1. GENERAL INTRODUCTION 1.

1 LOCATION
The Property is located in the western portion of the Group West at approximately 25-degree 25-minutes of longitude and 10-degree 39-minutes of latitude. Unless otherwise mentioned, all coordinates in this Report are provided in the Lambert Gaussian co-ordinate system, or a local datum. The area under consideration (collectively referred to as the Property) forms part of Gcamines Group West area in the Kolwezi region. The currently identified Resource Areas consist of the underground workings at the original Kamoto Mine (including the Kamoto Principal and Etang areas) as well as three variously flooded open pit mine areas; Dikuluwe-Mashamba East and Mashamba West, and the dry Musonoie-T17 West area. The physical facilities include the Kamoto Concentrator and Luilu metallurgical plant, related shops, warehouses, railroads and power lines. The Property is made up of two separate land packages; the first containing 176 carrs1 and the second containing 4 carrs for a total concession area of 15,235 hectares.

1.2

ACCESSIBILITY

The town of Kolwezi is accessible by paved and gravel roads from Lubumbashi, the capital city of the Katanga Province. Presently the 320km drive from Lubumbashi to Kolwezi takes approximately 6-7 hours. The road between Likasi and Kolwezi is in exceptionally poor condition apart from the final 30km outside (east) of Kolwezi itself. The distance from Likasi to Kolwezi is approximately 196km. The time taken to traverse this distance is between four to five hours on average. There are also three restrictions on the route, single lane bridges at distances of 70 and 80km from Likasi (these are not considered to be a problem as there are by-pass facilities at the bridge sites) and a bridge with a 20 ton load restriction where the road crosses the Nzilo lake, approximately 30km outside of Kolwezi. Loads in excess of 20 tons are rerouted to a pontoon to cross this section. Lubumbashi is the main airport for the Katanga Province and caters to various international flights, being serviced by both South African Airways and the Congolese airline Hewa Bora. The airport has refuelling facilities, but there are occasional problems obtaining fuel. Maintenance facilities are available. Customs and immigration procedures must be cleared at Lubumbashi. ITAB (an internal DRC company) operate regular flights from Lubumbashi to Kolwezi, with the flying time being approximately 45 minutes. The air field at Kolwezi is an asphalt topped strip 1750 meters long at 1500m asl. The condition of the strip is good and the air field is suitable for medium sized aircraft. There are no refuelling or maintenance facilities at the airstrip. From Kolwezi the Musonoi-T17 West site is a short (15 minute) automobile ride on a gravel road built by Gcamines. This same road traverses most of the Property, with the trip to the Kamoto Mine taking approximately 30 minutes and the DIMA pits approximately 45 minutes. Buses and taxis have access to this road and presently this is the main means of transport for the staff of the Kamoto Mine. Road access to the Property is sometimes affected by the heavy rains during the rainy season.

1.3

CLIMATE

Congo has a mild climate throughout the year, with typically heavy summer rains. During the rainy season, water-logging contributes significantly to the rapid degradation of roads. The climate is tropical. It is typically hot and humid in the equatorial river basin, cooler and drier in southern highlands and cooler and wetter in eastern highlands. South of Equator, the wet season is November to March and the dry season is April to October. In the southern parts of the DRC the annual average rainfall varies between 1,220 and 1,320mm with double maxima in December and March. The temperature for summer is between 18C and 32C and in winter varies between and 4C and 25C. The prevailing wind direction during most of the year is from the east-southeast. Average wind speeds vary from a low of 1.6m/sec in February to a high of 3.4m/sec in September. Maximum gusts range from about 22m/sec in the dry winter months up to 30m/sec in the wet summer months. Thunderstorms during the summer are generally associated with west-north-westerly winds. Malaria is endemic to the area.

1.4

GEOLOGY DEMOCRATIC REPUBLIC OF CONGO (DRC)

The Congo Basin, made up largely of Mesozoic to Cenozoic and Recent sediments, occupies large parts of the centre and west of the country. It is surrounded by more or less elevated Precambrian ridges: to the west by the Atlantic Rise, to the north by the Uganda to Central African Republic belts and to the south by the Kasai and northeastern Angola Shield. Tabular volcano-sedimentary deposits of Pan-African age around the margins of the basin. The southeast of the country is underlain by the Pan- African Lulian Arc. Along the eastern part at the border to the Western Rift of the East African Rift System, occur numerous Tertiary to Recent volcanoes and some carbonates.

1.4.1

STRATIGRAPHY AND TECTONICS

Archean terrenes are exposed in three principal parts of the Congo Crafton in equatorial Africa. 1) In the southwestern part it is the Kasai and northeastern Angola Shield. 2) in the northwest it is a broad basement comprising the foreland of the younger West Congolian mobile belt and 3) In the northeast occur granitegreenstone terrenes, which extend into the neighbor countries of the Central African Republic, Uganda and Sudan. In the region of the Kasai and northeastern Angola Shield ancient metamorphic basement is exposed, which is bounded at about 4 south by a fault. In the east the Archean terrene is bounded by the katangan System, while Phanerozoic rocks cover the southern and western ends of the shield. Most of the Kasai and northeastern Angola Shield is underlain by poorly exposed gneisses and magmatites. The oldest rocks, dated at about 3,400Ma, are the Upper Luanyi granite gneisses with pegmatites of amphibolite faces. These are separated from the adjacent Kanda Kanda grey tonalites and granodiorite gneisses by inferred faults. The Kanda Kanda gneisses contain diffuse lenses of alaskite gneisses, which are hololeucocratic pink rocks that probably formed near the limit of granulite faces metamorphism or as intrusions, which originated from the nearby charnockitic rocks, the Kasai-Lomami gabbronorite and charnockitic assemblage. Although their exact ages are unknown, the Kanda Kanda gneisses have been estimated to range between 3,400-2,820Ma. The Kasai-Lomami gabbro-norite and charnockitic assemblage omprises two rock suites: There is a mac unit (gabbro, norite, amphibolites and anorthosites), which originally comprised a heterogeneous sequence of hypabyssal intrusives or effusive magmatic rocks and deep- seated intrusives, which have undergone granulite facies metamorphism. The second unit is an acidic assemblage

comprising dark gneisses of charnockitic- enderbitic composition and aluminous granulites, both of which probably had partially sedimentary precursors. The acidic part of the Kasai-Lomami assemblage contains metadolerite dykes. Both the mac and the acidic components contain grano-clastic textures and cataclastic deformations, which reflect granulite facies metamorphism (or charnockitization) and regional deformation respectively. These events are dated at about 2,800Ma. The northwestern part of the Congo Craton is a broad basement upward, which constitutes the foreland of the younger West Congolian mobile belt of Pan- African age. It extends as a vast granitoid assemblage known as the Chaillu Massif from the Republic of Congo, the Democratic Republic of Congo, through Gabon, where it is mostly concealed beneath Neoproterozoic supracrustals, to southern Cameroon. The Chaillu Massif shows an N-S foliation and contains two generations of granitoids: grey granodioritic to quartz dioritic biotite or biotite-amphibolite types, and pink, mostly potassic migmatites, which occur as veins cutting the grey granitoids. Within the granitoids, schists and greenstones exist as septa, which have not been completely transformed by granitization. The Chaillu Massif granitoids have been dated at about 2,700Ma, thus the engulfed schists and greenstones are apparently older. In the northeastern part of the Congo Craton Archean gneisses and granitegreenstone terranes are widely distributed and extend into the adjacent territories of the Central African Republic, western Uganda and southern Sudan. In this vast region Archean rocks comprise the following major three assemblages: old basement gneisses, which have yielded ages of about 3,500Ma and are known as Bomu and West Nile Gneissic Complexes; scattered greenstone belts known as the Ganguan Greenstone Belt in the west and as the Kibalian Greenstone Belt in the east, both of which represent two periods of greenstone emplacement between 3,200-2,600Ma; and two main generations of granitoids emplaced at about 2,900-2,700Ma. The Bomu Gneissic Complex is exposed around the conuence of the Bomu and Uele Rivers at the border between the Democratic Republic of Congo and the Central African Republic. Several gneissic assemblages, the Bomu, Bereme, Nzangi and Monga gneisses constitute the basement complex in this region. The largest are the Bomu amphibolite- pyroxene gneisses occupying a synformal structure in the northern Democratic Republic of Congo. The Bomu gneisses are schistose and arnetiferous and have undergone retrograde metamorphism. They also contain massive and banded tonalitic and monazonitic granitoids. The geological history of these gneisses began with the deposition of probably oceanic precursors of the Bomu gneisses at about 3,500Ma, followed by high-grade tectono-thermal activity and nally the intrusion of tonalites at about 3,410Ma. The so-called West Nile Gneissic Complex includes several basement gneisses, which are poorly exposed from the West Nile Province in northwestern Uganda and the northeastern part of the Democratic Republic of Congo, through southern Sudan into the Central African Republic. Granulite rocks known as pre-Watian assemblage in this region contain charnockitic dolerite dykes and are characterized by isoclinal folds with vertical axial planes trending E or ENE. Before they were deformed and intruded by dolerite dykes, the parent rocks of these granulites were probably of volcano-sedimentary origin. These parent rocks were metamorphosed at greater crustal depths to granulite facies during the Watian tectono-thermal event at about 2,900Ma. Charnockites developed during this stage. The Watian event was probably followed by the formation of volcano-sedimentary rocks, which were later metamorphosed into the so-called Western Grey Gneisses

Group comprising well-layered gneissic rocks and predominantly composed of upper amphibolites facies biotite-hornblende gneiss with microcline. The Western Grey gneisses exhibit NE-plunging folds with steep axial planes and are assigned to the Aruan tectono-thermal event at about 2,680Ma. In the northeastern part of the Democratic Republic of Congo occur also the so-called Eastern Grey Gneisses, which are of low metamorphic grade. The Ganguan Greenstone Belt occurs in several exposures mainly east of the Bomu-Uele confluence. Lithologically it comprises from bottom to top sericite quartzites and quartz phyllites, quartz-poor talc schists, sericite schists, chlorite schists and phyllites. The Ganguan greenstones are dated at about 3,200Ma, but were affected by tectono-thermal activities at about 2,980Ma. Although the Kibalian Greenstone Belt is exposed in several isolated belts and is separated by the Upper Congo Granitoid Massif, it probably represents only one continuous greenstone belt, which has been subdivided into an eastern facies and a western facies. The eastern facies shows a predominance of mac to intermediate volcanics, while the western facies contains mostly banded iron formations and less mac rocks. The Kibalian Greenstone Belt is further subdivided into a regionally more extensive lower Kibalian with an age of about 2,890Ma and an upper Kibalian dated at about 2,500Ma. An island arc tectonic setting has been proposed as a model to explain the Kibalian greenstones, some of which are believed to be of oceanic crust origin. Granitoids are the most extensive rocks in the northeastern Congo Craton, representing mostly orthogneisses, which were derived from reworking of monzonite granites and tonalites. There are two generations of granitoids: the rst generation is dated at about 2,840Ma and consists of tonalites with diorites and granodiorites. The second group, which is dated at about 2,460Ma, is the most abundant and consists of medium-to-coarse-grained quartz monzonites, which intrude the rst generation.

The Lulian Arc comprises a zone of Neoproterozoic rocks in northern central Zambia and the Katanga (Shaba) Province in the Democratic Republic of Congo. Formed initially within a major zone of intra- continental extension, the Lulian Arc developed its present fold and thrust belt character during the development of the transcontinental Damara- Lulian-Zambezi Orogen. This complex orogenic system separates the Congo, Bangweulu and Kalahari Cratons, overprinting the 1,300-1,100Ma old Kibaran and Irumide orogenies. Isolated by the Mwembeshi Shear Zone the Lufilian Arc components in the Democratic Republic of Congo are also known as Katanga Orogen. Starting from about 875Ma, up to 10,000m of Katangan sediments were deposited within a system of linked, differentiallysubsiding rift basins and subsequent sag basins. Differences in the original rift morphology and subsequent tectonic evolution of the Lulian Arc accounts for the stratigraphic variations between regions and structural domains in the orogenic belt. In Katanga, the base of the otherwise in Zambia thick Roan Supergroup is generally not seen. This sequence is here assumed by the presence of signicant intraformational breccias, representing tectonic stacking of north-thrusted sheets. The Roan Supergroup is unconformably overlain by carbonaceous shales, iron formations and pyroclastics of the Mwashya Group. Within the KatanganZambian copper belt, the Upper Roan Supergroup and the Mwashya Group sediments contain significant volumes of irregular sill-like amphibolitic gabbros. The overlying Lower and Upper parts of the Kundelungu Supergroup have both glacial sequences at their bases, terminated by cap carbonates. The Katangan

sediments were deformed and metamorphosed to green schist and amphibolites grade during Pan-African times. Tabular cratonic sedimentary formations rest on the Congo Craton along its margin, representing the remnants of a once at-lying Pan-African cover, which is equivalent to the deformed successions in the craton-encircling Pan-African mobile belts. The basal parts of the Pan-African cratonic cover contain Kibaran molasse, while the upper part includes Pan- African molasse. Only very few radiometric ages are available, but stratigraphic correlations are based on stromatolites and acritarchs. On the southeastern part of the Congo Craton is the Mbuyi Mayi Supergroup, which is made up of conglomerates, quartzites, siltstones, shales and dolomitic shales, sometimes containing stromatolitic carbonates. The northern tabular sequence is known as the Lindian Supergroup, which lies north and northeast of Kisangani. It consists of the Ituri Group at the base, which is a typical epicontinental orthoquartzite -carbonate assemblage deposited under stable shallow marine conditions with stromatolites. The Aruwumi Group at the top comprises in ascending order quartzites of uvial and aeolian origin, marine or lagoonal limestones, euxinic shales and nally a thick deltaic arkosic sequence. Between the Congo and Tanzania Cratons patchy tabular outcrops belong to the Itombwe Supergroup, the equivalent of the Bukoban or Malagarasian Supergroups to the east. The Mpioka and Inkisi Groups are the foreland tabular sequences of the West Congolian Orogen. The Congo Basin is a broad downwarp centred on the Congo Craton and contains Karoo, Late Jurassic to Early Cretaceous uviatile and lacustrine deposits and an Upper Cretaceous non-marine succession. The Lualaba and the Kamina Series constitute the Late Jurassic to Early Cretaceous sequence, while the Kwanga Series represents the Upper Cretaceous succession, rich in freshwater fishes, ostracodes and palynomorphs. Diamondbearing gravels and conglomerates occur at the base of the Kwango Series, suggesting the intrusion of kimberlitic pipes in Early Cretaceous. Volcanism in the Western Rift of the East African Rift System commenced contemporaneously with, or shortly after volcanism began in the Kenyan Rift. The oldest basalts, dated at about 14Ma, form a foundation to the Virunga Massif east of the present rift. These ssure basalts are of transitional alkalinity, and are overlain by alkaline basalts ranging in age from 13 to 9Ma. In Late Pliocene times (ca. 3Ma), a change in tectonic style to NE-SW fracturing was accompanied by a fundamental change in volcanism. Potassic, highly undersaturated lavas now erupted along a zone transverse to the rift, building up a chain of large central volcanoes. Most, if not all, of these volcanoes evolved through a stage of having a semi-permanent lava lake, the two youngest being the Nyiragongo and Nyamulagira volcanoes.

1.4.2 ECONOMIC GEOLOGY

The overall decline of the Democratic Republic of Congos mining industry continued since the outbreak of the civil war drastically and has led to a virtual collapse of the metal mining sector of the country. The copper-belt of Katanga and Zambia within the Lulian Arc holds more than half of the worlds reserves of cobalt deposits and about 12% of the worlds copper reserves. Of the 4.8 million tones of cobalt metal reserves in the copperbelt, the Democratic Republic of Congo has the largest share, with about 3.1 million tonnes. The copper-belt is a polymetallic metallogenic province, the major types being stratiform, vein and skarn, in which the dominant deposits are

Cu-Co and Zn-Pb sulphides, Cl oxides and noble metals . Gold production has fallen considerably over the years, largely owing to obsolete equipment. Auriferous deposits exist mainly in the east of the country and currently some rehabilitation activities are underway. The output of zinc was a byproduct of the Kipushi Mine in the Katangan copperbelt near Lubumbashi. The mine was closed in 1993, but feasibility studies suggest a reopening aimed at a production of 200,000t/ y of zinc. It was also a major source of germanium. 200 tonnes of tin were yearly produced at Sominki in the east of the country till the early 1990s, but current production data are not available. The metallic ore of columbite-tantalite, sometimes better known as coltan, is found in major quantities in the eastern part of the Democratic Republic of Congo. When rened, coltan becomes metallic tantalum, a heat-resistant powder that can hold a high electrical charge. These properties have made it in the last decade a vital and strategic element in creating capacitors, the electronic elements that control current ow inside miniature circuit boards. Tantalum capacitors are used in almost all cell phones, laptops, pagers and many other electronics. Thus the price for coltan has skyrocket to as much as 400US$/kg in recent years.

2. REGIONAL GEOLOGY
Base metal mineralisation in the Zambian and DRC copper belt provinces is hosted by sedimentary rocks of the Neo-Proterozoic Katangan Sequence, developed within the Lufilian Arc. This copper belt extends over 600km from Luanshya (Zambia) in the southeast and to Kolwezi in the Democratic Republic of the Congo (DRC) in the northwest. The Katangan Supergroup rocks are up to 7,000m thick and are underlain by basement granite, intermediate metavolcanic and metasedimentary rocks dated at ~1,800Ma to 2,000Ma. The sediments represent a facies continuum of proximal to intermediate and distal dolomitic mudstones, sandstones and algal reef fragments. The Katangan Supergroup is subdivided into Roan, Lower and Upper Kundelungu Groups, separated respectively by the Grand and the Petit Conglomerat diamictite marker units. Mineralization at Kamoto occurs within the Mines Sequence (or Series des Mines) which is correlated to Lower Roan rocks elsewhere in the Lufilian arc. The Lufilian Arc forms part of a network of supracrustal belts in Africa (Pan-African) and South America that are host to important metallogenic provinces e.g. Katangan (DRC), Zambian copper belt, Kabwe Zn/Pb/Ag terrane (Zambia), Otavi Mountain Land Cu/Zn/Pb (Namibia), Gariep Belt Zn/Pb (Namibia) and the So Francisco craton Zn/Pb deposits (Brazil). The maximum age of the Katangan sedimentation is constrained by U-Pb dates on zircons from the Nchang granite at 877+/-11Ma. Extensive rifting occurred at around this time. It is generally accepted that the deposition of the supracrustals occurred during the rift phase of the Katangan Sequence in Zambia and DRC. The development of isolated, structurally bounded basins comprising half grabens/graben structures controlled initial sedimentation in the lowermost portion of the Katangan Sequence, the Roan Group. The configuration of the basin margin is especially important and controlled the development of thick wedges of clastic sediments in the basal sequences. Growth faults controlled prolonged and variable sedimentation into the basins. This resulted in the development of predominantly arenaceous and argillaceous rocks, with relatively thin interbeds of rudaceous material. Facies change occurs between the Zambian and DRC Roan group rocks, with argillaceous and carbonaceous rocks predominating in the DRC. The development of the ore

shale unit marks the first major marine transgression in the Zambian copper belt, and in the DRC this transgression also resulted in laterally extensive shallow marine sedimentation in the Series Des Mines. This provides an important marker that can be traced throughout the copper belts. The extensive flat-lying plains surrounding the Roan ridges in the DRC are ubiquitously underlain by Lower Kundelungu rocks although these are not exposed on surface at Kalukundi because of deep soils and thick vegetation These confirm the presence of Kundulungu stratigraphy as shown on maps compiled by Gcamines and other regional studies. The Lower Kundelungu stratigraphy consists of a basal conglomerate overlain by sandstones and shales. While the Katangan Supergroup sediments in Zambia are deformed by a series of open folds, in the DRC the Katangan Supergroup is preserved both as tightly folded, but relatively intact sequences and as complexly deformed, locally continuous but structurally dismembered rafts of lower Roan strata (Series Des Mines) within a mega breccia or melange that contains abundant evaporite minerals. The mega-breccia forms a kiteshaped wedge elongated parallel and adjacent to a major northwest trending lineament. Interpretations based on Landsat and aerial photographs suggest that this structure may represent an original Katanga basin edge fault. The structure of the Katangan Sequence in Zambia is considered to be the result of compression during basin closure, however in the DRC it is probably the result of decoullement at the northern margin of the basin and northward thrusting of the Katangan Supergroup over basement lithologies (granites and gneisses) and other, higher, Katangan Supergroup stratigraphy. The mega breccia is probably of tectonic origin, but focussed on incompetent chemical sediments.

2.1

MINERALIZATION

The stratiforrm ores in the DRC occur within two principal formations confined to a 40m thick succession at the base of the Mines Series. The upper formation is sandy shale, containing some carbonates and the lower is bedded dolomitic sandstone. The ore formations average approximately 10m in thickness separated by 20m to 30m of siliceous dolomite. Ore grades commonly vary between 4% and 6% copper and around 0.4% cobalt, with the ratio of copper to cobalt in the order of 8:1. The weathered oxide zone generally extends to a depth of between 70m and 150m, but may vary considerably between deposits. The weathering process commonly leads to high-grade supergene deposits near surface, but may also result in leaching of the mineralisation in places and/or concentration in otherwise barren horizons. At depth, a mixed oxide-sulphide zone grades into sulphide ore, sometimes at depths greater than 250m. In Zambia, the pre-Katangan basement rocks outcrop, forming the cores of large open folds parallel to the Lufilian Arc and the deposits coincide with embayments and tight synclines at the contact between the exposed Basement and Katangan rocks. Overfolding can be severe, but there is remarkably little faulting of significance to mining in any of the present mines. Mineralisation in the Zambian deposits is dominantly sulphide, comprising chalcopyrite, bornite and chalcocite, variably accompanied by pyrite and pyrrhotite, carrollite, covellite and digenite. Ore grades are commonly around 3 to 4% copper and 0.1 to 0.2% cobalt. Lateral and vertical zonation has been widely reported but is rarely as obvious or as simple as the literature suggests. There is generally a progressive transition from chalcocite to bornite to chalcopyrite to pyrite, vertically upward within the orebodies and laterally down dip. Due to the acidic nature of the silica rich host rocks on the Zambian Copperbelt, oxidation and leaching of copper minerals is common to about 45 to 60m

from surface, although may be observed to depths of several hundred metres. The leached zone close to surface is commonly barren or very poorly mineralised. Supergene enrichment below the zone of leaching is highly variable with the main supergene minerals including malachite, chalcocite, cuprite, chysocolla and vermiculite.

3. TECTONICS 3.1 FORMATION

The rifting phase and ocean evolution during which the Kundelungu Supergroup was deposited was followed by a phase of compression resulying in subduction of the ocean crust and collision between the Congo and Kalahari cratons. The Lufilian Orogeny refers to the collisional event which marked particularly the Lufilian Belt and occurred ca. 550 Ma ago. It affected, in the Lufilian and northern Zambezi Belts, the entire Katangan Supergroup, which endured deformation and involved the basement, which was partly reworked. This orogen marked the landscape either in Katanga or in Zambia. Different deformation structures can be distinguished and are classified in the paragraph below.

3.2

LUFILIAN OROGENIC ZONING

De Swardt and Drysdall (1964) identified three structural zones (i) the Outer Lufilian corresponding to the fold-and-thrust-belt part mainly located in Katanga, (ii) the Middle Lufilian which is characterised by the Domes area, mainly in northern Zambia and (iii) the Inner Lufilian which encompasses a southern synclinorium of Katangan cover, located in southern Zambia. A more complete classification was proposed by Unrug (1988), who defined five tectonic domains associated with the Lufilian belt from north to south (from DRC to Zambia):

After Porada, 1989

[ KA ] The Katangan Aulacogen or Golfe du Katanga , acted as the foreland during the northward thrusting in the external zone of the LB. [ I ] The external fold-and-thrust belt. This domain is marked by the piling up of nappes (Kolwezi, Mamfwe area). The Mines Subgroup deposits are constricted between two thrust horizons. The roof thrusts are generally folded. In Katanga, a tectonic breccia separates the Mwashia from the Roan group (the allochthonous Mine Subgroup) (Porada and Berhorst, 2000). It would indicate that the Mwashia and Kundelungu were as well displaced. [ II ] The Domes area, which is represented by several pre-katangan basement inliers; [ III ] The Synclinorial belt. The sediments of the synclinorial belt are poorly exposed, but define large fold structures at a low metamorphic grade. [ IV ] The Katanga high. This domain is poorly known but would correspond to the opposite active continental margin of an Angola plate (Porada, 1989).

3.3

METAMORPHISM

A major southward dipping thrust contact separates the HP Katangan metamorphic assemblages located south to southwest of the Domes area and other MP to LP metamorphic complexes located north of the Domes area (Kampunzu and Cailteux, 1999). The grade of regional metamorphism increases

10

from prehnite-pumpellyite facies in the northern boundary of the LB (Katanga, Congo), up to medium-pressure amphibolite facies metamorphism in the southern part of the copperbelt, near the domes area (northern Zambia) (Ramsay and Ridgeway, 1977, concerning Zambia, Lefebvre and Patterson, 1982, concerning Katanga). High pressure eclogites and whiteschists occur south of the Domes area (Vrana and Barr, 1972; Vrana et al., 1975; Cosi et al., 1992).

3.4

MINERALIZATION ORIGINS

The Central African Copperbelt hosts world class stratiform Cu (-Co) deposits and vein type base metal deposits in the Neoproterozoic Katangan Supergroup in the Democratic Republic of Congo (DRC) and Zambia. Based on literature review, satellite image interpretations and petrographic, geochemical and fluid inclusion analyses, multiple mineralisation-remobilisation phases that occurred during different stages of the evolution of the basin have been identified for the generation of the mineral deposits. The first and likely main period of mineralisation occurred after sedimentation in the Katangan part of the Copperbelt, during early to intermediate diagenesis of the lower part of the Roan Group. Early diagenesis started with the precipitation of frambodal and euhedral pyrite. The main phase of the stratiform mineralisation followed pyrite precipitation and consists of disseminated copper and often cobalt sulphides and sulphides (carrolite, chalcopyrite, bornite, digenite and chalcosite) in nodules and lenses, which are often pseudomorphs after evaporites (Muchez et al. 2008). A diagenetic origin is supported by the Re-Os dating of chalcopyrite in the Konkola deposit (Zambia) at 816 62 Ma (in Selley et al. 2005) and geochemical data. This mineralisation phase can be related to the early Katangan rifting of the basin during the Roan (Muchez et al. 2007), leading to the formation of a passive continental margin. A second mineralisation and/or remobilisation phase is characterised by the occurrence of Cu and Co sulphides in dolomite and quartz veins that crosscut the nodules and lenses of the mineralisation phase. A remobilisation is suggested by the identical mineralogy of the sulphides of the first phase and in the veins and geochemical similarities between both phases. Two periods can tentatively be suggested for formation of these mineralised veins. Firstly during the Late Roan, when volcanic and magmatic rocks were emplaced in the continental rift setting and when an elevated heat flow was present (Muchez et al. 2007). Secondly during the Lufilian orogeny between 592 and 512 (Rainaud et al. 2005) that caused the deformation of the Katangan sediments. Radiometric dating of sulphides at Nkana, Chibuluma and Nchanga (Zambia) revealed mineralisation ages around 583 and 526 Ma (Barra et al. 2004). During the latter period also mineralisation of tectonic breccias in the Roan, related to the Lufilian orogeny, could have taken place. Vein-type polymetallic and Cu-Ag deposits also occur in the Copperbelt (e.g. Kipushi and Dikulushi). Structural and radiometric evidence indicate these deposits formed during and after the Lufilian orogen. Superficial weathering of the primary sulphide deposits resulted in the formation of Cu and Co-hydroxides, -oxides, -silicates or -carbonates at the surface. In addition to an extensive set of newly formed minerals, this secondary enrichment also resulted in an upgrade of the Cu and Co content.

11

Schematic representation of the syn-sedimentary/syn-genetic model (after Garlick, 1972)

4. DEPOSIT TYPES
The Lufilian Arc forms part of a network of supracrustal Pan African belts (Neoproterozoic age) in Africa and South America that are host to important base metal provinces e.g. Katangan (DRC and Zambian copper belts), Kabwe Zn/Pb/Ag terrane, Otavi Mountain Land Cu/Zn/Pb (Namibia), Gariep Belt Zn/Pb (Namibia) and the So Francisco craton Zn/Pb deposits of Brazil. There are two main deposit types developed in the DRC copper belt where Cu and Co mineralisation occurs: Continuous, stratabound, sediment hosted Cu-Co deposits with significant strike extent (e.g. Tenke-Fungarume). These are similar to the Cu-Co deposits developed in the Zambian Copperbelt but may also be terminated at depth against breccias zones representing thrust faults. This is in contrast to the Zambian copper belt deposits which are generally continuous at depth. Discontinuous, raft-style stratabound sediment hosted Cu-Co deposits such as Kalukundi. The raft-style deposits are interpreted to be generally small allochtonous fragments of Lower Roan stratigraphy thrust northwards from the main Lufilian arc. Mineralisation and host lithology is broadly similar to the more continuous deposits. The relationship between the DRC carbonate-shale hosted deposits and the Zambian shale-arenite deposits is controversial, but there is no reason to propose

12

widely differing origins. The main differences are the characteristics of the Lower Roan Formation facies, and the tectonic disruption of the DRC stratigraphy.

5. STRATIGRAPHY 5.1

KATANGA COPPERBELT DRC Geology and Project Location.

KATANGA SUPERGROUP

The sediments in the Lufilian belt and its foreland were deposited during the Neoproterozoic, on a Palaeo- to Mesoproterozoic basement. The Katangan sediments started to be deposited in an intra-cratonic rift (Porada and Berhorst, 2000; Unrug, 1988) or in an epicontinental marine embayment (Jackson et al., 2003). The underlying pre- Katangan basement is poorly studied in Katanga and what is known in northern Zambia has been documented by Key et al. (2001) and Rainaud et al. (2002). These sediments were deformed during the Lufilian orogeny (ca 560 550 Ma; Cahen et al., 1984; Kampunzu and Cailteux, 1999; Porada and Berhorst, 2000). The Lufilian fold-and-thrust belt and its foreland are bordered to the west by the Mesoproterozoic Kibaran belt and to the east by the Paleoproterozoic Bangweulu block. The Katanga Supergroup consists of a 5 to 10 km-thick sequence that can be subdivided into three groups based on two regionally extensive diamictites. From the bottom to the top, the Katanga Supergroup is divided into the Roan, the Nguba and the Kundelungu Groups (Cailteux et al., 2005). Sedimentation of the Katanga system started in a continental Roan rift basin after ~880Ma (Armstrong et al., 2005), with a basal conglomerate (Cailteux, 1994). The Roan is divided into four subgroups, i.e. the R1 to R4 Subgroups. The R1 Subgroup, known as the roches argilo-talqueuses (R.A.T.), consists essentially of massive or irregularly stratified detrital formations with hematite present as authigenic plates and red pigment, attesting to the primary oxidising conditions (Cailteux, 1994). Towards the contact with the R2 (Mines Subgroup), there are indications that sedimentation took place in an evaporitic environment. The sedimentary transition to the Mines subgroup is at certain localities continuous, whereas at other localities a tectonic breccia developed at the contact. The tectonic breccia formed during detachment of the Mines Subgroup, which was aided by fluidisation of evaporitic material, probably present near the top of the R.A.T.

13

subgroup (Cailteux and Kampunzu, 1995). The importance of salt tectonics to explain the large observed breccia bodies in the Lufilian belt is further stressed by Jackson et al. (2003). The Mines Subgroup (R2) is a carbonate unit that contains the richest stratiform copper-cobalt mineralisation, which occur at two different stratigraphic levels. The overlying R3 (Dipeta Subgroup) is subdivided in four formations, each characterised by predominantly argillaceous and siliciclastic beds at the base and by predominantly carbonate beds at the top (Cailteux, 1994). The transition to the overlying Mwashya Subgroup is again marked by a tectonic breccia which developed at the contact. The Mwashya was deposited between 760 and 735Ma (Master et al., 2005). The continuous stratigraphic sequence for the Roan group, as proposed by Franois (1974) and Cailteux (1994), is contested by some authors.

Stratigraphy of the Katanga Supergroup in Democratic Republic of Congo (modified after Cailteux et al., 2005).

Porada and Berhorst (2000) agree that the R.A.T. was deposited on the preKatangan basement, but they believe that the overlying Mines, Dipeta and Mwashya subgroups form a platform facies association, which became a

14

Copperbelt-type tectonostratigraphical succession through the development of foreland propagating thrust faults. Wendorff (2000a+b, 2005) does not interpret the brecciated contacts as of tectonic origin. He proposed they should be called conglomerates that were derived from erosion of advancing thrust sheets during the Lufilian orogeny. The R.A.T. and the Dipeta Groups are olistostromes, deposited at the border of the developing Lufilian orogen (Wendorff, 2002a+b, 2005). In contrast to the disagreement about the stratigraphy of the Roan, all authors agree that sedimentation of the Nguba group started with the deposition of a diamictite (the Grand Conglomrat) that likely formed part of the Sturtian glacial deposits (Kampunzu et al., 2005). The Grand Conglomrat thickens towards the north (Franois, 1974) and is at least observed as far north as Pweto, which is a town to the north of Dikulushi (Cahen, 1954). The Likasi Subgroup, with at its base the Grand Conglomrat, contains a mixture of shale and dolomite in the south and a lateral facies change towards pure shale in the north of the Kundelungu basin (Franois, 1974; Batumik et al., 2006). The Kakontwe limestone, in the middle of the Likasi Subgroup, is only observed in the south, towards the Lufilian belt. This limestone formation could be a cap carbonate, confirming the interpretation of the Grand Conglomrat as a glacial tillite (Porada and Berhorst, 2000). The Monwezi Subgroup was deposited towards the end of the Nguba and consists of more detrital lithologies, with relatively thin arkose layers in the north and thick, slightly carbonatised pelites and fine sands in the south (Franois, 1974). Transition to the overlying Kundelungu Group is again marked by a diamictite (the Petit Conglomrat) that forms part of the Kalule Subgroup. This conglomerate layer could have been deposited during the Marinoan-Varanger ice age. The Kalule Subgroup is similar to the Likasi Subgroup, since it also contains a thin cap carbonate (the Calcaire Rose) overlying the Petit Conglomrat. The Kalule Subgroup becomes more detrital towards its top, with the deposition of dolomitic siltstones, sandy shales and pink oolitic limestone. The calcaire rose is, unlike the Kakontwe limestone from the Likasi Subgroup, continuous from the south to the north, with a layer thickness of around 5m (Franois, 1974). The Kiubo Subgroup overlies the Kalule Subgroup and consists of sandstones and shales (Cailteux et al., 2005). The top of the Kundelungu group is formed by the Plateau Subgroup that consists of shales and arkoses. Historically, the mineralized sections of the R.A.T. and the Mines Subgroup have been subdivided in different sections based on their appearance (e.g. Franois, 1974). The R1 Sub-group forms the so-called R.A.T. rouge. The Mines Subgroup (R2) has been subdivided into three formations that are subdivided into different niveaus. Formation R2.1 is subdivided into niveau R2.1.1 or the so-called R.A.T.gris, in niveau R2.1.2 that consists of subniveau R2.1.2.1 or DStrat and subniveau R2.1.2.2 or R.S.F. and niveau R2.1.3 or the R.S.C. The formations R2.2 and R2.3 are also called S.D. and C.M.N, respectively.

5.2

BASEMENT

In the Lufilian Belt, the boundary between the basement and the katangan succession is marked by the Nchanga Granite (ca. 877 +/- 11 Ma) unconformably overlied by conglomerates, arkoses and quartzites of the Lower Roan Group. The basement in the Lufilian belt, overlaid by the Katangan Supergroup, consists of the lower basement, which are rocks of Eburnean age (granites, gneisses and schists). In Zambia, directly covering the basement and prior to the Katanga deposition, the upper basement, the Muva Supergroup consists mainly of schists, quartzites, quartz-muscovite schists. It is encountered in the Lufilian Belt but limited to the Kafue Anticline, in the centre of the Luswishi Dome and locally

15

in the Chingola area. This group was deformed and metamorphosed within the Irumide Belt during the Kibaran cycle (1350- 1100 Ma). The intrusive rocks (mostly felsic magmatic) are considered as pre-tectonic (e.g. Nchanga Granite, Lusaka Granite, affecting the basement) as well as syntectonic (Porada and Berhorst, 2000) to the Katanga Supergroup (e.g. Ngoma Gneiss).

6. LOCAL GEOLOGY
Within the overall setting of the CAC, the Project area occurs within the DRC portion of the CAC in the Katanga Province, and forms part of the Kolwezi Klippe deposits. At Kolwezi, Roan Group strata actually overlie the younger Lower Kundelungu Group rocks, in a large thrust sheet known as the Kolwezi Nappe. The Kamoto Mine, DIMA and Musonoie-T17 West deposits occur within the Kolwezi Nappe and are hosted by the Mines Subgroup (old Mines Series or Series des Mines) of the Roan Group. The Kolwezi Nappe is an approximately elliptical, northeast striking synclinal basin with major and minor axes of approximately 20km and 10km, respectively. In Katanga, the Roan Group (which hosts the majority of the copper-cobalt deposits) consists mainly of carbonate rocks- schists, shales, siltstones, dolomites, stromatolitic bioherms, and sandstones. Here most of the Roan Group is allochthonous, and is bounded by breccias. There are two main stratiform CuCo orebodies separated by a biohermal dolomite. Despite their age and deformation, the rocks of Roan Group at Kolwezi are not highly metamorphosed, and the region is nearly devoid of intrusives, with only minor and sporadically located mafic intrusive rocks.

16

17

Kolwezi klippe geology

The main geological units making up the ore horizons in the Roan strata are listed as follows: CMN Calcaire a Minerais Noirs or Calcareous Unit with Black Minerals A slightlybanded and laminated light-grey to grey, silicified dolomite mineralized with black oxide ofiron, manganese and cobalt. The unit bears some similarities with the RSC. SDS "Shales Dolomitiques Superieurs" (Upper Dolomitic Shales) composed of bedded and laminated dolomitic siltstone and fine-grained sandstone. Sporadic, poor (sub-economic) copper mineralization occurs throughout this horizon. In some fragments, there are significant intersections of "hangingwall ore" in this material.

SDS 3b

SDB "Schistes De Base" (Basal Schists) silty dolomite to siltstone containing some nodules. This (Upper Orebody) is also one of the main ore bearing horizons with high grade copper and cobalt, which has been extensively mined by Artisanal workers.

SDS 2b collenia

18

SDB 1a Argilo

RSC "Roches Silicieuses Cellulaires" (Siliceous Rocks with Cavities, Cellular) comprises massive to stromatolitic, silicified dolomite. It forms conspicuous ridges. It is generally poorly mineralised in the suphide zone, but secondary enrichment in the hypogene zone is excellent in places. The hydrothermally altered stromatolites are occasionally enriched with black heterogenite (cobalt) oxides. RSF Roches Siliceuses Feuilletees or "Foliated" (Laminated) and Silicified (dolomitic) Rocks. It is made up of silicified bedded dolomitic shales. This unit hosts the "Lower Ore Zone" which is developed close to the contact with the overlying RSC. DStrat. Dolomites Stratifiees or "Stratified Dolomite" is similar to the overlying RSF. It is comprised of well-bedded argillaceous dolomites. Near the top of the unit, a nodular chert-rich horizon is characteristic. This unit also forms part of the Lower Ore Zone.

Dstrat

19

RAT

20

Roches Argilo-Talcqueuse is the lowest member of the Series des Mines stratigraphy and comprises a sequence of dolomitic and talcose argillaceous units. Both RAT Grise (Grey) and RAT Lilas (purple) occur in the Kalukundi area. This unit, particularly the RAT Grise, also forms part of the Lower Ore Zone. B RAT Breche RAT or brecciated RAT . A reddish-pink brecciated rock with calcite and silica veinlets and is at times well mineralized with specular haematite, occurring as veinlets. BRECHE HETEROGENE This unit occurs at the base of the sequence and the fragments in the breccia are derived from all rock types of the Roan Mines Series. The fragments are generally angular but occasionally well rounded, ranging from a few millimetres to several centimetres in size. The matrix consists of finer-grained particles with the same composition as the larger fragments. The breccia is generally accepted as having a tectonic origin.

7. MINERALIZATION
Two parallel to sub-parallel mineralized zones are encountered in the Kamoto Mine, DIMA and Musonoie-T17 West areas of the Property, which may be altered within the weathered zone, where supergene enrichment may refocus the main mineralized zones. In the underground workings at the Kamoto Mine, copper and cobalt occur as finely disseminated sulphide minerals, dominantly chalcocite and carrollite (Co2CuS4), with traces of bornite and chalcopyrite. The footwall to the lower mineralized zone (the OBI) is made up by the Red RAT (RAT Lilas) and is a haematitic unit devoid of sulphide mineralization. Within the OBI the main copper sulphide ore minerals are chalcocite and bornite and the main cobalt mineral is carrollite. The upper mineralized zone (the OBS) has a similar mineral assemblage to the lower mineralized zone, however chalcopyrite may also be present. The superior suffix has nothing to do with the grade of the mineralized zone, and relates purely to its stratigraphic position above the OBI. Above the OBS the sulphide fraction is gangue and consists mainly of pyrite with minor chalcopyrite. The upper and lower mineralized zones on the Property are separated by a poorly mineralized to unmineralized dolomitic unit, the RSC. Underground inspection of this unit at the Kamoto Mine (Etang Section) showed visible crystals of carrollite to be present in the lowermost metre, and this part of the unit may give elevated cobalt and copper grades.

7.1

OXIDE AND SULPHIDE MINERALOGY

The main oxide minerals in the Kamoto fragments are Malachite, Kolwezite and Chrysocolla in the case of copper and heterogenite in the case of cobalt. These and the less common minerals are listed as follows: Malachite Cu2Co3(OH)2 Chalcanthite CuSO4.5H2O Kolwezite (Cu,Co)2CO3(OH)2 Libenthinite (Cu2(PO4)(OH)) Chrysocolla Cu2H2(Si2O5)(OH)4 Cuprite Cu2O Native Copper

21

Heterogenite Co+3O(OH) Mg-Spherocobaltite Mg.CoCO3

Oxide mineralogy

The main sulphide minerals are chalcocite, bornite and chalcopyrite in the case of copper, and carrollite in the case of cobalt. The chemical compositions are as follows: Chalcocite Cu2S Digenite Cu2S Bornite Cu5FeS4 Covellite CuS Chalcopyrite CuFeS2 Carrolite Cu(Co)2S4 Linaeite (Siegenite) Ni(Co)2S4 Cobaltite CoAsS

Native Copper

In addition, haematite (Fe2O3), specular hematite (Fe2O3), sel rose cobalt a bright pink cobaltiferous-CaCO3 (above), and siderite (FeCO3) were reported by JCI and Gcamines also described the presence of tenorite (CuO). Pyrite is present in small amounts.

Sulphide Mineralogy

8. MINES
22

8.1

T17 MINE

The T17 West is described as dismembered structurally complex packages, which belong to the southern flank of a synclinal fold that extends 2,6 km and is overturned towards the north. Faulting is assumed to be the predominant process in the deformation and dismemberment of the deposit.

8.2

KAMOTO MINE

The Kamoto underground operations extract mineralized copper ores from the Kamoto Principal fragment, which is differentiated from the Kamoto East, mined in the KOV pit, but contains the same lithologies. The morphology of the ore body is described as flat to gently dipping in the central parts, becoming steeper towards the flanks. Dips in the central parts vary between 0 and 20 increasing to about 45 towards the flanks. Dips in the flank regions are between 45 to 85. The ore body is subdivided into four regions as follows: The main central region, comprising Zones 1 to 8 and division 5. Commonly referred to as the Principal. Etang South. Etang Nord.

Orebodies underground

8.3

KOV MINE

There are three main individual fragments hosting mineralized Lower Roan lithologies within the KOV pit area. These are Kamoto East, Oliveira and Virgule, from which the name KOV is derived. A fourth and smaller fragment, the FNSR, is a remnant of the Musonoi West fragment mined to the east of KOV pit. The FNSR lies below and is sub-parallel to the Virgule ore body. Other fragments within the area are OEUF and Variante. The OEUF consists mostly of hanging-wall lithologies occurring above the Virgule fragment, and the Variante lies below the Virgule and Oliveira fragments but outcrops towards the east in the Musonoi West area. Lower Roan lithologies have been identified in the Variante, but investigations indicate poor copper and cobalt mineralization within these lithologies. Within

23

each of the mineralized fragments, the succession of lithologies is intact, although in the FNSR fragment the Lower Roan lithologies occur overturned. The fragments that make up the KOV ore body occur in an east-west-striking synclinal structure consisting of a steeply dipping southern limb and a shallow dipping northern limb, respectively named the Kamoto East and Virgule ore bodies, while the Oliveira fragment is a shallower-dipping ore body in faulted contact with and below the Virgule ore body.

24