1

National Instrument 43-101 Technical Report for

Terra Firma Resources Inc.

Mallawa Exploration Project SOUTH SULAWESI, INDONESIA

PREPARED BY

MR. J.F. ERASMUS, ASSOCIATE GEOLOGIST OF MICROMINE PTY LTD

PROFESSIONAL NATURAL SCIENTIST (PR. SCI. NAT), REGISTRATION NUMBER

400099/03, SOUTH AFRICAN COUNCIL FOR NATURAL SCIENTIFIC

PROFESSIONS (SACNASP)

42 MAIN ROAD, HOGSBACK, EASTERN CAPE, SOUTH AFRICA

FOR

TERRA FIRMA RESOURCES INC.

6TH FLOOR - 890 WEST PENDER ST, VANCOUVER, BRITISH COLUMBIA, V6C

1J9, CANADA

AUGUST 11, 2011

Micromine Proprietary Limited ACN 009 214 868 174 Hampden Road, Nedlands Western Australia 6909 Phone: +61 8 94239000 Fax: +61 8 94239001 E-mail: mm@micromine.com

http://www.micromine.com.au

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Table of Contents

1 SUMMARY ....................................................................................................................... 5

2 INTRODUCTION ............................................................................................................ 7

3 RELIANCE ON OTHER EXPERTS ............................................................................. 7

4 PROPERTY DESCRIPTION AND LOCATION ......................................................... 8

4.1 LOCATION AND AREA .................................................................................................. 8 4.2 EXPLORATION AGREEMENT ...................................................................................... 11 4.3 OBLIGATIONS ............................................................................................................ 11

5 ACCESSIBILITY, CLIMATE, LOCAL RESOURCES, INFRASTRUCTURE AND

PHYSIOGRAPHY ................................................................................................................. 12

5.1 CLIMATE AND PHYSIOGRAPHY .................................................................................. 12

5.2 ACCESS ..................................................................................................................... 12 5.3 LOCAL RESOURCES AND INFRASTRUCTURE ............................................................... 13

6 HISTORY ........................................................................................................................ 13

6.1 EXPLORATION HISTORY SUMMARY ........................................................................... 13

7 GEOLOGICAL SETTING AND MINERALISATION............................................. 14

7.1 REGIONAL GEOLOGY ................................................................................................. 14 7.1.1 Stratigraphy .......................................................................................................... 14 7.1.2 Structural Geology ............................................................................................... 15

7.2 LOCAL GEOLOGY ...................................................................................................... 15 7.3 ALTERATION ............................................................................................................. 15

7.4 MINERALISATION ...................................................................................................... 15

8 DEPOSIT TYPES ........................................................................................................... 16

9 EXPLORATION ............................................................................................................ 17

9.1 EXPLORATION RESULTS ............................................................................................ 17 9.2 INTERPRETATION OF EXPLORATION RESULTS ........................................................... 24

10 DRILLING ...................................................................................................................... 24

11 SAMPLE PREPARATION, ANALYSES AND SECURITY .................................... 24

11.1 SAMPLING ................................................................................................................. 24 11.2 ANALYTICAL METHOD .............................................................................................. 24 11.3 BLANKS ..................................................................................................................... 25 11.4 STANDARDS............................................................................................................... 25

11.5 DUPLICATES .............................................................................................................. 25 11.6 LABORATORY INSPECTION ........................................................................................ 25

12 DATA VERIFICATION ................................................................................................ 26

13 MINERAL PROCESSING AND METALLURGICAL TESTING .......................... 26

14 MINERAL RESOURCE ESTIMATES ....................................................................... 26

15 MINERAL RESERVE ESTIMATES .......................................................................... 26

16 MINING METHODS ..................................................................................................... 26

17 RECOVERY METHODS .............................................................................................. 26

18 PROJECT INFRASTRUCTURE ................................................................................. 27

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19 MARKET STUDIES AND CONTRACTS .................................................................. 27

20 ENVIRONMENTAL STUDIES, PERMITTING AND SOCIAL OR COMMUNITY

IMPACT .................................................................................................................................. 27

21 CAPITAL AND OPERATING COSTS ....................................................................... 27

22 ECONOMIC ANALYSIS .............................................................................................. 27

23 ADJACENT PROPERTIES .......................................................................................... 27

24 OTHER RELEVANT DATA AND INFORMATION................................................ 27

25 INTERPRETATION AND CONCLUSIONS.............................................................. 28

26 RECOMMENDATIONS ............................................................................................... 29

27 REFERENCES ............................................................................................................... 31

28 CERTIFICATE OF AUTHOR ..................................................................................... 32

29 CONSENT OF AUTHORS ........................................................................................... 33

30 ADDITIONAL REQUIREMENTS FOR TECHNICAL REPORTS ON

DEVELOPMENT PROPERTIES AND PRODUCTION PROPERTIES ....................... 35

31 ILLUSTRATIONS ......................................................................................................... 35

32 APPENDIX 1: PETROGRAPHIC REPORT OF SAMPLES ................................... 36

33 APPENDIX 2: INTERNAL TFR REPORT ON EXPLORATION ACTIVITIES .. 48

34 APPENDIX 3: QAQC CHARTS .................................................................................. 54

34.1 STANDARD CONTROL CHARTS .................................................................................. 54

34.2 BLANKS ..................................................................................................................... 64

34.3 DUPLICATE SCATTER PLOTS ...................................................................................... 68

35 APPENDIX 4: INTERTEK LABORATORIES CERTIFICATION ........................ 73

36 APPENDIX 5: RECOMMENDED SAMPLING PROCEDURES ............................ 74

36.1 GEOCHEMICAL (PIT) SAMPLES .................................................................................. 74 36.2 TRENCH SAMPLES ..................................................................................................... 74

36.3 GEOCHEMICAL (PIT) SAMPLES .................................................................................. 75 36.4 TRENCH SAMPLES ..................................................................................................... 75 36.5 DIAMOND DRILLING .................................................................................................. 76

36.6 RC DRILLING ............................................................................................................ 77 36.7 DRILL HOLE AND SAMPLE NUMBERING ..................................................................... 78

LIST OF FIGURES

FIGURE 4-1: REGIONAL LOCATION MAP. ..................................................................................... 9 FIGURE 4-2: PROJECT LOCATION. .............................................................................................. 10

FIGURE 4-3: THE LOCATION OF THE CONCESSION BOUNDARY (OUTLINED IN A PURPLE BOX). ... 10 FIGURE 5-1: THE ACCESS ROUTE TO THE PROJECT SITE. ............................................................. 12 FIGURE 5-2: PROXIMITY OF POWER LINES TO THE PROJECT SITE. ............................................... 13 FIGURE 8-1: POLISHED SECTION OF MLW-5A (BO=BORNITE, CHP=CHALCOPYRITE, PY=PYRITE).

.......................................................................................................................................... 16

FIGURE 8-1: THE DIFFERENT ALTERATION CONFIGURATIONS IN MINERALISED PORPHYRY

SYSTEMS (SEERDORF ET AL 2005). .................................................................................... 17 FIGURE 9-1: LOCATION OF THE SAMPLES COLLECTED IN FEBRUARY AND MAY 2011. ............... 18

FIGURE 9-2: MINERALISATION AT MLW2. ................................................................................ 19

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FIGURE 9-3: SAMPLE LOCATION MLW5. ................................................................................... 20 FIGURE 9-4: CARBONATE ALTERATION AT LOCATION MLW5. .................................................. 20

FIGURE 9-5: CARBONATISATION OF A GARNET SKARN AT LOCATION MLW5. ........................... 21 FIGURE 9-6: ALTERATION AND MINERALISATION IN A FAULT ZONE AT MLW-05. .................... 21 FIGURE 30-1: RC SAMPLING PROCEDURE. ................................................................................. 78

LIST OF TABLES

TABLE 9-1: ASSAY RESULTS FOR THE SAMPLES COLLECTED IN FEBRUARY, 2011. .................... 19 TABLE 9-2: ASSAY RESULTS FOR THE SAMPLES COLLECTED BY MCS IN MAY, 2011. ............... 23 TABLE 11-1: DETAILS OF THE ANALYTICAL METHODS USED BY THE LABORATORY. .................. 25

TABLE 26-1: TFR EXPLORATION PLAN AND BUDGET. ................................................................ 29

APPENDICES

APPENDIX 1: PETROGRAPHIC REPORT OF SAMPLES.

APPENDIX 2: INTERNAL TFR REPORT ON EXPLORATION ACTIVITIES.

APPENDIX 3: QAQC CHARTS.

APPENDIX 4: INTERTEK LABORATORY CERTIFICATION.

APPENDIX 5: RECOMMENDED SAMPLING PROCEDURES.

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1 Summary This technical report has been prepared by Micromine Consulting Services (MCS, a division

of Micromine Pty Ltd) for Terra Firma Resources Inc. (TFR). It is intended to disclose the

exploration activities undertaken so far, describe the nature of the geology and mineralisation,

and make recommendations on the implementation of further exploration programs.

The Mallawa Prospect (Mallawa) lies within mining permit 124/KPPSP/IV/2010 and TFR

currently holds the rights to explore within this licence.

The Mallawa Prospect is located within the South Celebes Arm (active island arc system) and

along the south-western axis of the Walanae Fault Zone (WFZ). The regional geology is

typical of this environment and therefore contains highly deformed marine sediments,

metamorphic rocks and ultramafic rocks. These types of environments are known to be

favourable for the emplacement of porphyry type deposits and the intrusion of mineralised

magmas. The local geology predominantly contains terrestrial sediments and intrusive rocks;

however there is some minor interbedded limestone.

A number of alteration types have been observed at Mallawa and some of these are typical of

Porphyry type mineralisation. These include Propylitic alteration, Potassic alteration and

Phyllic alteration. The samples collected so far indicate that the mineralisation is contained

within an andesite that has in-filled one of the major structural features. Samples were

collected in areas showing abundant copper minerals where younger faults cut this andesite. A

number of gossanous zones have been observed, as well as float material containing

chalcopyrite. In addition to chalcopyrite, a number of the hand samples collected also

contained covelite and minor malachite.

Mr. Johannes Erasmus, associate MCS geologist, and Mr Achmad Ramdhani of MCS were

accompanied by Mr. I.N. Soeriaatmadja, Mr. M.G. Buchanan (both of TFR) as well as a

Senior Geologist from the Indonesian Mines Department during a visit to the site from the 4th

to the 6th of May, 2011. Mr. Erasmus is the Qualified Person (QP) for the project. In order to

ensure the results of the exploration program are compliant with National Instrument (NI) 43-

101, MCS has made a number of recommendations on the procedures to be followed.

The conceptual model being tested during the exploration program is that of a large porphyry

copper-gold system. A number of samples had been collected and assayed so far and some of

these have returned significant results. The objective of the most recent field trip was to take a

new set of samples to confirm the positive grades of the first round of sampling. Two of the

earlier high value samples were re-sampled and a number of new samples have also been

collected and submitted for analysis.

MCS has reviewed the TFR work program which includes geological, structural and alteration

mapping as well as ground magnetic and IP geophysical surveys to facilitate the selection of

target areas. This will be followed by a more detailed sampling grid of pit/trench sampling,

and then by drilling. The field mapping and sampling will be carried out by local geologists

under the supervision of Mr. Andri Subandrio, TFR Senior Geologist; with regular reviews of

the procedures by the QP. MCS will assist in the creation of mapping and logging templates

that may be used for all data collection activities.

The proposed TFR exploration work program will include geological, structural and alteration

mapping as well as ground magnetic and IP geophysical surveys. While this work is being

undertaken, geochemical samples will be collected over the different alteration zones to

determine their geochemical and mineralogical profile. This will be followed by a more

detailed sampling grid of pit/trench sampling and then by drilling. Regional geological data as

well as historic and current sampling results will be transferred onto a working base map and

the accuracy of the earlier mapping will be checked. All currency figures are Canadian dollars.

The cost of phase 1 exploration is as follows –

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Phase 1

0 to 6 months

6 months to 1

year

Trenching Sample Assay's 1200 @ $50/sample $30,000 $30,000

Consultant Geologist (QP) $12,000/month $72,000 $72,000

Local Senior Geologist $1150/month $6,900 $6,900

Local Junior Geologist $700/month $4,200 $4,200

Local Junior Geologist $700/month starting after 6

months $0 $4,200

Local Labour and Administrative Support @

$7,000/month $42,000 $42,000

Camp, Food, Fuel, Field Supplies Etc. $15,000 $15,000

Airfare and Transportation Expenses $7,500 $7,500

Contingencies 5% $8,880 $9,090

0 to 6 months and 6 months to 1 year subtotals $186,480 $190,890

Total Phase 1 $377,370

Phase 2 exploration is dependent upon the results of phase 1 work; expenditure is additional to

phase 1 and is as follows –

Phase 2 End of year 1 to

end of year 2

Ground Magnetic 16 (450m) lines @ $1200/ line $19,200

Geophysical IP & Resistivity 24 lines @ $1800/line $43,200

Diamond Drilling (NQ) 1500m @ $190/m $285,000

Drilling Sample Assay's 600 @ $50/sample $30,000

Trenching Sample Assay's 200 @ $50/sample $10,000

Consultant Geologist (QP) $12000/month $144,000

Local Senior Geologist $1150/month $13,800

Local Junior Geologist $700/month x 2 $16,800

Local Labour and Administrative Support @

$10,000/month $120,000

Camp, Food, Fuel, Field Supplies Etc. $30,000

Airfare and Transportation Expenses $24,000

Contingencies 10% $73,600

Total Phase 2 $809,600

TOTAL Phase 1 & 2 $1,186,970

The total for phase 1 and phase 2 exploration over a period of 2 years is Canadian dollars,

CD$1,186,970.

The results of the sample assays and the observations made in the field indicate that the

Mallawa Prospect has been subject to varying degrees of alteration and mineralisation. The

island arc terrane that characterises the area is another encouraging sign of the potential for

mineralisation in the area. This leads the QP to conclude that the area is conducive to the

formation of porphyry systems.

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2 Introduction This technical report has been prepared by Micromine Consulting Services (MCS) for Terra

Firma Resources Inc. (TFR). It is intended to disclose the exploration activities undertaken so

far, describe the nature of the geology and mineralisation, and make recommendations on the

implementation of the exploration program.

Mr. Johannes Erasmus is the appointed QP for the project and inspected the site from the 4th

to the 6th of May 2011, accompanied by Mr. Achmad Ramdhani of MCS, Mr. I.N.

Soeriaatmadja, the TFR Country Consultant Manager, Mr. M.G. Buchanan, the Logistics

Manager of TFR as well as senior geologists from the Indonesian Mines Department. Mr.

Erasmus is independent of each of TFR, Pt. Mutiara Surya Mallawa (Mutiara) and Tirta

Winata (Tirta). TFR has a memorandum of understanding (MOU) with both of these

companies in relation to the Mallawa project. This MOU will be discussed in detail in Section

4.2 (Exploration Agreement).

The data contained in this report was sourced from the results of analytical testing, field

observations and geology Feasibility Study (this is a geology study and is not a feasibility

study as defined in the National Instrument 43-101 standards of disclosure for mineral projects)

previously completed in the area by the local government authorities. The Feasibility Study

(this is a geology study and is not a feasibility study as defined in the National Instrument 43-

101 standards of disclosure for mineral projects) was authored by M.S Mutawakkil and it

analysed the suitability of the area for road construction materials. Other information was

sourced through verbal communications with the local geologists and from an unpublished

report written by Mr. Andri Subandrio, Senior Lecturer at the Applied Geology Research

Division, Institut Teknologi Bandung (The Institute of Technology, Bandung City).

The requirements during public disclosure according to NI 43-101 are very specific. They

have the intention of providing readers with transparency on how the technical results have

been derived. The purpose of the initial site visit was for the QP to review the planned

exploration and sampling programs and to suggest adjustments to the proposed procedures.

This will ensure that future data collection, storage and interpretation methods are compliant

with NI43-101 guideline requirements.

3 Reliance on Other Experts Much of the current knowledge of the local geology of the project is based on a report in

Indonesian language by Mr. Y. Mutawakkil, dated January 4th, 2010, referred to as the

Feasibility Study (this is a geology study and is not a feasibility study as defined in the

National Instrument 43-101 standards of disclosure for mineral projects).

In contracting MCS for the project, the following deliverables were set for the MCS geologist

in the scope of works:

Travel to the project site to verify the work completed so far and to recommend

procedures for future exploration activities;

Design the next stages of exploration with the TFR geologists; and

Act as the QP to sign off press releases related to the project.

Information on the local geology of the area such as the observed alteration and mineralisation

has been sourced from Mr. Andri Subandrio. This information is in the report sections

covering local geology, alteration and mineralisation. Mr. Andri Subandrio is Senior Lecturer

at the Applied Geology Research Division, Institut Teknologi Bandung, he is a geologist.

Both Mr. Y. Mutawakkil and Mr. Andri Subandrio are non-qualified persons as defined by the

NI43-101 guidelines.

This information has been sourced both in the form of verbal communication and from an

unpublished report written by Mr. Andri Subandrio on the petrography of the rock samples.

The samples collected on the property by TFR geologists were analysed by Intertek

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Laboratories in Jakarta. Intertek is accredited with Komite Akreditasi Nasional (KAN), which

is the Indonesian body responsible for laboratory standards. This allows Intertek to meet ISO

17025; General requirements for the competence of testing and calibration laboratories.

The information relating to the mineral title on the property was sourced from a company

press release titled “Terra Firma Signs MOU for Gold and Copper Property in South Sulawesi,

Indonesia”, dated April 19, 2011. This information was used in Section 4.2 (Exploration

Agreement).

The information relating to the environmental obligations in Section 4.3 (Obligations) was

sourced from the Indonesian Ministry of Environment’s document titled Overview of the EIA

(translated from Indonesian: Sekilas Tentang Amdal).

4 Property Description and Location

4.1 Location and Area

The Mallawa Project is located in South Sulawesi, Indonesia. The Malawa Prospect currently

is an 800 Ha mining permit located approximately three hours northeast of Makasar, The

permit is approximately 20 km north of the Bone Highway which is a major highway

connecting Makassar to Bone and other communities, Figure 4-1 and Figure 4-2 show a map

of the project location.

The mining permit number of Mallawa is 124/KPPSP/IV/2010 and it covers an area of 800 ha.

Figure 4-3 shows the location of the permit boundary. The origin of the permit boundary in

UTM coordinates (zone 50) is 821,713mE, and 9,463,958mN. For the mining permit the

boundaries are surveyed by the Indonesian mines department before the release of the IUP.

The method used is that of geodetic GPS with an accuracy of less than 0.5m. IUP is the

abbreviation for “Izin Usaha Pertambangan” which is what the mining permit is called in

Indonesia. The translation to English is mining permit.

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Figure 4-1: Regional Location map.

The holder of a Mining Authorization for Exploration is obliged to pay royalties of

Rupiah 1,000 (thousand rupiah) per hectare / annum; equivalent to 0.114545 Canadian dollars

per hectare per annum (source of exchange rate: http://www.xe.com, 9/6/2011).

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Figure 4-2: Project Location.

Figure 4-3: The location of the concession boundary (outlined in a purple box).

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4.2 Exploration Agreement

On April 19th, 2011, TFR entered a memorandum of understanding (MOU) with Pt. Mutiara

Surya Mallawa (“Mutiara”) and Tirta Winata (“Tirta”) under which the Company has the

option to acquire 75% of the issued and outstanding shares of Mutiara. Mutiara is an

Indonesian mineral exploration company that holds the mineral exploration license of

Mallawa. In addition, Mutiara is expected to acquire an additional 10,000 hectares of

prospective lands (the "Additional Properties") located within the 25 kilometre radius "area of

interest" defined in the MOU.

In exchange for Mutiara and Tirta entering into the MOU, TFR is required to pay an aggregate

of US$100,000 to the shareholders of Mutiara, US$25,000 of which was paid on execution of

the MOU and US$75,000 of which is payable within 60 days following acceptance of this

NI43-101 report on the Mallawa Property.

The MOU states subject to approval of the MOU by the TSX Venture Exchange, the parties

will enter into an option agreement (the Option Agreement) granting TFR an option to acquire

75% of the issued and outstanding shares of Mutiara. TFR is required to pay an additional

US$100,000 and issue 100,000 common shares to Mutiara's shareholders on execution of the

Option Agreement.

Under the Option Agreement, to successfully exercise the option to acquire 75% of the

outstanding shares of Mutiara, Terra Firma will be required to:

Pay an additional US$200,000 to Mutiara's shareholders within 18 months of the

approval of the MOU by the TSX Venture Exchange;

issue a further 200,000 common shares to Mutiara's shareholders on the later of the

date on which Terra Firma exercises the option and the date which is 120 days

following execution of the Option Agreement;

issue a further 200,000 common shares to Mutiara’s shareholders on the later of the

date on which Terra Firma exercises the option and the date which is 18 months

following execution of the Option Agreement; and

fund US$1.75 million in exploration expenditures on the Mallawa Property and the

Additional Properties, including at least US$250,000 in expenditures in the first year

of the Option Agreement.

The entering into of the MOU and the Option Agreement and the payments of cash (other than

the initial US$25,000 payment) and issuances of shares there under are subject to the approval

of the TSX Venture Exchange. All shares issuable under the transaction will be subject to a

four month hold period.

4.3 Obligations

Mutiara is an Indonesian mineral exploration company that holds the mineral exploration

license of Mallawa. TFR currently has no obligations for the property at the time when this

report was released, all obligations are for Mutiara. Mutiara is required to produce monthly,

quarterly and yearly exploration reports for the Mallawa project.

In addition to this, Mutiara is required to submit an environmental report every six months.

This requirement is associated with the Indonesian Ministry of Environment’s UKL-UPL,

which is an abbreviation in Indonesian translating to “Environmental Management Efforts and

Environmental Monitoring Efforts”.

The only additional permitting that may be required to undertake the exploration activities is a

heavy vehicle permit. This may be required when completing the diamond drilling activities

that are proposed over the next two years. This permit has not been obtained so far.

According to information supplied by TFR, TFR has no obligations under the MOU at this

time.

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5 Accessibility, Climate, Local Resources, Infrastructure and Physiography

5.1 Climate and Physiography

The climate at Mallawa is mainly affected by the extent of rainfall rather than the temperature.

The wet season in South Sulawesi occurs between October and March, while the dry season

occurs between April and September (Gunawan et al.). Temperatures vary to a lesser degree,

with minimums and maximums of approximately 23°and 31° respectively (Sulawesi Weather

and Climate). The high tropical rain during the wet season supports the rainforest vegetation.

Agricultural activities are mainly the cultivation of rice and cacao beans.

The region can be divided into two morphologies. The first is a planar area with low

undulating hills and the second the Wavy Hills area with medium sized hills. The Planar area

of generally undulating low hills stretches from the east to the west, approximately 50% of the

area including the villages of Jampue, Toceppa and Bulubulu where rice and other plantations

are cultivated. Wavy Hills generally occupies the northern and southern parts, again

approximately 50% of the area. Generally the slope angles of the hills are between 10° to 30°.

5.2 Access

The access route to Mallawa is shown in Figure 5-1. Macassar is the closest airport to the

project site and there is also a major port with the capacity to handle containers and the

importation of major mining equipment. Access to the property is along the sealed road that

links Makassar and Bone and then along smaller surfaced narrow roads. The project area is

located in a typical island environment with high contrasting elevations but most areas are

accessible by narrow surfaced roads, parts of which are in a poor to moderate condition but

access with 2-wheel drive vehicles is possible. Many tracks that should be accessible by four

wheel drive vehicles were observed, as well as some logging roads which may provide access

to future drill sites.

Figure 5-1: The access route to the project site.

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5.3 Local Resources and Infrastructure

Other mining activities on Sulawesi include limestone for cement manufacture and small

amounts of high sulphur coal used in the cement manufacturing. The closest power lines to

the property are approximately 12 Km away, Figure 5-2, high voltage power lines are pink.

The towns and cities of Makassar, Maros, Sungguminasa, and Takalar (Mamminasata) are in

the general area and may be a source of labour and also have intentions to open a connected

rail network by 2013. Some current employees of PT Terra Mineral Resources have been

sourced from local towns nearby the project site.

Aside from road access the infrastructure at the project site is very limited. There are some

residential dwellings on the property where the locals live. These homes are not connected to

any power source. The TFR base camp, which is a couple of kilometres from the property

boundary, is on the power grid.

Figure 5-2: Proximity of power lines to the project site.

6 History

6.1 Exploration History Summary

There was no ownership of the property prior to Mutiara. Mutiara first obtained the mineral

licence (IUP) on December 23rd, of 2008. IUP is the abbreviation for “Izin Usaha

Pertambangan” which is what the mining permit is called in Indonesia. The translation to

English is mining permit. The current licence (IUP) is Valid until April 30, 2030. The IUP is

able to be extended an additional 10 years, twice, for a total of an additional 20 years,

potentially allowing the IUP to be held until 2050.

Apart from the limited work performed by the government authorities in compiling the

feasibility study (this is a geology study and is not a feasibility study as defined in the

National Instrument 43-101 standards of disclosure for mineral projects), no other exploration

has been undertaken on the property. The geology feasibility Study (this is a geology study

and is not a feasibility study as defined in the National Instrument 43-101 standards of

disclosure for mineral projects) refers to earlier work by institutions that analysed the regional

resource availability for road building materials, including sand, crusher stone, coal and

marble. As Mallawa is an early stage exploration project, no previous resource estimates have

14

been completed and no mining studies have been completed. No previous production has

occurred at the site.

7 Geological Setting and Mineralisation

7.1 Regional Geology

The Mallawa Prospect is situated in the South Celebes Arm (Active Island Arc System) and

along the south-western axis of the Walanae Fault Zone (WFZ). It is underlain by the mélange,

metamorphic and ultramafic complexes of Triassic-Cretaceous ages. A mélange is a

metamorphic rock formation created from materials scraped off the top of a downward

moving tectonic plate in a subduction zone. They consist of intensely deformed marine

sediments and ocean-floor basalts and are characterized by the lack of regular strata, the

inclusion of fragments and blocks of various rock types, and the presence of minerals that

form only under high pressure and low temperature conditions. These Mesozoic complexes

are intruded and covered by Tertiary volcanic units and sedimentary rocks.

According to the local geologists, Mallawa has a favourable tectonic and structural position

for the emplacement of porphyry type deposits, especially in the western part. It is bounded by

major strike slip faults. This type of tectonic activity can create pull-apart basins which are

zones that provide high-permeability conduits for the emplacement of mineralized magmas to

shallow crustal levels (Appendix 2).

7.1.1 Stratigraphy

According to the Feasibility Study (this is a geology study and is not a feasibility study as

defined in the National Instrument 43-101 standards of disclosure for mineral projects), the

stratigraphy is based on the Geological Map Sheet Pangkajene, South Sulawesi, 1982. The

lithostratigraphy can be divided into five units:

7.1.1.1 Balangbaru Formation

This unit is a sedimentary unit consisting of alternating sandstone with silt-claystone and

black shale and occasional pebble-sized conglomerate. These Late Cretaceous rocks are

resting unconformably on the bedrock complex (metamorphic) and occupy the western part of

the Tocceppa area and covers less than 10% of the area. This unit is crushed by rocks of the

Mallawa Formation.

7.1.1.2 Mallawa Formation

This unit is composed of sandstone, arkose, siltstone, claystone, marl and conglomerate with

layers or lenses of coal and limestone. This unconformable formation is Early Eocene to

Paleocene in age. It covers approximately 5% of the area north-west of Matampa Pole

Mallawa.

7.1.1.3 Tonasa Formation

The Tonasa Formation consists of calcarenite and thick limestone containing abundant

foraminifera fossils and volcanic materials. These Eocene-Middle Miocene aged rocks can be

found around Matampapole and covers approximately 65% of the area.

7.1.1.4 Granodiorite

Granodiorite intrudes into the limestones and they are Miocene-Early Tonasa in age (Sukamto,

1982) and cover approximately 15% of the area in Matampapole and surroundings. The

granodiorite is light grey with primary minerals of quartz, biotite, oligioclase and alkali-

feldspar at the base which has been partly altered into propylite and argillite.

7.1.1.5 Basal

The basal unit is a dark grey and greenish-black intrusive rock in the form of dykes, sills and

stocks. The texture is porphyritic, with phenocrysts of pyroxene roughly 1cm in size. The

15

mafic rock is around 7.5 million years old, or Late Miocene to Late Pliocene. Solution from

the acidic magma has entered into the cracks or on the fault zone to form quartz veins, vein

calcite and sulphide veins.

7.1.2 Structural Geology

The interpretation and determination of geological structures in the area is the result of

reconstructing a combination of field data and the interpretation of topographic maps. Much of

the structural information was sourced from the Feasibility Study (this is a geology study and

is not a feasibility study as defined in the National Instrument 43-101 standards of disclosure

for mineral projects). Two main structures were noted:

7.1.2.1 Slump Structures

The Feasibility Study (this is a geology study and is not a feasibility study as defined in the

National Instrument 43-101 standards of disclosure for mineral projects) defines slump

structures where no or very little shifting has taken place. These types of rock fracture can

occur due to the cooling process at the time of formation of igneous rock, or a further

development of the structure due to forces acting on these rocks. Prominent structures located

in this region are open shear zones, indicated by cracks partly filled by quartz veins.

7.1.2.2 Fault Structure

Two types of faults are reported in the Matampapole area; strike slip and normal faults. There

is a major north-striking normal fault in the centre of the area of investigation. Overall fault

structures that dominate the area are controlled by tectonic compression from the northwest to

the southeast.

7.2 Local Geology

The Mallawa Formation is composed of non-marine sedimentary rocks, including

conglomerate, sandstone, claystone and coal. There are also interbedded marine sediments of

limestone belonging to the Tonasa Formation. Numerous intrusives are evident ranging from

basalt granodiorite, syenite, dolerite and diorite. The intrusive units have the same relative age

of the Early to Late Miocene volcanics. There also may be younger volcanic and intrusive

rocks on the Mallawa concession but only precise age dating would confirm this. The

alteration zone coincides with a circular structure in the northern part of Bukit Maraja that is

bounded on the south by a reverse fault which appears to have been formed by an intrusive

event along the WFZ. The alteration zone of Mallawa is cut by an extensive network of

altered and sheared dykes and late stage breccias.

7.3 Alteration

A number of zones of alteration have been identified by Mr. Andri Subandrio. In particular,

volcanic and intrusive rocks that are fresh to propylitically altered have been observed at the

highway at Mallawa. These are in sharp contact with a lower potassic alteration zone (PAZ),

characterized by light pink to milky white K-feldspar alteration with biotite veins, red

hematite clay and patchy zones of white gypsum. Below the PAZ zone is a central core of

bright white coloured rock exposed in the bottom of a ravine which is composed of quartz,

sericite, pyrite and kaolinite. This zone is related to the Phyllic alteration zone characteristic of

porphyry style alteration (pers. comm A. Subandrio). In some samples, K-feldspar veining is

evident which could be a remnant of an earlier Potassic zone telescoped by later destructive

alteration events. Within the alteration where leaching has occurred, mineralization is

predictably low due to acid destruction. However anomalous copper values of 0.01-7.53% Cu

have been recorded associated with the copper minerals chalcopyrite, covelite and malachite.

7.4 Mineralisation

During the recent MCS site visit, it was observed that one of the area’s major structural

features, presumed to be a fault, is filled by an andesite intrusion, striking north-south. The

andesite unit has an apparent thickness ranging from 10m to 15m, but exposure is often

limited by overburden. Two of the higher grading samples taken in February of 2011 were

16

collected where younger faults, showing the same strike, cut the andesite. At both sites,

significant copper mineralisation was observed and re-sampled at the time of the May 2011

field visit. The apparent width of the mineralised zones within the andesite was approximately

4m at MLW05.

Continuity of the andesite between observation points could not be confirmed due to the

topography but there is a high probability of extension. The continuation of the mineralised

zone from one observation and sample position to the next is less certain. Suitable outcrops

are restricted to the narrow river valleys due to the deep weathering and steep topography. As

a result, defining geological continuity through surface observations may be very difficult.

According to the TFR documents (Mallawa Porphyry Copper-Gold and Related Deposit

Exploration Target) numerous occurrences of copper gossans were found within the alteration

zone. These are normally associated with heavily sheared and altered rocks.

The mineralisation is disseminated through the silicate groundmass. Pyrite is the dominant

sulphide mineral and this is often replaced by chalcopyrite, arsenopyrite, covellite or bornite.

Minor galena and sphalerite also occurs within the mineralisation. When observed under

microscope, the sulphide crystals are mainly subhedral and it appears that they have been

corroded both on their edges and within the crystals. Figure 7-1 shows a photograph of a

polished section for sample MLW-5A (Appendix 1).

Figure 7-1: Polished section of MLW-5A (bo=bornite, chp=chalcopyrite, py=pyrite).

8 Deposit Types The geological model being tested at Mallawa is a disseminated porphyry style of

mineralisation. There are a number of typical geological characteristics typical to porphyry

systems that aid the exploration for mineralisation. The systems commonly occur at plate

boundaries and are usually centred on magmatic intrusions. Bands of alteration often emanate

from the central pluton, starting from a barren zone near the intrusion and progressing through

to sodic-calcic, “potassic, chlorite-sericite, sericitic, to advanced argillic” (Sillitoe 2010). The

mineralisation is often associated with the potassic zone of alteration, occurring within aplitic

veins and disseminated throughout the adjacent wall rock.

Porphyry systems are classified into five groups, according to the dominant contained metal;

porphyry Au, porphyry Cu, porphyry Mo, porphyry Sn and porphyry W (Seedorff et al 2005).

There are three alteration configurations that commonly occur within all five classes. The first

of these configurations can be broken down further into two sub-types. The configurations are

shown in Figure 8-1 and they can vary according to the spatial position of alteration around

the pluton.

17

Figure 8-1: The different alteration configurations in mineralised porphyry systems (Seerdorf et al 2005).

TFR will aim to use the conceptual model as a guide for the generation of targets. In particular,

the alteration assemblages can be used as a directional indicator to focus exploration efforts.

9 Exploration

9.1 Exploration Results

Two sampling campaigns were conducted within the concession; one in February 2011 and

another in May 2011. During the field trip conducted on February 26, 2011, 19 samples were

collected from five locations along the Mallawa Creek and these were submitted to the

laboratory for analysis. MCS was not part of that field trip and cannot comment on the

sampling QA/QC. The Sampling was carried out by local labourers led by TFR Senior

geologist Mr. Andri Subandrio. Figure 9-1 shows the sample locations. The samples were

hammered off the surface outcrops in the various locations along the creek.

18

Figure 9-1: Location of the samples collected in February and May 2011.

The assay results of the samples collected in February are shown in Table 9-1. The most

significant of these include MLW2A, MLW05A and MLW5D. MLW2A was taken from a

calc-silicate altered granodiorite that contains chalcopyrite, pyrite and covellite and it returned

grades of 1.22ppm Au and 5.22% Cu (Subandrio 2011). The sulphide minerals at location

MLW2 are shown in Figure 9-2.

MLW05A was sampled from a garnet skarn, with the predominant opaque mineral being

pyrite, followed by chalcopyrite, galena and sphalerite (Subandrio 2011). Sample location

MLW5 is shown in Figure 9-3. Photographs of the alteration at this site are shown in Figure

9-4, Figure 9-5 and Figure 9-6. The significant results at this location included a copper grade

of 7.33% from sample MLW5D and a copper grade of 1.08% for sample MLW05A.

19

Table 9-1: Assay results for the samples collected in February, 2011.

Samp ID Site Name

Au1 (ppm)

Cu (ppm)

Pb (ppm)

Zn (ppm)

Ag (ppm)

Cu (%)

Pb (%)

Zn (%)

Ag (%)

R001 MLW1 0.1 >10000 498 122 26

R002 MLW1 0.09 9370 833 145 34

R003 MLW1 0.05 >10000 586 917 22

MLW02B MLW2 0.01 10 13 24 <1

MLW02C MLW2 0.01 8 8 18 <1

MLW2A MLW2 1.22 >10000 >4000 >10000 >100 5.22 9.91 15.4 127

MLW2B MLW2 0.03 618 228 823 <1

MLW2D MLW2 0.1 6710 1970 1110 9

MLW03B MLW3 <0.01 9 17 21 <1

MLW03C MLW3 <0.01 29 6 43 <1

MLW3A MLW3 <0.01 12 7 36 <1

MLW05A MLW5 0.1 >10000 850 87 27 1.08

MLW05B MLW5 0.02 2420 317 43 8

MLW05C MLW5 0.23 3350 2640 148 79

MLW5A MLW5 0.15 243 195 77 6

MLW5C MLW5 0.18 884 2130 138 67

MLW5D MLW5 0.17 >10000 1690 1010 57 7.33

MLW5E MLW5 0.02 8070 119 47 4

MLW06 MLW6 <0.01 17 11 50 <1

Figure 9-2: Mineralisation at MLW2.

20

Figure 9-3: Sample location MLW5.

Figure 9-4: Carbonate alteration at location MLW5.

21

Figure 9-5: Carbonatisation of a garnet skarn at location MLW5.

Figure 9-6: Alteration and mineralisation in a fault zone at MLW-05.

22

The second round of sampling was undertaken during the MCS QP site visit from the 4th to the

6th of May 2011. The samples were taken as rock chip samples and put in plastic bags. Each

sample was triple bagged in an effort to prevent the samples from breaking out and being

contaminated. A total of 17 samples were submitted to Intertek Laboratories in Jakarta for

analysis. Table 9-2 shows the assay results for the samples collected. The most significant

results were received from samples ML-2D, ML-3A, ML-3C and ML-5A. ML-2D returned a

result of 0.95ppm for Au and 5.94% for Cu. ML-5A returned the highest Cu concentration,

with a value of 7.53%.

The elevated gold and copper values at ML5 correlate well with the results received during the

February sampling campaign in the same location, particularly MLW2. The anomalous copper

values at sample location ML3 have confirmed the results of the February location of MLW5.

No significant results were received from the new sample locations.

23

Table 9-2: Assay results for the samples collected by MCS in May, 2011.

Samp ID Site Name

Au1 (ppm)

Cu (ppm)

Pb (ppm)

Zn (ppm)

Ag (ppm)

Fe (%)

Hg (ppm)

As (ppm)

Cu (%)

Pb (%)

Zn (%)

Fe (%)

ML-2A ML5 <0.01 2400 248 1360 1 6.06 0.03 9 ML-2B ML5 <0.01 682 21 672 1 6.41 0.02 10 ML-2C ML5 0.01 454 514 925 2 5.31 0.04 23 ML-2D ML5 0.95 >10000 >4000 >10000 61 >8.01 0.31 21 5.94 1.81 1.17 12.5 ML-2E ML5 0.08 559 3070 3420 3 5.15 0.09 32 ML-2F ML5 0.04 221 221 974 1 2.85 0.01 28 ML-3A ML3 0.14 >10000 390 105 23 >8.01 <0.01 166 1.4 8.04 ML-3B ML3 0.03 334 127 45 5 2.69 0.02 258 ML-3C ML3 0.08 >10000 436 334 21 5.92 0.03 39 1.17 ML-5A ML5 0.09 >10000 >4000 3220 55 >8.01 0.09 <1 7.53 1.62 11.6 ML-5B ML5 <0.01 214 28 296 <1 6.89 0.02 8 ML-6 ML6 0.05 1760 718 130 24 2.03 0.03 6 BL2-1 ML2-1 <0.01 199 460 787 2 2.56 0.05 37 BL2-2 ML2-3 <0.01 16 14 33 <1 2.61 0.01 11 BL2-3 ML2-4 <0.01 26 13 39 <1 2.97 0.01 2 JP3 JP3 <0.01 39 20 61 <1 7.41 0.1 10 FL01 FL01 <0.01 5 5 6 <1 1.78 0.01 3

24

9.2 Interpretation of Exploration Results

The assay results from both sampling campaigns indicate that mineralisation occurs within the

tenement. The copper mineralisation is associated with disseminated pyrite and chalcopyrite

minerals within both granodiorite and garnet skarn host rocks. The alteration and

mineralisation of the sampled rocks indicate that the area has been subjected to hydrothermal

alteration. Confidence in the assay results is strengthened by the similarity between the two

sampling campaigns, where significant results were received at the same sample locations.

10 Drilling Mallawa is an early stage exploration project, no drilling has been conducted by TFR on the

concession and no drilling was completed by previous owners.

11 Sample Preparation, Analyses and Security

11.1 Sampling

The samples were collected as rock chip samples from exposures underlying a thin amount of

overburden. The overburden was scraped away and rock chip samples were taken from the

host rock and placed into thin plastic bags. These plastic bags were then labelled and sent to

the Intertek Laboratory.

There is the minor possibility that the samples could break out of these bags, leading to

contamination between them. Recommendations have been given to TFR by the QPs to ensure

that all samples collected in the future are triple bagged and that sample tags are placed on two

of the bags (Appendix 5). Due to the potential for contamination, the first batch of assay

results should only be used as an indication of potential mineralisation. No splitting was

undertaken to reduce the size of the samples or take duplicate samples.

MCS was not present during the first phase of the sampling program in February of 2011.

11.2 Analytical Method

Intertek Laboratories in Jakarta were used to analyse all the samples collected at Mallawa. The

laboratory is independent of TFR and MCS. No aspect of the sample preparation was

conducted by an employee, officer, director, or associate of MCS or TFR.

With regards to sample preparation, the samples submitted were mostly <2Kg, so the entire

sample was crushed and pulverised to 95% passing 200 mesh (-75um). The assay split of

200-250g was then grab sampled. The sample was then pulverised prior to final analysis.

Table 11-1 shows the methods used to analyse the samples. The first method was a 50g fire

assay with an atomic absorption spectrometry (AAS) finish. This was used for the gold

analysis. A gravimetric finish was used for gold grades greater than 50ppm. The second

analytical method used was a two acid geochemical digest with an AAS finish. Elements that

are in ore grade range received a triple acid geochemical digest. The acids used in this digest

included HCl, HClO4 and HNO3. The analysis of the mercury was completed using a

25

sulphuric and nitric acid digest with a cold vapour AAS finish. The final method used was x-

ray fluorescence (XRF) for the molybdenum.

Table 11-1: Details of the analytical methods used by the laboratory.

Laboratory Scheme Code

Description Elements Analysed

Lower Detection Limit

FA51 Fire assay, 50g charge, AAS finish. Au 0.01%

GA02 Two acid digest (HClO4, HCl), AAS finish.

Cu 2ppm

Pb 4ppm Zn 2ppm Ag 1ppm

GA30 Triple acid attack (HCl, HClO4 and HNO3) with AAS finish.

Cu 0.01%

Pb 0.01% Zn 0.01% Ag 0.01%

CV02 Two acid digestion (H2SO4 and HNO3) with a cold vapour AAS finish.

Hg 0.05%

XR01 X-ray fluorescence of a pressed pellet. Mo 1ppm

11.3 Blanks

Blanks were inserted by the analytical laboratory as part of its own QAQC program. Of all the

blanks inserted, none returned elevated grades. Charts of the blank results are shown in the

appendix 3.

11.4 Standards

Fifteen types of standards were submitted by the laboratory as part of its own internal QAQC

program. None of the actual results for the standards exceed the action limits, so the accuracy

of the analysis for all three batches is within acceptable limits. Charts of the standard results

are shown in the appendix 3.

11.5 Duplicates

No field duplicates were collected at the point of sampling. Lab repeats were inserted by the

laboratory to analyse the reproducibility of the AAS instrument. All the results indicate a very

strong positive correlation between the original and duplicate results. Scatter plots of the lab

repeats are shown in the appendix 3.

11.6 Laboratory Inspection

No inspection of the laboratory has been completed to date. Intertek is accredited with Komite

Akreditasi Nasional (KAN), which is the Indonesian body responsible for laboratory standards.

This allows Intertek to meet ISO 17025; General requirements for the competence of testing

and calibration laboratories. The certification of the laboratory is presented in the appendix 4.

26

12 Data Verification

The assay results for the samples collected in February were provided to MCS by both

Intertek and TFR. Both of these datasets were identical. The MCS field trip undertaken from

the 4th to the 6th of May confirmed the presence of mineralisation at the sample locations.

Further samples were collected to confirm the previous assay results and additional samples

were taken from new areas. The location of the samples collected in May are also shown in

Figure 9-1, they have the prefix MI. This batch of samples was delivered to the assay

laboratory; all results are shown in Table 9-2.

The sampling procedures of the TFR geologists were not observed by the QPs in February

because the sampling was completed when the QP was not on site. As a result, no comments

on the validity of the sampling can be made. The QP was able to verify the location of the

samples during the site visit in May.

Data captured in the future will be monitored through regular site visits. MCS will verify that

the captured data is collected in a consistent manner on the prescribed templates and then

entered correctly into the database. Datasets provided to MCS will be regularly checked for

errors and if any are observed, these will be corrected by the company geologist with the

assistance from the QP.

13 Mineral Processing and Metallurgical Testing Due to the early development stage of exploration of this project, no mineral processing and

metallurgical testing work has been requested or performed on the samples from the Mallawa

project.

14 Mineral Resource Estimates Mallawa is an early stage exploration project and no attempt has been made to estimate a

Mineral Resource.

15 Mineral reserve Estimates Mallawa is an early stage exploration project and no attempt has been made to estimate a

Mineral Reserve.

16 Mining methods Mallawa is an early stage exploration project; no mining study has been conducted for this

project.

17 Recovery methods Mallawa is an early stage exploration project; no processing study has been conducted for this

project.

27

18 Project infrastructure Mallawa is an early stage exploration project; no infrastructure exists for this project other

than rudimentary access roads.

19 Market studies and contracts Mallawa is an early stage exploration project, no market study has been conducted for this

project and there are no contracts in place related to mineral sales.

20 Environmental Studies, Permitting and Social or Community Impact

TFR do not currently have any environmental permits applied for or approved. Neither do

TFR have any formal agreements in place with the local government or community. Mallawa

is an early stage exploration project; there are no mine related plans for waste and tailings

disposal, site monitoring, and water management; and no mine closure permits, arrangements

or plans of any kind.

21 Capital and Operating Costs Mallawa is an early stage exploration project; there is no production at the project site, so

there has been no determination of capital and operating costs.

22 Economic Analysis Mallawa is an early stage exploration project, there is no production at the project site, so

there has been no economic analysis conducted.

23 Adjacent Properties According to TFR personnel, no base metal or gold concessions by other exploration

companies join onto the TFR concession. The technical report states that its qualified person

has been unable to verify the information and that the information is not necessarily indicative

of the mineralization on the property that is the subject of the technical report”

24 Other Relevant Data and Information There is no additional relevant data that can supplement the information provided throughout

this report.

28

25 Interpretation and Conclusions Based on the assay results from reconnaissance sampling and the geological observations

made during both site visits, there is good potential for mineralisation on the concession.

Island Arc environments are particularly conducive to the formation of porphyry systems.

This is due to the culmination of recent volcanic activity and the presence of numerous faults

in such environments. A number of key geological traits of porphyry systems have been

observed within the concession area. In particular, the porphyritic granodiorite, the occurrence

of sulphide mineralisation and characteristic alteration assemblages are all indications that the

area could fit the geological model being applied.

In addition to the geological observations, the assay results of the samples taken on the

concession have confirmed that there are anomalous concentrations of gold and copper. The

first round of sampling in February produced significant results from samples containing

chalcopyrite, covellite, pyrite and minor malachite. These results were confirmed and verified

on site by the QP in May of 2011 when a second round of sampling was completed. The assay

results for the May samples confirmed the presence of mineralisation at the February sample

locations.

Now that anomalies have been identified on the concession, it will be necessary to conduct a

detailed mapping and sampling program to characterise the nature of the geology. Effort

should be made to determine whether the spatial location of the alteration is typical of

porphyry systems and therefore can be used as a guide to exploration. The use of detailed field

mapping and geophysical techniques may generate more targets over which further

geochemical sampling and drilling can be conducted.

29

26 Recommendations Before any further work is completed, it is essential that a team of experienced geologists be

appointed. Currently the only geologist working for TFR is Mr. Subandrio and as he has other

commitments as well. He will be using his comprehensive knowledge of the geological and

mineralisation environment to guide a group of local geologists on the mapping and sampling.

This work will have to be regularly supervised to ensure the results are valid and useful. MCS

should also visit the site on a regular basis to ensure the compliance to the prescribed

procedures.

MCS will assist in creating a geological mapping and logging template that should be used

during data collection. This should be the minimum standard used by field geologists for all

activities; including field observations, logging core and logging reverse circulation (RC) drill

cuttings. Data from hard copies of these templates should be captured electronically into a

database and the hard copy should be filed in a safe manner for at least seven years.

The proposed TFR exploration budget is shown in Table 26-1. The work program will include

geological, structural and alteration mapping as well as ground magnetic and IP geophysical

surveys. While this work is being undertaken, geochemical samples will be collected over the

different alteration zones to determine their geochemical and mineralogical profile. This will

be followed by a more detailed sampling grid of pit/trench sampling and then by drilling.

Regional geological data as well as historic and current sampling results will be transferred

onto a working base map and the accuracy of the earlier mapping will be checked. All

currency figures are Canadian dollars.

Table 26-1: TFR exploration plan and budget.

Phase 1

0 to 6 months

6 months to 1

year

Trenching Sample Assay's 1200 @ $50/sample $30,000 $30,000

Consultant Geologist (QP) $12,000/month $72,000 $72,000

Local Senior Geologist $1150/month $6,900 $6,900

Local Junior Geologist $700/month $4,200 $4,200

Local Junior Geologist $700/month starting after 6

months $0 $4,200

Local Labour and Administrative Support @

$7,000/month $42,000 $42,000

Camp, Food, Fuel, Field Supplies Etc. $15,000 $15,000

Airfare and Transportation Expenses $7,500 $7,500

Contingencies 5% $8,880 $9,090

0 to 6 months and 6 months to 1 year subtotals $186,480 $190,890

Total Phase 1 $377,370

Phase 2 exploration is dependent upon the results of phase 1 work; expenditure is additional to

phase 1 and is as follows –

Phase 2 1 year

Ground Magnetic 16 (450m) lines @ $1200/ line $19,200

Geophysical IP & Resistivity 24 lines @ $1800/line $43,200

Diamond Drilling (NQ) 1500m @ $190/m $285,000

Drilling Sample Assay's 600 @ $50/sample $30,000

Trenching Sample Assay's 200 @ $50/sample $10,000

Consultant Geologist (QP) $12000/month $144,000

Local Senior Geologist $1150/month $13,800

30

Local Junior Geologist $700/month x 2 $16,800

Local Labour and Administrative Support @

$10,000/month $120,000

Camp, Food, Fuel, Field Supplies Etc. $30,000

Airfare and Transportation Expenses $24,000

Contingencies 10% $73,600

Total Phase 2 $809,600

TOTAL Phase 1 & 2 $1,186,970

The total for phase 1 and phase 2 exploration over a period of 2 years is Canadian dollars,

CD$1,186,970.

There are a number of key steps and processes that MCS recommends to ensure the

exploration program is run as efficiently and effectively as possible. As a first preparatory

stage, a base map should be prepared that will form the basis for the initial field work. This

should be followed by establishing a base reference line from which all measurements will be

taken. Before the field crews are dispatched into the field, a base camp should be established

where a secure sampling and sample storage facility must be erected. Sample security and

integrity is of the utmost importance and access to this facility must be restricted to a limited

number of persons. Communication at the base camp is essential and if the internet

connectivity is not strong enough using conventional cellphone networks, it is suggested that a

satellite system be installed. Data must be sent through a secure connection to the data

management team at MCS.

It is the recommendation of the QP that the geophysical surveys should be shifted to Phase 1

of the program to assist in locating areas of high potential that may require additional

sampling programs prior to drilling. The initial geophysical traverses need to be done on the

areas with the high sample grades. The strike extensions and lateral continuity of these areas

should be investigated as a high priority by running parallel traverses ever further from the

sample positions in both directions. Starting with a broad geophysical program and generating

smaller and smaller targets from this will be the best process to achieve this.

The commencement of drilling should be contingent on delineation of significant zones of

mineralisation during phase one. Where drill access is not possible due to the steep slopes, a

man-portable drill rig may be necessary.

Where there is any uncertainty in the exploration procedures, it will be necessary to consult

the QP so that NI43-101 compliance can be maintained. When the time comes to disclose the

exploration results to the market, the QP needs to be able to verify that every effort has been

made to avoid technical errors. A robust procedure for exploration work will give the reader a

higher degree of confidence and thus give any reported results greater integrity. The Company

will need to implement an internal QA/QC protocol (blanks, standards and duplicates),

particularly during the drilling phase. Not only rely on internal lab controls.

Following a systematic process during exploration will be the quickest way of finding

economic mineralisation. Starting with a broad geophysical program and generating smaller

and smaller targets from this will be the best process to achieve this. Given the requirements

for NI43-101 disclosure, it is critically important that the procedures detailed above are

followed. This will ensure that sufficient data is captured on the samples, that the samples are

representative and that the QAQC program has been able to detect and prevent any analytical

errors.

31

27 References

Gunawan D., Gravenhorst G., Jacob D. and Podzun, R (n.d.). Rainfall Variability Studies

in South Sulawesi using Regional Climate Model REMO. Source from

http://www.tropentag.de/2003/abstracts/full/413.pdf on May 12, 2011.

Mallawa Porphyry Copper-Gold and Related Deposit Exploration Target, n.d. TFR internal

report.

Mutawakkil, M.S. 2010. Laporan Lengkap Hasil Eksplorasi, Bahan Galian Mineral Logam

Cufrun (Cu) Dan Aurun (Au).

Seerdorf, E., Dilles, J.H., Proffett, J.M., Einaudi, M.T., Zurcher, L., William, J.A.S, Johnson,

D.A., and Barton, M.D. 2005. Porphyry Deposits: Characteristics and Origin of

Hypogene Features. Society of Economic Geologists, Inc, Economic Geology 100th

Anniversary Volume, pp. 251-298.

Subandrio, A.S. 2011. Report on Petrographical and Mineragraphy Analysis of Malawa Rock

Samples of Kabupaten Bone, South Celebes.

Sukamto 1982, Geological Map of Pangkajene & Watampone Quadrangle Scale 1:250,000

Feasibility Study geology; Mr Andri Subandrio, Senior Lecturer at the Applied Geology

Research Division, Institut Teknologi Bandung (this is a geology study and is not a

feasibility study as defined in the National Instrument 43-101 standards of disclosure for

mineral projects)

32

28 Certificate of Author I, Johannes Erasmus do hereby certify that:

I am an associate geologist contracted by Micromine Pty and the Micromine consulting services, a

division of Micromine Pty Ltd; 174 Hampden Road, Nedlands, Perth, Western Australia.

1. I reside at 42 Main Road, Hogsback, Eastern Cape, South Africa.

2. I graduated in 1980 from the University of South Africa with a Bachelor of Science in

geology and a Master of Science (Mining) from the University of the Witwatersrand in

2000.

3. I visited the Mallawa Project, Licence 124/KPPSP/IV/2010 from May 4th

to May 6th 2011.

4. I am registered with the South African Council for Natural Scientific Professions in terms

of the Natural Scientific Professions Act, 2003 in the field of Geological Science,

Registration Number 400099/03.

5. I have practiced my profession continuously for 30 years and have been a consultant to

the minerals industry for over 15 years.

6. I have read the definition of “qualified person” set out in National Instrument 43-101 (NI

43-101) and certify by reason of my education, affiliation with a professional association,

and past relevant work experience, I do fulfil the requirements to be a “qualified person’

for the purposes of the NI43-101 for this project.

7. I am responsible for all sections of the report; “National Instrument 43-101 Technical

Report for PT. Terra Mineral Firma Resources Inc. Mallawa Exploration Project” dated

August 11, 2011.

8. I have had no prior involvement with the property that is the subject of this technical

report.

9. As of the date of this certificate, to the best of my knowledge, information and belief, the

technical report contains all scientific and technical information that is required to be

disclosed to make the technical report not misleading.

10. I am independent of each of Terra Firma Resources, Pt. Mutiara Surya Mallawa (Mutiara)

and Tirta Winata (Tirta) applying the tests in Section 1.4 of National Instrument 43-101.

11. I have read National Instrument 43-101 and Form 43-101F1 and the Technical report has

been prepared in compliance with that Instrument and form.

Prepared August 11, 2011

Johannes F. Erasmus

Hogsback, South Africa

33

29 Date and Signature Page

Johannes Erasmus BSc, GDE, MSc (Mining)

Associate geologist of Micromine Pty Ltd

42 Main Road, Hogsback, Eastern Cape, South Africa

The effective date of the technical report is 11th of August, 2011.

Signed by the QP on this day 11th of August, 2011.

Johannes Erasmus

Pr. Sci. Nat.

34

30 Consent of Authors

Johannes Erasmus BSc, GDE, MSc (Mining)

Associate geologist of Micromine Pty Ltd

42 Main Road, Hogsback, Eastern Cape, South Africa

Consent of Qualified person

To TMX Venture Exchange, British Columbia Securities Commission, Alberta

Securities Commission and Ontario Securities Commission;

I, Johannes Erasmus, do hereby consent to the filing of the written disclosure with the

securities regulatory authorities of the technical report titled “National Instrument 43-101

Technical Report for Terra Firma Resources Inc. Mallawa Exploration Project” dated August

11th 2011 (the Technical Report).

Dated this day, 11th

of August 2011.

Johannes Erasmus

Pr. Sci. Nat.

35

31 Additional Requirements for Technical Reports on Development Properties and Production Properties

The concession is not in the development stage and there are no active mining operations. As

a result, no information can be provided on technical or economic considerations.

32 Illustrations All illustrations are contained with the relevant sections of the report.

36

33 Appendix 1: Petrographic Report of Samples

REPORT ON PETROGRAPHICAL AND

MINERAGRAPHY ANALYSES OF

MALAWA ROCK SAMPLES

OF KABUPATEN BONE

SOUTH CELEBES

By

Dipl. Ing. Ir. Andri Slamet Subandrio

For

TERRA FIRMA RESOURCES INC

2011

37

Sample No. MLW-02A, 02B & 02D

MEGASCOPIC CHARACTERISTICS

Rock name: Calc-silicate altered and sericitized Granodiorite

Nature of Sample: Small rock chip

Minerals Visible: Calcite, quartz, sericite, muscovite, chlorite minor biotite, hornblende

feldspar and chalcopyrite, covelite and pyrite.

Texture: Possibly relic phaneritic and porphyritic.

Colour: Creamy white-pale green.

Grain Size: Medium grained.

Other Comments: This strongly mineralized (chalcopyrite and pyrite) rock appears under

a binocular microscope to be strongly or pervasively metasomatically

altered, fractured and quartz carbonate veined, possibly porphyritic,

intermediate igneous intrusive with granodioritic norm. Primary

silicate minerals appear to be rare as residual grains.

MICROSCOPIC CHARACTERISTICS

Constituents: (Percent visual estimate)

60% Calcite, quartz and sericite (muscovite), representing products of

silicic, CO2 metasomatic and K-metasomatic alteration processes,

occur in about equal abundance as fine interlocking aggregates that in

places exhibit the relic porphyritic fabric of a diorite, possibly

granodiorite porphyry, as suggested by the rare residual andesine

present and chloritized prismatic biotite. Primary quartz is absent.

Quartz and calcite also filled irregular microfractures. Sericite

pseudomorphs after tabular and lath shaped andesine

microphenocrysts are also represented. Epidote present scarcely.

30% Chlorite and epidote of metasomatic origin occurs as tabular and

prismatic pseudomorphs after primary biotite and hornblende grains

and clusters as well as rare microphenocrysts. Residual hornblende

and biotite present as microveinlets cross cut the sericitized K-

Feldspar.

10% Opaques occur as scattered, discrete, subhedral and euhedral

grains and clusters that appear to be predominantly composed of

primary chalcopyrite, pyrite and covelite as the anhedral form and

yellow metallic lustre suggest.

Texture: Relic porphyritic and granular. Metasomatic Alteration: CO2

metasomatic, sericitic, silicic, and chloritic

Petrogenesis: A strongly microfractured and pyritized, sillicified, sericitized,

carbonatized and chloritized, diorite microporphyry.

Remarks: The relic igneous, plus the presence of residual andesine and

chloritized biotite and hornblende, suggest that the protolith was a

granodiorite porhyry. Metasomatic alteration was almost pervasive

and selective. The oxide and sulphide opaque phase present can only

be positively identified in reflected light.

ROCK NAME: Strongly microfractured chloritized, silicified, sericitized of

granodiorite porphyry

38

Various images of sample MLW‐02 show granodiorite that sericitized, CO2 metasomatized

and chloritized and groundmass Hornblende and biotite laths are partly altered to chlorite and secondary quartz, sometime associated with opaque minerals which mostly consist of base

metal sulfide. Note: bi = biotite, ca = calcite,ch = chlorite, ep = epidote, Kf = K‐feldspar,ho =

hornblende, om = opaque mineral, pl = plagioclase, py = pyrite,qz = quartz, sc = sericite

39

Pyrite (white) shows bright reflectance and porous crystals disseminated in silica groundmass of altered materials. Chalcopyrite (yellow) shows faint reflectance differences (upper right) due

to compositional variations. It encloses fine‐ galena and arsenopyrite crystals (dark grey

grey). Chalcopyrite (yellow upper right)is corroded by galena (medium grey). The right photo shows pyrite which is corroded by silicate groundmass. Note: asp = arsenopyrite, chp =

chalcopyrite, ga = galena, py = pyrite, sil gm = silica groundmass

40

Sample No. 3A & 3B

MEGASCOPIC CHARACTERISTIC

Field Name: Potassic altered diorite

Nature of Sample: Rock chip

Minerals Visible: Megacryst of K-feldspar, biotite vein, chlorite, calcite and quartz vein,

pyrite, chalcopyrite

Texture: Biotite vein cross cut diorite

Colour: Pale grayish-pinkish with black fleck of mafic mineral

Grain Size: Fine to medium grained

Other Comments: The sample exhibits vein texture resulting from the interlayering of

very fine grained biotite cross cut feldspatic groundmass.

MICROSCOPIC CHARACTERISTICS OF ALTERED ROCKS

Constituents: (Percent visual estimate)

90% K-feldspar, quartz and scarcely calcite product of K-metasomatic

alteration, occur as fine-medium grained aggregates, hornfelsic and

interlocking texture that are seen to replace the intermediate

plagioclase and fill irregular microfractures. It is a late metasomatic

alteration event, and over prints, and hence masks the earlier sericitic

and argillic alteration even.

7% Biotite, products of potassic alteration, occur in about equal

abundance as fine crystalline aggregates that are seen to cross cut the

primary intermediate plagioclase, and associated alkali feldspar,

hornblende to varying degrees, ranging from moderate to almost

complete. Late phyllic overprinting by sericite and microfracture

filling by sericite can be seen.

3% Opaques occur as scattered, discrete, interstitial and intergranular

anhedral to euhedral grains, blebs and clusters that appear to be mainly

composed of accessory magnetite.

Texture: Relic of phaneric porphyritic and hornfelsic groundmass Metasomatic

Alteration: Potassic with secondary K-feldspar and biotite

Petrogenesis: A strongly microfractured, strongly silicified, propylitized and argillic

altered, fine grained biotite- hornblende-quartz diorite.

Remarks: The residual andesine and abundant hornfelsic and interlocking texture

secondary biotite, K-feldspar and quartz present suggest that the

protolith was a medium grained hornblende diorite.

ROCK NAME: Strongly microfractured and potassic altered of hornblende diorite or

Microdiorite

41

Potassic alteration is shown by abundant of feldspar and quartz that cross cut by secondary

biotite with the expulsion of fine‐grained disseminated magnetite. Plagioclase feldspar is

partly altered to sericite whereas biotite chloritized and silica enrichment giving hornfelsic and

interlocking texture Note: b‐1i = primary biotite, bi‐2 = secondary biotite, ch = chlorite, ep =

epidote, Kf = K‐feldspar, mg = magnetite, op = opaque mineral, pl = plagioclase, qz = quartz,

sc = sericite

42

Sample No. MLW-05A, 05B, & 05C

Location: Mallawa

Rock name: Garnet Skarn with iron carbonate alteration and base metal sulphide

mineralization

Field Description: Garnet Skarn

Offcut Description: A porous, pale green to tan brown rock consisting of carbonate

(dolomite/siderite) which pseudomorph garnet and chalcopyrite/pyrite

Thin Section Descriptions (Constituent in %)

Garnet 5%, Pyrite 3%, Chalcopyrite 2%, Sphalerite 0.5%, Galena 0.5%, Calcite 75%, Sericite

9% and Quartz (5%)

Description: An intensely altered (carbonatized) skarn. Garnet was the originally

the primary constituent of this rock, in loosely interlocking medium-

coarse sized euhedral-subhedral grains. Abudant sulphides and minor

anhedral quartz have been deposited interstitially to the garnet. The

garnet is mostly altered and replaced by very fine-grained iron bearing

carbonate (siderite).

Pyrite is the most abundant sulphide, forming irregular-shaped,

coarse-grain aggregates disseminated through the skarn. These are

overgrown and rimmed by a small amount of chalcopyrite.

Trace amounts of galena infill small cavities in both sphalerite and

chalcopyrite, and sometimes appear to overgrown (and hence postdate)

both sphalerite and intergrown rhombic iron carbonate.

Comments: Garnet skarn with alteration and sulphide deposition as follows

43

Skarn altered diorite consist of mainly medium‐coarse grained calcite, biotite, chlorite,

epidote, sericite and garnet. Feldspar and mafic minerals are partly altered to carbonate, biotite, chlorite, epidote secondary quartz, sometime associated with opaque minerals which mostly consist of base metal sulfide. Note:bi = biotite, ca = calcite, ch = chlorite, ep = epidote, ga =

garnet, Kf = K‐feldspar, mu = muscovite, om = opaque mineral, pl = plagioclase, py = pyrite,

qz = quartz, sc = sericite

44

Pyrite shows bright reflectance and porous crystals disseminated in silica groundmass of

altered materials. Chalcopyrite (yellow) shows faint reflectance differences due to compositional variations and partly altered tobornite. The lowest photos shows pyrite which area corroded by silicate groundmass. Note: bo = bornite, chp = chalcopyrite, py = pyrite, sil

gm = silica groundmass

45

Sample No. MLW-06

MEGASCOPIC CHARACTERISTICS

Rock name: Muscovite-Sericite Altered Diorite

Nature of Sample: Small rock chip

Minerals Visible: Quartz, feldspar, muscovite, sericite minor calcite, and chalcopyrite

and pyrite.

Texture: Possibly relic phaneritic and microporphyritic.

Colour: Pale grey.

Grain Size: Fine grained.

Other Comments: This weakly mineralized (chalcopyrite and pyrite) rock appears under

a binocular microscope to be strongly or pervasively metasomatically

altered, fractured and cross cut by biotite vein, possibly

microporphyritic, intermediate igneous intrusive with diuretic norm.

Primary silicate minerals appear to be rare as residual grains.

MICROSCOPIC CHARACTERISTICS

Constituents: (Percent visual estimate)

65% Quartz, sericite, muscovite, representing products of silicic, CO2

metasomatic and K-metasomatic alteration processes, occur in about

equal abundance as fine interlocking aggregates that in places exhibit

the relic microporphyritic fabric of a diorite, possibly a diorite

microporphyry, as suggested by the rare residual andesine present and

chloritized prismatic hornblende. Hornblende is mostly altered to

chlorite, muscovite and sericite. Primary quartz is absent. Quartz and

calcite also filled irregular microfractures. Sericite pseudomorphs after

tabular and lath shaped andesine microphenocrysts are also

represented. Epidote present scarcely, partly associated with biotite

vein.

25% Chlorite of metasomatic origin occurs as tabular and prismatic

pseudomorphs after primary hornblende grains and clusters and rare

microphenocrysts. Residual biotite present as microveinlets cross cut

the sericitized K-Feldspar.

10% Opaques occur as scattered, discrete, subhedral and euhedral

grains and clusters that appear to be predominantly composed of

primary pyrite as the anhedral form and yellow metallic lustre suggest.

Texture: Relic microporphyritic and granular. Metasomatic Alteration:

Muscovite, silicic, CO2 metasomatic, sericitic and chloritic.

Petrogenesis: A strongly microfractured and pyritized, sillicified, sericitized,

carbonatized and chloritized, diorite microporphyry.

Remarks: The relic igneous, plus the presence of residual andesine and

chloritized hornblende, suggest that the protolith was a diorite

microporhyry. Metasomatic alteration was almost pervasive and

selective. The oxide and sulphide opaque phase present can only be

positively identified in reflected light.

ROCK NAME: Strongly microfractured sericitized, chloritized, silicified, of micro

diorite porphyry

46

Microphotographs of various point of MLW‐06 display euhdral‐subhedral pyrite which

disseminated throughout sericitized groundmass. Note: py = pyrite, sil gm = silica groundmass

47

Micrometer scale for polish and thin section

48

34 Appendix 2: Internal TFR Report on Exploration Activities

Malawa Porphyry Copper –Gold and Related Deposit Exploration Target

1. Extensive granodioritic-dioritic rocks throughout Malawa until Pangkajene with strongly indication of potassic and propylitic zone alteration that outcropped in the creek near Malawa village.

2. Significant skarn vein type which enveloped by propylitic alteration zone that outcropped on the middle downstream of Malawa creek (MLW-5). The vein is dominated by carbonate mineral consist of coarse to very coarse grained chalcopyrite, pyrite, arsenopyrite and scarcely galena and sphalerite.

3. Discovery of vein that probably as a part of a stockwork system which enclosed by advanced argillic or phyllic (quartz+sericite+pyrite) alteration zone on MLW-2. The geochemistry analysis on the vein sample of MLW-2 shows interesting gold grade of 1.2 ppm Au and 5.2% of Cu.

4. By this first field visiting program is found also in the Malawa area (in observation point of MLW-5) some thin film of malachite.

5. The Malawa area is associated with favorable structural and its tectonic setting of Island Arc environment that bounded by major strike slip faults and shear. The best extension for porphyry copper prospect is to the west and northwest in radius 30-40 km from Malawa until Pangkajene area.

Zones

6. Malawa district lies presumably in the favorable metallogenic belt associated with the ancient calc alkaline volcanic and intrusive rocks of South Celebes. The famous Porphyry Copper and Gold mining recently present in Tombolilato and Messel of Gorontalo Provice in the northern arm of Celebes.

7. Malawa is located on Kabupaten Bone (Bone District) which has easy access to major highway, electricity power and logistic.

8. There are no environmental issues to prevent mining.

9. According to the exploration steps on the Malawa property, there has no drilling data (never have been drilled).

PROPERTY DESCRIPTION

The Malawa Prospect currently is a 800 Ha mining permit located approximately three hours

northeast of Makasar, in Sulawesi, Indonesia The permit is approximately 20 km north of the

Bone Highway which is a major highway connecting Makassar to Bone and other

communities.

49

REGIONAL GEOLOGY

Figure 1. Simplified regional geological map of Malawa-Pangkajene area. This map is cropped out from “Geologic Map of the Pangkajene and Western Part of Watampone Quadrangle of

Sukamto (1982).

The Malawa Prospect is situated in the South Celebes Arm (Active Island Arc System) and

along the southwestern axis of the Walanae Fault Zone (Fig. 1). It is underlain by the mélange,

metamorphic and ultramafic complexes of Triassic-Cretaceous ages. These Mesozoic

complexes area intruded and covered by Tertiary volcanic and sedimentary rocks.

Malawa has a very favorable tectonic and structural position for the emplacement of porphyry

type deposits, especially in the western part until Pangkajene. It is bounded by major strike

slip faults Walanae Fault Zone (WFZ). This type of tectonic activity can create pull-apart

basins which are zones that provide high-permeability conduits for the emplacement of

mineralized magmas to shallow crustal levels.

LOCAL GEOLOGY

The Malawa Formation is composed of non-marine of fluviatile sedimentary rock of

conglomerate, sandstone, claystone and coal (Tem). There are also interbedded marine

sediments of limestone of Tonasa Formation (Temt). Numerous intrusives are evident ranging

from basalt (b) granodiorite (gd), syenite (s) and diorite (d) that are placed as coeval with the

Early to Late Miocene volcanics. There also may be younger volcanic and intrusive rocks on

Malawa but only precise age dating would determine this. The alteration zone is coincident

with a circular structure in the northern part Bukit Maraja (bukit=hill) that is bounded on the

south by a reverse fault which appears to have been formed by an intrusive event along the

WFZ. The alteration zone of Malawa is presumably cut by an extensive network of altered and

sheared dikes and also by late stage breccias.

50

Alteration and Mineralization

The alteration as seen from the highway is striking. Fresh to Propylitically altered volcanic

and intrusive rocks are in sharp contact with a lower Potassic Alteration Zone (PAZ)

characterized by light pinkish to milky white K-feldspar altered rock, segregation or biotite

vein; red hematite clay altered rock and patchy zones of white gypsum. Below the PAZ zone

is a central core of bright white colored rock exposed in the bottom of a ravine which is

composed of quartz, sericite, pyrite and kaolinite. This zone is presumably related to the

Phyllic alteration zone characteristic of porphyry style alteration. In some samples is identified,

K-feldspar veining is evident which could be a remnant of an earlier Potassic zone telescoped

by destructive later alteration events. Within the alteration (leached zone) mineralization is

predictably low due to acid destruction. However anomalous copper values of 0.01-7.31% Cu

have been recorded associated with the copper minerals chalcopyrite, covelite and malachite.

Numerous occurrences of copper gossans were found within the alteration zone associated

with sheared and intensely altered rocks. Anomalous gold values of up to 1.2 ppm have been

found by our chemical analyses on MLW-2. On the periphery of the alteration zone to the east

other investigators have found malachite and extensive chalcopyrite veins assaying up to 7.3%

Cu. Float in streams drainages contain mainly chalcopyrite. Principle alteration suites

associated with preliminary studies of this porphyry copper prospect: Cu, Au, Ag, Pb, Zn

Table 1: The geochemical analyses of preliminary field study of Malawa prospect as shown bellow

RECOMMENDATION

1. Detail ground survey of geological and geophysical mapping for 800 Ha Malawa property.

2. The exploration property has to be extend (from only 800 Ha surrounding Malawa’s village) to the west and northwest of with radius 30-40km starting from Malawa until Pangkajene.

3. Conduct an Resistivity (R) and Induced Polarization (IP) and ground magnetic survey over the alteration zone to determine drill targets.

4. Drill minimum two deep with approximately 1000 m total length using reverse circulation (RC) holes followed up by another two core holes.

51

52

53

54

35 Appendix 3: QAQC Charts

35.1 Standard Control Charts

The standard control charts have been produced according to element and batch. The batch ID

is shown in the legend of each chart (e.g. 111463 Results).

1.6

1.7

1.8

1.9

2

2.1

2.2

Cu

(%

)

STD GBM999-3Cu

Expected Value

Lower Warning Limit

Upper Warning Limit

Lower Action Limit

Upper Action Limit

111463 Results

0.8

0.85

0.9

0.95

1

1.05

1.1

1.15

1.2

Pb

(%

)

STD GBM999-3Pb

Expected Value

Lower Warning Limit

Upper Warning Limit

Lower Action Limit

Upper Action Limit

111463 Results

55

8

8.5

9

9.5

10

10.5

11

Cu

(%

)

STD GBM304-13Cu

Expected Value

Lower Warning Limit

Upper Warning Limit

Lower Action Limit

Upper Action Limit

111463 Results

8

13

18

23

28

Pb

(%

)

STD GBM304-13Pb

Expected Value

Lower Warning Limit

Upper Warning Limit

Lower Action Limit

Upper Action Limit

111463 Results

8

10

12

14

16

18

20

Zn (

%)

STD GBM997-6CZn

Expected Value

Lower Warning Limit

Upper Warning Limit

Lower Action Limit

Upper Action Limit

111463 Results

56

390

410

430

450

470

490

510

530

Ag

(pp

m)

STD GBM997-6CAg

Expected Value

Lower Warning Limit

Upper Warning Limit

Lower Action Limit

Upper Action Limit

111463 Results

0

50

100

150

200

250

As

(pp

m)

STD GBM995-2As

Expected Value

Lower Warning Limit

Upper Warning Limit

Lower Action Limit

Upper Action Limit

110634 Results

5000

5200

5400

5600

5800

6000

6200

6400

6600

6800

Cu

(p

pm

)

STD GBM306-8Cu

Expected Value

Lower Warning Limit

Upper Warning Limit

Lower Action Limit

Upper Action Limit

111826 Results

57

220

270

320

370

420

470

520

570

Pb

(p

pm

)

STD GBM306-8Pb

Expected Value

Lower Warning Limit

Upper Warning Limit

Lower Action Limit

Upper Action Limit

111826 Results

220

320

420

520

620

720

820

920

1020

Zn (

pp

m)

STD GBM306-8Zn

Expected Value

Lower Warning Limit

Upper Warning Limit

Lower Action Limit

Upper Action Limit

111826 Results

3

3.5

4

4.5

5

5.5

6

6.5

7

7.5

8

Ag

(pp

m)

STD GBM306-8Ag

Expected Value

Lower Warning Limit

Upper Warning Limit

Lower Action Limit

Upper Action Limit

111826 Results

58

0

100

200

300

400

500

600

700

800

900

Cu

(p

pm

)

STD BM 161Cu

Expected Value

Lower Warning Limit

Upper Warning Limit

Lower Action Limit

Upper Action Limit

111463 Results

0

200

400

600

800

1000

1200

Pb

(p

pm

)

STD BM 161Pb

Expected Value

Lower Warning Limit

Upper Warning Limit

Lower Action Limit

Upper Action Limit

111463 Results

0

200

400

600

800

1000

Zn (

pp

m)

STD BM 161Zn

Expected Value

Lower Warning Limit

Upper Warning Limit

Lower Action Limit

Upper Action Limit

111463 Results

59

0

1

2

3

4

5

Ag

(pp

m)

STD BM 161Ag

Expected Value

Lower Warning Limit

Upper Warning Limit

Lower Action Limit

Upper Action Limit

111463 Results

0

100

200

300

400

500

600

700

800

900

Cu

(p

pm

)

STD BM 161Cu

Expected Value

Lower Warning Limit

Upper Warning Limit

Lower Action Limit

Upper Action Limit

111826 Results

0

200

400

600

800

1000

1200

Pb

(p

pm

)

STD BM 161Pb

Expected Value

Lower Warning Limit

Upper Warning Limit

Lower Action Limit

Upper Action Limit

111826 Results

60

0

200

400

600

800

1000

Zn (

pp

m)

STD BM 161Zn

Expected Value

Lower Warning Limit

Upper Warning Limit

Lower Action Limit

Upper Action Limit

111826 Results

0

1

2

3

4

5

Ag

(pp

m)

STD BM 161Ag

Expected Value

Lower Warning Limit

Upper Warning Limit

Lower Action Limit

Upper Action Limit

111826 Results

550

600

650

700

750

800

Cu

(p

pm

)

STD BM 161Cu

Expected Value

Lower Warning Limit

Upper Warning Limit

Lower Action Limit

Upper Action Limit

111826 Results

61

650

750

850

950

1050

1150

1250

Pb

(p

pm

)

STD BM 161Pb

Expected Value

Lower Warning Limit

Upper Warning Limit

Lower Action Limit

Upper Action Limit

110634 Results

0

200

400

600

800

1000

1200

Zn (

pp

m)

STD BM 161Zn

Expected Value

Lower Warning Limit

Upper Warning Limit

Lower Action Limit

Upper Action Limit

110634 Results

0

1

2

3

4

5

6

Ag

(pp

m)

STD BM 161Ag

Expected Value

Lower Warning Limit

Upper Warning Limit

Lower Action Limit

Upper Action Limit

110634 Results

62

1.2

1.3

1.4

1.5

1.6

1.7

Cu

(%

)

STD BM-16/214Cu

Expected Value

Lower Warning Limit

Upper Warning Limit

Lower Action Limit

Upper Action Limit

111463 Results

1.2

1.3

1.4

1.5

1.6

1.7

Cu

(%

)

STD BM 161Cu

Expected Value

Lower Warning Limit

Upper Warning Limit

Lower Action Limit

Upper Action Limit

111826 Results

1.2

1.3

1.4

1.5

1.6

1.7

Cu

(%

)

STD BM 161Cu

Expected Value

Lower Warning Limit

Upper Warning Limit

Lower Action Limit

Upper Action Limit

110634 Results

63

0

0.5

1

1.5

2

2.5

3

3.5

4

4.5

Mo

(p

pm

)

STD NCS DC 73325Mo

Expected Value

Lower Warning Limit

Upper Warning Limit

Lower Action Limit

Upper Action Limit

111826 Results

0

2

4

6

8

10

Mo

(p

pm

)

STD STSD-3Mo

Expected Value

Lower Warning Limit

Upper Warning Limit

Lower Action Limit

Upper Action Limit

111826 Results

0

0.05

0.1

0.15

0.2

0.25

0.3

0.35

Au

(%

)

STD ST 441Au

Expected Value

Lower Warning Limit

Upper Warning Limit

Lower Action Limit

Upper Action Limit

111463 Results

64

35.2 Blanks

0

0.05

0.1

0.15

0.2

0.25

0.3

Au

(%

)

STD ST 441Au

Expected Value

Lower Warning Limit

Upper Warning Limit

Lower Action Limit

Upper Action Limit

110634 Results

0

0.001

0.002

0.003

0.004

0.005

0.006

11

14

63

11

14

63

11

14

63

11

14

63

11

14

63

11

14

63

11

14

63

11

18

26

11

18

26

11

18

26

11

18

26

11

18

26

11

18

26

11

06

34

11

06

34

11

06

34

11

06

34

11

06

34

Batch ID

Au1 PPM

0

0.2

0.4

0.6

0.8

1

1.2

Batch ID

Cu PPM

65

0

0.5

1

1.5

2

2.5

11

14

63

11

14

63

11

14

63

11

14

63

11

14

63

11

14

63

11

14

63

11

18

26

11

18

26

11

18

26

11

18

26

11

18

26

11

18

26

11

06

34

11

06

34

11

06

34

11

06

34

11

06

34

Batch ID

Pb PPM

0

0.2

0.4

0.6

0.8

1

1.2

11

14

63

11

14

63

11

14

63

11

14

63

11

14

63

11

14

63

11

14

63

11

18

26

11

18

26

11

18

26

11

18

26

11

18

26

11

18

26

11

06

34

11

06

34

11

06

34

11

06

34

11

06

34

Batch ID

Zn PPM

0

0.001

0.002

0.003

0.004

0.005

0.006

11

14

63

11

14

63

11

14

63

11

14

63

11

14

63

11

14

63

11

14

63

11

18

26

11

18

26

11

18

26

11

18

26

11

18

26

11

18

26

11

06

34

11

06

34

11

06

34

11

06

34

11

06

34

Batch ID

Hg PPM

66

0

0.1

0.2

0.3

0.4

0.5

0.6

11

14

63

11

14

63

11

14

63

11

14

63

11

14

63

11

14

63

11

14

63

11

18

26

11

18

26

11

18

26

11

18

26

11

18

26

11

18

26

11

06

34

11

06

34

11

06

34

11

06

34

11

06

34

Batch ID

Ag PPM

0

0.001

0.002

0.003

0.004

0.005

0.006

11

14

63

11

14

63

11

14

63

11

14

63

11

14

63

11

14

63

11

14

63

11

18

26

11

18

26

11

18

26

11

18

26

11

18

26

11

18

26

11

06

34

11

06

34

11

06

34

11

06

34

11

06

34

Batch ID

Pb %

0

0.001

0.002

0.003

0.004

0.005

0.006

11

14

63

11

14

63

11

14

63

11

14

63

11

14

63

11

14

63

11

14

63

11

18

26

11

18

26

11

18

26

11

18

26

11

18

26

11

18

26

11

06

34

11

06

34

11

06

34

11

06

34

11

06

34

Batch ID

Cu %

67

0

0.001

0.002

0.003

0.004

0.005

0.006

11

14

63

11

14

63

11

14

63

11

14

63

11

14

63

11

14

63

11

14

63

11

18

26

11

18

26

11

18

26

11

18

26

11

18

26

11

18

26

11

06

34

11

06

34

11

06

34

11

06

34

11

06

34

Batch ID

Zn %

0

0.5

1

1.5

2

2.5

11

14

63

11

14

63

11

14

63

11

14

63

11

14

63

11

14

63

11

14

63

11

18

26

11

18

26

11

18

26

11

18

26

11

18

26

11

18

26

11

06

34

11

06

34

11

06

34

11

06

34

11

06

34

Batch ID

Ag PPM

0

0.1

0.2

0.3

0.4

0.5

0.6

11

14

63

11

14

63

11

14

63

11

14

63

11

14

63

11

14

63

11

14

63

11

18

26

11

18

26

11

18

26

11

18

26

11

18

26

11

18

26

11

06

34

11

06

34

11

06

34

11

06

34

11

06

34

Batch ID

Mo PPM

68

35.3 Duplicate Scatter Plots

0

0.1

0.2

0.3

0.4

0.5

0.6

11

14

63

11

14

63

11

14

63

11

14

63

11

14

63

11

14

63

11

14

63

11

18

26

11

18

26

11

18

26

11

18

26

11

18

26

11

18

26

11

06

34

11

06

34

11

06

34

11

06

34

11

06

34

Batch ID

As PPM

R² = 0.9999

0.00

0.20

0.40

0.60

0.80

1.00

1.20

1.40

0.00 0.20 0.40 0.60 0.80 1.00 1.20 1.40

Du

plic

ate

(p

pm

)

Original (ppm)

Duplicate Scatter PlotAu

69

R² = 0.9986

0

1000

2000

3000

4000

5000

6000

7000

8000

9000

10000

0 1000 2000 3000 4000 5000 6000 7000 8000 9000 10000

Du

plic

ate

(p

pm

)

Original (ppm)

Duplicate Scatter PlotCu

R² = 0.9988

0

500

1000

1500

2000

2500

3000

0 500 1000 1500 2000 2500 3000

Du

plic

ate

(p

pm

)

Original (ppm)

Duplicate Scatter PlotPb

70

R² = 1

0

200

400

600

800

1000

1200

0 200 400 600 800 1000 1200

Du

plic

ate

(p

pm

)

Original (ppm)

Duplicate Scatter PlotZn

R² = 0.9992

0

10

20

30

40

50

60

70

80

90

0 10 20 30 40 50 60 70 80 90

Du

plic

ate

(p

pm

)

Original (ppm)

Duplicate Scatter PlotAg

71

R² = 1

0

0.5

1

1.5

2

2.5

3

3.5

4

0 0.5 1 1.5 2 2.5 3 3.5 4

Du

plic

ate

(p

pm

)

Original (ppm)

Duplicate Scatter PlotHg

0

0.2

0.4

0.6

0.8

1

1.2

0 0.1 0.2 0.3 0.4 0.5 0.6

Du

plic

ate

(p

pm

)

Original (ppm)

Duplicate Scatter PlotMo

72

R² = 0.9992

0

10

20

30

40

50

60

70

80

0 10 20 30 40 50 60 70 80

Du

plic

ate

(p

pm

)

Original (ppm)

Duplicate Scatter PlotAs

73

36 Appendix 4: Intertek Laboratories Certification

74

37 Appendix 5: Recommended Sampling Procedures Since the project is in its early stages, the only sampling that has been undertaken, as far as

can be determined, is the collection of rock grab samples. In order to ensure compliance to

NI43-101 during the exploration program, the following sampling procedures have been

suggested:

37.1 Geochemical (Pit) Samples

Depending on the density of sampling required, the Project Geologist will select pits to be

sampled after consulting with the Company Exploration Manager and the QP. Pits are to be

dug down to bedrock where possible or to a depth of 0.5m. Individual pits must be marked

with a plastic sample tag tied to a stake, clearly indicating the sample number using a

permanent marker pen.

The profiling should be undertaken using the following procedure:

Obtain the 3D coordinates of the surface collar using the GPS. In order to increase the

accuracy of the measurement, the GPS should be set to “enabling GPS” so that the

values can be averaged.

Record the date, total depth of the pit, the rock type and any alteration.

The dip and strike of any structural features such as joints, veins and faults should

also be noted.

Using a small spade or geo-pick, cut a V-shaped channel in the formation while

collecting the material into a sample bag.

Samples of approximately 2kg are to be collected.

Samples must be double-bagged in strong plastic bags. One sample tag tied to the

inside bag and one to the outside. Plastic bag ties and plastic tags marked with a

permanent marker are recommended.

37.2 Trench Samples

Trench samples allow for observations to be made of the change in grade or quality on the

same lithology or of the change in lithology over the length of the trench. The following

methodology is recommended: Obtain the 3D surface collar coordinates at each end using a GPS. In order to increase

the accuracy of the measurement, the GPS should be set to “enabling GPS” so that the

values can be averaged;

Clean one long face with a spade from top to bottom if the side of the trench or rock

outcrop is to be sampled. Alternatively clean the bottom of the trench so that it is free

from any material that has fallen from the surface;

Record the date and measure the total length and depth of the trench;

Log the trench in as much detail as possible, taking note of any alteration, lithology

and structural features as per the prescribed log sheet;

Using spray paint, measure and mark intervals of 1m from across the base of the

trench;

Photograph the face/trench;

Number the samples from any end, ensuring this is consistent with other trenches;

Using a diamond saw in hard rock, or a small spade or geo-pick in weathered material,

cut a V-shaped channel while collecting the material into a sample bag;

Samples of approximately 2 kg should be collected.

75

Sampling lengths should be adjusted at the discretion of the geologist based on

changes in alteration or lithology;

Such changes must be recorded by the geologist on the sample bag and on the log

sheet.

In order to ensure compliance to NI43-101 during the exploration program, the following

sampling procedures has been suggested.

37.3 Geochemical (Pit) Samples

Depending on the density of sampling required, the Project Geologist will select pits to be

sampled after consulting with the Company Exploration Manager and the QP. Pits are to be

dug down to bedrock where possible or to a depth of 0.5m. Individual pits must be marked

with a plastic sample tag tied to a stake, clearly indicating the sample number using a

permanent marker pen.

The profiling should be undertaken using the following procedure: Obtain the 3D coordinates of the surface collar using the GPS. In order to increase the

accuracy of the measurement, the GPS should be set to “enabling GPS” so that the

values can be averaged.

Record the date, total depth of the pit, the rock type and any alteration.

The dip and strike of any structural features such as joints, veins and faults should

also be noted.

Using a small spade or geo-pick, cut a V-shaped channel in the formation while

collecting the material into a sample bag.

Samples of approximately 2kg are to be collected.

Samples must be double-bagged in strong plastic bags. One sample tag tied to the

inside bag and one to the outside. Plastic bag ties and plastic tags marked with a

permanent marker are recommended.

37.4 Trench Samples

Trench samples allow for observations to be made of the change in grade or quality on the

same lithology or of the change in lithology over the length of the trench. The following

methodology is recommended: Obtain the 3D surface collar coordinates at each end using a GPS. In order to increase

the accuracy of the measurement, the GPS should be set to “enabling GPS” so that the

values can be averaged;

Clean one long face with a spade from top to bottom if the side of the trench or rock

outcrop is to be sampled. Alternatively clean the bottom of the trench so that it is free

from any material that has fallen from the surface;

Record the date and measure the total length and depth of the trench;

Log the trench in as much detail as possible, taking note of any alteration, lithology

and structural features as per the prescribed log sheet;

Using spray paint, measure and mark intervals of 1m from across the base of the

trench;

Photograph the face/trench;

Number the samples from any end, ensuring this is consistent with other trenches;

Using a diamond saw in hard rock, or a small spade or geo-pick in weathered material,

cut a V-shaped channel while collecting the material into a sample bag;

Samples of approximately 2 kg should be collected.

76

Sampling lengths should be adjusted at the discretion of the geologist based on

changes in alteration or lithology;

Such changes must be recorded by the geologist on the sample bag and on the log

sheet.

37.5 Diamond drilling

10.1.1 Drill Core Samples

Drill cores must be packed into metal core boxes. Either the responsible geologist or

geological assistant will undertake the following tasks: Witness and verify the measuring of the depth of the hole;

Observe the correct packing of the core;

Observe the correct numbering of depth blocks, taking note of core losses or gains;

Ensure that the core is transported to the core yard with the minimum of disturbance;

The length of the core samples should be based on the geology encountered down the

hole. The minimum sample interval should be 20cm and the maximum sample

interval should not exceed 1.5m;

All core is to be photographed and the output is to be forwarded to the core shed on a

regular basis;

One half of the core over the target mineralisation is to be sampled and the remaining

half is to be stored for future reference;

Should a request for a duplicate sample be received, the stored half of the core should

be quartered and the remaining quarter should again be stored;

Sampling should start 50cm above the mineralised area and end 50cm below;

Record the data onto the computer database on a daily basis;

A permanent core yard geologist is to be responsible for the sawing, sampling and

storing of the core. The responsibility of the field geologist is the marking and

logging of the core.

For diamond drill holes, the following data must be captured: The length of the core run, in metres and millimetres, as defined by the driller’s core

blocks;

The length drilled, measured length of core recovered (in metres and centimetres) and

a calculation of the per cent core recovered;

A graphic lithological section;

Lithological features such as the degree of weathering, colour, grain size, field rock

name (often in capitals or underlined);

Proportions of rock minerals;

The attitude of bedding or foliation (the angle between the planar structure and the

long axis is generally stated, often termed );

Attitude and spacing of other structures such as joints and sheared zones. It is also

important to make note of the width of the sheared zones;

The interval in which ore minerals are present is to be listed separately, with ore

mineral species in capitals or underlined. Notes should also be colleted on the

orientation of ore minerals, the gangue minerals present, grain size and a visual

estimate of the percentage of metal.

Diamond core should be logged using the coding system provided by Micromine. It is good

practice to use summary logs for modelling purposes and to keep the detailed logs for

77

reference if required. Diamond core should be geotechnically logged, photographed and the

recovery should be determined while the core is still wet and sitting in the tube. If this is not

possible, all man-made breaks should be clearly marked with an X when the core is being

placed in the core tray.

Core boxes should be transported to the base on a daily basis and stored under cover. All

cores should be logged within two days of completion of the hole. Due to high humidity and

rainfall, core left exposed will be weathered very quickly. All observations are to be

transferred to the database at least on a weekly basis. The order of the logging procedure is

described below: Lay the complete core out in the core boxes;

Join and align the core prior to marking off a centre line for cutting with a diamond

saw (which will occur later). Joining and aligning the core will also ensure that all

length measurements are accurate;

Identify and record the major lithological changes;

Record the major structural features such as faults, veins and joints;

Log in the sequence prescribed in the log sheet, ensuring that all the sections in the

sheet are addressed.

37.6 RC Drilling

The logging of RC drill cuttings is more difficult and the information acquired is less detailed

relative to diamond core. The following information should be captured during the logging of

RC chips: The weight of each sample should be measured in order to determine recoveries.

Coupled with the theoretical mass that should be recovered according to the diameter

of the hole, the sample weight can be used to calculate the per cent recovery;

The depth of the water table should be noted to assist with subsequent hydrological

studies;

RC rod changes should also be noted in the logs, as well as the depths at which the

hole was stopped for any reason;

The penetration rate should be noted to provide a relative measure of rock hardness.

RC drill samples will be collected by the drill crew at 1m intervals into a 20kg numbered bag

and delivered to the sample preparation area at the camp. Field geologists should regularly

observe the sampling to ensure that samples are taken according to the specifications in the

drill contract.

RC drilling should be carried out by experienced drillers using the appropriate equipment.

This equipment would include compressors with sufficient air capacity for the depths and

material drilled. Air capacity can be easily boosted by using auxiliary compressors that are

capable of providing sufficient air to prevent water inflow below the water table. A down-

hole face sampling hammer should be used as well as stabilisers to prevent deflection of the

hole near the collar. In addition, the hole should be sealed to prevent air and dust loss at the

collar. It is good practice to implement the use of 'blow-backs' at the end of each sample run

whereby the bit is pulled back from the bottom of the hole and the hole is cleaned out for a

few seconds with air.

RC sampling should always be carried out with care so that the results can be successfully

matched with any diamond twin holes. This assists in allaying any concerns regarding RC

drilling as a resource definition tool. There is much debate regarding the sampling of wet RC

holes. If the sample cannot be kept dry by the air pressure used, then the samples should not

be collected at all.

78

RC samples should be collected through a properly designed and fitted cyclone that minimises

dust loss. After collection and weighing of the entire sample, a riffle splitter should be used to

split the sample down to a manageable size for assaying; approximately 4kg. Spear sampling

is acceptable if it is carried out properly and with due care in terms of sample homogenisation.

Sample residues should be clearly marked and stored securely under cover. shows the

proposed RC sampling procedure. The samples are to be numbered in sequence from the top

to the total depth with the numbering correlating to the drill depth.

Figure 37-1: RC sampling procedure.

37.7 Drill hole and Sample Numbering

It is recommended that a consistent numbering system be developed that adequately identifies

the project, sampling method (surface grab, trench, drill core or RC) followed by a number in

RC Cyclone Output

(1 metre = 15 – 25 kg)

25mm Split

15mm Split

15mm Split

Sample for Laboratory

(1.5 – 4 kg)

Logging

Residue bagged and

stored at field camp

Oxide material >7 kg

Sulphide material > 15

kg

Duplicate

(back-up)

1.5 – 4 kg

(bagged and stored

undercover at field

camp) Fractional

samples taken

(optional)

Chip Tray

(for a visual record)

79

sequence. This must be recorded together with date sampled and the coordinates, including

the collar elevation.