Preliminary Estimate of Mineral Resources Karakartal Project, East Central Turkey

Transcription

1 Preliminary Estimate of Mineral Resources Karakartal Project, Prepared for Anatolia Minerals Development Limited 1333 East Dry Creek Road, Suite 24 Englewood, CO 8112 Prepared by Michael J. Lechner, P. Geo. Resource Modeling Incorporated 124 Lazy J Drive P.O. Box 295 Stites, ID 83552

2 Table of Contents Section... Page 1. SUMMARY INTRODUCTION RELIANCE ON OTHER EXPERTS PROJECT DESCRIPTION AND LOCATION ACCESSIBILITY, CLIMATE, LOCAL RESOURCES, INFRASTRUCTURE AND PHYSIOGRAPHY HISTORY GEOLOGICAL SETTING Regional Geology Local Geology DEPOSIT TYPES MINERALIZATION EXPLORATION DRILLING SAMPLING METHOD AND APPROACH SAMPLE PREPARATION, ANALYSES AND SECURITY YAMAS/Rio Tinto Sample Preparation and Assaying Procedures Anatolia Sample Preparation and Assaying Procedures DATA VERIFICATION ADJACENT PROPERTIES MINERAL PROCESSING AND METALLURGICAL TESTING Introduction Summary Findings MINERAL RESOURCE AND MINERAL RESERVE ESTIMATES Sample Data Geologic Data Topographic Data Bulk Density Data Assay Statistics High-grade Outliers Compositing Geologic Framework Grade Envelopes Variography Block Model Setup Grade Estimation Grade Model Validation Resource Classification...66 Resource Modeling Inc. i Karakartal Report

3 17.15 Conceptual Pits Resource Tabulation OTHER RELEVANT DATA AND INFORMATION INTERPRETATION AND CONCLUSIONS RECOMMENDATIONS REFERENCES DATE AND SIGNATURE PAGE ADDITIONAL REQUIREMENTS FOR TECHNICAL REPORTS ON DEVELOPMENT PROPERTIES AND PRODUCTION PROPERTIES...83 Resource Modeling Inc. ii Karakartal Report

4 List of Figures... Page Figure 4-1: General Location Map... 7 Figure 4-2: Physiographic Map of Turkey... 8 Figure 4-3: Map of Anatolia Exploration Licenses... 9 Figure 7-1: Regional Geologic Map Figure 7-2: Local Geologic Map Figure 11-1: Karakartal Drill Hole Locations Figure 13-1: 28 ALS Chemex Sample Preparation Figure 14-1: Copper Standard #233 Performance Figure 14-2: Gold Standard #233 Performance Figure 14-3: Original vs. Duplicate Gold Samples... 3 Figure 14-4: Original vs. Duplicate Copper Samples... 3 Figure 16-1: Location of Metallurgical Samples Figure 17-1: Gold Assay Histograms Figure 17-2: Copper Assay Histograms Figure 17-3: Silver Assay Histograms Figure 17-4: Cumulative Probability Plot All Au Assays Figure 17-5: Cumulative Probability Plot - Diorite Au Assays Figure 17-6: Cumulative Probability Plot - All Cu Assays... 5 Figure 17-7: Cumulative Probability Plot - Diorite Cu Assays Figure 17-8: Block Model Lithologic Model - North-South Section Figure 17-9: Block Model Lithologic Model NW-SE Section Figure 17-1: Perspective View of Au Grade Envelope Looking NE Figure 17-11: Perspective View of Cu Grade Envelope Looking NE Figure 17-12: Down-hole Gold Correlogram Figure 17-13: Down-hole Copper Correlogram Figure 17-14: Omni-directional Gold Variogram Figure 17-15: Omni-directional Copper Variogram Figure 17-16: Gold Swath Plot - Eastings Figure 17-17: Gold Swath Plot - Northings Figure 17-18: Gold Swath Plot - Elevations Figure 17-19: Copper Swath Plot - Eastings Figure 17-2: Copper Swath Plot - Northings Figure 17-21: Copper Swath Plot - Elevations Figure 17-22: Copper Grade Tonnage Curves... 7 Figure 17-23: Gold Grade Tonnage Curves Resource Modeling Inc. iii Karakartal Report

5 List of Tables... Page Table 1-1: Karakartal Mineral Resources... 2 Table 4-1: Anatolia Exploration Licenses... 8 Table 11-1: Karakartal Drilling Summary... 2 Table 12-1: Relevant Karakartal Copper Composites Table 12-2: Relevant Karakartal Gold Composites Table 17-1: Collar Elevations vs. Topographic Surface... 4 Table 17-2: Specific Gravity Values Table 17-3: Gold Assay Grades by Select Lithologic Units Table 17-4: Gold Assay Grades by Select Alteration Units Table 17-5: Copper Assay Grades by Select Lithologic Units Table 17-6: Copper Assay Statistics For Select Alteration Units Table 17-7: Block Model Lithologic Codes Table 17-8: Block Model Extents Table 17-9: Block Model Items... 6 Table 17-1: Au and Cu Grade Estimation Parameters Table 17-11: Global Bias Check Table 17-12: Resource Categories Table 17-13: LG Conceptual Pit Parameters Table 17-14: Global Block Model Inventory Table 17-15: Resources Inside of LG Pits Using.5 g/t AuEQV Cutoff... 7 Resource Modeling Inc. iv Karakartal Report

6 1. SUMMARY Resource Modeling Inc. (RMI) was retained by Anatolia Minerals Development Limited (Anatolia) to prepare an estimate of Mineral Resource s for their Karakartal Project, which would comply with Canadian National Instrument standards. The Karakartal project is located in east central Turkey between the towns of İlliç and Kemaliye, near the village of Kabatas. The purpose of this report is to summarize the results of RMI s site visit, review the available data, describe the construction of the preliminary resource model, tabulate Mineral Resources and to provide a list of observations and recommendations. The Karakartal project consists of four Turkish mineral exploration licenses totaling about 5,533 hectares that are owned by Anatolia. The author has not verified the validity of Anatolia's exploration licenses. Karakartal is one of many intrusive hosted copper-gold systems that occur in this region of Turkey. A variety of exploration activities have been carried out including surface mapping, surface soil and rock chip sampling, various geophysical methods (e.g. induced polarization and magnetics), petrographic studies, remote sensing, and two drilling campaigns. The author performed a site visit, reviewed drilling, logging, sampling, and assaying practices. The performance of Anatolia s quality assurance-quality control program was reviewed by the author prompting several recommendations. A subset of the electronic database was audited and verified by the author. A geologic model was constructed by the author based on an interpretation (reviewed by the author) by Anatolia s project geologist (Deniz Atmiş). Gold and copper grade envelopes were constructed around drill hole intercepts and used to control the estimate of block model grades. The estimated block grades were validated by the author using visual and statistical methods. The block grades were categorized into Indicated and Inferred Mineral Resource categories using mineralized continuity that was based on drill hole grades and variography ranges along with the number of drill holes that were used to estimate grade. The author generated a series of conceptual pits using various price and cost parameters. The tonnes and grades of blocks inside of the base case conceptual pit form the basis for Mineral Resources at Karakartal. Table 1-1, shown on the next page, summarizes the Indicated and Inferred tonnes, grade, and contained metal content inside of the base case conceptual Lerchs- Grossmann (LG) pit using a.24% copper equivalent cutoff grade that was based on a recoverable copper and gold metal price ratio where copper equivalent: CuEQV = Cu + (Au *.4868), with copper grade expressed as a percentage and gold grade in grams per metric tonne (g/t). Gold and copper prices used for the conceptual base case LG pit were $75/ounce and $2./pound, respectively. Recovery rates used in the various LG cases for gold and copper were 81% and 91%, respectively. Resource Modeling Inc. 1 Karakartal Report

7 Table 1-1: Karakartal Mineral Resources Indicated Resources Inferred Resources Tonnes Cu Lbs Au Ozs Tonnes Cu Lbs Au Ozs Cu (%) Au (g/t) Cu (%) Au (g/t) () () () () () () 13, , , , Based on a thorough review of the current drill core assay data, the Karakartal deposit appears to be a relatively low to medium-grade gold-copper porphyry type of deposit. Within the currently recognized mineralized system at Karakartal, copper and gold grades tend to range between.3 to.5% and.5 to 1. g/t, respectively. The geometry of the primary host rock (potassic altered diorite) is somewhat limiting along strike to the southeast but remains open and essentially untested along strike to the northwest. The mineralized system currently identified by drilling also appears to be open at depth. Additional mineralization would improve the economic viability of the Karakartal project and should be investigated. The Karakartal deposit remains open along strike to the northwest and also down-dip. In addition to the possibility of adding tonnage to the currently recognized Karakartal mineralization by drilling along strike, several nearby geophysical anomalies may represent similar mineralized systems. One of these targets is located about one kilometer west of the Karakartal deposit and was identified by the Yeni Anadolu Mineral Madencilik Sanayi Ticaret Ltd. Sti. (YAMAS) - Rio Tinto joint venture (2). Anatolia should prepare a drilling program that would trace the currently recognized Karakartal mineralization northwesterly from the last row of mineralized drill holes. The cost for such a program would be based on the number of holes/meters drilled. RMI believes that a minimum of 5-1 holes would be required. The holes should be prioritized so that subsequent holes would be contingent of the results of earlier ones. RMI s estimate for such a program is approximately US $1,,, depending on the actual number of holes drilled, the amount of site preparation required, and assaying costs This estimate is based on drilling ten holes each averaging between 4 to 5 meters in depth or a total of about 4, to 5, meters. All of the YAMAS/Rio Tinto joint venture geophysical anomalies should be examined in the field. Older geochemical data may need to be bolstered by collecting additional samples (i.e. stream silt, soil samples, rock chips, trench samples, etc.). Geologic field mapping may reveal favorable alteration assemblages that along with supporting geochemical data may represent viable drill targets. Again the costs for such a program are highly variable and dependent upon an analysis of the existing data as to how much more data needs to be collected or whether there is a strong enough indication of mineralization to warrant a drilling program. Resource Modeling Inc. 2 Karakartal Report

8 The author also recommends that the topographic base map for the Karakartal project be updated prior to undertaking any scoping level or pre-feasibility studies. The current topographic data were obtained from large scale Turkish military maps which tend to be somewhat generalized and result in some uncertainty in the estimate of pit tonnage. The previous recommendations were made in order to determine the viability of increasing the overall resource base of the Karakartal project. The following recommendations represent best practice methods that should be undertaken by Anatolia: Developing a new drill hole database using standard relational database methods and programs (e.g. Microsoft Access) o Segregating various data types into their own tables using the drill hole name and/or down-hole depths as the relational component o Generating separate tables for collars, surveys, assays, QA/QC samples, lithology, alteration, oxidation, density, metallurgy, etc. Validating the drill hole database by checking the records against the original data including collar locations, down-hole surveys, assays, and geology. Comparing surveyed drill hole collar locations against topography noting and adjusting holes with significant differences. Using non-magnetic down-hole survey tools in geologic terrains known to have abundant magnetite (e.g. Maxibore tool). Improving quality assurance/quality control (QA/QC) procedures o Inserting blanks into the assay stream at a higher frequency of 1 blank for every 2 samples o Selecting 2 or 3 appropriate certified standards which have grade ranges suitable for the deposit being sampled (e.g. 1 low-grade, 1 medium grade, and 1 high-grade). Randomly inserting standards at a frequency of 1 standard for every 2 samples o Closely monitoring the results of the blanks and standards by plotting their grades (Y-axis) versus time or batch number (X-axis). Having the lab re-assay all samples associated with any failed control sample where failure is defined as a sample that is above or below 2 standard deviations from the certified value. Resource Modeling Inc. 3 Karakartal Report

9 o Do not average original and duplicate assays as this has a tendency to "smooth" the grade distribution and possibly lower the inherent in situ variability of the data. o Inserting duplicate samples (e.g. quarter core or duplicate reverse circulation (RC) sample) at a frequency of 1 duplicate for every 5 regular samples. o At the end of the assay campaign submitting at least 5% of the pulps that were prepared and assayed by the primary lab to a secondary commercial lab for check assaying. The samples can be selected randomly or by selecting one third as waste/low-grade, a third with moderate grade and a third as high-grade. Maintaining an undated electronic interpretation of geology (lithology, alteration, etc.) based on cross sections and level plans. Resource Modeling Inc. 4 Karakartal Report

10 2. INTRODUCTION This report was prepared for Anatolia. The report was prepared to provide Anatolia with a record of RMI and AMMTEC s observations, opinions, and results of various modeling efforts. RMI would like to thank a number of key individuals including Andrew Kaczmarek, Firuz Alizade, Deniz Atmiş, Berk Eralp, Kazim Yilmaz, Seda Çağatay, Yonca Yildirim Albayrak, and Hakan Yandimata for all of their help in obtaining data and other information. RMI obtained various data and historical reports from a number of Anatolia personnel. Mr. Michael J. Lechner, President of RMI is responsible for all sections of this report except Section 16, which is the responsibility of Mr. Hamid Sheriff of AMMTEC Ltd. (AMMTEC). Mr. Lechner visited the Karakartal project site during December 12-16, 28. The purpose of the site visit was to examine available drill core, review drill logging procedures, inspect accessible mineralized exposures, review sampling methods, sample security procedures, and to interview various staff members regarding various aspects of data collection. While on site the author also began data validation checks on the provided electronic drill hole data. Mr. Sheriff from AMMTEC did not personally inspect the Karakartal project site because there was little for him to gain from a site visit at this stage of the Karakartal project. He did however receive drill core samples from the owners of the property and conducted various metallurgical tests at AMMTEC's facilities which are located in western Australia (see Section 16). Resource Modeling Inc. 5 Karakartal Report

11 3. RELIANCE ON OTHER EXPERTS The author has not examined the validity of the Anatolia mineral licenses or property holdings and simply provides the information that was provided by Anatolia personnel (Table 4-1). Similarly the author is not able to render opinions on legal, political, environmental, or other factors relevant to the Karakartal project. For basic background information regarding the location, land status, history, and exploration of the Karakartal project, the author has reviewed a number of inter-company reports that were prepared by geologists involved with the YAMAS- Rio Tinto joint venture. The author has provided excerpted portions from referenced reports and assumes responsibility for their content. The author has reviewed and verified the Anatolia drill hole assay database along with their geologic interpretation and assumes responsibility for that information. Resource Modeling Inc. 6 Karakartal Report

12 4. PROJECT DESCRIPTION AND LOCATION The Karakartal (previously called Kabataş) project is located in the Erzincan province in east central Turkey approximately 55 air kilometers east of Ankara. Figure 4-1 is a general location map taken from a YAMAS-Rio Tinto joint venture report (Welton, C. and Crowley, B., 21). Figure 4-1: General Location Map Karakartal ~35 km North RMI is not aware of how the property boundaries were located as this information was not available. Resource Modeling Inc. 7 Karakartal Report

13 Figure 4-2 is a physiographic map of Turkey showing the location of the Karakartal project relative to several cities in Turkey. The property is located about 115 km by road southwest of Erzincan and about 15 km by road south-southeast of İlliç. Figure 4-2: Physiographic Map of Turkey Karakartal ~35 km North Table 4-1 summarizes various exploration licenses that Anatolia controls near the village of Kabataş. RMI has not checked on the validity or status of the four Karakartal licenses. The four licenses summarized in Table 4-1 total 5, hectares. Table 4-1: Anatolia Exploration Licenses No. City Town VR No. ER No. AR No. ÖİR Licence İR No. Area (ha) No. Date Due Date 1 ERZİNCAN Ilıç , /2/23 9/2/213 2 ERZİNCAN Kemaliye , /2/27 8/2/212 3 ERZİNCAN Kemaliye /2/27 8/2/212 4 ERZİNCAN Kemaliye , /2/27 8/2/212 Resource Modeling Inc. 8 Karakartal Report

14 Figure 4-3 is a plan map that shows the four Anatolia mineral licenses in the Karakartal area. Figure 4-3: Map of Anatolia Exploration Licenses Karakartal Mineralized Zone Karakartal Exploration Licenses According to Anatolia personnel, the Karakartal property is subject to a 1% net smelter royalty (NSR) upon commencement of production. The royalty is payable to Tüprag Metal Madencilik San. ve Tic. A.Ş., the Turkish subsidiary of Eldorado Gold Corporation once production commences. RMI has not reviewed the contract regarding the underlying royalty. The author is not aware of any environmental liabilities associated with the property. Resource Modeling Inc. 9 Karakartal Report

15 5. ACCESSIBILITY, CLIMATE, LOCAL RESOURCES, INFRASTRUCTURE AND PHYSIOGRAPHY The project site is located in a hilly/mountainous region where the regional topography is dominated by the Munzur Mountains and Euphrates River. The Karakartal project itself is located at elevations ranging between 1,5 and 2, meters above sea level. The Keban Reservoir on the Euphrates River is located approximately 17 km downstream from the Karakartal project. The area is sparsely vegetated with various grasses and shrubs. Trees appear to be restricted to nearby stream valleys. The area around the property supports a small population of shepherds who use the hills surrounding the project for grazing. The author notes that some of the houses in and near the village of Kabataş are summer homes owned by people living in Istanbul and Ankara. There are several gravel roads that provide access to the village of Kabataş and the Karakartal project site. The author was driven to the property area via a 16 km long maintained gravel road from the town of İliç (population approximately 2,6), which is located north of the property. The nearest population center of any size is the city of Erzincan (population approximately 11,), which is located about 115 km northeast of the property and can be reached year around by a paved road. A nearby rail line also provides access to İlliç and Erzincan with daily service to and from Ankara and Istanbul. Erzincan is also served by commercial airlines with connections to Ankara and Istanbul. The climate of the region is typically continental with hot dry summers and cold winters with heavy snowfall. Heavy thunderstorms and associated rainfall are common in the early summer months. The author is not aware of the sufficiency of surface rights for mining operations, the availability of power, water, mining personnel, potential waste disposal sites or potential processing plant sites. Resource Modeling Inc. 1 Karakartal Report

16 6. HISTORY The following information was taken directly from a YAMAS year end report (Alizade, 2): There are signs of small-scale ancient workings in the Kabataş region area. Tüprag conducted regional geochem work in early 199 s. MTA (Geological Survey of Turkey) conducted geological and limited geochemical surveying during 199 in the area (Avcı et.al, 1996). MTA mapped the area at a scale of 1:1 in 199. Porphyry copper mineralization was realized a result of mapping. The small MTA soil geochem grid (11m x 7m) also out lined a copper anomaly area of 9 m long and 3m wide and open both to the north and west. A couple of drill holes were proposed by MTA as a result of work, but none of them were tested. No geophysical survey was performed at the property. Tüprag conducted a regional recce geochemical survey in early 199 s around Kabataş area for evaluating the property for the gold potential. Late in 1998, YAMAS found the Kabataş property very interesting target for porphyry copper-gold mineralization from the MTA work, and later by the exploration work the mineralization and type was confirmed, and made a JV agreement with Tüprag in early The following information was taken directly from a YAMAS/Rio Tinto joint venture report (Walton, C. and Crowley, B., 21): Rio Tinto geologists first visited the property in October 1999 after the signing of a confidentiality agreement with AMDL. The central drainage (known as Copper creek) was visited where outcrops of mineralised potassically altered diorite were observed. This creek also exhibits extensive remobilization of secondary copper causing the stream to flow green in colour and large areas of copper staining to be developed. Also visited was the area of hornfelsed, brecciated and phyllically altered metasediments on the ridge to the South of Copper Creek. A second trip was undertaken during late October 1999 and limited check sampling was carried out to confirm interest in the property. Kabataş was recognised as a Copper/Gold porphyry system with potential for ore. The results warranted the property s inclusion in the Rio Tinto/AMDL Joint Venture and a Strategic Alliance Agreement. Following the signing of the JV agreement a full data set was submitted to Rio Tinto in March 2. These data were reviewed along with the check sampling results and a fieldwork programme was planned to test the potential of the presence of significant porphyry mineralisation. Mapping and sampling was completed across the prospect identifying the extents of the surface mineralisation and alteration. This was complemented by two detailed sampling traverses from within the potassic core Resource Modeling Inc. 11 Karakartal Report

17 of the system. Targets produced were tested as part of a diamond-drilling program in early 21. In 28, Anatolia drilled 22 diamond core holes to test the Karakartal copper/gold porphyry system. These holes were assayed and together with the previous Rio Tinto drilling provided the author with the primary data for this report. The author is not aware of any historical resource estimates for this property. Similarly, there is no documented production from the property, although the author observed several caved adits/trenches at several locations within the property holdings. Resource Modeling Inc. 12 Karakartal Report

18 7. GEOLOGICAL SETTING 7.1 Regional Geology The following information was taken directly from a YAMAS-Rio Tinto report (Walton, C. and Crowley, B., 21): The Munzur Formation dominates the regional geology of the area, and has been dated as being Jurassic/Cretaceous in age. The upper portion of this formation is a thick section of massive limestone that ranges to several hundred meters in thickness and forms the high Munzur mountain range dominating the topography of the area. The lowermost section of the formation around the prospect is comprised of thinly bedded, weakly laminated calcareous siltstones and metasediments. Intrusion of the diorite porphyry (and various related later phases) hornfelsed the calcareous siltstones and metasediments, and recrystallised the lower part of the massive limestone. Regionally important are a sequence of Cretaceous ophiolites (mainly serpentinites) that have been thrust over the Munzur sequence. This sequence hosts small-scale (production and grade data unavailable) chromite deposits that are still being worked and sub-economic Au mineralisation formed as a weathering product at the margins of the ophiolites. The above sequences have been intruded by Tertiary intrusives regionally mapped as andesites/spilites and porphyries but most commonly observed as dioritic porphyry. It is these Tertiary intrusives that have driven the mineralisation at Kabataş. Resource Modeling Inc. 13 Karakartal Report

19 Figure 7-1 is a regional geologic map that accompanied the Rio Tinto report and previously referenced text. Figure 7-1: Regional Geologic Map Karakartal 7.2 Local Geology The following information was taken directly from a YAMAS/Rio Tinto joint venture report (Walton, C. and Crowley, B., 21): The prospect-scale geology is dominated by the intrusion of the diorite porphyry into the lower Munzur Formation metasediments. This intrusion process and escaping volatiles fractured and brecciated the overlying hornfelsed sediments. This is particularly clear in the area south of the main zone of mineralisation on the ridge between the main Copper Creek and Dikmen Dere (Figure 3 Figure 7-2 in this report). At higher elevations in this area, iron oxides (mostly goethite and jarosite with minor hematite) and silica fill the open spaces and fractures of the breccia. At lower elevations, further to the south away from Copper Creek and particularly close to Dikmen Dere, pyrite +/- copper sulfides and silica often fill the open spaces and fractures. Skarn formation appears in many places near the peripheries of the diorite porphyry at the lowermost appearance of massive limestone, whether in contact with intrusive or with hornfels. Copper oxide rich gossans appear locally in the skarn zones and occasionally as replacements in the limestone. Resource Modeling Inc. 14 Karakartal Report

20 Intrusion of quartz monzonite porphyry in the main zone of mineralisation was the critical mineraliser at Kabataş. Several post-mineral intrusions occur along structural features. The mappable units of the prospect are as follows: LIMESTONE: The main mineralised and altered area is surrounded by limestone on all sides. This is locally re-crystallised to marble close to the contact with the intrusives. In general the limestone is un-mineralised however local structures have pyrite mineralisation up to 5%. The limestone also hosts several structurally controlled base metal rich exoskarn bodies. These are generally less then 2m in width but extend up to 2m into the limestone. The contact between the limestone and the intrusive/metasediment package appears to be flat lying with potential for the intrusives to extend beneath the limestone. Limestone outcrops within the main zone appear to be fault bounded blocks within the sediments and intrusives. Many small scale faults can be observed to control the contact zone. METASEDIMENT PACKAGE: The metasediments are mainly composed of siltstones and fine sandstones that have been locally hornfelsed. Bedding is almost completely destroyed by the contact metamorphism and alteration. Banding is still visible particularly in those units that have a high sulphide content. INTRUSIVE UNIT: The intrusive unit is composed of a multiphase intrusive that appears to take the form of a series of sheeted dykes. The intrusive unit is dominated by quartz monzonite porphyry and diorite porphyry. Phenocrysts of feldspar dominate the porphyritic phases with rarer qtz in the quartz monzonite phases. The sheeted dykes trend approx. 11º and are cut by many small-scale faults. These faults trend between 9º and 13º however movement on these structures is negligible (approx. 2m). POST-MINERAL DYKES: Several post-mineral dykes cross the intrusive and the metasediments package. Although insignificant with regards to their tonnage at the prospect, at least one of the dykes appears to have some control on the observed mineralization. It is probable that his structure and the head caused by its intrusion has caused some re-mobilisation of the metals brought in along the structure: ANDESITIC INTRUSIVE: This outcrops in the vicinity of Bahce Tepe and is unaltered. This unit could be associated with the andesitic agglomerates that are seen to the West of the main zone. Several post-mineral dykes cross the intrusive and the metasediments package. Figure 7-2 on the next page is a local geologic map taken from the 21 YAMAS/Rio Tinto joint venture geologic report by Walton and Crowley. Resource Modeling Inc. 15 Karakartal Report

21 Figure 7-2: Local Geologic Map Resource Modeling Inc. 16 Karakartal Report

22 8. DEPOSIT TYPES Karakartal is a copper-gold porphyry system hosted in variably altered diorite that has intruded a sequence of carbonates and metasedimentary units. The average gold and copper grades for all assayed drill hole intervals collected to date from the Karakartal deposit average.19 g/t and.15%, respectively. Core hole samples collected from about 5,3 meters of potassic altered diorite yield average gold and copper grades of.28 g/t and.22%, respectively. Using a copper equivalent cutoff grade of.24% (see section for a discussion of copper equivalency) there is a core zone of mineralization totaling about 3 to 5 million tonnes with average copper and gold of.25% and.38 g/t, respectively. Resource Modeling Inc. 17 Karakartal Report