TECHNICAL REPORT ON THE DUKWE COPPER PROJECT AND MATSITAMA by nhs90963

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									                                                    A. C. A. Howe International Limited




                                TECHNICAL REPORT
                                      ON THE
                             DUKWE COPPER PROJECT
                                       AND
                       MATSITAMA PROSPECTING LICENCES
                                BOTSWANA, AFRICA




                                       FOR



                               AFRICAN COPPER PLC




Report No. 884

A. C. A. Howe International Limited
Toronto, Ontario, Canada

Michael Newbury, P.Eng.
Howard Coates, P.Geo
Dino Titaro, P.Geo


May 5, 2005
                                                                                             A. C. A. Howe International Limited


                                                   TABLE OF CONTENTS

SUMMARY...................................................................................................................................... i

1.0        INTRODUCTION.......................................................................................................... 1-1
   1.1.       Authorization and Terms of Reference.................................................................... 1-1
   1.2.       Qualifications of Howe and Authors ........................................................................ 1-1
   1.3.       Scope of Work and Sources of Information ............................................................ 1-2
2.0        RELIANCE ON OTHER EXPERTS .......................................................................... 2-1

3.0        PROPERTY DESCRIPTION AND LOCATION ...................................................... 3-1
   3.1.       General........................................................................................................................ 3-1
   3.2.       Dukwe Copper Deposit.............................................................................................. 3-1
   3.3.       Matsitama Prospecting Licences .............................................................................. 3-3
4.0  ACCESSIBILITY, CLIMATE, LOCAL RESOURCES, INFRASTRUCTURE AND
PHYSIOGRAPHY..................................................................................................................... 4-1

5.0        HISTORY ....................................................................................................................... 5-1

6.0        GEOLOGICAL SETTING ........................................................................................... 6-1
   6.1.       Regional Geology ....................................................................................................... 6-1
   6.2.       Geology of the Dukwe Deposit Area......................................................................... 6-4
7.0        DEPOSIT TYPES .......................................................................................................... 7-1

8.0        MINERALIZATION..................................................................................................... 8-1
   8.1.       Dukwe Copper Deposit.............................................................................................. 8-1
   8.2.       Thakadu and Makala Copper/Silver Deposits ........................................................ 8-5
9.0        EXPLORATION............................................................................................................ 9-1
   9.1.       Regional Exploration Matsitama Belt...................................................................... 9-1
   9.2.       Detailed Exploration Dukwe Deposit ..................................................................... 9-30
   9.3.       Detailed Exploration, Thakadu and Makala Deposits ......................................... 9-33
10.0       DRILLING ................................................................................................................... 10-1
   10.1.          Nature and Extent of Work ................................................................................ 10-1
   10.2.          Historic Dukwe Definition Drilling and Underground Chip Sampling.......... 10-1
   10.3.          Mortbury Surface Drilling and Underground Chip Sampling Programs...... 10-2
   10.4.          Drilling Database Used For Resource Estimates .............................................. 10-3
11.0       SAMPLING METHOD AND APPROACH ............................................................. 11-1
   11.1.          Drill Core Samples............................................................................................... 11-1
   11.2.          Percussion Drill Samples..................................................................................... 11-1
   11.3.          Underground Chip Samples................................................................................ 11-2
12.0       SAMPLE PREPARATION, ANALYSES AND SECURITY.................................. 12-1

13.0       DATA VERIFICATION ............................................................................................. 13-1
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14.0      ADJACENT PROPERTIES ....................................................................................... 14-1

15.0      MINERAL PROCESSING AND METALLURGICAL TESTING........................ 15-1
  15.1.          Dukwe Oxide Zone Metallurgical Testing......................................................... 15-1
  15.2.          Dukwe Oxide Zone Mineral Processing............................................................. 15-7
16.0      MINERAL RESOURCE AND MINERAL RESERVE ESTIMATES................... 16-1
  16.1.          Introduction.......................................................................................................... 16-1
  16.2.          Historical Resource Estimations......................................................................... 16-1
  16.3.          Dukwe Oxide Resource Estimate ....................................................................... 16-2
  16.4.          Dukwe Oxide Reserve Estimate.......................................................................... 16-3
  16.5.          Dukwe Sulphide Resources ................................................................................. 16-4
17.0   PROPOSED MINING OPERATIONS...................................................................... 17-1
  17.1.          Proposed Oxide Open Pit Mine .......................................................................... 17-1
  17.2.          Proposed SX-EW Oxide Process Plant .............................................................. 17-3
18.0   RECOVERABILITY................................................................................................... 18-1

19.0   MARKETS ................................................................................................................... 19-1

20.0   CONTRACTS .............................................................................................................. 20-1

21.0   ENVIRONMENTAL CONSIDERATIONS.............................................................. 21-1
  21.1.          Environmental Impact Assessment Report ....................................................... 21-1
  21.2.          Water Supply and Control.................................................................................. 21-2
  21.3.          Mine Closure and Reclamation for Dukwe Oxide Operation ......................... 21-4
22.0   TAXES .......................................................................................................................... 22-1

23.0      CAPITAL AND OPERATING COST ESTIMATES .............................................. 23-1
  23.1.          Capital Cost Estimate .......................................................................................... 23-1
  23.2.          Oxide Project, Construction Elements............................................................... 23-2
  23.3.          Dukwe Project Operating Costs ......................................................................... 23-5
24.0      ECONOMIC ANALYSIS ........................................................................................... 24-1
  24.1.          General.................................................................................................................. 24-1
  24.2.          Base Case Results................................................................................................. 24-2
  24.3.          Sensitivity Analysis .............................................................................................. 24-2
  24.4.          Summary of Cash flow Analysis......................................................................... 24-2
  24.5.          Upside Potential ................................................................................................... 24-3
25.0      PAYBACK.................................................................................................................... 25-1

26.0      MINE LIFE .................................................................................................................. 26-1

27.0      INTERPRETATION AND CONCLUSIONS ........................................................... 27-1
  27.1.          Messina Copper Licences .................................................................................... 27-1
  27.2.          Matsitama Prospecting Licences ........................................................................ 27-2

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28.0       RECOMMENDATIONS............................................................................................. 28-1

29.0       REFERENCES............................................................................................................. 29-1


                                                           LIST OF TABLES
Table 3-1: Dukwe Copper Project and Matsitama Prospecting Licences, List of Mineral
Rights .......................................................................................................................................... 3-1

Table 5-1: Summary of Past Drilling at the Dukwe Copper Deposit.................................... 5-4

Table 7-1: SEDEX (Mt. Isa) Target Model for Matsitama Belt ............................................ 7-2

Table 8-1: Physical Dimensions of the Dukwe Deposits ......................................................... 8-3

Table 8-2: Physical Dimensions of the Thakadu and Makala Deposits*.............................. 8-7

Table 9-1: Geophysical Characterization of Matsitama Mineralization Types................... 9-5

Table 9-2: Characteristics of Mineralization, Matsitama Belt ............................................ 9-21

Table 9-3: Prioritized Exploration Targets by GIS Modeling............................................. 9-22

Table 9-4: Revised Mineralization Model, Thakadu-Makala Area .................................... 9-24

Table 9-5: Selected Drill Hole Results, Mutsuku Area......................................................... 9-25

Table 9-6: Revised Mineralization Model, Nakalakwana Area........................................... 9-27

Table 9-7: Historic Dukwe Sulphide Resources, Falconbridge 1983, (1% Cu/3m) ........... 9-31

Table 9-8: Historic Dukwe Sulphide Resources, Falconbridge 1983, (1.5% Cu/2m) ........ 9-32

Table 9-10: Dukwe Global Resource Estimation, MPH-Bottrill 1997 (no cut-off)............ 9-32

Table 9-9: Thakadu & Makala Copper Deposits, Historic Grade/Tonnage Estimations. 9-35

Table 10-1: Drilling Database Summary ............................................................................... 10-3

Table 13-1: Check Assays on Pulp Samples, Minvest-Anglovaal-Rio Tinto Labs............. 13-3

Table 15-1: Dukwe Oxide Zone Diagnostic Leach Test Results .......................................... 15-3

Table 15-2: Lakefield Column Leach Test General Descriptions ...................................... 15-3

Table 15-3: Dukwe Oxide Zone Phase 2a Column Leach Test Results .............................. 15-3

Table 15-4: Lakefield Lock Cycle Test Results..................................................................... 15-4

Table 15-5: Dukwe Oxide Zone Testwork and Design Values ............................................ 15-5
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Table 15-5: Estimated Acid Consumption............................................................................. 15-6

Table 16-1: Historical Resource Estimates, Dukwe and Thakadu-Makala ....................... 16-2

Table 16-1 Dukwe Indicated Leachable Copper Mineral Resources.................................. 16-3

Table 16-2: Oxide Reserve Estimate (After SNC-Lavalin, 2002) ........................................ 16-4

Table 16-3: All Dukwe Sulphide Resources at Various Cut-off Grades............................. 16-5

Table 17-1: Open Pit Parameters (after SNC 2002) ............................................................. 17-2

Table 23-1 Capital Cost Estimate.......................................................................................... 23-1

Table 23-3: Oxide Manpower Requirements ........................................................................ 23-5

Table 23-5: Dukwe Open Pit Operating Cost Estimate ....................................................... 23-6

Table 23-8: G & A Cost – Summary ..................................................................................... 23-8

Table 24-1: Model Parameters ............................................................................................... 24-1

Table 24-2: Dukwe Copper Base Case Cash Flow Model .................................................... 24-2

Table 28-1: Proposed Budget Dukwe Oxide Copper Project, May-December, 2005........ 28-1

Table 28-2: Proposed Budget Dukwe Sulphide Zone, May-December, 2005..................... 28-2

Table 29-3: Phase I Budget, Dukwe-Matsitama Regional Exploration .............................. 28-3

Table 29-4: Phase II Budget, Dukwe-Matsitama Regional Exploration ............................ 28-3

Table 29-3 Budget Summary (3 Years)................................................................................. 28-4

                                                    LIST OF FIGURES
Figure 3-1: Property Map ......................................................................................................... 3-2

Figure 4-1: Regional Location Map ......................................................................................... 4-1

Figure 4-2: Property Outline .................................................................................................... 4-2

Figure 5-1: Early 20th Century Underground Workings, Bushman Mine .......................... 5-2

Figure 6-1: Regional Geology ................................................................................................... 6-1

Figure 6-2: Property Geology ................................................................................................... 6-3

Figure 6-1: Dukwe Surface Geology ........................................................................................ 6-4

Figure 8-1: Dukwe Typical Cross Section, 2100N................................................................... 8-1
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Figure 8-2: Dukwe Typical Cross Section, 2952N................................................................... 8-2

Figure 8-3: Thakadu and Makala Copper Deposits, Surface Geological Map .................... 8-6

Figure 9-1: Matsitama, Magnetic Analytical Signal, Filtered for Dykes.............................. 9-8

Figure 9-2: Matsitama, Electromagnetic Conductors ............................................................ 9-9

Figure 9-3: Matsitama, Radiometric Potassium Plot ........................................................... 9-10

Figure 9-4: Matsitama, Soil Geochemistry, Cu Anomaly Map ........................................... 9-14

Figure 9-5: Matsitama, Soil Geochemistry, Zinc Distribution Map ................................... 9-16

Figure 9-6: Matsitama, Soil Geochemistry, Peak Residuals of Zn and Cu. ....................... 9-17

Figure 9-7: Hyperspectral Survey, Short Wave Infrared 2 ................................................. 9-19

Figure 13-1: Check Assays Scatter Plot, Minvest – Anglovaal, Total Copper................... 13-2

Figure 13-2: Check Assays Scatter Plot, Minvest – Anglovaal, Acid Soluable Copper .... 13-2

Figure 15-1: Dukwe Oxide Zone Process Flow Sheet ........................................................... 15-7

Figure 17-1: Dukwe Ultimate Pit Design ............................................................................... 17-1

Figure 17-2: Dukwe Heap Leach / SX-EW Process Plant Diagram.................................... 17-3




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                                         SUMMARY
Introduction
A. C. A. Howe International Limited (“Howe”) has been retained by African Copper PLC
(“African Copper or the Company”) to complete an Independent Technical Report (“Report”) on
the Dukwe Copper Project and Matsitama Prospecting Licences located in Botswana. This
Report complies with National Instrument 43-101 and Form 43-101F guidelines and was
prepared in conformity with generally accepted Canadian mining industry practice. The report
assesses the technical and economic potential of the project areas and recommends a follow up
program. Howe understands that this Report will be used by African Copper for a TSX listing
application.
In preparing this Report, Howe reviewed geological reports and maps, miscellaneous technical
papers, company letters, memoranda and other public and private information as listed in the
“Reference” section of this report. In addition, Howe completed a site visit and interviews with
key personnel as well as drawing on its own experience in copper projects and previous work in
Botswana.
Property and Agreements
African Copper has mineral rights that include one Retention Licence together with five
Prospecting Licences and one pending Prospecting Licence application, covering an unsurveyed
area of some 4,306.0 km2. Mineral rights are 100% owned by African Copper through its wholly
owned subsidiaries Mortbury Limited (“Mortbury”), a British Virgin Island corporation, and
Messina Copper (Botswana) (Pty) Limited (“Messina Copper”) and Matsitama Minerals
(Botswana) (Pty) Limited (“Matsitama Minerals”), both Republic of Botswana companies. The
licences are 100% owned by Messina Copper and Matsitama Minerals free and clear of
encumbrances such as underlying payments or royalties to previous owners. The licences are
subject to annual fees and work expenditures.
Location and Accessibility
The Dukwe and Matsitama properties are located in northeastern Botswana to the west and
northwest of the City of Francistown. The property is located, in flat, semi-desert, scrub-bush
country accessed by paved roads. The Dukwe deposit is fifteen kilometres from the paved
Francistown-Maun highway, and the adjacent parallel railway and 132 kV power line. Access to
the site will be along a new 12.5 km long road to be constructed from the main Francistown
highway.
History
Ancient production of copper from cupriferous ores in the Matsitama area is known to have
taken place between the 12th and 15th Centuries AD. The largest ancient mining operations were
at the Bushman Mine (now the Dukwe deposit) and at Thakadu, with approximately forty-five
smaller operations throughout the Matsitama Belt. Early 20th Century exploration work in the
Matsitama area dates back to the early 1900’s and resulted in the development of the Bushman
Mine (Dukwe deposit) of the Bechuanaland Copper Co. Ltd. Exploration and development of
the Dukwe site occurred in the period from 1908 to 1913, followed by production on a sporadic
basis from 1913 to 1918.
Modern-day exploration programs were implemented from the 1950’s to the present. The
Bechuanaland Geological Survey conducted geological mapping, geophysical surveying and


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several drill holes on the Dukwe property in 1953. This was followed by a first major period of
exploration by Bamangwato Concessions Limited (“BCL”), a subsidiary of Rhodesian Selection
Trust. This work occurred in the periods from 1959 to 1963 and from 1972 to 1974 and included
limited diamond drilling and substantial percussion drilling leading to the re-discovery of the
original Dukwe oxide resource. Modern exploration/development work in the remainder of the
Matsitama Belt was also initiated by BCL, 1960-1976.
BCL’s mineral rights in the area lapsed at the end of 1976 and by mid 1977 Falconbridge
Explorations (Botswana) Limited (“Falconbridge”) acquired substantial mineral holdings.
Falconbridge undertook a major exploration programs on the Dukwe and Thakadu-Makala
properties, between 1979 and 1982.
Messina Investments Limited (“Minvest”) through its Botswana subsidiary Messina Copper
acquired the Dukwe property in 1992. Mortbury, through its purchase of Messina Copper,
acquired the property in 1996. African Copper subsidiaries Mortbury, Messina Copper and
Matsitama Minerals began acquiring prospecting licences and commenced exploration in the rest
of the Matsitama Belt in 1995. In 1998, Mortbury signed a joint agreement with Anglo
American Prospecting Services (Proprietary) Limited (“Anglo”) regarding the future exploration
and development of the Matsitama Project. Following expenditures of over US$3.5 million,
Anglo returned the property in the middle of 2000.
In April 2002, SNC-Lavalin Engineers and Constructors Inc. (“SNC-Lavalin”) completed a
feasibility study report for Mortbury on the Dukwe Copper Project. This report analysed the
technical and economic viability of a conventional open pit and SX/EW copper processing plant
for the Oxide Copper Zone at Dukwe. Subsequent to that report, additional technical
information through an additional study by MDM-Ferroman (Pty) Ltd. (“MDM) of South Africa
in July 2004 and changes in economics have resulted in an economically viable project.
In April 2004, African Copper subsidiary Matsitama Minerals acquired a prospecting licence
covering the Thakadu and Makala deposits. As a result of this it now owns exclusive rights to
the entire Matsitama Belt, including the two main copper areas, Dukwe and Thakadu/Makala.
Geology and Mineral Deposits
On a continental scale the Matsitama Supergroup lies within a PaleoProterozoic terrain or
complex, which forms part of the southern African Shield. The Supergroup has been
metamorphosed and deformed, in an orogenic event, which structurally placed the sedimentary
and volcanic sequence over the older granite-gneiss terrain along a series of thrust and nappe
surfaces. Subsequent to this deformation, major linear structural features were developed along
the western side of the Matsitama Belt. The most extensive and prominent structure of these is
the Bushman lineament. The Dukwe deposit is directly associated with this lineament. Other
mineralized zones are located in a similar sedimentary belt approximately 25 km to the south.
The known mineral deposits in the Matsitama Belt are Archaean to Proterozoic metasediment-
hosted strataform Cu-Zn-Pb-Ag sulphide deposits.
Dukwe Geology and Mineralization
The Dukwe deposit lies within a near-vertically dipping, thin, linearly extensive belt of the early
Proterozoic Matsitama Supergroup metasedimentary rocks. They are enclosed by sheared
granite-gneisses and granites of the Mosetse Complex within the broader structural domain of


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the Bushman lineament. The metasedimentary rocks and the enclosing granite-gneisses have
been flattened, elongated and attenuated within the Bushman lineament shear zone.
The primary sulphide consists of chalcopyrite mineralization within a complex assemblage of
breccias and carbonaceous calcareous sediments developed within a limestone horizon of the
Matsitama Group sediments. The near surface parts of this zone have been enriched in a
supergene blanket, while the parts closest to surface have been oxidized with the development of
copper-carbonates and copper-oxide minerals.
Copper oxide mineralization extends from surface to a depth of approximately 70 m. The
supergene chalcocite mineralization is progressively oxidized towards surface with the
development of the copper-carbonates, such as malachite and rarer azurite; copper-silicates, such
as chrysocolla; together with very minor native copper and copper oxides, such as cuprite.
Chalcocite supergene copper mineralization is developed over depths ranging from 0 m up to
150 m below surface. Chalcopyrite-bearing hypo gene mineralization lies below the oxide
copper mineralization. Above the hypo gene mineralization, chalcopyrite is replaced by
chalcocite, starting with chalcocite rims visible on chalcopyrite grains.
Thakadu and Makala Geology and Mineralization
The Thakadu and Makala deposits are sediment-hosted essentially strataform disseminated
sulphide zones in a poly-deformed and metamorphosed sequence of volcanic, volcaniclastic and
clastic sedimentary units. The primary sulphide minerals are chalcopyrite (85-90%) and bornite
(10-15%) with minor pyrite adjacent to the copper bearing material. The upper approximately
50 metres of the deposits are characterized by secondary zones of oxidation wherein the primary
sulphides are replaced by chalcocite, malachite and cuprite-tenorite together with traces of native
copper and marcasite.
The primary ore-forming minerals at Thakadu are chalcopyrite (90%) and bornite (10%), both as
fine to medium grained disseminations throughout the host rocks. Minor pyrite occurs adjacent
to the copper-bearing zone, but only rarely inside it. A mineralogical zonation is apparent with a
chalcopyrite-bornite assemblage in the center, ranging outward to chalcopyrite, and then pyrite
on the outside margins. Chalcocite and covellite are present in trace quantities. The oxide zone
at Thakadu consists of chalcocite, malachite, cuprite-tenorite, chrysocolla and traces of native
copper and marcasite. The Makala deposit exhibits the same general characteristics as Thakadu
in terms of host rock lithologies, primary sulphide mineralogy and sulphide mineral zonation.

General Exploration Activities Outside of Proposed Mine Area
Regional Exploration Matsitama Belt
Modern exploration was started by BCL in 1960. The original work was in the Dukwe Copper
deposit area and the associated linear zone or shear. As the exploration moved southward good
potential for copper mineralization in the Matsitama area became apparent. Soil geochemistry
and related work revealed anomalous copper values and numerous ancient workings, some of
which exposed copper oxides in quartzite and limestones.
Two phases of exploration program were conducted by BCL in the Matsitama Belt and environs
namely: Phase 1 (1960 – 1966) carried out BCL; and Phase 2 (1972 – 1976) by BCL in joint
venture with Anglo American Corporation.



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Phase 1 exploration work included an airborne geophysical survey, a regional soil geochemical
survey and geological mapping/prospecting, followed by limited ground geophysics, trenching,
pitting, percussion and diamond drilling. The Phase 2 work began by re-analyzing the soil
samples for copper and selected samples for lead, zinc and nickel using atomic absorption
spectrometry, a much more reliable and precise analytical method. Additional ground
geophysics, geological mapping and drilling were done during this stage.
The BCL work, in particular the mapping/prospecting and soil geochemistry, drew attention to
mineral occurrences within three general areas:Thakadu-Makala-Dihudi-Mutsuku (copper-zinc);
Tholo-Lepashe-Tau (copper); and Nakalakwana area (copper).
Falconbridge held mineral rights in the Matsitama Belt outside of the Dukwe area between 1977
and 1988 focusing their exploration efforts on an area that included the Thakadu-Makala and
Dihudi deposits.

African Copper subsidiaries began exploration in the Matsitama Belt in 1995. In 1995–96
Mortbury completed an airborne geophysical (Questem) survey. Historical data compilations
were also undertaken to identify possible exploration targets in the geology and past geochemical
programs. The studies identified 147 separate, large and locally, high-grade geochemical
anomalies. Exploration records showed that of these 147 anomalies, only 16 had ever been
drilled by either percussion or diamond core drilling and that in every case, geochemically
anomalous copper assays or copper mineralization was intersected.

In 1998, Mortbury signed an agreement with Anglo regarding the exploration and development
of the Matsitama Project. Following expenditures of over US$3.5 million, Anglo returned the
property in the middle of 2000.

Anglo initially completed a major digital compilation of the historical records, including GIS
target-modeling. They then flew two airborne surveys over the entire licence area, a proprietary
128-band, four spectrometer hyperspectral surveys and a combined magnetic, electromagnetic
and radiometric Spectrem survey. The work on the historical targets largely confirmed or
extended the previously known anomalies, whereas only a few of the holes on geophysical
targets intersected any mineralization. Anglo completed 8,900 metres of reverse circulation
drilling in 94 holes and 2,345 metres of diamond drilling in 15 holes

The work by Mortbury as confirmed by Anglo has resulted in a substantially revised
stratigraphic and structural framework for the belt and confirmed the existence and scope of at
least three large mineralized targets measured in tens of kilometres of strike extent as well as the
numerous smaller anomalies. From preliminary compilation of the data at hand three high
potential areas, Tholo-Lepashe-Tau, Thakadu-Makala-Dihudi-Musk and Nakalakwana, are
attractive targets for further exploration.

Detailed Exploration Dukwe Sulphide Zone
The primary sulphide mineralization underlying the oxide copper zone is a potential major
source of copper metal that could complement or continue the proposed Oxide Copper mining
operation described later.



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Much of the drilling data for the Dukwe deposit was acquired by previous holders of mineral
rights in the area. Drilling campaigns include core and percussion drilling by BCL from 1959-63
(BCL, 1963) and from 1972-74 (BCL, 1974). Additional core and percussion drilling was
completed by Falconbridge between 1978-89. African Copper acquired the Property in 1996 and
completed drilling programs in 1996 and 2001.

Prehistoric mining operations which may have removed between 50,000 and 100,000 tonnes of
copper ore are known at Dukwe. Early 20th Century exploration work at Dukwe dates back to
the early 1900’s and resulted in the development of the Bushman Mine (Dukwe Copper
Deposit), which was in sporadic production from 1913 to 1918. The historic workings were
reopened examined, mapped and sampled three times in the latter half of the 20th Century. All of
the workings are confined to the oxide and supergene zones.

The only known metallurgical test work conducted on the Dukwe sulphide zone was done by
Falconbridge. Material from one drill hole was subjected to bench-scale tests. Mineralogically
the test sample contained only two sulphide minerals; chalcopyrite and minor pyrite. Small scale
bench tests by Falconbridge showed that a coarse fraction can be gravity concentrated to yield a
graphite free 27-28% Cu concentrate. The finer fraction can produce a flotation concentrate
grading 25-27% copper but containing up to 8% graphite.

Grade/tonnage estimations were made for the primary sulphide portions of the Dukwe deposits
in connection with prefeasibility studies undertaken by Falconbridge in the early to mid 1980’s
and by MPH Consulting Limited/Bottrill Geological Services (“MPH-Bottrill”) for Mortbury in
1997.

A pre-feasibility study was completed on the Mapanipani North area of the Dukwe deposit by
Falconbridge in July 1982. The study was updated several times after the initial work as new
information, concepts or infrastructure improvements were incorporated into the economic
model. Since over 15 years have passed since the most recent of these studies was completed
many aspects of the studies are no longer relevant to the current situation.

The sulphide zone at Dukwe is indicated to be a potentially huge copper resource that has not
been systematically evaluated as a potential mining operation since the late 1980’s. Since then
the infrastructural situation and copper price outlook have changed substantially in a positive
manner. The proposed oxide copper mining operation at Dukwe should further improve the
general infrastructure situation for the potential underground sulphide copper mining operation.

Detailed Exploration Thakadu-Makala Deposits
Two major extended work programs have been conducted on the Thakadu and Makala deposits;
the first by BCL between 1962 and 1976 and the second by Falconbridge from 1977 to 1982.
African Copper has only very recently acquired the mineral rights to these deposits and has not
yet completed any of its own investigations.

The drilling campaigns at Thakadu and Makala were conducted exclusively by BCL during the
period 1962-1976. A total of 156 boreholes with a combined length of about 39,000 metres were
completed from surface, including both diamond and percussion drill holes. Another 882 metres



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of underground diamond drilling was completed on the two deposits. The maximum depth to
which the mineralization has been tested is approximately 550 vertical metres.

Falconbridge acquired the deposits in June 1977 and subsequently the BCL drill core, records,
and analytical results were re-examined. After a series of verification exercises, including 524
check assay determinations for both copper and silver, Falconbridge concluded that the drilling
information was accurate and sufficient for grade/tonnage estimations and potential mine
planning exercises.

BCL sunk shallow prospect shafts to approximately 70 metres below surface on each of the
deposits and carried out geological investigations, channel sampling for grade distribution,
sampling for process test work, and underground diamond drilling. Between 1977 and 1979 the
Thakadu prospect shaft was rehabilitated, dewatered, remapped and resampled by Falconbridge.
Also a bulk sample of 180 tonnes of sulphide material was taken for pilot plant test work.

Extensive metallurgical test work has been conducted on both the oxide and primary or sulphide
portions of the deposits. Both BCL and Falconbridge have undertaken a variety of tests that
have shown that copper and silver, can be readily recovered as saleable products, using proven
conventional technology.

BCL completed in-house grade and tonnage estimations in 1968 and 1976, and in 1968 also
retained engineering consulting firm Behre Dolbear to do an independent calculation.
Falconbridge completed a similar grade tonnage estimate using the BCL database in March
1977.

Four prefeasibility studies were completed on the Thakadu and Makala deposits by or for
Falconbridge between 1980 and 1993. Since over a decade has passed since the most recent of
these studies was completed many aspects of the studies are no longer relevant to the current
situation.

It is known that both deposits are open at depth and to a limited degree along strike. The deepest
drill holes, to a vertical depth of about 550 metres, were still well mineralized, so the down dip
potential is significant.

Detailed Exploration Dukwe Oxide Zone
African Copper’s predecessor and subsidiary companies acquired the Property in 1996 and since
then has done extensive exploration including drilling to confirm previous results and increase
confidence levels for the preparation of a feasibility study that was completed in April 2002 and
updated in 2004.

In 1960 to 1964 BCL, carried out, geological mapping and trenching, as well as the drilling of six holes
totalling 1,462 metres (B5-B10) in 1962 and 1963. The underground workings in the Bushman and
Mopanipani areas were mapped and sampled. In 1972-74 BCL returned to Dukwe and continued with
general exploration work, as well as extensive drilling. The drilling program involved investigation
of both geochemical and geophysical anomalies with five diamond drill holes for 717.5 metres (B11-B15),
Halco drilling (61 holes, 14,021 ft.) and wagon drilling(404 holes, 8,725 samples).



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In 1978-89 Falconbridge followed with an extensive program of compilation of previous work,
underground mapping and sampling, geophysics and geochemistry.

In 1996 African Copper completed a program of exploration on the Dukwe deposit consisting of core
drilling of 26 holes totalling 5,086 metres; reverse circulation (RC) drilling of 14 holes totalling
1,758 metres along with 641 metres of percussion drilling to pre-collar seven diamond drill
holes; and rehabilitation of the Bushman No. 2 Shaft for access to -60 metre and -30 metre levels in order
to make a visual examination of the mineralization.

The objectives of the drilling were to test the mineralization at shallower levels than for most of
the historical work, primarily in order to evaluate the oxide potential, and to in-fill the existing drill
pattern.

In 2001, as part of the SNC Feasibility Study work, Mortbury drilled seven diamond drill holes
for metallurgical test work, two geotechnical holes in the footwall and hanging wall, four overburden
drill holes to investigate the Karroo thickness, and one care and custody hole which also served as a
geotechnical hole. A number of shallow test pits and two shallow geotechnical holes were also
completed during this period.

Data Verification Dukwe Oxide Zone
The data verification procedures by African Copper and their independent consultants include
the confirmation of existence of work sites such as survey grids, property boundaries, drill holes
and underground workings as well as procedures to test the reliability of the historic database, in
particular the copper analytical results. The laboratories utilized by Mortbury employed the
usual in-laboratory blanks, standards and duplicate analyses to ensure precision and accuracy of
results. While there is no documentation available for the earlier Falconbridge and BCL results
it is likely that similar procedures would have been adhered to. In Howe's opinion the laboratory
assaying has been done to industry standard.

Metallurgical Studies and Process Test Work Dukwe Oxide Zone
The oxide zone mineralized material from the Dukwe deposit has been subjected to a number of
metallurgical studies. A diamond drilling program was initiated and supervised by Mortbury to
generate metallurgical samples for analysis and column testing. Representative samples from
each ore source were analyzed to establish their copper contents and subjected to diagnostic
leach tests in order to provide an indication of the different mineralogical ore types in terms of
their copper mineralogy.
Mineralogy was conducted by Lakefield South Africa (“Lakefield”) and determined that quartz
is the predominant gangue mineral (>50% of the ore). Calcite is expected to be the main gangue
acid consuming mineral in Dukwe ore, occurring mostly in the form of hydrothermal veins. The
relative proportion of calcite was estimated to vary from 5 to 20% for oxide and supergene type
ores.
An extensive series of leach tests including bottle roll and column leach tests were conducted on
the composite samples and design values for the processing were chosen. The main results are
summarized in the following table.


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                                                        Gross Acid      Copper
                        Design Values                   Cons. kg/t     Dissolution
                        Metallurgical Composite            74.5          82.3%
                        Oxide Composite                    74.5          82.3%
                        Supergene Composite                68.4          85.0%
                        Upper Trans. Composite            140.3          76.8%

The test work program showed that high leach efficiencies can be achieved from almost all
samples. Based on the metallurgical testing an optimum flow sheet was designed for the Dukwe
deposit oxide zone.
Dukwe Oxide Zone Mineral Resource and Mineral Reserve Estimates
Roscoe Postle Associates Inc. reported on Resources and Reserves as part of the SNC Lavalin
Feasibility study. The resource has been classified into measured, indicated and inferred
categories according to Canadian Institute of Mining, Metallurgy and Petroleum (CIM) and NI-
43-101Standards.
                       Dukwe Leachable Copper Indicated Mineral Resources
 Indicated Resources                BUSHMAN              MAPANIPANI                   MAPANIPANI NORTH
                        (000’s t)     % Cu  Metal (t)    T      %Cu       Metal (t)   T     % Cu   Metal (t)
 Oxide                  865           1.34  11,631       854    1.15      9,825       585   1.27   7,458
 Supergene              1,455         1.74  25,318       902    1.59      14,302      856   1.47   12,621
 Transition             1,476         1.80  26,523       928    1.21      11,198      326   1.58   5,152
 Total Resources        3,796         1.67  63,472       2,684  1.32      35,325      1,768 1.43   25,231
(Source: RPA, 2002)

The total Indicated Resource for the Bushman, Mapanipani and Mapanipani North zones
including oxide, supergene and transition material is 6,549,000 tonnes averaging 1.76% copper
or 115,176 tonnes of contained copper metal.
The Mineral Reserve Estimate is as follows:
                         Oxide Reserve Estimate (After SNC-Lavalin, 2002)
                                     Tonnes             Grade % Cu        Contained Metal (t)
     Oxide Ore                          2,042,100             1.51                 30,631
     Supergene Ore                      2.147,860             1.81                 38,876
     Transition Ore                      911,610              2.69                 24,522
     Total Ore                          5,101,570             1.85                 94,029
     Waste                              57,068,200

The SNC-Lavalin 2002 feasibility study cash flow model indicated negative profitability for
Dukwe, given the input parameters used at the time. Thus the potential ‘run of mine’ (“ROM”)
grade-tonnage estimate, obtained after mine dilution and extraction factors, etc. were taken into
account, was not categorized as Reserves sensu stricto by SNC-Lavalin. The more recent
economic evaluations using the MDM 2004 input parameters and Howe’s own models indicate
profitability. On this basis Howe believes that the ROM grade-tonnage estimation can be
reasonably classified as Probable Reserves.




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Proposed Mining and Processing Operations Dukwe Oxide Zone
The total to be mined is 5.1 million tonnes with an average grade of 1.51% Cu. Incorporation of
changing economics and technical changes demonstrates that the Project is technically feasible
and economically viable.
Proposed Open Pit Mine
The Dukwe pit design was derived from an optimized pit shell that was created using Whittle 4X
(single element) software. A number of optimizations were completed followed by a series of
sensitivities to arrive at the optimum pit shell. This shell was then imported into Gemcom Mine
Modeling Software to complete the design of the ultimate pit and interim pit phases. The pit
optimization parameters included the operating costs, process recovery, metal price and slope
factors.
Proposed Heap Leach-SX-EW Process Plant
The process operation consists of primary, secondary and tertiary crushing in closed circuit to
reduce the feed to 100% passing 12 mm. After agglomeration with acid and raffinate, the ore is
transported to the heap. Copper recovery is achieved through a standard SX/EW process to
produce LME grade copper cathodes from the leach solutions.
Run of mine material from the open pit is transported to an ore tip by 40 t dump trucks. Ore is
then scalped on a vibrating grizzly, with oversize lumps crushed in the primary jaw crusher.
Combined primary, secondary and tertiary crusher product is re-screened to remove final product
and the screen oversize passes to the tertiary cone crusher. Final crushed product is conveyed to
an open conical stockpile.
Ore is withdrawn from the stockpile by vibrating feeders and fed to an agglomeration drum,
where strong sulphuric acid is added to agglomerate the fine material. Agglomerated ore is
conveyed to the heap pads and placed by a stacker.
There will be three cells in total; each cell is nominally 580 m long x 200 m wide and will have
four lifts, 4 m high. A maximum of two cells will be operating at any one time. The cell
dimensions and volumes are based on a leach time of 200 days for a feed rate of 2,250 t/d of
material. Leach solution will discharge into a lined collection ditch, and then be routed through a
450 mm diameter HDPE pipe draining by gravity into the Pregnant Leachate Solution (“PLS”)
pond.
Solution from the PLS pond is pumped to two stages of extraction mixer-settlers where the
copper is transferred from the aqueous phase to the organic phase. The pregnant electrolyte is
pumped to the electrowinning feed tank through two heat exchangers. Electrowinning copper
production is designed at 36 t/day, while expected production is 33.3 t/day (1.80% copper at
82.3% extraction). From the electrowinning feed tank the electrolyte is pumped to the cells. The
cathodes are stainless steel blanks and are withdrawn on a weekly basis. The cathode bales are
washed prior to being stripped in the semi-automatic cathode stripping machine. Weighing and
repair stations are included, as well as mechanical handling equipment, to remove and store the
copper cathodes.
The Dukwe Copper Project will produce London Metal Exchange (“LME”) grade cathode
copper as its primary sales product.



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Environmental Considerations Dukwe Copper Project
Environmental Impact Assessment Report
The environmental conditions and socio-economic issues associated with the Dukwe Copper
Project are fully documented in the Environmental Impact Assessment (“EIA”) report including
environmental baseline studies which was prepared by Water Surveys (Botswana) (Pty) Ltd.
(“WSB”) and submitted to the government for approval. In addition to documenting the existing
baseline conditions, the EIA report describes the likely impacts that the Project will have on the
environment and the mitigation measures to reduce these impacts. These environmental studies
are designed to conform to requirements under Botswana legislation for the environmental
assessment of mining projects.
In general, the Dukwe Copper Project is expected to be beneficial from a socio-economic
viewpoint with the creation of employment for local villages for a period up to 10 years, and
contribution to the tax base for the country.
Water Resources Issues
Water resources issues including; hydrology, hydrochemistry, water resource modeling, well
field costing and contaminant transport modeling have been examined in connection with the
EIA. As design of the facility has gone hand in hand with the EIA, the design has taken into
account the particular environmental site constraints and risks. Risks are recognized to be;
release of process liquors to the surface water or groundwater environment, potential of damage
to the nationally important Dukwe well field and, the local environment. The risks associated
with the draw down of groundwater levels will be minimized through efficient process design to
ensure the economical use of abstraction water through the reuse of process and captured surface
water.
Closure and Reclamation Plan
In the context of reclamation and final closure, the main areas requiring closure are:
    • An open pit mine with an ultimate depth of up to 150 m and width of 200 to 300 m,
        extending over a strike length of over 1.5 km.
    • A waste dump expected to contain up to 57 Mt of waste rock.
    • A ramp to an ore truck dump, crusher and ore stockpile;
    • A heap leach facility, with a permanent clay and geomembrane lined pad arrangement,
        covering a total area of about 350,000 m2.
    • A pond systems to hold leachate and raffinate solutions, process water and storm water
        runoff.
    • An SX/EW plant and associated process equipment, and sulphuric acid storage tank;
    • Support services infrastructure.
The final reclamation and closure measures for the Dukwe Copper Project have been
documented.
Capital and Operating Cost Estimates Dukwe Oxide Copper Project
Pre-production Capital Costs
The total capital for the Dukwe Copper Project is estimated at US$ 39.6 million. The estimate is
based on the feasibility prepared by MDM in 2004 that was US$ 37.5 million for the open pit
SX-EW project and the balance US$ 2.1 million has been added by Howe for working capital
and arranging costs. Cost breakdowns are shown in the following table.


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                                      Capital Cost Estimate
               Item                                      US$ (000’s)
               Process Plant                                  19,001
               Infrastructure                                  2,560
               Spares                                           344
               First Fill                                       811
               Owners Costs                                     500
               Acid Plant                                      9,230
               Contract Mining                                  900
               Pre-stripping                                   2,867
               Contingency                                     1,245
               Sub Total                                      37,458
               Howe add-in (Working Capital)                   1,550
               Howe add-in (Arranging Costs)                    590
               Grand Total                                    39,598

Sustaining Capital
Sustaining capital will be required over the LOM for mobile equipment rebuild and replacement,
and the replacement or rebuild of some plant equipment. There will also be leach pad expansion.
The sustaining development costs are estimated at $ 3.97 million over the life of the oxide
project.
Operating Costs
The operating costs are based on the same studies as the capital costs and reflect the savings that
result for the integrated operation. Over the mine life cash operating costs are approximately
US$0.71/lb. Operating costs for the various components of the project are summarized in the
following table.
                   Dukwe Oxide Copper Project Operating Cost Estimate
                              Area                  Cost $/t ore
                              Plant                       4.41
                              Contract Mining            11.04
                              Other Mining                3.13
                              Gen. & Admin.               1.30
                              Acid Costs                  4.33
                              Total                      24.21

Electrical Power
Electrical power for the operations will be supplied from BPC’s regional grid. An analysis of
drives, operating time and power requirements for each area of the operation has been
performed. A unit power cost of BWP 0.15/kWh or $ 0.032/kWh has been applied for an
operating power cost of $1.36/t ore.
Acid Plant
Acid is produced on site via the burning of elemental sulphur and subsequent conversion of SO2
to SO3 and absorption of SO3 to produce sulphuric acid. For this study, acid plant capacity has
been set at 250 t/day, which means that a large excess of acid is produced during the first five
years operation. It has been assumed that this acid will be sold at the mine gate at a price of $
120/t acid.


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If the acid plant was constructed on a stand alone basis to operate independently from the Dukwe
mine it would require its own working capital. On the basis of producing 250 t/day of saleable
product the plant will require initial working capital for 45 days of operation in the amount of
$810,000.
Economic Analysis Dukwe Oxide Copper Project
Howe has conducted an economic analysis of the Dukwe Copper oxide project in conjunction
with African Copper. The cash flow is based on constant money, life of reserve mine model with
operating and capital estimates.
The model assesses the Project value in terms of the two most significant standard assessment
criteria:
    • Net Present Value (NPV);
   •   Internal Rate of Return (IRR).
Base Case Fiscal and Taxation Parameters
   • Capital and operating costs are stated in first quarter 2004 US Dollars, and no provision
      has been made for inflation during the pre-production period or thereafter.
   •   The base case model assumes a copper price of $1.10 per pound for the life of the project.
       The project has also been assessed at $1.00 and $1.20 per lb as part of the sensitivity
       analysis.
   •   The standard Botswana tax system has been assumed except where negotiated otherwise
       or provided for by the current laws and regulations.

Other Parameters
The applicable tax rate in Botswana is 25%. Capital expenditures are expensed when incurred or
carried forward until required. The discount rates applied to the cash flow is 10%. The reserve
life is based on the MDM feasibility for the oxide
                                    Base Case Model Parameters
           Parameter                                                            Oxide
           Pounds of Copper produced/ yr                                  24,341,000
           Tonnes of Ore mined /year                                       728,800
           Average Grade % Cu                                                1.85
           Copper Price US$ per pound                                         1.10
           Tonnes of Waste Mined                                          50,208,200
           Stripping Ratio                                                   9.84
           Copper Revenue (M$)                                               187.4
           Pre-Production Capital Costs (M$)                                 39.6
           Project Mining and Processing Cost /lb Cu (life of mine)           0.71
           Acid Revenue ($ millions)                                         50.5
           Exchange Rate                                                1US$= 4.8 BWP

Base Case Results
The base case results form the cash flow model is as follows:



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                               Dukwe Copper Base Case Cash Flow Model

                Parameter
                Pounds of Copper produced (millions lb)                           170.4
                Project Mining & processing Cost $/lb1                            $0.71
                Copper Price US$ per pound                                        $1.10
                Revenue (M$) (Including Acid)                                    $237.9
                Operating Costs (incl Acid) (M$)                                  153.4
                Taxes &Sustaining Capital (M$)                                      9.5
                Net Cash flow (after tax & capital)                                74.9
                Pre-Production Capital Costs (M$)                                  39.6
                Project
                NPV @ 10% (millions)                                                6.8
                IRR (%)                                                            14.2


Sensitivity Analysis
As shown on the following table the project is sensitive to copper prices.
                    Copper Price                          $1.00      $1.10       $1.20

                    NPV @ 10.0 %                          M$             M$      M$
                    Project NPV,                          1.58           6.8     14.8

                    Internal Rate of Return                %              %       %
                    Project IRR                            9.0           14.2    19.0

The IRR is calculated on the after tax cash flow and an investment of $39.6 million.
Summary of Cash Flow Analysis
The summary table indicates that the project is very sensitive to the copper price. The operation
does not become taxable until late in the operation due to the high capital for construction and
heavy past capital expenditures.
The project which is 100% owned by African Copper can generate sufficient funds from
production to repay the required capital investment to place the project into production. The
14.2% IRR is considered reasonable and provides a good return to the investors in line with the
risk level. The project has flexibility in its operations that will enable the owners to mitigate the
usual risk areas associated with mining operations and maintain a positive cash flow. The
extensive other known copper mineralization within the Dukwe licence area and the associated
exploration areas owned by African Copper offer considerable potential to delineate additional
resources that will extend the mine life beyond the initial seven years.
Payback and Mine Life Dukwe Oxide Copper Project
Based on the estimated capital cost of 39.6 million and using the parameters as stated above the
payback for the project is:
Copper Price            0.95                   1.00               1.10                   1.20
Payback (yrs)           5.2                    4.7                3.95                   3.5

Based on the present reserves of 5.101 million tonnes within the current pit envelope and at a
mining rate of 2000 t/d the mine life is seven years. The mine life may be increased due to:


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   •   A revision of the reserves due to a higher copper price currently (US$1.50/lb) vs. the
       $0.80/lb used in the original reserve estimate.
   •   Exploration potential within the vicinity of the mine.
   •   Exploration potential in the surrounding area.
   •   Potential production from the sulphide mineralization that underlies the oxide ore zone.
Interpretation and Conclusions
Dukwe Oxide Copper Project
The copper oxide project has sufficient resources/reserves to sustain a proposed open pit, heap
leach SX/EW operation for a minimum of seven years. All permits and licences to develop and
operate the Dukwe copper oxide project are in the process of being finalized. An Environmental
Impact Study and an Archaeological Study have been completed and on receipt of the detailed
engineering the Company can submit its request for a mining licence.
The Project will generate net cash flow of approximately $35.4 million, after taxes and recovery
of capital, over the initial 7-year mine life based on a copper price of $1.10/lb. The project
generates an NPV at a 10% discount of $6.8 million and an IRR of 14.2%. Howe concludes that
the development plan for the Dukwe Copper oxide project is reasonable and attainable.
Dukwe Sulphide Zone
The sulphide zone at Dukwe is indicated to be a potentially large copper resource that has not
been systematically evaluated as a potential mining operation since the late 1980’s. Since then
the infrastructural situation and copper price outlook have changed substantially in a positive
manner. The proposed oxide copper mining operation at Dukwe should further improve the
general infrastructure situation for the potential underground operation.
Howe concludes that the deeper sulphide zone within the Dukwe licence area and the nearby
associated exploration areas owned by African Copper offer considerable potential to delineate
additional resources that could substantially extend the mine life of the copper oxide deposit.
Matsitama Prospecting Licences
Thakadu-Makala Copper Deposits
These mineral deposits were, until recently, owned by a party unrelated to African Copper. Now
that the Dukwe and Thakadu-Makala copper deposits (published combined reserves of 4.85 Mt
at a grade of 2.71% Cu for the Thakadu-Makala copper deposits) are both 100% owned by
African Copper there is an opportunity to evaluate the economic ramifications of various
possible development scenarios involving the two projects, either separately or together. Howe
believes that efforts to develop a mine at Dukwe should continue as planned while at the same
time exploring the possibilities for combining or sharing operational and/or management
functions for both projects.
Regional Exploration Program
It is concluded that the Matsitama Properties have a wealth of systematic multidisciplinary
exploration data that indicate substantial areas of highly prospective terrain especially for
sediment-hosted copper and zinc deposits. It is important to note that previous exploration
efforts sometimes focused on primarily on geochemical targets, while at other times emphasis
was on geophysical responses, especially electromagnetic conductors. The geochemical targets
were found to be caused by base metal mineralization in bedrock while the best conductors were


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graphitic concentrations in metasediments. Thus it is apparent that to date the geochemical
database is the best indicator of bedrock mineralization. A large number of geochemical
anomalies are inadequately tested or have never been explained.
Recommendations
Howe’s recommendations for ongoing work in the Matsitama belt encompass four main sets of
exploration/development objectives:
   • Ongoing development of the Dukwe Oxide Copper Project for the near term.
   • Continuing investigations into the economic viability of the Dukwe Sulphide Zone.
   • Preliminary economic evaluation of the Thakadu-Makala copper deposits.
   • Systematic exploration of the vast mineral holdings covering the Matsitama belt outside
       of the above noted deposit areas.
Budget Summary
The following table provides a summary of the total work program budget and development
budget over a 3 year period is provided below. Additional capital expenditures will be required
to continue development work on the Dukwe Oxide Copper Project after the detailed design and
engineering work is completed. Additional debt and/or equity funding will be required for this.
               Area                      General Description                  Budget (US $ x 106)
Dukwe Oxide Zone
Dukwe Oxide Copper Project        Detailed design and engineering                   $3.37
(May-December, 2005)
Dukwe Oxide Copper Project        Construction and Start-up                          $0.0
(2006-2007)
Sub Total                                                                           $3.37
Dukwe Sulphide Zone
Dukwe Sulphide Exploration        20,000m NQ core drilling                          $5.24
Phase 1 (May-December, 2005)
Dukwe Sulphide Exploration        To be determined after 2005                        $0.0
Phase 2                           program
Sub Total                                                                           $5.24
Thakadu-Makala Deposits
Sulphide and Oxide Exploration    Preliminary Economic Study                        $0.10
(May-December, 2005
Provisional Ongoing Exploration   Included in Matsitama Budget                       $0.0
Sub Total                                                                           $0.10
Matsitama Prospecting Licences
Phase I                           Drilling, geophysics, continuing                   3.85
(May-December, 2005)              evaluation on Thakadu-Makala
Phase II                          Follow – up to Phase I pending                     4.51
(2006-2007)                       successful            results  –
                                  drilling/feasibility study
Sub Total                                                                           $8.36
Grand Total                                                                         $17.07




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                                     1.0 INTRODUCTION

A. C. A. Howe International Limited (“Howe”) has been retained by African Copper PLC
“African Copper” or “the Company”) to complete an Independent Technical Report (“Report”)
on the Dukwe Copper Project and Matsitama Prospecting Licences located in Botswana. This
Report complies with National Instrument 43-101 and Form 43-101F guidelines and was
prepared in conformity with generally accepted Canadian mining industry practice. The report
assesses the technical and economic potential of the project areas and recommends a follow up
program.

Howe understands that this Report will be used by African Copper for a TSX listing application.

1.1.   Authorization and Terms of Reference

African Copper initially approached Howe, pursuant to an engagement letter dated April 21,
2004 to complete a summary technical report for the Dukwe Copper Project and Matsitama
Prospecting Licences located in Botswana for an AIM listing application (Newbury et. al.,
2004). Subsequently, African Copper retained Howe on April 25, 2005, to prepare the Report to
conformity with National Instrument 43-101. Howe understands that no new technical data
exists between the date of the original assignment and the date of this Report.

1.2.   Qualifications of Howe and Authors

Howe is an international geological and mining consulting firm, which was incorporated in the
Province of Ontario in 1966 and has continuously operated under a “Certificate of
Authorization” to practice as Professional Engineers (Ontario) since 1970. Howe provides a
wide range of geological and mining consulting services to the international mining industry,
including geological, evaluation and valuation reports, pre-feasibility and feasibility studies on
mineral properties. The firm’s services are provided through offices in Toronto, Canada, and
London, U.K. Howe is not an insider, associate or affiliate of African Copper.

The Report has been prepared principally by Mr. Michael Newbury, P.Eng, and Mr. Howard
Coates, P.Geo, Associate Consultants with Howe. The preparation of the Report was in
consultation with Mr. Dino Titaro M.Sc., P.Geo. Consulting geologist, President and CEO of
Howe, Mr. Titaro has over 27 years experience including a background in international mineral
exploration and evaluation studies. Mr. Newbury has over 35 years experience in the mining
industry including extensive experience in the evaluation of gold and base metal exploration and
mining projects throughout the world. Mr. Coates has over 34 years experience in the mining
industry that also includes extensive experience in the evaluation of gold and base metal
exploration and mining projects throughout the world.

The principles involved in the preparation of this Report have a demonstrated track record in
undertaking independent assessments of Resources and Reserves, project evaluations and audits,
technical reports and independent feasibility evaluations to bankable standards on behalf of
exploration and mining companies and financial institutions worldwide. More importantly, all of




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the authors of this Report have the relevant experience to the deposit type reviewed in this
Report.

Neither Howe nor any of the authors of this Report (nor their family members or associates) have
a business relationship, other than acting as an independent consultant, with African Copper or
any associated company, nor with any company mentioned in the Report, which is likely to
materially influence their impartiality or create the perception that, the credibility of the Report
could be compromised or biased in any way. The views expressed herein are genuinely held and
deemed independent of African Copper.

Moreover, neither the authors of the Report nor Howe (nor their family members or associates)
have any financial interest in the outcome of any transaction involving the properties considered
in this Report, other than the payment of normal professional fees for the work undertaken in
their preparation (which are based upon hourly charge-out rates and reimbursement of expenses).
The payment of such fees is not dependent upon the content or the conclusions of either this
Report, or any consequences of any proposed transaction.

African Copper has accepted that the qualifications, expertise, experience, competence, and
professional reputation of Howe’s Principals, Associate Geologists and Engineers and are
deemed appropriate and relevant for the preparation of this Report. African Copper has also
accepted that Howe’s principals are members of professional bodies that are appropriate and
relevant for the preparation of this Report.

1.3.   Scope of Work and Sources of Information

African Copper commissioned Howe to compile the Technical Report on the properties and
develop an exploration program to target areas of critical gaps in the technical information.

In preparing this Report, Howe reviewed geological reports and maps, miscellaneous technical
papers, company letters, memoranda and other public and private information as listed in the
“Reference” section of this report. In addition, Howe completed a site visit and interviews with
key personnel as well as drawing on its own experience in copper projects and previous work in
Botswana.

Mr. Michael Newbury of Howe, accompanied by Mr. David Jones of African Copper and Mr.
Simon Bate of Messina Copper, conducted a site visit to the Dukwe Copper Project and the
Matsitama Prospecting Licences during the period May 14 to 19, 2004. Howe did not collect
any independent samples as part to this site visit as a number of other highly qualified
independent groups have worked on the properties and have confirmed the geology and samples
collected by the Company.

All units of measurement used in this report are metric unless otherwise stated. Copper values
are reported as percent of copper (“%”). The U.S. dollar is used throughout this Report unless
otherwise stated. At the time of writing this Report, the exchange rate for conversion of U.S.
dollars to the Botswana Pula was 1:5. Varying exchange rates have been used in the report




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dependent upon specific estimations made at varying times. These have all been indicated in the
respective areas.




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                           2.0 RELIANCE ON OTHER EXPERTS

Howe assumed that all of the information and technical documents reviewed and listed in the
“References” are accurate and complete in all material aspects. While Howe carefully reviewed
all of this information, Howe has not concluded any extensive independent investigation to
verify their accuracy and completeness.

Howe has not searched titles to the land holdings and has not independently verified the legal
status of the ownership of the Property or the underlying agreements.

The information, conclusions contained herein are based on the information available to Howe at
the time of preparation of this Report, assumptions, conditions and qualifications as set forth in
the Report and data listed in the “References”.

Some of the quoted Resources and Reserves reported herein are non National Instrument 43-101
compliant and are reported for historical purposes, unless otherwise stated in the Report.

African Copper has warranted that a full disclosure of all material information in its possession
or control has been made to Howe. African Copper has agreed that neither it nor its associates
will make any claim against Howe to recover any loss or damage suffered as a result of Howe’s
reliance upon the information provided by African Copper for use in the preparation of this
Report. African Copper has also indemnified Howe against any claim arising out of the
assignment to prepare this Report, except where the claim arises as a result of any proved wilful
misconduct or negligence on the part of Howe. This indemnity is also applied to any
consequential extension of work through queries, questions, public hearings or additional work
required arising from Howe’s performance of the engagement.

African Copper has reviewed draft copies of the Report for factual errors. Any changes made as
a result of these reviews did not involve any alteration to the conclusions made. Hence, the
statement and opinions expressed in this document are given in good faith and in the belief that
such statements and opinions are not false and misleading at the date of this Report.

Howe reserves the right to, but will not be obligated to, revise this Report and conclusions
thereto if additional information becomes known to Howe subsequent to the date of this report.




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                        3.0 PROPERTY DESCRIPTION AND LOCATION
3.1.      General
The Company has mineral rights that include one Retention Licence together with five
Prospecting Licences and one pending Prospecting Licence application, covering an unsurveyed
area of some 4,306.0 km2 (Figure 3-1). A summary of mineral rights is provided in Table 3-1.
Mineral rights are 100% owned by African Copper through its wholly owned subsidiaries
Mortbury Limited (“Mortbury”), a British Virgin Island corporation, and Matsitama Minerals
(Botswana) (Pty) Limited (“Matsitama Minerals”) and Messina Copper (Botswana) (Pty)
Limited (“Messina Copper”), both Republic of Botswana companies.
  Table 3-1: Dukwe Copper Project and Matsitama Prospecting Licences, List of Mineral
                                       Rights
         Licence           Recorded            Area          Expiry          Specified     Work Expenditures
                            Holder             Km2            Date            Metals         (Annual Fees)
       RL 2004/1IR      Messina Copper          36      December 31, 2006   Cu, Ni, Pb,   (P180,000)
                      (Botswana) (Pty) Ltd.                                 Zn, PGM,
         Pending        Messina Copper        270.0                         Cd, Co, Ag    Year 1: US$150,000
                      (Botswana) (Pty) Ltd.                                   & Au        Year 2: US$150,000
                                                                                          Year 3: US$150,000
       PL 14/2004      Matsitama Minerals     937.0      March 31, 2007                   Year 1: US$45,540
                      (Botswana) (Pty) Ltd.                                               Year 2: US$113,380
                                                                                          Year 3: US$113,380
       PL 15/2004      Matsitama Minerals     1000.0     March 31, 2007                   Year 1: US$45,540
                      (Botswana) (Pty) Ltd.                                               Year 2: US$113,380
                                                                                          Year 3: US$113,380
       PL 16/2004      Matsitama Minerals     1000.0     March 31, 2007                   Year 1: US$45,540
                      (Botswana) (Pty) Ltd.                                               Year 2: US$113,380
                                                                                          Year 3: US$113,380
       PL 17/2004      Matsitama Minerals     1000.0     March 31, 2007                   Year 1: US$45,540
                      (Botswana) (Pty) Ltd.                                               Year 2: US$113,380
                                                                                          Year 3: US$113,380
       PL 01/2005      Matsitama Minerals      63.0     December 31, 2007                 Year 1: US$15,000
                      (Botswana) (Pty) Ltd.                                               Year 2: US$50,000
                                                                                          Year 3: US$50,000
                     Total                    4,306.0

Retention Licence 2004/1IR grants Messina Copper exclusive rights to the Dukwe Copper
deposit for future mining operations. The Dukwe Copper deposit, including Bushman,
Mapanipani and the Mapanipani North zones, as well as sufficient lands for situating mine
facilities, are all located well within the 36 km2 licence boundaries. The elevation of the Project
area is 1,000 m and it is centered on coordinates of 20º31’38” South and 26º35’46” East.
3.2.      Dukwe Copper Deposit
The Dukwe Copper licences area, including the 36 km2 Retention Licence and the pending 270
km2 Prospecting Licence, are held in the name of Messina Copper. The pending application for
the Prospecting Licence, a result of the subdivision of the original 306 km2 Dukwe Prospecting
Licence into Retention and Prospecting components, is being routinely processed by the
Government of Botswana. Mortbury purchased Messina Copper from Messina Investments
Limited (“Minvest”) under an agreement dated January 16, 1996 between Mortbury and


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Minvest. The licences are now 100% owned by Mortbury free and clear of encumbrances such
as underlying payments or royalties to previous owners. The licences are subject to annual fees
and work expenditures as set out in Table 3-1 above.




                                             2004/1R




                                                  1/2005




Figure 3-1: Property Map


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The Botswana government has the option to acquire up to a 15% working interest participation
in the mine upon the issue of the mining licence (Mines and Minerals Act, 1999, Part VI, Section
40). Howe is not aware of any other royalties, back-in rights, payments or other agreements or
encumbrances to which the Project or licence area is subject.

African Copper’s Dukwe Retention Licence can be converted to a Mining Licence that is valid
for an initial 25-year period, with renewals allowed. The conversion from exploration to
retention to mining licence is a process that is not subject to any political interference. On
completion of a Feasibility Study, an Environmental Impact Assessment (EIA) Report and an
Archaeological study and submission to the Mines department a mining licence is issued.
African Copper has completed the EIA, the Archaeological study and a revised Feasibility Study.
The project is now in the detailed design and engineering stage.

Both the environmental and archaeological reports were used to obtain rights of access and land
use. The Minister of Local Government, Lands and Housing gave approval to the application for
surface rights in August 1996, subject to normal rentals, compensation, and establishment of any
housing within the existing village of Dukwe.

3.3.   Matsitama Prospecting Licences

The Matsitama Prospecting Licences include five issued Prospecting Licences, including four
obtained in 2004 and a fifth covering the Thakadu and Makala copper deposits was obtained in
2005.

The four original licences, Prospecting Licences No. 14/2004, 15/2004, 16/2004 and 17/2004
inclusive, covering 3,937.0 km2, are issued to Matsitama Minerals (Botswana) (Pty) Limited
under Section 16 of the Mines and Minerals Act. The Minister of Minerals, Energy and Water
Resources has granted to the Company exclusive right to prospect for Cu, Ni, Pb, Zn, PGM, Cd,
Co, Ag and Au for a period of three years commencing on April 1st, 2004 and ending on March
31st, 2007. The licences have minimum annual work expenditure requirements as set out in
Table 3-1 above.

The Thakadu and Makala copper deposits mineral rights, formerly a 63 km2 enclave inside
Prospecting Licence No. 16/2004, became available for acquisition in April 2004. On April 14th,
2004, Matsitama Minerals (Botswana) (Pty) Limited formally applied to the Government of
Botswana for a Prospecting Licence referred to as the Thakadu Licence, that is now incorporated
in the Matsitama Project. The Company was granted an exclusive right to prospect for Cu, Ni,
Pb, Zn, PGM, Cd, Co, Ag and Au for a period of three years commencing on January 1st, 2005
and ending on December 31st, 2007. The licence has minimum annual work expenditure
requirements as set out in Table 3-1 above.

The status of the mineral rights, surface rights and details of agreements has not been certified by
Howe.




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  4.0 ACCESSIBILITY, CLIMATE, LOCAL RESOURCES, INFRASTRUCTURE AND
                              PHYSIOGRAPHY

The Dukwe and Matsitama properties cover an area of 4,306 square kilometres located in
northeastern Botswana to the west and northwest of the City of Francistown (Figure 4-1). The
area is located in low relief, typical mixed Mopane Savannah scrubland, north of the paved
Francistown to Nata highway 120 kilometres northwest of Francistown. There is a general very
gentle slope from east to west, with drainage into the Sua Pan salt flats of the Makgadikgadi
basin. Soil forming processes have been fluvio-lacustrine. Drainage is dendritic and ephemeral in
nature, flowing only after heavy rains, from the east into the Sua Pan.




Figure 4-1: Regional Location Map

The property is located, in flat, semi-desert, scrub-bush country accessed by paved roads. The
property is crossed by a major paved highway, a modern standard gauge railway line and a 132
kV electrical power line all located only ten to fifteen kilometres from the Dukwe copper
deposit. Access to the site will be along a new 12.5 km long road to be constructed from the
highway. Skilled labour and most services are available in Francistown, and the proximity to the
mature mining industry of South Africa ensures that most required services and supplies are
available. Francistown is the local transportation hub, with an international airport, passenger
rail service and a major regional bus terminal. Modern hotels, lodges, shops and restaurants are
able to provide most services. Telephone lines are dependable as are mobile phones and high-


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speed internet access is available. Mobile telephone service is available at the Dukwe project
site.

The recently developed Sua Pan evaporatic soda-ash operations lie to the west. The major
copper-nickel operations at Selebi-Phikwe lie to the southeast and the Thakadu-Makala copper
deposits lie within the same Precambrian Matsitama volcanic and sedimentary belt. The overall
property is approximately 50 km long by up to 35 km wide (Figure 4-2). Licence 92/93 that
incorporates the Dukwe deposit is oriented parallel to the north-northeast trending Bushman
lineament. The actual Dukwe Copper deposit covers about a 2 km long by 0.5 km wide portion
of the property.




Figure 4-2: Property Outline

The climate is warm dry continental with less than 10 inches of rain annually. The temperature
varies from winter night time lows of 7º C to summer highs of 40º C.




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                                         5.0 HISTORY

Ancient production of copper from cupriferous ores in the Matsitama area is known to have
taken place between the 12th and 15th Centuries AD. Evidence of these activities such as
primitive mining and smelting sites are present in various parts of the region including the main
mineral occurrences described in this Report. The production of copper from the region supplied
this commodity into the trade network controlled by the Great Zimbabwe State (1250 - 1430
AD). Production was increased after the succession of the Chibunde Phase of the Buta State
(1430 – 1685 AD) over Great Zimbabwe in the mid-1400’s and had ceased by the Nichasike
Phase of the Buta State (1685 – 1830 AD).

The largest ancient mining operations were at the Bushman Mine (now the Dukwe deposit) and
at Thakadu, with approximately forty-five smaller operations throughout the Matsitama Belt.
Thakadu was one of the largest mines in the Sub-Saharan region during this period, and yielded
an estimated 712 tons of copper (Molyneux and Reinecke, 1983, Summers 1969) from an open
pit operation. Charcoal from the base of a small stope produced an isotopic date of ca. AD 1474
(Summers, op. cit.). The ancient Dukwe Mine comprised 20 winzes and stopes to a maximum
depth of 34 m, from which copper and graphite were produced (Boocock, 1954, Jorissen, 1910).
By ancient standards these were substantial operations, with estimates that 50,000-100,000 tons
of ore were mined in the Bushman Lineament in prehistoric times, with the higher figure more
likely (Byron, 1983). Over 95% of this tonnage is believed to have come from the Bushman and
Mapanipani workings.

Early 20th Century exploration work in the Matsitama area dates back to the early 1900’s and
resulted in the development of the Bushman Mine (Dukwe Copper Deposit) of the Bechuanaland
Copper Co. Ltd. Exploration and development of the Dukwe site occurred in the period from
1908 to 1913, followed by production on a sporadic basis from 1913 to 1918 (Chunnett, et. al.,
2000). During the early European exploration of southern Africa, an estimated 10,000 tonnes of
copper ore grading 8% to 30% copper were produced from underground mining from 12 shafts
or winzes extending to a maximum depth of 90 m (Figure 5-1). The mining operation was
suspended for a variety of reasons, including: a) remote location for transport of concentrate; b)
low concentrate grades; c) difficult metallurgy to treat near surface mixed oxide-sulphide ores; d)
lack of adequate water supply; e) onerous terms with Cecil Rhodes, holder of the property, with a
50% net smelter return; and; f) disease, wildlife and unfriendly locals.

The remainder of this section deals with modern-day exploration programs that were
implemented from the 1950’s to the present. The following information has been summarized
from various reports provided by Mortbury (see Sources of Information). It is a chronological
account of exploration programs by several groups including both major and junior
mining/exploration companies and governmental agencies. Salient details of these programs are
discussed in more depth in subsequent sections of this Report, in particular, those sections
describing regional and advanced project exploration activities (Sections 9.1, 9.2 and 9.3).

The Bechuanaland Geological Survey conducted geological mapping, geophysical surveying and
several drill holes on the Dukwe property in 1953. This was followed by a first major period of



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exploration by Bamangwato Concessions Limited (“BCL”), a subsidiary of Rhodesian Selection
Trust. This work occurred in the periods from 1959 to 1963 and from 1972 to 1974 included
limited diamond drilling and substantial percussion drilling leading to the re-discovery of the
original Dukwe oxide resource. They reopened the underground workings, developed a short
winze, and completed a property wide geochemical and prospecting program along the 25 km
length of the Bushman lineament.




           Early 20th Century Bushman Mine Workings
           (Isometric Projection by Falconbridge, 1987)




                               25m

                    0


                               25m


                     25m




Figure 5-1: Early 20th Century Underground Workings, Bushman Mine

Modern exploration/development work in the remainder of the Matsitama Belt was also initiated
by BCL, 1960-1976. Two phases of exploration program were conducted by that company in the
Matsitama Belt and environs namely:
• Phase 1 (1960 – 1966) carried out by BCL; and
• Phase 2 (1972 – 1976) by BCL in joint venture with Anglo American Corporation.




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This work led to discovery and systematic exploration of two copper-silver zones, the Thakadu
and Makala deposits. The BCL exploration completed on the two deposits is summarized as
follows:
• 39,000 m (156 holes) of surface percussion and diamond drilling;
• prospect shafts to depth of approximately 70 m on each deposit with a combined 620 m of
    lateral development; and
• 882 m of underground diamond drilling.

BCL mineral rights in the area lapsed at the end of 1976 and Falconbridge Explorations Limited
(“Falconbridge”) subsequently applied to the Botswana Government for a prospecting licence
covering the Matsitama area, including the two deposits. This licence, State Grant 7/77
(Matsitama), was first approved on June 15, 1977.

During the period 1977 to 1982 Falconbridge undertook the following work program in the
Thakadu/Makala area:
• Rehab Thakadu prospect shaft with channel sampling to check BCL database;
• 524 duplicate samples of BCL core taken for verification purposes;
• 3 tonne samples of oxide and sulphide material taken for bench scale metallurgical test work;
• 180 tonnes of sulphide mineralization taken for pilot plant test work; and
• A variety of hydrogeological, geotechnical, and mineralogical investigations.

In response to a request from the Government of Botswana, the Metal Mining Agency of Japan
(“MMAJ”) conducted a collaborative mineral exploration program, between 1979 and 1983, in
an area of 5,300 km2 that included the Vumba greenstone belt, the Timbale granite and the
northeastern part of the Matsitama Belt.

Gold Fields Botswana (Pty) Ltd (“Gold Fields”) completed a reconnaissance survey of the
Matsiama Belt in 1985, subsequently acquiring two prospecting licences to cover that part of the
belt not included in the Falconbridge licences. Field programs were conducted during the mid-
1980’s.

Falconbridge Explorations (Botswana) (Pty) Limited (“Falconbridge (Botswana)”) undertook a
major exploration program on the Dukwe property, between 1979 and 1982, to evaluate the
deeper chalcopyrite resources for development of a possible underground mine and concentrator.
Falconbridge identified a mineral inventory (not NI 43-101 compliant) of about 13 million
tonnes averaging 3.85% copper. That was set out in a comprehensive in-house prefeasibility
study in 1982, and updated in 1987 and in 1992. Their work also included reopening the first
two levels of the original underground workings, extensive diamond drilling, geophysical
surveys and percussion holes for exploration and water resources. The various Falconbridge
drilling programs are summarized in Table 5-1.




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              Table 5-1: Summary of Past Drilling at the Dukwe Copper Deposit

                             Holes   Percussion (m)   Diamond Drilling (m)   Total Drilling (m)
 Diamond drilling programs   89      9,775            14,568                 24,343
 Percussion programs         232     15,744                                  15,744
 Total                       321     25,519           14,568                 40,087


Messina Investments Limited (“Minvest”) through its Botswana subsidiary Messina Copper
Botswana (Pty) Ltd. acquired the Dukwe property in 1992 and completed metallurgical sampling
and permitting for a proposed underground mine, concentrator and smelter. Mortbury, through
its purchase of Messina Copper, acquired the property in 1996 and commenced a drilling
program designed to test the concept that the chalcopyrite was overlain by a potential leachable
oxide blanket. The drill program consisted of some 6,800 m of diamond core and reverse
circulation drilling. It confirmed the existence of the mixed copper oxide-copper carbonate cap,
and identified an extensive and thick zone of secondary copper enrichment as a supergene
chalcocite blanket at intermediate depths between the shallow mixed copper oxide-copper
carbonate and chalcocite zones and the original deeper chalcopyrite zones. The program also
included grid rehabilitation, ground and airborne geophysics, underground rehabilitation
mapping, sampling and drilling.

African Copper subsidiaries Mortbury, Messina Copper and Matsitama Copper began acquiring
prospecting licences and commenced exploration in the Matsitama Belt in 1995. In 1998,
Mortbury signed a joint agreement with Anglo American Prospecting Services (Proprietary)
Limited (“Anglo”) regarding the ongoing exploration and development of the Matsitama Project.
Following expenditures of over US$3.5 million, Anglo returned the property in the middle of
2000.

In April 2002, SNC-Lavalin Engineers and Constructors Inc. (“SNC-Lavalin”) completed a
feasibility study report for Mortbury on the Bushman Mine (Dukwe) Copper Project. This report
analyzed the technical and economic viability of a conventional open pit and SX/EW copper
processing plant for the Oxide Copper Zone at Dukwe. The SNC-Lavalin report was
complemented by specialist reports on resources/reserves by Roscoe Postle and Associates Inc.
(“RPA”), as well as environmental impact assessment, archaeological assessment and water
resources reports, all by Water Surveys (Botswana) (Pty) Ltd., (“WSB”). Subsequent to that
report, additional technical information through an additional study by MDM-Ferroman (Pty)
Ltd. (“MDM) of South Africa in July 2004 and changes in economics have resulted in an
economically viable project.

In April 2004, African Copper subsidiary Matsitama Copper was able to acquire a prospecting
licence covering the Thakadu and Makala deposits. As a result of this it now owns exclusive
rights to the entire Matsitama Belt, including the two main copper areas, Dukwe and
Thakadu/Makala.




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Environmental studies on the Dukwe property have been ongoing since 1995 with the
submission of an Archaeological Impact Assessment Study completed by the University of
Botswana. Permission to proceed with exploration mining operations was received from the
National Museum, Monuments and Art Gallery in October 1995, subject only to reporting if any
artefacts of a cultural or historical significance were present. No sensitive sites were located on
the property, and no additional work was deemed required. An EIA report and baseline testing
program, as part of an initial mining licence application, was undertaken in 1996 by WSB.

Both the environmental and archaeological reports were used to obtain rights of access and land
use. The Minister of Local Government, Lands and Housing gave approval to the application for
surface rights in August 1996, subject to normal rentals, compensation, and establishment of any
housing within the existing village of Dukwe.




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                                6.0 GEOLOGICAL SETTING
6.1.   Regional Geology
On a continental scale the Matsitama Supergroup lies within a PaleoProterozoic terrain or
complex, which forms part of the southern African Shield. This Precambrian Shield is centered
upon ancient Achaean “granite-greenstone” cratons with the Kaapvaal to the south, the Limpopo
Belt and the Zimbabwe to the north. This composite Zimbabwe-Limpopo-Kaapvaal core is
surrounded by a series of progressively younger Precambrian accretionary or reworked tectonic
belts forming the gradually expanding stable platform of the southern African Shield. This shield
is covered by younger, post-cratonization, continental sedimentary, volcanic and intrusive
assemblages of Precambrian and Phanerozoic ages.
Regionally the Supergroup lies within one of the younger Precambrian, probably lower
Proterozoic or Paleoproterozoic, terrains along the western side of the composite Zimbabwe-
Limpopo-Kaapvaal block (Figure 6-1). The immediate area, known as the Mosetse Complex,
consists of extensive granitic gneisses with numerous linear enclaves and larger belts of
supracrustal rocks. Some of the narrower supracrustal belts- the Shashe Group- are deformed and
metamorphosed along with the gneiss terrain and may represent similar sedimentary paragneiss
and ultramafic-mafic lithologies as in the Limpopo Belt. Other sedimentary and volcanic
sequences appear to lie in structural contact or unconformably over these granite-gneiss and
supracrustal enclaves, of which the most extensive is the Matsitama Supergroup.




Figure 6-1: Regional Geology




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Similar Proterozoic supracrustal assemblages, with metamorphic ages of 2.3 to 1.6 Ga, are
located along the western side of the Zimbabwe craton further to the north, where they form part
of the Ubendian mobile belts, the Dewaras Trough and Piriwiri-Lomagundi Basin. They are also
found along the northwestern side of the Kaapvaal craton and the overlying Witwatersrand and
Transvaal sequences to the south in South Africa.

The Matsitama Supergroup (Figure 6-2) hosts numerous copper and zinc-lead-barite deposits and
mineral occurrences, which are also being explored by Mortbury. The belt also hosts the
Thakuda and Makala deposits with published combined reserves of 4.85 Mt at a grade of 2.71%
Cu.

The Matsitama Supergroup has been metamorphosed and deformed, probably in an Ubendian
orogenic event, which structurally placed the sedimentary and volcanic sequence over the older
granite-gneiss terrain along a series of thrust and nappe surfaces. Subsequent to this deformation,
major linear structural features were developed along the western side of the Matsitama Belt.

The most extensive and prominent structure of these is the Bushman lineament. This lineament is
a major ductile-brittle shear zone up to 200 km long and 5 km wide, with apparent sinistral sense
of movement and probable west-side up vertical displacement. Sections of the Matsitama
Supergroup metasediments have been caught up within this shear zone, particularly as remnants
in low-strain zones or pressure-shadows at the ends of elongate, lozenge-shaped, siliceous
mylonite zones developed within the basement granite-gneisses. The Dukwe deposit lies at the
north end of one of these prominent metasedimentary lozenges. Other mineralized zones are
located in a similar sedimentary belt approximately 25 km to the south.

This composite Shield of an Achaean and Proterozoic basement is overlain by younger
Proterozoic platformal assemblages: the Palapye Trough, and the Waterburg and Spoutansberg
sequences. Large areas of the Shield are overlain by extensive basins of Carboniferous to
Cretaceous Karroo platformal clastic sedimentary rocks, including coals exploited at Morupule
and flood-basalt volcanic rocks. These Karroo basins host major groundwater aquifers. An
extensive Karroo basin lies to the west of the Dukwe Mine. The actual unconformable on-lap is
located midway along the drilled extent of the Dukwe mineralization, where a basal tillite
conglomerate and overlying sandstones and mudstones form a wedge which thickens rapidly to
the north and west. Thinner remnant outliers of the Karroo cover exist elsewhere along the
Bushman lineament and are responsible for some areas that lack a geochemical signature over
the mineralized horizon.

The Southern African Shield produces diamonds from various areas with kimberlitic intrusive
rocks. One of the most important of these areas is at Letlhakane-Orapa approximately 150 km
southwest of the Dukwe deposit.

Large areas of western Botswana are covered by the Tertiary Kalahari sands, with the contact of
continuous cover located approximately 25 km west of the Dukwe Mine. Small outliers of
Kalahari sand occur frequently across the entire region.




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      (Source MPH Consulting Limited)
Figure 6-2: Property Geology


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6.2.   Geology of the Dukwe Deposit Area

Dukwe Geology
The Dukwe deposit lies within a near-vertically dipping, thin, linearly extensive belt of the early
Proterozoic Matsitama Supergroup metasedimentary rocks. They are enclosed by sheared
granite-gneisses and granites of the Mosetse Complex within the broader structural domain of
the Bushman lineament (Figure 6-1).




Figure 6-1: Dukwe Surface Geology

The Matsitama Supergroup metasedimentary rocks in the area of the deposit are up to 300 m
wide, and average 200 m. In the area of the deposit, the sedimentary unit has been traced over a
north-south strike length of 6.5 km, from where it pinches out to the south to the limit of drilling
beneath the Karroo cover to the north.




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The metasedimentary rocks have been metamorphosed to amphibolite facies, as indicated by the
garnets in the western argillite unit, with later retrograde chlorite development, as seen in both
the metasedimentary rocks and the enclosing granite gneiss.

Lithology and Stratigraphy: The principal Matsitama lithologies enclosing the deposit are
carbonaceous calcareous rocks and various argillaceous (chloritic) and carbonaceous (graphitic)
phyllites to schists. The deposit is entirely hosted within a series of brecciated and somewhat
altered equivalents of these rocks in a stratabound horizon close to the western side of the
calcareous sequence and along its contact with the chloritic argillaceous sedimentary rocks to the
west. The lithologies are described below as seen in a consistent sequence from east to west
across the sedimentary belt.

   • Eastern Granite-Gneiss/Granite
   The coarse-grained, grey, mesocratic granitic to granodioritic gneisses to the east are
   relatively homogeneous and consist of quartz, plagioclase, orthoclase, chlorite, epidote and
   hornblende. Muscovite, cogenetic with vein chalcopyrite in the granite gneiss east of the
   Mapanipani North zone, has been dated at about 1.94 Ga using Rb-Sr methods. Locally the
   eastern contact is a more massive granitic phase, only weakly deformed, but intensely altered
   by red colouring of the orthoclase.

   • Tectonic-Breccia/Contact-Zone
   These gneisses are intensely deformed to granoblastic and mylonitic fabrics along the contact
   with the Matsitama sedimentary rocks within the Matsitama lineament. The gneisses are also
   altered with increasing chlorite and sericite. The intensity of the deformation and chloritic
   alteration increases towards the contact where there is typically a zone of high strain
   including mylonite.

   The sedimentary rocks in immediate contact with the granite gneiss consist of a highly
   siliceous mylonite (historically described as chert) and, calcareous, locally graphitic and
   typically chloritic contact breccia. The contact breccia has components of the granite
   gneisses as well as the adjacent carbonates, which are often highly siliceous along their
   eastern margin.

   • Epidote-Diopside-Garnet Skarn
   Locally, a distinct skarn assemblage that has developed along the contact of the Eastern
   granite. The skarn is massive porcelaineous silica-dolomite with patches of semi massive
   hematite-magnetite, along with epidote and calc-silicate minerals (possible diopside and
   grossular garnet). The overall distribution of this contact skarn is presently unknown,
   however a similar skarn assemblage was seen very locally within sections of the mineralized
   breccias.

   • Brecciated Cherty Dolostone
   This is the eastern-most unit of the Matsitama sedimentary sequence on the property. The
   cherty dolostone unit is developed mostly along the Mapanipani and Mapanipani North
   sections of the deposit. The unit is very thin or missing along the Dukwe section, where it is
   either structurally attenuated and/or intruded by the Eastern massive granite.


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The unit is composed of finely laminated layers of dark grey dolostone and white chert,
giving the rock a banded appearance described as “zebra-” or “tiger-striped”. Brecciation and
small scale folding are common. Folds do not appear to extend over any distance and are
characterized by very irregular and convoluted patterns, lack of any penetrative fabrics or any
consistent fold axes. Locally the cherty-dolostone is interbedded with thin layers of
carbonaceous phyllite/graphite-schist, chlorite argillite/phyllite/schist or limestone-dolostone.

• Limestone-Dolostone
The main lithological unit hosting the copper deposit is a massive limestone or dolostone that
is mostly carbonaceous (bituminous) and invariably argillaceous. It is found east of the
Brecciated Cherty Dolostone unit and encloses various other lithologies, including limestone
breccia, carbonaceous phyllite, chlorite phyllite and the main mineralized breccia units.

This main carbonate unit is thickest along the east side of the mineralized breccias and is
present locally in the west side adjacent to the chlorite-garnet argillite unit. The limestone is
usually medium grey, massive and fine grained. Locally, it is variably recrystallized,
silicified and lighter grey, often with distinct quartz patches. Elsewhere it is a darker grey,
probably reflecting an original higher carbonaceous content.

Ubiquitous hairline, microcrystalline graphitic and/or chloritic stylolites cut the limestone
and are probably responsible for “elephant skin” weathered surfaces on boulders. The
dolostones are mottled and blotchy with relict compositional colour banding, boudinaged
dark grey layers and fragments indicative of replacement of limestone by dolostone. The
limestone-dolostone unit grades into well foliated argillaceous layers as chlorite phyllite or
schist, characteristically cut by centimetre-scale quartz ± calcite veins. Elsewhere it grades
into more carbonaceous layers, which are well foliated and described as carbonaceous
phyllite or graphite schist.

• Limestone-Dolostone Breccia
This breccia unit is found throughout the limestone-dolostone rocks, but principally towards
the west where it is gradational into the more intense and mineralized breccias. The fabric
consists of irregularly shaped, but typically angular fragments of the dark carbonaceous
limestone or dolostone in a cement of planar microcrystalline veins of white to pink quartz
and calcite of irregular distribution and variable size. These are the characteristics of
collapse-breccias, Breccia hosted veins very rarely contain any sulphides and are not
associated with any wall rock or fragment alteration, beyond pervasive silicification or
dolomitization of the fragments.

• Carbonaceous Phyllite/Graphitic-Schist
This unit consists predominantly of fine grained, black to very dark grey fissile to schistose
rock that usually contains fine-grained pyrite. This unit appears to be an extreme variant
derived from the most carbonaceous or bituminous parts of the limestone. Sheared graphitic
rocks have also formed along fault zones.




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   Most of the intervals identified as carbonaceous phyllite or graphite schist form the
   immediate wall rocks to the mineralized breccias. The distribution of this unit is somewhat
   irregular, since it can form a relatively thick envelope to the breccias, be absent or entirely
   replaced by the breccia units up to their contact with the host limestones.

   • Chlorite-Argillite Phyllite Schist
   Throughout the limestone-dolostone unit, there are more fissile sections of phyllites and
   schists where the primary colour is green, rather than grey. These rock types are probably
   derived from the more argillaceous and less competent members of the original limestone-
   dolostone. Elsewhere, these units are associated with zones of faulting, such as the series of
   oblique faults, which offset the Mapanipani North zone from Mapanipani.

   • Chlorite-(Garnet)-Argillite Schist (Amphibolite)
   The westernmost stratigraphic unit, west of the limestone-dolostone and the mineralized
   breccias, is a heterogeneous, green argillaceous unit, which is either massive amphibolite or
   variably fissile to schistose. The unit contains abundant garnet-shaped clots of dark green
   chlorite, sometimes with quartz and calcite. The clots are probably retrograde garnets.
   Numerous small quartz-calcite veins occur in the unit, particularly close to its eastern
   contact. Some veins carry chalcopyrite.

   • Western Granite Gneiss
   The western granite gneiss has a white, heterogeneous, medium grained, leucocratic fabric
   composed of quartz-microcline-oligoclase and abundant epidote. This unit is interlayered
   with aplo-granite gneiss.

Structure: The metasedimentary rocks and the enclosing granite-gneisses have been flattened,
elongated and attenuated within the Bushman lineament shear zone. Frequent pinch and swell or
lozenge-shaped fabrics correspond to the main S and C foliation planes at all scales from visual
to microscopic.

The most noticeable zones extreme foliation and deformation are post-mineral, steeply northwest
dipping fault zones that strike north-northeast at a low angle to the overall northerly strike of the
Bushman shear zone. Most offsets are extensional in origin with sinistral movement and normal
throw. Some are compressional as reverse faulting, so that the net movement overall may be
close to neutral. The most significant off-setting zones identified consist of the extensional fault
at the south end of the Bushman section; the extensional to neutral fault which divides the
Bushman from the Mapanipani section (the “South Fault”); and compressional overlap between
the Mapanipani and Mapanipani North sections (the “North Fault”).




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                                      7.0 DEPOSIT TYPES

The known mineral deposits in the Matsitama Belt are Archaean to Proterozoic metasediment-
hosted strataform Cu-Zn-Pb-Ag sulphide deposits. The fundamental characteristics of the
mineral deposits are summarized as follows:
   • Temporal Range: Archaean to Proterozoic, Mosetse Complex, early to middle
       Proterozoic orogenic belt or complex consisting of sedimentary belts within a general
       area of granitic gneisses.
   • Rock Types: Thick sequence of metamorphosed and deformed sedimentary rocks
       (including dolomites, quartzites, phyllites) with intercalated mafic volcanic rocks
       (amphibolites).
   • Depositional Environment: Continental marginal basin of indeterminate type
       (continental slope basin, etc.).
   • Paleotectonic Setting: Passive continental margin sedimentation with possible
       associated volcanic arc complex (amphibolites) in an initial extensional regime followed
       by a compressive one.
   • Structure: Synsedimentary faulting at active margin of basin.
   • Associated Deposits: None known.
   • Primary Ore Mineralogy: Chalcopyrite dominant with minor bornite, sphalerite, trace
       chalcocite, pyrite, pyrrhotite, galena, barite.
   • Mineralization Texture/Structure: Primary disseminated to massive copper sulphides,
       showing outward zonation from chalcopyrite-bornite-chalcocite to pyrite.
   • Alteration: Silicification, chloritization, (sericitization?); secondary supergene
       enrichment in malachite, cuprite-tenorite, chrysocolla, azurite.
   • Geochemical Signature: Dominantly Cu and Zn, with minor Ag, Ba.

Previous workers in the Matsitama Belt (Moyes et al, 1999) have put forward several deposit
models that satisfy some but usually not all of the above diagnostic features. These include:
   • Polymetallic Replacement or Manto Type                                 Cu only
   • Basaltic Copper                                                        Cu only
   • Besshi Massive Sulphide                                                Cu + Zn
   • Sediment-Hosted Stratiform Copper                                      Cu + Zn
   • Sedimentary Exhalative (SEDEX)                                         Cu + Zn
   • Mississippi Valley Type (SE Missouri)                                  Zn only
   • Mississippi Valley Type (SE Appalachian)                               Zn only
   • Iron Oxide/copper-gold (IOCG)                                          Fe, Cu, Au
The general relevance of these models is discussed in Section 9 under GIS Target Modeling and
Regional Exploration Potential.

While Howe agrees that the Dukwe Deposit and Matsitama Belt cannot and should not be
constrained by any particular model, it is apparent that one conceptual deposit type, the SEDEX
model, is more appropriate than the others. In particular the Matsitama Belt shows many of the
key characteristics of SEDEX style mineralization found in the Mt Isa mining district of
Australia. Many of the geological characteristics of the belt, as well as the style and extent of the



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mineralization, are very similar and comparable to the copper ores of Mt. Isa. The Zn-Pb-Ag
ores at Mt Isa do not as of yet have a significant analog at Matsitama, although several Zn
occurrences and many Zn soil anomalies are as yet inadequately tested. The key parameters of
the SEDEX, Mt Isa model are compared with Matsitama Belt in Table 7-1.

               Table 7-1: SEDEX (Mt. Isa) Target Model for Matsitama Belt

                     SEDEX Zn-Pb-Ag and Cu, Mt. Isa                                 Matsitama Belt
 Deposits:     Large, 150 Mt, 7% Zn, 6% Pb, 150 g/t Ag,              Dukwe, 20 Mt, 2.5% Cu, (open at depth);
               plus 255 Mt @ 3.3% Cu                                 Thakadu-Makala, 5 Mt, 2.7% Cu (open)
                                                                     Several Zn sulphide occurrences
 Ore           Sphalerite and Galena dominant with pyrite,           Chalcopyrite dominant with minor bornite,
 Mineralogy    chalcopyrite, pyrrhotite, barite                      sphalerite, trace chalcocite, pyrite,
               Chalcopyrite dominant in Cu rich orebodies            pyrrhotite, galena, barite.
 Alteration    Silicification or iron carbonate with minor           Silicification, chloritization, sericitization
               tourmaline, albite, chlorite
 Dimensions:   Complex orebodies; multiple parallel Pb-Zn            Mineralization over strike lengths of over
               horizons over strike of " 2,000 m, stratigraphic      2,000 m (Dukwe, Thakadu northern
               width of " 500 m, to 1,000 m depth                    extension), stratigraphic widths of 200 m
                                                                     (Dihudi), open at depth of 200 m
 Regional      Marginal marine basins                                Continental marginal basin
 Geology:      Greenschist-amphibolite metamorphism                  Greenschist-amphibolite metamorphism
               Continental basalts as important part of older rift   Extensive lower mafic volcaniclastic unit;
               fill                                                  lower assemblage ultramafic
               Diverse sedimentary host lithologies, terrestrial,    Red-beds, carbonates, black shales;
               peritidal and deep marine settings, partly            peritidal facies; evaporitic sabkha units;
               evaporitic; includes black, grey, brown, red rocks    includes coloured rocks (Mmalogong Fm.,
                                                                     Palalmela Fm)
               Within few kilometres of major, long-lived            Bushman lineament,
               regional fault
 Local         Syngenetic, early diagenetic (pre-deformational)      Stratiform mineralization and geochemical
 Geology:      mineralization                                        anomalies
               Carbonaceous, pyritic, black and grey (dolomitic)     Biotite-graphite     schists;    graphitic
               mudstones                                             horizons, and EM conductors
               Significant carbonates                                Dolomites, limestones
               Tuffaceous mafic volcanics                            Regional and local
               Coarse grained debris flows                           Thakadu conglomerate
               local heat sources                                    Numerous high potassium features from
                                                                     radiometrics survey, extensive mafic sills




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                                  8.0 MINERALIZATION

8.1.   Dukwe Copper Deposit

The geological setting of the Dukwe Deposit was described in detail in Section 6-1 and is only
briefly summarized here. The deposit lies within a near-vertically dipping, thin, linearly
extensive belt of the early Proterozoic Matsitama Supergroup metasedimentary rocks. They are
enclosed by sheared granite-gneisses and granites of the Mosetse Complex within the broader
structural domain of the Bushman lineament (Figures 8-1 and 8-2). The metasedimentary rocks
and the enclosing granite-gneisses have been flattened, elongated and attenuated within the
Bushman lineament shear zone.




Figure 8-1: Dukwe Typical Cross Section, 2100N




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Figure 8-2: Dukwe Typical Cross Section, 2952N

The primary sulphide consists of chalcopyrite mineralization within a complex assemblage of
breccias and carbonaceous calcareous sediments developed within a limestone horizon of the
Matsitama Group sediments. The near surface parts of this zone have been enriched in a
supergene blanket, while the parts closest to surface have been oxidized with the development of
copper-carbonates and copper-oxide minerals.

The overall deposit has been traced by drilling and surface sampling over a strike length of 4,370
m. Five separate sections or zones have been outlined. From south to north these are Erasmus,
Bushman, Mapanipani, Mapanipani North and Mahume. These historically named zones were
originally believed to be separate and discrete mineralized bodies. Those from Bushman to
Mahume, however, have now been shown to be continuous except for the slight displacements
along post-mineral faults.

The mineralization is hosted within part of the limestone unit where it is particularly
carbonaceous and graphitic, and where it is host to a variety of breccias. Collectively this
characteristic assemblage is continuous along strike, in contrast to the pinch-and swell
deformation associated with the Bushman shear zone. The mineralized unit is also continuous


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vertically and is open to depth everywhere along its strike length, with its deepest drill
intersection at 475 m below surface.

This stratabound mineralized breccia and host carbonaceous limestone has an overall true width
of 30 m to 60 m. The assemblage gradually thickens and thins along strike and with depth, with
pinch-swell wavelengths measured in the order of 100 m.

The physical dimensions of the Dukwe deposits as determined by historic drilling investigations
are tabulated as follows:

                   Table 8-1: Physical Dimensions of the Dukwe Deposits

        Parameter                               Bushman-Mapanipani-Mapanipani North
        Strike length                                         2,040m
        Thickness of mineralized assemblage                   30-60m
        Drilled vertical depth                                 475m
        Dip                                                 Sub-vertical

   • Oxide Mineralization
   Copper oxide mineralization extends from surface to a depth of approximately 70 m. The
   supergene chalcocite mineralization is progressively oxidized towards surface with the
   development of the copper-carbonates, such as malachite and rarer azurite; copper-silicates,
   such as chrysocolla; together with very minor native copper and copper oxides, such as
   cuprite. Local remnants of the supergene assemblage may be preserved within the zone.

   Near surface oxide-carbonate redistribution of the copper mineralization was accompanied
   by the development of iron oxides and hydroxides (hematite, goethite) in a generally
   gossanous matrix within which almost all of the original host rock carbonate has been
   dissolved, giving a generally porous and vuggy appearance to the breccias.

   The oxide mineralization is absent or very low grade in various zones of the deposit, even
   though the underlying chalcocite and chalcopyrite zones are mineralized. These low grade
   areas or gaps may correspond to crosscutting oblique fault zones along which the oxide
   mineralization has been leached by the action of recent groundwaters. The top of the oxide
   zone is covered locally by Karroo Group rocks that appear to fill paleotroughs developed
   locally along the oblique crosscutting fault zones.

   There is no doubt that the secondary chalcocite and overlying malachite-rich oxide zones
   represent the typical effects of near surface groundwater supergene enrichment and
   weathering developed upon the original hypogene mineralization.

   The upper mineralization is hosted within complex bodies of breccias consisting of two
   major components: a white quartz-chert-calcite-feldspar breccia (BXQC or white breccia);
   and a dark grey to black graphite-quartz-chert-calcite breccia (BXCB or black breccia).
   Overall, the mineralized breccia comprises approximately two thirds black breccia and one-
   third white breccia. Different strike segments of the overall zones, as well as individual drill



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hole intersections, have varying proportions of black or white breccia, with no apparent
control on their relative proportions or distribution.

These breccias may have originated as collapse-breccia in a carbonate and evaporite platform
assemblage. The rock can become progressively more brecciated with earlier fragments and
matrix forming reworked breccia fragments cemented by younger quartz and carbonate. The
end result is a silica-carbonate breccia consisting of quartz, calcite and chert fragments
forming an interlocking network of fragments of various and irregular sizes.

Locally, within the mineralized unit, there are two other vein types, which are rarely if ever
mineralized. The first consists of coarse-grained massive calcite veins, which locally can be
very thick and appear to be very late. The second are quartz-carbonate veins with relatively
abundant feldspar crystals.

• Supergene Mineralization
Chalcocite supergene copper mineralization is developed over depths ranging from 0 m up to
150 m below surface and along the entire length of the Dukwe Deposit from Bushman to
Mapanipani North. Chalcopyrite-bearing hypogene mineralization lies below the oxide
copper zone. Above the hypogene mineralization, chalcopyrite is replaced by chalcocite,
starting with chalcocite rims visible on chalcopyrite grains. The lower contact of the
chalcocite zone with the hypogene mineralization appears to be relatively sharp. Rare
chalcocite and bornite observed at depth in the hypogene zone may represent part of a
sulphur deficient primary assemblage.

Above the chalcopyrite-chalcocite transition, there are sometimes remnants of chalcopyrite
unaffected by supergene alteration. This may reflect penetration of the supergene alteration
to variable depths along the different parts of the breccia and local differences in the
permeability to groundwater.

The copper grades within the supergene chalcocite zone are higher than in the underlying
hypogene chalcopyrite mineralization. The widths of the supergene sulphide zone are also
somewhat greater due to chalcocite replacement of pyrite, which locally extends beyond the
main chalcopyrite-rich intervals. There is also significant chalcocite development within the
irregular, discontinuous copper mineralization in either wall of the main mineralized
horizons.

Typically, the higher-grade supergene intervals coincide with very oxidized, limonitic
breccias, which are weak and crumbly.

• Primary Sulphide Mineralization:
The predominant hypogene sulphide mineral in the breccia is chalcopyrite, in a chalcopyrite
to pyrite ratio of approximately 5:1 to 10:1. The relative pyrite content is higher at the
margins of the more heavily mineralized intervals. There is also a second generation of finer
grained pyrite, probably of syn-sedimentary origin, within the least altered and un-brecciated
sections of the bituminous limestone. Galena, sphalerite, fluorite, quartz, carbonate veins are
locally present to both the east and west of the main copper intersections.



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    Copper mineralization rarely forms a significant proportion of the entire mineralized unit.
    The distribution of chalcopyrite and associated pyrite is extremely irregular, consisting of
    individual grains, blebs, clumps and semi-massive bodies. Mineralization was introduced and
    crystallized during the entire sequence of brecciation and accompanying alteration, forming
    within the silica-dolomite matrix cement of all of the multiple phases of breccia from the
    quartz-calcite veins. These veins cement the fragments in the earliest stages of breccia
    development in the bituminous limestone, with the exception of the brecciation in the syn-
    sedimentary to diagenetic “limestone breccia” unit.

    The higher grade primary mineralization is typically in two, 2 m to 7 m wide layers or
    horizons which are sub-parallel to the walls of the overall mineralised unit and the enclosing
    stratigraphic sequence. These two layers can be recognized in most drill intersections and
    have been mapped and sampled continuously over a strike length of 205 m on the -60 m
    Level of the historical Dukwe Mine. Locally, the intervening unmineralised interval,
    typically 5 m wide, thins to the extent that it cannot be recognized in drilling, and there
    appears to be only one, thicker mineralised interval.

       At the northern end of the Mapanipani section, and where Mapanipani is in fault over-lap
       with Mapanipani North, there is a third or fourth sulphide layer to the east and/or west of the
       main zone. Strike-fault repetitions of the two main horizons may account for additional
       mineralization.

       Generally, there is less continuous, and lower grade mineralization within the breccia in the
       hanging wall and footwalls of these two main lenses. The lower grade material is
       approximately 20 m wide but locally may be up to 50 m wide where the primary lenses are
       repeated by strike-faulting. The copper grade decreases progressively towards the outer limits
       of the brecciated zone, and typically there is a two to five metre interval with almost no
       sulphides at the boundary with the enclosing, unbrecciated metasedimentary rocks.

8.2.      Thakadu and Makala Copper/Silver Deposits

The Thakadu and Makala deposits (Figure 8-3) are sediment-hosted essentially strataform
disseminated sulphide zones in a poly-deformed and metamorphosed sequence of volcanic,
volcaniclastic and clastic sedimentary units (Ryan, 1982). The primary sulphide minerals are
chalcopyrite (85-90%) and bornite (10-15%) with minor pyrite adjacent to the copper bearing
material. The upper approximately 50 metres of the deposits are characterized by secondary
zones of oxidation wherein the primary sulphides are replaced by chalcocite, malachite and
cuprite-tenorite together with traces of native copper and marcasite.

The main lithologic units in the area are amphibolites and clastic siliceous sediments. The
amphibolites are amphibole-biotite schists interpreted as intermediate to mafic metavolcanic
rocks with related volcaniclastic rocks including lapilli tuffs. The intercalated sedimentary units
comprise quartzites, calcareous quartzites and phyllites with minor marble (limestone) and
banded chert. The calcareous quartzites are the immediate host rocks to the copper bearing
minerals.



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Figure 8-3: Thakadu and Makala Copper Deposits, Surface Geological Map

Structurally the dominant feature in the area is a northwesterly-trending moderately southerly-
dipping and westerly-plunging major isoclinal fold. In the vicinity of the two deposits the core
region of the fold comprises mainly sediments with intercalated amphibolites, while away from
the core the opposite is true with amphibolites dominating the assemblage. The Thakadu deposit
occupies the hinge zone of the fold with both limbs containing significant mineralization, while
the smaller Makala deposit is confined to the north limb several hundred metres to the northwest.
All lithologic units are cut and displaced (up to 60m horizontal displacement) by a set of


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northerly trending oblique cross faults. Other faults have been observed at the hanging and
footwall contacts of the Thakadu deposit.

The physical dimensions of the two deposits as determined by historic drilling investigations are
tabulated as follows:

            Table 8-2: Physical Dimensions of the Thakadu and Makala Deposits*

   Parameter                        Thakadu                           Makala
   Strike length                    450m                              1100m
   Average thickness                11.6m                             4.1m
   Maximum thickness                33m                               8.68m
   Drilled vertical depth           500m                              550m
   Dip                              80-30oS                           49oS
* Source Ryan, 1982.

Both deposits are open and untested at depth and to a limited extent along strike.

The Thakadu deposit is hosted by calcareous quartzite (70%) and quartz-mica schist (30%). As
described by Ryan (op. cit.) the calcareous quartzites can in detail exhibit a wide range of
compositions from calcareous to feldspathic to micaceous types, to clean orthoquartzites. The
rocks are generally fine grained, sometimes cherty and banded in appearance. Graphite is a
common minor constituent. The quartz-mica schist is typically composed of quartz and biotite
and/or chlorite. The primary ore-forming minerals at Thakadu are chalcopyrite (90%) and
bornite (10%), both as fine to medium grained disseminations throughout the host rocks. Minor
pyrite occurs adjacent to the copper-bearing zone, but only rarely inside it. A mineralogical
zonation is apparent with a chalcopyrite-bornite assemblage in the center, ranging outward to
chalcopyrite, and then pyrite on the outside margins. Chalcocite and covellite are present in
trace quantities. The oxide zone at Thakadu consists of chalcocite, malachite, cuprite-tenorite,
chrysocolla and traces of native copper and marcasite. The chalcocite appears to be randomly
distributed, while the malachite and cuprite-tenorite which jointly are the most abundant copper-
bearing minerals decrease in abundance towards the 5m wide transition zone with the primary
mineralization. Chrysocolla and native copper are minor constituents of the secondary zone.

The Makala deposit exhibits the same general characteristics as Thakadu in terms of host rock
lithologies, primary sulphide mineralogy and sulphide mineral zonation. The primary ore-
forming minerals at Makala are chalcopyrite (85%), bornite (14%), and chalcocite etc. (1%) as
fine grains that form in bands several millimetres thick parallel to the bedding/schistosity. The
oxide zone at Makala was not studied it detail by previous operators because its grade/tonnage
potential was not considered to be of economic significance.




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                                      9.0 EXPLORATION

9.1.   Regional Exploration Matsitama Belt

Nature and Extent of Work
Modern exploration was started by BCL in 1960. The original work was in the Dukwe Copper
Deposit area and the associated linear zone or shear. As the exploration moved southward good
potential for copper mineralization in the Matsitama area became apparent. Soil geochemistry
and related work revealed anomalous copper values and numerous ancient workings, some of
which exposed copper oxides in quartzite and limestones.

Two phases of exploration program were conducted by BCL in the Matsitama Belt and environs
namely:
   • Phase 1 (1960 – 1966) carried out BCL; and
   • Phase 2 (1972 – 1976) by BCL in joint venture with Anglo American Corporation.

Phase 1 exploration work included an airborne geophysical (magnetic and radiometric) survey, a
regional soil geochemical survey (215,000 samples analyzed for Cu only by dithizone
colorimetry), and geological mapping/prospecting. This was followed by limited ground
geophysics, trenching, pitting, shallow ‘wagon’ drilling and diamond drilling. The Phase 2 work
began by re-analyzing the soil samples for copper and selected samples for lead, zinc and nickel
using atomic absorption spectrometry, a much more reliable and precise analytical method.
Additional ground geophysics, geological mapping and drilling were done during this stage.

The BCL work, in particular the mapping/prospecting and soil geochemistry, drew attention to
mineral occurrences within three general areas:
   • Thakadu-Makala-Dihudi-Mutsuku (copper-zinc).
   • Tholo-Lepashe-Tau (copper).
   • Nakalakwana area (copper).

Falconbridge held mineral rights in the Matsitama Belt between 1977 and 1988 focusing their
exploration efforts on an area that included the Thakadu-Makala and Dihudi deposits. This work
is generally unrelated to this section on regional exploration activities. The advanced exploration
work conducted by Falconbridge on the Thakadu-Makala deposits is discussed in Section 9.3
below.

In response to a request from the Government of Botswana Metal Mining Agency of Japan
(“MMAJ”) conducted a collaborative mineral exploration program, between 1979 and 1983, in
an area of 5,300 km2 that included the Vumba greenstone belt, the Timbale granite and the
northeastern part of the Matsitama Belt. The work completed by MMAJ in the Matsitama area
comprised:
    • Compilation of geological maps at 1:20,000 scale.
    • Soil geochemistry on a 500m x 500m grid, closed in places to a 250 m x 500 m.
    • An airborne INPUT/total field magnetic/radiometric survey by Geoterrex Ltd., 2,800 line
       km.


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   •   Ground geophysical follow up; Crone pulse EM, IP and magnetic surveys on 26 targets.
   •   Drilling; 3,010.35 m in 28 boreholes.

Gold Fields completed a reconnaissance survey of the Matsiama Belt in 1985, with
recommendations to acquire two prospecting licences to cover that part of the belt not included
in the Falconbridge licence. The field programs of Goldfields comprised standard semi-regional
and detailed soil sampling for gold and a range of base metals. Ground magnetometry and IP
were used where required.

African Copper subsidiaries began exploration in the Matsitama Belt in 1995. In 1995–96, after
acquiring Messina Copper, Mortbury had Aerodata – World Geoscience completed an airborne
geophysical (Questem) survey. An evaluation of the results was completed by Simon Bate of
MGE Consulting (Pty) Ltd (Bate, 1996). A historical data compilation was also completed
through MPH Consulting (Botswana) (Pty) Ltd by Water Surveys Botswana (Pty) Ltd. In 1998 a
major compilation was commenced by Bottrill Geological Services on behalf of Mortbury using
the BCL data on open file at the Botswana Geological Survey (BGS) in Lobatse. The objective
of the review was to identify possible exploration targets in the geology and past geochemical
programs. Stratabound situations with the potential for, or evidence of, supergene enrichment
were prioritized.

The Bottrill compilation for Mortbury included the contouring of all the available soil sampling
records for copper analyzed by BCL, a study that identified 147 separate, large and locally, high-
grade geochemical anomalies. Exploration records showed that of these 147 anomalies, only 16
had ever been drilled by either percussion or diamond core drilling and that in every case,
geochemically anomalous copper assays or copper mineralization was intersected. In many
cases those anomalies were still open along strike or had never been drilled or intersected thick
calcrete rubble and no bedrock source for the anomalies.

On July 29, 1998, Mortbury signed an agreement with Anglo regarding the ongoing exploration
and development of the Matsitama Project. Following expenditures of over US$3.5 million,
Anglo returned the property in the middle of 2000 at the end of the first two year program as it
was no longer consistent in scope with their revised corporate objectives.

Anglo initially completed a major digital compilation of the historical records, including GIS
target-modeling. They then flew two airborne surveys over the entire licence area, a proprietary
128-band, four spectrometer hyperspectral survey and a 13,900 line kilometre combined
magnetic, electromagnetic and radiometric Spectrem survey. They established grids over
various copper and/or zinc targets known largely from historical work and on targets selected
from the Spectrem survey on which they have completed ground geophysics, soil geochemistry,
geological mapping and trenching. The work on the historical targets largely confirmed or
extended the previously known anomalies, whereas only a few of the holes on geophysical
targets intersected any mineralization. Anglo completed 8,900 metres of reverse circulation
drilling in 94 holes and 2,345 metres of diamond drilling in 15 holes. In total they analyzed over
24,000 samples. Anglo focused their drilling effort on two areas, Thakadu and Nakalakwana,
with limited drilling in the Lepashe area.




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The work by Mortbury as confirmed by Anglo has resulted in a substantially revised
stratigraphic and structural framework for the belt and confirmed the existence and scope of at
least three large mineralized targets measured in tens of kilometres of strike extent as well as the
numerous smaller anomalies.

The following sections focus on the salient features of these previous exploration activities by
discipline (i.e. Geology, Geophysics, Geochemistry, Remote Sensing Imagery and GIS target
modeling) followed by a review of initial follow-up testing of target areas by drilling, trenching
etc.

Geological Mapping and Prospecting Activities
There are several compilations that describe the regional geology of northeast Botswana with the
focus on the area underlain by the Matsitama Schist Belt e.g. Bennett (1968), Lintern (1982),
Aldiss (1991), Majoule (1995), Bottrill (1998) and Moyes et. al. (1999). Of these, the most
comprehensive is that by Bottrill (op. cit.). This report is a compilation of all available published
and unpublished sources including maps of the Botswana Department of Geological Survey,
those accompanying various theses and the detailed diamond drill logs of mineralized zones and
field maps of BCL. The reports on prospecting operations by BCL, MMAJ, Gold Fields and
Anglo also address this matter to varying degrees of detail.

The results of the various geological and related investigations are synthesized in Section 6.0:
Geological Setting and Section 8.0: Mineralization above and will not be discussed further here.

Airborne Geophysical Surveys
Four airborne geophysical surveys have been conducted over the Matsitama Belt since the early
1960’s including:
   • 1960: An extensive airborne magnetic and radiometric survey flown for BCL.
   • 1979: An airborne INPUT electromagnetic/total field magnetic/radiometric survey
       totalling 2,800 line km flown along 300m spaced north-south lines, at a nominal terrain
       clearance of 120m, by Geoterrex Ltd. for MMAJ.
   • 1996: An airborne Questem electromagnetic/magnetic survey flown by Aerodata–World
       Geoscience for Mortbury.
   • 1998: A Spectrem electromagnetic/magnetic/radiometric survey totalling 13,900 line km
       covering the current Matsitama licences flown for Anglo.

For the purposes of this Report the two ‘state of the art’ surveys completed in the 1990’s are
considered to be the most relevant to ongoing exploration activities. The results of these surveys
are summarized below.


Questem Magnetic and Electromagnetic Survey, Mortbury Limited, 1996
The Questem ’96 airborne survey was carried out by World Geoscience under the supervision of
MPH Consulting (Botswana) (Pty) Limited and involved data processing, presentation and
interpretation of the results of an airborne magnetic and electromagnetic survey of the Matsitama
and Dukwe (Bushman) areas (Bate, 1996). Processing techniques included derivative profiles,
reduction to the pole (RTP), separation filters, scalar gradients (using orthogonal polynomials),


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high pass filters, co-occurrence filters, texture filters, and 3-D Euler deconvolution depth
estimates.

The survey was flown along lines oriented at 045o at a nominal line spacing of 400m with an
average terrain clearance of 120m. The magnetometer was located in a stinger in the tail of the
aircraft, and the horizontal coil EM receiver bird was towed at a mean height of 50m above
ground level. The transmitter was operated at a frequency of 37.5 Hz.

The geophysical data was presented as profiles located on plan maps and contour maps. The
illustrative products from the survey utilized for interpretive purposes are listed as follows (Bate,
op. cit.):

       Magnetic Data
       • Total Magnetic Intensity (TMI) contour maps and stacked profiles, used for general
         data quality observations and identification of discrete features.
       • Calculated 1st Vertical Derivative magnetic gradient profiles, which show improved
         spatial resolution of gradient data, by reducing overlap, improving spatial resolution
         of deep and shallow sources, and aids interpretation of individual anomalies, structure
         and lithological units.
       • Calculated 2nd Vertical Derivative profiles, enhances near-surface anomalies,
         isolating them from background and intensifying contact locations.
       • Scalar Gradient similar to vertical gradients, but reduces the near-surface
         contributions, and contacts are identified by maximum gradients.
       • 1 km High Pass Filter, reduces large and extensive (regional) anomalies.
       • Separation Filters, highlights shallow features.
       • 3-D Euler Depth Estimates, solves the data for depth and source position.
       • Texture Filters, enhances near-surface magnetic responses, near equivalent to
         lithological and structural mapping.
       Electromagnetic Data
       • Stacked Profiles, selected and individual channels.
       • Colour Contoured Images, selected channels, amplitudes and conductance plots.
       • RGB Ternary Images, ternary plots of channels (4, 7, 11).
       The geophysical data from this survey has been interpreted in detail at first by Bate (op.
       cit.) and subsequently by Anglo (Moyes et. al., 1999). In general the electromagnetic
       data was more useful than the magnetic data in the Matsitama Belt due to interference
       from a prominent set of post-mineralization mafic dykes. The salient points of these
       interpretive studies are listed as follows:
       Magnetic Interpretation
       • The total magnetic field response is dominated by the magnetic signature of the ESE-
         trending Botswana mafic dyke swarm which masks the more subtle magnetic features
         associated with the mineralized lithologic units.
       • The Bushman shear zone in the west of the area can be readily identified.
       • General lithological interpretations are difficult, and restricted to areas with increased
         Kalahari cover.


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       •   A number of circular and ovoid features are interpreted as possible intrusive bodies,
           probably of felsic to intermediate composition.
       •   A banded iron formation in the far-western part of the area gives rise to a high
           amplitude NNW-SSE striking magnetic anomaly that appears to be disrupted by
           several minor WNW-ESE to NW-SE trending faults with right-lateral displacement.
       Electromagnetic Interpretation
       • Although many discrete bedrock conductors were recorded, none had the very high
          conductance that might be expected over a copper-rich, sphalerite-poor sulphide
          deposit.
       • Individual conductors were interpreted subjectively as high, moderate or low
          conductors. Single line features of weak conductivity and possible continuations of
          conductive horizons or features were recorded.
       • Most of the conductors were of low conductivity, and high conductors tended to
          occur at the margins of the Matsitama Belt.
       Geophysical Characterization of Mineralization
       Bate (op. cit.) produced a summary of the general geophysical responses of the known
       styles of mineral deposits recognized in the Matsitama Belt. Four main types of primary
       mineralization were described:
       • Dukwe Mine Fault Type:               This style of deposit comprises chalcopyrite
           concentrations in quartz veins and reefs associated with a prominent fault or shear
           zone.
       • Thakadu-Makala-Dihudi Type: This type of mineralization is associated with
           carbonate-bearing quartzites and quartz-mica schists that are locally weakly to
           moderately graphitic. The primary sulphides are disseminated or banded chalcopyrite
           with minor bornite, with trace amounts of chalcocite, pyrite, pyrrhotite, galena,
           sphalerite and magnetite.
       • Nakalakwana, Agente and Tau Type: Disseminated chalcopyrite in impure
           (ferruginous and feldspathic) quartzites and calcareous schists.
       • Palamela Type: Associated with amphibolites and greenschists (metavolcanics) with
           chalcopyrite disseminated throughout the rock or forming thin veneers on schistosity
           and joint surfaces.
       The empirical geophysical features of the four mineralization types are summarized in
       Table 9-1.
        Table 9-1: Geophysical Characterization of Matsitama Mineralization Types
Deposit Type     Magnetic       EM               IP              Stratigraphic   Structural
                 Response       Response         Response        Control         Control
Bushman          Discrete low   Low-high         Mod-high        No              yes
(Dukwe Copper)
Thakadu-Makala   Low-mod        Low-mod          Mod-high        Yes             Probably
Nakalakwana      Low-mod        Low              Mod-high        Yes             Probably
Palamela         Possibly       Low-high         Mod-high        Yes             Possibly
                                Narrow-wide
       (Source Bate, 1996)



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Spectrem Magnetic, Electromagnetic and Radiometric Survey, Anglo American
Corporation, 1998
A total of 13,985 line kilometres of Spectrem electromagnetic, magnetic and radiometric data
were completed by Spectrem Limited for Anglo over the Matsitama licences in October 1998
(Moyes, et. al., 1999) (Chunnett, et. al., 2000). The main objectives of this survey were to
improve the definition of the magnetic and electromagnetic data obtained previously by the
Questem ’96 survey and to provide radiometric information previously missing.

The Spectrem EM system operates in the Time-Domain, with the transmitter coil mounted
around the wing-tips, nose and tail of the aircraft, whilst the three-component (X, Y and Z)
receiver coil is towed in a bird some 40 m below and 130m behind the aircraft during surveying.
The magnetic sensor is towed in a separate bird about 20 m below the aircraft. The radiometric
sensor is mounted inside the aircraft. During the Matsitama survey, a flight line spacing of 250 m
was used, an optimal distance designed to detect an average size conductive SEDEX-type
stratiform ore deposit.

The AEM profiles were interpreted by Archer (1999) using the Autopick software developed by
Spectrem. An anomaly grading scheme was applied to assist in prioritizing bedrock anomalies
for ground follow-up. This is a cumulative assessment, by the interpreter, of the likelihood of a
particular anomaly being a prospective target. The scheme takes cognizance of such features as
peak shape i.e. width and amplitude, conductivity-thickness product (CTP) or conductance and
magnetic association. Anomalies are graded A, B, C or D, with A-grade anomalies being the
most favourable.

In the case of the Matsitama Belt, where the principal target type under consideration was
disseminated stratiform mineralization, suspected to be of fairly low conductivity, the Spectrem
interpreter was instructed to broaden the selection process and to include more of the weaker
anomalies than usual. Included in the picking were poor formational responses not normally
selected as anomalies from the profile data.

The geophysical data was presented as profiles located on plan maps and contour maps. The
data presentation products from the survey utilized for interpretive purposes are listed as follows
(Archer, 1999):

       Magnetic Data
       • Total Magnetic Intensity Contour Maps at 1:200,000 scale (one sheet overview) and
         1:100,000 (four sheets, detail).
       • Magnetic Analytical Signal filtered for dykes at 1:200,000 scale.

       Electromagnetic Data
       • AEM anomalies with topocadastral (topography, hydrology and infrastructure) data
          underlain at 1:50,000 scale, ten sheets.
       • Electromagnetic X channel resistive limit at 1:100,000 on four sheets.
       • Electromagnetic Z channel resistive limit at 1:100,000 on four sheets.
       • Electromagnetic X channel time constant at 1:200,000 scale one sheet overview.
       • Electromagnetic Z channel time constant at 1:200,000 scale one sheet overview.


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Radiometric Data
• K-Th-U radiometric ternary at 1:100,000 scale on four sheets.
• K-Th-U radiometric ternary at 1:200,000 scale one sheet overview.
• Radiometric potassium at 1:200,000 scale one sheet overview.
• Radiometric thorium at 1:200,000 scale one sheet overview.
• Radiometric uranium at 1:200,000 scale one sheet overview.

The geophysical data from this survey has been interpreted in detail by Moyes, et.al.
(op.cit.) and Chunnett, et. al. (op. cit.). As was the case with the earlier Questem ’96
survey, the electromagnetic data was more useful than the magnetic data in the region
due to interference from the mafic dykes. The EM data is generally more sophisticated
than that of the previous survey having both earlier and later time responses and
recording the Z component in addition to the X component. As a result many new
conductors of various quality have been identified by the latter survey. The salient points
of these interpretive studies are listed as follows:

Magnetic Interpretation
The total magnetic field response is again dominated by the mafic dyke swarm, and the
data have been filtered to minimize this effect. Like previous attempts at filtering the
Questem ’96 survey, this was generally unsuccessful as shown in Figure 9-1. However,
previously noted features from the earlier survey were confirmed along with the
following observations (Moyes, et. al., op.cit.):
• The eastern margin of the supracrustal belt is defined by a linear group of anomalies
    that strike NNE parallel to the Bushman shear zone in the west of the area.
• The banded iron formation in the far-western part of the area is a dominant magnetic
    feature, which is defined by prominent faulting.
• The granite-gneiss terrain is defined by conspicuous open fold structures along the
    southern margin of the Matsitama Belt, which marks an abrupt transition in structural
    style, along a line that approximates to the Thakadu-Matsuku shear zone.
• An area of high magnetic intensity, with a corresponding copper in soils anomaly,
    occurs in the Tholo region
• The adjacent Sebilogae-Sebotha formation has a distinct magnetically flat signature
    that contrasts with the Matsitama supracrustal sequences.




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Figure 9-1: Matsitama, Magnetic Analytical Signal, Filtered for Dykes

      Electromagnetic Interpretation
      The general results of the EM survey are shown in Figure 9-2 and the main interpretive
      observations are as follows (Moyes, et. al., op.cit.):
      • The conductor geometries change in structural from isoclinal folding and bedding-
         parallel faulting in the center of the Matsitama Belt to more open folding south of the
         Duhudi-Thakadu line.



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      •   The strongest conductors are associated with the major structural features of the
          region.
      •   Strong conductors are also located in the Matsitama area, where faulting and folding
          apparently delineate the contact between the Sebilogae-Sebotha Formation with the
          schist belt to the northeast. These conductors have been extensively faulted by a
          major zone of dislocation that trends NNW, and terminates against the Bushman
          shear zone.
      •   A large number of strong conductors in the southwest of the area strike approximately
          NW and are folded or rotated into the Bushman shear zone.
      •   There are few strong conductors within the Matsitama supracrustal belt proper, and
          all show a NW strike direction.
      •   Moderate conductors are also associated with the major basin margin fault
          boundaries, such as the Mosupe shear zone and in the Matsitama area.
      •   Weak conductors are numerous across the entire area.




Figure 9-2: Matsitama, Electromagnetic Conductors

      Radiometric Interpretation
      • The radiometric data (K, U, Th) ternary image and the individual radiometric element
        plots all show a considerable amount of structural, lithologic and surficial deposit


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         detail. In addition to this the radiometric potassium plot (Figure 9-3) shows a number
         of high potassium anomalies, spatially associated with known copper deposits, that
         may indicate substantial alteration haloes around those deposits.




Figure 9-3: Matsitama, Radiometric Potassium Plot

      The main interpretive observations concerning the radiometrics are as follows (Moyes, et.
      al., op.cit.):



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       •   In terms of surficial effects it is important to note that the Kalahari sand cover is
           generally thin, thus permitting bedrock signatures to be discernable over much of the
           area.
       •   Drainage effects are observed in the data, such as a K anomaly along the Mosupe
           River which drains high K-U-Th granite terrain to the northeast.
       •   A large pan area in the southwest corner of the area also shows a significant
           radiometric anomaly.
       •   The data show a clear differentiation into radiometric domains which correlate well
           with the known geology of the area. The boundaries of the domains also correlate
           well with known or inferred structural features.
       •   Prominent K anomalies are located in the Nakalakwana area and to the south and
           west of Thakadu/Makala. These anomalies correspond very closely with mapped
           outcrops and inferred subcrops of quartzitic units. Since quartzitic units would not
           normally be characterized by potassium enrichment it is considered that these
           anomalies might reflect alteration phenomena associated with the nearby copper
           deposits.


General Observations Regarding Airborne Geophysical Surveys
In general, the airborne geophysical surveys completed to date have been of moderate to good
usefulness in defining or confirming structural and lithologic features, but of very limited use in
identifying hitherto unknown mineralization.

The usefulness of the magnetic data as a mapping tool for potentially mineralized stratigraphic
units and other marker horizons is severely hampered by magnetic interference from post-
mineralization magnetic dykes. Furthermore, the known base metal deposits such as Dukwe,
Thakadu/Makala and Nakalakwana are characterized a near absence of magnetic ore-forming
minerals such as pyrrhotite and magnetite.

The electromagnetic systems are also of limited use for detecting the relatively low
concentrations of disseminated or banded chalcopyrite found in the known deposits. At the same
time the widespread presence of graphite in the sedimentary host rocks, conductive overburden
and structural features, further complicate the picture by producing a multitude of barren
conductive features.

The radiometric data were generally useful both in defining lithlological/structural domains and
more importantly identifying a possible K-enrichment alteration halo associated with the two
main deposits surveyed, Thakadu/Malala and Nakalakwana. The Dukwe deposit area was not
covered by the survey.

Geochemical Surveys
The Matsitama Belt has been subjected to considerable historical exploration, mostly at shallow
levels, that has delineated various mineral deposits, mineralized showings and anomalies.
Exploration by BCL in the 1960's and 1970's included extensive regional grid soil geochemistry
totalling 215,000 samples, which were analyzed for Cu, Ni and Zn (Moyes, et. al., op.cit.). This



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sampling was at a 300 m line spacing and 30 m station spacing. The sampling covered the
complete Matsitama belt an area 65 km long by 30 km wide.

In the late 1990’s Mortbury and Anglo established grids over various copper and/or zinc targets
known largely from the above historical work. Follow up work consisted of ground geophysics,
some soil geochemistry, geological mapping and trenching. In total Anglo analyzed over 24,000
samples duplicating approximately 12% of the original sampling. The Anglo sampling confirmed
both the location and amplitude of the original sampling thus validating the historical database.
The work on the historical targets largely confirmed or extended the previously known
anomalies (Moyes, et. al., op.cit.).

Regional Soil Geochemistry, BCL Limited, 1963-66
The first phase work included systematic soil sampling along a grid with samples collected at
100 foot (~30m) intervals along lines 3000 feet (305 m) apart. The individual samples were
taken at 1 foot nominal depth (30.5 cm) along lines oriented roughly perpendicular to the
regional strike of the rocks, i.e. NNE in the south to ENE in the north. The total number of
samples initially taken was approximately 110,000. Subsequent more detailed follow-up
sampling in anomalous areas ultimately brought the overall sample total to over 200,000. The
analytical results by dithizone colorimetry for copper only (about 98% of the samples), and early
Atomic Absorption Spectrometry (“AAS”) identified, and confirmed the presence of several
anomalous copper zones around the widespread ancient workings.

In the Tholo-Lepashe-Tau area, reconnaissance mapping and soil sampling identified anomalous
copper values up to 150 – 200 ppm, which were followed-up by pitting and trenching. Outcrop
mapping in the Lepashe River area indicated that the copper anomaly was due to the copper in
amphibolites with intercalated, discontinuous quartzites.

In the Thakadu-Makala-Dihudi-Mutsuku area detailed soil geochemical surveys enabled
definition of the extension of the mineralized horizon at the Thakadu/Makala deposit area. At
Dihudi, soil geochemistry, followed by geology, trenching, wagon and diamond drilling outlined
three narrow sub-parallel anomalies with the central one associated with copper oxides in quartz-
carbonate.

At Nakalakwana, detailed soil sampling and mapping allowed identification of a geochemical
anomaly with a strike length of 6 km and a width of 1200 m. Wagon drilling defined
mineralization in a zone 200 m long and 90 to 120 m wide. Copper grades were 0.2 – 0.5% Cu
with local peaks of 1.2% Cu.

Regional Soil Geochemistry, BCL Limited, 1972-76
The semi-regional soil samples from the 1960’s program were re-analyzed for copper during
July and August 1973 (Moyes, et. al., op.cit.). As previously noted, these had been analyzed by
dithizone colourimetry, a method found to be unreliable. The re-analysis, done with AAS using
the Varian Techtron 1200, was undertaken to define the anomalies in more detail.




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Soil samples from selected areas were also analyzed for lead, zinc and nickel. Values greater
than 130 ppm Cu, 125 ppm Zn and 95 ppm Ni were considered anomalous. This formed the
basis of the second phase of the exploration.

The re-analysis of the semi-regional soil samples for copper, nickel and zinc, resulted in a clearer
understanding of the three previously noted anomalous areas:
   • Thakadu-Makala-Dihudi-Mutsuku (copper-zinc).
   • Tholo-Lepashe-Tau (copper).
   • Nakalakwana area (copper).

The Thakadu-Makala-Dihudi-Mutsuku area extends over 15 km. Re-sampling in this area
covered an area from 3km to the southeast of Thakadu to 2 km northwest of Mutsuku. North of
Thakadu at Mosima, ancient smelter sites were discovered.

The Nakalakwana area re-analysis re-confirmed the extensive soil anomalies but also indicated
some other previously unknown areas in the vicinity that were followed-up. The Phute Prospect,
approximately 6km to the southwest of Nakalakwana Hill, was also re-investigated subsequent to
the re-analysis. Follow-up exploration revealed that the anomalies were mainly due to magnetite
or pyrite.

The Tholo-Lepashe-Tau zone, extending over 20 km includes Tau, Agente, Palamela, Lepashe,
Antbear and Tholo prospects. The re-analysis extended the anomaly to the north of Lepashe and
south of Tau. Numerous copper anomalies were re-affirmed. Of these, the most interesting was
at Tholo North. In all, 23 wagon holes were drilled, one of which exposed malachite-bearing
amphibolite. Analytical results from Agente and Palamela yielded no anomaly.

Other anomalous values over 130 ppm Cu were also investigated with little success.

Geochemical Compilation/Verification Work, Anglo American Corporation, 1998-2000
At the beginning of the Anglo/Mortbury program Anglo undertook a critical appraisal of the
BCL geochemical database as part of a systematic compilation of previous work in the region
(Moyes, et. al., op.cit.). This work had two main components:
   • Digitizing of data, geo-referencing with respect to other data sets, and re-computation,
       and
   • An orientation study to provide field control on the existing data, and to provide a more
       critical appraisal of the mineralization style.

Geochemical Data Compilation
The current data set for Cu, Zn and Ni has been complied from a number of sources including
the 1973-75 re-analysis of Cu from the 1963-66 survey, the 1973-74 regional programs, and the
MMAJ survey for areas outside the BCL data set (Moyes, et. al., op.cit.). These data were
produced by digitizing the point data from BCL and MMAJ, and were geo-referenced through
delineation of the old baselines and cross-lines with digital topographic maps, supported by
ground GPS readings. Anomaly maps for the main elements of current interest, Cu, Zn, and Ni
were produced.



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A large part of the Matsitama Belt is considered to be highly anomalous with respect to a
background copper value of 60 ppm (Figure 9-4).




Figure 9-4: Matsitama, Soil Geochemistry, Cu Anomaly Map

Several copper anomaly groups have been identified (Moyes, et. al., op.cit.):
   • Thakadu-Makala: These anomalies correspond to the known copper deposits and extend
       towards Lengau and the Matsitama River over a 5 km strike length. Many of these


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       anomalies coincide with ancient smelter sites, suggesting at least a partially cultural
       overprint on the geochemical dispersion pattern.
   •   Dihudi-Mutsuku: These anomalies seem to be a continuation of the Thakadu-Makala
       anomalies over a strike length of over 13 km. The area is characterized by a general
       elevation above defined background levels, with several isolated high value Cu
       anomalies.
   •   Matsitama-Lepashe Rivers: In this region there is an extensive zone of anomalous
       background Cu with widely distributed higher anomalies, broadly corresponding to the
       Lepashe facies of the Matsitama Belt. The most prominent anomaly extends 15 km from
       Matsuku East to Kamela.
   •   Palamela: This major anomaly forms a series of curvilinear belts from south of Tau to
       north of Palamela and Agent, a zone that is about 30 km long and commonly with copper
       values in excess of 200 ppm. The high amplitude anomaly corresponds to biotite schist
       and limestone units dipping low to moderately westward.
   •   Naklakwana: This area includes the Naklakwana, Naklakwana Hill and Phute areas that
       are within an area of approximately 16 km by 12 km that contains numerous individual
       anomalies.
   •   NW Naklakwana Area: This set of anomalies, located within the volcaniclastic part of the
       Lepashe facies, extends for over 30 km NW from the Naklakwana group


The zinc distribution map (Figure 9-5) shows a series of anomalies corresponding to the
Palamela Formation, that are closely related to the some of the copper anomalies described
above, but significantly offset from the Cu peaks. The most prominent Zn anomalies are
summarized as follows (Moyes, et. al., op.cit.):
   • Eskoka-Thakadu-Makala: Essentially similar in distribution to the Thakadu-Makala Cu
       anomaly described above, with a stronger discrete Zn anomaly to the north of Makala.
   • Dihudi-Mutsuku: This anomaly is about 21 km long and appears to be a continuation of
       the Eskoka-Thakadu-Makala Zn anomaly. Unlike the Cu anomaly the Zn anomaly is as
       pronounced north of the Matsitama River as it is to the south.
   • Mutsuku East-Kamela-Naklakwana Hill: This anomaly is interpreted as a continuation of
       the Dihudi-Mutsuku anomaly.
   • Matsitama-Mutsuku Rivers: These anomalies correspond with the central group of
       diffuse copper anomalies noted above and occur in a biotite schist unit.




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Figure 9-5: Matsitama, Soil Geochemistry, Zinc Distribution Map

The spatial relationships and offsets between the copper and zinc anomalies are illustrated by the
peak residual (95th percentile) value plots of the two elements (Figure 9-6). This likely indicates
a degree of metal zonation, a common characteristic of sediment-hosted base metal deposits.




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Figure 9-6: Matsitama, Soil Geochemistry, Peak Residuals of Zn and Cu.

Nickel in soils were analyzed as a side investigation to search for possible nickel-copper deposits
similar to that discovered farther south in Botswana in the Phikwe-Selibi mining area. The
Matsitama area in general has quite high background nickel values, in the order of 300 ppm Ni,
but only a few distinct anomalies.

Geochemical Orientation/Verification Survey
Anglo conducted a geochemical orientation survey in the Matsitama area during November 1998
(Winterburn, 1998). Extended soil profiles were taken in three areas including; the Dihudi Cu
prospect, the Mutsuku Zn prospect and the Nakalakwana copper prospect. Soil samples were
screened and the –80# and –200# fractions were retained. The –80# fraction was analysed by


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multielement XRF analysis and the –200# fraction by ICP-OES at Anglo’s South African in-
house research laboratory (“AARL”). The analyses confirmed the original BCL geochemistry,
although there were differences in the concentration levels. Variable shifts in the positioning of
the soil sample data when compared to BCL geochemical maps were reported.

Winterburn (op. cit.) noted two different styles of mineralization:
   • Zinc-copper-lead-silver-barium associated with the siliceous carbonates.
   • Copper-(nickel, chrome, cobalt, vanadium) associated with the amphibolites and mafic
      volcanics.

Soil samples were analysed using the XRF multi-element (41 elements) technique at the AARL.
The only exception is the Mutsuku grid where the samples were analysed with the ICP-OES
technique for Cu, Zn, Pb, Ba, Mn, S, As, Co, Cr and Ni. In addition to this, gold was also
analysed for on the Mutsuku grid using the Geofire technique. Gold was also analysed for on the
grids covering the Nakalakwana Hill area.

The orientation survey was successful in accomplishing the following:
   • The BCL Cu-Zn-Ni anomalies were confirmed by the Anglo profiles.
   • Some geo-referencing problems were noted as apparent shifts in the data from one survey
       to another. This was most pronounced in the Dihudi area where the Anglo anomaly
       peaks are shifted some 150 metres to the north of the BCL peaks. The shifts are less
       pronounced at Mutsuku, while at Nakalakwana the anomalies are coincident in both data
       sets.
   • The orientation survey has shown that a number of pathfinder elements occur in
       association with the main elements of interest including; Ag, Pb, Ba, K, S and Mn.


Hyperspectral Survey
This survey was flown by Anglo in October 1998. The basis of the hyperspectral survey is the
principle of Visible (Vis), Near Infrared (NIR) and Short Wavelength Infrared (SWIR 1 & 2)
spectrometry. Central to this technique is that minerals have characteristic spectral signatures
that arise from different crystallographic factors. In theory the hyperspectral scanner survey
should give precise information on the geographic distribution of mineral and vegetation species,
which can related to regolith development, underlying bedrock geology, and in some cases with
alteration zonation associated with mineralization.

The hyperspectral data was acquired utilizing a Hy-MapTM imaging spectrometer mounted in a
light fixed-wing aircraft and flown at altitudes between 2000 and 5000 m above ground level.
The Hy-MapTM comprises four separate spectrometers covering the 420nm to 2,500nm
wavelength range. Different mineral and vegetation groups have characteristic spectral
absorption signatures within this wavelength range (Courtenage et. al., 1999).

Thirty-five north-south oriented overlapping strips were flown for the Matsitama area. The flight
strips vary from approximately 12 to 80 km in length and cover an area of about 4,614 km3. For
presentation purposes the data has been spectrally subset into three wavelength ranges including;
the Visible-Near Infrared (VisNIR), Short Wave Infrared 1 (SWIR 1) and Short Wave Infrared 2


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(SWIR 2) ranges. Each of the spectral subsets is processed individually to extract specific
mineralogical information. A mosaic showing the spectral interpretation of results of the SWIR
2 range is presented as an example of the survey data (Figure 9-7).




Figure 9-7: Hyperspectral Survey, Short Wave Infrared 2


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In practice the majority of pixels in any flight strip contain more than one type of material (e.g.
different mineral and vegetation species, water, etc.). As a consequence there is a certain amount
of computer aided extrapolation required to produce a geological interpretation of the data.

Courtenage et. al., op. cit. report that the results of the regional interpretation revealed that the
areas dominated by basement gneiss are characterized by kaolinite/smectite, illite/sericite and
iron oxide. These have been interpreted as associated with the weathering of gneissic lithologies.
Chlorite- and amphibole-spectral responses detected in the gneissic terrains also occur, albeit
limited. These have been interpreted as associated with either mafic units e.g. dykes or
associated with regional low grade metamorphism. Comparisons of the hyperspectral results
with the mapping are positive and, as such, these can be used to further define the extents of the
lithological units. Of significance is that it has been shown that, on a regional scale, there are
compositional variations on strike. Other, smaller scale, compositional variations seen in the
data, could not be adequately explained.

The presence of illite/sericite has been interpreted as an alteration signature as it occurs in e.g.
amphibolites, a lithology not expected to have this response. The increase in abundance towards
the east identifies an alteration system with an origin to the south and east of the area, possibly
associated with the Chilimanzi granite.

The processing of data from the southern part of the survey provided far greater spectral
discrimination with subtle mineralogical variations and greater coverage being obtained. The
westerly decrease along strike of the illite/sericite conforms to the relative increase in the
proportion of chlorite. This has been interpreted as a higher temperature, low pH alteration
signature being present in the east, confirmed by the presence of pyrophyllite and dickite at
Nakalakwana Hill, that grades to a lower temperature, higher pH signature in the west. This
supports the interpretation of a hydrothermal alteration system, with an origin in the south and
east of the surveyed area, with the fluids evolving in a westerly direction. Overall, it would
appear as though there is a gradation from potassic to propylitic alteration.

Compositional variations associated with varying proportions of illite/sericite, chlorite/epidote
and amphibole appear to be controlled by previously unrecognized northeast trending structures.
Of importance, is the apparent control on the distribution of the copper anomalies by these
structures, suggesting that the copper was introduced, at a late stage, along with these
hydrothermal fluids. This alteration does not appear to have a relationship with the zinc
mineralization.

GIS Target Modelling
Anglo’s approach to exploration began with formulation of a number of pertinent mineralization
models for the Matsitama Schist Belt, followed by data integration to produce Areas of Interest
(AOI) or simply exploration targets for ground follow-up.

Moyes, et. al., (1999) determined that a suitable mineralization model for the Matsitama Belt
must accommodate the characteristic features outlined in Table 9-2.




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                     Table 9-2: Characteristics of Mineralization, Matsitama Belt

 Attribute                     Matsitama Characteristics
 Age                           Archaean to Proterozoic
 Rock Types                    Thick sequence of metamorphosed and deformed sedimentary rocks (including
                               dolomites, quartzites, phyllites) with intercalated mafic volcanic rocks
                               (amphibolites)
 Depositional Environment      Continental marginal basin of indeterminate type (continental slope basin, etc.)
 Tectonic Setting              Passive continental margin with possible associated arc complex in an initial
                               extensional regime followed by a compressive one.
 Associated Deposits           None known
 Mineralogy                    Chalcopyrite dominant with minor bornite, sphalerite, trace chalcocite, pyrite,
                               pyrrhotite, galena, barite
 Texture/Structure             Disseminated to massive copper sulphides, showing outward zonation from
                               chalcopyrite-bornite-chalcocite to pyrite.
 Alteration                    Silicification, chloritization, (sericitization?); secondary supergene enrichment in
                               malachite, cuprite-tenorite, chrysocolla, azurite
 Geochemical Signature         Dominantly Cu and Zn, with minor Ag, Ba.
(Source Moyes, et. al., 1999)

A total of seven possible models have been put forward to explain the above characteristics:
   • Polymetallic Replacement or Manto Type                               Cu only
   • Basaltic Copper                                                      Cu only
   • Besshi Massive Sulphide                                              Cu + Zn
   • Sediment-Hosted Stratiform Copper                                    Cu + Zn
   • Sedimentary Exhalative (SEDEX)                                       Cu + Zn
   • Mississippi Valley Type (SE Missouri)                                Zn only
   • Mississippi Valley Type (SE Appalachian)                             Zn only

A Sediment-hosted stratiform copper model does not explain the copper, zinc and copper-zinc
mineralization in the Matsitama Belt. None of the seven possible models, generated through an
iterative process that accommodated all observed and inferred characteristics of the MSB
mineralization, adequately explains the copper and zinc mineralization. Based on available data,
mineralization models for the Matsitama Belt were considered to be a combination of Basaltic
Copper and MVT (Appalachian) types (Moyes, et. al., op. cit.). It is noted here that Howe
considers a SEDEX model as being the most applicable to the Belt. See Section 7.0 for details.

Comprehensive data integration enabled all the combination of data layers to produce viable
areas of interest (AOI), each being a logical unit and that could be quantitatively assessed as
regards priority ranking (Chunnett, et. al., 2000). Conclusions reached were:
    • High potassium values are associated with ‘quartzite’ units taken to represent a probable
       palaeo-aquifer system.
    • Where high potassium to quartzite association is found, zinc and copper anomalies are
       spatially located, but differentiated, in adjacent host rocks.
    • Where potassium is reduced, copper anomalies are associated with quartzite units and
       zinc with mixed carbonate units.



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   •   Some, discreet, copper anomalies appear not to be correlated with either high potassium
       or quartzite units.

The target areas of Greater Esoka, Nakalakwana, Gamogae, Potokoxwaa and Phute were
selected on the basis of significant spatial correlation between radiometric potassium and
uranium, copper and zinc geochemistry, lithology (arkoses and quartzites) and D1 and D4
structures, which indicated the potential for a high temperature magmatic hydrothermal
mineralization system.

Structure was demonstrated to have a significant control on the Matsitama Belt mineralization.

The table below illustrates the prioritized areas for further investigation.

                 Table 9-3: Prioritized Exploration Targets by GIS Modeling

   Priority    AOI    Name                        Metals/Comments
   1           10     Mutsuku East-Mutsuku Zinc   3 large Zn-dominated anomalies and 7 smaller ones.
   2           11     Dihudi West                 5 medium Zn-dominated anomalies.
   3           23     Nakalakwana Hill West       3 medium Zn+Cu anomalies and several smaller ones.
   4           24     Nakalakwana Hill            2 medium Zn+Cu anomalies and several smaller ones.
   5           13     Dihudi                      1 medium Zn-dominated anomaly.
   6           25     Phute                       1 large Cu-dominated anomaly.
   7           15     Kamela-Lengau               2 large Cu+Zn anomalies and 2 medium ones.
   8           3      Palamela                    1 large Cu-dominated anomaly.
   9           2      Lepashe                     1 medium Cu-dominated anomaly.
   10          1      Tholo                       Several smaller Cu-dominated anomalies.
   11          51     South of Gamogae            1 large Cu+Zn anomaly.
   12          9      Saparamondaraa (Sebotha)    1 large Zn anomaly
   13          4,12   Gaokae,    Sebotha    and   Large Ni-dominated anomalies.
               &16    Mohahu
       (Source Chunnett, et. al., 2000)

Grids were established over various copper and/or zinc targets known largely from historical
work and on geophysical electromagnetic targets selected from the Spectrem survey. Follow up
work consisted of ground geophysics, soil geochemistry, geological mapping and trenching. In
total Anglo analyzed over 24,000 soil samples duplicating approximately 12% of the original
sampling. The Anglo sampling confirmed both the general location and amplitude of the original
sampling thus validating the historical database.

Target Testing Drilling Programs
This section deals with drilling programs of various types including percussion, reverse
circulation and limited diamond drilling that were implemented to test exploration target areas.
Drilling to outline or define known mineralized areas such as Dukwe and Thakadu/Makala is
discussed in Section 6.0.

Exploration by BCL in the 1960's and 1970's included widespread reconnaissance shallow
percussion drilling but only to a depth of 30m, which would still be in the oxidized horizon. This
drilling tested only sixteen out of the total of 193 Cu and/or Zn soil geochemical anomalies then



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outlined. It is highly noteworthy that all sixteen of these areas tested were related to shallow
bedrock base metal mineralization. Diamond drilling further tested four of these zones, and all
were developed into definable tonnages and grades, one of which was developed underground
for production.

Anglo’s work on the historical targets in the 1990’s largely confirmed or extended the previously
known anomalies, whereas very few of the holes on geophysical targets intersected any
mineralization. In fact those targets which were based solely on electromagnetic conductors
were found to be caused by graphite, while targets which also had a geochemical signature were
found to reflect mineralization. Throughout the history of this project every single hole drilled
on a geochemical target has encountered mineralization.

Anglo completed 8,900 metres of reverse circulation drilling in 94 holes designed to test
geophysical targets. All of the Anglo reverse circulation holes were drilled at –60 degrees for a
drill hole length of 100 m. These holes would thus have tested targets to a vertical depth of
approximately 60 to 80 meters. The depth of oxidation in the Matsitama belt is 60-100 metres.
Thus in all probability the reverse circulation drilling would not have tested fresh mineralization
in any of the holes. Diamond drilling amounted to 2,345 metres of diamond drilling in 15 holes.
Eight of the fifteen diamond drill holes were drilled to test gravity anomalies, the remaining
seven holes tested litho-geochemical targets. None of the eight gravity holes encountered any
significant mineralization or assays. Of the seven holes drilled to test geochemical features, all
holes intersected significant mineralization. Better results include; Nakalakwana Hole 1
returning 15.0m grading 0.84% Zn and a further 98m grading 0.49%, Hole 10 returned 49 m
grading 0.97% Zn and Hole 3 returned 83.6m grading 0.60% Zn. Anglo focused their drilling
effort in the Thakadu (20% of total expenditures) area with limited drilling at Lepashe (5.8%)
and Nakalakwana (7.5%). The drilling portion of the total exploration expenditures was only
11.8%.

Regional Exploration Potential
The work by Mortbury as confirmed by Anglo has resulted in a substantially revised
stratigraphic and structural framework for the belt and confirmed the existence and scope of at
least four large mineralized targets measured in tens of kilometres of strike extent as well as the
numerous smaller anomalies. Many of the geological characteristics of the belt, as well as the
style and extent of the mineralization, are very similar and comparable to those in the Cloncurry
region of Queensland, Australia with such world class Zn-Pb-Ag mines as Mt. Isa, Cannington,
Century, as well as the copper ores of Mt. Isa and the more recently developed Ernest Henry
deposit.

From preliminary compilation of the data at hand three high potential areas, Tholo-Lepashe-Tau,
Thakadu-Makala-Dihudi-Mutsuku and Nakalakwana, are attractive targets for further
exploration. Exploration completed to date has largely been directed toward compilation and
target definition surveys. Limited drilling, particularly where testing geochemical targets, has
been successful in defining the presence of significant copper and zinc mineralization in bedrock.
The three areas are described in more detail below.




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  • Thakadu (Thakadu-Makala-Dihudi-Mutsuku) Area
  The Thakadu area is centered on the Thakadu and Makala deposits. Mineralization is hosted
  in a calcareous quartzite to quartz schist. This unit exhibits wide variation in composition
  from calcareous to feldspathic to micaceous types, to clean quartzites. Graphite is a common
  minor constituent. Chlorite and biotite are present in the more schistose portions of the
  deposit. Surrounding units are predominately intermediate amphibolite-biotite schist, which
  may volcanic/volcaniclastic in origin.

  A Proterozoic stratiform sediment hosted Zn-Pb-Ag-Cu deposits model is proposed to guide
  exploration. Target examples are large, > 100 million tonnes @ >> 10 % Zn+Pb; e.g. Mt. Isa:
  150 Mt, 7% Zn, 6% Pb, 150 g/t Ag, plus 255 Mt @ 3.3% Cu. Key component of the model
  are outlined in Table 9-4.

              Table 9-4: Revised Mineralization Model, Thakadu-Makala Area

                Typical Deposits                                      Matsitama Belt
Target:         Large, > 100 million tonnes @ >> 10 % Zn+Pb;          Target
                e.g. Mt. Isa: 150 Mt, 7% Zn, 6% Pb, 150 g/t Ag,       Resources at Dukwe of " 20 Mt, open at
                plus 255 Mt @ 3.3% Cu                                 depth; at Thakadu-Makala of " 12 Mt
Dimensions:     Complex orebodies; multiple parallel Pb-Zn            Mineralization over strike lengths of over
                horizons over strike of " 2,000 m, stratigraphic      2,000 m (Dukwe, Thakadu northern
                width of " 500 m, to 1,000 m depth                    extension), stratigraphic widths of 200 m
                                                                      (Dihudi), open at depth of 200 m
Regional        Marginal marine basins                                Yes
Geology:        Greenschist-amphibolite metamorphic                   Yes
                Continental basalts as important part of older rift   yes - extensive lower mafic volcaniclastic
                fill                                                  unit; lower assemblage ultramafic
                Diverse sedimentary host lithologies, terrestrial,    yes - red-beds, carbonates, black shales;
                peritidal and deep marine settings, partly            peritidal facies; evaporitic sabkha units;
                evaporitic; includes black, grey, brown, red rocks    includes coloured rocks (Mmalogong Fm.,
                                                                      Palalmela Fm)
                Within few kilometres of major, long-lived            yes - through Thakadu; also Bushman
                regional fault                                        lineament
Local           Syngenetic, early diagenetic (pre-deformational)      yes – stratiform mineralization and
Geology:        mineralization                                        geochemical anomalies
                Carbonaceous, pyritic, black and grey (dolomitic)     yes - biotite-graphite schists; graphitic
                mudstones                                             horizons, and EM conductors
                Significant carbonates                                yes – dolomites, limestones
                Tuffaceous mafic volcanics                            yes – regional and local
                Coarse grained debris flows                           yes – Thakadu conglomerate
                local heat sources                                    yes – numerous high potassium features
                                                                      from radiometrics survey, extensive mafic
                                                                      sills
      (Source Chunnett, et. al., 2000)

  This potentially mineralized stratigraphy has been traced by wide spaced reconnaissance
  drilling, soil geochemistry and geophysics over a total strike length of forty kilometres. It
  occurs in a complexly folded, steeply dipping sequence of metamorphosed, originally
  carbonaceous pyritic black shales with interbedded limestones, exhalative barite-celestite
  horizons and chert. The mineralization is hosted within the black shales (which are now


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mostly biotite-schists) and consists of disseminated chalcopyrite, sphalerite and galena in
association with pyrite-pyrrhotite. The southeast end of the belt contains predominantly
copper mineralization with weak zinc-lead occurrences in the hanging wall in the Thakadu-
Makala area. The zinc-lead content increases gradually north-westward along 20 kilometres
of the belt to co-incident copper-zinc-lead in the Dihudi area and more extensive zinc-lead
mineralization in the Mutsuku area at the northwest end of the belt. This entire sequence
appears to be duplicated by folding or faulting in a parallel 20 km long belt lying to the
northeast in the Kamela-Lengau area.

In the Dihudi area, drilling has delineated three parallel mineralized zones over a total strike
length of 1,100 metres. Intersections include 4.64% Cu and 67 g/t Ag over 4.57 m, 2.38%
Zn over 4.26 m and 5.86% Pb over 6.4 m. The soil geochemical and geophysical (EM, IP)
anomalies associated with the Dihudi mineralization occur along strike for a further five
kilometres although locally interrupted by alluvial cover.

One diamond drill test hole has been drilled into each of two of these extensive anomalies.
Each one intersected multiple horizons of stratabound coincident semi-massive chalcopyrite-
sphalerite-galena in association with pyrite-pyrrhotite, in an overall mineralized interval of
94.5 metres. The host rock is black shales and staurolite-biotite schists with local exhalative
chert and barite with associated interbedded mafic pyroclastic volcanic rocks and syn-
volcanic sills are extensively altered with epidote, K-feldspar and locally intense tourmaline.

Diamond drilling in the Mutsuku area has confirmed the existence of extensive sphalerite-
galena mineralization in an over eight kilometres long complexly folded biotite-schist and
black shale unit, as interpreted from extensive Zn-Pb-Ba geochemical anomalies in various
fold limbs. Diamond drill hole results highlights from Mutsuki are presented in Table 9-5.

                Table 9-5: Selected Drill Hole Results, Mutsuku Area

HOLE                                      WIDTH (m)                           % ZN
MDD 001                                      98.0                             0.49
Including                                    48.0                             0.65
Including                                    10.0                             1.05
MDD 010                                      49.0                             0.97
Including                                    36.0                             1.17
Including                                    17.0                             1.47
MDD 011                                      53.7                             0.60
Including                                    21.0                             1.37
Including                                    11.0                             1.75

A residual gravity anomaly covering an area of 1,200 m by 850 m lies to the north of the fold
closure of the anomalous black shale horizon and remains untested by drilling.

• Nakalakwana Area
The Nakalakwana area is located 25 kilometres southeast of the Thakadu area. The contact
between the Mmalogong Formation and the Nakalakwana Formation roughly bisects this
area of interest. To the south the Mmalogong formation consist of predominately sub-arkose
sandstone with characteristic iron-oxides or “red beds” and includes amphibolite grade


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metamorphic equivalents. The Nakalakwana formation is a broad group of iron-rich quartzite
and calcareous pelites. The formation also contains occasional thin units of limestone and
amphibolites. The Palamela -Mutsuku formation which hosts most of the mineralization in
the Thakadu area to the west extends a short distance into the Nakalakwana area of interest.
The northern portion of the property is underlain by the Lepashe River formation, here
forming a band varying in thickness from under 200 meters in the west to over 3000 meters
in the east. The Lepashe River formation consists of a mixed package of mafic volcanic tuffs
and flows, continental tholeiitic rocks and lesser limestone, sandstone and mudstones. In the
area of the contact between the Nakalakwana formation and the Mmalogong formation a
number of 100 to 200 meter wide arkosic units can be traced for over 10 kilometres marking
a distinct fold structure. There is considerable thickening of this arkosic units near the hinge
of the fold.

The Nakalakwana copper deposit occurs near the contact between the Nakalakwana
formation and the Mmalogong formations. Historic grade/tonnage estimates stand at
11,000,000 tonnes grading 0.63% copper. Mineralization occurs in a 600 meter wide band of
deformed garnet-staurolite-biotite schists. Better individual drill holes include 0.85% Cu over
83 meters and 0.63% Cu over 69.0 m. Regional soil geochemistry surveys have identified a
number of moderate to strong soil anomalies for both copper and to a lesser extent zinc. In
addition soil surveys have identified laterally extensive barite anomalies. The Nakalakwana
deposit is reflected by a moderate to strong copper anomaly roughly 4 kilometres in length.
There are at least six additional anomalies that share similar dimensions to the Nakalakwana
soil anomaly. Five of the six anomalies occupy the same general stratigraphic horizon as
Nakalakwana. These anomalies have had little or no drilling, particularly given their size.
Two of these anomalous areas, Phute and the North Nakalakwana area are further discussed
below.

The large Nakalakwana fold structure is clearly reflected by a prominent potassium anomaly,
which marks the lateral extent of some of the mapped arkosic units associated with the
mineralization in the area. A second broad and extensive anomaly occurs along the southern
portion of the Nakalakwana area of interest. This southern anomaly is underlain by gneissic
rocks of the Jankie Gneiss group.

The high band of conductivity that marks the margin of the Lepashe formation along the
northern portion of the property extends into the Lepashe area. Unlike the northern extends
of the conductive zone, in the Nakalakwana area the conductive band consists of a number of
conductive horizons, likely due, at least in part, to folding. There is no apparent conductive
horizon directly associated with the Nakalakwana mineralization.

More recently a number of the regional geochemical anomalies were selected for detail
ground follow-up. In most cases only a portion of the anomalies were covered, generally but
not always followed by drilling a few RC holes. Anglo also drill tested selected EM targets
along the conductive trend to the north. Anglo drilled a single hole in the Nakalakwana
resource area to investigate the style of mineralization and to confirm the grade of the
resource. This hole returned 0.44% Cu over 112 meters.




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  A Proterozoic Iron-Oxide/ copper (gold) model is proposed to guide exploration. Target
  examples are a Tennant Creek type deposit (7Mt at 2.3% Cu, 22 g/t Au) or Mt. Isa type
  (255Mt at 3.3% Cu). Key component of the model are outlined in Table 9-6.

                 Table 9-6: Revised Mineralization Model, Nakalakwana Area

                     Typical Deposits                                     Matsitama Belt
Target:              Extremely variable 7 Mt, 2.3% Cu average, 22         Bushman: " 20 Mt, 2.5% Cu
                     g/t Au average (Tennant Creek); 255 Mt, 3.3%
                     Cu (Mt. Isa)
Dimensions:          Irregular Cu zones over 400 x 200 m (Mt. Isa)        Soil anomaly dimensions at six
                                                                          anomalies in excess of 2,000 m of
                                                                          strike length
Regional Geology:    Turbidite filled graywacke-shale sedimentary         Shale-carbonate             assemblage.
                     rift basins (Tennant Creek); carbonaceous            Palamela-Mutsuku formation to the
                     dolomitic shale (Mt. Isa)                            northwest
                     Subaerial volcanics or felsic intrusives             mafic volcaniclastics; intrusives not
                     (granitoids, porphyries)                             identified.     Extensive     potassium
                                                                          anomaly below the Naklakwana area
                                                                          and to the south may in part be related
                                                                          to intrusive presence
                     Ironstones   or   disseminated    magnetite   or     Ironstone in lower assemblage;
                     haematite                                            disseminated haematite in arkoses.
                                                                          Site of some of the ancient workings
                                                                          in hematite pits.
Local Geology:       Ironstones or haematite-rich shales; breccias        Both present, iron rich shales with
                     (Ernest Henry); A silica-dolomite@ (dolomite-        arkoses        and      silica-dolomite
                     quartz-ankerite-chalcopyrite) (Mt. Isa)              assemblages at Dihudi, Mutsuku,
                                                                          Thakadu (Mmalogong Fm.)
                     chlorite-muscovite alteration; magnetite-siderite    Present at Nakalakwana
                     or calc-silicates
                     Chalcopyrite-(pyrite) in veinlets (stratabound       Present at Nakalakwana
                     networks)
                     strong Fe-oxide (haematite) association              Present throughout red-bed arkose
                                                                          formation
                     Au high (Tennant Creek) or low (Mt. Isa);            no data
                     associated Bi, U, REE
      (Source Chunnett, et. al., 2000)

  Further exploration potential includes;
  • Western extension of the resource area at Nakalakwana Hill has seen only limited drill
     testing. Anglo drilling focused on a series of zinc anomalies and EM conductors
     occurring stratigraphically above the copper horizon. Results were mixed. This anomaly
     extends for approximately 4 kilometres and requires further testing.
  • The broad high potassium anomaly that underlies the Nakalakwana Hill resource extends
     3 kilometres to the east and folds back on itself. The northern trend is approximately 4
     kilometres in length. Only limited drilling has been competed to the east and very little
     work has been done on the northern extension.
  • The Phute Cu anomaly, located 5 km southwest of Nakalakwana Hill, was tested by
     Anglo but at only two locations along a 3,000 metre strike length. Better results include



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   0.24% Cu over 19 m and 0.28% Cu over 50 m. One hole averaged 0.14% Cu over it’s
   entire length of 104 metres. Further testing of this anomaly is required.

• Lepashe (Tholo-Lepashe-Tau) Area
Mineralization in the Lepashe area (eastern portion of the prospecting licence) is associated
with amphibolites and metavolcanics. Chalcocite and chalcopyrite mineralization is
disseminated throughout these rock units forming veneers on schistosity plane and joints
surfaces. Mineralization is likely to have a low to high response to electromagnetic methods
and possible high magnetic signature. Controls for the mineralization are a combination of
stratigraphic and structural.

The geological setting of the Lepashe area is characterized by a broad “S” shapes fold
feature. The southern portion of the property is underlain by a +10 kilometre thick sequence
of the Lepashe River formation. The northern portion of the property covers a mixed
sequence of Palamela-Mutsuku formation, amphibolites and basement rocks of the Mosupe
formation. The northern sequence of mixed units varies in thickness from 1.5 to 5 kilometres
and best defines the broad “S” shaped fold structure. The Lepashe River formation consists
of a Proterozoic age sequence of interbedded mafic volcaniclastic tuff, flows, continental
thoeliites and lesser sedimentary units including limestone, sandstone and mudstones. The
Palamela-Mutsuku formation is also Proterozoic in age, and in the Lepashe area, consists of a
mixed group of mica schists, biotite schists, carbonates, marbles, with lesser interbedded
mafic volcaniclastics and arkosic units. Basement rocks of the Mosupe formation represent
the base of the Matsitama supergroup. In the Lepashe area the Mosupe formations consist of
a mixed group of sedimentary, volcanics and ultramafic intrusives, including banded iron
formations and less common carbonates and quartzites. These units are bounded in the east
by the younger, possibly Archean gneisses and granites of the Motloutse complex. Mesozoic
to Upper Palaeozoic sedimentary and volcanic units of the Karroo Group overly a portion of
the Lepashe area forming east-west band, 2 to 3 km in thickness. A number of copper
showings, primarily based on the presence of “ancient” workings, occur along the contact of
the Lepashe River formation and the Palamela-Mutsuku formation.

There is a prominent continuous conductive trend that extends the length of the contact area
with the Palamela-Mutsuku formation and reflects the “S” shaped fold feature. The
conductive horizon changes from a single horizon along fold limbs to multiple horizons near
fold closures. A broad east–west trending conductive zone corresponds with the known limits
of the overlying Karroo group.

The prospective units have been covered by the regional geochemical surveys as well as
selected detail ground areas. The contact between the Lepashe river formation and the
Palamela-Mutsuku formation is marked by a laterally extensive copper soil anomaly
(>80ppm), which extends from the Thakadu area of interest to the northern portion of the
Lepashe area of interest. The anomaly clearly reflects the “S” fold structure and extends for
over 30 kilometres varying in width from 250 to 1000 meters in thickness. Further north in
the Tholo area, a broad 4000m wide pyramid shaped copper anomaly occurs along the same
horizon. A number of smaller but still significant copper anomalies occur lower in the
Lepashe formation. Significant nickel anomalies occur to the north of the copper anomalies



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associated with the ultramafic units of the Mosupe formation. One of these nickel anomalies
measures 1500 by 2000m. Previous operators completed a program of “wagon” percussion
holes in the area of the Tholo anomaly but the shallow depth of drilling failed to get beneath
the calcrete cover.

Anglo completed an evaluation of historical data expanded the existing regional soil
sampling coverage and established detail soil sampling and geophysical grids on selected
portions of the regional soil grid. A total of 10 new trenches were established in the Lepashe
area of interest. 7 RC drill holes were completed to test geophysical, and geochemical
anomalies for both copper and nickel. All RC holes were drilled to test EM features and in
most cases graphitic schists were intersected. Assay values for base metals were all low. The
Anglo RC drilling was probably too shallow, <60m, to test any primary mineralization.

Detail mapping at 1:20,000 scale outlined the large Tholo copper anomaly which forms an
inverted pyramid shape approximately 4.2 kilometres in width. Anglo drilling and trenching
in the area was all directed toward ground HLEM targets outside the limits of the copper soil
anomaly. Drill holes intersected graphitic schists and disseminated sulphides which returned
only low base metal values. Earlier operators drilled portions of this anomaly with a series of
“wagon” drill holes which failed to penetrate the calcrete cover.

A large nickel anomaly measuring 3,000 metre by 1500 metres corresponds to an area
underlain by ultramafic intrusives. Layered chromite and magnetite have been identified in
the rare outcrops in this area. A high potassium anomaly 4000 m by 1000 m in size underlies
the northern half of the nickel anomaly. A smaller nickel anomaly(+500 metres) is situated
1500 metres to the west. This smaller anomaly will require further ground targeting to
properly define its size and strength. Anglo trenched three areas, only one of which was
located on the nickel anomaly. One sample returned 1.3 gpt Pt + Pd. Anglo did not
complete any drilling in this area.

Further exploration potential in the Lepashe area includes the 30 kilometre long copper soil
anomaly along the contact between the Lepashe River and Palamela-Mutsuku formations
which has yet to be properly tested. Previous drilling was too shallow to adequately test the
anomaly. With the current extensive digital database, regional soil geochemistry, airborne
electromagnetic and magnetics, radiometrics and hyperspectral survey the 30 kilometre long
anomaly can quickly be targeted.

There are also several smaller, but still significant soil geochemical anomalies. These
anomalies occur throughout the Lepashe River formation. A number of these anomalies are
over 2,000 metres in length and may be more continuous with ground follow-up. The
extensive digital dataset in this area would facilitate an inexpensive and rapid targeting and
prioritization of targets. The Ultramafic/Nickel area is one of two large nickel anomalies (the
other is in the Thakadu area) in the Matsitama belt. There is also a coincident potassium
anomaly similar in scale to the nickel anomaly. This anomaly is a strong PGE target that has
yet to see any drilling.




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    • Thakadu – Nakalakwana-Lepashe Areas
    All three extensive priority zones which existed prior to the Anglo program (Lepashe,
    Thakadu and Nakalakwana) remain as important targets for further work for copper and/or
    lead-zinc mineralization. Several smaller, but still significant anomalies, of which the few
    tested returned significant intersections, such as at Phute (Naklakwana area). There are
    numerous other showings which remain as interesting targets but were never followed-up by
    Anglo. Each of the extensive priority zones are associated not only with the base metals in
    soils, but also with areas of anomalous radioactive potassium, metallogenically favourable
    lithologies and electromagnetic survey conductors. Many of the smaller, but locally higher
    amplitude base metal anomalies have similar, favourable rock associations and locally co-
    incident remote sensing characteristics.

9.2.   Detailed Exploration Dukwe Deposit

The Dukwe Deposit, specifically the potentially open pit mineable oxide mineralization, is the
cornerstone of African Copper’s Botswana activities. Because of the overall importance of the
detailed exploration work at Dukwe in the context of the Project’s Feasibility Study the results of
this work are presented in detail in the following Sections 10 to 13 inclusive. The primary
sulphide mineralization underlying the oxide copper zone is a potential major source of copper
metal that could complement or continue the proposed mining operation. This section will deal
primarily with the sulphide zone at Dukwe.

Percussion and Diamond Drilling
Much of the drilling data for the Dukwe Deposit was acquired by previous holders of mineral
rights in the area. Drilling campaigns include core and percussion drilling by BCL from 1959-63
(BCL, 1963) and from 1972-74 (BCL, 1974). Additional core and percussion drilling was
completed by Falconbridge between 1978-89 (Falconbridge Explorations (Botswana) Pty. Ltd.,
1977-89). African Copper’s predecessor and subsidiary companies acquired the Property in
1996 and completed drilling programs in 1996 and 2001. The various drilling programs are
described in more detail in Section 10, 11 and 12 of this report.

Historic Mining and Underground Exploration
Prehistoric mining operations which may have removed between 50,000 and 100,000 tonnes of
copper ore are known at Dukwe. Early 20th Century exploration work at Dukwe dates back to
the early 1900’s and resulted in the development of the Bushman Mine (Dukwe Copper
Deposit), which was in sporadic production from 1913 to 1918 (Chunnett, et. al., 2000). An
estimated 10,000 tonnes of oxide copper ore grading 8% to 30% copper were produced from
underground mining from 12 shafts extending to a maximum depth of 80 m.

The historic workings were reopened examined, mapped and sampled three times in the latter
half of the 20th Century. In the 1960’s BCL reopened the underground workings and, developed
a short winze, the Erasmus Winze. Between 1979 and 1982 Falconbridge completed a major
exploration program that again reopened, mapped and sampled the old workings. Finally
Mortbury reopened the Bushman No. 2 Shaft and accessed the -30 and -60 metre levels for the
purposes of mapping and sampling.




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All of the workings are confined to the oxide and supergene zones.

Sulphide Zone Metallurgical Studies
The only known metallurgical test work conducted on the Dukwe sulphide zone was done by
Falconbridge (Ryan, 1983) (Johnston, 1983). Material from drill hole B16 at Mapanipani North
was subjected to bench-scale tests.

Mineralogically the test sample contained only two sulphide minerals; chalcopyrite and minor
pyrite. Both sulphide minerals are usually coarse grained and blebby, approaching semi-massive
in high grade sections but tend to be medium grained in lower grade sections. Graphite occurs in
association with fault zones and breccia fragments within the mineralized zones and in seams in
the hanging and foot walls, and therefore would appear in the process stream as dilution.

Small scale bench tests by Falconbridge showed that a coarse fraction (-1 +0.5mm) can be
gravity concentrated (Reichert cones) to yield a graphite free 27-28% Cu concentrate. The finer
fraction can produce a flotation concentrate grading 25-27% copper but containing up to 8%
graphite.


Historic Sulphide Resource Estimations
Grade/tonnage estimations were made for the primary sulphide portions of the Dukwe deposits
in connection with prefeasibility studies undertaken by Falconbridge in the early to mid 1980’s
(Johnston, 1983) and by MPH Consulting Limited/Bottrill Geological Services (“MPH-Bottrill”)
for Mortbury in 1997 (Brereton and Bottrill, 1997).

Falconbridge used the term ‘mineral inventory estimates’ to describe its mid 1980’s grade
tonnage calculations. Two categories or classes of mineral inventory are stated; ‘drill indicated’
and ‘projected’ that broadly conform to Indicated and Inferred Resources under NI 43-101.
These categories apply to the sulphide zone only from 125 to 470 m vertical depth for ‘drill
indicated’ and 470 to 600m for ‘projected’. Howe has not evaluated this historic resource
estimation in detail and therefore cannot verify whether or not it conforms to NI 43-101
standards. The Falconbridge estimates are presented for information purposes, using two sets of
cut-off criteria in Tables 9-7 (1% Cu + 3 m mining width) and Table 9-8 (1.5% Cu + 2m). Howe
notes that reporting combined ‘drill indicated’ (~Indicated Resources) and ‘projected’ (~Inferred
Resources) is not in accordance with NI 43-101 standard practice.

      Table 9-7: Historic Dukwe Sulphide Resources, Falconbridge 1983, (1% Cu/3m)

     Class*                 Drill Indicated                    Projected                           Total
     Deposit          Tonnes       Cu%      Ag g/t    Tonnes      Cu%        Ag g/t    Tonnes       Cu%    Ag g/t
    Bushman           839,000       3.00     3?      2,921,000     3.35       3?      3,759,000     3.28    3?
   Mapanipani        2,271,000      2.67     3.3     5,485,000     2.97       3.5     7,757,000     2.88    3.4
 Mapanipani North    4,206,000      2.91     4.2     2,725,000     3.08       3.4     6,930,000     2.98    3.9
      Total          7,316,000      2.85     >3      11,130,000    3.10       >3      18,447,000    3.00    >3
* Not NI 43-101 compliant




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     Table 9-8: Historic Dukwe Sulphide Resources, Falconbridge 1983, (1.5% Cu/2m)

     Class*                  Drill Indicated                      Projected                           Total
     Deposit           Tonnes       Cu%      Ag g/t    Tonnes        Cu%        Ag g/t    Tonnes       Cu%    Ag g/t
    Bushman            641,000       3.72     3.1     2,143,000       4.15       3.1     2,784,000     4.05    3.1
   Mapanipani         1,498,000      3.61     4.4     3,878,000       3.84       4.4     5,376,000     3.77    4.4
 Mapanipani North     2,951,000      3.68     5.5     1,905,000       3.76       4.8     4,856,000     3.72    5.2
      Total           5.091,000      3.66             7,926,000       3.91               13,017,000    3.85
* Not NI 43-101 compliant

Mortbury contracted MPH-Bottrill to update the general resource base after completion of the
1996 exploration program. The database used for resource estimation included 129 core or RC
boreholes completed by BCL, Falconbridge and the new drilling by Mortbury. The resource
estimation was reportedly done to the then proposed Canadian Institute of Mining and
Metallurgy classification the precursor to current NI 43-101 standards. The estimation is termed
a ‘global resource’ that comprises all mineralized material outlined by drilling irrespective of
cut-off grade or minimum potential mining widths. The maximum vertical depth of both
Indicated and Inferred Resources in this study is approximately 470 m. The MPH-Bottrill
Resource estimation is summarized in Table 9-10.

      Table 9-10: Dukwe Global Resource Estimation, MPH-Bottrill 1997 (no cut-off)

     Class                                        Indicated Resource                    Inferred Resource
     Deposit (Type)                          Tonnes       Cu%     Width m          Tonnes       Cu%    Width m
     Bushman (Oxide-Carbonate)               877,760      1.56      10.62             -           -         -
     Bushman (Supergene-Chalcocite)         1,457,495     3.99       6.55             -           -         -
     Bushman (Primary-Chalcopyrite)         1,890,871     2.56       4.93          786,060      1.34      6.27
     Bushman Total                          4,226,126     2.85       6.67          786,060      1.34      6.27
     Mapanipani (Oxide)                      620,210      1.50      12.13             -           -         -
     Mapanipani (Supergene)                  930,246      2.35       5.79             -           -         -
     Mapanipani (Primary)                   4,009,132     2.23       5.05         2,435,765     2.36      8.00
     Mapanipani Total                       5,559,588     2.17       5.97         2,435,765     2.36      8.00
     Mapanipani North (Oxide)                599,613      1.39      12.90             -           -         -
     Mapanipani North (Supergene)           1,128,477     2.16      10.01             -           -         -
     Mapanipani North (Primary)             4,144,160     2.62       6.72         1,064,745     2.31      6.48
     Mapanipani North Total                 5,872,270     2.40       7.98         1,064,745     2.31      6.48
     Grand Total (All Types)               15,657,984     2.44       5.96         4,286,571     2.16      7.21
     Grand Total (Primary Only)            10,044,183     2.45       5.03         4,286,571     2.16      7.21

There is reasonable correlation between the Falconbridge and MPH-Bottrill estimates once the
respective estimation parameters are taken into account. This will be discussed in more detail in
Section 16.2 below.
Historic Pre-Feasibility Studies Dukwe Sulphide Zone
A pre-feasibility study was completed on the Mapanipani North area of the Dukwe deposit by
Falconbridge in July 1982 (Ryan, 1982). The study was updated several times after the initial
work as new information, concepts or infrastructure improvements were incorporated into the
economic model (Johnston, 1983), (Ryan, 1987), (Haynes and Blaine, 1989). Since over 15
years have passed since the most recent of these studies was completed many aspects of the
studies are no longer relevant to the current situation.




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At the times of completing the above noted studies there were a number of constraints limiting
the economic viability of any potential mining operation. The most notable of these were
infrastructure factors such as; inadequate available water and electrical power supplies, a lack of
skilled workers in the region, and the need to construct a 13 kilometre access road. The
construction of an on-site smelter was also being considered. From a sales and marketing
standpoint the mid 1980’s were a period of weak copper prices that strengthened somewhat in
1988-90 before easing off again in the early 1990’s.
The infrastructure situation has changed in the region with marked improvements in among other
things, the available water and power supplies. The Dukwe deposits need to be re-evaluated in
the light of these changes.
Exploration/Development Potential
The sulphide zone at Dukwe is indicated to be a potentially huge copper resource that has not
been systematically evaluated as a potential mining operation since the late 1980’s. Since then
the infrastructural situation and copper price outlook have changed substantially in a positive
manner. The proposed oxide copper mining operation at Dukwe should further improve the
general infrastructure situation for the potential underground operation.
Further detailed exploration is required to increase the overall confidence level in the currently
outlined indicated resource area, along with further step out drilling to determine the overall size
potential of the copper deposits. Areas of first priority interest in this regard include; Bushman,
Mapanipani and Mapanipani North, where substantial work has been done previously, and under
explored mineral occurrences including Erasmus and Mahume located along strike. A
substantial work program including surface diamond drilling, geological studies, metallurgical
test work, etc. are required to form the basis of a preliminary economic evaluation of the
sulphide zone. If this work is positive an underground exploration program will be required to
test the geological continuity of the mineralization, the mineability of the deposit, and to obtain
bulk sample material for further process test work.
9.3.   Detailed Exploration, Thakadu and Makala Deposits
Nature and Extent of Work
This section summarizes exploration/development work programs that were undertaken by
previous holders of the mineral rights to gain a detailed understanding of the two copper deposits
preparatory to completing a series of economic evaluations. As outlined earlier in Section 3.0,
two major extended work programs have been conducted on the Thakadu and Makala deposits;
the first by BCL between 1962 and 1976 and the second by Falconbridge from 1977 to 1982.
African Copper has only very recently acquired the mineral rights to these deposits and has not
yet completed any of its own investigations. At the time of writing African Copper is still in the
process of acquiring detailed technical data on the deposits from various sources. The following
sub-sections concentrate on broad technical aspects of the previous investigations that essentially
remain constant over time, rather than the economic evaluations and feasibility studies that are
dated.
Percussion and Diamond Drilling
The drilling campaigns at Thakadu and Makala were conducted exclusively by BCL during the
period 1962-1976. A total of 156 boreholes with a combined length of about 39,000 metres were



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completed from surface, including both diamond and percussion drill holes. Another 882 metres
of underground diamond drilling was completed on the two deposits. The maximum depth to
which the mineralization has been tested is approximately 550 vertical metres.
Falconbridge acquired the deposits in June 1977 and subsequently the BCL drill core, records,
and analytical results were re-examined. After a series of verification exercises, including 524
check assay determinations for both copper and silver, Falconbridge concluded that the drilling
information was accurate and sufficient for grade/tonnage estimations and potential mine
planning exercises.
Underground Exploration
BCL sunk shallow prospect shafts to approximately 70 metres below surface on each of the
deposits with a combined 620 metres of lateral underground development. These openings were
used for a variety of purposes including; geological investigations, channel sampling for grade
distribution, sampling for process test work, and for underground diamond drilling. Information
from this work was used together with the surface drilling database to complete grade/tonnage
estimates for both deposits.
Between 1977 and 1979 the Thakadu prospect shaft was rehabilitated and dewatered by
Falconbridge. The underground workings were re-mapped in detail on both plan and section to
verify and complement the BCL geological, geotechnical and analytical database. The openings
were channel sampled for grade distribution purposes, mineralogical investigations and bench-
scale metallurgical test work. In addition 3 tonnes of oxide and sulphide material was taken
from underground locations and surface dumps for further process testing. Finally in
October/November 1980, a bulk sample of 180 tonnes of sulphide material was taken for pilot
plant test work.
Metallurgical Studies
Previous owners of the deposits have conducted extensive metallurgical test work on both the
oxide and primary or sulphide portions of the deposits. Both BCL and Falconbridge have
undertaken a variety of tests that have shown that the main metallic commodities, copper and
silver, can be readily recovered as saleable products, using proven conventional technology. The
oxide material from Thakadu is amenable to copper recovery by crushing and heap leaching
followed by solvent extraction and electrowinning (“SX-EW”), while the sulphide material can
be processed into a saleable copper concentrate with silver credit by conventional crushing,
milling and flotation methods.

The oxide material from Thakadu has been extensively tested at bench-scale and pilot plant
levels. The optimum findings to date indicate that a copper recovery of about 70% can be
achieved over a period of 30 days with a heap thickness of 2 metres of minus 1 inch (~2.5cm)
crushed material. Sulphuric acid consumption by weight is a 3.5 to 1, acid to copper ratio. Acid
consumption is high due to the relatively high carbonate content of the mineralization.

Available test results on the sulphide material indicate that a copper extraction of 90 to 96% can
be achieved by flotation producing a sulphide concentrate containing 28 to 32% copper and
approximately 250 g/t silver.




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  Historic Resource/Reserve Estimations
  Four separate estimations of the grade and tonnage of the Thakadu and Makala deposits have
  been made between 1968 and 1977. BCL completed in-house estimations in 1968 and 1976, and
  in 1968 also retained engineering consulting firm Behre Dolbear to do an independent
  calculation. Falconbridge completed a similar grade tonnage estimate using the BCL database in
  March 1977 (Lee, 1977) while its licence application was being processed by the Government of
  Botswana.

  The above estimates have been reported as “possible in situ reserves” in Falconbridge’s 1989
  feasibility study (G.S.E., 1989). It is noted that such a classification does not conform to current
  international standards for reporting mineral resources and reserves. However, since BCL,
  Falconbridge and Behre Dolbear are all well-established reputable major participants in the
  international mining industry, there is no hesitation to report their grade/tonnage estimations as
  historic resources herein.

  The BCl (1968 & 1976), Behre Dolbear (1968) and Falconbridge (1977) grade/tonnage
  estimations are summarized in Table 9-9.

      Table 9-9: Thakadu & Makala Copper Deposits, Historic Grade/Tonnage Estimations

                       Behre Dolbear - 1968        BCL – 1968              BCL - 1976                Falconbridge – 1977
                       mil.     Cu        Ag g/t   mil.     Cu    Ag g/t   mil.     Cu      Ag g/t   mil.     Cu        Ag g/t
                       T        %                  T        %              t        %                t        %
Thakadu
Oxides                 0.81     3.77         -     0.81    3.77   -        0.97     3.75    45.5     0.84     3.65      38.2
Sulphides              1.17     2.60         -     1.54    2.47   -        1.23     3.02    -        1.84     2.53      25
Combined Total         1.99     3.03         -     2.35    2.92   -        2.21     3.34    -        2.68     2.88      29
Makala
Oxides                 -        -            -     -       -      -        -        -       -        0.41     1.64      38
Sulphides (1% cut-     4.62     2.12         -     4.53    2.08   -        -        -       -        4.32     1.99      -
off)
Sulphides (1.5% c/o)   -        -            -     -       -      -        -        -       -        2.17     2.51      -
  (Compiled by Falconbridge, source G.S.E., 1989)

  Historic Feasibility Studies
  Four feasibility studies were completed on the Thakadu and Makala deposits by or for
  Falconbridge between 1980 and 1993 (Charlap, 1980) (Ryan, 1982) (G.S.E., 1989). Since over a
  decade has passed since the most recent of these studies was completed many aspects of the
  studies are no longer relevant to the current situation.

  At the times of completing the above noted studies there were a number of constraints limiting
  the size of any potential mining operation. The most notable of these limiting factors were, the
  available water and electrical power supplies, and a lack of skilled workers in the region. As a
  consequence of this only quite small mining projects were considered in the studies, such that the
  then outlined copper resources were sufficient for 20-25 years of possible production. In spite of
  this, the economic evaluations indicated that reasonable profitability could be achieved, albeit at
  modest levels of cash flow.




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The infrastructure situation has changed in the region with marked improvements in among other
things, the available water and power supplies. The Thakadu and Makala deposits need to be re-
evaluated in the light of these changes.

Exploration/Development Potential
Exploration activities effectively ceased on the two deposits in 1979 after Falconbridge
completed its re-evaluation and verification work pertaining to the earlier BCL programs. As
noted above, sufficient copper resources were outlined at that time for up to 25 years of potential
production. Thus there was no incentive or justification to continue outlining more of the same
type of mineralization.

It is known that both deposits are open at depth and to a limited degree along strike. The deepest
drill holes, that have penetrated to a vertical depth of about 550 metres, were still well
mineralized, so the down dip potential is significant. Motivation to test this potential would still
be gauged by possible mining operation size constraints.




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                                         10.0    DRILLING

Exploration drilling at Matsitama and outline/definition drilling at Thakadu-Makala was
previously described in Section 9. This section will concentrate on drilling (and underground
chip sampling) specific to the proposed oxide mining operation at Dukwe.

10.1.   Nature and Extent of Work

Much of the exploration data for the Dukwe Deposit comes from reports prepared by previous
holders of mineral rights in the area. The most significant of these are reports on core and
percussion drilling by BCL from 1959-63 (BCL, 1963) and from 1972-74 (BCL, 1974), while
similar reports by Falconbridge cover core and percussion drilling completed between 1978-89
(Falconbridge Explorations (Botswana) Pty. Ltd., 1977-89). African Copper’s predecessor and
subsidiary companies acquired the Property in 1996 and since then has done extensive
exploration including drilling to confirm previous results and increase confidence levels for the
preparation of a feasibility study that was completed in April 2002 (SNC, 2002).

10.2.   Historic Dukwe Definition Drilling and Underground Chip Sampling

In 1951 to 1954 the Bechuanaland Protectorate Geological Survey completed geological mapping, a self-
potential geophysical survey, and drilled a total of four diamond drill holes (B1-B4) at the
Bushman and Erasmus occurrences. There are no records of the results of these holes.

In 1960 to 1964 BCL, carried out, geological mapping and trenching, as well as the drilling of six holes
totalling 1,462 metres (B5-B10) in 1962 and 1963. The underground workings in the Bushman and
Mopanipani areas were mapped and sampled. Based on the results, the Erasmus Winze was sunk.
Operations were suspended as work focused on other prospects. The results of the drilling are recorded
in drill logs for holes B5 to B10 and were used in African Copper’s database for resource estimates.
Complete drill logs and analytical certificates are available for these holes. A map of the
underground workings and sampling is also available.

In 1972-74 BCL returned to Bushman and continued with general exploration work, as well as extensive
drilling. The drilling program involved investigation of both geochemical and geophysical anomalies
with five diamond drill holes for 717.5 metres (B11-B15), Halco drilling (61 holes, 14,021 ft.) and wagon
drilling(404 holes, 8,725 samples). This work showed that the lower limit of oxidation is at least
100 metres below surface, and provided sufficient information to speculate on the size of the
oxide resources. The records of diamond drill holes B11 -B15 were used in African Copper’s work.
Complete logs and certificates are available.

In 1978-89 Falconbridge Exploration (Botswana) (Pty) Ltd. followed with an extensive program
of compilation of previous work, underground mapping and sampling, geophysics and
geochemistry. In 1979 to 1982, 49 core holes totalling 10,257 metres of core and 6,483 metres of
pre-collar percussion drilling was completed in the series FB16 to 67, as well as an additional six
holes in the FE and FEW series for 1,441 metres of core. In addition 23 percussion holes totalling
1,712 metres were drilled. The records of diamond drill holes FB16 to 67, FES, 17, 18, 19 and 21 and



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FBW9 were used in the current database. Complete logs and certificates are available. The records
of the underground sampling are available on two plans showing the geology, with an incomplete
legend, and the sample results for the individual copper samples, presumed to be chip samples.

With the completion of the Falconbridge program the major part of the deposit had been drilled to an
average section-line spacing of 122 metres (equivalent to an original 400 foot grid spacing), with
most of the diamond drilling being below 150 metres to depths of as deep as 475 metres.

10.3.   Mortbury Surface Drilling and Underground Chip Sampling Programs

1996 Drilling and Channel Sampling Program
Between July and December 1996 MPH Consulting Limited managed a program of exploration on the
Dukwe property on behalf of African Copper subsidiary, Mortbury Limited, consisting of:
   • Re-picketing and line-cutting totalling 4.6 kilometres;
   • Core drilling of 26 holes totalling 5,086 metres;
   • Reverse circulation (RC) drilling of 14 holes totalling 1,758 metres along with 641 metres
      of percussion drilling to pre-collar seven diamond drill holes; and
   • Rehabilitation of the Bushman No. 2 Shaft and replacement of ladders and staging for access to -60
      metre and -30 metre levels in order to make a visual examination of the mineralization.

The 200m E baseline was recut from 1309N to 3318N. Existing cement monuments, located at
regular intervals along the baseline ensured the line was recut accurately. The existing
Falconbridge grid was recut or repicketed and re-chained for those lines on which proposed drill holes
were planned. All collar locations were located by chaining from the 200m E baseline, and an elevation
of 1000 metres above sea level was assumed for all holes.

Drilling operations were completed under a contract with SDS Drilling, a division of Boart Drilling
(Pty.), operating out of Gaborone, Botswana. The diamond drill rig was a Longyear LF70 mobilized from
North Bay, Ontario, while the reverse circulation equipment came from the SDS Gaborone base.

The objectives of the drilling were to test the mineralization at shallower levels than for most of
the historical work, primarily in order to evaluate the oxide potential, and to in-fill the existing drill
pattern at 122 metres with intermediate sections, reducing the hole spacing along the strike to an
average of 61 metres.

Drilling was carried out on 17 sections from lines 1309N to 3318N. Typically two core holes and one RC
hole were drilled on each section, with the core holes targeted to intersect the mineralized unit at -100
metres vertical depth or deeper.

Down-hole deviations of diamond drill holes were recorded by Sperry Sun instruments every 50
metres down the hole. All casing was removed from the holes except for the percussion pre-collars
which had been used on seven of the diamond drill holes.

Twenty-six NQ core holes (designated with MC prefix) were drilled for a total of 5,086 metres, including
641 of pre-core percussion drilling.




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Although core recoveries were generally acceptable (greater than 85%), local bad ground
conditions were responsible for the abandonment or premature termination of seven holes. Four
of these did not completely intersect the target mineralized unit, while the other three penetrated
the target and were terminated early in the footwall. In all cases, bad ground conditions were caused
by caving in the hole due to either friable altered granite gneiss near the granite-sedimentary rock
contact in the hanging wall, or to graphitic faults within or on the margins of the mineralized unit. To
avoid hole caving due to bad ground conditions in the granite gneiss, seven of the diamond drill
holes were pre-collared with the reverse circulation rig. Recoveries in the mineralized unit were from
10% to 95%, and typically 80% to 95%, with the poorest recovery encountered if intersecting graphitic
fault gouge. RQD values were generally high in the silica-carbonate breccia, but ranged from 0% to
90%, depending upon the proportion of carbonaceous sediment or breccia.

Fourteen reverse circulation percussion holes (MR prefix) were drilled for a total of 1,758 metres. These
holes were typically drilled on the same lines as the core holes. The percussion holes were
intended to intersect the mineralized unit at a depth of-50 metres, with the main objective being to assess
the extent of oxide mineralization.

2001 Diamond Drilling Program
In June to August 2001, as part of the SNC Feasibility Study work, Mortbury drilled seven
diamond drill holes for metallurgical test work (MM-A to MM-G), two geotechnical holes in the
footwall and hanging wall (BG-1 and BG-2), four overburden drill holes (OB-1 to OB-4) to investigate
the Karroo thickness, and one care and custody hole (BG-3) which also served as a geotechnical hole. A
number of shallow test pits and two shallow geotechnical holes (WW-1 and WW-2) were also
completed during this period.

During the summer of 2001, additional information in South Africa and Botswana was found which
included plans, sections, drill logs and assay certificates. Mortbury compiled the new assay data and
the assay file expanded from approximately 10,000 records to approximately 15,000 records. Assay
certificates for holes FBV3 and FBW5, which previously had no assay data available, were also found.

10.4.   Drilling Database Used For Resource Estimates

The data base for the African Copper resource estimates consisted of all of the available drill
records, as logs and analytical certificates +/- cross-sections from Erasmus in the south to Mahume in
the North, including all historical drilling from 1962 to 1981 as well as the 1996 Mortbury drilling (Table
10-1).
                               Table 10-1: Drilling Database Summary

      Hole Numbers             Total Holes       Total RC m       Total Core m        Company, Years
B5-B15                             11                 -             2,180.81       BCL, 1962, 73
FB16-67                            49              6,483.7          10,257.3       Falconbridge, 1979-81
FE8, FE17-19,21, FBW9               6              1,441.0
FPH1-23                            23             1,712.35
MC1-3,5,7,15-26, 28,               26               639.0             4,440.7      Mortbury, 1996
33,35-37,39-42
MR1-14                              14              1758.0
Total                              129             12,034.05        16,878.81




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Topographic Control
The BCL grid was an Imperial measure tape-and-compass grid. In 1980, Falconbridge brought in a
mine surveyor to establish a new grid and tied in all previous data to this grid. Falconbridge
established a new baseline parallel to, and 620 m to the west of, the most recent BCL 7000 baseline.
This new baseline was designated 200E and the northing opposite Erasmus Winze 1000N/200E. Large
permanent concrete beacons were erected along the baseline at 1000N, 1600N and 2000N. BCL holes B5
to B15 were tied into the new grid and semi-permanent concrete pegs established every 300 m from
1000N to 3500N. The 200E baseline is at approximately BCL easting 4965, while BCL line 15.0 is
Falconbridge 1123.6N, and BCL line 7.0 is 3562.5N (Johnston and Chandler, 1980).

Mortbury recut the Falconbridge 200E baseline from 1309N to 3318N and recut or repicketed sections
planned for drilling.

In July 2001, Land Surveyor Mr. J.A. Hawlcy of Africa Surveys (Botswana) (Pty) Ltd of Gaborone,
Botswana surveyed the drill collars, test pits and trenches, mine shafts, dirt road, water tanks, and
general topography. He used a Leica Global Positioning System (GPS) System 300, a Leica
Heerbragg Spirit Level, and SKI Static Kinematic and Model Maker Engineering software.

A static GPS survey was conducted to establish the planimetric position of BC1 (in the vicinity of the
base camp) relative to the surrounding national survey control points namely, BPP118, BPS373 and
BPS380. A levelling exercise was used to create a height control network for the project area based on
the interpolation of a height above mean sea level for BC1 using a 1:50 000 topographical map of the
Dukwe region. The points BC1, BL1-BL3 and RD1-RD4 collectively constitute the height network
established. Real-time kinematic (RTK) GPS observations at each of the above-mentioned bench
marks were combined with the post data processing results of the static component of the survey to
calibrate the GPS in height and plan respectively using SKI Static Kinematic software. The topographic
points of detail were then fixed using RTK GPS surveying techniques.

The results of the survey conducted have been presented in the form of a Lo and a UTM coordinate list,
both with elevations attached. The Lo coordinates derived for the topographic points of detail are
consistent with the Botswana National Survey Control System and have been converted to the UTM
coordinate system using the Model Maker Engineering Software package (Hawley, 2001).

Mortbury verified the accuracy of the UTM transformation by comparing the coordinates for surveyed
collars versus the Gemcom transformed coordinates and found that all of the Falconbridge and
Mortbury hole eastings and northings reconciled to within three metres. The surveyed mine shaft locations
were within a few metres of the positions as digitized from the Falconbridge underground level plans.
Mortbury estimates that the transformed UTM collar coordinates for non-surveyed holes and the
underground samples are likely accurate to approximately ±3 m. This is considered to be reasonable for
Mineral Resource estimation use, considering that most of the drill holes are spaced 60 m apart.

Borehole Directional and Inclination Surveys
BCL took Tropari azimuth and dip readings at approximately every 30 m for most of its diamond
drill holes in the Dukwe deposit area with the exception of holes B5 (no assays available) and B10.




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Falconbridge took Tropari azimuth and dip readings at approximately every 50 m for most of its
diamond drill holes.

Mortbury used a single-shot Sperry Sun instrument to measure down hole deviations
approximately every 50 m in the 1996 diamond drill holes. No down hole survey tests were taken in any of
the 2001 diamond drill holes.




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                       11.0    SAMPLING METHOD AND APPROACH

The assay database comprises diamond drill core samples, percussion drill chip samples, and
underground chip samples.

11.1.   Drill Core Samples

Caving, jamming and poor core recovery problems were reported for the early BCL diamond drill
holes drilled in 1962 and 1963. Only two of these holes (B6 and B10) have assays used in the
resource estimate. For the 1972-73 holes, BCL used a Halco-Tiger percussion drill to pre-collar to
below approximately a 60 m depth. The pre-collars of holes B14 and B15 were cased with 3 m lengths
of 102 mm diameter Alvinius steel pipe welded together and the holes were drilled with NXM (54.7 mm
diameter) core barrels (Johnston and Chandler, 1980). Pre-collar percussion chip sample assays (ppm
Cu) are reported for holes B 1 to B15 every 0.6 m (2 ft).

Falconbridge also pre-collared its holes and took generally 3 m samples of the percussion chips.
Falconbridge recovered NQ (50 mm) and TNW (60 mm) diameter core and reported generally good
core recoveries with a few exceptions in oxidized or graphitic material (FB31, FB32, and FB33).
Standard procedure was to sample the entire width of the breccia zone and mineralized areas at 0.5 m
intervals and the rest at 1 m intervals. The samples were split and sent to Maclaughlin & Lazar (Pty)
Ltd. in Johannesburg for assaying (Cu, and some Pb, Zn, Ag and oxide copper).

In the 1996 Mortbury program, all drill core was delivered by the contractor to MPH personnel at the core
logging facility set up on the property, adjacent to Bushman Shaft No. 2. Core was logged and marked for
sampling and those boxes containing sections to be sampled were transported to the camp where samples
were cut in half with a diamond saw. Reverse circulation holes were drilled wet, with the chips logged and
sampled on site at one metre intervals. Sample records were kept as numbered sample books, as tags placed
in the core boxes (or in the remaining sample bag for percussion samples) and on sample sheets
incorporated into the drill logs. A numbered sample tag was placed inside each sample bag sent for
analysis and the appropriate sample number was also marked on the outside of each bag. Core boxes, or
percussion sample bags, were labelled and the remaining core was stored and stacked on site during the
duration of the program. At the end of the program most of the core, with the exception of the majority
of the hanging wall granite gneiss sections, was shipped to Lobatse and stored permanently at the core
library of the Botswana Geological Survey. The remaining percussion sample bags were left on site in a
fenced area.

Mortbury samples were shipped by land to Minvest Laboratories in Johannesburg, South Africa. All
samples were assayed for total copper. Where the total copper percent was greater than 0.25%,
the samples were also submitted for sulphuric acid soluble copper.

11.2.   Percussion Drill Samples

The BCL and Falconbridge large diameter down-the-hole hammer percussion holes were
generally drilled dry to the water table. BCL sent the entire percussion samples to a laboratory for



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crushing and analysis to eliminate potential mineral sorting issues. BCL considered its percussion
samples with the same level of confidence as its split core (Lintern, 1973).

The 1996 Mortbury percussion holes were drilled wet. The chips were logged and sampled on site at one
metre intervals.

11.3.   Underground Chip Samples

The crosscuts and the backs of drifts were continuously chip sampled by Falconbridge. The
samples, generally 1 m in length, were crushed to -1 cm in a pestle and mortar and then riffle split. Half
the material was sent for assay and half retained. Before splitting the samples were logged for
lithology and mineralogy and the proportions of the various copper minerals were noted. The
samples were sent to Maclaughlin & Lazar (Pty) Ltd in Johannesburg for assaying (Cu, and some Pb and Zn).




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               12.0    SAMPLE PREPARATION, ANALYSES AND SECURITY

There is no available detailed information on the BCL sample preparation and analytical
protocols. All of the Falconbridge samples were sent to Maclaughlin & Lazar (Pty) Ltd in
Johannesburg. Mortbury’s 1996 samples were analysed by Messina Investments Laboratories or
Minvest and their 2001 samples to Lakefield African Laboratory, both in Johannesburg.

The Maclaughlin & Lazar (Pty) Ltd sample preparation is unknown. The laboratory’s oxide
copper assay protocol is as follows:
Maclaughlin & Lazar Oxide Copper Assay Protocol
   1. 1.0 g sample in tube.
   2. Add ml of 5% by volume H2SO4 saturated with SO2
   3. Cover. Let stand for 1 hr with shaking.
   4. Filter into 250 ml beaker and wash with hot H2O.
   5. Boil off excess SO2 from the filtrate.
   6. Make to 250 ml (volumetric flask)
   7. Mix
   8. Read A.A

The Minvest sample preparation and analytical protocols are provided below. The smallest value in the
database for BCL, Falconbridge and Mortbury assays is 0.001% TCu.

Minvest Sample Preparation
  1. Dry and Crush
  2. Crusher compressed air cleaned after each sample.
  3. Riffle until ±100 g sample is left.
  4. The sample is packed and the reject is returned to original bag and stored.
  5. The sample from step 3 is pulverized for 1.5 to 2 minutes, mixed and returned to packet.
  6. The aliquots for assaying are weighed out from 5.
  7. All checks are run on samples 5.

Minvest Total Copper Analytical Protocol
  1. 0.5 g sample in 250 ml beaker
  2. Add 10 ml nitric acid and 1 ml perchloric acid.
  3. Cover with speedy wrap cover glass
  4. Place on hot plate, boil to near dryness
  5. Remove, cool, wash cover glass and sides of beaker, add 5 ml nitric acid
  6. Boil
  7. Cool
  8. Transfer to volumetric flask
  9. Make up to volume (H2O)
  10. Mix
  11. Read A.A.
Notes:
    1. If A. A. reading indicates higher than 9% Cu the assay is repeated by electro plating with freshly weighed
       sample.



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    2.   Every 10th sample is checked with a freshly weighed out sample, as are all high values. Once every day, a
         standard sample is checked.
    3.   One in ten samples (from step 5 in sample preparation) are check assayed by Anglovaal Laboratories.

Minvest Sulphuric Acid Soluble Copper Analytical Protocol
  1. 0.5 g sample in 250 ml beaker.
  2. Add +/- 0.5 g Na2SO3
  3. Add 40 ml H2O
  4. Remove tramp iron.
  5. Add 10 ml 1:1 H2SO4
  6. Shake 60 minutes.
  7. Transfer to 100 ml volumetric flask.
  8. Mix and filter a portion for A.A. reading.
  9. Read A.A. using H2SO4 standards

Note:
    1.   When diluting compensate to original 5% H2SO4

The 2001 Mortbury BG3 samples were assayed at Lakefield Africa for both total and sulphuric acid soluble
copper using the 1996 Minvest protocols (Bottrill, 2001). The diagnostic leach results and analytical
protocols for the 2001 metallurgical samples are provided in Bottrill (2001).

The sample preparation process and assay work has been reviewed. The laboratory work was all
done to industry standards using standard procedures in accredited laboratories. The process
included external check assays to a number of other labs for comparative analysis. Internally the
process used adequate blanks, standards, duplicates and replicate samples.

No special security measures were taken other than routine careful marking, handling,
transportation and storage of samples.




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                                   13.0    DATA VERIFICATION

The data verification aspects include the confirmation of existence of work sites such as survey
grids, property boundaries, drill holes and underground workings as well as procedures to test the
reliability of the historic database, in particular the copper analytical results. With respect to the
analytical data we will review the African Copper in-laboratory and intra-laboratory QA/QC
procedures and discuss the preliminary results of check sampling results between the Minvest
laboratory and other South African laboratories.

The confirmation of existence of work sites investigation was done by M. Newbury during his
May 14-19, 2004 site visit. In essence all of the work sites and technical observations reported
by African Copper and checked by Howe are properly recorded and accurate within acceptable
limits. No verification samples were taken for check assay in connection with the Howe site
visit for the following reasons:
    • It is considered unwarranted because a thorough series of checks were previously done
         by Mortbury and its independent consultants during the exploration process and in
         connection with the Feasibility Study.
    • There are no surface or underground exposures available for sampling, and the limited
         amount of halved or quartered drill core remaining for the sulphide zones are now
         believed to be weathered and oxidized.
    • The Oxide Copper Project is already fully documented to bankable feasibility study
         standards in terms of deposit grade, size and shape as well as metallurgical
         characteristics.

Assay quality control (QC) and quality assurance (QA) data exists for the Mortbury 1996 and 2001
drilling programs.

1996 Drilling Program
External check assay digital data and assay certificates exist for 206 sample pulps sent to Anglovaal
Research Laboratory (Anglovaal) in Florida, South Africa. The 206 Minvest total copper assays
average 0.643% TCu compared to 0.681% TCu for Anglovaal, a -6.1% bias. The bias may be due in part to
different analytical protocols and may also be due to gravity settling in the pulp bags. There are also
external check assay data available for 67 samples with sulphuric acid soluble copper assays. The 67 Minvest
samples average 0.422% acid soluble copper compared 0.462% copper for Anglovaal. Mortbury sent 12
pulps to Rio Tinto Services Laboratory (Rio Tinto) as a further check on the Minvest and
Anglovaal sulphuric acid soluble assays. The check analytical results for pulp samples submitted
to all three laboratories are shown in Table 13-1. Scatter plots were prepared by Howe for the
Minvest vs Anglovaal as a check of the data and are presented in Figures 13-1 and 13-2.

As noted in Section 12.0, the laboratories utilized by Mortbury employed the usual in-laboratory
blanks, standards and duplicate analyses to ensure precision and accuracy of results. While there
is no documentation available for the earlier Falconbridge and BCL results it is likely that similar
procedures would have been adhered to.

In Howe's opinion the laboratory assaying has been done to industry standard. Assaying
accuracy is reasonable but reproducibility (precision) is lower than generally expected for copper


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in a few samples. This may indicate either a sample handling or preparation problem and/or
nugget effect from coarse particulate copper minerals.


                                        14
                                                  DUKWE CHECK ASSAYS
                                                  PULPS - TOTAL COPPER
                                        12

                                        10
                       % Cu ANGLOVAAL




                                         8

                                         6
                                                                                              Correlation = 0.9922
                                                                                                        n = 206
                                         4

                                         2

                                         0
                                             0           2         4           6         8        10            12   14
                                                                               % Cu MINVEST




Figure 13-1: Check Assays Scatter Plot, Minvest – Anglovaal, Total Copper


                                  14
                                                 DUKWE CHECK ASSAYS
                                                 PULPS –ACID SOLUABLE COPPER
                                  12

                                  10
             % Cu ANGLOVAAL




                                        8

                                        6
                                                                                              Correlation = 0.9174
                                                                                                        n = 67
                                        4

                                        2

                                        0
                                             0          2         4        6            8        10            12    14
                                                                          % Cu MINVEST




Figure 13-2: Check Assays Scatter Plot, Minvest – Anglovaal, Acid Soluble Copper



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      Table 13-1: Check Assays on Pulp Samples, Minvest-Anglovaal-Rio Tinto Labs

       Sample                Total Copper %                 Acid Soluble Copper %
       Number           Minvest       Anglovaal   Minvest        Anglovaal        Rio Tinto
          15              0.35           0.32      0.04             0.04            0.03
          35              0.69           0.65      0.06             0.06            0.05
          75              2.46           2.52      1.13             0.96            1.08
          85              1.77           1.81      0.49             0.47            0.48
         125              2.55           2.59      0.50             0.49            0.46
         135              0.31           0.33      0.06             0.07            0.06
         145             12.83           12.89     0.64             0.80            0.73
         185              0.64           0.51      0.48             0.44            0.41
         205              7.60           7.74      3.28             2.41            2.97
         245              0.38           0.36      0.27             0.26            0.28
         255              2.08           2.06      0.15             0.22            0.22
         285              6.75           6.80      0.22             0.36            0.39
       Average            3.20           3.22      0.61             0.55            0.60



2001 Drilling Program
Lakefield are a reputable accredited laboratory with proper quality control procedures in place.
The procedures were determined to be adequate. Check of analyses carried out on the Phase 1
samples in Lakefield Johannesburg were compared with a re-analysis done in Lakefield, Ontario.
The differences were not significant.

RPA Mineral Resource Estimate
RPA utilized Gemcom software for their resource estimation and the database for the project
comprises 15,228 assays. The database can be summarized as follows:

   GEMCOM TABLE                                               Number of Records
   Header                                                           431
   Survey                                                          1,064
   Assays                                                         15,228
   Geology                                                         2,577
   Simplified Geology                                              2,452
   Composite Control                                                663
   Composites                                                     17,281

261 assays with values greater than 5% total Copper has been checked, all of the underground
chip sample assays and four records with sample lengths exceeding 3m. No errors were found. A
minimum of 2,088 assay records with the assay records or drill logs for records without
certificates were reviewed and approximately 14% of the assay data verified. The assay data in
the Geocom’s drill hole database is valid and most of the drill hole collar and down hole survey
azimuth and dip values have been checked making adjustments as required.

The header and survey data in the Geocom drill hole database is valid. RPA did not discover any
cases of miscoded geology when comparing the hard copy drill logs with the digital information.



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All the pits, trenches, shafts, drill collars, roads and other infrastructure was surveyed in July
2001 by land surveyor J.A. Hawley of African Surveys (Botswana) (Pty) Ltd of Gabarone. This
was completed using a Leica Global Positioning System 300. It is Howe’s opinion this work is
adequate to provide accurate positioning information for Mineral Resource estimation purposes.

The assay distributions from the main drilling programs and sample types were compared to
confirm that there were no significant differences between the total copper assays from the
various sampling programs. Therefore it has been deemed acceptable to use the total copper
assays in the Resource Estimation.




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                             14.0    ADJACENT PROPERTIES

Since African Copper holds mineral rights covering the entire Matsitama Belt, all of the adjacent
territory that might contain mineral deposits similar to those at Dukwe, Thakadu-Makala, etc. is
already controlled by the company. Therefore there are no adjacent properties of direct
significance to the current property.




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          15.0   MINERAL PROCESSING AND METALLURGICAL TESTING

The oxide zone mineralized material from the Dukwe deposits have been subjected to a number
of metallurgical studies. Detailed descriptions of the test work and the test results are contained
in a number of reports, which are listed below:
    • Lakefield Research, report no. met. 01/C13, The Bushman Project Botswana, Phase 1:
Ore Characterization by Diagnostic Leaching (Original Scope).
    • Lakefield Research, report no. met. 01/C13B, The Bushman Project Botswana, Phase 1:
Ore Characterization by Diagnostic Leaching (Leach Inc. Programme).
    • Lakefield Research, report no. MIN 0801/92, Mineralogical Examination of Bore-core
Samples from the Bushman Copper Project Botswana.
    • Metallurgical Evaluation of the Bushman Copper Ore, Dr. Ronald J. Roman, P.E., Leach
Inc.
    • Lakefield Research, report no. met. 01/C13, The Bushman Project Botswana, Phase 2a:
Mini Column Heap Leach Tests. (Progress Report)
    • Lakefield Research, report no. met. 01/C13, The Bushman Project Botswana, Phase 2b:
Mini Column Locked Cycle Heap Leach Tests. (Progress report)

15.1. Dukwe Oxide Zone Metallurgical Testing
A diamond drilling program was initiated and supervised by Mortbury to generate metallurgical
samples for analysis and column testing. The diamond drill core was logged and observed
visually by SNC-Lavalin. Various intervals were identified by SNC-Lavalin and used to produce
twenty-one individual samples for testing at Lakefield Research in Johannesburg, South Africa.

The 21 samples were received as whole drill core. The first step in the preparation involved air-
drying the material. The drill core samples were then individually crushed to 100% passing
25mm. Representative sub-samples from each ore source were analyzed to establish their copper
contents and subjected to diagnostic leach tests in order to provide an indication of the different
mineralogical ore types in terms of their copper mineralogy.

       Oxide Composite;
       Supergene Composite; and,
       Upper Transition Composite.


The metallurgical response of the lower transition zone has been investigated by testing reject
samples from earlier drilling programs. The reject samples were used because the drilling
program did not intersect the lower transition zone and hence no samples were available for
column testing.

Mineralogy
Mineralogy was conducted by Lakefield South Africa (“Lakefield”) and determined that quartz
is the predominant gangue mineral (>50% of the ore). Calcite is expected to be the main gangue
acid consuming mineral in Dukwe ore, occurring mostly in the form of hydrothermal veins. The




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relative proportion of calcite was estimated to vary from 5 to 20% for oxide and supergene type
ores.

Assuming reaction of acid with 100% of the calcite (only) present, acid consumption would be in
the order of 50 to 200 kg/t ore. However, the Oxide and Supergene ores are known to have been
altered by groundwater to oxide, carbonate and secondary copper (chalcocite), hence the
inference can be made that calcite is also altered (groundwater leached) and therefore consumes
less acid. In contrast, calcite in the Upper transition ore is far less leached by groundwater and
can reasonably be expected to consume more acid.

Chemical Composition of Process Water
Water samples were taken by WSB and sent to Lakefield Research in Johannesburg for analysis.
The samples are the most representative of the potential water quality of the feed to the plant.
These samples are very low in chloride and TDS. Even allowing for concentration due to
evaporation, it is unlikely that chloride levels will exceed 0.5 g/L. The water is relatively clean
and low in dissolved solids and impurities. The only potentially deleterious ion is chloride. In
order to demonstrate that chloride levels would not affect bacterial activity, a leach column
operated at 1 g/L chloride was included in the Phase 2a mini-column tests. The leach rates were
similar to those using low chloride leach solutions.

Water samples were obtained from site, from boreholes that are not currently in operation.
Assay of the “as is” and “acidified” water samples showed a range of values as follows:
         • TDS of the “as is” samples ranged from 56 to 4540 g/litre, compared to 220 for Rand
             Water Board
         • TDS of the acidified samples ranged from 1056 to 5128 g/litre
         • Chlorine content from 61 to 1312 mg/litre, with only 1 sample out of 14 assaying >
             1000 mg/litre, compared to RWB at 13 g/litre
         • Fluorine content generally < 1 mg/litre, compared to RWB at 0.16 mg/litre

In summary, analysis of borehole water indicated no problems are to be expected with plant
operation.

Diagnostic Leach Tests
Leach Inc conducted bottle rolls tests using 5 g of ore milled to 70% -75 µm and leached with
excess sulphuric acid for about 5 hours, generally simulating agitated tank leach conditions. The
bottle roll results can be regarded as good indicators of heap leach acid soluble copper
dissolution. An artificial ferric solution is required to estimate the bio-leachable component.
This was not done in the Leach Inc tests.

Diagnostic leach provides higher acid consumption results than column leach and generally acid
consumption can be seen as the maximum possible.

Table 15-1 provides the relevant results of the diagnostic leach tests to determine the
favourability of the ore to leaching:




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                Table 15-1: Dukwe Oxide Zone Diagnostic Leach Test Results
                   Sample                 Copper dissolution      Gross acid consumption, kg/t
        Metallurgical composite                  77                            138
        Oxide composite                          98                            144
        Supergene composite                      92                            160
        Upper transition composite               80                           371

The main test work was conducted on composite samples that were prepared to reflect the nature
of the deposit as it might be mined.
Column Leach Tests
Lakefield column leach tests were divided into Phase 2a and Phase 2b tests. Phase 2a tests were
the “mini-columns”, all performed on the same metallurgical composite sample, with crush size,
agglomeration method, irrigation rate and certain other parameters varied on specific tests.
Phase 2b tests were generally larger columns, performed on the three composite ore type
samples: Oxide, Supergene and Upper Transition. Overall details of the Lakefield column tests
are given in Table 15-2 and Table 15-3 below :
               Table 15-2: Lakefield Column Leach Test General Descriptions
               Tests                 Samples            Column number               Column
                                                                                 diameter, mm
           Phase 2a        Metallurgical composite          #1 to 14                150
                           Oxide composite                   #1 & 4               150, 250
           Phase 2b        Supergene composite             #2,3,5,6,7             150, 250
                           Upper Transition composite          #8                   150

Phase 2a Column Leach Tests
All tests used strong acid for agglomeration, except for column 9 which used dilute acid and
gave the lowest copper dissolution of 38.1%. Column 14 also gave a very poor copper
dissolution of 39.0%; it is suspected that the incorrect amount of strong acid was used in the
agglomeration of this column.
            Table 15-3: Dukwe Oxide Zone Phase 2a Column Leach Test Results
                   Column Test             Gross Acid       Copper               Comments
                    Description            Cons. kg/t      Dissolution
         Lakefield 2a #1                     108.4           76.4%       <6.35 mm crush
         Lakefield 2a #2                    105.85           80.9%       <9.5 mm crush
         Lakefield 2a #3                     109.6           78.9%
         Lakefield 2a #4                     133.7           84.0%
         Lakefield 2a #5                     151.0           83.7%       <19 mm crush
         Lakefield 2a #6                     151.8           85.6%       <25 mm crush
         Lakefield 2a #7                     108.2           77.3%       Cure time 7 days
         Lakefield 2a #8                     139.2           86.2%       50% acid agglomeration
         Lakefield 2a #11                    124.9           80.2%       Pyrite added
         Lakefield 2a #12                    108.0           86.7%       1000 ppm CI-
         Lakefield 2a #13                     74.5           85.4%       Raffinate, acid 4 g/litre
         Lakefield 2a #14                    110.6           39.0%       4 m column
         Average Columns                     119.0           78.7%
         Average excl. column #14            119.8           82.3%




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All tests were run at an irrigation rate of 10 litre/h/m², except for column 10 which used an
irrigation rate of 20 litre/h/m² and proved to have the highest acid consumption of 169.8 kg/t.

Column 12 included an artificial chloride level of 1,000 ppm to test the effect on bacterial
activity. No adverse effect was noted, although chalcocite content in the metallurgical composite
sample is less than in the Supergene composite.

Column 13 used a synthetic raffinate solution as feed to the column, with acid concentration of 4
g/litre compared to all other columns at 10.7 g/litre. Column 13 gave the lowest acid
consumption of all Phase 2a columns, indicating that lower acid concentration in irrigation
solution leads to lower acid consumption. This finding was noted and applied in the Phase 2 b
columns, all of which recycled raffinate and used an initial dilute acid solution.

The results for columns 9 and 10 are omitted due to the unreliability of their results for the
reasons discussed in the paragraphs above.
Phase 2b Lock Cycle Tests
On the basis of the above a second set of tests Phase 2b were completed using optimizations that
were evident from the first test resulting in. The results of these tests are presented below for the
Oxide, Supergene and Upper Transition Composites in Table 15-4.
                         Table 15-4: Lakefield Lock Cycle Test Results
      Column Test Description     Gross Acid       Copper       Comments
                                  Cons. kg/t      dissolution
      Oxide Composite
      Lakefield 2b #1                85.3           87.3%       0.5 m column: acid 9.38 g/litre
      Lakefield 2b #4                75.7           63.7%       3 m column: acid 4.83 g/litre
      Average columns                80.5           75.5%
      Average excl. col. #1          75.7           63.7%
      Supergene Composite
      Lakefield 2b #2                97.5           84.3%       0.5 m column: acid 9.38 g/litre
      Lakefield 2b #3                62.9           88.5%       0.5 m column: acid 4.83 g/litre
      Lakefield 2b #5                57.8           89.2%       2 m column: acid 4.83 g/litre
      Lakefield 2b #6                94.1           89.7%       Dilute acid agglomeration
      Lakefield 2b #7                58.8           86.3%       3 m column: acid 4.83 g/litre
      Average Columns                74.2           87.6%
      Average excl. col. #2          68.4           88.4%
      Upper Transition Composite
      Lakefield 2b #8          165.3            80.9%           2 m column: acid 4.83 g/litre

Column 4 showed lower acid consumption than column 1, due to the lower acid concentration of
4.83 g/litre compared to column 1 with 9.38 g/litre. However column 4 also gave lower copper
dissolution than column 1, this may have been a result of insufficient strong acid added for
agglomeration.
Acid consumption of 75.7 kg/t has been used for the Oxide ore for process design purposes. The
Metallurgical composite average value of 82.3% has been used for oxide copper dissolution.
Column 2 operated with acid concentration of 9.38 g/litre compared to 4.83 g/litre for all others,
resulting in the highest acid consumption of 97.5 kg/t. If the result of column 2 is omitted, the


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average acid consumption is 68.4 kg/t. This value has been used for Supergene ore for process
design purposes.
Copper dissolution of 86.3% is lowest for column #7 (omitting column #2), which was the tallest
column at 3 m high. Allowing for real heap inefficiency, it is expected that copper extraction
will be 85% and this value has been used for design.
The detailed results for column 8 show incremental extra copper dissolution of 4.1% for
incremental extra acid consumption of 25 kg/t, up to the final acid consumption of 165.3 kg/t.
The result for Upper Transition composite can therefore be restated as 76.8% dissolution at 140.3
kg/t gross acid consumption and these values have been used for process design purposes (Table
15-5).
                 Table 15-5: Dukwe Oxide Zone Test work and Design Values
                    Test Work Value               Gross Acid      Copper
                                                  Cons. kg/t     Dissolution
                    Metallurgical Composite          74.5          82.3%
                    Oxide Composite                  75.7          75.5%
                    Supergene Composite              68.4          88.4%
                    Upper Trans. Composite          165.3          80.9%
                                                  Gross Acid      Copper
                    Design Values                 Cons. kg/t     Dissolution
                    Metallurgical Composite          74.5          82.3%
                    Oxide Composite                  74.5          82.3%
                    Supergene Composite              68.4          85.0%
                    Upper Trans. Composite          140.3          76.8%

Net acid consumptions are calculated in the financial model based on the annual blend of ore
types with different tonnages and head grades.
The test work program showed that high leach efficiencies can be achieved from almost all
samples. The most important decisions taken on the selection of process plant parameters are
given below.

Crush Size
Columns 1, 2, 3, 4, 5 and 6 were operated to determine the optimum crush size. The minimum
crush size that is proven in typical industry operating practice is 100% passing approximately 12
mm. As well as presenting possible problems in application, the metallurgical response of
smaller crush sizes was not as good as the 12 mm size. Columns 5 and 6 tested crush sizes
greater than 12 mm. Good response was experienced, but recoveries were generally similar with
higher acid consumptions. A 12 mm crush size was selected as optimum, although improvements
over crush sizes of 19 and 25 mm turned out to be marginal by the time the program was
completed. The design of the crushing circuit was, therefore, based on primary, secondary and
tertiary closed-circuit operation.

Acid Consumption/Method of Acidification
The acid consumption of the ore is generally high. Uncontrolled acid consumption on certain
samples and composites can be over 150 kg/t of 100% sulphuric acid. The Base Case method of
acid addition was to agglomerate with 25% of the final acid consumption as predicted using the
Leach Inc. test. Columns 7, 8, 9 and 10 investigated alternative methods, such as longer cure


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time, agglomerate with 50% of Leach Inc. test maximum, dilute acid addition, or higher
irrigation flow rates.

It was shown in Column 13, in the Phase 2a program, and other columns in the Phase 2b and 3
program that the acid consumption can be significantly reduced by using dilute acid, containing
metal sulphates as a leach solution. This simulates the projected leach solution in the actual
operation. Efforts were made to simulate this in the Phase 2b and 3 programs to demonstrate the
reduced consumption.

The highest pH at which the SX process can operate is close to 2. This corresponds to an acidity
in the pregnant leach solution (PLS) of less than 1 g/L sulphuric acid. Many of the columns
operated in this range. As extraction of the copper takes place during the SX process, the acidity
is increased. This is why acidity levels of 4 g/L were selected for the artificial raffinate.

Acid consumptions, expressed as 100% sulphuric acid, are estimated based on the test work and
are summarized in the following table. These are considered possible in the actual operation if
careful attention is paid to the acidity of the PLS and raffinate. Generally, an analysis showed
that acid consumption is independent of the grade of the ore, hence acid consumption is
expressed as kg/t of ore, rather than kg/kg of copper recovered. Estimated acid consumptions for
the heap leach are presented in Table 15-5.

                              Table 15-5: Estimated Acid Consumption

Sample                        Leach Inc. Diagnostic      Column test acid         SNC-Lavalin Estimated
                             leach acid consumption     consumption (kg/t            acid consumption
                             test (kg/t 100% H2SO4)       100% H2SO4)               (kg/t100%H2SO4)
Metallurgical composite               138             Column 13 from 2a-70                  70
                                                        kg/t using artificial
                                                      raffinate when leaching
                                                            was complete
Oxide composite                       144             Column 1 from 2b/3, 86      Metallurgical composite
                                                        kg/t using base case      value used in financial
                                                             conditions                 evaluation

Supergene composite                   160             Column 3 from 2b/3, 63      Metallurgical composite
                                                        kg/t using artificial     value used in financial
                                                              raffinate                 evaluation

Upper    transition   zone            371              Column 8 from 2b/3 -                136
sample                                                136 kg/t using artificial
                                                      raffinate when leaching
                                                            was complete
Lower    transition   zone     Variable 42 to 500               None                   Not predicted
sample
(Source SNC-Lavalin Feasibility Report)




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15.2.   Dukwe Oxide Zone Mineral Processing

Based on the metallurgical testing an optimum flow sheet was designed for the Dukwe deposit
oxide zone as shown in Figure 15-1. The process flow sheet is described in more detail in
Section 17.2 below.



                                                           W aste 669.4 kt/month
                                        Open Pit
                                              Ore 65.6 kt/month

          W ater 2.6 kt/month
                                            Crush
                                              Ore 65.6 kt/month

          Acid 1696 t/month
                                      Agglomerate
                                              Ore 65.6 kt/month

          W ater 16.9 kt/month
          Acid 1696 t/month           Heap Leach          Raffinate 820 m³/h

                                              PLS 820 m³/h

          Extractant                    Solvent
          Kerosene
                                       Extraction                      Crud solids
                                   Barren           Loaded
                                 153 m³/h           153 m³/h
          Guar
          CoSO4                     Electrowinning             Bleed


                                   LME copper cathode
                                      972.2 t/month

Figure 15-1: Dukwe Oxide Zone Process Flow Sheet




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        16.0    MINERAL RESOURCE AND MINERAL RESERVE ESTIMATES


16.1.   Introduction

The resource and reserve estimates provided in this section of the report are based on
information and estimates from previous studies. These estimates are separated into two groups,
both with two subdivisions (primary or sulphide mineralization and secondary or oxide
mineralization) namely:

   •    Historic Estimates by BCL, Falconbridge and their consultants for Dukwe and Thakadu-
        Makala.
   •    Current Estimates by African Copper related companies and their consultants for Dukwe.

The authors are all well qualified experts in the evaluation and estimation of ore reserves and
resources. Howe has reviewed these in a preliminary fashion and believes that the estimates
have been made within the appropriate standards stated for purposes of this Report.


16.2.   Historical Resource Estimations

The following historical estimates are presented for information purposes only. The individual
estimates are believed to have been done to high standards by reputable companies and would
appear to reasonably indicate the tonnes and grades outlined at the dates of preparation.
However the various estimates predate the current standards embodied in NI 43-101 and
therefore do not conform to same. In Howe’s opinion none of these estimates can be verified as
either measured or indicated resources by NI 43-101 or similar standards. Howe believes that
there is sufficient documentation available to reasonably allow the various estimates to be
classified as Inferred Resources.

Table 16-1 summarizes all known estimates undertaken prior to Mortbury’s involvement in the
project since the 1970’s. The various estimates pertain to Dukwe and Thakadu Makala, for
oxide and sulphide mineralization, at all levels of confidence. The estimates were described
earlier in more detail in Sections 9.2 and 9.3 of this report. Some of the data utilized for the
various Dukwe estimates, at least where backed up by proper documentation, are further utilized
in Mortbury’s estimations. Some of the information below will be revisited later (see Section
16-5), notably the Dukwe sulphide zone estimates by Falconbridge, which will be compared with
subsequent Mortbury work vis a vis the general exploration/development potential of the primary
copper zone that underlies the oxides.




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              Table 16-1: Historical Resource Estimates, Dukwe and Thakadu-Makala

                   Deposit                                                                            Resource
               (Mineralization               Company            Tonnes x 106   Copper   Silver g/t    Category
                    Type)                     (Year)                             %                   (Original)
        Dukwe
        (Oxide total)                       BCL (1974)              12.5        0.45        -        Not stated
        (Oxide selected)                                             8.7        0.64        -
        (Oxide >1% Cu)                                              1.76        2.40        -
        (Oxide + Sulphide >1% Cu         Falconbridge               8.43        3.00        -           1A
        (Sulphide >1% Cu                 (1983)                    10.77        2.76        -           1B
        (Total >1% Cu)                                             19.20        2.87        -        1A + 1B
        (Total >1.5% Cu)                                           13.02        3.85       4.0       1A + 1B
        (Drilled Sulphide, 125-470m)       Minvest (1993)           18.4        3.07        -        Not stated
        (Projected Sulphide, 470-600m)                              5.6         2.71        -
        (Total Sulphide)                                            24.0        2.99        -
        (Oxides, 0-125m)                                            4.9         2.99        -
        Thakadu
        Oxides                             Behre Dolbear            0.81        3.77       -         Not stated
        Sulphides                             (1968)                1.17        2.60       -
        Combined Total                                              1.99        3.03       -
        Oxides                              BCL (1968)              0.81        3.77       -         Not stated
        Sulphides                                                   1.54        2.47       -
        Combined Total                                              2.35        2.92       -
        Oxides                           BCL (1976)                 0.97        3.75      45.5       Not stated
        Sulphides                                                   1.23        3.02       -
        Combined Total                                              2.21        3.34       -
        Oxides                           Falconbridge               0.84        3.65      38.2       Not stated
        Sulphides                        (1977)                     1.84        2.53      25.0
        Combined Total                                              2.21        3.34      29.0
        Makala
        Sulphides (1% cut-off)           Behre Dolbear (1968)       4.62        2.12       -         Not stated
        Sulphides (1% cut-off)           BCL (1968)                 4.53        2.08       -         Not stated
        Oxides                           Falconbridge               0.41        1.64      38.0       Not stated
        Sulphides (1% cut-off)           (1977)                     4.32        1.99
        Sulphides (1.5% c/o)                                        2.17        2.51
           (not NI 43-101 compliant)

16.3.      Dukwe Oxide Resource Estimate

The following section is summarized from the Roscoe Postle Associates Inc. report on Resources
and Reserves attached to the SNC Lavalin Feasibility study. The resource has been classified
into measured, indicated and inferred categories according to Canadian Institute of Mining,
Metallurgy and Petroleum (CIM) Standards on Mineral Resources and Reserves - Definitions
and Guidelines, the report of the CIM Standing Committee on Reserve Definitions dated August
20, 2000. The estimations of the resources have been made by a Qualified Person according to
the requirements stipulated in National Instrument 43-101.

The definitions for resource categories used in this report are also consistent with those defined
in “CIM Definition Standards on Mineral Resources and Mineral Reserves”, by the CIM
Standing Committee on Reserve Definitions adopted by the CIM on November 14, 2004.

The resource analysis used constructed mineralization envelopes for lenses of leachable copper
with sufficient shape and grade continuity to be classified as Indicated. Consequently, all of the


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ore blocks with interpolated grades above the cut-off grades are classified as Indicated Mineral
Resources.

Solid models were not constructed for a number of smaller hanging wall and footwall splays, or
less well-defined lenses. This material has not been included in the resource estimate. However,
it is expected that some of these blocks will likely be included within the design pit limits.

Most of the Leachable Copper Mineral Resource estimate lies within 100 to 150 m from surface.
The Falconbridge level plans were digitized and constructed 3-D solids of all underground
openings. Some volume assumptions were made to model the ancient stopes and some of the
winzes. Based on their 3-D modelling of the underground openings, Rosco Postle Associates Inc.
(“RPA”) estimates that about 60,000 t of material were excavated at Bushman and Mapanipani.
This includes some barren wall rock in shafts and cross-cuts.

Table 16-1 summarizes the mineral resources for this deposit.

               Table 16-1 Dukwe Indicated Leachable Copper Mineral Resources

 Indicated Resources               BUSHMAN             MAPANIPANI                MAPANIPANI NORTH
                       (000’s t)     % Cu  Metal (t)   T      %Cu    Metal (t)   T     % Cu   Metal (t)
 Oxide                 865           1.34  11,631      854    1.15   9,825       585   1.27   7,458
 Supergene             1,455         1.74  25,318      902    1.59   14,302      856   1.47   12,621
 Transition            1,476         1.80  26,523      928    1.21   11,198      326   1.58   5,152
 Total Resources       3,796         1.67  63,472      2,684  1.32   35,325      1,768 1.43   25,231
(Source: RPA, 2002)

The total Indicated Resource for the Bushman, Mapanipani and Mapanipani North zones
including oxide, supergene and transition material is 6,549,000 tonnes averaging 1.76% copper
or 115,176 tonnes of contained copper metal. The cut-off grades are; 0.5% TCu grade for the
oxide and supergene zones and 1.0% TCu for the transition mineralization. The deepest resource
blocks occur at 170 m below surface.

16.4.   Dukwe Oxide Reserve Estimate

Mineralised resource quantities and grades were prepared using Gemcom software for the
resource block model by RPA.

The resource estimate was classified as an indicated resource, in accordance with CIM
definitions. Only this material was used to determine mineralised material within the pit limits.
Material classified as inferred resources are excluded from the reported quantities.

The material classified as ore refers to the mineralised resources contained within the pit design.
Ore is herein described as that material which has a grade that is above an economic cut-off. A
cut-off grade is used to determine if a tonne of material has sufficient economic value to be
considered as ore. As a minimum criteria, a tonne of material should be able to demonstrate
sufficient value to offset all cash costs excluding mining and capital.

The cut-off grade for this study was derived as follows:


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        (Process Cost * Dilution) Cut-off Grade = ((Metal Price*2,205)/100) * Recovery)

The economic cut-off grade for the oxide and supergene ore types was 0.61% Cu while the
transition cut-off was 1.26 %Cu.

A dilution factor of 1.05, which represents five percent dilution, has been assumed for the
project. This number was based on past mining experience with operations that employ
equipment similar to that proposed for the project. It has also been assumed that ore losses will
occur during mining operations typically as a result of blasting. These losses have been estimated
at five percent, which equates to a 95% mining recovery. Again, it is believed that this is a
reasonable estimate based on past experience.

Since a mining cut-off grade was applied to the ore, it was reasoned that the diluting material
must have grade. An estimate of 0.41% Cu in the dilution was used for calculations of feed
grades. This estimate was taken from the Whittle optimization output file, which lists the grade
of the reject material.

SNC-Lavalin in 2002 carried out an investigation of the interim pit shells produced by Whittle in
an effort to identify high grade, low strip ratio areas prior to preparing the mining schedule.

The Reserve Estimate is as follows:

               Table 16-2: Oxide Reserve Estimate (After SNC-Lavalin, 2002)

                               Tonnes             Grade % Cu        Contained Metal (t)
    Oxide Ore                     2,042,100             1.51                 30,631
    Supergene Ore                 2.147,860             1.81                 38,876
    Transition Ore                 911,610              2.69                 24,522
    Total Ore                     5,101,570             1.85                 94,029
    Waste                         57,068,200

SNC-Lavalin 2002 feasibility study cash flow model indicated negative profitability for Dukwe,
given the input parameters used at the time. Thus the potential ‘run of mine’ (“ROM”) grade-
tonnage estimate, obtained after mine dilution and extraction factors, etc. were taken into
account, was not categorized as Reserves sensu stricto by SNC-Lavalin. The more recent
economic evaluations using the MDM 2004 input parameters and Howe’s own models indicate
profitability. On this basis Howe believes that the ROM grade-tonnage estimation can be
reasonably classified as Probable Reserves.

16.5.   Dukwe Sulphide Resources

As described in some detail earlier in Section 9.2, grade/tonnage estimations were made for the
primary sulphide portions of the Dukwe deposits in connection with prefeasibility studies
undertaken by Falconbridge in the early to mid 1980’s (Johnston, 1983) and by MPH Consulting
Limited/Bottrill Geological Services (“MPH-Bottrill”) for Mortbury in 1997 (Brereton and
Bottrill, 1997). The various sulphide resources only estimates for the Dukwe deposits are


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compiled and reviewed in Table 16-3. There is reasonable correlation between the Falconbridge
and MPH-Bottrill estimates once the respective estimation parameters are taken into account.


            Table 16-3: All Dukwe Sulphide Resources at Various Cut-off Grades

      Class                          Indicated Resource                     Inferred Resource
      Deposit (Cut-off)        Tonnes      Cu%         Depth        Tonnes        Cu%         Depth
                                                       Range                                  Range
      MPH-Bottrill, 1997 (No Cut-off, Global Estimate)
      Bushman                 1,890,871     2.56     108-376m       786,060       1.34      238-400m
      Mapanipani              4,009,132     2.23      72-456m      2,435,765      2.36      216-456m
      Mapanipani North        4,144,160     2.62      84-474m      1,064,745      2.31      266-472m
      Total                  10,044,183     2.45      72-474m      4,286,571      2.16      266-472m
      Falconbridge, 1983 (1% Cu/3m mining width)*
      Bushman                  839,000      3.00     125-470m      2,921,000      3.35      125-600m
      Mapanipani              2,271,000     2.67     125-470m      5,485,000      2.97      125-600m
      Mapanipani North        4,206,000     2.91     125-470m      2,725,000      3.08      125-600m
      Total                   7,316,000     2.85     125-470m 11,130,000          3.10      125-600m
      Falconbridge, 1983 (1.5% Cu/2m mining width)*
      Bushman                  641,000      3.72     125-470m      2,143,000      4.15      125-600m
      Mapanipani              1,498,000     3.61     125-470m      3,878,000      3.84      125-600m
      Mapanipani North        2,951,000     3.68     125-470m      1,905,000      3.76      125-600m
      Total                   5.091,000     3.66     125-470m      7,926,000      3.91      125-600m
   * Falconbridge ‘drill indicated’ and ‘projected’ material reclassified by Howe as ‘indicated’ and ‘inferred’
   resources respectively. .

The following is an account of the differences and general comparisons between the various
estimates and the resource potential of the primary copper zone at Dukwe.

The significant differences between the three estimations tabulated above are as follows:
   • The MPH-Bottrill estimate was based on substantially more drilling information than the
       Falconbridge work.
   • The two Falconbridge studies applied assumptions regarding possible mining scenarios
       namely arbitrary cut-off grades of 1% and 1.5% copper and minimum mining widths of 3
       and 2 metres. The MPH-Bottrill estimation included all copper mineralization within the
       major mineralized system irrespective of grade.
   • The MPH-Bottrill study evaluated drill tested mineralization only (above approximately
       470m), while the Falconbridge studies projected mineralization beyond the drilling to
       600m vertical depth.

In terms of the drill tested area between depths of approximately 100-125m and 470 metres the
following resource potential is suggested:
    • The overall sulphide zone mineralized package contains approximately 14 million tonnes,
       or about 39,000 tonnes per vertical meter of material averaging about 2.4% copper above
       470 m vertical depth.
    • Employing various cut-off criteria (obviously) results in increased grade and reduced
       tonnage. The Falconbridge, 1% Cu/3m scenario reduces the tonnage but increases the
       average grade to 2.85% Cu, while the 1.5%/2m scenario increases the grade to 3.66 %


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   Cu. The amount of ‘projected’ tonnage above 470m is unknown so the overall tonnage
   and tonnes/vertical metre for the two Falconbridge scenarios is therefore unknown as
   well.

The sulphide zone resource estimations suggest that the Dukwe deposit could have very large
copper deposit potential. The tonnes per vertical metre estimation provides a general
guideline for overall resource potential. For example, if the 39,000 tonnes/vertical metre is a
reasonable indication of the potential mineralization below the drilled area, an additional
approximately 4 million tonnes of copper mineralization might be added to the resource base
for each new 100m vertical section that is drill tested.




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                           17.0    PROPOSED MINING OPERATIONS

African Copper engaged MDM Ferroman (Pty) Ltd. (“MDM”) of South Africa to review the
previous studies and to update portions to reflect the current economic climate and with the
results of additional studies that had been completed in the interim. The MDM study update was
completed in July, 2004. Much of the primary information was obtained from a full scale
feasibility study for the surface copper oxide portion of this project that was completed in April
2002 by SNC-Lavalin (“SNC”).

The total to be mined is 5.1 million tonnes with an average grade of 1.51% Cu. incorporation of
changing economics and technical changes demonstrates that the Project is technically feasible
and economically viable.

17.1.   Proposed Oxide Open Pit Mine

The Dukwe pit design was based on geological data and a resource block model as summarized
in Section 16. The ultimate pit design is shown in Figure 17-1.




        (Source SNC-Lavalin Feasibility Report)

Figure 17-1: Dukwe Ultimate Pit Design




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The pit design was derived from an optimized pit shell that was created using Whittle 4X (single
element) software. A number of optimizations were completed followed by a series of
sensitivities to arrive at the optimum pit shell. This shell was then imported into Gemcom Mine
Modeling Software to complete the design of the ultimate pit and interim pit phases.

The Whittle 4X software utilizes the Lerchs-Grossman algorithm to evaluate the blocks within
the model. Blocks are included in the optimum shell if the mining of the block along with the
cumulative values of all blocks within the shell produce a net positive cash flow.

The pit optimization parameters included the operating costs, process recovery, metal price and
slope factors. These were used to estimate the net value of each block in the block model. Pit
slopes for the optimization were assigned by rock type. A Slope Number file and a Slope Profile
file, was prepared to identify the slope angles to be assigned to the various rock types. These two
files were then used to prepare the structure arcs file, which Whittle uses during the optimization
to create the pit shells.

Parameters
The economic parameters used for the Dukwe oxide optimization study are presented in Table
17-1.

                        Table 17-1: Open Pit Parameters (after SNC 2002)

        Parameter                                                                      Value
        Mine operating cost                                                          US$0.70/t
        Process cost (oxide ore)                                                     US$7.91/t
        Process cost (supergene ore)                                                 US$7.91/t
        Process cost (transition ore)                                                US$16.91/t
        Process recovery                                                               83%
        Dilution factor                                                                 5%
        Mining recovery                                                                95%
        Metal price                                                                  US$0.80/lb
        Slope angle                                     (granite)                       45º
        Slope angle                                     (metasediment)                  55º
        Slope angle                                     (karoo)                         40º

Operating costs shown in the table above were finalized on February 28, 2002. MDM (July
2004) has reviewed the above and made adjustment based on their assessment of the project
under current conditions. This includes economic aspects and a change in the slope angle for the
pit based on a review on the geotechnical data by SRK Consulting. The resultant parameters are
as follows:

               The copper price is $1.00.
               The process recovery is 85%
               The slope angle for the East wall has been increased by 40
               Process cost oxide and supergene $7.26/t
               Process cost transition ore $9.98




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                                                            A. C. A. Howe International Limited


17.2.   Proposed SX-EW Oxide Process Plant

The crushing circuit consists of primary, secondary and tertiary crushing in closed circuit to
reduce the feed to 100% passing 12 mm. After agglomeration with acid and raffinate, the ore is
transported to the heap. Copper recovery is achieved through a standard solvent
extraction/electrowinning (SX/EW) process to produce LME grade copper cathodes from the
leach solutions. The process plant flow sheet is shown in Figure 17-2.




(Source: SNC-Lavalin Feasibility Report)

Figure 17-2: Dukwe Heap Leach / SX-EW Process Plant Diagram
A number of trade-off studies were completed to maximize the value of the Project and insure
the design was appropriate for the local conditions. These included:
    •   Permanent vs. on-off pad;
    •    Pad loading methods;
    •    Use of custom heap building methods;
    •    Pad liner construction methods;
    •    Number of heaps;
    •    Number of ponds;
    •     Types of irrigation;
    •     Environmental aspects.


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A permanent pad was selected based on a lower estimated overall capital and operating costs.
The heap is designed to use a single synthetic liner over a liner made from local clays. There will
be only one heap to treat all the materials, and it will have a single PLS pond and one raffinate
pond; other ponds are required to contain rainwater runoff during storm events. Dripper
irrigation was selected over “Wobblers” to reduce evaporation during the dry season.

Crushing and Agglomeration
The plant receives ore mined from the open pit and transported to the ore tip in 40 t back tip
dump trucks. Ore is scalped on a vibrating grizzly, with oversize lumps crushed in the primary
jaw crusher. Primary crushed ore is screened to remove final product; screen oversize passes to
the secondary cone crusher. Combined secondary and tertiary crusher product is re-screened to
remove final product and the screen oversize passes to the tertiary cone crusher. Final crushed
product is conveyed to an open conical stockpile.

Ore is withdrawn from the stockpile by vibrating feeders and fed to an agglomeration drum,
where strong sulphuric acid is added to agglomerate the fine material. Agglomerated ore is
conveyed to the heap pads and placed by a stacker with a slewing head.

Leach Pads and Ponds
The agglomerated ore is transported to the leach pads by truck. The ore is reclaimed by front-end
loader to a conveyor, which feeds the radial stacker. The radial stacker builds the heap in a
retreating manner.

There will be three cells in total; each cell is nominally 580 m long x 200 m wide and will have
four lifts, 4 m high. A maximum of two cells will be operating at any one time. The cell
dimensions and volumes are based on a leach time of 200 days for a feed rate of 2,250 t/d of
material. Only the base of the first cell area located furthest to the north will be prepared prior to
start-up. All mopane vegetation will be removed, and the upper 500 mm of “clayey” topsoil and
roots excavated and stored in stockpiles as spoil and/or for future reclamation. The surface will
be graded by importing, placing and compacting fill material. The slope will be approximately
1% to the north. The pad base liner section is designed to consist of an impervious clay liner 450
mm thick, overlain by a 150 mm thick graded sand layer to protect the clay liner from
construction traffic and desiccation cracks, and to act as a base for the 1.5 mm thick HDPE
geomembrane liner. The lined pad section will uniformly slope towards the leachate collection
ditch to the north side of each cell.

Prior to placement of rock on top of the HDPE liner, a system of 50 mm diameter perforated
leachate drainage pipes will be laid on the liner at a spacing of 2 m. The pipes will be placed
parallel to the 1 percent slope to the north. The drainage pipes will then be covered by a 450 mm
thick layer of crushed and screened rock, carefully placed to act as a wearing surface for trucks
hauling material to the radial stacker for placement.

Leach solution collected within each of the drainage pipes will discharge into a lined collection
ditch, sloping from east to west at a slope of 0.5% along the north side of each of the three pads




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as they are in turn developed. The collected leach solution in the ditch will then be routed
through a 450 mm diameter HDPE pipe draining by gravity into the PLS pond.

The PLS and raffinate ponds will be created by an excavation into the natural impervious clay
stratum, located below the surficial desiccated outwash clays. Each of the ponds will have 3:1
side slopes and will be lined with a double liner of 1.5 mm thick high density polyethylene
(HDPE) geomembrane. The upper primary liner will be monitored to detect any leakage and
provision will be made to pump any discharge back to the pond. The storm water pond will be
similar to the above pond system except it will not be lined as it will temporarily store only clean
diverted site runoff water. This water will be reclaimed as make up water to the process water
pond.

Solvent Extraction Plant
Solution from the PLS pond is pumped to two stages of extraction mixer-settlers where the
copper is transferred from the aqueous phase to the organic phase using a proprietary liquid ion
exchange reagent as the extractant in kerosene. Raffinate is pumped to the raffinate pond. The
loaded organic goes to the loaded organic tank and is pumped to a one-stage strip mixer-settler.
The strip solution is spent electrolyte. Before leaving the solvent extraction section, small
amounts of entrained organic are removed from the pregnant electrolyte in a coalescing filter.

A crud tank and filter are included, to recover clean organic and aqueous solutions from any crud
formed in the mixer-settlers.

Electrowinning Plant
The pregnant electrolyte is pumped to the electrowinning feed tank through two heat exchangers.
Electrowinning copper production is designed at 36 t/day, while expected production is 33.3
t/day (1.80% copper at 82.3% extraction). The other has heat added. From the electrowinning
feed tank the electrolyte is pumped to the cells. The flow from the cells returns to the spent
electrolyte tank from where it is pumped back to the strip circuit. To minimize copper
concentration gradients in the cells, electrolyte is recirculated back to the cells, thereby
increasing the flow in the cells. The cathodes are stainless steel blanks and are withdrawn on a
weekly basis. The cathode bales are washed prior to being stripped in the semi-automatic
cathode stripping machine. Weighing and repair stations are included, as well as mechanical
handling equipment, to remove and store the copper cathodes.

Reagents and Utilities
Guar is added to the circulating electrolyte to improve cathode quality and cobalt sulphate is
added to improve the life of the lead anodes. Sulphuric acid is delivered by truck to a single
storage tank, from where it is pumped to the process. Similarly, diesel is delivered to a vendor-
owned storage and delivery system from where it is pumped to the various users.

The make-up water supply will be from the well field to the process area by pipeline.




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Design Criteria
The crushing plant, ore stockpile, agglomeration and heap building plant design is based on a
daily throughput of 2,250 t/d of ore from the mine. These sections operate at a rate of 250 t/h.
Using the estimated leach time of 200 days, the heap lift height of 4 metres, the agglomerated ore
bulk density of 1.4 t/m3 and irrigation rate of 10 L/h/m2, some 820 m3/h of leach solution is
applied to the heap and flows to the solvent extraction plant. This plant has a two extract, one
strip mixer-settler configuration and is sized using an emulsion throughput of 4 m3/h/m2.

             General                      Unit                    Design Value
     Throughput                           T/yr                      787,500
     Throughput                         T/month                      65,625
     Operating Days                                                    350
     Throughput                          T/day                        2,250
     Ore Haul                            H/day                         12
     Feed Grade                                                      1.80%
     Oxide extraction                                                 82.3
     Copper Production                  T Cu/yr                      11,666
     Copper Production                  T Cu/d                        33.3
     Ore Density                                                      2.60
     Bulk density                                                      1.4

The electrowinning plant is sized to produce 33.3 t/d of copper. The cell design, together with
the anode and cathode configuration is one designed before by SNC-Lavalin and similar to
others used in the industry. Each cell has a copper production capacity of 0.58 tons of copper per
day, calculated from an industry standard current density of 304 A/m2 and the submerged
cathode area per cell that is 75.6 m2. The required number of cells is 62. This number is
estimated based on the required daily copper production.

Crush Size
Columns were operated to determine the optimum crush size. The minimum crush size that is
proven in typical industry operating practice is 100% passing approximately 12 mm. As well as
presenting possible problems in application, the metallurgical response of smaller crush sizes
was not as good as the 12 mm size.

Two columns tested crush sizes greater than 12 mm. Good response was experienced, but
recoveries were generally similar with higher acid consumptions. As a result of process
improvements, the crush size of 19 mm is being used to improve both capital and operating costs
with minimal impact on recovery. The design of the crushing circuit is based on primary and
secondary closed-circuit operation.

Acid Consumption/Method of Acidification
The acid consumption of the ore is generally high. Uncontrolled acid consumption on certain
samples and composites were as high as 150 kg/t of 100% sulphuric acid. It was shown that the
acid consumption can be significantly reduced by using dilute acid, containing metal sulphates as
a leach solution. This simulates the projected leach solution in the actual operation.

The highest pH at which the SX process can operate is close to 2. This corresponds to an acidity
in the pregnant leach solution (PLS) of less than 1 g/L sulphuric acid. Many of the columns



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operated in this range. As extraction of the copper takes place during the SX process, the acidity
is increased. This is why acidity levels of 4 g/L were selected for the artificial raffinate.

Acid consumptions, expressed as 100% sulphuric acid, are estimated based on the test work
generally, an analysis showed that acid consumption is independent of the grade of the ore,
hence acid consumption is expressed as kg/t of ore, with the metallurgical test-work based net
acid consumption consumptions:

                                                    Gross Acid      Copper
                     Design Values                  Cons. kg/t     Dissolution
                     Metallurgical Composite           74.5          82.3%
                     Oxide Composite                   74.5          82.3%
                     Supergene Composite               68.4          85.0%
                     Upper Trans. Composite           140.3          76.8%

The recovery based on solution assays is expected to be about 82% over the life of the operation.

Leach Time
The leach time of an actual operation differs from that of a laboratory column test. Considering
the variables in a column test, the estimated leach times of 80 to 90 days achieved in a 1.5 m
column test would correspond to approximately 200 days or less in practice, using 4 m lifts.

Acid Plant
Acid consumption for the project is a major component of the operating cost as the actual price
delivered is significant. To mitigate this it is proposed that the project build and operate its own
plant. The acid plant capacity is 250 t/day, will result in an excess of acid during the first five
years operation. It has been assumed that this acid will be sold at the mine gate at a price of $
120/t acid and therefore generate additional revenue. This sale price is conservative as similar
producers in the region have been receiving up to US$ 165.00 per tonne of acid.




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                                 18.0    RECOVERABILITY

Recovery
Leach recoveries achieved under controlled laboratory conditions are not realised during full-
scale operation due to channelling, poor distribution of acid, heap wash due to rainfall etc. On
that basis, it is recommended that an estimated recovery of 82% be used for the Upper Transition
and Metallurgical composites. This value is used in the financial evaluation. The recovery
based on solution assays is higher than 82%, but a conservative view has been taken.

Leach Time
The leach time of an actual operation differs from that of a laboratory column test. Variations are
mainly due to differences in column height, temperature, open vs. closed circuit operation, ferric
ion concentration, bacterial activity, pH variations and method of acid addition, and
agglomeration and curing conditions. SNC-Lavalin has considered these variables based on in-
house experience. SNC-Lavalin has estimated that the leach times of 80 to 90 days in a 1.5 m
column test would correspond to approximately 200 days or less in practice, using 4 m lifts. This
is supported by experience in Chilean and Australian operations, such as Cerro Colorado,
Quebrada Blanca, Nifty and Girilambone, which have mineralogical and operational similarities.

Conclusions
1. Diagnostic leaching shows that agitated tank leaching of Dukwe ore is not economically
   feasible, owing to the high gross sulphuric acid consumption: 144 kg/t for Oxide composite
   and 159.8 kg/t for Supergene composite.
2. Diagnostic leaching gave copper dissolution of 36.7% for the Supergene composite sample,
   showing how chalcocite in the sample is not readily leached under short duration agitated
   tank conditions. Agitated cyanide leach provided 86.7% dissolution of the copper in the
   Supergene composite.
3. The expected main gangue acid consumer is calcite.
4. Acid consumption in column tests was higher at irrigation rate of 20 litre/h/m² than at the
   usual value of 10 litre/h/m².
5. Acid consumption in column tests was higher at feed acid concentrations of 9.38 g/litre
   (Lakefield Phase 2b column 2) and 10.7 g/litre (Phase 2a columns) compared to feed acid of
   4.83 g/litre (Lakefield Phase 2b column 3).
6. Agglomeration must be performed with concentrated sulphuric acid at dosage of 30-50% of
   the expected total acid consumption. Agglomeration with an equivalent volume of 10 g/litre
   acid solution was not successful in Lakefield Phase 2a column #9.
7. Having ruled out tank leaching, bio-assisted heap leach of Dukwe ore is the only feasible
   process route for the oxide and supergene ores. heap leach of the upper transition ore is also
   preferred although the acid consumption will be much higher than the oxide mineral
   processing and metallurgical testing




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                                                                                 19.0           MARKETS

The Dukwe Copper Project will produce London Metal Exchange (“LME”) grade cathode
copper as its primary sales product. While ongoing copper prices may be an issue, an available
market for such a product is not.

The Copper market
Copper is probably the most widely used metal in the world. Copper is utilized in many industry
sectors including building, construction, electrical and electronics, industrial machinery,
transportation and consumer products. The primary use of copper is for electrical and electronic
applications due to copper’s excellent electrical conductivity, durability, malleability and
resistance to corrosion.

Demand for copper comes from the following main sectors: construction, electronics, industrial
machinery, transportation and consumer and general products, with the first three of these
representing over 85 percent. of worldwide copper consumption. The majority of demand comes
from US, Europe and Asia. China’s share of world copper demand has risen from approximately
3 per cent in 1970 to approximately 20 per cent in 2003. Asia now accounts for almost half the
world’s copper consumption. With China’s economy set to continue to grow this is likely to
create additional demand for copper in the future.

The US, China and Japan have all seen industrial growth and the drawdown in copper
inventories has led to a recent decline in stocks of copper held by the international exchange
warehouses, and the cash price for copper has risen dramatically as a result of this shortage:

                                      Global Copper Stocks (excluding Producer Inventories) and LME Official cash price

                    1,600                                                                                                                                                     $1.80



                    1,400                                                                                                                                                     $1.60

                                                           Price (Right Scale)
                    1,200                                                                                                                                                     $1.40



                    1,000                                                                                                                                                     $1.20



                     800                                                                                                                                                      $1.00



                     600                                                                                                                                                      $0.80



                     400                                                                                                                                                      $0.60

                                          Inventories (Left Scale)
                     200                                                                                                                                                      $0.40



                       0                                                                                                                                                      $0.20
                            A 86

                                   A 87

                                             A 88

                                                    A 89

                                                            A 90

                                                                   A 91

                                                                          A 92

                                                                                  A 93

                                                                                         A 94

                                                                                                A 95

                                                                                                       A 96

                                                                                                              A 97

                                                                                                                     A 98

                                                                                                                            A 99

                                                                                                                                   A 00

                                                                                                                                           A 01

                                                                                                                                                  A 02

                                                                                                                                                         A 03

                                                                                                                                                                A 04

                                                                                                                                                                       A 05
                             pr-

                                    pr-

                                              pr-

                                                     pr-

                                                             pr-

                                                                    pr-

                                                                           pr-

                                                                                   pr-

                                                                                          pr-

                                                                                                 pr-

                                                                                                        pr-

                                                                                                               pr-

                                                                                                                      pr-

                                                                                                                             pr-

                                                                                                                                    pr-

                                                                                                                                            pr-

                                                                                                                                                   pr-

                                                                                                                                                          pr-

                                                                                                                                                                 pr-

                                                                                                                                                                        pr-




Source: Bloomberg

Over the past twenty years, the spot copper price has averaged US$0.98 per pound within a range
of US$0.57 to US$1.55 per pound. The spot copper price on April 29, 2005 was US$1.52 per
pound.


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                                                                                             A. C. A. Howe International Limited




Over the past few years demand growth has outpaced supply additions, which led to a supply
shortfall in 2003 of over 300,000 tonnes. This has widened further during the course of 2004
with the total deficit estimated by some industry experts to be between 600,000 and 1 million
tonnes.

 (000 tonnes )                                                      2002           2003      2004           2005E        2006E
World refined copper production                                    15,350          15,724    15,934          17,491      18,806
Less world refined copper consumption                              14,903          15,578    16,923          17,697      18,344
Surplus (deficit)                                                     447           (304)     (989)           (206)         462
Source: Brook Hunt Copper Metal Service



Chinese consumption growth, having receded from the previous year, still grew at a very robust
18% year over year. China, North America and Europe collectively account for about two-thirds
of global copper demand.

                                  2004 Estimated Global Copper Consumption (16.923 million tonnes)




                                                   Eastern Bloc, 1069, 7%


                                                                                            W Europe, 3796, 24%




                            China, 3564, 23%




                              Other, 325, 2%
                                                                                                  N America, 2737, 17%
                             Latin Amer, 913, 6%




                                                           Asia/India, 3249, 21%
            Legend: Consumer, 000 tonnes, percentage of global consumption



        Source: Brook Hunt

During the first few years of the current decade copper producers curtailed copper mine and
refinery output in response to low prices. The rapid rise in copper prices which began in late
2003 has led to the restart of de-activated production as well as the emergence of new projects.
An estimated 865,000 tonnes of additional mined production entered the market in 2004, but
refinery utilization rates remained at about 85% as a significant portion of the additional mined
production was absorbed into concentrate pipelines and smelter stock replenishments.




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Despite the increases on the supply side, the strong demand for copper metal outpaced the
additional supply, forcing consumers and merchants to draw down physical and dealer
inventories to fulfill their needs. By year-end LME Exchange stocks decreased 384,000 tonnes to
49,000 tonnes. Total LME, Comex and Shanghai exchange stocks decreased by 672,000 tonnes
over the course of the year.

After breaking through the $1.00/lb level at the end of 2003, the copper price continued to rise
steadily, reaching a high of $1.41/lb in early April. Copper prices then retracted to the $1.20-
$1.30/lb range until late September, after which they regained momentum, rising to a high of
$1.49/lb at year end.

The average LME cash-settlement price for 2004 was $1.30/lb, 60% above the average price of
$0.81/lb in 2003. As a result of the higher prices, global copper mine production is forecast to
increase a further 1.6 million tonnes in 2005. Global refined metal production is also forecast to
increase 1.6 million tonnes but this is dependent on higher smelter availability in 2005. As global
economic growth is projected to ease slightly in 2005, the growth in copper consumption is
forecast to slow to about 4%. Strong economies in China and India may offset declines in the
US and Europe such that the 4% estimate becomes conservative. The projected market deficit is
currently about 200,000 tonnes for the year, significantly less than in 2004. But copper prices can
be expected to remain at historically high levels while the supply/demand deficit is projected to
persist in 2005.

Copper is settled like most commodities in US dollar terms. Weakness in the US dollar has
contributed to the rise in all commodity prices, although the supply/demand pressures on copper
likely have had a greater impact on prices.




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                                                            Copper Price - US Dollar relationship


         120                                                                                                                                                $2.00
                                                                                 Trade Weighted US Dollar (Left Scale)
         115                                                                                                                                                $1.80


         110                                                                                                                                                $1.60


         105                                                                                                                                                $1.40


         100                                                                                                                                                $1.20


          95                                                                                                                                                $1.00


          90                                                                                                                                                $0.80


          85                                                                                                                                                $0.60
                                                                                                          Copper Price (Right Scale)

          80                                                                                                                                                $0.40


          75                                                                                                                                                $0.20


          70                                                                                                                                                $-
               A 86

                      A 87

                             A 88

                                    A 89

                                           A 90

                                                  A 91

                                                         A 92

                                                                A 93

                                                                       A 94

                                                                              A 95

                                                                                     A 96

                                                                                            A 97

                                                                                                   A 98

                                                                                                          A 99

                                                                                                                  A 00

                                                                                                                         A 01

                                                                                                                                A 02

                                                                                                                                       A 03

                                                                                                                                              A 04

                                                                                                                                                     A 05
                pr-

                       pr-

                              pr-

                                     pr-

                                            pr-

                                                   pr-

                                                          pr-

                                                                 pr-

                                                                        pr-

                                                                               pr-

                                                                                      pr-

                                                                                             pr-

                                                                                                    pr-

                                                                                                           pr-

                                                                                                                   pr-

                                                                                                                          pr-

                                                                                                                                 pr-

                                                                                                                                        pr-

                                                                                                                                               pr-

                                                                                                                                                      pr-
    .
Source: Bloomberg

This loss of purchasing power in the US dollar is seen to provide support for copper prices, even
in the face of rising global production. The interplay between the purchasing power of the US
dollar, US copper demand and global production remains complex and is probably the most
difficult relationship to forecast in terms of copper pricing.




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                                                              A. C. A. Howe International Limited


                                    20.0    CONTRACTS

Because of the nature of Dukwe’s sales product, LME grade cathode copper, there will be no
requirement for concentrating, smelting or refining contracts. There will be a future requirement
for construction, mining and transportation/handling contractors once the detailed design and
engineering is completed. No sales, hedging or forward sales contracts are currently in place or
being negotiated.




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                      21.0   ENVIRONMENTAL CONSIDERATIONS


21.1. Environmental Impact Assessment Report
The environmental conditions and socio-economic issues associated with the Project are fully
documented in the Environmental Impact Assessment (“EIA”) report including environmental
baseline studies which was prepared by Water Surveys (Botswana) (Pty) Ltd. (“WSB”) and
submitted to the government for approval (WSB, 2002). In addition to documenting the existing
baseline conditions, the EIA report describes the likely impacts that the Project will have on the
environment and the mitigation measures to reduce these impacts. These environmental studies
are designed to conform with requirements under Botswana legislation for the environmental
assessment of mining projects, which is a prerequisite for the issuance of the Environmental
Permit to African Copper. The Environmental Permit will also support Mortbury’s application to
the Commissioner of the Ministry of Minerals Energy and Water Affairs (MMEWA), Botswana,
for a Mining Licence for the Project and to the Lands Board, Bamangwato Tribal
Administration, for the Application for Surface Rights.

The isolated nature of the mine site effectively mitigates any impacts from noise or dust, and
minimizes the visual effects of the Project and adherence to the mitigation measures in the EIA
will further reduce these impacts. Impacts to biological resources will be limited to the areas
required for the mine site, access road and water supply pipeline/maintenance road. These effects
will be relatively minor and limited to the period of active mining in some areas, given the
mitigation measures proposed and the closure plan following cessation of mining activities.

In general, the Project is expected to be beneficial from a socio-economic viewpoint with the
creation of employment for local villages for a period up to 10 years, and contribution to the tax
base for the country. The main land use impact of the Project will be the disturbance of
approximately 400 ha (4 km2) of relatively non-productive grazing lands. It is planned that there
will be some progressive reclamation of disturbed land undertaken prior to final closure. Two
large piles of mine rock, occupying about 30% of the total Project area, as well as an open-pit
occupying another 25% of the total area, will remain after closure.

A number of identified archaeological resources may be permanently destroyed during the
development of the Project. The importance of the mine features has been identified based on
their size and research potential. The implementation of the recommendations outlined in the
Archaeological Impact Assessment Report (van Waarden, 2002) conducted as part of the EIA,
such as preserving the areas of concern within the site area, or, if preservation is impossible,
conducting a complete archaeological excavation of the site prior to destruction, will mitigate
these losses. Discussions with government authorities will need to be conducted to determine the
best approach for minimizing losses due to Project activities.

Monitoring will also be required on closure to show that the system is stabilised and can be
abandoned without detrimental impacts. This will include monitoring of the waste rock dump
and spent leach heaps to show slope stability has been achieved and vegetation taking hold.
Preparation for closure is inherent within the design and operation.




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                                                                A. C. A. Howe International Limited


The proposed development will have unavoidable impacts on the existing land users as the 4 km2
of land required, plus additional land for access road improvements, the mine well field and
pipeline route will cause displacement. One land user will be unable to continue using his present
facilities as his borehole will lie within the footprint of the open pit and will thus be destroyed.
Two other land users may suffer draw down of their boreholes due to either dewatering of the
open pit or to abstraction from the mine well field. There may also be nuisance and disturbance
to these land users due to operations. The Lands Board will determine satisfactory compensation
for those who will suffer loss due to the mining operation.

A significant impact of development and operation is the nature and frequency of traffic to the
mine. It is urged that a new access road be sited and constructed from the main highway to the
mine. This has very significant benefits including prevention of disturbance and potential
accident and injury to the villagers using the Lands Area and cattle post users.


21.2.   Water Supply and Control

Water resources issues including; hydrology, hydrochemistry, water resource modeling, well
field costing and contaminant transport modeling have been examined in connection with the
EIA (WSB, 2002). The location of the mine and nature of the operation raises concern for the
maintenance of the adjacent Dukwe Well Field resource. As design of the facility has gone hand
in hand with the EIA, the design has taken into account the particular environmental site
constraints and risks. Risks are recognised to be; release of process liquors to the surface water
or groundwater environment, potential of damage to the nationally important Dukwe Well Field,
the local environment, and very slight potential risk to the internationally recognised specialized
habitat of the Makgadikgadi Pans located some 50 km west of Dukwe.

The risks associated with the draw down of groundwater levels will be minimized through
efficient process design to ensure the economical use of abstraction water through the reuse of
process and captured surface water. However, even with these measures, the model shows there
is potential for a permanent 2 m draw down of Dukwe Well Field boreholes (Clusters 1 and 2) by
operation of the proposed Dukwe Mine well field. This is not sufficient to have significant
effects on regional water supply over the long-term. The potential for moderate groundwater
quality degradation by contaminant migration from the site will be minimized through good
design, maintenance and operation of the mining and processing areas (i.e. design process cells
and storm water runoff pond to contain 200 mm of rainfall, in addition to process water/storm
water). Emergency procedures will also be developed to deal with storm events in excess of the
design basis of a 25-year return event.

The quantity of process solution in circulation is 19,680 m3/d; evaporative losses are estimated at
590 m3/d. In addition, 327 m3/d are used to adjust the moisture content of the material being
crushed and agglomerated before being fed to the heap. Other uses for water are 50 m3/d for dust
suppression in the pit and haul roads.

Purified water is required for the SX/EW plant, for reagent make-up and cathode wash, at the
rate of 60 m3/d. This water is recycled as EW bleed to the PLS pond. Purified water is also



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supplied at the rate of 30 m3/d for personnel use and for the laboratory. Sewage effluents will not
be recycled to process water. Laboratory effluent is returned to the raffinate pond.

It is intended however, to take advantage of the rainfall and runoff from the heap leach areas.
This is typically in the range of 300-450 mm annually. This amount of rain falling on the heap
leach pad can generate a daily volume in the order of 11,000 m3 or up to 126,000 m3 annually,
which is directed to the process water reservoirs. In addition, the storm water runoff from the
remainder of the site and from the open-pit is diverted to or pumped to the storm water pond for
re-use. This has the environmental benefit of conserving groundwater supplies and of preventing
migration of potentially acidic water runoff. When the storm water pond and process water
reservoirs can provide the daily makeup water, the take from groundwater resources falls
dramatically from 1,057 to 90 m3/d. This is required for potable use and for the solvent
extraction make-up.

Groundwater modeling results show that the above water demand can be supplied from up to
four production boreholes drilled into the Mea Arkose, located to the north of the mine lease
area. The following well field targets have been selected:

   •   Target 1: Easterly extension of the Makgadikgadi Line approximately 5 km from the
       eastern-most Dukwe Well Field borehole. This area contains a zone of high
       transmissivity exploited by some of the bores in the Dukwe Well Field.

   •   Target 2: North of the Semowane River along the eastern edge of the Karoo Basin,
       between the Chidumela Fault and the Bushman Lineament.

Four production boreholes are proposed, each drilled to 200 mbgl (metres below ground level)
and equipped with electric submersible pumps with a diameter of 300 mm to the base of
mudstone and 250 mm thereafter. The final casing will be 165 mm with a gravel pack (3.5 mm)
to rest water level. The screen used will be of the louvered variety over about 33 m of the
aquifer.

A pipeline route has been chosen which links each borehole directly with the next so as to form a
single pipeline. Elevations along the selected route vary from about 994 m at Borehole 1 to about
1,007 m at Dukwe mine. The proposed pipeline route extends for a distance of approximately 15
km, encounters five minor river crossings, but does not cross any agricultural lands.

The potential impacts of release of contaminants is shown to be of moderate local significance,
with the worst case scenarios showing minor sulphate increases in Dukwe Well Field boreholes.
However the mitigation offered by good design, operation and maintenance is so strong that
expectations of contaminant transport from the mining area is low. There is considered to be no
impact on the Makgadikgadi Pans.

The Company is likely to be asked to provide monitoring systems to prove that contamination is
not occurring. Further monitoring will be required to show up any effects on Dukwe Well Field
and cattle post boreholes of abstraction from the proposed Dukwe Mine well field. Such
monitoring is likely to be necessary for provision of the annual reports required by various
Government Departments.


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The contamination of surface water will be prevented by the recycling of all process and contact
waters within the site area, and the diversion of non-contact water around the site. Contamination
of the groundwater regime will be avoided with the construction of an engineered geomembrane
lining system for the heap leach pad and associated pond system. Upon closure, all contained
process solutions will be removed, and only nondiverted surface runoff water will be collected in
ditches and routed via the storm water pond, overflowing in extreme storm events to the open-
pit.


21.3.   Mine Closure and Reclamation for Dukwe Oxide Operation

A plan for ongoing site reclamation and final closure of the Project is summarized in this section
from the SNC Lavalin feasibility study. In recent years, most mines in developed countries,
before being permitted, are required to submit a plan for progressive reclamation and eventual
closure. In many instances, the proponent is required to post a bond based upon the estimated
capital cost for closure, with credits given for advanced reclamation.

Project Components for Closure
In the context of reclamation and final closure, the main areas requiring closure are:
    • An open pit mine with an ultimate depth of up to 150 m and width of 200 to 300 m,
        extending over a strike length of over 1.5 km.
    • A waste dump expected to contain up to 57 Mt of waste rock.
    • A ramp to an ore truck dump, crusher and ore stockpile;
    • A heap leach facility, with a permanent clay and geomembrane lined pad arrangement,
        covering a total area of about 350,000 m2.
    • A pond systems to hold leachate and raffinate solutions, process water and storm water
        runoff.
    • An SX/EW plant and associated process equipment, and sulphuric acid storage tank;
    • Support services infrastructure.

Closure Objectives
The principal objectives of this closure plan are to:
   • develop and implement responsible progressive reclamation strategies for cost effective
       closure;
   • minimize the disturbances during the Project life cycle, to reduce environmental impact;
   • attain physical and geochemical stability over the long term;
   • plan that the final surface condition over all mine facilities and infrastructure will support
       natural re-vegetation, and if practical, enhance natural re-vegetation and allow for the
       return to cattle grazing.

Reclamation and Closure
The final reclamation and closure measures for the Dukwe Copper project are described as
follows:




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Open Pit Mine
The main activities associated with the closure of the open pit mine will be the removal of all
equipment and mine support infrastructure, followed by the cleanup of possible fuel spills or
contaminants in the pit, which could affect the quality of the water that infiltrates into the mine.

The mine is not expected to encounter much ground water infiltration during the operating life,
nor will there be a significant build-up of a pool following closure. As such, oxidation of the pit
walls will continue over time. Fortunately, the acid base accounting testing on selected ore
samples has indicated that the ore body should not develop acid rock drainage.

If slope monitoring indicates any sectors with long-term stability problems around the pit rim
perimeter, appropriate measures, such as blasting and excavation for slope flattening, will need
to be undertaken. Security barriers, fences and warning signs will need to be erected.

Waste Rock Dump
The main factors to consider in the closure plan for the waste rock dump are long-term stability,
surface erosion with sediment yield, dusting problems and the potential for acid rock drainage
with the mobilization of metals.

Surface erosion and dusting will be reduced by introducing a vegetative cover on the top surface
and side slopes. Organic rich black cotton clay soils with root mass and mopane vegetative
matter from the open pit, heap leach pad and waste dump pre-stripping as previously stockpiled
will be used.

Acid base accounting tests carried out on the waste rock have indicated that, except for a single
sample with some graphitic schist, the majority of the waste rock shows a net acid consumption,
or neutralizes acid generation.

Heap Leach Pads
Once the leaching operation at each of the three pad areas has been completed, final reclamation
can begin. The first step will be to use fresh water to flush out the residual sulphuric acid in the
upper most lift. Acid base accounting tests on the spent heap ore has indicated that there is
enough residual buffering capacity in the remaining rock for neutralization. That is, following
leaching and the cessation of acid addition, the pH will rise.

A vegetative cover would be placed over each of the completed heaps in sequence.

SX/EW Process Plant and Site Infrastructure
For planning purposes, it is assumed that following decontamination and cleaning, all serviceable
equipment will be dismantled and transported off-site for reuse or recycling. ,

Methods for the management of materials and equipment at closure will be finalized during
operations based on environmentally-focussed, cost-benefit analysis and risk assessment. During




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the interim however, the following are the most likely steps that would be taken in the final
reclamation and closure of plant and infrastructure facilities:
    • Hazardous materials stored on-site and associated with the plant will be packed and
        transported off-site for sale or disposal.
    • Above ground piping and electrical wires will be dismantled and removed;
    • All structures will be dismantled, and reusable materials will either be sold or donated to
        local villages;
    • Non reusable inert materials from dismantling or demolition will be disposed either by
        burning or burial in the waste rock dump on site subject to regulatory approval;
    • Intact items will be sold to local enterprises;
    • Selected intact structures will be maintained and turned over for local use if requested.

The buildings and site infrastructure will be dismantled to foundation level, and an appropriate
cover of local stockpile black cotton soils and excavated vegetal matter from the pre-stripping
operation will be used in the final cover. Demolition materials will be disposed as noted above.

Access and Site Roads
An approximately 12.5 km long gravel access road will link the main Francistown to Nata paved
road with the mine site entrance on the east side of the property. The road crosses relatively
higher ground with only minor ephemeral creek crossings. It is planned that the road would
remain open for a period of at least three years following mine closure to allow access for site
monitoring purposes.

Hazardous Chemicals and Wastes
Areas used to store chemicals and petroleum products will be monitored regularly during
operations to ensure proper storage and handling, as well as immediate cleanup of spillage.
Therefore, at closure minimal contamination will exist. However, appropriate remediation
measures will be taken for cleanup if there is any contamination. These measures would include
excavation and disposal of contaminated soils and/or concrete off site at an approved landfill
location.

Prior to closure, all remaining chemicals will be transported off-site.

All structures for the storage of hydrocarbons will be removed. The impervious geomembrane
liner for the bermed fuel tanks will be cleaned and disposed of off-site. Surplus consumable
materials will be sold. Spent hydrocarbon liquids will be sent off-site for recycling or disposal.

Decontamination of certain structural and equipment surfaces by washing or steam cleaning will
create wastewater, which may require evaporation. Sludge generated from decontamination will
require disposal in an off-site managed facility.

Site Water Management
During the closure period, surface disturbances caused by the excavation and haulage of cover
materials for re-vegetation efforts, or dismantling of structures may cause a potential for
sediment in runoff waters. It is envisaged that the majority of the closure activities would be



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scheduled for the dry season, in which case the most significant concern would be dust
generation, which can be minimized by the use of a water truck to spray haulage roads.


Site Monitoring After Closure
Physical changes in the waste rock and heap leach piles will be monitored from completion of
closure to establish baseline information. The monitoring program will likely involve a checklist
of items to investigate, including:
     • Surface erosion gullies or signs of sediment deposition;
     • Changes in the vegetative cover, including moisture content profile, layer thickness, root
       penetration depth, etc.;
     • Conditions of surface water ponding, runoff and drainage layer system

Although conceptual only at this stage, it is intended that the monitoring effort will likely be
carried out once each wet and dry season through operations for three years after final
abandonment.

Periodic samples of the water quality will be taken to ensure that there is no deterioration with
time.




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                                         22.0   TAXES

Botswana imposes an income tax on companies of 15%, plus an additional tax of 10%. A
withholding tax of 15% is payable on dividends distributed to shareholders (not applicable to
dividends paid to Botswana inter group companies or the Botswana Government), but this
withholding tax is offset against the liability for additional company tax up to the maximum of
the available additional company tax credit. If 100% of after-tax profits are distributed to
shareholders by way of dividend and all of the dividends are subject to withholding tax, the
effective tax rate is 26.25%.

Mining capital expenditure can be written off in the year in which the expenditure is incurred. If
profit in any year, after all other eligible deductions are made, is less than the capital
expenditures in question, any unutilized capital expenditures may be carried forward and
deducted in future years.

In terms of the Income Tax (amendment) Act 1998 the following is applicable to Non-Diamond
mining:
1.    100% of the mining capital expenditure incurred in any year can be claimed as a deduction
      in that year.
2.    The rate of tax shall be 70 - 1500 where X = Taxable income x 100
                                    X               Gross income

     There is a proviso that the rate shall not be less than 25%. It should be noted that this is a
     progressive tax rate that can range between 25-55%. The rate is inclusive of 10%
     Additional company tax, which is available for offset against dividend withholding tax of
     15%.
3.   Head office expenses that exceed 1.5% of the gross income will be treated and taxed as a
     dividend. This means that these expenses will be disallowed as a deduction and taxed at the
     rate of withholding tax applicable dividends (currently 15%)
4.   Interest paid by a foreign controlled resident company on a foreign debt that exceeds a
     foreign debt to equity ratio of 3:1 will be treated and taxed as a dividend This means that
     the interest relating to the excess will be disallowed as a deduction and taxed at the rate of
     withholding tax applicable dividends (currently 15%).
5.   Any interest paid on a loan, from a foreign company of an affiliated company resident in
     Botswana, at rates in excess of the market rate (depending on the type and currency of the
     loan) will be treated and taxed as dividends. This means that the interest relating to the
     excess will be disallowed as a deduction and taxed at the rate of withholding tax applicable
     dividends (currently 15%).
6.   Royalties paid in the year (irrespective of the year in which incurred) are deductible.




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                 23.0   CAPITAL AND OPERATING COST ESTIMATES

23.1.   Capital Cost Estimate

The estimated Capital cost requirements for the oxide open pit project are the result of an
evaluation conducted by MDM as set out in their report of July, 2004 (MDM, 2004). The
majority of the cost estimate has been based on South African Rands (ZAR), converted to US$ at
an exchange rate of US$ 1.00 = ZAR 6.50. No provision has been made for cost escalation or
exchange rate fluctuations.

The total capital for the project is estimated at US$ 39.6 million. The estimate is based on the
feasibility prepared by MDM in 2004 that was US$ 37.5 million for the open pit SX-EW project
and the balance US$ 2.1 million has been added by Howe for working capital and arranging
costs.

Dukwe Open Pit Capital Costs
The total capital for the open pit operation and the SX-EW plant has been estimated by MDM in
their feasibility study at US$ 37.6 million. This includes the initial pad construction and a US$
0.9 million mobilization charge for the mining contract.

                                 Table 23-1 Capital Cost Estimate

                                                        US$ (000’s)
               Process Plant                                 19,001
               Infrastructure                                 2,560
               Spares                                          344
               First Fill                                      811
               Owners Costs                                    500
               Acid Plant                                     9,230
               Contract Mining                                 900
               Pre-stripping                                  2,867
               Contingency                                    1,245
               Total                                         37,458

A contingency of US$ 1.245 million or approximately 3.34% was included in the capital cost
estimate and is considered adequate in view of the level of detail in the estimates that are based
primarily on quotes from suppliers. In addition, Howe has added working capital of US$ 1.55
million is required to cover the first 4 months of mining and plant operations until the revenue
from metal sales exceeds the operating costs. If the owner seeks debt financing the arranging
costs are estimated to be US$590,000 resulting in a total capital cost of US$ 39.6 million.

Sustaining Capital (Open Pit)
Sustaining capital will be required over the LOM for mobile equipment rebuild and replacement,
and the replacement or rebuild of some plant equipment. There will also be leach pad expansion.
The sustaining development costs are estimated at $ 3.97 million over the life of the oxide
project.




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Pre-Production Mine Development
All pre-production development and construction is assumed to be done by contractor. The unit
rates, mobilization and demobilization costs applied to pre-production development were based
on multiple quotations supplied by mine contractors for a similar recent project. These rates
include waste haulage.

Mobile Equipment
The mobile equipment fleet is based on the estimate to develop and sustain operations at a rate of
2,500 tonnes per day. Unit costs for the major units were based on recent quotations received
from vendors.

Fixed Mine Equipment
Fixed mine equipment capital was based on requirements at start-up. Quotations obtained on like
units from similar studies were used as the basis of unit costs. Installation man-hours were
estimated for each component and applied to the capital estimate at an average rate of $15/h.


23.2.   Oxide Project, Construction Elements

Infrastructure
Access to the site will be by a new road will connect the site to the existing public road from
Francistown. Construction equipment and materials will be marshalled in Francistown for
transport to the site.

Communications
No sophisticated communication systems are anticipated other than a reliable telephone system,
fax, internet connection and an on-site radio system. The Botswana network offers reliable
telephone, fax, and internet connection via the existing land line system. A small PABX will be
installed for internal communication as well as an on-site radio system with a single control
room base station and hand-held plant radios.

Sewage Treatment and Garbage Disposal
Domestic sewage from washrooms and lunch rooms will be collected and gravity fed to a
Rotating Biological Contactor (RBC) for treatment.

Potable Water
A package potable water plan provides potable water to the process plant, administration
building, and dry complex. Water is supplied from the fresh water pipeline that will be
constructed for the existing operation.

Buildings
In general, all buildings will be uninsulated functional structures, designed for the semi-tropical
climate using locally available materials of construction.

The offices, guesthouses and main security guard house will be located east of the activities
associated with the SX/EW process plant area. As such, they are upwind of the prevailing wind
direction from the mine, waste rock dump, heap leach operation and process plant. The


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guesthouse will be of similar construction as the Office and will be used to accommodate
periodic site visits of senior staff and visitors.

The main administration office building is planned to be a functional single-story structure with
masonry walls and a pre-formed sloped galvanized sheet steel panel roof, complete with gutters
and downspouts installed on a structural girt system. Air conditioning will be provided and the
roof panel underside will be insulated. The area of the building is planned to be 24 m2.

Fuel Supply and Storage
The fuel supply will be based on a vendor maintained and operated system. A diesel tank will be
supplied with a dispensing system as part of the fuel cost. Storage site preparation costs are
included in the capital cost estimate.

Personnel Transportation
The mine site is located within a reasonable traveling distance from a major city Francistown,
and other smaller villages, such as Dukwe and Mosetse. All personnel will live in existing towns
and travel to the mine as required. It is likely that expatriate and senior staff will be based in
Francistown. It is envisaged that travel to the mine will be provided by two minivans with
drivers. Similarly, other staff will live in towns like Dukwe and Mosetse and a regular bus
service will be provided to coincide with shift changes.

It is envisaged that the minivan and bus service will be provided by a contractor.

Catering, Cafeteria
A small lunchroom with cafeteria is provided in the change house/dry facilities. Kitchen facilities
are also included in the guesthouse. An allowance has been made in the operating costs for costs
associated with meals for guests.

Health, Safety and Security
One of the main Project safety concerns is associated with the aspect of trucking process
reagents and copper production into and out of the mine site.

Change House/Dry Facilities
The change house and dry facilities for plant and mine personnel will be located west of the
office administration building, and immediately to the south of the future Phase 3 heap leach
pad. This building, nominally 12 m by 32 m, will be constructed to local standards as a design-
build structure. Plans are for separate male and female drys with soiled and clean change sections
with lockers, showers and washrooms. Six offices are planned as well as a lunchroom to
accommodate 40 people at a time.

Shops/Maintenance Facility and Warehouse
The project has assumed that a locally constructed facility, comprising containers and a simple
roof structure, common to other small projects in Africa, will be constructed in an area east of
the laboratory and dry buildings. No capital costs have been allocated to this facility since it will
be constructed from empty containers salvaged at site, and the roofing material costs will be
minimal.



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Laboratory
This facility will be nominally 9 m by 21 m and of similar construction to the administration
building. It will be divided into a bucking room, preparation room, furnace and oven room,
balance room and laboratory. There will be a small office, lunchroom and male and female
change rooms.

Aggregate Source
The portable fine ore crushing plant for crushing the mine ore will be purchased early and set up
on site to crush the aggregate material. Aggregates will be washed, screened and stockpiled.
Sand will be purchased off site and delivered by truck if suitable material is unavailable at the
site.

Concrete Batch Plant
During construction, a concrete batch plant will be set up close to the process plant. If there is
need for a mine concrete batch plant, consideration for using this facility during construction
should be given.

Storm Water Systems
Storm water from the general catchment area (essentially defined by the perimeter security
fence), which will include the waste rock dumps and inactive heap leach pad area, will be
collected in a storm water runoff pond, where it will then used as process makeup water. In the
event of extreme storm water runoff, the storm water pond would be discharged to the open pit.

Equipment and Bulk Materials
Equipment and material quantities were estimated from general concepts and comparison with
similar sized projects and other available documentation. Costs for the supply of major
equipment are based on budget quotations and/or in-house information from similar projects.

Material take-offs for all mass earthworks for site excavation and backfill, diversion ditching and
internal roads construction was estimated. The estimate included some yard utility and inter-
building process piping quantities. Aggregate will be produced on site. Sand will be purchased
by the contractor from off-site sources.

The unit cost of concrete is based on average formwork usage and rebar requirements based on
the supply of ready mixed concrete with batch facilities on site. Quantities for concrete were
estimated from in-house information from similar projects.

Structural steel supply, detailing, shop fabrication, and shop painting are included in the unit
material price. Labour hours include field erection, fitting and touch-up painting. The estimate
quantities for structural steel and allowances for fire protection are based on in-house
information from similar projects.

Process piping costs are based on 18% of mechanical costs based on data for similar type
projects.   Allowances include pipe, fittings and valves, wastage, supports and other
miscellaneous items.



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Primary electrical equipment is based on a preliminary cost per horsepower based on from
similar projects. Instrumentation costs are based on 5% of mechanical costs based on in-house
historical data for similar projects. An additional allowance for a control system has also been
estimated.

Freight
Unit weights for all mobile equipment were obtained from vendor information. The weights of
fixed mine equipment and electrical distribution equipment was estimated. The freight cost also
includes the cost of transporting all the supplies required for preproduction development, such as
explosives, pipe, and rock bolts. Freight was estimated, assuming that all equipment and supplies
is sourced from South Africa.

Indirect Costs
Construction indirect costs, estimated at 13% of the direct cost, and include an allowance for
contractor’s mobilization and demobilization and general construction in directs, such as
construction management facilities, contractor’s temporary services, and warehousing.
An allowance for vendor representatives is provided.

Spare parts allowances for the process plant have been calculated at 5% of mechanical
equipment costs for equipment excluding fabricated tanks, chutes and miscellaneous metals.
First fill costs for mill media, reagents and fuel are included in the estimate.

Contingency allowances have been analyzed and calculated for every discipline in each area.
The contingency carried represents 10% of all costs. The contingency allowance covers items
which are included in the scope of work, but which cannot be adequately defined at this time due
to lack of accurate detailed design information. Contingency, as defined herein, is not intended
to cover such items as labour disputes, changes in scope or price escalation.

23.3.   Dukwe Project Operating Costs

The operating costs are based on the same studies as the capital costs and reflect the savings that
result for the integrated operation. Over the mine life cash operating costs are approximately
US$0.71/lb.

Manpower Requirements
The project will be fully manned to operate 365 days per year. Contract mining in the open pit
will reduce the required full-time employee complement.

                         Table 23-3: Oxide Manpower Requirements

                         Area                  Complement
                         Plant                      57
                         Maintenance                13
                         Laboratory                  7
                         Geology & Mine             22
                         Administration             24
                         Acid Plant                 12
                         Total                     135


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Labour Rates
Direct field labour rates are based on rates for labour Botswana. Average hourly rates are based
on 5 day week, 10 hour workday (average 50 h/wk). The direct labour rates include the
following:
               Base labour rate, payroll burdens and benefits,
               Overtime premiums,
               Contractor’s supervision and administration,
               Contractor’s overhead and profit,
               Small tools and consumables including welding rods, sealants, adhesives and
               lubricants,
               Contractor’s indirect and temporary site facilities,
               Construction equipment.
The craft labour rates used are:
                  Discipline                                        Rate           (US$/day)
                  Local unskilled Labour                            8.00
                  Local semi-skilled Labour                         10.00
                  Expat Semi-skilled                                110.00
                  Expat Skilled                                     200.00


Unit Labour-Hours
Unit hours-hours for most construction and installation estimates are based on labour hours have
been adjusted by 14% to account for loss of productivity for working 6-10 hour days in a week.
Open Pit SX-EW Operating Costs
Mine operating costs have been estimated by MDM as set out in their report dated July 2004.
This is based on data from Botswana from projects that MDM are managing the country at the
present time.
Information regarding local labour rates and the cost of operating supplies is current. Some of the
equipment operating costs are based on information provided by suppliers.
A breakdown of the equipment life cycle cost (LCC) was obtained for most of the major pieces
of equipment from Barloworld Equipment. Those costs that were not available were estimated
using the “Western Mine Engineering– An Estimators Guide (2000 edition)”. A comparison of
the costs provided by Barloworld Equipment with those in the Estimator Guide revealed that the
cost estimates were similar. Fuel costs reflect local rates.
                    Table 23-5: Dukwe Open Pit Operating Cost Estimate
                               Area                 Cost $/t ore
                               Plant                      4.41
                               Contract Mining           11.04
                               Other Mining               3.13
                               Gen. & Admin.              1.30
                               Acid Costs                 4.33
                               Total                     24.21



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       Plant
                                                 US$/t               Distribution
                        Water                            0.08              1.4%
                        Power                            1.36             23.2%
                        Reagents, spares                 1.11             18.9%
                        Plant labour                     1.23             21.0%
                        Maintenance                      0.22              3.8%
                        Assay                            0.41              7.0%
                        Total                            4.41

Labour costs are based on current rates of pay in Botswana and the staffing schedule as follows:
Staffing
                         Area                     Complement          Cost $/t ore
                         Plant                            57                  0.80
                         Maintenance                      13                  0.43
                         Laboratory                        7                 Contract
                         Geology & Mine                   22                  0.38
                         Administration                   24                  0.55
                         Acid Plant                       12                   NA
                         Total                            135                 2.16

Electrical power for the operations will be supplied from BPC’s regional grid. An analysis of
drives, operating time and power requirements for each area of the operation has been
performed. A unit power cost of BWP 0.15/kWh or $ 0.032/kWh has been applied for an
operating power cost of $1.36/t ore.
Reagent Details
            ITEM                      Function                    Type           Packaging       Unit
      Crusher Liners        Wear protection                                        Bulk          Pallet
      Crusher Oil           Lubrication                                           Drum          210 litre
      Sulphur               Production of Acid                  Elemental          Bulk         Tonnes
      Extractant            Copper Recovery                      LIX 84           Drum          210 litre
      Kerosene              Organic Dilutant                    Shell 2325        Drum          210 litre
      Guar                  Cathode smoothing                    Cypress           Bag           25 kg
      Cobalt Sulphate       reduce anode corrosion                               Bulk Bag        800 kg
      Diesel                Heating fuel                          Shell            Bulk           Litre

Plant Reagents and Spares

  ITEM                     Unit    Used/t feed      Used         Unit US$       Transport $/t    Cost US$/t
                                                  t/month
  Crusher Liners           Kg         0.025          1.6            5.15                85           0.13
  Crusher Oil              Kg                        0.0                                             0.04
  Sulphur                  Kg                        0.0                                             0.04
  Extractant               Kg         0.043         2.80            8.33                199          0.36
  Kerosene                Litre        0.811        47.9            0.48                120          0.47
  Guar                     Kg         0.004         0.26            1.38                80           0.01
  Cobalt Sulphate          Kg         0.0008        0.05           14.62                80           0.01
  Diesel                  litre       0.060         3.54            0.61                80           0.04
  Total                                                                                              1.11



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Acid Plant
Acid is produced on site via the burning of elemental sulphur and subsequent conversion of SO2
to SO3 and absorption of SO3 to produce sulphuric acid. For this study, acid plant capacity has
been set at 250 t/day, which means that a large excess of acid is produced during the first five
years operation. It has been assumed that this acid will be sold at the mine gate at a price of $
120/t acid.

If the acid plant was constructed on a stand alone basis to operate independently from the Dukwe
mine it would require its own working capital. On the basis of producing 250 t/day of saleable
product the plant will require initial working capital for 45 days of operation in the amount of
$810,000.

Acid consumption will be higher from year 5 of operation, when processing Upper Transition
zone ore. The effect of higher acid consumption is calculated in the financial model using the
average calculated ore blend values for each year of operation.

Details of the acid plant operating cost are provided below.

                Plant Size                    T acid/d                         250
                Plant Cost                   $ millions                       9.23
                 Sulphur                         T/d                           80
                 Sulphur                         $/t                           170
                  Water                        T/t acid                        1.1
                  Power                      KWh/t acid                         90
                 Sulphur                      $ /month                      408,000
                  Water                       $/month                         2,541
                  Power                       $/month                        21,808
                 Labour                       $/month                        96,923
               Maintenance                    $/month                         9,231

                   Total                      $/month                       538,503
                   Total                      $/t Acid                       71.8

       It must be noted that these figures are preliminary values that may be adjusted on
       completion of detailed engineering.
General and Administration
Estimated average general and administrative costs are made up of primarily salary and benefit
costs, all employee travel expense to and from site, and all other supplies for the life of mine for
the Dukwe Oxide Copper Project are summarized by major expense elements. The total average
process unit cost is $1.30 /t of ore treated and $0.04 /lb of copper produced.
                                Table 23-8: G & A Cost – Summary
                Area                                      Cost, $/t
                Salaries                                  0.69
                Assay Lab                                 0.41
                Site Services                             0.20
                Total                                     1.30



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Staff
All mine administrative and staff personnel will work out of an administrative complex located
near the process plant. Estimates of general and administrative staff are shown in the following
table.
                   Position                                          Number
                   General Manager                                       1
                   Safety and Security Director                          1
                   Administration/Accounting Superintendent              1
                   Human Resources Director                              1
                   Benefits Coordinator                                  1
                   Environmental/External Affairs Superintendent         1
                   Environmental Engineer                                1
                   Environmental Technicians                             1
                   Purchasing Agent                                      1
                   Warehouse Coordinator                                 1
                   Accounts Payable/Payroll Clerks                       1
                   Accounting Clerk                                      1
                   Administration Assistants                             1
                   Total                                                13

Employee Travel
Access to and from the site will be supplied to employees. Buses will transport employees from
nearby towns to the mine. Transportation costs was estimated at $0.75 per man trip. These costs
were calculated, based on the current annual employee day trips per year are estimated to be
about 28,000 assuming 130 employees making four man trips per week. A four percent
allowance for trips by contractors, vendors, and visitors has been included in this total.




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                                  24.0     ECONOMIC ANALYSIS

24.1.   General

Howe has conducted its own economic analysis of the Dukwe Copper oxide project, as the
analysis by MDM was in Howe’s opinion incomplete and did not include some capital and
operating costs or taxes. The economic appraisal of the Dukwe Copper Project has been
completed using Microsoft Excel® software. The economic model has been developed in
conjunction with African Copper. The cash flow is based on constant money, life of reserve mine
model with operating and capital estimates.

The model assesses the Project value in terms of the two most significant standard assessment
criteria:
    • Net Present Value (NPV);
   •    Internal Rate of Return (IRR).

Base Case Fiscal and Taxation Parameters
  • Capital and operating costs are stated in first quarter 2004 US Dollars, and no provision
      has been made for inflation during the pre-production period or thereafter.
   •    The base case model assumes a copper price of $1.10 per pound for the life of the project.
        The project has also been assessed at $1.00 and $1.20 per lb as part of the sensitivity
        analysis.
   •    The standard Botswana tax system has been assumed except where negotiated otherwise
        or provided for by the current laws and regulations.

Other Parameters
The applicable tax rate in Botswana is 25%. Capital expenditures are expensed when incurred or
carried forward until required.
The discount rates applied to the cash flow is 10%.

The reserve life is based on the MDM feasibility for the oxide

                                    Table 24-1: Model Parameters
            Parameter                                                            Oxide
            Pounds of Copper produced/ yr                                  24,341,000
            Tonnes of Ore mined /year                                       728,800
            Average Grade % Cu                                                1.85
            Copper Price US$ per pound                                         1.10
            Tonnes of Waste Mined                                          50,208,200
            Stripping Ratio                                                   9.84
            Copper Revenue (M$)                                               187.4
            Pre-Production Capital Costs (M$)                                 39.6
            Project Mining and Processing Cost /lb Cu (life of mine)           0.71
            Acid Revenue ($ millions)                                         50.5
            Exchange Rate                                                1US$= 4.8 BWP




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24.2.     Base Case Results

The base case results form the cash flow model is as follows:

                        Table 24-2: Dukwe Copper Base Case Cash Flow Model

              Parameter
              Pounds of Copper produced (millions lb)                          170.4
              Project Mining & processing Cost $/lb1                           $0.71
              Copper Price US$ per pound                                       $1.10
              Revenue (M$) (Including Acid)                                   $237.9
              Operating Costs (incl Acid) (M$)                                 153.4
              Taxes &Sustaining Capital (M$)                                     9.5
              Net Cash flow (after tax & capital)                               74.9
              Pre-Production Capital Costs (M$)                                 39.6
              Project
              NPV @ 10% (millions)                                               6.8
              IRR (%)                                                           14.2


The base case revenues from the cash flow model are broken out per year as follows:

$ 000’s        1             2              3           4         5            6            7
Copper         15,213        24,987         25,462      28,109    27,196       31,671       34,786
Acid           7,384         5,740          5,902       6,757     6,683        7,773        10,227
Total          22,597        30,727         31,364      34,865    33,879       39,444       45,013

24.3.     Sensitivity Analysis

As shown on the following table the project is sensitive to copper prices.

                  Copper Price                          $1.00     $1.10       $1.20

                  NPV @ 10.0 %                          M$         M$         M$
                  Project NPV,                          1.58       6.8        14.8

                  Internal Rate of Return                %          %          %
                  Project IRR                            9.0       14.2       19.0

The IRR is calculated on the after tax cash flow and an investment of $39.6 million.

24.4.     Summary of Cash flow Analysis

The summary table indicates that the project is very sensitive to the copper price. The operation
does not become taxable until late in the operation due to the high capital for construction and
heavy past capital expenditures.




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The project which is 100% owned by African Copper can generate sufficient funds from
production to repay the required capital investment to place the project into production. The
14.2% IRR is considered reasonable and provides a good return to the investors in line with the
risk level. The project has flexibility in its operations that will enable the owners to mitigate the
usual risk areas associated with mining operations and maintain a positive cash flow. The
extensive other known copper mineralization within the Dukwe licence area and the associated
exploration areas owned by African Copper offer considerable potential to delineate additional
resources that will extend the mine life beyond the initial seven years.

24.5.   Upside Potential

Mining the Oxide Deposit
The mining strip ratio may be improved following more geotechnical drilling planned for the
Phase 2 study. It is expected that the east pit wall slope may be significantly increased. SRK
will revise and recalculate the pit design and tonnage schedule based on this. Steeper pit slopes
will have a sharply positive effect on the project due to lower strip ratio and earlier delivery of
ore to the plant.

Ore Reserve Oxide
It is known that ore oxide ore exists along strike, south of the proven ore reserve, notably in the
Erasmus orebody. Infill drilling is required to complete 50 m drill hole spacing and allow for
definition of a further resource. In addition the previous reserve estimate was made with
significantly lower commodity prices and higher costs. Recalculation of the reserves using the
MDM numbers is expected to increase the oxide reserves. .

In addition MDM is reviewing the overall pit design parameters through the existing Whittle
analysis. It is expected that the resource/reserve base for the pit design will change as a result of
the current economic and operating costs resulting in an increase that will extend the oxide mine
life.

Acid Consumption
Scope exists to perform large (tall) column test work in order to obtain accurate values for lower
acid consumption, especially on the Upper Transition ore. Such tests will however require long
times to complete, in the order of six months of laboratory column irrigation after obtaining
suitable samples.

Capital and Operating Costs
The capital and operating costs have been estimated by MDM on the basis of their general
experience and preliminary quotes in the construction and operation of similar projects. It is
expected that these costs will reduced during detailed engineering and final contractual pricing
discussions with suppliers.

Sulphides
The sulphide deposit is open in all directions. Drilling by Falconbridge in 1982 and 1987 on 240
meter sections extended the sulphide mineralization to the north for over 2 kilometres. It is
expected that further drilling will increase the sulphide resources.



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Nine holes were drilled by Falconbridge and the results are tabulated below;

                  Drill Hole No.        Grade % Cu               Width (m)
                         1                 4.26                    2.30
                         2                 0.79                    3.44
                         3                 1.57                    3.44
                         4                   -                       -
                         5                 1.49                    1.05
                        6a                 3.21                    5.74
                        6b                 1.90                    2.87
                        7a                 1.46                    3.17
                        7b                 2.94                    3.44
                        7c                 2.10                    3.21
                        8a                 2.34                    4.59
                        8b                 1.20                    9.76




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                                      25.0   PAYBACK

Based on the estimated capital cost of 39.6 million and using the parameters as stated above the
payback for the project is:

 Copper Price             0.95                1.00               1.10                1.20
 Payback (yrs)             5.2                 4.7               3.95                 3.5




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                                     26.0    MINE LIFE

Based on the present reserves of 5.1 million tonnes within the current pit envelope and at a
mining rate of 2000 t/d the mine life is seven years. The mine life may potentially be increased
due to any or all of the following factors:
   • A revision of the reserves due to a higher copper price currently (US$1.50/lb) vs the
        $0.80/lb used in the original reserve estimate.
   • Exploration potential within the vicinity of the mine.
   • Exploration potential in the surrounding area.
   • Potential production from the sulphide mineralization that underlies the oxide ore zone.




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                     27.0   INTERPRETATION AND CONCLUSIONS

27.1.   Messina Copper Licences

Dukwe Oxide Copper Deposit
The Dukwe copper oxide deposit has been traced by drilling and surface sampling over a total
strike length of 4,370 m. with the area to be mined contained within the central 2000 m. The
deposit itself has an overall thickness of between 30 and 60 m and the oxide soluble portion of
the deposit extending to a depth of approximately 150m.

The Dukwe Deposit leachable copper Indicated Mineral Resource totals 6.55 Mt, at an average
grade of 1.76% TCu, and contains 115 Mkg of copper at a 0.5% TCu cut-off grade for the oxide
and supergene mineralization and a 1.0% TCu cut-off grade for the transition mineralization. The
probable reserves derived from the Indicated Resource is 5.1 Mt at a grade of 1.85% TCu at a
cut-off grade of 0.5% .

The deposit will be mined by open pit to a depth of 150 m using 40 t trucks at a rate of 2250t per
day. The ore will be crushed and placed on heap leach pads. The pregnant solution will then be
piped to a standard solvent extraction and electrowinning plant. The plant is designed to produce
33.3 t of copper per day (11,666 t per year)

The copper oxide project has sufficient resources/reserves to sustain a proposed open pit, heap
leach SX/EW operation for a minimum of seven years.

All permits and licences to develop and operate the Dukwe copper oxide project are in the
process of being finalized. An Environmental Impact Study and an Archaeological Study have
been completed and on receipt of the detailed engineering the Company can submit its request
for a mining licence.

The total construction capital cost of the copper oxide leach SX-EW project is estimated at $37.5
million excluding working capital of $1.55 million and arranging fees of US $590,000, if the
owner seeks partial debt financing for the project. Mining will be undertaken on a contract basis.
Total operating cost for the project is estimated to average $0.71 per lb of copper over the mine
life (includes smelting, refining and transportation).

The Project will generate net cash flow of approximately $35.4 million, after taxes and recovery
of capital, over the initial 7-year mine life based on a copper price of $1.10/lb. The project
generates an NPV at a 10% discount of $6.8 million and an IRR of 14.2%.

Howe concludes that the development plan for the Dukwe Copper oxide project is reasonable
and attainable.

Dukwe Sulphide Zone
The underlying copper sulphide mineralization has been initially evaluated by Falconbridge in
the mid 1980’s below the copper oxide zone and extended the sulphide mineralization to the



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north for over 2 kilometres. They estimated a resource of 13.0 million tonnes at an average grade
of 3.85%, at a 1.5% Cu / 2 m width cut-off, containing 1.1 billion pounds of copper (non
National Instrument 43-101 compliant) from 125 to 600 m below surface.

The sulphide zone at Dukwe is indicated to be a potentially large copper resource that has not
been systematically evaluated as a potential mining operation since the late 1980’s. Since then
the infrastructural situation and copper price outlook have changed substantially in a positive
manner. The proposed oxide copper mining operation at Dukwe should further improve the
general infrastructure situation for the potential underground operation.

Howe concludes that the deeper sulphide zone within the Dukwe licence area and the nearby
associated exploration areas owned by African Copper offer considerable potential to delineate
additional resources that could substantially extend the mine life of the surface copper oxide
deposit.

It is recommended by Howe that the Dukwe Copper project be perused and that further
refinement of information towards the final design parameters for the open pit copper oxide be
completed along with further evaluation of the deeper copper sulphide mineralization.

27.2.   Matsitama Prospecting Licences

The Matsitama Prospecting Licences cover a very large area, some 4,000 square kilometres of
highly prospective mineral holdings. These licences are contiguous with the 306 km2 Messina
Copper Licence that contains the Dukwe Copper Deposit discussed above. The following
comments fall under two specific and quite different headings. The first is the Thakadu-Makala
Copper Deposits which represent an advanced exploration project that might be considered as a
high quality potential mining project in its own right or alternatively as a natural complementary
project running either in parallel or in series with Dukwe. The second subject is the general
exploration potential of the Matsitama (and Messina Copper) Properties outside of the Dukwe
and Thakadu-Makala deposits.

Thakadu-Makala Copper Deposits
These mineral deposits were, until recently, owned by a party unrelated to African Copper. Now
that the Dukwe and Thakadu-Makala copper deposits (published combined reserves of 4.85 Mt
at a grade of 2.71% Cu for the Thakadu-Makala copper deposits) are both 100% owned by
African Copper there is an opportunity to evaluate the economic ramifications of various
possible development scenarios involving the two projects, either separately or together.

At this time the Dukwe deposit is indicated to be economically viable as a stand-alone venture
while Thakadu-Makala is at a very early stage of re-evaluation. Howe believes that efforts to
develop a mine at Dukwe should continue as planned while at the same time exploring the
possibilities for combining or sharing operational and/or management functions for both projects.
It is recommended that African Copper undertake an economic evaluation to determine the best
path toward optimum development of the combined resource assets. Since this study might
impact to some extent on the current development plan at Dukwe it should be completed without
delay.



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Regional Exploration Program
It is concluded that the Matsitama Properties have a wealth of systematic multidisciplinary
exploration data that indicate substantial areas of highly prospective terrain especially for
sediment-hosted copper and zinc deposits. It is important to note that previous exploration
efforts sometimes focused on primarily on geochemical targets, while at other times emphasis
was on geophysical responses, especially electromagnetic conductors. The geochemical targets
were found to be caused by base metal in bedrock while the best conductors were graphitic
concentrations in metasediments. Thus it is apparent that to date the geochemical database is the
best indicator of bedrock mineralization. A large number of geochemical anomalies are
inadequately tested or have never been explained.




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                               28.0     RECOMMENDATIONS

Howe’s recommendations for ongoing work in the Matsitama belt encompass four main sets of
exploration/development objectives:
   • Ongoing development of the Dukwe Oxide Copper Project for the near term. Specific
       development milestones for 2005.
   • Continuing investigations into the economic viability of the Dukwe Sulphide Zone.
       Specific advanced exploration work for 2005.
   • Preliminary economic evaluation of the Thakadu-Makala copper deposits. Specific
       economic scoping work for 2005.
   • Systematic exploration of the vast mineral holdings covering the Matsitama belt outside
       of the above noted deposit areas. General regional exploration work for an
       approximately 3 year period, 2005-2007.

Dukwe Oxide Copper Project
The main budget items connected with this project for the remainder to 2005 are associated with
detailed design and engineering for mine, plant and infrastructure requirements of the proposed
Open Pit Mine-Heap Leach/SX-EW Process Facility. The main aspects of this work are;
geotechnical work to confirm pit slope angles, redesign of the pit to incorporate current
economic parameters, completion of some of the detailed engineering for construction, and
design engineering for the SX-EW plant. The Budget for the period May-December, 2005 is
summarized in Table 28-1.

     Table 28-1: Proposed Budget Dukwe Oxide Copper Project, May-December, 2005

                   BUDGET                                     AMOUNT
                   ITEM                                  Pula        US$
                   General and Administration           1,550,000 $ 338,000
                   Detailed Engineering (RSV/SENET)    11,194,000 $ 2,444,000
                   Geotechnical (SRK)                     336,000 $    73,000
                   Analyses, Process Test work            746,000 $ 163,000
                   Environmental Monitoring               298,500 $    65,000
                   Metallurgical Consultant                67,000 $    15,000
                   Contingency                          1,224,000 $ 267,000
                   Total                               15,415,500 $ 3,365,000

The overall preproduction capital cost for the Dukwe Oxide Copper Project based on MDM
estimates are described in detail in Sections 23. The above approximately $3.4 million budget is
part of the $39.6 million capital cost.

Dukwe Sulphide Zone
In addition the deeper sulphide potential should be further evaluated primarily through drilling to
confirm the Falconbridge resource estimate, followed by an updated National Instrument 43-101
compliant resource estimate. Also, further step out drilling should be done to determine the
overall size potential of the sulphide zone along strike. Areas of first priority interest in this
regard include; Bushman, Mapanipani and Mapanipani North, where substantial work has been


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done previously, and under explored mineral occurrences are located along strike. A substantial
work program including surface diamond drilling, geological studies, metallurgical test work,
etc. are required to form the basis of a preliminary economic evaluation of the sulphide zone. If
this work is positive an underground exploration program will be required to test the geological
continuity of the mineralization, the mineability of the deposit, and to obtain bulk sample
material for further process test work.

The main cost component of this work is 20,000 metres of NQ core drilling including
verification, outline and definition boreholes designed to continue testing the sulphide zone.
Additional work on the sulphide zone will include; integration of the various data sets,
geological investigations, updating the resource estimates, mineralogical studies, metallurgical
test work and preliminary economic analyses. The budget for the period May-December, 2005 is
presented in Table 28-2.

         Table 28-2: Proposed Budget Dukwe Sulphide Zone, May-December, 2005

                   BUDGET                                     AMOUNT
                   ITEM                                   Pula          US$
                   General and Administration            1,550,000   $ 338,000
                   Personnel Costs                       3,375,000   $ 737,000
                   Consultant (Resource estimation)        148,000   $    32,000
                   Field Expenses                        2,388,000   $ 521,000
                   Travel & Accommodation                   49,000   $    11,000
                   Drilling Costs including mob/demob   12,239,000   $ 2,672,000
                   Logging and sampling                    448,000   $    98,000
                   Assays/Analyses                       1,769,000   $ 386,000
                   Contingency                           2,042,000   $ 446,000
                   Total                                24,008,000   $ 5,241,000

Preliminary Economic Evaluation Thakadu-Makala Deposits
As noted in Section 27.2 above, there is an opportunity to evaluate the economic ramifications of
various possible development scenarios involving the Dukwe and the Thakadu-Makala projects,
either separately or together. Howe recommends that an experienced team of mining and
exploration professionals be put together to evaluate these deposits for strategic planning
purposes. A budget of US$100,000 for the period May-December, 2005 is recommended for
this purpose.

General Exploration Matsitama Belt
It is recommended that African Copper begin implementing a systematic program to test the
potentially mineralised areas indicated by the existing exploration database, especially the
geochemical results. This information is for the most part adequately compiled and available for
use, although the Hyperspectral Survey has not been fully integrated. Individual target areas
should be defined by detailed geochemical traverses and possibly suitable geophysical
techniques such as Induced Polarization/resistivity profiles as warranted and then tested by
drilling or trenching. Because of the very large number of potential targets a substantial long-
term budget is required. Howe is of the opinion that the character of the property is of sufficient
merit to justify the following recommended program.


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A two-phase budget for Dukwe-Matsitama regional exploration is outlined that would be spent
over a two to three year period. This budget includes funding to conduct systematic exploration
throughout the vast property with concurrent pre-feasibility to full feasibility investigations
going on at Thakadu-Makala and possibly other known mineral occurrences. The first phase
budget covering the initial 1 to 1.5 year work period is presented in Table 29-3.
                Table 29-3: Phase I Budget, Dukwe-Matsitama Regional Exploration
ITEM                                                                                    US$
Personnel Costs             Supervision, consulting, geologists, technicians, labour,   $ 400,000
                            data processing, CAD
Support Costs               Field & office expenses, map/drawing costs, permits,        $ 400,000
                            travel, equipment rental, vehicle rental, fuel &
                            maintenance
Grids                       Line cutting, re-establish old grids, land surveying, GIS   $ 100,000
Geophysics                  Contract magnetometer & IP/resistivity surveys              $ 250,000
Drilling                    Contract mob-demob., reverse circulation drilling, core     $1,500,000
                            drilling
Analyses                    Contract assays, analyses including soil samples            $ 300,000
Pre-feasibility Study       Contract Thakadu-Makala economic evaluation                 $ 300,000
Environmental Studies       Contract baseline studies & monitoring                      $ 200,000
Report Costs                                                                            $ 50,000
Sub total                                                                               $3,500,000
Administration              10%                                                         $ 350,000
Total                                                                                   $3,850,000

The second phase budget is conditional upon satisfactory exploration results as well as a positive
pre-feasibility at the Thakadu-Makala deposits area. The second phase budget covering the
second 1 to 1.5 year work period is presented in Table 29-4.
             Table 29-4: Phase II Budget, Dukwe-Matsitama Regional Exploration
ITEM                                                                                    US$
Personnel Costs             Supervision, consulting, geologists, technicians, labour,   $ 400,000
                            data processing, CAD
Support Costs               Field & office expenses, map/drawing costs, permits,        $ 400,000
                            travel, equipment rental, vehicle rental, fuel &
                            maintenance
Grids                       Line cutting, re-establish old grids, land surveying, GIS   $ 50,000
Geophysics                  Contract magnetometer & IP/resistivity surveys              $ 200,000
Drilling                    Contract mob-demob., reverse circulation drilling, core     $1,000,000
                            drilling
Analyses                    Contract assays, analyses including soil samples            $ 300,000
Feasibility Study           Provisional Thakadu-Makala feasibility study                $1,500,000
Environmental Studies       Contract baseline studies & monitoring                      $ 200,000
Report Costs                                                                            $ 50,000
Sub total                                                                               $4,100,000
Administration              10%                                                         $ 410,000
Total                                                                                   $4,510,000

The grand total of the Phase 1 and provisional Phase 2 recommended regional exploration
budgets is US$ 8,360,000.


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Budget Summary
Table 29-5 provides a summary of the total work program budget over a 3 year period is
provided below. Additional capital expenditures will be required to continue development work
on the Dukwe Oxide Copper Project after the detailed design and engineering work is completed.
Additional debt and/or equity funding will be required for this.

                                  Table 29-3 Budget Summary (3 Years)

               Area                          General Description                  Budget (US $ x 106)
Dukwe Oxide Zone
Dukwe Oxide Copper Project            Detailed design and engineering                   $3.37
(May-December, 2005)
Dukwe Oxide Copper Project            Construction and Start-up                          $0.0
(2006-2007)
Sub Total                                                                               $3.37
Dukwe Sulphide Zone
Dukwe Sulphide Exploration            20,000m NQ core drilling                          $5.24
Phase 1 (May-December, 2005)
Dukwe Sulphide Exploration            To be determined after 2005                        $0.0
Phase 2                               program
Sub Total                                                                               $5.24
Thakadu-Makala Deposits
Sulphide and Oxide Exploration        Preliminary Economic Study                        $0.10
(May-December, 2005
Provisional Ongoing Exploration       Included in Matsitama Budget                       $0.0
Sub Total                                                                               $0.10
Matsitama Prospecting Licences
Phase I                               Drilling, geophysics, continuing                   3.85
(May-December, 2005)                  evaluation on Thakadu-Makala
Phase II                              Follow – up to Phase I pending
(2006-2007)                           successful            results  –                   4.51
                                      drilling/feasibility study
Sub Total                                                                               $8.36
Grand Total                                                                             $17.07

                                           Respectfully Submitted,

                                           A. C. A. Howe International Limited




                                           Michael Newbury, P.Eng


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Howard Coates, P. Geo.




Dino Titaro, P.Geo.
May 5, 2005




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                                  29.0    REFERENCES

Aldiss, D.T. 1991. The Motloutse complex and the Zimbabwe Craton/Limpopo Belt Transition
        in Botswana. Precambrian Research, 50, 89-109.

Archer, C.T., May 1999, SPECTREM survey of the Matsitama block in Botswana, AATS –
       Geophysical Services Department, Ref: 15/105/500/98/352.

Armstrongs (2001) Letter Dated March 15, 2001 from Armstrongs to Two Financial Institutions
      Regarding Mortbury Credit Facility.

Arita, K. and Nishiie, M., February 1983, Report on Geological Survey of Northeastern
       Botswana, Japan International Cooperation Agency, Metal Mining Agency of Japan.

Barton, J.M. Jnr, Blaine, J.L, Doig, R. & Byron, C.L. 1994. The geological setting style of
       copper mineralization at the Bushman group of deposits, northeastern Botswana. Journal
       of African Earth Sciences, 18 (2), 87-97.

Bate, S, 1996. Interpretation report on the 1996 airborne magnetic and electromagnetic Data
       from the Bushman-Matsitama licence area in the Central District of Northeastern
       Botswana for MPH Consulting (Botswana)(Pty) ltd. 39 pp.

BCL (1963) Quarterly Reports to Bechuanaland Government, Bamangwato Concessions Limited
      (14 reports from November 1959 to September 1963). Rhodesian Selection Trust
      Exploration Limited and Bamangwato Limited.

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      (7 reports from June 1972 to March 1974). Rhodesian Selection Trust Exploration
      Limited and Bamangwato Concessions Limited.

BCL (1903 – 1913) Quarterly Reports and Letters Concerning the Bechuanaland Exploration
      Company and the Bechuanaland Copper Company.

Bennett, J.D. 1968. Craton-mobile belt relations with particular reference to the Mosetse-
       Matsitama area, northeastern Botswana. Geological Magazine, 107(2), 113-123.

Boocock, C. (1955) Report on the copper deposits of the Bushman Mine – Phudolooga area.
      Geological Survey, Bechuanaland Protectorate.

Boocock, C., 1954. Report on the copper deposits of the Bushman Mine-Phudulooga area. Rep.
      Geol. Surv. Bech. Prot., Unpublished.

Bottrill, T. (November 2001): Geological Interpretation of Mineralogical Assays, Mortbury
        Memorandum Dated November 9, 2001.




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                                                            A. C. A. Howe International Limited


Bottrill, T. J. (August 1998) Summary Report on the Bushman Mine Chalcocite Zone
        Metallurgical Problem, 18 pp.

Bottrill, TJ. 1998. Progress report on the Matsitama Project, Botswana. PL 78/95, 79/95 80/95,
        81/95. November 1995 – October 1998. Ontario, Terence J. Bottrill Geological
        Services, 173 pp.

Brereton, W.E. and Bottrill, T.J., (1997) MPH Consulting Limited and Bottrill Geological
       Services (December 1997) Geology and mineral resources of the Bushman copper
       deposit, Botswana, for Mortbury Limited.

Buchan, R. (December 1979) Mineralogical Examination of 10 samples from Bushman and
      Matsitman, Botswana. Falconbridge Nickel Mines Limited, Metallurgical Laboratories,
      Thornhill, Ontario, Bulletin B98 (2125)

Burks, F.B.J.M., and Marr, S. (November 1995) Estimated capital and operating costs for the
       Bushman mine proposed heap-leach and SX/EW plant. Bateman Minerals and Industrial
       Limited for Messina Investments.

Byron, C.L. (May 1983) Review of the copper exploration along 80 km of the Bushman
      Lineament, Prospecting Licences 7/77 and 2/78, N.E. Botswana. Falconbridge
      Explorations (Botswana) (Pty) Limited, Bulletin B191.

Calder. S. (July, 2004). Dukwe Copper Oxide Deposit Feasibility Study Report.           MDM
       Ferroman.

Calder. S. (September 10, 2004). Dukwe Copper Sulphide Orebody Scoping Study Report.
       MDM Ferroman.

Carney, J.N., Aldiss, D.T., and Lock, N.P. (1994) The Geology of Botswana. Geological Survey
      Department, Bulletin 37, 113 pp.

Charlap, G., 1980. January 1980, Feasibility Study, Thakadu and Makala deposits (Matsitama
       Concession) in Botswana. Unpublished company report.

Chavez, Jr., W. X. (April 2000) Supergene Oxidation of Copper Deposits: Zoning and
      Distribution of Copper Oxide Minerals. Society of Economic Geologists Newsletter, no.
      41, pg. 9-21.

Chunnett, I. E., Aucamp, J.J., Davenport, J.W.J., Lewis, R.D., Knupp, K-P., Mitsch, N.M.,
      Venter, L., Raoelison, I.L., Reid, K.S., Robertson, A.S., Tau, K.B., van Rooyen, C., and
      Wimterburn, P.A., 2002. Matsitama Venture Area, Final Report, Ambase Exploration
      (Botswana) (Pty) Limited. Unpublished company report.




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                                                           A. C. A. Howe International Limited


Coomer, P.G., Coward, M.P., and Lintern, B.C. (1977) Stratigraphy, Structure and
     Geochronology of Ore Leads in the Matsitama Schist Belt of Northern Botswana.
     Precambrian Research, vol. 5, pg. 23-41.

Coomer, P.G., Coward, M.P. & Lintern, B.C., 1977. Stratigraphy, structure and Geochronology
     of ore leads in the Matsitama schist belt of northern Botswana. Precambrian Research, 5,
     23-41.

Courtenage, P.M., Gerber, A, Linton, P.L., Ferraz, M.F.F., Sears, M and Engelbrecht, S> 1999.
       The Matsitama Schist Belt, Botswana: Results of the Hyperspectral survey. Anglo Amer.
       Corp. Geophysical Services Dept. Int. rept. (Unpublished).

Dragon Management for Mortbury Limited, (February 2001) Extracts from Falconbridge
      Exploration Botswana Progress Reports on Bushman Mine, 8 pages.

Dragon Management for Mortbury Limited (March 2001) Record of the Past Exploration of the
      Bushman Property, 28 pp.

Dragon Management for Mortbury Limited (July 1998) Notes on Falconbridge Progress Reports,
      10 pages.

Dreier, J. E. (April 1993) The Integrated Use of Geology, Petrography, Aqueous Geochemistry
        and Geochemical Modeling in the Evaluation and Metallurgical Testing of Oxide Copper
        Deposits. In: Integrated Methods in Exploration and Discovery, Abstracts. Samuel B.
        Romberger and Darby I. Fletcher, eds. AB-25

Dudas, L. (April 1998) Mineralogical examination of five samples from the Bushman copper
      deposit, Botswana. Appendix to Leach Inc. report, August 1998. 19pp.

Evans, L. (2002) Resource Estimate of the Bushman Deposit, Botswana for Mortbury Limited by
       Roscoe Postle Associates Inc. (Unpublished)

Falconbridge Explorations (Botswana) Pty) Limited (1977-1989) Quarterly Reports to Botswana
       Geological Survey (23 reports from October 1977 to September 1983, and 6 reports from
       October 1987 to June 1989).

Falconbridge Explorations (Botswana (Pty) Limited. (October 1978 – October 1982) Detailed
       Progress Reports of State Grants 7/77 (Matsitama) and 2/78 (Bushman North)

G.S.E., 1989. Thakadu and Makala Copper Mine, Feasibility Study, August 1989. Unpublished
       company report.

Greenman, L. (January 1978) Geology and Ore Reserves of the Bushman Mine, Botswana, and
      Suggestions for Further Exploration. Falconbridge Explorations (Botswana) (Pty)
      Limited, Bulletin 2040.




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                                                            A. C. A. Howe International Limited


Haynes, W.D., Blaine, J. L. (November 1989) Bushman mine project, Updated prefeasibility
      study (620,000 tpy), Falconbridge Explorations (Botswana) (Pty) Limited Bulletin B244.

Hawley, J.A. (2001) Report on Survey, Letter Dated July 2001 with Attached Tables by Africa
      Surveys (Botswana) (Pty) Ltd.

Iasillo, E. and Schlitt, W.J. (1999) Practical Aspects Associated with Evaluation of a Copper
         Heap Leach Project, In SME publication Copper Leaching Solvent Extraction, and
         Electrowinning Technology edited by Gerald V. Jergensen II.

Isaaks, E. (1999) SAGE2001 General Purpose Software for Variography, Isaaks and Co.
       (www.isaaks.com).

Johnston, D. (May 1983) Bushman mine copper deposits, detailed mineral inventory estimates
       for prospecting licences 7/77 and 2/78 – Botswana, Falconbridge Explorations
       (Botswana) (Pty) Limited, Bulletin B192.

Johnston, D. and Chandler, T.E. (September 1980) Interim Report on Work Done to 30th June
       1980 on the Bushman Area, Botswana, State Grants: 7/77 and 2/78, Projects: 87 and 97.
       Falconbridge Explorations (Botswana) (Pty) Limited.

Kedda, S. W. (1993) Mineralogical examination of Bushman mine, examination of sulphide and
      oxide ore. Anglo American Research Laboratories (Pty) Limited, Reference No.
      S/93/764, Appendix III to Bushman Copper Project Metallurgy File, Messina
      Investments Limited, 1995.

Lakefield Research, report no. met. 01/C13, The Bushman Project Botswana, Phase 1:
       Ore Characterization by Diagnostic Leaching (Original Scope).

Lakefield Research, report no. met. 01/C13B, The Bushman Project Botswana, Phase 1:
       Ore Characterization by Diagnostic Leaching (Leach Inc. Programme).

Lakefield Research, report no. MIN 0801/92, Mineralogical Examination of Bore-core
       Samples from the Bushman Copper Project Botswana.

Lakefield Research, report no. met. 01/C13, The Bushman Project Botswana, Phase 2a:
       Mini Column Heap Leach Tests. (Progress Report)

Lakefield Research, report no. met. 01/C13, The Bushman Project Botswana, Phase 2b:
       Mini Column Locked Cycle Heap Leach Tests. (Progress report)

Lee, J.E.,1977. The geology and mineralised reserves of the Thakdu and Malaka Copper/Silver
       deposits, Matsitama Grant Area, Botswana. Unpublished company report.

Lintern, B.C. 1982. The stratigraphy and structure of the Matsitama schist belt, north-eastern
       Botswana. Ph.D. Thesis, England, University of Leeds, p. 234.{Unpublished}



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                                                               A. C. A. Howe International Limited




Lintern, B.C. (1973) Report on the copper deposits of the Bushman area. Bamangwato
       Concessions Limited.

Majaule, T., 1993. The geochemistry and evolution of the Matsitama supracrustal belt, NE
      Botswana. M.Sc. Thesis, England, University of Leeds, p215. {unpublished}

McKnight (2001) Digital files with geotechnical logs of test pits and diamond drill holes.

MDM Ferroman, Review and Update of the Feasibility Study of the Dukwe Mine, July, 2004.

Moffat, H. G. (1912) Report on Work to Year End (May 31, 1912), the Bechuanaland Copper
       Co. Ltd. (document reference: “PB.SB.14”)

Molyneux, A.J.C. (1903) Draft Report on The Bushman Copper Mine to the Bechuanaland
      Exploration Company (document reference: “PB.SB.1”)

Mortbury (July 2000) Summary of the Bushman Copper Mine to the Bechuanaland Exploration
      Company (documented reference: “PB.SB.1”)

Mortbury (February 2000) Geology of the Bushman Copper Deposits by T.J. Bottrill, 11 pp.

Mortbury Limited – Messina Copper (October 1999) Bushman Copper Deposit Open Pit
      resources, 8 pages.

Moyes, A.B., et al. 1999. The Matsitama Schist Belt, Botswana: A multidisciplinary approach.
      Vol. 1 Project summary, Vol. 2 Project details and Vol. 3 (maps). Geophysical Services
      Department, Anglo American Corporation of South Africa Ltd.(Unpublished)

MPH Consulting Limited and Bottrill Geological Services (December 1997) Geology and
    mineral resources of the Bushman copper deposit, Botswana, for Mortbury Limited.

MPH Consulting (January 1997) Geological Report – Bushman Copper Property Botswana for
     Mortbury Limited.

MPH Consulting Limited (January 1997) Summary Report on the Bushman Copper Project
     Botswana, Africa for Mortbury Limited, British Virgin Islands.

Newbury, M., Coates, H., and Titaro, D. (November 2004) Technical Report on the Geology and
     Mineral Resources, Dukwe Copper Project and Matsitama Prospecting Licences,
     Botswana, Africa for Numis Securities Limited, The Royal Bank of Canada Europe
     Limited and African Copper PLC. (Unpublished)

Roman, R. (September 2001) Review of Copper Leach Testing Program and Results. Leach, Inc.
     for Mortbury.




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                                                             A. C. A. Howe International Limited


Roman, R. (January 2991) Letter to Mortbury detailing test procedures.

Roman, R. (August 1998) Metallurgical Evaluation of Chalcocite Ore from the Bushman Copper
     Deposit, Botswana. Leach Inc., Tucson, Arizona for Mortbury Limited.

Ryan, A., 1982. July 1980 Feasibility Study, Thakadu Open Pit.           Revised and updated.
      Unpublished company report.

RPA (2001) Bushman Copper Deposit Phase 2 Metallurgical Composite, Memorandum Dated
      September 25, 2001.

Summers, R., 1969. Ancient Mining in Rhodesia. Rhodesia (Salisbury) Museum Memoir 3.

SNC (2001) Weigh Scale Calibration Results, SNC MS Word file weighsca.doc dated September
      4, 2001.

SNC (2002A) Cut-Off Grade Calculation, SNC Memorandum by Kevin Morris Dated February
      28, 2002.

SNC (2002B) Feasibility Study on the Bushman Copper Project for an Open Pit Mine and Heap
      Leach, SX/EW Plant in Botswana dated April 2002 by SNC-Lavalin Engineers &
      Constructors Inc. (four volumes)

Van Waarden, C. (2002) Bushman Mines Archaeological Impact Assessment for Mortbury
Limited. (Unpublished)

WSB (2002) Bushman Copper Project Environmental Impact Assessment Report (draft) for
Mortbury Limited by Water Surveys (Bostwana) (Pty) Ltd. (Unpublished)

Winterburn, P.A. 1998. Results of an orientation survey undertaken in the Matsitama Licence
      area, Botswana. Geochemistry Unit, New Mining Business Division, Anglo American
      Corporation of South Africa Ltd, Unpublished Report (December 1998), 16 pp.




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                                                           A. C. A. Howe International Limited




                      CERTIFICATES OF QUALIFICATION


DINO TITARO
228 Wales Crescent,
Oakville, Ontario, L6L 3X7,
Telephone: 416-368-7041 ext 226
Fax: 416 368 2579
Email: dtitaro@acahowe.ca
                              CERTIFICATE of AUTHOR

     1.    I am currently employed as President and CEO of:

                  A. C. A. Howe International Limited,
                  330 Bay Street, Suite 830,
                  Toronto, Ontario
                  Canada
                  M5H 2S6

     2.    I graduated in 1976 with an Honours Bachelor of Science Degree in geology from
           Brock University, St. Catharines, Ontario, and in 1980 with a Master of Science
           Degree in geology from the University of Western Ontario, London, Ontario.

     3.    I am a Fellow of the Geological Association of Canada and a member of the
           Canadian Institute of Mining and Metallurgy, Society of Economic Geologists
           and a P.Geo. registered in the Provinces of Saskatchewan (APEGS, No. 10601)
           and Ontario (APGO, No. 0677).

     4.    I have practised my profession for 28 years since my graduation from university.

     5.    I am a coauthor of this report entitled “Technical Report on the Dukwe Copper
           Project and Matsitama Prospecting Licences, Botswana, Africa” for African
           Copper PLC dated May 5, 2005.

     6.    I have read the definition of “qualified person” set out in National Instrument 43-
           101 (“NI 43-101”) and certify that by reason of my education, affiliation with a
           professional association (as defined in NI 43-101) and past relevant work
           experience, I fulfill the requirements to be a qualified person for the purposes of
           NI 43-101.

     7.    I was responsible for the overall supervision in the preparation of this report. I
           have primary responsibility for Sections 1 and 2 of this Technical Report with


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                                                              A. C. A. Howe International Limited



              shared responsibility for Sections 16, 27 and 28.

       8.     The information and data used in this report were obtained from the references
              cited.

       9.     No site visit was made to the property by the undersigned in connection with
              preparation of this report.

       10.    As the President and CEO of A. C. A. Howe International I have had prior
              involvement with the Company in the preparation of prior reports.

       11.    I am not aware of any material fact or material change with respect to the subject
              matter of this Report which is not reflected in the Report, the omission to disclose
              which makes the technical report misleading.

       12.    I am currently independent of the issuer applying all of the tests in Section 1.5 of
              NI 43-101.

       13.    I have had prior involvement in the Dukwe-Matsitama Properties as an
              independent consultant coauthoring an AIM report in 2004

       14.    I have read NI 43-101 and Form 43-101F1, and the Report has been prepared in
              compliance with that instrument and form.

       15.    I consent to the filing of the Report with any stock exchange and other regulatory
              authority and any publication by them, including electronic publication in the
              public company files on their websites accessible by the public, of the Technical
              Report.

Dated this 5th day of May 2005




                             “
Dino Titaro, M.Sc., P.Geo.




                                                                                              29-2
                                                                 A. C. A. Howe International Limited




Michael Newbury
192 Douglas Ave.
Toronto, Ont
Canada

                                  CERTIFICATE of AUTHOR


I, Michael Newbury of 192 Douglas Ave. Toronto, Ont. do hereby certify that:

I am a registered professional Engineer in the Province of Ontario and a Member in good
standing of the Canadian Institute of Mining, Metallurgy and Petroleum with in excess of thirty
years of experience in the evaluation of mineral deposits and projects. I have an Honours B.Sc.
in Economic Geology from Queen’s University and a M.Sc. from McGill University. I am a
“qualified person” for the purposes of National Instrument 43-101 – Standards of Disclosure for
Mineral Projects (the “National Instrument”).

I am a coauthor of this report entitled “Technical Report on the Dukwe Copper Project and
Matsitama Prospecting Licences, Botswana, Africa” for African Copper PLC dated May 5, 2005.

I visited the Project (as defined in this report) between May 14 and May 18, 2004.

I am responsible for the preparation of this report, except as provided for or disclaimed in the
report, based on the sources and documents described in the report. I have primary responsibility
for Section 15, and Sections 17 to 26 inclusive of this Technical Report with shared
responsibility for Sections 16, 27 and 28.

As of the date of this report, I am not aware of any material fact or material change with respect
to the subject matter of this report, which is not reflected in this report, the omission to disclose
which makes this report misleading.

I am not nor do I expect to become an insider, associate, affiliated entity, partner or employee of
African Copper or an insider or affiliated entity of African Copper.

I do not own or expect to receive any securities of African Copper or an affiliated entity of
African Copper or any ownership or royalty interest in the Project.

I have not received the majority of my income in the three years prior to the date of this report
from any of: African Copper, insiders or affiliated entities of African Copper.

I am not nor do I expect to become an insider, affiliate or partner of a person or company that has
an ownership or royalty interest in a property which has a boundary within two kilometres of the
closest boundary of the Project.




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                                                               A. C. A. Howe International Limited


I do not have nor do I expect to obtain an ownership or royalty interest in a property that has a
boundary within two kilometres of the closest boundary of the Project.

I have had prior involvement in the Dukwe-Matsitama Properties as an independent consultant
coauthoring an AIM report in 2004.

I have read the National Instrument and Form 43-101F1, and this report has been prepared in
accordance therewith.

I hereby give my consent to African Copper to use this report in support of its application to the
AIM Market in connection therewith, and to reference this report in any applicable disclosure
document, provided that no portion is to be used out of context in such a manner as to convey a
meaning which differs from that set out in the whole.

Dated this 5th day of May 2005




Michael Newbury, P. Eng.




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                                                                   A. C. A. Howe International Limited




Howard Coates
3366 Palgrave Road
Mississauga, Ont
Canada

                                 CERTIFICATE of AUTHOR


I, H. J. Coates, of Mississauga, Ontario do hereby certify that:

1. I am a consulting geologist with an office at 615–133 Richmond Street West, Toronto,
   Ontario, Canada.

2. I am a coauthor of this report entitled “Technical Report on the Dukwe Copper Project and
   Matsitama Prospecting Licences, Botswana, Africa” for African Copper PLC dated May 5,
   2005.

3. I am a graduate of Memorial University of Newfoundland in St. John’s, Newfoundland and
   hold a degree of Master of Science in Geology.

4. I am a member in good standing of Professional Engineers and Geoscientists, Newfoundland
   and Labrador, as a Professional Geoscientist, Membership No. 03766.

5. I have practiced my profession continuously for a period of 35 years including substantial
   work on base and precious metal projects in Canada and several overseas countries.

6. I have personally undertaken and/or assisted in the preparation of many independent
   technical reports for other clients in the past.

7. No site visit was made to the property by the undersigned in connection with preparation of
   this report.

8. I have primary responsibility for Sections 3 to 14 inclusive of this Technical Report with
   shared responsibility for Sections 16, 27 and 28.

9. I am independent of the Issuer, having no present or anticipated interest, either directly or
   indirectly in the Dukwe or Matsitama Properties or securities of African Copper PLC., or any
   related companies.




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                                                                 A. C. A. Howe International Limited



10. I have had prior involvement in the Dukwe-Matsitama Properties coauthoring an AIM report
    in 2004 and conducting a resource evaluation in 1997, both as an independent consultant.

11. I have read National Instrument 43-101, and this report has been prepared in compliance with
    same.

12. As a result of my education, professional experience and professional qualifications, I am a
    Qualified Person as defined in NI 43-101.

13. As of the date of this certificate this Technical Report contains all of the information required
    under Form 43-101 F1 in respect of the property that is the subject of the Technical Report.

14. The statements made in this report are based on data made available to the undersigned from
    African Copper’s files. The information is to the best of my knowledge correct, complete and
    not misleading.

15. I hereby give my consent to African Copper to use this report, in support of its application to
    the TSX in connection therewith, and to reference this report in any applicable disclosure
    document, provided that no portion is to be used out of context in such a manner as to convey
    a meaning which differs from that set out in the whole.



Dated this 5th day of May 2005




Howard Coates, M.Sc., P.Geo.




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