SRK Consulting (Canada) Inc.

101 – 1984 Regent Street South

Sudbury, Ontario, Canada
P3E 5S1

T: +1.705.682.3270

sudbury@srk.com
www.srk.com

Memo
To: Ahmed Smouh Date: February 8, 2018
Company: Group Managem From: Sébastien Bernier
Copy to: Project #: 3CM036.005
Subject: Mineral Resource Statement - Tizert Copper Project, Morocco

1 Introduction

SRK Consulting (Canada) Inc. (“SRK”) was retained by Group Managem (“Managem”) to update the
mineral resource estimate for the Tizert copper project. The Tizert copper project is an undeveloped
sedimentary-hosted copper (silver) property located in the Anti-Atlas province of Morocco. The deposit is
potentially amenable to bulk underground mining.

The mineral resources reported herein consider drilling information available to December 13, 2017 and
were evaluated using a geostatistical block modelling approach constrained by copper mineralization
wireframes. The mineral resources have been estimated in conformity with the CIM “Mineral Resource and
Mineral Reserves Estimation Best Practices” guidelines and are classified according to the CIM Definition
Standards for Mineral Resources and Mineral Reserves (May 2014) guidelines. The Mineral Resource
Statement is reported in accordance with Canadian Securities Administrators’ National Instrument 43-101.

The construction of the mineral resource model for the Tizert copper project was a collaborative effort
between Managem and SRK personnel. Managem provided the borehole database, preliminary copper
mineralization wireframes, and economic parameters for the cut-off grade determination. The construction of
three-dimensional resource domains was reviewed by Mr. Sébastien Bernier, PGeo (APGO#1847) during the
site visit which occurred between December 11 and 18, 2017. Mr. Bernier also completed the resource
evaluation work in close collaboration with Managem. Finally, this assignment benefited from the senior
review of Mr. Glen Cole, PGeo (APGO#1416).

2 Mineral Resource Estimation Methodology

The mineral resources reported herein have been estimated using a geostatistical block modelling approach
informed from core borehole data all constrained within 0.2 % Cu grade shells. Geological models of the
PIII, Série de Base and Dolomite units associated with the grade shells, were defined using a traditional
wireframe interpretation constructed from sectional interpretation of the drilling data.

The evaluation of the mineral resources involved the following procedures:

Managem_Tizert_MRS_Memo_3CM036_005_SBB_gc_vp_Rev05.docx Local Offices: Group Offices:

Saskatoon Africa
Sudbury Asia
Toronto Australia
Vancouver Europe
Yellowknife North America
South America
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• Database compilation and verification;

• Construction of three-dimensional wireframe models for the boundaries of the lithology and
0.2% Cu grade shells containing the copper (and silver) mineralization;
• Definition of resource domains within the geological models;
• Data extraction and processing (compositing and capping), statistical analysis, and variography;
• Selection of estimation strategy and estimation parameters;
• Block modelling and grade estimation;
• Validation, classification, and tabulation;
• Assessment of “reasonable prospects for eventual economic extraction,” and selection of the
reporting assumptions; and
• Preparation of the Mineral Resource Statement.

2.1 Resource Database

As of December 1, 2017, the exploration data available to evaluate the mineral resources for the Tizert
copper project includes surface 816 boreholes drilled (166,341 metres – 23,337 assays), all drilled by
Managem with the exception of a few historical exploration holes.

The collar position of each borehole was assessed using a hand-held GPS unit with accuracies generally
within a few metres. When required, the elevation of the boreholes was adjusted using a high-
resolution topographic profile provided by Managem.

SRK received the borehole sampling data in Datamine Studio format. SRK performed the following
validation steps:

• Checked minimum and maximum values for each quality value field and confirmed/edited those
outside of expected ranges; and
• Checked for gaps, overlaps and out of sequence intervals in assays tables.

No errors were found and SRK is satisfied with the quality of the database received from Managem.

2.2 Geological Modelling

The PIII, Série de Base and Dolomite units forming the Tizert copper project were modelled by Managem,
with most of the mineralization and at a higher grade occurring in the Série de Base. During the site visit,
SRK validated the interpretation and wireframing approach with Managem. In close collaboration with SRK,
Managem generated 10 unique 0.2 % Cu grade shells to constrain the copper (and silver) mineralization of
the deposit (Figure 1). The grade shells are essentially parallel to the lithological units. SRK carefully
reviewed the wireframes provided by Managem and, after minor modifications, is satisfied with the quality
of the wireframes generated by Managem.

SRK is satisfied that the geological modelling honours the current geological information and knowledge of
the Tizert copper (silver) project.

2.3 Compositing and Capping

Borehole assay data was extracted from within all the 0.2% Cu grade shells (Figure 1) and examined for
determining an appropriate composite length (Figure 2). Block model cell dimensions and anticipated large-
scale room and pillar underground mining methods were also considered in the selection of the composite
length. A modal composite length of 1.0 metre was applied to all data (Figure 2).

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The impact of copper and silver outliers was examined on composite data using log probability plots and
cumulative statistics. In collaboration with Managem, SRK determined that capping analysis should be
performed based on the different lithologies (PIII, Série de Base and Dolomite) present within the 0.2% Cu
grade shell. Basic statistics for each metal assays, composites, and capped composites are summarized in
Table 1. Basic statistics, histograms, and cumulative probability plots for each metal were applied to
determine appropriate capping grades. These are illustrated in, Figure 4 and Figure 5 using copper and silver
in Série de Base as an example, respectively.

Figure 1: Modelled 0.2% Cu Grade Shells for the Tizert Copper Project, in Relation to the Drilling
Information (Black)

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Figure 2: Sampling Length within the 0.2% Cu Grade Shells

2.4 Specific Gravity

Specific gravity measurements were obtained by pycnometry at the assay laboratory as part of the routine
assaying protocol. A total of 1,677 specific gravity measurements were taken within the mineralized units
(Figure 3). A uniform specific gravity of 2.75 was applied to all the 0.2% Cu grade shells.

Figure 3: Summary of the Specific Gravity Database

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Figure 4: Basic Statistics of the Copper Data for the Série de Base

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Figure 5: Basic Statistics of the Silver Data for the Série de Base

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Table 1: Basic Statistics

Sample Standard Coefficient Capped
Element Lithology Minimum Maximum Mean
Count Deviation of Variation Count
Assays
Copper (%) PIII 40 0.00 3.30 1.14 1.09 0.96
Copper (%) Série de Base 7,857 0.00 15.36 0.69 0.82 1.19
Copper (%) Dolomite 2,022 0.00 12.28 0.48 0.83 1.74
Silver (g/t) PIII 40 0.00 125 10.41 22.56 2.17
Silver (g/t) Série de Base 7,857 0.00 615.00 141.39 22.78 1.58
Silver (g/t) Dolomite 2,022 0.00 479.00 12.40 27.07 2.18
Composites
Copper (%) PIII 45 0.00 3.30 1.37 1.04 0.76
Copper (%) Série de Base 5,478 0.00 15.36 0.80 0.81 1.01
Copper (%) Dolomite 1,315 0.00 12.28 0.65 0.94 1.46
Silver (g/t) PIII 45 0.00 125.00 11.61 24.21 2.09
Silver (g/t) Série de Base 5,478 0.00 351.19 16.62 22.33 1.34
Silver (g/t) Dolomite 1,315 0.00 357.82 16.25 30.65 1.89
Capped Composites
Copper (%) PIII 45 0.00 3.20 1.36 1.03 0.76 1
Copper (%) Série de Base 5,478 0.00 7.50 0.80 0.78 0.97 3
Copper (%) Dolomite 1,315 0.00 6.30 0.63 0.81 1.29 5
Silver (g/t) PIII 45 0.00 47.00 8.96 14.80 1.65 2
Silver (g/t) Série de Base 5,478 0.00 209.00 16.56 21.62 1.31 4
Silver (g/t) Dolomite 1,315 0.00 167.00 15.28 22.71 1.49 10

2.5 Block Model Definition

The criteria used in the selection of block size included the borehole spacing, composite assay length, the
geometry of the modelled grade shells, and the anticipated underground mining technique. In collaboration
with Managem, SRK selected a block size of 10 by 10 by 2 metres on X, Y and Z respectively. Subcells at 1
metre resolution on X and Y, 0.5 metre on Z were used to honour the geometry of the modelled grade shells.
Subcells were assigned the same grade as the parent cell. The block model is not rotated. The characteristics
of the final block model are summarized in Table 2.

Table 2: Tizert Project Block Model Specifications

Block Size (m) Number Rotation Rotation
Domain Axis Origin*
Parent Subcell of Cells Angles Priority
X 10 1 207,800 340 - -
All Y 10 1 362,600 500 - -
Z 2 0.5 600 450 - -
*UTM grid (NAD 83 datum)

2.6 Variography

Variography were used to assess the spatial continuity of the copper and silver data and to assist with the
selection of estimation parameters. SRK evaluated the spatial distributions using variograms and
correlograms on data from the Central area of the deposit where the drilling density is denser. Continuity
directions were assessed based on the orientation of the mineralization relative to the lithological units and
their spatial distribution. Further, variogram calculation considered sensitivities on orientation angles prior to
finalizing the correlation orientation. All variogram analysis and modelling was performed using Datamine
Studio RM and the Geostatistical Software Library (GSLib).

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The modelled variogram for the Central area is presented in Figure 6 and Table 3. The same variogram was
applied to all other zones, however the orientation was adjusted to honour the individual slight dip change
(Table 4). The variogram model developed for copper was also applied for the silver estimation.

Figure 6: Copper Variogram for the Central area that forms the Basis for Variogram Fitting
Note: The solid lines correspond to the fitted model, while the dashed lines correspond to the experimental
variogram in those same directions.

Table 3: Variogram Parameters for the Tizert Project

R1x R1y R1z
Element Source Structure Contribution Model
(m) (m) (m)
C0 0.25 Nugget - - -
Central
Cu C1 0.60 Exponential 80 90 7
Area
C2 0.15 Spherical 275 120 7

Table 4: Variogram Angle Orientations for the Tizert Project

Angle1 Angle1 Angle1 Axis Axis Axis
Zone Code
1 2 3 1 2 3
Ouest 18 120 -12 2 Z X Y
Ouest 37 120 -12 6 Z X Y
Nord 55 120 -15 10 Z X Y
Nord 47 120 -15 10 Z X Y
Centre 9 120 12 6 Z X Y
Centre 35 120 6 3 Z X Y
Sud 19 120 -12 3 Z X Y
Sud 54 120 -15 4 Z X Y
Est 17 120 8 10 Z X Y
Aferni 6 120 12 15 Z X Y

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2.7 Estimation Strategy

Table 5 summarizes the general estimation parameters used for the copper and silver estimation. In all cases,
grade estimation used ordinary kriging and four passes informed by capped composites (Table 6). The first
pass was the most restrictive in terms of search radii and number of boreholes required. Successive passes
usually populate areas with less dense drilling, using relaxed parameters with generally larger search radii
and less data requirements. SRK assessed the sensitivity of the copper block estimates to changes in
minimum and maximum number of data, use of octant search, and the number of informing boreholes.
Results from these studies show that globally the model is relatively insensitive to the selection of the
estimation parameters and data restrictions mainly due to the relative uniformity of the copper grade
distribution.

For the first estimation pass, composites from at least three boreholes informing at least seven of the search
ellipsoid octants were necessary to estimate a block. The second pass also used restrictive octant search
options, but only five octants were required. Because of their unique geological characteristics, the grade
shell was estimated independently using a hard boundary.

Table 5: Summary of Estimation Search Parameters for Copper and Silver

Parameter 1st Pass 2nd Pass 3rd Pass 4th Pass
Interpolation method OK OK OK OK
Search range X (relative to Variogram range) 1x 1x 1x 2x
Search range Y (relative to Variogram range) 1x 1x 1x 2x
Search range Z 40m 40m 40m 40m
Minimum number of composites 9 7 5 2
Maximum number of composites 12 16 16 16
Octant search Yes Yes No No
Minimum number of octant 7 5 - -
Minimum number of composites per octant 1 1 - -
Maximum number of composites per octant 12 12 - -
Maximum number of composites per borehole 4 4 4 0

Table 6: Volume Estimated per Pass

Estimation Volume Percent
Zones
Pass Estimation Estimated
1 8,269,073 21%
2 13,571,378 35%
All
3 14,997,699 39%
4 1,897,108 5%

2.8 Block Model Validation

The block model estimates were validated through:

• Comparison of the basic statistics of ordinary kriging estimates with nearest neighbour estimates
and with the original capped composite source data. (Figure 7).
• Comparison of kriged estimates against an inverse distance (power of two) estimates to assess
potential impact of negative kriging weights.
• Visual comparison of block estimates to original borehole data on plans and sections.

Validation checks confirm that the block estimates are a reasonable representation of the informing data
considering the current level of geological and geostatistical understanding of the deposit.
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Figure 7: Validation of the Copper Block Estimates for the Tizert Project

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3 Mineral Resource Classification and Preparation of Mineral Resource Statement

CIM Definition Standards for Mineral Resources and Mineral Reserves defines a mineral resource as:

“[A] concentration or occurrence of diamonds, natural solid inorganic material, or natural solid
fossilized organic material including base and precious metals, coal, and industrial minerals in or
on the Earth’s crust in such form and quantity and of such a grade or quality that it has reasonable
prospects for economic extraction. The location, quantity, grade, geological characteristics and
continuity of a Mineral Resource are known, estimated or interpreted from specific geological
evidence and knowledge.”

The “reasonable prospects for economic extraction” requirement generally implies that the quantity and
grade estimates meet certain economic thresholds and that the mineral resources are reported at an
appropriate cut-off grade that considers extraction scenarios and processing recoveries. Block model
quantities and grade estimates were classified according to the CIM Definition Standards for Mineral
Resources and Mineral Reserves (May 2014) by Mr. Sébastien Bernier, PGeo (APGO#1847).

The Mineral Resource Statement for the Tizert copper project is reported at an in-situ cut-off grade of 0.45
percent copper equivalent (CuEq) assuming a copper price of US$ 2.95 per pound, a silver price of
US$ 16.00 per ounce and a recovery of 88 percent and 85 percent respectively (Table 7).

Table 7: Assumptions Considered for Conceptual Underground Extraction

Parameters Value Unit
Copper Price 6,500 US$/tonne
Silver Price 16 US$/oz
Milling Recovery – Copper 86 percent
Milling Recovery – Silver 85 percent
General and Administrative 2.08 US$/tonne of feed
Mining Costs 18.80 US$/tonne mined
Milling Costs 10.64 US$/tonne of feed
Mining Dilution 5 percent
Mining Loss 10 percent
In Situ Cut-Off Grade 0.45 percent CuEq

Mineral resource classification is typically a subjective concept, and industry best practices suggest that
resource classification should consider the confidence in the geological continuity of the mineralized
structures, the quality and quantity of exploration data supporting the estimates, the geostatistical confidence
in the tonnage and grade estimates, and the continuity at the reporting cut-off grade. Appropriate
classification criteria should aim at integrating these concepts to delineate regular areas at a similar
classification.

SRK is satisfied that the geological modelling honours the current geological information and knowledge.
The location of the samples and the assay data are sufficiently reliable to support resource evaluation. SRK
considers the deposit to be amenable to extraction by underground methods. The sampling information was
acquired primarily by core drilling on pierce points spaced at 50 to 200 metres. Most areas have been
sampled by a sufficient number of boreholes to model the spatial variability of copper grade. Accordingly, all
block estimates with borehole spaced fifty metres or less can be classified as Measured resources. Areas
informed by drilling between 50 to 100 metres can be classified as Indicated with the remaining of the
geological model being classified as Inferred resources.

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The Mineral Resource Statement for the Tizert copper project is presented in Table 8. Mineral resources are
not mineral reserves and do not have demonstrated economic viability. There is no certainty that all or any
part of the mineral resources will be converted into mineral reserves. SRK is unaware of any environmental,
permitting, legal, title, taxation, socio-economic, marketing, and political or other relevant issues that may
materially affect the mineral resources.

Table 8: Mineral Resource Statement*, Tizert Copper Project, Morocco,

SRK Consulting (Canada) Inc., January 23, 2018
Quantity Grade Contained Metal
Resource Category
(‘000 t) Cu (%) Ag (g/t) Cu (‘000 Lb) Ag (‘000 Oz)
Measured 13,010 0.76 15 218,000 6,300
Indicated 63,050 0.81 17 1,125,900 34,500
Measured + Indicated 76,060 0.80 17 1,343,900 40,800
Inferred 15,240 0.74 16 248,600 7,800
* Reported at a cut-off grade of 0.45 percent copper equivalent assuming a bulk underground mining method,
copper price of US$ 2.95 per pound, a silver price of US$ 16.00 per ounce and a recovery of 88 percent and 85
percent respectively. All figures rounded to reflect the relative accuracy of the estimates. Mineral resources are
not mineral reserves and do not have demonstrated economic viability.

The mineral resource model is relatively sensitive to the selection of the reporting copper equivalency
reporting cut-off grade. To illustrate this sensitivity, the quantities and grade estimates are presented in Table
9 at various cut-off grades and grade tonnage curves are presented in Figure 8. The reader is cautioned that
the figures presented in this table should not be misconstrued with a Mineral Resource Statement. The
figures are only presented to show the sensitivity of the block model estimates to the selection of copper
equivalent cut-off grade.

Table 9: Global Block Model Quantities and Grade Estimates* at Various Copper Equivalent Cut-Off
Grades
Cut-Off Measured and Indicated Blocks Inferred Blocks
Grade Quantity Grade Quantity Grade
CuEq Tonnage Cu Ag Tonnage Cu Ag
(%) (Kt) (%) (g/t) (Kt) (%) (g/t)
0.10 88,000 0.73 16 18,000 0.66 15
0.20 88,000 0.74 16 18,000 0.66 15
0.30 86,000 0.75 16 18,000 0.67 15
0.40 80,000 0.78 17 16,000 0.71 16
0.50 72,000 0.83 18 14,000 0.77 17
0.60 63,000 0.88 19 12,000 0.82 18
0.70 53,000 0.94 20 10,000 0.88 19
0.80 44,000 1.01 21 8,000 0.95 21
0.90 35,000 1.09 23 7,000 1.00 22
1.00 28,000 1.17 24 5,000 1.05 23
1.10 22,000 1.26 26 4,000 1.12 25
1.20 17,000 1.34 27 3,000 1.19 27
1.30 14,000 1.42 28 2,000 1.25 29
1.40 11,000 1.51 29 1,000 1.35 31
1.50 8,000 1.60 31 1,000 1.48 33

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Figure 8: Global Grade Tonnage Curves for the Tizert Project

Yours truly,

SRK Consulting (Canada) Inc.

Sébastien Bernier, PGeo

Principal Consultant (Resource Geology)

Reviewed by: Glen Cole, PGeo, Principal Consultant (Resource Geology)

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