CHOCO 10 CONCESSION AND MINE ESTADO BOLIVAR, VE

SUITE 205 – 700 WEST PENDER, VANCOUVER, BRITISH COLUMBIA V6C 1G8 Telephone (1) (604) 647-6463 Fax (1) (604) 647 6455

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RUSORO MINING LIMITED Vancouver, B.C.

TECHNICAL REPORT

ON THE

PMG (GOLD FIELDS) CHOCO 10 CONCESSION AND MINE

ESTADO BOLIVAR, VENEZUELA

Robert J. Leader, P. Eng. John Perry, P. Geo. Ian Ward, P. Eng.

Christopher Jacobs, C. Eng. Christopher R. Lattanzi, P. Eng.

November 21, 2007

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TABLE OF CONTENTS Page

1.0 SUMMARY 1

2.0 INTRODUCTION AND TERMS OF REFERENCE 6 2.1 GENERAL ...................................................................................................................6 2.2 CURRENCY AND ABBREVIATIONS .....................................................................6 2.3 CORPORATE NAMES ...............................................................................................7 2.4 CLARIFICATION OF RESOURCE AND RESERVE DEFINITIONS .....................8

2.4.1 Mineral Inventory ................................................................................................8 2.4.2 Mineral Resources................................................................................................8 2.4.3 Mineral Reserves..................................................................................................8

2.5 SITE VISITS ................................................................................................................9 2.6 QUALIFIED PERSONS ..............................................................................................9

3.0 RELIANCE ON OTHER EXPERTS 10

4.0 PROPERTY DESCRIPTION AND LOCATION 11 4.1 LOCATION AND AREA OF THE PROPERTY......................................................11 4.2 CLAIMS, LICENCES AND TITLE ..........................................................................12 4.3 ROYALTIES, PAYMENTS AND OTHER AGREEMENTS ..................................17 4.4 PERMITS AND LICENCES .....................................................................................19

5.0 ACCESSIBILITY, CLIMATE, LOCAL RESOURCES, INFRASTRUCTURE AND PHYSIOGRAPHY 20

5.1 TOPOGRAPHY, CLIMATE AND VEGETATION .................................................20 5.2 ACCESS AND POPULATION CENTRES ..............................................................20 5.3 AVAILABILITY OF POWER, WATER AND PERSONNEL.................................20

6.0 HISTORY 22 6.1 EARLY HISTORY OF THE AREA..........................................................................22 6.2 MODERN HISTORICAL EXPLORATION .............................................................22 6.3 BRIEF HISTORY OF OWNERSHIP ........................................................................23 6.4 HISTORY OF RECENT OWNERSHIP....................................................................24 6.5 HISTORICAL RESOURCE ESTIMATES ...............................................................25 6.6 HISTORICAL MINING PRODUCTION..................................................................27

7.0 GEOLOGICAL SETTING 29 7.1 REGIONAL GEOLOGY ...........................................................................................29 7.2 GEOLOGY OF THE CHOCO 10 AREA ..................................................................31 7.3 CHOCO 10 DEPOSIT GEOLOGY ...........................................................................32

8.0 DEPOSIT TYPES 37

9.0 MINERALIZATION 38 9.1 CHOCO 10 .................................................................................................................38

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9.1.1 Rosika – Coacia – Pisolita (RCP) ......................................................................38 9.1.2 Villa Balazo – Karolina (VBK)..........................................................................40

9.2 CHOCO 10 BROWNFIELDS TARGETS.................................................................41

10.0 EXPLORATION 42 10.1 CHOCO 10 .................................................................................................................42 10.2 REGIONAL TARGETS, EL CALLAO DISTRICT..................................................43

11.0 DRILLING 45 11.1 CHOCO 10 DEPOSIT................................................................................................45

12.0 SAMPLING METHODS AND APPROACH 50 12.1 SAMPLING PROGRAMS.........................................................................................50

12.1.1 1993 to 1995 and the 2003 Micon Verification Drilling Programs ...................50 12.1.2 Bolivar Gold 2003 - 2004 ..................................................................................50 12.1.3 Bolivar Gold 2005- March, 2006.......................................................................51 12.1.4 Gold Fields March, 2006 - Present ....................................................................51

12.2 CORE RECOVERY...................................................................................................53

13.0 SAMPLE PREPARATION, ANALYSIS AND SECURITY 56 13.1 PRE-MARCH, 2005...................................................................................................56 13.2 BOLIVAR GOLD: 2003 – MARCH, 2006 ...............................................................56 13.3 GOLD FIELDS PROCEDURES ...............................................................................58

14.0 DATA VERIFICATION 61 14.1 SUMMARY ...............................................................................................................61 14.2 DATA VALIDATION AND DATABASE ...............................................................61

14.2.1 Historical Data Verification ...............................................................................62 14.3 GOLD FIELDS’ DATA VALIDATION AND DATABASE ...................................63

14.3.1 Gold Fields Choco 10 Database.........................................................................64 14.3.2 Maxwell Database Audit....................................................................................68 14.3.3 Smee and Associates ..........................................................................................69

14.4 DATA QUALITY CONCLUSIONS .........................................................................70 14.4.1 Gold Fields Assay Procedures ...........................................................................70

15.0 ADJACENT PROPERTIES 72 15.1 LA VICTORIA AND TOMI MINES ........................................................................73 15.2 ISIDORA MINE (MINA CHILE)..............................................................................73 15.3 COLUMBIA MINE....................................................................................................73 15.4 INCREIBLE 6 DEPOSIT...........................................................................................74

16.0 MINERAL PROCESSING AND METALLURGICAL TESTWORK 75 16.1 METALLURGICAL TESTWORK ...........................................................................75

17.0 MINERAL RESOURCE AND MINERAL RESERVE ESTIMATES 77 17.1 INTRODUCTION......................................................................................................77

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17.2 MICON TECHNICAL DATA REVIEW ..................................................................77 17.3 CHOCO 10 MINERAL RESOURCE........................................................................86

17.3.1 Description of Mineral Resource Estimation Methodology ..............................86 17.4 CHOCO 10 MINERAL RESERVES.........................................................................93

17.4.1 Description of Mineral Reserve Estimation Methodology ................................93 17.5 STATEMENT ON MINERAL RESOURES AND RESERVES ..............................96

18.0 OTHER RELEVANT DATA AND INFORMATION 98

19.0 DEVELOPMENT PROPERTIES AND PRODUCTION PROPERTIES 99 19.1 MINE PLANNING ....................................................................................................99

19.1.1 Overview............................................................................................................99 19.1.2 Current Life-of-Mine Plan .................................................................................99 19.1.3 Life-of-Mine Projects.......................................................................................102

19.2 MINING OPERATIONS .........................................................................................102 19.2.1 Description of Mining Operations and Equipment ..........................................102 19.2.2 Equipment Maintenance Facility .....................................................................103 19.2.3 Key Observations and Conclusions .................................................................104

19.3 GRADE CONTROL AND RECONCILIATION....................................................104 19.3.1 Overview..........................................................................................................104 19.3.2 Description of Grade Control Measures ..........................................................104 19.3.3 Reconciliation ..................................................................................................105 19.3.4 Micon’s Observations and Conclusions...........................................................107 19.3.5 Recommendations............................................................................................109

19.4 MINERAL PROCESSING ......................................................................................109 19.4.1 Introduction......................................................................................................109 19.4.2 Crushing and Grinding.....................................................................................111 19.4.3 CIP Leaching and Gold Recovery....................................................................111 19.4.4 Sampling, Analysis, Gold Accounting and Security........................................111 19.4.5 Process Conclusions.........................................................................................112

19.5 TAILINGS DAM .....................................................................................................113 19.5.1 Introduction......................................................................................................113 19.5.2 Overview of the Tailings Facilities ..................................................................114 19.5.3 Life of Mine Tailings Deposition Assessment.................................................114

19.6 HUMAN RESOURCES...........................................................................................115 19.6.1 Introduction......................................................................................................115 19.6.2 Legislation........................................................................................................115 19.6.3 Organizational Structures and Operational Management ................................116 19.6.4 Recruitment, Training, Productivity Initiatives and Remuneration Policies ...117 19.6.5 Training............................................................................................................117 19.6.6 Productivity Initiatives .....................................................................................118 19.6.7 Remuneration Policies .....................................................................................118 19.6.8 Industrial Relations ..........................................................................................118 19.6.9 Productivity Assumptions ................................................................................119 19.6.10 Separation Liability..........................................................................................119 19.6.11 Social Development Initiatives ........................................................................119

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19.7 HEALTH AND SAFETY ........................................................................................120 19.7.1 Introduction......................................................................................................120 19.7.2 Legislation........................................................................................................121 19.7.3 Statistics ...........................................................................................................121 19.7.4 Occupational Health and Safety Management.................................................121 19.7.5 Future Considerations ......................................................................................122

19.8 ENVIRONMENTAL CONSIDERATIONS............................................................122 19.8.1 Introduction......................................................................................................122 19.8.2 Legislation........................................................................................................124 19.8.3 Environmental and Social Policy and Management ........................................127 19.8.4 Environmental Issues .......................................................................................128 19.8.5 Decommissioning and Closure Liabilities .......................................................129

19.9 TAXES, ROYALTIES AND LEVIES.....................................................................129 19.9.1 Royalties...........................................................................................................129 19.9.2 Taxation ...........................................................................................................130

19.10 CAPITAL AND OPERATING COST ESTIMATES..............................................130 19.10.1 Capital Expenditure Forecast ...........................................................................130 19.10.2 Operating Cost Estimates.................................................................................133 19.10.3 Mining Operating Costs ...................................................................................134 19.10.4 Processing Operating Costs .............................................................................135 19.10.5 General and Administration Operating Costs ..................................................137

19.11 ECONOMIC ANALYSIS ........................................................................................138 19.11.1 Production Schedule ........................................................................................138 19.11.2 Cash Flow Projection .......................................................................................138 19.11.3 Base Case Evaluation.......................................................................................139 19.11.4 Sensitivity.........................................................................................................140

20.0 INTERPRETATION AND CONCLUSIONS 142

21.0 RECOMMENDATIONS 145

22.0 REFERENCES 146

23.0 SIGNATURE PAGE 148

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List of Tables Page

Table 1.1 Choco 10 Unconstrained Mineral Resource as of September 30, 2007.............3

Table 1.2 Choco 10 Mineral Reserve as of September 30, 2007.......................................3

Table 1.3 Production Statistics from July, 2006 to September, 2007 by Quarter..............4

Table 1.4 Choco 10 Forecast Mining Statistics..................................................................4

Table 1.5 Life-of-Mine Cash Flow Projection...................................................................5

Table 2.1 List of Abbreviations .........................................................................................6

Table 2.2 Corporate Names, Abbreviations and Relationships .........................................7

Table 4.1 Choco 4 and Choco 10 Title Description.........................................................13

Table 4.2 Details of Other Mining Titles not including the Choco 10 and 4 Concessions......................................................................................................15

Table 4.3 Royalty Payments to CVG and CVG-Tecmin .................................................18

Table 6.1 Choco 10: Historical Ownership......................................................................24

Table 6.2 BHPE Measured and Indicated Mineral Resources at 0.5 g/t Au Cut-Off ....................................................................................................................25

Table 6.3 Micon Estimate of Choco Gold Project Mineral Resource Estimate...............26

Table 6.4 Micon Estimate of Choco Gold Project Mineral Resource Estimate...............26

Table 6.5 Diluted Mineral Reserve and Stripping Estimates (0.5 g/g Au Cut-off)..........27

Table 6.6 MDA Estimate of Choco Mineral Resources at 0.5 g/t cut-off........................27

Table 6.7 Production Statistics from July, 2006 to September, 2007 by Quarter............28

Table 11.1 Choco 10 Deposit - Drill Spacing and Orientation for Pre-2007 Drilling.............................................................................................................46

Table 11.2 Choco 10 - Drill Metres and Drill Types Completed.......................................48

Table 11.3 Diamond Drill Core Recovery for Material Type (to the end of 2006) ...........48

Table 12.1 Summary of 2003-2004 Sample Intervals .......................................................51

Table 12.2 Diamond Drilling Showing the Different Core Size Proportions ....................54

Table 14.1 MRM Procedures which Underpin the Mineral Resource Quality Management System........................................................................................64

Table 14.2 Gold Fields Assay Procedures and QC Protocols ............................................70

Table 14.3 Gold Fields QC Sample Failure Criteria..........................................................71

Table 15.1 La Victoria and Tomi, Production and Resources ...........................................73

Table 15.2 Isidora Mine Proven and Probable Reserves, December, 2006 .......................73

Table 17.1 Choco 10 Unconstrained Mineral Resources as of September 30, 2007 .........86

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Table 17.2 Total Number of Validated Drill Holes and Drill Metres by Hole Type and Deposit as at Database Close-off Dates Outlined in Text.........................91

Table 17.3 Drill Hole and Composited Sample Numbers by Drill Hole Type and Deposit used in Resource Model Estimation ...................................................91

Table 17.4 Choco 10 Mineral Reserves as of September 30, 2007 ...................................93

Table 17.5 Choco 10 Pit Design Criteria ...........................................................................94

Table 17.6 Undiscounted Lerchs-Grossman Shell vs. Pit Design at US$500/oz...............95

Table 19.1 Choco 10 Forecast Mining Statistics..............................................................100

Table 19.2 Choco 10 Life-of-Mine Tailings Storage Facility Assessments ....................115

Table 19.3 Manpower (historical)....................................................................................117

Table 19.4 Environmental Legislation.............................................................................124

Table 19.5 CVG Over a Range of Gold Prices ................................................................129

Table 19.6 Project Capital Costs ......................................................................................131

Table 19.7 Processing Capital Costs (US$ 000) ..............................................................131

Table 19.8 Mining Capital Costs .....................................................................................132

Table 19.9 G&A Capital Costs (US$ 000).......................................................................132

Table 19.10 Forecast Cash Operating Costs ......................................................................133

Table 19.11 Mining Unit Operating Costs .........................................................................134

Table 19.12 Mine Operating Costs ....................................................................................135

Table 19.13 Processing Unit Operating Costs ...................................................................135

Table 19.14 Lif-of-Mine Process Operating Costs ............................................................136

Table 19.15 On-site Administration and Indirect Costs.....................................................137

Table 19.16 Life-of-Mine Production Schedule ................................................................138

Table 19.17 Life-of-Mine Cash Flow Projection...............................................................138

Table 19.18 Net Present Value of Free Cash Flow............................................................139

Table 20.1 Choco 10 Unconstrained Mineral Resources as of September 30, 2007 .......142

Table 20.2 Choco 10 Mineral Reserves as of September 30, 2007 .................................143

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List of Figures Page

Figure 4.1 Location of the Choco 10 Mine Close to the Guyana and Brazil Borders in the Southeastern Portion of Venezuela ..........................................11

Figure 4.2 El Callao District Showing Current Gold Fields Concessions and Active Gold Mines and the Choco 10 Deposit ................................................12

Figure 4.3 The Company Structure within Venezuela Showing Ownership of the Various Mining and Exploration Concessions (purple)...................................15

Figure 5.1 Plan Showing the Choco 10 Mining Areas and Mine Infrastructure ...............21

Figure 7.1 Regional Geology of the Northern Guyana Shield Showing Major Gold Deposits with Resource Ounces..............................................................29

Figure 7.2 Geology of the Choco 10 Region Showing Selected Major Gold Deposits............................................................................................................30

Figure 7.3 Geology of the Choco-El Callao District .........................................................33

Figure 7.4 Stratigraphic Sequence and Mineralization at Choco 10 .................................34

Figure 7.5 Geology Map of the Choco 10 (showing the four primary ore deposits; Rosika, Coacia, Pisolita (RCP) and Villa Balazo-Karolina (VBK) ..............................................................................................................35

Figure 7.6 Northwest-Southeast Geological Cross-Section ..............................................36

Figure 9.1 Schematic West-East Cross-Section Through the Rosika Deposit ..................39

Figure 9.2 Representative Section of the Pisolita Deposit ................................................40

Figure 9.3 Schematic Northwest-Southeast Cross-Section Through the VBK Deposit .............................................................................................................40

Figure 10.1 Choco Property: Regional Exploration Target Area........................................44

Figure 11.1 Drill Hole Collar Location Map for Choco 10.................................................47

Figure 12.1 Scatter Plot of Diamond Drill Recovery versus Grade ....................................55

Figure 13.1 Process Map of the Sample Flow for Choco 10 Resource Definition .............58

Figure 14.1 Sample Consignment Form..............................................................................65

Figure 14.2 Drill Hole Data Entry .......................................................................................66

Figure 14.3 Assay Laboratory Sif file .................................................................................67

Figure 14.4 Data Shed - Data Validation ............................................................................67

Figure 14.5 Assay Swapper .................................................................................................68

Figure 15.1 Regional Map (radar image) of the El Callao Gold District ............................72

Figure 15.2 CVG Minerven Concessions............................................................................74

Figure 17.1 Plan of Section Locations for Rosika, Coacia, Pisolita and VBK ...................79

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Figure 17.2 Coacia Cross-Section 807945 North................................................................80

Figure 17.3 Coacia Cross-Section 808000 North................................................................80

Figure 17.4 Cocia Cross-Section 808100 North..................................................................81

Figure 17.5 Pisolita Cross-Section 807645 North ...............................................................81



Figure 17.8 Rosika Cross-Section 808495 North................................................................83



Figure 17.11 VBK Cross-Section 400...................................................................................84



Figure 17.14 Schematic Cross-Section through Rosika Showing Ore Domain Lodes and Halos .........................................................................................................88

Figure 17.15 Schematic Cross-Section through Coacia Showing Ore Domain Lodes and Halos .........................................................................................................88

Figure 17.16 Schematic South-North Long Section through Pisolita Showing Ore Domains ...........................................................................................................89

Figure 17.17 Schematic Northwest-Southeast Section through VBK Showing Ore Domain Lodes and Halos.................................................................................90

Figure 17.18 Schematic Relationship between Optimzed Pit Shell and Final Design..........95

Figure 19.1 Life-of-Mine – Mining Sequence...................................................................101

Figure 19.2 Ore and Waste Tonnes Mined, Grade and Strip Ratio...................................102

Figure 19.3 Choco 10 Mine Call Factors for Grade and Tonnage by Month for 2006................................................................................................................106

Figure 19.4 Schematic Flow Diagram of Choco 10 Plant.................................................110

Figure 19.5 Breakdown of Life-of-Mine Average Operating Costs .................................133

Figure 19.6 Life-of-Mine Ore and Waste Tonnage Mined ...............................................134

Figure 19.7 Annual Tonnage Treated by Material Type ...................................................136

Figure 19.8 Life-of-Mine Processing Tonnage and Grade................................................137

Figure19.9 Cash Flow Projection .....................................................................................139

Figure 19.10 NPV10% Sensitivity Chart ...............................................................................140

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1.0 SUMMARY Micon International Limited (Micon) has been retained by Rusoro Mining Limited. (Rusoro) to prepare a National Instrument (NI) 43-101 Technical Report describing the Choco 10 deposit and mine, which Rusoro is currently purchasing from the present owners Gold Fields Limited (Gold Fields). The Choco 10 gold mine is located on the Choco 4 and 10 concession, close to the historic gold mining town of El Callao in Bolivar state, Venezuela. The property includes a number of relatively low grade gold deposits which are currently being mined as open pits. The ore from all pits is treated at an average rate of 5,400 t/d in a central processing plant employing grinding and cyanide leaching using carbon-in-pulp (CIP) technology. Micon conducted a site visit to the Choco 10 operation in Venezuela from August 14 to 16, 2007. Micon’s review team included Vic Bryant, Senior Metallurgist, James Leader, Senior Mining Engineer, Dave Laudrum, Senior Geologist, Jenifer Hill, Senior Environmental Scientist. John Perry, P.Geo., then visited the site during the week of October 22, 2007. At the time of the August visit, the mine and plant were not operating due to a blockade by artisanal miners, who occupied the project area prior to current mining operations. This report is based upon extensive Gold Fields’ project information, plus past reports, supplemented by Micon’s direct field observations and by discussions with responsible representatives of Gold Fields. Micon has reviewed the forecasts prepared by Gold Fields and is of the opinion that these have been prepared to the standard normally expected of a feasibility study. The Choco 4 and Choco 10 concessions are located approximately 15 km west of the mining town of El Callao in Bolivar State, Venezuela. They cover a total area of 7,214.51 ha. The mining concessions were granted by Ministerio de Energia y Minas (MEM) to Corporación Venezolana de Guayana (CVG) in 1993, after which CVG transferred the rights to Promiven’s 70% subsidiary Promotora Minera de Guayana C.A. (PMG), subject to conditions. The property is subject to royalties according to the rights granted in 1993 by MEM to CVG. Mining rights were granted effective for 20 years and may be renewed, after 20 years, for a further 20 years. The Venezuela Ministry of Basic Industries and Mining published the resolutions giving final approval to the issuance of the exploitation certificates for the Choco 4 and 10 concessions on December 5, 2005. All other operational and on-going exploration permits are in place. Operation of the Choco 10 mine was initiated by Bolivar Gold Inc. through its Venezuelan subsidiary PMG in 2005 and sold to Gold Fields in March, 2006. Open pit mining has, to date, focused on weathered or oxidized material in the Pisolita, Coacia and Rosika deposits. Mining of the VBK deposit is scheduled to commence in 2008.

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The Choco 10 operation experienced numerous challenges in the first half of 2007 including water availability, grade control issues, availability of spare parts, small miner disputes, and labour collective agreement negotiations. As a result, production was less than projected. The mine has been working extensively to rectify these issues and has recently resumed its target production rates. The Choco mineral concessions cover oxide and sulphide gold mineralization that occurs in the western portion of the Pastora greenstone belt, which in turn forms part of the Proterozoic to Archaean Guyana Shield. Primary gold deposits comprise irregular lenses and pods of quartz-sericite altered metavolcanic rock. Shearing has facilitated the deep tropical weathering observed in the region and the development of saprolite to depths of 30 to 70 m. Quartz and sericite enriched gold mineralization is hosted by clay and sericite altered metavolcanic rocks. Drilling has been extensive on the property by previous and current owners including Promiven, Bolivar Gold and Gold Fields for a total of 157,043 m of diamond drilling, 23,782 m of reverse circulation drilling, and 42,483 m of aircore drilling. Resource estimations have been verified extensively. Most recently the resource has been audited by Snowden (2007), Maxwell (2007), and Smee (2006). Gold Fields implemented a comprehensive Resource Management Quality Management System when it acquired the property in 2005 that ensures that the resource definition follows industry best practices, and is in compliance with SAMREC and Sarbanes-Oxley requirements. The Choco 10 Mineral Resource and Mineral Reserve estimates were developed by Gold Fields and presented in a “Competent Persons’ Report on the Mining and Exploration Assets of Promotora Minera De Guayana, Choco 10 Gold Mine” as of December 31, 2006 (CPR). In order to endorse the existing resources of Choco 10, a detailed review of the available technical documentation and mineral resource and reserve estimation procedures was undertaken by Micon. Additionally, the individual who generated the resource and reserve estimates for Gold Fields, Jennifer Gressier, was interviewed and answered questions on her work on the Choco 10 deposit. Lastly, cross-sections were generated showing exploration drill hole composites against the actual block model grade estimates and modelled geology for each of the mineral deposits that make up the Choco 10 area. These cross-sections have been used to examine the composites against the actual estimated values within selected blocks. A comprehensive review of the available mineral resource and reserve estimates documentation and procedures for Choco 10 was completed during October, 2007. The major source used in this review is the Gold Fields CPR, Sections 4 and 5, which detail the procedures used in the development and estimation of the mineral resource and reserve contained within the Choco 10 deposit. In Micon’s opinion the resource estimation methodology and procedures developed by Gold Fields are very thorough and provide an excellent basis for the resource and reserve estimates.

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The Table 1.1 presents the Gold Fields Mineral Resource statement for the Choco 10 deposits as of September 30, 2007. The Mineral Resources are reported in-situ, and include the Mineral Reserves given in Table 1.2. They are un-constrained (in that no economic mining limits were applied) and include breakdowns by measured, indicated and inferred. They are also broken down by individual deposits and material types.

Table 1.1 Choco 10 Unconstrained Mineral Resource as of September 30, 2007

Measured Indicated Total M + I Inferred

Tonnes Grade Au oz Tonnes Grade Au

oz Tonnes Grade Au oz Tonnes Grade Au

oz Pit Material

Cut-Off

Grade (millions) (g/t) (000) (millions) (g/t) (000) (millions) (g/t) (000) (millions) (g/t) (000)

Rosika Oxide 0.5 0.1 2.74 13 0.5 1.49 22 0.6 1.79 35 0.1 1.95 5 Trans 0.5 0.2 3.02 15 0.2 1.50 12 0.4 2.09 26 0.1 2.08 5 Fresh 0.5 1.6 3.21 165 11.1 2.23 796 12.7 2.35 961 5.9 2.12 400 Coacia Oxide 0.5 0.1 1.18 3 2.0 1.86 120 2.1 1.83 123 0.5 1.75 27 Trans 0.5 0.0 0.00 0 0.4 1.65 23 0.4 1.65 23 0.2 1.80 12 Fresh 0.5 0.0 0.00 0 3.9 2.29 287 3.9 2.29 287 3.1 1.71 171 Pisolita Oxide 0.5 0.3 2.25 24 2.0 1.45 95 2.4 1.57 119 1.3 1.09 45 Trans 0.5 0.2 2.31 18 0.3 1.90 18 0.5 2.09 36 0.3 1.35 14 Fresh 0.5 0.1 1.96 5 0.2 1.60 8 0.2 1.72 13 5.5 2.66 470 VBK Oxide 0.5 0.0 0.00 0 0.3 2.03 22 0.3 2.03 22 0.4 1.21 15 Trans 0.5 0.0 0.00 0 0.2 2.21 13 0.2 2.21 13 0.2 1.17 9 Fresh 0.5 0.0 0.00 0 35.1 2.67 3,017 35.1 2.67 3,017 25.3 2.26 1,844 Sub Total Oxide 0.5 0.6 2.22 41 4.8 1.67 259 5.4 1.72 300 2.2 1.28 93

Trans 0.5 0.4 2.58 33 1.1 1.77 65 1.5 1.98 98 0.8 1.48 40 Fresh 0.5 1.7 3.15 170 50.3 2.54 4,107 52.0 2.56 4,277 39.8 2.26 2,885 Grand Total 2.6 2.86 243 56.3 2.45 4,432 58.9 2.47 4,675 42.9 2.19 3,017

Micon’s review of the Choco 10 mineral resource also included a review of the mineral reserve estimates. Gold Fields, using the mineral resource model described above, developed a reserve estimate using Whittle 4X pit optimization software at a US$500 per ounce gold price and cut-off of 0.5 g/t. The results of this optimization were used to develop an ultimate pit design which was then scheduled for the remainder of the mine life. Reserves from this work were estimated as of December 31, 2006 and reported in the CPR. The reserves were updated to a mining surface dated September 30, 2007 by Gold Fields using the US$500/ounce pit shell described in the CPR. Within this pit shell, reserves were determined using a gold price of US$550/ounce and are based on industry standard design practice and represent an economic, mineable design for the proven and probable reserves. These are tabulated in Table 1.2.

Table 1.2 Choco 10 Mineral Reserve as of September 30, 2007

Proven Probable Total P + P

Tonnes Grade Au oz Tonnes Grade Au oz Tonnes Grade Au

oz Pit

Cut-Off

Grade (millions) (g/t) (000) (millions) (g/t) (000) (millions) (g/t) (000)

Rosika/Coacia 0.5 1.9 3.05 185 9.4 2.80 841 11.2 2.84 1,026 Pisolita 0.5 0.4 2.59 36 0.7 2.41 52 1.1 2.48 88 VBK 0.5 0.0 0.00 0 4.9 4.42 703 4.9 4.42 703 Sub Total Pits 0.5 2.3 2.97 221 15.0 3.32 1,596 17.3 3.27 1,817 Stockpiles 0.5 0.4 1.08 14 0.0 0.00 0 0.4 1.08 14 Grand Total 2.7 2.70 234 15.0 3.32 1,596 17.7 3.22 1,830

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The Mineral Resource set out in Table 1.1 and the Mineral Reserve set out in Table 1.2 were estimated in accordance with the SAMREC code. In Micon’s opinion, however, they comply fully with the Canadian Institute of Mining, Metallurgy and Petroleum (CIM) standards on Mineral Resources and Reserves – Definitions and Guidelines, developed by the CIM standing committee on reserve definitions, as adopted by the CIM Council on December 11, 2005. Micon considers that the Measured, Indicated and Inferred Resources quoted in this report are equivalent to Measured, Indicated and Inferred Mineral Resources under the CIM definitions, and that the Proved and Probable (Ore) Reserves quoted herein are equivalent to Proven and Probable Mineral Reserves, as defined by the CIM. Production statistics for the Choco 10 mine from July, 2006 to September, 2007, are shown in Table 1.3. Planned future production levels are summarized in Table 1.4. The reserves, as currently known, are sufficient for a remaining life of ten years.

Table 1.3 Production Statistics from July, 2006 to September, 2007 by Quarter

Q3- 2006 Q4-2006 Q1-2007 Q2-2007 Q3-2007

Ore tonnes t 362,120 346,692 194,253 199,263 267,712 Head grade g/t 1.87 1.90 1.58 1.49 2.13Contained gold oz 21,767 21,137 9,893 9,517 18,347

Tonnes processed t 305,757 356,785 191,395 147,304 401,100 Head grade g/t 1.98 2.23 1.61 1.65 1.80Gold to process oz 19,457 25,612 9,891 7,809 23,268 Gold recovered oz 17,354 23,031 8,392 6,859 19,854 Gold sold oz 17,227 22,801 8,224 7,409 14,004

Table 1.4

Choco 10 Forecast Mining Statistics

Statistic Units LoM* F2007** F2008 F2009 F2010 F2011 F2012 F2013-F2017

Material Mined (Mt) 141.474 6.566 10.923 17.087 18.020 18.014 17.996 55.505

Ore (Mt) 16.875 1.263 1.869 1.834 1.823 1.689 1.828 7.274 Waste (Mt) 124.599 5.303 9.054 15.253 16.197 16.324 16.168 48.230 Stripping Ratio (t waste:ore) 7.38 4.20 4.85 8.31 8.88 9.66 8.84 7.63

Ore Grade (g/t) 3.36 1.85 2.39 2.53 3.00 3.01 3.02 4.19

Mining Costs (US$/t ore) 16.34 7.21 9.09 15.45 18.21 17.87 19.33 17.45

(US$/tore&waste) 1.95 1.39 1.56 1.66 1.84 1.68 1.96 2.29 Note: *Does not include July-December, 2006 actual production.

Micon has reviewed the life-of-mine production and cost estimates prepared by Gold Fields for the Choco operation. Micon regards these estimates as reasonable. The life-of-mine cash

5

flow projection compiled by Micon from these estimates, using a constant gold price of US$550/oz, is summarized in Table 1.5.

Table 1.5 Life-of-Mine Cash Flow Projection

(US$ millions) 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 LOM

Total Revenue 65.7 70.5 73.5 79.2 81.8 85.0 91.4 97.2 165.9 103.9 914.0 Mining costs 16.7 28.6 23.4 22.2 18.1 12.0 7.7 5.7 6.0 0.9 141.4 Processing costs 10.6 10.9 10.7 10.7 10.6 10.7 10.6 10.7 10.6 10.8 106.9 G&A on-site costs 5.4 5.4 5.4 5.4 5.4 5.4 5.4 5.4 5.4 5.4 54.2 G&A off-site costs 4.7 4.7 4.7 4.7 4.7 4.7 4.7 4.7 4.7 4.7 47.3 Royalties and fees 2.8 3.0 3.1 3.3 4.9 5.7 6.2 6.6 11.2 7.0 53.7 Closure, etc. 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 8.0 10.2 Capital expenditure 33.7 13.0 5.2 4.0 3.0 2.2 1.2 0.9 0.9 64.0 Cap.development - 0.1 6.5 7.8 16.8 23.3 29.2 34.8 16.5 135.0 Taxation 6.7 4.3 5.9 7.6 8.1 8.4 9.2 10.7 15.1 17.6 93.6 Free cash flow -15.2 0.3 8.4 13.2 9.8 12.2 16.9 17.4 95.1 49.5 207.6 Cumulative c/flow -15.2 -14.9 -6.5 6.7 16.5 28.7 45.6 63.0 158.1 207.6 Average Revenue US$/oz 550.0 550.0 550.0 550.0 550.0 550.0 550.0 550.0 550.0 550.0 550.0 Opcosts US$/oz 339.2 412.6 356.2 323.8 296.1 251.3 210.1 188.6 126.8 194.7 249.0 Capital US$/oz 282.0 101.7 87.3 82.1 133.4 165.0 183.0 202.1 57.7 - 119.8 Taxes US$/oz 56.2 33.2 43.8 52.7 54.4 54.6 55.4 60.7 50.1 93.3 56.3 Free Cash Flow US$/oz (127.4) 2.5 62.7 91.4 66.1 79.0 101.6 98.6 315.4 262.0 124.9

As shown in Table 1.5, the projected cash operating cost of Choco 10 averages US$249/oz gold produced over the life of the mine. Life-of-mine capital expenditures add a further US$120/oz. The total free cash flow over the life of the mine is estimated at US$208 million (US$124.9/oz), with a net present value of US$91 million at a discount rate of 10% per year. These projections suggest that the Choco 10 project is economically robust.

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2.0 INTRODUCTION AND TERMS OF REFERENCE 2.1 GENERAL At the request of Mr. George Salamis, President of Rusoro Mining Limited (Rusoro), Micon International Limited (Micon) has been retained to provide an independent NI 43-101 compliant audit of the Choco 10 resource estimate and to report on the technical aspects of the Choco 10 property and operating mine. This request was made following the announcement that Rusoro had reached an agreement with Gold Fields Netherlands Services BV (Gold Fields), a wholly-owned subsidiary of Gold Fields Limited, whereby Rusoro has acquired all of Gold Fields' Venezuelan assets, including the producing Choco 10 mine situated in the El Callao district of Bolivar State, Venezuela. 2.2 CURRENCY AND ABBREVIATIONS All currency amounts are stated in US dollars or Venezuelan Bolivars, as specified, with costs and commodity prices typically expressed in US dollars. Quantities are generally stated in Système International d’Unités (SI) metric units, the standard Canadian and international practice, including metric tons (tonnes, t) and kilograms (kg) for weight, kilometres (km) or metres (m) for distance, hectares (ha) for area, grams (g) and grams per tonne (g/t) for gold grades (g/t Au). Table 2.1 is a list of the various abbreviations used throughout this report.

Table 2.1 List of Abbreviations

Name Abbreviations

Canadian Institute of Mining, Metallurgy and Petroleum CIM Canadian National Instrument 43-101 NI 43-101 Carbon in leach CIL Centimetre(s) cm Competent Persons’ Report CPR Cut-off Grade COG Day d Degree(s) o Degrees Celsius oC Dollar(s), Canadian and US $, CDN$ and US$ Gram(s) g Grams per tonne g/t Greater than > Hectare(s) ha Hour(s) hr(s) Internal rate of return IRR Kilogram(s) kg Kilometre(s) km Less than < Litre(s) L Metre(s) m Million tonnes Mt Million ounces Moz Million years Ma Million tonnes per year Mt/y

7

Name Abbreviations Milligram(s) mg Millimetre(s) mm Net present value NPV Net smelter return NSR Not available/applicable n.a. Ounces oz Ounces per year oz/y Percent(age) % Quality Assurance/Quality Control QA/QC South African Mineral Resource Committee SAMREC Second s Specific gravity SG System for Electronic Document Analysis and Retrieval SEDAR Système International d’Unités SI Tonnes t Tonnes per day t/d Tonnes per month t/m Universal Transverse Mercator UTM Year y

2.3 CORPORATE NAMES Frequently used corporate names are abbreviated throughout this report. The list in Table 2.2 summarizes the abbreviations and corporate relationships.

Table 2.2 Corporate Names, Abbreviations and Relationships

Abbreviation Full Name Comment Rusoro Rusoro Mining Limited Gold Fields Gold Fields Netherlands

Services BV Gold Fields Netherlands is a wholly owned subsidiary of Gold Fields Limited of South Africa. Gold Fields holds a 95% interest in PMG.

PMG Promotora Mineria de Guyana PMG is the holder of the leases of the Choco 10 concession and the mine operator.

Micon Micon International Limited Micon is independent of Rusoro and Goldfields. Micon is responsible for preparation of this report.

Promiven Promotora Mineria de Venezuela

Promiven owns at least 70% of the issued and outstanding shares of PMG.

CVG Corporacion Venezuela de Guayana

A Venezuelan government corporation.

El Callao Holdings El Callao Holdings Regional exploration company. FMO CVG-Ferromineria del

Orinoco C.A. A subsidiary of CVG.

Bolivar Bolivar Gold Corporation Previous owner of Choco 10 prior to Gold Fields.

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2.4 CLARIFICATION OF RESOURCE AND RESERVE DEFINITIONS Within the Gold Fields organization there are some variations on accepted international resource reporting conventions. This note is to clarify the use of the terms mineral inventory, mineral resources and ore reserves as used within Gold Fields and as they relate to publicly released and internal data pertaining to the Choco 10 project. 2.4.1 Mineral Inventory Within Gold Fields the mineral (or sometimes referred to as modelled) inventory is an internal measure and is the total measured, indicated and inferred resource that has been modelled. There are no economic or practical constraints placed upon it apart from those imposed by a geological or resource classification process and a cut-off grade. 2.4.2 Mineral Resources 2.4.2.1 Gold Fields Convention Gold Fields requires that a potentially economic subset of the total modelled mineralization be reported as a mineral resource. As a result all Gold Fields’ mines report their resources within the constraints of a practical and economic mining outline. In the case of surface mines, resources are reported “inside the pit shell” that has been optimized at a gold price chosen for resource reporting for that year (Gold Fields convention). 2.4.2.2 External Conventions The more commonly used convention does not impose this constraint, and resources are reported “above a cut-off grade” without any constraint of a mining outline. In this NI 43-101 Technical Report external conventions have been used in reporting of mineral resources. 2.4.3 Mineral Reserves Though mineral reserves are based on the entire modelled inventory they are a further subset of the mineral resource with the additional constraints that:

• Inferred material is treated as waste.

• The gold price is aligned to a three year trailing average (June, 2007 = US$550).

• Higher level of detail in design and evaluation applied – equivalent to pre-feasibility as minimum.

As such the Gold Fields definition for reporting of mineral reserves aligns with the more commonly used external conventions and these have been used in this NI 43-101 Technical Report for mineral reserves.

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2.5 SITE VISITS Micon visited Gold Fields’ Choco 10 property and mining operation on two occasions. From August 14 to 16, 2007, Mr. Jim Leader, P.Eng., Mr Dave Laudrum, P. Geo., Mr Vic Bryant, MAusIMM, and Ms. Jenifer Hill, R.P.Bio. visited the mine site. From October 16 to 19, 2007, Mr. John Perry, P.Geo. visited the mine site and the core logging and data gathering facility in the nearby town of El Callao. Mr. Ian Ward, P.Eng. visited the site in July 2002 and October 2004. Mr. Ward supervised the preparation of this Technical Report, previously inspected the processing plant described in this report, and managed the 2003 feasibility study for the Choco project and the installation of the processing facility, conducted by Micon for PMG. Micon was assisted during the visit by a number of employees working for Choco 10 including Mr. Mathew Dusci, Manager Mineral Resources, Ms. Jennifer Gressier, Resource Manager, Mr. Brent Ashton, Mine Manager, Mr. Richard Nicholls, Mineral Resource Manager, as well as by various mine personnel on site. The review of the Choco 10 property and mine was based on published material researched by Micon, as well as data, professional opinions and unpublished material submitted by the professional staff of Gold Fields and Choco 10. Much of the data for the Technical Report came from reports prepared and provided by Gold Fields. A list of material referenced in preparing this report is contained in Section 22.0 – References at the end of this report. A review of the database parameters and the methodology of resource and reserve estimation was conducted during a visit by Mr. Sam Shoemaker to Gold Fields’ Denver, Colorado office in October, 2007. Micon is pleased to acknowledge the helpful cooperation of both Rusoro’s and Gold Fields’ management and personnel, as well as the Choco 10 project personnel, all of whom made any and all data requested available and responded openly and helpfully to all questions, queries and requests for material. 2.6 QUALIFIED PERSONS The Qualified Persons responsible for the preparation of this report and the audit of the mineral resource and mineral reserve estimate on the Choco 10 mine are Mr. John Perry, P.Geo., a senior geologist with Micon in Vancouver, Mr. Robert J. Leader, P.Eng., a senior mining engineer with Micon in Vancouver, Mr. Christopher R. Lattanzi, P.Eng., a senior mining engineer with Micon in Toronto, Mr. Christopher Jacobs, C.Eng., a senior mineral economist with Micon in Toronto and Mr. Ian R. Ward, P.Eng., President and principal metallurgist with Micon in Toronto.

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3.0 RELIANCE ON OTHER EXPERTS Micon has reviewed and analyzed data provided by Rusoro and Gold Fields and has drawn its own conclusions therefrom, augmented by its direct field examination. Micon has not carried out any independent exploration work, drilled any holes or carried out any program of sampling and assaying on the property. During the field visit Micon did not collect any samples to confirm the mineralization at the Choco 10 gold mine as it is an operating gold mine and any samples collected by Micon would only reflect the mineralization at the sample location and not necessarily the economic nature of the mineralization at the mine. While exercising all reasonable diligence in checking, confirming and testing, Micon has relied upon Gold Fields’ presentation of the Choco 10 gold mine data from both itself and previous organizations in formulating its opinion. Micon has not reviewed any of the documents or agreements under which Gold Fields holds title to the Choco gold mine or the underlying mineral concessions and Micon offers no legal opinion as to the validity of the mineral titles claimed. A description of the properties, and ownership thereof, is provided for general information purposes only. The existing environmental conditions, liabilities and remediation have been described where required by NI 43-101 regulations. These statements also are provided for information purposes only and Micon offers no opinion in this regard. The descriptions of geology, mineralization and exploration are taken from reports prepared by Gold Fields and PMG staff. The conclusions of this report rely on data available in published and unpublished reports and information supplied by the organizations which have conducted exploration on the property, and information supplied by Gold Fields and its consultants. In Micon’s opinion, the information provided to Gold Fields was supplied by reputable organizations and Micon has no reason to doubt its validity. Many of the maps and tables for this report were reproduced or derived from reports written by or for Gold Fields.

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4.0 PROPERTY DESCRIPTION AND LOCATION This section gives a brief description of the Choco 10 gold mine, its location, status of claims, royalties payable to third parties and a list of the permits and licences held by the company. Specific aspects pertaining to the topography, climate, infrastructure and local resources are contained in Section 5.0. A brief historical account of the discovery and development of the Choco 10 property is contained in Section 6.0. 4.1 LOCATION AND AREA OF THE PROPERTY The Choco 10 gold mine is located in the southeastern part of Venezuela in the Bolivar state (Figure 4.1), approximately 15 kilometres west of the town of El Callao. The mine is located on an exploitation project, which amalgamates the Choco 10 and Choco 4 Concessions (Figure 4.2). Choco 10 operates under a mining lease, which is approximately 2,100 hectares. The major industrial city of Puerto Ordaz is located 190 kilometres northwest of El Callao and is linked to the mine by paved road. Venezuela has a good road infrastructure, although road conditions have been deteriorating during the last 15 years near the mine. Under the terms of its exploitation certificate the Company is obligated to maintain a portion of the access road for the Choco 10 mine.

Figure 4.1 Location of the Choco 10 Mine Close to the Guyana and Brazil Borders in the Southeastern Portion of

Venezuela

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4.2 CLAIMS, LICENCES AND TITLE Most of the Company’s mining rights in Venezuela (including the Choco 10 mine) are concessions granted to CVG, a governmental development entity for the Guayana region, which have been leased by CVG to different subsidiaries of the Company. PMG is a joint venture between Promotora Minera de Venezuela, S.A., Promiven (a wholly-owned subsidiary of Gold Fields which it acquired from Bolivar), and CVG-Ferromineria del Orinoco C.A. (FMO). The concessions held through PMG are owned 95%. These include Choco 10, Choco 4, Bochinche B1 and B2, and Bochinche Zero. Other exploration concessions, which include Choco 1, 2, 6, 9, 12, and 13 and Increible 16 (Figure 4.2), are 100% owned by various subsidiaries of the Company. The Choco 10 mine commenced production in August, 2005. Current operations consist of open pit mining and a processing plant comprising conventional comminution and carbon-in-pulp processing. The Choco 10 mine uses typical open pit mining methods of drilling, blasting, loading and hauling. Two pits are currently being operated within the Choco 10 concession, Pisolita and Rosika-Coacia. The pits are located two to three kilometres from the main plant.

Figure 4.2 El Callao District Showing Current Gold Fields Concessions and Active Gold Mines and the Choco 10

Deposit

Hecla - Isidora

5km

El Callao Town

CVG - Colombia

Guasipati Town

Gold FieldsConcessions

Yuruari River

Increible 16

Choco 6

Choco 9

Choco 12

Choco 2

Choco 1

Choco 13

Choco 10 Mine

Choco 4

Choco 10

Shandong – Sosa Mendez

Crystallex - Tomi

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The Choco project consists of two mineral concessions, Choco 4 and Choco 10. The known resource lies entirely within the Choco 10 concession; however, some of the mine infrastructure is also located on the Choco 4 concession. Upon completion of the exploration phase and application for the exploitation permit in March, 2004, PMG relinquished 50% of the concessions consisting of 2,128.74 hectares and 1,472.03 hectares on Choco 10 and 4 respectively. Micon has not made an independent investigation or verified the title to such surface rights as are described herein for the Choco concessions. The terms of the Choco 4 and 10 concession title are shown in Table 4.1.

Table 4.1 Choco 4 and Choco 10 Title Description

Mining Rights Held

by Promotora Minera De Guayana, P.M.G., S.A. (PMG)

Titles Rights and Minerals Area and Location Term

CHOCO 4

The mining rights over this area were first granted by the MEM to the CVG by means of a concession on May 10, 1993, which was then leased by the CVG to

PMG. Later, an exploitation permit named

“Certificate of Exploitation” was granted to the CVG on February 4,

1994.

Exploration and subsequent

exploitation of alluvial and vein

manganese, niobium, tantalum,

molybdenum, vanadium,

chromium, nickel, cobalt, tungsten,

gold, copper, zinc, silver and tin.

Concession was originally granted for a 2,941.8570 hectares area, El Callao Municipality, Bolivar

State, Venezuela. PMG selected for exploitation an area of 1,458.12 hectares, divided into 4 plots (CH4-

1, CH4-2, CH4-3 and CH4-4) of 493.87, 307.40,

204.76 and 452.09 hectares, respectively.

The Choco 4 Certificate of Exploitation grants to its holder the right to exploit the minerals

for a term of 20 years commencing on the date of publication in the Official

Gazette, renewable for periods no longer than 10 years each and no

longer than 20 years in total. Having been published on

December 5, 2005, the Choco 4 CE will expire on December 5,

2025, unless an extension is granted.

CHOCO 10

The mining rights over this area were first granted by the MEM to the CVG by means of a concession on May 10, 1993, which was then leased by the CVG to

PMG. Later, an exploitation permit named

“Certificate of Exploitation” was granted to the CVG on February 4,

1994.







Concession was originally granted for a 4,249.3490 hectares area, El Callao

Municipality Bolívar State, Venezuela. PMG selected for exploitation an area of 2,124.53 hectares, divided

into 5 plots (CH10-1, CH10-2, CH10-3, CH10-4

and CH10-5) of 499.95, 403.31, 389.78, 373.19 and

458.30 hectares, respectively.

The Choco 10 Certificate of Exploitation grants to its holder the right to exploit the minerals

for a term of 20 years commencing on the date of publication in the Official

Gazette, renewable for periods no longer than 10 years each and no

longer than 20 years in total. Having been published on

December 5, 2005, the Choco 10 CE will expire on December 5,

2025, unless an extension is granted.

The Choco 4 and 10 concessions were granted by the Ministry of Energy and Mines (Ministry of Mining) on May 10, 1993 to Corporación Venezolana de Guayana, C.A. (CVG) and published in Official Gazette No. 4.578 Extraordinary, dated May 18, 1993 and registered before the Real Estate Registry Office of the Roscio District, State of Bolivar, on April 15, 2003.

14

CVG leased the Choco 4 and 10 concessions to Promotora Minera de Guayana (PMG), pursuant to the two lease agreements entered into between CVG and PMG dated February 4, 1994, authenticated before the Second Notary Public of Puerto Ordaz, Bolivar State on April 8, 1994, under No. 7 and 9, Volume 55 of the Authentication Books of said notary and registered before the Real Estate Registry Office of the Roscio District, State of Bolivar, on April 15, 2003 (the Choco 4 and 10 Lease Agreement). The agreement with CVG grants PMG the rights to explore and exploit the vein and alluvial minerals listed in the Choco 10 concession for the term of the Choco 4 and 10 concessions, subject to the payment of royalties and taxes and meeting a number of obligations. Gazetting of the final approval for issuance of exploitation certificates for the Choco 4 and 10 concessions was published on November 1, 2005. The Venezuela Ministry of Basic Industries and Mining published the resolutions giving final approval to the issuance of the exploitation certificates for the Choco 4 and 10 concessions on December 5, 2005. The main terms of the exploitation certificates include:

• To assure the supply of technology to the mining industry and its transference in favour of the country.

• To hire with priority national persons.

• To promote national investigation activities in the geology, mining, metallurgy and related sectors.

• To establish a personnel training program with the objective that, in a period of 10 years, 95% of the personnel required for the development of the concession-related activities are Venezuelan.

• The construction of a school and medical dispensary at the Choco community within 2 years of the permit being issued.

• The construction of an aqueduct for El Choco town.

• Maintenance of the El Callao – Mateco road between the Edelca Substation and the Choco 10 operation.

The properties held through PMG (95%) include Choco 10, Choco 4, Bochinche B1 and B2 and Bochinche Zero. The Company also controls exploration and mineral rights through a number of various subsidiary companies for Choco 1, 2, 6, 9, 12 and 13, and Increible 16. The company structure controlling the interests of Choco 4 and 10, and the other concessions within the El Callao Municipality and Sifontes Municipality of Bolivar State, Venezuela, is shown in Figure 4.3. The mining titles for the concessions are described in Table 4.2. The Company controls a total area of 45,145 hectares of mining concession rights in Venezuela, including the Choco 4 and 10 concessions.

15

Figure 4.3 The Company Structure within Venezuela Showing Ownership of the Various Mining and Exploration

Concessions (purple)

The Company controls all interests below the Gold Fields Netherlands Services BV and Orogen Holdings (BVI) Limited umbrella organizations shown on Figure 4.3 above.

Table 4.2 Details of Other Mining Titles not including the Choco 10 and 4 Concessions

Mining Rights Held

by Promotora Minera De Guayana, P.M.G., S.A. (PMG)


BOCHINCHE B1 AND BOCHINCHE

B2

The rights over these two areas were first granted by the MEM to the CVG by

means of two concessions, which were then leased by

the CVG to PMG.






as well as the deposits of gold, copper, zinc and tin associated to

the other deposits.

B1 and B2 are areas of 5,000 hectares each, located in Sifontes

Municipality, Bolivar State. In order to obtain the Certificate of Exploitation, the title holder must select

an area up to 50% and return the remaining

portion to the Republic.

2 years for exploration and 20 years for exploitation, this last

term beginning on the publication date of the Certificate of

Exploitation in the O.G., subject to 10-year extensions, up to a maximum of 40 years. The

Certificate of Exploitation has not been issued.

The original concession titles were granted by the MEM to the

CVG on December 15, 1989; published in the O.G. Nº 4.181

Extr., dated May 10, 1990.

16

Mining Rights Held

by Corporación Aurífera De El

Callao, C.A. (CORALCA)


CHOCO 1, CHOCO 2, CHOCO 12

The rights over these areas were first granted by the

MEM to the CVG by means of three identical concessions, which were

then leased by the CVG to CORALCA.







Choco 1 is 4,000 hectares, Choco 2 is 2,600 hectares and Choco 12 is 2,881.2 hectares; all located in El

Callao Municipality, Bolivar State. In order to obtain the Certificate of

Exploitation, the title holder must select an area up to 50% and return the remaining portion to the

Republic.



Exploitation in the O.G., subject to 10-year extensions, up to a maximum of 40 years. The

Certificate of Exploitation has not been issued. The term of the

Choco 1, 2 and 12 Leases is the same as the respective

concessions. The original concession titles

were granted on May 10, 1993 and published in the O.G. Nº 4.578 Extr., May 18, 1993.

CHOCO 13 Choco 13 is a contract granted by the CVG to

CORALCA.

Exploration, development and exploitation of

vein and alluvial gold and

diamonds.

Choco 13 is an area of 2,063.03 hectares, located

in the El Callao Municipality, Bolivar

State, Venezuela.

25 years from the date of execution of the agreement, expiring on May 27, 2016.

Mining Rights Held by Corporación Minera Choco 9, C.A. (CMCh9)


CHOCO 9

The rights over this area were first granted by the

MEM to the CVG by means of a concession,

which was then leased by the CVG to CMCh9.







Choco 9 is 5,000 hectares,, El Callao Municipality,

Bolivar State, Venezuela. In order to obtain the

Certificate of Exploitation, the title holder must select

an area up to 50% and return the remaining

portion to the Republic.



Exploitation in the O.G., subject to 10-year extensions, up to 40

years. The Certificate of Exploitation has not been issued. The original concession title was granted on May 10, 1993; it was published in the O.G. Nº 4.578

Extr., May 18, 1993.

Mining Rights Held by Proyectos

Mineros Del Sur, C.A. (PROMINSUR)


CHOCO 6

The rights over this area were first granted by the

MEM to the CVG under a concession, which was

then leased by the CVG to PROMINSUR.







Choco 6 is 5,000 hectares,, El Callao Municipality,

Bolivar State. In order to obtain the Certificate of

Exploitation, the title holder must select an area up to 50% and return the remaining portion to the

Republic.



Exploitation in the O.G., subject to 10-year extensions, up to 40

years. The Certificate of Exploitation has not been issued. The original concession title was

granted on May 10, 1993 and published in the O.G. Nº 4.578

Extr., May 18, 1993.

17

Mining Rights Held by Proyectos

Mineros Del Sur, C.A. (PROMINSUR)


INCREÍBLE 16 Increíble 16 is a contract granted by the CVG to

PROMINSUR.

Exploration, development and exploitation of

vein and alluvial gold and

diamonds.

Increíble 16 is an area of 5,000 hectares, located in

the El Callao Municipality, Bolivar State, Venezuela.

20 years from the date of execution of the agreement,

expiring on December 28, 2012, subject to 10-year extensions at

the discretion of the CVG.

4.3 ROYALTIES, PAYMENTS AND OTHER AGREEMENTS When it acquired Promiven and its 70% subsidiary PMG in 2003, Bolivar agreed to pay to the prior owner of PMG (Cemex Venezuela C.A., or “Cemex”) a royalty on gold production from Choco 10 and/or Choco 4. The royalty becomes payable once PMG’s gold production reaches 700,000 ounces of gold produced. The royalty is calculated and paid on ounces of gold attributable to Promiven’s equity interest in PMG. This was increased to 95% following Bolivar’s acquisition. Once this level of production is reached, the amount of the royalty will be calculated monthly using the average London PM fixing price of gold during the calendar month, but will be payable quarterly in arrears. The royalty is US$10 per ounce, but increases to US$15 per ounce if the average price of gold for the relevant calendar month reaches US$315 or more, and US$20 per ounce if the average price of gold for the relevant calendar month reaches US$400 or more. If Cemex wants to sell its right to receive the royalty to a third party, it must first offer it to the Company on the same terms. In addition, pursuant to the Choco 4 and Choco 10 lease agreements between CVG and PMG, PMG must pay a monthly production royalty to CVG and CVG Técnica Minera C.A. (a CVG subsidiary). The royalty is paid monthly in arrears in Bolivars, at the official exchange rate in place (or in gold at the request of CVG), within the first 10 days of each calendar month, based on the production of the immediately preceding calendar month. It is calculated monthly, is based on the number of ounces of gold produced and ranges between 1.0% and 3.5%, depending on the average price of gold in the New York market for the relevant month, as determined by CVG. This royalty amount is subject to value added tax. As part of the exploitation phase, the following taxes are payable upon the commencement of commercial production from the Choco 4 and 10 concessions:

• Decree Law of Mines: Exploitation Tax of 3% on gross production based on the commercial value of the gold in the city of Caracas, payable monthly. Pursuant to article 90 of the Decree Law of Mines of 1999 the exploitation tax is credited towards the payment of the surface tax. Therefore in practice no additional surface taxes will apply.

• The Choco 10 Lease Agreement originally included a monthly royalty payable to

CVG based on monthly gold production, ranging from 0.28% to 10%, depending on the grade of gold per ton (g/t), and a royalty to CVG Technica Minera (Tecmin) as a

18

finder’s fee equivalent to a monthly gross production royalty of 1% during the first 10 years after the date of execution of the lease agreement. These royalties were renegotiated between PMG and CVG on March 12, 2004 and were substituted by a gross royalty payable to CVG and CVG Tecmin calculated on production of gold (oz Au). The CVG & CVG-Tecmin royalty is shown in Table 4.3.

Von Seigmund, L., and Kritzler, D. (2005a) reported that according to Bolivar’s counsel the CVG royalty includes a gross royalty on production to CVG-Tecmin of 1% for the first 10 years of the Choco 10 lease (until August, 2004); and 0.5% thereafter. Therefore, after August, 2004 the royalty figures in Table 4.3 should be reduced by 0.5%. Future discussions between CVG Tecmin and PMG are required to clarify this interpretation.

Table 4.3 Royalty Payments to CVG and CVG-Tecmin

Average Gold Price (US$/oz Au) Royalty to CVG and CVG-

Tecmin < $300/oz 1.0% $300/oz to $350/oz 1.6% $350.01/oz to $375/oz 2.23% $375.01/oz to $400/oz 2.70% $400.01 to $450/oz 3.00% >$450/oz 3.5%

An additional royalty is payable to Cemex in connection with the acquisition of Promiven by Carisma. The royalty payment is detailed below:

• Carisma agreed to pay Cemex a royalty of US$10 per ounce of produced gold, exceeding the first 700,000 ounces produced by PMG. The royalty will be paid quarterly in arrears within the first 15 days of each calendar quarter. In addition, it will be calculated on the same proportion as the equity interest attributable to Promiven in Promotora Minera de Guayana C.A. (PMG). The royalty shall be increased to (i) US$15 per ounce, if the average price of gold is US$315 or more in the London Bullion Market, (ii) US$20 per ounce, if the average price of gold is US$400 or more, in the London Bullion Market. Carisma has a right of first refusal to purchase the royalty.

• In addition to the purchase price and the royalty, Carisma agreed to make a bonus

payment of US$1,500,000 to Cemex as follows: (i) US$750,000 on each of the eighth and ninth anniversaries of the date of commencement of commercial production, or (ii) a single instalment of US$1,500,000 within 90 days of reaching a total production of 700,000 ounces of gold.

Under the Choco 10 lease agreement, the lease holder is obliged to pay annual surface taxes to the MEM, now MIBM, according to a sliding scale that varies with the age and the surface of the concession (the older and larger the concession, the surface tax rate increases). PMG has

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stated that these taxes have been paid and that they are current, and that there are no defaults in terms of existing permitting and licencing. The information on the royalty payments was provided to Micon by Gold Fields staff. Micon has not independently verified the terms and requirements of the royalties but has no reason to believe they are not as stated above. 4.4 PERMITS AND LICENCES Based on discussions with Choco staff, official gazettes, exploitation permits, and monthly and quarterly reports, it is Micon’s understanding that all permits and licences are in place to operate the mine. In addition to the rights and titles discussed previously, authorization was granted to occupy Choco 4 (#000439) and Choco 10 (#000580) with expiry dates of April 8, 2014 and February 4, 2014, respectively. The environmental permits are in place for the mineral exploitation in Choco 4 and 10. The mine is currently fulfilling the permit obligations. The groundwater well field permit is also in place. The mine is in the process of permitting the new waste rock dump site and has also submitted an application to extract water from the Yuruarí River. It is understood that water extraction from the Yuruarí River will not likely be needed with additional efficiencies for reclaiming tailings water and operation of the new well field. Permits will need to be applied for, or amended, to get authorization for any open pit expansions, any mill expansions, and for a new tailings impoundment.

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5.0 ACCESSIBILITY, CLIMATE, LOCAL RESOURCES, INFRASTRUCTURE AND PHYSIOGRAPHY

5.1 TOPOGRAPHY, CLIMATE AND VEGETATION Choco 10 lies in an area of low hills between elevations 200 m and 300 m above sea level. The area is partly savannah and partly tropical forest. The soil is nutrient-poor and present land use is confined to rural cultivation, cattle ranching and minero (small mining) activity. The climate at Choco 10 is tropical, with temperatures averaging around 25.7° C and humidity ranging from 76% to 82%. The average annual precipitation at El Callao is 1,325 mm per annum. The heaviest rainfall occurs during the months from June to August, which average 150 mm of precipitation per month. During the remainder of the year the rainfall is about 80 mm per month except in the dry season from February through March when precipitation is about 36 mm per month. The average annual evaporation is about 1.78 m per year. 5.2 ACCESS AND POPULATION CENTRES A paved secondary road passes through the concessions in Choco 10 and provides access to the town of El Callao, about 15 km to the east from the concessions. El Callao has a population of approximately 25,000 and is the centre of population in the area. It is a historic gold mining centre and a number of present and past producing mines are located nearby. The main highway, between the regional centre of Puerto Ordaz, a major city on the Orinoco River 190 km to the north, and other gold mining centres of El Dorado and Kilometre 88, and the Brazilian frontier to the south, passes through El Callao. The Choco concessions are mostly unused for agricultural activity and the gently sloping topography provides suitable and adequate locations for project infrastructure and potential waste storage and tailings storage areas. Figure 5.1 is a general plan showing the mining and infrastructure areas. 5.3 AVAILABILITY OF POWER, WATER AND PERSONNEL A major high voltage 400 kV electrical supply line carrying power from the Guri dam, and destined for Brazil, passes near El Callao. A substation about 5 km from the Choco concessions supplies power to El Callao. The Choco 10 mine is connected to the main electricity grid that transmits energy from Venezuela to Brazil. A rain-dependent reservoir supplies water for use at the mine, which is supplemented by a well field that is being developed and commissioned. A potential water supply is from the Yuruari River, which passes north of the concessions, approximately 8 km distant, and from which other local mines and the El Callao municipality draw water.

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Most of the personnel working at the mine live in and around El Callao. The population is familiar with mining and can provide the majority of the local labour force. Mine supervision and technical support are provided by contract expatriate staff that is housed in staff quarters on the outskirts of El Callao. Personnel travel by bus or truck to the mine each day and there is no permanent accommodation at the mine site.

Figure 5.1 Plan Showing the Choco 10 Mining Areas and Mine Infrastructure

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6.0 HISTORY 6.1 EARLY HISTORY OF THE AREA Mina de Oro Choco is located within the highly endowed El Callao district, which has seen much gold mining during the past four centuries. Gold mining in the El Callao district dates back to the early Spanish Conquest in the 1500’s in the search to find El Dorado. The centre of the Spanish colony was believed to be Tupequen, modern day El Callao. According to legend El Callao means “the secret” referring to the hidden source of the immense riches known as the legendary El Dorado that had been concealed by the religious orders. During the 1800’s exploitation of gold in the El Callao district was undertaken first by a Frenchman, Dr. Luis Plassard in 1849 and then by Corsicans and Venezuelans who established the El Callao company in 1870. The company mined the El Callao mine below the site of the present town until 1887. Mining in the area of the Choco 10 concession dates back to 1897, when a British company operated the historic Concordia mine located 2 kilometres from the current Choco 10 operation. A mine shaft was sunk 200 m to develop a 1 m wide quartz vein reportedly carrying 40 g/t of gold. New Goldfields of Venezuela (a subsidiary of Gold Fields) commenced mining in the El Callao district in the second part of the nineteen-twenties. The company made a long list of acquisitions in the period including Choco 6 in 1921 and Choco 1, 2, 3, 4, and 5 in 1924. New Goldfields of Venezuela explored extensively in the area and at the same time inherited mines around the historic El Callao district. 6.2 MODERN HISTORICAL EXPLORATION Exploration in the Choco 10 area has included drilling, geochemical surveys, geological mapping, airborne and ground magnetic field surveys, structural geology studies, petrographic studies and geophysical surveys. The drill hole database utilized to generate the current resource is the result of a number of drill campaigns conducted over the history of the Choco 10 deposit. This account of the historical exploration on the Choco 10 property has been extracted from the Micon Technical Report dated October 31, 2003 and the Gold Fields “Competent Persons’ Report on the Mining and Exploration Assets of Promotora Minera de Guayana, Choco 10 Gold Mine” dated December, 2006, referred to below. Modern exploration activity in Choco started in the early 1990’s with a regional geochemical soil survey carried out within the Choco 4 and 10 concessions. Geophysical techniques were utilized during 1992 starting with an aeromagnetic survey within the concessions. It was followed by a ground magnetic survey, a detailed geochemical soil survey and trenching

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covering five prospect areas. A strong indication for gold mineralization was obtained as a magnetic high. During 1993, a geological survey and a semi-detailed geochemical soil survey carried out within the concession areas disclosed a large gold anomaly (>100 ppb Au) covering an approximate area of 1,500 m x 1,500 m. Targeting the large gold anomaly, a drilling program by Aircore and HQ3 was commenced in 1993. In 2003, Micon undertook a confirmation drilling program as part of data verification for a feasibility study. A total of 346.7 m of HQ3 diameter diamond drilling was completed in ten holes. The holes were located as near as possible to previous Promiven drilling with the aim of twinning these earlier holes. Micon concluded that there was a reasonable correlation between the earlier Promiven drill intercepts and the twins (Micon 2003a). During 2003 and 2004, a total of 240 infill and step-out holes were drilled by Bolivar Gold for 46,563 m. During this period, drilling was completed with HQ diamond drill core (63.5 mm diameter). Bolivar continued drilling in 2005 to March, 2006 and no significant changes were made to the drilling methods during this period. A couple of trial RC twin holes were completed to compare with diamond results. The drilling encountered a number of problems due to significant groundwater volumes. A total of 48,488 m of diamond and 537 m of RC was completed. From March, 2006 to December, 2006, Gold Fields completed a total of 46,047 m of diamond drilling and 15,386 m of RC resource definition drilling. Over 1,200 holes, mainly Aircore, with an average vertical depth of 30 m, were completed. The drilling identified the presence of four major zones of mineralization in Choco 10, named as the Coacia, Pisolita, Rosika West and Rosika East prospects. The initial drill spacing was 50 m x 50 m, followed by infill drilling of 50 m x 25 m and 25 m x 25 m. Validation holes in Coacia and Pisolita were drilled on a grid of 12.5 m x 12.5 m. Aircore drilling in Choco 4, according to Promiven, showed mineralization in a saprolite zone and intersected gold bearing quartz veins, and Promiven suggested that lode type mineralization is likely to exist at depth. No record of a resource estimate has been provided. A summary tabulation of recent drilling conducted by Gold Fields on the Choco property is provided in Section 11.0. 6.3 BRIEF HISTORY OF OWNERSHIP The following account of the historical ownership of the Choco 10 property, tabulated below in Table 6.1, was extracted from the Gold Fields “Competent Persons’ Report on the Mining and Exploration Assets of Promotora Minera de Guayana, Choco 10 Gold Mine” dated December, 2006, with subsequent updates.

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Table 6.1 Choco 10: Historical Ownership

Date Activity February, 1988 Promiven and CVG entered into an Association Agreement pursuant to which CVG and Promiven agreed

to incorporate a joint venture (PMG) for the development of certain concessions, which were originally to be leased by CVG to PMG. The original agreement was for Promiven to hold 51% of PMG’s shares and CVG the remaining 49%.

May, 1989 Amendment to the Association Agreement to provide Promiven 70% ownership of PMG and CVG 30%. The Association Agreement provided that the project risks were to be totally borne by Promiven. CVG transferred its interest in PMG to FMO. FMO’s interest in PMG was carried through the exploration phase and, thereafter, FMO retained the right to participate in any project development by funding its 30% share.

1991 Modern exploration commences on Choco 4 and 10. At the time there were five mines in existence, known as Concordia, Choco, Mackenzie, Coacia, and Villa Balazo. Two of these now form part of the Choco 10 reserve statement. Three were in operation during 1991 including Concordia, Coacia and Choco.

February, 2003 Carisma entered into the Carisma-Cemex Agreement with Cemex with the purchase of 70% of the shares in Promiven.

February, 2003 Bolivar Gold entered into an arm’s length share purchase agreement with Carisma, Newfield Investments A.V.V. The company purchased from Newfield all of the issued and outstanding shares of Carisma with the issuing of 5,000,000 common shares having a deemed value of C$1.5M. Carisma’s sole asset is all of the issued and outstanding shares of Promiven, which retained a 70% interest in PMG.

May, 2003 Bolivar Gold, Cemex and Carisma signed an addendum to the Carisma-Cemex Agreement pursuant to which, in lieu of the foregoing instalment payments of the Promiven purchase price, Bolivar Gold paid Cemex a lump sum of US2.95M. Under the Carisma-Cemex Agreement, Carisma is also obliged to pay to Cemex a sliding royalty payment.

November, 2004 At the General Assembly of Shareholders, Promiven approved the capital increase of PMG and automatic dilution of FMO from 30% to 0.2%.

December, 2004 FMO filed an action to annul the effects of the resolutions approved in the General Assembly of Shareholders at the Political Administrative Chamber of the Supreme Tribunal of Justice.

July, 2005 Settlement was reached with FMO through mediation with the Ministry of Basic Industries and Mines regarding the dispute over the dilution of FMO, which increased Promiven’s ownership of PMG to 95% and the payment of US$6 million in installments

April, 2005 Choco 10 mine was commissioned. August, 2005 First commercial production commences from Choco 10 mine. November, 2005 Gazetting of the final approval for issuance of exploitation certificates for the Choco 4 and 10 concessions November, 2005 The Bolivar Gold – Gold Fields transaction was announced on November 21, 2005, December, 2005 Venezuela Ministry of Basic Industries and Mining published the resolutions giving final approval to the

issuance of the Exploitation Certificates for the Choco 4 and 10 concessions. February,, 2006 Bolivar Gold acquisition became effective on February 21, 2006. March 2006 Gold Fields assumes operational control of PMG on March 1, 2006. October, 2007 The Rusoro Mining – Goldfields transaction was announced on October 11, 2007

6.4 HISTORY OF RECENT OWNERSHIP On October 11, 2007, Rusoro acquired all of the Venezuelan assets of Gold Fields, including the Choco 10 gold mine, subject to the fulfilment of certain conditions which are anticipated to be satisfied on or about the end of November, 2007, for total consideration of US$150 million in cash, US$30 million in a convertible note and 140 million common shares of Rusoro. As a result of this acquisition, Rusoro will assume from Gold Fields all of Gold Fields’ rights and obligations regarding the Venezuelan assets. Prior to the October 11, 2007 acquisition Gold Fields held the rights to Choco 10 and other Venezuelan assets as described earlier in Section 4.0. Gold Fields acquired its rights in its Venezuelan assets through a plan of arrangement with Bolivar on February 28, 2006. Under the plan of arrangement Gold Fields acquired all of the outstanding securities in Bolivar which it did not already hold. Gold Fields owned its interest in the Choco 10 mine through its

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holding in Promotora Minera de Guayana (PMG) S.A. PMG is a joint venture between Promotora Minera de Venezuela, S.A., and Promiven (a wholly-owned subsidiary of Gold Fields which it acquired from Bolivar), and Corporación Venezolana de Guayana (CVG), a governmental development entity for the Guayana region. Gold Fields assumed operation of PMG on March 1, 2006. The remaining interest in PMG is not subject to dilution and is in the process of being transferred to a different subsidiary of CVG that is in charge of mining activities in the region. This transfer is being made as a result of a settlement agreement entered into with the mediation of the Ministry of Basic Industries and Mines in connection with a shareholding dispute regarding the share capital of PMG that arose prior to Gold Fields’ acquisition of Bolivar. As a consequence of the settlement agreement, Gold Fields’ legal ownership interest in PMG will reflect the 95% effective interest it acquired from Bolivar. As part of the settlement, Bolivar and Gold Fields made payments totalling US$6 million to a subsidiary of CVG that originally held the remaining interest in PMG, with an additional US$1 million pending. 6.5 HISTORICAL RESOURCE ESTIMATES The following historical resource estimates dating from January, 1996 to October, 2003 were extracted from the Micon Technical Report dated October 31, 2003. BHP Engineering (BHPE) and Snowden Associates carried out resource evaluation studies for the Choco 10 deposit in 1994-1995, and BHPE conducted a preliminary feasibility study during 1995 and 1996. In January, 1996 the resource above a nominal cut-off grade of 0.5 g/t, stated according to the JORC Code, was reported by BHP Engineering in a report referred to as RE02199, as shown in Table 6.2.

Table 6.2 BHPE Measured and Indicated Mineral Resources at 0.5 g/t Au Cut-Off

Zone Tonnage Grade Au Au

(Mt) Au (g/t) (kg) (oz) Laterite 4.58 1.23 5,637 81,000

Clay 7.24 1.88 13,632 438,000 Fresh 2.64 2.07 5,465 176,000 Total 14.46 1.71 24,734 795,000

Inferred Resources 1.67 1.38 2,302 74,000

Micon conducted an economic and technical review of the Choco project in 2002 on behalf of TecnoPetrol, which later became Bolivar Gold. The results of this work were presented in the Micon report entitled “Gold Resources of Concessions Choco 4 and 10, Estado Bolivar, Venezuela”, originally dated November 26, 2002 and revised January 23, 2003. Micon’s estimate of mineral resources in 2002 is presented in Table 6.3.

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Table 6.3 Micon Estimate of Choco Gold Project Mineral Resource Estimate

(As of October 1, 2002)

Cut-Off Category Tonnage Grade Gold Gold (t) Au (g/t) (kg) (oz)

0.5 Indicated 9,584,655 2.37 22,677 729,075 0.5 Inferred 4,601,921 2.21 10,170 326,973


The report accompanying Micon’s October 1, 2002 mineral resource estimate included a proposed drilling program. The program was designed to upgrade mineral resources classified as inferred to the indicated category and to expand mineral resources by exploration beyond the known limits of mineralization. Micon conducted a further technical review of the project for Bolivar in late 2003. The results of this work, an update of the earlier work, were presented in a Technical Report entitled “Gold Resources of Concessions Choco 4 and 10, Estado Bolivar, Venezuela”, dated October 31, 2003. Micon’s estimate of mineral resources in 2003 is presented in Table 6.4 and was classified according to the CIM Standards on Mineral Resources and Reserves, Definitions and Guidelines adopted by CIM Council on August 20, 2000, and contained in National Instrument 43-101.

Table 6.4 Micon Estimate of Choco Gold Project Mineral Resource Estimate

(As of October 1, 2003)

Cut-Off Category Tonnage Grade Gold Gold (t) Au (g/t) (kg) (oz)

0.5 Indicated 13,229,143 2.47 32,690 1,051,016 0.5 Inferred 2,300,254 1.93 4,443 142,842


Micon completed a feasibility study in November 2003 for Bolivar Gold / PMG based on a reserve of 879,000 contained ounces gold. Results of the feasibility were published in Bolivar Gold’s November 17, 2003 news release on SEDAR. The Mineral Reserve estimate from the feasibility study is shown in Table 6.5. The current Choco 10 processing plant and infrastructure are based on the Micon 2003 feasibility design.

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Table 6.5 Diluted Mineral Reserve and Stripping Estimates (0.5 g/g Au Cut-off)

Ore Type Ore (000’t) Grade (g/t) Au-metal

(000 oz) Inferred+Waste

(000’s) Strip Ratio

(t/t) Au (%)

Laterite 2,850.52 1.400 127,883 2,465.09 - 14.5 Weathered 7,192.61 2.349 543,157 23,231.34 - 61.8 Fresh 2,549.35 2.544 208,549 8,138.97 - 23.7 Total 12,582.49 2.174 879,589 33,835.39 2.69 100.0 In its “Updated Technical report on the Choco Project Resources and Reserves” of January 28, 2005, MDA listed the total mineral resources for the Choco project as shown in Table 6.6. MDA did not make a resource estimate for the VBK deposit.

Table 6.6 MDA Estimate of Choco Mineral Resources at 0.5 g/t cut-off

(As of January 28, 2005)

Cut-Off Category Tonnage Grade Ounces

(t) Au (g/t) Measured and Indicated Resources Pisolita project

0.5 Measured 0 0 0 0.5 Indicated 8,793,000 1.37 389,000 0.5 Total 8,793,000 1.37 389,000

Rosika/Coacia 0.5 Measured 3,714,000 2.53 302,000 0.5 Indicated 19,241,000 1.64 1,014,000

Total 22,955,000 1.78 1,316,000 Total

0.5 Measured 3,714,000 2.53 302,000 0.5 Indicated 28,034,000 1.56 1,403,000

Total 31,748,000 1.67 1,705,000

Inferred Resources 0.5 Pisolita project 336,000 0.8 9,000 0.5 Rosika/Coacia 3,728,000 0.91 109,000 0.5 VBK project 28,415,000 1.85 1,686,000

Total 32,479,000 1.73 1,804,000 6.6 HISTORICAL MINING PRODUCTION Records provided by Gold Fields indicate that during the period from April, 2005 to February, 2006 when Bolivar operated the Choco mine, a total of 823,147 tonnes were milled at an average head grade of 2.07 g/t Au. Recovered gold was 49,880 ounces and a total of 42,510 ounces of gold were sold.

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For the period from March 1 to June 30, 2006, Gold Fields has reported that at the Choco 10 operation a total of 454,000 tonnes of ore were processed at an average head grade of 1.89 g/t Au. A total of 25,300 ounces of gold were recovered and 28,300 ounces of gold were sold. The production from July, 2006 to the latest reporting period is shown in Table 6.7 by calendar quarter.

Table 6.7 Production Statistics from July, 2006 to September, 2007 by Quarter

Q3- 2006 Q4-2006 Q1-2007 Q2-2007 Q3-2007

Ore tonnes t 362,120 346,692 194,253 199,263 267,712 Head grade g/t 1.87 1.90 1.58 1.49 2.13Contained gold oz 21,767 21,137 9,893 9,517 18,347

Tonnes processed t 305,757 356,785 191,395 147,304 401,100 Head grade g/t 1.98 2.23 1.61 1.65 1.80Gold to process oz 19,457 25,612 9,891 7,809 23,268 Gold recovered oz 17,354 23,031 8,392 6,859 19,854 Gold sold oz 17,227 22,801 8,224 7,409 14,004

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7.0 GEOLOGICAL SETTING 7.1 REGIONAL GEOLOGY The Choco mineral concessions are located within the Guyana Shield, which occupies the northern part of the Amazon Craton between the Amazon and Orinoco river basins. The geology of the Guyana Shield as a whole is poorly known, reflecting minimal development, limited access, as well as intense tropical weathering and cover across this large area. It has been subdivided into three major geological entities: i) Archaean rocks of the Imataca Complex; ii) Palaeoproterozoic Trans-Amazonian granite-greenstone belts; and iii) Palaeoproterozoic sedimentary and igneous rocks of the Roraima Group, Uatumã Group and the Avanavero Suite. The majority of gold mineralization is hosted by the greenstone belts; some of the more important of these include the Pastora Supergroup and Botanamo Group in Venezuela, the contiguous Barama-Mazaruni Groups in Guyana, the Marowijne Group in Suriname, and the Maroni Group in French Guiana (Figure 7.1). The Choco concessions cover oxide and sulphide gold mineralization located within the Guasipati Greenstone Belt in the Pastora Palaeoproterozoic Province.

Figure 7.1 Regional Geology of the Northern Guyana Shield Showing Major Gold Deposits with Resource Ounces

Choco 10 4.8M oz

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Greenstone belts across the shield are dated to between 2250 and 2110 Ma for the metavolcano-sedimentary sequences and between 2250 and 1900 Ma for the associated granitoid complexes. The volcano-sedimentary packages and early granitoids were metamorphosed, deformed and mineralized during the Trans-Amazonian Orogeny, dated from approximately 2200 to 1900 Ma. This orogeny caused the accretion of various volcanic centres (the precursors of greenstone belts) around Archaean palaeocontinents including the Imataca Complex in Venezuela. The Palaeoproterozoic greenstone belts and granitoid complexes are separated from the Imataca Complex by the Guri Structure, a major east-northeast-trending ductile shear zone (see Figure 7.2). At a regional scale, many gold deposits of the Guyana Shield are located in close proximity to, but not on, major shear zones as is typically the case for orogenic gold deposits.

Figure 7.2 Geology of the Choco 10 Region Showing Selected Major Gold Deposits

The Trans-Amazonian Orogeny has been constrained between 2120 and 2095 Ma for the Omai region in Guyana. The only radiometric age of gold mineralization also comes from Omai, dated at ca. 2000 Ma. The sparse dating has led to a model in which deposition of volcano-sedimentary sequences occurred between 2250 and 2110 Ma, with subsequent peak metamorphism of the supracrustal rocks from 2120 until 2090 Ma. Metamorphism at depth of

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higher-grade rocks then continued until 1950 Ma when metamorphic fluids were released at depth and migrated towards the surface, mineralizing the supracrustal rocks. This model is commonly invoked to explain the source of mineralizing fluids in orogenic gold deposits. Venezuela has a long history of gold production. The most important area was the El Callao mining district, which hosts the Choco 10 project. The El Callao mine is considered to have been the most productive gold mine in the world during the latter part of the 19th century. As of 1995, more than 260 gold-bearing quartz veins were known to exist in the district (MDA 2005). 7.2 GEOLOGY OF THE CHOCO 10 AREA The gold mineralization at Choco 10 is typical of Archaean-Proterozoic orogenic gold deposits. The deposit is hosted in an early Proterozoic sequence of the Pastora Greenstone Belt of the Guyana Shield. The stratigraphy comprises a tholeiitic to calc-alkaline volcanic package, overlain by volcaniclastic and epiclastic rocks intruded by gabbroic sills. The rock package has been subjected to intense tropical weathering. The Choco 10 gold complex is located in a regional northeast-plunging synclinal hinge zone. The structural architecture is dominated by folds and ductile fabrics indicating a long history of compressional deformation. Mineralization is dominantly structurally controlled and is associated with strain partitioning. High-grade gold mineralization occurs with carbonate, pyrite, silicification and quartz-veining in lower-strain zones typically associated with spaced crenulations, folding and chaotic foliations. The Choco mineral concessions are situated within the central portions of the Guasipati Greenstone Belt (or Pastora Supergroup). The stratigraphy comprises a tholeiitic to calc-alkaline volcanic package, overlain by volcaniclastic and epiclastic rocks intruded by gabbroic sills. These greenstone-belt rocks have been metamorphosed to lower greenschist facies. Late dykes of intermediate composition and felsic stocks and sills have also intruded the greenstone-belt package. The meta-volcanics and meta-sedimentary rocks that underlie this area comprise the El Callao, Cicapra and Caballape Formations. These units can be summarized, in ascending stratigraphic order, as:

• El Callao Formation: tholeiitic basalts; mainly pillowed with hyaloclastite breccias and massive zones.

• Cicapra Formation: tholeiitic basaltic package; volcaniclastic rocks, including

conglomerates and breccias at top, brecciated basalt flows, some arkosic sandstones.

• Caballape Formation: intermediate calc-alkaline volcaniclastic rocks, breccias, conglomerates, tuffs, siltstones, epiclastic – pyroclastic.

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The granitic domes of the Supamo Complex divide packages of meta-sedimentary and meta-igneous greenstone-belt rocks to form branching synclinoria between the intrusive uplifts. Structural geology of the greenstone belts is dominated by folds and ductile fabrics indicating a long history of compressional deformation. The Choco mine area is located immediately north of the Laguna Dyke which cuts north-northeasterly through the area. All of the currently known gold deposits in the district are reported to occur to the north of this dyke. The distribution of the stratigraphy together with the more prominent structural geological features is illustrated in Figure 7.3. The rock package has been subjected to intense tropical weathering. Consequently, much of the near-surface mineralization is contained within saprolitic horizons. 7.3 CHOCO 10 DEPOSIT GEOLOGY The Choco 10 gold complex is located in a regional northeast-plunging synclinal hinge zone. Mineralization is dominantly structurally controlled and is associated with strain partitioning. High-grade gold mineralization occurs with carbonate, pyrite, silicification and quartz-veining in lower-strain zones typically associated with spaced crenulations, folding and chaotic foliations. The Choco 10 gold deposits are hosted in the basal portion of the Guasipati Greenstone Belt and have been metamorphosed in the lower greenschist facies. Recent work by Gold Fields’ geologists is refining elements of the stratigraphy in this area; the current startigraphic sequence established for the Choco 10 deposits is shown in Figure 7.4. From stratigraphic base to top (west to east), the main rock units in the camp are:

• Tholeiitic basalts, flow-top breccias and interbedded chert. • Mafic volcaniclastic rocks. • Calc-alkaline intermediate volcaniclastic sediments. • Gabbro sill intruding both the basalts and volcaniclastic units. • Trondhjemite pluton and associated dykes intruding the whole sequence.

The deposits are located in a regional northeast-plunging synclinal hinge zone (Figures 7.5 and 7.6). The structural architecture is dominated by folds and ductile fabrics indicating a long history of compressional deformation. Deformation partitioning is highly developed and, as a result, there are large volumes of rock that preserve primary features (low-strain zones), while deformation is concentrated in zones of intense development of ductile fabrics (high-strain zones). Ductile or brittle shear zones that accommodate large displacements are absent.

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Figure 7.3 Geology of the Choco-El Callao District

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Figure 7.4 Stratigraphic Sequence and Mineralization at Choco 10

The deformation history of the Choco 10 mineralized complex comprises:

• Early Trans-Amazonian NE-SW to E-W directed bulk shortening that forms a steep S1 fabric and rotates S0 to a moderate dip.

• D2 NW-SE bulk shortening forming NE to ENE trending folds of S0 and S1.

• WNW to ESE shortening during D3 which partitions deformation into discrete zones of high-strain. During development of D3 shear zones in VBK the S2 fabric is reactivated.

• Late Trans-Amazonian NE-SW shortening during D4 producing weak, kink-like, crenulation.

The structural framework created during D2 is the main geometrical control on mineralization at the Choco 10 system, which corresponds to the S2 trend, axial planar to regional folds. D2 high-strain zones can be further divided into higher-strain – cleavage/limb domains where S0 and S1 have been rotated into parallelism with S2, and lower-strain – microlithons/hinge domains where D1 folds are preserved.

Stratigraphic Sequence and Mineralization

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High-grade ore shoots are controlled by the geometry of D2 structures such as D2 fold axes and S2 strain domains intersecting favourable bedding (S0) or foliation (S1) geometry. The timing of gold mineralization is not well constrained.

Figure 7.5 Geology Map of the Choco 10 (showing the four primary ore deposits; Rosika, Coacia, Pisolita (RCP) and

Villa Balazo-Karolina (VBK)

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Figure 7.6 Northwest-Southeast Geological Cross-Section

(corresponding to the A-B trace on the geological map, Figure 7.5)

VBK Rosika-Coacia Saddle

Note: The main stratigraphy is folded around the regional syncline with the gabbro in the core. Mineralization is shown in red with the bulk of the high-grade mineralization on this section associated with VBK. A high-grade shoot is located on the domain 41 structure at the intersection with a flow-top breccia (FB). The December, 2006 resource pit shell is shown in black. Additional descriptions of the property geology and mineralization are provided in Section 17.3, in support of the discussion on Mineral Resources.

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8.0 DEPOSIT TYPES Choco 10, together with other gold deposits in the El Callao district, is considered to be an “orogenic-type” deposit; these types of deposits are sometimes, very broadly, referred to as mesothermal. They are characteristically associated with deformed and metamorphosed mid-crustal blocks, particularly in spatial association with major crustal structures. The following description has been taken from Goldfarb and Groves (2005) and from MDA (2005), who also took from earlier work by Goldfarb. Orogenic gold deposit formation is inherent to juvenile crust formation throughout Earth history, reflecting an evolution from dominantly greenstone-hosted ores in the Precambrian to essentially identical ores in metasedimentary host rocks in the Phanerozoic. Processes that controlled the generation of ore-forming fluids varied little over geological time and basically reflect synorogenic thermal events that mobilized fluids and metals during pro-grade metamorphism along active continental margins. However, evolving styles of plate tectonics on a cooling Earth affected the overall preservation potential of orogenic gold deposits and controlled the temporal distribution of the ores. A scarcity of crust from the first few billion years of Earth history reflects the extremely rapid recycling of juvenile material on a very hot early Earth. Large blocks of continental crust evolved into well-defined cratons between mainly ca. 2.8 and 1.7 Ga. Reflecting the importance of episodic plume events on controlling early plate tectonics and thus periods of crustal growth, orogenic gold formation was associated with greenstone belt development between 2.8-2.5 and 2.1-1.8 Ga. Relatively buoyant Late Archean-Palaeoproterozoic sub-continental lithosphere mantle (SCLM) was essential for cratonization of the new crust and thus preservation of orogenic gold deposits in continental interiors for billions of years. These gold-bearing cratons have survived numerous break-up and collisional episodes, with their contained gold endowment still intact. Beginning in the Mesoproterozoic, crustal growth was less episodic as Cordilleran-style plate tectonics dominated accretionary continental margins. Negatively buoyant, relatively thin Phanerozoic SCLM favoured uplift and erosion of accretionary orogenic belts, such that middle to upper crustal rocks that host the gold deposits are only preserved in belts originating during the most recent 600 Ma. Gold ores show a general correlation with the growth phases of the global supercontinent cycle, and may form in both the deforming forearc and backarc regions of an active continental margin. Orogenic-type deposits are locally high grade and may yield large quantities of gold. While the vein systems or structures can be relatively easy to trace, ore shoots are less predictable. Resources and production from economic Phanerozoic orogenic-gold deposits are estimated at just over one billion ounces of gold; this includes placer accumulations, which are commonly associated with this mineral deposit type. Excluding the Witwatersrand ores, the classification of which is still controversial, known Precambrian gold concentrations are about half this amount.

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9.0 MINERALIZATION Regional alteration is typified by a metamorphic assemblage that consists of epidote-chlorite ±amphibole ±albite ±magnetite ±sericite ±carbonate. Low-grade halos adjacent to mineralization typically have alteration assemblages consisting of chlorite ±carbonate ±sericite ±magnetite and contain in the order of 100-500 ppb gold. 9.1 CHOCO 10 The characteristics of gold mineralization at the Choco 10 deposits are varied as a result of a complex interplay between host rock rheology, permeability and geochemistry, proximity to structures and hydrothermal fluid composition. Mineralization is dominantly structurally controlled and is associated with strain partitioning. Higher-grade mineralization is dominantly hosted in lower strain domains characterized by spaced or chaotic crenulation and less commonly brecciation and cataclastites, coupled with well-developed continuous foliations typical of high-strain domains. In general, mineralization is accompanied by carbonate alteration, dominantly ankerite and dolomite, and varying degrees of silica and sericite. Pyrite is the most abundant sulphide phase; it occurs in relatively low concentrations (typically 2-10%) and has a good correlation with gold tenor. Replacement-style hydrothermal alteration is common in more permeable host-rocks such as coarse-grained volcaniclastics and flow-top breccias of basalts. In less permeable massive basalts and gabbros, vein-hosted mineralization is common and often contains visible gold. Magnetite, present as disseminations and stringers between clasts in the original flow-top breccias, has been replaced by pyrite which is closely associated with gold mineralization in the higher-grade lodes. Specific characteristics of the mineralization at each deposit are outlined below. 9.1.1 Rosika – Coacia – Pisolita (RCP) Within the continuous Rosika-Coacia system, rheological heterogeneities resulting from the distinct stratigraphic sequence form the dominant geometrical control on mineralization. Lithological contacts dip between 40° and 65° to the east, in the northern limb of the syncline. Towards Coacia (defined as south of 808245 mN) the stratigraphy steepens and wraps around the syncline. Mineralization broadly, but not strictly, follows this geometry. The most favourable sites for mineralization are the coarse intermediate volcaniclastic, the contact between the intermediate and mafic volcaniclastic units, and the flow-top breccia unit at the top of the footwall basalt (Figure 9.1). However, the entire stratigraphy (from hanging-wall gabbro, through volcaniclastics, to footwall basalt) can host economic mineralization. Mineralization at Rosika-Coacia tends to be more brittle in character, with abundant hydrothermal brecciation and veining. The alteration assemblage associated with

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mineralization comprises ankerite-dolomite-silica-pyrite±sericite and 2-10% pyrite. High-grade ore shoots occur in Rosika at the intersection of southeast dipping S2 foliations with east-dipping S1. The S2 structures become more north-northeast striking (from northeast) toward the intersection with the main Rosika system possibly refracting at the contact with less competent volcaniclastic rocks. At Coacia a major ore shoot is controlled by the northeast steeply plunging syncline axis.

Figure 9.1 Schematic West-East Cross-Section Through the Rosika Deposit

Note: The majority of mineralization is hosted in the intermediate and mafic volcaniclastic with the gabbro in

the hanging-wall. Pisolita lies within the basal basaltic unit, with mineralization predominantly within the regolith. Mineralization is dominantly controlled by a stack of sub-horizontal quartz veins which formed in the southwest continuation of the hinge zone of the Coacia syncline. At Pisolita, D2 fold axes are shallow and double plunging. The geometry of mineralized domains is controlled by foliation and quartz veining which have been folded into an open M-shape in all directions, creating shallow and undulating dips (Figure 9.2). Mineralized zones in the fresh rock are less well understood due to limited deep drilling. However, they are considered to be analogous to VBK-style lodes and are characterized by ankerite-dolomite-sericite-pyrite alteration enveloping quartz ±albite ±dolomite veins. To the north of Pisolita a tronjhemite intrusion occurs, and gold grades are usually enhanced along the margins which present a site of great competency contrast. Pisolita is named for the significant mineralization hosted within a pisolitic laterite horizon.

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Figure 9.2 Representative Section of the Pisolita Deposit

Note: Shows flat-lying undulating orebodies and basaltic host rock. The resource pit shell is shown.

9.1.2 Villa Balazo – Karolina (VBK) Mineralization at VBK is hosted within southeast dipping lower-strain domains bounded by high-strain lower grade halos (Figure 9.3). This trend is coincident with the axial plane of district scale folds and the general trend of the differentiated crenulation cleavage S2.

Figure 9.3

Schematic Northwest-Southeast Cross-Section Through the VBK Deposit

Note: High-grade mineralization associated with the domain 41 structure is located on the contact

with the in situ fractured basalt unit marking a flow-top boundary. Both resource and reserve pit shells are shown.

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The mineralized strain domains in VBK form a stacked series, largely due to the prevailing basalt-dominated stratigraphy which lacks such a strong fluid focus compared to the stratigraphic sequence hosting Rosika-Coacia. Where favourable stratigraphy provides geochemical and rheological contrasts, mineralization is enhanced at the intersection with the strain domains, particularly in the flow-top breccias. On a smaller scale, the mineralized domains consist of alternating lower- and high-strain domains. The high-strain halos are dominated by calcite and chlorite alteration with small pyrite content, while the lower-strain lodes are dominated by ankerite-dolomite ±sericite ±silica with high (typically 1-15%) pyrite content. The highest grade lodes correspond with increased silicification and pyritization, most notably where the main domain 41 lode intersects the flow-top basalt. Significant mineralization also occurs in the footwall, and in the hanging-wall where strain domains dips are relatively shallow. The mineralization tends to pinch-out toward the surface. 9.2 CHOCO 10 BROWNFIELDS TARGETS Exploration conducted within, or proximal to, areas currently being mined has defined a number of advance targets; these are summarized below. VBK Domain 41 Extensions: Mineralization remains open both along strike and down-dip on the VBK domain 41 structure. High-grade mineralization is hosted at the contact with the favourable, in-situ fractured basalt which provided a strong rheological contrast to focus fluid flow. Gold Fields reports that mineralization has been defined over 1.2 km in strike and believes that there is potential to upgrade a significant portion of Inferred material to Indicated, and to extend the resource by drilling down-plunge on the defined mineralization. The structure offers potential for underground mining, subsequent to surface mine development. Intersections obtained after drill database close-off, so currently outside the resource model, include 6 m @ 10.7 g/t, 19.2 m @ 5.3 g/t, 12.5 m @ 6.3 g/t and 10 m @ 4.9 g/t gold. VBK NW Repetitions: Strong soil anomalies and ground geophysics response indicate a potential repetition of the domain 41 structure. Soil anomalies extend over 2 km along northeast strike at +50 ppb Au. This target has not been drill tested. Identification of economic mineralization in this location would further layback the VBK pit, which would increase the value of footwall mineralization which is not economic under current conditions. Pisolita Deeps: The majority of drilling at Pisolita is limited to the regolith, with only minor diamond drilling at depth. Diamond drilling has intersected a number of flat-lying high-grade mineralized structures (Figure 9.2).

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10.0 EXPLORATION 10.1 CHOCO 10 Prior to Gold Fields acquiring control of the Choco 10 mine and property as a whole, exploration on the Choco concessions had included:

• Drilling (see Section 11.0).

• Line clearing and gridding.

• Construction of access trails.

• Excavation of exploration trenches.

• Surface geochemical surveys including stream sediments, soils and rocks at several levels of detail.

• Topographic and concession boundary surveying.

• Geological mapping at several scales and levels of detail.

• Airborne and ground geophysical surveys including frequency domain electromagnetics, magnetics, radiometrics and induced polarization.

• Structural interpretation using radar imagery.

• Metallurgical testing.

• Petrographic studies.

• Structural studies.

These activities have been discussed by Micon (2003) and MDA (2005), in two previous NI 43-101 compliant reports that are filed on SEDAR. For the Choco 10 deposit, the outcome of all the above work was the delineation of four areas, Rosika, Coacia, Pisolita, and Villa Balazo-Karolina (VBK), that are now being mined, or are scheduled for mining in the near term. The exploration work carried out at the mine site by Gold Fields since March, 2006 includes, primarily, infill drilling designed to advance resource classifications plus in-pit (to depth) and step-out drilling to expand resources. The geological interpretation of the exploration data is reported in Sections 7.0 to 9.0 of this report and the discussion of the resource estimates in Section 17.0 includes interpretations of

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the exploration data that support the estimates. These interpretations are not repeated in this section. 10.2 REGIONAL TARGETS, EL CALLAO DISTRICT As the arrangements between Rusoro and Gold Fields relating to the Choco property are driven by the Choco 10 mine, regional exploration activities conducted by Gold Fields have not been examined. The general nature of work conducted is summarized below. Gold Fields has been exploring in the El Callao district for the past 3 years through a joint venture with Bolivar Gold on the Choco 1, 2, 6, 9, 12, 10 and 13 concessions. The aim of the regional exploration program is to evaluate the gold potential outside the immediate Choco 10 mine area. Primary targets are those that are within trucking distance of the Choco 10 plant, at distances ranging from 2 km to 20 km. Approximately 20 targets contained within 8 target areas have been defined either from historical showings (as artisanal to small scale workings) or as anomalies generated from modern-era geochemical and geophysical surveys (Figure 10.1). Some of the showings/anomalies located in these target areas have been trenched. All have been drilled to some degree, although it is not known if the drill data are preserved in every instance. Most of the targets have in excess of 20 drill holes reported; in total there is 65,619 m of drilling from 770 drill holes (564 RC holes for 44,438 m, 78 core holes for 15,526 m, and 128 shallow aircore holes for 5,655 m). Some targets have seen extensive drilling. Cerro Azul, located approximately 10 km west-northwest of the Choco 10 mine, contains 170 drill holes totalling 13,732 m (156 RC holes for 10,377 m plus 14 core holes for 3,355 m). Significant drill intercepts from Cerro Azul are reported to include 9.1 m @ 7.31 g/t gold, 4 m @ 12.93 g/t gold, and 6 m @ 8.27 g/t gold. Since March, 2006, Gold Fields, operating through El Callao Holdings, has completed 7,612 m of diamond drilling (39 holes) and 5,681 m of RC drilling (74 holes) within the eight target areas; the drill holes and metres drilled are included in the totals presented above. Other exploration activities include regional and local mapping aimed at resolving the regional stratigraphy and structural setting, a detailed helicopter and fixed-wing airborne magnetic survey of the district, and development of technical strategic alliances with other companies including government agencies to enable sharing of data and knowledge.

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Figure 10.1 Choco Property: Regional Exploration Target Area

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11.0 DRILLING 11.1 CHOCO 10 DEPOSIT Delineation of mineralization at Choco 10 has been accomplished by means of drill holes which have traced the gold mineralization from surface to a vertical depth of between approximately 200 m (Pisolita) and 450 m (Rosika-Coacia). The rock package has been subjected to intense tropical weathering and has been weathered to saprolite near surface. The Choco 10 gold complex is located in a regional northeast-plunging synclinal hinge zone. Mineralization has been found to occur as tabular sheeted-zones, irregular lenses and pods which range in dip from sub-horizontal (Pisolita), to moderate (VBK), to steeply dipping (Rosika), depending upon where the mineralization is situated with respect to the synclinal axis. Most of the drilling to date has focused upon the definition of surface mineable resources but deeper drilling has indicated that potential exists for underground development on some of the mineralization. The mineralization is open to depth at Rosika-Coacia and at VBK. At Rosika-Coacia, the potential for ore development within hanging-wall gabbro is also being evaluated. Other targets have been identified proximal to the current reserves which may provide additional resources once drilled. In most instances, the drilling penetrates the mineralization at an angle other than 90o requiring correction factors to be applied for true thickness determinations which are enabled by core descriptions, high core recoveries and down-hole survey data. The drill hole database utilized to generate the current resource is the result of a number of drill campaigns conducted over the history of the Choco 10 deposit. The drill spacing and orientations for each deposit vary; a summary to the end of 2006 is provided in Table 11.1. Drilling conducted in 2007 formed part of a framework approach, intended to define the extent of mineralization, and was not designed for the purpose of resource to reserve conversion. Analysis of drilling results from this period has indicated that there has been no material change to resource classification, grade estimation and geological interpretation. For this reason, the December 31, 2006 resource model has not been updated. The 2007 drilling has included condemnation drilling in prospective dump, low-grade stockpile and infrastructure areas.

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Table 11.1 Choco 10 Deposit - Drill Spacing and Orientation for Pre-2007 Drilling

Historically, three drill methods have been used: diamond, reverse circulation (RC) and aircore (AC). These methods have been described in previous NI 43-101 compliant reports, submitted by Micon (2003) and MDA (2005) and are not repeated below. Except for tabulations of drilling statistics, details of drill programs conducted prior to Gold Fields’ acquisition of the concessions are presented in Section 6.0. Only drilling activities carried out by Gold Fields are discussed herein. Collar locations for all drill holes on the Choco 10 deposit are shown (by campaign) in Figure 11.1. Gold Fields, between March, 2006 and June 30, 2006 completed a total of 59,028 m of diamond drilling and 19,525 m of RC resource definition drilling by a maximum of six diamond drill rigs and three RC drill rigs in operation at any one time. Two separate diamond drilling companies were under contract: Boart Longyear Venezuela S.A and Core Beil. Boart Longyear employed two track-mounted 1200 series Longyear 44s and two skid-mounted LF series conventional diamond drill rigs. Core Beil operated two Versadrill skid-mounted rigs. AK Drilling S.A., a Peruvian based drilling company, completed all RC drilling. The drilling was carried out with either a buggy mounted, articulated Foremost (Buggy W750 900 cfm and 350 psi) drill rig or a track-mounted Schramm (660H Rotadrill 1,300 cfm and 500 psi), utilizing 5 ¼ to 5 ½ inch diameter face hammers. The metres drilled, by type, over each of the different drill campaigns are summarized in Table 11.2. The database predominantly consists of diamond drilling which represents 70.5% of the total drill metres to date, with 19% aircore and 10.5% RC. Of the diamond drilling, more than 92% has been completed with HQ (63.5 mm) during the life of the project. PQ (85.0 mm) core has been used for drilling in the regolith and cased off to HQ. NQ (47.6 mm) was used rarely, for holes which encountered problems completing with HQ, or for wedges drilled from the parent HQ hole; a total of 1,278 m of NQ has been drilled to date.

Deposit Spacing Orientation Rosika Variable drill spacing from 25 mN x 25 mE to

100 mN x 50 mE. Dominantly 50 mN x 25 mE to 25 mN x 25 mE.

50o to 60o orientated towards 270o.

Coacia Variable drill spacing from 25 m x 25 m, 50 m x 25 m, 50 m x 50 m to 50 m x 100 m.

Multiple orientations including 270o, 320o and 235o. Inclinations of drill holes are generally 50 o to 60 o.

Pisolita Dominantly 25 mN x 25 mE spaced shallow aircore drill holes.

Dominantly vertical

VBK Variable drill spacing from 12.5 m x 12.5 m orientation sections through to 50 m x 100 m. Dominantly 50 m x 25 m and 50 m x 50 m.

50o to 60o towards 320o.

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Figure 11.1 Drill Hole Collar Location Map for Choco 10

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Table 11.2 Choco 10 - Drill Metres and Drill Types Completed

For the period up to December 31, 2006, 94% of the diamond drill core had been sampled; the average sample length was 1.22 metres. Core recovery at Choco 10 has historically been very good. Recovery data for diamond drilling have been systematically collected throughout all recent drill campaigns (since 2003). There are currently 41,180 measurements in the database with a total average core recovery of 96.2%. Recoveries of various cored material types are shown in Table 11.3. There has been a continuous focus to ensure good recoveries from drilling, including implementation of drilling PQ diameter core in the regolith and completion of HQ in fresh rock. Since Gold Fields’ ownership, RC drilling has been routinely employed to test mineralization in the regolith and bedrock within 200 m of the surface.

Table 11.3 Diamond Drill Core Recovery for Material Type (to the end of 2006)

Total Metres Core Recovery

(%) Rock Type 897 78.3 soil/mottled zone

9,967 87.1 saprolite 3,204 90.4 saprock

63,362 98.7 fresh rock Down-hole survey data were collected by Gold Fields using either the Reflex or Flexit single-shot survey method. Points are taken every 50 m with the first point taken 9 m below the

Total 1993-2007 (to June 30,2007) Number of Holes Type Metres Average Depth (m) 1,176 AC 42,483 36 277 RC 23,782 86

3 RC pre-collar, DD tails 1,335 445

602 DD 157,043 261 Others 1993-2006 (pre-March ,2006) Number of Holes Type Metres Average Depth (m) 1,176 AC 42,483 36 62 RC 4,257 69 440 DD 99,351 226 Gold Fields 2006 (from March, 2006) Number of Holes Type Metres Average Depth (m) 186 RC 15,386 83

3 RC pre-collar, DD tails 1,335 445

129 DD 44,712 347 Gold Fields 2007 (to June, 30) Number of Holes Type Metres Average Depth (m) 15 RC 1,765 118 14 RC 2,374 (condemnation) 170 33 DD 12,981 393

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bottom of the casing. If either the azimuth or declination deviates by more than 2o from the previous data point, an “infill” data point is taken at the next opportunity. Historical and recent drill programs have been conducted on as many as 20 other targets contained within 8 target areas on other parts of the Choco property. These targets, while prospective for additional gold resources, do not form the primary focus of the arrangements between Rusoro and Gold Fields; as such, they do not form a substantive part of this study. Information on these targets is briefly presented in Section 10.2.

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12.0 SAMPLING METHODS AND APPROACH 12.1 SAMPLING PROGRAMS 12.1.1 1993 to 1995 and the 2003 Micon Verification Drilling Programs Descriptions of sampling procedures and the approach to sampling employed during the 1993 to 1995 drilling and in the 2003 verification drill program supervised by Micon, are provided in previously filed NI 43-101 compliant reports by Micon (2003) and MDA (2005) and are not repeated herein. 12.1.2 Bolivar Gold 2003 - 2004 Descriptions of sampling procedures and the approach to sampling employed during the 2003-2004 drill program carried out by Bolivar Gold are also presented by MDA (2005). As procedures used in Bolivar’s 2005-2006 program were essentially the same, those employed in 2003-2004 are reviewed herein for the sake of continuity. A total of 240 infill and step-out holes were drilled in 2003 and 2004 by Bolivar Gold for 46,563 m. During this period, drilling was completed with HQ diamond drill core (63.5 mm diameter). Diamond drilling was contracted to St. Lamberts. At the time of Mine Development Associates’ (MDA 2005) visit to the Choco project in May, 2004, the diamond core handling procedure was as follows:

• Drillers bring the core to Bolivar Gold’s facility near El Callao at the end of each drilling shift.

• Geotechnical technicians measure the core and mark metreages.

• Box lids are labelled with starting and ending metreages.

• Saprolite core is washed down to expose textures.

• Core is photographed.

• Geotechnical logging is done.

• Geological logging is done.

• The core logger selects sample intervals.

• Core is sampled.

Sample intervals were determined by the geologist logging the core, based on the observed geology. Within geological units, standard sample intervals were used; the sampling intervals

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ranged from one to three metres, but were typically one to 1.5 metres. Sample lengths in the database from 2003 to 2004 are summarized in Table 12.1. The company at the time had two core cutting stations at the facility at La Ramona. Sampling was completed by company employees. The sampling method employed varied with the type of material: in loose, rubbly non-cohesive material typically found near the surface, it was sometimes necessary to simply scoop about half of the material in the interval out of the core box. In cohesive but soft material such as laterite and some saprolite, the core was cut in half lengthwise with a knife or machete. In hard saprock or fresh rock, a standard diamond-bladed masonry saw was used, which was cooled and lubricated by a constantly flushing water system. No RC or AC drilling was completed during this period.

Table 12.1 Summary of 2003-2004 Sample Intervals

Length Sample Count

all samples 14,711 3 m or less 14,706 2 m or less 14,654 2 m exactly 89 1.5 m or less 14,232 1.5 m exactly 6,647

1 m or less 5,514 1 m exactly 4,148

Table compiled using a database that was current as of May, 2004 12.1.3 Bolivar Gold 2005- March, 2006 No significant changes were made to the drilling methods during this period. The diamond drill contractor changed to Boart Longyear who purchased St. Lamberts. A couple of trial RC twin holes were completed by AK Drilling to compare with diamond results. The drilling encountered a number of problems due to significant groundwater volumes. A total of 48,488 m of diamond and 537 m of RC was completed. Diamond core samples: Procedures followed those of the previous period. The saprolite samples were split with a knife and spatula, and saprock and fresh rock samples were cut with the masonry saw. RC samples: Minor RC sampling was completed on site. For dry samples a standard Jones riffle splitter was used and for wet samples large perforated buckets with porous micropore bags. The dry samples were split to 3-5 kg sample weights while a bulk wet samples was taken and dried for submission to the laboratory. 12.1.4 Gold Fields March, 2006 - Present A total of 46,047 m of diamond drilling and 15,386 m of RC resource definition drilling was completed from March to December, 2006 by a maximum of six diamond drill rigs and three

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RC drill rigs in operation at any one time. Two separate diamond drilling companies were under contract: Boart Longyear Venezuela S.A and Core Beil. Boart Longyear employed two track-mounted 1200 series Longyear 44s and two skid-mounted LF series conventional diamond drill rigs. Core Beil operated two Versadrill skid-mounted rigs. AK Drilling S.A., a Peruvian based drilling company, completed all RC drilling. The drilling was completed with either a buggy mounted, articulated Foremost (Buggy W750 900 cfm and 350 psi) drill rig or a track-mounted Schramm (660H Rotadrill 1,300 cfm and 500 psi) utilizing 5 ¼ to 5 ½ inch diameter face hammers. An additional 20,425 m are being drilled in 2007. Since the acquisition of the Choco 10 property by Gold Fields, an aggressive and systematic exploration program has been implemented. The program has been completed to industry best practice. The Mineral Resource Management department has established the framework through the development of the MRQMS (Mineral Resource Quality Management System). Gold Fields implemented procedures for all the key stages of the resource definition exploration process which were applied to the drill campaign from March, 2006. The relevant procedures include:

• MRM_P006_Diamond Core Management - the diamond core management procedure details each step involved in the handling of drill core upon arrival at the core yard.

• MRM_P004_Reverse Circulation Drilling - the reverse circulation drilling procedure

details the entire drilling and sampling process including quality control. The diamond drill sample preparation procedure is summarized below:

• Arrival of core boxes at core yard.

• Re-align core, metre marks and measurement of recovery and RQD.

• Photograph core.

• “Quick” geological log of core.

• Core cutting lines marked to bisect the dominant fabric.

• Selection and marking of sample intervals. These are constrained to geological units. The minimum length sample for HQ core is 0.25 m and maximum sample length is 1.5 m. Internal to geological units the preferable sample length is one metre.

• Flag and tag sample sites with cognizance of QC sample sites.

• Move core to cutting area.

• Prepare sample bags based on sample tags observed in boxes.

• Saw core, ensuring consistent half goes in bag, other half back in box.

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• Samples are moved to sample preparation area and organized for shipping.

• QC samples are inserted into the sample stream.

• Samples are dropped off at the laboratory with requisition prepared by database administrator.

• Core boxes are moved back to core shack for detailed geological logging.

The RC sample preparation procedure comprises:

• Sample bags are labelled before hole starts drilling, including for QC samples.

• Sample is collected at one metre intervals and split either in Jones splitter or automatic UDR cone splitter.

• Single sample is collected, two samples collected where duplicates are required.

• QC samples are inserted into sample stream.

• Samples are placed in large plastic bags ready for delivery to the laboratory.

• Samples are loaded into truck and moved off site.

• Database administrator prepares sample requisition form.

• Samples shipped to the laboratory with requisition form.

Prior to Gold Fields’ ownership, multiple data validation reviews had been undertaken on the Choco 10 deposit to ensure high standards of quality, including those by BHP Engineering, Micon, Analytical Solutions Ltd., Smee and Associates, and MDA. Maxwell completed a detailed independent audit of the Gold Fields database in July, 2006 (Maxwell 2006b) in order to verify the data in preparation for input into the resource estimation. The audit involved a review of the compilation and loading of data into the Gold Fields Venezuela database, verification of 10% of all assay data from the original hard-copy certificates, and auditing of the database structure and contained data, for both historic and recent data. A number of issues were identified by Maxwell in accordance with SAMREC which were subsequently corrected by Gold Fields and Maxwell staff. In order to validate the corrections a second review was undertaken on site by Maxwell in August, 2006 as part of the sign-off process prior to utilization of the database for the resource model update. 12.2 CORE RECOVERY The database predominantly consists of diamond drilling which represents 71% of the total drill metres to date, with 21% aircore and 8% RC.

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A total of 92% of all diamond drilling has been completed with HQ (63.5 mm) during the life of the project (Table 12.2). PQ (85.0 mm) core has been used for drilling in the regolith and cased off to HQ. NQ (47.6 mm) was used rarely, for holes which encountered problems completing with HQ, or for wedges drilled from the parent HQ hole.

Table 12.2 Diamond Drilling Showing the Different Core Size Proportions

Description Metres % PQ (85 mm) 10,905 7% HQ (63.5 mm) 135,531 92% NQ (47.6 mm) 1,278 1% Total core 147,715 Core sampled 139,572 94% Average sample length 1.22

* For the period to December 31, 2006 Core recovery at Choco 10 has historically been very good. Recovery data for diamond drilling have been systematically collected throughout all recent drill campaigns since 2003. There are currently 41,180 measurements in the database with an overall average of 96.2% recovery. Figure 12.1 is a scatter plot of diamond drill recovery versus gold grades by the various drill phases. There has been a continuous focus to ensure good recoveries from drilling, including implementation of drilling PQ core diameter in the regolith and completion of HQ in fresh rock. Since Gold Fields’ ownership, RC drilling has been routinely employed to test mineralization in the regolith and bedrock within 200 m of the surface.

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Figure 12.1 Scatter Plot of Diamond Drill Recovery versus Grade

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13.0 SAMPLE PREPARATION, ANALYSIS AND SECURITY 13.1 PRE-MARCH, 2005 A detailed summary of sampling, analytical and QA/QC procedures employed during previous exploration and development of the Choco project from 1993 to March, 2005 is documented in the MDA Technical Report (MDA, 2005). A brief review has also been provided by Micon (2003) for the first phase of exploration conducted by Promiven from 1993 to 1995. These reports are compliant with, and have been filed under the requirements of NI 43-101. They are available for review on the SEDAR web-site; the reader is referred to these reports for details regarding historical QA/QC procedures. In order to present continuity of discussion, some details pertaining to work conducted by Bolivar Gold between 2003 and 2005 are included in the discussion below. The following descriptions are drawn from MDA (2005) and the Gold Fields Competent Persons’ Report (2006). 13.2 BOLIVAR GOLD: 2003 – MARCH, 2006 Bolivar Gold used three laboratories for sample preparation and analysis. From May to September, 2003, samples were prepared at the Triad Laboratory located at the La Camorra mine site. Samples were crushed to approximately 0.5 mm using a jaw crusher and split using a riffle box to yield a 250 g sub-sample. This was pulverized to -150 mesh (100 microns) using a ring and puck pulverizer for hard rock, and a disc pulverizer for saprolitic material. Pulverized 250 g sub-samples were shipped to ALS-Chemex in Vancouver; analysis by fire assay with AAS finish was completed on 30 g sub-samples. From September to December saprolitic samples were prepared in Tumeremo, at SGS Laboratories, before being shipped to ALS-Chemex in Vancouver for analysis as described above. In each case, samples with assays greater than 2 g/t gold were re-analyzed by fire assay with a gravimetric finish. Throughout 2004 all rock samples were sent to Triad for sample preparation and analysis. Approximately 800 samples were also sent to SGS in Toronto for check analysis, including selected saprolitic samples. In 2005, following recommendations made by Dr. Barry Smee (Smee, 2004a), Bolivar Gold used Triad as its main laboratory with 10-20% of the analyses checked at an independent laboratory. Samples were crushed to approximately 0.5 mm using a jaw crusher followed by a roll crusher, and split using a riffle box to yield a 250 g sub-sample. This was then pulverized to -150 mesh for hard rock using a ring and puck pulverizer, and by a disc pulverizer for saprolitic material. Prior to sub-sampling for assay, sample pulps were homogenized by rolling 10-20 times on clean paper. Samples were assayed using a 30 g charge by fire assay with AAS finish. Samples reporting more than 2 g/t gold were re-analyzed by fire assay with gravimetric finish. Bolivar Gold routinely submitted QA/QC samples to industry standard practice. The sample collection procedures, preparation, analysis and QA/QC data have been audited and reviewed by a number of external consultants, including Micon in November, 2003 (Micon 2003);

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Analytical Solutions Ltd. (ASL) in October, 2003 and August, 2004 (Bloom 2003 and 2004); Smee and Associates Consulting Ltd. in August, 2004, December, 2004 and August, 2005 (Smee 2004a, 2004c and 2005a); Mine Development Associates (MDA) as part of the NI 43-101 resources and reserve report in January, 2005 (MDA 2005); and SRK Consulting from Cardiff as part of the Gold Fields due diligence of Bolivar Gold in June, 2005 (SRK 2005). MDA (2005) indicates that during 2003 and 2004, two of the laboratories (ALS Chemex and XRAL/SGS) held International Organization for Standardization Certifications in the 9000 series. For ASL Chemex MDA states:

“At its North American laboratories, ASL Chemex holds ISO 9002:1994 and ISO 9001:2000 certifications.”

And that, for XRAL/SGS: “…… their laboratory is technically accredited under ISO 7025 with Standards Council of Canada. They are also registered to ISO 9000 International Quality Management Standard.”

No certification was given for the Triad Laboratory. With regard to sample security, MDA noted that:

“….. drill core is delivered to the company’s facility near El Callao by the drill contractor, at the end of each shift. The facility is fenced and has full-time security guards at the entrance. When not being processed, the core box is kept lidded. Many people, all company employees, are involved in measuring, logging and sampling the core. The core processing area is roofed but otherwise open, so that all activities can readily be viewed by anyone, including geologists and supervisors. This makes it difficult for any individual to mis-handle core, either deliberately or unintentionally, without being observed. Samples from core are placed in standard plastic sample bags. The bags showing the sample number are placed inside the sample bag, and the bag is stapled shut. Daily progress charts are maintained, tracking the progress of drilling and all stages of core handling and sampling. For most of 2004 the samples, in the sealed bags, were driven to the Triad laboratory by employees of Bolivar Gold. Starting in October of 2004, Triad laboratories began to pick up the samples at Bolivar Gold’s facility.”

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The analytical data from the Choco drilling campaign were deemed to be of a sufficient quality for use in resource estimations in meeting or exceeding the requirements of NI 43-101 (MDA 2005). SRK Cardiff concluded that the quality control procedures used to date and the results of these are sufficient to confirm the quality of the database (SRK 2005). 13.3 GOLD FIELDS PROCEDURES Sample preparation and analysis during the period April, 2006 to the present have been completed to the company’s “Procedure MRM_P016 Rock Sample Preparation and Analysis – Resource Definition”. To date, most of the samples have been prepared at the Triad Laboratory located in El Callao. All samples are dried at a temperature not exceeding 110 °C. The total sample is crushed to 90% passing -2 mm (10 mesh) and then rifle split to produce a 750 g to 1,000 g sub-sample. Pulverization of the sub-sample is to at least 95% passing -106 µm. A 400 g pulp sample is retained and returned to Gold Fields for permanent storage. Analysis is completed by fire assay using an AAS finish, with an additional gravimetric finish for all results exceeding 2 g/t gold. This process is mapped in Figure 13.1 which also shows the frequency of the submission of all quality control samples, including field duplicates, standards, blanks, sample preparation duplicates and analytical duplicates.

Figure 13.1 Process Map of the Sample Flow for Choco 10 Resource Definition

FLOW CHART SAMPLE PROCESS. GOLD FIELDS, 2006

Field

Drill Hole

RC /DD

Chips Sample / Core Samples

1 : 30 Duplicate (FD) Original

Sample

1:30 Standard

1:30 Blank (FB)

Laboratory Data base

Backup Rejects / ½ Core Backup - Pulps

Original Sample

Drying 90 º C Crushing ( 70% pass 2 mm)

1:20 Screen Test

Sample 1 kg.

1 : 30 Crushing Duplicate

Pulverizing 95% pass 150 µ m

1 : 30 Pulverizing Duplicate

Sample 50g (Au - FA) Digestion in Aqua Regia

50 g FA finish AAS If Au >2 ppm

FA finish GRAV Final Result

( sif format)

Quality Control (QAQC)

Assays Results Failed QC Assay

Results pass QC

Pulp Re assay (PR)

Quality Control

Swap Samples

Rejects

Analysis Reception (DIGITAL)

1:20 Screen Test

Pulp 400g

Data Shed – Data Entry

Batches pass QC

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Dr. Barry Smee completed an audit of the sample protocol and QA/QC data in July 2006. He concluded that the data capture, data review and QA/QC protocols are comprehensive and compliant with industry best practices (Smee, 2006). In the 2006 Competent Persons’ Report, Gold Fields (2006) indicates that Triad is pursuing an ISO 9001 accreditation. Due to subsequent concerns centred around quality control and assay turn-around times, particularly with regard to grade control samples from the mine, Gold Fields issued a contract in March, 2007 to ACME Analytical Laboratories Ltd. under the terms of which ACME would establish an assay laboratory dedicated to samples from the Choco 10 operation. ACME’s laboratory, located in Guasipati (20 km north of El Callao) is now operating and is currently ramping-up to full capacity. At its North American laboratories, ACME holds ISO 9001:2000 accreditation. ISO certification is laboratory specific. Since Gold Fields ownership, regular density measurements have been taken for 10-15 cm core lengths for every interval of a different weathering unit, rock or alteration type according to company protocol MRM-P010:

• Water immersion is undertaken on all samples, avoiding direct measurement of the volume of water displaced by a sample. Samples are dried at 100 °C for 24 hours then weighed to determine the dried mass. The sample is placed on a support of known weight in water and the sample suspended in water. The dry bulk density is determined as the mass of sample in air divided by the difference between the mass of the sample in air and the mass of the sample in water.

• Weathered samples are dried as above, and the sample is weighed to determine the dry

mass. The density of the wax is determined and the sample completely sealed by a coating of hot wax. After cooling the sample is weighed and suspended in water. The dry bulk density is determined as for rock samples, taking into account the volume of the wax.

Sample security is much as that described above for Bolivar Gold. Core and sample handling at the drill rig and at the Gold Fields core logging/sampling/storage (camp) facility is performed according to one of several established company procedures (see Section 14.0). The main elements include:

• Gold Fields staff collect the RC chips and drill core from the field and transport them

to the secure camp facility. While there is security at the camp gate, there are no restrictions to access within. While there are many company employees, involved in core handling and sampling, the core processing area is open and can be easily monitored by the employees, including geologists and supervisors.

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• Gold Fields’ drivers transport the samples to some local laboratories but ACME provides transport to its own laboratory.

• Sample bags are tied at the top with a cloth tie. Then, for transport, a maximum of 5

samples are placed in a large plastic bag. These bags sealed with plastic cable ties.

• One sample tag/ticket is placed in the sample bag (bag identified in permanent marker on the outside), and the second tag/ticket comes to the office for QC and sample mixing checking. These tags are kept, and discarded (burnt) after 6 months in the case of grade control samples. Exploration tags are kept forever.

• There is also a hand-over list for the change of custody of samples from field

supervisors to the drivers. When the samples arrive at the camp facility the samples are checked again and the sample consignment is produced for the laboratory. The sample consignment list is signed at the camp prior to shipping and checked and signed again upon receipt by the laboratory. These forms are in duplicate; Gold Fields keep a copy and the laboratory keeps the other

It is Micon’s opinion that the sample preparation and analytical procedures carried out on Choco 10 core and RC samples since April, 2006 have been conducted well within acceptable standards, and that sample security has been appropriate.

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14.0 DATA VERIFICATION 14.1 SUMMARY In addition to a comprehensive and very well documented set of procedures and internal QA/QC checks, Gold Fields has had external audits carried out on most aspects of the QA/QC and resource estimation process. Recent external audits include the following:

• Snowden, June, 2007, “Assessment of effectiveness of MRM Internal controls within Goldfields operations” (this report was commissioned by Price Waterhouse Coopers regarding compliance with the Sarbanes-Oxley Act 2002).

• Snowden, March, 2007, “External Resource and Reserve Audit”.

• Maxwell Geoservices, July, 2006, “Data Audit and Validation”.

• Smee and Associates Consulting Ltd, July, 2006, “A review of Quality Control Procedures and Field Sampling Techniques”.

The overall tone of the reports by external auditors has been very favourable, and it appears that significant recommendations from those reports have been, or are being, implemented by Gold Fields. Apart from observations of field and sampling procedures made during the site visit, Micon has not completed additional data verification for this report. Industry best practices, SAMREC guidelines, and Sarbanes-Oxley requirements are being followed. There have been numerous recent audit programs as mentioned above and further described in the following sections. In addition, Gold Fields is a large, established mining company with high integrity as demonstrated by the implementation of the detailed Mineral Resource Quality Management System. Micon accepts that the data are verified and can be relied upon. The following sections are adapted from Gold Fields’ December, 2006 Competent Persons’ Report and present a synopsis of the data verification and audit programs that have taken place. 14.2 DATA VALIDATION AND DATABASE The foundation of the resources and reserves is reliable and accurate data stored in a robust and validated system. At the commencement of the El Callao Holding joint venture between Gold Fields and Bolivar Gold in Venezuela a SQL (Structured Query Language) database with a DataShed front-end was developed to store all drill hole data. The database is relational to ensure validation of data upon entry, with a normalized assay management system in which laboratory data are digitally uploaded, to meet industry best practice, SAMREC (South African Mineral Resource Committee) guidelines and Sarbanes-Oxley compliance) requirements.

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14.2.1 Historical Data Verification The Promiven drill hole data were stored in Quattro Pro V1.0. In 1995, BHP Engineering analyzed the data in Microsoft Excel. The data consisted of assays and drill hole information such as borehole identification, survey data and overlapping intervals. BHP corrected any inconsistencies in the data. Bolivar Gold developed an internal geological legend and stored the data in an Access database comprising multiple non-relational tables and views. Information stored in the database included data from core-logging, surface rock sampling and soil sampling. Assays results were provided to Bolivar Gold in Excel spreadsheets or in text format and uploaded into the Access database through manipulating the data. 14.2.1.1 Micon Data Verification Micon’s report of 2003 described two main components which included an analysis of the quality control data available at the time, and a drill program verification supervised by Micon. The report describes in detail the quality control sample procedures. QA/QC samples were submitted systematically to check the precision and accuracy of the Triad laboratory at La Camorra and the ALS Chemex laboratory in Vancouver, as well as the SGS laboratory in Toronto as an umpire check laboratory. Micon concluded that the results from ALS Chemex compared well with the SGS umpire check laboratory and, therefore, only ALS Chemex assays were used for mineral resource estimation. Micon was satisfied that the 2003 assay data were reliable. 14.2.1.2 MDA Database Audit In May, 2004, MDA conducted an audit of the Bolivar Gold Access database to be used for the resource estimate (MDA, 2005). MDA did not review the quality control data and relied the previous work by BHP Engineering, Micon, Analytical Solution Ltd. and Smee Associates as to the suitability and validity of Promiven-Bolivar Gold’s quality control procedures. MDA selected 130 samples randomly from the original paper or digital assay certificates and checked the information against the database used by MDA for resource estimation. Minor discrepancies were found. MDA checked the digital database against paper copies and paper assay certificates of 42 drill holes. Some problems in the data were found and described in the MDA report. These included:

• Seven instances in the database were different from those in the paper copies. These discrepancies related to data entry error in the second decimal place.

• Eleven instances in which sample numbers or sample intervals differed between the

database and the paper log.

• Ten instances in which drill hole collar coordinates or collar direction differed between the database and the paper log.

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• One instance in which down-hole directional survey data differed between the database and the paper log.

These discrepancies were corrected by Bolivar Gold. In December, 2004, an additional data audit was undertaken based on new drilling in the Coacia and Rosika prospects (MDA, 2005). The audit of the new database was competed with backup information and some scanned original documents by Bolivar Gold. Some discrepancies were encountered in the assay database in which 467 samples were checked against 453 digital files. Bolivar Gold corrected these discrepancies. The MDA report concluded that the database was sufficiently reliable to support resource estimation. In addition, MDA selected 21 intervals of drill core that were re-sampled and re-analyzed (MDA, 2005). Samples were prepared at a laboratory in Tumeremo. The duplicated results compared reasonably well with the original data, with one exception. The average difference for the sample pairs was 34%, which could be related to sample size, given that a quarter core generally does not duplicate the characteristics of a half core. 14.2.1.3 Smee and Associates In December, 2004, Smee and Associates reviewed the quality control procedures for the Choco project again (Smee, 2004). A number of problems were encountered and conclusions and recommendations made. Details of these are summarized in the MDA 2005 report. The most salient conclusion was that the QC scheme used by Bolivar Gold met or exceeded the requirements of NI 43-101 and of “mining best practices” as defined by the CIM. The analytical data from the Choco drilling campaign was deemed to be of a quality that could be used for resource estimations, and met or exceeded the requirements of NI 43-101. In late 2004 and 2005, an intense resource definition drill campaign was undertaken in preparation for mining which commenced in 2005 at Choco 10. In August, 2005 Smee and Associates reviewed the quality control of the data and concluded that the Triad Laboratory was not performing as was expected in turn-around time and in data quality. Some of the issues may have arisen from the use of OREAS standards which Gold Fields later determined to be of unsuitable matrix for monitoring assaying of Choco 10 samples. Significant improvements in the database were noted. 14.3 GOLD FIELDS’ DATA VALIDATION AND DATABASE Since the acquisition of the Choco 10 property by Gold Fields, an aggressive and systematic exploration program has been implemented. The program has been completed to industry best practice. The MRM department has established the framework through the development of the MRQMS (Mineral Resource Quality Management System). The system consists of procedures, audits and sign-off documents for all key elements that input into the generation of resource models and ensure compliancy under the Sarbanes-Oxley Act of 2002. The key components of the framework include:

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• Validity – Controls to assure the validity of key activities.

• Accuracy – Controls to establish the accuracy of data inputs and outputs.

• Completeness – Controls to ensure the completeness of the process followed.

• Timing – Preventative and detective controls to identify potential risk and deviation of quality.

• Segregation of Duties/Sign-off – key members of the senior team responsible for aspects of the MRM process.

A list of the key procedures is shown in Table 14.1.

Table 14.1 MRM Procedures which Underpin the Mineral Resource Quality Management System

Procedure Number Procedure MRM_P004 Reverse Circulation – Drill Sampling, Quality Control and Logging.

MRM_P005 Reverse Circulation Grade Control – Drilling, Sampling, Quality Control and Logging.

MRM_P006 Diamond Drilling.

MRM_P007 Diamond Core Management – Core Handling, Geotechnical Logging, Photos, Sampling.

MRM_P008 Diamond Drill Geological and Structural Logging. MRM_P010 Core Density Data Collection. MRM_P013 Pit Mapping. MRM_P014 Sample Consignment. MRM_P016 Rock Sample Preparation and Analysis – Exploration. MRM_P017 Rock Sample Preparation and Analysis – Mining. MRM_P018 Database – Data Entry. MRM_P019 Database – Data Validation. MRM_P020 QC Data Management. MRM_P021 Resource Modelling – Geological Interpretation. MRM_P022 Resource Modelling – Geostatistical Analysis. MRM_P023 Resource Modelling – Estimation and Classification. MRM_P035 Mine Planning Procedure (Checklist.)

14.3.1 Gold Fields Choco 10 Database A database scheme was developed for Gold Fields Exploration - South America under the El Callao Holdings Joint Venture, concurrent with the initiation of a new Gold Fields Geological Legend designed for deposits of South America. The aim of these was to provide a system to uniformly capture and securely store geological data, enabling straightforward access to all users. The scheme was developed in part based on the Maxwell Data Model (MDM), in part on Gold Fields Exploration Australasia’s model and further customized and advanced to correspond to the legend. Hence, upon Gold Fields acquisition of Bolivar Gold in March, 2007, Maxwell Geoservices was engaged to integrate the Bolivar Gold exploration and grade control databases into the Gold Fields Venezuela DataShed-SQL database (Maxwell 2007a). The integration involved data integrity checks and migration of validated data into the Gold Fields Venezuela database according to the MDM. Where absent from the Access databases,

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further required information was sourced from external sources (such as reports) where possible. All data that did not pass the MDM data integrity checks were quarantined and assigned to a BGC database administrator/ responsible geologist for validation and correction. A team comprising geologists from Bolivar Gold and Gold Fields (formerly El Callao Holdings) converted geological codes from the Bolivar Gold geological legend to those of the Gold Fields Geological Legend. This was required due to the different scheme and fields in the two databases, and as the Bolivar Gold geological legend was more interpretative compared with the more descriptive, observation-based geological legend of Gold Fields. All geological data, from mining, resource definition and regional exploration, are stored within the centralized SQL Server database. All data are currently manually entered by trained staff; however, certain checks are in place to minimize or eliminate data entry errors. Customized data entry forms have been developed in MS Access and are accessed via DataShed. As the database is relational, no codes can be entered that do not exist in linked library tables. The DataShed interface optimizes speed and accuracy of data entry, easy user access, data validation and extraction of the data to other software. Via SQL a series of work groups were established with defined tasks to manage permissions and ensure the integrity of database. There are five key elements comprising management of geological, sampling and QC data. These are described below: Sample consignment forms have been developed. These supply information of batches sent to the laboratory of sample numbers, preparation and analytical methods and QC instructions (Figure 14.1). These data are stored in the database. The forms are e-mailed to the laboratory at the time of sample submission with hardcopies signed for submission and retrieval of samples. Detailed information is described in MRM_P014, Sample Consignment procedure.

Figure 14.1 Sample Consignment Form

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Data entry templates have been developed and customized for geological and sampling data (Figure 14.2). The relational database minimizes the risk of incorrect data entry. All data entry is according to procedure MRM_P018, Database – Data Entry.

Figure 14.2 Drill Hole Data Entry

Assay results are automatically uploaded into the database in a text format known as a sif file (Figure 14.3). These files include detailed information about the batch, methods, units, detection limits and elements assayed. The file also includes all QC data in the sequence of analysis. The file cannot be tampered with, and must be generated in this consistent format by the laboratory. The assay data are stored in a normalized format to ensure all required information is stored for each sample, and that multiple assay results are stored for each sample. Import of assay data follows procedure MRM_P018, Database – Data Entry.

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Figure 14.3 Assay Laboratory Sif file

Data validation is controlled via rules, library tables, triggers and stored procedures. Data that do not meet defined rules on import are rejected and stored in buffer tables until corrected. Any data with a code not existing in a library table cannot be entered. Once all data for a drill hole have been entered into the database, the geologist responsible for the drill hole validates this against original hard copy logs. A validation extension has been developed in DataShed to run queries against the database (Figure 14.4), which includes checks for incorrect collar locations, testing for overlapping, missing or incorrect down-hole surveys, and incorrect collar location procedures and templates are available for all geological data. Data validation is undertaken according to procedure MRM_P019, Database – Data Validation.

Figure 14.4 Data Shed - Data Validation

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Assay Swapper is an extension recently developed in collaboration between Gold Fields Venezuela and Maxwell (Figure 14.5) to enable original results which are determined to be unreliable to be replaced by validated re-analyses. This tool enables closing the loop on quality control. A full audit trail with justification for the replacement is stored in the database.

Figure 14.5 Assay Swapper

14.3.2 Maxwell Database Audit Maxwell was engaged to complete a detailed independent audit of the Gold Fields database in July, 2006 in order to: i) validate data, including verification that the data base integration process had accurately transcribed data from the original source, and verification of 10% of original assay certificates against the database, and ii) the database was compliant with the South African Code for Reporting Mineral Resource and Mineral Reserve (SAMREC) and hence verified for use in generation of the resources and reserves. To facilitate the audit, Gold Fields supplied:

• A backup of the current Gold Fields SQL database.

• The final Bolivar Gold Access exploration database.

• Ten percent of the original assay certificates across all campaigns (companies and laboratories) in the life of the project in hard copy form.

Findings from the audit included:

• 99.99% of assays in the database were correct compared with hardcopy assay certificates.

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• Some inconsistent loading of historical QC data, but “considering the age of the data the amount of QC data is admirable” (Maxwell 2006b).

A summary of key recommendations from the audit affecting SAMREC compliancy, included:

• Drill hole location – some holes without national grid coordinates or grid identification, others missing some coordinates. Most holes lacked documentation of survey method.

• Down-hole surveys - several holes lacked down-hole survey data, some azimuths did

not have grid recorded, some down-hole survey methods, survey company and dates not recorded.

• Drill hole samples – some intervals below end of hole depth, some sample type,

methods and sampler missing.

• Density - several invalid or overlapping intervals, some data missing for technician and date measured.

• Assays - sample preparation data not recorded, several drill hole QC records without

sample type and method, several standards without expected values, assay methodology missing for some historic data.

• Geology – some overlapping intervals in lithology, structure, vein and weathering

tables.

• Quality control - tables need to be populated appropriately with historical QC data.

• Metadata – table should be populated. Identified issues were prioritized and addressed by Gold Fields and Maxwell to ensure all issues affecting compliancy (SAMREC/ SOX) were rectified. In order to validate the corrections, a second review by Maxwell was undertaken on site in August, 2006 to sign-off the database for use in the generation of the annual resource models. 14.3.3 Smee and Associates In July, 2006, Smee and Associates reviewed field procedures and sampling techniques, audited the laboratory and reviewed quality control data. Minor issues were raised regarding field and quality control procedures, data capture and QA/QC analyses. Smee concluded that PMG’s data capture, data review, and QA/QC protocols are comprehensive and complaint with industry best practices (Smee 2006).

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14.4 DATA QUALITY CONCLUSIONS The QA/QC procedures were reviewed with Micon’s project manager and staff geologists during the site visit. Micon was able to observe core and RC chip sample logging and sampling, insertions into the sample streams of field duplicates, standards and blanks, and demonstrations of data entry and data control (such as follow-up procedures regarding control sample failures, database protocols, etc). The overall impression was one of transparency of approach, methodology and results and that the work was being conducted by very competent professionals and technical staff working to industry best practice standards. 14.4.1 Gold Fields Assay Procedures Assays procedures and QC sample insertion protocols employed by Gold Fields are summarized in Table 14.2 and QC sample failure criteria are shown in Table 14.3.

Table 14.2 Gold Fields Assay Procedures and QC Protocols

QP Protocol - Gold Fields 2006

Exploration Mining QC Sample Regional Resource Definition Grade Control Blanks 1 in 20 1 in 30 1 in 40 Standards 1 in 20 1 in 30 1 in 40 Field Duplicates* 1 in 30 1 in 40 DD, 1 in 30 RC 1 in 40 Lab Procedures Regional Exploration Resource Definition Grade control Max Oven Temp 70o <110o 110o Pulverization 750 - 1,000 g 500 g Fire Assay 50 g 30 g Gravimetric >2 g/t 1 in 20 of >2 g/tLab QC Exploration and Mining Preparation Duplicates 1 in 30 Analysis Duplicates 1 in 30 Preparation Passing Minimum 70% passing 10 mesh (-2 mm) Analysis Passing 95% passing 150 mesh (-106 um) Screen Tests 1 in 20

* ‘Geologically random’. Diamond core prep duplicates - ½ core for Resource Definition. ¼ core for Regional Exploration.

# 5% check assays to SGS Lima for Regional Exploration & Resource Definition.

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Table 14.3 Gold Fields QC Sample Failure Criteria

Gold Fields Venezuela - Quality Control Table of Logic

Rule QC Type QC Measure Description 1 Blanks (Standards) Contamination A blank greater than 5 times the mean

(baseline) is a failure (25 ppb SGS, 50 ppb Triad)

2a Standards Accuracy A standard greater than 2 standard deviations from the mean is a failure

2b Standards Accuracy Grade Control - A standard greater than 3 standard deviations from the mean is a failure

3 Standards Accuracy 2 adjacent standards greater than 2 standard deviations from mean on same side of mean is a failure (indicates bias)

4 Field Duplicates* Precision (field + lab) % Difference >20% to be investigated, HARD of >10 is failure

5 Laboratory Duplicates* Precision (prep + analysis) % Difference >20% to be investigated, HARD of >10 is failure

Duplicates <20 ppb Au (SGS) and <100 ppb Au (Triad) not included as failure as close to detection limit (1 ppb (20x) and 10 ppb (5x) respectively).

Action ^ Action 1 If both rules 1 and 2a are broken for all QC samples in one batch, re-send entire pulps for re-

assay Action 2 If either rules 1 or 2a and rule 5 are broken for all QC samples in one batch, re-send entire

pulps for re-assay Action 3 For any 1 rule broken for individual GF QC samples only (except rule 4), if >100 ppb Au

Triad/50 ppb Au SGS, send sample and adjacent samples until the next passing control sample is reached for re-assay of pulps

Action 4 Accept results if rule 4 broken (probable natural variation) ^ No actions are taken for Mine Grade Control samples except under specific circumstances.

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15.0 ADJACENT PROPERTIES In the El Callao Gold district, the gold deposits are aligned in a broad east-northeast trend which mimics the Guri Fault trend to the north. It is noteworthy that all major deposits lie close to and/or to the north of the Laguna magnetic high (Figure 15.1), a feature which is believed to mark an important structure in the greenstone. Most of the deposits are hosted in the volcanic and volcaniclastic rocks of the Pastora Supergroup (e.g. Choco 10, Colombia, Sosa Mendes/Union and Isidora) and less significantly in the overlying Botanamo Group (e.g. Tomi). Gold deposits in the district highlight the potential for both high-grade, low-tonnage deposits such as the historical El Callao mine and Hecla’s Isidora mine (formerly Mina Chile) as well as low-grade, higher-tonnage deposits such as La Victoria and Choco 10.

Figure 15.1 Regional Map (radar image) of the El Callao Gold District

(Showing the most significant deposits with past production and reserves, and the Gold Fields ground holding (yellow) The metavolcano-sedimentary package is roughly shown in grey due to the response from the strong vegetation)

The following information on adjacent properties is taken from publicly available documents, but Micon has been unable to verify this information. (Published resource figures vary depending on the source and what exploration was completed.) The information presented below is not necessarily indicative of the Choco 10 property. These deposits are not part of the Choco 10 deposit. Reference is also given to historical mining in adjacent areas and to other properties in the El Callao district in Sections 4.0 and 6.0.

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15.1 LA VICTORIA AND TOMI MINES The La Victoria and Tomi mines of Crystallex International Corporation are located approximately 25 and 40 km, respectively, northeast of the Choco 10 mine. Mineral Resource and 2006 production figures are shown in Table 15.1.

Table 15.1 La Victoria and Tomi, Production and Resources

Category Thousand

Tonnes Grade

(g/t Au) Thousand

Ounces Gold La Victoria Indicated Resources 2.4 4.5 349 Tomi Indicated Resources 0.013 18.3 8 La Victoria 2006 Gold Production - - 41 Tomi 2006 Gold Production - - 3

15.2 ISIDORA MINE (MINA CHILE) The Isidora mine of Hecla Mining Company is located approximately 15 km east of the Choco 10 mine. The proven and probable reserves remaining at Isadora as of December 31, 2006 are shown in Table 15.2 (Source: http://www.hecla-mining.com).

Table 15.2 Isidora Mine Proven and Probable Reserves, December, 2006

Category Thousand

Tons Grade

(oz/t Au) Thousand

Ounces Gold Proven & Probable Reserves 351,288 0.88 307,400

15.3 COLUMBIA MINE The Columbia mine of CVG-Minerven (a corporation owned by the Venezuelan Government) is located approximately 25 km east of Choco 10 near the town of El Callao. Production in 2004 was 100,906 ounces (256,339 t at 13 g/t Au) and reserves were stated at 1.6 Mt at a grade of 9.2 g/t Au with ore shoots grading up to 60 g/t Au, (Channer, Graffe, and Vielma, 1996 – SEG Newsletter). CVG Minerven owns a number of the adjacent concessions as presented in Figure 15.2. Choco 5, located immediately west of Choco 10 and 4 is being explored by Gold Reserve Inc., which may take over ownership if a production decision is made (Source: http://www.goldreserveinc.com).

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Figure 15.2 CVG Minerven Concessions

(Source: http://www.cvgminerven.com)

15.4 INCREIBLE 6 DEPOSIT The Increible 6 project is owned by Rusoro and located approximately 20 km northeast of the Choco 10 mine. To date, Rusoro has published an indicated resource of 23.45 Mt grading 2.11 g/t Au, as well as an inferred resource of 17.53 Mt grading 1.95 g/t Au, at a 0.5 g/t Au cut-off grade (Rusoro Mining website, November 15, 2007 press release). Rusoro operates five additional exploration projects in the district.

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16.0 MINERAL PROCESSING AND METALLURGICAL TESTWORK Micon prepared a feasibility study for the Choco project in November 2003, which was based on test work conducted to that date and detailed mine and plant design. Following detailed engineering by Bolivar, installation and commissioning of the Choco processing plant commenced in 2004 through its subsidiary PMG. Prior to design of the plant numerous phases of metallurgical testwork were conducted starting in 1994. Details of this testwork were covered in both the Micon Technical Reports of November, 2002 and October, 2003 and the MDA Technical Report of March, 2005. For full details of the testwork the reader is directed to these reports. For sake of completeness a summary of the more recent testwork is set out below followed by a brief description of the processing facilities constructed in 2004. 16.1 METALLURGICAL TESTWORK Initially in 1994, metallurgical testwork was carried out for evaluation of heap leaching and gravity recovery for gold. In 1995, composite samples representing the four zones of laterite, clay/schist, silicified zone/quartz veins and volcanic bedrock were used for metallurgical testing of multiple phase milling/CIP cyanidation and heap leach/cyanidation. McClelland Laboratories of Nevada, USA, conducted the composite preparation and testing. The following results were obtained:

• Bottle roll cyanidation tests of 48 hours duration after a final grind to 80% passing 0.074 mm showed a recovery of gold in excess of 90% for all samples. The laterite and clay/schist samples generated gold recoveries of 94%.

• Recoveries from the softer laterite and clay types were maintained at high levels even

at significantly coarser feed sizes up to 12 mm, indicating the potential of this material for heap leaching.

• The volcanic bedrock sample provided much lower recovery at coarser sizes than

0.074 mm with estimated recovery of 45% in a heap leaching operation.

• The laterite and clay zones appear to be naturally acidic and during cyanide testing a high lime consumption of up to 14 kg/tonne was shown. For the quartz vein and bedrock samples, reasonable lime consumptions of around 3 kg/tonne were experienced. Cyanide consumption in all sample types was in the range of 0.4 kg/tonne.

• A single column leach test was conducted with a weathered composite crushed to 12

mm and agglomerated with cement. Cement consumption required to achieve a stable agglomerate, was high at over 12 kg/tonne. Maximum recovery of gold was attained after 60 days of testing, to a level of 90%.

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After commencement of Bolivar’s activities at the site, further testwork was conducted. In 1996 two composite drill core samples representing bedrock were submitted to Lakefield Research, Canada, for standard grinding and bottle roll cyanidation tests. The ball mill metric work index was determined to be 14.1 and 13.7 for the respective samples. This compared well with a value for a bedrock composite tested by McLelland of 13.6. The average gold extraction after grinding to 74 microns was 90%, confirming the previous work. Subsequent testing during 2003 at Lakefield Research employed specific drill core samples of bedrock. The respective gold extractions by cyanide leaching for two samples, after fine grinding to 80 microns, were 87% and 93%. Leach tests conducted on remaining samples, which represented various areas of the weathered zone, returned gold extractions above 93% and with an average of 95%. Compared with the previous testwork, indicated lime consumption for the weathered material was much lower in the Lakefield tests, while cyanide consumption was slightly higher. A set of 12 near-surface samples from the laterite zone was collected by pitting during 2003 and submitted to Lakefield Research for cyanide leach tests and acid-base accountability tests. Eleven of these samples yielded gold extraction ranging between 90-98%. Lime consumption was lower than shown in the McLelland testing with an average of approximately 6 kg/t. Acid-base accounting tests were run on the same core samples and composites submitted for cyanide leach tests. All samples except one were net acid consumers. The exception was the “pyritic” bedrock sample, and this was only slightly net acid producing. From these tests it was assumed that average tailings or waste dumps would not be acid generating. In its October 31, 2003 report Micon concluded that “Micon considers that these results are quite typical of gold deposits of this region and confirm the potential of conventional fine grinding and cyanide leaching to recover gold from the deposit at recovery levels of 90% or higher.” A description of the process plant and Micon’s conclusions from its site visit and review of operations are contained in Section 19.4 – Mineral Processing.

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17.0 MINERAL RESOURCE AND MINERAL RESERVE ESTIMATES 17.1 INTRODUCTION The Choco 10 Mineral Resource and Mineral Reserves estimates were developed by Gold Fields and presented in a “Competent Persons’ Report on the Mining and Exploration Assets of Promotora Minera De Guayana, Choco 10 Gold Mine” as of December 31, 2006 (CPR). In order to endorse the existing resources of Choco 10, a detailed review of the available technical documentation and mineral resource and reserve estimation procedures was undertaken by Micon. Additionally, the individual who generated the resource and reserve estimates for Gold Fields, Jennifer Gressier, was interviewed and answered questions on her work on the Choco 10 deposit. Lastly, cross-sections were generated showing exploration drill hole composites against the actual block model grade estimates and modelled geology for each of the mineral deposits that make up the Choco 10 area. These cross-sections have been used to examine the composites against the actual estimated values within selected blocks. 17.2 MICON TECHNICAL DATA REVIEW A comprehensive review of the available mineral resource and reserve estimates documentation and procedures for Choco 10 was completed during October, 2007. The major source used in this review is the Gold Fields CPR, Sections 4 and 5, which detail the procedures used in the development and estimation of the mineral resource and reserves contained within the Choco 10 deposit. In Micon’s opinion the resource estimation methodology and procedures developed by Gold Fields are very thorough and provide an excellent basis for the resource and reserve estimates. In addition to the technical data review, a meeting was held with Jennifer Gressier, the Gold Fields geologist who developed the Choco 10 mineral resource estimate and reserves. In this meeting the mineralized domains were explained and reviewed along with geologic and structural controls, the block estimation methodology, Gold Fields constrained (within a mineable pit design) and unconstrained (a mineral resource inventory) mineral resources, and the historic reconciliation of the current resource estimate. Since the Choco 10 mineral resource is currently being mined, Gold Fields has been examining the performance of the model through a mine-to-model reconciliation. Reconciliations of the mine to model were examined through the period ending December 31, 2006 and are explained within the CPR. These discussions with Gold Fields’ staff further demonstrated the lengths to which Gold Fields went to develop a reconcilable, mineralized domain constrained, resource estimate for Choco 10. The work completed on the Choco 10 resource estimate captures all of the known mineralizing constraints and only estimates gold grades into areas where the domains have been modelled, while honouring the assay information and estimating parameters. To further check the grade estimates on the Choco 10 block model, cross-sections were generated through each mining/resource area with drill holes, drill hole gold composites, block outlines, block gold grades, surface topography, mineralized domains, resource and

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reserve pit shells, and geologic contacts. Several visual checks were performed to validate the grade estimate:

1. Individual block gold assay estimates were compared to nearby drill hole gold composites.

2. Mineralized domains were checked to ensure that block gold grade estimates were

constrained to within individual mineralized domains.

3. Resource and reserve pit shells were examined to determine the shell shape as opposed to the mineral resource.

4. Any areas where apparent problems with the gold grade estimates and the geometry of

the mineralized domains might occur were investigated. This review indicated that no apparent problems existed in the cross-sections checked and that the resource estimation procedure had in fact performed as planned. Figure 17.1 is a plan view, showing the locations of the cross-sections generated for this review. The cross-sections themselves are shown in Figures 17.2 to 17.13.

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Figure 17.1 Plan of Section Locations for Rosika, Coacia, Pisolita and VBK

.

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Figure 17.2 Coacia Cross-Section 807945 North

Figure 17.3 Coacia Cross-Section 808000 North

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Figure 17.4 Cocia Cross-Section 808100 North

Figure 17.5 Pisolita Cross-Section 807645 North

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83

Figure 17.8 Rosika Cross-Section 808495 North


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Figure 17.11 VBK Cross-Section 400

85


.


.

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17.3 CHOCO 10 MINERAL RESOURCE The Choco 10 resource information is based on Gold Fields' current in-situ resource models, which were estimated using three-dimensional computerized models containing geological data and kriged estimated grades at a cut-off of 0.5 g/t Au. The Table 17.1 presents the Mineral Resource statement for the Choco 10 deposits as of September 30, 2007. They are un-constrained (in that no economic mining limits were applied) and are classified into measured, indicated and inferred categories. They are also broken down by individual deposits and material types. The Mineral Resources are reported in-situ, and are inclusive of the Mineral Reserves given in Table 17.4.

Table 17.1 Choco 10 Unconstrained Mineral Resources as of September 30, 2007




oz Pit Material COG

(millions) (g/t) (000) (millions) (g/t) (000) (millions) (g/t) (000) (millions) (g/t) (000) Rosika Oxide 0.5 0.1 2.74 13 0.5 1.49 22 0.6 1.79 35 0.1 1.95 5 Trans 0.5 0.2 3.02 15 0.2 1.50 12 0.4 2.09 26 0.1 2.08 5 Fresh 0.5 1.6 3.21 165 11.1 2.23 796 12.7 2.35 961 5.9 2.12 400 Coacia Oxide 0.5 0.1 1.18 3 2.0 1.86 120 2.1 1.83 123 0.5 1.75 27 Trans 0.5 0.0 0.00 0 0.4 1.65 23 0.4 1.65 23 0.2 1.80 12 Fresh 0.5 0.0 0.00 0 3.9 2.29 287 3.9 2.29 287 3.1 1.71 171 Pisolita Oxide 0.5 0.3 2.25 24 2.0 1.45 95 2.4 1.57 119 1.3 1.09 45 Trans 0.5 0.2 2.31 18 0.3 1.90 18 0.5 2.09 36 0.3 1.35 14 Fresh 0.5 0.1 1.96 5 0.2 1.60 8 0.2 1.72 13 5.5 2.66 470 VBK Oxide 0.5 0.0 0.00 0 0.3 2.03 22 0.3 2.03 22 0.4 1.21 15 Trans 0.5 0.0 0.00 0 0.2 2.21 13 0.2 2.21 13 0.2 1.17 9 Fresh 0.5 0.0 0.00 0 35.1 2.67 3,017 35.1 2.67 3,017 25.3 2.26 1,844 S/Total Oxide 0.5 0.6 2.22 41 4.8 1.67 259 5.4 1.72 300 2.2 1.28 93 Trans 0.5 0.4 2.58 33 1.1 1.77 65 1.5 1.98 98 0.8 1.48 40 Fresh 0.5 1.7 3.15 170 50.3 2.54 4,107 52.0 2.56 4,277 39.8 2.26 2,885 Grand Total 2.6 2.86 243 56.3 2.45 4,432 58.9 2.47 4,675 42.9 2.19 3,017

17.3.1 Description of Mineral Resource Estimation Methodology The Gold Fields CPR describes the procedures, estimation methodology and mineral resources estimates in extensive detail in Section 4.0. Extracts from this section are provided below with some paraphrasing to suit the form of this report. Resource estimate numbers quoted within the CPR are through to the end of December, 2006, when the report was issued. As these are out of date, they have been omitted from this report and replaced with estimates current to the end of September, 2007 where required. 17.3.1.1 Orebody Definition Mineralized domains were defined based on current geological and structural understanding of controls on mineralization by integrating all available data. At Rosika-Coacia the mineralized domains were defined based on lithology, alteration, pyrite content and structure. Lodes comprise lower-strain brittle-ductile structures intensely altered by ankerite-dolomite-silica-pyrite ±sericite, hosted principally in coarse intermediate and

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mafic volcaniclastics, chert and the upper flow-top breccia in basalt. The halos are defined by sericite-ankerite ±dolomite ±pyrite ±calcite alteration in higher strain zones. The Rosika-Coacia mineralized domains, from hanging-wall to footwall and north to south, comprise:

• Residual colluvium/ lateritic horizon.

• Upper hanging-wall gabbro-hosted lode (GB1).

• Lower hanging-wall gabbro/ upper volcaniclastic (intermediate sandstone) hosted lode (GB1/ C1a).

• Hanging-wall upper halo (C1b).

• Rosika main lode (C2a) – internal shoot defined at intersection with NNE C2b.

• Mid and footwall halo (lower - C3).

• Rosika NNE cross-cutting lode (C2b).

• Rosika footwall basalt hosted NNE lode.

• Coacia hanging-wall lode (C1c).

• Coacia main lode (C2c) – plunging high-grade internal shoot defined following fold axis.

• Coacia regolith vein-hosted surfaces (seven, SE Coacia).

Representative cross-sections through mineralized domains are shown in Figure 17.14 and Figure 17.15. At Pisolita, definition of domains was principally based on quartz vein content and grade. Four types of mineralization were identified defining the following mineralized domains:

• Upper laterite/ mottled zone/ upper saprolite horizon.

• Sub-horizontal regolith hosted quartz-vein lodes (six surfaces).

• North Pisolita gently southeast-dipping regolith hosted quartz-vein lodes (five surfaces).

• Gently east-dipping basalt hosted deep lodes (six surfaces).

Figure 17.16 illustrates the Pisolita mineralized domains in long section.

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Figure 17.14 Schematic Cross-Section through Rosika Showing Ore Domain Lodes and Halos

Figure 17.15

Schematic Cross-Section through Coacia Showing Ore Domain Lodes and Halos

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Figure 17.16 Schematic South-North Long Section through Pisolita Showing Ore Domains

3334 35

36

37

38

28

2422

21

27 25

30

30

3229

21

3127

23

26

1 × northing(m)

2 ×elevation

(m)

base of weathering

The VBK mineralized domains were principally defined by structure (high- and lower-strain domains), alteration and pyrite content. The geological model comprises three core mineralized packages and minor surfaces in the hanging-wall. Halos are defined by high-strain domains characterized by continuous penetrative foliation/ shearing and chlorite-calcite alteration. Internal lodes within the halos are identified by intense carbonate-pyrite (>1%) ±silica alteration and lower- and high- strain structures. High-grade shoots within domain 41 are defined principally by the oblique intersection of the in-situ fractured basalt unit, associated with intense ankerite-dolomite alteration, increased silicification, greater than 2% pyrite, and relatively high-grades (correspond to leapfrog contour above 1g/t).

The mineralized packages consist of:

• Hanging-wall – five halos, hosting three lodes.

• Core 1 (domain 41) – one halo hosting three lodes. Two high-grade shoots are defined on the domain 41 lode.

• Core 2 (footwall) – three halos hosting five lodes.

• Core 3 (footwall) – three halos hosting five lodes.

Figure 17.17 is a schematic section illustrating the domain lodes and halos in the VBK zone.

basalt

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Figure 17.17 Schematic Northwest-Southeast Section through VBK Showing Ore Domain Lodes and Halos

Throughout Rosika-Coacia and VBK internal low-grade halos were defined within, and excised from, lodes based on geology and grade (same characteristics as halos, <0.5 g/t). Internal poorly mineralized-barren zones were defined based on geology (primary textures preserved, epidote-chlorite ±calcite alteration) and grade (<0.1 g/t), and were excised from halos. As the mineralized domains have been defined principally by geology, and the contacts are generally sharp, the domains have been treated as hard boundaries for geostatistical analysis and estimation. The exceptions are the high-grade shoots where soft boundaries have been used, since contacts cannot be pin-pointed based on the current drill spacing. The high-grade shoots at Rosika-Coacia have a 30 m external and 20 m internal soft boundary applied, and on the VBK high-grade shoots a 20 m external soft boundary has been applied.

17.3.1.2 Resource Database

The database input into the resource estimation for the Gold Fields CPR was current to September 21, 2006 for Pisolita, October 14, 2006 for Rosika-Coacia and November 28, 2006 for VBK. The majority of the database consists of diamond holes (62%), followed by RC (24%), then aircore (14%), with a total of 3,622 drill holes for 216,082 metres. RC drilling includes 36,753 m of grade control drilling from the Rosika, Coacia and Pisolita open pits. The total validated drill database available for geological interpretation and resource modelling is shown in Table 17.2.

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Table 17.2 Total Number of Validated Drill Holes and Drill Metres by Hole Type and Deposit as at Database Close-

off Dates Outlined in Text

Diamond RC Aircore Tricone Total Deposit Holes Metres Holes Metres Holes Metres Holes Metres Holes Metres Pisolita 64 9470.9 1,127 22,371 625 24,367 1 8 1,817 56,217 Rosika-Coacia 260 53,365 1,001 24,499 263 6378.6 1 22 1,525 84,264 VBK 228 70,934 52 4,667 0 0 0 0 280 75,601 Totals 552 133,770 2,180 51,536 888 30,745 2 30 3,622 216,082

The number of sample composites used to generate the resource estimate, selected within the mineralized domains, is shown in Table 17.3.

Table 17.3 Drill Hole and Composited Sample Numbers by Drill Hole Type and Deposit used in Resource Model

Estimation

Sample Composites Deposit Diamond RC Aircore Tricone Total

Pisolita 833 4,603 4,207 0 9,643 Rosika-Coacia 9697 9,300 4,328 7 23,332 VBK 16,723 1,009 0 0 17,732 Totals 27,253 14,912 8,535 7 50,707

The density database was closed off on September 23, 2006 for Rosika-Coacia-Pisolita (RCP) and November 15 for VBK. The density data comprised 3,736 fresh-rock samples for RCP and 4,226 for VBK. Saprolite samples consisted of 127 for RCP and 97 for VBK. Saprock consisted of 15 samples for RCP and an additional four for a total of 19 for VBK, and seven samples from gabbro saprock.

17.3.1.3 Grade and Tonnage Estimation

The Choco 10 Mineral Resource estimates were completed in collaboration with Snowden Mining Industry Consultants Inc. Similar estimation methodologies were used at RCP and VBK. A lithological model was developed to determine rock types principally for the application of density. This defined all known lithological units, including gabbro, various coarse- and fine-grained intermediate and mafic volcaniclastics, and basalt including flow-top breccias. Spatial analysis of fresh rock density data by rock code was undertaken, and the mean of the density data within each lithological unit was applied to that unit. Weathering horizons defined the base of saprolite and saprock. Mean densities based on logged regolith code for each horizon were applied to the weathering horizons for each deposit.

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Data were selected within the mineralized domains and samples composited down hole to 2 m intervals to ensure equal support. A length of 2 m was selected based on the current mining method, domain geometry and raw sample length. Data within each domain were declustered at optimal grid dimensions prior to geostatistical analysis in order to remove any bias caused by preferential drilling of some areas. Analysis of the declustered data was undertaken to identify and treat extreme values, which may have an undue influence on the estimation. Possible outliers were identified for each domain by reviewing the declustered sample histogram, the sample log histogram, the log-probability plot and the spatial location and support of surrounding data. Based on this review and by examination of the impact of removing the high values on mean and variance plots, appropriate top cuts were determined and applied on an individual domain basis by resetting all values above the selected threshold to the threshold value. Directional variograms were defined for each domain or group of domains of like geological and geostatistical characteristics based on the geological understanding of controls on mineralization and anisotropies indicating principal directions of maximum grade continuity. In some cases, particularly for RCP domains, Gaussian transformations were undertaken to improve the quality of the variogram. Quantitative kriging neighbourhood analysis was undertaken to optimize the estimation search strategy, including block size, number of samples and search ellipse dimensions, to minimize conditional bias. Grades were interpolated into 10 mE by 25 mN by 5 m elevation panels using ordinary kriged parent cell estimation. Density was applied to individual lithological units and weathering horizons by determining the declustered mean of the data within each unit. Uniform Conditioning (incorporating information effect) was performed to determine the recoverable resources above a range of cut-off grades at the selective mining unit scale (2.5 mE by 5 mN by 2.5 m elevation). Extensive validation was undertaken of the ordinary kriged and uniform conditioned estimates.

17.3.1.4 Classification

The Mineral Resources are classified as Measured, Indicated and Inferred, as defined and described in the SAMREC Code. Resource confidence classification considered the following aspects which affect confidence in the resource estimation: data quality, geological continuity, data density and orientation, grade continuity, estimation quality, mining method and scale. Classification was based on a scale of annualized production at the current mill capacity. Measured resources have been defined in Rosika and Pisolita where sample spacing is at a minimum of 25 mE by 25 mN, the geology of mineralization is well understood, the deposits are in part exposed in open pits, grade continuity is demonstrable and estimation quality is high (mean slope of regression of 0.9 for all domains). Indicated resources have been defined at RCP where sample spacing is at a minimum of 25 mE x 50 mN and at VBK where sample spacing is at a minimum of 50 mE by 50 mN. In areas classified as Indicated the geological controls on mineralization are well understood, good grade continuity is evident, and estimation quality is considered reasonable (mean slope of regression of 0.85 for all domains). Inferred resources have been defined in RCP and VBK where sample spacing is at a minimum of 100 mE by 100 mN, geological confidence and grade continuity is moderate and estimation

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quality acceptable (mean slope of regression of 0.7 for all RCP domains and 0.6 for all VBK domains). Material that does not meet the above criteria is excluded. 17.3.1.5 Selective Mining Units

The panel block size of 10 mE by 25 mN by 5 m elevation was defined taking into consideration the block size at which reliable kriging estimates could be produced, and according to possible underground mining selectivity. The open pit selective mining unit of 2.5 mE by 5 mN by 2.5 m elevation has been defined based on possible mining selectivity with the existing mining fleet. 17.4 CHOCO 10 MINERAL RESERVES Micon’s review of the Choco 10 mineral resource also included a review of the mineral reserve estimates. Gold Fields, using the mineral resource model described above, developed a reserve estimate using Whittle 4X pit optimization software at a $500 per ounce gold price. The results of this optimization were used to develop an ultimate pit design which was then scheduled for the remainder of the mine life. Reserves from this work were estimated as of December 31, 2006 and reported in the CPR. The reserves were updated to a mining surface dated September 30, 2007 by Gold Fields using the $500/ounce pit shell described in CPR. Within this pit shell, reserves were determined using a gold price of $550/ounce and are based on industry standard design practice and represent an economic, mineable design for the proven and probable reserves. These are tabulated in Table 17.4 The tonnage and grade estimates and classification are appropriate according to the SAMREC Code. Proven Mineral Reserves are derived from Measured Mineral Resources, and Probable Mineral Reserves from Indicated Mineral Resources. Reserves are presented on a run-of-mine basis delivered to the metallurgical processing facility. All Reserves are located on PMG’s Choco 10 mining concession.

Table 17.4 Choco 10 Mineral Reserves as of September 30, 2007



oz Pit COG

(millions) (g/t) (000) (millions) (g/t) (000) (millions) (g/t) (000) Rosika/Coacia 0.5 1.9 3.05 185 9.4 2.80 841 11.2 2.84 1,026 Pisolita 0.5 0.4 2.59 36 0.7 2.41 52 1.1 2.48 88 VBK 0.5 0.0 0.00 0 4.9 4.42 703 4.9 4.42 703 Sub Total Pits 0.5 2.3 2.97 221 15.0 3.32 1,596 17.3 3.27 1,817 Stockpiles 0.5 0.4 1.08 14 0.0 0.00 0 0.4 1.08 14 Grand Total 2.7 2.70 234 15.0 3.32 1,596 17.7 3.22 1,830

17.4.1 Description of Mineral Reserve Estimation Methodology The Gold Fields CPR describes the parameters used in developing optimized pit outlines, mine planning and scheduling for the life-of-mine plan (LOMP) and reporting of the mineral

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reserve estimates in extensive detail in Section 5.0. Extracts from this section are provided below, with some paraphrasing. Micon’s observations and conclusions follow the extracts. 17.4.1.1 Pit Optimization The pit optimization and mine planning process at Choco 10 is dependent upon input from the Mineral Resource Department. Responsibility is assigned for addition/revision and depletion sign-off on the Mineral Resource, which forms the basis for subsequent design, planning and extraction scheduling, incorporated into the life-of-mine plan. This is completed using a combination of computerized geological modelling, pit optimization, mine planning and production scheduling utilizing various in-house and commercial software packages. The planning cycle commences with the ratification of key input parameters prior to producing a compliant Mineral Resource statement, adjusted for all Resource depletions. On completion of the Resource update, the planning process commences, incorporating:

• Corporate decision on macro economic parameters.

• Development of a strategic plan which investigates the optimal scenario for each operation at the pre-determined economic parameters.

• Development of a life-of-mine plan, which forms the basis of the Choco 10 annual Mineral Reserve declaration.

• Development of a two-year operational plan (top down goals, which are derived from the strategic plan).

The Choco 10 open pit operation uses standard mine design software (Whittle 4X) to derive the optimal pit shells. Then detailed engineering and design work is carried out on the optimized pit shells using Datamine software, to define a “smoothed” mineable pit with required berms and access roads. The Mineral Reserves developed for these pits are used for scheduling mine production which is carried out using an in-house spreadsheet scheduler. The principal criteria used in the design of the open pit shells are summarized in Table 17.5.

Table 17.5 Choco 10 Pit Design Criteria

Factors Units Choco 10

Gold Price Used for Designs (US$/oz) 500 Cut-off grade (mine) for mill feed - fresh ore g/t 1.07 Cut-off grade (mine) for mill feed - oxide ore g/t 0.91 Stripping ratio waste : ore 7.4 Dilution % 10 %– 11% loss of grade Mine Call Factor % 100 Plant recovery factor fresh ore % 89.0 Plant recovery factor oxide % 93.0

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Figure 17.18 is a typical section showing the difference between the optimized pit shell and the pit design. Table 17.6 shows the differences between the optimized shells and the pit designs for all mining areas. Inferred Resources inside the shells or designs are reported as waste.

Figure 17.18 Schematic Relationship between Optimzed Pit Shell and Final Design

Table 17.6 Undiscounted Lerchs-Grossman Shell vs. Pit Design at US$500/oz

Total Ore (Mt)

Grade

(g/t)

Contained Gold (koz)

Waste Tonnes

(Mt)

Total Tonnes

(Mt) LG Shells (RCP) 12.719 2.91 1,191 49.855 62.574 Design (RCP) 12.2 2.89 1,126 54.7 66.9 Percent of LG shells (RCP) 96% 99% 95% 110% 107% LG Shells (VBK) 4.736 4.61 702 59.565 64.301 Design (VBK) 4.7 4.6 695 69.874 74.572 Percent of LG shells (VBK) 99% 100% 99% 117% 116% LG Shells (Total) 17.5 3.37 1,893 109.42 126.875 Design (Total) 16.9 3.37 1820.8 124.6 141.5 Percent of LG shells (Total) 97% 100% 96% 114% 112%

In the CPR, the Mineral Reserves for all pits were estimated using cut-off grades corresponding to a gold price of US$500/oz. For the September, 2007 Mineral Reserves quoted herein, this price was increased to US$550/oz to better reflect the 0.5 g/t cut-off used in the model. Ore cut-off grades for processing are different for each pit, and are calculated using the documented mine planning assumptions, which detail the economic and physical parameters for each pit.

Base of Weathering

Whittle 4-X Optimized Shell

Pit Design

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17.4.1.2 Geotechnical Considerations for Pit Design Geotechnical recommendations used for pit design criteria for the Rosika, Coacia and Pisolita pits have been provided by Golder Associates. Golder was initially involved with the project in 2003 when it undertook a slope design study on behalf of Micon, which was conducting a feasibility study at Choco 10 for Bolivar Gold. The initial geotechnical investigation included drilling of inclined geotechnical holes, installation of piezometers and rock sample testing. Since Gold Field’s acquisition of the mine, Golder has visited the site twice in the latter half of 2006 to review actual mining conditions and the stability of slopes excavated to date to validate its earlier recommendations. The site visit revealed that the slope recommendations were appropriate and could continue to be used. These recommendations are:

• Oxide Material: Bench face angles of 60 to 65 degrees, with bench heights varying between 5 m and 10 m and berm widths varying between 3 m and 6 m to give an overall inter-ramp angle of between 40 and 46 degrees.

• Fresh Material: Bench face angles of 67 to 75 degrees, with bench heights of 20 m and

berm widths varying between 8 and 10 m to give an overall inter-ramp angle of between 47 and 56 degrees.

For the VBK pit, a preliminary geotechnical study has also been completed by Golder to complement its prior study completed for Bolivar Gold. This study involved logging of core, rock strength testing and measurement of the groundwater. It is recognized by both Golder and PMG that further studies will need to be carried out prior to commencement of mining in this pit in order to make final geotechnical recommendations. This work would include targeted geotechnical drilling and logging, piezometer installations and structural modelling. The preliminary recommendations for the VBK pit are summarized as:

• Oxide Material: Bench face angles of 60, with bench heights of 5 m or 10 m and berm widths varying between 3 m and 6 m to give an overall inter-ramp angle of between 40 and 43 degrees.

• Fresh Material: Bench face angles of 60 to 75 degrees, with bench heights of 20 m and berm widths of 8 m to give an overall inter-ramp angle of between 46 and 56 degrees.

17.5 STATEMENT ON MINERAL RESOURES AND RESERVES The Mineral Resources set out previously in Table 17.1 and the Mineral Reserves set out previously in Table 17.4 were estimated in accordance with the SAMREC code. In Micon’s opinion, they also comply fully with the Canadian Institute of Mining, Metallurgy and Petroleum (CIM) standards on Mineral Resources and Reserves – Definitions and Guidelines, developed by the CIM standing committee on reserve definitions, as adopted by the CIM Council on December 11, 2005. Micon considers that the Measured, Indicated and Inferred

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resources quoted in this report are equivalent to Measured, Indicated and Inferred Mineral Resources under the CIM definitions, and that the Proved and Probable (Ore) Reserves quoted herein are equivalent to Proven and Probable Mineral Reserves, as defined by the CIM.

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18.0 OTHER RELEVANT DATA AND INFORMATION Readers should note that the historical resources and references to past Technical Reports discussed in Section 6.0 – History of this report are now outdated. Considerable additional field work and a re-evaluation of the mineral resources has been completed on the property by Gold Fields since acquiring Choco in 2005. In addition currently reported resources and reserves by Gold Fields are based on different gold prices and cost estimates and hence different cut-off grades. The reader is directed to Section 17.0 above for reference to current resource estimates as published by Gold Fields and Micon’s review of the same. As the Choco 10 property has been a producing mine since August, 2005 additional information on the mining and processing operation has been included in this report. The reader is referred to Section 19.0 – Additional Requirements for Technical Reports on Development Properties and Production Properties for information on the current mine operations. Micon is not aware of any information that has not been disclosed, as part of its review of the Choco 10 property, and referred to in this report that could affect or alter the conclusions expressed herein.

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19.0 DEVELOPMENT PROPERTIES AND PRODUCTION PROPERTIES The Choco 10 ore is being mined by open pit mining of both oxide and fresh material, with processing through a single conventional CIP plant with a nameplate capacity of 5,400t/d. Choco 10 has a mine life of 10 years based on current Mineral Reserves. However, ongoing exploration programs are designed to advance the site towards increased annual production and hence lower unit operating costs. Micon has reviewed the mine planning and mining operations at Choco 10, including a visit to the mine in August, 2007. Micon considers that the mine planning function at Choco 10 is being carried out in a professional, industry standard manner. At the time of the site visit mining operations were being hampered by the low mechanical availability of mining equipment. Gold Fields are taking active steps to improve the equipment availability and to purchase additional mining machinery in order to be better able to meet production targets. 19.1 MINE PLANNING This section includes discussion and comment on the mining engineering related aspects of the life-of-mine plans associated with the Choco property. Specifically, comment is given on the mine planning process and the main projects which may influence future mining operations. 19.1.1 Overview Choco 10 has a two-stage mine planning process. The Mining Department compiles a life-of-mine plan during the first half of each fiscal year and a more detailed two-year operational plan during the second half of the fiscal year. The operational plan for each year is presented to the Gold Fields Board of Directors at the end of each previous fiscal year. Projects are categorized in terms of total expenditure, and all projects involving expenditure of greater than the equivalent of US$6 million are submitted to the Board of Directors for approval. It should be noted that Gold Fields Fiscal year commences in July thus the first quarter of the Fiscal year (Q1) is from July through September. For all operational plans, a detailed two-year operating and capital cost budget is produced and, where appropriate, extended for the life-of-mine production schedule. The two-year operational plan is generally prepared on a monthly basis, extending into quarterly periods. Zero-based costing is used to formulate the two-year plan. Of critical importance is the utilization of historically achieved data for productivity and operating costs, which are the basis from which the operational budget is benchmarked. 19.1.2 Current Life-of-Mine Plan Pit scheduling was completed using an in-house spreadsheet, using bench reserves generated in Datamine for each 2.5 m mining flitch at each pit. A constraint of July, 2008 was used as the earliest commencement date for the VBK pit as this pit requires environmental permitting

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for development of the pit, associated waste dump and blocking/diversion of a small seasonal stream currently passing through the pit area. Mining has been scheduled to commence in November, 2008. Mine scheduling has targeted supplying sufficient ore to the process plant. Under this schedule, the process plant capacity was reduced to 52,000 t in January, 2007, because of water shortages, increasing gradually to normal capacity of 164,000 t per month in July, 2007. During this period, 119,000 t of existing low grade oxide stockpiles will supplement mine ore production for feed to the plant, with the remaining 228,000 being fed at various stages throughout the remaining mine life to F2017. Table 19.1 gives the forecast five-year mining profile for Choco 10, where mining costs are stated in January, 2007 money terms. The current life-of-mine plan includes mining and processing the reserves within the pit designs, as well as existing surface stockpiles. The plan mines 16.3 Mt of ore at a grade of 3.43 g/t, and 125.2 Mt of waste. Mining is completed at the end of F2016.

Table 19.1 Choco 10 Forecast Mining Statistics

Statistic Units LoM* F2007** F2008 F2009 F2010 F2011 F2012

F2013-F2017

Material Mined (Mt) 141.474 6.566 10.923 17.087 18.020 18.014 17.996 55.505

Ore (Mt) 16.875 1.263 1.869 1.834 1.823 1.689 1.828 7.274 Waste (Mt) 124.599 5.303 9.054 15.253 16.197 16.324 16.168 48.230 Stripping Ratio (t waste:ore) 7.38 4.20 4.85 8.31 8.88 9.66 8.84 7.63

Ore Grade (g/t) 3.36 1.85 2.39 2.53 3.00 3.01 3.02 4.19

Mining Costs (US$/t ore) 16.34 7.21 9.09 15.45 18.21 17.87 19.33 17.45

(US$/t ore&waste) 1.95 1.39 1.56 1.66 1.84 1.68 1.96 2.29

Note: *Does not include July-December, 2006 actual production. According to the mine plan the total mining rates need to increase in order to supply sufficient ore to the process plant. The following increases are scheduled in total material mined:

• 650,000 t/month April, 2007. • 1,000,000 t/month December, 2007. • 1,330,000 t/month January, 2008. • 1,500,000 t/month October, 2008.

The increases in production up to April, 2008 will be undertaken by augmenting the mine’s own fleet with mining equipment rented and operated by a mining contractor. It is anticipated thereafter that the increase will be carried out using newly purchased equipment. All mining is planned to be conducted with 100 t class excavators and 55 t capacity dump trucks. However, Gold Fields has planned to undertake a study to evaluate other options (i.e. larger fleet size) prior to placing equipment orders as this may result in improved economics and efficiencies.

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Due to the high strip ratio at the VBK pit, it will be necessary to commence mining there in November, 2008, to ensure a continuous ore supply to the process plant whilst that pit is being completed in F2015 to F2016. As such, surface stockpiles will increase to 0.854 Mt by the end of F2014. During the following years this ore will be re-handled to the process plant as mine ore production will be insufficient to match plant requirements alone. Generally, mining advance rates have been limited to 5 m per month in areas that require drill and blast. Figure 19.1 shows the planned mining sequence and scheduled annual tonnages of total material mined.

Figure 19.1 Life-of-Mine – Mining Sequence

F2007 F2008 F2009 F2010 F2011 F2012 F2013 F2014 F2015 F2016 F2017Coacia 1Rosika / CoaciaPisolita 1Pisolita 2Pisolita NVBK

Tonnes Mined

6,56

5,81

9

10,9

23,1

91

17,0

86,9

58

18,0

20,0

19

18,0

13,7

53

17,9

95,8

57

17,0

02,4

50

16,6

34,9

09

15,9

10,4

55

5,79

5,99

0

161,

000

Ore grade mined increases over the life-of-mine, due to higher grades being encountered at Rosika/Cocia and especially at the VBK pit from F2015. Mined ore grade averages 3.36 g/t Au over the life-of-mine period. Figure 19.2 shows the planned annual tonnages of ore and waste, and the ore grade and waste ratio.

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Figure 19.2 Ore and Waste Tonnes Mined, Grade and Strip Ratio

Ore & Waste Mined, Grade and Strip Ratio

0

2,000,000

4,000,000

6,000,000

8,000,000

10,000,000

12,000,000

14,000,000

16,000,000

18,000,000

20,000,000

F200

7

F200

8

F200

9

F201

0

F201

1

F201

2

F201

3

F201

4

F201

5

F201

6

F201

7

Period

Tonn

es M

ined

(t)

0.00

1.50

3.00

4.50

6.00

7.50

9.00

10.50

12.00

13.50

15.00

Stri

p R

atio

(t:t)

, Gra

de (g

t)

Waste Mined t Ore Mined t Strip Ratio t:t Ore Mined g/t

19.1.3 Life-of-Mine Projects Several projects require successful completion to allow the current life-of-mine schedule to be implemented. Environmental permitting will be required for two new waste dumps (one in August, 2007 and one for June, 2009), also for exploitation of the VBK pit for commencement in November, 2008. The environmental permit for the VBK pit will need to include a management plan for blocking or diverting the small, seasonal stream which currently passes through the planned pit area. Optimization studies at VBK will need to be carried out, as there is a significant quantity of mineralized material in the footwall of the deposit and below the reserve pit design, to determine if underground mining could extend the life-of-mine operation. If an underground mine is feasible, then the interface between the reserve pit design and underground mine will need to be optimized. 19.2 MINING OPERATIONS 19.2.1 Description of Mining Operations and Equipment Mining at Choco 10 is presently carried out by conventional open pit methods using an owner-operated equipment fleet augmented by equipment and labour supplied by mining contractor - Constuctura Ramel. Load-and-haul is undertaken using a standard truck-shovel operation, with excavators in backhoe and front-shovel configurations. Currently the mine is operating two O&K RH40s with a cat 5090B from the mining contractor. The owner’s truck fleet consists of nine Terex TR60’s which are currently augmented with nine Caterpillar 773 trucks from the mining contractor. Each truck has an average payload capacity of 55 tonnes.

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With the current equipment fleet, the primary excavation capacity is approximately 335,000 bank cubic metres (BCM) per month. However, to date the maximum achieved has been 284,000 BCM/month due to lower than planned equipment availabilities. Consistent with the current production schedule, mining is carried out seven days per week, with three shifts per day using four shift crews. All shifts are of eight hours duration. Ancillary equipment includes bulldozers, graders, water trucks and service truck vehicles, supporting the drill-and-blast and haulage operations through vehicle, road and bench maintenance, and dust and erosion control. This equipment is a mix of owner operated and contractor supplied. To achieve the current life-of-mine plan, the mining fleet will have to be significantly increased, to a maximum of five excavators and twenty-eight trucks. Production is planned to ramp up to approximately 1.5 Mt/month by late 2008. To date only minor quantities of oxide zones and transitional zones have been drilled and blasted, as mining has not yet reached the depth of fresh rock. These areas are drilled and blasted in 5 m lifts, with excavation of 2.5 m flitches. The oxide material which cannot be ‘free-dug’ is blasted using lower powder factors than those expected when fresh rock is encountered. Waste material is hauled to planned dumps located close to the pit exit. PMG has a progressive reclamation plan, whereby as areas become inactive they are immediately rehabilitated through contouring, replacement of topsoil, seeding, planting and fertilization. Ore is selectively mined and hauled directly to one of two run-of-mine pads, where it is stockpiled and then fed to the process plant as required. All haul roads are designed for Terex TR60 trucks. For double-lane traffic the minimum width is 20 m, and includes a drainage ditch and safety berm. For single-lane traffic a minimum width of 12 m is used. 19.2.2 Equipment Maintenance Facility The maintenance shop is open on all sides allowing for dust to enter the shop during the dry season. This can cause problems with carrying out repairs and removing parts in a clean environment. There is a lack of a rigorous preventative maintenance program in place and equipment is repaired as it breaks down. However, Gold Fields report that there is a severe shortage of spare parts for the equipment and this is exacerbated by having to stock spares for a number of different makes of equipment. No separate shop exists for the contractor and at present all the equipment needs to be maintained in the single facility, which is under size for the planned expansion of the mining fleet.

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19.2.3 Key Observations and Conclusions Based on the site visit, review of documentation and discussions with Gold Fields’ staff Micon had the following observations and conclusions.

• At present mining has been confined to oxide/regolith material, with a component of transitional oxide/sulphide material. These relatively shallow pits especially in the RCP area tend to have low strip ratios. As the RCP pits deepen and the VBK pit is mined the strip ratios will increase. This will require additional mining equipment, especially trucks and shovels. These have been allowed for in the capital budgets.

• The mine production rate has been consistently behind plan primarily owing to low

equipment availability because of shortages of qualified maintenance personnel, spare parts, lack of PM schedules, an inadequate maintenance facility, and work stoppages due to past labour disputes. Micon is informed that steps are being taken by the operator to address these issues.

• In order to improve the efficiency of mine operation, expenditures will be required to

provide for an effective equipment maintenance facility, investment in an adequate inventory of spare parts, and possibly purchase of replacement equipment for some of the older units. Gold Fields is addressing these issues, which are the primary reasons for low availability of the equipment, and have budgeted for construction of an expanded and better designed facility.

• Additional experienced shift supervisors and mechanics will need to be recruited as

well as pit engineers/geologists to plan and monitor mine operations and ensure that unplanned dilution is minimised.

19.3 GRADE CONTROL AND RECONCILIATION 19.3.1 Overview Prior to Gold Fields’ ownership in March, 2006 grade control was conducted by blast hole drills, samples were assayed by cyanide leach, and tonnes-grade ore block estimation was by weighted average of 5 m composites. Reverse circulation grade control drilling was implemented in May, 2005 and is designed on a 10 m grid along strike by 5 m across strike, oriented at each deposit to intersect the ore perpendicularly: Rosika at 50° to 270°, Coacia and Pisolita at 60° to 320°. 19.3.2 Description of Grade Control Measures Areas are selected for grade control drilling based on location of ore predicted in resource models and by pit mapping. To the end of December, 2006 a total of 50,930 m of RC grade control drilling have been completed. Where possible all drill holes are surveyed. Grade control is conducted under geological supervision with sub-samples taken at 1 m intervals

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using a UDR Rotaport cone splitter or a riffle splitter, to ensure adequate definition of mineralization, particularly at ore-waste contacts. For every 40 samples, an identical field duplicate is taken. All samples are dried to a maximum temperature of 110 °C, then crushed to 90% passing -2 mm and a 500 g sub-sample pulverized to 95% passing -106 µm. For every 30 samples, a preparation duplicate is taken from the crushed material and a pulverization duplicate is taken from the pulp. Analysis of 30 g sub-samples is conducted by fire assay, with a gravimetric finish on 5% of samples exceeding 2 g/t from the fire assay. For every 30 samples, an analytical repeat is undertaken. A similar process is undertaken for grade control modelling and estimation at all open pits as was done for resource modelling. Ore domains are defined based on geology, principal alteration, pyrite concentration, structure and quartz vein content and gold grade. Cut-off grades are 0.5 g/t for low-grade ore, and between 0.7 and 1.0 g/t for high-grade ore. Exploration and grade control samples are selected within the ore wireframes, which act as hard boundaries, and are composited down-hole to 1 m intervals representing the dominant sample interval and the narrow ore surfaces. Analysis has been undertaken to identify and treat extreme values which may have an undue influence on the estimation. Possible outliers were identified for each domain by reviewing the sample histogram, the log-probability plot, the spatial location and support of surrounding data. Based on this review and by examination of the impact of removing the high values on mean and variance plots, appropriate top cuts were determined and applied on an individual domain basis by resetting all values above the selected threshold to the threshold value. Directional variograms were applied for each domain adapted from the previous resource model based on the geological understanding of controls on mineralization and anisotropies indicating principal directions of maximum grade continuity. Grades were interpolated into 2.5 mE by 5 mN by 2.5 m elevation blocks using Ordinary Kriged parent cell estimation. In Pisolita, model blocks are subsequently regularized to the flitch height to account for extracting the flat-lying ore surfaces based on current mining methods. Density was applied to individual lithological units and weathering horizons based on the mean of the data within each unit based on the previous resource model with updates to saprolite values based on recent data. 19.3.3 Reconciliation A reconciliation system was initiated in March, 2006 to collect data to enable measurement of the performance across the resource to mine to mill process. By measuring the performance of each stage in the cycle, areas requiring improvement can be identified and improved. Risk can be reduced through feedback of reconciliation outcomes into resource models to improve confidence in predictions. The production measures recorded each month include original resource (model on which acquisition of project was based), current resource, grade control model, grade control design, initial claim production, final claim production, and actual (mill allocated) production.

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The following key reconciliation measures are calculated:

• Grade control model/ resource – predictability of resource.

• Grade control design/ grade control model – planned dilution.

• Final claimed production/ grade control design – unplanned dilution.

• Actual delivered ounces/ estimated delivered ounces - Mine call grade factor, measures accuracy of geological estimate of production.

The Mine Call Factor is shown in Figure 19.3. This illustrates that the mill allocated grade was higher than the mine claim grade, with an average of 107% for 2006. Conversely the tonnage factor illustrates that mine claim tonnes exceed those allocated by the mill, at 90% average for 2006. Now that a full reconciliation process is in place at the mine, increased focus is required to improve the quality of production and mill data. In addition, the mine has changed laboratories to ACME which has a faster turn-around time on samples so that the reconciliation is faster and operations can be modified more efficiently.

Figure 19.3 Choco 10 Mine Call Factors for Grade and Tonnage by Month for 2006

Choco 10 Mine Call Factors

70%

80%

90%

100%

110%

120%

130%

140%

Mar-06 Apr-06 May-06 Jun-06 Jul-06 Aug-06 Sep-06 Oct-06 Nov-06 Dec-06

Month / Year

Min

e C

all F

acto

r

70%

80%

90%

100%

110%

120%

130%

140%

Tonn

age

Fact

or

Grade Factor 3 MMA Grade Factor 6 MMA Grade Factor Tonnage Factor

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19.3.4 Micon’s Observations and Conclusions Gold Fields’ reconciliation of the current Resource Model to Mine to Mill for the period March 2006 to July 2007 shows a net gain in tonnes and ounces but a net drop in predicted grade relative to the predictions in the Resource Model. In Micon’s opinion these lower-than-predicted grades can best be explained by factors other than problems or errors in the resource estimate. All of the following points could be expected to have an effect on the accurate reconciliation of resource model to mine production and mill throughput:

• RC Grade Control drilling in the pits, and the resulting grade control model, are generally delineating more tonnes at a lower grade relative to the Resource Model. Back reconciling the December 2006 resource model to the grade control model over Gold Fields’ life-of-mine (from March 2006 to July 2007) shows that the grade control model contains 130% of the tonnes, 89% of the grade, and 115% of the ounces relative to the resource model.

• In-pit mapping and direction of mining activities is carried out by technicians rather

than geologists. Gold Fields recognizes shortcomings in this system and is planning to hire junior mine geologists to carry out the in-pit activities.

• Mining to date has dominantly been in oxide material where visually distinguishing

ore from waste is very difficult. This makes grade control difficult for the in-pit mine geology technicians.

• The assay lab turnaround time for grade control samples is unacceptably long

(somewhere between 10 to 18 days). This has resulted in a situation where relatively inexperienced technicians may be making day-to-day ore/waste calls in the pits without benefit of timely assays.

• Neither mining nor milling rates at Choco has achieved their targeted capacities. In

order to meet production targets there might be pressure on mine geology technicians to send lower grade ore directly to the mill that otherwise may have been directed to low grade oxide stockpiles. The current lack of permitted space for stockpile capacity would be an additional incentive for geology to send lower grade ore to the mill, as the only other alternative might be to discard it as waste.

• There are questions about the actual mined tonnages. There is no truck scale, and

there are no weightometers on the trucks or loaders. The one weightometer in the entire ‘system’ is a single roller unit on the conveyor into the mill and this unit was purchased and used by Bolivar Goldfields when they built the mill. The mill consistently reports receiving lower tonnages than the mine reports sent to them.

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• Further to the above point, moisture content of the oxide ore averages approximately 18%, but varies by season from approximately 10% to 30%. This would contribute to the problem of reporting accurate mined/milled tonnages relative to the Resource Model (which is based on dry tonnes).

• There have been ongoing problems with the crusher which ‘plugs up’ when processing

either wet oxide ore or sulphide ore which is mixed with wet oxide ore. The pits have not yet accessed areas where significant volumes of sulphide-only ore (which the crusher can handle) can be accessed. Therefore, areas of the mine plan which were focused on accessing higher grade sulphide ore have been changed to target lower grade oxide-only ore which can be processed without going through the crusher.

• Both planned and unplanned dilution during mining activities has resulted in lower ore

grades than predicted.

• Production is consistently behind budget due to factors such as low equipment availability (due primarily to shortages of qualified maintenance personnel and spare parts) and water shortages at the mill.

• Gold Fields have identified problems with the quality of survey control which affect

the quality of pit and stockpile surveys and they are planning to change the survey system and/or personnel. (Micon did not obtain information on the magnitude of these survey problems during the recent site visit.)

• Much of the ore mined to date has come from Pisolita where mineralization consists of

relatively flat-lying veins in saprolite/regolith. In contrast the bulk of the current resource at Choco is sulphide mineralization in relatively steeply dipping zones. Caution is required when drawing conclusions about the expected performance of the overall Choco resource model based on the situation at Pisolita as there are significant differences between the two.

• To date production and milling at Choco have been confined to oxide/regolith

material, with a component of transitional oxide/sulphide material. Mining to date has literally only ‘scratched-the-surface’ of the Choco orebody(s). There is little data available at this stage of project development with which to carry-out a meaningful reconciliation of resource-to-mine-to-mill with regard to the main body of sulphide mineralization which is to be the ore source over most of the life-of-mine.

• Up to December 2006 the reconciliation figures were based on the acquisition model

which was the basis of Gold Fields’ decision to acquire the project from Bolivar Goldfields. Since December 2006 the reconciliation figures are based on Gold Fields’ updated resource model, which is based on a significantly improved geological model, and is performing better than the now-outdated acquisition model.

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19.3.5 Recommendations The simplistic solutions (all of which Gold Fields are working to implement) to the question of dealing with the lower-than-predicted gold grades would be as follows:

• As soon as practically possible start mining in sulphide mineralization where grades are generally higher and where ore contacts can be visually determined.

• Sort out mine and mill issues to allow production at planned capacity.

• Hire mine geologists, rather than technicians, who are better able to define ore

contacts and to map more effectively.

• Improve survey personnel and/or systems to get better control of mine and stockpile volumes.

• Reduce turnaround time from the assay laboratory so the mine geologists get results of

grade control samples in two days or less.

• Install additional weightometers to ensure that correct weights/volumes are being used in reconciliations.

• Have sufficient stockpile capacity to handle the lower-grade ‘incremental’ ore.

• Choose, and strictly use, grade cut-offs so that the lower-grade tonnes which are

defined by grade control drilling are either left behind in the pit or sent to the appropriate stockpiles.

19.4 MINERAL PROCESSING 19.4.1 Introduction The Choco 10 gold recovery plant was installed and commissioned in 2004, with the majority of equipment sourced from the recently shut down Grouse Creek mine in Idaho. The process equipment and building frames were shipped to the Choco site and reinstalled on the current location. The rated capacity of the plant is 1.9 Mt/y or about 5,400 t/d with average ore hardness. The process is conventional, consisting of primary crushing, two-stage milling, cyanide leaching, carbon adsorption and elution, electro-winning and gold smelting. Tailings disposal is undertaken in a valley dam, with decant solution returned as process water to the plant. Figure 19.4 shows a general process flowsheet for the Choco 10 gold recovery plant.

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Figure 19.4 Schematic Flow Diagram of Choco 10 Plant

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19.4.2 Crushing and Grinding Run-of-mine ore is tipped directly by truck or front-end loader into dump pocket fitted with a grizzly for oversize removal, and the undersize withdrawn by an apron feeder. Material from the apron feeder is fed onto a screen where undersized material bypasses the primary jaw crusher. A separate feed bin is also in place to allow for bypassing the crusher when the feed material is predominantly oxide (saprolitic material). The crusher product and undersize material are fed directly onto the SAG mill conveyor feed-belt. Lime is added onto the SAG mill feed-belt via a bin and screw conveyor. Milling is conducted in a 17 feet diameter by 20 feet long SAG mill (2,750 HP) operated in either open or closed circuit, with the SAG mill product feeding a 17 feet diameter by 23 feet long ball mill (2,750 HP). A facility is in place to return pebbles back to the SAG mill feed-belt. The ball mill product is screened on a Delkor linear screen for removal of trash. 19.4.3 CIP Leaching and Gold Recovery Cyanide leaching of the milled product slurry is undertaken in five large leach vessels each of 3,450 cubic metres. The leach vessels are mechanically agitated with air injection to maintain dissolved oxygen at an acceptable level. The installed leaching capacity allows for theoretical leach residence time in excess of 70 hours. The slurry is transferred from the leach tanks to a conventional carbon-in-pulp circuit, comprising seven CIP tanks, operating in a conventional counter-current flow of slurry and carbon. Carbon is transferred upstream by recessed impeller pumps with inter-stage screens, recently upgraded to 2- type NKM screens per tank. Loaded carbon is pumped from the first tank to the elution and regeneration section for stripping of contained gold. The regenerated carbon is returned back to the seventh adsorption tank. Elution of loaded carbon is carried out in batches of four tonnes through a conventional pressure stripping vessel. Acid washing of the loaded carbon is undertaken predominantly to reduce calcium loadings on the carbon. Carbon regeneration is carried out in a kiln with typical temperatures of 700 degrees Celsius. Tails from the adsorption circuit are screened for removal of carbon, and pumped directly to the tailings dam. 19.4.4 Sampling, Analysis, Gold Accounting and Security Plant feed tonnage is measured via a conveyor belt weigh scales on the SAG mill feed conveyor. Capital is currently being expended to upgrade methods to determine the metallurgical plant balance. Upgrade of plant security is in progress, including installation of closed-circuit security cameras and construction of a secondary security fence around the plant to better control access to the plant facility.

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19.4.5 Process Conclusions The plant is designed to operate as a SAG / ball mill operation; however, the current feed is predominantly saprolite/oxidized material with very low work index and requires little energy for grinding. At the time of Micon’s visit milling was set up to operate with only the SAG mill. When operating in this mode the plant is capable of treating the equivalent of nearly 6,000 t/d of saprolitic ore. The head grade and recovery budget to June, 2007 were 2.16 g/t and 92%. Gold recovery for the first half of 2007 was reported to have averaged 86.16% which is fair for the lower reported head grade of 1.4 g/t. However, with the lower treatment rate currently encountered the longer retention time in the leach circuit should have resulted in improved extraction rates. The lower recovery being experienced could be a result of a coarser grind since only one mill is in operation. The lower head grade is reported to be a result of mining areas different to those planned. 19.4.5.1 Key Operating Statistics Currently the plant operating time is low as a result of the following principal factors:

1. Water shortages cause a considerable amount of mill downtime during the dry season (approximately October to May). For the first five months of 2007, per month operating time averaged 52.7%. The water shortages are a result of having insufficient storage capacity to carry the plant through the dry season. A number of remedial measures to mitigate this situation are underway including the completion of 12 boreholes furnishing about 60 l/s or more than 80% of the mine’s current water needs and shortages are not expected to arise in the future. The measures will include increasing the site water storage capacity, thickening tailings to increase the immediate recycle water and possibly installing additional make-up water wells on the property.

2. It was reported that a shortage of spare parts had caused maintenance difficulties but

has now been overcome.

3. It was stated during the Micon visit that there is a lack of front-line experienced supervisory personnel. PMG indicated they are working on hiring and making changes to some of these key positions.

19.4.5.2 Plant Operating Costs A review of the various reports relating to operating costs for the plant indicates that these are in reasonable agreement with those to be expected for a similar plant treating this type of ore. Additionally the reagent consumptions also agree well with those on which the feasibility study was based. As operating time improves, unit operating costs should also reduce.

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However, these costs will increase slightly when fresh, harder ore is treated as predicted in the feasibility study. 19.4.5.3 Process Key Findings The plant visit and subsequent review of the operating data indicates:

• There are no reasons for the plant not being able to operate at the design tonnage of 5,400 t/d assuming that the water shortage issue is resolved.

• Analysis of the tonnage treated during the operating periods demonstrates that the

capacity is achievable. A key factor (other than water) is to improve the quality of the maintenance, as despite the downtime incurred for water shortages, there are indications that the plant is operating on a breakdown maintenance basis.

• To assist in cleaning the inevitable spills, plant floor gradients should be sufficiently

sloped to make sure that the material can be easily hosed to sumps. The floor slopes are generally inadequate to facilitate this work with a subsequent build up of spillage. The area surrounding the concentrator should be paved.

19.5 TAILINGS DAM 19.5.1 Introduction This section includes discussion and comment on the tailings engineering aspects associated with the Choco mine. Specifically, detail and comment is focused on the design, construction, geotechnical integrity, remaining capacity and management practices governing the tailings facilities. The tailings output of the Choco 10 plant to the Tailings Storage Facility (TSF) is 1.97 Mt/y when treating oxide ore, however a lower rate has been achieved in 2006 and 2007. The current TSF has been constructed to 220 mRL and has a final design crest elevation of 224 mRL. After construction to the final height, the TSF is estimated to have capacity to 2010 depending on plant production rates. Preliminary work has commenced to identify options to increase the capacity of the existing TSF or to find an alternative location. However, the TSF is crossed by a high-voltage power line feeding Brazil which limits any further expansion of the current TSF. Golder Associates, Denver, has completed a “Pre-feasibility Trade-off Study for an Expanded Tailings Management System”, which has identified three preferred sites for construction of a new TSF. Golder considered a long-term conceptual requirement to store 80 Mt of tailings, which is significantly more than the current reserve or resource. Golder recommends post processing the tailings to paste or thickening in order to improve the deposition characteristics and water recovery. However, the study was based on oxide tailings only and further work

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will need to be done to determine the rheology of fresh ore tailings, which are expected to exhibit superior settling characteristics. 19.5.2 Overview of the Tailings Facilities The TSF has currently been constructed to 220 mRL, and consists of three ‘saddle’ embankments constructed across valleys (one larger and two smaller). The largest of the three embankments is approximately 25 m high. The embankments were designed by Proyectos Hidraulicos, and are constructed of selected compacted oxide earth fill and incorporate constructed vertical and horizontal sand seepage-interception ‘chimney’ drains. Construction of the final lift on the embankments to the design elevation of 224 mRL is in progress, and is being undertaken by a contractor, supervised by a third party consulting engineer company, with overall review by Proyectos Hidralicos. A 4 m freeboard is required to be kept between the crest and the tailings level at all times in order to handle a flood situation. Slurry tailings are pumped at approximately 35 to 40 percent solids from the process plant to the TSF, a distance of approximately 2.5 km, through 450 mm polyethylene pipe. The tailings are discharged through a single outlet which is moved from time to time in order to develop a beach sloping away from the embankment. The sloping beach directs decanted water towards a rock filter berm. A pontoon mounted electric pump is located in the pond upstream of the rock filter which pumps the surface water back to the process plant for reuse via a 350 mm diameter PVC pipe. Cyclones have been ordered and will be installed to improve the reclaim water from the tailings. The tailings impoundment area will be approximately 105 ha upon construction to 224 mRL. Proyectos Hidraulicos has recently been engaged to conduct a formal inspection of the TSF for structural integrity and operational compliance. Any areas that require rectification will be addressed on an on-going basis. The tailings do not generate acid nor do they contain high levels of metals. A seepage monitoring program has been initiated. Cyanide concentrations within the filtered pond water are within recommended international limits. 19.5.3 Life of Mine Tailings Deposition Assessment The existing TSF, when completed to 224 mRL will have sufficient storage capacity for a total of 5.5 Mt at a settled density of 1.15 t/m3. Capacity is needed for an additional 13.3 Mt in a new facility to contain the life-of-mine tailings. This has been estimated at a cost of $0.50/t ore after the current TSF is filled.

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Table 19.2 summarizes the life-of-mine deposition projections and comparable available capacities.

Table 19.2 Choco 10 Life-of-Mine Tailings Storage Facility Assessments

Mine Life-of-Mine

Deposition Available Capacity

Surplus/(Shortfall) Expenditure Period

(Mt) (Mt) (%) Choco 10 16.7 3.4 (80%) 2007 –2016

19.6 HUMAN RESOURCES 19.6.1 Introduction This section includes discussion and comment on the human resources related aspects associated with Choco 10. Specifically, information is included on the current organizational structures and operational management, recruitment, training, productivity initiatives and remuneration policies, industrial relations and productivity projections. Gold Fields issued an updated Ethics Policy in 2003 which is fully compliant with Sarbanes-Oxley, a Human Rights Policy, and a HIV/AIDS Policy, which confirm full compliance with all applicable International Labour Organization Conventions. A revised Code of Ethics has recently been finalized and implemented. PMG is in the process of establishing all internal human resource policies to reach full compliance with all applicable International Labour Organization Conventions and Venezuelan Labour Legislation. 19.6.2 Legislation Venezuela has extensive constitutional and legislative provisions regulating labour relations. In general employees working in Venezuela are subject to Venezuelan labour laws as set forth in the Organic Labour Law, or Labour Law, even if they are employed by a foreign corporation. In recent years, the Venezuelan government has implemented stricter labour laws and has increased worker rights. The Labour Law, its regulations and related social benefits laws impose statutory duties and taxes on companies doing business in general in Venezuela. Most of the provisions of these laws govern minimum benefits, and they regulate among other things:

• Payment of salaries, which includes minimum wages, workday duration, overtime, payment of profit-sharing, vacation and social benefit payments.

• Employment termination.

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• Work-related accidents, occupational illnesses and “organic law of work conditions”, which impose on employers the obligation of maintaining a work environment where employees are safeguarded against work-related accidents and illnesses.

• Social security law.

• Mandated employer contributions to the National Education Cooperation Institute.

• Mandatory housing policy funds.

• Unemployment.

• Collective bargaining rights of employees. In Venezuela, violation of labour, health, safety and other social benefits regulations may lead to fines, and in some cases, even criminal liability. The Government declared labour stability in October, 2000. This labour stability has been extended periodically. In March, 2006, the national executive by Decree 4,397 extended the labour stability until September, 2006. Pursuant to this decree, public and private companies are prohibited from dismissing workers without justified cause, and from modifying working conditions, unless such modification is derived from a collective bargaining agreement accepted by the workers. The dismissal prohibition does not apply to terminations of the employment relationship for justified cause. This decree is not applicable to workers with less than three months of service or earning more than VEB 633,600 monthly (US$294.70 at the official exchange rate). In April, 2006, a new Labour Law Regulation was approved by the Venezuelan National Assembly. The new labour regulations give employees increased trade union rights. These provisions are unlikely to impact significantly on the Venezuela operations, as the workforces have historically been unionized and there are established structures in place to regulate the employer/employee and company/employee relationship at an operational level. However, the government will promote additional changes in the Labour Law to improve social and labour benefits. In Venezuela, most of the labour and social benefits awarded by law are improved upon by collective bargaining agreements. Once granted these improved benefits may never be decreased. The company/union collective agreement was renegotiated in 2007. It was signed September 21, 2007, retroactive to January 1, 2007, and covers a two year period. 19.6.3 Organizational Structures and Operational Management The current organizational structure, together with operational management, is under revision.

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Table 19.3 gives the average historical total employees costed (TEC) per year or part thereof for the mine. The number of employees required will be reviewed with changes in production rates.

Table 19.3 Manpower (historical)

Mining Operations F2003 F2004 F2005 F2006 (number) (number) (number) (number) CHOCO 10 MINE 43 123 377 533

19.6.4 Recruitment, Training, Productivity Initiatives and Remuneration Policies Choco 10 has specific policies and practices in place, which address, on an integrated basis, its human resource requirements. Recruitment is principally determined by the operational requirements of the project for specific skills, by the extent of labour turnover levels and by relevant legislation. Legislation includes that 90 percent of personnel must be Venezuelan citizens. Recruitment preference targets people from the El Choco, El Callao, Guasipati and Tumeremo areas. In Venezuela, in addition to the social and labour benefits awarded by the law, the mine, under the CBA, provides other benefits for the employees. Benefits include payment of 100 percent of the premiums for health and life insurance, transport, food and other contributions to family members. 19.6.5 Training The Choco 10 operation has prepared a comprehensive training and development plan for all workers and employees as part of a program to increase the skill levels on site, with particular reference to compliance with legal requirements and to provide the capacity for individuals and teams to work safely and productively. The training and development plan addresses technical training and supervisory and managerial skills development. During fiscal 2007, the Choco 10 operation is forecast to spend approximately US$150,000 on the employee training and development plan. Specific areas of focus in the training and development programs include:

• Safe working practice training by means of programs aligned with the requirements of Venezuelan legislation, especially IPSASEL regulation, company standards and within the framework of OHSAS 18001, and COVENIN Regulation.

• Interventions aimed at improving the business awareness and teamwork of employees

particularly at the lower levels of the organization.

• Improved middle management skills through the implementation of an internal leadership program.

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• Systems to track and manage, on an integrated basis, employee development and performance.

The training and development activities relating to business awareness bring benefits that extend beyond the workplace, and can be used outside of the workplace and in other potential careers. 19.6.6 Productivity Initiatives The Choco 10 operation recognizes that labour productivity provides significant scope for improving the economic performance of the business. The commitment of the company and its workers is to improve continuously all aspects related to daily work performance, including team work, multifunctional work, and the effective application of the operation schemes. The work is to be completed in a safe and environmentally responsible manner. The company has established a policy of paying a production bonus, on a monthly basis. The production bonus is paid on the results of production, with safe work at a reasonable cost measured against the annual operational plan as approved by the management of the company. 19.6.7 Remuneration Policies PMG operates remuneration and employee benefits policies that recognize labour market conditions, collective bargaining processes, equity and Venezuelan legislation. The operation is aligned with industry remuneration levels in the jurisdictions in which it operates, and remunerates according to individual contracts and/or the collective agreement. The company completed two market salary surveys during 2006. The Choco 10 mine provides medical coverage to all employees and workers. A meal bonus is also provided. 19.6.8 Industrial Relations Industrial relations are managed on multiple levels, and in a number of formalized structures. These include the prevailing legislative requirements, regulatory bodies, labour representation, collective bargaining arrangements, sectoral and operation specific employer-employee agreements, and labour relations management philosophies and practices. The Choco 10 operation has confronted several industrial disputes, owing to the complexities associated with management of the strongly unionized workforce, which is supported by socialist government policy. The company is working on developing an improved strategy for managing industrial relations and improving relationships with the union.

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The Collective Bargaining Agreement between the labour union (SINTRA PMG, S.A.) and the company was renegotiated and signed in 2007 and covers the period from January 1, 2007 to January 1, 2009. 19.6.9 Productivity Assumptions Productivity initiatives are primarily focused on a three-pronged Operational Excellence Model. The model incorporates initiatives related to improved mine designs, mine layouts and set-ups across the whole mining process. In addition, people are paramount in driving productivity. The mine focuses on ensuring that people are adequately equipped to perform at higher productivity levels, backed up by increased motivational levels and initiatives aimed at mobilizing its people. Quality is also an important productivity driver. Mine productivity was 438 g gold or 252 t crushed per employee per month in 2006. 19.6.10 Separation Liability The total separation liability for the mine has been estimated by application of an average unit separation cost multiplied by the projected TEC at the time of closure. The estimated separation cost to be expended on closure is US$2.9 million, according to Venezuela legislation and the current collective agreement. 19.6.11 Social Development Initiatives PMG engages in a range of people-related development activities in the communities in which the mines are situated and in those labour-sending communities that may be located at some distance from the mines. At the Venezuelan operations PMG agreed with Corporación Venezolana de Guayana (CVG), in an addendum to the Choco 4 and Choco 10 lease Agreements, to include a formal obligation to contribute at least US$250,000 per year in social contributions for the development of the mining area after the commencement of commercial production. Social programs in progress include:

• Building of a small rural medical clinic located at the Choco Village. The clinic was constructed to specifications from the Institute of Public Health of the State of Bolivar.

• Construction of an aqueduct to supply the Choco Village with potable water.

• Resurfacing of a portion of the El Callao to Manteco road, from the Edelca Substation

to the mine entrance.

• Repair of the Choco Village school.

• Local vaccination programs.

• Apprenticeship and training programs.

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• Establishing local community cooperatives for the completion of company programs, including rehabilitation, construction and supply of exploration consumables.

In addition to the above, Gold Fields and the Ministry of Basic Industries and Mines have agreed to compensate a group of approximately 111 small miners who formed the Association of Miners Evicted from Coacia and claim to have been evicted from Choco 10. As a result of this agreement:

• VEB 5 million was paid to each associate.

• A ranch, Los Guaicas, will be granted to the Association for the construction of houses and to establish a Social Production Enterprise, which will be financed by the mine (aggregate amount not exceeding VEB 800 million), and formed by and comprised of associates.

• The mine will be in charge of constructing the common infrastructure of the projects

with an investment of up to VEB 7 million per house.

• Once each house is completed, each associate will receive a payment of VEB 8 million.

• The Institute of Mining Geology (INGEOMIN), dependent on the Ministry of Basic

Industries and Mines, will provide up to VEB 30 million in construction materials per associate for the construction of the houses.

This agreement with the small miners had to be renegotiated as a result of a road blockade in August, 2007. An agreement was concluded with the Pisolita small miners, and an agreement with the Coacia small miners is in the process of being completed. 19.7 HEALTH AND SAFETY 19.7.1 Introduction This section includes discussion and comment on the safety and health related aspects. Current and historical health and safety statistics are presented, with discussion on the more significant measures in progress to deal with identified risks, including risk management and safety and health measures. PMG is devoted to the absolute execution of national legislation with the aim of becoming internationally accredited in OHSAS 18001 and obtaining certification in the safe handling of sodium cyanide. As part of this commitment, PMG is implementing a safety management system.

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19.7.2 Legislation Choco 10 operates in accordance with the standard procedures, codes of safety and regulations of health and effective labour safety in Venezuela, such as Covenin Norms, LOPCYMAT and regulation of the conditions of hygiene and industrial safety. Under the Labour Law, an employer is liable to employees or their relatives, as the case may be, for work-related accidents and occupational illnesses suffered by them, unless such accidents: (i) occur due to force majeure events; (ii) derive from the intentional will of the employee; (iii) occur while an individual is performing an occasional service for the employer which is not related to the company’s business; or (iv) occur in the course of work undertaken by the employee working from his own domicile. The Labour Law provides for indemnification payments of up to two years’ salary, but not in excess of 25 times the applicable monthly minimum salary. The payment of indemnification is triggered when the accident derives from the service or is directly related to it, whether or not there is fault or negligence of the employer or the employee. Furthermore, as an employer engaged in mining activities, the mine faces potential liability arising from injuries to, or deaths of, workers, including workers employed by its contractors. The Venezuelan Organic Law of Work Conditions (the Organic Law) imposes on employers the obligation to maintain a work environment where employees are safeguarded against work-related accidents and illnesses. The Organic Law imposes certain obligations on employers which can be onerous, such as the implementation and maintenance of medical services and the creation of employer-employee committees in charge of coordinating policies related to work and safety procedures, conditions and precautions. In case of infringement, the Organic Law provides for penalties, including criminal liability where an employee’s injury results from the negligence of his or her employer or the employer’s non-compliance with legal requirements. 19.7.3 Statistics There were no fatalities in 2006 or 2007 to September, 2007. Lost time accidents averaged 19 per year in fiscal 2006 and 2007. Statistically, 30 percent of the accidents were caused by dangerous work positions, motors or revolving parts without protection and sub-standard conditions. 19.7.4 Occupational Health and Safety Management This operation strives to achieve and maintain outstanding health and safety performance through the participation of all employees and the application of safe, innovative processes and technologies, within a framework of full compliance. There are a number of actions that have been implemented in the last couple years including:

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• Development of a safety culture through inspections, audits, safety campaigns and meetings.

• Induction program for all employees and contractors to improved safety knowledge and awareness.

• Training and accreditation modules.

• Development and standardization of safety procedures.

• Routine external and internal occupational health and safety audits.

• Establishing and training of a mine site emergency rescue team.

• Certification of lifting equipment.

The Choco 10 operation has invested US$50,000 in vaccination programs throughout 2006 for all workers and communities proximal to the mine site. The program includes vaccination against yellow fever, tuberculosis, hepatitis B and tetanus. 19.7.5 Future Considerations The mine will continue to be exposed to commonplace mining hazards such as water, dust, fire, high-wall failure, explosions, materials handling as well as occupational hygiene and transportation issues. The risks associated with safety and occupational health will be effectively managed through the implementation and improvement in the following:

• OHSAS 18001.

• Full implementation of the Full Compliance Health and Safety Management System.

• Development of safe working culture.

• Specialized audits for high risk areas including cyanide handling, electrical safety and lifting certification.

• Training and improved skills of the workforce.

19.8 ENVIRONMENTAL CONSIDERATIONS 19.8.1 Introduction The following section includes discussion and comments on the environmental management aspects of the Choco 10 mine. Specifically, comments are included on the environmental legislation applicable to the mine, compliance with legislation and environmental authorizations, environmental policies and management, key liabilities and risks over the life

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of the operation and decommissioning and closure of the mine. For the purposes of this section, liability and risk are defined as follows:

• A liability can be assigned a monetary value to be included in the financial model (e.g. costs associated with new special waste storage facilities).

• A risk involves too much uncertainty to enable cost predictions to be made (e.g.

possibility that more stringent requirements will be imposed by the regulator in the future).

For the purposes of this study, the criteria used for assessment purposes are those required by relevant host-country legislation and are generally accepted practice in the mining industry. Initial environmental baseline data for the Choco 4 and 10 concessions are included in the 2003 Environmental Impact Assessment “Mining Development Project Choco 4 and Choco 10” completed by Ambioconsult. The Choco 10 project area falls within the Dry Tropical Forest bioclimatic zone of Venezuela. The weather conditions in this zone are characterized by an annual maximum rainfall pattern, occurring from May to January. Historically, this zone has received an average annual rainfall of over 1,100 mm, with an average maximum rainfall during July of approximately 160 mm and a minimum average of 38.3 mm in March. The mean monthly temperature varies only slightly between 25 °C and 27 °C throughout the year. The mine concessions in the El Callao district are entirely in a rural setting. Ambient air quality and visibility are considered good since there are only two small controlled emission points of gaseous and particulate matter in the project area. However, there are some local emissions (e.g. road dust and bush burning). The majority of the forest in the El Callao district is composed of secondary forest in various stages of development. The area has been extensively disturbed by subsistence agriculture, forestry and artisanal and commercial mining. Like the flora, the fauna has been extensively disturbed. Hunting is common in the district. This has resulted in a reduced number of larger mammals. During October, 2006 a baseline survey identified 130 different species of mammals, reptiles, fish and birds, none of which is considered rare or uncommon. The Choco 4 and 10 concessions present a hydrographical dendrite pattern with most of the superficial water intermittent. Both concessions lie inside the Yuraurí River main drainage basin. The only permanent flow of water is the Yuraurí River, which flows from west to east and contains a maximum average of 174 m3/s in August and a minimum average of 2 m3/s in February/March.

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19.8.2 Legislation This section lists the most important environmental legal requirements that affect the Choco 10 operation. The operation is working on ensuring compliance with all regulatory requirements. There is no assurance that future changes in environmental regulation, if any, will not adversely affect the Company’s operations. The most important legal instruments and permit requirements are listed in Table 19.4.

Table 19.4 Environmental Legislation

Regulation/Agency Purpose

Organic Law of the Environment Establishes inside the national policy the fundamentals to preserve, protect and improve the environment and a framework for sustainability.

Law of Biodiversity Governs all the matters related to biodiversity. Decree N° 1.257. “Norms about evaluation of activities with potential to impact the environment”. 13-03-1996

Establishes norms to evaluate activities capable of degrading the environment and also requires the registration of all companies in the MARN.

Resolution N° 056. “Norms about environmental evaluation of hydrocarbons and mining projects”. 04-07-1996

Establishes the requisites and time periods to apply and obtaining permits for mining projects.

Decree Nº 883. “Norms for classification and quality control on surface water and water discharge”. 11-10-1995

Set the limits on water discharge and the limits for classification of surface water.

Decree Nº 1.400. “Norms about regulation and control of water usage and the watersheds”. 10-07-1996

Governs water usage and establishes the requirements to apply for the water usage permits.

Decree Nº 638. “Norms about air quality and control of atmospheric emissions”. 26-04-1995

Governs and controls air emission and air quality.

Decree Nº 2.635. “Norms to control the handling of hazardous material and waste”. 22-07-1998

Controls the handling, temporary and final disposal of hazardous material and waste.

Decree Nº 2.216. “Norms for handling commercial, industrial, domestic or any kind of non-hazardous waste”. 23-04-1992

Governs the handling storage and final disposal of non-hazardous waste.

Decree Nº 1.659. “Partial rules of the water and soil woodland law about forest rehabilitation.” 05-06-1991 34.808 27/09/1991

Governs the rehabilitation and compensation from the deforestation permits.

Decree N° 3.091. “Technical Norms to control the affect associated with gold and diamond mining on the Bolivar state and Antonion Díaz county on Delta Amacuro state”

Addresses at the local level the rules to control the contamination from the gold mining industry.

A new environmental law, Ley Orgánica del Ambiente, (the Environmental Law) was published in December, 2006 (Gaceta Oficial de la Republica Bolivariana de Venezuela, No. 5.833 Extraordinario) to replace the 1976 Environmental Law. The new law provides a comprehensive framework for environmental management for sustainable development in Venezuela. Various related decrees established regulations, standards and procedures applicable to individuals and corporations. The most important of these regulations include:

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(i) regulations for activities that may provoke changes in streams, obstruction of channels and sedimentation problems; (ii) regulations for the control of toxic residues; (iii) regulations for the control and management of non-toxic solid residues; (iv) regulations for the control of gas or particle emissions; and (v) regulations for the control of liquid effluents. These technical regulations must be considered in the development of mining projects and non-compliance with the above listed regulations may result in criminal, civil and administrative liabilities. In order for mining companies to conduct exploration/exploitation activities in Venezuela, the following permits are required:

• Authorization for Occupation of Territory (Occupation Permit). This permit authorizes a company’s presence at a location, but not the undertaking of any activity. Regulations published under the Decree Law of Mines of 1999 (the Decree Law of Mines), in 2001, require that an Occupation Permit be approved before the granting of mining concessions.

• Authorization for Usage of Natural Resources for Exploration (Exploration Permit).

After the occupation permit is granted, a mining company must file an application for an exploration permit with the Ministry of the Environment. The exploration permit must include a brief description of the proposed project, measures for preventing, mitigating and correcting environmental impacts and the conditions and recommendations for the exploration phase. Exploration permits must contain, among others things, the following information: (i) the exploration program; (ii) the quantity of natural resources to be affected by the exploration phase; (iii) identification of impact to the areas to be affected by the exploration; and (iv) a mitigation and recovery plan which must contain plans for the treatment of solid toxic and non-toxic residues, recovery measures for affected ground, topography and drainage, a reforestation plan and an estimated annual cost. An Environmental Supervision Plan (Supervision Plan) must be filed as part of the Exploration Permit application. The Supervision Plan sets forth the manner in which the execution of the project will be evaluated and controlled.

• Authorization for Usage of Natural Resources for Exploitation (Exploitation Permit).

An application for an Exploitation Permit must be filed with the Ministry of the Environment prior to the commencement of exploitation activities. The Exploitation Permit must include: (i) a brief description of the proposed project; (ii) a description of plans to prevent, mitigate and correct the environmental impacts of the project; and (iii) the conditions under which the environment may be affected or impacted. A bond issued by a local bank or insurance company must be posted in order to guarantee the execution of the measures necessary for the reclamation of the area and the reduction of the impact of mining activities on the environment during the exploitation phase.

In addition, a number of other authorizations, activities and plans may be required, as indicated below:

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• Authorization for water exploitation is required for extracting ground or surface water. Permission is also required for diversion of watercourses.

• Plan for management of hazardous and non-hazardous wastes.

• Environmental Supervision Plan.

• Quarterly monitoring of water discharges and effluents. Air quality monitoring twice a year; rainy and dry season. Yearly check on atmospheric emission.

• Every major change in the original project must be communicated to the Ministry of the Environment, including significant environmental incidents. Some major changes may require an environmental assessment report for Ministry approval, for example new pits, waste dumps or tailings ponds.

• Annual report of hazardous wastes generation, handling and disposal.

• Forestry products resulting from clearing activities must be given to the state through the Ministry of the Environment regional office.

• Various building and construction permits from various regulators.

• Conformance to health and safety standards for the use and storage of cyanide.

• The Ministry of the Environment also requires quarterly environmental supervision reports for the duration of the operations.

19.8.2.1 Compliance Under Bolivar Gold, PMG submitted the first environmental study related to exploration activities in January, 2000 which was subsequently approved for the Choco 4 and 10 concessions. In September, 2003, PMG filed an environmental impact study of its mining project within the Choco 4 and 10 concessions. After technical discussions, the environmental impact study was approved and then the environmental permits for construction of mine, plant and ancillary facilities issued to PMG by the Ministry of Environment on January 21, 2004. Both the exploration and exploitation environmental permits have been renewed and granted for 2006/2007. PMG will prepare bonds of US$122,558 to guarantee implementation of the mitigation and control actions included in the initial 2003 EIA for these concessions for exploitation activities. A bond for US$126,905 has also been submitted for the exploration program on the Choco 4 and 10 concessions. The only outstanding permit is that for the installation and operation of the pipeline to the river, although this permit may no longer be necessary for the operation. Nonetheless, the permit application has been submitted and is awaiting approval from the Environmental

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Ministry. A groundwater well field has been developed and permitted. Based on the latest water balance calculations, this water will be sufficient for mill make up water when combined with additional water reclaim initiatives. The following plans and reports have been presented and approved by the Ministry of the Environment:

• Quarterly environmental supervision reports. • Plan of management of dangerous and non-dangerous wastes and exceeding materials. • Annual report of dangerous waste generation, handling and disposal (2005). • Plan for Compensatory Rehabilitation and Reforestation of Impacted Areas. • Quarterly monitoring of water discharges and effluents. • Report for atmospheric emissions (2006).

19.8.3 Environmental and Social Policy and Management The Choco 10 operation’s focus has been to ensure legal compliance in all its activities. The operation is in the process of developing an Environmental Management System (EMS) within the framework of ISO14001:2004. The management of PMG is committed to environmentally responsible and sustainable practices and to promote the conservation or enhancement of the natural and social environments in which the company operates. The Choco 10 operation has employed a dedicated Sustainable Development Manager who is responsible for coordinating and communicating with all stakeholders, including communities and the government. The Sustainable Development Manager is also involved with coordinating the community development programs such as construction of a health centre and kindergarten, and road and water supply improvements. The General Manager is ultimately responsible for environmental management at the Choco 10 mine. The Environmental Manager and the Sustainable Development Manager report directly to the General Manager. The Environmental Manager routinely meets with all department managers to review and advise on minimizing environmental impact and on permitting requirements. The Environmental Department dominantly employs cooperatives from the community to assist in rehabilitation and large environmental projects. Additional resources are planned for the environmental department to assist with continual improvement such as continual development of the Environmental Management System, a new hazardous materials storage building, and reduction of the incidence of spills. Environmental monitoring programs in and around the mine site have been implemented to ensure good practice, including:

• Superficial and Groundwater Annual Monitoring Plan. • Air Quality and Atmospheric Emissions Annual Monitoring Plan.

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The mine is working on progressive reclamation activities which include topsoil spreading on the waste dumps, and revegetation activities through transplanting and raising plants for reclamation in a plant nursery located near the water reservoir. 19.8.4 Environmental Issues The key environmental issues for the mine are discussed below, along with the associated liabilities and risk. The operation faces a number of challenges in the future to ensure full compliance and gain all the required permits. The key environmental issues to address in the future include:

• Additional environmental assessment documents must be prepared and submitted to gain approval to develop additional open pits, waste dumps, new tailings disposal facilities, water rerouting and any other significant change to the project.

• Undue delays in granting environmental permits may have a significant effect on the

Choco 10 operation. The approval time for governmental agencies to grant permits is significant. Nevertheless, rejections of well-supported permit applications are uncommon.

• Currently all process tailings generated by the mill operations are deposited into and

stored in the main tailings dam facility. All water is reclaimed from the tailings impoundment for use in plant processing. Risks associated with management of the tailings impoundment need to be kept low by ensuring dams are properly engineered, constructed, inspected and maintained regularly.

• The main CIP tanks at the plant, and the storage and preparation areas of cyanide are

surrounded by a secondary containment system, which directs all spills and run-off into a sump. A pump reintroduces these spills into the process to ensure no release into the environment.

• The disposal of waste materials from mining and mineral processing can have a

potential effect on the environment due to natural weathering processes, particularly those giving rise to the formation of acid drainage and dissolution of metals such as copper, zinc, lead, nickel and mercury, which are harmful in the environment. In September, 2006, PMG initiated a routine monitoring program as part of the Superficial and Groundwater Annual Monitoring Plan. The program includes routine sampling of groundwater located adjacent to the pits, and surface groundwater run-off proximal to the waste dump. The results show no acidity and low to undetectable concentrations of dissolved metals. Continual testing and monitoring is being carried out to gain a full understanding of the potential for ARD in the Choco 10 mine area.

• Choco 10 is developing a facility to temporarily store hazardous materials on-site.

Construction of this facility will greatly enhance the management of contaminated

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waste. The facility will be constructed according to Venezuela regulatory requirements.

19.8.5 Decommissioning and Closure Liabilities Venezuelan law requires mining operations to rehabilitate land disturbed by mining. As part of this law, the company has established a four-year plan to fulfill the Plan for Compensatory Rehabilitation and Reforestation of Impacted Areas. The law also requires the development of a closure program for the operation, and it is mandatory that an environmental audit be undertaken to determine the real scope and magnitude of the environmental impacts produced during the project life. The company has completed a preliminary closure plan with estimated costs of US$4.8 million for complete mine rehabilitation. To ensure sufficient funds are available, PMG is making a monthly provision of US$65,200 for the anticipated life of the mine. PMG has entered into an agreement with a local university (Universidad Experimental de Guayana – UNEG) to develop a detailed decommissioning and mine closure program. This study will include technical and cost details for the total rehabilitation of the expected areas of impact over the life of the mine. The study will focus on developing a continuous rehabilitation work program as areas become available. 19.9 TAXES, ROYALTIES AND LEVIES 19.9.1 Royalties Revenue derived from the Choco 10 property is subject to four royalties. These are described below, and have been accounted for in the cash flow projection used by Micon in its evaluation of the property. 19.9.1.1 MIBAM and CVG MIBAM is calculated at the rate of 3% on gross value of gold sales. CVG is calculated on a stepped basis, as shown in Table 19.5. Neither MIBAM nor CVG is assumed to be an allowable expense for tax purposes.

Table 19.5 CVG Over a Range of Gold Prices

Gold Price(US$/oz)

CVG (%)

<300 nil 350 0.60 375 1.23 400 1.70 450 2.00

>450 2.50

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19.9.1.2 TECMIN TECMIN is calculated at the rate of 1% on gold sales. It is treated as an allowable expense for tax purposes. 19.9.1.3 Cemex A royalty will become payable to Cemex once cumulative gold production from the Choco 10 property exceeds 700,000 ounces. The royalty will then be payable at the rate of $20/oz on 70% of total gold production. This royalty is considered an allowable expense for tax purposes. 19.9.2 Taxation Corporate profits are assumed to be subject to income tax at the rate of 28%. Depreciation allowances on projected capital expenditure are assumed to be claimable on a straight-line basis over the remaining mine life, commencing in the year the cost is incurred. These allowances amount to $64.0 million in total. Depreciation allowances on previous expenditures totalling $37.7 million, together with amortization of pre-production operating expenses totalling $43.5 million, are assumed claimable pro-rata with gold production over the remaining mine life. Micon considers these allowances to have been provided for appropriately in the tax computation. The capital cost of waste development relating to the VBK open pit is fully provided for in the cash flow projection in the period in which the cost is incurred. However, in the tax computation, the allowance claimed for this cost is matched to gold production from the VBK open pit. Since much of this gold production occurs in a later period, Micon considers the tax computation to be conservative (prudent) in so far as it assumes deferral of this claimable expense in the tax computation. 19.10 CAPITAL AND OPERATING COST ESTIMATES Choco 10 operates on a financial year (FY) ending June 30. Unless stated otherwise, the schedules and any reference to ‘year’ in this section refer to financial and not calendar years. 19.10.1 Capital Expenditure Forecast The life-of-mine capital expenditure forecast for Choco 10 includes $64.0 million in project capital costs, and a further $135.0 million in capital waste mining cost to develop the VBK open pit. Table 19.6 shows the timing of these expenditures.

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Table 19.6 Project Capital Costs

(US$ 000)

2008 2009 2010 2011 2012 2013 2014 2015 2016 LOM TotalProcessing 12,473 3,700 1,196 1,096 996 1,096 996 896 896 23,347Mineral resource mgmnt 100 100Mining 16,686 8,144 3,429 2,290 1,495 468 32,511Environmental 620 85 705Administration 3,711 1,026 400 450 400 400 50 6,437Commercial 183 144 144 144 144 144 903Sub-total Project Capital 33,672 12,954 5,169 3,980 3,035 2,208 1,190 896 896 64,003VBK pit development 76 6,500 7,834 16,804 23,287 29,223 34,802 16,508 135,034 Grand Total 33,672 13,030 11,670 11,814 19,839 25,495 30,413 35,698 17,405 199,037 19.10.1.1 Processing Plant Capital Processing plant capital expenditure of $23.3 million comprises the individual projects shown in Table 19.7.

Table 19.7 Processing Capital Costs (US$ 000)

2008 2009 2010 2011 2012 2013 2014 2015 2016 LOM TotalTailings Dam 1,998 896 896 896 896 896 896 896 896 9,170 Yuruari project 5,000 5,000 Project management 1,443 1,172 2,615 Various projects - total 1,224 632 100 1,956 Standby SAG mill motor 600 600 1,200 Reservoir 650 650 Carbon regeneration 507 507 SAG mill disch cyclones 250 250 Water supply 200 200 Tower lights 200 200 Containment bund walls 200 200 Cyanide distrib. system 200 200 Process water pond 200 200 Emergency generator 200 200 Sustaining capital 300 200 100 100 100 800 Total Process Capital 12,473 3,700 1,196 1,096 996 1,096 996 896 896 23,347 19.10.1.2 Mining Capital Mining fleet costs of $28.9 million and associated capital expenditure of $3.6 million comprise the total mining capital expenditure shown in Table 19.8. Appropriate provision has

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been made in the cash flow projection for the deposits needed to secure equipment supply ahead of scheduled delivery times.

Table 19.8 Mining Capital Costs

(US$ 000)

2008 2009 2010 2011 2012 2013 2014 2015 2016 LOM TotalExcavators 2,000 1,000 3,000 Trucks 6,480 3,600 1,440 11,520 Dozers 2,550 1,700 1,700 850 6,800 Graders 400 400 400 1,200 FEL 800 800 1,600 Water trucks 900 900 Drill rigs 2,200 550 550 550 3,850 Deposits/(Credit) 1,305 (1,007) 39 (90) (165) (83) - Mining Fleet Capex 13,635 7,694 3,429 2,160 1,485 468 28,870 Mine workshop 1,000 1,000 Various projects - total 502 10 512 Rosika Creek diversion 500 500 Magazine 500 500 Lighting plants 185 130 315 Fire suppression - trucks 114 114 Fire suppression - other 300 300 Fuel truck 200 200 Light vehicles 50 150 200 Total Mining Capital 16,686 8,144 3,429 2,290 1,495 468 32,511

19.10.1.3 General and Administration Capital Life-of-mine general and administration capital costs of $6.4 million include the expansion of Kukenan village at a cost of $3.5 million, replacement vehicles for $1.8 million and various minor projects for a total of $1 million. The breakdown and timing of these is shown in Table 19.9.

Table 19.9 G&A Capital Costs (US$ 000)

2008 2009 2010 2011 2012 2013 2014 2015 2016 LOM TotalExpansion Kukenan 2,500 1,000 3,500 Light vehicles 128 26 400 450 400 400 50 1,854 Admin office expansion 500 500 SAP system project 400 400 Security (CCTV, changehouse) 85 85 EH&S equipment 70 70 Communication system 28 28 Total G&A capital 3,711 1,026 400 450 400 400 50 6,437

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19.10.2 Operating Cost Estimates Cash operating cost projections for the Choco 10 operation have been prepared on a zero-based budget basis, using factors for productivity and unit input costs derived from the current operation. Micon has reviewed the assumptions underlying the estimates and the derivation of the annual cost forecasts, and finds them to be reasonable, and to have been prepared to the standard that would normally be expected of a feasibility study. Table 19.10 shows the operating costs per tonne milled over the life of the mine. Capitalized waste mining costs are deducted from operating expenses and are reflected separately in the cash flow forecast.

Table 19.10 Forecast Cash Operating Costs

(US$ 000)

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 LOM Ave.

Mining incl VBK 16,736 28,684 29,934 30,036 34,889 35,307 36,936 40,502 22,513 879 276,416 less Capital development 76 6,500 7,834 16,804 23,287 29,223 34,802 16,508 135,034 Net Mining (excl. capital) 16,736 28,608 23,433 22,202 18,085 12,019 7,713 5,700 6,005 879 141,382 Mill processing 10,607 10,904 10,704 10,676 10,649 10,669 10,650 10,652 10,648 10,786 106,946 G&A - on site 5,415 5,415 5,415 5,415 5,415 5,415 5,415 5,415 5,415 5,415 54,150 G&A - off site 4,733 4,733 4,733 4,733 4,733 4,733 4,733 4,733 4,733 4,733 47,330 Royalty MIBAM 1,970 2,114 2,206 2,375 2,454 2,549 2,743 2,915 4,978 3,117 27,421 Royalty Cemex 1,475 2,163 2,327 2,473 4,223 2,645 15,306 Refining, etc 791 849 885 953 985 1,023 1,101 1,170 1,998 1,251 11,007 Rehabilitation 4,800 4,800 Social costs, etc. 250 250 250 250 250 250 250 250 250 3,150 5,400 Total cash operating cost 40,503 52,872 47,627 46,605 44,046 38,821 34,932 33,307 38,250 36,776 413,740

Over the life-of-mine, the average operating cost per tonne milled is US$22.89, expressed in current terms. The breakdown of this amount is shown in Figure 19.5.

Figure 19.5 Breakdown of Life-of-Mine Average Operating Costs

(US$/tonne milled)

Mining, $7.82/t, 34%

Process, $5.92/t, 26%

G&A, $5.61/t, 25%

Other, $3.54/t, 15%

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19.10.3 Mining Operating Costs Mining operating cost forecasts have been developed for each principal material type, namely oxides (including alluvium), transition, and fresh (unweathered) rock. The life-of-mine average unit cost for each type is given in Table 19.11.

Table 19.11 Mining Unit Operating Costs

(US$/tonne mined)

Oxide Transition Fresh General mine operations 0.169 0.169 0.169 Maintenance workshop overhead 0.105 0.105 0.105 Drill & Blast - ore and waste 0.988 0.988 0.988 Drill & Blast - presplit 0.025 0.025 0.025 Plant hire 0.096 0.096 0.096 Loading 0.096 0.090 0.102 Hauling 0.385 0.335 0.317 Dumps & roads 0.113 0.086 0.074 Grade control 0.063 0.063 0.063 Dewatering 0.012 0.012 0.012 Rehandling 0.009 0.009 0.009 Total operating cost per tonne 2.061 1.977 1.960

The tonnages of ore and waste mined over the life-of-mine are shown in Figure 19.6. Over the life-of-mine, the waste:ore ratio averages 6.92, including the development waste from the VBK open pit.

Figure 19.6 Life-of-Mine Ore and Waste Tonnage Mined

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

F2008 F2009 F2010 F2011 F2012 F2013 F2014 F2015 F2016

Tonn

age

min

ed (0

00 t)

-

2.00

4.00

6.00

8.00

10.00

12.00

Was

te :

Ore

Waste tonnage Ore tonnage Waste:Ore ratio

135

Over the life of the mine, this results in the operating costs forecast in Table 19.12. Bulk waste mined to open up the VBK open pit is considered to be capital development, and is therefore treated separately in the cash flow forecast. For that reason, it is shown here deducted from the operating expenses of the ongoing operation.

Table 19.12 Mine Operating Costs

(US$ 000)

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017LOM Total

General mine ops 2,601 3,149 3,143 2,928 2,794 2,514 2,524 2,487 1,410 23,548 Workshop o/head 1,610 1,949 1,945 1,812 1,729 1,556 1,562 1,540 873 14,578 Drill & blast 684 11,343 13,882 15,112 19,732 21,584 21,767 21,454 12,158 137,716 Loading 1,331 1,584 1,735 1,656 1,740 1,730 1,901 1,930 1,008 14,616 Hauling 6,669 7,679 6,376 5,805 5,919 4,798 5,990 9,564 4,492 57,293 Dumps & roads 2,203 1,539 1,542 1,438 1,388 1,257 1,321 1,843 902 13,432 Grade control 1,557 1,142 656 659 845 981 971 796 1,121 8,727 Dewatering 93 178 181 229 295 300 296 168 1,741 Presplit D&B 186 357 363 457 591 601 592 336 3,482Rehandle 81 19 120 81 56 46 879 1,282 Total Mining Cost 16,736 28,684 29,934 30,036 34,889 35,307 36,936 40,502 22,513 879 276,416 less Capital Dev’t. - 76 6,500 7,834 16,804 23,287 29,223 34,802 16,508 - 135,034Net Mining Cost 16,736 28,608 23,433 22,202 18,085 12,019 7,713 5,700 6,005 879 141,382

19.10.4 Processing Operating Costs Process operating cost forecasts have been developed for the oxide and fresh material types; transition material is assigned a cost which is an average of the oxide and fresh rock unit cost. The life-of-mine average unit cost for each type is given in Table 19.13.

Table 19.13 Processing Unit Operating Costs

(US$/tonne treated)

Oxide Transition Fresh Labour 0.76 0.82 0.87 Power 0.54 0.60 0.66 Cyanide 1.14 1.12 1.10 Lime 1.22 1.09 0.96 Grinding media 0.39 0.56 0.73 Carbon 0.04 0.05 0.06 Caustic soda 0.14 0.14 0.14 Hydrochloric acid 0.07 0.07 0.07 Mill liners 0.20 0.25 0.29 Fuel 0.01 0.01 0.01 Maint. consumables 0.80 0.90 1.00 Process consumables 0.10 0.10 0.10 Other 0.05 0.05 0.06 Processing cost per tonne 5.45 5.75 6.05

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Owing to the increasing proportion of fresh material processed in the later years of operation, the average cost per tonne treated is forecast to increase over time. Figure 19.7 shows the annual tonnages of each material type processed.

Figure 19.7 Annual Tonnage Treated by Material Type

Over the life of the mine, the unit costs given in Table 19.9 result in the average operating costs shown in Table 19.14.

Table 19.14 Lif-of-Mine Process Operating Costs

(US$ 000)

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 LOM Total

Oxides 10,109 3,995 3,907 1,058 109 366 19,543

Transition 183 3,659 321 362 518 16 5,060

Fresh 315 3,250 6,475 9,257 10,540 10,152 10,650 10,652 10,648 10,404 82,343

Total Processing 10,607 10,904 10,704 10,676 10,649 10,669 10,650 10,652 10,648 10,786 106,946

The impact of the increase processing costs is off-set by a steady increase in the grade of material processed over time. Towards the end of the mine life, the grade rises higher for a short period while better material near the ultimate pit limit becomes accessible, as shown in Figure 19.8.

500

1,000

1,500

2,000

Fresh Ore (t 000) 52 537 1,070 1,530 1,742 1,678 1,760 1,761 1,760 1,720

Transition (t 000) 32 636 56 63 90 3

Oxides (t 000) 1,855 733 717 194 20 67

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

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Figure 19.8 Life-of-Mine Processing Tonnage and Grade

19.10.5 General and Administration Operating Costs The operating budget for the Choco 10 mine includes provision for on-site and off-site administration charges. Over the life of the mine, no material change is expected in the annual on-site administrative costs, which are presented in Table 19.15.

Table 19.15 On-site Administration and Indirect Costs

(US$ 000/y)

Security 939 Procurement 424 Environment 486 Laboratory 358 Sub-total Indirect 2,207 Accounting and Finance 558 Management & Planning 660 Social costs 159 ITC 474 Legal 259 Human Resources 446 General Services 530 Housing 122 Sub-total Admin 3,208 Grand total annual On-site G&A cost 5,415

Off-site corporate administration and general charges are also provided for, to the extent of $2.933 million and $1.800 million per year for in-country and off-shore charges respectively.

1,650

1,700

1,750

1,800

1,850

1,900

1,950

2,000

F2008 F2009 F2010 F2011 F2012 F2013 F2014 F2015 F2016 F2017

Tonn

age

min

ed (0

00 t)

-

1.00

2.00

3.00

4.00

5.00

6.00

7.00

Gra

de tr

eate

d (g

/t)

Ore tonnage Grade treated (g/t)

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The total off-site general and administration charges therefore amount to $4.733 million per year. 19.11 ECONOMIC ANALYSIS 19.11.1 Production Schedule The base case used for evaluation of the Choco 10 operation applies the production forecast given in Table 19.16.

Table 19.16 Life-of-Mine Production Schedule

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 LOM

Total Processed (000 t) 1,939 1,907 1,843 1,787 1,762 1,768 1,760 1,761 1,760 1,790 18,076 Grade treated (g/t) 2.06 2.28 2.49 2.80 2.95 3.05 3.30 3.51 5.99 3.68 3.19 Gold content (000 oz)

129 139 147 161 167 173 187 198 339 212 1,852

Plant recovery (%) 92.9 91.9 90.7 89.6 89.0 89.2 89.0 89.0 89.0 89.2 89.7 Recov. gold (000 oz)

119 128 134 144 149 154 166 177 302 189 1,662

19.11.2 Cash Flow Projection Table 19.17 and Figure 19.9 present the life-of-mine cash flow projection derived from the analysis of economic and production factors presented above. The base case evaluation assumes a gold price of US$550/oz throughout the operating period.

Table 19.17 Life-of-Mine Cash Flow Projection

(US$ millions) 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 LOM

Total Revenue 65.7 70.5 73.5 79.2 81.8 85.0 91.4 97.2 165.9 103.9 914.0 Mining costs 16.7 28.6 23.4 22.2 18.1 12.0 7.7 5.7 6.0 0.9 141.4 Processing costs 10.6 10.9 10.7 10.7 10.6 10.7 10.6 10.7 10.6 10.8 106.9 G&A on-site costs 5.4 5.4 5.4 5.4 5.4 5.4 5.4 5.4 5.4 5.4 54.2 G&A off-site costs 4.7 4.7 4.7 4.7 4.7 4.7 4.7 4.7 4.7 4.7 47.3 Royalties and fees 2.8 3.0 3.1 3.3 4.9 5.7 6.2 6.6 11.2 7.0 53.7 Closure, etc. 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 8.0 10.2 Capital expenditure 33.7 13.0 5.2 4.0 3.0 2.2 1.2 0.9 0.9 64.0 Cap.development - 0.1 6.5 7.8 16.8 23.3 29.2 34.8 16.5 135.0 Taxation 6.7 4.3 5.9 7.6 8.1 8.4 9.2 10.7 15.1 17.6 93.6 Free cash flow -15.2 0.3 8.4 13.2 9.8 12.2 16.9 17.4 95.1 49.5 207.6 Cumulative c/flow -15.2 -14.9 -6.5 6.7 16.5 28.7 45.6 63.0 158.1 207.6 Average Revenue US$/oz 550.0 550.0 550.0 550.0 550.0 550.0 550.0 550.0 550.0 550.0 550.0 Opcosts US$/oz 339.2 412.6 356.2 323.8 296.1 251.3 210.1 188.6 126.8 194.7 249.0 Capital US$/oz 282.0 101.7 87.3 82.1 133.4 165.0 183.0 202.1 57.7 - 119.8 Taxes US$/oz 56.2 33.2 43.8 52.7 54.4 54.6 55.4 60.7 50.1 93.3 56.3 FCF US$/oz (127.4) 2.5 62.7 91.4 66.1 79.0 101.6 98.6 315.4 262.0 124.9

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Figure19.9

Cash Flow Projection

-

20.0

40.0

60.0

80.0

100.0

120.0

140.0

160.0

180.0

F2008 F2009 F2010 F2011 F2012 F2013 F2014 F2015 F2016 F2017

Free cash flow

Capital expenditure (works)

Taxation

Closure, etc

Royalties and fees

G&A off-site costs

G&A on-site costs

Processing costs

Capex (development)

Mining costs

Revenue

A notable feature of the cash flow is the large increase in revenue and free cash flow in 2016. This is the result of high grade material exposed at the bottom of the open pit near to its completion. The occurrence of this high grade material is important as it provides a significant contribution to the net present value (NPV) of the Choco 10 operation. 19.11.3 Base Case Evaluation The base case valuation has been carried out assuming a gold price of US$550/oz gold. Table 19.17 (above) shows the projected cash operating cost at Choco 10 to be US$249/oz of gold produced over the life-of-mine. A further US$120/oz of capital expenditure is incurred, resulting in a net margin of 33% before tax. A discounted cash flow evaluation of the base case gives the NPV results summarized in Table 19.18.

Table 19.18 Net Present Value of Free Cash Flow

(US$ million)

Discount % p.a.

NPV (2007 terms)

0.0% 207.6 2.5% 167.7 5.0% 136.2 7.5% 111.1

10.0% 90.9 12.5% 74.7 15.0% 61.5

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Choco 10 is an on-going operation. As such, the capital cost of construction is a historical or sunk cost, and the calculation of an internal rate of return (IRR) is therefore not considered particularly meaningful. Nevertheless, owing to the large capital expenditures planned in 2008 and 2009, the base case cash flow is initially negative, so it is possible to calculate an IRR in this instance. The base case cash flow shows an IRR of 57%. Payback occurs in 2011 both on the undiscounted cash flow and when discounted at 10%/y. 19.11.4 Sensitivity 19.11.4.1 Price, Operating and Capital Costs Sensitivity of the NPV to variation in the gold price, operating costs and capital expenditure is shown in Figure 19.10. The NPV is shown to be most sensitive to changes in the gold price, moderately sensitive to operating cost changes and less sensitive to changes in capital expenditure. At the same time, it is shown that the project is robust across the range of variation in these inputs that can reasonably be expected over the project life.

Figure 19.10 NPV10% Sensitivity Chart

-

25

50

75

100

125

150

175

NPV

@ 1

0%/y

dis

coun

t (U

SD m

illio

n)

Opcosts 155.4 133.9 112.4 90.9 69.5 47.4 24.8

Capex 106.7 101.4 96.2 90.9 85.7 80.4 75.2

Price (20.7) 21.1 55.9 90.9 125.8 160.7 195.6

70% 80% 90% 100% 110% 120% 130%

19.11.4.2 Reserve Grade As noted above, the availability of high grade material exposed near the floor of the open pit provides a significant increase in gold output at the end of the mine life. The sensitivity of the NPV10 to the grade of ore treated during this period was tested by ‘capping’ gold output in

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2016 and 2017 at the highest level achieved in the project up to that time. The impact of this is to reduce the project NPV10 by US$23.9 million, or 26%, to US$67.0 million. Thus, it is concluded that even in the event that the predicted increase in gold output is not achieved , the project remains robust overall.

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20.0 INTERPRETATION AND CONCLUSIONS Bolivar Gold began operating the Choco 10 mine through. a Venezuelan company, PMG in August, 2005. Gold Fields assumed control in March, 2006, and continued to manage the mine through PMG.. Going forward, PMG will operate the mine under control of Rusoro. Gold-bearing ore is being mined by open pit mining with processing by a single, conventional CIP plant with a design capacity of 5,400 t/d. Choco 10 has an estimated remaining mine life of 10 years based on current ore reserves. PMG exploration in 2006 included 46,047 m diamond drilling and 15,386 m RC drilling. An additional 45,124 m of diamond drilling and 32,400 m RC drilling will be completed in 2007. The Mineral Resources set out in Table 20.1 and the Mineral Reserves set out in Table 20.2 were estimated in accordance with the SAMREC code. In Micon’s opinion, they also comply fully with the Canadian Institute of Mining, Metallurgy and Petroleum (CIM) standards on Mineral Resources and Reserves – Definitions and Guidelines, developed by the CIM standing committee on reserve definitions, as adopted by the CIM Council on December 11, 2005. Micon considers that the Measured, Indicated and Inferred resources quoted in this report are equivalent to Measured, Indicated and Inferred Mineral Resources under the CIM definitions, and that the Proved and Probable (Ore) Reserves quoted herein are equivalent to Proven and Probable Mineral Reserves, as defined by the CIM. Table 20.1 shows the current estimate of mineral resources in each area of the property, inclusive of the mineral reserve estimates given in Table 20.2.

Table 20.1 Choco 10 Unconstrained Mineral Resources as of September 30, 2007




oz Pit Material COG

(millions) (g/t) (000) (millions) (g/t) (000) (millions) (g/t) (000) (millions) (g/t) (000) Rosika Oxide 0.5 0.1 2.74 13 0.5 1.49 22 0.6 1.79 35 0.1 1.95 5 Trans 0.5 0.2 3.02 15 0.2 1.50 12 0.4 2.09 26 0.1 2.08 5 Fresh 0.5 1.6 3.21 165 11.1 2.23 796 12.7 2.35 961 5.9 2.12 400 Coacia Oxide 0.5 0.1 1.18 3 2.0 1.86 120 2.1 1.83 123 0.5 1.75 27 Trans 0.5 0.0 0.00 0 0.4 1.65 23 0.4 1.65 23 0.2 1.80 12 Fresh 0.5 0.0 0.00 0 3.9 2.29 287 3.9 2.29 287 3.1 1.71 171 Pisolita Oxide 0.5 0.3 2.25 24 2.0 1.45 95 2.4 1.57 119 1.3 1.09 45 Trans 0.5 0.2 2.31 18 0.3 1.90 18 0.5 2.09 36 0.3 1.35 14 Fresh 0.5 0.1 1.96 5 0.2 1.60 8 0.2 1.72 13 5.5 2.66 470 VBK Oxide 0.5 0.0 0.00 0 0.3 2.03 22 0.3 2.03 22 0.4 1.21 15 Trans 0.5 0.0 0.00 0 0.2 2.21 13 0.2 2.21 13 0.2 1.17 9 Fresh 0.5 0.0 0.00 0 35.1 2.67 3,017 35.1 2.67 3,017 25.3 2.26 1,844 S/Total Oxide 0.5 0.6 2.22 41 4.8 1.67 259 5.4 1.72 300 2.2 1.28 93 Trans 0.5 0.4 2.58 33 1.1 1.77 65 1.5 1.98 98 0.8 1.48 40 Fresh 0.5 1.7 3.15 170 50.3 2.54 4,107 52.0 2.56 4,277 39.8 2.26 2,885 Grand Total 2.6 2.86 243 56.3 2.45 4,432 58.9 2.47 4,675 42.9 2.19 3,017

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Table 20.2 Choco 10 Mineral Reserves as of September 30, 2007



oz Pit COG

(millions) (g/t) (000) (millions) (g/t) (000) (millions) (g/t) (000) Rosika/Coacia 0.5 1.9 3.05 185 9.4 2.80 841 11.2 2.84 1,026 Pisolita 0.5 0.4 2.59 36 0.7 2.41 52 1.1 2.48 88 VBK 0.5 0.0 0.00 0 4.9 4.42 703 4.9 4.42 703 Sub Total Pits 0.5 2.3 2.97 221 15.0 3.32 1,596 17.3 3.27 1,817 Stockpiles 0.5 0.4 1.08 14 0.0 0.00 0 0.4 1.08 14 Grand Total 2.7 2.70 234 15.0 3.32 1,596 17.7 3.22 1,830

Micon has reviewed the life-of-mine production and cost forecasts prepared by Gold Fields and is of the opinion that these have been prepared to the standard normally expected of a feasibility study. During 2007, PMG has faced operational challenges at Choco 10 concerning grade control, labour syndicates, water supply, small miner agreements, and availability of mining equipment. Nonetheless, PMG has worked to resolve these issues and the mine has resumed full production since September, 2007. In order to remedy grade control problems, a detailed mineral resource management (MRM) quality system has been implemented by PMG. As a result, improved drilling, sampling, analysis, quality control, and data verification systems, and use of a different analytical laboratory providing a faster turn-around time, are expected to improve the overall quality of grade control and on-going mine modelling and optimization. Measures are being taken to build up an inventory of spare parts on site and to improve the expediting process for moving equipment and materials into Venezuela. This will improve equipment availability and overall mine production. A collective agreement has been signed that will be valid until January, 2009. An agreement is currently being negotiated with the Coacia artisanal miners and an agreement will be negotiated with the Pisolita artisanal miners in the near future. Improvements are being made to the consultation program with both workers and the community. These measures will assist with reducing operational challenges from labour and community disputes. Water shortages in 2007 were partly a result of a natural dry period in a larger hydrologic cycle. Based on a study by Water Management Consultants, measures being taken to improve the tailings water reclaim and develop a groundwater well field should provide reliable year-round water for the process plant. Based on a gold price of US$550/oz from the start of F2008 over the life-of-mine, the mine is forecast to yield 1.662 million ounces of gold for net revenue of US$914 million. Cash operating costs are forecast to be US$249/oz. of gold produced. Capital expenditures (including replacement of the mining fleet and waste development costs in the proposed VBK

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open pit) amount to US$120/oz. After taxes of US$ 56/oz, life-of-mine free cash flow is thus US$125/oz or a total of US$208 million. Discounting this cash flow at 10%/yr, the net present value of Choco 10 is estimated to be US$91 million, in 2007 terms. A sensitivity analysis concludes that the cash flow projection is sufficiently robust to withstand adverse variance in the gold price, capital expenditure or operating costs within the range that may reasonably be expected. The overall conclusion is that the Choco 10 property hosts an economically significant remaining gold reserve and that the property warrants continued exploitation and exploration.

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21.0 RECOMMENDATIONS It is Micon’s opinion that PMG has overcome the critical operational challenges at the Choco 10 mine experienced in 2007 and is resuming the mine’s designed production rate. There is sufficient merit in the operation and deposits to continue production and continue the exploration program to expand the resource. Based on its review of the operation and available supporting material, Micon recommends that PMG continue work in the following key areas:

• It is anticipated that there will be other challenges as the mine moves from the oxide to the fresh material both in terms of mining and processing. It is recommended that PMG continues to assess operational options to optimize production.

• Continued exploration to increase reserves and help expand known reserves, in

particular to increase oxide reserves.

• Continue efforts to fill key staff positions and retain staff.

• Re-assess the requirement for contract mining and take measures to ensure there is sufficient mining equipment on site to meet production requirements in the future

• Develop a spare parts inventory and improve routes for expediting equipment and

material to Venezuela.

• Improve the current maintenance facility and maintenance practices so as to achieve higher equipment availabilities

• Assess changes to milling rates and equipment to optimize production rates and

revenue.

• Continue to develop efficiencies in the water reclaim from the tailings slurry. Explore and develop another groundwater well field water source as support in the event that the current well field or cyclone do not fulfill all water requirements as projected.

• Continue efforts to design and permit a new waste rock dump and a new tailings

disposal facility.

• Strengthen the community consultation program to improve transparency and relations and reduce the risk of time lost from labour and land agreement disputes.

• Allocate additional resources and manpower to the environmental programs to

improve environmental protection and management, including such programs as hazardous materials storage and progressive reclamation to reduce erosion.

146

22.0 REFERENCES BHP Engineering (1995). Choco 10 Gold Project Report on Ore Reserve Evaluation. Consultants report done for Promotora Minera de Venezuela S.A. pgs 94. Bloom, L. (2003). Letter report from Analytical Solutions Ltd. to Promotora Minera Guayana describing a review of the quality control procedures employed at the Choco Project, October 31, 2003. Bloom, L. (2004). Assay Quality Control for the Choco 10 Deposit Venezuela 2003-2004 Drilling Program prepared on behalf of Bolivar Gold Corp, August, 2004. Goldfarb, Richard J. and David I. Groves (2005). The Evolving Earth and Orogenic Gold. Paper No. 103-7. 2005 Salt Lake City Annual Meeting, Session 103, Geological Society of America, Abstracts with Programs, Vol. 37, No. 7, p. 239. Gold Fields Limited (2006). Competent Persons’ Report on the Mining and Exploration Assets of Promotora Minera de Guayana “PMG”, Choco 10 Gold Mine, December, 2006, pgs 172. Gold Fields Limited (2007). Summary Competent Persons’ Report (CPR) on The Mining and Exploration Assets of Choco 10 Limited, as of June 30, 2007. An Addendum to CPR of 31 December, 2006, pgs. 21. Maxwell (2006a). Gold Fields Venezuela: BGC Database Integration Report. Complied by Moses Matema. July 20, 2007, pgs 10. Maxwell (2006b). Data audit and validation of GF_Venezuela SQL Database. Principal auditor L. Jepsen, July 31, 2007, pgs 110. Micon (2002). Gold Resources of Concessions Choco 4 and 10, Estado Bolivar, Venezuela, Originally dated November 26, 2002 and revised January 23, 2003. Micon (2003). Micon International Limited – Technical Report, Gold Resources of Choco 4 and 10, Estado Bolivar, Venezuela. Consultants report for Bolivar Gold Corp. by Micon International Ltd. Author S. Barlett, October 31, 2003. Micon (2003a). Micon International Limited – Choco Gold Project, Feasibility Study. Consultants report for Promotora Minera de Guayana C.A. Mine Development Associates (2005). Updated Technical Report on the Choco Project Gold Resources and Reserves, Bolivar State, Venezuela. Prepared for Bolivar Gold Corp. Authors – S. Ristorcelli, P. Ronning, and N. Prenn, January 28, 2005, pgs 178.

147

Smee, B. (2004a). A Review of Quality Control Procedures and Core Sampling Methods Choco 10 Project, El Callao, Bolivar State, Venezuela. August, 2004, pgs 30. Smee, B. (2004b). Results of an Audit of SGS and Triad Laboratories Canada and Venezuela, Prepared for Bolivar Gold Corp. and El Callao Holdings (Gold Fields). July and August, 2004, pgs 52. Smee, B. (2004c). A Review of Quality Control Protocol and Data, Choco 10 Project, El Callao, Bolivar State, Venezuela. Consultant’s report by Smee and Associates for Bolivar Gold Corp., December, 2004. Smee, B. (2005a). A Review of Quality Control Procedures and Core Sampling Methods Choco 10 Project, El Callao, Bolivar State, Venezuela. Prepared for Bolivar Gold Corp. August, 2005, pgs 15. Smee, B. (2005b). Results of an Audit of Triad Laboratories, Venezuela, Prepared for Bolivar Gold Corp and El Callao Holdings (Gold Fields). August, 2005, pgs 37. Smee, B. (2006). A Review of Quality Control Procedures and Field Sampling Techniques, El Callao, Bolivar State, Venezuela, Prepared for Promotora Minera de Guayana (Gold Fields). July, 2006, pgs 42. SRK (2005). Project Boomerang QA/QC Report, Prepared for Gold Fields International. Compiled by J. Gilberston. June, 2005, pgs 45.

148

23.0 SIGNATURE PAGE This report titled “Technical Report on the PMG (Goldfields) Choco 10 Concession and Mine, Estado Bolivar, Venezuela”, with an effective date of November 21, 2007, was prepared for Rusoro Mining Limited by the following authors: “Jim Leader” Date: November 21, 2007 Robert J. Leader, P.Eng. Senior Mining Engineer Micon International Limited “John Perry” Date: November 21, 2007 John Perry, P. Geo. Senior Associate Geologist Micon International Limited “Chris Jacobs” Date: November 21, 2007 Christopher Jacobs, C. Eng. Senior Mineral Economist Micon International Limited “Ian Ward” Date: November 21, 2007 Ian Ward, P. Eng. Principal Metallurgist Micon International Limited “Christopher R. Lattanzi” Date: November 21, 2007 Christopher R. Lattanzi, P. Eng Senior Mining Engineer Micon International Limited

149

CERTIFICATE OF AUTHOR

As a co-author of this report entitled “Technical Report on PMG (Gold Fields) Choco 10 Concession and Mine, Estado Bolivar, Venezuela” dated November 21, 2007, I, Robert James Leader do hereby certify that: 1) I am employed by, and carried out this assignment for, Micon International Limited, Suite 205, 700

West Pender Street, Vancouver, BC, V6C 1G8, tel. (604) 647-6463, fax (604) 647-6455. 2) I hold the following academic qualifications: ACSM (First Class) Camborne School of Mines - 1974

M.Sc. (Engineering) Queens University, Kingston, Ontario - 1981 3) I am a registered Professional Engineer with the Association of Professional Engineers and

Geoscientists of British Columbia (Membership #13896), I am a member in good standing of other technical associations and societies, including:

• The Canadian Institute of Mining, Metallurgy and Petroleum

• The Institute of Materials, Minerals and Mining (IOM3), UK

4) I have worked as a mining engineer in the minerals industry for 32 years; 5) I have read National Instrument NI 43-101 and, by reason of education, experience and professional

registration; I fulfill the requirements of a Qualified Person as defined in NI 43-101. My work experience includes 3 years working as a mining engineer on a base metal underground mine, and over 15 years as a senior mining engineer and consultant carrying out reserves estimates and mine planning and design for diverse mining projects both underground and open pit;

6) In this report I am responsible for preparation of parts of section 1, sections 2, 3, 4, 5, 6, 15, parts of section 17 (including 17.4), section 18, and sections 19.1, 19.2, 19.3, 19.5, 19.6, 19.7 and 19.8, parts of sections 20 and 21, and Section 22.

7) I visited the site and reviewed the operation from August 14 to 16, 2007; 8) I have had no prior involvement with the mineral properties in question; 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 this report not misleading;

10) I am independent of the parties involved in the transaction for which this report is required, other than providing consulting services;

11) I consent to the filing of the report with any Canadian stock exchange or securities regulatory authority, and any publication by them of the report.

Dated this 21st day of November, 2007 “Robert J. Leader” Robert J. Leader, M.Sc., P.Eng.

150

CERTIFICATE OF AUTHOR

As a co-author of this report entitled “Technical Report on PMG (Gold Fields) Choco 10 Concession and Mine, Estado Bolivar, Venezuela” dated November 21, 2007, I, John H. Perry do hereby certify that: 1) I carried out this assignment for Micon International Limited, Suite 205, 700 West Pender Street,

Vancouver, BC, V6C 1G8, tel. (604) 647-6463, fax (604) 647-6455 2) I hold the following academic qualifications: B. Sc (Hons) Geology University of Exeter, UK - 1972

Post graduate studies in geology University of Calgary, Alberta – 1972-76 3) I am a registered Professional Geoscientist with the Association of Professional Engineers and

Geoscientists of British Columbia (Membership #19598); as well I am a fellow of the Royal Geological Society, London, UK.

4) I have practiced my profession for over 31 years within Canada and internationally. I have practiced as

an independent consultant since 1979 and as an Associate of Micon International during 2007. The majority of my work has been carried out on exploration and development projects.

5) I have read National Instrument NI 43-101 and, by reason of education, experience and professional

registration; I fulfill the requirements of a Qualified Person as defined in NI 43-101.

6) In this report I am responsible for preparation of parts of section 1, section 7 to 14, and parts of sections 20 and 21, and Section 22 using data summarized in the reference section of this report.

7) I visited the site and reviewed data and drill core from October 15 to 20, 2007. 8) I have had no prior involvement with the mineral properties in question. 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 this report not misleading.

10) I am independent of the parties involved in the transaction for which this report is required, other than providing consulting services.

11) I consent to the filing of the report with any Canadian stock exchange or securities regulatory authority, and any publication by them of the report.

Dated this 21st day of November, 2007 “John H. Perry” John H. Perry, P.Geo.

151

CERTIFICATE OF AUTHOR As a co-author of this report, I, Ian R. Ward do hereby certify that: 1. I am employed as the President and Principal Metallurgist by, and carried out this assignment for;

Micon International Limited, Suite 900, 390 Bay Street, Toronto, Ontario M5H 2Y2, tel (416) 362-5135 fax (416)362-5763.

2. This certificate applies to the technical report titled “Technical Report on PMG (Gold Fields) Choco 10

Concession and Mine, Estado Bolivar, Venezuela” dated November 21, 2007 3. I hold the following academic qualifications: B.Sc. (Hons) Minerals Engineering, The University of Birmingham, U.K. 1968 4. I am a registered Professional Engineer of Ontario (membership number 48869010); as well, I am a

member in good standing of the Canadian Institute of Mining, Metallurgy and Petroleum; 5. I have worked as a metallurgist in the minerals industry and in consulting engineering companies for

the last 39 years. My work experience includes processing plant operation, the management of technical and feasibility studies, management of metallurgical testwork programs and the design of numerous gold and base metal processing plants;

6. I am familiar with NI 43-101 and, by reason of education, experience and professional registration; I

fulfill the requirements of a Qualified Person as defined in NI 43-101; 7. I have visited the property which is the subject of this report in July 2002 and in October 2004; 8. I have inspected the processing plant described in this report, and have managed the 2003 feasibility

study for the Choco project and the installation of the processing facility, conducted by Micon International Limited for Promotora Minera de Guayana C.A., and I am responsible for parts of section 1, sections 16 and 19.4, and parts of sections 20 and 21of this report;

9. I am independent of the parties involved in the transaction for which this report is required, other than

providing consulting services; 10. I have had no prior involvement with the property or the issuer other than providing consulting service,

during inspections of the plant prior to its relocation to Venezuela and management of the feasibility study of the Choco project.

11. I have read NI-43-101 and I consider that this report has been prepared in compliance with the

instrument. 12. 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.

13. I consent to the filing of the report with any Canadian stock exchange or securities regulatory authority,

and any publication by them of the report. Dated this 21st day of November, 2007 “Ian R. Ward” Ian R. Ward P.Eng.

152

CERTIFICATE OF AUTHOR CHRISTOPHER A. JACOBS

As the author of portions of this report describing the Choco 10 concession and mine, Estado Bolivar, Venezuela, I, Christopher A. Jacobs, do hereby certify that: 1. I am employed by, and carried out this assignment for:

Micon International Limited Suite 900 – 390 Bay Street Toronto, ON, M5H 2Y2 tel. (416) 362-5135 fax (416) 362-5763

2. I hold the following academic qualifications:

B.Sc. (Hons) Geochemistry, University of Reading, 1980; M.B.A., Gordon Institute of Business Science, University of Pretoria, 2004.

3. I am a Chartered Engineer registered with the Engineering Council of the U.K. (registration number

369178); 4. Also, I am a professional member in good standing of: The Institute of Materials, Metals and Mining

(Member); and The Canadian Institute of Mining, Metallurgy and Petroleum (Member). 5. I have worked in the minerals industry for 27 years; 6. I do, by reason of education, experience and professional registration, fulfill the requirements of a

Qualified Person as defined in NI 43-101. My work experience includes 10 years as an exploration and mining geologist on gold, platinum, copper/nickel and chromite deposits; 10 years as a technical/operations manager in both open pit and underground mines; 3 years as strategic (mine) planning manager and the remainder as an independent consultant.

7. I have not visited the Choco 10 mine. 8. I am responsible for the preparation of certain items of the report entitled “Technical Report on the PMG

(Gold Fields) Choco 10 Concession and Mine, Estado Bolivar, Venezuela” dated November 21, 2007, comprising parts of Section 1, Sections 19.9, 19.10, and 19.11, and parts of sections 20 and 21;

9. I am independent of the parties involved in the transaction for which this report is required, as defined in

Section 1.4 of NI 43-101; 10. I have had no prior involvement with the mineral properties in question; 11. I have read NI 43-101 and the portions of this report for which I am responsible have been prepared in

compliance with the instrument; 12. 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 this report not misleading;

Dated this 21st day of November, 2007 “Christopher A. Jacobs” Christopher A. Jacobs, C.Eng MIMMM

153

CERTIFICATE OF AUTHOR As a co-author of this report entitled “Technical Report on PMG (Gold Fields) Choco 10 Concession and Mine Estado Bolivar, Venezuela” dated November 21, 2007, I, Christopher R. Lattanzi do hereby certify that: 1. I am employed by, and carried out this assignment for, Micon International Limited, Suite 900, 390 Bay

Street, Toronto, Ontario M5H 2Y2, tel. (416) 362-5135, fax (416) 362-5763, e-mail [email protected].

2. I hold the following academic qualifications: B. Eng. (Mining) University of Melbourne, Australia 1959 3. I am a registered Professional Engineer with the Association of Professional Engineers of Ontario

(membership number 25705013); as well, I am a member in good standing of The Canadian Institute of Mining, Metallurgy and Petroleum.

4. I have worked as a mining engineer in the minerals industry for 45 years. 5. I have read NI 43-101 and Form 43-101F1 and, by reason of education, experience and professional

registration, I fulfill the requirements of a Qualified Person as defined in NI 43-101. My work experience includes 10 years in the planning and supervision of mining operations in Australia, Canada and the United States and more than 30 years in consulting practice related to resource and reserve estimates and mine engineering.

6. In this report I am responsible for parts of Section 1 and for Sections 17.1, 17.2, 17.3 and parts of 17.5,

20 and 21. The review, of the block model and resource calculations, was performed by an experienced Micon mine planner, Mr Sam Shoemaker, and I have reviewed and accepted his work and hence take responsibility for its disclosure in this report.

7. This Report has been prepared in compliance with the criteria set forth in NI43-101 and Form 43-

101F1. 8. I have had no prior involvement with the properties that are the subject of this Technical Report. I have

not visited the properties. 9. I am not aware of any material fact, or change in reported information, in connection with the subject

properties, not reported or considered by me, the omission of which makes this report misleading. 10. I am independent of the parties involved in the transaction for which this report is required, other than

providing consulting services. 11. I consent to the filing of the report with any Canadian stock exchange or securities regulatory authority,

and any publication by them of the report. Dated this 21st day of November, 2007 “Christopher.R. Lattanzi”

Christopher R. Lattanzi, P. Eng.

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