Morro do Pilar Iron Ore Project

Ingo Gustav Wender Property

April 2005

1-) INTRODUCTION The offered property from Ingo Gustav Wender with approx. 16.000 HA , is close to the town of Morro do Pilar , which is located on the northward extending belt from the Quadrilátero Ferrifico province . This town is 50 km from Itabira , where the existing rail system ends . The road distance to Belo Horizonte is 150 km .( See attached map -Existing Rail System ) The first pig iron plant from Brazil was erected in Morro do Pilar in the 19th century . This belt has been prospected for gold , phosphate , cromite and iron , however iron never had a very strong activity , due to the riches from the nearby Quadrilatero Ferrifero . The property owner - Ingo Gustav Wender - is interested to sell the property . 2-) EXPLORATION HISTORY CVRD has a long history of prospecting campaigns in the region and actually has control over important iron reserves ( high grade itabirites and soft hematites ) . This reserves are located in the Serra da Serpentina ( 15 km NE from Morro do Pilar ) and also in the southern part from the city of Morro do Pilar . ( See attached resumed reserves from CVRD in the region ) RTDM ( Rio Tinto Desenvolvimentos Minerais ) also did significant exploration work on the northern part from this belt , close to the town of Serro. RTDM had an option agreement with the family Ottoni in 1999 , to explore the Ceu Aberto Property , located in the northern part of the town of Serro , distant approx. 110 km from Morro do Pilar . RTDM was targeting a potential geological resource from more than 100MT . The result from the exploration work from RTDM was , that the hematitic iron ore reserve from the property was estimated to be approx. 41 MT , what in combination with the distance to the existing rail system - 164 km to Itabira - was reason to drop the option agreement . Currently this property is for sale by the Ottoni family ( See attached RTDM Report ) . Previous exploration work from CVRD in the years of 1966-1967 on the the “Ceu Aberto Property “ defined the reserves from that property as being approx. 21 MT of compact hematite . Since the early 70`s , the properties currently hold by Ingo Gustav Wender were under control from COMIG ( Companhia Mineradora de Minas Gerais ) and various other companies . The properties were prospected for gold , phosphate , cromium and talc .

Only recently the offered property package could be assembled together , under control of only one party - Ingo Gustav Wender – offering by this way the possibility of a larger scale project . (See attached Topographic Map and Geologic Map from the Espinhaço Project - Sheet Conceição do Mato Dentro – indicating the properties from Ingo Gustav Wender and CVRD and ) 3-) REGIONAL GEOLOGY The first study about this region , published by the DNPM - Boletim 106/1957 ( Sôbre uma Ocorrência Singular de Platina e Geologia da Parte Central da Serra do Cipó ) gave first geological information about this region and targeted a platinum occurrence , associated to ultramafic intrusions ( See attached Boletim DNPM-106/1959 ). The official study Boletim Nº 129-1967 published by the DNPM in the year of 1967 - Estudos Geologicos para Pesquisas Minerais na Região Ferrifera do Nordeste de Minas Gerais , targeted the iron ore resources from the belt . ( See attached Boletim DNPM-129/1967 ). COMIG also did exploration activity in the years of 1985/1995, targeting phosphate , talc , gold and cromium , associated to the Mata Cavalos Volcanic Sequence . ( See attached maps – Projeto Morro do Pilar-COMIG) In the year of 1997 the Revista Brasileira de Geofísica presented a study about the target Bueiro – located on the Mata Cavalos Volcanic Sequence , within the properties from Ingo Gustav Wender ( See attached study from Sergio Augusto Morais & Ulisses Cyrino Penha ) . The project Serra do Espinhaço/1997 integrated all previous information and gave new insights about the regional geology . ( See attached resumed Project Serra do Espinhaço /1997 ) . The above studies , the study from CVRD at the Serra da Serpentina and the RTDM report about the Ceu Aberto property give different interpretations for the regional geology . 4-) RESERVES The reserves from the Serra da Serpentina (under control from CVRD ) , defined after a drilling campaign with 29 drills NX- (2.803 meter ) , have indicated reserve of aprox. 3.864 MT ( See attached study - Dados preliminares sobre o depósito de minério de ferro da Serra da Serpentina, Conceição do Mato Dentro / 1983 ).

This reserves also were investigated previously by the DNPM- Boletim Nº 129-1967 above mentioned . On that studies , the reserves from the Serra da Serpentina were originally estimated to be only 87 MT , showing a huge discrepancy . The reserves from CVRD , located in the southern part from the city of Morro do Pilar , had a estimated reserve of approx. 168 MT, as per publication DNPM- Boletim Nº 129-1967 . A drilling campaign from CVRD , in the years of 1976-1979 determined however a total reserve of 770 MT on that properties , showing also a huge discrepancy( See attached study from VILELA, O. V. & SANTOS, O. M. 1983 - Prospecção e geologia da jazida de minério de ferro de Morro do Pilar , MG) . The publication DNPM- Boletim Nº 129-1967 estimates the reserves on properties from Ingo Gustav Wender to approx. 117 MT . (See attached Resume of Reserves Ingo Gustav Wender ) . Field visits to the mapped ore bodies/outcrops showed that the quantity , the size and the thickness from the mapped ore bodies exceeds significant from the study . It is expected that after a detailed exploration campaign , the reserves from the property will also increase very significantly , same as the reserves from CVRD . 5-) CONCLUSION The property hold by Ingo Gustav Wender offers the unique opportunity to access a highly under explored ground , with approx. 16.000 ha . There are strong indications that the already estimated iron ore reserve of aprox. 117 MT is much underestimated and larger reserves of hematite can also be expected . The property is inserted in a high interest region , were CVRD already has huge defined iron ore reserves . Beside of iron ore , the properties also have potential for gold & platinum . Ingo Gustav Wender Rio de Janeiro , April 2005

Bibliography : BELEZKIJ, V. (1959). Sobre uma ocorrência singular de platina e geologia da parte central da Serra do Cipó.Dep. Nac. Prod. Mineral/ Div. Fom. Prod. Mineral, Bol. 106, Rio de Janeiro, 77 p. SCORZA, E. P. (1967). Descrições petrográficas (In: N. H. Zander et al., 1967, "Estudos Geológicos para Pesquisas Minerais na Região Ferrífera do Nordeste de Minas Gerais"). Dep. Nac. Prod. Mineral, Div. Fom. Prod. Mineral, Bol. 129, Rio de Janeiro, 128 p. VILELA, O. V. & SANTOS, O. M. (1983). Dados preliminares sobre o depósito de minério de ferro da Serra da Serpentina, Conceição do Mato Dentro, MG. Anais, 2o Simpósio de Geologia de Minas Gerais, Soc. Bras. Geologia, Núcleo MG, Belo Horizonte, p. 333-346. VILELA, O. V. & SANTOS, O. M. (1983). Prospecção e geologia da jazida de minério de ferro de Morro do Pilar , MG. Anais, 2o Simpósio de Geologia de Minas Gerais, Soc. Bras. Geologia, Núcleo MG, Belo Horizonte, p. 321-332. PROJETO ESPINHAÇO / 1997 -GEOLOGIA DA FOLHA CONCEIÇÃO DO MATO DENTRO, MINAS GERAIS-João Henrique Grossi Sad, Maria Antonieta Alcântara Mourão, Marcelo Lopes Vidigal Guimarães & Luiz Guilherme Knauer

Existing Rail System

FERROVIAS IMPLANTADAS NA REGIÃO SUDESTE

FCA

MRS

Vitória-Minas

Vitória

ESMG

Angra dos ReisViscondeItaboraí

Varginha

Cruzeiro

Santos

São Paulo

Arafértil

CSN

Uberlândia

Araguari

Catalão

Pirapora

Porto dePirapora

BeloHorizonte

RJSP

UBERABA

LEGENDA

C.LafaieteCaeté

Itabira

GovernadorValadares

Ouro Preto

MORRODO PILAR

List of Claims - Morro do Pilar

Claim Claim

Application Area ( HA) Place Title Holder Status 1 832.649/04 2.000,00 Fazenda Salvador Ingo Gustav Wender* Alvará Published 07/03/2005 2 832.650/04 1.780,11 Fazenda do Talco Ingo Gustav Wender* Alvará Published 07/03/2005 3 832.651/04 1.507,26 Fazenda do Tanque Ingo Gustav Wender* Alvará Published 13/04/2005 4 832.652/04 1.843,38 Fazenda Limeira Ingo Gustav Wender* Alvará Published 07/03/2005 5 833.802/04 597,23 Fazenda da Laje Ingo Gustav Wender Alvará Published 20/05/2005 6 830.414/05 1.693,50 Ingo Gustav Wender Alvará Published 11/05/2005 7 830.459/05 2.000,00 Ingo Gustav Wender Awaiting Alvará to be Published 8 830.458/05 1.936,54 Ingo Gustav Wender Alvará Published 11/05/2005 9 830.881/05 2.000,00 Ingo Gustav Wender Alvará Published 15/06/2005 10 830.990/05 2.000,00 Ingo Gustav Wender Awaiting Alvará to be Published

11 831.571/05 1.000,00 Ingo Gustav Wender Awaiting Alvará to be Published 18.246,69 * Title Transfered to Ingo Gustav Wender

Reserves Ingo Gustav Wender - Morro do Pilar Based on Study : ESTUDOS GEOLOGICOS PARA PESQUISAS MINERAIS NA REGIÃO

FERRIFERA DO NORDESTE DE MINAS GERAIS

BOLETIM DNPM129/1967

Sheet Morro do Pilar - Reserves under control from Ingo Gustav Wender

Ore Body as per Owner from Mineral Rights Surface from

Ore Body Thickness from

Ore Body Total Volume from

Ore Body Volume Under Control from Boletim 129/67) ( M2 ) ( M) ( M3) Ingo Wender ( M3 )

1 85% CVRD- 15%Ingo Wender 1.090.000,00 30 32.700.000,00 4.905.000,00 2 85% CVRD- 15%Ingo Wender 3.050.000,00 4 30.500.000,00 4.575.000,00 3 65% CVRD- 35%Ingo Wender 910.000,00 44 3.640.000,00 1.274.000,00 4 100% Ingo Wender 1.030.000,00 4 4.120.000,00 4.120.000,00 5 100% Ingo Wender 2.570.000,00 6 15.420.000,00 15.420.000,00 6 100% Ingo Wender 360.000,00 7 2.520.000,00 2.520.000,00 7 100% Ingo Wender 510.000,00 4 2.040.000,00 2.040.000,00 8 100% Ingo Wender 240.000,00 5 1.200.000,00 1.200.000,00 9 100% Ingo Wender 370.000,00 44 1.480.000,00 1.480.000,00 10 100% Ingo Wender 370.000,00 4 1.480.000,00 1.480.000,00

95.100.000 M3 39.014.000 M3 285.300.000 Ton 117.042.000 Ton Reserves Ingo Wender Based on Study Boletim 129 / 1967

Reserves CVRD - Morro do Pilar Based on Study : ESTUDOS GEOLOGICOS PARA PESQUISAS MINERAIS NA REGIÃO FERRIFERA DO NORDESTE DE MINAS GERAIS

BOLETIM DNPM129/1967

Sheet Morro do Pilar - Reserves under control from CVRD

Ore Body as per Owner from Mineral Rights Surface from

Ore Body Thickness from

Ore Body Total Volume

from Ore Body Volume Under Control

Boletim 129/67 ( M2 ) ( M) ( M3) From CVRD ( M3 )

1 85% CVRD- 15%Ingo Wender 1.090.000,00 30 32.700.000 27.795.000

2 85% CVRD- 15%Ingo Wender 3.050.000,00 4 30.500.000 25.925.000

3 65% CVRD- 35%Ingo Wender 910.000,00 44 3.640.000 2.366.000

4 100% Ingo Wender 1.030.000,00 4 0 0

5 100% Ingo Wender 2.570.000,00 6 0 0

6 100% Ingo Wender 360.000,00 7 0 0

7 100% Ingo Wender 510.000,00 4 0 0

8 100% Ingo Wender 240.000,00 5 0 0

9 100% Ingo Wender 370.000,00 44 0 0

10 100% Ingo Wender 370.000,00 4 0 0

66.840.000 M3 56.086.000 M3

285.300.000 Ton 168.258.000 Ton Reserves CVRD

Based on Study

Boletim 129/1967

Reserves CVRD - Morro do Pilar After Drilling Campaign by CVRD / Year 1976-1979 Measured Indicated Inferred Total

Reserve - Ton Reserve - Ton Reserve- Ton Reserve Ton

HD ( Hematita Dura )

HM ( Hematita Mole )

HP ( Hematita Pulvurulenta )

IM ( Itabirito Mole ) 34.000.000 76.200.000 110.200.000

IP ( Itabirito Pulvurulento ) 110.000.000 205.500.000 315.500.000

Form. Ferrifera Indiferenciada 1.000.000 2.200.000 100.000.000 103.200.000

ID ( Itabirito Duro ) 81.000.000 160.100.000 241.100.000

Total Ton 226.000.000 444.000.000 100.000.000 770.000.000 Total TonBibliography : Anais do 2º Simpósio de Geologia de Minas Gerais- 1983

Prospec. e Geol. da Jazida de Minério de Ferro de Morro do Pilar

Otoniel Vieira Vilela - André Montes Gut. Laguna - Otavio Mir. Santos

Reserves CVRD – Serra da Serpentina (Sheet - Santo Antônio do Rio Abaixo)

Reserves CVRD - Serra da Serpentina As per Study Boletim 129/1967 Total m3 29.000.000

Total Ton 87.000.000 Reserve Based on study Boletim 129/1967

Reserves CVRD - Serra da Serpentina After Drilling Campaign Year 1977 Measured Indicated Inferred Total

Reserve - Ton Reserve - Ton Reserve- Ton Reserve-Ton

HD 12.800.000 12.800.000 25.600.000

HM 800.000 800.000 1.600.000

HP 6.400.000 8.800.000 15.200.000

IM 66.900.000 99.540.000 214.650.000 381.090.000

IP 128.400.000 193.200.000 548.700.000 870.300.000

IM+IP 0 0 1.812.500.000 1.812.500.000

ID 41.820.000 66.180.000 650.010.000 758.010.000

257.120.000 381.320.000 3.225.860.000 3.864.300.000 Total Ton Bibliography : Anais do 2º Simpósio de Geologia de Minas Gerais- 1983

Dados Preleminares Sôbre o Depósito de Minério de Ferro da

Serra da Serpentina-Conceição do Mato Dentro - MG

Otoniel Vieira Vilela - Otavio Miranda Santos

Topographic Map – Sheet Conceição do Mato Dentro

Geological Map – Sheet Conceição do Mato Dentro Metaultramafic rocks - with intercalated iron formation( Mata Cavalo Volcanic Sequence )

Metadiabase and Anfibolites

Serra da Serpentina Group - Itabiritic Unit

Serra da Serpentina Group - Filites

Iron Ore Bodies

Espinhaço Group- - Sopa Brumadinho Formation - Quarzites