eluvial coltan. They have been observed in outcrop, exposed beneath mining

areas in swamps, and intersected in AMRG’s trenches and pits. SRK ES considers that these

hold good potential to host primary coltan and cassiterite mineralisation and represent an

important exploration target. The Kindia area may also host such lithologies as evidenced by

alluvial occurrences here, and the Kadabi area also has some initial geochemical indications.

Gold

SRK ES’ review of AMRG’s exploration data, and the presence of eluvial gold mineralisation, endorses the possibility of a zone of bedrock gold mineralisation in mica- and magnetite-

schists with associated pegmatites to the west of the Ranongo Ridge in the Laminaia South

exploration target. SRK ES is of the opinion that this is likely to be shear zone hosted and

that the main shear lies within the large valley to the west of the ridge. Mineralised fluids may

have precipitated gold preferentially in the magnetite-rich lithologies, as seen at Ranongo

North. There is good potential here, and this should remain as an exploration objective for

AMRG.

In rivers and streams draining the magnetite-schist shear zone bedrock gold target area,

significant quantities of alluvial gold have been recovered by both small-scale commercial and

artisanal miners since the 1930s. A particular focus of this is the Kangafly, close to the

Laminaia village, where mining takes place extensively over a 1 km2 area. This is also the

site of the first gold discovery in the Loko Hills.

Found in close association to the magnetite-schist target, increasing and intense artisanal

mining at several sites within a north-south zone about 3 km long indicates potentially

extensive occurrences of in-situ eluvial gold mineralisation. This is supported by AMRG’s initial pitting results, and SRK ES is of the opinion that this style of mineralisation may hold

good economic potential for a relatively low-cost mining operation.

Eluvial mineralisation may have formed as a result of supergene enrichment in saprolites

developed above mica- and magnetite-schist bedrock that hosts primary gold mineralisation,

and it seems to be found in greatest abundance within a distinctive mottled saprolite

especially in proximity to sheared magnetite-rich schists and pegmatites. This is particularly

the case in the Ranongo North exploration area where the main mineralised zone is in

relatively gentle terrain along the western flanks of the Ranongo Ridge.

Based on geological continuity and the presence of numerous artisanal mining areas, there is

potential for mineralisation to be found, where favourable conditions exist, within an area of 7

km in length between the Ranongo South and Ranongo North exploration areas.


SRK ES_Loko Hills ITR_110713_IMAGES COMPRESSED July 2013 Page iv of iv

As a result of a focused pitting programme that includes small-scale bulk sampling, AMRG

are rapidly gaining a good understanding of the main gold-mineralised units in the Laminaia

area and, pending confirmatory laboratory analysis, SRK ES believes that the Company could

soon move to a bulk sampling or trial mining phase in order to assess the feasibility and

economics behind a commercial mining operation. There is also similar potential in the

Kasasi and Manahun areas where eluvial gold mineralisation of a very similar nature has

been the target of a recent gold rush by local miners, plus indications of this type of

mineralisation elsewhere in the Khatanta area.

Diamonds

The diamond potential is indicated by very intensive alluvial mining activities that took place

about 10 years ago in the Kamakwie area when over 10,000 miners were working swamp

areas. Large stones were reportedly recovered, for example 110 ct, 28 ct and 25 ct in

anecdotal reports and 56.87 ct in official records. Small scale mining continues today in the

same area as well as near the Kindia and Kadabi prospects. One such active mining site

near Kamakwie was visited by SRK ES in May 2013 where they were shown four diamonds,

the largest of which was an estimated 1.77 ct and of good quality. SRK ES believes that

there is a good possibility of indentifying diamondiferous kimberlite pipes or dykes within the

licence areas; these may have a north-westerly trend and could be similar to those in the

diamond fields of southern Guinea. Their presence is supported by historic exploration data

that shows the presence of kimberlite indicator minerals in stream sediments in a number of

locations within the licence areas.

Company Profile

AMRG is a well established company in Sierra Leone and has developed a comprehensive

infrastructure within their operating areas from which they undertake their exploration. They

are staffed by an experienced team that SRK ES considers capable of carrying out the

required works. Members of the Board have more than 20 years of experience in the mining

and minerals trading industry in Sierra Leone, and enjoy good relationships at a

Governmental level. In the local area, AMRG is well known and maintains very good

community relations. This is achieved through organising and funding numerous community

development projects, improvements to local infrastructure and the construction or

rehabilitation of facilities such as schools, hospitals, police stations and town meeting places.

The community is kept well informed of their exploration activities and the Company promises

improved working conditions as well as better organisation in the artisanal mining areas within

their exploration licences.

All of the above places AMRG in a strong position to undertake exploration and realise the

significant mineral potential of their licence areas.


SRK ES_Loko Hills ITR_110713_IMAGES COMPRESSED July 2013 Page i of iv

Table of Contents

1 INTRODUCTION ................................................................................................. 1

1.1 Background .............................................................................................................................. 1

1.2 Terms of Reference ................................................................................................................. 1

1.3 Work Completed ...................................................................................................................... 1

1.4 Past Involvement ..................................................................................................................... 1

1.5 Verification, Validation and Reliance ....................................................................................... 2

1.5.1 Verification ..................................................................................................................... 2

1.5.2 Technical Reliance ........................................................................................................ 2

1.5.3 Legal Reliance ............................................................................................................... 2

1.5.4 Declaration .................................................................................................................... 2

1.5.5 Copyright ....................................................................................................................... 2

1.6 Qualifications of Consultants ................................................................................................... 3

2 RELIANCE ON OTHER EXPERTS ..................................................................... 3

3 PROPERTY DESCRIPTION ................................................................................ 4

3.1 Location ................................................................................................................................... 4

3.2 Access ..................................................................................................................................... 6

3.3 Topography and Vegetation .................................................................................................... 7

3.4 Climate ..................................................................................................................................... 7

4 EXPLORATION HISTORY .................................................................................. 7

4.1 Previous Exploration ................................................................................................................ 7

4.2 Previous AMRG Exploration .................................................................................................... 8

4.3 Current AMRG Exploration .................................................................................................... 10

4.3.1 Columbite-tantalite....................................................................................................... 10

4.3.2 Gold ............................................................................................................................. 15

5 PAST PRODUCTION ........................................................................................ 18

5.1 Gold Production ..................................................................................................................... 18

5.1.1 Laminaia Mining Area .................................................................................................. 19

5.1.2 Kasasi Mining Area...................................................................................................... 21

5.1.3 Other eluvial gold mining areas ................................................................................... 23

5.2 Coltan Production .................................................................................................................. 24

5.3 Diamond Production .............................................................................................................. 27

6 GEOLOGICAL SETTING .................................................................................. 29

6.1 Regional Geology .................................................................................................................. 29

6.2 Local Geology ........................................................................................................................ 31

6.2.1 Lithologies ................................................................................................................... 32

6.2.2 Metamorphism ............................................................................................................. 33

6.2.3 Structure and Deformation .......................................................................................... 33


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7 DEPOSIT TYPES AND MINERALISED ZONES ............................................... 35

7.1 Introduction ............................................................................................................................ 35

7.2 Coltan ..................................................................................................................................... 35

7.2.1 Mineralisation Styles.................................................................................................... 35

7.2.2 Generic Models ........................................................................................................... 37

7.2.3 Prospective Areas ....................................................................................................... 39

7.3 Gold ....................................................................................................................................... 48


7.3.2 Generic Models ........................................................................................................... 49


7.4 Diamonds ............................................................................................................................... 54


7.4.2 Generic Models ........................................................................................................... 54


8 CONCLUSIONS ................................................................................................ 56

8.1 Introduction ............................................................................................................................ 56

8.2 Exploration Priorities .............................................................................................................. 56

8.3 Coltan ..................................................................................................................................... 57

8.4 Gold ....................................................................................................................................... 57

8.5 Diamonds ............................................................................................................................... 58

8.6 Company Footprint ................................................................................................................ 58

9 RECOMMENDED FUTURE EXPLORATION .................................................... 59

9.1 Coltan ..................................................................................................................................... 59

9.1.1 Alluvial Coltan .............................................................................................................. 59

9.1.2 Primary Coltan ............................................................................................................. 60

9.2 Gold ....................................................................................................................................... 61

9.2.1 Eluvial Gold ................................................................................................................. 61

9.2.2 Primary Gold ................................................................................................................ 62

9.3 Diamonds ............................................................................................................................... 63

10 EXPLORATION PRIORITIES & CORPORATE STRATEGY ............................ 63

10.1 Exploration Priority Matrix ...................................................................................................... 63

10.2 Corporate Strategy ................................................................................................................ 65

10.3 AMRG Community Relations ................................................................................................. 66

11 REFERENCES .................................................................................................. 67

REPORT DISTRIBUTION RECORD ....................................................................... 69


SRK ES_Loko Hills ITR_110713_IMAGES COMPRESSED July 2013 Page iii of iv

List of Tables Table 3-1 Summary of AMRG’s exploration licence holdings in the Loko Hills area ............................. 4

Table 4-1 Pressed pellet XRF analysis results for 8 mineral concentrate samples ............................. 14

Table 10-1 Exploration priority matrix for AMRG’s Loko Hills licences ................................................ 64

List of Figures Figure 3-1 Location of AMRG’s Loko Hills exploration licences in Sierra Leone ................................... 5

Figure 3-2 AMRG exploration licence boundaries overlain onto SRTM digital terrain model and showing the main exploration prospects. Coordinates are in WGS 84 UTM Zone 28N ....................................................................................................................................... 6

Figure 4-1 Coltan exploration pitting locations and heavy mineral grades in the Khatanta prospect. Courtesy of AMRG. ..................................................................................................... 12

Figure 4-2 Left: Coarse grained tantalite grains from the Kamahorhorni swamp. Right: 1 kg columbite cobble from the Kamasegetuma swamp. .................................................................... 13

Figure 4-3 Eluvial gold pitting locations and completed pits as of 02/06/13 in the Ranongo South exploration area. Gold grade information is from trench samples. Courtesy of AMRG ..................................................................................................................................... 16

Figure 4-4 Eluvial gold pitting locations and completed pits as of 02/06/13 in the Ranongo North exploration area. Gold grade information is from trench samples. Courtesy of AMRG ..................................................................................................................................... 17

Figure 5-1 Distribution of artisanal gold mining areas within AMRG’s licences. Mining areas shown as yellow polygons ...................................................................................................... 19

Figure 5-2 View from the top of the Ranongo Ridge across the Kangafly mining area and the town of Laminaia ...................................................................................................................... 20

Figure 5-3 Mining activities targeting mottled saprolite in the Mabale mining area north of Laminaia 21

Figure 5-4 Mining activity at Kasasi. Note the dredging equipment at the base of the slope. ............ 22

Figure 5-5 Photograph of targeted materials at Kasasi ....................................................................... 23

Figure 5-6 Gold purchased by AMRG from a local gold dealer at Kasasi. .......................................... 23

Figure 5-7 Deep gold working in pegmatites and schists within the Khatanta prospect ..................... 24

Figure 5-8 View across the valley in one of the main mining areas in the Khatanta prospect. ........... 26

Figure 5-9 Exploiting mineralised weathered pegmatites at the edge of the swamp shown in Figure 5-8................................................................................................................................ 26

Figure 5-10 Micaceous Group II kimberlite material in alluvial gravels awaiting washing at a diamond mining site about 1 km south of AMRG’s EL 49 licence boundary ............................. 28

Figure 5-11 Diamonds recovered from a swamp about 1 km south of AMRG’s EL 49 licence boundary. Note garnets in the pan concentrate derived from kimberlitic material from alluvial gravels shown in Figure 5-10 .......................................................................... 28

Figure 6-1 Simplified geological map of Sierra Leone (Source: Sierra Leone Mining Review February 2003) showing the location of AMRG’s Loko Hills exploration licences...................... 31

Figure 6-2 Geology within AMRG’s Loko Hills licence areas as published by the GSSL and showing the main exploration prospects. Greenstone belt rocks of the Loko Hills Group are shown in yellow and annotated PLl ............................................................................. 32

Figure 6-3 Vertical foliation in sheared mica schists exposed in AMRG’s trench TR_1042800 on the Ranongo Ridge, EL 50. Note the intrusion of thin pegmatite veins exploiting the foliation. ....................................................................................................................... 34


SRK ES_Loko Hills ITR_110713_IMAGES COMPRESSED July 2013 Page iv of iv

Figure 6-4 Thin pegmatite dyke intruding sheared magnetite schists exposed in AMRG’s trench TR_1042800 on the Ranongo Ridge, EL 50. Note the pegmatite crosscutting older highly deformed veining within the schists. ................................................................. 34

Figure 7-1 Large coltan fragment from the Khatanta prospect ............................................................ 35

Figure 7-2 Coltan recovered from AMRG’s exploration pits in the Khatanta area, licence EL 49 ....... 36

Figure 7-3 Fairly fresh medium-grained pegmatite, possibly mineralised, from the centre of the Khatanta prospect ....................................................................................................... 37

Figure 7-4 Detail of medium-grained pegmatite from the central Khatanta prospect. The metallic mineral 5 mm in diameter to the left of centre is thought to be coltan ........................ 37

Figure 7-5 Target areas within AMRG’s licence areas defined as having potential to host coltan mineralisation .............................................................................................................. 40

Figure 7-6 Currently known pegmatite occurrences in the Khatanta prospect .................................... 41

Figure 7-7 Tourmaline- and cassiterite-bearing pegmatite dykes exposed in trench MAT_TR 001 ... 42

Figure 7-8 AMRG graphical geological log (plan format) of trench MAT_TR 001 showing pegmatite dykes intersected in the trench. ................................................................................... 42

Figure 7-9 View into trench MAT_TR 001 showing sharp contacts between pegmatite dykes and sheared mica schist. The markers in the trench show 1 m intervals. ........................ 43

Figure 7-10 Left: East-west trending gully underlain by mineralised pegmatites, and showing evidence of mining activities. Right: Tourmaline-bearing pegmatite found beneath eluvial diggings. ........................................................................................................... 43

Figure 7-11 Left: Weathered tourmaline-bearing pegmatites exposed by gold mining activities. Right: Fresh tourmaline- and columbite-bearing pegmatites from the western flanks of Kamabonkoni Hill..................................................................................................... 44

Figure 7-12 Gridded tin (Sn) grades in AMRG soil sampling data for the Khatanta prospect ............. 45

Figure 7-13 Gridded tungsten (W) grades in AMRG soil sampling data for the Khatanta prospect .... 46

Figure 7-14 Gridded beryllium (Be) grades in AMRG soil sampling data for the Khatanta prospect .. 47

Figure 7-15 Gold grain recovered from mottled schist saprolite at Ranongo North ............................ 48

Figure 7-16 Schematic diagram of the main secondary gold mineralisation settings and supergene mineralisation processes in the Loko Hills, based on the topography and geology of the Ranongo Ridge...................................................................................................... 50

Figure 7-17 Distribution of alluvial gold artisanal mining areas and areas identified by AMRG as having alluvial gold potential within their licence areas ............................................... 52

Figure 7-18 Alluvial gold occurrences and areas that have potential to host eluvial gold mineralisation within AMRG’s Loko Hills licences .............................................................................. 53

Figure 7-19 Map showing kimberlite indicator mineral dispersion in stream sediments samples taken by African Minerals Ltd. in and around AMRG’s licence areas. .................................. 56


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AN INDEPENDENT TECHNICAL REPORT ON EXPLORATION LICENCES EL48/2011, EL49/2011 AND EL50/2011 IN THE

LOKO HILS AREA, SIERRA LEONE

FILE REF: SRK ES_Loko Hills ITR_040713.docx

1 INTRODUCTION

1.1 Background

SRK Exploration Services Limited (“SRK ES”) is an associate company of the international group holding company, SRK Consulting (Global) Limited (the “SRK Group”). SRK ES has

been requested by AMR Gold (SL) Ltd. (“AMRG”, hereinafter also referred to as the “Company”) to prepare an Independent Technical Report on the Mineral Assets of the

Company comprising three mineral exploration licences in the Loko Hills area of Bombali

District, northern Sierra Leone.

AMRG is a subsidiary of Avivit Gold Company Ltd. and is a well established company in

Sierra Leone and have been active in the exploration and mining industry for a number of

years. The Company is well known and respected within their operating areas, employ

significant numbers of local workers and enjoy good relations with local communities and

governmental authorities in Sierra Leone. AMRG is currently engaged in exploration for

tantalite-columbite and gold mineralisation.

1.2 Terms of Reference

The purpose of the ITR is to summarise the geology and mineral potential of AMRG’s licence areas, present SRK ES' opinion of the areas’ prospectivity for gold, tantalite-columbite

(hereafter referred to as “coltan”) and diamond mineralisation and provide prioritised exploration recommendations, particularly for commodities that show potential to generate

cash flow for the Company in foreseeable future.

It is understood that AMRG intends to use the report in support of prioritising and planning

further exploration activities.

1.3 Work Completed

SRK ES has been provided with all data and reports from AMRG’s current and previous exploration programmes, and has reviewed these in order to assess the geology, mineral

potential and main mineralised zones within their licence areas. Meetings and

teleconferences have been held between AMRG and SRK ES in order to discuss findings and

formulate exploration priorities and strategies. In May 2013, the licence areas were visited by

Mr Jon Russill, Senior Exploration Geologist with SRK ES, in order to make observations in

the current exploration areas for coltan and gold and review AMRG’s exploration methods.

1.4 Past Involvement

SRK ES were previously engaged by AMRG in January 2013 to review the exploration work

undertaken by the Company in their Laminaia South exploration area and comment on the

results. A further aim of this was to provide advice as to future exploration strategy, and a

report was submitted in March 2013. This commission included visits to the Laminaia South

and Kasasi areas by Mr James Gilbertson of SRK ES and Dr Chris Bonson of SRK

Consulting (UK) Ltd.



1.5 Verification, Validation and Reliance

1.5.1 Verification

This report is dependent upon technical input from AMRG, much of which has taken in good

faith. SRK ES has, however, conducted a review and assessment of all material technical

issues likely to influence the Exploration Assets, which included the following:

Two visits to the Exploration Assets in January 2013 and May 2013;

Discussion and enquiry following access to key project and head office personnel;

and

An examination of historical information and results made available by the Company

in respect of the Exploration Assets up to 05/06/2013.

Where fundamental exploration base data collected by the Company have been provided

(geological information, assay information, exploration programmes) for the purposes of

review, SRK ES has performed all necessary validation and verification procedures deemed

appropriate in order to place the correct level of reliance on such information.

To the knowledge of SRK ES, as informed by the Company, there has been no material

change in respect of the Exploration Assets since 05/06/2013.

1.5.2 Technical Reliance

SRK ES places reliance on the Company and its technical representatives that all technical

information provided to SRK ES, as at 10/06/2013, is accurate.

1.5.3 Legal Reliance

In consideration of all legal aspects relating to the Exploration Licences, SRK ES has placed

reliance on the representations by the Company that the following are correct as at

10/06/2013:

that the Directors of the Company are not aware of any legal proceedings that may

have any influence on the rights to explore for minerals;

that the legal owners of all mineral and surface rights have been verified; and

that no significant legal issue exists which would affect the likely viability of the

exploration licences as reported herein.

1.5.4 Declaration

SRK ES will receive a fee for the preparation of this report in accordance with normal

professional consulting practice. This fee is not contingent on the outcome of report or any

gain made by AMRG as a result of the recommendations in this report. SRK ES will receive

no other benefit for the preparation of this report.

Neither SRK ES nor any Directors of SRK ES have at the date of this report, nor have had

within the previous two years, any shareholding in the Company, the Exploration Assets or

advisors of the Company. Consequently, SRK ES and the Directors of SRK ES consider

themselves to be independent of the Company.

1.5.5 Copyright

Subject to the foregoing, copyright of all text and other matter in this document, including the

manner of presentation, is the exclusive property of SRK ES. It is an offence to publish this

document or any part of the document under a different cover, or to reproduce and/or use,

without written consent, any technical procedure and/or technique contained in this document.



The intellectual property reflected in the contents resides with SRK ES and shall not be used

for any activity that does not involve SRK ES, without the written consent of SRK ES.

1.6 Qualifications of Consultants

The SRK Group, of which SRK ES is a subsidiary, comprises 1,600 staff and offers expertise

in a wide range of geological disciplines. The SRK Group’s independence is ensured by the

fact that it holds no equity in any project. This permits the SRK Group to provide its clients

with conflict-free and objective recommendations on crucial judgment issues. The SRK Group

has a demonstrated track record in undertaking independent assessments of Exploration

assets, resources and reserves, project evaluations and audits, CPR’s, Mineral Experts Reports and independent feasibility evaluations to bankable standards on behalf of

exploration and mining companies and financial institutions worldwide. The SRK Group has

also worked with a large number of major international mining companies and their projects,

providing mining industry consultancy service inputs. The SRK Group and SRK ES also have

specific experience in commissions of this nature.

This Independent Technical Report has been prepared based on a technical review by a team

consultants sourced from SRK ES. These consultants are specialists in the fields of

exploration and mining geology.

The individuals who have provided input to this report are listed below and have extensive

experience in the exploration and mining industry and are members in good standing of

appropriate professional institutions.

Jon Russill BSc, FGS Project manager, site visits, reporting

James Gilbertson MCSM, CGeol, FGS Project director, reporting

Chris Lambert BSc, FGS, GradIMMM, ACSM Data reviews

William Kellaway MCSM, MAusIMMM Technical review

2 RELIANCE ON OTHER EXPERTS

In reviewing the geology, mineral potential and historic exploration in the Loko Hills area, SRK

ES has used a number of reports and papers produced by or for AMRG or available in the

public domain. These include:

AMR Gold (SL) Limited. 2011. Conceptual study, A report on work carried out on the

AMR Gold Loko Hills and Gori Hills exploration Licences between June 2011 and

November 2011. AMR Gold (SL) Limited.

Bennett, J. 2009. Report of visit. JB MineTech.

Harris, C., Kakebeeke, V., Stacey, J., Winter, J., Sillah, S., & Thomas, A. 2012.

Interim report on the phase 1a of the feasibility study carried out on the Laminaia

South prospect. AMR Gold (SL) Limited.

Sillah, S. 2013. Coltan exploration work plan for AMR Gold Loko Hills licences North

West of Sierra Leone, Bombali District. AMR Gold (SL) Limited.

Sillah, S. 2013. Elluvial and alluvial exploration work plan for AMR Gold Loko Hills

licences North West of Sierra Leone, Bombali District. AMR Gold (SL) Limited.

Sillah, S. 2013. Evaluating the economic mineral potential in AMR Gold’s Loko Hills licences, North Western Sierra Leone. AMR Gold (SL) Limited.

Sillah, S. 2013. Hard rock gold exploration work plan for AMR Gold Loko Hills



licences North West of Sierra Leone, Bombali District. AMR Gold (SL) Limited.

Sillah, S. 2013. Kimberlite exploration work plan for AMR Gold Loko Hills licences

North West of Sierra Leone, Bombali District. AMR Gold (SL) Limited.

Slowey, E. & Bennett, J. 2008. Competent Person’s Report on gold, platinum and diamond projects in Sierra Leone. Avivit Minerals Company Limited. CSA

Consultants.

Stacey, J. 2010. Opportunity Apprasal. Avivit Minerals Company Limited.

Strasser-King, V. E. H. 2004. Geological invesitagetion into the Tumpe and Kate

leases of CDR Resources Ltd in Kamakwie, Northern Sierra Leone. CDR Resources.

Thomas, A. 2012. Analysis and interpretation of structural data from the phase 1

drilling campaign at Laminaia South. AMR Gold (SL) Limited.

Wilkinson, A. F. 2005. Evaluation of potential for economic gold and base metal

mineralisation within company licence area (at 31/03/05) and proposed exploration

programme. Sierra Leone Diamond Company Limited.

In addition to these, SRK ES receives weekly reports from AMRG’s exploration team and has records of these from late March 2013 up to the time of writing.

Although SRK ES has visited the licence areas of two occasions, much of the data and

observations presented in the above documents has not been verified and is taken in good

faith.

3 PROPERTY DESCRIPTION

3.1 Location

The Republic of Sierra Leone (“Sierra Leone”) is located on the Atlantic Coast of West Africa,

at around eight degrees north of the Equator. Sierra Leone borders the Republic of Guinea in

the north and east and the Republic of Liberia to the southeast. The country has a land area

of 71,740 km2 and is divided into four geographical regions; the Northern, Southern, Eastern

and Western Provinces which in turn are divided into 14 districts.

AMRG’s licences lie within the district of Bombali, in the Northern Province in an area of hilly

terrain referred to as the Loko Hills. Their location is shown in Figure ‎3-1. AMRG holds three

exploration licences (numbered EL 48/2011, EL 49/2011 and EL 50/2011), and these include

five exploration prospects named Khatanta, Laminaia (North and South), Kindia and Kadabi.

These prospects reflect the occurrences of greenstone belt lithologies of the Loko Hills Group

within the licence areas. Together, the licences cover an area of 735.7 km2 (Table ‎3-1).

Table ‎3-1 Summary of AMRG’s exploration licence holdings in the Loko Hills area

Licence Number Surface Area, km2 Exploration Prospects

EL 48/2011 242.9 Laminaia South, Kindia

EL 49/2011 245.5 Khatanta, Kadabi

EL 50/2011 247.3 Laminaia North



Figure ‎3-1 Location of AMRG’s Loko Hills exploration licences in Sierra Leone

The Laminaia North and South prospects include a long arcuate ridge known as the Ranongo

Ridge. AMRG has subdivided the Laminaia South area into the Ranongo North and Ranongo

South exploration areas.

Licences EL 48 and EL 50 are within the Sanda Loko Chiefdom, whilst licence EL 49 is within

the Sella Limba Chiefdom. There are numerous rural villages throughout the licences, and

the largest town in the area is Kamakwie in the south-western part of EL 49.

The licence boundaries and the main exploration prospects are shown in Figure ‎3-2.

EL 49/2011

EL 48/2011

EL 50/2011



Figure ‎3-2 AMRG exploration licence boundaries overlain onto SRTM digital terrain model and showing the main exploration prospects. Coordinates are in WGS 84 UTM Zone 28N

3.2 Access

Access in the area is typical of a remote site in West Africa. Good quality sealed highways

connect Freetown to Makeni, the closest major town to the south of the licence areas. From

Makeni, secondary unsealed roads provide access to the most westerly region of the licence

area and the town of Kamakwie, the location of one of AMRG’s field camp. This road is

currently being upgraded to provide a sealed road between Makeni and the Guinea border,

passing through Kamakwie. This will significantly improve access to the project once

complete.

Further access to the rest of the licences comprises dirt tracks between villages. These can

become difficult during the wet season. Access into exploration areas away from villages is

along footpaths and more remote sites must be accessed by line cutting, especially during the

wet season. Many of the villages have water wells, but there is no mains electricity other than

that provided by generators.



3.3 Topography and Vegetation

Sierra Leone has four distinct geographical regions. At the coast, mangrove swamps and

forests form the predominant natural landform. With progression inland, the countryside

becomes lowland plains comprising forests, bush and farmland which occupy around 43% of

Sierra Leone's land area. Upland plateaus interspersed with high mountains form the far

eastern areas of the country. Mount Bintumani rises to 1,948 meters in this area and forms

the highest point in Sierra Leone.

The southern regions of Sierra Leone are occupied by rain-forested plains and farmland. The

coast of Sierra Leone has some 400 km of Atlantic coastline and the world's third largest

natural harbour in which the, Freetown, is located.

The northern regions of the country, including the Loko Hills area, are categorised as part of

the Guinean forest-savannah mosaic ecoregion, an area of interlaced forest, savannah and

grassland which occupies the southern coastline of West Africa from Guinea, Sierra Leone

and Liberia through the Ivory Coast and Ghana into Nigeria and Cameroon. Low lying valleys

are generally quite thickly vegetated by forest or secondary undergrowth. Swamp areas in

the valley floors, where not mined, are covered by tall grasses or rice paddies. Many of the

hillsides have been cleared for agriculture or, where not currently farmed, are covered by

dense secondary undergrowth. Hilltops and plateaus are often sparsely vegetated.

Unlike other greenstone belts in Sierra Leone which have well-defined hills and ridges, the

Loko Hills are relatively subdued and sometimes flat-topped. This seems particularly the case

for greenstone belt occurrences in the Kadabi, Khatanta and Kindia areas. Laminaia forms a

distinct ridge that is largely continuous for more than 30 km. This may reflect the fact that the

Loko Hills Group is older than other greenstone belts in Sierra Leone and therefore has been

subject to a greater degree of erosion.

The main rivers in the area are the Mongo and the Little Scarcies. These join in the northern

part of licence EL 49 and then continue westwards parallel to the licence boundary.

3.4 Climate

The climate of Sierra Leone is one of the wettest and hottest in West Africa with average

annual rainfall of 3,150 mm. Sierra Leone has a tropical climate with a rainy season from May

to November, July and August being the wettest and most humid months. The dry season

lasts from December to May. During the dry season, the harmattan blows cool, dry winds

laden with fine sand off the Sahara Desert. The average temperature across the country is 26

°C but the seasonal average can extend as high as 36 °C throughout the year.

4 EXPLORATION HISTORY

4.1 Previous Exploration

Alluvial gold was first discovered in the Loko Hills by the Sierra Leone Geological Survey

(“SLGS”) in 1931. This was in the Laminaia area and this has been a target of interest ever

since and the subject of historic small-scale commercial mining until the 1970s.

MacFarlane et.al. (1980) conducted basic geological mapping across the region and identified

gold mineralisation from panned concentrates in two streams to the south of the hills. The

SLGS identified further gold anomalies prospecting along a number of rivers and streams on

the western flanks of the Ranongo Ridge in 1985 (SLDC, 2005).

Grid-controlled geological mapping, geochemical soil sampling and ground magnetic surveys



were conducted by Beaty Geological Ltd. on behalf of B.L.K Mining Enterprises in 1985 but

the project did not continue to a more advanced phase.

In 2004, CDR Resources commissioned an assessment of the area’s potential for gold (CDR

Resources, 2004). The Sierra Leone Diamond Company (“SLDC”, now African Minerals Ltd.

or “AML”) also carried out initial regional stream geochemical sampling over the area (Stacey,

2010). Both of these studies concluded that there was good potential for gold, especially in

placer deposits, and that the area warranted further work.

In 2005, SLDC undertook further reconnaissance work in the Loko Hills area in conjunction

with several other greenstone belts in Sierra Leone. This included a soil sampling programme

over the Laminaia South region, the results of which were later used by AMRG in their

exploration design for this area.

SLDC also carried out diamond exploration in the area, mainly consisting of reconnaissance

stream sediment sampling to assess the presence of kimberlite indicator minerals (chrome

diopside, pyrope garnet, picro ilmenite, chrome spinel and olivine). The data from the 314

stream sediment samples in what is now AMRG’s licence areas showed a number of

prospective anomalies.

AML completed more detailed soil sampling, pitting and airborne magnetic surveys over the

greenstone belt in the Laminaia area in 2007. Soil sample results highlighted an extensive low

grade gold anomaly (>10 ppb Au) over an area of some 14 km by 1.5 km, following the trace

of the Ranongo Ridge that includes the Laminaia North and South prospects. Within this

zone, three higher grade (>100 ppb Au) gold anomalies were observed (Stacey, 2010). AML

did not carry out any further work in the area. This thought to have been due to a strategic

decision to focus on their large Tonkolili iron ore project rather than a lack of prospectivity.

4.2 Previous AMRG Exploration

AMRG conducted reconnaissance visits in November 2010 and May 2011 to the Loko Hills

area before applying for the current exploration licences. These were awarded in June 2011

and, following initial studies, divided into five target areas: Kindia, Khatanta, Laminaia (North

and South) and Kadabi. These target areas reflect the location of greenstone belt units within

the licence areas. The main objective of AMRG at that time was to identify an economically

viable lode gold deposit of more than 1 Moz with grades of about or greater than 2.5 g/t Au.

Exploration began in August 2011 with reconnaissance geological mapping and grab

sampling across all five of the target areas, focussing on the greenstone belt’s topographic

highs. Stream sediment and pan concentrate sampling was carried out in the Kadabi, Kindia

and Laminaia South areas (a total of 176 samples of which 27 have analytical data). Pan

concentrates were mainly intended to check for the presence of gold grains. This was

followed by a very extensive soil sampling programme and a total 7,090 soil samples were

collected across all the targets except Kindia. 6,927 of these have analytical data for gold and

trace elements.

In Laminaia South the sampling lines were positioned to infill the soil sampling previously

conducted by AML and were orientated east-west over the ridge. AML’s database included

1,579 samples collected at 100 m intervals on lines spaced at 800 m. AMRG positioned lines

between AML’s at a spacing of 800 m, giving an effective sample line spacing of 400 m when

the databases were merged. 904 samples were collected by AMRG at 50 m spacing along

the lines during October 2011. These samples were submitted to the ALS laboratory in

Ireland for analysis. This phase of work concluded in December 2011 and resulted in a



second phase of more detailed exploration starting in January 2012.

In the Khatanta and Kadabi prospects, soil sampling was undertaken on west-east and north-

south lines respectively. Lines were spaced every 400 m, and samples taken every 100 m

along the lines. Geochemical results revealed only small discontinuous gold anomalies that

suggested limited potential. However further investigation suggested that this was due to the

deep weathering profile and extensive laterisation. In such an environment near-surface soil

samples were unlikely to be representative of the underlying geology or potential

mineralisation. This is supported by the presence of extensive artisanal mining activity in both

areas, which suggests that the areas are prospective and contrasts with the poor soil

sampling results.

Results were better in the Laminaia South area. When AMRG’s soil geochemistry results

were merged with older AML data the results were found to be comparable such that when

the two datasets were viewed alongside one another they showed the same anomalous gold

trends. These contiguous gold anomalies showed good correlation to the greenstone belt

ridge and this, plus the presence of numerous long-established artisanal gold mining sites, led

to the Laminaia South area being prioritised and considered to have the best potential to host

mineralisation of the targeted size and grade. A more advanced exploration programme was

therefore undertaken in 2012 and included detailed mapping, trenching, geophysical

surveying (Induced Polarisation) and diamond drilling.

Fifteen trenches were excavated in Laminaia South in order to expose and sample the

bedrock where gold anomalies were indicated by the soil sampling. Three of these were not

completed or sampled due to thick laterite cover and steep topography. The trenches were

mainly underlain by amphibolite lithologies with some leading into mica schists at their

western ends. Horizontal channel samples were taken at 1 m intervals along the lower walls

of trenches resulting in 3,262 samples with analytical results for gold and trace elements. The

results indicated that the most prospective lithology was the mica- and magnetite-rich schists

on the western flank of the ridge, and that the amphibolites contained only minor low grade

anomalies.

An induced polarisation survey was carried out in order to identify zones that may host

sulphide mineralisation and to assist with the structural interpretation of the area. This was

followed by a 12 hole scout drilling programme that commenced in August 2012.

A man-portable diamond drill rig was used at inclinations between -50˚ to -80˚ and holes were

drilled towards the west or northwest. The maximum depth of the boreholes was 250 m and

holes were drilled at HQ diameter in upper weathered material and then at NTW diameter.

Core was sampled every 1 m and samples were submitted for analysis to ALS in Ireland. The

total length drilled was 1799.87 m.

Diamond drilling results were consistent with the surface geological mapping for the area,

showing amphibolite units at higher elevations and mica- or magnetite-rich schists beneath

the western flanks of the ridge. Pegmatites mapped in outcrop were also intersected and

show a distinct geochemical signature, particularly in terms of elevated niobium grades.

Some significant areas of pyrite mineralisation were observed, albeit over fairly short

intersections. In places, this appears to correspond to areas of increased chargeability in the

geophysical data.

Veining encountered by drilling is generally highly deformed and only found over short

intersections. Assay results for gold reflect this and show low to moderate grades over short

distances, with grades >1 g/t Au never found in intersections of more than 1 m.



Drillhole DDH008 shows the best results. Gold-mineralised intersections are still short, but

the hole has the highest grade results from the drilling programme. This is reflected in the

trench that overlies this drill hole (trench 1042800) which hosts some of the highest grade

gold anomalies from the trenches (4.9 g/t gold over 1 m). It is notable that this hole mainly

drilled through mica schists, with the best intersection averaging 1.72 g/t Au over 7 m from 57

m to 64 m, including 6.88 g/t Au from 59 m to 60 m and 3.48 g/t Au from 62 m to 63 m.

It was concluded following this drilling programme and after a detailed review by AMRG and

SRK ES that the amphibolites in the Ranongo Ridge were unlikely to host an economic gold

deposit, and that the best potential appeared to be in the schist units that form the western

flanks of the ridge. However, the drilling programme, having mainly targeted the

amphibolites, included only limited intersections through the schists and may not have

reached the main mineralised zones.

The observation that the schists, particularly magnetite-rich schists, are prospective is

supported by local mining activities that exploit in-situ eluvial gold in saprolitic schists at a

number of locations along the base of the ridge. Detailed mapping identified further outcrops

of magnetite schists, mainly in the Ranongo North area, and these were often close to

outcrops of pegmatite dykes and often targeted by artisanal mine workings.

It was concluded the eluvial gold mineralisation within saprolites derived from the schist units

on the flanks of the ridge and into the large valley to the west could hold economic potential.

This style of mineralisation is targeted by local miners in several locations over a distance of

some 7 km along the flanks of the Ranongo Ridge, suggesting that the mineralised zone may

be extensive. It is also found in the Kasasi area in licence EL 49 where, in early 2013, a new

gold rush started with several hundred local miners moving into the area.

Also in early 2013, AMRG became increasing aware of intense mining activity for alluvial

columbite-tantalite (“coltan”) mineralisation in the Kindia and Khatanta prospects. Due to the

current high value and demand for these minerals coupled with the potential ease of

exploitation via low cost mining and trading with local miners, AMRG decided to prioritise

coltan as its primary exploration target. It currently shows the best potential to provide the

Company with cash flow in the near future. Concurrent to this, it was decided to maintain a

presence in the Laminaia area and continue exploration to evaluate the potential for eluvial

and primary gold mineralisation.

4.3 Current AMRG Exploration

Since early 2013, AMRG’s exploration focus has been on columbite-tantalite mineralisation in

their Khatanta prospect (EL 49), and eluvial gold mineralisation in the Laminaia South

prospect (EL 48 and EL 50) which has recently been sub-divided into the Ranongo North and

South exploration areas.

4.3.1 Columbite-tantalite

Recent exploration aimed to define the potential for columbite-tantalite (“coltan”) mineralisation within alluvial settings in the Khatanta prospect. AMRG’s team has largely concentrated on swamps and river valleys before the wet season renders conditions too

difficult to work in such areas. Exploration comprises pitting at 100 m intervals along the axis

of swamps and valleys. The pits are excavated with dimensions of 1 m by 1.5 m and alluvial

gravels extracted down to bedrock and panned to a heavy mineral concentrate. These

concentrates are then dried and screened at 1 mm and the weight of each fraction recorded.

Generally, heavy minerals in the oversize (>1 mm) comprise coltan (this is competently



recognised by AMRG’s team), but the undersize appears to include a range of minerals such

as magnetite, titanomagnetite, coltan, cassiterite and garnet. The heavy mineral grade of a

pit is calculated by comparing the weight of heavy minerals to the volume of gravel sampled

(calculated using the pit dimensions and the gravel thickness) and is quoted as kilograms per

metres cubed of material (kg/m3).

To date, a total of 205 pits have been excavated and sampled. These are distributed across

the Khatanta prospect and cover many of the swamp areas. The areas that are subject to

extensive artisanal mining activity have not been sampled because of the heavily disturbed

ground and wet conditions in such areas.

Overburden thickness across all the pits averages about 0.9 m, and alluvial gravel thickness

is approximately 0.3 m. The quantity of coltan in the gravels is variable, but seems to be

found almost everywhere that has been pitted so far. On average about 40% of the total

heavy minerals is in the coarser (>1 mm) concentrate fraction and, in certain areas, the

coarse fraction represents more than 90% of the total heavy minerals. More work is required

to characterise the fine fraction and determine whether this can be included as an economic

component of the total heavy minerals.

Current alluvial exploration pitting coverage together with heavy mineral grades within these

pits is shown in Figure ‎4-1. This also shows the locations of artisanal mining areas. The data

indicate that there may be good potential in the northern part of the prospect, and valleys in

this area have yet to be affected by artisanal mining.

SRK ES’ experience on other similar projects has shown that mineralisation in swampy valley floors may be highly sporadic at a local scale whereby low grade or barren material can exist

very close to higher grade material. This seems to be the case in the Khantanta area. Given

the very high density of the targeted minerals and their often coarse grain size, it is not

expected that they will travel great distances into areas of gentle relief. It is therefore possible

that more abundant mineralisation and better grade continuity may be found in the upper

reaches of valleys, on higher terraces and in eluvial or colluvial settings close to primary

mineralisation. AMRG will target such areas in forthcoming exploration since these will be

easier to explore during the wet season compared to swamps and valley floors.

Pressed pellet XRF analysis carried out by ALS in Vancouver on eight mineral concentrates

obtained from exploration pits in alluvial material confirm that the mineralisation is likely to

include varieties of the columbite-tantalite group (no mineralogical work has been carried out

to date). The results of this analysis are shown in Table ‎4-1. SRK ES is of the opinion that

these grades are sufficiently high to be of interest to potential end users of the mineral

concentrate, and that tantalum will be the main value driver in pricing. It is also encouraging

to note that uranium and thorium values are likely to be low enough for the mineral not be so

radioactive that problems arise when shipping concentrates or at the processing stage.

In May 2013, AMRG acquired their own portable Niton XL3t GOLDD+ X-Ray Fluorescence

(“XRF”) analyser and have trained their technicians to use this on mineral concentrates in the field. This will provide important information for where higher grade and therefore higher

value mineralisation is located. The analyser was used on the same pulverised samples as

those for which results are provided in Table ‎4-1 and it was found that it showed very good

correlation to laboratory results for tantalum and niobium.



Figure ‎4-1 Coltan exploration pitting locations and heavy mineral grades in the Khatanta prospect. Courtesy of AMRG.



AMRG is analysing <1 mm and >1 mm fractions of mineral concentrates from the exploration

pits with their XRF and this confirms that the fine fraction contains only very low grades of

tantalum and niobium, although there are sometimes high tin grades of over 2%. This

emphasises the need for further investigation into economic mineralisation in the fine

fractions.

Due to the coarse nature of the oversize fraction, three coltan grains from each sample are

being selected at random for XRF analysis and an average of the results taken. This

approach not likely to be representative of overall grades and a portable milling device should

be acquired in order to prepare more homogenous samples for analysis. Notwithstanding

this, the results show some very high grades some grains in excess of 40% Ta2O5 and others

in excess of 60% Nb2O5. This probably represent tantalite and columbite respectively, but is

should be noted that these are not readily distinguished from each other in the field.

Figure ‎4-2 Left: Coarse grained tantalite grains from the Kamahorhorni swamp. Right: 1 kg columbite cobble from the Kamasegetuma swamp.



Table ‎4-1 Pressed pellet XRF analysis results for 8 mineral concentrate samples

BaO Nb Nb2O5 Sb Sn Ta Ta2O5 Th U W Zr Fe2O3 K2O MgO

mE mN % % % % % % % % % % % % % %

MAT001 809,834 1,053,661 <0.01 30.40 43.49 <0.01 0.55 18.75 22.90 <0.01 0.02 0.22 0.13 10.80 <0.01 0.19

MAT002 809,834 1,053,661 <0.01 36.60 52.36 <0.01 1.16 10.05 12.27 0.01 0.03 0.61 0.24 12.75 <0.01 0.25

MAT003 813,583 1,055,786 <0.01 31.70 45.35 <0.01 3.30 12.65 15.45 0.01 0.02 0.43 0.26 11.55 <0.01 0.30

MAT004 813,487 1,056,250 <0.01 38.60 55.22 <0.01 0.02 10.85 13.25 <0.01 0.02 0.49 0.23 12.65 <0.01 0.13

MAT005 812,439 1,056,429 <0.01 37.60 53.79 <0.01 0.02 13.10 16.00 <0.01 0.03 0.45 0.15 10.90 <0.01 0.11

MAT006 813,607 1,055,884 <0.01 36.70 52.50 <0.01 2.38 9.91 12.10 <0.01 0.03 0.53 0.26 12.45 <0.01 0.25

MAT007 814,229 1,059,127 <0.01 59.80 85.54 <0.01 <0.01 6.42 7.84 <0.01 0.01 0.41 0.20 14.05 <0.01 0.09

KINDIA KIN001 812,458 1,047,847 <0.01 4.97 7.11 <0.01 1.73 3.31 4.04 <0.01 0.01 0.12 0.12 35.70 0.01 0.27

MA

TA

NT

A

UTM Zone 28N

Sample IDProspect



A 50 m trench excavated on a gentle ridge between the Kamasortha and Kamahorhorni

swamps in which coltan mining takes place revealed the presence of 13 pegmatite dykes, the

largest of which was about 6 m wide. These are also observed in pits nearby, and coltan is

found in upper weathered material. Both in the trenches and in the pits, coltan grains are

present in weathered overburden suggesting that the pegmatites are mineralised. Analytical

results from horizontal channel sampling on the trench walls are pending.

Reconnaissance work in the Khatanta area has shown the presence of other pegmatite

occurrences, some of which appear to be extensive particularly in the area of Kamabonkoni

Hill in the centre of the prospect as noted by Wilkinson in 2005 and observed by SRK ES in

2013. These lithologies are thought to be the source of the alluvial coltan mineralisation.

Pegmatites are not only found on high ground; pegmatitic saprolite has been observed

beneath swamps that are being mined, and pegmatitic rocks make up much of the oversize

from mining activity.

AMRG is also carrying out a survey of all the mining areas within their prospects in order to

determine the location and extent of these, the demographics of people working in the mines,

and the environmental impact of this activity. As well as providing further information on

prospective areas, this will provide a valuable baseline for environmental and social factors

prior to the Company undertaking mining activities.

4.3.2 Gold

Recent activity in 2013 has focused on evaluating the eluvial gold potential in the Laminaia

South area. This is being done via the excavation of 4-5 m deep pits that allow detailed

observations of the regolith and saprolite profile to be made. In the Ranongo South area,

pitting is carried out on a 50 m x 50 m grid pattern within and alongside the Kangafly artisanal

mining area. 64 pits were planned in an area of about 700 m x 700 m, of which 29 have been

excavated to date (Figure ‎4-3). In Ranongo North, pits are spaced every 50 m along 500 m

spaced lines that cover a distance of almost 3 km from south to north. A total of 50 pits were

planned here, of which 33 have been excavated (Figure ‎4-4).

Samples (30 kg each) are taken from vertical channels in the walls of the pits, with separate

samples being taken for each regolith unit or lithological unit. These samples are then

panned to a concentrate and assessed with the objective of making a qualitative assessment

of which units are most prospective. This is done by counting the number of grains and

recording their size and shape. Samples are also taken and retained for future laboratory

analysis.

Consistent observations are being made between the pits whereby an upper layer of colluvial

lateritic material that has been transported from the ridge above often contains fine rounded

grains of gold. This is followed by another lateritic horizon, more likely to be in-situ, which

generally has a very low gold grain count. Saprolites derived from mica- and magnetite-

schists beneath this layer are usually most abundant in gold, especially where they have a

distinctive mottled appearance and are proximal to occurrences to magnetite-schists and

pegmatites that may have intruded along shear zones. This is particularly the case at

Ranongo North. Gold in the saprolites is generally found beneath iron-rich hardpans, is often

coarse-grained and may be angular or dendritic, suggesting that it represents in-situ

mineralisation. Particularly prospective material appears to be found in areas of relatively

gentle relief to the west of the steep western slopes of the Ranongo Ridge. Samples from pits

that intersect amphibolites generally contain much finer grained gold and it is markedly less



abundant than in pits within mica- or magnetite-schist lithologies.

Figure ‎4-3 Eluvial gold pitting locations and completed pits as of 02/06/13 in the Ranongo South exploration area. Gold grade information is from trench samples. Courtesy of AMRG



Figure ‎4-4 Eluvial gold pitting locations and completed pits as of 02/06/13 in the Ranongo North exploration area. Gold grade information is from trench samples. Courtesy of AMRG



5 PAST PRODUCTION

5.1 Gold Production

The Loko Hills area has a long history of gold production. Following its discovery at Laminaia

in 1931 alluvial gold was commercially mined by Messrs. Shamel Brothers and by Gold and

Base Metal Mines, Nigeria Ltd. Production is reported to have reached an average of over

400 oz per month (Macfarlane, 1981). Maroc Mining also undertook alluvial gold mining on

several swamps and flats around the Loko Hills during the late 1960s and early 1970s. Gold

was found to occur in a series of swampy streams draining amphibolites on the Ranongo

Ridge but the primary source was not located.

Artisanal mining activity exploiting both alluvial and eluvial gold is now very widespread

across the licence areas and shows close association to the greenstone belts. There has

been a large influx of miners into the area from around Sierra Leone and neighbouring

countries and new areas of mineralisation are continually being discovered. Improvements in

local mining skills have also resulted in the development of tunnels and shafts that target

mineralisation in saprolite and laterite.

AMRG have undertaken extensive surveying of mining sites and believe that they have

delineated about 80% of them; their mapping data currently shows 85 individual sites within

the licence areas (Figure ‎5-1). These include sites at Kasasi, Kadabi and Kathumpeh in Sella

Limba Chiefdom and Laminaia, Kampala, Manahun, Makoko and Madina in Sanda Loko

Chiefdom.

In some areas, mining activity takes place over large areas. For example, the current gold

rush area at Manahun in the southern part of the Khatanta prospect shows mining sites along

a valley floor for a distance of 2.5 km. Similarly large areas of mineralisation may be found at

Kampala in the south-eastern part of licence EL 48.

Local mining has previously been supported by AMRG whereby they employed up to 100

miners to exploit mineralisation identified by their exploration in the Kateh area near Kadabi.

Between March and May 2006, the purchase and export of 333.69 oz of gold by AMRG from

this area is recorded by the Ministry of Mineral Resources.

Other small-scale commercial mining activity within the licences is currently being undertaken

at Kasasi by Fairtrade Mining, and at Kampala by a Chinese company (Sheng Feng) and a

Ukrainian company known as Revolution Mining.



Figure ‎5-1 Distribution of artisanal gold mining areas within AMRG’s licences. Mining areas shown as yellow polygons

5.1.1 Laminaia Mining Area

There are numerous artisanal mine operating in the Laminaia area beneath and on the flanks

of the Ranongo Ridge within licences EL 48 and EL 50 and these are the longest established

in the Loko Hills. Most people living in the area appear to be engaged with gold mining

activities.

In low lying swamps and valley floors, the miners exploit alluvial gravels. In many areas such

as the Kangafly, the closest mining area to Laminaia (Figure ‎5-2), the gravels have been

worked numerous times and miners report that, today, un-worked gravels are encountered

very rarely. This is also a testament to their inefficient recovery techniques which consist of

washing gravels over rudimentary wooden sluices.



Figure ‎5-2 View from the top of the Ranongo Ridge across the Kangafly mining area and the town of Laminaia

As the swamps and stream valleys have become depleted, miners have recently started

working at higher elevations towards the flanks of the Ranongo Ridge. Here, gold is derived

from an upper layer of colluvium that is thought to be transported laterite from the amphibolite

ridge above. Beneath this, there is considerable interest in mineralised saprolites especially

those derived from mica schists and magnetite schists and, in many areas, miners are

tunnelling into the saprolite (Figure ‎5-3). SRK ES is of the opinion that this gold is present as

a result of supergene enrichment of an underlying primary source. Areas where the saprolite

has a mottled appearance are particularly productive. Mining in the saprolites is most active

during the wet season because such activity takes places at higher elevations where there is

less water available for washing.



Figure ‎5-3 Mining activities targeting mottled saprolite in the Mabale mining area north of Laminaia

5.1.2 Kasasi Mining Area

The Kasasi area on the eastern side of licence EL 49 has experienced a recent gold rush. In

January 2013 there were over 300 artisanal miners working in the area in a relatively

organised manner (Figure ‎5-4). Most of these miners are from the local area and

neighbouring villages within Sella Limba Chiefdom, and the Chiefdom’s mining committee were responsible for organising mining activities and preventing conflict. A daily rate of 5,000

Leones (US$1.20) was being paid to each mining group, normally comprising two to three

people. A Chinese company has also been active in the area using a dredging system in a

swamp area beneath the artisanal workings.

Mining at Kasasi takes place on sloping terrain and does not appear to exploit alluvial

material. Instead it is the top soil, laterite and underlying pegmatitic saprolite that are worked,

with the highest grade material in the saprolite (Figure ‎5-5). Local miners report that the



quantity of gold increases uphill and becomes coarser down the regolith profile, consequently

activity is gradually progressing uphill. In some areas, tunnels are being developed into the

saprolite. The gold appears to have undergone little or no transportation on account of its

coarseness and angularity. Some dendritic textures suggest secondary enrichment

(Figure ‎5-6).

Figure ‎5-4 Mining activity at Kasasi. Note the dredging equipment at the base of the slope.

Local miners at Kasasi were interviewed by AMRG’s geologist and claim that they extract 0.5-

1 g of gold per day. It appears that this is derived from relatively little soil/laterite since all

mined material was being carried across the hillside to be washed at the nearest water source

in a swamp, thus limited the quantity that can be worked per day. Three authorised gold

buyers were also interviewed and they each claimed to buy over 40 g per day, and stated that

this did not represent all of the gold that was being recovered each day at the site.

SRK ES concluded during a visit to Kasasi in January 2013 that gold mineralisation is eluvial

and present as supergene enrichment beneath a number of distinct hardpans and within

mottled pegmatitic saprolite.



Figure ‎5-5 Photograph of targeted materials at Kasasi

Figure ‎5-6 Gold purchased by AMRG from a local gold dealer at Kasasi.

5.1.3 Other eluvial gold mining areas

In May 2013 SRK ES observed similar material to that around Laminaia and at Kasasi being

targeted for gold in the Khatanta prospect, especially in close proximity to pegmatite dykes.

One particularly deep (15 m) and impressive excavation was encountered in which saprolitic



pegmatites and magnetite schists had been worked for gold under the direction of a Chinese

trader (Figure ‎5-7). Abundant coltan, probably derived from the pegmatites, was observed in

waste materials here, apparently ignored by the mining team.

Figure ‎5-7 Deep gold working in pegmatites and schists within the Khatanta prospect

5.2 Coltan Production

Coltan production is a relatively recent development in the Loko Hills and has been taking

place for about one year. The main areas of activity are within or close to greenstone belt

occurrences in AMRG’s Kindia (EL 48) and Khatanta (EL 49) prospects.

In the Kindia area, mining has taken place along three main valleys that drain the greenstone

belt with numerous pits found over distances of about 2.8 km downstream. Many of the

swamps here have been mined out, initially for gold or diamonds, and alluvial material is

subsequently being reworked for coltan.

There are some extensive workings within swamps in the Khatanta prospect. The largest of

these, the Kamahorhorni swamp, is in the centre of the prospect and is approximately 300 m

wide and 1 km long (Figure ‎5-8). Up to 200 miners are known to work here. Alluvial gravels

are targeted by pits of about 2 m depth in the centre of the valley but, at the edges of the

swamps, saprolitic pegmatites are being worked to depths of 3-4 m (Figure ‎5-9). Most miners



use pans to reduce the gravels to a heavy mineral concentrate and a few screen gravel

through 2 mm sieves and pick out coltan from the oversize. Local miners report that coltan

becomes more abundant and coarser grained above and within these saprolites, providing

useful indications of potential primary mineralisation. The presence of the pegmatites is

supported by numerous angular clasts and blocks of tourmaline-rich lithologies in the oversize

left after washing material. As the swamps become mined out, it is likely that activity may

move onto higher ground targeting coltan in the terraces and underlying pegmatites.

It should also be noted that mining methods are highly inefficient. A single pit of about 2 m by

2 m may be excavated and washed in a day by a mining team of two people, but it is unlikely

that all of the mineralised material will be extracted. By the following day, that pit will have

flooded and, with many lacking pumping equipment, the miners will move to a new location

thus leaving mineralised material behind. Furthermore, material is left un-worked between

pits within swamps so that the entire area does not become flooded. These swamps are very

difficult if not impossible to mine by artisanal methods during the wet season.

The coltan industry appears to be thriving in the Loko Hills and there are weekly markets in a

number of villages at which the mineral concentrates are sold. There are also at least three

companies (foreign and Sierra Leonean) operating within AMRG’s licence area that, via local agents and their mining teams, appear to be organising mining activities and undertaking

targeting work. Much of the mined coltan is taken directly by these companies, and therefore

the amount that may be seen for sale at the markets may only be a small proportion of what is

actually being produced.

Some degree of secrecy seems to surround coltan mining and it is difficult to obtain accurate

information regarding the quantity of coltan being produced or where the most productive

areas are. However, an individual miner can regularly extract up to 10 kg per day and one of

the local mining agents reported that their teams can produce around 1,000 kg per week.

There is a general consensus that the actual amount is likely to be higher.

The organisation of mining activities by other companies within AMRG’s licence area is likely to be illegal. AMRG are therefore making considerable efforts to take control of mining

activities by establishing a coltan trading organisation. They will promise to provide miners

with suitable equipment (such as spades, pumps, pans and footwear), offer a fairer price for

their coltan and provide technical direction for mining locations. The local communities and

authorities seem to be very supportive of this approach.



Figure ‎5-8 View across the valley in one of the main mining areas in the Khatanta prospect.

Figure ‎5-9 Exploiting mineralised weathered pegmatites at the edge of the swamp shown in Figure ‎5-8



5.3 Diamond Production

A diamond occurrence was first recorded in 1970 by the Sierra Leone Geological Survey in

the Kamakwie area, now the south-western part of AMRG’s licence EL 49. Small-scale

artisanal mining ensued, and became intense between 2003 and 2004 following significant

recoveries in the Kathumpeh area about 1.5 km southeast of Kamakwie. At least 10,000

miners from all over Sierra Leone and neighbouring countries were estimated to be working in

this area in 2004.

Much of this activity was illegal and hence there are few records of production. However, it is

thought that production over the two years was in the order of 3,000 to 4,000 ct. There is an

official record in the Diamond Industry Annual Review of a stone of 56.87 ct, and anecdotal

reports of other stones of 110 ct, 28 ct and 25 ct. High value blue and green diamonds are

also reported locally.

Mining was undertaken in a large number of small pits throughout a valley close to the source

of the Makoti River that varies in width from 100 to 250 m and is about 1 km long. The valley

is flanked by terraces and low flat-topped hills typical of the terrain in basement geology in this

part of Sierra Leone. Mining also took place along the Kirimi River immediately to the west of

Kamakwie. Aside from small active workings in this area, large scale artisanal mining largely

ceased by 2005 due to problems encountered with unstable overburden and a high water

table.

Investigations by SLDC on ground adjacent and to the southeast of AMRG’s licence area unearthed a small kimberlitic fissure in a swamp, thus confirming the presence of kimberlite

dykes in this area. These are thought to be related to the north-northwest trending

diamondiferous dykes that are known further north in Guinea and bear no relation to the east-

northeast trending dykes in the well known Kono and Tongo diamond fields in eastern Sierra

Leone.

In May 2013, SRK ES visited a small active diamond working in a swamp about 4 km

southeast of Kamakwie and 1 km south of AMRG’s licence boundary. Here, kimberlitic

material was observed in material from a mining pit that had been stockpiled ready for

washing (Figure ‎5-10). This contained abundant mica (phlogopite) and is thought to

represent Group II kimberlite material. A pan concentrate of this showed the presence of

pyrope garnets and ilmenites. Miners working in the area reported the presence of a 0.5 m

wide dyke further upstream and claimed that most diamonds where found downstream of this

dyke. SRK ES was also shown four stones apparently mined from this area, the largest being

1.77 ct (Figure ‎5-11).



Figure ‎5-10 Micaceous Group II kimberlite material in alluvial gravels awaiting washing at a diamond mining site about 1 km south of AMRG’s EL 49 licence boundary

Figure ‎5-11 Diamonds recovered from a swamp about 1 km south of AMRG’s EL 49 licence boundary. Note garnets in the pan concentrate derived from kimberlitic material from alluvial gravels shown in Figure ‎5-10



AMRG also report small-scale diamond mining activities near the village of Siria on the

western side of the Kindia prospect (EL 48) as well as at Kabumbo and Katimbo in the Kadabi

area in the northern part of EL 49. No further information is currently available regarding the

extent of such workings or the levels of production.

It is noted that all previous and current mining locations show close correlation to the

presence of kimberlite indicator minerals in historic exploration data, suggesting that

diamondiferous kimberlites may be close to mining locations.

6 GEOLOGICAL SETTING

6.1 Regional Geology

Most of Sierra Leone is underlain by rocks of Precambrian age (Archean and Proterozoic). In

addition to these ancient rocks there is a 50 km coastal strip that comprises marine and

estuarine sediments of Palaeogene to Recent age. The Precambrian outcrops cover about

75% of the country and typically comprises granite-greenstone terrain. It represents part of an

ancient continental nucleus located on the edge of the West African Craton. The Archean

basement can be subdivided into infracrustal rocks (gneisses and granitoids), supracrustal

rocks (containing greenstone belts), and basic and ultrabasic igneous intrusions.

The basement complex of Sierra Leone has been subjected to major polyphase deformation

and is demonstrated by the complex folding which can be observed throughout the region.

Three orogenic cycles have affected the units during its history, namely; the Leonean (2,950-

3,200 Ma), the Liberian (2,700 Ma) and the Rokelide (550 Ma) events. It tends to display a

north-south trending foliation and is highly metamorphosed to migmatites in some regions.

The Leonean orogenic episode commenced with the intrusion of a basic igneous suite (the

Pre-Leonean amphibolites) and by the formation of a greenstone belt represented by the Loko

Group which is now deeply eroded. The Loko Group forms the main target lithologies within

AMRG’s licences and comprises amphibolites, sillimanite quartzites and ironstones. It

appears to have formed on a gneiss/granitoid basement in which several granitoid bodies

related to an earlier plutonic-orogenic episode have been recognised, mainly in the northern

part of the country. Only the main deformational phase of the Leonean orogenic episode,

which resulted in folds and fabrics trending east-west, has been distinguished. Gold,

cassiterite and columbite mineralisation associated within portions of the Loko Group is

probably related to a late Leonean granitisation event which accompanied the formation of the

shear zones in the craton.

Other volcano-sedimentary sequences are preserved within the granites, gneisses and

migmatites. Highly folded greenstone belts predominate in north and central Sierra Leone. In

the southeast the metamorphic facies increases, first with the Kambui schists and finally with

the Mano-Moa Granulites.

Greenstone belts of the Kambui Supergroup are believed to have been deposited upon a

post-Leonean basement and accompanied by basic to ultrabasic intrusives. The Kambui

Supergroup includes most of the schist belts exposed in the Sula Mountains and the Kangari,

Kambui, Nimini and Gori Hills; the Marampa Group; and the two small greenstone belts of the

Serekolia and Sankarama in the northeast. These greenstone belts comprise a lower volcanic

unit composed of ultrabasic lavas and basic lavas with pillow layers, overlain by a

sedimentary unit comprising tuffs, pelitic and psammitic sediments, with conglomerate layers

and ironstone bands. The greenstone belts are the principle host of Sierra Leone’s primary



gold mineralisation. Other associated mineral deposits include molybdenite, columbite-

tantalite and chromite. The Marampa Group, bounded on its eastern margin by a tectonic

contact, is important for its iron-ore deposits and forms the upper part of the Kambui

Supergroup.

Late Liberian granitoids, marginal to, and within, the Kambui Supergroup, are associated with

important zones of shearing and deformation where gold, sulphide and molybdenite

mineralisation have been concentrated.

The Rokel-Kasila Zone bounds the main part of the West African Craton on its west and

southern margin in Sierra Leone, and appears to form part of a north-south orogenic belt.

Within this belt, the Marampa Group appears to represent some of the oldest rocks. The

Kasila Group, also considered to be part of the Kambui Supergroup, comprises a high-grade

series of granulites, consisting of garnet, hypersthene and hornblende gneisses, quartzites

and associated migmatites.

Where eroded, significant secondary deposition of titanium minerals have formed. The Kasila

Group also contains notable deposits of bauxite. A late Precambrian to Cambrian sedimentary

and volcanic assemblage, the Rokel River Group, was deposited unconformably on a

basement complex. Deposition was probably in an intracratonic fault-bounded basin along the

line of the Rokel-Kasila Group following the formation of the tectonic zone at the end of the

Liberian or during the Eburnean Orogeny. The Rokel River Group and the Kasila Group to the

west were deformed during the Rokelide orogeny (~550 Ma).

The Ordovician Saionya Scarp Group forms a small ingression into Sierra Leone in the north

of the country, and is comprised of horizontally bedded arkoses, grits and shales with

interbedded dolerite sills. In Sierra Leone, the Saionya Scarp Group rests unconformably on

the Rokel River Group.

Dolerite intrusives are common as dykes trending mainly east-west within the basement

complex, and as extensive sills above the Rokel River Group. Kimberlite dykes and pipes of

Cretaceous age follow a similar pattern in the east of the country in the Koidu-Sefadu area.

Kimberlite dykes are also present in the north and west but these appear to trend northwest

and may be more similar to those in southern Guinea.

The Triassic Freetown igneous complex forms an intrusive body on the coast, with an arcuate

outcrop concave towards the west. It is composed of a layered complex of gabbro, norite,

troctolite and anorthosite. Platinum occurs in the gravels of many of the streams that cut the

outcrop and in anorthositic gabbro in the noritic gabbro complex of the Freetown Peninsula.

The relationship of this complex with the other units is obscured by the coastal veneer of

Pleistocene to Recent sediments of the Bullom Group which lies unconformably on the

basement.

Pleistocene to Recent weathering has led to laterisation across a large part of Sierra Leone,

affecting mainly the greenstone belts and the extensive dolerite intrusions. The bauxite

deposits formed within the Kasila Group are a result of this weathering process.



Figure ‎6-1 Simplified geological map of Sierra Leone (Source: Sierra Leone Mining Review February 2003) showing the location of AMRG’s Loko Hills exploration licences

6.2 Local Geology

Areas underlain by greenstone belt lithologies in the Loko Hills are represented by variably

vegetated flat-topped hills and ridges rising to approximately 300 m above the surrounding

countryside. AMRG’s licence areas include five occurrences of greenstone belt rocks of the

Loko Group and these have been termed Kadabi, Khatanta, Kindia, Laminaia North and

Laminaia South (annotated PLI in Figure ‎6-2). Laminaia North and Laminaia South represent

the two halves of a long arcuate occurrence of the greenstone belt that is known as the

Ranongo Ridge and which extends for over 30 km. There is a further occurrence of the Loko



Hills greenstone belt outside to the north of licence area EL 49.

Figure ‎6-2 Geology within AMRG’s Loko Hills licence areas as published by the GSSL and showing the main exploration prospects. Greenstone belt rocks of the Loko Hills Group are shown in yellow and annotated PLl

6.2.1 Lithologies

The Loko Hills Greenstone Belt consists of a number of disconnected greenstone blocks

which form the topographic highs of the area and have been intruded by late granites and

associated pegmatites that are mineralised with tourmaline, cassiterite and columbite.

The Archaean greenstone lithologies are the main focus for exploration in the licence areas



and comprise a lower ultramafic unit which is succeeded by metasedimentary and

metavolcanic rocks comprising amphibolites, quartz-biotite schists, hornblende schists, meta-

greywackes, quartzites and banded ironstones (Wilkinson, 2005). The amphibolites are

medium-grained rocks composed principally of hornblende and plagioclase feldspar with

accessory minerals including tourmaline and iron (Stacey, 2010). Banded ironstones and

magnetite schists occur as irregular lenses and pods adjacent to the amphibolites and are

most common on the crest and flanks of the Laminaia ridge; the eastern limit of the belt.

These consist of a matrix of magnetite and quartz with accessory hornblende, biotite,

cummingtonite and garnet (Wilkinson, 2005; Stacey, 2010).

Late intrusive granites have intruded into the basement and also surround some members of

the greenstone belt. This can be seen at Laminaia and in the Khatanta prospect. Contact with

the granitoids is poorly exposed but where observed it has been diffuse and is gradational.

Pegmatitic veins emanate from the intrusions and cross-cut the amphibolites (Stacey, 2010).

These units have sequentially been intruded by mafic sills, intermediate dykes and late

kinematic granite derived pegmatites (Wilkinson, 2005). It is likely that the pegmatite dykes

have exploited pre-existing structural features such as shear zones.

Basement lithologies in the area comprise highly deformed granite gneisses and there is

some evidence, particularly within licence EL 49, that these host diamondiferous kimberlite

dykes with a north-westerly strike.

6.2.2 Metamorphism

The area has undergone regional and contact metamorphism to a variable degree within the

Loko Hills area. Metamorphism can be observed from mid-amphibolite facies to granulite

facies across the belt. In the Laminaia area, observations made by SRK ES suggest that the

metamorphic grade of the amphibolites is somewhat higher than in other greenstone belts in

Sierra Leone. This may be a reflection of the greater age of the Loko Hills Group.

6.2.3 Structure and Deformation

The Loko Hills area has undergone intense polyphase deformation which has developed the

complex folding and shearing throughout the region. Northeast trending lineaments dominate

the Loko Hills and are commonly exploited by river courses such as the Little Scarcies and

Mongo Rivers. Other lineaments follow a northwest trend (Wilkinson, 2005) and cross-cut the

northeast trend.

Within the area of the Ranongo Ridge, the major structural feature is a north-south oriented

shear zone which affects the amphibolites and mica schists. A vertical dip-slip nature in the

shear zone has been suggested because of the high planar strain foliation which has been

developed in the medium grained rocks (Figure ‎6-3). The shear zone appears to be fairly

homogeneous in nature and suggests that there may not be any heterogeneity in the structure

where hydrothermal fluid flow may have been concentrated. However, there is evidence that

the shear zone has been exploited by pegmatite dykes (Figure ‎6-4). These follow a similar

north-south trend along the western flanks of the Ranongo Ridge and have been observed

within sheared mica- and magnetite-schists.

Initial studies by AMRG into the tourmaline-, cassiterite- and columbite-mineralised

pegmatites in the Khatanta prospect suggest that they have a north-easterly trend. This is

consistent with the regional structures in this area suggesting that the pegmatites have again

exploited large scale structures.



Figure ‎6-3 Vertical foliation in sheared mica schists exposed in AMRG’s trench TR_1042800 on the Ranongo Ridge, EL 50. Note the intrusion of thin pegmatite veins exploiting the foliation.

Figure ‎6-4 Thin pegmatite dyke intruding sheared magnetite schists exposed in AMRG’s trench TR_1042800 on the Ranongo Ridge, EL 50. Note the pegmatite crosscutting older highly deformed veining within the schists.



7 DEPOSIT TYPES AND MINERALISED ZONES

7.1 Introduction

SRK ES consider the following to be the main types of mineralisation within AMRG’s licence areas:

Coltan – Alluvial, Eluvial and Primary

Gold – Alluvial, Colluvial, Eluvial and Primary

Diamonds – Alluvial and Primary

The deposit types, mineralisation styles and the main mineralised zones are described further

in the following sections.

7.2 Coltan

7.2.1 Mineralisation Styles

Coltan within alluvial gravels is known along rivers, streams and in low-lying swamps in the

Kindia and Khatanta areas and appears to be widespread as evidenced by the distribution of

mine workings and the results of AMRG’s exploration. The grain size of the coltan may be highly variable; it is present in fine grained (<1 mm) material alongside other heavy minerals

such as magnetite, titanomagnetite and cassiterite and may also be found as large clasts.

For example, a single piece of coltan observed by SRK ES from the Khatanta area weighed

536.73 g (). There are also anecdotal reports of pieces of coltan being found by local miners

that weigh several kilograms.

Figure ‎7-1 Large coltan fragment from the Khatanta prospect

The coltan can be very angular, often showing good crystalline forms, particularly in the upper

reaches and edges of alluvial settings and when close to weathered pegmatites.

Examples of coltan recovered from AMRG’s exploration pits in the Khatanta prospect are

shown in Figure ‎7-2.



Figure ‎7-2 Coltan recovered from AMRG’s exploration pits in the Khatanta area, licence EL 49

Eluvial coltan mineralisation in saprolised pegmatitic rocks is also present and has been

observed by SRK ES in several parts of the Khatanta prospect where it has been exposed

and worked by local miners at the edges of swamp areas. Medium- to coarse-grained coltan

has also been observed on the ground surface in the central part of the Khatanta prospect

where it has been liberated from underlying weathered pegmatites, and may also have been

transported down the flanks of ridges by gravity action.

The alluvial, eluvial and colluvial coltan within AMRG’s licences has been derived from

mineralised pegmatites that may be associated to late granitic intrusions in the area.

Therefore there is the potential for the area to host primary coltan mineralisation within

pegmatite dykes, sills or pods. Several occurrences of medium- to coarse-grained

tourmaline-, cassiterite- and coltan-bearing pegmatites have been located within the Khatanta

prospect, often in the upper reaches of catchment areas that host alluvial mineralisation.

To date, limited exploration has been undertaken on these pegmatites therefore it is not

possible to comment in detail on their mineralogy or petrology. As evidenced by material

found in alluvial deposits, the grain size of the coltan is likely to be very variable and it is

possible that chemical variations of the coltan may exist within and between pegmatites on

account of the likely mineralogical zonation of these rocks. This has economic significance in

terms of variations in the ratios of niobium to tantalum, the latter being the higher value

element.

An example of relatively fresh pegmatitic material that may host coltan is shown in and .

This sample was taken in an extensive zone of pegmatites in the central part of the Khatanta

prospect, close to and upstream of one the area’s major alluvial coltan mining areas.



Figure ‎7-3 Fairly fresh medium-grained pegmatite, possibly mineralised, from the centre of the Khatanta prospect

Figure ‎7-4 Detail of medium-grained pegmatite from the central Khatanta prospect. The metallic mineral 5 mm in diameter to the left of centre is thought to be coltan

7.2.2 Generic Models

An association of cassiterite- and columbite-mineralised pegmatites with Archaean

greenstone belts is known elsewhere in the world and examples can be found in Canada,

Australia and Africa. The emplacement of fertile granites (enriched in rare-elements) that

postdate the greenstone belts is required and the pegmatites will be derived from these.

Generally the pegmatites are emplaced along deep-seated faults. Granitic pegmatites can be

subdivided into four geological classes based on their environment and petrogenetic features

(Rudenko et al., 1975; Ginsburg et al., 1979; Černý, 1982, 1989):

1. Abyssal class of migmatitic products of partial melting; barren to poorly mineralised

(U, REE, Be, Nb);



2. Muscovite class generated by partial melting and/or restricted granitoid differentiation;

barren to poorly mineralised (U, Th, REE, Li, Be, Ti, Nb>Ta); source of muscovite and

ceramic industrial minerals;

3. Rare-element class derived by advanced fractionation of fertile granites; poorly to

extremely mineralised (Li, Rb, Cs, Be, Ga, Y, REE, Sn, Ti, U, Th, Nb, Ta); the main

source of lithophile rare-element mineralisation among all the pegmatite classes;

4. Miarolitic class produced by advanced fractionation of fertile granites; poorly to

extensively mineralised as the rare-element class, and commonly gem-bearing; the

main source of optical material, gemstock and collectibles.

Currently there is no geochemical or mineralogical data for the pegmatites within AMRG’s licence areas but SRK ES is of the opinion that they may belong the rare-element class on

account of the mineralisation that may be derived from them. This type of pegmatite is related

to granites derived from depleted lower crust that are not usually associated to an orogenic

event. By contrast, all other types of pegmatites are from late tectonic peraluminous granites

mobilised from undepleted lower crust.

The fertile granites from which the pegmatites originate may be fairly small (less than 10 km

across) and may have been emplaced into axial faults, cross-cutting faults and basal

detachment faults within the greenstone belts, as well as along batholithic contacts at the

margins of these belts. They may have been derived from metasediments or mixed protoliths,

possibly at the interface of the hosting metasedimentary-metavolcanic supracrustal rocks and

their basement. In the Loko Hills area, sub-vertical faults and shear zones that cut the

greenstone belt blocks are likely to be the main structural elements that control distribution of

the pegmatites.

Fertile melts migrating through these structures may facilitate the partial melting of protoliths.

Crystal melt and liquid fractionation results in volatile components and rare lithophile elements

accumulating in the upper parts of the intrusions. Distinct geochemical, textural and

mineralogical zoning is typical of the fertile granites, capped by pegmatitic rocks which in

themselves may demonstrate zonation.

Alluvial mineralisation will form when mineralised pegmatites become weathered and eroded

and resistant minerals such as coltan and cassiterite and are deposited within gravels along

streams and rivers. This mineralisation may be present beneath present day drainages as

well as in palaeochannels and old alluvial terraces. Eluvial mineralisation may be present

directly above intensely weathered pegmatites, and colluvial mineralisation may form when

this moves downslope under the influence of gravity.



7.2.3 Prospective Areas

Alluvial Coltan Mineralisation

The current understanding of the distribution of alluvial coltan mineralisation is largely

reflected by the distribution of artisanal coltan mining activities. These are fairly widespread

and concentrated in the Kindia and Khatanta areas, and to a lesser extent in the north-

western part of licence EL 49.

AMRG have also defined further areas that may hold potential for alluvial mineralisation.

These are mainly swamp areas and have been selected on one or more of the following

factors:

they include artisanal mining sites in their upper reaches;

they include positive results from AMRG’s exploration;

they drain areas in which geochemical anomalies are observed; or,

they drain areas where potentially mineralised pegmatites have been observed.

In total, the selected potentially mineralised zones in the Khatanta area cover an area of 9.96

km2.

It should be noted that both alluvial coltan exploration and artisanal mining for alluvial coltan in

AMRG’s licences are in relatively early stages and it is possible that there are further mineralised zones yet to be discovered. AMRG has defined areas that may have potential to

host coltan mineralisation. These have been selected based on the presence of favourable

geology including the presence of pegmatites, known alluvial occurrences of coltan and

known coltan mining sites. Not all of these areas will host coltan mineralisation, but they

serve to define targets for further exploration.

Due to the high density of the mineral and its often large grain size, it is SRK ES’ opinion that it may not be transported far along drainage systems and therefore the most prospective

zones for alluvial mineralisation may be the upper reaches of rivers or streams and the

terraces or higher ground above them, provided that primary mineralisation is present nearby.

Good examples of this are seen in the Kamahorhoni mining area in the Khatanta prospect

where extensive pegmatite zones are close by. It is also the case that many coltan mining

pits expose highly weathered pegmatites. This and the highly angular nature of coltan in such

areas suggests that it is in fact eluvial mineralisation being exploited whereby the coltan has

been liberated from a weathered bedrock source.



Figure ‎7-5 Target areas within AMRG’s licence areas defined as having potential to host coltan mineralisation



Primary Coltan Mineralisation

Recent mapping and trenching work by AMRG has identified pegmatites within their licence

areas. Analytical or mineralogical data for samples from these is not yet available but, in SRK

ES’ opinion, the pegmatites are probably the source lithologies for the alluvial coltan. The

locations of currently known pegmatite occurrences in the Khatanta prospect are shown in

Figure ‎7-6. This includes pegmatite outcrops as well as locations where pegmatites have

been exposed beneath cover, either by artisanal mining or exploration pitting. It is expected

that further mapping in the area will identify further occurrences.

Figure ‎7-6 Currently known pegmatite occurrences in the Khatanta prospect

Trench MAT_TR 001 is located in the Khatanta prospect immediately to the southwest of the

Kamahorhoni swamp, an area of intense artisanal mining activity. The trench runs from west

to east and is 50 m long. 13 pegmatite dykes of variable width and hosted in sheared mica



schists were observed in the trench including two 4 m wide tourmaline-, wolframite- and

cassiterite-bearing dykes from 17.20 m to 21.40 m and 28.70 m to 32.80 m respectively

(Figure ‎7-7, Figure ‎7-8and Figure ‎7-9). Smaller tourmaline-bearing dykes appear to trend

parallel to the large dykes, and the dykes are estimated to strike towards the north-northeast.

Due to its similar appearance, differentiation of coltan from tourmaline, wolframite is

sometimes difficult in the exposed pegmatites, but it was noted by SRK ES that subrounded

coltan was present in weathered material directly above pegmatite intersections in the trench.

Figure ‎7-7 Tourmaline- and cassiterite-bearing pegmatite dykes exposed in trench MAT_TR 001

Figure ‎7-8 AMRG graphical geological log (plan format) of trench MAT_TR 001 showing pegmatite dykes intersected in the trench.

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 Meters

KEY

Mica schist

Barren Pegmatite

Tourmaline Pegmatite

13m of coarse to fine grained

Tourmaline pegmatite dyke

containing Cassiterite and

Wolframite intersected. The

pegmatite are believe to be the

host rock for Coltan in the

project area as in Solomon

(Rwanda), Tanco (Canada),

Strong (Spain)

4m of unmineralised

Pegmatite

intersected in trench

Not completed down



Figure ‎7-9 View into trench MAT_TR 001 showing sharp contacts between pegmatite dykes and sheared mica schist. The markers in the trench show 1 m intervals.

About 20 m south of trench MAT_TR 001, that local miners have been exploiting eluvial coltan

mineralisation and their activities have concentrated along a narrow east-west trending gully

that is underlain by the same pegmatites that are intersected in AMRG’s trench. Pegmatites are alongside intensely sheared mica schists, supporting the model of structural control to

emplacement.

Figure ‎7-10 Left: East-west trending gully underlain by mineralised pegmatites, and showing evidence of mining activities. Right: Tourmaline-bearing pegmatite found beneath eluvial diggings.

About 2 km due east of trench MAT_TR 001, on the other side of the valley that is being

intensely mined for coltan, the Kamabonkoni Hill shows further occurrences of pegmatites.

On the hill itself, Wilkinson (2005) reports that pegmatite outcrops are widespread and have

some association to gold mineralisation which SRK ES interprets as being due gold

mineralisation within structures that were later intruded by pegmatites. In May 2013, SRK ES

visited the western flanks of this hill and found further extensive zones of pegmatites over a

distance of at least 500 m within a westward draining valley that leads into the main coltan

mining area. In some areas, these had been exposed by artisanal gold workings and it was



noted that coltan was present in the waste material.

Figure ‎7-11 Left: Weathered tourmaline-bearing pegmatites exposed by gold mining activities. Right: Fresh tourmaline- and columbite-bearing pegmatites from the western flanks of Kamabonkoni Hill

A 10 m wide pegmatite zone has also been identified in outcrop by AMRG’s field team close to the village of Mabanda in the north-eastern part of the Khatanta prospect. Saprolitic

pegmatite was excavated from a pit close to the outcrop and a panned concentrate of this

material contained coltan. These pegmatites are located at the head of a valley that drains to

the north-northwest and in which AMRG report alluvial heavy mineral grades of 4.8 kg/m3 and

1.2 kg/m3 in pits 500 m from the pegmatite outcrops.

SRK ES is of the opinion that mineralised pegmatites are numerous and widespread in the

Khatanta prospect. This is evidenced by the locations of known pegmatites in the Khatanta

prospect and the fact that many of the coltan mining pits in the area have exposed saprolitic

pegmatites at their edges or contain pegmatite clasts in waste material. The pegmatites most

likely occur as a swarm and may have been derived from the late granite intrusions in the

area. Limited outcrop makes an accurate determination of the strike of the pegmatites

difficult, but current the current opinion is that they have roughly a northerly or north-north-

easterly strike following the general structural trend in the area.

It is also likely that mineralised pegmatites may be found in the Kindia area on account of the

alluvial mineralisation found here.

Pegmatites and their parent granites may have distinctive geochemical characteristics.

Anomalies in soil sampling data for elements such as tin, beryllium, tungsten, caesium and

lithium as well as niobium and tantalum can provide useful indications of potentially

mineralised zones especially where there are coherent anomalies for several of these

elements. This is well-illustrated in the Khatanta area where certain areas show elevated

concentration of tin, tungsten and beryllium (Figure ‎7-12, Figure ‎7-13, and Figure ‎7-14).

Grades themselves are not high, probably as a result of deep weathering or masking by

overlying laterites, but the data provide useful targets for follow up investigation. The main

areas of interest are Kamabonkoni Hill in the centre of the prospect and areas in the

northwest. It is notable that some of the anomalies coincide with observations of pegmatites.



Figure ‎7-12 Gridded tin (Sn) grades in AMRG soil sampling data for the Khatanta prospect



Figure ‎7-13 Gridded tungsten (W) grades in AMRG soil sampling data for the Khatanta prospect



Figure ‎7-14 Gridded beryllium (Be) grades in AMRG soil sampling data for the Khatanta prospect



7.3 Gold


Gold mineralisation in the Loko Hills may be found in alluvial settings along streams, rivers

swamps and floodplains within and adjacent to the greenstone belt blocks from which it has

been eroded from primary sources or zones of secondary enrichment. It is found as rounded

grains and concentrated in alluvial gravels that form the main target in the numerous artisanal

mining sites within the licence areas.

Colluvial gold is also present and exploited by local miners. This is found in transported

lateritic material that has moved downslope from amphibolite ridges and other topographic

highs and may drape onto in-situ laterite surfaces at lower elevations. Known examples of

this are found in the Laminaia area where local miners exploit relatively fine-grained (<0.5

mm) and rounded gold in moderate abundance from surface down to depths of around 1.0 m.

In-situ eluvial gold mineralisation is generally found in intensely weathered saprolites,

especially where these have a mottled appearance, and there are known examples of this in

the Laminaia, Kasasi and Khatanta areas. Gold in the saprolites is coarse-grained (up to 2

mm but also found as large rounded nuggets), occurring as gold dendrites in cracks and

joints, or as small crystals in pore spaces, generally with irregular shape, jagged rims and

numerous indentations. This style of mineralisation is generally found beneath hardpans in

the overlying laterites and suggests some degree of re-precipitation as part of the laterisation

process. Current mining activity and AMRG’s exploration observations from pitting along the flanks of the Ranongo Ridge indicate a close correlation between an increased abundance of

gold and a distinctive mottled appearance in the saprolites. The degree of mineralisation

appears to increase in the presence of magnetite-rich schists and, furthermore, there is some

association with mineralisation and the presence of pegmatitic rocks. It is suggested that the

pegmatites have exploited structural features that may have some influence on the primary

mineralisation from which the eluvial gold is derived.

Figure ‎7-15 Gold grain recovered from mottled schist saprolite at Ranongo North

Primary gold mineralisation is likely to be present or has been present within the Loko Hills

greenstone units. Although this has not yet been definitively identified in a significant deposit,

the presence of primary mineralisation is evidenced by the occurrences of eluvial

mineralisation being exploited by local miners and the abundant occurrences of alluvial gold

mineralisation. It should be remembered that, given the long erosional history of this area,

some alluvial occurrences may represent palaeo-placers that host gold from primary



mineralisation that has long since been eroded away. Current evidence suggests that primary

gold mineralisation may be vein-hosted, orogenic and structurally controlled. This is

supported by the presence of high grade quartz vein material (e.g. 132 g/t gold in one grab

sample of float material) that is found during alluvial and eluvial mining activities near

Laminaia.


Primary Mineralisation

Primary gold mineralisation in the Loko Hills is most likely to be lode gold hosted in shear

zones or mesothermal mineralisation in granite-greenstone terrains. Mineralisation may be

concentrated within and at the margins of the supracrustal greenstone belts and associated

with the presence of banded iron formations or magnetite-rich schists and various mafic and

ultramafic lithologies, and gold may be hosted in quartz veins.

The emplacement of late intrusives in the vicinity of the greenstone belt is thought to be an

important factor in mineralisation, whereby gold would have been stripped from mafic and

ultramafic assemblages in the Loko Hills Group by fluids emanating from the younger

Archaean granites which pass through the greenstone units via fault conduits and/or contacts.

Gold may be precipitated favourably in magnetite-rich lithologies, such as the magnetite schist

found at Ranongo North in the Laminaia prospect. Current exploration findings suggest this

to be one of the more prospective lithologies in the area.

There also seems to be some relationship between the presence of pegmatite dykes and

increased gold mineralisation. This is evidenced by AMRG’s soil sampling results on the Ranongo Ridge which show anomalous gold values around these pegmatites, and by

saprolitic pegmatites often being exposed in artisanal workings where they exploit eluvial

mineralisation. At this stage it is not clear whether the pegmatites themselves are

mineralised, and SRK ES consider it more likely that the pegmatites have exploited structural

features such as shear zones that host pre-existing mineralisation. Gold may have been

remobilised during emplacement of the pegmatites and possibly enriched around their

margins.

Currently, the best evidence for the model described above is found in the Laminaia area.

This is partly because this has been the subject of most exploration to date. SRK ES propose

that the large valley to the west of the Ranongo Ridge hosts a large shear zone. Late

granites in the vicinity provided the fluids to flow through the shear zone and subsidiary

structures. Gold scavenged by these fluids was then precipitated in magnetite-rich lithologies

such as the schists found in the Ranongo North exploration target that are now the subject of

much mining activity. Late stage pegmatite dykes then exploited the shear zone, and again

this is well illustrated in the Ranongo North area.

Eluvial Mineralisation

The significant occurrences of eluvial mineralisation at locations such as Laminaia and Kasasi

are a result of secondary concentration (supergene enrichment of underlying primary

mineralisation) of the gold during the process of deep and intense weathering that may take

place to depths of between 5 m and 50 m. As a result of chemical weathering, gold bearing

veins and veinlets breakdown and form the rubble-like material that can be observed in some

of the mined areas. This is known by local miners as ‘gold stones’.

A number of the eluvial workings in the area also coincide with tourmaline-rich pegmatite

bodies that often weather preferentially and increase exposure of gold-mineralised saprolites.



It is also possible that gold remobilisation and enrichment during the pegmatites’ emplacement have resulted in increased gold enrichments in these areas.

Eluvial mineralisation forms when meteoric fluids percolate through the weathering zone,

preferentially removing the more reactive elements from the unit. Inert elements such as gold

remain in-situ and can become chemically purified. This can be observed in gold in the Loko

Hills that is extracted by artisanal miners in eluvial settings. It has a bright yellow colour and

is therefore of a high fineness; its low silver content is typical of gold that has undergone

supergene enrichment of this manner.

The local artisanal miners focus on iron 'hardpans' as a precursor to gold mineralisation.

Fluctuating, but steadily reducing, water tables across the area acted as a concentrating

process and results in a pervasive mineralisation of iron throughout the regolith. These

hardpans can create sub-horizontal supergene iron oxide in the laterite profile and can lead to

the concentration of fine-grained secondary gold at mid-saprolite areas with a lateral

dispersion away from the primary source of up to 500 m or more.

Colluvial Mineralisation

Colluvial gold mineralisation is often found in overlying lateritic material that has been

transported from higher ground above by gravity action. This may have been derived from

material that could itself have been mineralised by supergene enrichment previously, prior to

being transported.

provides a schematic diagram of SRK ES’ interpretation of the two secondary gold mineralisation settings in the Loko Hills, and the supergene enrichment processes that formed

them. Due to a greater understanding of the area compared to elsewhere, this is based on

the geology and topography of the Ranongo Ridge in the Laminaia area.

Figure ‎7-16 Schematic diagram of the main secondary gold mineralisation settings and

supergene mineralisation processes in the Loko Hills, based on the topography and geology

of the Ranongo Ridge.


Alluvial Gold Mineralisation

Alluvial gold mineralisation is widespread within the licence areas and appears to be closely

associated to occurrences of greenstone belt rocks. It is known, based on mining activities, at



Kasasi, Kadabi and Katumpe in Sella Limba Chiefdom, and Laminaia, Kampala, Manahun,

Makoko and Madina in Sanda Loko Chiefdom. The most numerous significant occurrences

are found along the flanks of the Ranongo Ridge, especially on the western flanks.

Figure ‎7-17 shows the distribution of artisanal alluvial gold mining locations for as mapped by

AMRG and the areas in which AMRG believes there may be further potential for alluvial gold.

These have been selected based on their topographic relationship to greenstone belt

occurrences that show anomalous gold concentrations in soil samples, field observations of

artisanal mining areas, the presence of appropriate terrain (flood plains and river courses) and

agreement with Hall’s (1969) classification of alluvial gold occurrences in Sierra Leone. This

proposes that alluvial gold may be primarily found at elevations of about 250 m where the

terrain is relatively gentle to flat. These are regarded as depositional environments that have

been present for several millions of years, thus allowing the accumulation of gold which may

be further enriched as a result of reworking during changes in climatic conditions. Priority

areas are considered to be along 4th or 5

th order streams and rivers that may host thicker

gravels, but may be difficult to exploit by local miners on account of these gravels being deep

and requiring significant stripping and water pumping.

Two prospective areas have been defined by AMRG within licence EL 48. These are the

Laminaia-Kampala zone in the southeast corner of the licence, and the Kindia zone in the

northwest corner. The target at Kindia covers an area of 9.41 km2 with a potential gravel

thickness of 0.5 m, whist the Laminaia-Kampala target consists of three areas that total 7.94

km2 with a potential gravel thickness of 0.75 m.

In licence EL 50, the Madina target is thought to host one main alluvial target that extends

over an area of 3.67 km2 with gravel thicknesses of about 0.5 m. The village of Madina itself

is located on a hilltop and it has been reported that the residents often find gold grains in soils

within the village.

A large area between Khatanta and Kadabi in licence EL 49 has been identified by AMRG as

an alluvial gold target. This covers an area of 9.71 km2 of low lying flats with an assumed

gravel thickness of 0.5 m.

It should be noted that the target areas discussed above have been based on AMRG’s selection criteria and have not yet undergone reconnaissance exploration in order to confirm

the assumed extents, gravel thicknesses and the presence of gold. SRK ES notes that they

are not areas that have so far been subject to artisanal mining activity, but it is possible that

this is because the nature of the areas precludes efficient mining using basic artisanal

equipment and methods.



Figure ‎7-17 Distribution of alluvial gold artisanal mining areas and areas identified by AMRG as having alluvial gold potential within their licence areas

Eluvial Gold Mineralisation

Currently the clearest examples of in-situ eluvial gold mineralisation in intensely weathered

(saprolitic) rocks can be seen at in mining sites at Kasasi in licence EL 49 and at several

locations along the flanks of the Ranongo Ridge in the Laminaia area of licences EL 48 and

EL 50, and especially in the Ranongo North exploration area.

Eluvial gold mineralisation is a viable exploration target and, in the Laminaia area, there is

potential for this style of mineralisation to be present, albeit possibly sporadically according to

the presence of favourable conditions, over a distance of some 3.5 km between the Kangafly

and Bolima mining areas. This is based on current observations; it is quite possible that

mineralisation may be more extensive considering that there are several more artisanal

mining sites to the south of Kangafly and to the north of Bolima.



Smaller-scale eluvial gold workings have been observed in the central Khatanta area where

there is also a mine site that extends to 15 m depth (Figure ‎5-7). The eastern side of the

greenstone units in the Khatanta area may hold further potential especially along strike from

the Kasasi area.

Figure ‎7-18 shows known alluvial gold occurrences within the licence areas, plus areas that

AMRG consider to have potential to host eluvial gold mineralisation. These have been

selected based on the presence of favourable geology, field observations of eluvial gold

mineralisation and locations of artisanal mine workings. It is encouraging that the areas are

extensive, but of course they are unlikely to be underlain by similarly extensive mineralisation.

They should be considered as target areas for further investigation.

Figure ‎7-18 Alluvial gold occurrences and areas that have potential to host eluvial gold mineralisation within AMRG’s Loko Hills licences



Primary Gold Mineralisation

Laminaia

In this area, the mica- and magnetite-schists that form the western flanks of the Ranongo

Ridge show the best potential to host primary gold mineralisation in the Laminaia area.

Primary gold mineralisation in fresh mica- or magnetite-schists has yet to be identified in

sufficient quantities or locations to be able to develop a robust mineralisation model, apart

from some thin drilling intersections of sheared quartz veins in Ranongo North that graded

0.5-2 g/t gold. SRK ES is of the opinion that gold is hosted by a shear zone that is probably

located beneath the large valley to the west of the Ranongo Ridge. This is a large feature

and mineralisation may be extensive.

Kasasi

Kasasi is located in the eastern part of licence EL 49 and intense mining activity exploits in-

situ eluvial gold mineralisation at the boundary of amphibolites and granites. This area shows

potential to host underlying primary gold mineralisation. Further exploration is required to

determine the nature of this but, given the similarities in eluvial gold, primary mineralisation

may be similar to that interpreted for the Laminaia area.

Other Areas

All of the occurrences of greenstone belt lithologies within the licence areas show a close

association to alluvial or eluvial gold mineralisation, suggesting that gold has been derived

from the greenstone belt rocks or near their contacts with late granites or basement granites.

Therefore they hold potential to host primary gold mineralisation. However, with the exception

of the Ranongo Ridge, exploration on most of the greenstone belt areas is at a fairly early

stage and potential primary sources of mineralisation have not yet been identified. The

development of thick laterite in this area means that outcrop of potentially mineralised zones

is very limited, and it may also reduce the effectiveness of surface soil sampling. It is also

possible that much of the original primary mineralisation may have been eroded away.

7.4 Diamonds


Alluvial diamond mineralisation is known in the Kathumpeh area near Kamakwie, Siria in the

Kindia prospect and at sites near the Kadabi prospect. Of these, Kathumpeh has seen the

most mining activity.

Although not yet identified within AMRG’s licence areas, it is very likely that diamondiferous

kimberlite dykes or pipes are present close to areas that host alluvial mineralisation. This can

be evidenced by to the topographic setting of alluvial occurrences whereby they are in

catchment areas that are isolated within the licence areas, the presence of kimberlite indicator

minerals and a known kimberlite dyke to the southeast of Kamakwie.


The only known economically significant primary sources of diamond are kimberlite and

lamproite. Kimberlite is defined as a volatile-rich, potassic, ultrabasic igneous rock that

occurs as small volcanic pipes, dykes and sills. It has an inequigranular texture resulting from

the presence of macrocrysts (phenocrysts and xenocrysts) set in a fine-grained matrix. The

mineralogy comprises olivine with several of the following: phlogopite, calcite, serpentine,

diopside, monticellite, apatite, perovskite, and ilmenite. Kimberlite often contains fragments of

upper-mantle derived ultramafic rocks, including xenocrysts such as pyrope garnet, picro-



ilmenite, chromian spinel and chrome-diopside. Diamonds are found as a very rare

constituent, and only a small proportion of known kimberlites contain diamonds.

Two distinct types of kimberlite are recognised: Group I, or olivine-rich, monticellite-

serpentine-calcite kimberlites and Group II, or micaceous kimberlites. These distinctive

groups are derived from sources in the earth’s mantle that are either slightly depleted (Group I), or enriched (Group II) with respect to light rare earth elements. This enrichment and

depletion is evidence of past metasomatic processes occurring in the mantle.

Diamondiferous kimberlites are almost exclusively found in regions underlain by Archaean

craton, with the main exception being the Argylle lamproite in Australia which lies in a

Proterozoic mobile belt. In most parts of the Earth, temperatures at the high-pressure depths

that diamonds form and are preserved (about 120 km) are too high for diamond formation.

However, cratons have relatively cool lithospheric roots in which isotherms are deflected

downwards and the diamond stability field is deflected upwards. Kimberlitic magmas

generated at or below these depths may therefore “sample” the lithospheric roots in this

“diamond window” and can collect diamonds during their ascent to the surface.

Alluvial diamond deposits results from the erosion of diamondiferous dykes and pipes and the

redistribution of diamonds by fluvial action. Deposits may develop on or adjacent to cratonic

source areas, especially where the climatic history has included periods of tropical humid

conditions alternating with semi-arid conditions. Tropical conditions allow the deep

weathering of source rocks and the liberation of resistant minerals, whilst erosion during semi-

arid periods allows the stripping of deep regolith and the transportation of released diamonds.

Local factors that influence alluvial diamond concentration include drainage morphology and

bedrock lithologies that erode to form good trap sites.


Alluvial Diamond Mineralisation

Alluvial diamond mineralisation is known in the Kathumpeh area in licence EL 49 about 1.5

km southeast of the town of Kamakwie, the location of significant previous mining activity

(Section ‎5.3). Alluvial occurrences are also indicated by artisanal workings on the Kirimbi

River just southwest of Kamakwie and. also in licence EL 49, there is thought to be potential

in the Kadabi area as indicated by small-scale mining sites.

In licence EL 48, AMRG report mining activities for alluvial diamonds in the Siria area to the

east of Kindia where local workers exploit gravels for both diamonds and coltan.

Primary Diamond Mineralisation

Exploration work carried out by SLDC (now African Minerals Ltd.) identified the presence of

kimberlite indicator minerals (“KIM” in heavy mineral concentrates from stream and soil samples taken from areas that are now covered by AMRG’s licences EL 48 and EL 49

(Figure ‎7-19). It is not thought that these anomalies have been followed up in any great

detail. However, a small kimberlitic fissure was exposed by SLDC geologists at shallow depth

in a swamp in the Kamakwie area and showed close correlation to the presence of KIM. It is

not clear whether this was discovered within what is now AMRG’s licence area.

In May 2013, a small area of artisanal diamond workings was visited by SRK ES in a shallow

valley about 4.5 km southeast of Kamakwie and 1.3 km south of AMRG’s licence boundary. Here, weathered kimberlite material was observed in gravels that had been stockpiled for

washing and local miners reported having seen a dyke in bedrock further upstream.

Diamonds are reportedly more abundant downstream of this dyke.



Despite this being outside of the licence area it provides further encouraging evidence of the

presence of diamondiferous kimberlites in this area and it is possible that they may track into

AMRG’s licence area. This is supported by the presence of KIM within the licences. KIM anomalies are also present close to Siria and Kadabi where there are known alluvial diamond

workings.

Kimberlites in the Loko Hills area are not thought to be related to the northeast trending

kimberlites dykes and pipes in the well known Koidu and Tongo diamond fields in eastern

Sierra Leone. Instead they are more likely to be related to the northwest trending kimberlites

dykes found across the border in Guinea.

Figure ‎7-19 Map showing kimberlite indicator mineral dispersion in stream sediments samples taken by African Minerals Ltd. in and around AMRG’s licence areas.

8 CONCLUSIONS

8.1 Introduction

SRK ES is of the opinion that AMRG’s exploration licences in the Loko Hills region include

some highly prospective areas that show good potential for coltan, gold and diamond

mineralisation. For coltan and gold, the main areas of interest appear to be around the

margins of and within the four greenstone belt units within the licences whilst diamond

mineralisation occurs in basement granites and gneisses.

8.2 Exploration Priorities

Currently, a key objective for AMRG is to generate cashflow in the near future, and SRK ES

are of the opinion that alluvial or eluvial coltan mineralisation shows the best potential of

achieving this. Second to this would be eluvial gold mineralisation. The evaluation of primary

coltan and gold mineralisation, as well as diamonds, would involve longer term and more



costly exploration and therefore may be considered as longer term objectives. However, the

exploration and exploitation of alluvial and eluvial mineralisation will however provide some

very useful data in terms of defining primary sources.

8.3 Coltan

Coltan is a high value mineral and there appears to be good demand for it in the international

market. Furthermore, supply to the global market may currently be limited as a result of other

producing mines closing down or becoming depleted. Therefore SRK ES expects that buyers

of this mineral could be found relatively easily.

Another factor affecting supply is that various acts have recently been passed in the US and

Europe (e.g. the Dodd-Frank Act, 2010) stating that end-users of metals such as tantalum

must be able to show that the minerals from which the tantalum was derived have been

sourced from conflict-free areas. The aim of this is to provide transparency and curb the

funding of conflict from coltan mining, as has been the case in the eastern Democratic

Republic of Congo for a long period. Demand for tantalum is likely to remain high, and

therefore there is keen interest along the supply chain to obtain conflict-free sources of coltan.

Sierra Leone meets such requirements and this will be viewed positively by potential off-

takers.

Alluvial coltan mineralisation is supporting a very active mining and trading industry in the

area. Much of this activity has very limited legal basis and the organisation and equipping of

mining teams in AMRG’s licence areas by other companies is illegal. AMRG, alongside national and local authorities, are currently making significant progress in curtailing the

involvement of these companies and are providing incentives for local miners to continue their

work but sell their coltan directly and solely to AMRG who can then trade it on the

international market. This is likely to provide the fastest revenue to AMRG, and it is also

hoped that conditions for local miners will improve as a result of AMRG’s involvement. This

activity is largely focused on the Khatanta area of licence EL 49.

Concurrent to this, the Company’s exploration in the Khatanta prospect shows that alluvial

coltan mineralisation is widespread and that potential new resources exist in areas that have

not yet been subject to artisanal activity. Examples of this are found in northern parts of the

prospect. Exploration is still at a fairly early stage and concentrated on swampy areas in

which the concentrations of coltan in the gravels appear to be sporadic. Based on past

experience and observations of local miners, SRK ES expects that good or possibly better

results may also be found around the margins of swamps and on terraces above them, and

exploration is due to move into such areas.

Considering the low cost exploration techniques and potentially low mining and processing

costs for alluvial and eluvial coltan, combined with strong demand, SRK ES recommends that

a focus on coltan has, at this stage, the best potential to provide near-term cashflow to the

Company.

Primary coltan mineralisation hosted by late stage granitic pegmatites of the type identified in

the Khatanta area is also an important exploration target with economic significance and,

whilst it is a longer term exploration objective, SRK ES believes there to be good potential

here. There may be similar potential in the Kindia area. As far as SRK ES is aware, positive

exploration results would represent the first significant hardrock mineralisation in Sierra

Leone.

8.4 Gold



Eluvial gold mineralisation also shows good potential to generate revenue and robust targets

are being developed by AMRG, especially in the Ranongo North exploration area where

sheared magnetite-rich schists appear to represent a favourable host to gold mineralisation.

Kasasi should also be considered on account of the high level of artisanal mining activity

there, plus it is possible that significant mineralised strike extensions may be found within the

mica and magnetite schist units elsewhere along the Ranongo Ridge. Like coltan, this style of

mineralisation may also be explored and exploited at a relatively low cost.

Current indications lead SRK ES to believe that the licence areas show good potential to host

gold mineralisation in hardrock settings. Gold is likely to be structurally controlled by, for

example, shear zones with mineralisation preferentially hosts in magnetite-rich lithologies, as

seen in the Laminaia area particularly at Ranongo North. An interpreted shear zone to the

west of the Ranongo Ridge is of interest. Exploration for hardrock mineralisation will be

higher cost and may be considered as a longer term objective, but the understanding of this

model will increase during exploration for alluvial and eluvial mineralisation.

8.5 Diamonds

Recent field observations, the presence of kimberlite indicator minerals in historic

mineralogical data and artisanal mining activity suggest that AMRG’s licence areas also show good potential to host both alluvial and primary diamond mineralisation derived from

northwest trending kimberlite dykes. This seems to be particularly the case for licence EL 49,

but western parts of licence EL 48 are also of interest.

8.6 Company Footprint

AMRG has extensive experience of operating in Sierra Leone and are fortunate to enjoy good

relationships with Governmental bodies responsible for the mining industry. Their presence in

the area is well established, they are well equipped and staffed by a highly experienced Sierra

Leonean team that is very capable of carrying out the required exploration. The Company

appears to be well respected within their areas of operation, and community relationships are

maintained by continual engagement through stakeholder meetings and numerous AMRG-

funded projects that aid the development of the region. All of this places the Company in

good stead to continue their operations smoothly into the foreseeable future. Naturally the

communities and the Government are keen to see the commencement of mining operations

and SRK ES feels that the current exploration targets and approach recommended here may

achieve this in the quickest possible time.

It should be noted that the mining of coltan and gold in alluvial and eluvial settings may have

significant impacts on both the natural environment and on areas used for farming by the local

population. These will clearly need to be accounted for, and SRK ES is confident that AMRG

is sensitive to such issues and will act in accordance with Sierra Leonean legislation.



9 RECOMMENDED FUTURE EXPLORATION

9.1 Coltan

9.1.1 Alluvial Coltan

Exploration Methods

Manual pitting of alluvial material and panning this to a concentrate is currently being used to

evaluate areas of alluvial coltan mineralisation. AMRG have achieved good coverage of the

swamp areas and river valleys in the Khatanta prospect and this should continue until the wet

season makes it too difficult to do so. Thereafter, attention should turn to higher terraces

which will be easier to explore in wet conditions, and which SRK ES suspects may have good

potential in terms of grade and grade continuity especially close to areas of primary

mineralisation.

Pitting is currently being undertaken at a spacing of 100 m between pits, and this is sufficient

to highlight the presence of coltan and show which areas are most prospective. Once the

best target areas have been defined, infill pitting can be carried out in order to obtain sufficient

data for a Mineral Resource Estimation.

Detailed observations on the nature of alluvial coltan should be recorded, such as its grain

size and angularity, as well as the nature of underlying bedrock. This will provide useful

indications as to the proximity to primary mineralisation and therefore where primary

mineralisation may be found.

Whilst much focus has been on the coltan potential of the Khatanta area, the Kindia prospect

also holds potential. AMRG reports that many of the valleys have been extensively mined

already, but there could still be potential in terraces and swamps that are less amenable to

local mining methods.

The Kadabi area may also hold potential and there has been some recent pitting activity in the

southern part of the prospect near the village of Kamaha organised by Chinese traders.

Both Kindia and Kadabi should also be subject to reconnaissance visits to determine whether

coltan mining is taking place.

Grade Determination

AMRG have recently acquired a handheld XRF analyser that is capable of reporting

reasonably accurate grades for tantalum and niobium. Due to the variability in grade and

Ta/Nb ratios, apparently at both regional and very local scales, the use of this is important in

terms of identifying high value (i.e. high tantalum grade) material. It is important however that

samples are crushed and homogenised prior to analysis in order to provide material that is

fine-grained enough to provide representative grades. It is recommended that AMRG acquire

a small portable milling device for this purpose.

Local miners and AMRG’s exploration teams obtain fine-grained (<1 mm) material in their

panned concentrates, and apparently this is sold alongside coarser grained coltan in the local

markets for the same price. SRK ES is of the opinion that this fine fraction probably includes

less valuable heavy minerals such as magnetite as the major component. AMRG’s recent XRF analyses on such material are supportive of this, generally showing only very low or

below detection grades for tantalum or niobium. It is therefore questionable whether this fine

grained concentrate should be included in a product for sale. SRK ES recommends further

work on this to determine whether low-value minerals can be separated out, possibly using

equipment such as a Frantz laboratory magnetic separator.



Potential buyers of the coltan will need to perform their own analysis in order to determine the

suitability of the material, and this may also be used in pricing negotiations. It is

recommended that AMRG analyse equal splits of these samples themselves in order to check

that they are in agreement with off-takers’ analyses. In order to do this, as much coltan as

possible will need to be homogenised and ten samples of about 500 g each selected at

random from this. Each sample will then need to be split in half and one part sent to the off-

taker and one to an accredited laboratory of AMRG’s choice. Given the grade variability and

coarse nature of the mineralisation, true homogeneity between sample splits will be difficult to

achieve, but this is the best approach at this stage.

Metallurgical Testwork

It may also be worthwhile commissioning mineralogical and metallurgical studies into the

coltan in order to determine exactly what commodities of value can be extracted from it and

what processing is required to achieve this. This would require fairly large samples (50 kg)

that would be subject to crushing, milling and separation using, for example, gravity and

magnetic methods. This may be expensive work, but again could provide useful data for

negotiations with end users of the product.

Trial Mining

Once there is a good understanding of the most prospective areas and potential resources

within them, AMRG may consider moving to a trial mining phase in order to establish mining

and processing methods and costs. SRK ES envisages that the type of equipment required

for this would include a bulldozer, excavator, frontend loader or dump truck and mobile

processing equipment. The latter may include some form of washing device such as a

trommel feeding into a gravity separation device such as a jig. Coltan may be found in a wide

range of grain sizes from cobble-sized to fine-grained material, and therefore the separation

system must be able to account for this. The finer details of this will clearly be subject to the

characterisation of fine-grained heavy minerals as discussed above.

Coltan Trading

Local buying of coltan and selling it on the international market may provide the Company

with the quickest source of revenue, but efforts should also be made to identify where the

artisanal miners are sourcing their coltan. This will clearly provide important data in terms of

understanding the main mineralised zones.

It is also strongly recommended that AMRG complete a survey of all possible artisanal mining

sites within their prospects in order to determine where exactly mining is taking place and the

scale and productivity of such workings. This will also provide important baseline data for the

environmental impact of current mining activities.

9.1.2 Primary Coltan

Mapping

A number of areas in the Khatanta prospect have been mapped by AMRG as late granites.

SRK ES has visited one such occurrence and found the area to host tourmaline-rich

pegmatites that are potentially mineralised with coltan. These lithologies are the likely source

of alluvial mineralisation in the licence areas and therefore it is recommended, as a first

phase, to remap areas described as granites and assess them for the presence of

pegmatites. It is thought that this could be carried out relatively quickly. Once identified,

mapping should be carried out to establish the extent of the pegmatites if outcrop is sufficient

to do this.



It is suggested that the largest hill in the Khatanta prospect should be the initial focus of this

work. AMRG and SRK ES have observed large zones of potentially mineralised pegmatites

in this area, and extensive occurrences here were reported in previous investigations

(Wilkinson, 2005). These occurrences are found close to and above the most extensive area

of alluvial and eluvial coltan mining activity in the Khatanta prospect.

Other indications of the locations of primary mineralisation will be gained from the data from

alluvial coltan exploration in the Kathanta area. The presence of coarse-grained coltan with

increased angularity will suggest proximity to the source. This data can be used to direct

mapping operations in areas upstream of or directly underneath such material.

The Kindia prospect may also host primary coltan mineralisation. However, the area has not

been covered to the same extent by geochemical sampling and therefore it is suggested, as a

first pass, that more detailed mapping is undertaken in areas previous defined as late granites

in order to determine whether these host mineralised pegmatites.

Soil sampling results from the Kadabi area also show some weak geochemical anomalies that

could be associated to pegmatites, especially in the north-eastern part of the prospect. It is

recommended that mapping teams visit these areas and determine whether pegmatites are

present.

Geophysics

The pegmatites are likely to host increased concentrations of radioactive minerals and the use

of a gamma ray spectrometer may be useful during mapping for detecting increased

radiogenic emissions associated with them, especially in areas of limited outcrop. It is

cautioned that even thin layers of non-radioactive overburden can mask the emissions from

underlying geology and therefore this method may not be effective in areas with alluvial or

organic overburden.

Geochemistry, Mineralogy and PetrologyThe pegmatites may produce distinctive

geochemical anomalies for elements such as Ta, Nb, Sn, W, Be, Cu, Li, Rb and Cs. AMRG’s already comprehensive soil sampling coverage over the Khatanta prospect shows some

interesting anomalies for these elements in areas now known to be underlain by pegmatites.

There are other anomalous areas that should be investigated, especially in the north of the

prospect where some of the higher alluvial grades are found. Areas deemed prospective

based on the above criteria should be visited by mapping teams. In areas where outcrop is

limited, pitting and trenching may be necessary in order to expose bedrock.

Grab sampling and chip-channel sampling should be undertaken during reconnaissance

phases in order to obtain material for geochemical, mineralogical and petrographic analysis.

The latter is recommended in order to fully understand coltan-hosting lithologies and to gain

some understanding of how they may be processed. Systematic sampling may comprise

channel sampling in trenches or across outcrops. Due to the coarse-grained nature of the

pegmatites and the erratic distribution of mineralisation, all types of samples will have to be

relatively large in order to be representative.

9.2 Gold

9.2.1 Eluvial Gold

Pitting

SRK ES recommends that exploration for the potentially large zones of eluvial gold

mineralisation in the Ranongo North and South areas near Laminaia should continue, using



the current pitting programme to target the mottled saprolite units especially in areas

underlain by magnetite schists. It should aim to define the extent of the main mineralised

saprolite units, gain a thorough understanding of mineralisation through the regolith profile,

and build confidence for the mineralisation model.

In the Kasasi area, there is an intense level of mining activity but the eluvial gold model has

not yet been systematically tested by AMRG. This represents another exploration objective

that can be approached in a similar way to the Laminaia area.

Bulk Sampling

SRK ES is of the opinion that the understanding of the main mineralised material is improving

rapidly and that AMRG could soon move to a bulk sampling phase at Ranongo North in order

to test larger volumes and establish the feasibility of an eluvial mining operation. Prior to this

it is recommended that metallic screen assays are carried out on selected samples from the

pits for a range of lithologies and regolith types in order to provide more quantitative data and

confirm the interpretations made from visible gold counts.

The type of equipment that would be required for bulk sampling may include an excavator, a

crushing device (the saprolites can be well cemented), a washing device such as a trommel

and equipment to separate the gold such as a sluice or shaking table. Although current

observations suggest that this is not the case, if the gold is found to be very fine-grained then

it may be necessary to include a more advanced concentrating device such as a Knelson

Concentrator.

Initial bulk sampling should test all units in the regolith/saprolite profile in order to further

confirm which are the most prospective units and whether changes are required in processing

methods between the units.

9.2.2 Primary Gold

The exploration and eventual exploitation of eluvial gold will provide valuable data for

understanding the primary gold mineralisation from which supergene enrichment has

occurred. SRK ES believe that the gold is likely to be hosted by shear zones or their

subsidiary structures with gold precipitated preferentially in the presence of magnetite-rich

lithologies as a result of the competency and chemical boundaries that they form. The

relative abundance of gold in saprolitic material will provide some idea of the focus of primary

mineralisation. An initial exploration target may be the interpreted shear zone lying to the

west of the Ranongo Ridge.

Geophysics

Based on the interpretation that gold mineralisation shows close association to magnetite-rich

lithologies, it is recommended that a ground-based magnetic survey is carried out over the

flanks of the Ranongo Ridge. This will highlight where the main magnetic units are and may

help to define the general structure of the area. It should be possible to perform this survey

relatively quickly and at low cost. Anomalous areas can then be further investigated by

mapping, pitting, trenching and sampling.

Trenching and Drilling

Once robust targets have been developed, these can be further investigated by trenching in

order to expose bedrock lithologies and obtain samples for geochemical analysis. Positive

results from this could be used to plan a scout drilling programme in order to test the model

and establish the width and depth extent of mineralisation. It is acknowledged that, in some

areas, thick laterisation or alluvial cover may mean that trenching is not feasible. In such



cases, there may be few options other than to progress to a drilling phase.

9.3 Diamonds

Reconnaissance Exploration

Diamond exploration should concentrate initially on those areas where alluvial mining is

known to take place or has taken place in the past. Such areas include the Kathumpeh area

near Kamakwie, the Siria area near the Kindia prospect, and locations just south of the

Kadabi prospect. Exploration may be further directed by the data for kimberlite indicator

minerals in stream sediment samples that AMRG has in its possession.

Reconnaissance exploration should include producing an inventory of prospective alluvial

areas and geological mapping. Mapping may reveal the presence of topographic features

that are characteristic of preferentially weathered kimberlites, such as linear lows or circular

depressions. Stream sediment sampling to build on the current data held by AMRG would be

useful for identifying kimberlite indicator minerals.

Geophysics

Based on these investigations, prospective areas may be covered by magnetic surveys in

order to define anomalies that may relate to kimberlite dykes or pipes. Ground based

surveying is the most cost effective method but airborne surveys, if funds permit, could cover

far larger areas more quickly. If there is the possibility of airborne surveying, then this could

be considered at an earlier stage of exploration.

Trenching and Bulk Sampling

Once anomalous areas have been defined, trenching would need to be carried out to expose

kimberlitic material and characterise it. Samples for mineralogical assessment would need to

be taken. Should positive results be obtained, a phase of bulk sampling or trial mining would

be required in order to fully evaluate the kimberlites’ potential and the viability of mining them.

10 EXPLORATION PRIORITIES & CORPORATE STRATEGY

10.1 Exploration Priority Matrix

Given the current understanding of the geology and mineral prospectivity of AMRG’s licences, SRK ES has developed an exploration matrix that serves to highlight what, in SRK ES’ opinion, should be the exploration priorities. The matrix (Table 10-1) includes a scoring

system for six factors that can be used to define the attractiveness of an exploration target.

One of these is the potential of a target to provide short term revenue; this is current a key

aim of the Company.

The matrix should be considered as fluid and scores may change as exploration progresses.

For example, the degree of geological complexity also reflects how well understood the

geology and mineralisation of a target is; this will likely improve following exploration.

Potential socio-environmental risks account for the environmental impact of future mining

activities and the possible impact on local communities in terms of the effect on farming areas

and artisanal mining activities. Alluvial targets score poorly in this respect since they may

have a significant environmental impact that must be accounted for, and they have the

potential to cause disruption to current local mining activities.

In total, 18 exploration areas have been considered and these comprise targets for gold

(alluvial, eluvial and primary), coltan (alluvial, eluvial and primary) and diamonds (alluvial and

primary).



Table ‎10-1 Exploration priority matrix for AMRG’s Loko Hills licences

No. Prospect Licence No. Commodity Style Geological

complexity

Degree of

artisanal

activity

Short Term

Revenue

Potential

Relative

Exploration

Cost/complexity

Access

Potential Socio-

Environmental

risk

Total

1 Khatanta EL 49 Coltan Alluvial 3 5 5 5 3 2 23

2 Ranongo North EL 48 / EL 50 Gold Eluvial 3 5 4 4 4 1 21

3 Khatanta EL 49 Coltan Eluvial 4 4 4 4 3 2 21

4 Kindia EL 48 Coltan Alluvial 2 5 4 4 3 2 20

5 Ranongo South EL 48 Gold Eluvial 2 5 3 4 5 1 20

6 Kasasi EL 49 Gold Eluvial 2 5 4 4 4 1 20

7 Laminaia Basin EL 48 / EL 50 Gold Primary 4 1 2 2 4 5 18

8 Kindia EL 48 Coltan Eluvial 3 3 4 3 3 2 18

9 Kamakwie EL 49 Diamond Alluvial 3 4 2 3 3 2 17

10 Laminaia Ridge EL 48 / EL 50 Gold Primary 4 1 1 2 4 5 17

11 Kinda EL 48 Diamond Alluvial 3 3 3 3 3 2 17

12 Khatanta EL 49 Coltan Primary 4 1 2 3 3 4 17

13 Kadabi EL 49 Diamond Alluvial 3 2 3 3 3 2 16

14 Active River Channels All areas Gold Alluvial 3 4 3 2 2 1 15

15 Kindia EL 48 Coltan Primary 3 1 2 2 3 4 15

16 Kamakwie EL 49 Diamond Primary 2 2 1 2 4 3 14

17 Kinda EL 48 Diamond Primary 2 1 1 2 3 3 12

18 Kadabi EL 49 Diamond Primary 2 1 1 2 3 3 12



10.2 Corporate Strategy

Until the start of 2013, the main drive for AMRG in its Loko Hills properties was the

identification and development of hardrock gold mineralisation. As such the greenstone

terranes that exist within the licence holding were explored with the aim of defining classic

lode gold mineralisation similar to that defined in other greenstone belts across Sierra Leone

and bordering countries. Such projects include Baomahun in the Kangari Hils, Komahun in

the Nimini Hills and Lake Sonfon in the Sula Hills.

This hard rock exploration was the first modern exploration of its kind in the Loko Hills area

and, while its immediate success has been limited (not unusual for a project at this early

stage), it has successfully illustrated the importance on gold mineralisation of magnetite-rich

facies within the broad mica schists lithology and with the emplacement of late stage

pegmatites. Both of these materials are highly weathered and primary mineralisation is likely

hosted beneath eluvial and colluvial overburden.

The eluvial material has in itself been shown to host significant quantities of gold as

evidenced by its exploitation by large numbers of artisanal miners in such places as Kangafly

and other sites along the flanks of the Ranongo Ridge and Kasasi. As such this eluvial

material may exist as a more immediate and preferential target for AMRG in the short term

ahead of the more capital-intensive primary gold exploration.

Eluvial gold, along with associated alluvial mineralisation, can be very hard to efficiently

quantify and record as part of a Mineral Resource classified to international reporting codes

due to its extreme heterogeneity or randomness of grade (nugget effect). However, this

material is relatively soft in nature and coupled with the broad dispersion of the mineralisation,

can be relatively easily mined at low cost by operators with little commercial mining

experience. With this in mind, SRK ES recommend that AMRG consider trial mining,

particularly the eluvial material, as a primary exploration target in the short term with a view to

developing cash flow at the project. This will also have the benefit of adding to the an

exploration dataset that can be used for future hard rock exploration.

The strategy of securing short term cash flow to help fund exploration for primary

mineralisation and obtain data for the same also runs true for the relatively recently identified

coltan potential within the Loko Hills project area. Alluvial coltan has been mined by local

communities and bought by local and, increasingly, foreign traders for about one year. AMRG

have recently commenced purchasing this material in an aim to develop closer community

relationships with these miners as well as developing the possibility to utilise this work force in

future small scale mining; a strategy that SRK ES support. Alluvial coltan, most likely derived

from coarse grained late stage pegmatites, requires little processing towards a marketable

product that can again provide AMRG with a positive cash flow in the short- to medium-term,

once they have secured buyers of this material in the international market. In contrast to the

gold mineralisation at Loko Hills, the primary coltan mineralisation is likely more

heterogeneous due to is course grained nature, than the alluvial mineralisation.

AMRG have also identified potential for alluvial and possibly primary diamond mineralisation

within sections of the Loko Hills licences. This too can be considered a significant asset to the

Company. However, bearing in mind that AMRG currently hold in the region of 18 separate

exploration targets as seen in the matrix study, SRK ES would recommend against tackling all

these separate commodities and areas at once and thereby spreading AMRG’s resources too thinly. SRK ES suggest that the optimal short to medium-term exploration strategy for AMRG



is to define a clear and robust road map for the next 1-3 years of exploration development.

SRK ES have used the matrix of possible exploration targets to assist in defining this strategy.

The strategy recommended by SRK ES is summarised in three main points:

In the Khatanta and Kindia areas, maximise short- to medium-term revenue from

alluvial and eluvial coltan production by utilising the local work force;

Review the extent of eluvial gold mineralisation within the mica schist and adjacent

lithologies in the Laminaia area and conduct bulk sampling or trial mining, moving

towards commencing small scale mining and gold production; and,

Undertake short exploration programmes targeting primary gold, coltan and diamond

mineralisation, directed from data produced during the alluvial and eluvial

developments.

SRK ES recommend that hardrock mineralisation, particularly gold, should remain as the

ultimate target for AMRG and should be the main focus once further data has been produced

and reviewed but, for now, this should be driven and funded by alluvial/eluvial coltan and gold

production.

To realise this strategy AMR will need to carefully manage their field exploration team’s time and direction. Sufficient time should be devoted to recording artisanal coltan mining and

defining the most prospective ground, whilst not neglecting bulk sampling of the eluvial gold

material which in turn will require obtaining some knowledge of efficient small scale crushing,

screening and washing (hydro-monitoring) equipment.

SRK ES also advise AMRG to consider the potential socio-environmental issues while

pursuing this strategy. The Company will need to assess what the potential socio-

environmental risks are and how far they wish to mitigate these at this stage. This is

particularly important while engaging local artisanal miners and when producing from near-

surface wetlands. SRK ES advise assessing this situation from three main angles:

environmental assessment and monitoring of exploration/small scale production;

social matters arising with local community involvement; and

stakeholder engagement when dealing with local artisanal miners.

10.3 AMRG Community Relations

The Company places a great deal of importance on fostering good relationships with the

communities within their licence areas and undertake a great deal of work in developing and

improving local facilities and infrastructure. Much of this work is highly successful,

appreciated by the communities and AMRG should be commended for this. Furthermore, the

Company employs significant numbers of local people both on a long term basis and as

casual labourers, bringing obvious benefits to the area.

Current projects include the construction of a secondary school at Laminaia, a school at

Kindia, the refurbishment of a town meeting place (Court Barry) in Kamalo and ongoing work

on road refurbishments. AMRG have also taken a two year rent on a building in Khatanta

from which they will operate their coltan trading activities. Previous projects have included a

secondary school in Kamalo, a Court Barry in Kamakwie, a hospital in Kamakwie, computer

training for local youths in Kamakwie, a number of farming initiatives and numerous road

refurbishments and bridge constructions.

The result of this is that a high level of community engagement is maintained and the

Company is well known and respected in the area. Relations with those in positions of



authority such as Paramount Chiefs, the police force and the mines inspectorate appear to be

very good, and AMRG also enjoys a close relationship with senior figures in the Ministry of

Mineral Resources and other parts of the Sierra Leone Government.

Developing community relations to the extent that AMRG have done is often a major hurdle

for exploration companies, and the Company’s current standing in the community places it in good stead to operate smoothly in the area.

For and on behalf of SRK Exploration Services Ltd

Jon Russill

Senior Exploration Geologist

SRK Exploration Services Ltd

Date: 04/07/2013

William Kellaway

Principal Exploration Geologist, Director

SRK Exploration Services Ltd

Date: 10/06/2013

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(SL) Limited.

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Rudenko, S. A., Romanov, V. A., Morakhovskyi, V. N., Tarasov, E. B., Galkin, G. A. and

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Sillah, S. 2013. Coltan exploration work plan for AMR Gold Loko Hills licences North West of

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SRK EXPLORATION SERVICES LTD

REPORT DISTRIBUTION RECORD

Complete this form and include it as the final page for each copy of the report produced.

Report No. ES7538

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Name/Title Company Copy Date Authorised by

Michael Howarth AMR Gold (SL) Ltd PDF 04/07/2013 JR

Raphael Israel AMR Gold (SL) Ltd PDF 04/07/2013 JR

Shraga Israel AMR Gold (SL) Ltd PDF 04/07/2013 JR

Colin Harris AMR Gold (SL) Ltd PDF 04/07/2013 JR

Francois Du Plesiss AMR Gold (SL) Ltd PDF 04/07/2013 JR

Gary Vallerius AMR Gold (SL) Ltd PDF 04/07/2013 JR

Salim Sillah AMR Gold (SL) Ltd PDF 04/07/2013 JR

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AN INDEPENDENT TECHNICAL REPORT ON EXPLORATION …

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