Saza-Makongolosi Gold Project (SMP), Tanzania Gold Project (SMP), Tanzania ... 11.8.1 Database...

Saza-Makongolosi Gold

Project (SMP), Tanzania

Technical Report NI 43-101

Prepared by:

Desmond Subramani, Pr.Sci.Nat. for Helio Resource Corporation

Date of Report - March 20, 2014

SAZA-MAKONGOLOSI GOLD PROJECT (SMP)

TANZANIA

TECHNICAL REPORT NI 43-101

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Contents CONTENTS .............................................................................................................................. I

TABLES ................................................................................................................................. IV

FIGURES ................................................................................................................................ V

1 SUMMARY .................................................................................................................... 1-9

2 INTRODUCTION .......................................................................................................... 2-13

2.1 Company and Project Name ............................................................................................ 2-13

2.2 Terms of Reference and Purpose of the Technical Report ................................................ 2-13

2.3 Independence .................................................................................................................. 2-14

2.4 Sources of Information .................................................................................................... 2-14

2.5 Personal Inspection of the Property ................................................................................. 2-14

2.6 Units of Measure ............................................................................................................. 2-14

3 RELIANCE ON OTHER EXPERTS..................................................................................... 3-14

4 PROPERTY DESCRIPTION AND LOCATION .................................................................... 4-15

5 ACCESSIBILITY, CLIMATE, LOCAL RESOURCES, INFRASTRUCTURE AND

PHYSIOGRAPHY .......................................................................................................... 5-18

5.1 Topography, Elevation and Vegetation ............................................................................ 5-18

5.2 Accessibility ..................................................................................................................... 5-18

5.3 Infrastructure .................................................................................................................. 5-19

5.4 Climate ............................................................................................................................ 5-19

6 HISTORY ..................................................................................................................... 6-21

6.1 Population History ........................................................................................................... 6-21

6.2 Historic Production .......................................................................................................... 6-21

6.3 Historic Exploration ......................................................................................................... 6-22

7 GEOLOGICAL SETTING AND MINERALISATION ............................................................. 7-23

7.1 Regional Geology ............................................................................................................. 7-23

7.2 Property Geology ............................................................................................................. 7-24

7.3 Mineralisation ................................................................................................................. 7-25

7.3.1 Kenge .............................................................................................................. 7-25

7.3.2 Porcupine ........................................................................................................ 7-26

7.3.3 Konokono and Tumbili ..................................................................................... 7-26

7.3.4 Continuity of Mineralisation ............................................................................. 7-26

7.3.5 Associated Mineralogy/Alteration .................................................................... 7-26

8 DEPOSIT TYPES ........................................................................................................... 8-26

8.1 Kenge .............................................................................................................................. 8-26

8.2 Porcupine ........................................................................................................................ 8-27

8.3 Konokono and Tumbili ..................................................................................................... 8-27

8.4 Re-Os Dating .................................................................................................................... 8-27


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9 EXPLORATION ............................................................................................................. 9-28

9.1 Historic Exploration ......................................................................................................... 9-28

9.1.1 Technoexport 1970-1974 (Luena et al 1974) .................................................... 9-28

9.1.2 Princess Resources / CSA Africa 1995-1999 (Henderson & Lewis: various CSA

Quarterly reports) ............................................................................................ 9-29

9.1.3 Anglogold 1997-1999 (Smith & Sango Feb & Dec 2000) ................................... 9-29

9.2 Exploration Conducted by Helio Resource Corp. .............................................................. 9-31

10 DRILLING .................................................................................................................. 10-34

10.1 Reverse Circulation Drilling ............................................................................................ 10-35

10.1.1 Positioning of RC drill holes ............................................................................ 10-35

10.1.2 RC Drilling Procedures .................................................................................... 10-35

10.2 Diamond Drilling ............................................................................................................ 10-37

10.2.1 Positioning of DD holes .................................................................................. 10-37

10.2.2 Diamond Core Drilling Procedures: ................................................................ 10-38

11 SAMPLE PREPARATION, ANALYSES AND SECURITY .................................................... 11-40

11.1 General.......................................................................................................................... 11-40

11.2 Soil Sampling ................................................................................................................. 11-40

11.3 Rock Sampling ............................................................................................................... 11-41

11.4 Reverse Circulation Sampling ......................................................................................... 11-41

11.5 Diamond Core Sampling ................................................................................................ 11-43

11.6 Sample Storage and Dispatch ......................................................................................... 11-45

11.7 Laboratory Procedures .................................................................................................. 11-45

11.7.1 African Assay Laboratories (AAL) .................................................................... 11-45

11.7.2 Acme Laboratories ......................................................................................... 11-46

11.7.3 Genalysis Laboratory Services PTY Ltd ............................................................ 11-46

11.8 QA/QC ........................................................................................................................... 11-47

11.8.1 Database Errors ............................................................................................. 11-47

11.8.2 Blanks ............................................................................................................ 11-48

11.8.3 Salted Blanks ................................................................................................. 11-48

11.8.4 Standards ...................................................................................................... 11-51

11.8.5 Field Duplicates.............................................................................................. 11-61

12 DATA VERIFICATION.................................................................................................. 12-63

12.1 Collar and Down Hole Surveys ....................................................................................... 12-63

13 MINERAL PROCESSING AND METALLURGICAL TESTING.............................................. 13-63

13.1 General.......................................................................................................................... 13-63

13.1.1 Kenge optimum circuit responses (% Au recoveries) (see Appendix 29.1): ...... 13-63

13.1.2 Porcupine optimum circuit responses (% Au recoveries) (see Appendix 29.3): 13-64

13.2 Metallurgical Sample Selection ...................................................................................... 13-64

13.3 Mineralogical Evaluation ............................................................................................... 13-64

13.4 Mineral Processing ........................................................................................................ 13-65

13.4.1 Comminution Assessment .............................................................................. 13-65


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13.4.2 Gravity Separation Test-work ......................................................................... 13-65

13.4.3 Flotation Test-work ........................................................................................ 13-65

13.4.4 Cyanidation Test-work ................................................................................... 13-66

13.5 Environmental implications ........................................................................................... 13-66

13.6 Additional work and further Work Planned .................................................................... 13-67

14 MINERAL RESOURCE ESTIMATES ............................................................................... 14-67

14.1 Geological Database ...................................................................................................... 14-67

14.1.1 Topography ................................................................................................... 14-67

14.1.2 Drill Holes ...................................................................................................... 14-69

14.1.3 Relative Density ............................................................................................. 14-72

14.2 Geological Model on which the Grade Estimation is based ............................................ 14-74

14.2.1 Grade Domaining ........................................................................................... 14-74

14.2.2 Grade Domaining using Leapfrog ................................................................... 14-75

14.2.3 Domaining in Datamine ................................................................................. 14-79

14.3 Compositing .................................................................................................................. 14-80

14.3.1 Composited Statistics ..................................................................................... 14-81

14.4 Variography ................................................................................................................... 14-88

14.5 Top Capping .................................................................................................................. 14-88

14.6 Grade Estimation ........................................................................................................... 14-89

14.6.1 Method .......................................................................................................... 14-89

14.6.2 Krige Neighbourhood Analysis ....................................................................... 14-89

14.6.3 Model Construction and Parameters .............................................................. 14-90

14.6.4 Kriging Parameters ......................................................................................... 14-91

14.7 Model Validation ........................................................................................................... 14-91

14.8 Grade Distribution Plots................................................................................................. 14-97

14.9 Resource Classification ................................................................................................ 14-100

14.10 Resource Tabulation .................................................................................................... 14-102

14.11 Pit Optimisation ........................................................................................................... 14-105

14.12 Previous Resource Estimates ....................................................................................... 14-108

14.12.1 Kenge Main .................................................................................................. 14-109

14.12.2 Porcupine Main ........................................................................................... 14-109


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15 MINERAL RESERVE ESTIMATE ...................................................................................15-110

16 MINING METHODS ...................................................................................................16-110

17 RECOVERY METHODS ...............................................................................................17-110

18 PROJECT INFRASTRUCTURE ......................................................................................18-110

19 MARKET STUDIES AND CONTRACTS .........................................................................19-110

20 ENVIRONMENT STUDIES, PERMITTING, AND SOCIAL OR COMMUNITY IMPACT ........20-110

21 CAPITAL AND OPERATING COSTS .............................................................................21-110

22 ECONOMIC ANALYSIS ...............................................................................................22-110

23 ADJACENT PROPERTIES ............................................................................................23-111

24 OTHER RELEVANT DATA AND INFORMATION ...........................................................24-111

25 INTERPRETATIONS AND CONCLUSIONS ....................................................................25-111

26 RECOMMENDATIONS ...............................................................................................26-112

27 REFERENCES ............................................................................................................27-114

28 CERTIFICATES OF QUALIFIED PERSONS .....................................................................28-115

28.1 Desmond Subramani, Pri.Sc.Nat. .................................................................................. 28-115

29 APPENDIX ................................................................................................................29-117

29.1 The Recovery of Gold From SMP Samples .................................................................... 29-117

29.2 Heach Leach Amenability Tests .................................................................................... 29-135

29.3 Recovery of Gold From SMP Porcupine Target. ............................................................ 29-139

Tables Table 1-1: Mineral Resource Statement – February 2014, SMP Gold Project. ........................................................ 1-10

Table 1-2: Mineral Resource – high grade open pit and underground potential. ................................................... 1-11

Table 4-1: PL status. ................................................................................................................................................. 4-17

Table 6-1: Historic exploration in the SMP area. ..................................................................................................... 6-22

Table 9-1: Work Conducted by Technoexport between 1970 and 1974. ................................................................ 9-28

Table 9-2: Work Conducted by Anmercosa between 1997 and 1999 across the 9 PLs belonging to TGL. ............. 9-29

Table 9-3: Work Conducted by Anmercosa between 1997 and 1999 across the 2 PLs belonging to Demco. ........ 9-30

Table 9-4: Regional soil geochemistry. .................................................................................................................... 9-31

Table 9-5: Detailed soil geochemistry. .................................................................................................................... 9-32

Table 9-6: Geophysical surveys................................................................................................................................ 9-32

Table 9-7: Airborne Magnetic and Radiometric geophysical surveys. ..................................................................... 9-32

Table 9-8: Drilling: holes by PL. ................................................................................................................................ 9-32

Table 9-9: Drilling totals. .......................................................................................................................................... 9-33

Table 9-10: Metallurgical testing. See Section 13 for detail metallurgical reporting. ............................................. 9-33

Table 9-11: Work conducted by consultants. .......................................................................................................... 9-33

Table 10-1: Drilling programmes on the SMP to December 2011. ........................................................................ 10-34

Table 11-1: Database errors. ................................................................................................................................. 11-47

Table 14-1: Summary of simplified lithological codes. .......................................................................................... 14-69

Table 14-2: Summary of KZONE Flagging in Datamine. ......................................................................................... 14-79

Table 14-3: Statistical summary of Au g/t per KZONE. .......................................................................................... 14-82


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Table 14-4: Summary of variogram parameters. ................................................................................................... 14-88

Table 14-5: Summary of Top Capping values. ....................................................................................................... 14-89

Table 14-6: Summary of search parameters for estimation. ................................................................................. 14-90

Table 14-7: Statistical comparisons - sample and model estimates for Kenge Main. ........................................... 14-91

Table 14-8: Statistical comparison - sample and model estimates for Mbenge and Porcupine Main. ................. 14-92

Table 14-9: Mineral Resource Statement – February 2014, SMP Gold Project. .................................................. 14-103

Table 14-10: Mineral Resource – Excluding Unchanged Resources. ................................................................... 14-104

Table 14-11: Mineral Resource – high grade opencast and underground potential. .......................................... 14-104

Table 14-12: Input Parameters for Pit Optimisation. .......................................................................................... 14-105

Table 14-13: Mineral Resource inside US$ 1,250.00 per ounce pit shell. ........................................................... 14-107

Table 14-14: High Grade Mineral Resources below US$ 1,250.00 per ounce pit shell. ...................................... 14-108

Table 14-15: Resource Statement – Golder Associates, November 2010. .......................................................... 14-108

Table 14-16: Resource Statement – SRK, February 2012. ................................................................................... 14-109

Table 25-1: Resources inside a pit shell at different gold prices. ........................................................................ 25-112

Table 26-1: Proposed Budget for Further work. .................................................................................................. 26-113

Figures Figure 4-1: Location of the SMP within Tanzania. ................................................................................................... 4-16

Figure 4-2: SMP Licence map. .................................................................................................................................. 4-17

Figure 5-1: Topography within SMP. ....................................................................................................................... 5-18

Figure 5-2: Temperature and Rainfall Averages (Nov 2007 – Dec 2011). ................................................................ 5-20

Figure 5-3: Temperature (2008 – 2011). ................................................................................................................. 5-20

Figure 5-4: Rainfall (2008 – 2011). ........................................................................................................................... 5-21

Figure 6-1: Location of historical mines within the SMP area. ................................................................................ 6-22

Figure 7-1: Regional Setting of the Ubendian Belt and the SMP area (Lenoir et al 1995). ...................................... 7-23

Figure 7-2: The Saza and Dubwana Shear Zones in relation to targets and historical workings. ............................ 7-25

Figure 10-1: Illustration of an RC drill fence: drill holes in black, anomalous zone in blue. .................................. 10-35

Figure 10-2: RC chip pad. ....................................................................................................................................... 10-37

Figure 11-1: Riffle Splitting. ................................................................................................................................... 11-42

Figure 11-2: Pipe sampling procedure. .................................................................................................................. 11-43

Figure 11-3: Blanks plot. ........................................................................................................................................ 11-48

Figure 11-4: Graph showing gold concentrations as analysed in GAP02. ............................................................. 11-49




Figure 11-8: Graph showing gold concentrations as analysed in CRM G302-2. .................................................... 11-52

Figure 11-9: Graph showing gold concentrations as analysed in CRM G303-8. .................................................... 11-53

Figure 11-10: Graph showing gold concentrations as analysed in CRM G305-1. .................................................. 11-53




Figure 11-14: Graph showing gold concentrations as analysed in CRM G310-10. ................................................ 11-56






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Figure 11-22: Original vs blank plot. ...................................................................................................................... 11-62

Figure 14-1: Topography for the Kenge deposit. ................................................................................................... 14-68

Figure 14-2: Topography for the Mbenge deposit. ............................................................................................... 14-68

Figure 14-3: Topography for the Porcupine deposit. ............................................................................................ 14-69

Figure 14-4: Plan showing RC holes in Red, for Kenge Main deposit. ................................................................... 14-70

Figure 14-5: Plan showing RC holes in red, for Mbenge deposit. .......................................................................... 14-70

Figure 14-6: Plan showing RC holes in red for Porcupine Main deposit. ............................................................... 14-71

Figure 14-7: Section comparing Au values between RC and DD holes, Porcupine Main deposit. ......................... 14-71

Figure 14-8: Plan showing additional drilling since SRK estimate. ........................................................................ 14-72

Figure 14-9: Histogram for RD readings at Kenge Main. ....................................................................................... 14-73

Figure 14-10: Histogram for RD readings at Mbenge. ........................................................................................... 14-73

Figure 14-11: Histogram for RD readings at Porcupine Main. ............................................................................... 14-74

Figure 14-12: Section showing mineralised domain for Kenge Main, superimposed on simplified lithology. ...... 14-76

Figure 14-13: Section showing mineralised domain for Kenge Main, superimposed Au values. .......................... 14-76

Figure 14-14: Section showing mineralised domain for Mbenge, superimposed on simplified lithology. ........... 14-77

Figure 14-15: Section showing mineralised domain for Mbenge, superimposed on Au values............................ 14-77

Figure 14-16: Section showing mineralised domain for Porcupine Main, superimposed on simplified lithology. 14-78

Figure 14-17: Section showing mineralised domain for Porcupine Main, superimposed on Au values. .............. 14-78

Figure 14-18: Boundary Analysis between high grade domain and mineralisation for Kenge and Porcupine. .... 14-79

Figure 14-19: Cross-section showing KZONE flagging in the block model for Kenge Main. .................................. 14-80

Figure 14-20: Histogram of sample length prior to compositing........................................................................... 14-81

Figure 14-21: Sample distributions for the KML MZ domain................................................................................. 14-82

Figure 14-22: Sample distributions for the KML HG domain. ................................................................................ 14-83

Figure 14-23: Sample distributions for the KMU MZ domain. ............................................................................... 14-83

Figure 14-24: Sample distributions for the KMU HG 1 domain. ............................................................................ 14-84

Figure 14-25: Sample distributions for the KMU HG 2 domain. ............................................................................ 14-84

Figure 14-26: Sample distributions for the KMSE MZ domain. ............................................................................. 14-85

Figure 14-27: Sample distributions for the KMSE HG domain. .............................................................................. 14-85

Figure 14-28: Sample distributions for the MB MZ domain. ................................................................................. 14-86

Figure 14-29: Sample distributions for the MB HG domain. ................................................................................. 14-86

Figure 14-30: Sample distributions for the PORC MZ domain. .............................................................................. 14-87

Figure 14-31: Sample distributions for the PORC HG domain. .............................................................................. 14-87

Figure 14-32: Section showing block model coding for Porcupine Main. ............................................................. 14-90

Figure 14-33: Trend Analysis plot for Kenge Main Lower, mineralised domain. ................................................... 14-93

Figure 14-34: Trend Analysis plot for Kenge Main Lower, high grade domain...................................................... 14-93

Figure 14-35: Trend Analysis plot for Kenge Main Upper, mineralised domain. ................................................... 14-94

Figure 14-36: Trend Analysis plot for Kenge Main Upper, high grade domain. .................................................... 14-94

Figure 14-37: Trend Analysis plot for Mbenge, mineralised domain. ................................................................... 14-95

Figure 14-38: Trend Analysis plot for Mbenge, high grade domain. ..................................................................... 14-95

Figure 14-39: Trend Analysis plot for Porcupine, mineralised domain. ................................................................ 14-96

Figure 14-40: Trend Analysis plot for Porcupine, high grade domain. .................................................................. 14-96

Figure 14-41: Long section showing Au distribution for Kenge Main, HG domain. ............................................... 14-97

Figure 14-42: Grade Tonnage Curve for the Kenge Main & Mbenge, Minz domain. ............................................ 14-98

Figure 14-43: Grade Tonnage Curve for the Kenge Main & Mbenge - HG domain. .............................................. 14-98


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Figure 14-44: Grade Tonnage Curve for the Porcupine Main, Minz domain. ........................................................ 14-99

Figure 14-45: Grade Tonnage Curve for the Porcupine Main, HG domain. ........................................................... 14-99

Figure 14-46: 3D view showing Kenge Main deposit, coloured on Resource Classification. ............................... 14-101

Figure 14-47: Section view showing Mbenge deposit, coloured on Resource Classification. ............................. 14-101

Figure 14-48: Section view showing Porcupine Main deposit, coloured on Resource Classification. ................. 14-102

Figure 14-49: 3D View showing optimum pits for Kenge Main, using a US$ 1,250 gold price. ........................... 14-106

Figure 14-50: 3D View showing optimum pits for Mbenge, using a US$ 1,250 gold price. ................................. 14-107

Figure 14-51: 3D View showing optimum pits for Porcupine Main, using a US$ 1,250 gold price. .................... 14-107

Figure 23-1: Map showing the location of the Kenge and Porcupine Resource Areas and proximity to Shanta Gold’s

Bauhinia Creek Pit, New Luika Gold Mine. ................................................................................. 23-111


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Glossary

Abbreviations, Symbols, and Acronyms

Coefficient of Variance ........................................................................................................................ CoV

Canadian Dollar ................................................................................................................................ CAD$

Canadian Institute of Mining ............................................................................................................... CIM

Diamond Drill Hole ............................................................................................................................. DDH

Induced Coupled Plasma ...................................................................................................................... ICP

National Instrument 43-101 ....................................................................................................... NI 43-101

Qualified Persons ................................................................................................................................ QPs

Quality Assurance/Quality Control .................................................................................................. QA/QC

Rock Quality Description .................................................................................................................... RQD

Standard Deviation ................................................................................................................................ SD

Special Advisory Committee ................................................................................................................ SAC

Three Dimensional ................................................................................................................................ 3D

Universal Transverse Mercator .......................................................................................................... UTM

United States Dollar ......................................................................................................................... USD$

Whole Rock Analysis .......................................................................................................................... WRA

X-Ray Fluorescence ............................................................................................................................. XRF

Units of Measurement

Centimetres ......................................................................................................................................... cm

Degrees .................................................................................................................................................... °

Degrees Celsius ...................................................................................................................................... °C

Feet ......................................................................................................................................................... ft

Grams ..................................................................................................................................................... g

Grams per tonne………………………………………………………………………………………….. ....................................... g/t

Hectares ................................................................................................................................................ ha

Kilogram per tonne .............................................................................................................................. kg/t

Kilograms .............................................................................................................................................. kg

Metre ..................................................................................................................................................... m

Metres above mean sea level .......................................................................................................... mamsl

Millilitres .............................................................................................................................................. mL

Million tonnes ...................................................................................................................................... Mt

Parts per million ................................................................................................................................. ppm

Percent................................................................................................................................................... %

Tonne ....................................................................................................................................................... t


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1 SUMMARY

Helio Resource Corporation (http://www.helioresource.com/) is a mineral exploration and development

company based in Vancouver, Canada, which is currently focused on the exploration and development

of its Saza-Makongolosi Gold Project (SMP) in Tanzania. SMP is located in the UTM zone 36S on the

WGS 84 datum, approximately 800 km southwest of the city of Dar es Salaam, Tanzania, in the Mbeya

region. The project covers an area of 238 km2 comprising twelve contiguous prospecting licences.

The SMP is part of the Lupa Goldfield, which lies along the eastern edge of the Western Rift Valley close

to Lake Rukwa. Mbeya, the capital of the Mbeya Region, is approximately 100 km southeast by road

from the SMP. Within the area of the SMP, Helio has identified over 30 exploration targets. The target

areas that are the focus of this technical report are Kenge, Konokono/Tumbili and Porcupine. Kenge is

made up of Kenge Main, Kenge SE, Mbenge and Snakebite zones. Konokono/Tumbili comprises the

Konokono and Tumbili zones, while Porcupine is made up of Porcupine Main, Porcupine Quill and

Porcupine NW zones.

The Lupa Goldfield is situated in the southwestern part of the Tanzanian Craton, within the Lower

Proterozoic mobile belt of the 1.8 Ga Ubendian System. Lithologies comprise granitic, intermediate and

mafic intrusive rocks together with ferruginous quartzites. Several prominent structural trends are

observed in the Lupa Goldfield. The dominant Saza Shear Zone trends ENE. A strong WNW to NW trend

is seen in outcrop and satellite imagery together with the ENE trending structures. The regional

foliations are associated with major dextral shear zones. Two distinct granites dominate the igneous

suite that underlies the SMP area. The Ilunga Granite is observed extensively in the northern half of the

SMP. The Saza Granite occurs in the southern portion of the prospect area. Gold mineralisation occurs

in both the Ilunga and Saza Granites. The mineralisation can be described broadly as shear zone-hosted

orogenic or intrusion-related gold systems. Mineralisation is dominantly associated with “Saza-parallel”

(070°) and “Kenge-parallel” (120°) shear zones.

Mineralisation at the SMP comprises pyrite (generally less than 1% by volume) with minor chalcopyrite

and molybdenite, plus occasional scheelite and galena. Gold occurs as free gold, electrum and

occasionally as tellurides. Mineralisation is associated with quartz veining, silicification, sericitisation,

haematisation and occasionally chloritisation.

Helio began exploration activities in 2006. The work completed to date is as follows:

• IP and ground magnetic geophysical surveys;

• Airborne magnetic and radiometric geophysical surveys;

• Regional soil geochemistry;

• Diamond and reverse circulation (RC) drilling;

• Metallurgical testing;

• Structural studies for the controls of mineralisation.

The exploration drilling database supplied by Helio contains 892 drillholes totalling 112,246 m. 58,852

sample results, from approximately 93,264 m of drilling are contained in the database used for Resource


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Estimation herein. The updated section of the Mineral Resource Statement is calculated for the

Porcupine Main and Kenge Main, Kenge South East and Mbenge Targets only, defined by a total of 312

drill holes comprising 48,882 m of drilling.

Preliminary metallurgical test work was conducted by SGS Lakefield Research Limited (SGS) in Ontario,

Canada. The test work programmes conducted on Kenge and Porcupine mineralised material indicated

amenability to conventional gravity and cyanidation gold recovery techniques.

This Mineral Resource Statement represents the third Mineral Resource Estimate prepared for SMP.

Previous estimates were completed by Golder Associates and SRK in November 2010 and February 2012

respectively. The current mineral resource estimate for SMP, summarised in Table 1-1 below, is effective

as of February 2014. Mineral resources that form part of this update i.e. Kenge Main, Mbenge and

Porcupine are stated at a 1.0 g/t cut-off. The Snakebite, Porcupine Quill, Porcupine NW, Konokono and

Tumbili which report into the Inferred Mineral Resource category and remain unchanged since the SRK

estimate are included in this Resource Statement. These Mineral Resources were previously stated 0.5

g/t cut-off.

The total Indicated Mineral Resource for all eight zones is estimated at 9.44 Mt, grading at 2.07 g/t, with

an additional Inferred Mineral Resource of 7.44 Mt, grading at 1.28 g/t. The Inferred Mineral Resource

summary excluding the Snakebite, Porcupine Quill, Porcupine NW, Konokono and Tumbili zones is 3.62

Mt, grading at 1.54 g/t.

Table 1-1: Mineral Resource Statement – February 2014, SMP Gold Project.

Classification Domain Tonnes - Mt Grade – Au g/t Ounces

Indicated Kenge Main 2.41 2.54 196 811

Indicated Mbenge 1.18 1.64 62 219

Total Indicated - Kenge Target 3.59 2.24 259 030

Indicated Porcupine Main 5.85 1.96 368 646

Total Indicated - Porcupine Target 5.85 1.96 368 646

Total Indicated - SMP 9.44 2.07 627 676


Inferred Kenge Main 0.65 1.58 33 019

Inferred Mbenge 0.38 1.64 20 037

Inferred Snakebite 0.73 1.62 38 022

Total Inferred - Kenge Target 1.76 1.61 91 078

Inferred Porcupine Main 2.59 1.52 126 573

Inferred Porcupine Quill 1.06 0.85 28 968

Inferred Porcupine NW 0.53 0.59 10 054

Total Inferred - Porcupine Target 4.18 1.23 165 595

Inferred Konokono 1.00 1.06 34 080


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Inferred Tumbili 0.5 0.99 15 915

Total Inferred - Konokono/Tumbili 1.5 1.04 49 995

Total Inferred - SMP 7.44 1.28 306 668

Notes:

1-Mineral Resources are classified according to the CIM definitions.

2-Resources for Kenge Main, Mbenge and Porcupine Main are stated at

a cut-off grade of 1.0 g/t.

3-Resources for Snakebite, Porcupine Quill, Porcupine NW, Konokono

and Tumbili are stated at a cut-off grade of 0.5 g/t.

4-Densities are assigned according to Section 14.1.3.

5-Unchanged Resources have been maintained from the SRK estimate.

6-Rounding errors may occur.

A high grade option was assessed for high-grade open pit and underground mining potential. This was

based on a new understanding that the higher-grade, well mineralised zones occur as narrow shoot

controlled veining within the broader shear zone. This high grade resource is stated at a 3.0 g/t cut-off

and is summarised in Table 1-2 below. The total Indicated Mineral Resource for the high grade

component is estimated at 2.04 Mt, grading at 5.04 g/t. The Inferred Mineral Resources are estimated at

0.096 Mt grading 5.21 g/t.

Table 1-2: Mineral Resource – high grade open pit and underground potential.











Inferred Porcupine Main 0.006 3.90 752


Notes:


2-Resources are stated at a cut-off grade of 3.0 g/t.




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This Technical Report has been prepared by Caracle Creek International Consulting MinRes (Proprietary)

Limited (CCIC MinRes) in order for Helio Resource Corp to file a current NI 43-101 compliant Technical

Report on the System for Electronic Document Analysis and Retrieval in support of their February 3,

2014 disclosure of the Mineral Resource Update for the Kenge and Porcupine Targets. The Technical

Report serves to provide background information to this resource statement on SMP, and as an

exploration summary of the work carried out by Helio since 2006.


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2 INTRODUCTION

2.1 Company and Project Name

This Technical report has been prepared for Helio Resource Corporation (“Helio” or “the Company”), a

mineral exploration and development company based in Vancouver, Canada.

The Saza-Makongolosi Project (“SMP”) is a gold exploration project, located in the Mbeya Region of

Tanzania. Helio Resource Corporation (“Helio”), through its wholly owned subsidiary BAFEX Tanzania Ltd

(“BTL”), either holds or is in the process of formalising the acquisition of the Prospecting Licences (“PLs”)

that make up the project area.

2.2 Terms of Reference and Purpose of the Technical Report

Helio released a Maiden Mineral Resource Estimate for the SMP, prepared by Golder Associates, in

November 2010. In August 2011, Helio commissioned SRK Consulting (Australasia) Pty Ltd (“SRK”) to visit

the property and prepare an updated geological model and Mineral Resource Estimate for the SMP

(released February 14, 2012.)

In October 2013 Helio retained Caracle Creek International Consulting MinRes (Proprietary) Limited

(http://caraclecreek.com/) (“CCIC MinRes”), to prepare an Independent Technical Report (the “Report”)

on SMP. This Report has been prepared by CCIC MinRes in order for Helio to file a current NI 43-101

compliant Technical Report on the System for Electronic Document Analysis and Retrieval (“SEDAR”) in

support of their February, 2014 disclosure of the Mineral Resource Update for the Kenge and Porcupine

Targets.

CCIC MinRes is a privately owned professional geological consulting company that provides a wide range

of geological services to the exploration and mining industries. The company has considerable

experience in exploration and Mineral Resource Estimation in Africa, having undertaken numerous

exploration projects in various countries, for various clients.

Mr Sivanesan (Desmond) Subramani is designated as the Qualified Person regarding the mineral

resource estimation. Mr Subramani is a member in good standing of the South African Council for

Natural Scientific Professions (SACNASP No. 400184/06) as well as a member of the Geological Society of

South Africa and the Geostatistical Association of South Africa. He has 18 years’ industry experience, on

various commodities, in both operational and consulting environments, having worked for both major

mining houses as well as junior explorers. International experience includes assignments in Australia,

Botswana, Canada, China, the DRC, Ghana, Namibia, Tanzania, Saudi Arabia and Zambia. He is a super-

user of Leapfrog™ and Datamine™ Studio 3 (“Datamine”), with his core strengths being advanced

geological modelling, geostatistical resource estimation and conditional simulation.


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2.3 Independence

For the preparation of this report, CCIC MinRes has no pecuniary or other interests that could

reasonably be regarded as capable of affecting its ability to provide an unbiased opinion in relation to

Helio’s projects or resources as discussed in this Report. CCIC MinRes 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 any transaction, or the conclusions or opinions expressed in this Report,

and CCIC MinRes will not receive any other benefit. As of the date of this Report, neither CCIC MinRes,

nor any of its directors has (and has not had within the previous five years) any shareholding in Helio, or

the assets or projects reported on herein, and consequently CCIC MinRes considers itself to be

independent of Helio.

2.4 Sources of Information

Much of the background information in this Technical Report has been sourced and updated from three

previous Technical Reports, which detail SMP, and have all been the filed on SEDAR.

Various other reports were also supplied by Helio including those by C. MacKenzie. All documents used

in the preparation of this Report are listed under Item 27 (References). All illustrations are embedded

within the body of the report.

2.5 Personal Inspection of the Property

Personal inspection of the Property was conducted between December 9 and December 12, 2013, by Mr

Desmond Subramani of CCIC MinRes. The Kenge Main, Mbenge and Porcupine Main deposits were

visited. This site visit also included a review of the drilling, logging and sampling protocols and

procedures. CICIC MinRes also conducted random verification checks on the database.

2.6 Units of Measure

Unless specified, all measurements in this Technical Report use the metric system. Common

measurements are in metric units. Ages of various rock units are given in millions of years before

present (“Ma”) or billions of years before present (“Ga”).

Universal Transverse Mercator (“UTM”) coordinates are used within this report, and are reported in

UTM zone 36S, WGS 84 datum. Unless otherwise stated the report currency is US dollars (USD).

3 RELIANCE ON OTHER EXPERTS

This Technical Report has been prepared for Helio and the information, conclusions, opinions and

estimates contained herein are based on:

• Information available at the time of preparation of this Report,


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• Assumptions, conditions and qualifications as set forth in this Report, and

• Data, reports and other information as supplied from Helio and other third party sources.

For the purpose of this Report, the author has relied on ownership information provided by Helio. In

consideration of all legal aspects relating to the Project, CCIC MinRes places reliance on Helio that the

information relating to the legal aspects, and the status of surface and mineral rights, are accurate.

Property information in this report is sourced from previous reports updated by Helio and the author is

not responsible for the accuracy of any property data, and do not make any claim or state any opinion as

to the validity of the property disposition described herein.

For the preparation of this report, the author relied on maps, documents, and electronic files generated

by the current and past exploration crews, contributing consultants and the technical team of Helio. To

the extent possible under the mandate of a NI 43-101 compliant report, the data have been verified

with regard to the material facts.

Except for the purposes legislated under provincial securities laws any use of this Report by any third

party is at that party’s sole risk.

4 PROPERTY DESCRIPTION AND LOCATION

The United Republic of Tanzania is located in East Africa, approximately between 1˚ to 12˚ South of the

Equator and 4˚ and 10˚ East of the Prime Meridian. The SMP gold project covers an area of

approximately 238 square kilometres and is located in the Mbeya Region of Tanzania, 100km by road

northwest of the regional capital, Mbeya, which itself lies some 760 km by road southwest of Dar es

Salaam, the main port in Tanzania (Figure 4-1)


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Figure 4-1: Location of the SMP within Tanzania.

The SMP area was initially defined by the license boundaries of 5 Prospecting Licences (PLs) which were

acquired in transactions with two local companies - Thorntree Minerals Limited (TTML) and Dhahabu

Resources and Mining Company Limited (DREMCO). Helio has completed the earn-in for a 100% interest

in each PL subject to a 2% royalty, which can be reduced to 1% by a payment of CAD$ 1,000,000 by Helio


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to the local partner. Figure 4-2 shows the configuration of the PLs which currently make up the SMP,

Table 4-1 displays the PL numbers, ownership and current status.

Table 4-1: PL status.

Informal Name Owner PL Number Expiry Date Application Status

Gap BTL 2963/2004 December

2013 HQ-P 27781 Retention Licence

Application with

Ministry

Kwaheri BTL 2964/2004 December


Application with

Ministry

Ilunga BTL 2965/2004 December


Application with

Ministry.

Saza BTL 2580/2004 June 2013 HQ-P 27305 Retention Licence

Application with

Ministry

Gap North BTL 7097/2011 November

2015 n/a Current

Saza East BTL 7143/2011 August 2015 n/a Current

Makongolosi North BTL 5990/2009 June 2015 n/a Current

Saza South BTL 4963/2008 March 2013 HQ-G 17351 Application with

Ministry

Saza West TTML 5326/2008 October

2014

n/a Current

Mkwajuni North TTML 7710/2012 February

2016 n/a Current

Maleza BTL Not issued - HQ-P24588 Application with

Ministry

Kwaheri East BTL 8506/2012 December

2016 HQ-P21156 Current

Figure 4-2: SMP Licence map.


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5 ACCESSIBILITY, CLIMATE, LOCAL RESOURCES, INFRASTRUCTURE AND

PHYSIOGRAPHY

5.1 Topography, Elevation and Vegetation

The SMP project is located on the Lupa Block, which lies along the eastern edge of the Western Rift

Valley close to Lake Rukwa. In general the project area is flat but a series of hills, the Ilunga range,

occurs within the project area. The elevation ranges from around 900m to 1729m (Figure 5-1).

Vegetation throughout the area tends to be of the Miombo or Brachystegia-type woodland with

occasional areas of thorn scrub. Moderate to intense deforestation for fuel and farming has occurred

over much of the SMP and the surrounding countryside.

Figure 5-1: Topography within SMP.

5.2 Accessibility

Mbeya, the capital of Mbeya Region, is located approximately 100km southeast by road from the SMP.

Mbeya is located on the main TAZARA railway and TANZAM highway, both of which link Dar es Salaam

with Zambia, and is thus a main hub for communications between southern and eastern Africa. Songea

International Airport (100km from the SMP, 20km southwest of Mbeya) was opened in 2012 and

supports daily scheduled flights services to and from Dar es Salaam.

The SMP project is accessed by a dirt road from Mbeya. The journey between Mbeya and SMP project is

approximately two to two and a half hours. The road to Mbeya from Chunya is currently being tarred.

The Regional Capital of Chunya is approximately one hour’s drive east from the SMP project. Chunya

has a grass airstrip.


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5.3 Infrastructure

A 33Kva power line runs along the road from Chunya to Mbeya, then through the SMP project to

Mkwajuni, where the Helio field camp is located. Mains electricity is available on site. All the major

mobile phone networks have pylons in Mkwajuni and Makongolosi, with an additional Vodacom tower

situated on the peak of the eastern end of the Ilunga hills (outside of the SMP).

Exploration services and equipment are accessible through the road and rail networks of Tanzania.

The local workforce consists primarily of subsistence farmers and occasional artisanal miners. Tanzania

has a rapidly expanding mining industry and a reasonably qualified workforce could be developed from

other areas of the country.

No mining infrastructure is located on the SMP project. However, since late 2012, Shanta Gold Ltd. has

been operating the New Luika Gold Mine in a property immediately adjacent to the SMP.

Helio established an exploration camp in Mkwajuni (some 5km south of the SMP project area) during

early 2006. As the project has developed this camp has been expanded and improved. The camp is

based in a renovated National Bank of Commerce building set within a large secure compound. The

building provides a large office area and living quarters for staff and the compound is large enough to

allow for core logging, storage and cutting areas, as well as secure sample storage, diesel storage

facilities and vehicle maintenance areas.

Small scale fly camps are regularly mobilized to more remote areas to facilitate more efficient working

schedules.

5.4 Climate

Tanzania’s climate is sub-tropical. The climatic variation between the different regions of the country is

significant; mountainous regions and coastal areas in particular are subject to significantly more rain

than the lowlands and high plateau areas. Major rainfall is limited to two wet seasons: November to

December and February to April. Systematic weather monitoring stations are rare, the closest to the

SMP being the Songea International Airport. However, given its notably higher altitude compared to the

SMP and it’s proximity to a major mountain range, it is significantly cooler and wetter than the project

area. Since November 2007, Helio has collected rainfall and temperature figures at the Mkwajuni office.

Figure 5-2 displays the average monthly (daytime) temperature and rainfall (24hours) recorded between

November 2007 and December 2011.


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Figure 5-2: Temperature and Rainfall Averages (Nov 2007 – Dec 2011).

Temperature readings were taken four times per day; 7am, 11am, 3pm and 7pm. Rainfall is recorded as

a total over a 24hr period; 7am to 7am. Figure 5-3 and Figure 5-4 display temperature and rainfall data

for 2008 to 2011. Due to reduced staffing levels continuous recording of this data is sporadic over

December and January: this has a minor effect on the recorded temperature, however rainfall data for

these months are consistently low. Unreliable temperature data was collected between August and

November 2011 (due to low battery power in the digital thermometer), therefore this data has been

excluded from the dataset.

Figure 5-3: Temperature (2008 – 2011).

0.0

50.0

100.0

150.0

200.0

250.0

0.0

5.0

10.0

15.0

20.0

25.0

30.0

35.0

Te

mp

De

g C

Average TAverage Rainfall


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Figure 5-4: Rainfall (2008 – 2011).

6 HISTORY

6.1 Population History

The Lupa Block was very sparsely populated during the early part of the 20th Century, the majority of the

population being nomadic herdsmen (Grantham 1932). It is reported that by the mid1970s the

population of the Chunya district was ‘about 50 thousand’ with the population primarily engaged in

agriculture. However from the 1930s to the 1950s many local people were employed in gold mining

(Luena et al 1974). According to figures from the 2002 census published by the Tanzanian Bureau of

National Statistics the population of the Chunya district stood at just under 206,000.

6.2 Historic Production

Gold was discovered in the early 1900s and the Lupa Goldfield began production as an alluvial field in

1922 (Teale & Oates 1946). Systematic mining was started in 1935-6 by East African Goldfields at the

Saza Mine, which was subsequently continued by New Saza Mines Ltd between 1939 and 1956. The

New Saza Mine was the largest mine on the goldfield and drew material from the Saza Mine Shafts #1

and #2, Blacktree, Winter, Luika and Razorback mines. Reported production between 1939 and 1956

was 270,770 oz. of fine gold and 242,942 oz. of fine silver from 1.1 million tonnes of ore (Gallagher 1936,

Harris 1962).

Other small-scale colonial era mines are were exploited in the area, including Kwaheri, Gap and

Nkatano, however production is not clearly reported for these mines (Smith & Sango 2000).

Historic mines that are located within the SMP are The New Saza Mine (Saza 1 & 2 shafts), Razorback,

Blacktree, Winter, Gap and Kwaheri mines, the locations of which are shown in Figure 6-1.


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Figure 6-1: Location of historical mines within the SMP area.

6.3 Historic Exploration

Since Tanzania gained independence there has been a number of exploration programmes conducted

over the areas that now makes up the SMP. Table 6-1 gives a brief summary of historic exploration in

the area; in depth detail can be found in Section 9.1.

Table 6-1: Historic exploration in the SMP area.

Company Exploration Period

Technoexport 1970 – 1974

Princess Resources 1995 – 1999

Anglogold 1997 – 1999


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7 GEOLOGICAL SETTING AND MINERALISATION

7.1 Regional Geology

The Lupa Goldfield is situated at the southwest part of the Tanzanian Craton within the Lower

Proterozoic mobile belt of the Ubendian System (1.8Ga). Lithologies comprise granitic, intermediate and

mafic intrusive rocks together with ferruginous quartzites. The Lupa Goldfield is bounded by the WNW

trending Rukwa Faults, the NE trending Usangu Rift Faults and the ESE trending Northern Boundary

fault.

Figure 7-1: Regional Setting of the Ubendian Belt and the SMP area (Lenoir et al 1995).

The Ferruginous quartzites are banded quartz – magnetite rocks, which are interpreted to have been

banded iron formations and are presumed to be the oldest formation to occur (Smith & Sango 2000).

There are a number of stages of granite intrusion. The earliest phase is often sheared and mylonitised.

The intrusion of diorites appears to have been roughly coeval, however intrusive relationships are

difficult to establish at some locations.

The Ilunga granite, which comprises the Ilunga Hills, forms a prominent east-west ridge. It is a

hypidiomorphic granite, tending towards alkali composition. The Saza granite is a true granite or

granodiorite, and also is hypidiomorphic in texture. Basic intrusive rocks of dioritic to gabbroic


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composition and dykes of granitic and basic compositions are common in the Lupa Goldfield. Dolerite

dykes are the youngest intrusive event.

Several prominent structural trends are observed in the Lupa goldfield. A strong WNW to NW trend is

seen in outcrop and satellite imagery, this foliation has been found to be due to major dextral shear

zones. Many of the WNW structures show NW-SE splays, which link adjacent shears and are common

near contacts between lithological units.

The prominent ENE to E-W trends occur as shears and mylonite zones, these zones also appear to be

dextral in nature, although a later sinistral displacement has also been reported. In some places they

cut and displace the WNW structures suggesting that they are younger.

The Saza Shear Zone is one of the well known ENE-WSW trending structures. It is over 35km long and

hosts most of the known significant gold mineralisation in the western part of the Lupa Goldfield.

NNW trending structures are also known in the goldfield, in most cases they are not extensive and are

often bounded by WNW trending shears. NE-SW trending shears are also common, they displace the

WNW trending shears with a dextral sense of movement.

All structures have had long histories of re-activation, the latest period occurring during post-Cretaceous

rifting.

7.2 Property Geology

The SMP is located on the western margin of the Lupa Goldfield, the south-eastern corner of the

property covers a minor amount of the Rukwa Trough. The lithologies of the SMP are part of a bimodal

igneous suite with minor volcanics. However, in the small area of the property that lies within the Rukwa

Trough, Recent sediments are present.

The igneous suite is dominated by granite/tonalite, with two distinct granites being observed:

• Saza Granite: A post-tectonic hornblende – biotite granite with coarse grained quartz and

feldspar; in places it grades to a granodioritic composition.

• Ilunga Granite: A medium grained, leucocratic, alkali granite, thought to have been intruded

towards the end of the Ubendian Orogeny.

The Ilunga granite is observed extensively in the northern half of the SMP, it outcrops prominently and is

the primary constituent of the E-W trending Ilunga hills and of the smaller hills in the east of the

licenses. The Saza Granite is observed extensively in the southern portion of the prospect area. Gold

mineralisation occurs in both the Ilunga and Saza Granites.

Significant diorite/gabbro bodies are observed in the southern portion of the SMP. Contacts are often

mutually intrusive and therefore relationships between the mafic and felsic lithologies can be difficult to

ascertain.


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Except when the rocks are sheared, primary igneous textures are preserved. Lower greenschist facies

metamorphism is common, and there is little evidence for a major thermal event.

The Saza Shear zone is the dominant structure in the area, striking 070˚ and traceable for over 35km

within the SMP. The New Saza Mine’s 1 and 2 shafts, as well as the Gap and Winter mines are all located

at various points on the Saza Shear.

Two structural sets stand out in the SMP, both of which are associated with mineralisation. As such they

have been given names which reflect the nature of structures where they were first identified (the Saza

shear zone and the Kenge Target):

• Saza Parallel: 070˚

• Kenge Parallel: 120˚

The significance of the intersections of these two structural orientations is becoming increasingly

apparent. For example, the Main zone of the Porcupine Target occurs at the intersection of Saza-parallel

and Kenge-parallel structures.

Figure 7-2: The Saza and Dubwana Shear Zones in relation to targets and historical workings.

7.3 Mineralisation

Gold in the Lupa Goldfield is observed to be to be deposited by shear zone mineralisation. Whether this

mineralisation style is orogenic or intrusion-related is still unclear. Mineralisation is widespread across

the SMP and varies in size from meter- to kilometre-scale deposits. The two deposits which are the main

focus of this report, Kenge and Porcupine, display the following characteristics:

7.3.1 Kenge Mineralisation is focused on a series of massive anastamosing quartz veins which are emplaced in a

shear zone that trends 120˚ and generally follows the contact between Saza Granite and granodiorite


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bodies. Gold mineralisation is observed up to 40 m in thickness and is associated with the vein quartz

and the mylonitized Saza Granite and granodiorite wall rocks.

7.3.2 Porcupine A sheeted quartz vein system within the Ilunga Granite, at the intersection of two structures (070˚ and

120˚). Gold mineralised zones up to 90 m thick consist of sheeted quartz veining within altered host

granite.

7.3.3 Konokono and Tumbili Drilling on the Konokono and Tumbili targets is much more restricted than on Porcupine and Kenge,

with the majority of holes being drilled using an RC rig. The mineralization observed at these targets

corresponds broadly with the Porcupine system, however in both cases a number of different granites

are observed and significantly more mafic material is present.

7.3.4 Continuity of Mineralisation The Kenge Target has a strike length in excess of 2,000m and is made up of five zones: North West,

Main, South East, Snakebite and Mbenge.

7.3.5 Associated Mineralogy/Alteration Mineralisation at the SMP comprises of pyrite (generally less than 1% by volume) with minor

chalcopyrite and molybdenite, plus occasional scheelite and galena. Gold occurs as free gold, electrum

and occasionally as tellurides. Mineralisation is associated with quartz veining, silicification,

sericitisation, haematisation, and occasionally chloritisation. Minor brecciation is important in localising

mineralisation at Porcupine, and mylonitisation is dominant at the Kenge Main Zone.

8 DEPOSIT TYPES

The SMP gold deposits can be described broadly as shear zone-hosted orogenic or intrusion-related gold

systems. Mineralization is dominantly associated with Saza parallel (070˚) and Kenge parallel (120˚)

trending shear zones which are parallel to the Palaeoproterozoic Ubendian and Usagaran belts. There is

little evidence to suggest a major thermal event and age-dating of mineralisation and fluid inclusion

work has given equivocal results.

The deposit characteristics of the Kenge and Porcupine targets are as follows:

8.1 Kenge

• Bulk target hosted within a ductile deformation regime, high grade targets in brittle structures.

• Mineralization is focused along a 120˚ trending shear zone (which closely follows the contact of

a granite with a diorite).


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• Gold is contained in pyrite bearing quartz veins and mylonitized wall rock which has undergone

sulphidation and sericitization.

• Quartz veins range from 10 cm to 10 m in thickness.

• Intersections of the main mineralized structure are up to 40 m thick.

• Alteration is dominated by sericite-chlorite-carbonate, which is characteristic of low-

temperature and low-pressure hydrothermal systems.

8.2 Porcupine

• Target hosted within a brittle deformation regime

• Mineralization is focused on the intersection of Kenge parallel and Saza parallel shear zones

within the Ilunga Granite.

• Gold mineralization is associated with a sheeted vein quartz, quartz/pyrite and pyrite fracture

system. Coincident pervasive mineralization and alteration of the granite host rock is

characterized by sulphidation and sericitization.

• Quartz veins range from 0.5 cm to 2 m in thickness.

• Mineralized structures may be more than 90 m thick.

• Alteration is dominated by sericite-chlorite-carbonate, which is characteristic of low-

temperature and low-pressure hydrothermal systems.

8.3 Konokono and Tumbili

Drilling on the Konokono and Tumbili targets is much more restricted than on Porcupine and Kenge,

with the majority of holes being drilled using an RC rig. The mineralization observed at these targets

corresponds broadly with the Porcupine system, however in both cases a number of different granites

are observed and significantly more mafic material is present.

8.4 Re-Os Dating

Helio has conducted Re-Os dating on molybdenite at the SMP. Kenge has recorded an age of around

1.93 Ga and Porcupine of 1.88 Ga. As such, the mineralisation at the SMP is more similar to deposits of

the Birimian in West Africa (e.g. Chirano and Ahafo deposits) than those elsewhere in Tanzania, which

are Archaean in age.


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9 EXPLORATION

9.1 Historic Exploration

9.1.1 Technoexport 1970-1974 (Luena et al 1974) The Soviet-Tanzanian Agreement of 1969 provided for Technoexport to render Tanzania technical

assistance in geological investigations including detailed prospecting for gold in the Lupa Goldfields. This

is thought to be the first systematic prospecting and evaluation of the Lupa. Table 9-1 gives the total

work conducted by Technoexport across the entire Goldfield.

Table 9-1: Work Conducted by Technoexport between 1970 and 1974.

Type of Work Unit Total Amount

Prospecting Traverses Km 450

Geochemical Survey Sample 1014

Heavy Concentrates Sample 7050

Channel Sampling Sample 2550

Drilling

For Reef Gold Meter 5636

For Alluvial Gold Meter 1525

Trenching Cubic Meter 4800

Pitting (inc. Cross cuts) Meter 3150

Geophysical Survey

Magnetics Stations 12742

Electrical Profiling Stations 17504

Vertical Electrical Sounding Stations 344

Technoexport reported non-NI 43-101 compliant reserves of reef gold across the Lupa Goldfields to be

33,988 kg, which could be increased with detailed exploration of several deposits, including Saza. Most

of the “reserves” were reported to be in the North Western part of the goldfield, and Technoexport

specifically noted that the closely localized deposits around the Gap mine and Nkutano (Helio targets

Gap and Reefski, respectively) were sufficient to operate a reduction plant, with additional ore added

from Saza. The report also recommended further exploration of the area.

Information from Luena et al 1974 has been used by Helio for initial regional target generation when

Helio first began work on the SMP. The whereabouts of core generated by Technoexport is unknown.


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9.1.2 Princess Resources / CSA Africa 1995-1999 (Henderson & Lewis: various

CSA Quarterly reports) Princess Resources held five PLs in the Makongolosi area in the mid to late 1990s, including ones that

correspond to Helio’s Ilunga and Kwaheri licences. Information on this work is fragmentary, however it is

clear the following activities took place:

• Remote sensing interpretation;

• Structural analysis;

• Geological mapping;

• Regional and detail soil sampling;

• Rock chip and trench sampling;

• RC and Diamond drilling.

Discussions with the inhabitants of the village, which was built out of the remains of the camp that CSA

operated out of, lead to the discovery of a large pile of core which had been emptied out of its trays –

none of this material is useful. A number of RC chip trays were recovered, however many were damaged

and missing material, and the holes which had the best grade were absent.

In Helio’s initial exploration over areas previously explored by Princess/CSA it became apparent that

there were major issues with CSA’s sampling methodology as well as accuracy and precision of their

ability to locate their samples and drill holes. Therefore, the work carried out by Princess/CSA has not

been used to assist in the formulation of Helio’s exploration strategy, other than in general terms.

9.1.3 Anglogold 1997-1999 (Smith & Sango Feb & Dec 2000) Anglogold Exploration Tanzanian Limited worked across eleven PLs in the Lupa Goldfields. These PLs

were owned by two separate companies, Tanganyika Gold Limited (TGL) and Dhahabu Exploration and

Mining. Anglogold entered in to separate JV’s with each company whereby their subsidiary, Anmercosa

Services (Eastern Africa) Limited, managed all exploration across all licenses. Exploration across all the

PLs was conducted between September 1997 and October 1999.

9.1.3.1 Tanganyika Gold JV work:

Of the nine licenses held by TGL only 5 have direct links to the SMP. The licence areas worked on

included those on Helio’s Gap, Saza and Saza West licences. Listed below is all the work conducted by

Anmercosa during the JV.

• Interpretation of regional airborne geophysical and Landsat image data

• Integrated structural analysis

• Landform and regolith mapping

• Sampling, trenching and drilling displayed in Table 9-2

Table 9-2: Work Conducted by Anmercosa between 1997 and 1999 across the 9 PLs belonging to TGL.


Regional Soil Grid Sample 5693

Detailed Soil Grid Sample 1578


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Rock Grabs Sample 191

Trenching Meters 1080

Trench Samples Sample 570

RAB Drilling Meter 5239

RC Drilling Meter 649

Diamond Drilling Meter 949.5

Anmercosa identified two areas of interest for detailed exploration: the Stockwork Zone and the Saza

Mine (Helio targets Konokono and Cheche, respectively). Anmercosa concluded that during their

exploration no significant gold mineralization worthy of follow up was identified. The JV was terminated

in 2000.

9.1.3.2 Dhahabu Exploration and Mining JV

The two PLs held by Dhahabu contained the Razorback and Gap mines. Listed below is all the work

conducted by Anmercosa during the JV.

• Interpretation of regional airborne geophysical and Landsat image data

• Integrated structural analysis

• Landform and regolith mapping

• Sampling, trenching and drilling displayed in Table 9-3

Table 9-3: Work Conducted by Anmercosa between 1997 and 1999 across the 2 PLs belonging to Demco.


Regional Soil Grid Sample 427

Stream Sediment sampling Sample 32

Rock Grabs Sample 74

Trenching Meters 726

Trench Samples Sample 367

RAB Drilling Meter 4513

Anmercosa targeted the Saza mine (Helio’s Cheche and Kenge targets) for detailed exploration, and

concluded that during their exploration no significant gold mineralization worthy of follow up was

identified. The JV was terminated in 2000.

Anmercosa’s data that has been obtained by Helio has been digitized and where possible ground

truthed. The data is in relatively good order; however it has not been used by Helio for any other

purpose than to carry out initial regional target generation when Helio first began work on the SMP. The

whereabouts of the drill core generated by Anmercosa is unknown.


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9.2 Exploration Conducted by Helio Resource Corp.

Helio began exploration operations on the Saza PL (PL2580/2004) in April 2006. In the last quarter of

2006 the Gap, Kwaheri and Ilunga PLs (2963/2004, 2964/2004 and 2965/2004 respectively) were added

to the SMP project and initial field work was conducted. In October 2008 the Saza West PL (5326/2008)

was added to the project and the SMP attained the dimensions it currently has.

Since the beginning of exploration activities in 2006 a number of geophysical, geochemical, drilling and

remote sensing exercises have been conducted across the SMP. In addition to work conducted by BTL

there have been a number of occasions where BTL has used contractors to assist. Exploration conducted

on the SMP since 2006 is summarized in the following tables:

Table 9-4: Regional soil geochemistry

Table 9-5: Detailed soil geochemistry

Table 9-6: Geophysical surveys

Table 9-7: Airborne Magnetic and Radiometric geophysical surveys

Table 9-8: Drilling: holes by PL

Table 9-9: Drilling totals

Table 9-10: Metallurgical testing

Table 9-11: Work conducted by contractors

In addition to the work listed in the tables below Helio has also conducted mapping exercises of varying

complexities over many areas and specific targets within the SMP at all stages of the project to date.

During this field work a total of 548 rock samples have been collected and analysed. Table 9-4: Regional soil geochemistry.

PL Year Samples Specifications

Gap (2963/2004) 2007 866* 250m x 250m offset grid

Kwaheri (2964/2004) 2007 865* 250m x 250m offset grid

Ilunga (2965/2004) 2007 843* 250m x 250m offset grid

Saza (2580/2004) 2007 865* 250m x 250m offset grid

Saza West (5326/2008) 2008 565* 250m x 250m offset grid

*Note that the number of samples includes duplicate samples and CRM inserted for QA/QC.


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Table 9-5: Detailed soil geochemistry.

PL Year Target Samples Specifications

Gap (2963/2004) 2007 Dubwana 245* 50m x 100m offset grid

Kwaheri

(2964/2004)

2007 Panya 258* 25m x 100m offset grid

Saza South

(4963/2008)

2008 Tumbili 1,087* 25m x 100m offset grid

Combined

Programme

Saza East

(7143/2011)

Ilunga (2965/2004)

Saza (2580/2004)

Saza South

(4963/2008)

2011

Saza East And

surrounds

2880* 1358* 503* 288*

25m x 200m offset grid

* Note that the number of samples includes duplicate samples and CRM inserted for QA/QC

Table 9-6: Geophysical surveys. PL Year Method Line km

Saza (2580/2004) 2006 IP – Gradient Array and Pole-Dipole. Magnetics 130

Saza (2580/2004) 2007 IP – Gradient Array. Infill lines 8

Saza (2580/2004) 2007 Magnetics 50

Gap (2963/2004) 2007 IP – Gradient Array 78

Kwaheri (2964/2004) 2007 IP – Gradient Array 130

Ilunga (2965/2004) 2007 IP – Gradient Array 50

Table 9-7: Airborne Magnetic and Radiometric geophysical surveys.

Year Line km Specifications

2007 1130 200m line spacing, 20-30m elevation (terrain dependent)

2009 5290 50m line spacing, 20-30m elevation (terrain dependent)

*Note that in 2007 the SMP consisted of the Saza, Gap, Kwaheri and Ilunga License, whereas in 2009 it also

included Saza West. The airborne surveys covered all license areas which were operated by Helio at the time of

flying.

Table 9-8: Drilling: holes by PL.

2006 2007 2008 2009 2010 2011

Total

PL

RC DD RC DD RC DD RC DD RC DD RC DD

Saza

(2580/2004) 33 6 88 67 112 12 2 17 11 348

Kwaheri

(2964/2004) 3 23 26 52

Gap

(2963/2004) 6 20 41 100 20 31 31 50

299


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Ilunga

(2965/2004) 16 16

Makongolosi North

(5990/2009) 5 33 38

Saza South

(4963/2008) 16 4 36 56

Saza West

(5326/2008) 25 10 35

Saza East

(7143/2011) 37 37

Total Year 33 6 97 67 20 153 160 27 133 35 73 77 881

Table 9-9: Drilling totals.

Year RC holes RC meters DD holes DD meters Total holes Total meters

2006 33 3,138 6 1,027.55 39 4,165.55

2007 97 8,531 67 9,485.82 164 18,016.82

2008 20 1,621 153 27,177.85 173 28,798.85

2009 160 15,049 27 8,945.45 187 23,994.45

2010 133 12,136 35 7,809.2 168 19,945.20

2011 73 6561 77 10,200.17 150 16,761.17

2013 4 781.81 4 781.81

Total 519 47,973 373 65,273 892 112,246

Table 9-10: Metallurgical testing. See Section 13 for detail metallurgical reporting. PL Job Number Drill Material Date of Report

Saza (2580/2004) 11940-001 50kg Composite of SZD011, 013 & 021 August 2008

Saza (2580/2004) 11940-002 Remaining material from job 11940-001

(SZD011, 013 & 021)

May 2009

Gap (2963/2004) 11940-003 50kg of material from GPD004 August 2009

Table 9-11: Work conducted by consultants.

PL Contractor Work Conducted Date

Saza(2580/2004) Dave Coller Study of structural controls of Au

mineralisation in the Kenge target

April 2008

Gap 2963/2004) SRK Consulting Study of structural controls of Au

mineralisation in the Porcupine target

January 2010

All SMP Impel Geoscience Study of structural controls of Au

mineralisation across the SMP

July 2010


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10 DRILLING

Helio has undertaken ten drilling campaigns on the SMP. Table 10-1 displays statistics of each campaign.

Helio has utilized diamond core and reverse circulation drilling (DD and RC, respectively) across the SMP,

using the two methods for specific aspects of exploration.

RC drilling is mainly utilized as a first pass exploration tool: once a target is identified through

geochemical, geophysical or mapping work an RC rig will be used to drill exploratory drill fences which

allows the Company to quickly test large areas of ground at moderate expense.

Diamond core drilling is used mainly to follow up any discoveries made by RC drilling. The DD rig will in

most cases replicate the original RC hole to confirm the original drilling and assess the degree of

upgrade in assay figures which is frequently seen when comparing RC to DD grades. If the repeated hole

confirms the discovery in the RC hole a grid pattern will be drilled around the discovery hole to assess

the strike and dip extensions of the discovery. If a discovery is significant then a drill plan will be

designed on a local grid to regulate the drilling in the area.

On occasion access and availability constraints will result in RC and DD rigs swapping roles so as to

enable first pass and detailed drilling in areas which are off limits to the machines that would normally

be used.

Table 10-1: Drilling programmes on the SMP to December 2011.

Year Company Rig Type Holes Meters

2006 Major Drilling Tanzania KL150 RC 33 3,138

Geo-logical Drilling Ltd Longyear 38 DD 6 1,027.55

2007 Stanley Mining Services Ltd UDR650 RC 97 8,531

Geo-logical Drilling Ltd Longyear 38

Longyear 44

DD 67 9,485.82

2008 Capital Drilling Tanzania Ltd KL600 RC 20 1,621

Geo-logical Drilling Ltd 2 x Longyear 38’s

Longyear 44

2 x Goldenbears

DD 153 27,177.85

2009 Tandrill Ltd Smith Capital 10RSH RC 160 15,049

Geo-logical Drilling Ltd Goldenbear DD 27 8,945.45

2010 Tandrill Ltd Smith Capital 10RSH RC 133 12,136

Geo-logical Drilling Ltd Longyear 38

Goldenbear

DD 35 7,809.20

2011 Layne Drilling Ltd RC 73 6561

Geo-logical Drilling Ltd 2 x Longyear 38 DD 77 10200.17

2013

Geo-logical Drilling Ltd Longyear 38 DD 4 781.81

TOTAL 892 112,246

Of the 892 holes drilled all but 51 were surveyed using digital down-hole survey tools. Major Drilling did

not survey their work, neither did Capital Drilling (however two of the holes drilled by Major Drilling


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were subsequently surveyed by Geo-Logical in order to replicate discovery holes). The following tools

were used by the other drilling contractors:

• Geo-logical Drilling: Reflex

• Stanley Mining Services: Flex-it

• Tandrill: Reflex

• Layne: Flex-it

Of the 373 diamond drill holes, 86 were drilled using orientation equipment, 16 using Ezi-Mark tools, 70

with a Reflex Act tool. All holes are located during drilling using a standard handheld GPS. Once the rig

has vacated the site a DGPS unit is used to record an accurate and precise set of X, Y and Z coordinates.

10.1 Reverse Circulation Drilling

Set practices are described in Helio’s standard operating procedures regarding the operation of an RC

rig. This section summarises the procedures.

10.1.1 Positioning of RC drill holes The vast majority of RC drilling conducted by Helio takes the form of fence drilling. Once a target is

identified a line of RC holes is planned, the holes are positioned so that there is an overlap at the top

and bottom of each hole. Figure 10-1 illustrates how an RC fence allows for precise quantities of drilling

to be planned and executed whilst ensuring anomalous zones (picked out in blue) are sampled

regardless of the spatial extent of the zone compared to the length of the hole.

Figure 10-1: Illustration of an RC drill fence: drill holes in black, anomalous zone in blue.

In rare instances there may be factors which require an RC rig to drill single holes, in which case the

target is thoroughly surveyed and a cross section drawn up to ensure the hole is drilled to sufficient

depth to intersect any postulated zones of mineralization.

10.1.2 RC Drilling Procedures


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The material produced by an RC rig is collected directly from the machine’s cyclone by a Helio employee

by the meter in specially prepared and marked rice sacks. To minimise down-hole smearing of anomalies

the driller is instructed to lift the rod string slightly and blow out the hole after every meter is drilled.

Once removed from the cyclone the sample weight is recorded

The drilling contractor is required to clean out the cyclone at least between holes, or at the end of the

day. If significant water is intersected in the hole the cyclone is cleaned more regularly.

The sampling/logging area is located up wind of the machine to minimise contamination from dust

released during the drilling process. Except where there are small amounts of recovered material or

where the sample is wet (in which case pipe sampling is used) all material is passed through a three-tier

riffle splitter to homogenize the sample and reduce it to a suitable size. Depending on the size of the bit

used to drill the hole, the remaining 1/8th portion of recovered material results in a sample size of 2 kg

to 4 kg.

In order to maximise the detail of sampling in each hole whilst at the same time minimizing the cost of

sample transportation and analysis, RC holes are composited into 2m samples. Usually, 2 m composite

samples are made up from consecutive sub-samples, which are homogenized through the splitter. This

results in two samples being collected: a 2m composite laboratory sample; and a 2 m composite

reference sample which is stored by Helio.

To reduce the possibility of cross contamination between samples, a compressed air gun using the HP

take-off from the rigs compressor is used to clean the splitter between samples. Where this is not

possible, stringent (water-free) efforts to clean the splitter are made to reduce the possibility of cross

contamination.

Lithological logging is conducted using washed chips which are subsequently stored by the meter in a

chip tray. Lithological observations are recorded using prescribed forms and standard lithological codes.

Helio has modified the Australian Gological Survey Organisation (AGSO) drill codes to give a standard

Helio Code for each meter drilled. In addition to the chip tray which is stored in the Mkwajuni office

upon completion, a chip pad of material is created for each hole: drill chips (washed in a sieve) from

each 1m drill sample are piled next to the dust from the same sample in the order in which they are

drilled. A photograph of the chip pad is taken in uniform lighting which will give a record of both the

solid and powdered colours of the material drilled (Figure 10-2).


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Figure 10-2: RC chip pad.

At all times sample integrity is paramount. Should the production rate of the rig surpass the sampling

rate then all logging exercises are suspended to ensure that the sampling procedure is rigorously upheld.

Magnetic susceptibility is measured from the initial 1m rice sack sample where possible. If the speed of

drilling is such that this operation must be suspended then the measurements are taken from the 2 m

composite reference sample.

RC holes are routinely surveyed to record azimuth and dip. Holes will be surveyed at approximately 15 m

depth to confirm that the set-up of the rig is correct, a survey at the base of the hole is also taken to

confirm the path of the hole. In holes longer than 100 m a third survey is taken midway down the hole.

10.2 Diamond Drilling

Set practices are described in Helio’s standard operating procedures regarding the operation of a

diamond core rig. This section summarises the procedures.

10.2.1 Positioning of DD holes Diamond drilling is usually conducted as a follow up to RC drilling: once a target has been confirmed by

analysis of RC material a DD rig will be mobilized to re-drill the RC hole to replicate the results. The vast

majority of DD holes drilled are part of a plan which is devised around the known and postulated extents

of mineralized areas. Should a target show good potential for strike and dip extent a ‘mine grid’ is

generated, usually on 25 m x 25 m centres which allows for systematic drill location on a variety of

scales.


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In rare instances a DD rig may be used as a first pass exploration tool, in which case fence drilling

programmes (like those described for RC drilling) may be under taken. Alternatively a DD rig might be

used to test new targets in which case the target area is thoroughly investigated and a cross section

drawn up to ensure the hole is drilled to sufficient depth to intersect any postulated zones of

mineralization.

10.2.2 Diamond Core Drilling Procedures: Once recovered core has been reconstructed and cleaned it is placed in a core tray with a core block

introduced to the core string after each drill run. All core boxes are labelled with the hole number, box

number and from / to metreage. Should a core orientation tool be used on a hole the reorientation and

marking of the bottom line on the core is completed prior to the core being inserted into the core tray.

Any artificial core breaks made by the drillers are clearly marked so as to give an indication of fractures

not to be included in RQD measurements.

Once the core is cleaned, reconstructed, marked and in the core tray it is stacked at the drill site and

removed to the core processing site regularly. Core is transported in a metal frame which holds the core

trays safely in place. Each tray is covered with a thick layer of foam padding to stop the core from

moving during transportation.

On arrival at the core processing site a ‘quicklog’ is immediately completed by the geologist. This allows

the geologist to keep track of the progress of the rig; complete processing and logging of the core is a

lengthy and intricate process, by having a quick log to hand the geologist is able to give progress reports

to superiors and make sure the rig is kept working on schedule.

Geotechnicians receive the core at the processing site once it has left the drill site. The core is given a

second, thorough clean and is then reconstructed and compressed to provide the most accurate

depiction of the rock as it was in situ. Where orientated core is being handled the core is reconstructed

and the bottom of core mark extended to its fullest extent, whilst comparing the bottom of core mark

up and down hole to the next bottom of core mark. Where core is un-orientated or orientations are not

possible an arbitrary line is drawn on the core in a different colour. The lines on the core (orientated or

un-orientated) are used as cutting guides when the core is split for sampling.

Using the core blocks inserted at the bottom of each core run the core is meter marked to aid with

logging and sampling. At this stage the core is photographed dry and wet so a record of the core in its

original state is created.

Once the core has been fully prepared and photographed a number of different logs and processes are

recorded:

10.2.2.1 Lithological log

All holes are subject to a comprehensive lithological log. The log records depth, lithology, contacts,

structure, alteration, veining, and mineralization. Logging of core is done using prescribed forms and

standard lithological codes. Helio has modified the AGSO drill codes to give a standard Helio Code


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10.2.2.2 Structural log

If the core is orientated the α, β and γ angles are measured for contacts, fractures, veins, foliations,

lineations and any other structure found in the core.

10.2.2.3 Sample log, prep and dispatch

Sampling regimes differ depending on the knowledge of a target. If the target has not been drilled or the

understanding of the target is poor then the entire hole is sampled. If there is a strong understanding of

mineralization controls at the target then zones of interest are sampled continuously; the area has a

bracket of sampling around it appropriate to the size of the zone. Areas believed to be barren are

sampled at least once per box.

Once samples are defined the core is split, the samples bagged and dispatched to the laboratory (see

section 11)

10.2.2.4 Core Recovery and RQD log

Core recovery percentage is determined by comparing the measured length (ML) of the core between

two core blocks and dividing it by the indicated length (IL) noted by the driller on the end of run core

block (ML/IL x 100 = core recovery %). The quality of the core is defined as the percentage of core

recovered during drilling, counting only those pieces of intact rock over 100mm long.

10.2.2.5 Magnetic susceptibility log

Magnetic susceptibility readings are taken at each meter on the meter. Additional readings are taken

over anomalous zones where these do not coincide with the default 1 meter spacing.

10.2.2.6 Specific Gravity log

The SG of each sample taken is measured (unless the sample would not survive immersion in water).

Each piece of half core in the sample has a number written on it to aid with reconstructing the core once

the SG is measured. The sample is weighed in air, and again in water and the following calculation used

to calculate the SG of the sample: SG = weight in air / (weight in air – weight in water)

Diamond core holes are routinely surveyed to record azimuth and dip. Holes will be surveyed at the top

of the hole at the start of drilling to confirm that the set-up of the rig is correct, a survey is taken every

50m down-hole and a final survey is taken at the base of the hole to confirm the path of the hole.


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11 SAMPLE PREPARATION, ANALYSES AND SECURITY

11.1 General

Prior to arrival at the work site all Helio employees involved in taking any type of samples for laboratory

analysis are required to remove any metal rings and bracelets or any item of clothing or jewellery which

has potential to bias analysis.

Samples submitted to any laboratories are given sample numbers along with instructions for

preparation and analysis. No information is transmitted which would allow a laboratory to

geographically locate the sample, or to aid in the identification of duplicate, Certified Reference Material

(CRM) or blank samples.

CRM is obtained from Geostats PTY Ltd of Perth, Australia. Blank material is created by Helio using

stored reference RC material which is known to have null values and not be proximal to areas of known

mineralization; numerous null-grade reference samples are homogenised and multiple random samples

of the resulting blank are sent for analysis to confirm that the gold content of the blank is zero before it

is introduced into general usage.

11.2 Soil Sampling

Soil geochemistry has been used as a regional and targeted exploration tool within the SMP. Regional

soil sampling is conducted on a 250 m x 250 m offset grid. Where large areas have returned good soil

geochemistry results, detailed soil sampling grids have been carried out with associated mapping and

rock sampling. Detailed soil grids have been conducted at 25 m x 100 m, 50 m x 100 m and 25 m x 200 m

offset grids.

The entire SMP has been covered by regional soil sampling: 4,004 samples were collected. 6,619 soil

samples have been collected on detailed soil grids over the Panya, Dubwana and Tumbili targets, as well

as over the entire area of the Saza East PL and its surrounds (note: these figures include QA/QC

samples.)

Samples are collected on a pre-determined grid, sample sites are moved only if the site was in a stream

or river bed, or if it was directly on top of outcropping rock. Should the sample site not be suitable the

closest suitable site is identified and sampled, the new coordinates are noted. Prior to the

commencement of the sampling programme duplicate and CRM samples are added alternately every 25

samples to the sequence to assist in Helios’ QA/QC regime.

Each soil sample was collected from a hand-dug pit to the soil-rock interface, or where this was not

reached, a depth of 50 cm. Soil from the base of the pit is sieved and approximately 100-150 g of the -

250 µm fraction is retained for analysis. Should a sample be damp when excavated a 3 kg bulk sample is

collected, this material is then dried and sieved to collect the sample. The -250 µm fraction is placed in a

wire sealable ‘kraft’ sample packet, which in turn is enclosed in a plastic zip-lock bag and boxed for

shipment.


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Helio submits soil samples to Acme Laboratories in Vancouver, Canada for 36 element aqua regia

digestion ICP-MS analysis, Group 1DX, which has a lower limit of detection (LLD) of 0.5ppb for Au.

11.3 Rock Sampling

Rock sampling is conducted in one of two ways: channel sampling and grab sampling. Of these two

methods grab sampling has been used for the vast majority of rock sampling conducted to date on the

SMP.

A channel sample is conducted by collecting a continuous set of rock chips across a specified length of

outcropping rock. This is a difficult operation to achieve without introducing a bias to the results without

the use of a motorised channel sampler; every effort is taken not to introduce sampling bias when

carrying out a channel sample with a geological hammer. For this reason channel sampling is not

frequently conducted by Helio.

Grab samples are a representative collection of 1-2 kg of rock taken from 20-50 m of the sample site.

Samples are double bagged securely in durable plastic bags labelled inside and out with the sample

number. A sample tag is also included in the bag, which is secured using cable ties.

Samples are submitted to African Assay Laboratories (Tanzania) Limited, Mwanza, Tanzania (which is

part of the SGS Group) for fire assay with AAS finish.

11.4 Reverse Circulation Sampling

When an RC hole is drilled the entire length of the hole is sampled. Whilst planning the sampling

sequence the geologist will use a ready printed form which has designated samples which will be either

CRM, blank material or duplicate samples. In a 54 sample sequence two CRM, two duplicate and one

blank sample will be inserted. As well as the ready printed sample sheet a waterproof 3-tag sample book

is used; one tag is inserted inside the sample bag that is sent to the laboratory, one inside the reference

sample bag, and the third tag remains in the book as a second record of the sample sequence.

Material is collected from the cyclone in a plastic lined polyweave ‘rice sack’ which has meter numbers

marked on it. The rice sack is secured to the cyclone using a length of rubber bungee cord. The driller

indicates to the BTL employee manning the cyclone when a meter has been completed who removes

the rice sack from the cyclone. The driller will then lift the drill string from the base of the hole and blow

the hole out to reduce any down-hole smearing caused by residual heavy minerals in the hole. Once the

hole is cleared the bag for the next interval is attached and drilling recommences.

The cyclone is cleaned between holes and whenever an obvious build-up of material is observed,

especially if the sample is damp/wet.

The rice sack containing the recovered material is weighed and then is moved away from the rig to the

sampling and logging area which is located upwind of the machine. Recovered material usually weighs


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30 to 40kg depending on the diameter of the drill bit. Weighing the recovered material not only gives an

indication of the density of the material recovered, but also serves as a check to ensure the driller is

measuring meters drilled accurately and correct sample return is being produced.

Recovered material is homogenised and reduced to a usable quantity by being processed in a 3-tier riffle

splitter (Figure 11-1). The one-eighth split is retained, the other 7-eighths are returned to the rice sack,

which is then removed from the sample area and put in consecutive order with the material drilled from

the previous meter sampled.

Figure 11-1: Riffle Splitting.

Prior to the drilling of the hole the geologist in charge of drilling will fill out a sample sheet and sample

tag book for the hole. Each sample is a composite of two consecutive meters, therefore each sample will

have two sample bags prepared, one of which is marked as a reference sample. Once the drilled material

for the first meter of the sample has been split the retained material is placed in the first sample bag.

When the second meter of the sample has been split and placed in the reference sample bag both sets

of material are passed through a single split, thus homogenising the two separate meters into one single

sample. The two splits of this 2 m composite sample are then returned to the two sample bags, the

sample which is being submitted to the laboratory is always taken from the same side of the splitter.

Sample tickets are added and the bags securely sealed. Once 10 samples (20 m of drilling) have been

collected they are placed inside marked rice sacks. The samples are sent for analysis in the next sample


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shipment, the material marked as reference is stored by BTL as insurance against accident or loss of the

original sample, or for further analytical work in the future.

Occasionally, water is encountered in RC holes. If water ingress is minimal, then the hole can continue,

but if significant water is encountered, the hole is abandoned to reduce the potential for down-hole

contamination. Where material is recovered wet, pipe sampling is used so as not to contaminate the

riffle splitter. After mixing and homogenising the material comprising the sample, the rice sack

containing the sample is laid flat on the floor and its contents are evened out. A PVC pipe with an

internal diameter of 45 mm is inserted into the bag as shown in Figure 11-2 to obtain a representative

sample of the meter drilled.

Figure 11-2: Pipe sampling procedure.

11.5 Diamond Core Sampling

Once DD core has been returned to the processing site it is cleaned, marked, photographed and has

geotechnical and lithological logging conducted on it. When planning the sampling sequence the

geologist will use a ready-printed form which has designated samples which will be either CRM, blank

material or duplicate samples. In a 54 sample sequence two CRM, two duplicate and one blank sample


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will be inserted. As well as the ready-printed sample sheet a waterproof 3-tag sample book is used; one

tag is stuck inside the core tray to indicate the sample specifications, one is inserted inside the sample

bag that is sent to the laboratory, and the third tag remains in the book as a second record of the

sample sequence.

Sampling of core is conducted using the following conventions:

1. Zones of interest are sampled continuously; the area is bracketed by sampling around it

appropriate to the size of the zone.

2. Areas believed to be barren are sampled at least once per box (seven metres or so).

3. Samples are taken from the meter (or half meter) mark cut. Sampling is not conducted

according to lithology. Sample intervals are cut perpendicular to the axis of the core.

4. HQ core is sampled at 2 m, 1 m or 0.5 m intervals, depending on the interest of the rock.

The obvious ore intervals are sampled more often.

5. NQ core is sampled at 2 m or 1 m intervals, depending on the interest of the rock. The

obvious ore intervals are sampled more often.

6. When a sample cuts across change in core size the length of each type of core in the sample

is recorded.

7. Areas of extreme core loss, where there is insufficient sample to submit to the lab, are

composited into the nearest appropriate sample.

8. A sample is always taken at the end of the hole.

9. Holes drilled on new targets are sampled in their entirety until written instruction from

Chief Operations Officer specifies otherwise.

Point 3 was adopted in 2008; core sampled prior to this was sampled according to lithology. Core

recovery from the SMP is approximately 95%.

Once the geologist has identified the areas to be sampled, sample tags are inserted into the core box at

the start of each sample and secured in place with a sticker which has the interval marked on it. The

core itself is marked with the sample number and the half which is to be submitted to the lab is clearly

marked using a grease pencil. Core is split using CorStore core splitters and Almonte automated core

cutting machines. After any area of mineralization where gold has been observed has been split, a

cleaning block will be cut afterwards, to avoid any potential contamination of the following piece of

core. The core is split along the bottom-of-hole line when the core is orientated, or along the arbitrary

centre of core line where it is not. Once split the core is returned to the core tray and once all core that

requires cutting in the tray is split, the core tray is removed from the cutting room and on to the

sampling benches.

The same half of the core is submitted for all samples to ensure no bias is introduced as it is usual that a

core splitter will not split the core exactly in half. Core is double bagged in durable plastic sample bags

along with a sample ticket. Prior to packaging for transportation the samples are photographed for

reference.

In total 35,372 (from a combine total of 58,852) samples have been generated with diamond drilling.

This figure exclude CRM, Blank and duplicate samples, as well as samples which have been resubmitted

to laboratories for umpiring. Samples are submitted to African Assay Laboratories (Tanzania) Limited,


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Mwanza, Tanzania which is part of the SGS Group for fire assay with AAS finish. Screen fire assay and ICP

work is conducted on selected samples at Acme Laboratories in Vancouver, Canada and Genalysis

Laboratory Services, Perth, Australia respectively.

11.6 Sample Storage and Dispatch

The collection and processing of all samples prior to dispatch to laboratory is conducted by Helio

employees.

Duplicates, CRM and blank material are inserted into all sample sequences before dispatch to

laboratory.

All sampling is divided into batches; one batch is an entire drill hole, collection of related rock samples or

collection of related soil samples. Samples are submitted using a standardized laboratory submission

form which lists the sample numbers, type of material and analysis required and batch number.

Drilling samples are stored outside at the Mkwajuni Office. After the collection the samples are

stockpiled in a designated covered area within the core processing area which is a fenced and gated

area inside the secure Helio office compound in Mkwajuni. The compound is patrolled 24 hours by

guards from the Security Group Tanzania Limited. Access to the core processing area is restricted to

Helio employees.

All drilling samples are initially submitted to Africa Assay Laboratories (AAL) in Mwanza, and are

transported from site to the laboratory in a secure truck provided by Kanji Lalji Limited. Individual

samples bags are double bagged inside polyweave ‘rice sacks’ and a photograph of each hole is taken as

a record of what is dispatched. Samples arriving at AAL are checked into the laboratory against the

laboratory submission form provided both electronically to the laboratory and by hard copy which

accompanies the samples. AAL provides Helio with sample reconciliation data which lists samples

received, as well as additional or missing samples if such situations arise.

Samples which are sent to laboratories outside of Tanzania must be examined by the Madini and cleared

for exportation. Upon Clearance the samples are securely packaged and secured inside the

transportation container with an official wax seal, the samples are then dispatched to their destination

via courier.

11.7 Laboratory Procedures

11.7.1 African Assay Laboratories (AAL) AAl are based in Mwanza, northern Tanzania and are part of the SGS Group. AAL’ Mwanza laboratory

operates a quality system that has been accredited to ISO/IEC 17025 standard in other countries. The

laboratory also participates in numerous formal proficiency testing and round robin reference material


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certification programs. AAL applies quality control procedure by inserting CRM and duplicate analysis

into submitted sample sequences.

Samples are weighed on receipt, recorded and reported. RC and DD material is dried in trays, crushed to

a nominal 2 mm using a Jaw Crusher and Cone Crusher, then approximately 1 kg is split using a Jones

type riffle. Rejected material is retained in the original bar. The split is pulverised in a chrome steel bowl

to a nominal 75 µ. A 50 g sub-sample is taken for assay, with the pulverised residue retained in a plastic

bag.

The 50 g sub-sample is fused with a litharge based flux in a ceramic crucible, the resulting glass bead is

dissolved in aqua regia and the quantity of gold in the sample is determined by flame AAS. The detection

limits of this analysis is 0.01 ppm to 100 ppm.

Rejected course and pulped material is returned to the Helios’ Mkwajuni office compound in returning

sample trucks. It is catalogued and stored for later resampling. Once all work has been completed on the

samples and at least 6 months has elapsed permission is sought from the Helios’s Chief Operations

Officer to dispose of unwanted material. Samples that are part of mineralized zones are retained.

11.7.2 Acme Laboratories Acme Laboratories Vancouver attained ISO 90001 accreditation in 1996 and maintained their

registration in good standing since then. Work is ongoing to attain ISO 17025:2005 accreditation.

Helio uses Acme for ICP-MS analysis of soils and pulp materials.

Soils are dried at 60˚C to minimise the loss of volatile element and are screened to -180µ. Preparation of

soils is conducted in a specific part of the laboratory which is exclusive to soils, till and sediment. Aqua

regia is used to digest the sample and ICP-MS used to determine the values for 36 elements.

Acme applies quality control procedure by inserting CRM and duplicate analysis into submitted sample

sequences.

11.7.3 Genalysis Laboratory Services PTY Ltd Genalysis Laboratory services are part of the Intertek Group. Genalysis holds ISO/IEC 17025 (which

includes ISO 9001: 2000) accreditation.

Helio uses Genalysis to umpire results generated by Analabs. Reference RC material or diamond drill

core is submitted for screen fire assay; both the course fraction and the screen mesh used to screen the

fine fraction are also analysed to ensure any unacceptable sampling error from coarse gold is resolved.

Genalysis applies quality control procedure by inserting CRM and duplicate analysis into submitted

sample sequences.


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11.8 QA/QC

In order to carry out QA/QC protocols on the assays results, blanks; standards and duplicates were

inserted into the sample streams. Various statistical analyses were done on the standards, blanks and

duplicates verifying the integrity of the sampling procedures and assay results. CCIC MinRes received an

excel spreadsheet database from Helio containing a total of 65,392 samples. Of the 62,805 samples,

3,953 were blanks, field duplicates and Certified Reference Material, representing an insertion ratio of

just over 6%. Errors with regards to database entries were also checked to ensure consistency in the

database.

11.8.1 Database Errors

Checks were done on database entries to ensure that standard names are properly captured. There

seems to be a lack of consistency with regards to standard names. For example, G 302-2 has four

different names in the database i.e. 3022, G030222, G302 and G3022. Whilst not material in nature, this

has been rectified for the purpose of this study, but needs to be prevented in future.

Table 11-1: Database errors.

CRM Name Names in database

G302-2 3022, G03022, G302, G3022

G303-8 G303, G3038

G305-1 3051, G3051

G306-1 3061, G3061

G306-4 G3064

G307-3 G3073

G310-10 G31010

G310-4 G3104

G399-2 G3992

G901-7 9017, G9017

G901-9 G9019

G902-1 9021, G9021

G998-6 G9986

G999-4 9994, G9994

GAP 02 GAP02, GAP2

GAP 03 GAP03, GAP3

GAP 04 GAP04, GAP4

GAP 07 GAP07, GAP7


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11.8.2 Blanks

Blank samples are inserted into a sampling stream with the primary purpose of tracing sources of

artificially introduced contamination. Blank samples usually carry grades below detection limits. A total

of 1,333 blank samples were taken by Helio, which equates to approximately 1 in 50 insertion ratio. A

detection limit was set at 0.01 ppm gold for the purpose of this exercise. To verify the reliability of the

blank samples, the detection limit and the blank + 2, and 3 times the detection limit were plotted

against the blank samples (Figure 11-3). The plot shows that there are a number of blank samples that

have concentrations exceeding + 3 times detection limit threshold, however majority of the data points

are within acceptable limits. Those samples exceeding +3 times detection limit are attributed to the

insertion of mineralised RC material instead of blank as a result of a technician error. Following their

discovery of this, Helio changed it’s procedures and later blank values are more acceptable. Since 2011

when “salted” blanks were introduced into the QA QC procedures by Helio, all blanks have been

measured to 1kg, the same weight as a salted blank, in order that the lab cannot differentiate the two.

Figure 11-3: Blanks plot.

11.8.3 Salted Blanks

From 2011, in an attempt to increase scrutiny of the laboratory, Helio began using “salted” blanks.

These consist of a normal blank sample, 1kg, to which is added a Geostats prill of known grade. Four

prills are used, GAP-02, GAP-03, GAP-04 and GAP-07.


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Because blank samples are easily identified at the laboratory, the aim of salted blanks is to verify that

the laboratory is following the proper preparation and analytical procedures when blank samples are

submitted. These prills are inserted into a known weight of blank material. The expected grade of the

resulting “salted” sample therefore depends on process that the laboratory follows in preparing and

assaying the sample. According to Geostats, the standard deviation for each salted blank is 5% of the

target value; therefore two standard deviations would correspond to ±10% difference of the target

value. As illustrated by Figure 11-4, Figure 11-5, Figure 11-6 and Figure 11-7, although these results

show fluctuations, they are adequately distant from detection limits. However, it is important to realise

that the prill is inserted to the blank without being broken up, and therefore depending on the

preparation may not necessarily be detected, e.g. if the sample is riffled early on and not adequately

crushed, the prill may report to the reject material.

Figure 11-4: Graph showing gold concentrations as analysed in GAP02.


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11.8.4 Standards

The database contains at least 31 different Certified Reference Materials (CRMs), with the number of

analyses for each standard ranging from zero to 372. For this study, only 14 standards were considered;

all sourced from Geostats Pty Ltd in Australia.

Each standard has a recommended/certified value, Standard Deviation and a Confidence Interval value

from Geostats. To check the reliability of the results obtained for each standard submitted for analyses,

the recommended CRM value was plotted in a graph that included the upper and lower limits of one,

two and three times the Standard Deviation of said standard. Each result from the lab would be plotted

in the above mentioned graph to check how it compares with values recommended by Geostats. For a

result to be deemed ‘acceptable’ it must fall within the upper and lower limits of two Standard

Deviations. The results of this exercise are shown in the Figure 11-8 to Figure 11-21 below.


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Figure 11-8: Graph showing gold concentrations as analysed in CRM G302-2.

372 samples were submitted for analyses as G302-2, of these 6 (1.6%) returned values below two

standard deviations of the mean while 9 (2.4%) were above the two standard deviations threshold. The

majority of the samples lie within one standard deviation.


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A total of 85 G303-8 samples are present in the database, 3 (3.5%) are below the two standard

deviations lower limit. Two (2.4%) of the samples are above the two standard deviations upper limit.

One sample has a grade of 2.53 g/t which is closer to the certified value of G302-2 (2.50 g/t), leading to

an assumption that said sample might have been incorrectly labelled.



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5 (2%) of the 255 sampled G305-1 CRMs had grades below the 2 standard deviations lower limit while 7

(2.75%) are above the upper limits. 86% of the samples have values equalling or below the certified

value of 0.21 g/t, implying a negative bias.


312 samples were analysed as G306-1, one had no result. 5 (1.6%) samples were below and 5 (1.6%)

were above the upper and lower limits of two standard deviations of the mean, respectively. The data

appear to be evenly distributed, showing no indication of bias towards high or low values.


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Data for G306-4 show a bias towards the lower values, indicated by 76% (247 out of 326) of the samples

being less than the certified value of 21.57 g/t. 10 % of the samples lie below two standard deviations of

the mean while 1.2% of the samples are above the upper limit. This CRM has the highest grade of all the

CRMs used by Helio at SMP.


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All samples for G307-3 lie within the lower and upper limits of two standard deviations. All, bar three

samples, are greater than the certified value for G307-3 which is 0.24 g/t.



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There were 12 samples for G310-10, all of which fall within the limits of two standard deviations of the

mean. All are greater than the certified value indicating a bias towards higher values.


The database contains 12 G310-4 samples. Only 1 (8.3%) sample is greater than the upper limit of the

two standard deviations of the mean.


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63 G399-2 samples are present in the database, 2 (3.1%) samples lie on both sides of the upper and

lower limits of the two standard deviations limits. The majority of the samples appear to be equal or

greater than the certified value of G399-2.



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Data for G901-7 shows that majority of the values lie below the blue line, but within 2 Standard

Deviations. 2.7% (8 out of 298) and 0.7% (2 out of 298) of the samples are lower than the lower limit and

greater than the upper limit of the two standard deviations threshold, respectively.


The majority (73.2%) of the 41 G901-9 samples are equal or less than the mean certified value. 10% of

the samples lie outside the upper and lower limits of two standard deviations.


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The database contains 285 G902-1 samples. 97.9% of the samples lie within two standard deviations of

the mean. One sample had no results.



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Of the 71 sampled G998-6 standards, 88.7% lie within two standard deviations of the mean. 83% of the

samples were equal or greater than the mean certified value.


7 out of 352 (2%) G999-4 samples lie outside the two standard deviations limit. 1 sample contains no

results. 64% of the samples are equal or less than the recommended value of 3.02 g/t.

11.8.5 Field Duplicates

For this exercise 2401 duplicate samples were used. 49 were omitted because it was not clear which

samples were duplicates and which ones were the original samples. To check how close these are to the

original samples, a plot of the original samples with a zero, five, ten and fifteen percent difference of the

original samples was created (Figure 11-22). The majority of the samples were within the 10% difference

limit especially at grades higher than 0.1 g/t. The plot also shows a good correlation between the

original value and the duplicate, as is evident from the regression line with an R2 value of 0.95.


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Figure 11-22: Original vs blank plot.

The mean and standard deviations of the originals and duplicates also compare favourably. The mean

for the original samples is 0.268 while that of the duplicate samples is 0.264. The standard deviation

equals to 1.478 and 1.430 for the original samples and duplicates, respectively.


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12 DATA VERIFICATION

12.1 Collar and Down Hole Surveys

Sighting of the drill rig is done by hand help GPS. Collars are then surveyed using a DGPS, once the drill

rig has vacated the area. The initial DGPS Survey was conducted in-house but during 2013 a DGPS survey

by Gregory Symons Geophysics of Windhoek, Namibia was conducted to resolve issues with elevation

(Z) values. Downhole surveys were conducted using either the Reflex or Flex-it survey equipment.

During the CCIC MinRes site visit, holes from all campaigns up to and including the 2013 drilling

campaign were verified in the field. Hard copies of the downhole surveys were checked against the

database for transcription errors.

Verification of the DGPS survey data for the collars (DGPS) showed inconsistencies in the Z coordinate,

most notably for the in-house data. This is thought to be related to the calibration of the base station

used. X and Y co-ordinates however were reliable. As a result the Z coordinate was sampled from the

digital terrain model from the detailed 2009 NRG geophysical survey using the DGPS x, y coordinates.

13 MINERAL PROCESSING AND METALLURGICAL TESTING

13.1 General

A program of preliminary metallurgical testwork was conducted on behalf of Helio by SGS Lakefield

Research Limited (“SGS”) in Ontario, Canada to determine the processing characteristics of the

Porcupine and Kenge ores, and to develop a preliminary process flowsheet. Results from the Kenge ore

scoping study were published in August 2008 and followed by results from the Porcupine target ore in

August 2009. The tests included head grade analysis, mineralogical evaluation, comminution test-work,

gravity separation, flotation, cyanidation (of whole ore, gravity tailing and flotation concentrate) and

preliminary environmental testing. Both test-work programs indicated amenability to conventional

gravity and cyanidation gold recovery techniques. A follow up cursory heap leach amenability study was

conducted in May 2009 by SGS on the Kenge ore. Full SGS reports on the test work can be found in Appendix 29.1.

Summary results of this test work are reported below:

13.1.1 Kenge optimum circuit responses (% Au recoveries) (see Appendix 29.1):

• 95.6% by Gravity Separation + Gravity Tailing Flotation

• 95.6% by Whole Ore Flotation

• 94.5% by Gravity Separation + Gravity Tailing Cyanidation

• 93.3% by Gravity Separation + Flotation Concentrate Cyanidation

• 92.5% by Whole Ore Cyanidation


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• 34.7% by Gravity Separation

• Bond ball mill work index of 15 (metric) -- "intermediate hardness"

• No preg-robbing activity detected

• Low cyanide consumption

• Tailings should be non-acid generating and free from environmentally deleterious elements

13.1.2 Porcupine optimum circuit responses (% Au recoveries) (see Appendix 29.3):

• 94.8% by Whole Ore Flotation

• 93.4% by Gravity Separation + Gravity Tailing Flotation

• 91.9% by Gravity Separation + Flotation Concentrate Cyanidation

• 89.1% by Gravity Separation + Gravity Tailing Cyanidation

• 88.9% by Whole Ore Cyanidation

• 22.0% by Gravity Separation

• Bond ball mill work index of 15.7 (metric) -- "moderately hard"

• No preg-robbing activity detected

• Low cyanide consumption

• Tailings should be non-acid generating and free from environmentally deleterious elements

13.2 Metallurgical Sample Selection

A 50 kg test sample was composited using coarse reject material from mineralised drill core from the

Kenge target. Material for the test sample was sourced from three diamond drill holes (SZD011 from

Kenge SE Zone, and SZD013 and SZD021 from Kenge Main Zone). Helio composited the test sample to

have a weighted average head grade of 3.05 g/t Au on the basis of previously reported assaying.

Screened metallics tests by SGS indicated an average head grade for the test sample of 3.6 g/t Au.

A 50 kg composite test sample taken from the counterpart half-core from diamond drill hole GPD4 was

used in the porcupine testwork. The intercept chosen assayed 3.3g/t Au over 49.63 m from 52.76 m,

including 0.6m at 33.2 g/t Au from 66.1 m and 1.8 m at 39.1 g/t Au from 69.4 m. Head grade analysis of

the bulk sample from GPD4 conducted by SGS indicated that the sample graded 2.4g/t Au.

Samples were created for the flotation and cyanidation test-work from the gravity tailings of the initial

gravity concentration testing. Whole ore samples were also used in the testwork.

13.3 Mineralogical Evaluation

Mineralogical evaluations of the samples by polished section and XRD (x-ray diffraction) identified that

pyrite was the major sulphide present while minor amounts of chalcopyrite and galena were observed in

the Kenge ore and minor amounts of chalcopyrite, covellite and chalcocite were observed in the


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Porcupine ore. The results also support internal petrological, mineralogical and analytical studies

indicating that mineralised material from the Porcupine and Kenge targets has a simple mineralogy.

13.4 Mineral Processing

13.4.1 Comminution Assessment

Comminution testing using standard Bond ball mill work index tests recorded metric work indices of 15,

considered to be of “intermediate hardness” and 15.7, considered to be of “moderate hardness” for the

Kenge and Porcupine ore, respectively. The implication of the indicated ore characteristics on milling

energy and maintenance costs is that they will not be particularly onerous.

13.4.2 Gravity Separation Test-work

Gravity separation analysis was conducted on samples within a grind size range of 105 to 133 μm (P80)

for the Porcupine ore and a grind size range of 92 to 126 μm (P80) for the Kenge ore.

The initial Kenge ore tests indicate that gold recoveries up to 34.7% can be achieved by conventional

gravity separation techniques. In a similar test scenario gravity separation of the Porcupine ore indicated

gold recoveries up to 22.0%. The high recovery rates observed in both tests suggest that inclusion of a

gravity circuit in plant design and future test-work would be an obvious step towards optimizing

recovery.

13.4.3 Flotation Test-work

In both series of gravity tailing flotation and whole ore flotation tests, high recoveries were observed.

The Kenge ore testwork demonstrated an “excellent” response to gold recovery by flotation. Processing

by flotation of gravity tailings produced gold recoveries from 93.9% (92 μm -P80) to 95.6% (75 μm -P80).

Whole ore flotation tests concluded gold recoveries from 93.4% (125 μm -P80) to 95.6% (100 μm -P80).

For Porcupine ore, gold recoveries for the combined gravity and flotation process ranged from 91.6%

(133 μm -P80) to 93.4% (105 μm -P80). Similarly high recoveries were also observed during whole ore

flotation testing ranging from 90.5 % (256 μm -P80) to 94.8% (61 μm -P80)

In the Kenge test-work minimal grind size to gold recovery variations were noted. In the Porcupine ore a

potential relationship between finer grinding and increased gold recovery was established although


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further test-work is required to confirm this, and even so, recoveries of over 90% at grind sizes of 256µm

are particularly encouraging.

13.4.4 Cyanidation Test-work

Standard bottle roll testing was used for the cyanidation test-work. The grind sizes tested for the Kenge

ore ranged from 126 μm to 52 μm (P80). Gold recoveries for cyanidation of the gravity tailings ranged

from 89.9% (126 μm -P80) to 94.5% (59 μm -P80). Whole ore cyanidation tests concluded gold

recoveries from 86.7% (96 μm -P80) to 92.5% (58 μm -P80).

The grind sizes tested for the Porcupine ore ranged from 174 μm to 79 μm (P80) for cyanidation of the

gravity tailings, however, a coarser feed was used to assess the response of whole ore samples to

cyanidation, from 406 μm to 75 μm (P80). Gold recoveries for cyanidation of the gravity tailings ranged

from 82.0% (174 μm -P80) to 89.1% (79 μm -P80). Whole ore cyanidation tests concluded gold

recoveries from 70.3% (406 μm -P80) to 88.9% (75 μm -P80).

Both the Kenge and Porcupine ores showed a trend towards increased gold recovery with finer grind

sizes in both whole ore and gravity tailing tests.

A single Carbon-In-Leach (CIL) test on a sample of gravity tailings for both the Kenge and Porcupine ores

showed no increased gold recovery, therefore no preg-robbing activity is expected in either ore. It is also

notable that both testworks concluded the ores have a low cyanide consumption, in the region of 0.04 -

0.11kg/t for Kenge ore and 0.11 – 0.62 kg/t for Porcupine ore.

In both test-works, cyanidation of the flotation concentrate was conducted to determine the influence

of regrinding before cyanidation on gold recovery. In both testworks significant increases in recovery

were recorded.

Further testwork was undertaken in May 2009 by SGS Lakefield on material retained from the previous

2008 Kenge study to assess the ore’s amenability to heap leaching. The test-work focused on coarse ore

bottle roll cyanidation testing. The material used represented the coarsest material retained by SGS and

ranged in size from 1.7mm to 3.35mm. Results from this phase of test-work indicated that gold

recoveries in the order of 70% are possible, coupled with low reagent consumptions.

13.5 Environmental implications

Various ore acid generation tests and broad spectrum ICP testing suggest that tailings should be non-

acid generating and free from environmentally deleterious elements.


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13.6 Additional work and further Work Planned

Further metallurgical testwork is planned in order to optimise grinding sizes and flotation flowsheet

configurations, together with studies of the potential amenability of Porcupine ore to heap leaching.

Further testwork to include samples representing a wider spectrum of mineralisation across the

Porcupine target is also planned. This will assist in the analysis of plant design weighting in respect to

the proportion of different ores introduced into the final processing circuit.

14 MINERAL RESOURCE ESTIMATES

This Mineral Resource Statement represents the third Mineral Resource Estimate prepared for SMP.

Previous estimates were completed by Golder Associates and SRK in November 2010 and February 2012

respectively.

SMP is divided into three target areas – Kenge, Porcupine and Konokono/Tumbili. Kenge comprises the

Kenge Main, Mbenge and Snakebite deposits. Porcupine is made up of Porcupine Main, Porcupine Quill

and Porcupine West deposits. Konokono/Tumbili is made up of the Konokono and Tumbili deposits.

This revised Mineral Resource Estimate concerns the Kenge and Porcupine target areas only.

Konokono/Tumbili remains unchanged since the SRK estimate. Within the Kenge target area, only the

Snakebite deposit remains unchanged since the SRK update. Within the Porcupine target area, only the

Porcupine Main deposit has been changed since the SRK estimate.

The database used was verified and is sufficiently reliable to support a Mineral Resource Estimate. The

approach and methodologies applied in this resource estimation are in accordance with international

resource reporting guidelines, including NI 43-101.

Leapfrog™ software was used to construct volumetric solids for the zones of mineralisation. The three

dimensional resource modeling, as well as the geostatistical techniques for grade estimation was

undertaken using Datamine™.

The coordinate system used for modelling was the same as the primary coordinate system stored in

Helio’s drillhole database: UTM Zone 36S, datum WGS 84.

There is no certainty that all or any part of the Mineral Resource will be converted into Mineral Reserve.

The key assumptions and methodologies used for this resource estimate are fully outlined below.

14.1 Geological Database

14.1.1 Topography

A 3D digital elevation model (“DEM”) of the topography was supplied by Helio as 50 m line spacing, 2.5

m apart collected from the 2009 airborne magnetic and radiometric geophysical survey. Drillhole collar


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elevations were surveyed using a Differential GPS. To ensure consistency between the drillhole collars

and the DEM, the collars were projected vertically onto the DEM.

The Kenge deposit, Figure 14-1 below, outcrops along a ridge at approximately 1100 m AMSL and slopes

down at 20o towards the northeast and southwest.

Figure 14-1: Topography for the Kenge deposit.

The Mbenge deposit occurs at a lower elevation (Figure 14-2), with the topography dipping at 5o to the

South.

Figure 14-2: Topography for the Mbenge deposit.


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The Porcupine deposit (Figure 14-3) occurs at approximately 1220 m AMSL. Porcupine also creates a

ridge on surface, with an increase in gradient of about 15o to the SSE.

Figure 14-3: Topography for the Porcupine deposit.

14.1.2 Drill Holes

The database containing drillhole information was supplied by Helio in an Excel format. This was from

the same database used by SRK, with the inclusion of four additional drillholes completed in November

2013 and the new DGPS survey adjusting the collar positions slightly. Numerous lithology codes are

recorded in the database. These were grouped together to create a simplified lithology grouping. This

simplified lithology codes, defining the limits of mineralisation are summarised in Table 14-1. Gold

values were also taken into consideration when grouping the simplified lithology codes.

Table 14-1: Summary of simplified lithological codes.

Logging Code Description COVL Colluvium

VNQZ Vein Quartz

DIO Diorite

GRNT Granite

SZ Shear Zone

This Mineral Resource Estimate for the Kenge and Porcupine targets are based on 234 drillholes

(~32,380 m) and 78 drillholes (~16,500 m) respectively, the majority of which are diamond core (DD).

Figure 14-4, Figure 14-5 and Figure 14-6 below show the spatial position of the drillholes for Kenge

Main, Mbenge and Porcupine Main, respectively. The drillholes with red collars represent reverse

circulation (RC) drilling. There are a few cases where diamond core holes are drilled alongside RC holes

to allow for a “twinning” analysis. A particular example of twinning within Porcupine Main is shown as a


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cross section in Figure 14-7 below, the collar of the RC holes is coloured Red - GPR004. While there is

grade variability between individual samples, the overall trend of mineralisation and grades between RC

and DD holes is preserved.

Figure 14-4: Plan showing RC holes in Red, for Kenge Main deposit.

Figure 14-5: Plan showing RC holes in red, for Mbenge deposit.


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Figure 14-6: Plan showing RC holes in red for Porcupine Main deposit.

Figure 14-7: Section comparing Au values between RC and DD holes, Porcupine Main deposit.

Drillholes are generally orientated normal to the orientation of the shear zones and inclined at between

50˚ and 70o. Average drilling lengths of 135 m and 160 m are recorded for Kenge and Porcupine,

respectively.

Four additional drillholes were completed in November 2013. Three of these were drilled in the Kenge

deposit and one in the Mbenge deposit. These holes, shown with red collars in Figure 14-8 below were

drilled to confirm the interpretation of the high grade mineralisation plunging between 20o and 25o

towards the northwest.


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Figure 14-8: Plan showing additional drilling since SRK estimate.

14.1.3 Relative Density

Because the prominent rock types within the target areas varies, separate relative density

measurements have been used for the Kenge Main, Mbenge and Porcupine Main deposits. A total of

392 readings (Figure 14-9) are available for the Kenge Main mineralised zone, averaging 2.75 t/m3 with a

minimum of 2.25 t/m3 and a maximum of 3.42 t/m3. The average for Kenge with the outliers removed is

2.74 t/m3. The mineralised zone within Mbenge contains 77 readings (Figure 14-10) averaging 2.71 t/m3

and Porcupine contains 1965 readings (Figure 14-11) averaging 2.63 t/m3. These relative densities have

been assigned to the relevant block models for estimation.


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Figure 14-9: Histogram for RD readings at Kenge Main.

Figure 14-10: Histogram for RD readings at Mbenge.


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Figure 14-11: Histogram for RD readings at Porcupine Main.

14.2 Geological Model on which the Grade Estimation is based

14.2.1 Grade Domaining

The Kenge and Porcupine targets are split into three domains of mineralisation, namely:

• A “barren” or “unmineralised” domain. This is a lithological boundary that separates the

unmineralised granites and diorites from the mineralised sheared granites and quartz veins. This

boundary was treated as a “hard” boundary during grade domaining and estimation.

• A “Mineralised” domain. This is a combined lithological and mineralisation boundary based on a

0.3 g/t guideline, using a similar approach to SRK.

• An additional “High grade” domain has been included to delineate high grade mineralisation

within the “mineralised” domain. This was based on a new understanding that the higher-grade,

well mineralised zones occur as narrow shoot controlled veining within the broader shear zone.

The purpose of this was to identify a smaller but higher grade resource that could demonstrate

both a high grade open pit and underground mining potential. A lower cut-off grade of 3.0 g/t

was used as a guideline, determined from statistical histograms as well as geospatial positioning

of the high grade samples.

The mineralised domains are extended to depths of between 220 m to 280 m below surface.


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14.2.2 Grade Domaining using Leapfrog

Leapfrog is an implicit 3D modelling engine that works of a Radial Basis Function. The modelling

methodology differs from the traditional way of deterministically digitising out the zones of interest

along section lines, then stitching them together to create a 3D wireframe. Leapfrog is based on an

algorithm that uses all the data points in 3D space, together with geological constraints and parameters

to automatically generate volumes of interest. The benefits of using Leapfrog are:

• Interpretations are not limited to drill holes along a section line. Incorporating drill holes from

neighbouring section lines makes the model a full 3D interpretation, ensuring good correlation

between section lines;

• The algorithm can generate very complex forms, resulting in more efficient domaining; and

• The volumes are easily modified and updated with new information or changes in the

interpretation.

The contacts for the three domains were flagged using the “Interval Selection Tool” in Leapfrog, which

allows the user to interactively determine the intervals that are to be included or excluded from the

different domains.

The mineralised domain is predominantly composed of foliated or sheared granites and quartz veining,

with the high grades associated with sheared quartz veins. Mineralisation for Kenge Main as shown in

Figure 14-12 and Figure 14-13 below strikes approximately 126o azimuth, dipping at 70o to the

southwest. The mineralised domain is shown in orange, with the high grade domain superimposed in

purple. True thickness of the mineralised domain varies from 0.5 m to about 20.0 m with the majority

being between 8.0m and 12.0 m. True thickness for the high grade domain varies from 0.5 m to about

5.0 m and is generally between 1.0 m and 4.0 m thick. Mineralisation for Mbenge (Figure 14-14 and

Figure 14-15) strikes approximately East-West with a dip of 80o to the South. True thickness of

mineralisation averages 30.0 m, tapering to a few meters when it pinches out. The high grade domain at

Mbenge varies in true thickness between 4.0 m to 7.0 m and also pinches out like the form of extension

gashes. Mineralisation at Porcupine Main strikes at 60o azimuth, dipping 60o to the southeast (Figure

14-16 and Figure 14-17). True thickness of mineralisation averages 40.0 m, also tapering to a few meters

at the ends along strike. The high grade domain which is also like the form of extension gashes averages

10.0 m in true thickness.


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Figure 14-12: Section showing mineralised domain for Kenge Main, superimposed on simplified lithology.

Figure 14-13: Section showing mineralised domain for Kenge Main, superimposed Au values.


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Figure 14-14: Section showing mineralised domain for Mbenge, superimposed on simplified lithology.

Figure 14-15: Section showing mineralised domain for Mbenge, superimposed on Au values.


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Figure 14-16: Section showing mineralised domain for Porcupine Main, superimposed on simplified lithology.

Figure 14-17: Section showing mineralised domain for Porcupine Main, superimposed on Au values.


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14.2.3 Domaining in Datamine

The envelopes generated in Leapfrog were imported into Datamine for sample and block model

flagging. Even though the boundaries between the high grade domains and mineralisation appear to be

sharp contacts, these were tested using a soft boundary analysis technique. As illustrated in Figure

14-18 below, boundary analysis for the contact between mineralisation and high grade zones confirms a

“hard” boundary relationship.

Figure 14-18: Boundary Analysis between high grade domain and mineralisation for Kenge and Porcupine.

Zonal flagging in Datamine used a field called KZONE to distinguish the different grade domains during

geostatistical analysis and estimation. An example of this is, for Kenge Main is shown in Figure 14-19. A

summary of these KZONE codes with their descriptions are contained in Table 14-2 below.

Table 14-2: Summary of KZONE Flagging in Datamine. Zone Description KZONE Value Code Name

Barren host rock 0 WST

Kenge Main Lower – Mineralised Domain 11 KML MZ

Kenge Main Lower – High Grade Domain 12 KML HG

Kenge Main Upper – Mineralised Domain 21 KMU MZ

Kenge Main Upper – High Grade Domain One 221 KMU HG1

Kenge Main Upper – High Grade Domain Two 222 KMU HG1

Kenge Main South East – Mineralised Domain 31 KMSE MZ

Kenge MainSouth East – High Grade Domain 32 KMSE HG

Mbenge – Mineralised Domain 41 MB MZ

Mbenge – High Grade Domain 42 MB HG

Porcupine – Mineralised Domain 51 PORC MZ

Porcupine – High Grade Domain 52 PORC HG


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Figure 14-19: Cross-section showing KZONE flagging in the block model for Kenge Main.

14.3 Compositing

Sampling intervals focused on the lithology as well as visible mineralisation, hence sampling lengths

were restricted by the lengths of mineralisation, ranging from 0.1 m to 2.1 m. The predominant

sampling interval however, was either 0.5 m or 1.0 m. Composite length of 1.0 m was applied for Kenge

Main and 2.0 m for both Mbenge and Porcupine Main. The reason for the difference in composite

lengths is because of the difference in the average thickness of Kenge Main when compared to Mbenge

and Porcupine Main deposits. Compositing used the KZONE to ensure that samples were composited

within the different domains. To avoid any support bias, sample composites less than 0.25 m were

excluded from the study.


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Figure 14-20: Histogram of sample length prior to compositing.

14.3.1 Composited Statistics

Sampling protocols require that core intervals deemed to be barren with respect to gold mineralisation

are not usually submitted for analyses. However, as a check, random samples every 10.0 m or so within

the barren zones were often submitted as a check. Hence all un-sampled intervals have been set to

0.0001 prior to compositing and statistical analysis.

A statistical summary for the various KZONES are presented in the below. Because the high grade

domain is considered as a separate low tonnage high grade scenario as compared to the mineralised

domain, these two domains have been analysed and estimated independently of one another.

Mean of the composite samples for “KML MZ” (KZONE 11) domain is 1.06 g/t, with a positive grade tail

up to 7.45 g/t. The “KMU MZ” (KZONE 21) domain has a mean value of 0.93 g/t, CoV of 1.35 and a

maximum of 22.35 g/t. “KSE MZ” (KZONE 31) domain has mean value of 0.62 g/t, CoV of 1.37 and a

maximum of 10.90 g/t. “MB MZ” (KZONE 41) domain has mean value of 1.33 g/t, CoV of 1.57 and a

maximum of 38.30 g/t. “PORC MZ” (KZONE 51) domain has mean value of 1.49 g/t, CoV of 2.19 and a

maximum of 59.22 g/t.

Mean of the composite samples for “KML HG”(KZONE 12) domain is 6.85 g/t, with a positive grade tail

up to 50.65 g/t. The “KMU HG” (KZONE 221) domain has a mean value of 4.99 g/t, CoV of 0.9 and a

maximum of 24.04 g/t. “KSE HG” (KZONE 32) domain has mean value of 4.32 g/t, CoV of 0.77 and a

maximum of 18.81 g/t. “MB HG” (KZONE 42) domain has mean value of 4.54 g/t, CoV of 0.93 and a

maximum of 38.30 g/t. “PORC HG” (KZONE 52) domain has mean value of 4.39 g/t, CoV of 1.52 and a

maximum of 59.22 g/t.


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Histograms of sample distributions for High Grade domains are presented in below.

Table 14-3: Statistical summary of Au g/t per KZONE.

KZONE 11 12 21 221 222 31 32 41 42 51 52

FIELD AU AU AU AU AU AU AU AU AU AU AU

NUMTRACE 411 90 801 134 9 377 71 425 83 1628 290

MINIMUM 0.01 0.03 0.00 0.01 3.06 0.00 0.03 0.01 0.52 0.00 0.00

MAXIMUM 7.45 50.65 22.35 24.04 7.46 10.90 18.81 38.30 38.30 59.22 59.22

MEAN 1.06 6.58 0.93 4.99 5.36 0.62 4.32 1.33 4.54 1.49 4.39

VARIANCE 0.82 68.37 1.58 20.10 1.83 0.72 11.11 4.41 17.95 10.69 44.34

STANDDEV 0.90 8.27 1.26 4.48 1.35 0.85 3.33 2.10 4.24 3.27 6.66

STANDERR 0.04 0.89 0.04 0.39 0.47 0.04 0.40 0.07 0.47 0.06 0.29

SKEWNESS 1.83 3.56 7.51 1.93 0.11 5.46 1.94 7.11 6.17 9.27 4.83

KURTOSIS 6.77 14.15 104.50 4.44 -1.13 56.65 4.92 105.42 45.80 121.33 29.30

LOGESTMN 1.51 7.51 1.37 8.77 5.37 1.36 5.03 2.00 4.44 1.82 4.48

CoV 0.85 1.26 1.35 0.90 0.25 1.37 0.77 1.57 0.93 2.19 1.52

* STANDDEV = Standard Deviation

* STANDDEV = Standard Deviation

* CoV = Coefficient of Variation

Figure 14-21: Sample distributions for the KML MZ domain.


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Figure 14-22: Sample distributions for the KML HG domain.

Figure 14-23: Sample distributions for the KMU MZ domain.


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Figure 14-24: Sample distributions for the KMU HG 1 domain.

Figure 14-25: Sample distributions for the KMU HG 2 domain.


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Figure 14-26: Sample distributions for the KMSE MZ domain.

Figure 14-27: Sample distributions for the KMSE HG domain.


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Figure 14-28: Sample distributions for the MB MZ domain.

Figure 14-29: Sample distributions for the MB HG domain.


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Figure 14-30: Sample distributions for the PORC MZ domain.

Figure 14-31: Sample distributions for the PORC HG domain.


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14.4 Variography

Variogram analysis and modelling was done using Datamine Studio™. Variography and estimation for

Kenge Main used a 3D approach (as opposed to the 2D approach used by SRK) which is considered more

appropriate for narrow, shear-hosted gold deposits. The 3D approach applied by SRK for Mbenge and

the Porcupine Main deposits has been maintained. The experimental variograms were calculated along

the plunge of mineralisation for the various deposits. A summary of the variogram parameters is

presented in Table 14-4 below.

Table 14-4: Summary of variogram parameters.

1 2 3 4 5 6 7 8

KML MZ KML HG KMU MZ KMU

HG

KMSE

MZ

MKSE

HG

MB

MZ

PORC

MZ

VANG 1 216 216 212 212 190 190 178 150

VANG 2 63 63 75 75 80 80 81 60

VANG 3 70 70 66 66 40 40 40 -50

VAXIS 1 3 3 3 3 3 3 3 3

VAXIS 2 1 1 1 1 1 1 1 1

VAXIS 3 3 3 3 3 3 3 3

NUGGET 0.34 0.15 0.34 0.15 0.34 0.15 0.33 0.44

TYPE 1 1 1 1 1 1 1 1

X 42 26 42 26 42 26 32 40

Y 66 70 66 70 66 70 32 125

Z 42 26 42 26 42 26 5 10

C 1 0.36 0.54 0.36 0.54 0.36 0.54 0.66 0.34

TYPE 1 1 1 1 1 1 0 1

X 87 104 87 104 87 104 0 100

Z 163 164 163 164 163 164 0 125

Z 87 104 87 104 87 104 0 20

C 2 0.31 0.31 0.31 0.31 0.31 0.31 0 0.22

14.5 Top Capping

The top capping strategy considered various criteria to determine the optimum values. These included:

• Histograms of sample distributions;

• Sample percentiles;

• Spatial locations of outlier samples; and

• Validation of model estimates against samples.

A summary of the top capping values that were applied is presented in Table 14-5 below. All samples

that were greater than the top capping value were re-set to the top capping value.


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Table 14-5: Summary of Top Capping values. Domain Capping - Au Number of samples Percentile

KML MZ 5 g/t 1 99.8%

KML HG 30 g/t 2 97.9%

KMU MZ 10 g/t 1 99.8%

MB MZ 15 g/t 1 99.8%

MB HG 20 g/t 2 98.9%

PORCM MZ 15 g/t 4 99.8%

PORCM HG 30 g/t 9 98.9%

14.6 Grade Estimation

14.6.1 Method

The method of estimations for Au was Ordinary Kriging, estimations were done using the Estima process

in Datamine Studio™. Parameters for estimations (i.e. Parent Block size, Search distances and the

number of samples to be used for an estimate) were optimised using Krige Neighbourhood Analysis,

which is explained in more detail below.

14.6.2 Krige Neighbourhood Analysis

The aim of Krige Neighbourhood Analysis is to determine the optimal theoretical search and estimation

parameters during Kriging so as to achieve an acceptable Kriging Variance and Slope of Regression

(“SOR”), whilst ensuring that none or a minimal number of samples are assigned negative Kriging

Weights. Once this is determined, practicality is taken into account when deciding on the parameters to

be used. This optimisation was based on a representative area within the deposit. The following

parameters, in chronological order were optimised:

• Optimum search distances in the X,Y & Z directions together with determining the appropriate

minimum and maximum number of samples required for a reliable estimate;

• Optimum discretisation for the parent blocks size.

During search optimisations, the parent cell size of 15 m*4 m*15 m was used for Kenge main and 10

m*10 m*10 m was used for both Mbenge and Porcupine Main. Search distance in the X, Y and Z

directions were incrementally increased to determine the optimum Kriging Variance and Slope of

Regression. Attention is also given to the number of samples per estimate and the percentage of

samples with negative kriging weights.

Optimum search distances taking borehole spacing into account for Kenge Main, Mbenge and Porcupine

Main are summarised in Table 14-6 below.


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Table 14-6: Summary of search parameters for estimation.

Deposit Distance Along

Strike

Distance Along

Plunge

Distance Across

Strike

Min of

Samples

Max of

Samples

Kenge Main 60 m 110 m 60 m 2 20

Mbenge 50 m 70 m 10 m 1 40

Porcupine Main 100 m 125 m 10 m 1 40

14.6.3 Model Construction and Parameters

A block model was constructed using a parent cell size of 15m * 4m * 15m in the X, Y & Z directions for

Kenge Main. Parent block size of 10m * 10m * 10m in the X, Y & Z directions was used for Mbenge and

Porcupine Main. Sub-cell splitting was to ensure that the volumes of the ore zones are adequately

represented. Zonal control was applied during grade estimation with each grade domain in the block

model assigned a unique KZONE number, as described under Item 14.2.1 (Grade Domaining) above. A

section illustrating the block model colour coded by KZONE is shown in Figure 14-32.

Figure 14-32: Section showing block model coding for Porcupine Main.


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14.6.4 Kriging Parameters

The method for estimating Au was Ordinary Kriging. Zonal Control was applied, ensuring that samples

from a particular domain are constrained to estimating grades into the block model for that particular

domain. All boundaries were treated as “hard boundaries” between the various KZONES.

Parental cell estimation was used.

The following fields are recorded in the estimated block model:

• Au – Ordinary Kriged estimate for Au.

• KVAR – Estimated Kriging Variance for Au.

• NUMSAM – Records the number of samples used to estimate Au.

14.7 Model Validation

Model validation included the following:

• Visual comparisons of the estimated grades against the composite sample grades;

• Statistical comparisons for the Mean of estimated grades against Mean of composited samples;

and

• Trends or Swath Analysis checking, to ensure that regional grade trends from drill holes are

present in the model. Ordinary Kriging, in order to reduce the estimation errors, tends to have a

smoothing effect on the estimates. The objective of this exercise is to ensure that both regional

and local trends are best preserved.

A statistical comparison between composited samples and the model estimates are presented in Table

14-7 below. Mean of the samples are weighted by length while model estimates are weighted by

volume. Sample means are not de-clustered. The Means between samples and model estimates

compares favourably.

Table 14-7: Statistical comparisons - sample and model estimates for Kenge Main.

Sample Composites

Model Estimates

KZONE 11 12 21 221 222 31 32 11 12 21 221 222 31 32

FIELD AU AU AU AU AU AU AU AU AU AU AU AU AU AU

NSAMPLES 411 90 801 134 9 377 71 168387 56207 191402 52291 1896 67291 11924

MINIMUM 0.01 0.03 0.00 0.01 3.06 0.00 0.03 0.23 1.62 0.00 1.40 5.00 0.00 1.95

MAXIMUM 5.00 30.00 10.00 24.04 7.46 10.90 18.81 2.75 15.94 3.98 13.26 5.48 4.22 8.33

MEAN 1.06 6.14 0.92 4.99 5.36 0.62 4.32 1.03 6.10 0.96 4.68 5.31 0.66 4.27

VARIANCE 0.76 39.00 1.14 20.10 1.83 0.72 11.11 0.12 6.59 0.19 3.70 0.03 0.26 2.05

STANDDEV 0.87 6.25 1.07 4.48 1.35 0.85 3.33 0.35 2.57 0.43 1.92 0.16 0.51 1.43

SKEWNESS 1.36 2.43 3.57 1.93 0.11 5.46 1.94 0.34 1.16 1.36 0.87 -0.70 1.54 0.31

KURTOSIS 2.57 5.55 20.36 4.44 1.13 56.65 4.92 -0.01 0.88 3.43 1.30 -1.03 6.08 -0.87

CoV 0.82 1.02 1.16 0.90 0.25 1.37 0.77 0.34 0.42 0.45 0.41 0.03 0.77 0.34


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Table 14-8: Statistical comparison - sample and model estimates for Mbenge and Porcupine Main.

Sample Composites Model Estimates

KZONE 41 42 51 52

41 42 51 52

FIELD AU AU AU AU AU AU AU AU

NSAMPLES 425 83 1628 290 59628 18397 114961 63169

MINIMUM 0.01 0.52 0.00 0.00 0.18 1.99 0.01 1.65

MAXIMUM 15.00 15.00 30.00 30.00 4.47 12.74 9.12 15.39

MEAN 1.30 4.10 1.44 4.16 1.28 4.09 1.38 4.52

VARIANCE 3.03 4.41 7.19 27.51 0.45 0.91 0.76 3.14

STANDDEV 1.74 2.10 2.68 5.25 0.67 0.95 0.87 1.77

SKEWNESS 2.55 1.63 6.37 3.24 1.10 0.37 2.19 1.42

KURTOSIS 9.25 4.90 53.70 11.36 1.78 0.56 7.13 2.43

CoV 1.34 0.51 1.86 1.26 0.53 0.23 0.63 0.39

Block on Block analysis compares local trends in the samples against model estimates. The approach was

to divide the study area into blocks, select samples within each block and compare their Mean against

the Mean of model estimates within that same block, per KZONE. Plots comparing Mean of the samples

(Blue) and Mean of the estimates (Red) for the mineralised domains are illustrated below, green bars

represent the number of samples. Mean of the estimates are smoother and less variable than that of

the samples, while preserving grade trends of the samples.


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Figure 14-33: Trend Analysis plot for Kenge Main Lower, mineralised domain.

Figure 14-34: Trend Analysis plot for Kenge Main Lower, high grade domain.


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Figure 14-35: Trend Analysis plot for Kenge Main Upper, mineralised domain.

Figure 14-36: Trend Analysis plot for Kenge Main Upper, high grade domain.


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Figure 14-37: Trend Analysis plot for Mbenge, mineralised domain.

Figure 14-38: Trend Analysis plot for Mbenge, high grade domain.


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Figure 14-39: Trend Analysis plot for Porcupine, mineralised domain.

Figure 14-40: Trend Analysis plot for Porcupine, high grade domain.


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14.8 Grade Distribution Plots

Figure 14-41 below is a long section illustrating the Au distribution for the high grade domain block

model for Kenge Main, superimposed on drillholes. There is a good correlation between grades in the

drillholes and that of the block model. The plunge in high grade mineralisation towards the North West

is evident.

Figure 14-41: Long section showing Au distribution for Kenge Main, HG domain.

Grade tonnage curves for the mineralisation and high grade domains are presented from Figure 14-42 to

Figure 14-45 below. Kenge Minz is made up of the mineralisation domains for Kenge main and Mbenge.

For the Kenge mineralisation domain, majority of the tonnage occurs between 0.5 g/t and 1.5 g/t, while

For the Kenge high grade domain, majority of the material is between 2.0 g/t and 6.0 g/t. For the

Porcupine main mineralisation domain, majority of the tonnage occurs between 0.5 g/t and 2.5 g/t,

while for the Porcupine high grade domain, majority of the material is between 2.5 g/t and 5.0 g/t.


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Figure 14-42: Grade Tonnage Curve for the Kenge Main & Mbenge, Minz domain.

Figure 14-43: Grade Tonnage Curve for the Kenge Main & Mbenge - HG domain.


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Figure 14-44: Grade Tonnage Curve for the Porcupine Main, Minz domain.

Figure 14-45: Grade Tonnage Curve for the Porcupine Main, HG domain.


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14.9 Resource Classification

The definition of a mineral resource according to the Canadian Institute of Mining (“CIM”) reporting

code is:

• A Mineral Resource is a concentration or occurrence of diamonds, natural solid inorganic

material, or natural solid fossilized organic material including base and precious metals, coal,

and industrial minerals in or on the Earth’s crust in such form and quantity and of such a grade

or quality that it has reasonable prospects for economic extraction. The location, quantity, grade,

geological characteristics and continuity of a Mineral Resource are known, estimated or

interpreted from specific geological evidence and knowledge.

• Mineral Resources are subdivided, and must be so reported, in order of increasing confidence in

respect of geoscientific evidence, into Inferred, Indicated or Measured categories.

Based on the geological data and information presented in this report, there is sufficient information

about the location, shape, size, geological characteristics and continuity of the deposit to declare a

resource.

QA/QC protocols and results indicate an acceptable level of confidence in the analysis of the samples for

these drillholes.

2434 SG measurements have been collected, with a very low coefficient of variance. Applying a global

average per domain provides adequate confidence in the tonnage estimates.

The zones of mineralisation are well defined between drillholes, but the grade variability within these

mineralised zones at the current drill spacing creates uncertainly in the localised grade and metal

estimates.

Drillhole spacing of approximately 25 m down dip and 50 m along strike provides adequate geological

confidence to place the SMP resource into the Indicated and Inferred Categories. The resource

classification methodology was based on the following criteria:

• A buffer approximately 25 m around the data limits was used to limit the extents of the

Indicated Resource, provided that the exploration grid contained at least two drill holes;

• Inferred Resources were limited to a 50 m buffer around the data limits.

Images showing the Kenge Main, Mbenge and Porcupine Main Resource models, coloured on Resource

Classification are presented in Figure 14-46 to Figure 14-48 below. Green blocks represent Indicated

Mineral Resources and Red blocks represent Inferred Mineral Resources.


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Figure 14-46: 3D view showing Kenge Main deposit, coloured on Resource Classification.

Figure 14-47: Section view showing Mbenge deposit, coloured on Resource Classification.


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Figure 14-48: Section view showing Porcupine Main deposit, coloured on Resource Classification.

14.10 Resource Tabulation The current mineral resource estimate for SMP is summarised in Table 14-9 below. The effective date

for this resource statement is February 3, 2014. The mineral resources are classified as being in the

Indicated and Inferred categories according to the CIM Definition Standards. Mineral resources that

form part of this update i.e. Kenge Main, Mbenge and Porcupine are stated at a 1.0 g/t cut-off. The

Snakebite, Porcupine Quill, Porcupine NW, Konokono and Tumbili which report to the Inferred Mineral

Resource category and remain unchanged since the SRK estimate are included in this Resource

Statement and stated at a 0.5 g/t cut-off.

The total Indicated Mineral Resource for all eight deposits is estimated at 9.44 Mt, grading at 2.07 g/t,

with an additional Inferred Mineral Resource of 7.44 Mt, grading at 1.28 g/t. The Mineral Resource

summary excluding the Snakebite, Porcupine Quill, Porcupine NW, Konokono and Tumbili deposits are

presented in Table 14-10 below. The Indicated Mineral Resource remains the same while the Inferred

Mineral Resource changes to 3.62 Mt, grading at 1.54 g/t.

The high grade domain option, considered for a high grade open pit and underground mining potential

stated at a 3.0 g/t cut-off, is summarised in Table 14-11 below. The total Indicated Mineral Resource is

estimated at 2.04 Mt, grading at 5.04 g/t. The total Inferred Mineral Resource is estimated at 0.096 Mt,

grading at 5.21 g/t.


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Table 14-9: Mineral Resource Statement – February 2014, SMP Gold Project.











Inferred Snakebite 0.73 1.62 38 022



Inferred Porcupine Quill 1.06 0.85 28 968

Inferred Porcupine NW 0.53 0.59 10 054


Inferred Konokono 1.00 1.06 34 080

Inferred Tumbili 0.5 0.99 15 915

Total Inferred - Konokono/Tumbili 1.5 1.04 49 995


Notes:


2-Resources for Kenge Main, Mbenge and Porcupine Main are stated at a cut-off

grade of 1.0 g/t.

3-Resources for Snakebite, Porcupine Quill, Porcupine NW, Konokono and Tumbili

are stated at a cut-off grade of 0.5 g/t.





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Table 14-10: Mineral Resource – Excluding Unchanged Resources.















Notes:



3-Excludes Snakebite, Porcupine Quill, Porcupine NW, Konokono and Tumbili.




Table 14-11: Mineral Resource – high grade opencast and underground potential.











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Inferred Porcupine Main 0.006 3.90 752


Notes:





14.11 Pit Optimisation

The purpose of this optimisation study was to ensure that the Mineral Resources estimated for the SMP

meet the test of reasonable prospect of eventual economic extraction. Another consideration was to

investigate the high grade domain at depth beyond the open pit limits to assess the potential for

underground mining.

This study was conducted by AB Global Mining Consultants. The block models were imported into

Whittle™ software, and optimised according to parameters supplied by Helio. These are summarised in

Table 14-12 below. Three different gold price scenarios were considered as part of a sensitivity analysis.

These were US$ 1,000; US$ 1,250 and US$ 1,450 per ounce. Figure 14-49, Figure 14-50 and Figure 14-51

below illustrate a 3D view of the Kenge Main, Mbenge and Porcupine Main deposits. Superimposed on

top is the US$ 1,250 per ounce pit shell. For Kenge Main, a substantial amount of high grade domain (in

purple) occurs below the pit limits and presents an opportunity for underground mining. Very little of

the high grade material occurs outside of the pit shell at Mbenge and Porcupine Main.

Table 14-13 contains a summary of the Mineral Resources inside the US$ 1,250 per ounce pit shell.

Indicated Mineral Resources are 7.24 Mt, grading at 2.11 g/t. Inferred Mineral Resources are 0.49 Mt,

grading at 1.90 g/t. Additional Mineral Resources that lie below the pit shell and are potentially

mineable by underground methods are shown in Table 14-14. Indicated Mineral Resources are 0.15 Mt,

grading at 5.26 g/t and Inferred Mineral Resources, grading at 5.27 g/t.

Table 14-12: Input Parameters for Pit Optimisation.

Item Unit Value Input Parameters

Gold Price US$ /oz 1,000 US$ /oz 1,250 US$ /oz 1,450

Off site costs US$/oz 7.00 US$/oz 7.00 US$/oz 7.00

Royalties @ 4% of NSR US$/oz 30.00 US$/oz 37.5 US$/oz 43.5

Net gold price US$/oz 963.0 US$/oz 1,205.5 US$/oz 1,399.5

Net gold price US$/g 30.959 US$/g 38.756 US$/g 44.993

On Site Costs

Ore US$/t 2.00 2.00 2.00


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Waste US$/t 1.75 1.75 1.75

Milling Cost (for CIL) US$/t ore 10.00 US$/t ore 10.00 US$/t ore 10.00

G&A US$/t ore 5.00 US$/t ore 5.00 US$/t ore 5.00

Sustaining Capital Cost US$/t ore 0.50 US$/t ore 0.50 US$/t ore 0.50

Sub-total Mill, G&A, Sust.

Capital US$/t ore 15.50 US$/t ore 15.50 US$/t ore 15.50

Process and Mining Losses

Mining Recovery % 100 100 100

Process Recovery % 94 94 94

Dilution % 10 10 10

Discount Rate % 5 5 5

Rehabilitation Cost (US$/t ore) 0 0 0

Production Rate (Ore

tonnes/annum) 300 000 300 000 300 000

Geotechnical Parameters

Slope Angles (Overall) Degrees 55 Degrees 55 Degrees 55

Figure 14-49: 3D View showing optimum pits for Kenge Main, using a US$ 1,250 gold price.


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Figure 14-50: 3D View showing optimum pits for Mbenge, using a US$ 1,250 gold price.

Figure 14-51: 3D View showing optimum pits for Porcupine Main, using a US$ 1,250 gold price.

Table 14-13: Mineral Resource inside US$ 1,250.00 per ounce pit shell.

Classification Domain Tonnes – Mt Grade – Au g/t Ounces








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Notes:





Table 14-14: High Grade Mineral Resources below US$ 1,250.00 per ounce pit shell.

Classification Domain Tonnes – Mt Grade – Au g/t Ounces



Notes:





14.12 Previous Resource Estimates This resource estimate is the third published for the SMP. Previous estimates were done by Golder

Associates in November 2010 and SRK in February 2012. These are stated in Table 14-15 and Table

14-16 below. Changes from the Golder Associates to SRK estimate are summarised below:

• For Kenge SRK used lithology as well as 0.3 g/t as a guideline for domaining. Golder Associates

used 0.5 g/t as a guideline. This resulted in SRK reporting a higher tonnage at a lower grade. The

estimation methodology was also changed from a 3D estimate to a 2D estimate.

• For Porcupine, there was additional drilling before the SRK estimate. This additional drilling was

both infill and well as lateral extensions, resulting in an increase in tonnage and a decrease in

grade.

Table 14-15: Resource Statement – Golder Associates, November 2010.


Measured/Indicated Kenge/Mbenge 2.3 1.59 117 577

Measured/Indicated Porcupine 5.4 1.7 295 148


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Total Measured/Indicated - SMP 7.70 1.67 412 725


Inferred Kenge Mbenge 2.5 1.54 123 782

Inferred Porcupine 1.7 1.57 85 812


Notes:

1- Resources are stated at a cut-off grade of 0.9 g/t.

Table 14-16: Resource Statement – SRK, February 2012.


Measured/Indicated Kenge/Mbenge 6.6 1.53 324 663

Measured/Indicated Porcupine 10.8 1.55 538 212

Total Measured/Indicated - SMP 17.40 1.54 862 875


Inferred Kenge Mbenge 1.7 1.55 84 719

Inferred Porcupine 1.4 1.15 51 763


Notes:

1- Resources are stated at a cut-off grade of 0.9 g/t.

Comparisons between SRK’s and CCIC MinRes’s estimates are discussed below.

14.12.1 Kenge Main

CCIC Minres used a 3D estimation methodology because it is considered more appropriate for narrow,

shear hosted gold deposits. There were 3 additional drillholes in Kenge Main to confirm the new

interpretation of a plunge in the mineralisation towards the North West. This led to the inclusion of a

high grade core within the mineralised domain. Current resources are quoted using a 1.0 g/t cut-off as

opposed to 0.9 g/t for SRK. These changes resulted in a decrease in tonnage but increase in grade.

14.12.2 Porcupine Main

There was no additional drilling at Porcupine Main. Tightening up of the mineralised domain as well as

better constraining of the domains at depths and in areas with lesser data, resulted in decrease in

volume. Current resources are stated using a 1.0 g/t cut-off compared to the 0.9 g/t by SRK. These have

resulted in a decrease in tonnage and increase in grades.


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15 MINERAL RESERVE ESTIMATE

No Information to report on this section.

16 MINING METHODS


17 RECOVERY METHODS


18 PROJECT INFRASTRUCTURE


19 MARKET STUDIES AND CONTRACTS


20 ENVIRONMENT STUDIES, PERMITTING, AND SOCIAL OR COMMUNITY

IMPACT


21 CAPITAL AND OPERATING COSTS


22 ECONOMIC ANALYSIS



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23 ADJACENT PROPERTIES

Helio’s Kenge Target area is located 6 km east of Shanta Gold’s New Luika Mine, which produced 64,000

ounces of gold in 2013 and is projected to produce 80,000 ounces of gold in 2014. Figure 23-1 below

illustrates the proximity of the New Luika Mine’s Bauhinia Creek open pit to the Kenge,

Konokono/Tumbili and Porcupine Target areas.

Figure 23-1: Map showing the location of the Kenge and Porcupine Resource Areas and proximity to Shanta Gold’s Bauhinia Creek Pit, New Luika Gold Mine.

24 OTHER RELEVANT DATA AND INFORMATION

25 INTERPRETATIONS AND CONCLUSIONS

Helio has been prospecting the Saza-Makongolosi Project (SMP) since 2006. The exploration drilling

database supplied by Helio contains 892 drillholes totalling 112,246 m. Out of this 892 drillholes, 312

drillholes totalling 48,880 m were used for the updating of the Kenge Main, Mbenge and Porcupine

Main deposits.

CCIC MinRes visited the SMP site in December 2013. During this visit, CCIC MinRes reviewed the drilling,

logging and sampling protocols and procedures. This also included a visit to the main deposits as well as

sighting of drillhole collars in the field. CCIC MinRes carried out verification checks on the database,

including the comparison of random records in the database against original logging sheets and assay

certificates. Analysis of the QAQC results from the sampling program identified areas for improvement.

These are: using multiple code names for the same CRM material; mixing or incorrect tagging of CRM in

the log sheets. It is also recommended that 10% of all samples be submitted to an Umpire laboratory as

part of the QAQC protocols.


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The main objective of this work was to update the Mineral Resources at Kenge Main, Mbenge and

Porcupine Main with a view to assessing high-grade open pit and underground potential. The total

Resource therefore quoted using a 1.0 g/t cut-off, as at February 2014 is:

• Indicated Mineral Resources totalling 9.44 Mt at an average grade of 2.07 g/t, yielding 627,000

ounces.

• Inferred Mineral Resources totalling 7.44 Mt at an average grade of 1.28 g/t, yielding 306,000

ounces.

• The high grade alternative, using a 3.0 g/t cut-off yields 2.04 Mt of Indicated Resources, grading

at 5.04 g/t and hosting 330,000 ounces. Inferred Mineral Resources are 0.1 Mt, grading at 5.21

g/t and hosting 16,000 ounces.

Results of a preliminary pit optimisation study using gold prices of US$ 1,000; US$ 1,250 and US$ 1,450

are summarised below:

Table 25-1: Resources inside a pit shell at different gold prices. Gold Price Assumption Category Ounces Ave Grade (g/t Au)

$1,000 Indicated 447,113 2.1

Inferred 27,293 2.0

$1,250 Indicated 491,135 2.1

Inferred 30,305 1.9

$1,450 Indicated 562,796 2.1

Inferred 62,706 1.6

The Kenge Mineral Resource extends to depths of approximately 220m below surface ( Kenge Main) and

310 m below surface (at Mbenge), but the high grade domains are still open at depth and provide a

further opportunity for underground mining potential. Similarly, Porcupine is still open below 350m

depth, and some high-grade intercepts (metre samples grading over 40g/t Au) are present at depth,

again suggesting further opportunities for underground mining potential.

26 RECOMMENDATIONS

The outcome of this study is an independent NI 43-101 compliant Resource Estimate within SMP. There

are other prospective areas within the licence area that have the potential to develop into a deposit.

The recommendations for further work are summarised below:

• The high grade zones of mineralisation are open in a number of places, especially at the Kenge

Main and Porcupine Main deposits. This should be explored with the object of adding to

resources for underground mining.

• Further drilling at the Konokono and Tumbili deposits should be undertaken, to improve the

geological confidence of the Resources and investigate the potential for high-grade zones.


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• Further drilling at the Saza Mine, Snakebite, Quill and Gap mineralised occurrences should be

undertaken to show the potential to identify Mineral Resources.

• For future drilling campaigns, at least 10% of the samples should be submitted to an umpire

laboratory.

• A scoping study should be undertaken to investigate the economic potential of open pit and

underground resources.

A proposed budget for further work are summarised in Table 26-1 below. This encompasses further

exploratory drilling to improve the geological confidence of the Mineral Resources and further research

towards a scoping study.

Table 26-1: Proposed Budget for Further work.

Proposed Budget for Further work on SMP

Ounces

Infill Drilling 1,250,000

Geotechnical Drilling 250,000

Metallurgical Test-work 200,000

Environmental Surveys 250,000

Drill Test High-grade Targets 500,000

General and Administrative Expenses 250,000

Sub-total 2,700,000

Contingency (10%) 270,000

Total 2,970,000


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27 REFERENCES

SRK. March 2012: NI 43-101 Mineral Resource Estimate Update for the Saza- Makongolosi Gold Project,

Tanzania.

SRK. September 2012: NI 43-101 Preliminary Economic Assessment for the Saza- Makongolosi Gold

Project, Tanzania.

MacKenzie, C., March 2013: Review of the High-Grade Gold Shoots, and their Exploration potential, at

the Kenge and Porcupine Resources, SMP Gold Project, Lupa Goldfields, Tanzania.

MacKenzie, C., October 2013: Review of All High-Grade Gold Assays in Drilling at the SMP Gold Project,

Lupa Goldfields, Tanzania, including the description of the high-grade gold shoot at the

Konokono Target.


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28 CERTIFICATES OF QUALIFIED PERSONS

28.1 Desmond Subramani, Pri.Sc.Nat.

I, Desmond Subramani, of 90 Beryl Avenue, Bramley North, Johannesburg the Province of Gauteng, do

hereby certify that:

1. I am a Professional Geologist and am the Principal Resource Geologist at CCIC MinRes (Pty) Ltd.

2. I have practiced my profession continuously since 1995, and am a graduate of the University of

KwaZulu Natal, with a B.Sc. Hons (Geology and Economic Geology, 1994).

3. I am a member in good standing of the South African Council for Natural Scientific Professions

(SACNASP No. 400184/06) as well as a Member of the Geological Society of South Africa.

4. I have relevant experience, working in both operational mines as well as consulting

environments. This experience includes Shear hosted and Vein hosted gold deposits in

Australia, DRC, Ghana, Guinea Bissau, Mali, Namibia, South Africa, Saudi Arabia and Tanzania.

My key technical strengths are 3D Geostatistical Resource Estimation, Geological Risk

Assessment, Mineral Resource Classification and Independent Reporting.

5. I am a “qualified person” as defined by National Instrument 43-101.

6. As at the effective date of the Technical Report, to the best of my knowledge, information, and

belief, those sections or parts of the Technical Report for which I was responsible contain all

scientific and technical information that is required to be disclosed to make those sections or

parts of the Technical Report not misleading.

7. I have visited the SMP Property covered by the Technical Report (the “Property”) from the 9th to

the 12th of December 2013.

8. I have no prior involvement with Property or Helio Resource Corp. beyond my involvement

with the preparation and writing of the Technical Report. I am independent of Helio Resource

Corp. according to the definition of independence presented in Section 1.5 of National

Instrument 43-101.

9. I am the author of this report entitled “Saza-Makongolosi Gold Project (SMP), Tanzania -

Technical Report NI 43-101” dated March 20, 2014 and effective February 24, 2014 (the

“Techical Report”) and responsible for its contents.

10. I have read National Instrument 43-101 and Form 43-101F1 and the Technical Report has been

prepared in compliance with National Instrument 43-101 and Form 43-101F1.


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DATED at Johannesburg, South Africa, this 20th day of March A.D. 2014.

Respectfully submitted, signed

_________________

Desmond Subramani Pri.Sci.Nat.


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29 APPENDIX

29.1 The Recovery of Gold From SMP Samples


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29.2 Heach Leach Amenability Tests


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29.3 Recovery of Gold From SMP Porcupine Target.


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Saza-Makongolosi Gold Project (SMP), Tanzania Gold Project (SMP), Tanzania ... 11.8.1 Database...

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