technical report for colossus minerals...

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56 Fallon Drive DURAL NSW 2158 AUSTRALIA Tel: +61-2-9651 5373 Mobile: +61-4-1966 4553 email: [email protected]

ABN 28 094 217 482

TECHNICAL REPORT ON RECENT EXPLORATION AT THE SERRA PELADA GOLD-PLATINUM-PALLADIUM PROJECT

IN PARÁ STATE, BRAZIL, FOR COLOSSUS MINERALS INC.

Frontispiece: Mineralized zone exposed in the pit wall at Serra Pelada, 1982 Photo (looking north) courtesy of VALE

David G Jones BSc., MSc., FAusIMM, FIMMM, MAIME, MGSA

Effective Date: 31st January 2010

mailto:[email protected]�

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2 TABLE OF CONTENTS

3 SUMMARY ........................................................................................................................................ VI

PURPOSE .................................................................................................................................................... VI SCOPE ........................................................................................................................................................ VI PRÉCIS ....................................................................................................................................................... VI CONCLUSIONS ........................................................................................................................................... VII RECOMMENDATIONS ................................................................................................................................ VIII

4 INTRODUCTION ................................................................................................................................. 1

5 RELIANCE ON OTHER EXPERTS.................................................................................................... 2

6 PROPERTY DESCRIPTION AND LOCATION ................................................................................ 2

6.1 PROPERTY DETAILS ............................................................................................................................. 2 6.2 JOINT VENTURE TERMS ....................................................................................................................... 2 6.3 PERMITS AND ROYALTIES .................................................................................................................... 3

Exploration licenses ................................................................................................................................ 3 6.4 ENVIRONMENTAL REGULATION ........................................................................................................... 4

7 ACCESSIBILITY, CLIMATE, LOCAL RESOURCES, INFRASTRUCTURE AND PHYSIOGRAPHY ......................................................................................................................................... 6

7.1 ACCESS ............................................................................................................................................... 6 7.2 CLIMATE ............................................................................................................................................. 8 7.3 LOCAL RESOURCES .............................................................................................................................. 9 7.4 INFRASTRUCTURE ................................................................................................................................ 9 7.5 PHYSIOGRAPHY ................................................................................................................................. 11

8 HISTORY ............................................................................................................................................ 12

8.1 DISCOVERY AND OWNERSHIP ............................................................................................................ 12 8.2 PREVIOUS EXPLORATION ................................................................................................................... 12 8.3 PREVIOUS RESOURCE AND RESERVE ESTIMATES ................................................................................ 12

9 GEOLOGICAL SETTING ................................................................................................................. 13

9.1 REGIONAL GEOLOGY ......................................................................................................................... 13 9.2 CARAJÁS MINERAL PROVINCE ........................................................................................................... 14 9.3 REGIONAL GEOPHYSICS ..................................................................................................................... 15 9.4 LOCAL GEOLOGY .............................................................................................................................. 18

9.4.1 Rio Fresco Group .................................................................................................................... 18 9.4.1.1 Quartzite ....................................................................................................................................... 18 9.4.1.2 Carbonates ................................................................................................................................... 19 9.4.1.3 Metasiltstone ............................................................................................................................... 20 9.4.1.4 Polymictic Metaconglomerate ...................................................................................................... 22

9.4.2 Intrusives ................................................................................................................................. 22 9.4.2.1 Diorite Intrusions ......................................................................................................................... 22 9.4.2.2 Mafic Dykes ................................................................................................................................ 23

9.4.3 Metamorphism ......................................................................................................................... 23 9.4.4 Supergene Alteration ............................................................................................................... 23 9.4.5 Structure ................................................................................................................................. 24

10 DEPOSIT TYPES ............................................................................................................................... 26

10.1 CORONATION HILL ....................................................................................................................... 26

11 MINERALIZATION .......................................................................................................................... 29

12 EXPLORATION ................................................................................................................................. 33

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13 DRILLING .......................................................................................................................................... 34

13.1 CORE DRILLING ............................................................................................................................ 35 13.2 REVERSE CIRCULATION (“RC”) DRILLING ..................................................................................... 35 13.3 SURVEYING .................................................................................................................................. 36

14 SAMPLING METHOD AND APPROACH ....................................................................................... 37

14.1 VALE DRILL CORE ...................................................................................................................... 37 14.2 COLOSSUS DRILL CORE................................................................................................................. 38 14.3 COLOSSUS RC DRILLING ............................................................................................................... 39

15 SAMPLE PREPARATION, ANALYSES AND SECURITY ............................................................. 41

15.1 VALE DRILL CORE ...................................................................................................................... 41 15.1.1 Sample Preparation and Logging ........................................................................................ 41 15.1.2 Analyses.............................................................................................................................. 41 15.1.3 Security ............................................................................................................................... 44

15.2 COLOSSUS DRILL CORE................................................................................................................. 44 15.2.1 Sample Preparation and Logging ........................................................................................ 44 15.2.2 Analyses.............................................................................................................................. 46 15.2.3 Security ............................................................................................................................... 51

15.3 COLOSSUS RC DRILLING ............................................................................................................... 52 15.3.1 Sample Preparation and Logging ........................................................................................ 52 15.3.2 Analyses.............................................................................................................................. 52 15.3.3 Security ............................................................................................................................... 52

16 DATA VERIFICATION ..................................................................................................................... 53

17 ADJACENT PROPERTIES ............................................................................................................... 57

18 MINERAL PROCESSING AND METALLURGICAL TESTING ................................................... 58

19 MINERAL RESOURCE AND RESERVE ESTIMATES .................................................................. 60

20 OTHER RELEVANT DATA AND INFORMATION........................................................................ 61

20.1 SPECIFIC GRAVITY (“SG”) DETERMINATIONS ................................................................................ 61 20.2 GEOTECHNICAL INVESTIGATIONS .................................................................................................. 62 20.3 HYDROGEOLOGICAL INVESTIGATIONS ........................................................................................... 64 20.4 ENVIRONMENTAL INVESTIGATIONS ............................................................................................... 67

20.4.1 Air Monitoring .................................................................................................................... 67 20.4.2 Sampling ............................................................................................................................. 67

20.4.2.1 Sediment Sample Results ......................................................................................................... 68 20.4.2.2 Water Sample Results .............................................................................................................. 69

20.4.3 MERCURY LEVELS IN DRILL CORE ............................................................................................ 69 20.4.4 MERCURY LEVELS IN RC DRILL HOLES .................................................................................... 69 20.4.5 URANIUM LEVELS IN DRILL CORE............................................................................................. 69 20.4.6 PIT WATER PH ......................................................................................................................... 70 20.4.7 ESTUDO DE IMPACTO AMBIENTAL (EIA) ................................................................................... 70

21 INTERPRETATION AND CONCLUSIONS ..................................................................................... 71

22 RECOMMENDATIONS..................................................................................................................... 72

23 REFERENCES .................................................................................................................................... 73

GLOSSARY OF TECHNICAL TERMS ..................................................................................................... 76

APPENDIX 1 ................................................................................................................................................ 81

TENEMENT INFORMATION ........................................................................................................................... 81

APPENDIX 2 ................................................................................................................................................ 82

EIA EXECUTIVE SUMMARY ........................................................................................................................ 82 (IN PORTUGESE) ......................................................................................................................................... 82

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Figures FIGURE 1. LOCATION AND REGIONAL ACCESS TO SERRA PELADA ........................................................................ 7 FIGURE 2. LOCAL ACCESS AND INFRASTRUCTURE ............................................................................................... 8 FIGURE 3. AVERAGE MONTHLY TEMPERATURE AND RAINFALL AT MARABÁ ........................................................ 9 FIGURE 4. POWER TRANSMISSION LINES IN THE VICINITY OF SERRA PELADA...................................................... 10 FIGURE 5. LOCAL ACCESS AND PHYSIOGRAPHY, SERRA PELADA ....................................................................... 11 FIGURE 6. SIMPLIFIED REGIONAL GEOLOGY, NORTH-EAST BRAZIL ..................................................................... 13 FIGURE 7. REGIONAL GEOLOGY OF THE ITACAIÚNAS SHEAR BELT, CARAJÁS MINERAL PROVINCE. .................... 14 FIGURE 8. REGIONAL AEROMAGNETIC IMAGE (FILHO ET AL, 2008) .................................................................... 15 FIGURE 9. FALSE-COLOUR TEM IMAGE (FILHO ET AL, 2008)............................................................................. 16 FIGURE 10. IMAGE OF TOTAL GAMMA RADIATION COUNT (FILHO ET AL, 2008)................................................... 17 FIGURE 11. SURFACE GEOLOGY PLAN, SERRA PELADA...................................................................................... 19 FIGURE 12. DIAGRAM LOOKING WEST ILLUSTRATING INITIAL D1 COMPRESSION ................................................. 24 FIGURE 13. DIAGRAM LOOKING WEST ILLUSTRATING LATE D1 COMPRESSION .................................................... 24 FIGURE 14. DIAGRAM SHOWING FORMATION OF RECUMBENT SERRA PELADA SYNCLINE .................................... 24 FIGURE 15. LOCATION AND TECTONIC SETTING OF THE CORONATION HILL AU-PD-PT-U DEPOSIT ...................... 26 FIGURE 16. GEOLOGICAL MAP OF THE CORONATION HILL AU-PD-PT-U DEPOSIT (WYBORN ET AL, 1990) ........... 27 FIGURE 17. SCHEMATIC SECTION THROUGH SADDLE HILL ................................................................................ 27 FIGURE 18. DIAGRAM ILLUSTRATING POSTULATED ORIGIN OF THE CORONATION HILL MINERALIZATION ............ 28 FIGURE 19. SOUTHWEST PLUNGING CMZ WITHIN THE SYNCLINE ...................................................................... 29 FIGURE 20. SKETCH SECTION LOOKING NORTHEAST ALONG SYNCLINE AXIS ....................................................... 30 FIGURE 21. 3D MODEL LOOKING UP-PLUNGE TO NE SHOWING MINERALIZATION > 1/G/T AU IN YELLOW ............. 30 FIGURE 22. TYPICAL GEOLOGICAL CROSS SECTION OF THE SERRA PELADA DEPOSIT SHOWING INTERPRETED

GEOLOGY, ALTERATION AND DRILL-DEFINED AU-PT-PD MINERALISATION ............................................... 31 FIGURE 23. COLLARS OF HOLES DRILLED BY COLOSSUS TO END OCTOBER 2009 ................................................ 34 FIGURE 24. VALE DRILL HOLE COLLARS AND DRILL TRACES ............................................................................ 37 FIGURE 25. COLLAR LOCATIONS OF HOLES TABULATED ABOVE ......................................................................... 43 FIGURE 26. DRILL COLLARS AND TRACES OF COLOSSUS PHASE 1 HOLES CHECKED BY GENALYSIS ..................... 48 FIGURE 27. COLLAR LOCATIONS AND DRILL TRACES OF HOLES IN TABLE 4 ABOVE ............................................. 50 FIGURE 28. CROSS-SECTION THROUGH LINE 025 SW ........................................................................................ 51 FIGURE 29. DIAGRAM SHOWING KNELSON GRAVITY CONCENTRATOR SEQUENCE ............................................... 58 FIGURE 30. DIAGRAM SHOWING FALCON GRAVITY CONCENTRATOR SEQUENCE ................................................. 59 FIGURE 31. LOCATION OF GEOTECHNICAL DRILL HOLES FIGURE 32. SPGT001: PINK IS LOW STRENGTH .......... 62 FIGURE 33. CONCEPTUAL PLAN OF POSSIBLE UNDERGROUND AND SURFACE FACILITIES ..................................... 63 FIGURE 34. CONCEPTUAL DEWATERING BORES ................................................................................................. 65 FIGURE 35. LOCATIONS OF VALE WATER OBSERVATION BORES ....................................................................... 66 FIGURE 36. PH MEASUREMENTS OF WATER IN THE SERRA PELADA PIT............................................................... 70

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Photos PHOTO 1. HYDRO POWER LINE AT UTM ZONE 22 0635401ME, 9353939MN, 15KM NW OF SERRA PELADA ........ 10 PHOTO 2. MASSIVE QUARTZITE EXPOSED IN ROAD CUTTING 2.5KM NNW OF THE SERRA PELADA PIT. ................ 18 PHOTO 3. RED METASILTSTONE, SERRA PELADA PIT HIGHWALL. ....................................................................... 20 PHOTO 4. CROSS-BEDDING IN RED METASILTSTONE .......................................................................................... 21 PHOTO 5. PROGRESSIVE CARBON METASOMATISM OF RED METASILTSTONE ....................................................... 21 PHOTO 6. BROWN METASILTSTONE .................................................................................................................. 22 PHOTO 7. METACONGLOMERATE EXPOSURE ..................................................................................................... 22 PHOTO 8. METADIORITE OUTCROP, DRILL PAD SPD037 .................................................................................... 23 PHOTO 9. FOLDING AND S2 CLEAVAGE IN RED METASILTSTONE ......................................................................... 25 PHOTO 10. PHOTOMICROGRAPH OF HIGH-GRADE MINERALIZATION ................................................................... 32 PHOTO 11. REFLECTED-LIGHT IMAGE OF HIGH-GRADE MINERALIZATION ........................................................... 32 PHOTO 12. ENERGOLD RIG DRILLING TAILINGS ................................................................................................. 35 PHOTO 13. CORE TRANSFERRED FROM CORE BARREL INTO TRAY BY DRILLER AND MARKERS INSERTED .............. 38 PHOTO 14. CORE BOXES DELIVERED FROM RIG TO SERRA PELADA COMPOUND .................................................. 38 PHOTO 15. CORE TRAY WEIGHED ON ARRIVAL AT COLOSSUS’ PARAUAPEBAS COMPOUND .................................. 39 PHOTO 16. PREPARING FOR CORE TRAY PHOTOGRAPH ....................................................................................... 39 PHOTO 17. CUTTING SOFT CORE WITH A KNIFE (ASSISTED BY A HAMMER) .......................................................... 45 PHOTO 18. MANUAL CORE SPLITTER FOR HARD LITHOLOGIES............................................................................ 45 PHOTO 19. HIGH-GRADE PT STANDARDS .......................................................................................................... 45 PHOTO 20. SEALED FEDEX CONSIGNMENT ........................................................................................................ 46 PHOTO 21. COLOSSUS COMPOUND IN PARAUAPEBAS PHOTO 22. SECURED PULP STORAGE AREA ..................... 51 PHOTO 23. CORE STORAGE BAYS, PARAUAPEBAS ............................................................................................. 53 PHOTO 24. SPD-034 BOX 63 AS RECEIVED FROM DRILL RIG .............................................................................. 54 PHOTO 25. SPD-034 BOX 59 AS OBSERVED BY D G JONES AFTER SAMPLING ..................................................... 54 PHOTO 26. CRYSTALLINE GOLD RECOVERED FROM 54.5-55.0M IN VALE HOLE FD-032 ..................................... 55 PHOTO 27. CLOSE-UP OF AREA OUTLINED IN RED ABOVE ................................................................................... 55 PHOTO 28. CRYSTALLINE GOLD RECOVERED FROM SAMPLE AT LEFT ................................................................. 55 PHOTO 29.SAMPLE FROM FD-032, 55.0-55.5M ................................................................................................. 55 PHOTO 30. SELECTING CORE FOR SG DETERMINATION PHOTO 31. SG SAMPLES READY FOR WEIGHING ......... 61 PHOTO 32. SELECTED SG SAMPLE PHOTO 33. WEIGHING SG SAMPLE DRY .................................................. 61 PHOTO 34. WAXED SAMPLE (WHITE) RETURNED TO TRAY AFTER SG DETERMINATION ....................................... 61 PHOTO 35. BOX CUT FOR PORTAL ESTABLISHED BY VALE ................................................................................ 63 PHOTO 36. POWER LINE TO PROPOSED PLANT SITE ............................................................................................ 63 PHOTO 37. DRILL RIG CLEANING OUT OLD VALE WATER BORE SPWB 005 ....................................................... 66 PHOTO 38. REMNANT TAILINGS DUMP ADJACENT TO GROTA RICA CREEK NORTH OF THE SERRA PELADA PIT ..... 67 PHOTO 39. SLUICING TAILINGS INTO GRAVEL PUMP PHOTO 40. WASHING CU PLATE WITH ACID ................. 68 Tables TABLE 1. SIGNIFICANT RE-ASSAY RESULTS FROM CONTINUOUS INTERVALS OF VALE CORE ............................... 43 TABLE 2. GENALYSIS CHECK ASSAYS ............................................................................................................... 47 TABLE 3. SELECTED ASSAY RESULTS FROM CONTINUOUS INTERVALS IN COLOSSUS PHASE 2 DRILLING ............... 49 TABLE 4. COLOSSUS CHECK SAMPLING AND ASSAYING FOR AU, VALE HOLE FC-003 ........................................ 56 TABLE 5. COLOSSUS CHECK SAMPLING AND ASSAYING FOR PT & PD, VALE HOLE FC-003 ................................ 56 TABLE 6. PRELIMINARY KNELSON RESULTS FROM SAMPLE D39 ....................................................................... 58 TABLE 7. PRELIMINARY FALCON RESULTS FROM SAMPLE D39 .......................................................................... 59

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3 SUMMARY

Purpose To review the geology and exploration potential of the Serra Pelada Gold-Platinum-Palladium Project located near Marabá in Pará State, Brazil, for Colossus Minerals Inc.

Scope At the request of Dr. Vic Wall, Director, and Vice-President of Exploration for Colossus Minerals Inc. (“CMI”), Vidoro Pty Ltd (“Vidoro”) was commissioned in October 2009 to prepare a Technical Report on the Serra Pelada Gold-Platinum-Palladium Project (“the Project” or “Serra Pelada”) compliant with National Instrument 43-101. This report updates the previous report completed in December 2007 entitled “Technical Report on the Serra Pelada Gold-Platinum-Palladium Project in Para State, Brazil, for Colossus Minerals Inc.” (”the 2007 Report”). Colossus Geologia e Participações Ltda. (“Colossus”) is a limited liability Brazilian company that is a wholly-owned subsidiary of CMI. CMI is a company duly organized and existing under the laws of the Province of Ontario, Canada. The scope of the inquiries and of the report included the following:

• An audit of drilling, sampling and assaying procedures currently employed by Colossus • A review of recent exploration and other work by Colossus in advancing the Project • A review of the deposit model in the light of new information generated by exploration

carried out since 2007 • An opinion of the proposed program and budget for future work at the Serra Pelada

Gold-Platinum-Palladium Project Vidoro has not been requested to provide an Independent Valuation, nor has Vidoro been asked to comment on the Fairness or Reasonableness of any vendor or promoter considerations, and therefore no opinion on these matters has been offered.

Précis This report is a review of the Serra Pelada Gold-Platinum-Palladium Project located near Marabá in Pará State, Brazil. Colossus holds a 75% interest in a joint venture company called “Serra Pelada Companhia de Desenvolvimento Mineral” (“SPCDM”). The other 25% is held by Cooperativa de Mineração dos Garimpeiros de Serra Pelada (“COOMIGASP”). A formal request for the transfer of title over the tenement covering Serra Pelada to SPCDM was accepted by Departamento Nacional de Produção Mineral (“DNPM”) and the title transfer took effect on 14 September 2009. Serra Pelada is located in the Carajás Mineral Province, an Archean nucleus that is part of the Amazon Craton. The Carajás Mineral Province is composed mostly of granites and greenstone belts and hosts the largest gold deposits in the Amazon Craton, including Serra Pelada and the Salobo and Igarahapé Bahia Cu-Au deposits. The oldest rocks in the Carajás Basin are volcano-sedimentary rocks of the Itacaiúnas Supergroup that accumulated in the Late Archean about 2,700 Ma. The Itacaiúnas Supergroup is overlain unconformably by siliclastic marine platform sandstones and siltstones of the Águas Claras Formation and the late Archean Rio Fresco Group. The mineralization at Serra Pelada is hosted by metasedimentary rocks of the Rio Fresco Group. The lithologies include metaconglomerate, metasandstone, dolomitic carbonate and metasiltstone. The Serra Pelada Au-Pt-Pd mineralization is located in the hinge zone of a recumbent syncline. Dolomitic carbonate occurs at the base and is conformably overlain by meta-siltstones. The morphology of the mineralization broadly follows the contact between dolomitic carbonate and a

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carbon-altered meta-siltstone. The rocks have undergone supergene oxidation to depths in excess of 300m below surface. In 1979, a farm worker found gold at Serra Pelada, within a tenement held by Companhia Vale do Rio Doce (“CVRD”). On 29 November 2007 CVRD announced a change of name to “VALE”, and throughout this report the official name VALE will be employed. VALE began exploration drilling in the vicinity of Serra Pelada in 1980 immediately after the discovery was made. From the commencement of exploration until mid-1998, a total of 195 core holes were drilled by VALE inside the area being exploited by artisanal miners (“garimpeiros”), together with two metallurgical test holes. On 21 May 1980, the federal government of Brazil excised an area of 100 hectares from the tenement held by VALE. This area is now the tenement held by SPCDM. Since November 2007, Colossus and its joint venture partner have carried out an intensive diamond core drilling program that has verified the continuation of high-grade Au-Pt-Pd mineralization below the base of the previously mined pit and for a distance of at least 500m beyond the old pit. More than 40 diamond core holes for 11,000m have been drilled by the joint venture, additional to the previous 40,000m in 200 holes drilled in the past by VALE. Colossus has submitted more than 6,000 samples for analysis, principally for Au, Pt and Pd, with additional multi-element suites of analyses being completed on selected intervals. The database to the end of December 2009 contained in excess of 163,000 assays from 61,000 samples. Major milestones passed on the path to the granting of a mining concession to the joint venture include:

• Submission and approval of the Final Exploration Report • Submission of a Mining Plan and ore resource estimate to the DNPM • Submission of the Environmental Impact Study and Plan for Recovery of Degraded Areas

(“EIA/Rima”), and the completion of public hearings into the EIA/Rima.

Conclusions • The investment by Colossus in earning its 75% share of the Serra Pelada joint venture has

been entirely justified by the excellent results achieved to date in the systematic drill testing of the deposit.

• Exploration by VALE to 2007 and by Colossus since November 2007 has identified potentially economic mineralization below the depth reached by past garimpeiro mining.

• The exploration by Colossus has been carried out to standards in excess of industry norms.

In particular, the attention to sample security and chain of custody between the drill rig and the assay laboratory has been exemplary.

• The extraordinarily high grades achieved in some drill intersections, over many metres of

contiguous samples, have been verified by Quality Assurance and Quality Control (“QA/QC”) procedures adopted by Colossus and its laboratory contractors that are far more stringent than those normally used in exploration.

• Preliminary gravity separation studies indicate that >85% of the gold can be recovered quickly and cheaply into a gravity concentrate using a single-pass Falcon concentrator.

• Preliminary geotechnical and mining studies indicate that underground access by an

exploration decline is technically feasible at Serra Pelada.

• Environmental studies to date indicate that neither mercury nor uranium is present in quantities that will require special measures to be implemented. The water in the pit is unusually clean, and meets the World Health Organization (“WHO”) standards for potable drinking water. Drill core analyses to date of trace elements indicate that no deleterious elements are present in quantities that will present environmental problems. For example,

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arsenic levels are very low, generally <20ppm As, and the arsenic is present as oxide, a safer compound that sulphide.

• In Vidoro’s opinion, the CAD $25M budget for Serra Pelada proposed for 2010 by Colossus is sensible and justified given the advanced state of the Project.

• The excellent infrastructure in this historic mining district is a significant positive factor in the

potential development of the Serra Pelada Project.

Recommendations • The Serra Pelada Gold Platinum Palladium Project has reached a stage where significantly

increasing the current 25m line spaced drill density from surface will be costly and time prohibitive. An exploration decline to provide underground access for closer-spaced drilling is likely to prove more cost-effective than drilling long holes from surface. The CAD $8M expenditure proposed by Colossus to establish underground access in 2010 is reasonable and endorsed by Vidoro. The additional $5M proposed expenditure on exploration drilling from underground is practical and entirely justified.

• More metallurgical test work is required. The early gravity separation test work is extremely

encouraging but requires optimization. Various flotation parameters should be examined as well as leaching, in order to recover the valuable platinum group elements (“PGEs”). The budget of $250,000 proposed for 2010 by Colossus is modest and may require supplemental funding.

• The proposed exploration decline will be necessary to detail the distribution of high grade

subzones ahead of production as well as clarifying mining methods and optimizing the metallurgical plant. The design of the decline and related underground development, as proposed by Colossus, will facilitate bulk sampling for such purposes and facilitate timely production.

• The ongoing geotechnical and mining studies are appropriate for a project at this stage of its evaluation and should be continued.

• The 2010 budget proposed by Colossus includes $3M on site works, which Vidoro agrees will be absolutely necessary to support the ambitious programme.

Technical Report on Recent Exploration at the Serra Pelada Gold-Platinum-Palladium Project in Pará State Brazil for Colossus Minerals Inc.

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4 INTRODUCTION This report is a review of the Serra Pelada Gold-Platinum-Palladium Project located near Marabá in Pará State, Brazil. Colossus holds a 75% interest in a joint venture company called “Serra Pelada Companhia de Desenvolvimento Mineral” (“SPCDM”). The other 25% is held by Cooperativa de Mineração dos Garimpeiros de Serra Pelada (“COOMIGASP”). A formal request for the transfer of title over the tenement covering Serra Pelada to SPCDM was accepted by Departamento Nacional de Produção Mineral (“DNPM”) and the title transfer took effect on 14 September 2009. Colossus is a limited liability Brazilian company that is a wholly-owned subsidiary of CMI, a company duly organized and existing under the laws of the Province of Ontario, Canada. Colossus and COOMIGASP signed a Partnership Agreement on 16 July 2007 to form a joint venture company. At the request of Dr. Vic Wall, Director, and Vice-President of Exploration for Colossus Minerals Inc. (“CMI”), Vidoro Pty Ltd (“Vidoro”) was commissioned in October 2009 to prepare a Technical Report on the Serra Pelada Gold-Platinum-Palladium Project (“the Project” or “Serra Pelada”) compliant with National Instrument 43-101. This report updates the previous report completed in December 2007 entitled “Technical Report on the Serra Pelada Gold-Platinum-Palladium Project in Para State, Brazil, for Colossus Minerals Inc.” (”the 2007 Report”). The scope of the inquiries and of the report included the following:

• An audit of drilling, sampling and assaying procedures currently employed by Colossus • A review of recent exploration and other work by Colossus in advancing the Project • A review of the deposit model in the light of new information generated by exploration

carried out since 2007 • An opinion of the proposed program and budget for future work at the Serra Pelada

Gold-Platinum-Palladium Project Vidoro has not been requested to provide an Independent Valuation, nor has Vidoro been asked to comment on the Fairness or Reasonableness of any vendor or promoter considerations, and therefore no opinion on these matters has been offered. This report is based on technical data provided to Vidoro by Colossus, as well as discussions with geologists on site during a field inspection of the property. Colossus provided open access to all personnel and records necessary, in the opinion of Vidoro, to enable a proper assessment of the Project. Colossus has warranted in writing to Vidoro that full disclosure has been made of all material information and that, to the best of Colossus’ knowledge and understanding, such information is complete, accurate and true. Readers of this report must appreciate that there is an inherent risk of error in the acquisition, processing and interpretation of geological and geophysical data. Vidoro’s Project Co-coordinator was Mr. David Jones, who was also responsible for the geological interpretation. Mr. Jones carried out a field review of current exploration at the property in November 2009. Additional relevant material was acquired independently by Vidoro from a variety of sources. The list of references at the end of this report lists the sources consulted. This material was used to expand on the information provided by Colossus and, where appropriate, confirm or provide alternative assumptions to those made by Colossus. Six weeks were spent on data collection and analysis and preparation of this report. David Jones spent four days at Serra Pelada between 19-23 November 2009 carrying out the geological audit and examining key areas. Appraisal of all the information mentioned above forms the basis for this report. The views and conclusions expressed are solely those of Vidoro. When conclusions and interpretations credited specifically to other parties are discussed within the report, then these are not necessarily the views of Vidoro.


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5 RELIANCE ON OTHER EXPERTS The opinions expressed in this report have been based on information supplied to Vidoro by Colossus, its associates and their staff, as well as the additional information listed in the References. Vidoro has exercised all due care in reviewing the supplied information, including a recent visit to key sites in the Serra Pelada Gold-Platinum-Palladium Project area. Although Vidoro has compared key supplied data with expected values, the accuracy of the results and conclusions from this review are reliant on the accuracy of the supplied data. Vidoro has relied on this information and has no reason to believe that any material facts have been withheld, or that a more detailed analysis may reveal additional material information. The author has not relied on reports, opinions or statements of legal or other experts who are not qualified persons for information concerning legal, environmental, political or other issues and factors relevant to this report.

6 PROPERTY DESCRIPTION AND LOCATION

6.1 Property Details On 27 February 2007 the Ministério de Minas e Energia (Ministry of Minerals and Energy - “MME”) issued to COOMIGASP Exploration License No. 1485 under the process designated DNPM 850.425/90. Exploration Licenses are administered by the Departamento Nacional de Produção Mineral (“DNPM”), the Brazilian National Department of Mineral Production. This Exploration License is located 90 km southeast of the town of Marabá in Pará State, Brazil. The license, which covers the Serra Pelada Gold-Platinum-Palladium Project, comprises an area of 100 hectares located partly within a larger license, 813.687/69 held by VALE, and includes the Serra Pelada pit. Bounding coordinates of Exploration License No.1485, determined by Resource and Exploration Mapping Ltd. from DNPM title documents are (UTM Zone 22, South American Datum 1969): Latitude 5°56'22.28" South; Longitude 49°39'39.24" West Latitude 5°56'22.28" South; Longitude 49°40'11.94" West Latitude 5°56'54.65" South; Longitude 49°40'11.94" West Latitude 5°56'54.65" South; Longitude 49°39'39.24" West A legal opinion dated 13 November 2007 was provided to Colossus Minerals Inc., from Silva Martins Vilas Boas Lopes e Frattari (“SVLF”). SVLF are lawyers qualified to carry out the practice of law in the Federative Republic of Brazil. Copies of the SVLF legal opinions were provided in Appendix 1 to the 2007 Report (Jones & Hall, 2007). According to SVLF, the Mineral Rights at the time were valid and in good standing to 1st March 2010. Following the ratification of the Amended Agreement (see below) between Colossus and COOMIGASP on 6 September 2009, the Final Exploration Report was submitted by and in the name of the new Joint Venture Company “Serra Pelada Companhia de Desenvolvimento Mineral” (“SPCDM”) with DNPM on 9 September 2009. Colossus holds a 75% interest in SPCDM and therefore in Exploration License No. 1485. The request for transfer of title from COOMIGASP to SPCDM was accepted by DNPM and approved on 14 September 2009 (see Appendix 1 of this report).

6.2 Joint Venture Terms Details of the partnership agreement dated 16 July 2007 executed by COOMIGASP and Colossus were set out in the 2007 Report (Jones & Hall, 2007). On 12 November 2009, Colossus announced that it had amended its agreement (“Amended Agreement”) with COOMIGASP. The Amended Agreement was executed following ratification via a series of open meetings of the members of COOMIGASP and a vote passed by the members of


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COOMIGASP. The Amended Agreement was stamped by the authorities in Curionópolis on 6 September 2009. Pursuant to the original agreement between Colossus and COOMIGASP dated July 16, 2007, Colossus had the right to earn up to a 75% interest in SPC, which operates the Serra Pelada Project, by spending R $18.0 million (US $10.6 million) on exploration and development of the Serra Pelada Project. In addition, to earn its interest, Colossus was required to make staged premium payments to COOMIGASP based on the mineable gold reserve proven by exploration work accepted by the Brazilian National Department of Mines in the Plano de Aproveitamento Economico. Colossus has now met the R $18.0 million expenditure commitment. Pursuant to the terms of the Amended Agreement, Colossus will be required to make a monthly payment to COOMIGASP of R$350,000 (US$206,000) and will finance COOMIGASP’s portion of development costs until production commences. Reimbursement of funds advanced on COOMIGASP’s behalf by Colossus will commence on the second year of production and will be payable in equal quarterly instalments over a two year period. Additionally, the above referenced premium payments have been amended such that Colossus will make a life-of-mine premium payment to COOMIGASP per kilogram of precious metal sold from mine production in Brazilian Reals as follows:

* Precious metal is defined as any one of gold, platinum, palladium, rhodium, osmium, ruthenium or iridium **R$ 1 = US $0.5880 (November 9, 2009)

6.3 Permits and Royalties The legal framework for the development and use of mineral resources in Brazil was established by the Federal Constitution, which was enacted on October 5, 1988. Later, on August 15, 1995, Brazilian Congress approved Constitutional Amendments Nos. 6 and 9, which allow the participation of the private sector in joint ventures and/or private investment in the mining sector from both domestic and foreign investors. DNPM is responsible for regulating and implementing the Mining Code of Brazil. Mineral exploration licenses and mining concessions are issued and administered by the DNPM which also monitors exploration, mining, and mineral processing. To apply for and acquire mineral rights, a company must be incorporated under Brazilian law and have its head office and administration in Brazil. The process of acquiring title to mineral property is a phased procedure involving progressive steps as exploration and development work on a property advances. Tenure is secure as long as the titleholder meets clearly defined obligations over time, but the process of acquiring a mineral right can be lengthy. Exploration licenses are granted for a maximum period of three years, provided that all requirements are met and the area of interest does not overlap with an existing license. There is an annual fee (R$1.90 per hectare during the initial period, and R$2.87 during an extension period) on mineral rights to be paid to the Brazilian government. Exploration licenses can be extended for a second period no longer than three years. The renewal is left at the DNPM's discretion.


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Experimental mining authorization can be applied for and is granted by the DNPM for the purpose of establishing resources/reserves through processing of large scale bulk sampling (by a plant). It is allowed within a specific area of an exploration license before a mining concession is granted. The experimental mining authorization is granted provided an agreement has been reached with the surface right holder. It is also subject to receiving an underlying environmental license to be granted by the relevant environmental agency. Mining concessions can be applied for following a final exploration report to be submitted to, and approved by the DNPM by the final expiry date of the exploration license. The report must conclude and demonstrate that an economic mineral resource has been delineated and measured. Normally, a mining plan and feasibility study must be presented within a year. A licence of installation and a licence of operations are then issued by the applicable environmental agency as a prerequisite to the granting of the mining concession. A mining concession is granted for a period covering the mine life until the mineral reserves of the deposit are exhausted. A mining concession does not convey title to a mineral deposit but provides the holder with the right to extract, process, and sell minerals extracted from the deposit in accordance with a plan approved by the DNPM and environmental authorities. The holder of a mining concession must pay the government the Financial Compensation for the Exploitation of Mineral Resources ("CFEM"), a federal royalty, which is established at 1.0% of the net sales of gold ore or 0.2% of the net sales of other precious metals. In addition, a royalty must be paid to the landowner if the surface rights do not belong to the mining titleholder. This royalty amounts to 50% of CFEM. However, it is common practice to negotiate a separate compensation agreement that is satisfactory to both parties as this amount may not be sufficient for the land owner. Surface rights in Brazil are distinct from mining rights and must be acquired separately. The land owner has no title to the sub-soil or minerals contained therein. The Brazilian mining code provides for some form of expropriation of privately held surface rights subject to fair compensation. The holder of a mineral right is entitled to use the surface to conduct mining operations, including the construction of facilities required for such operations. The access to the land and reclamation of disturbed areas must be negotiated with each individual surface right holder. However, the landowners are obliged by law to provide access to the mineral licence holder to conduct exploration. If an agreement cannot be reached by negotiation there are legal mechanisms in place to allow courts to dictate an arrangement.

6.4 Environmental Regulation General environmental rules and obligations are relatively similar to those applicable in Canada. The Brazilian environmental policy is the responsibility of the Ministry of the Environment and is executed at three levels: federal, state, and municipal. The environmental legislation applied to mining is basically consolidated in the following environmental requirements: EIA (Study of Environmental Impacts), LP (Previous License), LI (Installation License), and LO (Operational License) and a PRAD (Rehabilitation Plan for Degraded Areas). An EIA is required as a condition for obtaining the LP for any activity which potentially causes substantial environmental impact The LP, LI and LO are mandatory for installing, expanding, and operating any mining activity, except exploration, under the systems of mining concession or licensing. A PRAD requires suitable technical solutions to rehabilitate the soil and other aspects of the environment that might be degraded by mining operations. In recognition that the preparation of an EIA can represent a substantial financial burden for a smaller projects, a company can undertake a less detailed form of EIA called "Environmental Diagnostic Report" in certain cases. The Serra Pelada Technical Report is submitted to the SEMA – Secretaria de Meio Ambiente which has the authority to waive the need for a full EIA. Instituto Brasileiro do Meio Ambiente e dos Recursos Naturais Renováreis, the federal environmental agency, is in charge of the licensing of activities with environmental impacts in more than one state or in federal waters, while SEMA is in charge of the licensing of activities with environmental impacts within the State of Para. The determination of competence between the two environmental bodies may cause overlap which may result in some cases in problems and delays for mining companies. Currently in Brazil, DNPM does not require any action concerning environmental actions or remediation of damage caused by previous operators of a particular license. However, DNPM does


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require that environmental licenses be presented. When these licenses are issued, the environmental bodies in general require the current operator to remediate the damages left by previous activities. In respect of the Serra Pelada Property, the Corporation does not expect that these requirements would be significant. The EIA/Rima for Serra Pelada was submitted to the Pará Secretaria Estadual de Meio Ambiente (Pará State Secretariat for the Environment – “Sema”) in September 2009. Public hearings concluded in December 2009 and the Pará State authorities are considering the submissions made at those hearings before issuing the environmental licence.


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7 ACCESSIBILITY, CLIMATE, LOCAL RESOURCES, INFRASTRUCTURE AND PHYSIOGRAPHY

7.1 Access The Serra Pelada Gold-Platinum-Palladium Project is located near the town of Marabá in the State of Pará, part of the Amazonia region of Brazil. The State capital, Belém, is located at the mouth of the Tocantins River on the South Atlantic Ocean coast about 600km NNE of Serra Pelada. The nearest major airport is at Marabá (population 157,000 in the 2005 census), a town on the Tocantins River situated about 90km NE of Serra Pelada. There are daily jet services to and from Brasília operated by both Tam Linhas Aereas (“TAM”) and also by Gol Transportes Aereos. During the 1960s and 1970s successive Brazilian governments made great efforts to build an infrastructure and encourage settlement in the Amazon region. One of the first roads built stretches from the capital Brasília to Belém, some 2,100km long. Dwarfing this highway and probably the most famous and controversial road is the TransAmazon Highway. This runs from Estreito on the Brasília-Belém road north through Marabá and Altamira, westwards to Rio Branco and on to Cruzeiro do Sul in the far western state of Acre.


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Figure 1. Location and regional access to Serra Pelada Figure compiled by D G Jones

Westmoreland


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From Marabá, a local paved road leads due south and then west, for a total of 100km to the turn-off east of Curionópolis (population 18,000). A 30km stretch of formed gravel road provides access to the Serra Pelada mine. The journey from Marabá takes about 2½ hours. Carajás airport is located half-way between the closed town of Carajás and the city of Parauapebas. TAM’s affiliate TRIP operates a weekday service to Carajás airport from Brasilia using ATR72 prop-jet aircraft. The 18km journey from the airport to Parauapebas takes only 15 minutes. Colossus has a local base in Parauapebas (official 2007 population 119,000), as does Intertek, the laboratory used by Colossus for preparation of the Serra Pelada samples.

Figure 2. Local access and infrastructure Figure compiled by D G Jones

7.2 Climate Situated only 6o south of the equator, the climate at Serra Pelada is typically equatorial with little variation in mean monthly temperatures throughout the year. The average maximum temperature for Marabá is 31.6oC while the average minimum is a steady 22oC. There are two distinct seasons; the winter is warm and dry while the summer is wet and humid. Three-quarters of the annual precipitation falls from December through April. In July, average rainfall for the month is 21 mm, while in February and March the monthly rainfall exceeds 350 mm. Rainfall intensity can be quite severe. The graphs below show climate data for Marabá. Annual rainfall average is 2,082mm.


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Figure 3. Average monthly temperature and rainfall at Marabá

Compiled by D G Jones from data provided by Weather Underground

7.3 Local resources The economy of the region is heavily dependent on mining, principally from the iron ore mines of Carajás. VALE is developing five projects in Southern Pará located within a radius of 90 km from Carajás, three of them to the southeast and two to the northeast. The Sossego project involved an investment of US$413 million and in June 2004 commenced production of 140,000 tpa of copper concentrate and 100,000 oz/year of gold. The project is VALE's first venture into copper production and includes a mine, mill and beneficiation plant and transport for the concentrate produced. The other projects should begin operations in 2010, producing an estimated 690,000 tpa of copper. Marabá is the market centre for the region and a hub for road, rail and river transport. Together with the mining industry, the city economy relies also on agriculture, cattle raising, handcraft production and commerce. There are many experienced miners in the vicinity and the university in Marabá is focused on training professionals for the mineral industry. The Tocantins River and its tributaries are of vital economic importance to the region, both as a source of fresh water for the population and industry, and as a source of hydro-electric power. The Serra Pelada Gold-Platinum-Palladium Project area is in a region of moderately fertile red-yellow podsols. Agricultural products include rice, corn, beans, palm oil, banana, tomato, watermelon, coffee, avocado, guava and cashew. Throughout the region there is extensive cattle-ranching, producing both milk and meat; using natural pastures that are annually burnt to stimulate young growth of herbs and grasses. Total stock numbers include up to 400,000 head of cattle and 50,000 pigs. The remaining forest areas have been intensively exploited for fuel wood for domestic use and especially for the production of charcoal. This is an important material for the production of pig iron from small plants in Marabá.

7.4 Infrastructure The burgeoning mining industry in the Carajás Mineral Province has required a massive investment in infrastructure and to create transport routes for industrial and agricultural exports. One of the biggest mining projects in Brazil is based on the iron ore deposits in the Serra dos Carajás near Parauapebas. With an estimated 18 billion tonnes of ore this is one of the biggest iron deposits in the world. The Projeto Grande Carajás Mining and Industrial Zone (“PGC”) is gazetted over an area of 400,000 sq km and involves a total investment of US $62 billion. The town of Carajás has been completely rebuilt and is closed to all but VALE workers. VALE constructed a heavy-duty rail line 892


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km long from the iron mines to the Atlantic port of São Luís (see Figure 1 above). The nearest railhead to Serra Pelada is at Carajás, 50 km by road from Serra Pelada. In October 2009 VALE announced that during 2010 it would invest a further US$8.2 billion capital expenditure in Brazil, including US$1.2 billion in the Carajás Serra Sul (S11D) iron ore mine. A further $600 million will be spent on the Salobo copper project, which has design capacity to produce 127,000 tonnes per annum of copper in concentrate. Project implementation is underway, and civil engineering has begun. Construction is scheduled for completion during the second half of 2011. Other minerals such as gold, copper, nickel, manganese and bauxite have also been found in significant quantities in the Carajás Mineral Province and more reserves of minerals are discovered each year. Much is exported in its raw form but there has been some attempt at refining it in the region. Industrial plants utilizing these reserves include the aluminum smelter in Belém (the largest industrial plant in Latin America) and a steel mill in São Luís. Mining developments have led to increased energy demands, spurring the construction of dams for the generation of hydroelectric power.

Just downstream from Marabá, the Tucuruí hydro-electric dam in 2005 had its capacity boosted to lift output to 8,370 MW and is the largest hydro-electric project in the world. Three other hydro-electric plants on the Tocantins River have a combined capacity of 2,630 MW and an additional plant is near completion. Seven more hydro-electric plants on the Tocantins River are planned.

Figure 4. Power transmission lines in the vicinity of Serra

Pelada

A branch of the main 230kv hydro-electric power transmission line from Tucuruí to Carajás supplies power to the Serra Pelada Gold-Platinum-Palladium Project area. Photo 1. Hydro power line at UTM Zone 22 0635401mE, 9353939mN,

15km NW of Serra Pelada


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7.5 Physiography The Carajás Mineral Province lies within the South Pará Plateau, in which altitudes vary from 500m to 700m. A series of NNE-SSW trending ranges project above the plateau, remnants of an older surface that was eroded to a peneplain and uplifted during the Paleozoic. Serra Pelada lies on the south-east flank of one of these, the Serra Sereno mountain range, with peaks up to 600m above sea level. The stream banks are terraced and capped with iron-aluminous laterite, currently being actively eroded. The drainage of the area flows into the Sereno Gorge, part of the Rio Parauapebas system. A tributary of the Sereno Gorge flows north-east from Serra Pelada.

Figure 5. Local access and physiography, Serra Pelada Cleared areas in red; forest areas in green.

The vegetation was originally dense evergreen tropical rain forest. Around the Serra Pelada mine, all of the original vegetation has been cleared for pasture and subsistence cultivation.


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8 HISTORY

8.1 Discovery and Ownership The discovery and history of the Serra Pelada mine were discussed in detail in the 2007 Report (Jones & Hall, 2007). Aspects of the garimpeiro operations during the 1980s have been covered by an excellent 1983 BBC documentary “Amazon Gold”, and the Australian “60 Minutes” television program “Treasure of Serra Pelada” broadcast in November 1985 which can still be viewed through the following video link: http://video.msn.com/video.aspx?mkt=en-AU&brand=ninemsn&vid=390ccaf1-07f7-42a1-a8e5-de4ea37a6805. The classic images of Serra Pelada captured by the Brazilian photo-journalist Sebastião Salgado are included in his book “Workers: Archaeology of the Industrial Age” published in 1993. On 27 February 2007, COOMIGASP was issued Exploration License No.1485 designated under DNPM Process 850.425/90. The license was published in the government gazette by DNPM on 1st March 2007 (DNPM, 2007). COOMIGASP was also obliged to present to the government its proposed exploration program, and within three years, a feasibility and environmental impact study, and mining program. The Final Exploration Report including the environmental, mining and feasibility studies was submitted by and in the name of the new Joint Venture Company “Serra Pelada Companhia de Desenvolvimento Mineral” (“SPCDM”) with DNPM on 9 September 2009. Colossus holds a 75% interest in SPCDM and therefore in Exploration License No. 1485. The request for transfer of title from COOMIGASP to SPCDM was accepted by DNPM on 14 September 2009 and is being processed, according to the DNPM website (see Appendix 1 of this report).

8.2 Previous Exploration The previous work by VALE on the property was discussed in detail in the earlier NI43-101 report (Jones & Hall, 2007).

8.3 Previous Resource and Reserve Estimates Various historical estimates for the remaining resources at Serra Pelada have been reported. These historical estimates however are not reported in accordance with NI43-101. They were discussed in the 2007 Report (Jones & Hall, 2007).

http://video.msn.com/video.aspx?mkt=en-AU&brand=ninemsn&vid=390ccaf1-07f7-42a1-a8e5-de4ea37a6805�

http://video.msn.com/video.aspx?mkt=en-AU&brand=ninemsn&vid=390ccaf1-07f7-42a1-a8e5-de4ea37a6805�


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9 GEOLOGICAL SETTING

9.1 Regional Geology The Brazilian Shield extends over much of South America east of the Andes Mountains. The major tectonic units of the Shield are the Mesoproterozoic Amazon, São Francisco and the Rio de la Plata Cratons, surrounded by Neoproterozoic orogenic belts. There are many smaller cratonic fragments, such as the São Luís Craton. Paleoarchean rocks occur as small cratonic nuclei in north-eastern Brazil. The cratons contain voluminous 2,600-3,000 Ma granitic and greenstone belts and a large volume of Paleoproterozoic rocks. The Neoproterozoic orogenic belts are dominantly derived from re-working of older Archean crust but also include Mesoproterozoic sediments and volcanogenic sediments. Major orogenic activity ceased in the Cambrian. Deformation of the Shield in the Phanerozoic is limited to re-activation of older sub-vertical shear zones.

Figure 6. Simplified regional geology, north-east Brazil Figure supplied by Colossus


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The Amazon Craton is the largest preserved block in the Brazilian Shield. Deformation is concentrated along the Neoproterozoic Araguaia orogenic belt on the eastern flank of the south Amazon craton. Gold deposits are concentrated in the Archean and Paleoproterozoic terranes, including the Archean Carajás Mineral Province of the Amazon Craton. The Carajás Mineral Province is composed mostly of granites and greenstone belts and hosts the largest gold deposits in the Amazon Craton, including Serra Pelada and the Salobo and Igarahapé Bahia Cu-Au deposits.

9.2 Carajás Mineral Province The Carajás Mineral Province is an Archean nucleus that has been divided into two different tectonic units, the northern and the southern blocks. The southern block is the older and is known as the Rio Maria granitoid-greenstone terrain (Hunh et al, 1988). It contains greenstone belts of the Andorinhas Supergroup and the associated Rio Maria, Mogno and Parazônia Archean intrusive granitoids (Ronze et al, 2000). The northern tectonic block is referred to as the Itacaiúnas Shear Belt (Araújo et al, 1988). The basement is mainly composed of gneisses and migmatites of the Xingú Complex dated at 2,800 Ma and east-west trending orthogranulites of the 3,000 Ma Pium Complex (Machado et al, 1991). The basement is overlain by the Carajás Basin, which is host to most of the mineral deposits in the Carajás Mineral Province. The formation of the Carajás Basin was initiated by regional extension of continental crust late in the Archean forming major dextral strike-slip faults. The same faults were later reactivated by sinistral transpression (Ronze et al, 2000).

Figure 7. Regional geology of the Itacaiúnas Shear Belt, Carajás Mineral Province. Figure supplied by Colossus

The oldest rocks in the Carajás Basin are volcano-sedimentary rocks of the Itacaiúnas Supergroup that accumulated in the Late Archean about 2,700 Ma and were metamorphosed to greenschist-amphibolite facies. Included within the Itacaiúnas Supergroup is the Rio Novo Sequence (Hirata, 1982) of mafic-ultramafic schists with minor felsic rocks, banded iron formation (“BIF”) and chert. The Rio Novo Sequence is intruded by differentiated mafic-ultramafic plutons of the Luanga Complex,


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dated at 2,763 ±6 Ma by Machado et al (1991). The Luanga Complex contains chromite and platinum group element (“PGE”) mineralization (Suita and Nilson, 1988). The Itacaiúnas Supergroup is overlain unconformably by siliclastic marine platform sandstones and siltstones of the Águas Claras Formation and the Rio Fresco Group, dated at 2,670 Ma (Cabral et al, 2002a & b). The Carajás Basin is intruded by Archean granites and diorites of the Plaquê Suite dated at 2,740 Ma and alkaline granites of the Estrela Complex and the Old Salobo Granite (2,763 ± 7 Ma; Barros et al. 2001). The 2,550 Ma Estrela granite crops out as an EW elongated elliptical body concordant with the regional structures. During the Proterozoic, around 1,880 Ma, anorogenic granite plutons of the Central Granite and the Cigano Granite were intruded. The anorogenic Cigano Granite (1,883 ± 2 Ma; Machado et al. 1991) is exposed about 15 km west of the Serra Pelada Au–Pd–Pt deposit. Dioritic and granodioritic plugs and gabbro dikes of uncertain age also occur in the area.

9.3 Regional Geophysics Published airborne geophysical data was acquired on behalf of the Brazilian Government in two separate surveys. Magnetic and electromagnetic data were obtained by Geoterrex-Dighem in March 1999, using a CASA C-212 aircraft. Flight lines were E-W oriented, perpendicular to the general N-S trend of the Rio Novo Group rocks, with lines spaced 250m apart. Control flight lines were N-S oriented and spaced 5km apart. Flying height was 120 m above the ground.

Figure 8. Regional aeromagnetic image (Filho et al, 2008)

Magnetic field anomalies highlight the structural framework and main geological features in the area. High signal values are associated with meta-ultramafic rocks of the mafic-ultramafic complexes and magnetite-rich shear zones related to the Serra Pelada Divergent Splay (SPDS). The meta-ultramafic rocks include dunite, meta-peridotite, serpentinite, sulphide-rich zones with pyrrhotite, and shear zones with magnetite. Formation of magnetite in meta-peridotite occurs simultaneously with talc and serpentine as a product of olivine alteration. The axes of the anomalies appear as anastomosed features that are ductile shear zones. Magnetite-rich, sub-parallel splays related to the Cinzento Transcurrent Shear Zone (CTSZ) cross-cut the Luanga ultramafic complex, centred 10km ESE of Serra Pelada. Magnetic highs are associated with


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magnetite-enriched meta-ultramafic rocks, such as dunite, peridotite, serpentinite, and talc-schist, as well as shear zones that truncate these complexes and remobilized the magnetite from the meta-ultramafic units. Platinum group metal (“PGM”) mineralization in the mafic–ultramafic Luanga Complex is associated with pyrrhotite-rich meta-pyroxenite and chromitite layers next to the contact between meta-pyroxenite and peridotite/serpentinite. Discrete circular anomalous highs can be seen in the central part of the area. These highs are associated with shallow magnetic banded iron formation sources such as the Serra Leste iron deposit 5km SE of Serra Pelada. Discontinuities in the high values of the NS or NNW anomaly patterns likely represent magnetite-enriched gabbroic dikes, which are widespread in the Itacaiúnas Supergroup. The time-domain electromagnetic map shows conductive zones in: (a) the NE portion of the map, where there are NE-trending aligned features (part of the Serra Sereno), which may represent carbonate and manganese-rich phyllite of the Rio Fresco Group; (b) the surroundings of the Formiga deposit, highlighting the thick alteration mantle, the meta-ultramafic rocks of the Formiga complex as well as banded magnetite-rich formations; (c) the mafic–ultramafic Luanga complex; (d) the Serra Pelada Au–Pd–Pt deposit, where high conductive zones occur due to the presence of carbonaceous meta-siltstone and to the thick alteration mantle generated by dissolution of the carbonate-rich meta-sandstone of the Rio Fresco Group.

Figure 9. False-colour TEM image (Filho et al, 2008) Gamma-ray spectrometric data was acquired by GEOMAG in June 1993, using a 212 Bell helicopter. The GR-820 Exploranium gamma-ray spectrometric system measured the natural gamma-ray spectrum in 256 channels at a height of 60 m.


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Figure 10. Image of total gamma radiation count (Filho et al, 2008)

High values of total radiation count can be related to the presence of Archean granitic rocks of the Estrela Granite Complex (AgrE), the Xingu Complex (AgrGni and AgrGntton) and Paleoproterozoic Cigano-type granites (EoPgrC). Intermediate to high values in the central area reflects the sericite-rich metasiltstones of the Rio Fresco Group (ARFm). Low values of total gamma radiation count are associated with outcrops of the mafic–ultramafic complexes (a = Luanga, b = Luanga South) and appear as dark colours. It is interesting to note that immediately east of the Serra Pelada Au-Pt-Pd deposit there is a small area of low values that is compatible with the radiometric signature of meta-mafic to ultramafic units. The possible presence of buried meta-mafic and meta-ultramafic rocks near this mineralization could provide a source for the Pt and Pd associated with Au in the Serra Pelada deposit. The radiometric high at the Serra Pelada deposit is related to relative enrichment in the potassium radiometric channel, possibly associated with hydrothermal alteration.


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9.4 Local Geology The mineralization at Serra Pelada is hosted by metasedimentary rocks of the Rio Fresco Group. The lithologies include metaconglomerate, metasandstone, dolomitic carbonate and metasiltstone. About 5km east of the deposit, mafic-ultramafic rocks of the Rio Novo Group outcrop, composed of tholeiitic and calc-alkaline lavas with intercalations of BIF, metamorphosed to amphibolite facies. The Rio Novo Group forms the basement in the Serra Pelada area. The nature of the contact between the Rio Fresco Group with the underlying Rio Novo Group is uncertain because of the absence of good exposures.

9.4.1 Rio Fresco Group The metasedimentary rocks of the Rio Fresco Group that overlie the Rio Novo Group at Serra Pelada are, from oldest to youngest, composed of quartzite at the base, carbonates, and metasiltstone at the top. These rocks have been intruded by diorite and subsequently by mafic dykes.

9.4.1.1 Quartzite Marine siliclastic metasediments form the base of the Rio Fresco sequence. They are deeply weathered to friable yellow to brown meta-sandstones.

There are two distinct lithofacies; quartzite and oligomictic quartzose metaconglomerate. Quartzite is the dominant lithofacies (97%), with the oligomictic quartzose metaconglomerate occurring as a minor interbed of variable thickness ranging from 0.2 to 3 m. The quartzite is approximately 40 to 70 m in thickness. Fresh, unweathered quartzite is a uniform white to light-grey, fine-grained (<0.1-1.5mm) rock containing quartz (99%), muscovite (1%) and trace amounts of zircon «1%) and rutile «1%). Original sedimentary cross- and graded-bedding structures are preserved locally, although the majority of the unit is massive and poorly sorted. Minor zones of foliation are represented by a weak alignment of quartz and muscovite grains. The fresh meta-conglomerate is a white to off-white, clast-and matrix-supported, quartz-pebble conglomerate. Clasts of BIF, quartzite and siltstone, ranging in size from 3 mm up to 5 cm, are set in a fine-grained and foliated quartz-sericite matrix. The original massive texture is well preserved.

Photo 2. Massive quartzite exposed in road cutting 2.5km NNW of the Serra Pelada pit.

Photo taken by D G Jones on 21 Nov 2009 at UTM Zone 22M 0647121mE, 9345315mS.


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Figure 11. Surface geology plan, Serra Pelada Figure supplied by Colossus

9.4.1.2 Carbonates The carbonate rocks cover a spectrum, from pure dolomite to calcareous mudstones, and together comprise the thickest sequence within the Rio Fresco Group. They probably formed on a shallow marine platform. Mapping by VALE showed that a thick cover of red laterite generally forms over carbonate-rich rocks. At surface they are weathered to quartz and oxides of iron and manganese; the carbonate has been completely leached. Dolomite is the dominant lithofacies (90%) with dolomitised silty sandstone occurring as minor (10%) interbeds of variable thickness (<1 to 12 m). Fresh carbonate is a white to cream, fine-grained (<0.1mm) rock containing dolomite (80-95%) and quartz (5-20%). The carbonate has a massive texture, although minor zones of foliation are represented by a weak alignment of dolomite and quartz grains locally. The upper parts of the carbonate sequence contain an increasing amount of fine-grained quartz, whereas the lower parts of the sequence are largely carbonate dominated. The minor dolomitised silty sandstone is an off-white to pale-pink, fine-grained (<0.1mm) rock containing dolomite (60-80%), quartz (10-20%), rutile/manganese (18%), muscovite (1-6%), phyllosilicate minerals (1-5%), zircon (<1%) and plagioclase (<1%). It is composed of alternating beds of dolomite-quartz (±rutile) and dolomite-quartz-phyllosilicate-rutile layers of between 0.1 to 4 cm in thickness. The rocks have been subjected locally to intense hydrothermal alteration in proximity to bodies of dioritic composition, which was responsible for recrystallization of carbonate and the introduction of chlorite, muscovite, galena, pyrite, chalcopyrite, molybdenite, digenite, rutile, baddeleyite and apatite. Chloritization is the most common and widespread alteration of the dolomitic carbonate. Actinolite, talc and biotite are altered to chlorite. Chlorite alteration is accompanied by the formation of xenomorphic and poikiloblastic sulfide minerals. Pyrrhotite occurs in equilibrium with pyrite, chalcopyrite and magnetite. Hydrothermal alteration also includes magnetite (up to 20 wt%) and muscovite (up to 25 wt%) enrichment. Magnetite is partially altered to hematite. Accessory


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hydrothermal minerals include tourmaline, titanite, allanite, epidote, monazite, apatite, molybdenite, galena and thorite (Tallarico et al, 2000).

9.4.1.3 Metasiltstone This package of marine and fluvial pelitic sediments was probably laid down in a rapidly sagging basin. Submarine landslides tumbled down the steep slopes around the basin rim and the debris formed classic turbidites characterized by well-preserved Bouma sequences. The rocks include siltstones and argillites that have been metamorphosed to lower greenschist facies phyllites. The majority of the phyllites are composed of quartz and sericite, with variable amounts of amorphous ferruginous and dark carbonaceous material. Crystals of tourmaline, pyrite and/or magnetite have been observed under the microscope. Some calc-silicates have been mapped by VALE just south of the tenement area. Primary bedding ranges from massive to laminated, distinguished by color variation. The most frequent colors are red and pink, with yellow less common, while grey and black are quite rare. The different colors reflect both compositional variations related to the depositional environment, and later carbon metasomatism. The red color reflects Fe-oxide enrichment, while gray and carbonaceous meta-siltstones are related to varying proportions of amorphous carbon (2-10% by weight). The tectonic fabric is defined by the orientation of sericite along the axial plane of folds in meta-conglomerates and meta-siltstones. The meta-sandstones exhibit weak recrystallization and, locally, the development of a granoblastic fabric.

Photo 3. Red metasiltstone, Serra Pelada pit highwall.

Photo taken by D G Jones 21 Nov 2009 at 647514mE, 9342916mS

9.4.1.3.1 Red Metasiltstone The red metasiltstone is a red, fine-grained (<0.1mm) rock containing phyllosilicate minerals (40-50%), hydrated Fe-oxide minerals (35-45%), muscovite (3%), quartz (1 %), and rutile (<1%). Original S0 bedding surfaces are generally well preserved and, more rarely, sedimentary cross-and graded-bedding, convolute bedding, and current ripple structures are recorded locally. The red metasiltstone is 40 to 120 m thick.


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Photo 4. Cross-bedding in red metasiltstone Photo taken by D G Jones 21 Nov 2009 at 647514mE, 9342916mS

Fresh red metasiltstone has a weakly-schistose texture defined by a weak alignment of phyllosillicate minerals, hydrated Fe-oxide minerals and quartz within discrete zones. However, large areas of the unit display massive textures with only very minor zones of weakly schistose texture. The phyllosilicate and hydrated Fe-oxide minerals typically occur as fine-grained (<0.1mm) xenoblastic grains. Muscovite typically occurs as heavily Fe-oxide coated, fine-grained (<0.1-0.4mm) xenoblastic to subidioblastic grains with random mineral orientation. The randomly orientated nature of the muscovite grains may indicate that it is part of a hydrothermal alteration assemblage. Quartz occurs as <0.1mm xenoblastic aggregates disseminated throughout the rock and as finely layered bedding structures. Zircon and rutile form fine-grained (<0.1mm) crystals of subidioblastic nature evenly dispersed throughout the rock.

9.4.1.3.2 Carbonaceous Metasiltstone In the nose and more locally on the limbs of the overturned syncline, carbon metasomatism has introduced carbon into the red metasiltstone. The colour of the metasiltstone changes from red to pale grey, progressively becoming darker as the carbon content increases. Above 10% carbon content, the rock becomes a black, sooty-textured phyllite. In all other respects the original red metasiltstone mineralogy, bedding and textural features are preserved.

Irregular grey banding Pervasive grey colouration Intense black carbon alteration

Photo 5. Progressive carbon metasomatism of red metasiltstone

Photos taken by D G Jones 21 Nov 2009 at 647514mE, 9342916mS – 9342880mS


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9.4.1.3.3 Brown Metasiltstone A distinctive unit consisting of brown and grey siltstones interbedded with pale pink sandstone can be seen in road cuttings just outside the SW corner of the Serra Pelada tenement.

Although it has much in common with the underlying red metasiltstone, the colour and associated lithologies are sufficiently distinctive for it to be mapped as a separate unit.

Photo 6. Brown metasiltstone Photo taken by D G Jones 21 Nov 2009 at 647238mE, 9342464mS

9.4.1.4 Polymictic Metaconglomerate The polymictic metaconglomerate is the youngest lithology of the Rio Fresco Formation within the Serra Pelada area and is 10 to 65 m thick. Fresh polymictic metaconglomerate is a white to pale-red, clast-and matrix-supported, quartz pebble metaconglomerate containing clasts of meta siltstone (10~25%), monocrystalline and polycrystalline quartz (5-10%), banded iron formation (5-10%), and chert (5-10%) set within a matrix of quartz (40-60%), hematite (2-15%), muscovite (1-2%), rutile (1%) and zircon(<1%).

The original S0 bedding surfaces are well preserved and zones of graded and cross-bedding occur locally. There are minor zones of weak foliation, represented by a weak alignment of matrix material. The metasiltstone, quartz, banded iron-formation and chert clasts are typically sub-angular to sub-rounded pebble size clasts (5-60mm). The quartz matrix occurs as fine-grained (0.2-1mm) xenoblastic grains. Hematite typically occurs as fine-grained (<0.1-3mm) subidioblastic grains.

Photo 7. Metaconglomerate exposure Photo taken by D G Jones 21 Nov 2009 at 647294mE, 9342479mS

9.4.2 Intrusives Locally, two intrusive phases have been recognised close to or within the Serra Pelada tenement area: (i) Archean metadiorite; and (ii) mafic dykes. The metadiorite displays evidence of metamorphism through foliation and prograde mineral associations, whereas the mafic dykes are post-metamorphism as they display preserved original randomly-orientated massive igneous textures.

9.4.2.1 Diorite Intrusions Metadiorite intrusions have been intercepted at depth in diamond drill core to the west and southwest of the Serra Pelada open pit. Some minor outcrops occur immediately to the southwest of the Serra Pelada open pit. Neither the morphology nor the number of intrusions in the area have been completely determined.


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The fresh metadiorite is a green-grey, medium grained (0.5-10mm) diorite containing sericite (40%), actinolite (35%), chlorite (8%), green hornblende (7%), plagioclase (5%), quartz (3%) and pyroxene (1%). The igneous assemblage is hydrothermally altered to albite, sericite, quartz, chlorite, epidote, rutile, and carbonate minerals. Diorites are crosscut by a set of veins containing quartz, epidote, chlorite, sericite and sulfide minerals (pyrite, chalcopyrite and bornite). Photo 8. Metadiorite outcrop, drill pad SPD037 Photo taken by D G Jones 21 Nov 2009 at 647238mE, 9342464mS

9.4.2.2 Mafic Dykes Mafic dykes are the youngest rock types within the Serra Leste prospect and have been dated at 198 Ma (Rb/Sr; Meireles et al., 1982). They intrude NW-trending fault structures adjacent to the Serra Pelada Au-PGE deposit and in the western and north-eastern areas of the Serra Pelada area (see Figure 12). The dykes cut all the rock sequences along a preferential NW direction. Generally they are magnetic, undeformed and coarse-grained. The composition is that of a black porphyritic gabbro (<0.1-40mm) containing plagioclase (60%), pyroxene (25%), magnetite (10%), chlorite (2%), sericite (2%) and biotite (1%). The original igneous texture is preserved.

9.4.3 Metamorphism The widespread occurrence of actinolite-calcite and the local association of diopside indicate a minimum of 550°C for the peak metamorphic temperature (Tracy and Frost, 1991). At equivalent temperatures, biotite, aluminum silicates and staurolite or cordierite would be expected in metasiltstones. However, the metasiltstones exhibit a very-low grade metamorphic assemblage and the rare garnet neoblasts are clearly post-tectonic and related to late hydrothermal activity. This thermal gradient is not consistent with the regional metamorphism, being better accounted for by a thermal aureole hypothesis. Additional evidence for contact metamorphism includes the presence of hydrothermally altered dioritic intrusions and the mineralogical similarity of the dolomitic carbonate with other amphibole-rich magnetite skarns (Einaudi et al. 1981). Cooling of the aureole triggered the breakdown of actinolite in accordance with the reaction: tremolite (actinolite) + CO2 + H2O = talc + calcite + quartz, at a temperature range of about 400-450°C (Tracy and Frost 1991). Later hydrothermal activity developed chlorite alteration in association to sulfide precipitation in both dolomitic carbonate and diorite intrusion(s). Chlorite thermometry (Cathelineau 1988) indicates a thermal range between 230°C and 360°C. Late-stage evolution of the hydrothermal system developed hematite and minor bornite. These parameters are consistent with Au and Cu mobilization via chloride complexes (Davidson and Large 1994). Chloride complexes are also efficient in transporting PGE, Hg and Ag in oxidized and acid hydrothermal solutions (Watkinson and Melling 1992).

9.4.4 Supergene Alteration Weathering has oxidized the clastic metasedimentary rocks and leached dolomitic carbonate. The base of the oxidation profile, located at a depth of 300 m, is marked by a knife-edge limit between unaltered dolomitic carbonate and a loose sandy material, with the impregnation of iron and manganese oxide and hydroxide. Volume reduction, caused by decalcification of the dolomitic carbonate, developed collapse breccia generally enriched in supergene Mn-oxides. All mineralization


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at Serra Pelada is intensely oxidized, and primary economic mineralization is as yet unknown beyond the base of the oxidation profile.

9.4.5 Structure The lithostratigraphy in the Serra Pelada area is aligned generally east-west, parallel to the regional trend of the Itacaiúnas Belt in which the prospect lies (see Figure 7). At least two episodes of regional deformation have affected the Rio Fresco Group. The first deformation D1 involved shortening of the crust from north to south. The compression was taken up by the folding of the sediments along east-west axes, initially in broad folds that became tighter and tighter until the dominant structures were very tight folds. The behaviour was rather like a ream of paper sheets being squeezed in a vice.

Figure 12. Diagram looking west illustrating initial D1 compression

Figure drawn by D G Jones This squeezing developed tight reclined to recumbent similar folds with axes plunging 15-25o to the south-west and related weak penetrative axial-plane cleavage, as well as east-west striking thrust faults that dip 45o - 70o to the south. The sediment pile was squashed into a space less than one third of its original width of 150km.

Figure 13. Diagram looking west illustrating late D1 compression

Figure drawn by D G Jones

The asymmetrical overturned syncline at Serra Pelada, with its axis dipping to the west between 15-25o, is a typical D1 fold. This large structure has parasitic folds on its flanks, with the south flank reversed and the north flank elongated. The axial plane of this fold emerges in the area of the deposit.

Figure 14. Diagram showing formation of recumbent Serra Pelada syncline The second phase of deformation D2 formed open, low-amplitude fold-fault systems, locally exhibiting steep, NNE to NE-trending axial surface crenulation. At Serra Pelada this caused a large inflection in the syncline, folding the axis in the direction of the dip plane and developing in the plan projection a concave fold dipping 50 to 70 degrees to the north. The axial plane cleavage S2 is non-penetrative.


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Photo 9. Folding and S2 cleavage in red metasiltstone Photo taken by D G Jones on 21 Nov 2009 at 647532mE, 9342930mS

A set of NW-trending sub-vertical fractures and faults overprint both the D1 and D2 fold structures and dip at 30o - 80o to the SW. These fractures control the emplacement orientation of mafic dykes (Tallarico et al, 2000). Less common are NE-trending faults that dip steeply to the NW, and WSW faults that dip at a shallow angle to the SSE.


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10 DEPOSIT TYPES Researchers have attributed Serra Pelada to a variety of deposit types. It displays some (but not all) of the characteristics of sediment-hosted deposits labelled as “orogenic” and “sediment-hosted epithermal”. Grainger et al (2002) suggest that Serra Pelada may be a distal equivalent of the iron oxide copper-gold (“IOCG”) deposits such as Salobo and Sossego in the Carajás Mineral Province. However, more recent data indicates that Serra Pelada bears strong similarities to unconformity-related uranium-precious metal deposits, of which Coronation Hill in Australia is a classic example. One of the most important characteristics of unconformity-related deposits is that the average grade of mineralization is high, and in addition to uranium, these deposits may also contain nickel, silver, molybdenum, copper, lead, zinc, bismuth, selenium, arsenic, gold and PGM.

10.1 Coronation Hill The Coronation Hill deposit is located near the southern end of the South Alligator River Valley in the Northern Territory of Australia and is approximately 230km south-east of the city of Darwin. United Uranium NL (UUNL), mined 26,147t of ore at a head grade of 0.26% U3O8 from Coronation Hill from about 1960 until 1964, from which 69t of U3O8 was recovered (Fisher, 1969).

Figure 15. Location and tectonic setting of the Coronation Hill Au-Pd-Pt-U deposit The lowest stratigraphic unit in the Coronation Hill area is the Koolpin Formation, intersected in drill-holes as stromatolitic dolomite, and seen in outcrop as ferruginous siltstone and chert. The Koolpin Formation is overlain by a sedimentary breccia, which in turn is overlain in faulted contact by a sequence of green chloritic volcaniclastic sediments that range from finely laminated siltstone through to lapilli tuff and tuff breccia. Minor black carbonaceous siltstone and chert are interbedded with the volcaniclastic sediments. The volcaniclastic sediments and sedimentary breccias are overlain, unconformably, by medium to coarse grained, poorly sorted red-brown to purple haematitic sandstone. Named the Coronation Hill Sandstone, it forms the prominent cliffs that effectively cap Coronation Hill. The base of the unit is generally conglomeratic with rounded pebbles to cobbles of quartz, quartz sandstone, siltstone and rare quartz-felspar porphyry.


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Figure 16. Geological map of the Coronation Hill Au-Pd-Pt-U deposit (Wyborn et al, 1990) At least two intrusive events have occurred. Quartz-felspar porphyry is common in outcrop and drill core, and intrudes into the Koolpin Formation and chloritic volcaniclastic unit. Boulders of porphyry are common in the sedimentary breccia units. A suite of intermediate intrusives ranging in composition from granodiorite, quartz monzonite, quartz diorite to diorite also intrudes into the Koolpin Formation and chloritic volcaniclastic unit. These lithologies are collectively referred to as quartz diorite in drill logs and field mapping. All known mineralization at Coronation Hill occurs in the lower Proterozoic Koolpin Formation and related intrusive rocks. The mineralization is interpreted to form narrow, sub-vertical bodies with a general north-south orientation. The mineralized zone as outlined by drilling which terminated in 1988, continues about 300m along strike, ranges in width from 50 to 120m, and extends more than 700m below surface. The drilling results show increasing gold and PGE grade with depth.

Figure 17. Schematic section through Saddle Hill


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In 1989, the mineral resources at Coronation Hill were estimated by the CHJV in accordance with the Australasian Code for Reporting of Identified Mineral Resources and Ore Reserves (“JORC Code”). The quoted Indicated Resource was 3.49Mt @ 5.12 g/t Au, 0.25 g/t Pt and 0.56 g/t Pd, plus an Inferred Resource of 2.87Mt @ 7.25 g/t Au, 0.35 g/t Pt and 1.31 g/t Pd (Leckie and Linke, 1998).

Two distinct styles of mineralization have been observed at Coronation Hill. Mixed U-Au-PGE mineralization is mostly restricted to carbonaceous units of the Koolpin Formation, and Au-PGE mineralization occurs in a number of different lithological units containing feldspar. Evidence from fluid inclusions indicates that U, Au, and PGE were all transported in the same highly oxidized, low pH, and very calcium rich brine, probably as oxy-chloride and chloride complexes, respectively. A mineralization temperature near 140oC is indicated by fluid inclusion data. Isotopic data show that the ore-bearing fluids were originally saline, meteoric groundwaters. These surface-derived, oxidized brines are believed to have flowed along aquifers of the cover sequence and down pre-existing sub-vertical faults to produce the observed styles of mineralization by chemical interaction with basement rocks. Coronation Hill is geologically, geochemically and genetically different from ore deposits resulting from epithermaI or ascending deep hydrothermal fluids, which are typically of a more reduced nature. Figure 18. Diagram illustrating postulated origin

of the Coronation Hill mineralization Figure from Mernagh et al, 1994

Modelling based on limited experimental data indicates that deposition of grades up to tens of ppm Au may occur by reduction of initially very oxidized fluid and/or by an increase in pH from the kaolinitic to the feldspar stability field. Au-PGE-only ore may be precipitated by a moderate decrease in oxygen fugacity and an increase in pH which results when the ore-bearing fluid interacts with feldspathic lithologies. A greater degree of reduction is needed to precipitate U (±Au-PGE) ore similar to that of other unconformity-related uranium deposits, and this may have occurred when the ore-bearing fluid either mixed with reduced, methane bearing fluids derived from the basement or directly interacted with carbonaceous or ferrous iron-rich units below the Kombolgie unconformity (Mernagh et al, 1994). Metallurgical test work indicated that 98% gold and 67% palladium extraction by cyanidation was achievable, and that a reasonable platinum extraction from the Coronation Hill ore is possible.


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11 MINERALIZATION The main Au-Pt-Pd mineralized zone at Serra Pelada cropped out in what is now the northern end of the open pit (see Frontispiece) and was mined over about 300m strike length to the southwest and to depths of around 120m in the pit. The VALE and Colossus drilling demonstrate that the mineralization continues at depth under the southern half of the pit, strikes more or less continuously at least 500m to the southwest to the boundary of 850.425/90, and is open to the southwest of this boundary. In this area mineralization has been encountered at depths of 250-350m below surface. The mineralisation has been oxidised by supergene process to depths in excess of 300m below surface. The Central Mineralized Zone (“CMZ”) overprints metasediments occupying the hinge and inner limbs of a NW-facing, SW-plunging, reclined synclinorium that plunges gently SW from the historical open pit. Some Au-Pt-Pd mineralization to the east and west of the main zone has also been encountered in the drilling. Some of this was mined in sections of the Serra Pelada pit.

Figure 19. Southwest plunging CMZ within the syncline Figure compiled by D G Jones from Colossus data


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Figure 20. Sketch section looking northeast along syncline axis Figure compiled by D G Jones from Colossus data

The CMZ is characterized by intense carbon and also argillic alteration, inboard of siliceous alteration mantling the synclinorial hinge. The highest grades of gold, platinum and palladium typically occur in the steeply dipping hinge at the contact between the metasiltstone and de-calcified carbonate (“sandstone”). This zone has up to 150m vertical extent and in places is more than 50m wide. Mineralisation is fracture-controlled at all scales, associated with steep, post-D2 faulting that provided conduits for the mineralizing fluids. On the limbs of the syncline, mineralisation and alteration form shallowly dipping, broadly stratabound zones, apparently associated with overprinting D2 fold-fault systems.

Figure 21. 3D model looking up-plunge to NE showing mineralization > 1/g/t Au in yellow Figure supplied by Colossus, modified and annotated by D G Jones. Red lines are drill hole traces.


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Au-PGE mineralisation is spatially and temporally associated with intense hydrothermal carbon and argillic (kaolinite-mica) alteration and to a minor extent with iron oxide-rich breccias. Alteration is fracture controlled at all scales and is strongest in fault-related siltstone breccias. Carbon-rich and argillic alteration involved de-silicification but broadly synchronous siliceous alteration, mainly replacing calcareous sandstones, discontinuously mantles the CMZ.

Figure 22. Typical geological cross section of the Serra Pelada deposit showing interpreted

geology, alteration and drill-defined Au-Pt-Pd mineralisation Figure supplied by Colossus

NB. Drill hole SPGT-002 is a geotechnical hole and has not been assayed to date. Mineralisation was sulphide-poor, but trace pyrite, some PGE selenides (Cabral 2006) and hypogene hematite are preserved in siliceous alteration, surviving the supergene oxidation and decalcification


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overprinting the deposit and surrounds. Au & PGE’s are present mainly as metals and alloys, mostly less than 100µm grain size, nuggets only having been found near surface. Alteration assemblages and limited fluid inclusion data indicate low hydrothermal temperatures, around 200oC (Cabral 2006). Au-PGE mineralisation is anomalous in rare earth elements (“REE”), Bi, Se, Te, U, and P; it is variable enriched in Co, Ni, (As, Cu, Pb, Zn, W), and depleted in SiO2 (Cabral et al., 2002; Grainger et al, 2002).

The adjacent photomicrograph shows carbon-rich meta-siltstone in the high-grade mineralized zone. Black carbon is preferentially aligned along the S2 cleavage (NW-SE in the photo). The carbon alteration weakens progressively away from the hinge zone. Photo 10. Photomicrograph of high-grade

mineralization Image supplied by Colossus

Polished section viewed as above at the same scale. The bright spots are gold grains; the somewhat less bright spots are PGE grains. The precious metals have precipitated in locations where carbon is most concentrated.

Photo 11. Reflected-light image of high-grade mineralization Image supplied by Colossus

U-Pb dating of hydrothermal monazite grains (Grainger, 2004) that are both texturally and genetically linked to the Au-Pt-Pd mineralization, indicate an age of 1861±45 Ma for the Serra Pelada mineralization. An 40Ar/39Ar age of 1882±3 Ma for the formation of biotite grains within the distal, barren alteration halo, falls within the error of the less-precise monazite age. The Au, Pt and Pd in the Serra Pelada deposit generally occur together in relatively constant proportions, suggesting that they were deposited from a single hydrothermal fluid, in which they most likely travelled as chloride complexes. The geochemistry of mineralisation and alteration is consistent with acidic (pH<4), highly oxidized, metal-transporting brine being introduced along structurally-controlled zones, and reacting with the intensely reducing carbon-rich environment concentrated in the synclinal fold hinge. This resulted in reduction of the oxidized fluid, with the noble metal minerals precipitating (see Wilde et al. 1989). Replacement of dolomite by silica in the surrounding rocks may have contributed to the de-acidification of the mineralizing fluids and enhanced the dumping of precious metals along the contact. The mechanism is similar to that envisaged for the Coronation Hill Au-Pt-Pd-U deposit described in Section 10.


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12 EXPLORATION Prior to the commencement of the Colossus Phase 1 drilling program in November 2007, exploration at Serra Pelada by Colossus included: • topographic surveying by Resource and Exploration Mapping Pty Ltd (“REM”) and

orthorectification of a 1m resolution IKONOS image (by Geoimage Pty Ltd) as a base for site work on Exploration License 850.425. The results of this work include a new digital elevation model for geological and drilling control, plus mapping of cultural and access features. Accurate (<1m) locations of fourteen remaining VALE drill collars and the locations of the boundaries of 850.425/90 were also determined by the REM survey

• compilation and preliminary analysis of the VALE drill hole, lithology and assay databases; These data were utilized to guide the locations of Colossus proposed drilling, and for the preparation of drill and geological sections and plans

• acquisition and relocation of about 40,000m of VALE diamond drill core to the Colossus facility in Parauapebas. This invaluable core library was catalogued and racked in Parauapebas

• resampling and assaying (Au, Pt, Pd) of selected intervals (totalling 2,000m to date) of VALE core, following the protocols set down in section 14 of this report

• site works for the drill pads for Phase 1 diamond drilling by Boart Longyear under contract to Colossus

• development of first pass 3D and geological models to guide this drilling. Surface geological mapping of tailings and waste from previous operations was completed and structural/lithological studies on bedrock exposures and VALE core carried out. This work guided the siting of the Colossus diamond drill holes.

• Together with information from the current drill program, the objective was to provide an adequate basis for resource delineation at Serra Pelada.

The work carried out in the period from November 2007 is set out in detail in the following sections. The Serra Pelada property was identified as the Corporation's most significant asset and spending of $7.5 million, including option payments, was incurred during the fiscal year to 31 July 2008. A further $14.9 million was spent on the Serra Pelada Property in fiscal 2009, including exploration expenses and option payments. The data base for the entire Colossus Serra Pelada program has been contracted to an independent specialist data management company, Resource and Exploration Mapping Pty Ltd (“REM”). REM uses Maxwell’s “DataShed” system as the front to their on-site SQL Server database to receive, verify, validate, store and supply data that complies with NI43-101 requirements for resource modeling. The Colossus data base operates through a Graphic User Interface (“GUI”) portal to Microsoft Access software. REM also provides data capture services and data conversion to and from numerous formats for Colossus, and manages the entire audit trail for every bit of data. David Jones was granted access through REM to the entire Colossus data base for the purposes of this report, and found the DataShed system to be far more rigorous than, and superior to, any previous data management system he had experienced.


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13 DRILLING Colossus drill collars up to the end of October 2009 are shown on the figure below:

Figure 23. Collars of holes drilled by Colossus to end October 2009


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13.1 Core Drilling The Colossus Phase 1 drilling program was carried out by contractor Boart Longyear. This company had previously drilled the Serra Pelada deposit under contract to VALE in 1997-98 and was experienced in the area. A single diamond core rig commenced drilling in November 2007 and by the end of March 2008 had completed 4 holes for a total of 1,156m. The drilling rate was slow due to difficult ground conditions, but core recovery was good except in intensely silicified zones alternating with soft weathered siltstone. The use of triple tube equipment may have improved recovery, but none was available in Brazil (and to date, this equipment is still unavailable). A second drilling rig was mobilized and commenced drilling in April 2008. The Phase 1 program of 5,129m of HQ core in 17 holes was completed in August 2008. Drilling was focused on the Central Mineralized Zone (“CMZ”) along 250m strike length down plunge and southwest of the historical Serra Pelada open pit. One additional hole (SPD009) was abandoned due to poor drilling conditions. All holes were prefixed “SPD”. All completed Phase 1 drill holes intersected apparently mineralized material but SPD-003, SPD-005 and SPD-006 were off target. One drill hole, SPD-017 tested the Western Zone of mineralization just to the west of the historical pit. This is a separate target from the Central Mineralised Zone, with limited historical drilling. Additionally, two PQ diamond hole (SPD-019 and 020) were drilled during Phase 1 to provide samples for initial metallurgical test work. In January 2009 Colossus commenced its Phase 2 drilling program. The contractor selected for this phase, after competitive bidding, was Minas Trading (“Minas”) of Belo Horizonte, a Brazilian company with considerable experience drilling iron ore. The planned program was for 5,000m of core drilling to be completed by May 2009. By April 2009 a review of all results received to that time encouraged Colossus to expand the Phase 2 program. Three diamond rigs were on site, with drilling extended to continue through end 2009, focused on 500 metres of strike length of the CMZ as well as testing new targets to both the east and west of this zone. The earlier VALE drilling had involved sub-vertical holes on lines 50m apart; Colossus planned to close up on lines 25m apart, drilling as shallow angle holes as technically possible from the south-east, with a few scissor holes from the north-west on each section.

An additional drilling rig, operated by Energold Drilling Corporation (“Energold”) based in Belém, commenced work testing the tailings remaining in the Serra Pelada pit in October 2009. Energold specializes in shallow-angle holes, and this work required holes inclined at 45o or less.

Photo 12. Energold rig drilling tailings Photo taken by D G Jones 21 Nov 2009

13.2 Reverse Circulation (“RC”) Drilling In April 2009 Colossus commenced a planned 2,000m RC drilling program at Serra Pelada. This was intended to supplement the core drilling of the CMZ, testing for mineralisation outboard of the CMZ, but within the bounds of a conceptual open pit development. Another objective was to evaluate tailings and waste from the historical open pit that were stored outside the pit to the northwest. Furthermore, the program increased the productivity of diamond drilling by drilling RC pre‐collars and facilitated hydrological tests in previously completed drill‐holes.


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RC sample quality and recoveries were adequate for assaying to depths of around 100m in siltstones and 60m in sandstones. Face sampling hammers rather than cross-over sub systems were used to ensure sample quality. A total of 39 holes for 863m were drilled to evaluate the tailings and waste outside the pit. These holes were prefixed “TBA”. The drill collars are shown on Figure 23.

13.3 Surveying Real Time Kinematic surveying (“RTK”) using the Global Positioning Satellite (“GPS”) system has been used for a variety of different surveying applications and the use of this GPS method for survey work has become widely accepted in the last 10 years. The RTK technique competes well with traditional survey methods in terms of accuracy, cost and efficiency, and also complies easily with Class C survey standards as required by current legislation in Australia if related to an accurately located (<2cm error) base station or benchmark. REM established an accurately located base station at a readily accessible former VALE water bore site within the Serra Pelada tenement and all Colossus survey data is referenced to this base station. The datum used is the South American Datum 1969 (“SAD69”) which is the official grid datum in Brazil. All grid references in this report are related to SAD69. Prior to the commencement of drilling a hole, each Colossus drill site is marked out using Differential GPS (“DGPS”) or RTK surveying equipment. If this equipment was not available a GPS unit is used and a GPS measurement at the Colossus datum point is taken both before and after the drill site has been pegged. Any error detected relative to the datum point is calculated and applied to the drill site location. The drill site is checked and if necessary re-marked out after the drill pad has been prepared. A drill hole collar document is completed and a scanned copy placed on the REM data portal for validation and insertion into the database. All drill rigs are set up and/or checked by a project geologist for the azimuth and inclination of the proposed drill hole. Only after this has been completed is drilling allowed to commence. Azimuth measurements are made by compass with appropriate declination and marked out with string for rig alignment. The project geologist also uses an electronic inclinometer on all sides of the drill rig to ensure the drilling platform is horizontal within 0.5 degree error. The electronic inclinometer is calibrated once a month at the designated calibration point. Once drilling has commenced, down hole surveys of each drill hole are made each 50m of drilling advance. All downhole surveys are made with Maxibor or Gyro surveying equipment. The data is downloaded in the Serra Pelada field office and sent electronically to Colossus’ Chief Geologist for checking with minimal delay. On completion of a drill hole, a final downhole survey is made and both digital and hardcopies of the survey data are sent to Colossus’ Chief Geologist. Hardcopies are archived in Parauapebas and digital copies placed on the data portal for validation and insertion into the database. After completion of the drill hole and removal of the drill rig a final survey of the drill hole collar is made by DGPS or RTK as soon as possible. On completion of the final survey collar pickup the collar location is sent to REM with minimal delay and updated on hardcopies which are scanned and placed on the data portal for validation and insertion into the database.


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14 SAMPLING METHOD AND APPROACH

14.1 VALE Drill Core The 40,000m of stored core from the earlier VALE program of 200 drill holes was recovered from VALE and removed to the Colossus security compound in Parauapebas in late 2007. Colossus commenced by re-logging the entire 40,000m or core, followed by a systematic program of re-sampling and assaying selected intervals of this core, in order to verify the results previously reported by VALE. The re-assay program involved sampling of complete intervals of remaining half core from drill holes outside the Serra Pelada pit, covering a representative spatial and temporal spread of VALE drilling.

Figure 24. VALE drill hole collars and drill traces Figure supplied by Colossus


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14.2 Colossus Drill Core At the drill site, each run of core is transferred by the driller from the core barrel into wooden core trays provided by Colossus.

Each channel of the tray is lined with black builder’s plastic, with an extra 10cm of plastic projecting out of the top of each side of the channel. After insertion by the driller of the core markers with details of each run stamped on them, the excess plastic is folded over the top of the filled channel to minimise disturbance of the core during transit, and a wooden lid nailed on top of the tray. The core is protected from rain, any other contamination and interference and held under strict security at all times. The drilling contractor delivers lidded, boxed core from the drill site to the Colossus compound in Serra Pelada as soon as possible after the core is retrieved and a core box is filled, together with the driller’s log.

Photo 13. Core transferred from core barrel into tray by driller and markers inserted

Photo taken by D G Jones 21 Nov 2009

Upon receipt of the core at the Colossus Serra Pelada facility, Colossus technicians open each box and check that each box is labelled with drill hole number, meterage interval, beginning and end of core interval, drilling azimuth and inclination, core separators labelled with meterage and recovery of core interval, and that the core is inserted in the correct positions in the trays. Photo 14. Core boxes delivered from

rig to Serra Pelada compound Photo taken by D G Jones 21 Nov 2009

The technicians at Serra Pelada also check that the drilling recoveries and meterages match those of the core within the core tray and the driller’s log. The driller’s log is scanned at the Serra Pelada compound and sent by satellite email to the data portal for validation and insertion into the database. On completion of the field checks, the core is wrapped again in the plastic liners before the core tray lid is nailed to the box. The technicians ensure that the core boxes and lids are in good condition and core material and containers are free from contamination. They then weigh and record the weight of each core box and store under strict security ensuring no interference prior to transfer, as soon as possible (e.g. daily) to Colossus Parauapebas facility.


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Transfer of the sealed core boxes to Parauapebas is done under secure conditions by Colossus staff and involves minimal vibration, jostling and contamination of core material. On arrival at the Parauapebas core shed facility the core boxes are weighed and the weights compared with the dispatch records from the Serra Pelada site office. The core boxes are opened and inspected and the plastic liners trimmed of excess material and nailed down. The core is cleaned of drilling lubricants with a thin edged spatula.

Photo 15. Core tray weighed on arrival at

Colossus’ Parauapebas compound Photo taken by D G Jones 23 Nov 2009

The drill core is photographed in individual boxes with hole ID, box number and depth interval displayed in large lettering on an A4 printed page. The core photos are downloaded onto the core shed geology computer and archived in the Parauapebas office. A copy is put onto the data portal for validation and insertion into the database.

Photo 16. Preparing for core tray photograph Photo taken by D G Jones 23 Nov 2009

The core is then logged for lithology, alteration, structure and geotechnical details by the project geologist using the Colossus logging codes. All logs are scanned and digitized and put onto the data portal for validation and insertion into the database. All hardcopies are archived in the Parauapebas office.

14.3 Colossus RC Drilling Samples were taken at 1m intervals directly from the drill discharge on the rig while drilling was in progress. A riffle splitter system, attached to the sample return hose cyclone sampling system, was utilized. Two samples were taken during the drilling process:

1) a minimum 2kg sample (laboratory sample) was taken from the riffle splitter system and sent for analyses;

2) a larger sample, of all remaining material in the 1m drilling advance, was taken from the excess that did not pass through the rifle splitter system. This sample was used for archival and was left at the drill site.


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Where a minimum 2kg sample was not able to be collected from the riffle splitter system a 'spear' was used to resample the larger archival sampling bag and the entire spear sample included in the laboratory sample. Both samples were labelled with the same sample number which was written on the sample bag with a permanent ink marker. Additionally, a sample ticket was placed in the laboratory sample bag and the sampled interval noted on the sample ticket reference for archiving. The sample number (from the sample ticket) was also written on the sample bag in large numbers with a thick permanent marker pen and the associated sample number noted on the RC drilling sampling sheet with the appropriate sample interval. All completed sampling ticket booklets were archived in the Parauapebas office. Once the minimum 2kg laboratory sample was bagged it was weighed and the sample bag securely fastened with staples. The weight of the sample was recorded on the RC drilling sample sheet. After each 1m drilling advance both the riffle splitter and cyclone were thoroughly cleaned with compressed air to ensure no residue remained on either before further drilling. A representative sample of each 1 m drilling advance of the drilling chips was archived in a 'chip tray' for archival. RC drilling is logged on a metre by metre basis for lithology and alteration by the project geologist. All logs are to be scanned and digitized and placed on the data portal for validation and insertion into the database. All hardcopies are archived in the Parauapebas office.


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15 SAMPLE PREPARATION, ANALYSES AND SECURITY

15.1 VALE Drill Core

15.1.1 Sample Preparation and Logging The first phase of VALE core sampling (by Colossus personnel) and sample preparation by SGS GEOSOL LABORATORIES (“SGS”) was carried out under strict protocols recommended independently by Pitard (2007). After photographing and logging, nominal 1 metre intervals of remaining half core were completely removed yielding samples of up to 2 to 3 kilogram mass. Where core recoveries were low, intervals were composited to yield approximately 1 kilogram minimum sample masses. Colossus QA/QC measures involved the systematic insertion of blanks, duplicates and certified gold‐PGE reference materials in the sample stream by Colossus personnel prior to secure shipping to the SGS sample preparation facility in Parauapebas. The sample preparation protocol used at SGS Parauapebas is shown below:

• Sample receipt 2-3kg • Drying at 105oC for 8 hours • Jaw Crush to >95% of sample passing 1.7mm • Split/quarter crushed samples using rotary splitter and separate into 1 kg samples (e.g. 4 x 1

kg samples). One x 1 kg sample is used for assay material and the rest are archived. Use 1 of every 20 samples as a duplicate, to be pulverized and assayed as well.

• Puck and ring pulverizing, >95% sample passing 106 micron • Quartz wash after each sample; retain quartz washes and assay for Au, Pd, Pt after each 20

samples and after each high grade sample • Screening of sample into + 106 micron and – 106 micron fractions • Sample pulps forwarded to SGS laboratory in Belo Horizonte.

15.1.2 Analyses The VALE drill core re-sampled by Colossus was analyzed by SGS at their Belo Horizonte laboratories. Initially, a 50g sample of both the +106 micron and –106 micron fractions was fire assayed by SGS, with ICP-AES finish for gold, platinum and palladium. The minus 106 micron fraction was subject to three 50g fire assays for each sample. The weighted averages of the oversize and undersized fractions were combined to provide total metal contents. Laboratory QA/QC measures involved the systematic insertion of blanks, duplicates and reference materials in the assay stream as well as checks on the ICP-AES instrumental calibration by analysis of standard solutions of gold, platinum and palladium. The lack of reference materials with very high grades of these elements precluded independent checks on the assay values at that time. In the first phase, 605 samples representing 623 metres of historic core were assayed by SGS for gold, palladium and platinum. Quartz washes were used after each sample as a precaution against contamination from very high grade and carbonaceous samples. Quartz washes after very high grade samples were analyzed. The laboratory routinely analyzed every 20th quartz wash sample. Replicate assays were performed by SGS every twenty samples. The duplicate samples were plotted and monitored for variation greater than 95%. Batches containing unacceptable duplicate variances were re-analyzed. Standard pulp samples were inserted at 1 in 50 frequency rate and blank pulp samples were inserted at 1 in 100 frequency rate. SGS dispatched assay certificate originals directly to REM. During data validation it became evident that a number of assay values in several assay batches had been mislabelled by SGS. On consultation SGS issued revised assay certificates.


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The SGS assay results for blanks, duplicates and replicates were generally satisfactory. Au, Pt and Pd values obtained by SGS for certified reference materials are typically on the low side of mean multi-laboratory values, but are mostly within accepted ranges for reference materials of medium grade. A high grade gold reference material inserted by SGS in several batches has assayed consistently low relative to its certified gold values. This reference material and also high value samples in these and other batches will be check assayed by an independent laboratory. A range of sample types were submitted by Colossus to Genalysis Limited in Perth, Australia, for independent laboratory checks. Where possible these included splits of rejects from coarse crushes, non‐subsampled and previously sampled pulps, Genalysis inserted other Au and PGE reference materials in all batches. Genalysis performed screen fire assays (AAS & MS finishes, Pb collector) on the pulverised rejects (>95% passing 106 microns) from the crushed (>95% passing 1.7mm), dried samples. Pulps were rehomogenized and fire‐assayed for Au‐Pt‐Pd utilising 50g or 25g aliquots and Pb collectors and also for Au and the complete PGE suite utilising 25g aliquots and NiS collector materials. Additional blanks and duplicates were inserted in the assay streams by Genalysis and replicate assays were performed every twenty samples. Quartz washes were used by Genalysis after each sample as a precaution against contamination from very high grade and carbonaceous samples. Quartz washes after very high grade samples were analyzed. The laboratory routinely analyzed every 20th quartz wash sample. Genalysis dispatched assay certificate originals directly to REM. The Genalysis assay results for blanks, duplicates and replicates were generally satisfactory. However unacceptably high Au‐(Pt‐Pd) values were noted in some quartz washes of pulveriser‐homogenizer vessels. These values appear to have resulted from over‐grinding and smearing of noble metal particles on vessel walls. Genalysis advised that some Au‐Pt‐Pd assays should be regarded as low due to these effects, but mass balances and additional check assays indicate that effects on grade and possible carryover between samples were generally within analytical uncertainties. Genalysis assay results of certified Au‐PGE reference materials were generally within accepted ranges for these materials. The results from different methods of fire assays were consistent within assay uncertainties. For internal consistency assays given highest priority in the Colossus database are 25g sample fire assays utilising NiS collector for Au and the PGE‐suite. Screen fire and multi‐element assay checks were also performed on the sample batches. Following receipt of the Genalysis check assay results, Colossus modified the analytical procedure to the following:

1. A pulverized 1 kg sample is quartered by rotary splitter into 4 equal splits (e.g. 4 x 250g splits) 2. A pulverized split (e.g. 1 x 250g) is weighed and used for a 25g fire assay for Au, Pt, Pd 3. A duplicate is inserted every 20 samples 4. A standard is inserted in each assay lot 5. A blank is inserted in each assay lot

In February 2009, Colossus announced results for the systematic assaying of core samples from seven drill‐holes representing 128m of down‐hole intersections in the CMZ. The assay values include platinum (up to 299 g/t), palladium (up to 387 g/t) rhodium (up to 7.7 g/t) and iridium (up to 4.9 g/t), grades among the highest on record. Significant assays for continuous intervals of Au‐PGE mineralisation are presented in the following table:


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Table 1. Significant re-assay results from continuous intervals of VALE core

Figure 25. Collar locations of holes tabulated above Figure drawn by D G Jones from data supplied by Colossus

These drill‐holes are from more southerly sections of the CMZ. The assayed intervals apparently represent high‐PGE subzones that warrant further drilling to establish continuity. Platinum/palladium ratios are also higher than expected from historical data for these subzones. The high Au‐PGE subzone in FD‐072 has been shown by subsequent Colossus drilling to be continuous with mineralization in the upper and outer fold hinge, up to 200m to the northeast.


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15.1.3 Security The drill samples were placed in plastic bags in the core facility, labelled and sealed by Colossus staff. The samples were bagged in woven sacks to maximum 30kg weight. Samples were transported to the SGS Geosol’s Parauapebas sample preparation facility by Colossus staff. SGS Geosol checked the samples in the shipment against the shipping form from Colossus as well as confirming all samples were in good condition before preparation and analysis. Standard procedure was to notify the client of any bags that were damaged on receipt and to remove those samples from the sample stream to avoid any potential for cross-contamination.

15.2 Colossus Drill Core

15.2.1 Sample Preparation and Logging Drill core boxes are weighed and then opened upon receipt into the core facility at Parauapebas and the plastic cut to reveal the core. The plastic cover is overlapped into the adjacent core tray beneath the plastic of that interval before that core interval is opened to ensure no contamination between samples. The core is then photographed as described in Section 14.2 above. The core is then logged for lithology, alteration, structure and geotechnical details by the project geologist using the Colossus logging codes. All logs are scanned and digitized and put onto the data portal for validation and insertion into the database. All hardcopies are archived in the Parauapebas office. The core is marked and a diamond sampling sheet is prepared by the project geologist. Sampling intervals are set to be no greater than 1.20m of recovered core (100% recovered HQ diamond core) and no less than 30cm (100% recovered HQ diamond core), or their equivalent, unless a smaller interval is associated with adjacent non-recovered zones. Sample intervals are based on continuous zones of recovered core only and zones of core located in between zones of non-recovered core are sampled individually. Sampling sheets are scanned and digitized and put onto the data portal for validation and insertion into the database. The original hardcopy is archived in the Parauapebas office. Each drill hole has each different lithology and alteration type sampled for density measurements. Samples, no smaller that 10cm and no larger than 30cm, of full HQ drill core are covered in paraffin wax and density measurements taken with an electronic scale using the water balance technique. Density measurement data sheets are scanned and digitized and placed on the data portal for validation and insertion into the database. The core is cut in half, as per the diamond sampling sheet intervals, manually with a metallic core slicer in softer and weathered lithologies and with a manual core splitter for harder lithologies. Both the core splitter and core slicer are thoroughly cleaned after each use and excess material removed from the sampling area.


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Photo 17. Cutting soft core with a knife

(assisted by a hammer) Photo taken by D G Jones 20 Nov 2009

Photo 18. Manual core splitter for hard lithologies

Photo taken by D G Jones 23 Nov 2009 The half core samples are placed in plastic sample bags. Where 1 kg of sample material is not obtainable from the half core sample, due to lack of sample between zones of non-recovered core, more sample is taken, leaving only a small amount of reference material in the core box interval, if additional material is required. A sample ticket is placed in the sample bag and the sampled interval noted on the sample ticket reference sheet for archiving. The sample number (corresponding with the sample ticket number) is written on the sample bag in large numbers with a thick permanent marker pen and the associated sample number is noted on the diamond sampling sheet with the appropriate sample interval. All completed sampling ticket booklets are archived in the Parauapebas office. Every 20 samples a blank, duplicate sample or standard is inserted as indicated on the diamond sampling sheet. The blank, duplicate samples or standards are also accompanied by a sample ticket and the standard reference number or duplicate intersection is noted on the sample ticket reference sheet for archiving. For each standard insertion either a PGE standard or Au standard are used alternately. Both these standard numbers are noted on the diamond sampling sheet and sample ticket reference sheet. When a duplicate sample is taken the half core sampled is split in half (quarter drill core) and half core is to remain in the core tray as reference material.

The sampling sheet is scanned and digitized and placed on the data portal for validation and insertion into the database. Standards for PGE and Au are inserted according to the expected grade of the interval they are associated with.

Photo 19. High-grade Pt standards Photo taken by D G Jones 22 Nov 2009


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The sample bags are stapled shut and placed within larger sample transport sacks in sequence for transport to the laboratory. Sample transport bags are labelled with "Colossus -Serra Pelada" and the sample transport bag number and the sequence of contained samples only (e.g. Colossus -Serra Pelada, Bag 4, samples 43-56) and a copy of the sample submission sheet is placed inside each bag in a plastic cover. A sample submission sheet for the appropriate lab is completed and a copy is archived in the Parauapebas office. The sample submission sheet must indicate the number of sample transport bags and number of individual samples contained in total and the assay method required for the contained samples. A copy of the sample submission sheet is scanned and digitized and placed on the data portal for validation and insertion into the database. In March 2009, a Genalysis affiliate, Intertek, opened a new sample preparation facility near the Colossus security compound in Parauapebas. To speed up assay turnaround, Colossus engaged the services of Intertek following stringent testing that verified that Intertek could achieve Colossus’ preparation protocols. Gold, PGE and other assaying would be carried out by Genalysis at their Perth laboratory in Australia. The first batch of samples prepared by Intertek and incorporating a number of QA/QC checks was submitted to Genalysis in April 2009. The sample preparation protocol used at Intertek Parauapebas is shown below:

• Sample receipt 2-3kg • Drying at 105oC for 8 hours (12 hours at 60oC for

samples to be assayed for Hg) • Jaw Crush to >95% of sample passing 1.7mm • Split/quarter crushed samples using rotary splitter

and separate into 1 kg samples (e.g. 4 x 1 kg samples). One x 1 kg sample is used for assay material and the rest are archived. Use 1 of every 20 samples as a duplicate, to be pulverized and assayed as well.

• Puck and ring pulverizing, >95% sample passing 106 micron

• Quartz wash after each sample; retain quartz washes and assay for Au, Pd, Pt after each 20 samples and after each high grade sample

• Screening of sample into + 106 micron and – 106 micron fractions

• Sample pulps boxed, sealed and couriered by Fedex to Genalysis in Perth, Australia.

Each Fedex consignment consists of one complete drill hole only. Photo 20. Sealed Fedex consignment

Photo taken by D G Jones 20 Nov 2009

15.2.2 Analyses Analyses for the Colossus Phase 1 drilling program were performed by SGS, following the same protocols as described in Section 15.1.2 above. Some 350 pulps plus reference materials and blanks as returned from the SGS assay program were submitted to Genalysis in Perth. The pulps represented assayed core intervals totalling 360m in ten Phase I drill‐holes, and included a broad range of precious‐metal grades and SGS assay batches. In addition to providing further information on the distribution of the full PGE suite at Serra Pelada, this assay program served as a check on previously announced results for gold, platinum and palladium, essential in view of the difficulties of assaying very high grade gold‐platinum‐palladium materials. Genalysis re‐homogenized the pulps and the mixer mills were subject to quartz washes after each sample to eliminate potential sample carry over. Every fifth quartz wash was assayed for gold & PGE,


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generally indicating minimal sample loss to pulveriser vessel walls. Re‐homogenization, as evidenced by check and repeat assays, was largely effective in minimising coarse gold effects, although variations in gold results for some high grade samples may reflect such sample heterogeneity. PGE results are more uniform.

The Genalysis 25g fire assays for gold and PGE’s utilised NiS collectors with ICP‐MS finish. A total of 23 check assays were done by this method. Genalysis performance on these checks, blanks and five certified reference materials (including very high grade gold & PGE standards) were all within acceptable ranges, as were new assays of reference materials utilised in previous assay programs. Genalysis assays of the latter exhibit far less scatter around recommended values for gold, platinum and palladium than results from SGS. The Genalysis 25g fire assays for gold, platinum and palladium (85 repeats in all), utilising Pb‐rich collectors with ICP‐MS finish, were performed on a selection of medium to high grade samples and for which substantial discrepancies with SGS assays were evident. Agreement between the Genalysis repeats and NiS fire assays is excellent for platinum and palladium and also for gold, generally within 10% even for bonanza samples, the repeats averaging slightly higher gold values. In August 2009 Colossus announced the results of this assay program. The new assays indicated higher grades of gold, platinum and palladium for most drill holes, as outlined in the adjacent table:

Table 2. Genalysis check assays Comparison with SGS assays, Phase 1 drilling

Note: Interval is not true thickness

The locations of the drill collars for the holes tabulated above are shown on the next figure over the page.


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Figure 26. Drill collars and traces of Colossus Phase 1 holes checked by Genalysis Figure drawn by D G Jones from data supplied by Colossus

The Phase 2 drilling program analyses are all being carried out by Genalysis in Perth, following sample preparation by their affiliate Intertek in Parauapebas. On delivery of samples to Intertek an official laboratory document recording the delivery date, number of samples and transport date/arrival to other facilities (if required) is provided for archival in the Parauapebas office. A copy is scanned and digitized and placed on the data portal for validation and insertion into the database. Initial Phase 2 assays carried out by Genalysis include Au-Pd-Pt only. Assaying for additional elements is determined by the Au-Pd-Pt assay. Samples for re-assay and additional element analysis are selected by Dr Chris Grainger (Chief Geologist for CMI) and Dr Vic Wall (Vice-President of Exploration for CMI). All assays that include uranium and mercury are reported separately on different assay certificates and arrival/delivery certificates. The analytical procedure used by Genalysis for Au-Pd-Pt is as follows:

1. A pulverized 1 kg sample is quartered by rotary splitter into 4 equal splits (e.g. 4 x 250g splits) 2. A pulverized split (e.g. 1 x 250g) is weighed and used for a 25g fire assay for Au, Pt, Pd 3. A duplicate is inserted every 20 samples 4. A standard is inserted in each assay lot 5. A blank is inserted in each assay lot

An assay certificate is forwarded by the laboratory to REM as soon as possible. The assay certificate states the following:

• Sample preparation protocol and method • Analytical protocol and methods used

A hard copy of the assay certificate is forwarded to and archived in the Parauapebas office.


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All pulps, splits and rejects from the laboratory are returned and archived at the Parauapebas core shed routinely. All pulps weighed and checked for correct/corresponding sample numbers and a pulp storage document is scanned and digitized and placed on the data portal for validation and insertion into the database. Additionally, all quartz wash material is returned to the Parauapebas core shed for storage. Between June and September 2009, Colossus announced assay results for three batches of samples from the Phase 2 diamond drilling program. Results for eleven Phase 2 drill holes are outlined in the table below.

These Phase 2 drill holes were HQ‐cored for a total of 3,440 metres. Drilling was focused on the CMZ. Step‐out drill holes SPD‐023 to SPD‐034 have contributed materially to the definition of gold‐platinum-palladium mineralization, including ultra high grade subzones in the CMZ. SPD‐034 exhibits four ultra high grade (>100g/t gold–equivalent) subzones including 3.98m @ 713.1g/t gold, 316.5g/t platinum and 475.9 g/t palladium with replicated assays up to 1784g/t gold, 805g/t platinum and 1213g/t palladium, the highest grades so far drilled by Colossus. The Corporation confirmed a new mineralized horizon called the Western Mineralized Zone, as shown by SPC‐012. The newly recognised prime target is localised around the shallowly dipping siltstone‐sandstone contact on the shallowly dipping lower limb of the reclined synclinorium.

Table 3. Selected assay results from continuous intervals in

Colossus Phase 2 drilling Note: Interval is not true thickness


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Figure 27. Collar locations and drill traces of holes in Table 4 above Figure drawn by D G Jones from data supplied by Colossus


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Figure 28. Cross-section through line 025 SW Figure supplied by Colossus

15.2.3 Security The Colossus compound in Parauapebas has high security walls; only one entry gate that is locked at all times except when used by authorized staff for entry and exit, and has a 24-hour security guard in a sentry box at the gate.

Photo 21. Colossus compound in Parauapebas Photo 22. Secured pulp storage area Photo taken by D G Jones 23 Nov 2009 Photo taken by D G Jones 20 Nov 2009

Inside the compound, separate storage areas, each secured by a padlocked iron gate, are used for storing all drill core (including the previous VALE core) and the sample pulps returned from the laboratories. Each storage bay is marked with a catalogue of the contents. After each drill hole is logged and sampled, the drill samples are placed in plastic bags in the core facility, labelled and sealed by Colossus staff. The samples are bagged in woven sacks to maximum 30kg weight. Samples are transported to the Intertek Parauapebas sample preparation facility by Colossus staff.


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Intertek checks the samples in the shipment against the shipping form from Colossus as well as confirming all samples are in good condition before preparation and analysis. Standard procedure is to notify the client of any bags that were damaged on receipt and to remove those samples from the sample stream to avoid any potential for cross-contamination. The sample submission sheets emphasise that results are to be sent by email, to V. Wall, C. Grainger, A. Kishida and REM only. Assay results are uploaded to the database by REM only.

15.3 Colossus RC Drilling

15.3.1 Sample Preparation and Logging Four metre composites of SPC reverse circulation drill chips were collected at the RC drill rig, along with 1m drill advance samples. The composites were forwarded to Intertek’s Parauapebas laboratory for gold assays. For any anomalous composites, assay samples were prepared by Intertek from the corresponding 4x1m samples and forwarded to Genalysis for gold, platinum and palladium assaying, as for core samples. Every 20 samples a blank, duplicate sample or a standard was inserted and indicated on the RC sampling sheet. The blank, duplicate sample or standard was also accompanied by a sample ticket and the standard reference number or duplicate intersection noted on the sample ticket reference book for archiving. For each standard insertion either a PGE standard or Au standard were used in alternating order. Both these standard numbers were to be noted on the RC sampling sheet and the sample ticket reference. When a duplicate sample is used, the additional minimum 2kg sample is taken from the larger archived sample with a 'spear sampler'. Standards for PGE and Au were selected to be similar to the expected grade of the interval on either side of the inserted sample. The sample bags were stapled shut and placed within larger sample transport sacks in sequence for transport to the laboratory. Sample transport bags were labelled with "Colossus -Serra Pelada" and the sample transport bag number and the sequence of contained samples only. A copy of the sample submission sheet was placed inside each bag in a plastic cover. A sample submission sheet for the appropriate lab was completed and a copy archived in the Parauapebas office. The sample submission sheet indicated the number of sample transport bags and number of individual samples contained in total and the assay method required for the contained samples. A copy was scanned and digitized and placed on the data portal for validation and insertion into the database. An official laboratory document recording the delivery date, number of samples and transport date/arrival to other facilities (if required) was provided by the appropriate laboratory for archival in the Parauapebas office. A copy was scanned and digitized and placed on the data portal for validation and insertion into the database.

15.3.2 Analyses Analytical procedures used by Genalysis for the Colossus RC samples were the same as described above in Section 15.2.2.

15.3.3 Security The same security procedures described in Section 15.2.3 above were followed for the Colossus RC samples, except that all RC sample pulps, splits and rejects from the laboratory were returned and archived at the Serra Pelada field base routinely. All pulps were weighed and checked for correct/corresponding sample numbers and a pulp storage document scanned and digitized and placed on the data portal for validation and insertion into the database. Additionally, all quartz wash material was returned to the Parauapebas core shed for storage.


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16 DATA VERIFICATION Resource and Exploration Mapping Ltd., an independent surveying contractor, has clarified the positions of the boundaries of Exploration License No.1485 issued under the process designated DNPM 850.425/90 and recovered the location of drill collars to compare with the survey locations determined by VALE, as well as providing topographic control points. A large volume of published data was reviewed by Vidoro. These publications are listed in the References. This independent material did not conflict with the information supplied by Colossus. The area was visited by David Jones as part of the project review for the preparation of this report. The geology was examined in and around the pit above the waterline, at the portal for the proposed decline, and in the Serra Pelada hills north of the deposit. The process of sample collection, from the point where core is removed from the core barrel at the drill site and placed into the core trays, through sealing and transport to the on-site facility at Serra Pelada where the driller’s logs and core are cross-checked, re-sealing and transport to the Colossus compound at Parauapebas, the processing and logging that takes place there, the sampling of the core and its dispatch to the Intertek sample preparation laboratory, were all observed and noted by David Jones. He also visited the Intertek laboratory to view the delivery and acceptance of the samples and the chain of custody procedures in action through the sample preparation and dispatch by air freight to the Genalysis laboratory in Perth, Australia. The QA/QC procedures observed by Colossus and the laboratories were examined in detail by David Jones.

More than 61,000m of drill core from Serra Pelada is stored at the Colossus Parauapebas secure compound. The core trays are warehoused in racks under cover and behind steel doors that are locked at night. David Jones selected one bay and checked off the trays stored in that bay against the manifest listed for that bay. All trays were present and correct. One tray was selected randomly from each bay, the nailed-down lid removed, and the contents checked against the sampling logs and the geological logs. There were no discrepancies detected in the 10 trays examined.

Photo 23. Core storage bays, Parauapebas Photo taken by D G Jones 19 Nov 2009

Eight core holes were laid out completely and examined in detail. These included Colossus holes SPD-002, SPD-034, SPD-042A, SPD-043, SPD-044, SPD-047, VALE hole FD-032, and Colossus tailings test hole SPC-012. The contents of the trays were checked off against the sampling and geological logs, and the assay sheets. Selected original core tray photos were compared with the present contents of the trays. There were no discrepancies detected in the 8 holes examined.


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Photo 24. SPD-034 Box 63 as received from drill rig Photo taken by Colossus Jul 2009

Photo 25. SPD-034 Box 59 as observed by D G Jones after sampling Photo taken by D G Jones 19 Nov 2009

VALE hole FD-032 contained an extraordinarily high-grade interval from 39-83m that averaged more than 4,000 g/t Au, 200 g/t Pt and 1,170 g/t Pd over that 40m length. The core sample from 54.5m to 55.0m returned 11,446 g/t Au (11.4% Au!), 610 g/t Pt and 14/t Pd. Colossus took a small portion of the remaining core and washed it, recovering several ounces of delicate crystalline and wire gold, mostly coated in palladium (see Photo 27 below). This is known as “ouro preto” in Brazil and was found as alluvial gold in the town of Ouro Preto in Minas Gerais. However, the crystalline nature of the gold in the sample from hole FD-032 precludes any likelihood of alluvial origin and therefore salting with gold from Ouro Preto. The photographs below illustrate the gold referred to above that was recovered by Colossus:


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Photo 26. Crystalline gold recovered from 54.5-55.0m in VALE hole FD-032 Photo taken by D G Jones on 23 Nov 2009

Photo 27. Close-up of area outlined in red above The adjacent interval in FD-032, from 55.0m to 55.5m had been assayed by VALE and returned around 7,000 g/t Au, 44 g/t Pt and 870 g/t Pd. David Jones took a small sample from that interval and washed it, recovering several grammes of crystalline gold. Vidoro is satisfied that the very high grades encountered in FD-032 are real.

Photo 28. Crystalline gold recovered from

sample at left Photo taken by D G Jones on 23 Nov 2009

Photo 29.Sample from FD-032, 55.0-55.5m


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A tabulation of sampling undertaken to the end of October 2009 was compiled by David Jones from the Colossus database and checked against the assay data. The match was satisfactory. More than 5% of the samples had been duplicated or were blanks and/or standards, verifying that the stringent Colossus QA/QC protocols had been followed. Some core intervals had been sampled and re-sampled up to 4 times, and up to 6 repeats of each analysis had been carried out in more than one laboratory (see example tables below). Colossus policy is to choose the minimum assay from the spread available for any particular sample, and designate that as the “accepted” assay. This is a very conservative approach.

Table 4. Colossus check sampling and assaying for Au, VALE hole FC-003

Table 5. Colossus check sampling and assaying for Pt & Pd, VALE hole FC-003


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17 ADJACENT PROPERTIES The Serra Leste iron ore deposit occurs about 5km east of Serra Pelada in a tenement held by VALE (see blue square, Figure 11). There is little information in the public domain about this deposit, but newspaper reports of public meetings suggest that VALE is moving this project through feasibility. Maintenance of the Serra Pelada access road is kept to a reasonable standard as a consequence of the VALE work. The Luanga chromite-PGM deposit, also held by VALE, occurs about 3km east of Serra Leste and is hosted by a mafic-ultramafic intrusive complex. There are no resource figures in the public domain for Luanga. David Jones observed recent drill pads and drill collars into the Luanga Complex, visible from the Serra Pelada access road. As far as Vidoro is aware, there are no significant mineral deposits like Serra Pelada in the vicinity.


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18 MINERAL PROCESSING AND METALLURGICAL TESTING Colossus and external consultants have undertaken extensive materials characterisation studies (reflected light petrography, scanning electron microscopy, electron microprobe analysis, screen fire assays and hydroseparations) on representative CMZ core samples. Gold PGE mineralisation is sulphide poor and typically exhibits highly structured distributions, spatially associated with carbon and kaolin rich domains. The gold and PGE minerals are not nuggety, with the bulk of the gold in the 100micron grain size range. Gold grains commonly contain minor alloyed palladium as well as inclusions of PGE rich minerals including selenides. Separate PGE rich minerals appear to be mainly metals and compositionally complex alloys commonly intergrown with iron and manganese oxides. In progressive screening and screen fire assaying, PGE’s report more strongly to fine fractions than gold, reflecting the finer grain sizes of the PGE rich minerals. First pass liberation and hydro separation studies suggested that CMZ mineralisation may be amenable to hydro-gravity concentration, particularly of gold. Other dense minerals encountered in hydro separates included rare earth-rich phosphates plus iron and manganese oxides/hydrous oxides. Two +50kg samples (designated D25 and D39), typical of carbonaceous and argillic altered siltstones in the CMZ, were selected and dispatched to hrlTesting Limited in Brisbane, Australia, for initial metallurgical test work. These samples are composites from continuous intervals of half drill core from SPD 020A and SPD 033 remaining after assay and are representative of mineralised subzones respectively with relatively high PGE/gold and moderate PGE/gold. Gold and PGE grades of the composited samples were estimated on a sample mass-weighted basis and checked by assays of sample splits. HrlTesting split each of the composited samples after crushing, retaining one split for a second stage of metallurgical test work. The balance of each composite was stage crushed and split into 5kg charges for a series of gravity concentration, initially utilising a Knelson concentrator, and screen sizing tests. Assaying of screened fractions, gravity concentrates and gravity tails was undertaken by Genalysis Limited in Perth, Australia.

Figure 29. Diagram showing Knelson gravity concentrator sequence

Table 6. Preliminary Knelson results from Sample D39


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Preliminary results have been very encouraging, with >80% and up to 86.8% recovery of the gold being recovered into a gravity concentrate from a relatively coarse 75µm grind. Platinum and palladium recoveries into a gravity concentrate using the Knelson concentrator have been poor.

An initial test using a Falcon gravity concentrator, which is a much simpler single-pass system and cheaper than the Knelson concentrator, produced results comparable to the Knelson test.

Figure 30. Diagram showing Falcon gravity concentrator sequence

Table 7. Preliminary Falcon results from Sample D39


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19 MINERAL RESOURCE AND RESERVE ESTIMATES A mineral resource estimate meeting current Brazilian standards was submitted to DNPM as part of the Mining Plan and accepted. However, for the same reason that the VALE mineral resource estimates (see discussion below) did not meet the NI 43-101 standard, this resource does not meet NI 43-101 requirements and cannot be published here. Mineral deposits that contain pods of exceptionally high-grade material are always difficult to assess. Geostatistical modelling by independent consultants Mining Associates Pty Ltd indicates that although the Serra Pelada mineralization is not nuggety, and therefore on a broad scale the variances are acceptable, in the high-grade areas the variance is largely due to extreme short scale geometric and spatial variability. A consequence of this short scale geometric and grade variability is the significant uncertainty with reporting of these extremely high-grade resources. The block sizes in these zones must be reduced, probably to 7-10m blocks. The drilling by VALE was on 50m spaced lines. Colossus has to date substantially closed the drill hole line spacing to 25m; however this is still too widely-spaced to allow a resource estimate in a category better than “inferred” to be calculated. Given the depth below surface, drill intersections spaced close enough to allow definition of block sizes of 10m or less can only be achieved by accessing the mineralization from underground. This would also facilitate drilling the flat to very shallow angle holes necessary to determine true thicknesses in the steep to vertically dipping high-grade zone in the fold hinge. Any mineral resource estimate will need to include the 40,000m of drilling carried out by VALE. Colossus have re-assayed in excess of 2,000m of this core, and re-logged all 40,000m, in order to assign a level of confidence to this historical work. The results suggest that the VALE work was done to a high standard and that the analytical results are reliable. The personnel responsible for VALE’s work were fully qualified under Brazilian law and recognised by the Brazilian professional body. However, Brazil is not represented on the Committee for Mineral Reserves International Reporting Standards (“CRIRSCO”) that sets the minimum standards being adopted in national reporting codes worldwide with recommendations and interpretive guidelines for the Public Reporting of Exploration Results, Mineral Resources and Mineral Reserves. Hence because the Brazilian personnel did not belong to a professional association recognized by NI 43-101, there could be some debate whether their work can be included in a resource estimate, even if that estimate was done by persons qualified under NI43-101. In Vidoro’s opinion, Colossus has carried out sufficient work to verify that the VALE results are reliable, and they should be included in a resource assessment. However the decision as to how this inclusion of historical data may qualify resource categories under NI 43-101 would be made by the independent Qualified Person responsible for resource modelling. The drilling by VALE, supplemented by an additional 11,000m in 40 cored holes drilled to date by Colossus, shows strong lateral and vertical continuity of the Au-Pt-Pd mineralization through much of the CMZ. This is reassuring, and through the use of techniques such as Conditional Simulation it should be possible to quantify the levels of certainty for a range of tonnages and grades of the mineralization present at Serra Pelada. In this way a Level of Risk can be assigned to each of a series of resource estimates. Conventional deterministic methods such as wireframes together with linear geostatistical estimation methods like global resource modeling inherently lack the ability to derive confidence intervals for quantifying uncertainty and risk. The use of conditional simulation techniques can help overcome this deficiency and provide a more accurate resource model for planning mining in deposits containing bonanza grades.


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20 OTHER RELEVANT DATA AND INFORMATION

20.1 Specific Gravity (“SG”) Determinations An accurate estimation of the average specific gravity for every lithological and alteration type is an important component in any potential resource calculation. For each hole drilled, Colossus routinely samples the full HQ drill core from each different lithology and alteration type prior to splitting the core for assay. To the end of Oct 2009, a total of 472 determinations had been completed. The work is on-going. The average SG to date is 2.2 by the dry method and 2.1 by the wet method.

Photo 30. Selecting core for SG determination Photo 31. SG samples ready for weighing After geological logging of a hole is completed, the responsible geologist marks out the intervals to be sampled for SG determination. The technicians then remove those portions of core from the core tray, mark and place each sample in a stainless steel container. Each sample is no smaller that 10cm and no larger than 30cm in length.

Photo 32. Selected SG sample Photo 33. Weighing SG sample dry

To prevent disintegration in water, the core sample is covered in paraffin wax and an electronic scale used to measure the mass of the sample in air. The waxed sample is then suspended in water for the second weighing and the following equation applied (Archimedes Principle): Mass of sample in air (“MA”) SG= MA – Weight of sample in water

Photo 34. Waxed sample (white) returned to tray after SG determination


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The sample is then returned to its original place in the core tray. Density measurement data sheets are scanned and digitized and placed on the data portal for validation and insertion into the database.

20.2 Geotechnical Investigations In November 2008 Colossus appointed Kevin Rosengren and Associates (“KRA”), and GeoTek Solutions to undertake geotechnical investigations at Serra Pelada. The objective of the geotechnical studies was to clarify open pit and/or underground options for the development of the Serra Pelada mine. Kevin Rosengren, FAusIMM (CP), has been an industry leader in the field of geomechanics for more than forty years, recognised in his recent award as Mineral Industry Consultants Association inaugural Medalist. Paul Maconochie (MEngSc, CPEng and RPEQ) of GeoTek Solutions has provided geotechnical consulting, specialising in open pit wall stability, for over twenty years. On the advice of its consultants, Colossus completed geotechnical logging of core from the Company’s Phase 1 Serra Pelada drilling program. Colossus provided its recently developed geological model and drilling database to the geotechnical consultancy. The consultants will also advise on and liaise with a program of hydrological and baseline environmental studies which will facilitate future mine development. Since June 2009, two geotechnical boreholes have been fully cored and logged:

• SPGT001 located for o/c and u/g design • SPGT002 located for u/g design.

Basic geotechnical logging of the current exploration boreholes is being carried by site geologists and laboratory testing began in October 2009.

Figure 31. Location of geotechnical drill holes Figure 32. SPGT001: pink is low strength Figure supplied by KRA Figure supplied by KRA

Commencing in June 2009, Australasian Mine Design and Development ("AMDAD") has evaluated open pit and underground preliminary mine designs on the advice of the geotechnical consultants and utilising the Colossus database. AMDAD will optimise these designs pending further geotechnical and resource drilling. The geotechnical studies have identified the red siltstone as suitable for (underground) ramp access to the Serra Pelada mineralization as well as evaluating potential open pit wall slopes. At this stage the open pit option has been set aside and decline access using a 5m by 5m opening with full arch support is being investigated. Excavation by road header is proposed, with ground support by rock bolts and shotcrete. The upper decline path needs to be tested with geotechnical drilling.


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Figure 33. Conceptual plan of possible underground and surface facilities Figure supplied by Colossus

VALE had established a portal for potential underground development, and cleared a site for a proposed treatment plant. A power line to the proposed plant site was installed by VALE. Subject to on-going negotiations with VALE, these facilities may form the basis for development of the Serra Pelada deposit by Colossus, as shown in the conceptual plan above.

Photo 35. Box cut for portal established by VALE Photo taken by D G Jones 21 Nov 2009 at 0646939mE, 9343087mN

Photo 36. Power line to proposed plant site Photo taken by D G Jones 21 Nov 2009 at 0646916mE, 9342711mN


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At present the underground mining method favoured by AMDAD is underhand cut and (paste) fill, a method commonly used for high-grade mineralization in weak rock. It is currently used in 11 gold mines in Nevada (including 4 on the Carlin Trend), at Red Lake and Eskay Creek in Canada, and 5 other mines in 5 other countries.

20.3 Hydrogeological Investigations Australasian Groundwater and Environmental Consultants Pty Ltd (“AGE”) were commissioned by Colossus to provide a summary of the hydrogeological regime of the Serra Pelada mine site and immediate surrounds. Colossus is concerned that a sandstone aquifer system surrounding the mineralization may present the following issues, risks and constraints: • Mine floor and wall stability issues; • High groundwater inflows to the mine and the need for dewatering; • water disposal. Following a site visit from 3-13 August 2009 AGE made recommendations for future work to provide data that will enable the design of a dewatering system. The work undertaken and objectives of the site visit were to:

• view the topographical and geological setting of the site and develop a general appreciation of the hydrogeological regime;

• undertake rising / falling head and / or pump-out permeability tests on selected bores; • locate dewatering bores installed in the area during the 1990’s; • view core samples obtained from two geotechnical holes; • select samples of core for laboratory analysis of permeability; • develop a conceptual strategy for a dewatering system; and • provide recommendations for obtaining data to advance this strategy.

Based on an inspection of the core from the geotechnical holes, inspection of outcrop of the prime rock types and the in-situ permeability tests, AGE concluded that the prime groundwater bearing formation is the decalcified sandstone which ranges from a moderately permeable silty material to a much more permeable clean friable sand. The average permeability of the full saturated thickness of the sandstone is 1.2 X 10-5m/s (0.6 to 1.0m/day), based on the tests of the geotechnical holes. However it is expected that zones of the clean, friable sandstone are likely to have a permeability of between 6 X 10-5m to 1 X 10-4m/s /s (5 to 10m/day). The results of the laboratory tests may provide better data on the variability of the permeability. The other main rock type, a red and green meta-siltstone, although slightly fractured is generally “tight”, but does yield water although in relatively small and manageable quantities. One proposed conceptual mine development consists of a decline commencing outside of the lease boundary within outcrop of the red/grey meta-siltstone. The decline will continue within the metasiltstone to intersect the mineralization. Although the meta-siltstone is “tight” and seepage is likely to be minimal and readily managed, there are groundwater issues that need to be considered in developing the decline, viz:

• higher inflows may occur on intersection of an open fracture or joint. Depending on the continuity of this fracture or joint and connection with the surrounding decalcified sandstone aquifer, the inflows may be short lived or continuous. It is considered however that the fractures/joints, particularly at depth are likely to be tight and the risk of long-term high inflow is minimal.

• floor heave of the decline. This is a potential issue where the decline is close to the contact

between the meta-siltstone and decalcified sandstone, particularly at depth where groundwater pressure in the sandstone will be high if not dewatered / depressurised. A geotechnical assessment of the risk and the level of dewatering required, if any, to prevent floor heave is recommended.


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The mineralization is located in carbonaceous siltstone at the nose of the fold and as such essentially abuts the weak decalcified sandstone which forms the hanging wall of the mine. This presents significant risk of:

• high groundwater inflows from the sandstone; and • an unstable hanging wall.

AGE proposed a conceptual dewatering system with the objective to:

• lower groundwater levels to below the floor level of the mine around the nose of the fold; and

• depressurize the sandstone water levels beneath the meta-siltstone and in so doing to minimize the potential for floor heave of the mine and of the drives and to assist in achieving optimum drawdown levels around the nose of the fold.

The conceptual design suggests that two lines of bores may be required. AGE also recommended that a monitoring bore cased with 60mm PVC casing and slotted over the section of decalcified sandstone below the siltstone core, be constructed. A sand filter should be installed in the bore annulus against the slotted casing to about 6m above the slots and the remainder of the casing grouted with a cement, bentonite mix to hydraulically isolate the lower sandstone section. In-situ permeability tests could then be undertaken in order to obtain data additional to the laboratory data or permeability. AGE recommended that this bore be located such that it can be used as a monitoring bore for a long term pumping test.

Figure 34. Conceptual dewatering bores

Figure supplied by AGE Eleven water observation bores installed by VALE have been identified at Serra Pelada. Although mostly vandalized, these bores represent a large capital expense and AGE estimated that up to $2 million could be saved if they could be rehabilitated, rather than Colossus having to construct new bores. However, there is no data on the construction of the bores, depth screened section, yield etc. AGE recommended that a drilling contractor be engaged to attempt to clean out the bores and redevelop them. Even if this was successful on only a couple of bores, they could be test pumped to obtain data on the aquifer parameters, yield etc enabling further assessment of the feasibility of developing a dewatering system. AGE recommended that:

• once the bores have been cleaned out a down-hole video camera should be run to assess the construction of the bore and the presence, depth and condition of the bore screen and / or slotted casing;

• if the video indicates that the bore is in good condition, it should then be airlift developed until producing clean, sand free water;

• a long term, 48-96 hour, constant rate pumping test should then be undertaken with drawdown monitored in surrounding bores in the decalcified sandstone. This will provide data on the aquifer yield, hydraulic parameters of the aquifer and the suitability of the bore for long term dewatering.

Colossus accepted AGE’s recommendations and in October commenced a program to clean out the existing observation bores.


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Photo 37. Drill rig cleaning out old VALE water bore SPWB 005 Photo taken by D G Jones 21 Nov 2009 at 0647140mE, 9342412mS

Figure 35. Locations of VALE water observation bores Figure supplied by Colossus


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20.4 Environmental Investigations Early in 2008 Colossus invited the United Nations Industrial Development Organisation (“UNIDO”) to undertake a study of the potential impact on the environment of residual mercury from earlier garimpeiro operations at Serra Pelada. UNIDO sponsors the Global Mercury Project, which aims to replace the use of mercury by artisanal miners worldwide with cleaner extraction technologies. During May 2008 Dr Marcello Veiga, Associate Professor at the Norman B Keevil Institute of Mining Engineering, University of British Columbia, Vancouver, Canada, evaluated the mercury levels at Serra Pelada. Dr Veiga was assisted by Mr Luiz Roberto Pedroso. The use of mercury to extract gold in Serra Pelada is not well documented. It is reported, by members of COOMIGASP, that amalgamation was not allowed to be employed at the site and the restriction was well enforced by the Federal Police until 1984 when the pit collapsed and was flooded. After this year miners started to re-process tailings and use mercury. The natural presence of mercury in the Serra Pelada gold ore is also reported (Cabral et al, 2002b). The amount of mercury used and lost in Serra Pelada is not known but local miners estimate something between 20 and 40 tonnes.

20.4.1 Air Monitoring Using a LUMEX RA-915 portable mercury analyzer, Dr Viega analyzed the levels of mercury in the air in and around Serra Pelada village. Natural Hg levels in air in rural areas usually range from 1 to 4 ng/m³ and in urban areas from 10 to 170 ng/cu m. Typically, Hg is found in air as elemental Hg but 1 to 25% can occur in the form of Hg (II), depending on the type of emission source. The limit for public exposure is 1,000 ng/cu m according to the World Health Organization (“WHO”). The level of mercury measured in the air of Serra Pelada village was around 80 ng/cu m. This was about eight times higher than in Parauapebas town (7-10 ng/m³) but still well below the WHO guidelines.

20.4.2 Sampling The use of mercury in the gold extraction in Serra Pelada was very rudimentary. It was reported by local miners that mercury was frequently spread on the riffles of long sluice boxes or used in copper plates to amalgamate the whole ore. Dr Viega observed in the field only 5 artisanal mining operations in Serra Pelada reprocessing tailings, in which 3 of them are using hydraulic monitors and sluice boxes and 2 operations using hammer mills and copper amalgamation plates. Miners obtain material from a 40 to 60 Mt tailings dump left by the former operations.

Photo 38. Remnant tailings dump adjacent to Grota Rica Creek north of the Serra Pelada pit Photo taken by D G Jones 21 Nov 2009


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Photo 39. Sluicing tailings into gravel pump Photo 40. Washing Cu plate with acid Photo taken by Fabricio de Paula, Oct 2006 Photo from Veiga (2008) Two operations grind the tailings in hammer mills (below 1mm) and pass the material over a 120x60 cm copper plate covered with mercury. Before starting, miners clean the copper plate with a car-battery solution of 33.5% sulphuric acid and apply fresh mercury on the plate surface. In operation, they allow the whole ground ore to be in contact with the mercury from the plate. This traps the gold particles forming an amalgam. This process is inefficient as it loses both fine gold particles and mercury by attrition with solids. In order to remove the amalgam trapped on the surface of the plate, miners use acid solution to clean oxidized copper spots and scratch the surface with a piece of plastic. This procedure dissolves some mercury forming Hg (II) compounds which are easily methylated by either aerobic or anaerobic bacteria. All tailings are deposited in the local creeks. Miners re-processing old tailings in hammer mills followed by copper-amalgamation plates recover between 0.7 to 3 g of gold per tonne of material processed. They usually process 30 tonnes of material per week. It is estimated that the method recovers less than 30% of the gold in the tailings. Dr Viega estimated that the amount of mercury being released to the environment by this operation is around 16 kg/year. If this number is extrapolated to the other 4 operations still active in the area, something around 80 kg of Hg is still being released to the environment in the Serra Pelada area. Samples of sediment and water were collected around and in the flooded open pit. Fish samples were collected by a local angler in the flooded pit.

20.4.2.1 Sediment Sample Results In the laboratory of the Department of Mining Engineering of the University of Pará, Marabá campus, all sediment samples were wet sieved in a 1 mm nylon screen using tap water. About 200 g of material below 1 mm was dried in an oven at temperature below 50 °C. Only this material was homogenized and packed to be sent to the analytical labs. The material above 1 mm, usually rich in quartz fragments, was not analyzed. In Dr Viega’s experience in other mercury assessment projects he observed that metallic mercury concentrates in the fine fractions. Total mercury analyses of sediments were performed in Vancouver, Canada (ALS Lab) and in the Evandro Chagas Institute (ECI) from the Ministry of Health, Belém, Pará State, Brazil. The bottom sediments of the flooded open pit were found to be contaminated with metallic mercury but the mercury concentrations are considered moderate when compared with other artisanal gold mining sites elsewhere in the world. The health effects caused by long-term exposure of the local population to these low levels of mercury are not known. The methylation process occurring at the bottom of the flooded pit was confirmed by medium levels (0.6 to 0.8 mg Hg/kg) of total mercury in small (15-20 cm) carnivorous fish (“traíra”) sampled in Serra Pelada. It is reasonable to believe that a significant part of the methyl mercury being formed in the flooded pit comes from the acid-soluble mercury being introduced in the water streams when miners use copper-amalgamation plates. Dr Viega recommended that this practice be stopped immediately.


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20.4.2.2 Water Sample Results Filtered (0.2 μm) water samples show normal levels of mercury usually found in natural fresh water bodies. All water samples show Hg levels in solution below the Brazilian Conselho Nacional do Meio Ambiente (“CONAMA”) Resolution #347 guidelines for mercury in fresh water (0.2 μg Hg/L). In seawater, the normal Hg concentration is around 0.05 μg/L Hg; in freshwater, the average concentration in world streams is around 0.07 μg/L Hg. Canadian freshwaters range from <0.005 to 0.24 μg/L Hg (Canadian Fresh Water Guidelines, 1987). According to Dr Viega, there would be no problem in relation to Hg if the water from the flooded pit were to be discharged into the surrounding water streams if the pit needs to be drained. If the pit were to be emptied, Dr Viega suggested either to process the Hg contaminated bottom sediments in order to remove the mercury and/or cover the sediments with a reactive material. This would immobilize the methyl mercury already formed at the bottom of the pit. The process of emptying the pit must be well controlled and monitored to avoid transport of suspended Hg-contaminated particles to the water streams. Dr Viega recommended filling the pit with tailings from the “montoeira” (old tailing dump) after reprocessing this material to extract gold. This is the best choice to keep safely covered the methyl mercury at the bottom of the pit. Evaluation of the natural levels of mercury in the Serra Pelada ore is also recommended.

20.4.3 Mercury Levels in Drill Core More than 1,380 core intervals (generally 0.5m to 1.0m in length) that have been sampled for other elements have also been assayed for Hg. The overwhelming majority of samples returned less than the assay detection limit of 0.2ppm Hg. A single 1.45m sample from 219.40m to 220.85m in hole SPD-34 returned 16ppm Hg, and from 4.1m to 5.7m in hole SPD-40 returned 9ppm Hg. The remaining samples rarely exceeded 1ppm Hg. Most sedimentary rocks contain around 0.02ppm Hg, while the average for carbonaceous shales is 0.2ppm Hg.

20.4.4 Mercury Levels in RC Drill Holes The Colossus RC drill holes tested the tailings stockpiled northwest of the Serra Pelada pit. A total of 60 1m intervals from 39 holes were analysed for Hg. Most samples returned less than the assay detection limit of 1ppm Hg. A single sample from hole TBA-39 returned 3ppm Hg, and 9 samples registered 1ppm Hg.

20.4.5 Uranium Levels in Drill Core More than 230 intervals from Colossus drill core (generally 0.5m to 1.0m in length) have been analysed to date for uranium. The average uranium content is 15ppm U, with a maximum of 95ppm U over a 0.56m interval in hole SPD-20A. The natural uranium content of rocks varies from 0.5 to 5ppm U. The uranium content of the Serra Pelada mineralization is slightly to moderately anomalous, but does not reach sufficient levels to trigger the need for special handling. An activity concentration of 1 becquerel per gramme (“Bq/g”) is currently the internationally-accepted level for defining the scope of regulation for naturally occurring materials containing uranium and thorium. This generally equates to around 80ppm U. In addition, to date Colossus has analysed 117 intervals of VALE drill core (generally 0.5m to 1.0m in length). The average is slightly higher, at 23ppm U, and the maximum reading was 145ppm U in a 1.5m interval in hole FD-104.


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20.4.6 Pit Water pH A series of 24 pit water samples were taken by Colossus periodically from different locations in the pit and tested for pH. The pit water meets WHO environmental standards for potable drinking water, with the pH falling within or very close to the range 6-9 recommended by WHO. Figure 36. pH measurements of water in the

Serra Pelada pit Figure compiled by D G Jones from data supplied by

Colossus

20.4.7 Estudo de Impacto Ambiental (EIA) The EIA for Serra Pelada was submitted to the Pará Secretaria Estadual de Meio Ambiente (Pará State Secretariat for the Environment – “Sema”) in September 2009. Public hearings concluded in December 2009 and the Pará State authorities are considering the submissions made at those hearings before issuing the environmental licence for a mining operation. The EIA is a comprehensive document in Portugese containing more than 750 pages of text, 272 figures, 106 photos, 33 maps, 253 tables, and 6 appendices. The Executive Summary is attached to this report as Appendix 2.


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21 INTERPRETATION AND CONCLUSIONS • The investment by Colossus in earning its 75% share of the Serra Pelada joint venture has

been entirely justified by the excellent results achieved to date in the systematic drill testing of the deposit.

• Exploration by Colossus since November 2007 has identified potentially economic mineralization below the depth reached by past garimpeiro mining.

• The exploration by Colossus has been carried out to standards in excess of industry norms.

In particular, the attention to sample security and chain of custody between the drill rig and the assay laboratory has been exemplary.

• The extraordinarily high grades achieved in some drill intersections, over many metres of

contiguous samples, have been verified by Quality Assurance and Quality Control (“QA/QC”) procedures adopted by Colossus and its laboratory contractors that are far more stringent than those normally used in exploration.

• Preliminary geotechnical and mining studies indicate that underground access by an

exploration decline is technically feasible at Serra Pelada.

• The excellent infrastructure in this historic mining district is a significant positive factor in the potential development of the Serra Pelada project.

• In Vidoro’s opinion, the CAD $25M budget for Serra Pelada proposed for 2010 by Colossus is

sensible and justified given the advanced state of the project. The budget and programme for 2010 is summarized below:


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22 RECOMMENDATIONS • The Serra Pelada Gold Platinum Palladium project has reached a stage where significantly

increasing the current 25m line spaced drill density from surface will be costly and time prohibitive. An exploration decline to provide underground access for closer-spaced drilling is likely to prove more cost-effective than drilling long holes from surface. The CAD $8M expenditure proposed by Colossus to establish underground access in 2010 is reasonable and endorsed by Vidoro. The additional $5M proposed expenditure on exploration drilling from underground is practical and entirely justified.

• More metallurgical test work is required. Various flotation parameters should be examined as

well as optimizing gravity separation. The budget of $250,000 proposed for 2010 by Colossus is modest and may require supplemental funding.

• The proposed exploration decline will be necessary to detail the distribution of high grade

subzones ahead of production as well as clarifying mining methods and optimizing the metallurgical plant. The design of the decline and related underground development, as proposed by Colossus, will facilitate bulk sampling for such purposes and facilitate timely production.

• The ongoing geotechnical and mining studies are appropriate for a project at this stage of its evaluation and should be continued.

• The 2010 budget proposed by Colossus includes $3M on site works, which Vidoro agrees will be absolutely necessary to support the ambitious programme.

For and on behalf of Vidoro Pty Ltd

David G Jones Effective Date: 31st January 2010


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23 REFERENCES Alkmim, F.F., and Marshak, S., 1998. Transamazonian Orogeny in the Southern São Francisco Craton region, Minas Gerais, Brazil: Evidence for Paleoproterozoic collision and collapse in the Quadrilátero Ferrífero. Precambrian Research, v. 90, pp 29–58. Araújo, O.J.B., Maia, R.G.N., Jorge-João, X.S. and Costa, J.B.S, 1988. A Megastruturação Arqueana da Folha Serra dos Carajás, in Congresso Latino-Americano Geologia No. 7, pp 324-333. Barros, C.E.M., Sardinha, A.S., Barbosa, J.P.O., Krimski, R., and Macambira, M.J.B., 2001. Pb-Pb and U-Pb zircon ages of Archean syntectonic granites of the Carajás metallogenic province, northern Brazil. Third South American Symposium on Isotopic Geology, Proceedings. pp 94–97. Berger, B.R and Bagby, W.C., 1993. The Geology and Origin of Carlin-type Gold Deposits, in R.P. Foster (editor) Gold Metallogeny and Exploration, Chapman and Hall, London, pp 210-248. Bernasconi, A., 1988. The Precambrian Gold Metallogeny of South America. in Goode, A.D.T. & Bosma, L.I. (Editors): BiCentennial Gold ‘88, Abstracts, pp 24-29. Cabral, A.R., Lehmann, B., Kwitko-Ribeiro, R. and Costa, C.H.C., 2002a. Palladium and Platinum Minerals from the Serra Pelada Au-Pd-Pt Deposit, Carajás Mineral Province, Northern Brazil. Can. Mineralogist Vol. 40, pp 1451-1463. Cabral, A.R., Lehmann, B., Kwitko-Ribeiro, R. and Costa, C.H.C., 2002b.The Serra Pelada Au-Pd-Pt Deposit, Carajás Mineral Province, Northern Brazil: Reconnaissance Mineralogy and Chemistry of Very High Grade Palladian Gold Mineralization. Economic Geology Vol. 97, pp 1127–1138. Cathelineau, M., 1988. Cation Site Occupancy in Chlorites and Illites as a Function of Temperature. Clay Minerals Vol. 23, pp 471-485. Connor, C., and O’Haire, D., 1988. Roadside Geology of Alaska. Mountain Press, Missoula. 250p. VALE, 2006. Gold Resources at the Serra Pelada Mine. Report to DNPM on Exploration License 850.425/90. Belo Horizonte. 63p. Davidson, G.J. and Large, R.R., 1994. Gold Metallogeny and the Copper-Gold Association of Australian Proterozoic. Mineralium Deposita Vol. 29, pp 208-223. Distler, V.V., Marina A. Yudovskaya, M.A., Mitrofanov, G.L., Prokof’ev, V.Y., Lishnevskii, E.N., 2004. Geology, composition, and genesis of the Sukhoi Log noble metals deposit, Russia. Ore Geology Reviews Vol. 24, pp 7-44. DNPM, 2005. Serra Pelada: Aprovado edital de readequação de ex-associados da Coogar. Boletim Informativo do Departamento Nacional de Produção Mineral - Ministério de Minas e Energia - ANO 1 Nº 5 - Maio de 2005. DNPM, 2007. DNPM emite alvará de pesquisa para Serra Pelada. Boletim Informativo do Departamento Nacional de Produção Mineral - Ministério de Minas e Energia - ANO 3 Nº 23 - Fevereiro e Março de 2007. Einaudi, M.T., Meinert, L.D. and Newberry, R.J., 1981. Skarn Deposits. Economic Geology, 75th Anniversary Volume pp 317-391. Emmanuel, S. and Ague, J.J., 2007. Implications of present-day abiogenic methane fluxes for the early Archean atmosphere. Geophysical Research Letters, Vol.34, No.15, pp 1-4. Filho, C.R de S., Nunes, A.R., Leite, E.P., Monteiro, L.V.S., and Xavier, R.P., 2008. Spatial Analysis of Airborne Geophysical Data Applied to Geological Mapping and Mineral Prospecting in the Serra Leste Region, Carajás Mineral Province, Brazil. Surv. Geophys. Vol. 28, pp 377–405. Fisher, W.J., 1969. Mining Practice in the South Alligator Valley. Atomic Energy of Australia, 12 (4), pp 25-40. Goldschmidt, V.M., 1922. On the Metasomatic Processes in Silicate Rocks. Econ.Geol. Vol.17, pp 105-123. Grainger, C.J., Groves, D.I., and Costa, C.H.C., 2002. The Epigenetic Sediment-Hosted Serra Pelada Au-PGE Deposit and Its Potential Genetic Association with Fe Oxide Cu-Au Mineralization within the Carajás Mineral Province, Amazon Craton, Brazil. Econ. Geol.Sp. Pub. No.9, pp 47-64. Grainger, C.J., Groves, D.I., Tallarico, F.H.B., and Fletcher, I.R., 2008. Metallogenesis of the Carajás Mineral Province, Southern Amazon Craton, Brazil: Varying styles of Archean through Paleoproterozoic to Neoproterozoic base- and precious-metal mineralisation. Ore Geology Reviews Vol.33, pp451-489. Groves, D.I., Barley, M.E., Cassidy, K.C., Hagemann, S.G., Ho, S.E., Hronsky, J.M. A., Mikucki, E.J., Mueller, A.G., McNaughton, N.I., Perring, C.S., and Ridley I.R., 1991. Archean lode-gold deposits: The products of crustal-scale hydrothermal systems. in Ladeira, E.A. (Editor): Brazil Gold ‘91, Balkama, Rotterdam, pp 299-305.


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Hartmann, L.A., and Delgardo, I de M., 2001. Cratons and Orogenic Belts of the Brazilian Shield and their contained Gold Deposits. Mineralium Deposita, v. 36, pp 207-217. Hirata, W.K., 1982. Geologia Regional, in Sympósio de Geologia da Amazônia No.1, Belém. Anexo aos Anais, pp 9-20. Huhn, S.R.B., Santos, A.B.S., Amaral, A.F., Ledsham, E.J., Gouveia, J.L., Martins, L.P.B., Montavão, R.M.G., and Costa, V.C, 1988. O Terreno Granito Greenstone da Região de Rio Maria, Sul do Pará, in Congresso Brasileiro de Geologia 35, Vol. 3, pp 1438-1452. Jones, D.G., and Hall, G.C., 2007. Technical Report on the Serra Pelada Gold-Platinum-Palladium Project in Para State, Brazil, for Colossus Minerals Inc. Report filed on SEDAR 21 Dec 2007. 57p. Leckie, J.F., and Linke, J.A., 1998. An Assessment of the Coronation Hill Resources and the Potential for Additional Resources. Coronation Hill Joint Venture. 39p. King, L.C., 1956. A Geomorfologia do Brasil Oriental. Rev. Brasil. Geogr. Vol.18, pp 147-265. Large, R.R., Danyushevsky, L.V., Scott, R.J., Meffre, S., Zaoshan Chang, Z. and Maslennekov, V.V., 2006. The Source and Timing of Gold in Orogenic Gold Deposits; a Case Study from the Giant Sukhoi Log Sediment-Hosted Deposit in Siberia. AMIRA Project P923, 5th Sponsors Meeting, Hobart. Leonardos, O.A., Jost, H., and Oliveira, C.G., 1991. Gold deposits and shear zone relationships in the Precambrian of Brazil: in Principais Depósitos Minerais do Brasil. Vol.III, DNPM/VALE. pp 167-169. Machado, N., Lindenmayer, Z.G., Krogh, T.E., and Lindenmayer, D.H., 1991. U-Pb Geochronology of Archean Magmatism and Basement Reactivation in the Carajás Area, Amazon Shield, Brazil. Precambrian Research Vol. 49, pp 329-354. Malkovets, V.G., W.L. Griffin, W.L, O'Reilly, S.Y. and Wood, B.J., 2007. Diamond, subcalcic garnet, and mantle metasomatism: Kimberlite sampling patterns define the link. Geology Vol.35, No.4., pp 339-342. Meireles, E.M. and Silva, A.R.B., 1988. Depósito de ouro de Serra Pelada, Marabá, Pará. in Principais Depósitos Minerais do Brasil, Vol.3, (C. Schobbenhaus C & C.E.S. Coelho, eds.). DNPM, Brasília, pp 547-557. Mernagh, T.P., Heinrich C.A., Leckie J.F., Carville D.P., Gilbert D.J., Valenta R.K., & Wyborn, L.A.I., 1994. Chemistry of Low-Temperature Hydrothermal Gold, Platinum and Palladium (± Uranium) Mineralization at Coronation Hill, Northern Territory, Australia. Economic Geology Vol.89 No.5, pp 1053-1073. Mitrofanov, G.L., Nemerov, V.K., Korobeinikov, N.K., Semeikina, L.K., 1994. Platinonosnyi potencial pozdnedokembriiskish uglerodistysh formacii Baikalo-Patomskogo nagor’ya. Platina Rossii. Problemy razvitiya mineral syr’evoi bazy platinovykh metallov. Geoinformmark, Moscow, pp. 150– 154. In Russian. Mountain B.W. and Wood, S.A. 1988. Solubility and Transport of Platinum-Group Elements in Hydrothermal Solutions: Thermodynamics and Physical Chemical Constraints, in Geo-platinum 87, Elsevier, London, pp 57-82. Pinheiro, R.V.L. and Holdsworth, R.E., 1997. Reactivation of Archean Strike-Slip Fault Systems, Amazon Region, Brazil. Journal of the Geological Society, Vol. 154, pp 99-103. Pitard, F.F, 1993. Pierre Gy's Sampling Theory and Sampling Practice, Second Edition: Heterogeneity, Sampling Correctness, and Statistical Process Control. CRC Press. Pitard, F.F, 2001. A Strategy to minimize ore grade reconciliation problems between the mine and the mill, in Mineral Resource and Ore Reserve Estimation – The AusIMM Guide to Good Practice (Ed: A C Edwards). The AusIMM., pp 557-566. PWC, 2007. Mine: Riding the Wave. Price Waterhouse Coopers Review of Global trends in the Mining Industry 2007. 100 p. Ronze, P.C., Soares, A.D.V., dos Santos, M.G.S. and Barreira, C.F., 2000. Alemão Copper-Gold (U-REE) Deposit, Carajás, Brazil, in Porter T.M. (editor), Hydrothermal Iron-Oxide-Copper-Gold and Related Deposits: A Global Perspective. Aust Mineral Foundation, Adelaide, pp 191-202. Suita, M.T.F. and Nilson, A.A., 1988. Geologia do Complexo Máfico-Ultramáfico Luanga (Provincia de Carajás, Pará) e das Unidades Encaixantes, in Congresso Brasileiro de Geologia No. 35, Belém, Anais Vol. 6, pp 2813-2823. Tallarico, F.H.B., Coimbra, C.R. and Costa, C.H.C., 2000. The Serra Leste Sediment-Hosted Au-(Pd-Pt) Mineralization, Carajás Province. Revista Brasileira de Geosciênces, Vol. 30 No. 2, pp 226-229. Threadgold, I.M., 1960. The Mineral Composition of Some Uranium Ores from the South Alligator River Area, Northern Territory. Mineragraphic Investigations Technical Paper No.2., CSIRO (Melbourne).


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Tracy, R.J. and Frost, B.R., 1991. Phase Equilibria and Thermobarometry of Calcareous, Ultramafic and Mafic Rocks, and Iron Formations, in D.M. Kerrick (editor) Contact Metamorphism. Min. Soc. America Reviews in Mineralogy, Vol. 26, pp 207-290. Ueno, Y., Yamada, K., Yoshida, N., Maruyama, S. and Isoyaki, Y., 2006. Evidence from fluid inclusions for microbial methanogenesis in the early Archaean era. Nature, Vol.440, No.7083, pp 516-519. Vieira, F.W.R., 1991. The Black Palladium Gold of the Iron Quadrangle, Minas Gerais, Brazil, Revisited: in Brazil Gold ‘91 (ed. Ladeira E.A.). Balkema, Rotterdam. pp 319-325. Villas, R.N., & Dias Santos, M., 2001. Gold Deposits of the Carajás Mineral Province: Deposit Types and Metallogenesis. Mineralium Deposita Vol.36, pp 300-331. Watkinson, D.H. and Melling, D.R., 1992. Hydrothermal Origin of Platinum-Group Mineralization in Low-Temperature Copper Sulphide-Rich Assemblages, Salt Chuck Intrusion, Alaska. Economic Geology Vol. 87, pp 175-184. Wilde, A.R., Bloom, M.S. and Wall, V.J., 1989. Transport and deposition of gold, uranium and platinum-group elements in unconformity-related uranium deposits. In: Keays RR et al (eds) The Geology of Gold Deposits: the perspective in 1988: Economic Geology Monograph 6: pp 637-650. Wyborn, L.A.I., Valenta, R.K., Needham, R.S., Jagodzinski, E.A., Whitaker, A and Morse, M.P., 1990. A review of the geological, geophysical and geochemical data of the Kakadu Conservation Zone as a basis for assessing the resource potential. Report by Bureau of Mineral Resources, Australia to Resource Assessment Commission Inquiry on the Kakadu Conservation Zone. Yakubchuk, A. S. & Nikishin, A. M. 2005. Russia, in: Selley, R. C., Cocks, L. R. M. & Plimer, I. R. (eds), Encyclopedia of Geology, Vol. 4, pp 456-473 Elsevier Academic Press.


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GLOSSARY OF TECHNICAL TERMS This glossary comprises a general list of common technical terms that are typically used by geologists. The list has been edited to conform in general to actual usage in the body of this report. However, the inclusion of a technical term in this glossary does not necessarily mean that it appears in the body of this report, and no imputation should be drawn. Investors should refer to more comprehensive dictionaries of geology in printed form or available in the internet for a complete glossary. AAS Atomic absorption spectroscopy - an analytical technique whereby a sample is vaporized and its nonexcited atoms are identified and quantified by the electromagnetic radiation they absorb at characteristic wavelengths. aeromagnetic survey Systematic measurement and collection, from an aircraft, of the earth’s magnetic field at regular intervals. Ag The chemical symbol for gold. alluvial deposit A mineral deposit consisting of recent surface sediments laid down by water. alteration The change in the mineral composition of a rock, commonly due to hydrothermal activity. alteration zone A zone in which rock-forming minerals have been chemically changed. amphibole A silicate mineral with a crystal structure characterized by a double chain of linked silicate tetrahedra with the general formula (Ca, Na, K)2(Mg, Fe, Al, Ti)5(Si,Al)8O22(OH)2 . andesite A fine-grained, dark-coloured extrusive rock. anomaly A departure from the expected or normal background. Archean The eon extending from the formation of the Earth about 4500 Ma to the beginning of the earliest forms of life around 542 Ma. arsenopyrite A mineral with the chemical composition FeAsS. As The chemical symbol for arsenic. Au The chemical symbol for gold. AusIMM Australasian Institute of Mining and Metallurgy. basalt A dark-coloured igneous rock. base-metal A non-precious metal, usually referring to copper, lead and zinc. basic Used to describe an igneous rock having relatively low silica content. biotite A dark-coloured mica. Bouma sequence A succession of characteristic sediment intervals starting at the bottom with graded bedding in fine sandstone, passing up to laminations, then current ripples, more laminae, with fine mudstone at the top. breccia A rock composed of angular rock fragments. bulk sample A large volume of soil or rock obtained for examination or analysis. Ca The chemical symbol for calcium. Cainozoic An era of geological time from the end of the Mesozoic to the present. calcalkaline Igneous rocks containing calcium-rich feldspar. Cambrian A period of geological time approximately from 506 Ma to 544 Ma. Carboniferous A period of geological time approximately from 295 Ma to 355 Ma. chalcopyrite A mineral of copper with the chemical formula CuFeS2. chert Crypto-crystalline silica. chlorite A generally green or black talcose layered mineral with the formula (Mg,Fe,Al)6(Si,Al)4O10(OH)8, often formed by metamorphic alteration of primary mafic minerals. clastic A rock composed principally of fragments derived from pre-existing rocks. comagmatic A set of igneous rocks that are regarded as being derived from a common parent magma. complex An assemblage of rocks of various ages and origins intricately mixed together. conglomerate A sedimentary rock formed by the cementing together of water-rounded pebbles, distinct from a breccia. cordierite A very hard metamorphic mineral with the formula Mg2Al4Si5O18, often formed by metamorphic alteration of clay. costean A trench excavated in the surface for the purpose of geological investigation. Cu The chemical symbol for copper. craton A major part of the Earth’s crust that has been stable and little deformed for a long time. Cretaceous A period of geological time approximately from 65 Ma to 135 Ma. crosscut A level driven across the main direction of underground mine workings.


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crypto- A prefix meaning hidden or invisible to the naked eye. cut-off grade The lowest or highest assay value that is included in a resource estimate. dacite A fine-grained extrusive rock composed mainly of plagioclase, quartz and pyroxene or hornblende or both. It is the extrusive equivalent of granodiorite. Devonian A period of geological time approximately from 355 Ma to 410 Ma. diamond drilling Rotary drilling technique using diamond set or impregnated bits, to cut a solid, continuous core sample of the rock. The core sample is retrieved to the surface, in a core barrel, by a wire line. dilution The proportion of material which is inadvertently included during mining operations, and which is generally of a significantly lower grade than the ore zone of interest. diorite A coarse-grained intrusive rock consisting mostly of plagioclase and dark mafic minerals. dip The angle at which any planar feature is inclined from the horizontal. dolerite An intrusive rock consisting mostly of dark mafic minerals. dolomite A rock containing >15% magnesium carbonate. dyke A tabular igneous intrusion that cuts across the bedding or other planar structures in the host rock. eluvial Material derived from decomposed exposed rocks that may have been washed, fallen, or blown by the wind for a short distance EM survey Electromagnetic survey. A method of measuring the alternating magnetic fields associated with electrical currents artificially or naturally maintained in the subsurface. A technique often used to identify massive sulphide deposits. Eon Two or more Eras form an Eon, the largest sub-division of geological time. epigenetic Originating at or near the Earth’s surface; mineral deposits formed later than the enclosing rocks. Epoch The smallest, most basic unit of geological time is the Age. An epoch comprises two or more Ages. Era Two or more Periods comprise a geological Era. euhedral A term applied to grains displaying fully-developed crystal form. ex- A prefix meaning without. exhalative A rock formed from the solidification of volcanic gases or vapours, often on the sea floor. extrusive Igneous rock that has been erupted on to the surface of the earth. Fe The chemical symbol for iron. feldspar A group of abundant rock-forming minerals with the general formula M(Al,Si)3O8, where M can be Na or K. felsic Light coloured rocks containing an abundance of feldspars and quartz. foliation A planar arrangement of features in any type of rock. Ga Billion years ago. gabbro A coarse-grained intrusive igneous rock composed chiefly of plagioclase feldspar and pyroxene. gneiss A banded rock formed during high-grade regional metamorphism. gossan A ferruginous deposit remaining after the oxidation of the original sulphide minerals in a vein or ore zone. graben An elongate, relatively depressed crustal unit or block that is bounded by faults on its long sides. granitoids A general term to describe coarse-grained, felsic intrusive plutonic rocks, resembling granite. granodiorite A coarse-grained granitic rock containing quartz, feldspar and biotite. granular Used to describe a rock composed of grains of approximately equal size. granulite A metamorphic rock with a granular texture. gravity survey Systematic measurement and collection of the earth’s gravitational field at the surface at regular intervals. Used to discern different rock types based on associated variations with differences in the distribution of densities, and hence rock types. greenschist A schistose metamorphic rock which owes its green color and schistose to abundant chlorite and lesser epidote and/or actinolite. greywacke A poorly sorted, fine to coarse-grained rock composed of angular to sub-angular particles that are mainly fragments of other rocks. hematite A mineral that is the main source of iron, with the chemical formula Fe2O3. The crystals form in the rhombohedral system (like a stretched and skewed cube). hematitic Containing hematite. idiomorphic A grain bounded by perfect crystal faces.


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ignimbrite The rock formed by the widespread deposition and consolidation of volcanic ash flows (=welded tuff). indicated resource A mineral resource sampled by drill holes, underground openings or other sampling procedures at locations too widely spaced to ensure continuity but close enough to give a reasonable indication of continuity, and where geoscientific data is known with a reasonable level of reliability. inferred resource A mineral resource inferred from drill holes, geoscientific evidence, underground openings or other sampling procedures where the gaps in the data are such that continuity cannot be predicted with confidence, and where geoscientific data may not be known with a reasonable level of reliability. intermediate Igneous rocks whose composition is intermediate between felsic and mafic rocks. intracratonic Within a large, stable mass of the earth’s crust. I-type granite A granite that results from igneous magmatic processes. JORC Joint Ore Reserves Committee - The Australasian Institute of Mining and Metallurgy. The guidelines of the JORC Code (1999) are observed in the calculation and reporting of ore resources and ore reserves. Jurassic A period of geological time approximately from 135 Ma to 203 Ma. K The chemical symbol for potassium. komatiite A mantle-derived igneous rock with a high content of magnesium. LandSat imagery Reflective light data of the earth’s surface collected by the LandSat satellite and commonly processed to enhance particular features. Includes the visible and invisible light spectrums. lithic tuff A tuff containing fragments of previously formed non-pyroclastic rocks. Ma Million years ago. mafic A dark-coloured rock composed dominantly of magnesium, iron and calcium-rich rock-forming silicates, and for rocks in which these minerals are abundant. magma Naturally occurring molten rock, generated within the earth. magnetic anomalies Zones where the magnitude and orientation of the earth’s magnetic field differs from adjacent areas. magnetic survey Systematic collection of readings of the earth’s magnetic field. The data are collected on the surface or from aircraft. magnetite A magnetic ore of iron with the chemical formula Fe3O4. The crystals are octahedral, like two four-sided pyramids joined at the base. manganiferous Containing manganese. mantle The zone in the earth between the crust and the core. martite A mineral that results from the oxidation of magnetite (Fe3O4) to haematite (Fe2O3) but which retains the octahedral crystal shape of magnetite. massive sulphides Rock containing abundant sulphides that constitutes close to 100% of the rock mass. Mesoproterozoic An era of geological time approximately from 1000 Ma to 1600 Ma. mesothermal Mineral deposits formed (precipitated) at moderate temperatures. Mesozoic An era of geological time approximately from 65 Ma to 248 Ma. meta- A prefix denoting metamorphism of the rock so qualified. metamorphism The mineral, chemical and structural adjustment of solid rocks to new physical and chemical conditions that differ from those under which the rocks originated. meteoric water Water derived from the earth’s atmosphere. Mg The chemical symbol for magnesium. mica A common mineral composed of a three-layered silicate lattice having a perfect cleavage. micaceous Containing mica. migmatite A metamorphic rock with a granular texture. Mo The chemical symbol for molybdenum. molybdenite The main ore of molybdenum; a lead-grey hexagonal mineral with composition MoS2. monzogranite A granular plutonic rock with a composition between monzonite and granite. muscovite A common mica that is essentially transparent. Na The chemical symbol for sodium. nappe A sheet-like block of rock that has moved predominantly horizontally. Neoproterozoic An era of geological time approximately from 544 Ma to 1000 Ma. O The chemical symbol for oxygen. olivine A silicate mineral with the general formula R2SiO4, where R can be Mg, Fe, Mn or Ca. Ordovician An era of geological time approximately from 435 Ma to 500 Ma. orogen Linear, deformed belts of rocks that form mountain chains.


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orogenic Originating with, or related to, an orogeny. orogeny The process of mountain-building. Ortho- A prefix meaning straight or regular. ortho-gneiss A gneiss presumed to have formed from an igneous rock. oxide Pertaining to weathered or oxidized rock. Paleoproterozoic An era of geological time approximately from 1600 Ma to 2500 Ma. Paleozoic An era of geological time approximately from 248 Ma to 544 Ma. pelite A sediment or sedimentary rock composed of the finest detritus (clay or mud-sized particles). penecontemporaneous Formed at almost the same time. percussion A method of drilling where the rock is broken into small chips by a hammering action. peridotite An ultramafic rock consisting mostly of olivine. Permian An era of geological time approximately from 248 Ma to 295 Ma. Period The basic unit of geological time in which a single type of rock system is formed. Phanerozoic The eon of geological time extending from 542 Ma to the present. phenocryst One of the relatively large and conspicuous crystals in a porphyritic rock. phyllite A metamorphosed rock, intermediate between slate and schist. Micaceous minerals impart a sheen to the cleavage surfaces, which are commonly wrinkled. phyllitic An adjective describing a rock that has the structure of a phyllite. pitchblende A massive brown to black variety of uraninite. placer A Spanish word meaning “sand bank” used to refer to sand and gravel in modern or ancient stream beds that contain precious metals. plagioclase A sub-group of the feldspar minerals with the general formula M(Al,Si)3O8, where M can be K, Na, Ca, Ba, Rb, Sr or Fe. plunge The attitude of a line in a plane which is used to define the orientation of fold hinges, mineralized zones and other structures. pluton A body of igneous rock presumed to be of deep-seated origin. podsol A group of zonal soils having a very thin organic-mineral layer overlying a gray, leached horizon and a dark brown, horizon enriched in iron oxide, alumina, and organic matter developed under coniferous or mixed forests. poikioblastic A granitic texture in which large crystals contain smaller crystals of other minerals. porphyritic Descriptive of igneous rocks containing relatively large crystals set in a finer-grained groundmass. porphyroblast A large, more or less euhedral crystal, that has grown during the process of metamorphism. ppb, ppm Parts per billion, parts per million (quantitative equivalent of g/t). Precambrian Geological time extending from 542 Ma to 4500 Ma. Proterozoic An eon of geological time approximately from 542 Ma to 2500 Ma. pyrite A common iron sulphide mineral with the chemical formula FeS2. pyrrhotite A common iron sulphide mineral with the chemical formula Fe1-xS where x varies from zero to 0.2. quartz A common silica mineral with the chemical formula SiO2. RAB drilling Rotary Air Blast drilling - a method of rotary drilling in which sample is returned, using compressed air, to the surface in the annulus between drill-rod and the drill-hole. This is a relatively inexpensive but less accurate drilling technique than RC or diamond coring. radiometric survey Systematic collection of radioactivity emitted by rocks at or near the earth’s surface; usually collected by helicopter or fixed wing aircraft. RC drilling Reverse Circulation drilling - a method of rotary drilling in which the sample is returned to the surface, using compressed air, inside the inner-tube of the drill-rod. A more accurate drilling technique than simple percussion drilling, the RC technique minimizes contamination. refractory Descriptive of ore difficult to treat for recovery of valuable minerals. rhyolite A volcanic rock composed chiefly of potassium feldspar and quartz. rift basin A large fault-bound depression, in-filled with volcanic and/or sedimentary material. RL Relative Level – usually used in relation to height above sea level or some other datum. S The chemical symbol for sulphur. schist Strongly foliated crystalline metamorphic rock. Elongate minerals tend to be aligned in parallel. schistose A rock that has the structure of a schist. scintillometer An instrument that measures ionising radiation by counting the flashes of light sericite A white, fine-grained mica, usually formed as an alteration product of various silicates in metamorphic rocks and the wall rocks of ore deposits.


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shear zone A zone in which rocks have been deformed primarily in a ductile manner in response to applied stress. sheetwash A widely distributed, thin blanket of sediment deposited in a broad, poorly defined drainage. SHRIMP “Sensitive High-Resolution Ion Microprobe”, a very accurate method of determining the ages of rocks. Si The chemical symbol for silicon. silicified The alteration or replacement of primary minerals by silica. Silurian An era of geological time approximately from 410 Ma to 435 Ma. skarn A thermally metamorphosed impure limestone. slate Metamorphosed shale that can be split into slabs and thin plates. soil sampling The collection of soil specimens for mineral analysis. stockwork A network of (usually) quartz veinlets produced during pervasive brittle fracture. Specific gravity (SG) The weight of an object in air compared to the weight of an equal volume of water stratabound Occurring within and parallel to the rock strata, but not necessarily deposited at the same time. stratiform Occurring within and parallel to the rock strata, and deposited at the same time. stratigraphic column A depiction of the layers of rocks in the sequence in which they were formed. stream sampling The collection of stream sediments for mineral analysis. strike The direction or bearing of a geological structure on a level surface, perpendicular to the direction of dip. stringer A small, thin discontinuous or irregular veinlet. subduction The process where one slab of the Earth’s crust descends beneath another. syncline A basin-shaped fold. syntectonic Occurring or forming at the same time as deformation and metamorphism. t, tpa Metric tonne, tonnes per annum. tectonics The processes that create the broad architecture of the surface of the earth. tectonism A general term for all movement of the crust produced by tectonic processes. Tertiary Applied to the first period of the Cainozoic era, 1.8Ma to 65Ma. tholeiitic A term applied to mafic or ultramafic rocks composed predominantly of magnesium-rich feldspar and pyroxene minerals. tonalite A diorite containing >20% quartz. tourmaline A complex silicate mineral containing aluminum and boron with varying quantities of many other elements. Transamazonian Orogeny An orogeny that built a mountain chain in South America about 2100 Ma. trench A long, narrow depression in the sea floor. trondjhemite A granodiorite in which K feldspar is absent. tuff General term for all consolidated volcanic rocks derived from volcanic explosions into the air. turbidite A sediment resulting from an underwater landslide. ultramafic Igneous rocks consisting essentially of ferro-magnesium minerals with trace quartz and feldspar. vesicular Term for an igneous rock containing small cavities, caused by small bubbles being trapped during the solidification of the rock. volcaniclastic A sedimentary clastic rock containing volcanic material. volcanogenic Of volcanic origin. W The chemical symbol for tungsten.


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APPENDIX 1

Tenement Information

Dados básicos do processo

Número do processo:

850.425/1990

T ipo derequerimento:

Requerimento de Lavra Garimpeira

Fase atual: Requerimento de Lavra

Ativo: Sim

Distrito: 5

UF: PA

Unidadeprotocolizadora:

Unid. Protocolizadora Desc 99

Data Protocolo: 13/07/1990 00:00:00

Data Prioridade: 13/07/1990 00:00:00

Pessoasrelacionadas:

Tipo de Relação CPF/CNPJ Nome Responsabilidade/RepresentaçãoPrazo de

ArrendamentoData deInício

Data Final

Titular\Requerente04.828.209/0001-07

Serra PeladaCompanhia deDesenvolvimentoMineral

14/09/2009

ResponsávelTécnicoMemorialDescritivo

044.549.607-04

CelioAugustoPedrosa

*** 13/07/1990

Titular\Requerente05.023.221/0001-07

Cooperativa deMineração dosGarimpeiros deSerra PeladaCoomigasp

13/07/1990 13/09/2009

Títulos:Número Descrição

Tipo doTítulo

Situação do Título Data de publicação Data Vencimento

1485APU3 AUT PESQ/ALVARÁ DEPESQUISA 03 ANOS PUB

Alvará dePesquisa

Outorgado 01/03/2007 01/03/2010

Substâncias:

Nome Tipo de uso Data de início Data final Motivo de encerramento

PALÁDIO Não informado 13/07/1990

OURO Não informado 13/07/1990

PRATA Não informado 13/07/1990

Municípios:Nome

MARABÁ /PA

Condição depropriedade do solo:

Não há informação sobre a propriedade do solo.

Processos associados: Nenhum processo associado.

Documentos quecompõem oprocesso:

Nenhuma informação sobre documentos apresentados para esse processo.

Eventos:

Descrição Data

350 - REQ LAV/REQUERIMENTO LAVRA PROTOCOLIZADO 24/12/2009

317 - AUT PESQ/RELATORIO PESQ APROV ART 30 I CM PUBL 16/12/2009

1731 - AUT PESQ/RAL CUMPRIMENTO DE EXIGÊNCIA 20/11/2009

250 - AUT PESQ/EXIGÊNCIA PUBLICADA 11/11/2009

282 - AUT PESQ/TRANSF DIREITOS -CESSÃO TOTAL EFETIVADA 16/09/2009

281 - AUT PESQ/TRANSF DIREITOS -CESSÃO TOTAL APROVADA 14/09/2009

794 - AUT PESQ/RELATORIO PESQ POSITIVO APRESENTADO 09/09/2009

236 - AUT PESQ/DOCUMENTO DIVERSO PROTOCOLIZADO 03/09/2009

255 - AUT PESQ/CUMPRIMENTO EXIGÊNCIA PROTOCOLI 18/08/2009



264 - AUT PESQ/PAGAMENTO TAH EFETUADO 03/07/2009


239 - AUT PESQ/DENÚNCIA DE INVASÃO DA ÁREA 20/05/2009

214 - AUT PESQ/COMUNICACAO OCORR OUTRA SUBSTANCI 05/05/2009


13/01/2010 Dados do Processo

…dnpm.gov.br/…/dadosProcesso.aspx 1/2




2 - DOCUMENTO DIVERSO PROTOCOLIZADO 22/01/2008

690 - PAGAMENTO EMOLUMENTOS CESSÃO TOTAL DIREITOS 19/12/2007

249 - AUT PESQ/TRANSF DIREITOS -CESSÃO TOTAL PROTOCOLIZADA 19/12/2007


209 - AUT PESQ/INICIO DE PESQUISA COMUNICADO 02/04/2007



323 - AUT PESQ/ALVARÁ DE PESQUISA 03 ANOS PUBL 01/03/2007

346 - REQ PLG/PRORROGAÇÃO PRAZO EXIGÊNCIA CONCEDIDA 05/02/2007


530 - PLG/EXIGÊNCIA PUBLICADA 29/09/2006

333 - REQ PLG/REQUERIMENTO LAVRA GARIMPEIRA PROTOCOLIZADO 13/07/1990

IMPORTANTE: este serviço possui caráter meramente informativo e, portanto, não dispensa o uso dos instrumentos oficiais pertinentes para produção de efeitos legais. Asinformações são disponibilizadas no momento e na forma em que são inseridas na base de dados pelos servidores e colaboradores do DNPM.

13/01/2010 Dados do Processo

…dnpm.gov.br/…/dadosProcesso.aspx 2/2


82

APPENDIX 2

EIA Executive Summary

(in Portugese)

EXTRAÇÃO MINERAL

PROJETO SERRA PELADA

GEOMMA-GEOLOGIA E MEIO AMBIENTE KEYSTONE

BELEM/2009

VOLUME I

GEOMMA

EIA – Estudo de Impacto Ambiental Setembro/2009

41

SUMÁRIO EXECUTIVO

O projeto Serra Pelada está localizado no Município de Curionópolis, Província Mineral de Carajás, Estado do Pará. Dista, em linha reta, cerca de 530 km da cidade de Belém e está interligado ao sistema rodoviário nacional, através da PA-275 (estrada que une Serra Norte a PA-150).

Geologicamente é composto por metassedimentos da Formação Rio Fresco. A zona mineralizada está dentro de uma seqüência de rochas metassedimentares de baixo grau metamórfico. A reserva total de minério é de quatro milhões de toneladas com teor de 8,20 g/t de ouro; 1,70 g/t de platina e 2,65 g/t de paládio, totalizando um volume de metal contido de 33 t de ouro, 6,8 t de platina e 10,6 t de paládio. A lavra subterrânea prevê uma reserva lavrável por um período de oito anos.

Nas áreas de influências, a ADA (133,83 ha) e a AID (1.100,76 ha) foram consideradas para os três meios (físico, biótico e antrópico). A AII dos meios físico e biótico tem superfície de 2.147,29 ha, já a do meio antrópico envolveu todo o Município de Curionópolis. O meio físico executou estudos na água superficial e de consumo humano, respectivamente vinte e cinco e dez, bem assim de dezessete amostras de sedimentos do fundo da cava garimpeira.

O meio biótico, na parte de vegetação, identificou predominância de capoeiras, áreas de pastos cobertos por gramíneas e plantio homogêneo de eucalipto. Nos levantamentos faunísticos foram diagnosticadas setenta e uma espécies de vertebrados terrestres; a ictiofauna é representada por peixes de águas estagnadas (cava garimpeira), como traíra (Hoplias malabaricus), cará (Cichlidae), lambari (Astyanax sp) e piranha (Serrasalmus). A comunidade planctônica incluiu fitoplâncton (cianofíceas, diatomáceas, euglenas e clorofíceas) e zooplâncton (amebas testáceas, rotíferos, cladóceros e copépodos).

Os dados secundários da socioeconomia refletem panorama semelhante aos demais de outros municípios da região; já os primários, incluem a AID como um aglomerado urbano. Na ADA ainda há um grupo remanescentes da ordem de dezoito famílias; população que sobrevive com índices sociais, de saúde e de educação um pouco abaixo da média regional, como reflexo da aglomeração deixada pela atividade garimpeira. O levantamento arqueológico identificou três ocorrências de sítios, todos fora da ADA.

O passivo ambiental levou em consideração os vestígios da atividade garimpeira, cujos remanescentes são os rejeitos, que será objeto de outro licenciamento. Um capítulo específico no EIA foi dedicado ao trabalhador.

Os principais impactos do meio físico se refletem na água superficial e de consumo humano. Os dados sobre mercúrio estão acima dos limites da legislação, atestando que o consumo de pescado deve ser evitado. O ar está dentro da normalidade, já os sedimentos e os aluviões mostraram valores anômalos em mercúrio. O meio biótico apresenta paisagem depauperada e as comunidades aquáticas, devido às características das águas, ainda permite a ocorrência de organismos em seus habitats. A exemplo do meio físico, as pesquisas sobre mercúrio também demonstram valores a margem do que prevê a legislação, sendo, da mesma forma, fator inibidor ao consumo de peixes pela população.

Na socioeconomia os impactos estão voltados para possível relocação de moradores, expectativas em relação à negociação de terras e moradias, aumento do fluxo migratório,

GEOMMA

EIA – Estudo de Impacto Ambiental Setembro/2009

42

expectativa quanto à empregabilidade e negócios, ocupação desordenada do espaço urbano, aumento do valor de venda e aluguel de imóveis, demanda por infraestrutura de saneamento, serviços públicos de saúde, possibilidade de incidências de doenças sexualmente transmissíveis e de prostituição, além de demanda por serviços de segurança pública e sobrecarga do sistema viário. Por outro lado, haverá inserção dos trabalhadores na rede de seguridade social, redução das taxas de desocupação/desemprego, melhoria das condições de empregabilidade local, aumento da renda familiar e do poder aquisitivo, dinamização da economia, geração de oportunidades e novos negócios, fortalecimento das empresas a partir da ampliação da demanda por bens e serviços; além de aumento em seus faturamentos, acrescido de incremento na arrecadação tributária municipal e estadual. A matriz que resume os impactos positivos e negativos na implantação e operação do empreendimento mostra um total de 66 impactos, destes, 49 são negativos (27 na implantação e 22 na operação) e 17 positivos (prevalecendo os da socioeconomia). O prognóstico avaliou três cenários: o primeiro de o empreendimento não ocorrer; o segundo implantando o projeto sem medidas ambientais. E o terceiro: viabilizando o projeto obedecendo à legislação atual, neste foram estudadas as vantagens e as desvantagens, predominando a primeira. Em face de a rigidez locacional do minério, não foi levada em conta a implantação do projeto em outro local. A análise de risco calcado nos impactos direciona para um programa específico, todavia, a avaliação indica proposições passíveis de gestão. Nas atividades do empreendimento serão tomadas medidas visando a mitigar e compensar os níveis de impactos identificados nos trabalhos previstos. Ambas as medidas (mitigadoras e compensatórias) deverão ser transformadas em programas de monitoramento e/ou de controle e de aplicações diretas sobre as atividades do projeto, envolvendo os três meios: físico, biótico e antrópico, cuja gestão será efetivada por um plano de controle e monitoramento, referente aos impactos a serem gerados na implantação, operação e desativação do empreendimento. Ao total serão 27 programas, sendo sete do meio físico, cinco do meio biótico e quinze do meio antrópico. No projeto priorizar-se-á restringir desmatamento. O foco perseguido será a melhor integração na economia e comunidades locais, através de ações voltadas para a comunicação e o desenvolvimento regionais, buscando não só práticas modernas de parceria, como também, resgatando o melhor entendimento, com efeito multiplicador em toda a população. A mensuração e a interação dos diversos impactos identificados e sua forma de mitigá-los conduzem à sustentabilidade do empreendimento. A compatibilização dos diversos impactos (físico, biótico e antrópico), observados no corpo do EIA e após seus cruzamentos, além de o passivo ambiental, (presença de degradação ambiental por ações exógenas ao projeto) e levando em conta as vertentes econômica, ambiental e social, cujo produto final é o desenvolvimento sustentável, direcionam para baixas e média modificações no ecossistema do projeto. Sendo assim, dentro do contexto de todo o estudo aqui desenvolvido, conclui-se que as condições são favoráveis à viabilidade do empreendimento. Também foram levados em conta alguns obstáculos que, com certeza serão vencidos ainda na fase preliminar do projeto. E é dentro dessa realidade que o projeto de Serra Pelada buscará o seu desenvolvimento, suportado pelos pilares de ações sustentáveis e socialmente responsáveis.

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