Scott Wilson Mining

Odyssey Resources Ltd

Alous Copper Silver Mine Project

Scoping Study

April 2007
Odyssey Resources Ltd
Alous Copper-Silver Mine Project Scoping Study

Report Control Form

Document Title Alous Copper-Silver Mine Project
Scoping Study

Client Name & Odyssey Resources Limited

90 Allstate Parkway, Suite #603
Address Markham, Ontario L3R 6H3
Canada

Document Reference Status &

D114506/R17712 Version 1
Issue No.
Issue Date April 2007

Lead Author
Peter Brown
(name) (signature & date)

Reviewer
Jim Hendry
(name) (signature & date)

Project Manager
David Smith
Approval (name) (signature & date)

Director Approval
Jim Hendry
(name) (signature & date)

Report Distribution Name No. of

Copies
Client

Scott Wilson Library 1 (master)

This document has been prepared by Scott Wilson Mining for the titled
project or named part thereof. The report expresses Scott Wilson Scott Wilson Mining
Mining’s opinions based on the information available at the time of Kanthack House, Station Road
preparation. No part of this document should be taken in isolation and Ashford, Kent, TN23 1PP
the entire document must be read, construed and acted upon in its
entirety. Scott Wilson Mining accepts no liability for use of or reliance
United Kingdom
on this document for any purposes other than that for which it was Tel: +44 1233 658200
commissioned or by any third party. Fax: +44 1233 658299
mining@[Link]

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Odyssey Resources Ltd
Alous Copper-Silver Mine Project Scoping Study

Contents
Page

1. TABLES III

2. EXECUTIVE SUMMARY ............................................................................................... 4

2.1. GEOLOGY .....................................................................................................................4
2.2. MINING ...........................................................................................................................4
2.3. MINERAL PROCESSING ...........................................................................................5
2.4. INFRASTRUCTURE.....................................................................................................6
2.5. ENVIRONMENT AND SOCIAL ..................................................................................6
2.6. PROJECT CAPEX ESTIMATE ..................................................................................6
2.7. PROJECT OPEX ..........................................................................................................8
2.8. ECONOMICS.................................................................................................................9

3. PROJECT DESCRIPTION........................................................................................... 18
3.1. REPORTS PROVIDED ..............................................................................................18
3.2. LOCATION...................................................................................................................18
3.3. CLIMATE......................................................................................................................19
3.4. LICENCE AREA .........................................................................................................19

4. GEOLOGY AND RESOURCES .................................................................................. 20

4.1. BACKGROUND ..........................................................................................................20
4.2. GEOLOGICAL SETTING ..........................................................................................21
4.3. RESOURCES ..............................................................................................................21
4.4. CONCLUSIONS ..........................................................................................................22

5. MINING 23
5.1. MINE OPTIMISATION ANALYSIS ..........................................................................23
5.2. MINE DESIGN .............................................................................................................25
5.2.1. Open Pit Designs .........................................................................................26
5.3. MINING METHODS AND EQUIPMENT .................................................................27
5.3.1. Drill and Blast Design .................................................................................27
5.3.2. Waste Disposal.............................................................................................28
5.4. MINE CAPITAL COST...............................................................................................28
5.5. MINE OPERATING COST ........................................................................................29
5.6. MANPOWER ...............................................................................................................29

6. MINERAL PROCESSING............................................................................................ 31
6.1. METALLURGICAL TESTWORK .............................................................................31
6.1.1. Summary of Previous Testwork...............................................................31
6.2. PLANT DESCRIPTIONS ...........................................................................................35
6.2.1. Flotation .........................................................................................................35
6.2.2. Heap Leaching ..............................................................................................36
6.2.3. Toll Processing.............................................................................................38
6.3. PLANT COSTS ...........................................................................................................38
6.3.1. Heap Leach Plant .........................................................................................39
6.3.2. Flotation Plant...............................................................................................40

7. INFRASTRUCTURE .................................................................................................... 42
7.1. SITE ROADS ...............................................................................................................42

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Alous Copper-Silver Mine Project Scoping Study

7.2. PROCESS PLANT .....................................................................................................42

7.3. MINE BUILDINGS ......................................................................................................42
7.3.1. Mine Workshop/Stores ...............................................................................42
7.3.2. Mine office .....................................................................................................42
7.3.3. Welfare Building...........................................................................................42
7.3.4. Sewerage treatment facility.......................................................................43
7.3.5. Explosive Store ............................................................................................43
7.3.6. Building Costs ..............................................................................................43
7.4. ELECTRIC SUPPLY ..................................................................................................43
7.5. WATER SUPPLY........................................................................................................43
7.6. TAILINGS DISPOSAL ...............................................................................................44

8. ENVIRONMENT AND SOCIAL ................................................................................... 45

8.1. BACKGROUND ..........................................................................................................45
8.2. LEGISLATIVE OVERVIEW.......................................................................................45
8.2.1. Environmental Legislation ........................................................................45
8.3. KEY ISSUES ...............................................................................................................46
8.3.1. Potential Significant Impacts....................................................................46
8.3.2. Regulatory Requirements..........................................................................46
8.4. RECOMMENDATIONS..............................................................................................47
8.5. REFERENCES ............................................................................................................47

9. PROJECT ECONOMICS ............................................................................................. 48

9.1. HEAP LEACH SCENARIO .......................................................................................48
9.2. FLOTATION SCENARIO ..........................................................................................49

10. CONCLUSIONS........................................................................................................... 52

11. RECOMMENDATIONS................................................................................................ 53
11.1. METALLURGICAL ASSESSMENT ........................................................................53
11.2. GEOLOGICAL ASSESSMENT ................................................................................53
11.3. INFRASTRUCTURE AND SITE ASSESSMENT ..................................................54

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Alous Copper-Silver Mine Project Scoping Study

1. TABLES

APPENDICES

(1) Notes on Previous Testwork Reports

(2) Drawings

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Odyssey Resources Ltd
Alous Copper-Silver Mine Project Scoping Study

2. EXECUTIVE SUMMARY
Scott Wilson Mining (SWM) has been appointed by Odyssey Resources Ltd. to
prepare a Scoping Study (the Study) on the Alous Copper-Silver Project (the Project)
of Odyssey Resources Ltd. (Odyssey). The purpose of the Study is to assist Odyssey
in its plans for the development of the Alous Copper-Silver Property.

The agreed scope of works is to include the following tasks:

(1) Review of Geology and Resource Model;
(2) Mine Planning/Design;
(3) Review of Metallurgy Documentation;
(4) Site Visit;
(5) Preliminary Processing Flow Sheet and Performance Estimates;
(6) General Site Layout;
(7) Preliminary Capital & Operating Costs;
(8) Project Economics;

2.1. GEOLOGY
A resource model has been previously prepared by P&E Mining Consultants and
based on this model a NI 43-101 Technical Report was submitted on 8 September
2006. The resource model was developed by P&E using the Gemcom commercial
modelling system. SWM has reviewed a copy of this resource model as well as the
Technical Report and has concluded that the resource estimate is suitable for
developing this scoping study analysis.

2.2. MINING
The geological interpretation shows the mineralization to be present in three separate
zones, designated Zones A, B & C. These open pit mine design limits are shown on
Drg. Nos. D11450-100-1000 (Flotation) and D11450-100-1001 (Heap Leach).

A Whittle open pit optimisation analysis was carried out to evaluate the potentially
mineable resources and to evaluate the alternative processing scenarios. The
analysis indicated that the most likely economically viable process will be by heap
leaching. The mine design has been based on this principle and will be a medium
scale open pit operation, mined at 1.0 Mtpa. The mining will be carried out utilizing
the traditional drill, blast, load and haul work cycle, with the bench height designed at
6 m with the berm width also set at 6 m.

The project evaluation summarised here has been based on all categories of Mineral
Resources, including Inferred Class material. The Inferred Class represents
approximately 30% of the current estimate and, as outlined later in this report, the
project economics are sensitive to available mineable resource. Consequently this
Scoping Study evaluation must be classed as a preliminary economic assessment.
The conclusions set out here are intended to support and guide decisions going
forward on advancing the project and identifying the key technical issues that need to
be assessed further before a full economic assessment can be completed.

The estimated recoverable in-pit resources are shown in the following table:

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Table 1: In-pit Resources

Pit Ore Tonnage (t) Cu (%) Ag (g/t) Cut-off Cu (%)
A 5,546,000 0.78 9.76 0.20
B 3,136,000 0.50 3.84 0.20
C 157,000 0.59 8.15 0.20
Total 8,839,000 0.68 7.63 0.20

The mine design has included for the following mining plant over the period of the
mine life;
• 1 No. 4 m3 capacity front-end loader
• 3 No. 35 tonne capacity off-road haulage trucks (a fourth haulage
truck will be required in year 4)
• 1 No. 150 mm diameter blast hole drilling rig.

The initial six years of production will be from Pit A with the remaining Pits B & C
being completed during year 9 of the project.

2.3. MINERAL PROCESSING

This section of the report has been prepared by Aker Kvaerner Engineering Services
(AKES) and has been based on reviews of several metallurgical testing reports
supplied by Odyssey.

The previous testwork, performed between 1967 and 1971 noted that heap leaching
had been found unsuitable, but it was not clear why this was so and the reports were
not available for review. Following the review of the available reports SWM are of the
opinion that if there is only 8.6 Mt of ore available, and given certain assumptions of
acid cost and consumption, the heap leach process may be more economically
viable processing option for the Alous project as compared to the flotation option.
Unfortunately it has not been possible to locate some of the reports that may have
helped to clarify the situation as regards the suitability of using the heap leach
process at Alous.

The analysis undertaken as part of this study shows that the flotation process is likely
to become viable only if additional economic resources can be identified.

Recommendations as regards additional testing works have been made by AKES, to

further confirm the suitability, or otherwise, of the heap leaching of the ore. These
are listed in Section 11 of this report and it is recommended that they be carried out
as part of the next phase of the project.

A need to carry out a hydrological survey to locate a sustainable water resource

(800,000 m3/annum) for the period of the mining works has been identified.

The option of toll processing the ore within Morocco has been investigated but the
nearest plant (CMG plant at Tata approx. 130 km from Alous) is currently running at
full capacity. No information was available as regards its future ability to process to
Alous ore or on the likely processing costs. Consequently this option could not be
evaluated in this study but does remain a possible option.

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2.4. INFRASTRUCTURE
The preliminary layout of the mine is shown on Drg. No [Link] has
been based on a heap leach process design.

If it is decided to proceed with a flotation plant it will be necessary to construct

sufficient tailing storage for the life of the mine. This will be 10.4 million m3 over the
life of the mine (1.3 m3/pa). From the topographical information available a site giving
one years capacity has been identified. This is shown on Drg. No. D11450-100-1000.
Further topographical survey information will be required to identify additional sites
for tailing storage.

The following buildings/facilities have been included in the mine design and CAPEX
estimates:
• Mine Office;
• Mine Workshop/Store;
• Welfare Building (including messing, changing and shower
facilities and prayer room);
• Explosive Store;
• Sewerage treatment.

2.5. ENVIRONMENT AND SOCIAL

For the Alous project to proceed further the national legislative framework in Morocco
requires that an Environmental Impact Assessment (EIA) is carried out, which would
then be reported in an Environmental Impact Statement (EIS). If international
funding is to be sought for the project, then the undertaking of an EIA and a
preparation of EIS will almost certainly be required to demonstrate compliance with
international best practice for the industry.

One of the key factors to be covered by the EIS will be the required resettlement,
both of the nearby village, and associated farming, primarily wheat production and
goats that are grazed across the area. It may also be necessary to prepare a
Resettlement Action Plan (RAP) for this element of the project.

Further key factors to be covered by the EIS will relate to, (but not limited to) the
following items:
• land take and subsequent potential impacts on soils, landscape,
ecology (e.g. Argan trees);
• archaeology and culture in the area;
• alteration and potential contamination of hydrogeology and
hydrology of the area.
These impacts are common to the mining industry and, while their specific
significance will require clarification through a project-specific EIS, in general these
impacts can usually be satisfactorily managed by application of recognised
mitigation, monitoring and management practices.

Typical budget for carrying out the EIA is US$500,000 and this has been included in
the Project CAPEX.

2.6. PROJECT CAPEX ESTIMATE

All capital costs are estimated to a typical Scoping Study level of +/- 50% accuracy.

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Table 2: Mine CAPEX

Activity Cost (US$)
Mining Equipment $3,908,000
Mine support facilities (Offices etc) $1,953,000
Mine general costs $1,363,000

Total CAPEX $7,224,000

Table 3: Indicative Heap Leach CAPEX

Item US$ Million
Crusher, conveyors Leach pad 11.5
SX/EW (ponds, utilities etc.) 13.0
EPCM etc. Included
Total Leach & SX/EW (over first 4
24.5
years)
Plus: deferred capital cost 5.0
for extra leach pads after Year 4
Total Processing CAPEX 29.5

Table 4: Indicative Flotation CAPEX

Item US$ Million
Equipment & Steelwork 16.4
Pipework 1.5
Electrical 5.8
Instruments & Control 0.9
Laboratory 1.1
Maintenance/Workshop/Misc 0.2
Spares: Stores First Fill 1.0
Delivery, Packing & FOB 0.6
Total Materials 27.5
Construction
Site Development Incl
Civils & Structures 14.7
Painting 0.3
Commissioning Artisan Support 0.1
Equipment Installer 1.3
Pipework Installer 2.9
Electrical Installer 2.9
Instruments Installer 0.2
Tailings Dam 1.6
Total Construction 24.0

Other Direct Costs

Temp. Facilities 0.7
Plant / Field / Scaffold / [Link]. 0.8
Shipping & Transport To Site Incld

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Vendors Staff & Consultants 0.6

3rd Party Inspection Incl
Total Other Direct Costs 2.1

Total Materials & Construction 53.6

EPCM & EXPENSES 6.7

Total 60.3

Insurance & Bonds Excl

Finance Charges Excl
Taxes, Duties, Fees Excl
Material Escalation (Excludes Equipment) Excl
Subcontracts Escalation Excl
Client Costs - (Reagents & Lube First Fill) 0.3
Contractors Contingency Excl
Total Plant Cost 60.6

Table 5: Infrastructure CAPEX

Building Area (m2) Cost ($)
Workshop/Stores 450 $103,500
Welfare Building 600 $135,000
Mine Office 200 $45,000
Explosive Store 100 $60,000
Sewerage treatment $20,000
Total building costs $363,500

2.7. PROJECT OPEX

Operating costs have been developed based on estimated input requirements, local
Moroccan labour rates and assumptions on consumption requirements based on
experience with other projects of a similar nature.

Table 6: Mine OPEX

Mining Activity US$/t Moved
Drilling 0.50
Blasting 0.15
Loading 0.20
Hauling 0.34
Roads and Dumps 0.25
Dewatering 0.08
Laboratory 0.02
Mine General 0.07
Maintenance Shop 0.10
Total 1.71

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Table 7: HL Processing OPEX

Expressed as either
Item
US$/t ore US$/lb Cu
Power 2.1 0.22
Manpower 0.5 0.05
Consumables 1.4 0.15
Maintenance Supplies 0.6 0.07
Total Processing OPEX 4.6 0.48

Table 8: Indicative Flotation OPEX

Item US$/t Ore
Power 4.9
Manpower 0.6
Consumables 2.3
Maintenance Supplies 0.8
Total 8.7

Table 9: Administration OPEX

Expressed as either
Item
US$ US$/t ore
Management $200,000 $0.20
Office Costs $100,000 $0.10
Warehouse Costs $100,000 $0.10
Transportation $50,000 $0.05
Taxes $100,000 $0.10
Insurance $100,000 $0.10
Communications $50,000 $0.05
Travel $50,000 $0.05

Total Administration OPEX $750,000 $0.75

2.8. ECONOMICS
Using capital and operating costs derived during the Study, an indicative project
economic analysis has been developed for the two process scenarios.

An allowance of US$1.60 million has been made for completing a project feasibility
study and an EIA.

A mine production rate of 1.0 Mtpa has been used for both process scenarios.

A copper price of $2.00/lb has been selected as the basis for the study.

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Based on the information outlined in each of the sections above the estimates of
project production performance, operating costs, and capital costs to develop the
project have been used to develop a project cash flow estimates and summary
economics for both the flotation, and the heap leach processing alternatives.

The heap leach project scenario contemplates a one year detailed technical
assessment period where the necessary metallurgical testing work, site investigation,
water supply evaluation, environmental baseline studies etc. are carried out. At the
end of this first year a project feasibility study will be completed supporting the project
implementation program covering the subsequent two years. The mine is forecast to
operate over a period of 9 years with site closure works being completed in the final
10th year.

For the study the same mine production levels have been used for each process
route.

A copper price of US$2.00/lb has been selected as the base case for the study. A
sensitivity analysis shows the impact of variation in the key project factors including
copper price.

The following summarises the base case cost factors that have been used to
generate the economics figures for a one million tonne per year heap leaching mine
development for the Alous deposit.

Table 10: Heap Leach Scenario – Key Cost Factors

Capital Costs
Project US$
Studies/Evaluation 1,600,000
Mine Equipment US$ 4,827,000
Process US$ 29,900,000
Infrastructure US$ 3,932,000
Closure Costs US$ 1,000,000
Contingency (20%) US$ 7,732,000
Total CAPEX US$ 48,991,000
Operating Costs
Mining US$/t mined $1.71
US$/t
Processing treated $4.60
US$/t
G&A treated $1.00
US$/t
Total Operating Costs treated $9.76

The following table summarises the results of the economic evaluation of the Heap
Leach Processing scenario. The project generates an undiscounted cash flow of
$21.5 million over the life of the mine and the project generates an internal rate of
return of 9%. At a 5% discount rate generates a Net Present Value for the project of
$7.5 million.

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Table 11: Heap Leach Evaluation Results

Project Parameter Unit
Total Tonnes Processed 000’s 8,840
Average Copper Grade 0.68
Total Waste Tonnes Mined 000’s 6,710
Total Material Mined 000’s 15,550
Stripping ratio 1.75
Copper Grade % 0.68
Copper Recovery % 60
Concentrate Cu Grade % N/A
Total Copper Cathode Production tonnes 35,845
Total Net Copper Revenue US$ Million 157.5
Cash Operating Cost US$ Million 86.3
Total Project CAPEX US$ Million 49.0
Total Pre-Tax Cash Flow US$ Million 21.5
NPV@ 5% US$ Million 7.5
IRR 9%

The flotation project scenario contemplates a one year detailed technical assessment
period where the necessary metallurgical testing work, site investigation, water
supply evaluation, environmental baseline studies etc. are carried out. At the end of
this first year a project feasibility study will be completed supporting the project
implementation program covering the subsequent two years. The mine is forecast to
operate over a period of 9 years with site closure works being completed in the final
10th year.

A copper price of US$2.00/lb has been selected as the base case for the study. A
sensitivity analysis shows the impact of variation in the key project factors including
copper price.

The following summarises the base case cost factors that have been used to
generate the economics figures for processing one million tonnes per year through a
flotation facility for the Alous deposit.

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Table 12: Flotation Scenario – Key Cost Factors

Capital Costs
Project US$
Studies/Evaluation 1,600,000
Mine Equipment US$ 4,827,000
Process US$ 60,600,000
Infrastructure US$ 3,932,000
Port Facilities US$ 500,000
Closure Costs US$ 1,000,000
Contingency (20%) US$ 13,912,000
Total CAPEX US$ 84,771,000

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Operating Costs
Mining US$/t mined $1.71
Processing US$/t treated $4.60
G&A US$/t treated $1.00
Total Operating Costs US$/t treated $9.76

The following table summarises the results of the economic evaluation of the Heap
Leach Processing scenario. The project generates an undiscounted cash flow of
$21.5 million over the life of the mine and the project generates an internal rate of
return of 9%. At a 5% discount rate generates a Net Present Value for the project of
$7.5 million.

Table 13: Flotation Evaluation Results

Project Parameter Unit
Total Tonnes Processed 000’s 8,840
Average Copper Grade 0.68
Total Waste Tonnes Mined 000’s 6,710
Total Material Mined 000’s 15,550
Stripping ratio 1.75
Copper Grade % 0.68
Copper Recovery % 87
Concentrate Cu Grade % 42%
Concentrate Ag Grade g/t 12.3
Copper Concentrate Production Tonnes 123,750
Total Net Conc. Revenue US$ Million 206.7
Cash Operating Cost US$ Million 112.5
Total Project CAPEX US$ Million 85.0
Total Pre-Tax Cash Flow US$ Million 7.6
IRR 2%

This preliminary economic analysis indicates that, even if the total resource (all
classes of mineral including inferred) of 8 Mt is converted to ore reserve, the flotation
processing option is unlikely to be economic at the base case (long term) copper
price of $2.00/lb. Heap leaching however may provide a positive return if the key
operation performance assumptions used here can be proven through a metallurgical
testing program. It is important to understand that this result is based on an
assumed “reasonable” level of acid consumption for the leaching process. This
remains a significant question.

If additional resources can be developed in the immediate vicinity of the known Alous
deposits then a larger operation could be considered and the economics of both
alternatives will improve. The silver content of the ore is contributes only a small
fraction of the revenue value (about 5%) in the flotation case.

The project economics are most sensitive to copper price and metallurgical recovery,
with capital costs and operating costs having a similar level of impact due to the
relatively short life of the project. Figure 1 and 2 present graphical summaries of +/-
20% variance of several of the key factors for each of the two project scenarios
considered.

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The comparative viability of the heap leach route relative to the flotation route
decreases as copper prices rise, due to the lower metal recovery of the heap leach.

Figure 1

Alous Project - Flotation Scenario Sensitivity Analysis

35.0
Millions

30.0

25.0
20.0
Net Present Value

15.0
10.0

5.0
0.0
-5.0
-10.0
-15.0
-20.0
80% 90% 100% 110% 120%
Variance Factor

Grade Price OPEX Recovery CAPEX

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Figure 2

Alous Project - Heap Leach Scenario

Sensitivity Analysis

35.0
Millions

30.0
25.0
20.0
Net Present Value

15.0
10.0
5.0
0.0
-5.0
-10.0
-15.0
-20.0
80% 90% 100% 110% 120%
Variance Factor

Grade Price OPEX Recovery CAPEX

The Alous deposit may ultimately be proven to be economic if a number of key

issues identified in this review can be demonstrated to meet the assumptions used in
this analysis. These aspects require detailed study of the site and surrounding area
and/or detailed test work designed to fully assess the key technical parameters. The
primary areas where opportunities to enhance the project have been identified
include:

1. Resources – a substantial increase in tonnage available to process through

proposed Alous treatment facilities (of either design) will have significant
positive impact on the project economics.
2. Metallurgical performance factors – the metallurgical recovery, and operating
parameters including acid consumption, crushing size, material strength will
enhance the confidence in the forecast of Heap Leaching economics.
3. Water supply – the location, size, permitting requirements, and transport
system requirements for delivering the quantities of process water required
for the processing facilities is a critical component in the establishing the
project economics.
4. Environmental baseline studies – the assessment of the potential project
impacts and their mitigation planning should be undertaken as early as
possible to ensure consistent communication with local and regional
populations whose support for the project will be required.
5. Site investigation – geotechnical evaluation of the rock slope angles and
foundation investigation, and additional topographic surveying will be required
in order to confirm key design criteria and site planning.
6. Infill drilling – reclassification of Inferred resources into the Indicated
classification will be required before a Pre-Feasibility Study can be
completed, and additional structural and geological interpretations are
recommended for incorporation into a more detailed resource model designed
to support eventual mining operations.

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It is apparent from this evaluation that, subject to confirmation of the performance

parameters, the heap leaching option has the best potential for a viable operation at
Alous. The capital costs and operating costs are expected to be substantially lower
than a flotation process, although at the expense of lower copper recovery. The
flotation option is likely to require a substantial increase in available resource for
processing, or copper grade, or both before a viable operation is likely to be
developed.

In order to confirm these assumptions and to proceed with a reasonable degree of

certainty on the heap leach process, SWM recommends the following:

1. Determine the availability and cost of the acid delivered to site.

2. If acid supply costs do not rule out the process, carry out scoping testwork to
check the following:
• Leaching kinetics, percolation rates and acid consumptions on
crushed representative lump or diamond drill core samples from
the deposit (not RC drill chips). This should be done at a series of
crushing sizes starting as coarse as possible and be directed and
evaluated for scale-up by an experienced copper heap leach
consultant. The assumed size of 19mm would provide good
percolation and a minimum crushing plant design, but the recovery
might be low.
• Detailed chemical analysis of the leach liquor.
• Crushing work index and abrasion index

3. Further test work will be required on samples representative of the types and
grades of ore within the ore body. The ore body should be modelled in terms
of hardness, grade and mineralogical type. At present it seems that there is a
different ore at the north of Zone A, because the copper mineralization
changes to chalcopyrite/pyrite. This is very significant because it will seriously
affect the heap leaching time or decrease the flotation concentrate grade.
4. If a flotation process option is to be pursued then more flotation specific
testwork is required. The previous test work provides a good starting point. A
good specialist mineral processing laboratory can perform most of these
tests. Tests should include;
• The range of crushing, rod mill and ball mill work indices and
abrasion index.
• SAG/Ball Mill design parameters, preferably by determining
JKTech ore properties. These should be done and evaluated by a
specialist comminution consultant/laboratory.
• Confirm the grind size. This may vary with ore type.
• Carry out flotation tests to determine an appropriate circuit and
reagent suite. Include at least cyclic tests on the selected circuit if
it includes circulating loads.
• A detailed chemical analysis of the flotation concentrate.
• Confirm high rate thickener sizes for concentrate and tails. A
thickener vendor would best carry this work out.
• Confirm concentrate filtration rates. A vendor would best carry this
work out.

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Alous Copper-Silver Mine Project Scoping Study

5. Additional resources need to be identified to augment the Alous project and

enhance the economics of a local processing facility.
6. Infill drilling to upgrade resource classification should be carried out.
7. More detailed structural and mineralogical interpretations should be
completed in order to develop a more precise resource model to support
eventual mining operations.
8. Hydrological investigations should be carried out to identify a reliable water
source for the life of the mine. An estimated process water makeup of
800,000 m3/pa is required. A detailed chemical analysis of the water is also
required. In particular chloride content will be important for assessment of
possible water use in the construction works. If sufficient water resources are
identified it will be necessary to obtain an extraction license from the
appropriate government department.
9. When the project is ready to progress to the Pre-Feasibility phase it will be
appropriate to undertake an EIA screening and complete an EIS.
10. SWM recommends that a programme of site investigation and slope stability
analysis be undertaken at the next stage of project evaluation in order to fully
address the pit slope design.

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3. PROJECT DESCRIPTION

3.1. REPORTS PROVIDED

The following reports were provided by Odyssey for use in this study by SWM:
• Technical Report and Resource Estimate on the Alous Copper-
Silver Property, Morocco. P&E Mining Consultants Inc. Report No
123, September 8th ,2006.
• Minerais et Métaux (No source on document) Feb 1968. Etude
Preliminaire de Concentration du Minerai de Cuivre d’Alous.
(Preliminary Laboratory Testwork.) In French.
• BRPM July 1971. Cuivre Alous: Resultats des Essays de Flotation
en Usine Pilote. In French. (Pilot Plant Results)
• BRPM August 1973. Les Mineralisations Cupriferes d’Alous –
Zones C et D. (Assessment of Reserves in Zones C & D). In
French.
• Division de l’Exploration Miniere, Department Mineralurgie. Dec
1980. Essais Effectues sur le Minerai D’Alous. In French. (This
summarised CSMRF, Bou Azzer, Aerofall Mill, Minerais et Metaux
and BRPM pilot testwork.)
• Sagax Maghreb. April 2006. Report on a Ground Topographical
GPS Survey on the Alous Project. This report was not reviewed by
AKES.
• Kappes Cassidy & Associates.25th May 2006 Draft Report. Acid
Column Leach Tests. (Column leach testwork on 2 finely crushed
samples. The sample origin was not stated)

The reports above referred to testwork reports in the 1960’s by The University of
Arizona and Colorado School of Mines (CSMRF). Also the P&E Mining Technical
Report referred to a testwork summary report of September 1968. These reports
were not available to SWM.

Some of the reports provided did not have the name of the source organisation on
them.

3.2. LOCATION
The property is located in south western Morocco at approximately 8º 33’ West and
30º 18’ North in the Anti Atlas region of Morocco. Alous lies approximately 120 km to
the east of Agadir (a main deep water port) and 40 km to the south east of the
Taroudant township. Access to the site is from the main highway between Taroudant
and Igherm, with the final approach to the property being on surfaced local roads.

The general terrain of the area is arid rocky rolling hills.

Adjacent to the proposed mine site is a small village which is based on a well and
buildings used for previous exploration/drilling work. The inhabitants (approx.100) of
this village will have to be re-settled prior to any mine construction works proceeding.

A verification drilling program and a detailed topographical survey of the site was
carried out for Odyssey during March 2006. Several deposits have been identified

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designated as Zones A, B &C. The surface topography and approximate zone

boundaries are shown on Drg. No. D11450-100-1001.

3.3. CLIMATE
The climate is termed as moderate with a minimum winter temperature of 5°C and a
maximum summer temperature of 40°C.

Rainfall is reported to be between 86 mm and 260 mm annually.

3.4. LICENCE AREA

The property comprises 31 exploration licences, 12 of which Odyssey Resources
own outright and the remaining 19 that Odyssey Resources acquired in a lease-to-
purchase agreement. Based on the drilling program that took place in the spring of
2006, resources have been defined in three zones (A, B & C) in compliance with NI
43-101 and CIM standards and are reported in the indicated and inferred categories
at a 0.30% Cu cut-off grade.

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4. GEOLOGY AND RESOURCES

4.1. BACKGROUND
The Alous copper-silver deposit is the largest currently known deposit located within
the Anti-Atlas Property, and is the main feature of one of the properties belonging to
Odyssey and is located within one of the thirty-one exploration licences held by
Odyssey.

The Anti-Atlas Property is approximately 500 km² in area, and is located in south
western Morocco, on the African continent. The geographic location is approximately
8º 33’ West and 30º 18’ North, and the location within Morocco is shown in Figure 3.

Several exploration programmes and studies (drifts and boreholes) have been
carried out at the Alous property since the early 1960’s through to 2006. Some of the
studies have been made available to SWM for review.

The latest drilling was carried out by Odyssey in the spring of 2006 with the goal of
confirming the drilling done by Occidental Minerals Ltd. in the late 1960s. Twenty-
two Reverse Circulation (RC) holes were drilled for a cumulative total of 1,042
metres. Eleven holes were drilled in Zone A, five in Zone B and six in Zone B.

Observations from the drill program confirmed that the geology and mineralization
were as expected, and results confirmed the drilling undertaken in the late 1960s by
Occidental Minerals.

P & E Mining Consultants Inc. submitted a NI 43-101 & 43-101f1 Technical Report
for the Alous Property (Technical Report And Resource Estimate On The Alous
Copper-Silver Property Morocco) in September 2006, a copy of which has been
provided to SWM.

Several metallurgical tests have been carried out on ore samples from the Alous
property and some of the metallurgical test reports have been made available to
SWRPA. These reports are discussed in the Section 6.1 (Metallurgical Testwork) of
this report.

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4.2. GEOLOGICAL SETTING

The Anti-Atlas region is sub-divided into four large domains; Precambrian I (PI),
Lower Precambrian II, (PII inf), Upper Precambrian II, (PII sup) and Precambrian III,
(PIII). General details of the regional geology are shown in Figure 3 below.

Figure 3: Regional Geology

For further details on local geology etc., reference should be made to the P & E
Report.

4.3. RESOURCES

SWM has reviewed the resource model and the resource estimate in the above
P & E Mining Consultants Technical Report for the Alous Property and finds that the
estimate is suitable as the basis for this Scoping Study review.

The Alous Resource Estimate generated by P & E is summarised in the table below.

Table 14: Resources

Source: Technical Report And Resource Estimate On The Alous Copper-Silver Property Morocco

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ZONE INDICATED INFERRED

Tonnes Copper Silver Tonnes Copper Silver
(000s) (%) (g/t) (000s) (%) (g/t)
A 5,232 0.81 10.1 12 0.49 6.0
B 175 .60 5.6 2,409 0.54 3.9
C - - - 165 0.60 8.4
Total 5,407 0.80 10.0 2,586 0.55 4.2

4.4. CONCLUSIONS
SWM has not identified any significant issues related to the resource estimation
methodology in the P & E technical report, and has found that the block model
developed for the deposit is suitable as the basis for this Scoping Study. As the
project advances to the next stage of evaluation SWM would make the following
recommendations;
• Develop more geological, structural, and surface control
constraints and implement these into the next resource block
model.
• Further diamond drilling, surface trenching and mapping work are
recommended.
• Further density testing is recommended to develop a larger
database supporting the tonnage factor, which may be
conservative.
• Silver assay values are sporadic and further data and analysis is
required before silver grade estimates should be included in the
resource estimate.

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5. MINING
The project evaluation summarised here has been based on all categories of Mineral
Resources, including Inferred Class material. The Inferred Class represents
approximately 30% of the current estimate and, as outlined later in this report, the
project economics are sensitive to available mineable resource. Consequently this
Scoping Study evaluation must be classed as a preliminary economic assessment.
The conclusions set out here are intended to support and guide decisions going
forward on advancing the project and identifying the key technical issues that need to
be assessed further before a full economic assessment can be completed.

5.1. MINE OPTIMISATION ANALYSIS

The first step in the process of evaluating the economic potential of the Alous project
was to undertake an open pit optimisation analysis to assess the quantity, quality,
and extent of economically mineable resources. This analysis was carried out
utilising the commercially available Lerchs-Grossman analysis software, Whittle 4X.
The P&E block model was used as the basis for this work.

Two sets of economic analyses were developed, one for a milling and flotation
treatment approach, and the other a heap leaching treatment method. The following
tables summarise the key operational and economic parameters utilised to develop
the analysis.

Table 15 summarises the flotation option. Table 16 summarises the heap leaching
option.

Table 15
Alous Scoping Study - Flotation Whittle Optimisation Parameters
Unit Mining Cost $/tonne mined $/t $1.63
Processing Cost $/tonne feed $/t $8.70
Unit Administration Cost $/tonne feed $/t $1.00
Combined Process/Admin $/tonne feed $/t ore $9.70
Copper Price $/lb Cu $2.00
Cu Recovery to Concentrate 87%
Cu% in Concentrate 42%
Overall Pit Slope Angle 55°
Copper Treatment Charge $/t conc. 90.00
Copper Refining Charge $/lb Cu $0.09
Copper Treatment Charge/lb Cu $/lb Cu $0.10
Total Smelter Charge/lb Cu $/lb Cu $0.19
Cu NSR $/lb Cu $1.81
Ore Transport $/t conc. $23.60
Ore Transport Charge/lb Cu $/lb Cu $0.03
Cu Return (Mine Gate) $/lb Cu $1.79
Silver Value

Silver Price $/oz Ag $10.00

Silver Recovery to Concentrate 70%
Silver Conc. Grade g/t 392.00

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Table 16
Alous Scoping Study - Heap Leach Whittle Optimisation Parameters

Unit Mining Cost $/tonne mined $/t $1.63

Leaching & SX/EW Cost $/tonne feed $/t $4.60
Unit Administration Cost $/tonne feed $/t $1.00
Combined Process/Admin $/tonne feed $/t ore $5.60
Overall Pit Slope Angle 55°
Copper Price $/lb Cu $2.00
Cu Recovery to Concentrate 60%
Cathode Transport $/t $23.60
Cathode Transport $/lb Cu $0.01
Cu Return (Mine Gate) $/lb Cu $1.99

Payable 95%
Silver Value/t conc. $119.73
Silver Value/lb. Cu in conc. $0.13

The parameters used in this analysis represent SWM best estimates at the
preliminary stages of the study. In some cases the factors may differ from factors
developed in subsequent stages, however it is judged that the changes would have
no material impact on the conclusions.

No detailed geotechnical assessment has been carried out on the Alous project,
consequently, the estimate of pit slope angles must be considered a preliminary
estimate and subject to confirmation through more detailed site investigations. In
general the rock outcrops observed at the site indicated that the rock mass was very
competent, and no adverse structural features were noted that could impact on the
slope stability. SWM recommends that a program of site investigation and slope
stability analysis be undertaken at the next stage of project evaluation in order to fully
address this issue.

The processing recovery factors have been estimated based on preliminary

information currently available. As noted in the Metallurgy section of this report
certain information documents were not available for review consequently these
factors must be considered preliminary and SWM recommends further test work be
undertaken to confirm and validate these factors.

Metal prices used in these analyses were US$2.00 per pound for copper and
US$10.00 per ounce for silver.

The Whittle optimisation analysis produced a set of optimum open pit mining limits
across a range of copper price assumptions. The resulting function indicates the
economic sensitivity of the Alous resource to changes in economic conditions
including metal price, recoveries, operating costs etc. Figure 4 presents the results
of the analysis.

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Figure 4

Alous Copper Project - Pit Optimization Analysis

$120 10
Millions

Millions
Operating Cash

$100 8

Ore Tonnes
Processed
$80
6
Flow

$60
4
$40
$20 2
$0 -

0
$3 20
$3 40
$3 60
$4 80
$2 60
$3 80
$3 00
$2 00
$2 20
$2 40
$1 60
$2 80
$1 20
$1 40
$0 60
$1 80
$1 00

.0
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
$0

Copper Price Basis

Heap Leach Milling Heap Leach Ore Tonnes Milling Ore Tonnes

On Figure 4, the bottom axis is expressed as copper price per pound factor applied
with the economically recoverable tonnage displayed on the right hand axis. Both
milling and heap leaching results are shown here with both producing very similar
results at each given copper price.

At the Study selected base price of US$2.00 the tonnage recovered totals 8.7 million
tonnes in the heap leach case and 8.3 million tonnes in the flotation case. At this
base price level virtually all of the available resource material (8.7 million tonnes) is
mined; in both cases and the size and shape of the economic excavation is
essentially the same in both scenarios.

The project operating cash flow (total revenue minus operating costs, ignoring capital
costs) amounts to US$109 million in the case of a milling operation at the base price
level. This compares with the project operating cash flow for the heap leach case at
the same price level of US$86.7 million.

Based on these results SWM concluded that the economic open pit limits were
essentially limited by the defined resource in the model. Consequently the mine
design would be the same under either processing scenario.

5.2. MINE DESIGN

The mining section of this report provides an estimate of the open pit resources
available for exploitation.

Two processing options for this study have been analysed in order to identify the
most economical processing route, these are;

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1. Heap leach

2. Flotation.
At this stage of the study it has been identified that the flotation option is likely to be
uneconomic at a throughput of 1 Mtpa but that the heap leach option could generate
a favourable return, if proven to be suitable to a typical copper leaching process.

The resource estimates for both processing options are very similar, with the heap
leach option being the most likely viable processing option in terms of economics at
this stage. The resource estimate for a heap leach process was therefore selected in-
order to generate open pit designs.

5.2.1. Open Pit Designs

Initial first pass pit designs have been completed for each of the ore zones A, B and
C based on the Whittle optimisation pit shells. A final optimum design will be
established from a more detailed evaluation at a later stage during a feasibility level
study. The preliminary layouts of the open pits are shown on Drg. Nos. D11450-100-
1000 (Flotation) and D11450-100-1001 (Heap Leach)

Pit overall slope angles have been estimated to be in the order of 55° based on past
experience for the type of material to be mined and exposures seen during the site
visit. Typical pit internal benches have been designed at 6 m in height, this bench
height is considered a good match for the size of mining equipment anticipated.
Also, 6 m wide benches have been provided at every 18 m interval at a slope angle
of 70°.

In-pit ramps have been included in the design for Pit A and B for the later stages of
mining out each pit. The first sections of the in-pit ramps are designed for double-
lane traffic with a width of 20 m, the last sections of the ramp close to the pit floor are
designed for single-lane traffic only, with a width of 10 m. The gradient of in-pit
ramps is 12%.

An in-pit ramp will not be required for the initial years of mining Pit A, B and C due to
favourable surface topography and a near surface ore deposit location. Temporary
ramps and haulage roads will be required to be constructed as mining progresses for
access purposes to and from the open pits.

A summary of in-pit resources for the three open pits are presented in Table 17
below:

Table 17: Summary of In-Pit Resources

Pit Ore Tonnage (t) Cu (%) Ag (g/t) Cut-off Cu (%)
A 5,546,000 0.78 9.76 0.20
B 3,136,000 0.50 3.84 0.20
C 157,000 0.59 8.15 0.20
Total 8,839,000 0.68 7.63 0.20

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5.3. MINING METHODS AND EQUIPMENT

A conventional open pit mining operation, of moderate capacity is envisaged for the
Alous deposit. The primary mining operations will consist of blasthole drilling,
blasting, loading and hauling of ore and waste materials for depositing in various
external locations.

The primary mining equipment fleet will consist of diesel powered conventional open
pit mining equipment, including;
• 1 No. 4 m3 capacity front-end loader
• 3 No. 35 tonne capacity off-road haulage trucks (a fourth haulage
truck will be required in year 4)
• 1 No. 150 mm diameter blast hole drilling rig.

The above primary equipment will be supported by fleet of auxiliary support

equipment and mobile service equipment and will be maintained in a fully equipped
maintenance shop.

The proposed production plan for the Alous deposit is based on a mining rate of
1.0 Mtpa combined from three separate open pits.

Pit A contains 64 % of the total resource and will be the first pit to be developed due
to the higher average copper grade and available ore tonnages compared to Pit B
and C. During year-6, Pit A will be fully exploited and mining operations will continue
at Pit B. Pit B and C will be fully mined out in year-9.

The mining production schedule is presented in Table 18 below:

Table 18: Preliminary Production Schedule

Year 1 2 3 4 5 6 7 8 9 Total
Ore (Mt) 0.90 1.00 1.00 1.00 1.00 1.00 1.00 1.00 0.94 8.84
Grade (Cu%) 0.61 0.69 0.83 0.81 0.80 0.80 0.45 0.50 0.58 0.68
Grade Ag (g/t) 7.45 8.65 11.50 11.32 11.60 6.75 3.94 2.35 4.93 7.63
Waste (Mt) 0.20 0.11 0.53 1.69 1.32 1.14 0.31 0.71 0.70 6.72
Total Material 1.10 1.11 1.53 2.69 2.32 2.14 1.31 1.71 1.64 15.55
Mined (Mt)
SR 0.22 0.11 0.53 1.69 1.32 1.14 0.31 0.71 0.75 0.76

For the heap leach option ROM ore will be hauled and dumped to a 2-stage crushing
plant located to the east of Pit A, where it will be crushed, agglomerated if required,
and conveyed to the heap leach pad. For the flotation option ROM ore will be hauled
directly from each mine to the process plant.

5.3.1. Drill and Blast Design

The drilling pattern is based on a typical bench height of 6.0 m and a powder factor of
0.25 kg/t. The drill pattern using a 150 mm diameter blast hole has been estimated
to be 4.70 m x 4.70 m with blast holes drilled to a total depth of 6.5 m including 0.5 m
of sub-drilling. The explosive column is 5.5 m with 1.0 m of stemming. Blast hole
spacing might vary depending upon the type of rock encountered.

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5.3.2. Waste Disposal

An estimated total of 7.45 Mt of waste rock will be generated from the three open
pits. Waste dump areas are located to the south-east of Pit A, north-east of Pit B
and to the south of Pit C. These locations are shown on Drg. No. D11450-100-1001
(Heap Leach).

Waste rock material from Pit A can be utilised for the construction of the tailings
storage facility embankment.

5.4. MINE CAPITAL COST

Mine capital costs have been estimated from similar sized mining operations, mining
equipment literature and adjusted according to recent escalation rates. They do not
include import duties, shipping or price discount as a result of supplier negotiations.
A list of mobile mining equipment and auxiliary items pertinent to the intended mining
operations are listed below in Table 19 below. All capital costs are estimated to a
typical Scoping Study level, +/- 50% accuracy.

Table 19: Summary of Mine CAPEX

Equipment Type Make and No. of Unit Cost Total Cost
Model Units US$ US$
Mine
Front End Loader CAT 980G 1 390,000 390,000
Haul Truck CAT 769D 4 452,000 1,800,800
Drill Rig Titon 600 1 557,000 557,000
(150 mm dia.)
Dozer D8 1 645,000 645,000
Grader CAT 14H 1 453,000 453,000
Explosive Truck Volvo 1 50,000 50,000
Water Truck Volvo 1 85,000 85,000
Crew Van Nissan 2 50,000 100,000
Pickup Trucks Toyota 8 42,000 336,000
Total Mine Fleet CAPEX 4,424,000
Maintenance
Shop & Offices 1 104,000 104,000
Equipment 1 500,000 500,000
Fuel and Lube Station 1 250,000 250,000
Fuel Truck 1 65,000 65,000
Service Truck 1 90,000 90,000
Flatbed Truck 1 80,000 80,000
Pickup Trucks 4 42,000 168,000
Total Maintenance 1,257,000
Mine General
Mine Office 1 45,000 45,000
Welfare Building 1 135,000 135,000
Sewerage treatment 1 20,000 20,000
Computer Equipment 1 58,000 58,000
Software 1 115,000 115,000
Survey Equipment 1 40,000 40,000

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Explosive Magazine 1 60,000 60,000

Pit Radios 1 30,000 30,000
Sump Pump and 1 100,000 100,000
Pipelines
Clearing 1 40,000 40,000
Haul Roads 1 200,000 200,000
Open Pit Development 1 200,000 200,000
Mine Commissioning 1 400,000 400,000
Total Mine General 1,443,000
Total CAPEX 7,124,000

5.5. MINE OPERATING COST

Operating costs have been generated for each mining activity i.e. drilling, blasting,
loading and hauling using mining equipment literature, past experience, typical labour
costs for Moroccan manpower and an in-country diesel fuel supply cost of
0.90 US$/litre. The respective costs are summarised in Table 20 below:

Table 20: Summary of Mine OPEX

Mining Activity US$/t Moved
Drilling 0.50
Blasting 0.15
Loading 0.20
Hauling 0.34
Roads and Dumps 0.25
Dewatering 0.08
Laboratory 0.02
Mine General 0.07
Maintenance Shop 0.10
Total 1.71

The total operating unit cost of US$ 1.71 is based on the average tonnage of total
material moved during the 9-year life of mine.

Mining equipment unit operating costs include the following items:

• overhaul; parts and labour
• maintenance; parts and labour
• fuel;
• lube;
• tyres; and
• part replacements due to wear.

5.6. MANPOWER
It is envisaged that a 365 day a year mining operation consisting of 2 No. 12-hour
shifts per day, 7-days a week will be implemented. The estimated mine manpower
requirements are summarised in Table 21 below:

Table 21: Summary of Mine Manpower

Salaried Personnel: Number
Mine 5

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Maintenance 2
Sub Total Salaried 7
Hourly Personnel:
Mine 24
Maintenance 18
Sub Total Hourly 42
Total Mine 49

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6. MINERAL PROCESSING

6.1. METALLURGICAL TESTWORK

6.1.1. Summary of Previous Testwork

Notes on the contents of the reports are in Appendix 1 to this report. Table 22
summarises the results of previous flotation work.

[Link]. Dump or Heap Leaching

This was tested in 1968 by the University of Arizona and found possible but with high
acid consumption. The P&E Report notes that the Colorado School of Mines also
demonstrated that leaching was not the appropriate method. Furthermore, they
report that work done in 1967 by ONA involving tests by the New Mexico Technical
Research Foundation (NMTRF) further agreed that flotation should be used rather
than leaching.

SWM were not able to check or review these reports. The only leaching report
available to SWM was a draft Kappes Cassidy testwork report of May 2006. This
describes a combination of heap and vat leaching tests on –1 mm material and does
not include any conclusions or recommendations. It is not known whether the
samples tested represented Alous Zone A-C or old tailings dams also owned by
Odyssey.

An average copper recovery of 93% in 65 days was achieved. The acid consumption
was around 123 kg H2SO4 /t, which equates to a specific acid consumption of 19 kg
H2SO4 /kg Cu leached. Whereas this would be extremely high for a commercial heap
leach, it is not clear how this was calculated. Since the tests switched from heap to
vat leaching after 30 days and at this stage acid agglomeration was used, it is not
clear what the figure means. For commercial heap leaching typical acid consumption
may be as little as 20 – 35% of that in laboratory tests. If that were to be the case for
the Alous ore, then a specific acid consumption of around 4 – 7 kg H2SO4 /kg Cu
leached could apply which is in line with a range of 1 – 7 kg published as typical in
commercial copper heap leaches. Furthermore from the mineralogy of Zones A, B
and C it is also not clear why the acid consumption should be unusually high. No
carbonates are reported as being present in the gangue.

It is noted that the University of Arizona and Colorado School of Mines testwork was
performed in 1967 – 8. The first commercial use of copper solvent extraction with LIX
reagents was in 1968 so the technology was in its infancy at the time of the early
Alous tests. Before the use of SX, copper cementation was used for copper
recovery. Cement copper is poor grade and requires smelting and refining whereas
SX/EW cathode copper is sold direct to consumers. It is not known whether the early
Alous testwork was based on SX/EW or leach/cementation and whether this
impacted on the preference for flotation.

Further information on the previous work and/or tests with evaluation by an

experienced heap leach engineer would be required to comment further on the
suitability of heap leaching.

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[Link]. Ore Grindability

The ore is hard and with a gangue high in felspars, and with some quartz, it is
expected to be moderately abrasive. A Rod Mill Work Index of 20.8 kWh/tonne and
Ball Mill Work Index of 23.9 kWh/tonne were determined in the Colorado School of
Mines testwork on a bulk sample from Zone A. Further grindability testing is required
to map the range of ore hardness and to size the mills.

A SAG/ Ball Mill circuit is normally used for this type of ore, although at only 1 Mtpa,
crushing and Single Stage Ball Mill or a Rod Mill/ Ball Mill would be an alternative
and would require less testwork.

[Link]. Flotation
Flotation can recover about 87% Cu to a 42% Cu concentrate with a simple circuit.
There is little data on silver recovery, but 70% was achieved in the Minerais et
Metaux pilot plant. There is disagreement within the testwork on the need for
sulphidiser, but the pilot plant tests by BRGM in 1971 found that it was required.
With the significant amount of oxide copper present it is expected that sulphidisation
will be required.

All the tests noted that the liberation size is coarse and a grind size of about 80%-
300 µm should be sufficient. It has been assumed for this scoping study that no
concentrate regrind will be required, but this needs to be tested. Modern flotation
tank cells are treating copper ore this size, without regrinding, at Chuquicamata in
Chile. It is probable that a flash flotation cell will be used in the grinding circuit to take
advantage of the coarse liberation size and reduce losses due to overgrinding. These
were not proven units at the time of the testwork.

No chemical analyses of concentrates except for copper were found in the reports. A
chemical analysis should be done to check for elements that may affect concentrate
price.

[Link]. Mineralogy
From oxide copper analyses, approximately 25% of the copper is present as oxide
copper. This is present as malachite and azurite. The remainder is sulphide copper
mostly as chalcocite and bornite. Chalcopyrite and pyrite occur in the North of Zone
A. Oxide copper, Chalcocite and bornite leach more rapidly than chalcopyrite so this
mineralization is beneficial for heap leaching.

[Link]. Ore Resource

The ore resources are all in the indicated or inferred category. However, assuming all
these resources are available as mine reserves, then the orebody size is
approximately 8 Mt at an average grade of 0.72% Cu and 8.1 g/t Ag. This copper
grade should correspond to about 0.18% Cu (ox) and 0.54% Cu (s). The ore block
model should show both sulphide and oxide copper analyses.

[Link]. Selective Mining

The orebody is, at long-term copper prices, low grade for its size for treatment by
flotation. Selective mining to improve the plant head grade would be desirable.
However it is assumed that the mineralization is evenly disseminated through the
deposit so that upgrading the plant feed cannot be achieved by selective mining.

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[Link]. Approximate Reagent Consumptions

These will doubtless change with further test work, partly because other reagents are
now available, but were reported in the testwork as:
• Xanthate 80 g/t
• Aerofloat 40 g/t Provision
• NaHS 300 g/t
• Frother 20 g/t
These are typical reagent consumptions for copper ore flotation.

[Link]. Samples
For the testwork samples head grade was between 0.89 and 1.0% Cu. This is higher
than the orebody resource grades. It appears all the samples came from Zone A.
Future testwork should be done on samples representative of all zones and the
grades, which are expected to be fed to the plant.

[Link]. Conclusion
The historical reports showed that the ore is amenable to straightforward copper
flotation at a coarse grind size. Further testwork is required on samples covering the
range of ore types and grades in the orebody.

Heap leaching had been rejected in early testwork, but this could not be reviewed
and the reasoning confirmed. Heap leaching could improve the viability of this
deposit and should certainly be re-visited.
.

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Table 22 : Summary of Flotation Results from Previous Testwork

Colorado Colorado
CTT – Bou ONA – Minerais Minerais et Fives Cail &
School of School of BRPM
Azzer NMTRF et Métaux Métaux ? Minemet
Mines Mines
Heavy
Flotation Flotation Aerofall Mill &
Study Cyclic Test Batch Test Liquids & Pilot Plant
Tests Tests Pilot Plant
Flotation
Year 1967 1967 1967? 1967 1968 1968 1968 1971
Sample Zone A
Cu (t)% 0.89 1.00 1.0 0.89
Head
Cu (ox)% 0.19 0.30 0.38 0.19
Grade
Ag g/t 15.3 >124 * 16
Conc Cu (t)% 40-42 42.0 40.6 ~ 44 41 44.4 40
Grade Ag g/t 500 630
Cu % 87-90 86.8 83.0 92 ~ 84 92 84.3 88
Recovery
Ag % 99 70.0
Mass
% To Conc 1.90 1.83
Recovery
80% - µm 150 400 350 150
Grind
Type Wet Wet Dry? Dry? Dry Wet
Work Index Rod 20.8
kWh/tonne Ball 23.9 23.3
KAX g/t 70 – 150 80
NaHS g/t Nil Nil 300 - 400 300
Aerofloat g/t 80 Nil
Frother g/t 5 28
*Error in Ag Flotation
Flotation Time Sulphidisation
Note assaying Time 55
55 mins Required
suspected mins

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6.2. PLANT DESCRIPTIONS

Two plant configurations have been considered for the processing of the Alous ore namely:
• Flotation Plant
• Heap Leaching Process
The following plant descriptions correspond to the indicative capital costs presented in Section
6.3:

The following general parameters have been used for both plant options:
• Feed Rate 1,000,000 tpa
• Plant Head Grade 0.72% Cu, 8.1 g/t Ag
• Reserve 8 Million tonnes

6.2.1. Flotation
The following parameters have been used:
• Recoveries: 87% Cu, 70% Ag.
• Concentrate Grade: 42% Cu
• Concentrate Weight: 1.5% of Feed. Weight 14,900 tpa
• Tailings Weight 985,000 tpa average

[Link]. Plant
The ore would be delivered by mine truck and tipped into a hopper equipped with an apron
feeder feeding a jaw crusher. The crushed ore, at about 80% minus120 mm, would be
conveyed to an open conical stockpile. Crushing would typically operate for two 8 hours shifts
per day, 7 days per week. From the stockpile, belt feeders would control the rate of feed to a
SAG mill. The SAG mill discharge would be pumped to a cluster of cyclones. The cyclone
underflow would flow to a Flash Flotation Cell for removal of coarse liberated sulphides;
flotation reagents for this would be fed to the SAG mill. The Flash Flotation Cell tailings would
flow into a Ball Mill for regrinding. The Ball Mill discharge would be combined with the SAG
mill discharge and recycle to the cyclones.

With ore this hard, a pebble crusher is commonly used to treat pebbles from the SAG mill. For
a low tonnage operation this may not be necessary, but further comminution testwork would
clarify this.

The cyclone overflow will be conditioned with reagents for about 10 minutes and sulphide
minerals floated for about 20 minutes. The sulphide tails would be conditioned with sulphidiser
and the oxide copper floated for 15-20 minutes. Stage addition of sulphidiser is likely to be
used.

The combined sulphide and oxide concentrates would be cleaned after conditioning with
reagents. Typically the 1st cleaner tails would be scavenged, with the cleaner scavenger tails
going to final tails. The 1st Cleaner concentrate would be re-cleaned in another bank of cells.
The previous testwork suggested no regrind of this cleaner tail was needed. The final copper
concentrate from the re-cleaner cells would be thickened in a high rate thickener and then
pressure filtered.

The copper concentrate filter cake would be stored in a shed on site and would then be
loaded by front end loader into a truck and transported to Agadir for shipping at about
15,000 tpa. Some bulk handling facilities will be needed at Agadir. Some storage will be
needed to accumulate a parcel of concentrate for shipping. Typically these parcels are
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5,000 t, but for this low production rate smaller parcels should be negotiated to avoid
damaging the cash flow.

The tailings would be thickened in a high rate thickener and pumped to a tailings dam. For this
area it is assumed that a lining is not required for the tailings dam and that legislation does not
compel the use of paste tailings disposal.

Water from both thickener overflows would be recycled back to the plant.

A review of expected power requirements indicated that the project with a flotation process
would require about a power supply of about 8.5 MW.

The plant would require makeup from a water resource of about 0.8 m3 water/t ore =
800,000 m3/a. With conventional sub aerial deposition of the tailings the density of deposited
tails would be about 1.3 dry t/m3 so the tails flow of 0.985 Mtpa would require about
1.3 million m3/a storage.

6.2.2. Heap Leaching

While it is appreciated that previous testwork has apparently ruled out the use of heap
leaching, the simplified economics show that this route may be required to make the project
viable. It is recommended that this route be re-examined. The previous reports should be
found if possible and new testwork should be done.

For the purposes of this study, it has been assumed that further testwork will show that heap
leaching of crushed ore is found to be possible with acid consumptions and copper recoveries
in line with those typical of other commercial heap leach operations. It has been assumed
that the ore is leached at a size of about 19 mm so that the ore can be crushed to this size in
2 stages of crushing. The indicative costs provided are for a typical heap leach at 1 Mtpa for
an ore of this type. This would correspond to the following flowsheet. A multiple lift permanent
pad leach is envisaged with sufficient initial pad area for about 4 – 5 years. After that time,
another pad would be required.

The following parameters have been used:

• Recoveries: 60% Cu, 0% Ag.
• PLS flow rate: 425 m3/h
• Acid Consumption 3 kg H2SO4/t Cu leached.
• Copper Produced 4320 tpa as Cathode.

[Link]. Crushing
Processing at 1 Mtpa over 8 years would require a crushing rate of about 3000 tonne per day.
For this duty an outdoor mobile aggregate type crushing plant of 300 tonnes per hour design
capacity would be used. The jaw crusher would be about 1200 mm by 900 mm and would
accept 600 mm top size ROM.

The crushing package would include a closed circuit screen returning oversize to a secondary
cone crusher. The crushing/screening package would come complete with grizzlies, feeder,
metal detector, magnet and discharge conveyor. The crushing would normally operate for two
8-hour shifts per day, every day except for public holidays with a one day-shift reserved for
maintenance.

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[Link]. Crushed Ore Conveying

The crushing plant discharge conveyor would deliver the crushed ore to a cross-country belt
conveyor that would run from the crushing plant along the entire length of the leach pad. This
initial distance is estimated to be about 650 meters.

This cross-country conveyor would deliver ore to a horizontal conveyor that moves ore to the
centreline of the leach pad. From this point, a series of mobile, elevating conveyors
(“grasshoppers”) are used to deliver the crushed ore to the stacking conveyor at the other end
of the pad. As ore is stacked, the stacking conveyor retreats to the point that one of the
grasshopper conveyors is removed. This sequence continues until the pad fills and a second
lift is initiated.

[Link]. Leach Pad Configuration

The cone crusher should be able to crush to 90%-19 mm. To crush smaller for this hard ore
would require a third stage of crushing. At this product size a 5 – 6 m high lift is contemplated
for the leach pad. This is consistent with expected height of the slewing stacker.

The recovery from the ore can only be found from testwork. From other projects, for the sake
of this conceptual design, a copper recovery of 60% is assumed over a leaching time of 150
days. For the zone where the mineral is predominantly chalcopyrite, the recovery is likely to
be less for a 150-day leach cycle.

For this cycle time a total leach pad area of approximately 90,000 m2 will be required for the
life of the mine.

The leach pad would be constructed with an underliner of prepared material to protect the
HDPE pad liner. The overliner material can be low grade ore from commissioning the
crushing plant early or obtained from a third party contractor. The HDPE liner extends under
the cross-country conveyor and also is used to collect leach solutions in the form of a trench.

A leaching flow rate of 10 l/min/m2 is assumed which, after evaporation and ore
moisturisation, leads to a PLS (pregnant leach solution) production of about 9.5 l/min/m2. This
amount is applied to 80% of the 56,000 m2 of the leach pad with 20% of the leach pad resting
at any given time. The flow from the heaps would be about 425 m3/hour.

[Link]. Ponds
Three solution ponds are required. The PLS pond would be about 8000 m3 total volume, the
raffinate pond about 10000 m3 and an emergency pond to handle heap draindown during
extended power failures also of about 10000 m3. The ponds are to be HDPE-lined. They may
need to be double-lined depending on Moroccan environmental rules.

[Link]. SX Plant
The SX Plant configuration is likely to be a single train of settlers in series-parallel. The
relatively low copper grade in the PLS allows for this arrangement. There are expected to be
four mixer-settlers in total:
• E-1, primary extraction unit, process one-half of the PLS or 212 m3/hr
• E-2, Secondary extraction unit
• E-1P, parallel primary extraction unit, process one-half of the PLS,
212 m3/hr
• S-1, strip unit, produces electrolyte for electro-winning (EW) circuit

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The settlers can be shop-fabricated, field-erected in FRP. They are expected to be about
7.5 m wide by 14 m long and 1 m deep.

The mixer tanks could be FRP also, though 316L ss is better unless there is high chloride in
the water. There would be three mix tanks for each extraction unit and two mix tanks for the
strip stage.

[Link]. Tank Farm

The tank farm would consist of heat exchangers, exchanger feed tank, electrolyte (filters to
remove solids and organic entrainment from the electrolyte), an electro-winning cell feed
circulation tank, a lean electrolyte tank and the required reagent additive vessels. There will
also be a filter backwash water tank and air scour blowers for the filters. The backwash water
must be very high quality to protect the electrolyte, so there will need to be a reverse osmosis
water treatment plant also.

[Link]. Electrowinning
The EW cells are expected to be configured in two rows of 15 cells each made of polymer
concrete, containing electrolyte distribution internal headers. There would be 30 No. 316L
stainless steel cathodes and 31 No. lead alloy anodes in each EW cell. The electro-winning
cells would probably be powered by a single DC transformer/rectifier rated at about 1250 kW.

A single 5 t bridge or gantry crane would harvest cathodes. Cathode stripping would be
performed by a semi-automated cathode washing and stripping machine at typically 100
cathodes per hour. All cathode sheet weighing, labelling and marking would be by manual
labour.

The copper cathodes production would be about 5 bundles per day at 2.5 tonnes per bundle.

The cells are enclosed within a building complete with ventilation to remove acid mist.

6.2.3. Toll Processing

SWM have been requested to review the possibility of the mined ore being processed at a
third party plant currently operating in the Alous area.

In this respect enquiries have been made in Morocco which has shown that the nearest
operating plant is at Tata run by CMG and some 130 km from Alous. However CMG have
indicated that the plant is currently running at full capacity and cannot accept any additional
input. No indication was given to its future capacity or of likely processing costs.

6.3. PLANT COSTS

The following costs are indicative only and have been estimated by scaling from other
projects. Their accuracy is accordingly order of cost. No contingency has been included. The
overall construction period for the heap leaching plant is estimated at 12 months. All capital
costs are estimated to a typical Scoping Study level, +/- 50% accuracy.

The following items have not been included in the costing analysis:
• Power and water supply to the site;
• Roads to the site;
• Mining costs;
• Pre-project leach testing costs, soils investigations and other owner costs.
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6.3.1. Heap Leach Plant

Table 23: Indicative Capital Costs
Item US$ Million
3000 tpd Crushing 5.2
Conveyors & Stacking 2.6
56,000 m2 Pad 4.1
Leach Subtotal 11.5

Ponds & Raffinate Pumps 1.6

SX/EW 10.6
Utilities etc. 0.8
SX/EW Subtotal 13.0
EPCM etc. Included

Total Leach, SX/EW 24.9

Plus: Deferred Capital Cost

For extra leach pads after 5.0
Year 4

Table 24: Indicative Operating Costs

Expressed as either
Item
US$/t ore US$/lb Cu
Power 2.1 0.22
Manpower 0.5 0.05
Consumables 1.4 0.15
Maintenance Supplies 0.6 0.07
Total 4.6 0.48

The operating costs have been based on:

• An in house conceptual manning list and applying the local labour costs
obtained by SWM.
• Indicative power consumption with a power tariff provided to SWM.
• An acid consumption of 3 kg H2SO4/kg copper produced. This a typical
figure for copper heap leaches, but clearly will be revised depending on
testwork.
• A sulphuric acid price of $100/t delivered. This was based on a 2006 ex
works quote of $80/t from another project plus a provision for delivery. The
acid price is however very sensitive to transport costs.
• Maintenance consumables at 3.5% of direct capital cost.

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6.3.2. Flotation Plant

Table 25: Indicative Capital Costs
Item US$ Million
Equipment & Steelwork 16.4
Pipework 1.5
Electrical 5.8
Instruments & Control 0.9
Laboratory 1.1
Maintenance/Workshop/Misc 0.2
Spares: Stores First Fill 1.0
Delivery, Packing & FOB 0.6
Total Materials 27.5
Construction
Site Development Incl
Civils & Structures 14.7
Painting 0.3
Commissioning Artisan Support 0.1
Equipment Installer 1.3
Pipework Installer 2.9
Electrical Installer 2.9
Instruments Installer 0.2
Tailings Dam 1.6
Total Construction 24.0

Other Direct Costs

Temp. Facilities 0.7
Plant / Field / Scaffold / [Link]. 0.8
Shipping & Transport To Site Incld
Vendors Staff & Consultants 0.6
3rd Party Inspection Incl
Total Other Direct Costs 2.1

Total Materials & Construction 53.6

EPCM & EXPENSES 6.7

Total 60.3

Insurance & Bonds Excl

Finance Charges Excl
Taxes, Duties, Fees Excl
Material Escalation (Excludes Equipment) Excl
Subcontracts Escalation Excl
Client Costs - (Reagents & Lube First Fill) 0.3
Contractors Contingency Excl
Total Plant Cost 60.6

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Table 26: Indicative Operating Costs

Item US$/t Ore
Power 4.9
Manpower 0.6
Consumables 2.3
Maintenance Supplies 0.8
Total 8.7

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7. INFRASTRUCTURE
Access to the mine property is from the local public road running adjacent to the site. This is a
surfaced road and is of sufficient standard for the transport of the mine product.

7.1. SITE ROADS

The layout of the site access roads are shown on D11450-100-1001 and will be compacted
un-surfaced stone roads.

7.2. PROCESS PLANT

The footprint of the two plant options and associated facilities, (heap leach pads, stockpiles,
ponds etc.) are shown on Drg. Nos D11450-100-1000 (Flotation) and D11450-100-1001
(Heap Leach)

7.3. MINE BUILDINGS

The following buildings have been included in the mine design:

7.3.1. Mine Workshop/Stores

This building will be of the single span portal frame design on a concrete slab foundation. The
roof and walls will be constructed using plastic covered profiled steel sheeting. This facility will
serve both the mining equipment and the process plant. Facilities will be included in the
building design for mining plant and small equipment maintenance and repair, (inspection pit,
workbenches, etc.). Within this building will also be a secure stores section, holding
equipment for both the mining and process plant operations.

The overall proposed size of this building is 30 m x 15 m, and the overall estimated cost for
this building will be $103,500 (not including tools etc.).

Associated with this facility will be the diesel fuel storage and filling arrangements. This will be
within a secure fenced compound 30 m x 20 m.

7.3.2. Mine office

This building will be a single storey constructed using structural steel frames and local
brickwork/blockwork. The mine office will serve both the mine and the process plant with office
space being provided for the following:
• Mine/Plant Manager; (2)
• Engineers; (3)
• Assayers (2)
• Chemist (1)
• Admin staff; (2)
• Records storage.
The overall size is 20 m x 10 m and the estimated cost for this building will be $45,000.

7.3.3. Welfare Building

This will include the following facilities in line with local requirements:
• Changing/shower provisions;
• Messing facilities;
• Toilet facilities;
• Prayer room.
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This will be provided for a total of approximately 50 mine and plant operatives /shift.. The
approximate size of this building will be 30 m x 20 m and will be constructed using locally
fabricated structural steel frames and brickwork/blockwork. The estimated cost of this building
will be $135,000.

7.3.4. Sewerage treatment facility

Associated with the mine buildings it will be necessary to install a sewerage treatment plant.
This would be of modular design and, dependant on the chosen design; it may be possible to
use the waste water for irrigation or plant re-use purposes.

The estimated cost for this facility will be in the region of $20,000.

7.3.5. Explosive Store

This will be built to standards and at a distance from the mine as required by Moroccan
regulations for such a building. The construction will include a perimeter bund and high
security fencing. It is possible that this building may need to be guarded by the Moroccan
military and a guardhouse may have to be provided.

An access road for explosive delivery and transport to the mine will be required. The
estimated cost for this building will be $20,000.

7.3.6. Building Costs

All capital costs are estimated to a typical Scoping Study level, +/- 50% accuracy.
The overall building costs are shown in Table 27 below:

Table 27: Building Costs

Building Area (m2) Cost ($)
Workshop/Stores 450 $103,500
Welfare Building 600 $135,000
Mine Office 200 $45,000
Explosive Store 100 $60,000
Sewerage treatment $20,000
Total building costs $363,500

7.4. ELECTRIC SUPPLY

The estimated power demand of the mine and process plant will be 8,500 kW with an annual
consumption of 52,000,000 kWh/annum.

Enquiries will have to be made with the Moroccan national power grid to confirm the suitability
of the adjacent overhead line to maintain this power load. The mine power supply will be fed
from the national power grid to a main surface substation from where electricity will be
distributed to the various site facilities.

7.5. WATER SUPPLY

The daily make up water demand for a flotation type process plant is estimated to be
800,000 m3/annum. There are several reported wells in the area, which are currently being
used by local villages. The output from these wells is unknown and a hydrological study will
have to be carried out to determine the likely available supply from these wells. If sufficient

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water is available from wells then extraction licenses will have to be obtained from the
appropriate government offices.

SWM believes that this will be a critical issue in the development Alous, and recommends that
a detailed examination of potential water sources and their accessibility be undertaken in the
next phase of project development.

7.6. TAILINGS DISPOSAL

If the flotation process is chosen, it will be necessary to provide tailing storage facilities. The
yearly production of tailings is estimated to be 1.3 million m3, giving a mine life total storage
requirement of 10.4 million m3. Associated with the tailings ponds will be tailings delivery and
water recovery pipelines.

Based on the topographical information made available to SWM, an initial tailings pond has
been located to the east of Zone A & B. This is shown on Drg. No D11450-100-1000 and will
have an approximate capacity of 1.4 million m3. This will have a life just over 1 year. SWM do
not access to detailed topographical maps of the area surrounding the proposed mine site and
have been unable to clearly identify further potential tailing pond sites in this study, although it
is known that there are other potential sites in the area. Additional detailed topographical
surveys will be required to support a comprehensive assessment of the tailing management
options for the flotation scenario.

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8. ENVIRONMENT AND SOCIAL

8.1. BACKGROUND
The Alous Copper-Silver deposits are located within steep fairly well vegetated valleys in
south-western Morocco. The Argan tree (argania spinosa) is prevalent, which is well adapted
for a harsh environment, surviving heat, drought and poor soil. These trees are little known
outside Morocco, and they only tend to grow in the south-west of the country; roughly
between Essaouira and Agadir, in an area covering 700,000-800,000 hectares. However in
the area where the Argan grows, there are about 21 million trees, which play a vital role in the
food chain and the environment, though their numbers are declining. One of the outcomes of
the EIA screening study (see below) will be to identify the presence and number of these trees
in the locality of the mine.

Evidence of former mining in the area is evident in the vicinity of the site in the form of
abandoned tailings ponds and adits leading into historic underground workings that are still
clearly visible. It is understood previous mining activity was predominantly undertaken in the
1960/70s. A good road network exists in the region and the site is currently accessed by a
narrow single track sealed road. The nearest major river course lies to the north of the site,
the exact distance is unknown.

The nearest community is located approximately 200 m from the deposit. This village has a
population of approximately 100 people living within 30-40 houses. The village services
include electricity, a mosque and a school. The community is well established and is
understood to have developed over 40 years ago following the establishment of a well by
BRGM. Subsistence farming for wheat is the predominant activity in the area. The main
town, of which the village is considered to be an offshoot, is located 1 km to the south-west of
the site with the next nearest predominant settlement being a further 20 km distant.

8.2. LEGISLATIVE OVERVIEW

The mining industry in Morocco accounts for 35% of foreign trade and about 6% of the GDP
of Morocco ([Link], 3 April 2007) and, as such, an established environmental
legislative framework for the mining sector is in place. The Ministry of Energy and Mines is
the main body responsible for implementing governmental policy for Energy, Mines and
Geology. It is divided into two Departments – the Head Offices for Energy and Mines
respectively. The Head Office for Mines has the principal jurisdiction for mining related
activities and as such is responsible for the National Mining Policy. From an environmental
perspective the head office of Mines is mandated to:
• control central and regional administrative sections which follow up and
control environmental activities undertaken by the mining industry; and
• regulate mineral processing through pollution regulation and by
implementing technical measures and devices for improved environmental
protection.

8.2.1. Environmental Legislation

The principal Environmental Legislation relating to the Mining industry includes:
• Dahir (law), dated 25 August 1914;
• Dahir (law) No 1-03-60 dated 12th May 2006;
• Decree of Public Works (General Management), dated 12 February 1935;
and

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• the Mining rules dated 16 April 1951.

The Moroccan Ministry of Regional Planning, Water and the Environment has the principal
jurisdiction for the Environment. It is made up of the State Secretariat for Water and the
Secretary General for Regional Planning and the Environment. The Division for Pilot Projects
and Impact Studies (la Division Des Projets Pilotes et des Etudes d'Impact), which is a part of the
Secretary General, are responsible for:

• Identifying projects that require an environmental study;

• Evaluating conformance of Environmental Impact Assessment (EIA) with
National Legislation.

[Link]. Environmental Impact Assessment

Dahir (law) No 1-03-60 (12th May 2006) relates to Environmental Impact Assessment (EIA).
Annexe 1 of the law indicates that all mining projects require the compilation of an
Environmental Impact Assessment.

An EIA is required, by the law, to contain; an Environmental Baseline Study, Project

Description, Impact Assessment, review of proposed measures to reduce negative impacts
and improve positive impacts, Environmental Monitoring Plan, a Policy and Legislative review,
Conclusion and contents of the EIA and a non technical summary for Public review. In
addition there are provisions for a Public Inquiry to obtain public views on the project.

[Link]. Other Environmental Legislation

Other Moroccan environmental legislation includes Laws (Dahirs) relating to waste
management, air quality, environmental protection, water quality, forests and unsanitary or
dangerous establishments.

8.3. KEY ISSUES

8.3.1. Potential Significant Impacts

The key impact presented by the project will be the required resettlement, both of the nearby
village, and farming, primarily wheat that is grown and goats that are grazed across the area.
Additional key impacts will relate to, land take and subsequent potential impacts on soils,
landscape, ecology (e.g. Argan trees), archaeology and culture in the area; and alteration and
potential contamination of hydrogeology and hydrology of the area. These impacts are
common to the mining industry and, while their specific significance will require clarification
through a project-specific EIA, in general these impacts can usually be satisfactorily managed
by application of recognised mitigation, monitoring and management practices.

8.3.2. Regulatory Requirements

The established national legislative framework in Morocco will require that a mining
development at Alous be subject to an Environmental Impact Assessment (EIA), which is
reported in an Environmental Impact Statement (EIS). In addition, if the project is to go for
international funding then the undertaking of an EIA and a preparation of EIS is almost
guaranteed to be mandatory and integral to demonstrate compliance with international best
practice for the industry.

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8.4. RECOMMENDATIONS
When the project is ready to progress to the pre-feasibility phase it will be appropriate to
undertake an EIA screening study. This is primarily a familiarisation exercise that will
investigate and confirm regulatory requirements at that time, environmental and social
baseline studies that should be established and an initial assessment of potential impacts.
During this stage of the project it will be appropriate to undertake initial engagement of key
stakeholders such as regulatory authorities on EIA requirement and the local village as careful
management of expectations and influx of other people into the area is likely to be a key
consideration.

It is also useful at this stage to clarify, where possible, the funding agency to be used for the
project, for example, World Bank, or whether the agency is Equator Principle registered. It is
appreciated that this is not always possible at such an early project stage however, it is
recommended that the level of study to be undertaken is agreed so that funding opportunities
are not subsequently inhibited.

In addition to an EIA, given the closeness of the nearby village to the proposed mine, it is
anticipated that a Resettlement Action Plan (RAP) will be required. This plan would formally
examine and document the required resettlement and the procedures to be followed. Given
the numbers involved, it may be possible that a framework RAP can be undertaken, which
should be clarified in the screening phase.

Finally, the existing historic mining at the site should also be considered at the screening
exercise. It is possible that the proposed mine plans will offer the opportunity to rehabilitate
some of these remaining areas, however it may be necessary to undertake a formal
audit/register to ensure that ownership of existing historic liabilities is not undertaken. It is
recommended that this be considered and discussed with the authorities once the project
moves into the pre-feasibility phase.

8.5. REFERENCES
• Kingdom of Morocco, Ministry of Energy and Mines, Mine head office,
Mining Sector 2002 edition.
• Ministere de l’Amenagement du Territoire de l’Eau et de l’Environnement
[Link]
• [Link], 3 April 2007

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9. PROJECT ECONOMICS
Based on the information outlined in each of the sections above the estimates of project
production performance, operating costs, and capital costs to develop the project have been
used to develop a project cash flow estimates and summary economics for both the flotation,
and the heap leach processing alternatives.

9.1. HEAP LEACH SCENARIO

The heap leach project scenario contemplates a one year detailed technical assessment
period where the necessary metallurgical testing work, site investigation, water supply
evaluation, environmental baseline studies etc. are carried out. At the end of this first year a
project feasibility study will be completed supporting the project implementation program
covering the subsequent two years. The mine is forecast to operate over a period of 9 years
with site closure works being completed in the final 10th year.

For the study the same mine production levels have been used for each process route.

A copper price of US$2.00/lb has been selected as the base case for the study. A sensitivity
analysis shows the impact of variation in the key project factors including copper price.

The following summarises the base case cost factors that have been used to generate the
economics figures for a one million tonne per year heap leaching mine development for the
Alous deposit.

Table 28: Heap Leach Scenario – Key Cost Factors

Capital Costs
Project US$
Studies/Evaluation 1,600,000
Mine Equipment US$ 4,827,000
Process US$ 29,900,000
Infrastructure US$ 3,932,000
Closure Costs US$ 1,000,000
Contingency (20%) US$ 7,732,000
Total CAPEX US$ 48,991,000
Operating Costs
Mining US$/t mined $1.71
US$/t
Processing treated $4.60
US$/t
G&A treated $1.00
US$/t
Total Operating Costs treated $9.76

The following table summarises the results of the economic evaluation of the Heap Leach
Processing scenario. The project generates an undiscounted cash flow of $21.5 million over
the life of the mine and the project generates an internal rate of return of 9%. At a 5%
discount rate generates a Net Present Value for the project of $7.5 million.

Table 29: Heap Leach Evaluation Results

Project Parameter Unit
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Total Tonnes Processed 000’s 8,840

Average Copper Grade 0.68
Total Waste Tonnes Mined 000’s 6,710
Total Material Mined 000’s 15,550
Stripping ratio 1.75
Copper Grade % 0.68
Copper Recovery % 60
Concentrate Cu Grade % N/A
Total Copper Cathode Production tonnes 35,845
Total Net Copper Revenue US$ Million 157.5
Cash Operating Cost US$ Million 86.3
Total Project CAPEX US$ Million 49.0
Total Pre-Tax Cash Flow US$ Million 21.5
NPV@ 5% US$ Million 7.5
IRR 9%

9.2. FLOTATION SCENARIO

The flotation project scenario contemplates a one year detailed technical assessment period
where the necessary metallurgical testing work, site investigation, water supply evaluation,
environmental baseline studies etc. are carried out. At the end of this first year a project
feasibility study will be completed supporting the project implementation program covering the
subsequent two years. The mine is forecast to operate over a period of 9 years with site
closure works being completed in the final 10th year.

A copper price of US$2.00/lb has been selected as the base case for the study. A sensitivity
analysis shows the impact of variation in the key project factors including copper price.

The following summarises the base case cost factors that have been used to generate the
economics figures for processing one million tonnes per year through a flotation facility for the
Alous deposit.

Table 30: Flotation Scenario – Key Cost Factors

Capital Costs
Project US$
Studies/Evaluation 1,600,000
Mine Equipment US$ 4,827,000
Process US$ 60,300,000
Infrastructure US$ 3,932,000
Port Facilities US$ 500,000
Closure Costs US$ 1,000,000
Contingency (20%) US$ 13,912,000
Total CAPEX US$ 84,471,000

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Operating Costs
Mining US$/t mined $1.71
Processing US$/t treated $4.60
G&A US$/t treated $1.00
Total Operating Costs US$/t treated $9.76

The following table summarises the results of the economic evaluation of the Heap Leach
Processing scenario. The project generates an undiscounted cash flow of $21.5 million over
the life of the mine and the project generates an internal rate of return of 9%. At a 5%
discount rate generates a Net Present Value for the project of $7.5 million.

Table 31: Flotation Evaluation Results

Project Parameter Unit
Total Tonnes Processed 000’s 8,840
Average Copper Grade 0.68
Total Waste Tonnes Mined 000’s 6,710
Total Material Mined 000’s 15,550
Stripping ratio 1.75
Copper Grade % 0.68
Copper Recovery % 87
Concentrate Cu Grade % 42%
Concentrate Ag Grade g/t 12.3
Copper Concentrate Production Tonnes 123,750
Total Net Conc. Revenue US$ Million 206.7
Cash Operating Cost US$ Million 112.5
Total Project CAPEX US$ Million 85.0
Total Pre-Tax Cash Flow US$ Million 7.6
IRR 2%

This preliminary economic analysis indicates that, even if the total resource (all classes of
mineral including inferred) of 8 Mt is converted to ore reserve, the flotation processing option
is unlikely to be economic at the base case (long term) copper price of $2.00/lb. Heap
leaching however may provide a positive return if the key operation performance assumptions
used here can be proven through a metallurgical testing program. It is important to
understand that this result is based on an assumed “reasonable” level of acid consumption for
the leaching process. This remains a significant question.

If additional resources can be developed in the immediate vicinity of the known Alous deposits
then a larger operation could be considered and the economics of both alternatives will
improve. The silver content of the ore is contributes only a small fraction of the revenue value
(about 5%) in the flotation case.

The project economics are most sensitive to copper price and metallurgical recovery, with
capital costs and operating costs having a similar level of impact due to the relatively short life
of the project. Figure 5 and 6 present graphical summaries of +/- 20% variance of several of
the key factors for each of the two project scenarios considered.

The comparative viability of the heap leach route relative to the flotation route decreases as
copper prices rise, due to the lower metal recovery of the heap leach.
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Figure 5

Alous Project - Flotation Scenario Sensitivity Analysis

35.0
Millions

30.0

25.0
20.0
Net Present Value

15.0
10.0

5.0
0.0
-5.0
-10.0
-15.0
-20.0
80% 90% 100% 110% 120%
Variance Factor

Grade Price OPEX Recovery CAPEX

Figure 6

Alous Project - Heap Leach Scenario

Sensitivity Analysis

35.0
Millions

30.0
25.0
20.0
Net Present Value

15.0
10.0
5.0
0.0
-5.0
-10.0
-15.0
-20.0
80% 90% 100% 110% 120%
Variance Factor

Grade Price OPEX Recovery CAPEX

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10. CONCLUSIONS
The Alous deposit may ultimately be proven to be economic if a number of key issues
identified in this review can be demonstrated to meet the assumptions used in this analysis.
These aspects require detailed study of the site and surrounding area and/or detailed test
work designed to fully assess the key technical parameters. The primary areas where
opportunities to enhance the project have been identified include:

1. Resources – a substantial increase in tonnage available to process through proposed

Alous treatment facilities (of either design) will have significant positive impact on the
project economics.

2. Metallurgical performance factors – the metallurgical recovery, and operating

parameters including acid consumption, crushing size, material strength will enhance
the confidence in the forecast of Heap Leaching economics.

3. Water supply – the location, size, permitting requirements, and transport system
requirements for delivering the quantities of process water required for the processing
facilities is a critical component in the establishing the project economics.

4. Environmental baseline studies – the assessment of the potential project impacts and
their mitigation planning should be undertaken as early as possible to ensure
consistent communication with local and regional populations whose support for the
project will be required.

5. Site investigation – geotechnical evaluation of the rock slope angles and foundation
investigation, and additional topographic surveying will be required in order to confirm
key design criteria and site planning.

6. Infill drilling – reclassification of Inferred resources into the Indicated classification will
be required before a Pre-Feasibility Study can be completed, and additional structural
and geological interpretations are recommended for incorporation into a more detailed
resource model designed to support eventual mining operations.

It is apparent from this evaluation that, subject to confirmation of the performance parameters,
the heap leaching option has the best potential for a viable operation at Alous. The capital
costs and operating costs are expected to be substantially lower than a flotation process,
although at the expense of lower copper recovery. The flotation option is likely to require a
substantial increase in available resource for processing, or copper grade, or both before a
viable operation is likely to be developed.

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11. RECOMMENDATIONS

11.1. METALLURGICAL ASSESSMENT

In order to confirm these assumptions and to proceed with a reasonable degree of certainty
on the heap leach process, SWM recommends the following:

1. Determine the availability and cost of the acid delivered to site.

2 If acid supply costs do not rule out the process, carry out scoping testwork to check the
following:
• Leaching kinetics, percolation rates and acid consumptions on crushed
representative lump or diamond drill core samples from the deposit (not RC
drill chips). This should be done at a series of crushing sizes starting as
coarse as possible and be directed and evaluated for scale-up by an
experienced copper heap leach consultant. The assumed size of 19mm
would provide good percolation and a minimum crushing plant design, but
the recovery might be low.
• Detailed chemical analysis of the leach liquor.
• Crushing work index and abrasion index

3 Further test work will be required on samples representative of the types and grades of
ore within the ore body. The ore body should be modelled in terms of hardness, grade
and mineralogical type. At present it seems that there is a different ore at the north of
Zone A, because the copper mineralization changes to chalcopyrite/pyrite. This is very
significant because it will seriously affect the heap leaching time or decrease the
flotation concentrate grade.

4 If a flotation process option is to be pursued then more flotation specific testwork is

required. The previous test work provides a good starting point. A good specialist
mineral processing laboratory can perform most of these tests. Tests should include;
• The range of crushing, rod mill and ball mill work indices and abrasion
index.
• SAG/Ball Mill design parameters, preferably by determining JKTech ore
properties. These should be done and evaluated by a specialist
comminution consultant/laboratory.
• Confirm the grind size. This may vary with ore type.
• Carry out flotation tests to determine an appropriate circuit and reagent
suite. Include at least cyclic tests on the selected circuit if it includes
circulating loads.
• A detailed chemical analysis of the flotation concentrate.
• Confirm high rate thickener sizes for concentrate and tails. A thickener
vendor would best carry this work out.
• Confirm concentrate filtration rates. A vendor would best carry this work
out.

11.2. GEOLOGICAL ASSESSMENT

1. Additional resources need to be identified to augment the Alous project and enhance
the economics of a local processing facility.

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2. Infill drilling to upgrade resource classification should be carried out.

3. More detailed structural and mineralogical interpretations should be completed in order

to develop a more precise resource model to support eventual mining operations.

11.3. INFRASTRUCTURE AND SITE ASSESSMENT

1. Hydrological investigations should be carried out to identify a reliable water source for
the life of the mine. An estimated process water makeup of 800,000 m3/pa is required.
A detailed chemical analysis of the water is also required. In particular chloride content
will be important for assessment of possible water use in the construction works. If
sufficient water resources are identified it will be necessary to obtain an extraction
license from the appropriate government department.

2. When the project is ready to progress to the Pre-Feasibility phase it will be appropriate
to undertake an EIA screening and complete an EIS.

3. SWM recommends that a programme of site investigation and slope stability analysis
be undertaken at the next stage of project evaluation in order to fully address the pit
slope design.

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Appendices

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Appendix 1

NOTES ON PREVIOUS TESTWORK

REPORTS

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1. P&E Mining Consultants Inc. Report No 123, September 8th 2006.

Resource:
The Alous orebody comprises 3 zones A, B and C. The majority of the ore is within Zone A
and B which are aligned on a NE – SW axis, Zone B being to the NE of Zone A. There is a
gap of about 200 m between these two orebodies. A small resource comprises Zone C, some
600 m to the south east of Zone A.

The Resource Estimate by P&E was:

Zone Indicated %Cu Ag g/t Inferred %Cu Ag g/t

Tonnes Tonnes

A 5,232,000 0.81 10.1 12,000 0.49 6.0

B 175,000 0.60 5.6 2,409,000 0.54 3.9
C - - - 165,000 0.60 8.4
Total 5,407,000 0.80 10.0 2,586,000 0.55 4.2
Total Indicated and Inferred 7,993,000 0.72 8.1

Metallurgy:
Two sulphide mineral facies:
Bornite and chalcocite. Ag/Cu ratios are quoted as 15:1 to 17:1. But these ratios do not agree
with grades on the resource estimate Table 16.5.
Pyrite and chalcopyrite, restricted to the Northern part of Zone A. Copper grades generally
less than 0.60%.
Between 1967 and 1971 there were six metallurgical studies. In 1967 the University of
Arizona undertook a dump leach test and concluded that dump leaching was possible, but
acid consumption is high. No details provided.
Using flotation, copper concentrate grades of between 40% and 44%Cu were obtained with
copper recoveries ranging from 84% to 92%.
The five subsequent studies concentrated on flotation as they all concluded that dump
leaching was not an appropriate beneficiation method.
The document refers to a summary report “Alouss Copper Deposit Snoep, September 1968”
(This was not available to AKES).
Summary:
The Colorado School of Mines (CSMRF) report indicated power requirements and ball and
liner consumptions. It demonstrated that leaching was not the appropriate method. Concluded
that flotation would obtain 40 – 42%Cu concentrate and 97-90%Cu recovery.
Copper oxides do not float without sulphidisation.
Combined oxide/sulphide cleaning should be used.
No regrinding of the cleaner tails is required.

2. BRPM Feb 1968. Preliminary Study of the Concentration of Alous Copper

Minerals

Objects:

To confirm the main results of CSMRF of Jan 1968

To examine the fundamentals of flotation of the mineral and collect information on the
processing circuits and equipment required.

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Samples came from Zone A. and were crushed to -5mm.

In 1966 heavy liquid analysis with bromoform was used to assess liberation size. This was a
problem due to porosity of the malachite. Liberation was assessed to be in the region of 400
microns. The tests were therefore aimed to be done at 90%-35 mesh (400 microns).

A test at 73%-400 microns showed this was too coarse.

A test at 87%-400 microns gave a recovery of 88%Cu.
Finer grinds caused losses in the fines that offset recovery from the coarser material. However
this may also have been an effect of the type of laboratory cell used being inappropriate for
the coarser grinds.

Problems in reproducing the CSMRF tests were blamed on the type of cell.

Analyses of screen fractions showed that losses in the fines were essentially oxide copper.
Cleaning tests using sodium silicate gave a recovery of 92%Cu (t) and 71% Cu (ox) to a
41%Cu concentrate.

Conclusions were:
Flotation of Alous ore was simple.
A bulk sulphide/oxide concentrate could be produced from a single cleaning circuit.
The coarse liberation size requires that a suitable cell is selected.
Obtaining a concentrate of about 40%Cu is no problem and this could be increased by
regrinding in the cleaning circuits.
Overgrinding should be avoided.
Reagent consumption is low.

More tests on mineral from zone A and comparative tests on Zones B and C were in hand.

3. BRPM July 1971. Pilot Plant Results

Nov 1967. The CSMRF did batch and cyclic flotation tests on Alous ore with a head grade of
0.89%CuT and 0.19%Cuox. The Cyclic test at 80% -150µm gave 87% copper recovery to a
42%Cu concentrate.

At the end of 1968, tests were performed by Minerais & Metaux in Paris. The head grade was
1%Cu, ground to 80%-350µm in a dry Aerofall Mill. These tests obtained an 84% Cu recovery
to a 44%Cu concentrate with a 1.9% weight pull. The flotation time was long at 55 minutes.
The circuit included 5 stages of sulphidisation and a regrind of the rougher concentrate. The
lower recovery was believed to be due to oxidation of the mineral by the dry grinding and it
was decided that BRPM would carry out a pilot plant test using conventional grinding.

BRPM carried out tests to determine also:

Optimum grind size and flotation pulp density for flotation in a Denver flotation cell.
Reagents required and addition points
Energy consumption to grind the ore to flotation size.

The pilot plant circuit comprised a closed circuit ball mill, conditioners and flotation cells. The
reagents were KAX, NaHS and Pine oil. The ore was the same as used by the CSMRF with a
head grade of 0.89%CuT and 0.19%Cuox.

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The following circuits were tested.

Flotation of sulphides followed by flotation of oxides after sulphidisation, cleaning of combined
sulphides and oxides. Test L2.
Feed 0.83%Cu
Conc 40%Cu
Tails 0.1%Cu (With 80% oxides)
Conc 1.83%Wt
Recovery 88.2%Cu

Circuit:
Grind 80%-150µm, 60%-74 µm.
Sulphide Float at 30% solids:
80g/t KAX & 28g/t Pine Oil
6 mins conditioning
12 mins sulphide flotation

Oxide Float:
200g/t NaHS & 40 g/t KAX.
10 Mins conditioning
6 mins flotation

100g/t NaHS & 30 g/t KAX.

5 Mins conditioning
6 mins flotation. Conc to head of oxide circuit.

Sulphide and oxide concentrates were cleaned together in 2 stages.

Bulk flotation without sulphidisation. Test L7

The circuit had 2 conditioning stages. Initially 6 minutes and another of 5 minutes later in the
float. Total flotation time 30 minutes.
Feed 0.76%Cu
Conc 42%Cu
Tails 0.19%Cu (With 74% oxides)
Conc 1.4%Wt
Recovery 77.4%Cu

Flotation in high pulp density (42%w/w). Test L8

Flotation conditions as for L2 but at 42% solids.
Feed 0.80%Cu
Conc 39.3%Cu
Tails 0.14%Cu
Conc 1.7%Wt
Recovery 83.3%Cu

Differential sulphide/oxide flotation. Test L5

Sulphide Float:
6 Mins conditioning
12 mins sulphide flotation
2 Cleaning stages

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Oxide Float:
2 Stage sulphidisation with 10 and 5 minutes conditioning.
12 mins flotation
2 Cleaning stages

Overall Results:
Feed 0.74%Cu
Conc 42.9%Cu
Tails 0.14%Cu
Conc 1.4%Wt
Recovery 81.2%Cu

Conclusions
Wet grinding gave better results than dry.
Oxides do not float without sulphidisation. 2 Stages of sulphidisation are sufficient.
Separate recleaning of the concentrates is not justified.
Increasing pulp density to 42% gave a reduction in recovery, but this was thought to be due to
the design of the cells available.

Some tails and concentrate thickening tests and concentrate filtration tests are included in the
appendices.

4. BRPM August 1973 (Assessment of Reserves in Zones C & D)

Not reviewed in detail.

Mineralization:

Zone A: Mainly bornite, chalcocite, pyrite, native copper, malachite and azurite in abundant
cracks in the rhyolite. In the northeast of Zone A is predominantly chalcopyrite and pyrite and
to the south east, bornite and chalcocite.

Zone B: Mainly chalcocite, malachite and azurite.

Zone C: Mainly chalcocite, malachite, azurite and minor pyrite and bornite.

5. Division de l’Exploration Miniere, Department Mineralurgie

Note 544 Dec 1980

Summarises previous Testwork.

Colorado School of Mines

3 t sample from orebody Zone A. Grade 0.89%Cu (t) and 0.19%Cu (ox).

Minerals were: chalcocite, bornite and malachite. Gangue was quartz with microcline and
albite felspars.

Grinding tests gave a BMWI of 21.7 kWh/st = 23.9kWh/te and RMWI of 18.9 kWh/st =
20.8kWh/te. This indicates a very hard ore.

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Simple flotation scheme used with only Amyl Xanthate and Aerofloat with no sulphidisation.
97%Ag was recovered in a batch test.

Results:
Cyclic Test.
Grind 80%-150µm.
Flotation Time 11 minutes.
Feed 0.89%Cu (t) with 0.19%Cu (ox)
Conc 42%Cu
Recovery 86.8%Cu.

CTT – Bou Azzer

The aim was to confirm the Colorado School of Mines tests. The tests showed that liberation
could be achieved with a very coarse grind of 80%-400 µm.
The oxides floated without sulphidisation using stage additions of Amyl Xanthate and cresylic
acid (?) frother.

Results:
Grind 80%-400µm.
Flotation Time 20 minutes.
Feed 1%Cu (t) with 0.30%Cu (ox)
Rougher Conc 7.5 - 11%Cu and 92% Recovery
Cleaner Conc 40%Cu and thought to be 83% Recovery. (Not clear from text)
Most copper was lost in the fines.

Aerofall Mill – Fives Cail

Tests done on a 20t sample gave a work index of 21.2 kWh/st = 23.3kWh/te. This is a very
hard ore.

6. Minerais et Metaux

Flotation tests done on a sample dry ground in the Aerofall mill.

Head grade 1% Cu (t), 0.38% Cu (ox) and 16g/t Ag.
Grind 80%-350µm.

Batch Tests showed:

Separate flotation of sulphides and oxides gave:
Flotation Time 20 minutes.
Rougher Conc 15%Cu and 86.7% Recovery
Cleaner Conc 36%Cu and 76.7% Cu Recovery.
Flotation without sulphidisation gave poor results.
Minemet and Fagergren flotation cells gave different results:

Further tests gave results not much different:

Concentrates 52.5 – 44.4%Cu depending on the number of cleaning stages.
Concentrate weight 1.59 – 1.9%
Copper recovery 83.3-84.3%
Silver recovery 79.5-83.8%
Flotation time about 42 minutes.

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Odyssey Resources Ltd
Alous Copper-Silver Mine Project Scoping Study

Reagent consumptions:
70 -150 g/t Amyl Xanthate
300-400 g/t NaHS
80g/t Aerofloat
5g/t Pine Oil

Thickener Areas, with 20 g/t Separan flocculant:

Tails 2.4 m2/t/h
Concentrate 0.18 m2/t/h
These are almost certainly cylinder tests and correspond to conventional thickeners.
Concentrate Filter Area 1.23 m2/t/h

7. BRPM

Following the differences obtained by CSMRF and Minemet, BRPM carried out a pilot plant
test with conventional grinding. The crushed sample was identical to that used by Colorado
School of Mines.

As described in (3) above.

Comparison of Test Results

Colorado CTT – Bou Minemet BRPM
School of Azzer
Mines
Cyclic Test Batch Test Pilot Plant Pilot Plant
Head Cu (t)% 0.89 1.00 1.0 0.89
Grade Cu (ox)% 0.19 0.30 0.38 0.19
Ag g/t 15.3 16
Conc Cu (t)% 42.0 40.6 44.4 40.0
Grade Ag g/t 500 630
Recovery Cu % 86.8 83.0 84.3 88.2
Ag % 70.0
Mass % To Conc 1.90 1.83
Recovery
Grind 80% - µm 150 400 350 150
Type Wet Wet Dry Wet
Work Index Rod 20.8
kWh/tonne Ball 23.9 23.3
KAX g/t 70 - 150 80
NaHS g/t Nil Nil 300 - 400 300
Aerofloat g/t 80 Nil
Frother g/t 5 28

8. Kappes Cassidy & Associates. Column Leach Tests 25 May 2006. Draft
Report

Feed ITT and ATT material. The source of this material is not noted, so it is assumed it is from
the Alous deposit and not from any of the other Odyssey prospects, although the file name of
the report is “Kappes Tailing Report”.

K:\Country\Morocco\PD 0175 Alous CuAg Project\D114506 Alous Scoping Study\9902 Reports\Final report\R17712 text_final.doc Scott Wilson Mining
Odyssey Resources Ltd
Alous Copper-Silver Mine Project Scoping Study

The material leached was nominally –1 mm and 0.68%Cu. One sample was 80% -300 µm
and the other 80%-800 µm. A copper extraction of 93% was obtained after an average of 65
days of leaching. The tests were run as drip leach tests for 30 days, but were then changed to
Vat Leaching by emptying the columns, agglomerating the material with acid and refilling the
columns. Thereafter upflow leaching was performed with flooded columns. The initial acid
strength was 10 g/L H2SO4. For the Vat leach stage, the agglomeration solution was used at
100 g/L. Acid consumption averaged 123 kg H2SO4/t corresponding to 19 kg H2SO4/kg Cu.
No results were presented for the copper recovery after the 30 day drip leach, but these might
have been in the appendix which was not provided.

No Cu (ox) analyses were presented nor comment on the gangue composition.

K:\Country\Morocco\PD 0175 Alous CuAg Project\D114506 Alous Scoping Study\9902 Reports\Final report\R17712 text_final.doc Scott Wilson Mining
Odyssey Resources Ltd
Alous Copper-Silver Mine Project Scoping Study

Appendix 2

Drawings

Drawing No. Title

D11450-100-1000 Site General Arrangement Flotation
Option
D11450-100-1001 Site General Arrangement Heap Leach
Option

K:\Country\Morocco\PD 0175 Alous CuAg Project\D114506 Alous Scoping Study\9902 Reports\Final report\R17712 text_final.doc Scott Wilson Mining