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  • 1. Resource AuditMMX Mineração e Metálicos S.A. Serra Azul Mines Brazil Prepared for: MMX Mineração e Metálicos S.A. Avenida Prudente de Morais1250 Belo Horizonte, Minas Gerais Brazil SRK Project Number: 162700.10 Prepared by: 7175 W. Jefferson Avenue, Suite 3000 Lakewood, CO 80235 Effective Date: November 16, 2010 Report Date: January 5, 2011 Author: Leah Mach, CPG, MSc
  • 2. MMX Mineração e Metálicos S.A. ISerra Azul Mines Resource AuditTable of Contents1 INTRODUCTION ........................................................................................................... 1-1 1.2.1 Sources of Information ......................................................................... 1-1 1.3.1 Site Visit................................................................................................ 1-22 PROPERTY DESCRIPTION AND LOCATION ........................................................... 2-13 GEOLOGICAL SETTING .............................................................................................. 3-1 3.1.1 Regional Structure ................................................................................ 3-1 3.2.1 Local Lithology..................................................................................... 3-4 3.2.2 Alteration .............................................................................................. 3-4 3.2.3 Structure ................................................................................................ 3-4 3.2.4 Metamorphism ...................................................................................... 3-54 MINERALIZATION ....................................................................................................... 4-15 DRILLING....................................................................................................................... 5-16 SAMPLING METHOD AND ANALYSIS..................................................................... 6-1 6.1.1 Logging and Sampling .......................................................................... 6-1 6.2.1 Logging and Sampling .......................................................................... 6-2 6.4.1 Sample Preparation ............................................................................... 6-3 6.4.2 Sample Analysis.................................................................................... 6-3 6.5.1 Comparison of Assayed and Calculated Global Grades ....................... 6-4 6.5.2 Stoichiometric Closure.......................................................................... 6-4 6.5.3 Certified Reference Material................................................................. 6-57 DATA VERIFICATION ................................................................................................. 7-18 MINERAL RESOURCES ESTIMATE .......................................................................... 8-19 RECOMMENDATIONS ................................................................................................. 9-110 REFERENCES .............................................................................................................. 10-111 GLOSSARY .................................................................................................................. 11-1 11.1.1 Mineral Resources .............................................................................. 11-1 11.1.2 Mineral Reserves ................................................................................ 11-1List of TablesTable 1: Drilling at the Serra Azul Mine ..................................................................................... IVTable 2: Serra Azul Mineral Resource Statement, as of November 16, 2010* ........................... VITable 1.3.1: Key SRK Project Personnel .................................................................................... 1-2Table 2.2.1: Serra Azul Land Tenure.......................................................................................... 2-1Table 5.1.1: Comparison of Twin RC and Core Drillholes ........................................................ 5-1Table 5.1.2: Drilling at Serra Azul.............................................................................................. 5-2Table 6.4.1: Laboratories used for Sample Preparation and Analysis ........................................ 6-2Table 6.4.1: Bureau Veritas Detection Limits ............................................................................ 6-4SRK Consulting (U.S.), Inc. January 5, 2011SerraAzulResource Audit_LMB_003.docx
  • 3. MMX Mineração e Metálicos S.A. IISerra Azul Mines Resource AuditTable 8.1.2: Basic Statistics for Assays ...................................................................................... 8-1Table 8.2.1: Basic Statistics of Metal Variables by Lithotypes used in Grade Estimation ........ 8-3Table 8.3.1: Composite Statistics................................................................................................ 8-4Table 8.4.1: Density of Lithotypes ............................................................................................. 8-5Table 8.5.1: Variogram Parameters ............................................................................................ 8-6Table 8.6.1: Block Model Dimensions and Origin ..................................................................... 8-7Table 8.6.2: Estimation Parameters ............................................................................................ 8-7Table 8.7.1: Basic Statistics of the Blocks.................................................................................. 8-8Table 8.8.1: Serra Azul Classification Criteria ........................................................................... 8-9Table 8.9.1: Serra Azul Mineral Resource Statement, as November 16, 2010* ...................... 8-10Table 8.10.1: Measured and Indicated Grade and Tonnage by Fe Cutoff. ............................... 8-11Table 8.10.2: Inferred Grade and Tonnage by Fe Cutoff ......................................................... 8-11Table 11.2.1: Glossary .............................................................................................................. 11-2Table 11.2.2: Abbreviations...................................................................................................... 11-3List of FiguresFigure 2-1: General Location Map of the Serra Azul Mine........................................................ 2-2Figure 3-1: Project Location within the São Francisco Craton................................................... 3-6Figure 5-1: Drill Collar Location Map........................................................................................ 5-3Figure 8-1: Drillhole Location Map with Topography and Mining Concessions .................... 8-13Figure 8-2: Cross-sections with Geology and Drilling Looking East....................................... 8-14Figure 8-3: Oblique View of Cross-sections Showing Change in Bedding Dip ...................... 8-15Figure 8-4: Omni-Directional and Downhole Variograms for Iron, Friable and Compact Itabirite8-16Figure 8-5: Cross-sections with Geology, Block Model and Drilling Looking East................ 8-17Figure 8-6: Swath Plot Index Map and Iron Swath Plot ........................................................... 8-18Figure 8-7: Cross-sections with Geology, Block Model Classification and Drilling ............... 8-19Figure 8-8: Grade Tonnage Curves, Iron .................................................................................. 8-20SRK Consulting (U.S.), Inc. January 5, 2011SerraAzulResource Audit_LMB_003.docx
  • 4. MMX Mineração e Metálicos S.A. IIISerra Azul Mines Resource AuditSummaryProperty Description and LocationThe Serra Azul Mine (the Project) is located in the Serra Azul area in the state of Minas Gerais,Brazil near the town of Igarapé, approximately 60km southwest of Belo Horizonte, the capital ofMinas Gerais. The Project consists of an operating mine and two beneficiation plants for theproduction of lump and sinter feed.OwnershipThe Project is controlled by AVG Mineraçao S/A, a subsidiary of MMX Sudeste MineraçãoLtda. (MMX Sudeste), a 100% owned subsidiary of MMX Mineração e Metálicos S.A. (MMX).Geology and MineralizationThe Project lies within the Quadrilátero Ferrífero (Iron Quadrangle). The geology of the IronQuadrangle has been studied since the 18th century and is one of the most important metallogenicprovinces in the world. The lithologies in this area include the Rio das Velhas and MinasSupergroups, which are part of the crystalline basement. This area is known for its banded ironformation (BIF) deposits.In the Project area, the Serra das Farofas is composed of rocks from the Minas Supergroup thatare underlain by the Rio das Velhas Supergroup in a clear discordant contact. The MinasSupergroup is subdivided, from youngest to oldest, into three groups: Piracicaba Group; Itabira Group; and Caraça Group.Locally, the stratigraphic sequence is inverted, with the most recent quartzitic formations of thePiracicaba Group overlain by the itabirites of the Cauê Formation, Itabira Group, which, in turn,is capped by the oldest phyllites and quartzites of the Caraça Group.Within the pit area, the geology is dominated by four formations. From oldest to youngest, theseare the Batatal, Cauê, Gandarela and Cercadinho Formations. The Batatal Formation has beenthrust over the younger Cauê Formation, which has been thrust over the youngest CercadinhoFormation. The deposit is crosscut by a northwest-trending, high-angle brittle fault that appearsto be offset by younger northeast trending faults.The mineralization at the Project consists of metamorphosed BIF subsequently with strongevidence of hydrothermal syngenetic formation with areas of supergene enrichment throughlateritic weathering. This results in a variety of different mineralization types. There are sevendistinct lithological ore types observed in this area of the Serra do Curral: Canga; Friable siliceous itabirite; Friable rich itabirite; Compact itabirite; Friable hematite;SRK Consulting (U.S.), Inc. January 5, 2011SerraAzulResource Audit_LMB_003.docx
  • 5. MMX Mineração e Metálicos S.A. IVSerra Azul Mines Resource Audit Compact hematite; and Friable carbonate itabirite.ExplorationLike most private iron mine operators in Brazil, AVG, Minerminas and prior operators have nothad extensive and detailed exploration programs. There has been minimal exploration drillingprior to MMX’s involvement in the Project. Limited channel samples were collected in the pitarea.Since 2005, 213 holes have been drilled at the Project, totaling 18,857M. The drilling consists ofboth core and reverse circulation drilling. Table 1 lists the number of drillholes by program andcompany and the laboratory that was used to analyze the samples.Table 1: Drilling at the Serra Azul Mine Number of Length Number of Campaign Period Laboratory Drillholes Type (m) Samples FSAVG, FSAVGSB 11 HW Core 2005 440 50 AVG Total AVG 11 2005 440 50 AVGMMX 9 HWL Core 2007 694 88 SGS SEFDSF 26 HQ, HWL 2007-2008 1,459 273 SGS,MMX FSMNM 3 HWL Core 2007-2008 191 34 MMX FDSB, SEFDSB 50 HWL Core 2008 3,190 628 MMX FDSF 6 HWL Core 2008 203 49 MMX RPSF (RC) 19 4 or 5" 2009 2,836 522 SGS FDSA 32 HQ, HN 2010 3,872 448 SGS, Bureau Veritas FDSC 11 HQ 2010 590 * Bureau Veritas RPSA (RC) 46 4.75 or 5" 2010 5,382 551 Bureau Veritas Total MMX 202 2007-2010 18,417 2593 Total 213 2005-2010 18,857 2643Mineral ResourcesMMX prepared the resource estimation for Serra Azul under the direction of Ms LilianGrabellos, Manager of Resouces and Reserves. Leah Mach, Principal Resource Consultant withSRK, audited the resource.The drillhole sample database was compiled by MMX and verified by SRK and is determined tobe of high quality and suitable for resource estimation. SRK received the drillhole database asfour comma separated variable (csv) files consisting of: Collar: Drillhole ID, easting, northing, elevation, and total depth; Survey: Depth, azimuth, inclination; Geology: From, to, lithology and code from drill log, modeled lithology and code from cross-sections; and Assay: Four files with one file for each of three size fraction groups and one for global, containing from, to, Fe, SiO2, Al2O3, P, Mn and LOI.Sixty-seven geologic cross-sections were constructed at 100 or 50m intervals depending on thedrill spacing. The cross-sections were used to prepare horizontal sections at 10m spacing fromSRK Consulting (U.S.), Inc. January 5, 2011SerraAzulResource Audit_LMB_003.docx
  • 6. MMX Mineração e Metálicos S.A. VSerra Azul Mines Resource Auditelevation 9550 to 1,365. The block model was coded from the horizontal sections. Thelithotypes that were used in grade estimation are Canga (CG), friable itabirite (IF), friablecarbonate itabirite (IFCA), and compact itabirite (IC).MMX composited the samples on 5m intervals starting at the top of the drillhole with breaks atthe lithotype solid boundaries. MMX conducted variography studies on the AVG andMinerminas properties separately because of the difference in the dip of the beds between thetwo properties. The study included directional and downhole variograms as well as omni-directional variograms. The omni-directional variogram was chosen as showing the best fit forthe data.A block model was created that covers the entire AVG/Minerminas mine area. The block modelcontains variables for: Fe, SiO2, Al2O3, Mn, P, and LOI – global and for each of the three size fractions; Lithotype; Percentage below topography; Estimation parameters – number of composites, number of drillholes, average distance of composites used in estimation, and distance to closest composite; and Class – 1=measured, 2=indicated, 3=inferred, 4=potential.Block grades were estimated by ordinary kriging in three passes. Blocks were classified asMeasured, Indicated or Inferred after each estimation pass. Blocks that did not meet thenecessary criteria for classification were re-estimated in the next pass. The search ranges weredetermined by the iron variogram range with the first pass at the variogram range and the secondat 150% of the range. The third pass was at 2000m to fill all the blocks in the model andestimate a mineral potential. The estimation was conducted using block and composite lithotypematching.The resources were classified according to CIM classification as Measured, Indicated, or Inferredbased on the pass in which the block was estimated and the number of drillholes used in theestimation. In order to control the depth to which the blocks could be classified, a surface wasgenerated at the base of the drillholes. This surface was lowered 20m and then uused to limit theclassification of measured, indicated, and inferred resources.The Mineral Resources for the Serra Azul Mine as of November 16, 2010, on a wet tonnes basisare presented in Table 2.SRK Consulting (U.S.), Inc. January 5, 2011SerraAzulResource Audit_LMB_003.docx
  • 7. MMX Mineração e Metálicos S.A. VISerra Azul Mines Resource AuditTable 2: Serra Azul Mineral Resource Statement, as of November 16, 2010* Tonnes ROCK CLASS (000s) Fe% SiO2% Al2O3% Mn% P% LOI% Measured 158,368 51.14 23.36 1.8 0.047 0.049 1.261 Indicated 41,621 48.46 26.99 1.67 0.144 0.048 1.333 IF Total M&I 199,989 50.58 24.12 1.77 0.07 0.05 1.28 Inferred 17 40.84 38.02 1.11 0.029 0.033 0.774 Measured 384,164 35.82 14.1 0.62 0.031 0.025 0.372 Indicated 252,657 34.32 49.23 0.7 0.082 0.025 0.519 IC Total M&I 636,821 35.22 28.04 0.65 0.05 0.03 0.43 Inferred 3,939 30.57 53.25 0.78 0.341 0.049 1.652 Measured 37,491 32.97 44.3 3.64 0.832 0.081 2.799 Indicated 13,608 32.9 44 3.72 0.993 0.083 2.926 IFCA Total M&I 51,099 32.95 44.22 3.66 0.87 0.08 2.83 Inferred 0 Measured 4,447 59.4 5.75 4.05 0.022 0.159 4.634 Indicated 7,170 55.37 8.1 5.69 0.037 0.226 5.801 CG Total M&I 11,617 56.91 7.2 5.06 0.03 0.2 5.35 Inferred 5,535 53.01 10.98 6.16 0.045 0.218 5.998 Measured 584,440 39.97 40.37 1.16 0.087 0.036 0.801 Indicated 315,056 36.6 45.13 1.07 0.129 0.035 0.851 Total Total M&I 899,496 38.79 42.04 1.13 0.1 0.04 0.82 Inferred 9,492 43.67 28.57 3.92 0.168 0.147 4.185* Cut-off Grade 12% Fe; tonnes on a wet basis.RecommendationsAnalytical and QA/QC DataMMX has a laboratory quality assurance/quality control program (QA/QC) in place and monitorsthe laboratory results from these samples on a regular basis. The QA/QC samples includesstandard reference samples developed from Serra Azul material and pulp duplicates.Resource EstimationSRK recommends that MMX continue to drill additional holes into the compact itabirite to gainadditional samples and analysis and increase confidence in the grades at depth and to increasethe indicated resources in this rock type.SRK Consulting (U.S.), Inc. January 5, 2011SerraAzulResource Audit_LMB_003.docx
  • 8. MMX Mineração e Metálicos S.A. 1-1Serra Azul Mines Resource Audit1 IntroductionSRK Consulting (U.S.), Inc., (SRK) was commissioned by MMX Mineração e Metálicos S.A.(MMX) to audit resources at the Serra Azul Mine. The Project is located in the Serra Azul areain the state of Minas Gerais, Brazil near the town of Igarapé, located approximately 60kmsouthwest of Belo Horizonte, the capital of Minas Gerais. The Project consists of twocontiguous open pit mines and two beneficiation plants for the production of lump and sinterfeed. The Tico-Tico Mine was acquired by MMX as part of the acquisition of AVG MineraçãoS.A. (AVG) in December 2007. The Ipê mine was acquired as part of the acquisition ofMineradora Minas Gerais Ltda (Minerminas) in March 2008. The properties are operated byMMX Sudeste Mineração Ltda. (MMX Sudeste), a 100% owned subsidiary of MMX.This report is prepared using the industry accepted Canadian Institute of Mining, Metallurgy andPetroleum (CIM) “Best Practices and Reporting Guidelines” for disclosing mineral explorationinformation and CIM Definition Standards for Mineral Resources and Mineral Reserves(December 11, 2005).Certain definitions used in this executive summary are defined in the body of this Technicalreport on resources and in the glossary in Section 10.1.1 Terms of Reference and Purpose of the ReportThis audit of Mineral Resources is intended to be used by MMX to further the development ofthe Project by providing an independent audit of the mineral resource estimates and classificationof resources. MMX may also use this Report for any lawful purpose to which it is suited.1.2 Reliance on Other ExpertsSRK’s opinion contained herein is based on information provided to SRK by MMX throughoutthe course of SRK’s investigations as described in Section 1.2.1, which in turn reflect varioustechnical and economic conditions at the time of writing.SRK reviewed certain materials pertaining to a limited amount of correspondence, pertinentmaps and agreements to assess the validity and ownership of the mining concessions. However,SRK did not conduct an in-depth review of mineral title and ownership; consequently, noopinion will be expressed by SRK on this subject.SRK is of the opinion that the information concerning the properties presented in this report(within or not produced by SRK) adequately describes the properties in all material respects.1.2.1 Sources of InformationThe underlying technical information upon which this Report is based represents a compilationof work performed by MMX. The studies and additional references for this Technical Report onResources are listed in Section 10. SRK has reviewed the Project data and incorporated theresults thereof, with appropriate comments and adjustments as needed, in the preparation of thisReport on Resources.The author reviewed data provided by MMX including hard copy and digital files located in theProject and MMX’s offices in Brazil. Discussions on the geology and mineralization wereconducted with MMX’s technical team. The drillhole assay database was prepared by MMX andverified by SRK.SRK Consulting (U.S.), Inc. January 5, 2011SerraAzulResource Audit_LMB_003.docx
  • 9. MMX Mineração e Metálicos S.A. 1-2Serra Azul Mines Resource AuditLeah Mach is a Qualified Person as defined by NI 43-101.1.3 Qualifications of Consultants (SRK)The SRK Group is comprised of over 900 staff, offering expertise in a wide range of resourceengineering disciplines. The SRK Group’s independence is ensured by the fact that it holds noequity in any project and that its ownership rests solely with its staff. This permits SRK toprovide its clients with conflict-free and objective recommendations on crucial judgment issues.SRK has a demonstrated record of accomplishment in undertaking independent assessments ofMineral Resources and Mineral Reserves, project evaluations and audits, technical reports andindependent feasibility evaluations to bankable standards on behalf of exploration and miningcompanies and financial institutions worldwide. The SRK Group has also worked with a largenumber of major international mining companies and their projects, providing mining industryconsultancy service inputs.This report has been prepared based on a technical and economic review by a team of consultantssourced principally from the SRK Group’s Denver, US office. These consultants are specialistsin the fields of geology exploration, mineral resource and mineral reserve estimation andclassification, open pit mining, mineral processing and mineral economics.Neither SRK nor any of its employees and associates employed in the preparation of this reporthas any beneficial interest in MMX or in the assets of MMX. SRK will be paid a fee for thiswork in accordance with normal professional consulting practice.The individuals who have provided input to this Report, who are listed below, have extensiveexperience in the mining industry and are members in good standing of appropriate professionalinstitutions. Ms. Leah Mach is a Qualified Person under Canadian Instrument NI 43-101guidelines.Table 1.3.1: Key SRK Project Personnel Name Responsibility Leah Mach Geology, Resources, Project Manager Neal Rigby Reviewer1.3.1 Site VisitLeah Mach, Qualified Persons for this report, made site visits to the Property on June 27 andOctober 7, 2007, February 13, 2009 and June 30, 2010. The site visits consisted of reviewing thedrill core and logging procedures, visiting the open pit and observing the operations and producttypes, visiting the beneficiation plant, and touring the property to see the tailings facility andwaste dumps.1.4 Units of MeasureMetric units are used throughout this report, except where otherwise stated.1.5 Effective DateThe effective date of this Audit of Resources is November 16, 2010. The resource estimationincludes drilling through November 10, 2010. The topography is current as of November 16,2010.SRK Consulting (U.S.), Inc. January 5, 2011SerraAzulResource Audit_LMB_003.docx
  • 10. MMX Mineração e Metálicos S.A. 2-1Serra Azul Mines Resource Audit2 Property Description and Location2.1 Property LocationThe Project is located approximately 60km southwest of Belo Horizonte, and approximately560km northwest of Rio de Janeiro in Minas Gerais State, Brazil (Figures 2-1 and 2-2). TheProject consists of three contiguous licenses in the Serra Azul Mountain Range, located near thecity of Igarapé in the southwest part of the Quadrilátero Ferrífero (Iron Quadrangle). The Projectalso includes six exploration claims surrounding the licenses. The licenses lie between20°07’30”S and 20°06’30S and between 44°17’W and 44°19’W (Figure 2-3). The Project lieswithin the municipalities of Brumadinho, Igarapé, Itatiaiuçu, Mateus Leme and São Joaquim deBicas.2.2 Mineral TitlesMMX holds the mineral rights through leases and ownership. Table 2.2.1 presents the miningand exploration licenses and requests for exploration licenses controlled by MMX in the SerraAzul area. The holder of the three mining licenses is Companhía de Mineração Serra da Farofa(CEFAR) and MMX has lease agreements with CEFAR for each one. Brazilian Mining Lawallows holders of Exploration or Mining Licenses to totally or partially assign or transfer theseclaims to a third party, with DNPM’s approval. The three mining licenses cover 509.71ha, theexploration licenses cover 4,331ha and areas requested for exploration cover 6,393.38ha.Table 2.2.1: Serra Azul Land Tenure Area Validity Claim Holder Location* Mineral(s) (ha) Permit Term Cia. de Mineração Serra Igarapé, Brumadinho and São Not 801.908/68 Iron 351.64 Mining da Farofa - CEFAR Joaquim de Bicas Applicable Cia. de Mineração Serra Not 805.374/71 Brumadinho and Igarapé Iron 83.37 Mining da Farofa - CEFAR Applicable Cia. de Mineração Serra Not 5.182/58 Brumadinho Iron 74.70 Mining da Farofa - CEFAR Applicable Exploration September 833.379/2004 AVG Igarapé,Itatiaiuçu,Mateus Leme Iron 1,035.00 License 2012 Exploration 832.182/2006 AVG Itatiaiuçu,Mateus Leme Iron 1,400.00 May 2013 License Exploration 830.632/2006 AVG Brumadinho, Igarapé Iron 1,896.00 July 2013 License Exploration 830.633/2006 AVG Brumadinho, Igarapé, Itatiaiuçu Iron 1,881.25 Request Exploration 831.243/2006 AVG Mateus Leme Iron 960.00 Request Brumadinho, S. Joaquim Exploration 832.183/2006 AVG Iron 1,912.50 de Bicas Request Brumadinho, S. Joaquim Exploration 830.826/2010 AVG Iron 7.97 de Bicas Request Exploration 831.713/2010 AVG Brumadinho Iron 12.01 Request Exploration 832.607/2010 AVG Brumadinho Iron 261.47 Request Brumadinho, S. Joaquim Exploration 834.356/2020 AVG Iron 1,358.18 de Bicas Request*City or DistrictSRK Consulting (U.S.), Inc. January 5, 2011SerraAzulResource Audit_LMB_003.docx
  • 11. SERRA AZUL MINE Serra Azul Mine, General Location Map of the Brazil Serra Azul Project MineSRK Job No.: 162700.10File Name: Figure 2-1.doc Source: MMX Mineração e Metálicos S.A Date: 12/20/10 Approved: LEM Figure: 2-1
  • 12. Serra Azul Mine, Site Location Map of the Brazil Serra Azul MineSRK Job No.: 162700.10 Source: MMX Mineração e Metálicos S.A Date 12/20/10 Approved: LEM Figure: 2-2File Name: Figure 2-2.doc
  • 13. 832182/2006 Exploration License Mining License Request for Exploration Municipal Limits Serra Azul Mine, Mineral Licenses Brazil Serra Azul MineSRK Job No.: 162700.10 Source: MMX Mineração e Metálicos S.A Date: 12/20/10 Approved: LEM Figure: 2-3File Name: Figure 2-3.doc
  • 14. MMX Mineração e Metálicos S.A. 3-1Serra Azul Mines Resource Audit3 Geological Setting3.1 Regional GeologyThe Project area is situated in the western portion of the Iron Quadrangle near Belo Horizonte,Minas Gerais, in the Serra do Curral homocline. Mineralization is hosted by the MinasSupergroup which is dominated by supracrustal metasedimentary and metavolcanic rocks.Intrusive rocks are rarely found in the area but where present, are basic sills and dikes up to 1mwide. Regional metamorphism reached the greenschist facies during multiple episodes ofdeformation.3.1.1 Regional StructureThe Project area lies within the São Francisco Craton tectonic province of South America shownin Figure 3-1. The Project is located in the extreme west of the Serra do Curral homocline and inthe north/northwest limit of the Iron Quadrangle. This region has a complex tectonic-metamorphic history and is part of the basement of the southern portion of the São FranciscoCraton. The São Francisco Craton (Almeida et al 1981) tectonic province was not affected bythe Brazilian deformation but is bordered by Brazilian fold belts that developed duringorogenesis culminating in the formation of Gondwana approximately 650 Ma. The basement ofthe craton was subjected to the Jequié/Rio das Velhas and Transamazonic tectonic-metamorphicevents that preceded the Brazilian deformation. There are various evolutionary models proposedfor the Iron Quadrangle region, and this area is still extensively studied.Among the large-scale structures in the Iron Quadrangle are the: Serra do Curral homocline; Serra da Moeda syncline; and Dom Bosco Syncline.The Serra do Curral homocline is located in the north and has a NE-SW strike and dips SE.Serra Moeda is located in the west part of the Iron Quadrangle and is the west limb of a synclinewhich has an N-S axis and dips to the south. The Dom Bosco syncline is in the south and has anE-W axis and is connected to the Serra Moeda syncline on the west side. There is also the Falhado Engenho zone of trans-current shearing, the Mariana anticline to the southeast and the SantaRita syncline to the east. According to Dorr (1969), the Santa Rita syncline corresponds to themajor and most complex folding of the region. Finally, the Gandarela isoclinal syncline islocated to the northeast with SE dipping limbs and the Fundão-Cambotas fault system thatextends for almost the entire length of the east border. Figure 3-2 shows the homocline,synclines and anticlines in the region.Serra do Curral HomoclineThere have been five different interpretations for the formation of the Serra do Curral homoclineas listed below: The homocline is a section of the Serra dos Três Irmãos region (Eichler, 1964); The homocline is the south limb of the Piedade syncline (Dorr, 1969); Pires (1979) interpreted the homocline as related to an anticline;SRK Consulting (U.S.), Inc. January 5, 2011SerraAzulResource Audit_LMB_003.docx
  • 15. MMX Mineração e Metálicos S.A. 3-2Serra Azul Mines Resource Audit Alkmim and Marshak (1998) interpret the structure as the inverted flank of a regional anticline; and Oliveira et al. (2005) interpret the homocline as the overturned limb of a recumbent allochthonous megafold, referred to as the Curral Nappe.Figure 3-3 shows schematic sections showing each author’s interpretation, which are discussedin detail below.Dorr (1969). The first interpretation was proposed by Eichler (1964) and is shown in Figure 3-3schematic section (a). Eichler (1964) interprets the homocline as a section of the Serra dos TrêsIrmãos region that has been brought in through thrust faults that trend to the north.According to Simmons (1968), the Serra do Curral homocline is the south limb of the Piedadesyncline, as suggested by Dorr (1969). This is shown in schematic section (b) in Figure 3-3.This structure is well characterized at the NE limit of the Serra do Curral (Serra da Piedade),where the two limbs of the syncline are recognized, a fact that leads Simmons (1968) to believethat the homocline represents one of the limbs of this megastructure. The Serra do Curralhomocline, dipping to the SE, is characterized by secondary folding with axial planes oblique tothe direction of the mountain ridge. Also recognized were small reverse faults, direction parallelto the syncline with displacement to the SE and normal faults of high angle that cut themegastructure.Pires (1979) was the first author to propose that the regional folding is related to an anticline.Through work that was done at the junction of the Serra do Curral homocline with the Moedasyncline, Pires (1979) proposes schematic section (c) shown in Figure 3-3. In this section, Pires(1979) shows an anticline, whose inverse limb (the north limb) would represent the Serra doCurral homocline. This structure is limited at the base by the Falha Curral, a thrust fault and theschists to the north, which are part of the Rio das Velhas Supergroup.Romano (1989) determined the petrographic and textural characteristics of the metavolcanicrocks of the regions of Mateus Leme to Esmeraldas and of Pará de Minas to the Pitangui.According to the author, such rocks represent the continuity of the Rio das Velhas Supergroup inthe Occidental Serra do Curral. In this region, Romano (1989) identified thrust faults sectioningthe Rio das Velhas Supergroup, among various other deformational features. The structures areattributed to two phases of regional deformation (Dn and D1). The first deformation affectedonly the Rio das Velhas Supergroup and the second that extended to the Minas Supergroup in thewest portion of the Serra do Curral homocline. The second regional deformation was of aprogressive compressional character.In the contact between the Sabará Group and the Belo Horizonte Metamorphic Complex, in theregion of Ibirité, southwest of the city of Belo Horizonte, Marshak et al. (1992) and Jordt-Evangelista et al. (1992), identified a zone of normal shearing and characterized three zones ofcontact metamorphism. They are, from NW to SE the zones of cordierite-sillimanite, ofstaurolite-andalusite-cordierite and of biotite. This situation exemplifies the metamorphicaureoles that occur in the contact zones of the supercrustal rocks with the basement metamorphiccomplexes, in response to the formation of domes and synclines.Endo and Machado (1997) interpret the Serra do Curral homocline as part of a syncline,characterized by the absence of a northern rim, or limb, at the western limit of the structure.Endo and Machado (1997) observed that on the southern rim/limb the rocks of the MinasSRK Consulting (U.S.), Inc. January 5, 2011SerraAzulResource Audit_LMB_003.docx
  • 16. MMX Mineração e Metálicos S.A. 3-3Serra Azul Mines Resource AuditSupergroup are in normal stratigraphic sequence with inclinations that vary from moderate tohigh while on the northern rim/limb the stratigraphic sequence is inverted. According to Endoand Machado (1997), the Zone of Normal Shearing (the Moeda-Bonfim zone) in contact betweenthe Bonfim Metamorphic Complex and the supracrustal rocks along the Serra da Moeda, extendsto the Serra do Curral homocline. Here, the zone of normal shearing it is identified by the SouzaNochese Zone of Shearing. Thus, the principal structural features are: Sub-orthogonal between the synforms Moeda and Curral; Breaking and absence of north rim/limb of the syncline; Normal ductile shearing between the metasediments and the Bonfim Complex; and Stratigraphic inversions in the south rim/limb of the synform.Based on these structures, Endo and Machado (1997) propose eight events of deformation for theregion: four in the Neo-Archean and four in the Proterozoic, all of co-axial character.Alkmim & Marshak (1998) observed parasitic asymmetric folding and mesoscopic faultstrending to the NW at the western limit of the Serra do Curral homocline. This observation ledto the interpretation that the Serra do Curral homocline may be the inverted flank of a regionalanticline with polarity to the NW. According to Alkmim & Marshak (1996), at the Curral-Moeda junction, the Curral anticline is refolded the Moeda syncline. The development of themega-anticline would be related to a compressive event, during the Transamazonic period andolder than the extension that resulted in doming and syncline formation. Alkmim and Marshak’s(1998) interpretation is shown in Figure 3-3 section (d).Finally, the relations proposed by Oliveira et al. (2005) for the region of Itatiaiuçu, is shown inFigure 3-3 section (e). According to the Oliveira et al. (2005), the schistocity observed in therocks of the Minas Supergroup and Rio das Velhas in the entire Serra do Curral region, is thesame that predominates in the sedimentary layering and schistocity in the mesoscopic folds withoverturned limbs. According to the authors, the Serra do Curral homocline is the overturnedlimb of a allochthonous recumbent megafold, trending to the north-northeast, and referred to byOliveira et al (2005) as the Curral Nappe.3.2 Local GeologyIn the Project area, the Serra das Farofas is composed of rocks from the Minas Supergroup thatare underlain by the Rio das Velhas Supergroup in an unconformity. The Minas Supergroup issubdivided, from youngest to oldest, into three groups: Piracicaba Group; Itabira Group; and Caraça Group.Locally, the stratigraphic sequence is inverted, with the most recent quartzitic formations of thePiracicaba Group overlain by the itabirites of the Cauê Formation, part of the Itabira Group,which, in turn, is capped by the oldest phyllites and quartzites of the Caraça Group. Thisstratigraphic inversion, as discussed in Section 5.1.1, characterizes the mountain ridge and ismost likely the rim of a recumbent fold.SRK Consulting (U.S.), Inc. January 5, 2011SerraAzulResource Audit_LMB_003.docx
  • 17. MMX Mineração e Metálicos S.A. 3-4Serra Azul Mines Resource Audit3.2.1 Local LithologyThe Caraça Group is subdivided into the Moeda (lower) and Batatal (upper) Formations. TheMoeda Formation is composed, principally, of coarse quartzites, metaconglomerates, andphyllites. According to Renger et al. (1994), the Moeda Formation has a maximum age of2.65Ga, and was deposited in a fluvial environment. Over time, this depositional environmentevolved into a marine-platform identified as the Batatal Formation. The Batatal Formation iscomposed, predominantly, of phyllites and graphitic phyllites. Its maximum age of deposition is2.5Ga (Renger et. al. 1994) and the Batatal Formation has a gradational contact with the ItabiraGroup.The Itabira Group is essentially composed of chemical sediments, a characteristic that separatesit from the Caraça Group. It is of great economic importance, as it hosts world class deposits ofiron and manganese, associated with gold and bauxite. It is divided, from base to top, into theCauê and Gandarela Formations. The Cauê Formation is composed of itabirites, dolomiticitabirites, amphibolitic itabirites, carbonate itabirites and lenses of marl and phyllites. Due totheir resistance to weathering, the itabirites form the principal ridges of the region with extensiveescarpments, such as the Serra do Curral. The Cauê Formation represents the principal target ofresearch work. Since the Gandarela Formation does not occur in the area researched, is the CauêFormation is in direct contact with the Piracicaba Group.The Piracicaba Group is divided, from base to top, into the Cercadinho, Fecho do Funil, Taboõesand Barreiro Formations. The Cercadinho Formation is the only one of this group that isidentified in the Project area, being composed of quartzites and graphitic phyllites, of light greycoloring that occurs in the north part of the area. According to Renger et al. (1994), this grouprepresents a new period of tectonic movement in the Minas Basin, initiated around 2.4Ga.The rocks show a general E-W direction with dips varying between 45º and 50º to the south withsome local variations occasioned by secondary asymmetric folding and by transverse faulting ofthe structure.3.2.2 AlterationAlteration in the area is described as intense silicification of compact itabirite resulting fromhydrothermal activity.3.2.3 StructureThe dominant structure in the project area is an antiform overturned to the north. The upper limbhas been completely eroded, leaving only the inverted lower limb.As a result of the numerous deformational episodes, bedding is rarely observed and then only inthe quartzite and phyllite of the Cercadinho Formation. However, the principal foliation, Sn iswell developed in all of the local lithologies. The Sn foliation dips approximately 30º to 40°S inthe northern part of the project and increases to about 70°S in the southern part of the area. Thissuggests that the Project is located on the inverted limb of an isoclinal anticline with vergence tothe north. Small scale, asymmetric folds with amplitudes from centimeter to meter scale areobserved at the Project where cataclasite has also been observed. These folds are typically tightwith E-W axes. Intense folding is seen in the BIF, often obliterating the primary structures.The contacts between formations show tectonic textures and are interpreted to be thrust faults.Normal faults are also observed in the project area.SRK Consulting (U.S.), Inc. January 5, 2011SerraAzulResource Audit_LMB_003.docx
  • 18. MMX Mineração e Metálicos S.A. 3-5Serra Azul Mines Resource Audit3.2.4 MetamorphismThe metamorphism identified in the Project area is related to continental collision during theTransamazonian Orogeny. Metamorphic grade in the Iron Quadrangle increases from west toeast as described by Dorr (1969). The rocks of the western and central portions reachedgreenschist facies whereas those in the east reached the almandine-amphibolite facies. In theSerra do Curral, metamorphism of greenschist facies predominates.Itabirite is a highly deformed rock with a composition derived by tectonic and metamorphicprocesses. Small preserved nuclei of magnetite in the interior of hematite crystals suggest thatthe greater part of these rocks were oxidized by hydrothermal solutions during the deformationalprocesses. The most common minerals in BIF, other than quartz, are siderite, ankerite, ferroandolomite, magnetite, martite and, locally, chlorite. Martite is a product of altered magnetite andankerite and is often a secondary mineral.3.3 Project GeologyWithin the pit area, the geology is dominated by four formations. From oldest to youngest, theseare the Batatal, Cauê, Gandarela and Cercadinho Formations. The pit geology is shown inFigure 3-4, and Figure 3-5 shows north-south cross-sections 573050 and 574250 through themine area. The Batatal Formation has been thrust over the younger Cauê Formation, which hasbeen thrust over the youngest Cercadinho Formation. The deposit is crosscut by a northwest-trending, high-angle brittle fault that appears to be offset by younger northeast trending faults.The dominant structural features consist of Sn foliation, fracture planes and minor fold axes.Foliation is the most conspicuous planar element within the pit and is preferentially developed inthe enriched itabirite. The Sn foliation strikes NW-SE and dips both NE and SW suggesting thepresence of a larger fold. Parasitic fold axes typically trend 150º to 200º.Well-defined fracture planes are found in both the friable itabirite and compact itabirite. It istypically more prominent in the compact itabirite. The fracture planes have two predominantorientations. One strikes NW and dips NE the other strikes NNE and dips SE. These fabricsoften host breccia zones with areas of significantly enriched iron.SRK Consulting (U.S.), Inc. January 5, 2011SerraAzulResource Audit_LMB_003.docx
  • 19. Três Marias FormationSão Francisco SupergroupOther units of São FranciscoSupergroupEspinhaço SupergroupPiracicaba andSabará GroupsItabira GroupCaraça GroupRio das Velhas SupergroupBasementNormal FaultThrust FaultFoliationBeddingMetamorphic Aureole Serra Azul Mine Serra Azul Mine Project Location within the Brazil São Francisco Craton SRK Job No.: 162700.10 Source: Marshak & Alkmim 1989 and Alkmim & Marshak 1998 File Name: Figure 3-1 Date: 12/20/10 Approved: LEM Figure: 3-1
  • 20. Serra Azul Mine Area Serra Azul Mine Location of Large Structures Brazil in the Serra Azul Mine AreaSRK Job No.: 162700.10 Source: Modified from Alkmim & Noce 2006 after Dorr (1969) and Romano (1989)File Name: Figure 3-2.doc Date: 12/20/10 Approved: DKB Figure: 3-2
  • 21. Sources: a) Schematic section proposed by Eichler (1964) in the region of the Serra dos Três Irmãos; b) Section proposed by Dorr (1969), section NW-SE in the Quadrilátero Ferrífero; c) Section proposed by Pires (1979) for the region of junction of the Serra do Curral with the Moeda syncline; d) Section proposed by Alkmim & Marshak (1998) for the region west of the homocline of the Serra do Curral; e) Schematic section proposed by Endo et al (2005) for the region of Itatiaiuçu (Section Itatiaiuçu). (Fm. Formation, Gr. Group, Sgp. Supergroup, ST Topographic Surface). Serra Azul Mine Geological Sections Proposed Brazil for the Region of theSRK Job No.: 162700.10 Serra do CurralFile Name: Figure 3-3.doc Date: 12/20/10 Approved: LEM Figure: 3-3
  • 22. COMPACT AMPHIPLITIC ITABIRITE Serra Azul Mine Geological Map of the Brazil Serra Azul Mine AreaSRK Job No.: 162700.10 Source: MMX Mineração e Metálicos S.A Date: 12/20/10 Approved: LEM Figure: 3-4File Name: Figure 3-4.doc
  • 23. Cross-section 573050 North-South Cross-section 574250 North-South Serra Azul Mine North-south Cross-sections Brazil through the Serra Mine in theSRK Job No.: 162700.10 Minerminas Area Source: MMX Mineração e Metálicos S.A Date: 12/20/10 Approved: LEM Figure: 3-5File Name: Figure 3-5.doc
  • 24. MMX Mineração e Metálicos S.A. 4-1Serra Azul Mines Resource Audit4 Mineralization4.1 Mineralized ZonesThe mineralization at the Project consists of metamorphosed BIF with strong evidence ofhydrothermal syngenetic formation with areas of supergene enrichment from subsequent lateriticweathering. This results in a variety of different mineralization types. There are seven distinctmineralization types at the Project: Canga; Friable siliceous itabirite; Friable rich itabirite; Compact itabirite; Friable hematite; Compact hematite; and Friable carbonate itabirite.Canga is the product of chemical weathering of all the types of friable ore. It generally has moreelevated grades of aluminum, phosphorous, and greater loss on ignition (LOI). It occurs in threestratigraphic locations: at the top of the BIF, in the base of the southern Serra das Farofas andover the schists of the Batatal Formation. In the Batatal Formation, canga is formed in the ironore colluvium. In some areas, it has elevated iron grades, due to the nature of the source rock.The presence of visible hematite clasts is common and goethite and limonite commonly occurwith secondary minerals, increasing the hardness.The friable itabirite is confined to the proximities of compact itabirite or of zones ofsilicification. The principal characteristics of this type of ore are the grades of silica that varyfrom 6% to 10% and in granulometry that is above 19mm. The bands are composed of friablehematite intercalated with bands of recrystallized quartz.Compact itabirites occurs at the base of the friable itabirites and as small elongated bodiespreferentially oriented WNW/ESE within the friable itabirite. These last are protoliths of proto-ore that remain after intense weathering and/or hydrothermal alteration along certain preferentialdirections such as the axis of folds.The friable carbonate itabirite is characterized by intercalations of clay bands alternating withbands of friable and compact hematite. The bands of clay are generally light rose colored butlocally may be white in color. Where these bands are white, kaolinite is often present. Thetexture is banded, with bands up to 40 to 50cm in width. Where kaolinite is common in the clay-rich bands, internal breccia texture are observed. The clay bands of clay also contain isolatedcrystals of euhedral quartz and specularite, both of which are coarse to very coarse in grain size.The euhedral quartz and the specularite are the product of secondary alteration, growing over theoriginal texture of these rocks. The hematite bands are fine and even occur as films intercalatedwith clay minerals. Friable hematite also occurs disseminated within the clay bands.SRK Consulting (U.S.), Inc. January 5, 2011SerraAzulResource Audit_LMB_003.docx
  • 25. MMX Mineração e Metálicos S.A. 4-2Serra Azul Mines Resource Audit4.2 Relevant Geological ControlsThe mineralization at the Serra Azul Mine shows strong evidence for both structural andlithological controls. There is also evidence for hydrothermal origin for the iron formation, withlater supergene modification that probably caused major enrichment in addition to “softening” ofthe ore. The hypogene phase is associated with D1 folding during which, hydrothermal fluidsascended to the surface as a result of decompression. This would also permit meteoric fluids todescend along the normal faults causing mixing resulting in oxidizing conditions and theformation of magnetite and carbonates, as described by Rosière et al. (2008). In this model, Fe-rich hydrothermal dolomite could be formed during the tight folding. Later, oxidization of theFe-rich dolomite caused leaching of Mg, Ca and CO2, resulting in the formation of hematite.Subsequent weathering resulted in supergene enrichment and “softening” of the ore. These samenormal faults would be the preferred routes for the meteoric fluids to circulate to deeper parts ofthe system. At the Project, this faulting could be represented by the high-angle brittle faultsobserved in the pit.The genesis of the friable carbonate itabirite with hypogene characteristics, could be controlledby D1 folding, that channelized mineralizing hydrothermal fluids parallel to the layering orcompositional banding. Higher-grade ore is concentrated in these folded areas. In the locationswhere the fluid/rock ratio was higher, bands of compact hematite were generated, possibly byleaching or complete substitution of the pre-existent carbonates. Nearby, where the fluid/rockratio was less, the leaching/substitution of the carbonates was not complete, some carbonateremained that, subsequently leached during supergene alteration, generating the contaminatedfriable ore. This high-grade ore is generally porous and almost always contains remnants ofweathered carbonate, observed as the orange to ochre colored interstitial material.Another observation at the Serra Azul Mine, primarily at AVG, is the close relationship betweenbreccias and/or veined areas with the high-grade friable ore and the rich itabirite. It has beenobserved that in areas with the greatest amount of breccias with carbonate veins and veinlets, it islikely that friable ore or rich itabirite will be present. This is also characteristic of areas onlyaffected by carbonate veins and veinlets. The carbonate veins can be parallel as shown in Figure7-2 or may crosscut itabirite banding. Portions of compact itabirite are common in the middle offriable ore.The contacts between friable and compact ores may be sharp or transitional. Where there arecarbonate veins/veinlets there is a tendency for the intensity of friability to be greater than theareas without carbonate veining.Iron remobilization most likely occurred as an association with hydrothermal fluids, resulting inthe formation of concordant and discordant hematite veins. These veins are often breccia zonesfilled by hematite. Some of the remobilized material is composed of magnetite. The process ofquartz remobilization was very intense in some areas, resulting in breccia formation andsilicification of the itabirite. Quartz remobilization often results in high compactness to theitabirite (hard itabirite). In places, the orientation of these silicified zones appears, to becontrolled by the hinges of D1 folds, where it is parallel to the banding. However, in other areasthe pattern is rather complex.SRK Consulting (U.S.), Inc. January 5, 2011SerraAzulResource Audit_LMB_003.docx
  • 26. MMX Mineração e Metálicos S.A. 5-1Serra Azul Mines Resource Audit5 Drilling5.1 Type and Extent of DrillingCore drilling in the Project area by MMX was performed by Vórtice Sondagens e Serviços deMineração, Ltda. (Vórtice) and Geológica e Sondagens Ltda. (Geosol), both based in BeloHorizonte. MMX also conducted reverse circulation (RC) drilling with contractor, GeosolGeosedna Perfurações and Especiais S.A. (Geosedna), also based in Belo Horizonte.A total of 18,858m have been drilled at the Project in 149 core holes and 64 RC holes. Holeswere drilled on a slightly irregular 100m x 100m grid.CoreAll core holes are HQ or HW sized core (77.8mm), and were drilled using a conventional drillrig. Sixty-one holes are vertical and the remaining holes were drilled at inclinations between -60° and -77° to the north. The hole depth varies from 11m to 268m with an average of 72m.RC DrillingThe RC holes were drilled with a hammer or tricone depending on the hardness of the rock. Thediameter of the hole drilled by hammer is 5in and the diameter of the hole drilled by tricone is4in. All holes were drilled at an inclination of 70° to the north. The average depth of the holes is125m, with a minimum of 35m and a maximum of 280m.The technique of RC drilling was new to the AVG/Minerminas project in 2009. In order toassess the results of RC drilling, two twin holes were drilled for comparison. Table 5.1.1presents the twin drillholes and the results for the matching intervals. RPSF15 and SEFDSF08are not true twins as one is vertical and the other angled at -70 to the north, however, the resultsfor the friable and compact itabirite are quite similar. The holes were collared on the finesstockpile, so the initial interval would not necessarily be expected to be similar. The twins,FSAVGB05 and RPSF16, show similar grades in the canga, but the RC hole has higher grades inthe friable itabirite.Table 5.1.1: Comparison of Twin RC and Core Drillholes Drilled Vertical Drillhole Orientation From To Interval Thickness Lith Fe SiO2 Al2O3 P Mn LOI 0.0 12.0 12.0 12.0 FS 49.10 24.95 2.43 0.072 0.01 2.42 RPSF15 Vertical 17.0 51.0 34.0 34.0 IF,IC 50.87 26.11 0.47 0.014 0.01 0.27 0.0 11.3 11.3 10.6 FS 44.40 31.70 1.60 0.052 0.01 1.38 SEFDSF08 North,-70 16.9 52.6 35.7 33.5 IF,IC 52.02 24.20 0.52 0.011 0.02 0.17 0.0 8.2 8.2 8.2 CG 63.79 2.42 2.57 0.057 0.03 3.51 FSAVGSB05 Vertical 12.7 39.9 27.2 27.1 IF,IC 47.91 29.67 0.56 0.014 0.02 1.06 0.0 5.0 5.0 5.0 CG 60.20 12.00 1.47 0.020 0.01 0.86 RPSF16 Vertical 12.0 37.0 25.0 25.0 IF 56.84 16.72 1.02 0.012 0.01 0.71SRK also reviewed the drillholes in cross-section and did not detect a noticeable difference ingrades between the RC and core holes.Table 5.1.2 lists the number of drillholes by program and company.SRK Consulting (U.S.), Inc. January 5, 2011SerraAzulResource Audit_LMB_003.docx
  • 27. MMX Mineração e Metálicos S.A. 5-2Serra Azul Mines Resource AuditTable 5.1.2: Drilling at Serra Azul Number of Length Number of Campaign Period Laboratory Drillholes Type (m) Samples FSAVG, FSAVGSB 11 HW Core 2005 440 50 AVG Total AVG 11 2005 440 50 AVGMMX 9 HWL Core 2007 694 88 SGS SEFDSF 26 HQ, HWL 2007-2008 1,459 273 SGS,MMX FSMNM 3 HWL Core 2007-2008 191 34 MMX FDSB, SEFDSB 50 HWL Core 2008 3,190 628 MMX FDSF 6 HWL Core 2008 203 49 MMX RPSF (RC) 19 4 or 5" 2009 2,836 522 SGS FDSA 32 HQ, HN 2010 3,872 448 SGS, Bureau Veritas FDSC 11 HQ 2010 590 * Bureau Veritas RPSA (RC) 46 4.75 or 5" 2010 5,382 551 Bureau Veritas Total MMX 202 2007-2010 18,417 2593 Total 213 2005-2010 18,857 2643*Assays not received at time of estimation5.2 ProceduresThe drillhole locations are first determined by the supervising geologist. Drill access is providedby clearing trails and drill pads with the use of a dozer. For inclined holes, a line is drawnbetween two stakes in the azimuth direction and the drill rig is aligned with it. The inclination ofthe drill rig is set by a MMX technician using the inclinometer of a Brunton compass. Uponcompletion of the drillhole, the final collar location is then surveyed by Prisma Produtos eServiços Ltda. ME (Prisma) using a Topcon Total Station, 239W, 3003W or 3005W. Prismathen generates a Microsoft Excel spreadsheet and/or a certified report in PDF format.The drilling at the Project has focused on the pit area. In general, the drillholes are on north-south section lines spaced at 100m. The drillholes on section line are about 100m apart. Drillingis limited by pit walls and areas of active mining, so the 100m by 100m is not completely filled.The drillholes were not drilled to a uniform elevation, consequently, the drillhole spacing iswider with depth below the surface. Core recovery is typically in excess of 90%. Figure 5-1 isa plan map showing the location of drillholes.5.3 ResultsThe compact and friable itabirites have varying hardness, which may result in different drillrecoveries and possible loss of material in friable zones. Core recovery averages more than 90%for all zones and RC recovery was generally greater than 70%. SRK did not observe problemswith loss of material in friable intervals. A comparison of twin RC and core holes and visualexamination of RC holes by cross-section did not detect a bias between the two drilling methods.MMX is using industry best practices for exploration drilling programs at the Project.SRK Consulting (U.S.), Inc. January 5, 2011SerraAzulResource Audit_LMB_003.docx
  • 28. Serra Azul Mine Drill Collar Location Map BrazilSRK Job No.: 162700.10File Name: Figure 5-1.doc Date: 12/20/10 Approved: DKB Figure: 5-1
  • 29. MMX Mineração e Metálicos S.A. 6-1Serra Azul Mines Resource Audit6 Sampling Method and Analysis6.1 Core DrillingAt the drill rig, the drill core is placed in wooden boxes, and washed of all foreign material. Atechnician delivers the boxes to the logging area where they are placed either in the sun or undera roof until they are completely air-dried. The drill core is photographed before and aftersampling to record geological descriptions and sampling intervals. Geologic logging andidentification of sample intervals are carried out by the project geologist. This process identifiesthe different litho types, geological contacts, zones of fault or fracture, ferruginous zones andinternal waste.MMX personnel supervise all sample security. The drill core is collected from drill sites, loggedand sampled under the direction and control of MMX. SRK is of the opinion that there has beenno tampering with the samples.6.1.1 Logging and SamplingThe HW-sized drill core is first photographed, and then logged by a geologist onto astandardized paper form. Data from the geological log is entered into an acQuire database, thegeological database management system developed by acQuire Technology Solutions Pty Ltd.During core logging, the geologist marks the beginning and end of each sample interval on thebox. Sample breaks are at changes in lithology and friability with some consideration placed onvisual estimations of Fe percentage. Sampling is conducted only within the ferruginous zones.Sample intervals have a minimum length of 1m and a maximum length of 5m. The preferredsample interval ranges between 3m and 5m (80% of samples). Zones of internal waste withinmineralized intervals are sampled and material outside the ferruginous zone is not sampled.Samples are collected by a trained sampler under the supervision of a technician or a geologistfollowing a sampling plan produced by acQuire. The sampling plan contains the identificationof primary and check samples according to MMXs QA/QC policy (see Section 11.4). The coreis split lengthwise using a diamond core saw in the competent zones and a specially designedscoop in the highly weathered zones. The sample is placed in a plastic bag with a sample tag.The plastic sample bag is further marked in two places on the outside with the sampleidentification. The sample bags are then sealed and sent to the laboratory for physical andchemical analysis. The remaining core is archived for future reference.6.2 RC DrillingThe RC drilling is conducted dry, without injecting water. The sample was discharged from thecenter tube return through a hose to a cyclone. The entire sample was collected over 1mintervals in plastic bags. The bags were marked with the drillhole number and from and tometerage. The bags were weighed by Geosedna personnel and the weights recorded on a formfor MMX. A small sample was collected for logging and stored in wooden boxes with 30compartments and a hinged cover.MMX personnel supervise all sample security. The samples were collected from drill sites,logged and sampled under the direction and control of MMX. SRK is of the opinion that therehas been no tampering with the samples.SRK Consulting (U.S.), Inc. January 5, 2011SerraAzulResource Audit_LMB_003.docx
  • 30. MMX Mineração e Metálicos S.A. 6-2Serra Azul Mines Resource Audit6.2.1 Logging and SamplingThe RC chips are logged by the geologist at the core facility and data from the geological log isentered into an acQuire database. The 1m samples are grouped into 5m intervals with breaks atlithological changes and the sample intervals are entered on a sampling form.Samples are sent to a commercial laboratory in Belo Horizonte where they are composited intothe sample intervals indicated by the geologist. The compositing procedure is described inSection 11.6.3 Factors Impacting Accuracy of ResultsThe compact and friable itabirites have varying hardness and will have varying drill recoveries.The varying hardness of the mineralized material forces the sampler to use two techniques forcore sample collection, which can make it difficult to collect a representative sample. MMXuses a saw for compact material and a trowel for friable material, which is industry standard.Because MMX uses lithological controls for sample intervals that are based on friability versuscompactness, the different material hardness does not present a problem. In addition, the corerecovery is good to excellent, averaging over 90%. RC drilling may also encounter problems atchanges in rock hardness or void spaces. SRK saw no evidence that there is a sampling problemor sample bias introduced at the Project due to varying hardness.MMX is conducting the sampling according to industry best practices for iron deposits.6.4 Sample Preparation and AnalysisBefore MMX acquired the property, sample preparation and analysis were performed at theAVG laboratory on the AVG property. During the initial exploration phase and in 2009, MMXused SGS Geosol Laboratórios, Ltda. (SGS) located in Belo Horizonte. For part of 2008, MMXused the laboratory at Mine 63 operated by its subsidiary, MMX-Corumbá Mineração Ltda.(MMX-Corumbá). In 2010, MMX used SGS and the Bureau Veritas laboratory in BeloHorizonte. The following sections describe the sample preparation, analysis and LaboratoryQA/QC for the samples sent to the Bureau Veritas laboratory. Previous reports by SRK havedocumented the same information for previous drill campaigns. Table 6.4.1 presents the numberof samples sent to each laboratory for the various drill campaigns.Table 6.4.1: Laboratories used for Sample Preparation and Analysis Company Year Laboratory Number Samples AVG 2005 AVG 50 2007 SGS 88 2007-2008 SGS,MMX 307 2008 MMX 677 MMX 2009 SGS 522 2010 SGS 181 2010 BV 850 Total 1825SRK Consulting (U.S.), Inc. January 5, 2011SerraAzulResource Audit_LMB_003.docx
  • 31. MMX Mineração e Metálicos S.A. 6-3Serra Azul Mines Resource Audit6.4.1 Sample PreparationSamples arriving at Bureau Veritas from MMX vary in size and material. The sample is initiallychecked for sample identification and preservation conditions upon receipt. The core samplepreparation process consists of: Drying in a kiln at 105ºC until the sample is completely dry; Crushing the whole sample until 95% of the sample passes through a 2mm sieve; Reducing the volume by homogenization and quartering in a rotary splitter to reduce sample to 300 to 600 g. Pulverizing the split until 95% passes a 150 mesh sieve; Quartering in a rotary splitter to a sampling weighing between 25 and 50g for analysis; Archiving the remaining coarse reject and pulp; and Record screening tests performed during sample crushing and grinding.The RC samples are received at the laboratory as the 1m samples originally collected at the drill.The sampling intervals, as noted by the geologist, are sent to the lab with the sample batch. Thesample preparation consists of the following steps: Drying in a kiln at 105ºC until the sample is completely dry; Jaw crushing until 100% of the sample passes through a 6.3mm sieve; Compositing samples according to the sample interval plan; and Splitting in a riffle splitter and dividing the sample into two halves, one for analysis and one retained for additional metallurgical or other testwork.6.4.2 Sample AnalysisAt the Bureau Veritas laboratory, all samples are analyzed using the XRF technique. The typicalsample size is 2g and is analyzed for percentage of Fe, Al2O3, SiO2, P, Mn, TiO2, CaO, MgO,K2O, Na2O and LOI.The steps in the analytic procedure for LOI consist of: Drying the sample in an oven at around 110ºC for at least one hour; Weighing the empty container (CV); Placing 1.5 to 2g of the dried sample in the container and weighing again (C+A); Placing the container with the sample in a previously heated oven and waiting until the temperature reaches 1000±50ºC and letting it calcine for more than 1 hour; and Removing the container from the oven, resting it on the refractory plate until it loses incandescence, and then put it in a closed dryer until the container and sample cool.Weighing and record the final weight. LOI is calculated using the following formula: (C A) (Final Weight) %FW x100 (C A) (CV)SRK Consulting (U.S.), Inc. January 5, 2011SerraAzulResource Audit_LMB_003.docx
  • 32. MMX Mineração e Metálicos S.A. 6-4Serra Azul Mines Resource AuditThe detection limits are shown in Table 6.4.1.Table 6.4.1: Bureau Veritas Detection Limits Analysis Lower Detection Limit Fe2O3 0.01% SiO2 0.10% Al2O3 0.10% P2O5 0.01% MnO 0.01% TiO2 0.01% CaO 0.01% MgO 0.10% Na2O 0.10% K2O 0.01%6.5 MMX Quality Controls and Quality AssuranceMMX has the following QA/QC program in place for its drilling programs: The insertion of Certified Reference material samples (CRM’s); Blind duplicates; Assayed versus calculated global grade comparisons; and Stoichiometric (chemical) closure calculations.MMX has used acQuire at its properties as a database management tool since December 2007.AcQuire includes QA/QC protocols within the sample numbering procedure. In the samplingplan, the system inserts two different standards and one pulp duplicate for each 20 samples atrandom positions. The standard batch size is 40 samples, with 34 primary samples, 2 pulpduplicates and 4 company standards. For each 50 samples, one coarse duplicate is also insertedinto the batch at a random position, reducing the primary samples to 33. If the batch is less than20, the system assures that at least two different standards and one pulp duplicate sample will beinserted in each batch.6.5.1 Comparison of Assayed and Calculated Global GradesMMX calculates a global grade of iron and other elements by determining a weighted averagebased on analysis of different sample of different grain size.6.5.2 Stoichiometric ClosureMMX calculates stoichiometric closure for analysis at Bureau Veritas from Fe2O3, SiO2, Al2O3,P2O5, MnO, TiO2, CaO, MgO, K2O, Na2O and LOI. This is basically a mass balancecalculations and stoichiometric closure is calculated by MMX using the following equation:S.C.=1.4298*(Fe-0.7773*FeO)+SiO2+Al2O3+2.2915*P+1.2912*Mn+TiO2+CaO+MgO+Na2O+K2O+(LOI+0.1114*FeO)+FeOStoichiometric closure is considered acceptable if it falls between 98% and 102%.SRK Consulting (U.S.), Inc. January 5, 2011SerraAzulResource Audit_LMB_003.docx
  • 33. MMX Mineração e Metálicos S.A. 6-5Serra Azul Mines Resource Audit6.5.3 Certified Reference MaterialMMX has developed its own CRM’s from material at the Serra Azul Mine with the assistance ofAgoratek International and SGS. The three CRM’s are: SAH – Serra Azul Hematite; SACL – Serra Azul Canga Laterite; and SAIC – Serra Azul Compact Itabirite (still in preparation).MMX sent 20 of each samples to SGS in Belo Horizonte, Perth and Ontario, ALS Chemex inLima and Perth, Intertek, Genalysis, Bureau Veritas, Ultratrace, Amdel and ACTLabs foranalysis of Fe, P, SiO2, Al2O3, CaO, TiO2, MgO, K2O, Na2O, FeO and Mn. MMX thenperformed various statistical tests on the results to arrive at the accepted mean and standarddeciation for each element or oxide.6.6 InterpretationThe samples from Serra Azul are submitted with QA/QC samples, including standards andduplicate samples with standard samples appropriate to the Project. MMX has developed newstandards from Serra Azul material. These samples have been sent to several laboratories in around robin to produce analyses used to calculate an expected mean and standard deviation.QA/QC sample failures are handled appropriately and are reviewed and investigated todetermine the reason for the error. The sampling preparation and analyses follow industryguidelines and the results from the QA/QC samples indicate that the analyses are suitable for aresource database.SRK Consulting (U.S.), Inc. January 5, 2011SerraAzulResource Audit_LMB_003.docx
  • 34. MMX Mineração e Metálicos S.A. 7-1Serra Azul Mines Resource Audit7 Data Verification7.1 Quality Control Measures and ProceduresMMX directly imports data received from the laboratories into its database. SRK has comparedassay certificates of 20% of the database and found no errors. The laboratory QA/QC measuresare described in the proceeding section.MMX is monitoring core recovery and is eliminating intervals with low recovery from theresource estimation database.MMX personnel check topographic updates to be sure that data is correct and check drillholecollars against topography.7.2 LimitationsThe limitations to the QA/QC program are described in the preceding section.SRK considers the data to be suitably verified and fit for resource estimation.SRK Consulting (U.S.), Inc. January 5, 2011SerraAzulResource Audit_LMB_003.docx
  • 35. MMX Mineração e Metálicos S.A. 8-1Serra Azul Mines Resource Audit8 Mineral Resources EstimateThis section provides details in terms of key assumptions, parameters and methods used toestimate the mineral resources together with SRK’s opinion as to their merits and possiblelimitations. The resource estimation for the Serra Azul Mine was prepared by Mr. Elvis Vargasunder the direction of Ms Lilian Grabellos, Manager of Resources and Reserves. MMX usesMintec’s MineSight software for resource estimation and mine planning. Leah Mach, PrincipalResource Consultant with SRK, audited the resource.8.1 Drillhole DatabaseThe drillhole sample database was compiled by MMX and verified by SRK and is determined tobe of high quality and suitable for resource estimation. The database consists of assays for 214holes drilled by AVG, Minerminas, and MMX. The average depth is 88m and the total meterageis 18,858m. About a third of the holes are vertical and the remainder were drilled atapproximately -70° to the north.SRK received the drillhole database as five comma separated variable (csv) files consisting of: Collar: Drillhole ID, easting, northing, elevation, and total depth; Survey: Depth, azimuth, inclination; Recovery: Advance from, to, length, recovered length, recovery percentage; Geology: From, to, lithology and code from drill log, modeled lithology and code from cross-sections; and Assay: From, to, Fe, SiO2, Al2O3, P, Mn, LOI, TiO2, CaO, MgO, and FeO.Table 8.1.2 contains basic statistics for the assay interval and metal variables of all analyzedsamples.Table 8.1.2: Basic Statistics for Assays Coefficient 1st 3rd Standard of Variable Number Minimum Maximum Average Quartile Median Quartile Deviation Variation Interval 2669 0.85 16.20 4.40 3.55 4.80 5.00 1.65 0.31 Fe 2669 2.86 68.20 40.55 32.67 38.70 49.85 12.80 .032 SiO2 2669 0.70 94.78 38.00 24.04 42.05 50.79 18.59 0.49 Al2O3 2669 0.02 29.32 1.92 0.31 0.94 2.52 2.76 1.44 P 2669 0.003 1.420 0.050 0.016 0.032 0.063 0.065 1.296 Mn 2650 0.002 21.53 0.16 0.001 0.01 0.03 0.86 5.41 LOI 2448 -1.95 13.95 1.34 0.10 0.57 1.86 1.91 1.43SRK Consulting (U.S.), Inc. January 5, 2011SerraAzulResource Audit_LMB_003.docx
  • 36. MMX Mineração e Metálicos S.A. 8-2Serra Azul Mines Resource Audit8.2 GeologySixty-seven geologic cross-sections were constructed at intervals of 100 or 50m depending onthe drill spacing. Figure 8-1 is a drillhole location map with mining concessions and topographyas of September 2010. The following lithotypes were modeled in the cross-sections: Stock pile; Canga; Friable Itabirite; Friable Hematite; Friable Carbonate Itabirite; Compact Itabirite; Compact Hematite; Intrusive; Quartzite; Phyllite; Breccia; and Quartz Vein.Figure 8-2 shows typical cross-sections through AVG and Minerminas.The cross-sections were used to prepare horizontal sections at 10m spacing from elevation 955 to1,365. The geology was coded into the block model based on the horizontal sections.Grades were estimated for lithotypes Canga (CG), Friable Itabirite (IF), Friable CarbonateItabirite (IFCA), and Compact Itabirite (IC). Table 8.2.1 presents basic statistics for theselithotypes.SRK Consulting (U.S.), Inc. January 5, 2011SerraAzulResource Audit_LMB_003.docx
  • 37. MMX Mineração e Metálicos S.A. 8-3Serra Azul Mines Resource AuditTable 8.2.1: Basic Statistics of Metal Variables by Lithotypes used in Grade Estimation Lithotype Statistic Fe SiO2 Al2O3 P Mn LOI Average 55.90 8.48 5.40 0.154 0.02 5.59 Minimum 26.32 0.70 0.64 0.020 0.00 0.18 Maximum 66.40 59.97 22.81 0.760 0.19 13.08 CG Median 59.54 5.20 3.36 0.124 0.02 4.60 St. Dev 9.92 10.40 5032 0.123 0.03 3.17 Count 119 119 119 119 117 115 Average 49.35 25.76 1.84 0.058 0.04 1.46 Minimum 13.85 0.70 0.04 0.005 0.00 0.00 Maximum 68.25 74.86 14.98 1.420 2.29 12.81 IF Median 49.50 26.23 1.34 0.040 0.01 0.97 St. Dev 10.32 15.59 1.83 0.085 0.12 1.68 Count 1513 1513 1513 1513 1497 1345 Average 34.96 48.02 0.89 0.034 0.05 0.66 Minimum 2.86 3.18 0.02 0.002 0.00 0.00 Maximum 66.00 94.78 21.33 0.318 7.10 12.66 IC Median 35.12 48.11 0.41 0.024 0.01 0.30 St. Dev 7.85 11.08 1.42 0.030 0.26 1.05 Count 2651 2651 2651 2651 2649 1755 Average 31.42 47.16 3.41 0.087 0.80 2.61 Minimum 6.53 4.40 0.07 0.005 0.00 0.04 Maximum 58.68 89.41 15.57 0.324 21.53 9.95 IFCA Median 30.13 48.03 2.87 0.075 0.24 2.20 St. Dev 10.07 14.48 2.24 0.053 1.94 1.75 Count 560 560 560 560 560 556 Average 39.56 40 1.59 0.051 0.13 138 Minimum 2.86 0.70 0.02 0.002 0.00 0.00 Maximum 68.25 94.78 22.81 1.420 21.53 13.08 All Median 37.75 43.45 0.81 0.035 0.01 0.69 St. Dev 11.70 17.29 2.11 0.063 0.73 1.82 Count 4843 4822 4822 4822 4802 37388.3 CompositingThe average length of the samples used in grade estimation is 2.23m with a range from 0.02 to15m. MMX composited the samples on 5m intervals starting at the top of the drillhole withbreaks at the lithotype solid boundaries. The variables that were composited include Fe, SiO2,Al2O3, P and Mn. Resulting composites with lengths less than 2.5m at the base of a lithotypechange were added to the previous composite, and samples greater than or equal to 2.5 weremaintained as such. Table 8.3.1 presents basic statistics of the composites used in gradeestimation.SRK Consulting (U.S.), Inc. January 5, 2011SerraAzulResource Audit_LMB_003.docx
  • 38. MMX Mineração e Metálicos S.A. 8-4Serra Azul Mines Resource AuditTable 8.3.1: Composite Statistics Lithotype Statistic Fe SiO2 Al2O3 P Mn LOI Average 57.47 7.05 4.79 1.167 0.02 5.23 Minimum 26.32 0.74 0.91 0.020 0.00 0.18 Maximum 66.40 59.97 18.77 0.460 0.19 12.66 CG Median 59.20 3.58 3.50 0.125 1.02 4.88 St. Dev 7.37 9.52 3.48 0.131 0.03 2.52 Count 84 84 84 84 82 82 Average 50.87 23.60 1.85 1.052 0.04 1.32 Minimum 13.85 0.74 0.05 0.005 0.00 0.00 Maximum 68.20 74.86 14.80 1.223 1.37 12.81 IF Median 51.49 22.40 1.30 0.034 0.01 0.98 St. Dev 10.23 15.12 1.79 0.079 0.11 1.37 Count 811 811 811 811 800 749 Average 35.31 47.91 0.74 0.028 0.04 0.51 Minimum 4.34 3.18 0.02 0.002 0.00 0.00 Maximum 63.36 91.13 14.58 0.318 5.16 12.66 IC Median 35.41 48.14 0.34 0.020 0.01 0.20 St. Dev .20 10.20 1.13 0.027 0.24 0.89 Count 1068 1068 1068 1068 1066 763 Average 33.20 44.19 3.59 0.086 0.78 2.66 Minimum 8.26 7.88 0.13 0.005 0.00 0.04 Maximum 57.10 85.16 13.80 0.270 15.50 9.36 IFCA Median 33.18 45.12 2.98 0.075 0.17 2.30 St. Dev 9.25 13.71 2.45 0.051 1.83 1.87 Count 286 286 286 286 286 283 Average 41.46 37.19 1.65 1.049 0.14 1.36 Minimum 4.34 0.74 0.02 0.002 0.00 0.00 Maximum 68.20 91.13 18.77 1.223 15.50 12.81 All Median 38.83 41.96 0.84 0.030 0.01 0.69 St. Dev 11.97 17.87 2.05 0.066 0.72 1.75 Count 2249 2249 2249 2249 2234 18778.4 DensityPrior to 2010, MMX conducted three programs of density measurements at the project. Thework was performed by Prominas under contract to MMX. The first program was done atAVG, the second at Minerminas and third was done at both AVG and Minerminas. During the2010 drill campaign, MMX has taken additional density measurements on the core samples. Thesand flask method was used for the friable lithotypes and the water displacement method for thecompetent lithotypes. Average values were calculated with and without outlier values bylithotype. The average values without outliers were used in the resource estimation. Table 8.4.1presents the densities by lithotype.SRK Consulting (U.S.), Inc. January 5, 2011SerraAzulResource Audit_LMB_003.docx
  • 39. MMX Mineração e Metálicos S.A. 8-5Serra Azul Mines Resource AuditTable 8.4.1: Density of Lithotypes Code Abbreviation Description Density (t/m3) Type 1 IF Friable Itabirite 2.80 Ore 2 IC Compact Itabirite 3.34 Ore 3 CG Mineralized Canga 2.90 Ore 4 IN Intrusive 2.00 Waste 5 QTZ Quartzite 2.84 Waste 6 FL Phyllite 2.35 Waste 10 IFCA Friable Carbonate Itabirite 2.09 Ore 11 BR Breccia 2.00 Waste 12 HFMN Friable Hematite 2.70 Waste 16 FS Fine stockpile 2.88 Waste 20 HC Compact Hematite 4.15 Waste 21 VQ Quartz vein 2.60 Waste8.5 Variogram Analysis and ModelingMMX conducted variography studies on the AVG and Minerminas properties separately becauseof the difference in the dip of the beds between the two properties. Figure 8-3 is an oblique viewof the cross-sections illustrating the change in bedding at an easting of about 574,650. The studyincluded directional and downhole variograms as well as omni-directional variograms. Theomni-directional variogram was chosen as showing the best fit for the data. The downholevariogram was used to determine the nugget. Figure 8-4 displays the omni-directionalvariograms for iron in the friable and compact itabirites.The variogram parameters used in the resource estimation are presented in Table 8.5.1.SRK Consulting (U.S.), Inc. January 5, 2011SerraAzulResource Audit_LMB_003.docx
  • 40. MMX Mineração e Metálicos S.A. 8-6Serra Azul Mines Resource AuditTable 8.5.1: Variogram Parameters Friable Itabirite Parameter Fe SiO2 Al2O3 P Mn LOI Nugget 5 5 0.5 0.0001 0.0002 0.05 Structure 1 Sill 72 185 1.5 0.0032 0.0058 1.21 Range (m) 125 146 44 35 150 37 Structure 2 Sill 23 35 1.25 0.0016 0.63 Range (m) 300 300 150 300 240 Model Spherical Spherical Spherical Spherical Spherical Spherical Compact Itabirite Parameter Fe SiO2 Al2O3 P Mn LOI Nugget 6 17 0.1 0.00016 0.01 0.05 Structure 1 Sill 18.4 34 1.05 0.0002 0.01 0.22 Range (m) 48 42 300 43 150 150 Structure 2 Sill 17 34 0.00031 0.23 Range (m) 300 300 300 300 Model Spherical Spherical Spherical Spherical Spherical Spherical Friable Carbonate Itabirite Parameter Fe SiO2 Al2O3 P Mn LOI Nugget 13 13 0.1 0.00010 0.01 0.15 Structure 1 Sill 50 95 2 0.0018 3.36 2.50 Range (m) 123 50 67 53 310 45 Structure 2 Sill 30 61 3.87 0.00074 0.22 Range (m) 300 300 460 300 200 Model Spherical Spherical Spherical Spherical Spherical Spherical Canga Parameter Fe SiO2 Al2O3 P Mn LOI Nugget 2.6 2 1.7 0.0050 0.00001 0.05 Structure 1 Sill 19 40 4.8 0.0007 0.0002 2.16 Range (m) 200 200 280 400 50 52 Structure 2 Sill 2.1 Range (m) 300 300 220 Model Spherical Spherical Spherical Spherical Spherical SphericalSRK Consulting (U.S.), Inc. January 5, 2011SerraAzulResource Audit_LMB_003.docx
  • 41. MMX Mineração e Metálicos S.A. 8-7Serra Azul Mines Resource Audit8.6 Grade EstimationA block model was created with limits and dimensions as shown in Table 8.6.1.Table 8.6.1: Block Model Dimensions and Origin Direction Minimum Maximum Block Size No. of Blocks X (East) 571,100 576600 25 220 Y (North) 7,774,100 7,777,300 25 128 Z (Elevation) 900 1,400 10 50The block model contains variables for: Fe, SiO2, Al2O3, Mn, P, and LOI; Lithotype; Percentage below topography; and Estimation parameters – number of composites, number of drillholes, average distance of composites used in estimation, and distance to closest composite.The block model was coded by lithotype from the lithologic solids produced from the horizontalsections. Up to four lithotypes and percentages could be stored for each block and thosevariables were used to validate the volume of each of the modeled lithotypes. The majority codewas used in estimation and in the mineral resource statement.The percentage of the block below topography was assigned to the topo percentage variable.Block grades were estimated by ordinary kriging in three passes. The parameters for each passare given in Table 8.6.2. Blocks were classified as Measured, Indicated or Inferred after eachestimation pass. Blocks which did not meet the necessary criteria for classification were re-estimated in the next pass. Samples were limited by quadrants, with a maximum of eightsamples per quadrant.Table 8.6.2: Estimation ParametersParameter Pass 1 Pass 2 Pass 3Composites Minimum number 4 4 1 Maximum number 32 32 32 Maximum per drillhole 4 4 4 Maximum per quadrant 8 8 8Distance (m) Friable, compact itabirite, friable carbonate itabirite 300 450 2000 Canga 200 300 2000The search ranges were determined by the iron variogram range with the first pass at thevariogram range and the second at 150% of the range. A third pass was run at 2000m to estimatemineral potential. The estimation was conducted using block and composite lithotype matching.Figure 8-5 presents cross-sections through the AVG and Minerminas areas with block grades anddrillholes.SRK Consulting (U.S.), Inc. January 5, 2011SerraAzulResource Audit_LMB_003.docx
  • 42. MMX Mineração e Metálicos S.A. 8-8Serra Azul Mines Resource Audit8.7 Model ValidationThe block model was validated by the following methods: Visual comparison of the block grades to the composite grades on cross-sections and horizontal sections; Comparison of assay, composite, and block statistics; and Swath plots.The visual examination of the block grades to the composite grades was in general quite good,except at depth in the compact itabirite, which was estimated in the third pass. Although MMXhas drilled several holes that penetrate the compact itabirite at depth, there are still relatively fewsamples for the large tonnage in the lithotype. However, the blocks estimated in the third passare not classified as measured, indicated, or inferred and therefore do not have an effect on themineral resource statement.The basic statistics of the blocks estimated in the first pass are presented in Table 8.7.1.Table 8.7.1: Basic Statistics of the Blocks Lithotype Statistic Fe SiO2 Al2O3 P Mn LOI Average 55.60 9.12 5.08 0.191 0.03 5.28 Minimum 3.48 1.07 0.01 0.21 0.01 0.52 Maximum 64.80 44.48 10.27 0.549 0.14 10.12 CG Median 55.93 5.88 5.00 0.147 0.02 4.97 St. Dev 5.39 7.85 2.02 0.101 0.03 1.55 Count 2414 2392 2414 2414 22414 2414 Average 50.92 23.61 1.77 0.048 0.07 1.27 Minimum 27.88 1.44 0.24 0.011 0.00 0.18 Maximum 66.28 56.77 9.65 0.596 .92 7.39 IF Median 51.65 22.98 1.57 0.040 0.02 1.15 St. Dev 6.69 9.91 0.87 0.030 0.13 0.64 Count 13017 13017 13017 13017 13017 13017 Average 34.33 49.45 0.68 0.024 0.06 0.44 Minimum 15.74 25.19 0.06 0.006 0.01 0.01 Maximum 51.04 73.51 7.50 0.104 1.51 9.38 IC Median 34.74 49.30 0.49 0.022 0.01 0.25 St. Dev 3.30 1.26 0.58 0.012 0.11 0.58 Count 59172 59172 59172 59172 59172 59172 Average 32.80 44.46 3.55 0.086 0.95 2.89 Minimum 19.99 20.08 0.01 0.021 0.01 0.52 Maximum 45.92 66.85 9.75 0.207 8.18 6.85 IFCA Median 32.40 45.86 3.21 0.084 0.50 2.97 St. Dev 3.48 5.86 1.61 0.028 1.10 0.83 Count 6927 6925 6927 6927 6927 6927 Average 37.48 43.72 1.22 0.039 0.13 0.92 Minimum 15.74 1.07 0.01 0.006 0.00 0.01 Maximum 66.28 73.51 10.27 0.596 8.18 10.12 All Median 35.32 47.98 0.73 0.028 0.02 0.42 St. Dev 8.04 12.54 1.37 0.041 0.42 1.23 Count 81530 81506 81530 81530 81530 81530SRK Consulting (U.S.), Inc. January 5, 2011SerraAzulResource Audit_LMB_003.docx
  • 43. MMX Mineração e Metálicos S.A. 8-9Serra Azul Mines Resource AuditThe average iron grades of the composites are somewhat higher than the assays. The compositegrades and block grades compare quite well.A nearest neighbor, or polygonal, estimation was performed as a comparison to the krigedgrades. Swath plots were prepared as north-south bands 200m in width and a comparison madeto the composite, kriging, and polygonal grades. The swath plots for iron indicate that the krigedand composites track quite well especially in areas where there is more closely spaced drilling aswould be expected. Figure 8-6 presents the swath plot for global iron grades.SRK has also conducted a resource estimation using similar parameters as MMX and hasreproduced their results within 2% for tonnage, which is acceptable. SRK considers that MMXhas used good practices in its resource estimation.8.8 Resource ClassificationThe resources were classified according to CIM classification as Measured, Indicated, or Inferredbased on the pass in which the block was estimated and the number of drillholes used in theestimation. Because the drillholes are terminated at different elevations, a surface wasconstructed at the base of the drillholes for use in resource classification. The surface wasdropped 20m (Ore -20m) This surface, the depth of drilling surface, was used to limit theclassification of measured, indicated, and inferred resources. Table 8.8.1 presents the criteriaused in the classification.Table 8.8.1: Serra Azul Classification Criteria Distance to closest Composite Minimum Step Class Drillholes IF, IC, IFCA CG Relation to Classification Surface Measured 3 100 70 Above Ore -20m Indicated 2 300 200 Above Ore -20m Step 1 Blocks not classified are re-estimated in Step 2 Inferred 1 No Requirement Above Ore -20m Step 2 Blocks not classified are re-estimated in Step 3 Step 3 Potential 1 No Requirement Above or below Ore -20m Blocks classified as Measured between Ore -20 and the original base of drilling are reclassified as Final IndicatedAll Measured blocks were required to be above the depth of drilling surface. All Indicatedblocks were required to be above or a maximum of 20m below the depth of drilling surface. Allblocks estimated in the second pass were classified as Inferred and blocks estimated in the firstpass and which were not classified as measured or indicated were classified as inferred as well.Figure 8-7 presents cross-sections through the AVG and Minerminas areas showing blockclassification.Blocks estimated in the third pass, at distances up to 2000m, were used to provide an estimate ofthe potential mineralization for the property. Potential mineralization is conceptual by natureand must be demonstrated with future drilling.SRK Consulting (U.S.), Inc. January 5, 2011SerraAzulResource Audit_LMB_003.docx
  • 44. MMX Mineração e Metálicos S.A. 8-10Serra Azul Mines Resource Audit8.9 Mineral Resource StatementThe Mineral Resources of the Serra Azul Mine as of November 16, 2010, on a wet tonne basisare presented in Table 8.9.1. The resources are limited by the DNPM mineral concessionboundary.Table 8.9.1: Serra Azul Mineral Resource Statement, as November 16, 2010* Tonnes ROCK CLASS (000s) Fe% SiO2% Al2O3% Mn% P% LOI% Measured 158,368 51.14 23.36 1.8 0.047 0.049 1.261 Indicated 41,621 48.46 26.99 1.67 0.144 0.048 1.333 IF Total M&I 199,989 50.58 24.12 1.77 0.07 0.05 1.28 Inferred 17 40.84 38.02 1.11 0.029 0.033 0.774 Measured 384,164 35.82 14.1 0.62 0.031 0.025 0.372 Indicated 252,657 34.32 49.23 0.7 0.082 0.025 0.519 IC Total M&I 636,821 35.22 28.04 0.65 0.05 0.03 0.43 Inferred 3,939 30.57 53.25 0.78 0.341 0.049 1.652 Measured 37,491 32.97 44.3 3.64 0.832 0.081 2.799 Indicated 13,608 32.9 44 3.72 0.993 0.083 2.926 IFCA Total M&I 51,099 32.95 44.22 3.66 0.87 0.08 2.83 Inferred 0 Measured 4,447 59.4 5.75 4.05 0.022 0.159 4.634 Indicated 7,170 55.37 8.1 5.69 0.037 0.226 5.801 CG Total M&I 11,617 56.91 7.2 5.06 0.03 0.2 5.35 Inferred 5,535 53.01 10.98 6.16 0.045 0.218 5.998 Measured 584,440 39.97 40.37 1.16 0.087 0.036 0.801 Indicated 315,056 36.6 45.13 1.07 0.129 0.035 0.851 Total Total M&I 899,496 38.79 42.04 1.13 0.1 0.04 0.82 Inferred 9,492 43.67 28.57 3.92 0.168 0.147 4.185* Cut-off Grade 20% Fe; tonnes on a wet basis.SRK Consulting (U.S.), Inc. January 5, 2011SerraAzulResource Audit_LMB_003.docx
  • 45. MMX Mineração e Metálicos S.A. 8-11Serra Azul Mines Resource Audit8.10 Mineral Resource SensitivityGrade tonnage curves were plotted separately for Total Measured and Indicated Resources andInferred Resources and are presented Tables 8.10.1 and 8.10.2 and Figure 8-8.Table 8.10.1: Measured and Indicated Grade and Tonnage by Fe Cutoff.Cut-off (Fe%) Mt Fe (%) SiO2 (%) Al2O3 (%) P (%) Mn (%) LOI (%) 20 979.11 39.34 41.16 1.18 0.038 0.10 0.87 22 978.92 39.35 41.15 1.18 0.038 0.10 0.87 24 977.71 39.37 41.12 1.17 0.038 0.10 0.87 26 971.21 39.46 41.00 1.17 0.038 0.10 0.86 28 952.21 39.71 40.68 1.17 0.038 0.09 0.86 30 909.18 40.21 40.02 1.16 0.037 0.07 0.83 32 851.21 40.84 39.24 1.12 0.037 0.06 0.81 34 762.40 41.74 38.02 1.10 0.036 0.04 0.80 36 569.09 44.00 34.53 1.24 0.041 0.05 0.93 38 365.70 47.93 28.12 1.63 0.050 0.05 1.24 40 273.95 50.99 23.15 1.93 0.058 0.05 1.49 42 238.02 52.52 20.73 2.05 0.062 0.04 1.61 44 217.37 53.42 19.31 2.10 0.064 0.04 1.67 46 198.20 54.24 18.05 2.12 0.066 0.04 1.71 48 177.16 55.09 16.67 2.16 0.069 0.03 1.77 50 156.00 55.92 15.31 2.21 0.072 0.03 1.85 52 129.09 56.94 13.68 2.24 0.075 0.03 1.93 54 99.92 58.08 11.81 2.30 0.080 0.03 2.04 56 71.27 59.33 10.09 2.26 0.079 0.02 2.05 58 46.32 60.59 8.11 2.34 0.087 0.02 2.22 60 25.77 61.91 6.22 2.29 0.098 0.02 2.37Table 8.10.2: Inferred Grade and Tonnage by Fe CutoffCut-off (Fe%) Mt Fe (%) SiO2 (%) Al2O3 (%) P (%) Mn (%) LOI (%) 20 14.81 47.21 22.20 4.65 0.167 0.12 4.73 22 14.81 47.21 22.20 4.65 0.167 0.12 4.73 24 14.81 47.21 22.20 4.65 0.167 0.12 4.73 26 14.81 47.21 22.20 4.65 0.167 0.12 4.73 28 14.77 47.27 22.10 4.66 0.167 0.12 4.74 30 12.43 50.66 15.98 5.37 0.188 0.06 5.25 32 11.47 52.36 12.85 5.75 0.200 0.04 5.55 34 11.32 52.61 12.36 5.81 0.202 0.04 5.62 36 11.28 52.67 12.23 5.83 0.203 0.04 5.63 38 10.85 53.31 10.83 6.06 0.210 0.05 5.85 40 10.71 53.49 10.44 6.12 0.212 0.05 5.90 42 10.48 53.77 9.83 6.21 0.214 0.05 5.95 44 10.39 53.87 9.62 6.25 0.215 0.05 5.97 46 10.24 53.99 9.38 6.28 0.216 0.05 5.98 48 9.88 54.24 8.82 6.37 0.219 0.05 6.04 50 9.39 54.51 8.35 6.43 0.223 0.04 6.02 52 7.85 55.22 7.02 6.54 0.238 0.04 6.13 54 5.06 56.51 5.20 6.16 0.279 0.02 6.23 56 2.32 58.09 4.24 5.60 0.263 0.02 5.86 58 1.29 59.09 3.91 4.98 0.255 0.01 5.49 60 0.25 61.40 3.69 3.03 0.199 0.01 4.80SRK Consulting (U.S.), Inc. January 5, 2011SerraAzulResource Audit_LMB_003.docx
  • 46. MMX Mineração e Metálicos S.A. 8-12Serra Azul Mines Resource Audit8.11 Mineral PotentialBlocks estimated in the third estimation pass provide a range of potential tonnages, which havenot yet been demonstrated to be resources with the current drilling. Potential mineralization isconceptual in nature and it is uncertain that if will be confirmed by future exploration. Thepotential mineralization at Serra Azul range from 115Mt located between 0 and 40m below thedepth of drilling surface to 570Mt at the maximum limits of the estimation. The potentialmineralization is predominately compact itabirite and thus far only limited drilling has penetratedthis unit to its full thickness. The estimated iron grades are therefore not reliable below the depthof drilling. SRK recommends that MMX continue to drill the compact itabirite in order toinvestigate iron grades at depth and to increase confidence in this potential.SRK Consulting (U.S.), Inc. January 5, 2011SerraAzulResource Audit_LMB_003.docx
  • 47. Serra Azul Mine Drillhole Location Map with Brazil Topography andSRK Job No.: 162700.10 Mining ConcessionsFile Name: Figure 8-1.doc Date: 12/120/10 Approved: LEM Figure: 8-1
  • 48. Friable Quartzite Phyllite Compact Section 572850, Looking East Canga Friable Compact Quartzite Phyllite Itabirite Section 575150, Looking East Cross-sections with Geology Serra Azul Mine Brazil and DrillingSRK Job No.: 162700.10 Looking EastFile Name: Figure 8-2.doc Date: 12/20/10 Approved: LEM Figure: 8-2
  • 49. Serra Azul Mine Oblique View of Cross- Brazil sections Showing Change inSRK Job No.: 162700.10 Bedding DipFile Name: Figure 8-3.doc Source: MMX Mineração e Metálicos S.A Date: 12/20/10 Approved: LEM Figure: 8-3
  • 50. Omni-Directional Variogram Serra Azul Mine for Iron, Friable and Compact Brazil ItabiriteSRK Job No.: 162700.10File Name: Figure 8--4.doc Source: MMX Mineração e Metálicos S.A Date: 12/20/10 Approved: LEM Figure: 8-4
  • 51. Base of Drilling Surface Section 572850, Looking East Section 575150, Looking East Serra Azul Mine Cross-sections with Geology, Brazil Block Model and DrillingSRK Job No.: 162700.10 Looking EastFile Name: Figure 8-5.doc Date: 12/20/10 Approved: LEM Figure: 8-5
  • 52. Serra Azul Mine Swath Plot Index Map and Iron Brazil Swath PlotSRK Job No.: 162700.10 Source: MMX Mineração e Metálicos S.A Date: 12/20/10 Approved: LEM Figure: 8-6File Name: Figure 8-6.doc
  • 53. Measured Indicated Inferred Potential Base of Drilling Surface Section 572850, Looking East Section 575150, Looking East Serra Azul Mine Cross-sections with Geology, Brazil Block Model ClassificationSRK Job No.: 162700.10 and DrillingFile Name: Figure 8-7.doc Date: 12/20/10 Approved: LEM Figure: 8-7
  • 54. Grade Tonnage, Measured and Indicated 1200 65 Millions 1000 60 800 55 Tonnes Fe % 600 50 400 45 200 40 0 35 20 40 60 Tonnes Cutoff Fe % Fe (%) Grade Tonnage, Inferred 16 65 Millions 14 12 60 10 Tonnes Fe % 8 55 6 4 50 2 0 45 28 48 Tonnes Cutoff Fe % Fe (%) Serra Azul Mine Grade Tonnage Curves Brazil IronSRK Job No.: 162700.10File Name: Figure 8-8.doc Date: 12/20/2010 Approved: LEM Figure: 8-8
  • 55. MMX Mineração e Metálicos S.A. 9-1Serra Azul Mines Resource Audit9 Recommendations9.1 Analytical and QA/QC DataSRK recommends that MMX continue its QA/QC program as part of every drilling program,which includes the insertion of standards and duplicates in the sample stream. Blanks arerecommended at all stages of sample preparation to eliminate this as a possible source of QA/QCfailures. The QA/QC program is monitored soon after the analyses are received so that samplefailures can be recognized and corrected early in the program.9.2 Resource EstimationSRK recommends that MMX continue to drill additional holes into the compact itabirite to gainadditional samples and analysis and increase confidence in the grades at depth and to increasethe indicated resources in this rock type.SRK Consulting (U.S.), Inc. January 5, 2011SerraAzulResource Audit_LMB_003.docx
  • 56. MMX Mineração e Metálicos S.A. 10-1Serra Azul Mines Resource Audit10 ReferencesAlmeida, F. F. M., Brito Neves, B. B. & Fuck, R. A., 1981, Brasilian structural province: anDorr, J.V.N. (1969), Physiographic, Stratigraphic and Structural Development of the Quadrilatero Ferrifero, Minas Gerais, Brazil: US Geol Survey Professional Paper 641AEndo, I. and Machado, R. 1997. Regimes Tectônicos no Segmento Meridional do Cráton do São Francisco: Quadrilátero Ferrífero e Áreas Adjacentes, Minas Gerais. In: Simpósio de Geologia de Minas Gerais, 1997, Ouro preto. Anais do IX Simpósio de Geologia de Minas Gerais. Belo Horizonte : SBG/NÚCLEO Minas Gerais, 1997. p. 58-59.Jordt-Evangelista, H.; Alkmim, F. F.; Marshak, S. 1992. Metamorfismo Progressivo e a Ocorrencia dos Tres Polimorfos de Al2Sio5 (Cianita, Andaluzita e Silimanita) na Formação Sabara em Ibirite, Quadrilatero Ferrifero, MG. REM - revista da escola de minas, Ouro Preto, v. 45, n. 1-2, p. 157-160.Alkmim F.F. and Marshak S.; 1989. Proterozoic contraction/extension tectonics of the southern São Francisco region, Minas Gerais, Brazil. Tectonics, 8:555-571.MMX, 2010, Serra Azul Resource Estimation Methodology, December 2010, Unpublished internal report.Oliveira, N. V. de; Endo, I.; Oliveira, L. G. S. de . 2005. Geomteria do Sinclinal Gandarela Baseada na Deconvolução Euler 2D E 3D - Quadrilátero Ferrifero (MG). Revista Brasileira de Geofísica, v. 23, p. 221-232.Pires, F. R. M. 1979. Tectonic Regimes Of The Quadrilatero Ferrifero, Mg. In: I Simp. Geol. do Craton S. Francisco e suas Faixas Marginais. p. 0-0.Renger F.E., Noce C.M., Romano A.W., Machado N. 1994. Evolução sedimentar do Supergrupo Minas: 500 Ma de registro geológico no Quadrilátero Ferrífero, Minas Gerais, Brasil. Geonomos, 2:1-11.Romano, A. W. 1989. Evolution Tectonique de la Region nord-ouest du Quadrilatere Ferrifere - Minas Gerais - Bresil (Geocronologie du Socle - Aspects Geochimiques et Petrographiques des Supergroupes Rio das Velhas et Minas). U.E.R. Geosciences et Materiaux, Universite de Nancy I, França, Tese de Doutoramento, 259p.Simmons,G. C., 1968. Geology and Iron Deposits of the Western Serra do Curral, Minas Gerais, Brazil. USGS/DNPM Professional Paper, 341 (G):1-53.SRK Consulting (US), Inc. January 2008 MMX/AVG NI 43-101 Technical Report.162703.05, 84pp.SRK Consulting (US), Inc. July 2008 MMX/Minerminas NI 43-101 Technical Report, 72pp.SRK Consulting (US), Inc. May 2009 Serra Azul NI 43-101 Technical Report, 72pp.SRK Consulting (U.S.), Inc. January 5, 2011SerraAzulResource Audit_LMB_003.docx
  • 57. MMX Mineração e Metálicos S.A. 11-1Serra Azul Mines Resource Audit11 Glossary11.1 Mineral Resources and Reserves11.1.1 Mineral ResourcesThe mineral resources and mineral reserves have been classified according to the “CIMStandards on Mineral Resources and Reserves: Definitions and Guidelines” (December 2005).Accordingly, the Resources have been classified as Measured, Indicated or Inferred, theReserves have been classified as Proven, and Probable based on the Measured and IndicatedResources as defined below.A Mineral Resource is a concentration or occurrence of natural, solid, inorganic or fossilizedorganic material in or on the Earth’s crust in such form and quantity and of such a grade orquality that it has reasonable prospects for economic extraction. The location, quantity, grade,geological characteristics and continuity of a Mineral Resource are known, estimated orinterpreted from specific geological evidence and knowledge.An ‘Inferred Mineral Resource’ is that part of a Mineral Resource for which quantity and gradeor quality can be estimated on the basis of geological evidence and limited sampling andreasonably assumed, but not verified, geological and grade continuity. The estimate is based onlimited information and sampling gathered through appropriate techniques from locations suchas outcrops, trenches, pits, workings and drillholes.An ‘Indicated Mineral Resource’ is that part of a Mineral Resource for which quantity, grade orquality, densities, shape and physical characteristics can be estimated with a level of confidencesufficient to allow the appropriate application of technical and economic parameters, to supportmine planning and evaluation of the economic viability of the deposit. The estimate is based ondetailed and reliable exploration and testing information gathered through appropriate techniquesfrom locations such as outcrops, trenches, pits, workings and drillholes that are spaced closelyenough for geological and grade continuity to be reasonably assumed.A ‘Measured Mineral Resource’ is that part of a Mineral Resource for which quantity, grade orquality, densities, shape, physical characteristics are so well established that they can beestimated with confidence sufficient to allow the appropriate application of technical andeconomic parameters, to support production planning and evaluation of the economic viability ofthe deposit. The estimate is based on detailed and reliable exploration, sampling and testinginformation gathered through appropriate techniques from locations such as outcrops, trenches,pits, workings and drillholes that are spaced closely enough to confirm both geological and gradecontinuity.11.1.2 Mineral ReservesA Mineral Reserve is the economically mineable part of a Measured or Indicated MineralResource demonstrated by at least a Preliminary Feasibility Study. This Study must includeadequate information on mining, processing, metallurgical, economic and other relevant factorsthat demonstrate, at the time of reporting, that economic extraction can be justified. A MineralReserve includes diluting materials and allowances for losses that may occur when the materialis mined.SRK Consulting (U.S.), Inc. January 5, 2011SerraAzulResource Audit_LMB_003.docx
  • 58. MMX Mineração e Metálicos S.A. 11-2Serra Azul Mines Resource AuditA ‘Probable Mineral Reserve’ is the economically mineable part of an Indicated, and in somecircumstances a Measured Mineral Resource demonstrated by at least a Preliminary FeasibilityStudy. This Study must include adequate information on mining, processing, metallurgical,economic, and other relevant factors that demonstrate, at the time of reporting, that economicextraction can be justified.A ‘Proven Mineral Reserve’ is the economically mineable part of a Measured Mineral Resourcedemonstrated by at least a Preliminary Feasibility Study. This Study must include adequateinformation on mining, processing, metallurgical, economic, and other relevant factors thatdemonstrate, at the time of reporting, that economic extraction is justified.11.2 GlossaryTable 11.2.1: Glossary Term Definition Assay: The chemical analysis of mineral samples to determine the metal content. Capital Expenditure: All other expenditures not classified as operating costs. Composite: Combining more than one sample result to give an average result over a larger distance. Concentrate: A metal-rich product resulting from a mineral enrichment process such as gravity concentration or flotation, in which most of the desired mineral has been separated from the waste material in the ore. Crushing: Initial process of reducing ore particle size to render it more amenable for further processing. Cut-off Grade (CoG): The grade of mineralized rock, which determines as to whether or not it is economic to recover its gold content by further concentration. Dilution: Waste, which is unavoidably mined with ore. Dip: Angle of inclination of a geological feature/rock from the horizontal. Fault: The surface of a fracture along which movement has occurred. Footwall: The underlying side of an orebody or stope. Gangue: Non-valuable components of the ore. Grade: The measure of concentration of gold within mineralized rock. Hangingwall: The overlying side of an orebody or slope. Haulage: A horizontal underground excavation which is used to transport mined ore. Igneous: Primary crystalline rock formed by the solidification of magma. Kriging: An interpolation method of assigning values from samples to blocks that minimizes the estimation error. Lithological: Geological description pertaining to different rock types. LoM Plans: Life-of-Mine plans. LRP: Long Range Plan. Material Properties: Mine properties. Milling: A general term used to describe the process in which the ore is crushed and ground and subjected to physical or chemical treatment to extract the valuable metals to a concentrate or finished product. Mineral/Mining Lease: A lease area for which mineral rights are held. Mining Assets: The Material Properties and Significant Exploration Properties. Ongoing Capital: Capital estimates of a routine nature, which is necessary for sustaining operations. Ore Reserve: See Mineral Reserve. RoM: Run-of-Mine. Sedimentary: Pertaining to rocks formed by the accumulation of sediments, formed by the erosion of other rocks. Sill: A thin, tabular, horizontal to sub-horizontal body of igneous rock formed by the injection of magma into planar zones of weakness. Stratigraphy: The study of stratified rocks in terms of time and space. Strike: Direction of line formed by the intersection of strata surfaces with the horizontal plane, always perpendicular to the dip direction. Sulfide: A sulfur bearing mineral. Tailings: Finely ground waste rock from which valuable minerals or metals have been extracted. Thickening: The process of concentrating solid particles in suspension. Total Expenditure: All expenditures including those of an operating and capital nature. Variogram: A statistical representation of the characteristics (usually grade).SRK Consulting (U.S.), Inc. January 5, 2011SerraAzulResource Audit_LMB_003.docx
  • 59. MMX Mineração e Metálicos S.A. 11-3Serra Azul Mines Resource AuditAbbreviationsThe metric system has been used throughout this report unless otherwise stated. All currency isin U.S. dollars. Market prices are reported in US$ per troy oz of gold and silver. Tonnes aremetric of 1,000kg, or 2,204.6lbs. The following abbreviations are used in this report.Table 11.2.2: AbbreviationsAbbreviation Unit or TermAl2O3 Alumina°C degrees CentigradeCa CalciumCaO Calcium oxidecm centimetercm2 square centimetercm3 cubic centimeter° degree (degrees)Fe IronFeO Iron oxideFe2O3 Iron oxide, also hematiteg gramg/t grams per tonneha hectareskg kilogramskm kilometerkm2 square kilometerkt thousand tonnesL literLOI Loss On Ignitionm meterm2 square meterm3 cubic meterMg MagnesiumMgO Magnesium oxidemasl meters above sea levelmm millimetermm2 square millimetermm3 cubic millimeterm.y. million yearsMn ManganeseMnO Manganese oxideNI 43-101 Canadian National Instrument 43-101Na SodiumNa2O Sodium oxide% percentP PhosphorousP2O5 Phsophorous pentoxideppb parts per billionppm parts per millionQA/QC Quality Assurance/Quality ControlRC rotary circulation drillingRoM Run-of-MineRQD Rock Quality Descriptionsec secondSiO2 Silica dioxideSG specific gravityt tonne (metric ton) (2,204.6 pounds)Ti TitaniumTiO2 Titanium dioxideXRD x-ray diffractiony YearSRK Consulting (U.S.), Inc. January 5, 2011SerraAzulResource Audit_LMB_003.docx
  • 60. NI 43-101 Technical Report on Resources MMX Mineração e Metálicos S.A. Bom Sucesso Project Minas Gerais, Brazil Prepared for: MMX Mineração e Metálicos S.A. Avenida Prudente de Morais1250 Belo Horizonte, Minas Gerais Brazil SRK Project Number: 162706 Prepared by: 7175 W. Jefferson Ave. Suite 3000 Lakewood, CO 80235 Effective Date: May 10, 2009 Report Date: May 11, 2009Contributors: Endorsed by QP:George Borinski Leah Mach, CPG, MScDorinda Bair
  • 61. MMX Mineração e Metálicos S.A. iBom Sucesso Project NI 43-101 Technical Report on ResourcesTable of Contents1 INTRODUCTION (ITEM 4) ........................................................................................... 1-1 1.1 Terms of Reference and Purpose of the Report ................................................... 1-1 1.2 Reliance on Other Experts (Item 5) ..................................................................... 1-1 1.2.1 Sources of Information .......................................................................... 1-1 1.3 Qualifications of Consultants (SRK) ................................................................... 1-2 1.3.1 Site Visit ................................................................................................ 1-2 1.4 Units of Measure .................................................................................................. 1-3 1.5 Effective Date ...................................................................................................... 1-32 PROPERTY DESCRIPTION AND LOCATION (ITEM 6)........................................... 2-1 2.1 Property Location................................................................................................. 2-1 2.2 Mineral Titles ....................................................................................................... 2-1 2.3 Legal Surveys....................................................................................................... 2-2 2.4 Surface Rights ...................................................................................................... 2-2 2.5 Location of Mineralization .................................................................................. 2-2 2.6 Royalties, Agreements and Ecumbrances ............................................................ 2-2 2.7 Environmental Liabilities and Permitting ............................................................ 2-3 2.7.1 Required Permits and Status .................................................................. 2-3 2.7.2 Compliance Evaluation ......................................................................... 2-4 2.7.3 Environmental Liabilities ...................................................................... 2-43 ACCESSIBILITY, CLIMATE, LOCAL RESOURCES, INFRASTRUCTURE AND PHYSIOGRAPHY (ITEM 7) .............................................................................. 3-1 3.1 Topography, Elevation and Vegetation ............................................................... 3-1 3.2 Climate and Length of Operating Season ............................................................ 3-1 3.3 Access to Property ............................................................................................... 3-1 3.4 Surface Rights ...................................................................................................... 3-2 3.5 Local Resources and Infrastructure ..................................................................... 3-2 3.5.1 Access Road, Transportation and Port .................................................. 3-2 3.5.2 Power Supply......................................................................................... 3-2 3.5.3 Water Supply ......................................................................................... 3-2 3.5.4 Buildings and Ancillary Facilities ......................................................... 3-2 3.5.5 Tailings Storage and Waste Dumps ...................................................... 3-2 3.5.6 Manpower .............................................................................................. 3-24 HISTORY (ITEM 8) ........................................................................................................ 4-1 4.1 Ownership ............................................................................................................ 4-1 4.2 Past Exploration and Development ...................................................................... 4-1 4.3 Historic Mineral Resource and Reserve Estimates .............................................. 4-1 4.4 Historic Production .............................................................................................. 4-15 GEOLOGIC SETTING (ITEM 9) ................................................................................... 5-1 5.1 Regional Geology ................................................................................................ 5-1 5.1.1 Stratigraphy ........................................................................................... 5-1 5.2 Local Geology ...................................................................................................... 5-3 5.2.2 Alteration ............................................................................................... 5-4 5.2.3 Structure ................................................................................................ 5-4SRK Consulting (US), Inc. 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  • 62. MMX Mineração e Metálicos S.A. iiBom Sucesso Project NI 43-101 Technical Report on Resources6 DEPOSIT TYPE (ITEM 10) ............................................................................................ 6-1 6.1 Geological Model................................................................................................. 6-17 MINERALIZATION (ITEM 11)..................................................................................... 7-1 7.1 Mineralized Zones ............................................................................................... 7-1 7.2 Surrounding Rock Types ..................................................................................... 7-1 7.3 Relevant Geological Controls .............................................................................. 7-1 7.4 Type, Character and Distribution of Mineralization ............................................ 7-18 EXPLORATION (ITEM 12) ........................................................................................... 8-1 8.1 Surveys and Investigations .................................................................................. 8-1 8.2 Interpretation ........................................................................................................ 8-19 DRILLING (ITEM 13) .................................................................................................... 9-1 9.1 Procedures ............................................................................................................ 9-1 9.2 Interpretation ........................................................................................................ 9-210 SAMPLING METHOD AND APPROACH (ITEM 14)............................................... 10-1 10.1 Sampling Methods ............................................................................................. 10-1 10.2 Location and Sample Density ............................................................................ 10-1 10.3 Factors Impacting Accuracy of Results ............................................................. 10-2 10.4 Sample Quality and Representativeness ............................................................ 10-2 10.5 Relevant Samples ............................................................................................... 10-211 SAMPLE PREPARATION, ANALYSES AND SECURITY (ITEM 15).................... 11-4 11.1 Sample Preparation ............................................................................................ 11-4 11.2 Sample Analysis................................................................................................. 11-4 11.3 Internal Laboratory Quality Controls and Quality Assurance ........................... 11-5 11.4 Quality Controls and Quality Assurance ........................................................... 11-5 11.5 Interpretation ...................................................................................................... 11-612 DATA VERIFICATION (ITEM 16) ............................................................................. 12-1 12.1 Quality Control Measures and Procedures ........................................................ 12-1 12.2 Limitations ......................................................................................................... 12-113 ADJACENT PROPERTIES (ITEM 17) ........................................................................ 13-114 MINERAL PROCESSING AND METALLURGICAL TESTING (ITEM 18) ........... 14-1 14.1 Procedures .......................................................................................................... 14-1 14.2 Results ................................................................................................................ 14-2 14.3 Conclusions ........................................................................................................ 14-415 MINERAL RESOURCES (ITEM 19) ........................................................................... 15-1 15.1 Topography ........................................................................................................ 15-1 15.2 Drillhole Database ............................................................................................. 15-1 15.3 Geology .............................................................................................................. 15-2 15.4 Compositing ....................................................................................................... 15-3 15.5 Density ............................................................................................................... 15-316 OTHER RELEVANT DATA AND INFORMATION (ITEM 20) ............................... 16-117 INTERPRETATION AND CONCLUSIONS (ITEM 21) ............................................ 17-1 17.1 Field Surveys and Drilling ................................................................................. 17-1 17.2 Analytical and Testing Data............................................................................... 17-1 17.3 Exploration Conclusions .................................................................................... 17-1SRK Consulting (US), Inc. 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  • 63. MMX Mineração e Metálicos S.A. iiiBom Sucesso Project NI 43-101 Technical Report on Resources 17.4 Resource Estimation .......................................................................................... 17-118 RECOMMENDATIONS (ITEM 22) ............................................................................ 18-1 18.1 Costs................................................................................................................... 18-119 REFERENCES (ITEM 23) ............................................................................................ 19-120 GLOSSARY .................................................................................................................. 20-1 20.1 Mineral Resources and Reserves ....................................................................... 20-1 20.1.1 Mineral Resources ............................................................................... 20-1 20.1.2 Mineral Reserves ................................................................................. 20-1 20.2 Glossary ............................................................................................................. 20-2List of TablesTable 1: Inferred Mineral Resources, April 15, 2009, Tonnes on a Wet Basis ............................IIITable 1.3.1: Key SRK Project Personnel .................................................................................... 1-2Table 2.2.1: Obligations of Brazilian Exploration Permit Holders ............................................ 2-1Table 2.6.1: Financial Obligations of Brazilian Mining Operations .......................................... 2-3Table 2.7.1.1: Environmental Licensing Stages of Brazilian Mining Projects........................... 2-4Table 9.1: Drillhole Statistics ..................................................................................................... 9-1Table 10.2.1: Sample Interval Statistics. .................................................................................. 10-2Table 10.5.1: Table of Relevant Composited Samples ............................................................. 10-3Table 11.2.1: Practical Detection Limits for SGS .................................................................... 11-4Table 11.4.1: APHP with Standard Deviation (SD)for Calculating Rejection Limits ............. 11-6Table 11.4.2: CRB1 with Provisional Standard Deviation for Calculating Rejection Limits .. 11-6Table 11.5.1: MMX’s Recalculated APHP Standard Deviation for Calculating Rejection Limits11-7Tables 14.2.1: Davis Tube Tests – Friable Itabirite .................................................................. 14-2Table 14.2.2: Davis Tube Tests – Semi-Compact Itabirite ....................................................... 14-2Table 14.2.3: Davis Tube Tests – Compact Itabirite 1 ............................................................. 14-3Table 14.2.4: Davis Tube Tests –Compact Itabirite 2 .............................................................. 14-3Table 14.2.5: Inbras LIMS test –Compact Itabirite 1 ............................................................... 14-4Table 14.2.6: Inbras LIMS test –Feed and Product Constituents ............................................. 14-4Table 15.2.1: Assay Basic Statistics by Company.................................................................... 15-2Table 15.4.1: Basic Statistics of the Composited Samples ....................................................... 15-3Table 15.5.1: Block Model Density Values .............................................................................. 15-4Table 15.6.1: Block Model Origin and Dimensions ................................................................. 15-4Table 15.7.1: Grade Estimation Parameters ............................................................................. 15-5SRK Consulting (US), Inc. May 11, 2009Bom Sucesso_NI 43-101 Technical Report on Resources_162706_MLM_011.doc
  • 64. MMX Mineração e Metálicos S.A. ivBom Sucesso Project NI 43-101 Technical Report on ResourcesTable 15.7.2: Average Grades in the Block Model. ................................................................. 15-5Table 15.10.1: Inferred Mineral Resources, April 15, 2009, Tonnes on a Wet Basis .............. 15-6Table 20.2.1: Glossary .............................................................................................................. 20-2Table 20.2.2: Abbreviations...................................................................................................... 20-3List of FiguresFigure 2-1: General Location Map of the Project ....................................................................... 2-5Figure 2-2: Bom Sucesso Exploration License ........................................................................... 2-6Figure 3-1: Location Map and Access to Bom Sucesso ............................................................. 3-3Figure 5-1: São Francisco Craton, the Iron Quadrangle and Bom Sucesso................................ 5-5Figure 5-2: Bom Sucesso Regional Geology .............................................................................. 5-6Figure 5-3: Bom Sucesso Local Geology ................................................................................... 5-7Figure 8-1: Bom Sucesso Geology Map ..................................................................................... 8-2Figure 9-1: Bom Sucesso Drillhole Location Map ..................................................................... 9-3Figure 11-1: Graphs for Analysis of CRM APHP with Rejection Limits ................................ 11-9Figure 11-2: Graphs for Analysis of Provisional Standard CRB1 with Rejection Limits ...... 11-10Figure 11-3: Graphs of Pulp Duplicates ................................................................................. 11-11Figure 11-4: Graphs of Coarse Duplicates.............................................................................. 11-12Figure 13-1: MMX Adjacent Mineral Rights ............................................................................ 13-2Figure 14-1: Inbras LIMS Flowsheet ........................................................................................ 14-5Figure 15-1: Bom Sucesso Drillhole Location Map, Topography and Block Model Limits ... 15-7Figure 15-2: Bom Sucesso Vertical Geological Sections, Locations and 3D........................... 15-8Figure 15-3: Bom Sucesso Vertical Geologic Cross-Sections ................................................. 15-9Figure 15-4: Bom Sucesso Horizontal Geologic Sections and Extruded Solids .................... 15-10Figure 15-5: Bom Sucesso Vertical Cross-Sections with Block Model Fe Grades ................ 15-11Figure 15-6: Bom Sucesso Horizontal Geologic Sections Elevation 1035 ............................ 15-12Figure 15-7: Grade Tonnage Curve Inferred Resources ......................................................... 15-13List of AppendicesAppendix ACertificate of AuthorSRK Consulting (US), Inc. May 11, 2009Bom Sucesso_NI 43-101 Technical Report on Resources_162706_MLM_011.doc
  • 65. MMX Mineração e Metálicos S.A. IBom Sucesso Project NI 43-101 Technical Report on ResourcesSummary (Item 3)Property Description and LocationThe Bom Sucesso Project is located in south central Minas Gerais, Brazil in the municipalities ofBom Sucesso and Ibituruna approximately 150km southwest of Belo Horizonte, the capital ofMinas Gerais. The license lies between 20°57’57”S and 21°04’17S and between 44°38’30’Wand 44°43’31W and between UTM coordinates 528000E and 538000E and 7670000N and7684000N.OwnershipMMX controls one exploration license covering 755.65ha in the Project area: DNPM Process Number: 831.408/2004.The license is issued in the name of LGA Mineração e Siderurgia Ltda. (LGA). In June 2008,MMX acquired the mineral rights of the Bom Sucesso Project through its subsidiary, AVX, fromLGA.The surface rights are held by various landowners and MMX has agreements with most toconduct exploration on their exploration license.Geology and MineralizationThe Project area lies within the São Francisco Craton tectonic province of South America,southwest of the Iron Quadrangle an important iron producing region in Brazil. This region hasa complex tectonic-metamorphic history and is composed of an Archean nucleus composed of agranite-greenstone terrane and the Paleoproterozoic Minas Supergroup sequence. Intrusive rocksare of dioritic and granitic composition. The Serra Bom Sucesso ridge, formed by the meta-sedimentary rocks of the Minas Supergroup, divides the basement into two domains, east andwest.The Minas Supergroup is composed of three Groups. The lower group, the Caraça Group, isfound on the west slope of Serra de Bom Sucesso and comprises interlayered fine-grainedquartz-biotite schist and quartzite. The Itabira Group is the host of the iron formation andconsists of quartz itabirite and dolomitic itabirite. The thickness varies from 70 to 220m. At thesurface, the quartz-itabirite is friable, fine-grained and is not hydrated. Weathering decreaseswith depth and the friable itabirite passes to semi-compact and then to compact. Magnetismvaries from medium to high and the magnetite is always fine-grained. The upper group, thePiracicaba Group, is exposed on the east side of Serra de Bom Sucesso and is composed of micaquartz schist with sericitic quartzite interlayers. The Piracicaba is about 400m in thickness.The mineralization at the Project consists of itabirite in the Itabira Group with areas of supergeneenrichment through subsequent lateritic weathering. This results in a variety of differentmineralization types. There are at least four distinct lithological ore types observed in the Projectarea: Friable quartz itabirite; Semi-compact itabirite; Compact itabirite; andSRK Consulting (US), Inc. May 11, 2009Bom Sucesso_NI 43-101 Technical Report on Resources_162706_MLM_011.doc
  • 66. MMX Mineração e Metálicos S.A. IIBom Sucesso Project NI 43-101 Technical Report on Resources Carbonate itabirite.Friable quartz itabirite occurs at the surface, as observed in outcrops and roadcuts. As theclassification itself suggests, the principal characteristics of this type of ore are the grades ofsilica that vary between 6% to 10% and in granulometry that is above 19mm. The bands arecomposed of friable hematite and magnetite intercalated with bands of recrystallized quartz.The friable itabirite grades into semi-compact and then into compact itabirite with depth belowsurface. As the degree of weathering decreases, the silica content increases and the iron gradesdecrease.ExplorationPrior to 1975, little systematic exploration was conducted on the property. In that year, ICOMIinitiated exploration on the Bom Sucesso and Ibituruna mountain ridges. A groundmagnetometry geophysical survey was conducted on 36 sections spaced at 500m perpendicularto the iron formation in order to determine the thickness of the unit. Shafts and trenches werealso opened to verify the contacts indicated by geophysics. Samples were collected from theshafts and trenches and geochemical and grain size analyses were performed on them.ICOMI conducted geologic mapping at a scale of 1:5000 within the exploration license area withthe use of a handheld GPS and a topographic map generated through aerophotogrametricrestitution by Georama Aerofotogrametria Ltda. (Georama).LGA drilled a total of 23 core holes in 2007 along the strike length of the Bom Sucesso deposit.It is not known if it conducted other exploration activities.MMX has undertaken a program of geologic mapping at a scale of 1:5000, using a GPS and thetopographic base map with 1m contours (described in Section 15). The mapping concentrated ondelineating the contacts between the Caraça, Itabira, and Piracicaba Groups and not on definingthe individual occurrences of friable, semi-compact and compact itabirite. Pegamite dikes andfaults were also mapped.MMX has drilled an addition 29 core holes on the Bom Sucesso Project.Analytical MethodsLGA and MMX used SGS Geosol Laboratórios, Ltda. (SGS) located in Belo Horizonte foranalysis of drill core during its drilling program at the Project. Samples are analyzed forpercentage of Fe, SiO2, Al2O3, K2O Na2O, TiO2, P, Mn, Ca, Mg, Cu, S, FeO and LOI. MMXinserted QA/QC samples throughout the drilling program. The sample preparation and analysesfollow industry guidelines and the QA/QC indicate that the results are suitable for a resourcedatabase. The analytical techniques and sample preparation are appropriate for themineralization and deposit type.ResourceThe resource estimation for the Project was prepared for MMX by Prominas Projetos e Serviçosde Mineração LTDA (Prominas), an independent geologic and engineering consultant companyin Belo Horizonte. The resource was audited by SRK.MMX estimated values for Fe, SiO2, Al2O3, P, Mn, MgO, CaO, TiO2, LOI, FeO, K2O, Na2O, Cuand S. The grade estimation was done in two passes using the Inverse Distance Squared (ID2)SRK Consulting (US), Inc. May 11, 2009Bom Sucesso_NI 43-101 Technical Report on Resources_162706_MLM_011.doc
  • 67. MMX Mineração e Metálicos S.A. IIIBom Sucesso Project NI 43-101 Technical Report on Resourcesalgorithm. The first pass had a range of 1000m and the second a range of 2000m. A minimumof 1 composite was required for both passes.Because the estimation in the vertical direction was unconstrained, a surface was created definedby the base of the drillholes to limit the classification of Inferred Resources.The Inferred Resources were classified according to the following parameters: Estimated in Pass 1; Maximum distance to the closest composite less than 400m; and Above the surface defined by the base of the drillholes.The Inferred Resources for the Bom Sucesso Project are listed in Table 1.Table 1: Inferred Mineral Resources, April 15, 2009, Tonnes on a Wet Basis Lithology Class Mt* Fe SiO2 Al2O3 P Mn LOI Friable Inferred 52 42.05 34.32 1.28 0.049 0.385 2.39 Semi-compact Inferred 21 38.28 40.47 0.67 0.043 0.168 1.53 Compact Inferred 291 27.14 43.29 1.30 0.039 0.169 3.09 Total Inferred 365 29.93 41.84 1.26 0.041 0.200 2.90*The Total Inferred Resources are not equal to the sum of the tonnages by lithology due to rounding.MMX has estimated potential resources as all blocks estimated in Pass 2 and blocks estimated inPass 1 that were not classified as Inferred Resources. The potential resource for the BomSucesso Project is between 500 and 740Mt at an approximate Fe grade of 27.5%. The potentialresource is about 95% compact itabirite most of which is below the depth of drilling andestimated in the second pass.Potential resources are highly speculative and there is no guarantee that future drilling will proveup the tonnage or grade.Conclusions and RecommendationsField Surveys and DrillingMMX has conducted surface geologic mapping over the entire extent of the itabirite within itsmineral license area at a scale of 1:5000. Mapping was focused on identifying contacts betweenthe Caraça, Itabira, and Piracicaba Groups and not on defining the individual occurrences offriable, semi-compact and compact itabirite within the Itabira Group. Pegamite dikes and faultswere also mapped.LGA drilled 23 core holes with an average depth of 35.2m. The drilling was focused on thefriable itabirite and was halted when the compact itabirite was encountered. Core recovery wasgenerally poor.MMX has drilled 29 core holes with an average depth of 131.1m and drilling continued into thecompact itabirite. Core recovery was greater than 95%.All the drilling has been on sections that are irregularly spaced between 100 and 700m, with afew at 1000m.SRK considers that the work cone by MMX meets industry best practices for iron ore deposits.SRK Consulting (US), Inc. May 11, 2009Bom Sucesso_NI 43-101 Technical Report on Resources_162706_MLM_011.doc
  • 68. MMX Mineração e Metálicos S.A. IVBom Sucesso Project NI 43-101 Technical Report on ResourcesAnalytical and Testing DataMMX is using appropriate sample preparation and analytical techniques for the mineralizationand deposit type, MMX is also meeting industry best practice in the submission of standards andduplicates and the analytical results are valid for resource estimation.Exploration ConclusionsA total of 52 holes have been drilled over the 5km strike length of the deposit. This density ofdrilling is adequate for an inferred resource in areas where the holes are more closely spaced.MMX’s mapping and drilling programs have been conducted according to industry best practicesand have produced results that are suitable for resource estimation.Resource EstimationThe resource estimation for the Project was prepared by Prominas, an independent geologic andengineering consultant company in Belo Horizonte, under MMX supervision and was audited bySRK. The estimation was conducted in two passes, with the first using a search distance of1000m and the second a search distance of 2000m. The ID2 algorithm was used for theestimation, requiring a minimum of one sample in both passes. Resources were classified asInferred if estimated in the first pass and if the closest composite was within 400m of the blockcentroid. Another qualification of inferred classification was that the block centroid had to lieabove a surface defined by the base of the drilling. SRK considers that the estimationmethodology and classification meet CIM guidelines for estimating and classifying resources.RecommendationsSRK recommends the following for the Bom Sucesso Project: Infill drilling to a 400m by 200m grid – 50 drillholes at an average depth of 135m. This program is designed to produce an Indicated Resource for the property; o 6750m at a cost of US$300/m, including assays – US$2 million. Additional metallurgical and process testing to define a process flowsheet; o Estimated $US200,000.SRK recommends the following additions to MMX’s QA/QC program: QA/QC results are monitored and reviewed as it is received from the analytical lab during all exploration programs; 5% to 10% of the samples be submitted to a secondary laboratory for analysis using the same analytical and preparation techniques used at the primary lab; o Submission to a secondary lab should be done throughout the exploration program as part of QA/QC. Continued monitoring of CRM APHP; and Monitor and graph analytical results through time to detect any instrument drift at the laboratory.SRK Consulting (US), Inc. May 11, 2009Bom Sucesso_NI 43-101 Technical Report on Resources_162706_MLM_011.doc
  • 69. MMX Mineração e Metálicos S.A. 1-1Bom Sucesso Project NI 43-101 Technical Report on Resources1 Introduction (Item 4)SRK Consulting (US), Inc., (SRK) was commissioned by MMX Mineração e Metálicos S.A.(MMX) to prepare a Canadian Securities Administrators (CSA) National Instrument 43-101 (NI43-101) compliant Technical Report on Resources for the Bom Sucesso Iron Ore Project (theProject) controlled by AVG Mineraçao S/A, a subsidiary of MMX Sudeste Mineração Ltda.(MMX Sudeste), a 100% owned subsidiary of MMX.The Project is located in south central Minas Gerais, Brazil in the municipalities of Bom Sucessoand Ibituruna approximately 150km southwest of Belo Horizonte, the capital of Minas Gerais.Bom Sucesso is an early stage exploration project.Form NI 43-101F1 was used as the format for this report. This report is prepared using theindustry accepted Canadian Institute of Mining, Metallurgy and Petroleum (CIM) “Best Practicesand Reporting Guidelines” for disclosing mineral exploration information, the CanadianSecurities Administrators revised regulations in NI 43-101 (Standards of Disclosure for MineralProjects) and Companion Policy 43-101CP, and CIM Definition Standards for MineralResources and Mineral Reserves (December 11, 2005).Certain definitions used in this Technical Report on Resources are defined in the body of textand in the glossary in Section 21.1.1 Terms of Reference and Purpose of the ReportThis Technical Report on Resources is intended to be used by MMX to further the developmentof the Project by providing an independent audit of the mineral resource estimates andclassification of resources.MMX may also use this Technical Report on Resources for any lawful purpose to which it issuited. This Technical Report on Resources has been prepared in general accordance with theguidelines provided in NI 43-101 Standards of Disclosure for Mineral Projects.1.2 Reliance on Other Experts (Item 5)SRK’s opinion contained herein is based on information provided to SRK by MMX throughoutthe course of SRK’s investigations as described in Section 1.2.1, which in turn reflect varioustechnical and economic conditions at the time of writing.SRK reviewed certain materials pertaining to a limited amount of correspondence, pertinentmaps and agreements to assess the validity and ownership of the mining concessions. However,SRK did not conduct an in-depth review of mineral title and ownership; consequently, noopinion will be expressed by SRK on this subject.SRK is of the opinion that the information concerning the properties presented in this report(within or not produced by SRK) adequately describes the properties in all material respects.1.2.1 Sources of InformationThe underlying technical information upon which this Technical Report is based represents acompilation of work performed by MMX and its contracted independent consulting firms.SRK Consulting (US), Inc. May 11, 2009Bom Sucesso_NI 43-101 Technical Report on Resources_162706_MLM_011.doc
  • 70. MMX Mineração e Metálicos S.A. 1-2Bom Sucesso Project NI 43-101 Technical Report on ResourcesThe studies and additional references for this Technical Report on Resources are listed in Section20. SRK has reviewed the Project data and incorporated the results thereof, with appropriatecomments and adjustments as needed, in the preparation of this Technical Report on Resources.The authors reviewed data provided by MMX including hard copy and digital files located in theProject and MMX’s offices in Brazil. Discussions on the geology and mineralization wereconducted with MMX’s technical team. The drillhole assay database was prepared by MMX andverified by SRK.Leah Mach is a Qualified Person as defined by NI 43-101.1.3 Qualifications of Consultants (SRK)The SRK Group is comprised of over 850 staff, offering expertise in a wide range of resourceengineering disciplines. The SRK Group’s independence is ensured by the fact that it holds noequity in any project and that its ownership rests solely with its staff. This permits SRK toprovide its clients with conflict-free and objective recommendations on crucial judgment issues.SRK has a demonstrated record of accomplishment in undertaking independent assessments ofMineral Resources and Mineral Reserves, project evaluations and audits, technical reports andindependent feasibility evaluations to bankable standards on behalf of exploration and miningcompanies and financial institutions worldwide. The SRK Group has also worked with a largenumber of major international mining companies and their projects, providing mining industryconsultancy service inputs.This report has been prepared based on a technical and economic review by a team of consultantssourced principally from the SRK Group’s Denver, US office. These consultants are specialistsin the fields of geology exploration, mineral resource and mineral reserve estimation andclassification, open pit mining, mineral processing and mineral economics.Neither SRK nor any of its employees and associates employed in the preparation of this reporthas any beneficial interest in MMX or in the assets of MMX. SRK will be paid a fee for thiswork in accordance with normal professional consulting practice.The individuals who have provided input to this Technical Report are listed below. Ms. LeahMach is the Qualified Person responsible for all sections and the overall preparation of thisIndependent Engineer’s Report.The key Project personnel contributing to this report are listed in Table 1.3.1. Ms. Mach’sCertificate of Author is provided in Appendix A.Table 1.3.1: Key SRK Project Personnel Name Responsibility Leah Mach Geology, Resource George Borinski Environmental, Permitting Dorinda Bair Laboratory QA/QC1.3.1 Site VisitLeah Mach, the Qualified Person for this report, made a site visit to the Property on February 12,2009. The site visits consisted of reviewing the drill core and logging procedures, and visitingseveral outcrops at the Project area.SRK Consulting (US), Inc. May 11, 2009Bom Sucesso_NI 43-101 Technical Report on Resources_162706_MLM_011.doc
  • 71. MMX Mineração e Metálicos S.A. 1-3Bom Sucesso Project NI 43-101 Technical Report on Resources1.4 Units of MeasureMetric units are used throughout this report, except where otherwise stated.1.5 Effective DateThe effective date of this Technical Report on Resources is May 10, 2009. The effective date ofthe resources is April 15, 2009. The resource estimation includes drilling and assays receivedthrough March 2009.SRK Consulting (US), Inc. May 11, 2009Bom Sucesso_NI 43-101 Technical Report on Resources_162706_MLM_011.doc
  • 72. MMX Mineração e Metálicos S.A. 2-1Bom Sucesso Project NI 43-101 Technical Report on Resources2 Property Description and Location (Item 6)2.1 Property LocationThe Project is located approximately 150km southwest of Belo Horizonte, and approximately250km northwest of Rio de Janeiro in Minas Gerais State, Brazil (Figure 2-1). The Projectconsists of one exploration license located near the cities of Bom Sucesso and Ibituruna in southcentral Minas Gerais. The license lies between 20°57’57”S and 21°04’17S and between44°38’30’W and 44°43’31W and between UTM coordinates 528000E and 538000E and7670000N and 7684000N (Figure 2-2). The Project lies within the municipalities of BomSucesso and Ibituruna.2.2 Mineral TitlesMining rights in Brazil are governed by the Mining Code and additional rules enacted byBrazil’s National Department of Mineral Production (DNPM), which is the governmental agencycontrolling mining activities throughout the country. Each application for an exploration orexploitation permit is represented by a mineral claim submitted to DNPM.Brazilian mining legislation dictates that the holder of an exploration license will pay annualtaxes to the DNPM based on the number of hectares held under the license, pay all expensesrelated to DNPM site inspections of the permit area, and will submit an exploration work reportto the DNPM prior to the expiration date of the permit. The detailed requirements are listed inTable 2.2.1.Table 2.2.1: Obligations of Brazilian Exploration Permit Holders Rule Description Applicable Law Provision Payment of DNPM’s The mineral right holder shall pay to DNPM the Mining Code, article 20. Annual Tax Annual Tax per Hectare (TAH) until the end of the exploration work. TAH is charged in the amount of: (i) R$1.55 per hectare, during the effective period of the authorization in its original term and (ii) R$2 per hectare, if the authorization term had been already extended. In case of default, DNPM shall impose penalties. If the penalties are not duly paid, DNPM may even cancel the Exploration Permit. Payment of DNPM’S The mining right holder shall be responsible for Mining Code, article 26, Expenses for Related expenses incurred by DNPM with inspections in the forth paragraph. Inspections exploration area. Exploration Work Report Before the authorization’s expiration date, the Mining Code, article 22, V. mining right holder shall submit to DNPM the due exploration work report.Compliance with the obligations mentioned above is essential for the mining right holder to keepits mineral claims in good standing, according to the applicable laws.At this time, MMX controls one exploration license covering 755.65ha in the Project area: DNPM Process Number: 831.408/2004.SRK Consulting (US), Inc. May 11, 2009Bom Sucesso_NI 43-101 Technical Report on Resources_162706_MLM_011.doc
  • 73. MMX Mineração e Metálicos S.A. 2-2Bom Sucesso Project NI 43-101 Technical Report on ResourcesThe license is issued in the name of LGA Mineração e Siderurgia Ltda. (LGA). In June 2008,MMX acquired the mineral rights of the Bom Sucesso Project through its subsidiary, AVX, fromLGA.The exploration report described in Table 2.2.1 was filed by LGA on September 12, 2007. TheDNPM requested additional information and LGA filed the requested information on November11, 2008. The exploration report was approved on May 6, 2009 and the company now has a yearto present an Economic Feasibility Plan (Plano de Aproveitamento Economico) to the DNPM.A request has been made to change the name of the owner to MMX, but the request may have tobe resubmitted following acceptance of the exploration report.2.3 Legal SurveysThe mineral licenses in Brazil are paper filings and do not require the actual location ofmonuments on the ground. The filing includes descriptions of the corners of the licenses inGeographical Coordinate System using the South American Provisional 1956 datum.2.4 Surface RightsThe surface rights are held by various landowners and MMX has agreements with most toconduct exploration on their exploration license. Should the Project progress to the miningphase, agreements will have to be made with, and compensation paid to, the landowners.2.5 Location of MineralizationThe mineralization described in this report are completely contained within the boundaries of theexploration license.2.6 Royalties, Agreements and EcumbrancesIn June 2008, MMX acquired the mineral rights of the Bom Sucesso Project through itssubsidiary, AVX, from LGA. The purchase price was US$193.3 million payable in four semi-annual consecutive installments, from July 2008 through January 2010. The purchase price mayaccrete by a variable portion of US$0.80 per additional tonne of iron ore over a base of 241.6million tonnes, to be measured during an 18-month period following the acquisition and indexedto the Consumer Price Index. LGA will not hold a royalty on future production.Once an exploration license is converted to a mining license, the owner must also comply withspecific rules set forth by Brazil’s mining legislation. These include a tax called theCompensation for the Exploitation of Mineral Resources (CFEM) which is levied on the sale ofraw or improved minerals. This tax is based on the type of commodity. The holder of the permitwill also financially compensate the entity entitled to the surface rights and provide DNPM anannual report describing production during the preceding year. This report must be received byMarch 15th of each year. The detailed requirements are listed in Table 2.6.1.SRK Consulting (US), Inc. May 11, 2009Bom Sucesso_NI 43-101 Technical Report on Resources_162706_MLM_011.doc
  • 74. MMX Mineração e Metálicos S.A. 2-3Bom Sucesso Project NI 43-101 Technical Report on ResourcesTable 2.6.1: Financial Obligations of Brazilian Mining Operations Rule Description Applicable Law Provision Payment of CFEM Tax The exploiter shall pay a CFEM tax called Financial Federal Law # 7.990, articles Compensation for the Exploitation of Mineral Resources 1 and 6. (CFEM), levied on the sale of raw or improved mineral, at a rate of: (i) 3% (three per cent) for manganese, potassium, rock salt Decree # 01*, article 15. and aluminum ore; (ii) 2% (two per cent) for iron, fertilizers, coal and other mineral substances; (iii) 1% (one per cent) for Federal Law # 8.001. gold; and (iv) 0,2% (zero point two per cent) for precious stones, cuttable gemstones, carbonates and precious metals. According to DNPM Act # 439, article 2, any defaulting party shall not be able to apply (i) for the extension of Exploration Permit terms; (ii) for temporary interruption of the exploitation; (iii) for DNPM’s approval of company mergers, acquisitions or spin- offs, as well as mining rights assignments and transfers. Surface Entitled Person Compensation The exploiter shall also pay the person entitled to the surface Mining Code, article 11, item area a compensation of 50% (fifty per cent) of CFEM’s due “b”. amount. Exploitation Annual Report The exploiter shall also present to DNPM, every year, by March Mining Code, article 47, XVI 15th, an exploitation annual report. Mentioned report shall and article 50. describe all the crucial aspects regarding the exploitation during the respective year. In case the report is not presented, DNPM shall impose penalties.The Bom Sucesso Project would be subject to the CFEM tax of 2% for iron ore (Table 2.6.1) anda royalty to the landowners equal to 50% of the CFEM tax should it go into production.2.7 Environmental Liabilities and Permitting2.7.1 Required Permits and StatusMMX was not required to obtain an environmental license for its drilling program as it was notnecessary to disturb the vegetation. For future infill drilling, it will be necessary to obtain thefollowing licenses: Licenca de Desmate to cut vegetation and establishment of a Reserva Legal, an environmental preserve to be located outside the license area. The area of the Reserva Legal must be 20% of the disturbance area; and Authorization to use water for drilling; andAs required by Brazilian National Environmental Policy, established August 31, 1981 by FederalLaw #6.938, all potentially or effectively polluting activities are subject to an environmentallicensing process. Rules regarding the licensing procedure were established by resolution #237of Conselho Nacional do Meio Ambiente (CONAMA), on December 19, 1997. The issuingagency determines the conditions, limits, and measures for the control and use of naturalresources, and permits the installation and implementation of a project. The license is issued byeither a federal, state or a municipal agency. Authority to issue a license is based on the arealextent for the proposed impact and generally follows the rules established by CONAMA’sResolution #237/97 listed below: Federal entities are responsible for licensing activities, which may cause national or regional environmental impact (more than two federal States); State entities and Federal District Entities are responsible for the activities which may cause State environmental impact (two or more cities); andSRK Consulting (US), Inc. May 11, 2009Bom Sucesso_NI 43-101 Technical Report on Resources_162706_MLM_011.doc
  • 75. MMX Mineração e Metálicos S.A. 2-4Bom Sucesso Project NI 43-101 Technical Report on Resources Municipal entities are responsible for licensing the activities, which may cause local environmental impact (within city limits).The license may be issued in one of the forms described in Table 2.7.1.1.Table 2.7.1.1: Environmental Licensing Stages of Brazilian Mining Projects License Description Preliminary License (PL) Indicates the enterprise environmental viability. Approves the location and concept of the Project. Is subject to a specific environmental impact assessment and a formal public hearing. Installation License (IL) Authorizes the initiation of the Project. Permits the engineering work and is subject to the presentation of an environmental control plan, similar to the Environmental Action Plan (EAP). Operation License (OL) Allows the beginning of the operation. The company is required to provide evidence that all the environmental programs and control systems were duly installed.For any activities where the environmental impact may be considered significant, anenvironmental impact study and the EIA/RIMA generated must be presented to the appropriategovernmental licensing agency. In addition, the applicable government agency and the Projectowner are required to publish all related information and provide for public hearings if required,according to the regulation of each location.MMX has initiated studies for the Environmental Impact Statement that is required to obtain aPL.2.7.2 Compliance EvaluationMMX is in compliance with the environmental requirements for the exploration and drilling stateof the Project.2.7.3 Environmental LiabilitiesMMX has informed SRK that there are no environmental liabilities at the Project and none wereobserved during the site visit.SRK Consulting (US), Inc. May 11, 2009Bom Sucesso_NI 43-101 Technical Report on Resources_162706_MLM_011.doc
  • 76. Bom Sucesso Project, General Location Map of the Brazil ProjectSRK Job No.: 162706.01File Name: Figure 2-1.doc Source: MMX Mineração e Metálicos S.A Date: 04/15/2009 Approved: LEM Figure: 2-1
  • 77. Bom Sucesso Project, Bom Sucesso Brazil Exploration LicenseSRK Job No.: 162706.01File Name: Figure 2-2.doc Source: MMX Mineração e Metálicos S.A Date: 04/15/2009 Approved: LEM Figure: 2-2
  • 78. MMX Mineração e Metálicos S.A. 3-1Bom Sucesso Project NI 43-101 Technical Report on Resources3 Accessibility, Climate, Local Resources, Infrastructure and Physiography (Item 7)The Project is located approximately 150km southwest of Belo Horizonte, and approximately250km northwest of Rio de Janeiro in Minas Gerais State, Brazil. The Project area lies between20°57’57”S and 21°04’17S and between 44°38’30’W and 44°43’31W and between UTMcoordinates 528000E and 538000E and 7670000N and 7684000N within the municipalities ofBom Sucesso and Ibituruna.3.1 Topography, Elevation and VegetationThe Bom Sucesso Project is located in south central Minas Gerais, an area characterized bygently rolling hills with moderate relief. The Project is located on the Serra do Bom Sucesso, aprominent ridge supported by quartzite and iron formation. The ridge trends N30°E and has anelevation of about 1200masl. The maximum relief in the area is about 400m.The main drainage in the area is the Rio das Mortes which is a tributary of the Rio Grande. Thevalleys are open and the drainage pattern is dendritic.The natural vegetation of the region is semi-humid forest, however, little remains of the originaltropical forest. The forests have been cleared for pasture and coffee plantations. Some smallareas of natural vegetation remain on the higher slopes of the ridge lines where trees up to 30min height may be found with shrubs, lychnophore, and creeping vines.3.2 Climate and Length of Operating SeasonThe regional climate is semi-humid The average temperature is 19°C, varying between highs of30 to 36° in the summer months and lows of 4 to 6° in the winter. The hottest months areNovember and December and the coolest months are June and July.The seasons are well defined with dry winters and rainy summers. The average annualprecipitation is 1600mm, with the maximum of 290mm in January and the minimum of 16mm inJuly.Exploration and any future mining operations would not be affected by the climate.3.3 Access to PropertyThe Project is located in the municipalities of Bom Sucesso and Ibituruna approximately 150kmsouth of Belo Horizonte. Access from Belo Horizonte is via the Fernão Dias Highway (BR381)to exit 638 and then by MG332 to Bom Successo (Figure 3-1). Fernão Dias Highway is a majorhighway that connects Belo Horizonte and São Paulo. From Bom Sucesso, the Project can beaccessed by either of two routes: the first is 6km of paved road that leads to São Thiago and thesecond is 6km of paved road and then 4km of unpaved road that leads to Ibituruna.The city of Bom Sucesso is also served by the Central Atlantic Railway, the Ferrovia CentroAtlântica (FCA).SRK Consulting (US), Inc. May 11, 2009Bom Sucesso_NI 43-101 Technical Report on Resources_162706_MLM_011.doc
  • 79. MMX Mineração e Metálicos S.A. 3-2Bom Sucesso Project NI 43-101 Technical Report on Resources3.4 Surface RightsThe exploration license contains sufficient land to support any future mining and processoperations. Negotiations will have to be made with the local landowners for purchase of land tosupport any future mining operations.3.5 Local Resources and InfrastructureThe state of Minas Gerais is a major mining area in Brazil. The Iron Quadrangle, has historicallybeen, and continues to be, a major producer of iron ore.3.5.1 Access Road, Transportation and PortAccess to the Project is via federal and state highways as described in Section 3.3.MMX is considering a 40km slurry pipeline from Bom Sucesso to the MRS Logística S.A.railway (MRS). MMX has a long term agreement with MRS to transport its current iron oreproduction to Sepetiba and/or MMX’s Sudeste port in the State of Rio de Janeiro. Agreementwill be expanded to include all of MMX Sudeste’s future production. The Sudeste port iscurrently being developed by LLX Logística S.A. and operations are planned to start in 2001.Figure 3-1 shows the locations of the Bom Sucesso Project, the MRS railway and the Sudesteport.3.5.2 Power SupplyThere are two power lines that run within 7.5km of the site: Energy System Lavras (SE Lavras) with transmission tension of 138kV; and Energy System Itutinga (SE Itutinga-Furnas) with transmission tension of 138kV.3.5.3 Water SupplyMMX contracted Potamos Engenharia e Hidrologia Ltda. to produce a hydrology study in 2008.The conclusion of the study was that sufficient water could be obtained from the Rio Das Mortesto sustain future mining and processing operations.3.5.4 Buildings and Ancillary FacilitiesThe office and core facility that supports the exploration activities is located in the city of BomSucesso. There are no buildings located at the Project site.3.5.5 Tailings Storage and Waste DumpsMMX is currently studying options for tailings and waste rock storage, with a priority of usingthe pit as the storage facility.3.5.6 ManpowerThe Project is currently being staffed by 40 employees and contracted personal of MMX. MinasGerais is a major mining center and has a pool of skilled miners. Any future mining operationscould be staffed from the local populace.SRK Consulting (US), Inc. May 11, 2009Bom Sucesso_NI 43-101 Technical Report on Resources_162706_MLM_011.doc
  • 80. Bom Sucesso Project, Location Map and Access to Brazil Bom SucessoSRK Job No.: 162706File Name: Figure 3-1doc Source: MMX Mineração e Metálicos S.A Date: 3/19/2009 Approved: LEM Figure: 3-1
  • 81. MMX Mineração e Metálicos S.A. 4-1Bom Sucesso Project NI 43-101 Technical Report on Resources4 History (Item 8)4.1 OwnershipStarting in 1949, the Bom Sucesso property was controlled by Sociedade Siderúgia BomSucesso, owned by the Castro family. Pig iron was produced between 1954 and 1964. SiderúgiaSudoeste de Minas Gerais (SISUMG) was established in 1959 and produced pig iron from theNorth and South Mines between 1959 and 1968. This plant was sold, remodeled, and startedoperations again in 1970. The plant was closed in 1975 and dismantled.In 1975, Indústria e Comércio de Minérios S.A. (ICOMI) began exploration in the area.The DNPM issued the exploration license, DNPM Process Number 831.408/2004, to ManoelFerreira Filho on April 1, 2004. On August 9, 2007, Mr. Ferreira sold the mineral rights to LGAand that agreement was approved by the DNPM on May 13, 2008. The final exploration reportwas presented to the DNPM on September 12, 2007, signed by both LGA and Mr. Ferreira. Theexploration report was approved by the DNPM on May 6, 2009.4.2 Past Exploration and DevelopmentPrior to 1975, little systematic exploration was conducted on the property. In that year, ICOMIinitiated exploration on the Bom Sucesso and Ibituruna mountain ridges. A groundmagnetometry geophysical survey was conducted on 36 sections spaced at 500m perpendicularto the iron formation in order to determine the thickness of the unit. Shafts and trenches werealso opened to verify the contacts indicated by geophysics. Samples were collected from theshafts and trenches and geochemical and grain size analyses were performed on them.ICOMI conducted geologic mapping at a scale of 1:5000 within the exploration license area withthe use of a handheld GPS and a topographic map generated through aerophotogrametricrestitution by Georama Aerofotogrametria Ltda. (Georama).LGA drilled a total of 23 core holes in 2008 along the strike length of the Bom Sucesso deposit.It is not known if it conducted other exploration activities.4.3 Historic Mineral Resource and Reserve EstimatesPrior to LGA’s involvement there were no published resources or reserves.4.4 Historic ProductionThere are no records of the historic production in the area, but from the extent of the open pitworkings, it is considered to be small.SRK Consulting (US), Inc. May 11, 2009Bom Sucesso_NI 43-101 Technical Report on Resources_162706_MLM_011.doc
  • 82. MMX Mineração e Metálicos S.A. 5-1Bom Sucesso Project NI 43-101 Technical Report on Resources5 Geologic Setting (Item 9)Bom Sucesso is located in the São Francisco craton in south central Minas Gerais. The area wasincluded in a map, São João del Rei, by Erichsen (1929). The lithologies are part of the MinasSupergroup which is one of the major iron formations in the Iron Quadrangle.Quéméneur and Baraud (1983) mapped the area at a scale of 1:50,000 and developed aninterpretation of the geology. A map was published of the southern Serra de Bom Sucesso byMoretzsohn and Soares Filho (1982). Quéméneur (1987) continued mapping at a scale of1:25,000 principally in the Serra Ibituruna. The regional distribution of the Minas Supergroup isshown in Figures 3-1 and 5-1.The area is included in the Lavras sheet of the South Minas Project undertaken by the stateowned exploration company, Companhia Mineradora de Minas Gerais (COMIG) and the FederalUniversity of Minas Gerais (UFMG) (2003).5.1 Regional GeologyThe Project area lies within the São Francisco Craton tectonic province of South America shownin Figure 5-1. Located southwest of the Iron Quadrangle, the Project is underlain by the samelithological units. This region has a complex tectonic-metamorphic history and is composed ofan Archean nucleus composed of a granite-greenstone terrane and the Paleoproterozoic MinasSupergroup sequence. Intrusive rocks are of dioritic and granitic composition.The São Francisco Craton (Almeida 1977) tectonic province was not affected by the Braziliandeformation. As seen in Figure 5-1, it is a crustal portion bordered by Brazilian fold belts thatdeveloped during orogenesis culminating in the formation of Gondwana approximately 650Ma.The basement of the craton was subjected to the Jequié/Rio das Velhas and Transamazonictectonic-metamorphic events that preceded the Brazilian deformation. There are variousevolutionary models proposed for the Iron Quadrangle region, and this area is still extensivelystudied.5.1.1 StratigraphyThe Serra Bom Sucesso ridge, formed by the meta-sedimentary rocks of the Minas Supergroup,divides the basement into two domains, east and west. Figure 5-2 is a geological map of thenorth-central region of Serra de Bom Sucesso.Archean and Paleoproterozoic BasementWestern DomainThe western domain exhibits an east-west structural trend corresponding to the oldest structureof the region. It is an Archean terrain comprising gneisses of tonalite-trondhjemite-graodiorite(TTG) composition that have reached the granulite facies of metamorphism. The gneissesenclose mafic and ultramafic rocks as well as Neoarchean intrusive bodies of charnockite andgranite. The charnockitic intrusions include numerous lenticular bodies of enderbite, tonalite,anorthosite and gabbro. The granitic intrusions are calc-alkaline or peraluminous. The BomSucesso Granite exhibits incipient gneissic characteristics and is calc-alkaline in composition andis rich in potassium, similar to the charnockites. The peraluminous granites also exhibit incipientgneissic characteristics and may be older than the Bom Sucesso Granite. Another importantSRK Consulting (US), Inc. May 11, 2009Bom Sucesso_NI 43-101 Technical Report on Resources_162706_MLM_011.doc
  • 83. MMX Mineração e Metálicos S.A. 5-2Bom Sucesso Project NI 43-101 Technical Report on Resourcesintrusive body is the ultramafic massif of the Morro das Almas, which is a probable layeredintrusion constituted essentially of serpentinite.Eastern DomainPaleoproterozoic rocks predominate in the eastern domain and metamorphism does not exceedthe amphibolites facies. Greenstone belts are constituted of amphibolites with lesser meta-ultramafic rocks. The amphibolites are predominately tholeiitic metabasalts. The ultramaficrocks vary from komatiite to komatiitic basalt. Layers of gondite occur in the southerngreenstones. The greenstone belts are characterized by alternating layers of amphibolites withfine-grained orthogneiss. These two lithotypes form a large-scale fold with an axial planeoriented east-northeast.Three plutonic suites occur in the Eastern Domain: gabbro-dioritic, tonalitic, and granitic.These suites are part of the magmataic arc which developed on the southern border of the SãoFrancisco Craton. The gabbro-dioritic plutons are predominately diorite and portions wereaffected by the shearing characteristic of the Serra de Bom Sucesso. There are two maintonalitic intrusions – the Tabuões and Casserita, and a few smaller intrusions. Most of thegranitic intrusions are located north of the outcrops of the Andrelândia Megasequence of meta-sediments. The Itutinga and Itumirim granites exhibit marked gneissic foliation formed duringthe Brazilian Orogenesis. The Ritápolis Granite exhibits almost no deformation. The pegmatitesthat extend from the Volta Grande to the Rio do Peixe is genetically related to the Ritápolisgranite.Minas SupergroupThe Paleoproterozoic Minas Supergroup forms a narrow band oriented N30°E between 500 and1000m in width and with a length of about 30km. Three stratigraphic levels have been identifiedfrom bottom to top, the Caraça, the Itabira and the Piracicaba Groups.Caraça GroupThe Caraça Group is the basal unit of the Manas Supergroup and consists of inter-layered quartz-biotite schist and fine-grained quartzite. The majority of outcrops of this unit show alteration byweathering. On the western slope of Serra de Bom Sucesso, the thickness of this group is morethan 300m.Itabira GroupThe Itabira Group consist of two types of itabirite: quartz-itabirite and dolomitic itabirite. Thequartz-itabirite is fine-grained with millimetric banding of layers rich in hematite and magnetiteand layers constituted essentially of quartz. The magnetism varies from medium to high and themagnetite is always fine-grained. Weathering has affected the itabirite by removing silica andthereby upgrading the iron content. Friable itabirite grades to semi-compact to compact withdepth below surface.The dolomitic itabirite has been found only in drillholes. It consists of millimetric banding ofhematite/magnetite and quartz/calcite/dolomite. The magnetite is fine-grained and highlymagnetic. Amphiboles are also found in the foliation. The dolomitic itabirite is from 60 to270m in thickness. Dikes and sills of metabasic rocks cut this unit.SRK Consulting (US), Inc. May 11, 2009Bom Sucesso_NI 43-101 Technical Report on Resources_162706_MLM_011.doc
  • 84. MMX Mineração e Metálicos S.A. 5-3Bom Sucesso Project NI 43-101 Technical Report on ResourcesPiracicaba GroupThe Piracicaba Group is exposed on the east side of Serra de Bom Sucesso. It consists of coarsemica quartz schist with interlayered sericitic quartzite. It also contains lenses of itabiriteintercalated in the schist. This itabirite was detected in the magnetometry survey conducted byICOMI. This unit is about 400m thick and it is crossed by dikes and pegmatite sills.Mesoproterozoic and Neoproterozoic Meta-sedimentsMesoproterozoic and Neoproterozoic meta-sediments are found in nappe structures that evolvedduring the Brazilian orogensis. The Carandal Mega-sequence consists of meta-pelites and meta-calcareous rocks. The Andrelândia Megasequence comprises biotite gneiss, phyllite, schist andquartzite. Both sequences show metamorphism of greenschist to amphibolites facies.Mafic DikesAll of the rocks described above have been cut by a large number of mafic dikes trendingnorthwest-southeast. The dikes are diabase and gabbro in composition and grain size, andcontain pyroxene and amphibole. They appear to have been formed in more than one magmaticevent and have been age-dated at 2,000 to 700Ma.5.1.2 StructureThe western domain exhibits an east-west structural trend that corresponds to the oldeststructures in the region. The north-northeast structures of Serra de Bom Sucesso is related to theTransamazonic orogenesis and is associated with important zones of shearing with sinistralmovement.Three phases of deformation have been attributed to the Brazilian orogenesis. The first two (D1and D2) are related to the evolution of the Brasilia Band and are interpreted to have beengenerated during a phase of progressive deformation that produced nappes with tectonictransport to the southeast (D1) and east-northeast (D2). The D1 folding, at microscopic andmacroscopic scale, is better observed in D2 joints. D2 folding is mesoscopic in scale and isgenerally isoclinal with an axial plane schistosity that corresponds to the principal foliation of themeta-sediments.The mineral indicators of the metamorphic event associated with D1 and D2 deformation includechlorite chloritoid, biotite, garnet, staurolite and kyanite that appear successively as themetamorphic grade increases. D1 and D2 structures were later deformed by D3, generatingpatterns of folding of regional dimension. D3 is characterized as a progressive deformationrelated to tectonic movements to the north-northwest and is attributed to the evolution of theRibeira Band. This phase of deformation generated folding that passes from open, with steepaxial planes trending north-south and sub-horizontal axes to closed folds with sub-vertical axialplanes trending southwest.5.2 Local GeologyBasement rocks and rocks of the Minas Supergroup are found within the license area.5.2.1 Local LithologyBasement granite and gneiss outcrop in the northern portion of the license area where theRibeirão Tabuões crosses Serra de Bom Sucesso.SRK Consulting (US), Inc. May 11, 2009Bom Sucesso_NI 43-101 Technical Report on Resources_162706_MLM_011.doc
  • 85. MMX Mineração e Metálicos S.A. 5-4Bom Sucesso Project NI 43-101 Technical Report on ResourcesThe Caraça Group is found on the west slope of Serra de Bom Sucesso and comprisesinterlayered fine-grained quartz-biotite schist and quartzite. The majority of outcrops are highlyweathered. The unit is up to 200m thick in the Project area.The Itabira Group is the host of the iron formation and consists of quartz itabirite and dolomiticitabirite. The thickness varies from 70 to 220m. At the surface, the quartz-itabirite is friable,fine-grained and is not hydrated. Weathering decreases with depth and the friable itabirite passesto semi-compact and then to compact. Magnetism varies from medium to high and the magnetiteis always fine-grained. Amphiboles and chlorite give a greenish-gray color to the itabirite.There are no outcrops of dolomitic itabirite which has been encountered only in drillholes.Dolomitic itabirite exhibits millimetric banding of hematite/magnetite andquartz/calcite/dolomite. It is fine-grained and highly magnetic. Where the calcite/dolomitebands are thicker, in the order of 10cm, millimetric magnetite occurs. Amphibole is noted in thefoliation of this itabirite.The Piracicaba Group is exposed on the east side of Serra de Bom Sucesso and is composed ofmica quartz shale with sericitic quartzite interlayers. The Piracicaba is about 400m in thickness.Mafic and pegamitic dikes cross-cut the three units of the Minas supergroup, with the maficdikes more prominent in the central part and the pegamitic dikes and sills more prominent in thenorth.Figure 5-3 is a geological map of the license area as mapped by ICOMI in the 1970’s.5.2.2 AlterationAlteration consist of weathering that has resulted in a decrease of silica in the itabirite with anaccompanying upgrade in iron content. Alteration decreases with depth below surface.5.2.3 StructureThe meta-sedimentary units strike N30°E and have an average dip of 70° to the southeast. Thedip varies from 45°SE to near vertical. Secondary folding is evident in roadcuts and drill core.The region is cut by numerous transverse faults and shear zones which strike to the northwest.The fracture zones are evident as breaks in the ridge line. A major fault, offsetting basementand Minas Supergroup rocks, exists where the Ribeirão Tabuões cuts the Serra.SRK Consulting (US), Inc. May 11, 2009Bom Sucesso_NI 43-101 Technical Report on Resources_162706_MLM_011.doc
  • 86. Atlantic Ocean Brazilian Belts Basement (>1.8Ga Phanerozoic Cover Proterozoic Cover São Francisco Craton Iron Quadrangle Minas Supergroup Bom Sucesso Rio das Vilhas Supergroup Bom Sucesso Project São Francisco Craton, the Brazil Iron Quadrangle and BomSRK Job No.: 162706 SucessoFile Name: Figure 5-1.doc Source: Alkmim & Marshak 1998 Date: 4/16/2009 Approved: LEM Figure: 5-1
  • 87. AVG/Minerminas Mine Bom Sucesso Brazil Regional GeologySRK Job No.: 162706File Name: Figure 5-2.doc Source: MMX Date: 4/16/2009 Approved: LEM Figure: 5-2
  • 88. Bom Sucesso Project Bom Sucesso Brazil Local GeologySRK Job No.: 162706File Name: Figure 5-3.doc Source: MMX Date: 4/16/2009 Approved: LEM Figure: 5-3
  • 89. MMX Mineração e Metálicos S.A. 6-1Bom Sucesso Project NI 43-101 Technical Report on Resources6 Deposit Type (Item 10)6.1 Geological ModelIron mineralization in the Iron Quadrangle and the surrounding area, as in other world locations,is controversial. Various models are proposed, but the most accepted current models arehydrothermal syngenetic and/or supergene enrichment. According to Guild (1957), ferruginoussediments of the Minas Supergroup are chemical precipitates, deposited when iron-bearing riverwaters mixed with marine waters in a shallow, low energy basin. This basin was isolated fromthe Proterozoic ocean by a volcanic arch and it is suggested that volcanic ash interacting withsaline basin waters lowered the pH of the water, which caused iron deposition. In addition,petrologic observations indicate that this basin received limited clastic material. The ferruginoussediments, formed by precipitation, consist predominantly of iron oxide and colloidal silica withlimited carbonate minerals. Carbonate mineral deposition was limited by the low pH of thereceiving basin waters.The deposits within the Minas Supergroup are characterized by banded iron formation (BIF),fine, alternating layers of iron and silica minerals. The iron minerals typically are hematite ormagnetite and the silica minerals are chert or quartz. Many of these formations have an ironcontent too low for profitable exploitation. However, with the formation of laterite duringintensive weathering, silica is leached from the rock enriching the residual material in iron andcreating a zone of potentially economic iron mineralization. Occurrences of leached BIF’saccount for the world’s main source of iron. The BIF’s in Minas Gerais are locally calleditabirite named for Pico do Itabirito, the type locale for itabirite. The itabirites are composed ofhematite and fine-grained quartz.The itabirites are typically characterized by the degree of leaching. Three common varieties arefriable itabirite, semi-compact itabirite and compact itabirites, each of these signifying adecreasing amount of leaching. Itabirites require dressing to liberate the hematite from thequartz and are very amenable to treatment. Consequently, itabirites and powdery hematite areprocessed into iron product concentrates, or iron product fines. Fines are preferably sold assinter feed, but product that contains a significant fraction of particles smaller than 1mm cannotbe fed directly into the sintering machine. This finer product is sold as feed for pelletizingplants, or pellet feed.Pure hematite contains a maximum of 69.94% iron compared to pure magnetite, which contains72.36% iron. Despite the higher iron content of magnetite, hematite is more valued by the steelindustry due to its higher reduction rate. During the steel-making process, hematite (Fe2O3) isprogressively reduced to magnetite (Fe3O4), then wüstite (FeO), and finally iron (Fe). Hematiteand magnetite have different crystal lattice structures; hematite has a hexagonal lattice, whereasmagnetite has a simple cubic lattice. This difference in atomic packing accounts for a volumeincrease during the loss of oxygen atoms. Consequently, a charge of hematite in a blast furnaceundergoes a much higher volume increase during the reduction process than the equivalent ironamount charged as magnetite. The increased porosity resulting from the volume change causes amarked increase in the overall reduction rate, more than offsetting the effect of the lower ironcontent of hematite.SRK Consulting (US), Inc. May 11, 2009Bom Sucesso_NI 43-101 Technical Report on Resources_162706_MLM_011.doc
  • 90. MMX Mineração e Metálicos S.A. 7-1Bom Sucesso Project NI 43-101 Technical Report on Resources7 Mineralization (Item 11)7.1 Mineralized ZonesThe mineralization at the Project is hosted by itabirite of the Itabira Group of the MinasSupergroup with areas of supergene enrichment through subsequent lateritic weathering. Thisresults in a variety of different mineralization types. There are at least four distinct lithologicalore types observed in the Project area: Friable quartz itabirite; Semi-compact itabirite; Compact itabirite; and Carbonate itabirite.Friable quartz itabirite occurs at the surface, as observed in outcrops and roadcuts. As theclassification itself suggests, the principal characteristics of this type of ore are the grades ofsilica that vary between 6% to 10% and in granulometry that is above 19mm. The bands arecomposed of friable hematite and magnetite intercalated with bands of recrystallized quartz.The friable itabirite grades into semi-compact and then into compact itabirite with depth belowsurface. As the degree of weathering decreases, the silica content increases and the iron gradesdecrease.The dolomitic itabirite is characterized by alternating layers of hematite/magnetite withquartz/calcite/dolomite This itabirite has been found only in drillholes and is of the compacttype. The rock is fine-grained and highly magnetic. Where the calcite/dolomite bands arethicker, millimetric magnetite occurs. Amphibole is also present in this itabirite.The quartz itabirite occurs along the entire crestline of Serra de Bom Sucesso from south to northto the Ribeirão Tabuões where it has been faulted away to the north.7.2 Surrounding Rock TypesThe underlying rocks of the Caraça Group lie to the west of the Itabira Group and the overlyingrocks of the Piracicaba Group lie to the west.7.3 Relevant Geological ControlsThe iron mineralization is contained within the itabirite of the Itabira Group. Subsequentweathering resulted in supergene enrichment and “softening” of the ore by removing silica andthereby upgrading the iron content. The weathering is stronger in areas where faulting andfracturing are more intense.7.4 Type, Character and Distribution of MineralizationThe itabirite is a metamorphosed BIF composed predominately of iron oxides and silica. Theiron is distributed throughout the itabirite and is richer where the weathering has removed silicaand thus upgraded the iron content.SRK Consulting (US), Inc. May 11, 2009Bom Sucesso_NI 43-101 Technical Report on Resources_162706_MLM_011.doc
  • 91. MMX Mineração e Metálicos S.A. 8-1Bom Sucesso Project NI 43-101 Technical Report on Resources8 Exploration (Item 12)This section describes exploration work undertaken by MMX since its acquisition of the Project.8.1 Surveys and InvestigationsMMX has undertaken a program of geologic mapping at a scale of 1:5000, using a GPS and thetopographic base map with 1m contours (described in Section 15). The mapping concentrated ondelineating the contacts between the Caraça, Itabira, and Piracicaba Groups and not on definingthe individual occurrences of friable, semi-compact and compact itabirite within the ItabiraGroup. Pegamite dikes and faults were also mapped. Figure 8-1 presents the geologic map thatwas the product of this program.MMX also conducted a drilling program as described in Section 15.8.2 InterpretationMMX has produced a geologic map to use in geologic modeling and locating drillhole sites.Because of the massive nature of iron deposits, and because of the good exposure of the itabiritesalong the crest of the Serra do Bom Sucesso, MMX has produced a map that outlines theoccurrence of the itabirite and that can be used in planning future drilling campaigns.SRK Consulting (US), Inc. May 11, 2009Bom Sucesso_NI 43-101 Technical Report on Resources_162706_MLM_011.doc
  • 92. Bom Sucesso Project Bom Sucesso Brazil Geology MapSRK Job No.: 162706File Name: Figure 8-1 doc Source: MMX Date: 4/16/2009 Approved: LEM Figure 8-1
  • 93. MMX Mineração e Metálicos S.A. 9-1Bom Sucesso Project NI 43-101 Technical Report on Resources9 Drilling (Item 13)The drilling at Bom Sucesso was conducted in two separate programs, one by LGA in 2007 andthe second by MMX in 2009. Figure 9-1 presents the drilling from both companies. Table 9.1lists the number of drillholes, total meters, and average depth. All the drilling at the project wasperformed with coring methods.Table 9.1: Drillhole Statistics Depth (m) Company Number Meters Minimum Maximum Average LGA 23 809.8 8.80 50.80 35.2 MMX 29 3802.5 46.35 266.85 131.1 Total 52 4612.3 8.80 266.85 88.79.1 ProceduresLGAAll the LGA holes were drilled with H sized core (63.5mm) tools by Geomaster Engenharia deSolos Ltda. All the drilling was vertical except one hole which was drilled with an inclination of75° to the west. Downhole surveys were not taken and with the shallow depths, little deviationwould be expected.After the hole was concluded, its location was marked with a cement base and a metal tag withthe drillhole identification. The collar coordinates were surveyed with a GPS receptor Geodésico900CS Leica, L1L2 RTK with Glonass antenna. An MMX contractor, MCE Consultoria eEngenharia Ltda., checked the coordinates with a Garmin GPS.The drillholes were described on lithologic logs and the core recovery was noted. MMXsubsequently verified the lithologic description and interval start and finish points. In general,the core recovery was fair to poor, averaging about 81%.Sample intervals were designated on a separate form.MMXThe drillhole locations were first determined by the supervising geologist. Drill access wasprovided by clearing trails and drill pads with the use of a dozer. For inclined holes a line wasdrawn between two stakes in the azimuth direction and the drill rig aligned with it. Theinclination of the drill rig is set by a MMX technician using the inclinometer of a Bruntoncompass.All the MMX drilling was started with H sized core, and in some cases finished with N (52mm),depending on drilling conditions. Twenty holes were drilled to the west-northwest withinclinations between 60 and 70°, one hole was drilled vertically and nine holes were drilled withinclinations of approximately 85° to the west-northwest. The drilling contractor was GeosolGeologia e Sondagens S.A. (Geosol) using a conventional Macsonda drill. Downhole surveyswere taken with a DeviFlexTM tool at 4m intervals for holes greater than 100m in length.Upon completion of the hole, the collar was marked with a cement base and metal tag identifyingthe drillhole. The collar coordinates were surveyed by an MMX surveyor, using a total stationbased on 18 points located by Unitopo Topografia e Projeto Ltda, based in Belo Horizonte.SRK Consulting (US), Inc. May 11, 2009Bom Sucesso_NI 43-101 Technical Report on Resources_162706_MLM_011.doc
  • 94. MMX Mineração e Metálicos S.A. 9-2Bom Sucesso Project NI 43-101 Technical Report on ResourcesMMX used a standard logging form to record lithology and core recovery. Sample intervalswere noted on the box and on a separate logging form.9.2 InterpretationBoth LGA and MMX used H sized core for drilling which is appropriate for iron ore deposits.The core recovery of the LGA holes averaged about 81% which is not considered a goodrecovery, however, MMX used the LGA holes only for geologic interpretation and did not usethem in resource estimation.MMX drilling procedures include surveys for downhole deviation and requirements forminimum core recovery by the contractor. Core recovery was greater than 95%. The drillholesare angled in order to intersect the itabirite as close as possible to perpendicular.All the drilling has been on sections that are irregularly spaced between 100 and 700m, with afew at 1000m.SRK considers MMX’s drilling procedures to meet industry standards.SRK Consulting (US), Inc. May 11, 2009Bom Sucesso_NI 43-101 Technical Report on Resources_162706_MLM_011.doc
  • 95. Bom Sucesso Bom Sucesso Project Brazil Drillhole Location MapSRK Job No.: 162706File Name: Figure 9-1.doc Date: 4/16/2009 Approved: LEM Figure: 9-1
  • 96. MMX Mineração e Metálicos S.A. 10-1Bom Sucesso Project NI 43-101 Technical Report on Resources10 Sampling Method and Approach (Item 14)10.1 Sampling MethodsLGAThe sample handling procedures used by LGA have not been documented. However, the drillcore is well preserved in wooden boxes and MMX has the original drill logs. The sampleintervals are marked on the core box and the core has been cut with a saw where competent. Thegeologic logs include core recovery, lithology, friability, and color.LGA sampled the itabirite and ferruginous zones, but did not sample zones of invernal waste.There was no laboratory QA/QC program in place.MMXAt the drill rig, the drill core is placed in wooden boxes, and washed of all foreign material. Atechnician delivers the boxes to the logging area where they are placed either in the sun or undera roof until they are completely air-dried. The drill core is photographed before and aftersampling to record geological descriptions and sampling intervals. Geologic logging andidentification of sample intervals are carried out by the project geologists on standardized paperforms. This process identifies the different lithology types, geological contacts, zones of fault orfracture, ferruginous zones and internal waste.During core logging, the geologist marks the beginning and end of each sample interval on thebox. Sample breaks are at changes in lithology and friability with some consideration placed onvisual estimations of Fe percentage. Sampling is conducted within the itabirite and ferruginouszones and includes zones of internal waste. Sample intervals have a minimum length of 1m anda maximum length of 5m. The preferred sample interval ranges between 3m and 5m.Samples are collected by a trained sampler under the supervision of a technician or a geologistfollowing a sampling plan produced by acQuire Technology Solutions Pty Ltd. (acQuire). Thesampling plan contains the identification of primary and check samples according to MMXsQA/QC policy (see Section 11.4). The core is split lengthwise using a diamond core saw in thecompetent zones and a specially designed scoop in the highly weathered zones. The sample isplaced in a plastic bag with a sample tag. The plastic sample bag is further marked in two placeson the outside with the sample identification. The sample bags are then sealed and sent to thelaboratory for physical and chemical analysis. The remaining core is archived for futurereference.MMX personnel supervise all sample security. The drill core is collected from drill sites, loggedand sampled under the direction and control of MMX. The core is stored in a well maintainedfacility that is also used for logging. SRK is of the opinion that there has been no tampering withthe samples.Data from the geological log is entered into an acQuire database, the geological databasemanagement system developed by acQuire.10.2 Location and Sample DensityThe Bom Sucesso Project has approximately 5km of strike length and has a total of 4600m ofdrilling in 52 holes. Figure 9-1 shows the location of the drillholes and distinguishes the LGASRK Consulting (US), Inc. May 11, 2009Bom Sucesso_NI 43-101 Technical Report on Resources_162706_MLM_011.doc
  • 97. MMX Mineração e Metálicos S.A. 10-2Bom Sucesso Project NI 43-101 Technical Report on Resourcesholes from the MMX holes. The MMX drilling is on approximately 600m sections with somesections about 1000m apart. Table 10.2.1 describes the sample intervals and the total meterssampled by company.Table 10.2.1: Sample Interval Statistics. Company Number Average Std Dev Mode Min Max Total Meters Sampled LGA 97 5.20 2.30 4.50 0.50 14.70 507 MMX 566 3.96 0.79 5.00 2.00 5.00 224510.3 Factors Impacting Accuracy of ResultsThe main factor that could impact the accuracy of the samples is sample recovery, especially inthe friable itabirite and in fracture and fault zones.10.4 Sample Quality and RepresentativenessThe MMX core has very good recovery and the samples are representative of the intervalsampled. The LGA core where there is poor recovery, does not provide a good sample. LGA’spractice of not sampling internal waste zones also poses difficulties, however, MMX has notused the LGA samples for resource estimation.10.5 Relevant SamplesTable 10.5.1 lists composited samples for the MMX and LGA drilling. The samples werecomposited over continuous assayed intervals, with breaks at lithotype boundaries and atintervals that were not analyzed. Because of the massive nature of the mineralization, the truethickness is not relevant.SRK Consulting (US), Inc. May 11, 2009Bom Sucesso_NI 43-101 Technical Report on Resources_162706_MLM_011.doc
  • 98. MMX Mineração e Metálicos S.A. 10-3Bom Sucesso Project NI 43-101 Technical Report on ResourcesTable 10.5.1: Table of Relevant Composited Samples DHID From To Length Fe Lithotype Company FDBS025 113.00 119.25 6.25 27.82 Compact itabirite MMX FDBS026 2.80 14.65 11.85 42.14 Friable itabirite MMX FDBS027 5.35 82.10 76.75 25.44 Compact itabirite MMX FDBS029 97.15 253.80 156.65 19.86 Compact itabirite MMX FDBS030 75.85 169.10 93.25 27.61 Compact itabirite MMX FDBS031 13.00 26.10 13.10 46.87 Friable itabirite MMX FDBS031 38.20 211.20 173.00 28.55 Compact itabirite MMX FDBS032 16.00 22.80 6.80 45.48 Friable itabirite MMX FDBS033 25.40 107.75 82.35 34.28 Friable itabirite MMX FDBS034 28.35 42.40 14.05 43.74 Friable itabirite MMX FDBS036 11.55 18.20 6.65 40.65 Semi-compact itabirite MMX FDBS036 24.25 42.45 18.20 34.07 Semi-compact itabirite MMX FDBS036 53.45 112.90 59.45 32.33 Compact itabirite MMX FDBS037 20.50 31.15 10.65 32.66 Friable itabirite MMX FDBS037 81.65 166.35 84.70 26.23 Compact itabirite MMX FDBS038 0.00 8.20 8.20 43.36 Friable itabirite MMX FDBS038 11.00 62.50 51.50 25.80 Compact itabirite MMX FDBS039 95.20 174.35 79.15 29.94 Compact itabirite MMX FDBS040 9.60 85.25 75.65 36.27 Compact itabirite MMX FDBS040 87.30 107.70 20.40 24.99 Compact itabirite MMX FDBS041 5.80 47.35 41.55 34.10 Compact itabirite MMX FDBS041 74.25 186.30 112.05 28.59 Compact itabirite MMX FDBS042 13.60 101.55 87.95 36.25 Friable itabirite MMX FDBS043 15.95 73.30 57.35 33.02 Compact itabirite MMX FDBS044 4.20 96.15 91.95 32.08 Friable itabirite MMX FDBS045 1.95 132.30 130.35 33.65 Compact itabirite MMX FDBS045 134.40 188.35 53.95 15.81 Compact itabirite MMX FDBS046 22.10 69.75 47.65 34.80 Semi-compact itabirite MMX FDBS047 3.95 72.65 68.70 39.53 Friable itabirite MMX FDBS047 74.65 128.80 54.15 34.76 Compact itabirite MMX FDBS048 5.35 157.90 152.55 28.87 Compact itabirite MMX FDBS048 161.70 191.35 29.65 16.87 Compact itabirite MMX FDBS049 4.35 62.35 58.00 47.43 Friable itabirite MMX FDBS050 11.75 90.10 78.35 33.62 Compact itabirite MMX FDBS051 12.35 87.80 75.45 32.47 Compact itabirite MMX FDBS052 95.50 101.35 5.85 20.37 Compact itabirite MMX FSBSA1 0.00 10.06 10.06 40.92 Compact itabirite LGA FSBSA3 0.00 29.95 29.95 48.42 Friable itabirite LGA FSBSB1 0.00 42.55 42.55 40.97 Friable itabirite LGA FSBSC1 0.00 5.35 5.35 45.10 Friable itabirite LGA FSBSC1 11.20 20.35 9.15 43.09 Friable itabirite LGA FSBSC1 23.45 41.65 18.20 47.64 Friable itabirite LGA FSBSC2 1.40 23.25 21.85 31.53 Compact itabirite LGA FSBSD1 8.85 23.30 14.45 37.53 Friable itabirite LGA FSBSD1 32.10 37.30 5.20 25.40 Compact itabirite LGA FSBSE1 0.00 41.45 41.45 54.65 Friable itabirite LGA FSBSF1 34.05 41.50 7.45 30.69 Compact itabirite LGA FSBSF2 16.15 25.15 9.00 36.09 Friable itabirite LGA FSBSG1 0.00 45.05 45.05 42.79 Friable itabirite LGA FSBSG2 0.00 50.00 50.00 41.47 Friable itabirite LGA FSBSH1 0.00 32.03 32.03 41.32 Compact itabirite LGA FSBSH2 0.00 38.05 38.05 41.13 Friable itabirite LGA FSBSJ1 0.00 17.75 17.75 38.08 Compact itabirite LGA FSBSJ2 9.93 27.30 17.37 35.43 Friable itabirite LGA FSBSK2 4.55 9.95 5.40 47.30 Friable itabirite LGA FSBSK2 14.80 32.40 17.60 37.25 Friable itabirite LGA FSBSL2 0.00 29.60 29.60 35.49 Compact itabirite LGA FSBSL3 7.00 35.00 28.00 35.89 Friable itabirite LGASRK Consulting (US), Inc. May 11, 2009Bom Sucesso_NI 43-101 Technical Report on Resources_162706_MLM_011.doc
  • 99. MMX Mineração e Metálicos S.A. 11-4Bom Sucesso Project NI 43-101 Technical Report on Resources11 Sample Preparation, Analyses and Security (Item 15)LGA and MMX used SGS Geosol Laboratórios, Ltda. (SGS) located in Belo Horizonte foranalysis of drill core during its drilling program at the Project. SGS has ISO 9000 and 14001certification and is in the process of obtaining ISO/IEC 17025 laboratory accreditation (SGSGeosol, 2009).11.1 Sample PreparationSamples arriving at SGS from MMX vary in size and material. The sample is initially checkedfor sample identification and preservation conditions upon receipt. The sample preparationprocess consists of: Drying in a kiln at 105ºC until the sample is completely dry; Crushing the whole sample until 90% of the sample passes through a 2mm sieve; Reducing the volume by homogenization and quartering in Jones splitter to reduce sample to 250 to 300g; Pulverizing the split until 95% passes a 150 mesh sieve; Quartering in a Jones splitter to a sampling weighing approximately 125g for analysis; Archiving the remaining coarse reject and pulp; and Record screening tests performed during sample crushing and grinding.Data is recorded in the Lab’s Information and Management System (LIMS) at each step in thepreparation analytical process.11.2 Sample AnalysisAt the SGS laboratory, MMX samples are analyzed using the techniques shown in Table 11.2.1.Samples are analyzed for percentage of Fe, SiO2, Al2O3, K2O Na2O, TiO2, P, Mn, Ca, Mg, Cu, S,FeO and LOI. Detection limits for these elements and oxides are shown in Table 11.2.1.Table 11.2.1: Practical Detection Limits for SGSAnalysis Technique Lower Detection LimitFe XRF 0.01%SiO2 XRF 0.10%Al2O3 XRF 0.01%K 2O XRF 0.01%Na2O XRF 0.10%TiO2 XRF 0.01%P XRF 0.01%Mn XRF 0.01%Ca XRF 0.01%Mg XRF 0.06%Cu XRF 0.01%S Leco Analyzer 0.01%FeO Titration 0.14%LOI Gravimetric 0.10%SRK Consulting (US), Inc. May 11, 2009Bom Sucesso_NI 43-101 Technical Report on Resources_162706_MLM_011.doc
  • 100. MMX Mineração e Metálicos S.A. 11-5Bom Sucesso Project NI 43-101 Technical Report on ResourcesThe steps in the analytic procedure for LOI consist of: Drying the sample in an oven at around 110ºC for at least one hour; Weighing the empty container (CV); Placing 1.5 to 2g of the dried sample in the container and weighing again (C+A); Placing the container with the sample in a previously heated oven and waiting until the temperature reaches 1000±50ºC and letting it calcine for more than one hour; Removing the container from the oven, resting it on the refractory plate until it loses incandescence, and then put it in a closed dryer until the container and sample cool; and Weighing and record the final weight.LOI is calculated using the following formula: (C A) (Final Weight) %FW x100 (C A) (CV)The detection limit for LOI is 0.10 %. Data is recorded in the LIMS.11.3 Internal Laboratory Quality Controls and Quality AssuranceSGS’s QA/QC consists of inserting quartz blanks every 40 samples and performing a screen testevery 20 samples. Screen test data is recorded using LIMS. In addition a duplicate is insertedevery 20 samples and a reference sample is inserted into every sample shipment. The data aretransferred directly from the equipment and stored in the LIMS.11.4 Quality Controls and Quality AssuranceThe QA/QC program used by MMX included the random insertion of standards, coarseduplicates and pulp duplicates at regular frequencies in the sample stream. Listed below are theinsertion frequencies for each group of control samples: Standards are inserted at two per 20 samples (10%) and alternate below a high and low grade Fe standard; Coarse duplicates are inserted at one per 50 samples (2%); and Pulp duplicates are inserted at one per 20 samples (5%); andThe QA/QC samples for MMX include 70 standard samples (35 each of high and low), 35 pulpduplicates and 14 coarse duplicates.MMX used two standards created from material from two mines. One is a certified referencematerial (CRM) and the second is in the process of certification. These are, respectively, AmapáHigh Phosphorous (APHP) a low grade iron standard, made with iron ore from material from theAmapá Iron Ore Mine, formerly owned by MMX and the Corumbá standard (CRB1) a highgrade iron standard from the MMX Corumbá Mineração Ltda operation. APHP was certified byPierre Gy and Dominique François-Bongarçon of Agoratek International (Agoratek) in 2007 andrevised in 2008. Agoratek is in the process of certifying CRB1.Standard rejection limits are determined by adding and subtracting the standard deviation fromthe recommended mean. Analysis of a standard is expected to fall within ±2 standard deviationSRK Consulting (US), Inc. May 11, 2009Bom Sucesso_NI 43-101 Technical Report on Resources_162706_MLM_011.doc
  • 101. MMX Mineração e Metálicos S.A. 11-6Bom Sucesso Project NI 43-101 Technical Report on Resourcesof the recommended mean. Table 11.4.1 lists Agoratek’s recommended analytical mean forCRM APHP with values for calculating rejection limits at one, two and three standarddeviations. Table 11.4.2 lists the same information for provisional standard CRB1. MMX usedtwo standard deviations to calculate rejection limits for both APHP and CRB1.Table 11.4.1: APHP with Standard Deviation (SD)for Calculating Rejection Limits Element/Oxide Mean (%) 1SD (grade %) 2SD (grade %) 3SD (grade %) Fe 35.00 0.142 0.284 0.426 Al2O3 6.82 0.065 0.13 0.195 P 0.123 0.0027 0.0054 0.0081 Mn 1.542 0.0387 0.0774 0.1161 SiO2 34.22 0.171 0.342 0.513 TiO2 0.3 0.005 0.01 0.015 LOI 5.06 0.106 0.212 0.318Table 11.4.2: CRB1 with Provisional Standard Deviation for Calculating Rejection Limits Element/Oxide Mean (%) 1SD (grade %) 2SD (grade %) 3SD (grade %) Fe 60.05 0.30 0.60 0.90 Al2O3 2.95 0.07 0.14 0.21 P 0.056 0.002 0.004 0.006 Mn 0.02 0.005 0.010 0.015 SiO2 9.21 0.14 0.28 0.42 TiO2 0.15 0.01 0.02 0.03 LOI 1.46 0.28 0.56 0.84Data is recorded in the LIMS. Original analytical certificates are sent to MMX. Analyticalresults are also provided electronically in Excel spreadsheets. MMX has used acQuire at itsproperties as a database management tool since December 2007. The acQuire software packageincludes QA/QC protocols within the sample numbering procedure.11.5 InterpretationThe recommended analytical mean and standard deviation used to calculate rejection limits forAPHP appeared to be too restrictive for the analytical technique and material being tested. IfMMX uses the 2 standard deviations (±0.284%) for Fe as recommended in the samplecertification, this results in a 54% failure rate for analysis of APHP. At 3 standard deviations thefailure rate for Fe is approximately 35%. Because of this high standard failure rate, MMXreexamined the certificate and recalculated the standard deviation by using all samples includingoutliers from the certification data. MMX found the standard deviation of the entire populationto be 0.38, which is the number MMX used to calculate rejection limits. Using 0.38 as thestandard deviation to calculate rejection limits as falling outside two standard deviations, MMXobserved a standard failure of approximately 9% for APHP. The analytical results for Fe fromSGS for this standard are consistently but not significantly higher than the recommended mean.The average for Fe for SGS is 35.30% Fe while the recommended mean for the standard is35.00%. Table 11.5.1 lists MMX’s recalculated standard deviations for APHP. Graphs for Fe,Al2O3, SiO2, P and LOI showing standard analysis are shown in Figure 11-1.SRK Consulting (US), Inc. May 11, 2009Bom Sucesso_NI 43-101 Technical Report on Resources_162706_MLM_011.doc
  • 102. MMX Mineração e Metálicos S.A. 11-7Bom Sucesso Project NI 43-101 Technical Report on ResourcesTable 11.5.1: MMX’s Recalculated APHP Standard Deviation for Calculating RejectionLimits Standard Deviations (in % element) for Batch Rejection Limits Unit Fe Al2O3 P Mn SiO2 TiO2 LOI Recommended Mean 35.00 6.82 0.124 1.54 34.22 0.300 5.06 1 0.38 0.12 0.003 0.05 0.43 0.005 0.54 2 0.76 0.24 0.006 0.10 0.86 0.010 1.08During certification of APHP, a total of 160 samples were analyzed for Fe2O3, Al2O3, P2O5,MnO, SiO2, TiO2. The analysis was completed at eight laboratories world wide and eachlaboratory received 20 samples. The samples were to be analyzed at each laboratory in fourbatches on different days using XRF on fused pellets. Agoratek found that although requested,most of the laboratories did not comply with the request to perform the analysis in four batcheson different days and instead ran all of the batches on the same day (Gy et al., 2008).During standard certification, analysis in batches on different days is a more realistic simulationof actual exploration sample submission and will be more representative of how a sample isanalyzed. A batch analyzed on the same day is referred to as within-set and the standarddeviation for that set is the within-set standard deviation (Src). The Src gives an indication of thehomogeneity of the sample and the labs ability to routinely reproduce the analytical method.Data analyzed on different days is the between-set data and the standard deviation is thebetween-set standard deviation (SLc). The SLc may be more realistic statistically since it includesall analysis and considers sample homogeneity, method reproducibility, biases betweenlaboratories and differences in sub-samples at different laboratories (Bloom, 2002).Since the certification laboratories did not perform the analysis as requested and the majority ofthe analysis was run on the same day, the data is more representative of a within-set database.This may be the reason the standard deviation from the analysis appears to be too restrictive.Agoratek compensated for the abundance of within-batch data, by performing variance analysison each element and each laboratory to determine the standard deviation used to calculaterejection limits (Gy et al., 2008). However, APHP is consistently performing higher thanexpected and SRK recommends that this standard continue to be monitored. Should theanalytical results from SGS continue to be higher than the mean with a higher standard deviation,a new standard may need to be selected or APHP may need to be recertified.Standard CRB1 is still in the certification process. MMX provided preliminary standarddeviation information for Fe, Al2O3, P, M, SiO2, TiO2 and LOI found in Table 11.4.2. Based onthe preliminary data, the SGS laboratory sample average for Fe is slightly higher, but within 0.05of the recommended mean for CRB1. There were five standard failures for Fe out of 35 analysisfor CRB1. Results for Fe, Al2O3, SiO2, P and LOI for standard CRB1 are shown in Figure 11-2.Standard failures are being investigated by MMX.Pulp duplicates showed good reproducibility for samples for Fe, SiO2 Al2O3 and Mg analysis.There were no duplicate analysis failures for Fe, SiO2 and Mg and one duplicate failure forAl2O3. There were seven duplicates failures for P (approximately 20%) across all resultsbetween the detection limit of 0.01% and 0.10%. This may be a result of the analysis near thedetection limit and needs to be investigated since P becomes an important contaminant at levelsSRK Consulting (US), Inc. May 11, 2009Bom Sucesso_NI 43-101 Technical Report on Resources_162706_MLM_011.doc
  • 103. MMX Mineração e Metálicos S.A. 11-8Bom Sucesso Project NI 43-101 Technical Report on Resourcesabove 0.04%. MMX is currently investigating sample failures. Figure 11.3 shows graphs for Fe,Al2O3, SiO2 and P of the pulp duplicate data.There were 14 coarse duplicates in the sample database. Coarse duplicates also showed goodreproducibility for Fe, SiO2 and Mg. There was one sample failure for P and eight samplefailures for Al2O3. The results for Fe, Al2O3, SiO2 and P are shown in graphs in Figure 11-4.MMX inserted QA/QC samples throughout the drilling program. Any inconsistencies inanalytical results or control sample failures were identified, investigated and if necessaryresubmitted for analysis to determine the reason for the failure. The sample preparation andanalyses follow industry guidelines and the QA/QC indicate that the results are suitable for aresource database. The analytical techniques and sample preparation are appropriate for themineralization and deposit type.SRK recommends that QA/QC, be monitored as part of an ongoing process during allexploration drilling programs. The QA/QC data must be monitored and reviewed as it isreceived from the analytical lab during the exploration programs so that analytical failures can bequickly identified, investigated and resolved.MMX does not submit samples to a secondary laboratory or insert sample blanks into the samplestream. SRK recommends that 5% to 10% of the samples be submitted to secondary laboratoryfor analysis using the same analytical techniques used at SGS. This will help identify samplebias, procedural variations in analysis and sample mixups. Submission to a secondary lab shouldbe done throughout the exploration program as part of QA/QC. SRK also recommends theinsertion of sample blanks into the sample stream to monitor any contamination during samplepreparation. The use of blank samples is useful to identify sample preparation problems and maybe more applicable to elements and oxides other than iron. SRK also recommends that standardsbe monitored and graphed over time in order to identify possible instrument drift at thelaboratory during analysis.SRK Consulting (US), Inc. May 11, 2009Bom Sucesso_NI 43-101 Technical Report on Resources_162706_MLM_011.doc
  • 104. Bom Sucesso Bom Sucesso Project Brazil APHP Standard AnalysisSRK Job No.: 162706File Name: Figure 11-1.doc Date: 4/16/2009 Approved: DKB Figure: 11-1
  • 105. Bom Sucesso Bom Sucesso Project Brazil CRB1 Standard AnalysisSRK Job No.: 162706File Name: Figure 11-2.doc Date: 4/16/2009 Approved: DKB Figure: 11-2
  • 106. Bom Sucesso Bom Sucesso Project Brazil Pulp duplicatesSRK Job No.: 162706File Name: Figure 11-3.doc Date: 4/16/2009 Approved: DKB Figure: 11-3
  • 107. Bom Sucesso Bom Sucesso Project Brazil Coarse duplicatesSRK Job No.: 162706File Name: Figure 11-4.doc Date: 4/16/2009 Approved: DKB Figure: 11-4
  • 108. MMX Mineração e Metálicos S.A. 12-1Bom Sucesso Project NI 43-101 Technical Report on Resources12 Data Verification (Item 16)12.1 Quality Control Measures and ProceduresDrillingMMX has checked the LGA drillholes for consistency in lithologic logging, core recovery, andsample intervals. The drillhole collars were field checked by a surveyor.In its own drilling program, MMX has followed industry best practices in logging and samplingand maintaining a laboratory QA/QC program.DatabaseMMX receives the data directly from SGS Geosol and it is loaded into an acQuire databasewithout cutting and pasting to ensure that errors are not made.Sample intervals that do not meet the requirements of having a stoichiometric closure between98 to 102% are not used in resource estimation. Likewise, intervals with core recovery less than70% are not used in resource estimation.SRK’s Data VerificationSRK examined six of the LGA core holes and two of the MMX core holes while conducting thesite visit. Comparisons were made to the lithologic logs and to the assay results and nodiscrepancies were found. SRK also visited the operating core drill and found that Geosol wasoperating in a professional manner.Comparisons were made between the database and the assay certificates for six of the LGA holesand six of the MMX holes and no errors were found.The laboratory QA/QC indicates that the laboratory is performing acceptably.12.2 LimitationsSRK did not take samples for analysis as the iron mineralization is obvious in the core samplesand it was not deemed necessary.SRK Consulting (US), Inc. May 11, 2009Bom Sucesso_NI 43-101 Technical Report on Resources_162706_MLM_011.doc
  • 109. MMX Mineração e Metálicos S.A. 13-1Bom Sucesso Project NI 43-101 Technical Report on Resources13 Adjacent Properties (Item 17)There are several mineral rights held by others in the Bom Sucesso area (Figure 13-1). None ofthese have operating mines.SRK Consulting (US), Inc. May 11, 2009Bom Sucesso_NI 43-101 Technical Report on Resources_162706_MLM_011.doc
  • 110. Bom Sucesso Project MMX Adjacent Mineral Rights BrazilSRK Job No.: 162706File Name: Figure 13-1.doc Source: MMX Date: 4/16/2009 Approved: LEM Figure: 13-1
  • 111. MMX Mineração e Metálicos S.A. 14-1Bom Sucesso Project NI 43-101 Technical Report on Resources14 Mineral Processing and Metallurgical Testing (Item 18)MMX conducted tests on the Bom Sucesso itabirite to identify the most economical process toproduce the richest product.Tests were carried out under the supervision of the MMX Technological Department staff in thefollowing laboratories: Escola de Engenharia of UFMG, Belo Horizonte, Minas Gerais; Fundação Gorceix - Ouro Preto, Minas Gerais; and Inbras-Eriez, Sorocaba, São Paulo.The main objective of this research was to determine the concentratability of drilling samplesfrom Bom Sucesso using only low intensity magnetic concentration (LIMS).14.1 ProceduresSamplesThe MMX Technological Development Department received prepared samples from the MMXGeological Department. The preparation was performed by SGS, where the samples werecrushed, pulverized and split.Two groups of samples were composited from the drill samples as follows: Group 1: Twelve samples with grain size <0.105mm samples, from separate lithologies and regions of the orebody: friable itabirite, semi-compact itabirite, compact itabirite 1 and compact itabirite 2, from North, Central and South Regions. These samples were used in the concentration tests, mineralogical study and liberation degree determination; and Group 2: Three samples with grain size <6.3mm from separate lithologies, friable itabirite, compact itabirite 1 and compact itabirite 2, were used to determine the work index. The semi-compact itabirite was not used because it represents just 6% of all the drill hole samples and it is not included in this preliminary study.Concentration Tests using Davis TubeThe Group 1 samples were used in the Davis Tube Magnetic Separator at UFMG. The sampleswere reduced to 95% less than 0.045mm for this concentration test.The main conditions of the test were: Water flow: 1.5 L/min; Agitation: average; Slope: 50°; Time: 10 minutes; Intensity: 800 Gauss; and Mass: 20g.SRK Consulting (US), Inc. May 11, 2009Bom Sucesso_NI 43-101 Technical Report on Resources_162706_MLM_011.doc
  • 112. MMX Mineração e Metálicos S.A. 14-2Bom Sucesso Project NI 43-101 Technical Report on ResourcesConcentration Tests InbrasA sample composed of North, Central and South compact itabirite 1 was tested at LIMS inInbras-Eriez. Figure 14-1 illustrates the process flowsheet. The sample was reduced to 97%<0.045mm and fed the first magnetic concentration test at 1350 Gauss with the resultingconcentrate feeding a cleaner test at 800 Gauss.14.2 ResultsConcentration Tests using Davis Tube - UFMGThe mineralogical studies have identified mainly magnetite, martite, quartz, hematite and silicateminerals. The liberation degree for the iron minerals were between 0.075mm and 0.038mm.The work index was 6.7kWh/t for the friable itabirite, 10.1kWh/t for compact itabirite 1 and10.0kWh/t for compact itabirite 2.Tables 14.2.1 through 14.2.4 show the results from Davis Tube Magnetic Separator for thefriable, semi-compact, compact 1 and compact 2 samples, respectively.Tables 14.2.1: Davis Tube Tests – Friable Itabirite Mass Fe FeO Fe SiO2 Al2O3 Ca K2O Mg Mn P FeO Region Sample Flow Recovery Recovery Recovery (%) (%) (%) (%) (%) (%) (%) (%) (%) North Friable Feed 41.0 32.5 3.06 0.84 0.53 0.81 0.31 0.037 7.45 North Friable Concentrate 38% 64% 97% 67.9 3.1 0.69 0.09 0.03 0.06 0.16 0.013 18.84 North Friable Tail 62% 24.2 50.8 4.53 1.30 0.84 1.27 0.40 0.052 0.36 Central Friable Feed 43.1 33.5 1.20 0.08 0.02 <0.10 0.32 0.055 4.70 Central Friable Concentrate 30% 46% 96% 67.8 1.9 0.40 0.03 0.01 <0.06 0.11 0.022 15.25 Central Friable Tail 70% 32.8 46.8 1.53 0.10 0.03 0.16 0.41 0.069 0.28 South Friable Feed 41.0 35.0 1.48 0.34 0.14 1.28 0.43 0.060 5.57 South Friable Concentrate 33% 55% 98% 67.1 3.7 0.43 0.05 0.03 <0.06 0.12 0.021 16.35 South Friable Tail 67% 27.9 50.8 2.01 0.49 0.19 1.11 0.58 0.080 0.14There were no significant variations in the RoM grades from North, Central and South areas forthe friable itabirite. Both regions produced high Fe and FeO grade concentrates with lowcontaminants. The SiO2 grade obtained is acceptable for commercial purpose, but furtherconcentration steps are going to be checked in order to clean the concentrate. However, theresults of pilot tests shown later, indicate better results than the Davis Tube.Table 14.2.2: Davis Tube Tests – Semi-Compact Itabirite Mass Fe FeO Fe SiO2 Al2O3 Ca K2O Mg Mn P FeO Region Sample Flow Recovery Recovery Recovery (%) (%) (%) (%) (%) (%) (%) (%) (%) North Semi-compact Feed 33.6 42.8 1.32 3.45 0.23 1.38 0.17 0.033 7.1 North Semi-compact Concentrate 35% 71% 96% 68.3 3.1 0.28 0.33 0.02 0.10 0.08 0.013 19.5 North Semi-compact Tail 65% 15.0 64.1 1.87 5.12 0.35 2.06 0.21 0.044 0.5 Central Semi-compact Feed 34.7 43.1 0.33 1.77 0.07 1.48 0.14 0.042 6.0 Central Semi-compact Concentrate 32% 60% 95% 64.4 7.2 0.13 0.21 0.01 0.14 0.07 0.015 17.6 Central Semi-compact Tail 68% 20.5 60.3 0.42 2.51 0.10 2.12 0.18 0.055 0.4 South Semi-compact Feed 38.4 41.3 1.59 0.07 0.07 <0.06 0.16 0.042 .3 South Semi-compact Concentrate 35% 61% 97% 66.1 4.8 0.36 0.03 0.01 <0.06 0.06 0.017 17.4 South Semi-compact Tail 65% 23.2 61.2 2.27 0.09 0.10 0.06 0.22 0.056 0.3SRK Consulting (US), Inc. May 11, 2009Bom Sucesso_NI 43-101 Technical Report on Resources_162706_MLM_011.doc
  • 113. MMX Mineração e Metálicos S.A. 14-3Bom Sucesso Project NI 43-101 Technical Report on ResourcesThe product from the semi-compact itabirite has the highest SiO2 grades among all samples.Mainly in the central and south regions, but a cleaner concentration is being checked to decreasethe SiO2 grade and increase Fe as well.Table 14.2.3: Davis Tube Tests – Compact Itabirite 1 Mass Fe FeO Fe SiO2 Al2O3 Ca K2O Mg Mn P FeO Region Sample Flow Recovery Recovery Recovery (%) (%) (%) (%) (%) (%) (%) (%) (%) North Compact 1 Feed 31.0 43.7 0.27 4.96 0.16 2.21 0.09 0.034 11.3 North Compact 1 Concentrate 37% 80% 95% 67.9 3.7 0.16 0.54 0.02 0.21 0.05 0.007 29.3 North Compact 1 Tail 63% 9.6 67.0 0.34 7.53 0.24 3.38 0.12 0.049 0.9 Central Compact 1 Feed 31.8 43.8 0.25 4.16 0.16 1.79 0.26 0.035 9.5 Central Compact 1 Concentrate 36% 76% 97% 66.7 4.6 0.13 0.58 0.04 0.24 0.09 0.010 25.2 Central Compact 1 Tail 64% 12.0 66.1 0.32 6.20 0.23 2.67 0.36 0.049 0.5 South Compact 1 Feed 31.4 45.5 1.59 2.56 0.26 1.85 0.22 0.038 8.2 South Compact 1 Concentrate 32% 68% 86% 66.7 5.0 0.27 0.22 0.03 0.14 0.08 0.010 22.2 South Compact 1 Tail 68% 14.9 64.4 2.20 3.66 0.37 2.65 0.28 0.051 1.7The highest metallurgical Fe recoveries were found in the compact itabirite 1 tests. As in theother lithological types, the product has high Fe and FeO grades. The SiO2 grades could also belower if combined with a cleaner concentration. The same happens in the compact itabirite 2shown in Table 14.2.4 below:Table 14.2.4: Davis Tube Tests –Compact Itabirite 2 Mass Fe FeO Fe SiO2 Al2O3 Ca K2O Mg Mn P FeO Region Sample Flow Recovery Recovery Recovery (%) (%) (%) (%) (%) (%) (%) (%) (%) North Compact 2 Feed 25.2 40.2 0.35 9.70 0.27 2.40 0.15 0.037 8.5 North Compact 2 Concentrate 27% 69% 88% 64.6 6.0 0.14 1.36 0.04 0.33 0.06 0.014 27.6 North Compact 2 Tail 73% 10.6 52.9 0.43 12.80 0.35 3.17 0.19 0.045 1.4 Central Compact 2 Feed 29.1 41.5 0.34 5.70 0.20 3.41 0.24 0.041 10.1 Central Compact 2 Concentrate 31% 72% 88% 66.9 5.1 0.14 0.79 0.03 0.37 0.07 0.007 28.7 Central Compact 2 Tail 69% 11.9 58.0 0.43 7.93 0.28 4.79 0.31 0.056 1.7 South Compact 2 Feed 25.5 42.7 0.60 7.58 0.31 4.19 0.15 0.046 7.8 South Compact 2 Concentrate 22% 59% 83% 68.1 4.0 <0,1 0.66 0.03 0.30 0.04 0.007 29.4 South Compact 2 Tail 78% 13.5 53.7 0.90 9.54 0.39 5.29 0.18 0.057 1.7Compact itabirite 1 and 2 have the highest FeO grades between the studied lithologies, rangingfrom 22% to 29%.A FeO metallurgical balance indicates FeO recoveries between 83% and 98%. High recoveriesindicate that Fe in the tailings does not come from magnetite mineral.Concentration Tests LIMS - InbrasFor the LIMS test in Inbras, the sample was the compact itabirite 1 composited from North,Central and South compact itabirite 1.The results are shown in Table 14.2.5.SRK Consulting (US), Inc. May 11, 2009Bom Sucesso_NI 43-101 Technical Report on Resources_162706_MLM_011.doc
  • 114. MMX Mineração e Metálicos S.A. 14-4Bom Sucesso Project NI 43-101 Technical Report on ResourcesTable 14.2.5: Inbras LIMS test –Compact Itabirite 1 Mass Met. Fe Fe SiO2 Al2O3 Ca K2O Mg Mn P FeO Flow Recovery Recovery (%) (%) (%) (%) (%) (%) (%) (%) (%) Feed 100% 100% 28.5 47.3 0.72 4.37 0.24 2.12 0.215 0.041 8.2 Tailings (1350 Gauss) 66% 27% 11.5 65.8 0.94 6.00 0.33 2.93 0.270 0.055 0.9 Tailings (800 Gauss) 5% 3% 19.2 56.0 0.82 5.82 0.25 2.66 0.280 0.049 2.0 Concentrate 29% 70% 68.2 4.4 0.20 0.49 0.02 0.23 0.081 0.009 25.6The results obtained for LIMS were similar to the results obtained with the Davis Tube test, butLIMS was more selective and produced higher Fe grades, 68.2%, and about 4% less massrecovery. The SiO2 and other contaminants had similar behavior in both tests. Themineralogical constituents of the feed and product are given in Table 14.2.6.Table 14.2.6: Inbras LIMS test –Feed and Product Constituents Top Monocrystaline Monocrystaline Lobular Goethite/ Gangue Irion Ores size % Lamelar Granular Hematite Martite Magnetite Limonite Quartz Silicates Liberation Liberation Flow (#) Retained Hematite (%) Hematite (%) (%) (%) (%) (%) (%) (%) (%) (%) Feed >400 9.4 0.1 1.0 0.7 3.3 58.4 0.2 21.4 14.3 96 Feed <400 90.6 0.6 1.3 0.0 1.5 43.1 0.0 34.1 100 Tailings (1350 G) >400 6.4 0.4 2.5 1.8 0.4 0.0 0.7 57.0 37.3 94 Tailings (1350 G) <400 93.6 1.1 1.5 0.0 0.0 0.0 0.0 62.0 35.4 100 Concentrate (800 G) >400 12.5 0.0 0.2 0.2 4.8 88.3 0.0 3.1 2.6 65 97 Concentrate (800 G) <400 87.6 0.0 1.1 0.0 3.2 89.2 0.0 4.3 2.0 93 99A mineralogical study was conducted to identify the SiO2 minerals present in the final products.The study indicates that it comes from non liberated quartz . The small amount present in thissize range is enough to increase SiO2 grade in the concentrate to more than 3.5%.14.3 ConclusionsBoth samples seemed to be highly attracted by low magnetic fields, demonstrating that it ispossible to use magnetic concentration for itabirites from Bom Sucesso. The products presentedhigh Fe grades, but in some results also have high SiO2 grade. The mineralogical study indicatesthat quartz comes from the insufficient liberation of gangue minerals. Futures studies areconcentrated on a combination of magnetic concentration and flotation.SRK Consulting (US), Inc. May 11, 2009Bom Sucesso_NI 43-101 Technical Report on Resources_162706_MLM_011.doc
  • 115. Feed 350 Gauss Final Tail 800 Gauss Concentrate Final Tail Bom Sucesso Project Inbras LIMS Flowsheet BrazilSRK Job No.: 162706File Name: Figure 14-1.doc Source: MMX Date: 4/16/2009 Approved: LEM Figure: 14-1
  • 116. MMX Mineração e Metálicos S.A. 15-1Bom Sucesso Project NI 43-101 Technical Report on Resources15 Mineral Resources (Item 19)This section provides details in terms of key assumptions, parameters and methods used toestimate the mineral resources together with SRK’s opinion as to their merits and possiblelimitations. The resource estimation for the Project was prepared for MMX by ProminasProjetos e Serviços de Mineração LTDA (Prominas), an independent geologic and engineeringconsultant company in Belo Horizonte, using Mintec’s MineSight software. MMX directlysupervised the work of Prominas. The resource was audited by Leah Mach, QP for this reportand Principal Resource Consultant with SRK.15.1 TopographyMMX contracted Serviços Aéreos Industriais S.I. Ltda (SAI) to generate topographic contoursfor the project area. The contours were derived from aerophotographs using the UTM DatumSAD69 23S Coordinate System. The control points for the flights were surveyed with a GPSTrimble 5700 L1/L2 following the standards of the Comissão Nacional de Cartografia. Theresulting contour intervals are 1m. Figure 15-1 shows the drillholes and topography with only10m contours for clarity.15.2 Drillhole DatabaseThe drillhole database consists of 29 core holes drilled by MMX and 23 core holes drilled byLGA. Table 15.2.1 presents statistics for each of the drill campaigns. The results in the twocampaigns are quite similar for the friable itabirite, but MMX has lower Fe values in the semi-compact itabirite and the compact itabirite and that is because MMX drilled deeper into thoselithologies, where the weathering is less, and therefore the iron grades are lower and the silicahigher.SRK Consulting (US), Inc. May 11, 2009Bom Sucesso_NI 43-101 Technical Report on Resources_162706_MLM_011.doc
  • 117. MMX Mineração e Metálicos S.A. 15-2Bom Sucesso Project NI 43-101 Technical Report on ResourcesTable 15.2.1: Assay Basic Statistics by Company MMX Lithotype Statistic Fe SiO2 Al2O3 P LOI Average 42.83 32.94 1.31 0.054 2.87 Std Dev 6.05 9.49 1.46 0.028 2.57 Minimum 24.04 6.64 0.18 0.017 0.06 Friable Maximum 56.58 53.91 10.22 0.220 13.69 CV 0.14 0.29 1.12 0.516 0.90 Number 111 111 111 111 110 Average 36.25 41.59 0.85 0.046 1.87 Std Dev 7.07 6.02 1.05 0.019 1.38 Semi- Minimum 20.25 21.82 0.05 0.022 0.22 compact Maximum 52.35 51.30 4.45 0.144 6.59 CV 0.20 0.14 1.23 0.411 0.74 Number 54 54 54 54 52 Average 26.44 42.96 1.17 0.035 4.11 Std Dev 7.77 6.64 2.47 0.010 5.71 Minimum 5.04 19.94 0.05 0.010 0.01 Compact Maximum 41.29 69.80 12.80 0.090 28.43 CV 0.29 0.15 2.12 0.294 1.39 Number 389 389 389 389 333 LGA Lithotype Statistic Fe SiO2 Al2O3 P LOI Average 43.52 31.93 1.76 0.054 3.15 Std Dev 7.33 11.23 1.90 0.022 1.76 Minimum 23.50 6.76 0.12 0.018 0.70 Friable Maximum 60.90 64.40 8.56 0.120 8.09 CV 0.17 0.35 1.08 0.400 0.56 Number 58 58 58 58 58 Average 40.09 39.91 0.83 0.044 1.63 Std Dev 2.52 3.72 0.60 0.012 0.71 Semi- Minimum 35.20 32.30 0.11 0.027 0.31 compact Maximum 44.90 47.80 2.48 0.076 3.43 CV 0.06 0.09 0.72 0.285 0.44 Number 18 18 18 18 18 Average 35.05 42.33 2.32 0.047 2.44 Std Dev 5.92 5.19 2.61 0.016 1.12 Minimum 25.40 34.70 0.18 0.029 0.94 Compact Maximum 44.60 51.20 7.70 0.090 4.58 CV 0.17 0.12 1.12 0.330 0.46 Number 13 13 13 13 1315.3 GeologyMMX constructed 30 vertical sections as shown in Figures 15-2 and 15-3. The followinglithologies were each modeled separately: Itabirite – siliceous and dolomitic friable, semi-compact, compact; Intrusive – acid, basic, pegamitite; Quartzite, schist, phyllite; and Soil, colluvium.SRK Consulting (US), Inc. May 11, 2009Bom Sucesso_NI 43-101 Technical Report on Resources_162706_MLM_011.doc
  • 118. MMX Mineração e Metálicos S.A. 15-3Bom Sucesso Project NI 43-101 Technical Report on ResourcesAll the drilling and the surface geologic mapping were used to construct the sections.The vertical sections were then used to generate 45 horizontal sections at 10m intervals (Figure15-4). The vertical sections were extruded 10m upward to create solids.SRK has reviewed the results and considers the geologic model to represent the geology of thedeposit as currently defined by mapping and drilling.15.4 CompositingThe samples were composited into 5m intervals with breaks at the geologic solid boundaries.Samples less than 2.5m were added to the previous sample to eliminate composites of shortlength. The compositing routine excluded the following: All LGA drilling because of poor recovery; MMX samples where core recovery was less than 70% (4 samples); and MMX samples where the stoichiometric closure was outside the acceptable range of 98 to 102% (3 samples).Table 15.4.1 presents statistics for the composited samples.Table 15.4.1: Basic Statistics of the Composited Samples Lithotype Statistic Fe SiO2 Al2O3 P Mn LOI Average 42.79 33.55 1.17 0.050 0.40 2.59 Std Dev 5.51 8.42 1.02 0.018 0.82 2.02 Minimum 28.10 7.10 0.20 0.017 0.04 0.06 Friable Maximum 56.58 45.48 5.76 0.109 5.60 9.92 CV 0.13 0.25 0.87 0.355 2.06 0.78 Number 82 82 82 82 82 82 Average 37.60 40.30 0.79 0.043 0.18 1.64 Std Dev 6.32 5.33 0.85 0.010 0.17 0.93 Semi- Minimum 21.31 25.75 0.12 0.024 0.06 0.30 compact Maximum 48.71 49.56 3.35 0.067 0.99 3.95 CV 0.17 0.13 1.08 0.238 0.94 0.57 Number 35 35 35 35 35 34 Average 27.70 43.55 1.21 0.038 0.18 2.93 Std Dev 6.64 5.32 2.53 0.014 0.24 3.93 Minimum 5.88 11.88 0.05 0.014 0.05 0.02 Compact Maximum 43.25 61.50 12.03 0.189 1.79 27.45 CV 0.24 0.12 2.09 0.378 1.33 1.34 Number 276 276 276 276 276 26115.5 DensityMMX conducted measurements on 1583 core samples and 65 surface samples using the waterdisplacement and sand flask methods, respectively. The density values used in the resourceestimation are shown in Table 15.5.1.SRK Consulting (US), Inc. May 11, 2009Bom Sucesso_NI 43-101 Technical Report on Resources_162706_MLM_011.doc
  • 119. MMX Mineração e Metálicos S.A. 15-4Bom Sucesso Project NI 43-101 Technical Report on ResourcesTable 15.5.1: Block Model Density Values Lithology Wet Density(g/cm3) Soil 2.20 Colluvium 2.20 Schist 3.00 Friable itabirite 2.31 Semi-compact itabirite 3.14 Compact itabirite 3.28 Friable dolomitic itabirite 2.31 Semi-compact dolomitic itabirite 3.14 Compact dolomitic itabirite 3.28 Phyllite 2.07 Quartzite 2.48 Basic intrusive 1.71 Acid intrusive 1.71 Pegmatite 1.7115.6 Block ModelA rotated block model was created with the origin and dimensions as shown in Table 15.6.1 andFigure 15-1.Table 15.6.1: Block Model Origin and Dimensions Direction Minimum Length Block size Number East 527140 3300 25 132 North 7670550 15600 50 312 Elev 600 1250 10 65The block model was coded with the following variables prior to grade estimation: Percent below topography; Percent within the mineral license boundary; Primary, secondary and tertiary lithologic codes and percentages for each block; and Density value for each lithology code.The lithology codes and percentages were assigned from the extruded geologic solids and eachblock could have up to three codes. Density values were assigned to each lithology code.15.7 Grade EstimationMMX estimated values for Fe, SiO2, Al2O3, P, Mn, MgO, CaO, TiO2, LOI, FeO, K2O, Na2O, Cuand S. The grade estimation was done in two passes using the Inverse Distance Squared (ID2)algorithm and the parameters shown in Table 15.7.1.SRK Consulting (US), Inc. May 11, 2009Bom Sucesso_NI 43-101 Technical Report on Resources_162706_MLM_011.doc
  • 120. MMX Mineração e Metálicos S.A. 15-5Bom Sucesso Project NI 43-101 Technical Report on ResourcesTable 15.7.1: Grade Estimation Parameters Parameter Pass 1 Pass 2 Composites Minimum 1 1 Maximum 24 24 Maximum/DH 3 3 Maximum/Quadrant 6 6 Search Distance(m) Major 1000 2000 Semi-Major 500 1000 Minor Free Free Search Orientation 030°,00°,00° 030°,00°,00°The following variables were also stored in for each block: Distance to the closest composite; Average distance to the composites used in estimation; Number of drillholes used in estimation; and Number of composites used in estimation.Table 15.7.2 contains the average grades in the block model.Table 15.7.2: Average Grades in the Block Model. Lithotype Fe SiO2 Al2O3 P Mn LOI Friable 41.94 34.17 1.23 0.050 0.41 2.50 Semi compact 37.62 40.77 0.08 0.043 0.19 1.56 Compact 27.09 44.22 1.90 0.042 0.22 2.9715.8 Block Model ValidationThe block model was verified by: SRK re-estimated Fe, SiO2, and P with same parameters as MMX, but using a single pass with a search range of 400m; Visual comparison of the drillholes and block grades; and Comparison of assay, composite, and block model statistics.SRK’s compared its estimation to MMX’s estimation considering only blocks within 400m ofthe closest composite. SRK’s tonnage was less than 1% difference in tonnage and had similarFe, SiO2, and P grades. Approximately 20% of SRK’s tonnage was estimated with only a singledrillhole. The longer MMX search range does not allow a comparison of tonnages comparedwith a single drillhole.The visual comparison of the drillholes and block grades and comparison of the assay, compositeand block grades indicate that resource estimation has produced results that reflect that data thatwas used in the estimation.SRK Consulting (US), Inc. May 11, 2009Bom Sucesso_NI 43-101 Technical Report on Resources_162706_MLM_011.doc
  • 121. MMX Mineração e Metálicos S.A. 15-6Bom Sucesso Project NI 43-101 Technical Report on Resources15.9 Resource ClassificationBecause the estimation in the vertical direction was unconstrained, a surface was created definedby the base of the drillholes to limit the classification of Inferred Resources.The Inferred Resources were classified according to the following parameters: Estimated in Pass 1; Maximum distance to the closest composite less than 400m; and Above the surface defined by the base of the drillholes.Figures 15-5 and 15-6 present vertical and horizontal sections, respectively, showing the inferredresources.SRK has reviewed the classification and the spatial distribution of the Inferred Resources and isof the opinion that the classification meets CIM guidelines for classification of resources.15.10 Mineral Resource Statement and SensitivityThe Inferred Resources for the Bom Sucesso Project are listed in Table 15.10.1.Table 15.10.1: Inferred Mineral Resources, April 15, 2009, Tonnes on a Wet Basis Lithology Class Mt* Fe SiO2 Al2O3 P Mn LOI Friable Inferred 52 42.05 34.32 1.28 0.049 0.385 2.39 Semi-compact Inferred 21 38.28 40.47 0.67 0.043 0.168 1.53 Compact Inferred 291 27.14 43.29 1.30 0.039 0.169 3.09 Total Inferred 365 29.93 41.84 1.26 0.041 0.200 2.90* The Total Inferred Resources are not equal to the sum of the tonnages by lithology due to rounding.The mineral sensitivity is shown as a grade tonnage curve in Figure 15-7.15.11 Potential ResourcesMMX has estimated potential resources as all blocks estimated in Pass 2 and blocks estimated inPass 1 that were not classified as Inferred Resources. The potential resource for the BomSucesso Project is between 500 and 740Mt at an approximate Fe grade of 27.5%. The potentialresource is about 95% compact itabirite most of which is below the depth of drilling andestimated in the second pass.Potential resources are highly speculative and there is no guarantee that future drilling will proveup the tonnage or grade.SRK Consulting (US), Inc. May 11, 2009Bom Sucesso_NI 43-101 Technical Report on Resources_162706_MLM_011.doc
  • 122. Bom Sucesso Bom Sucesso Project Drillhole Location Map, Brazil Topography and Block ModelSRK Job No.: 162706 LimitsFile Name: Figure 15-1.doc Date: 4/16/2009 Approved: LEM Figure: 15-1
  • 123. Cross-Section Location Map Cross-sections in 3D Bom Sucesso Project Bom Sucesso Brazil Vertical Geological Sections,SRK Job No.: 162706 Locations and 3DFile Name: Figure 15-2.doc Date: 4/16/2009 Approved: LEM Figure: 15-2
  • 124. Section 7 Section 19 Section 26 Bom Sucesso Bom Sucesso Project Vertical Geologic Cross- Brazil SectionsSRK Job No.: 162706File Name: Figure 15-3.doc Date: 4/16/2009 Approved: LEM Figure: 15-3
  • 125. Elevation 1035 Horizontal Plan, cut by Topography Extruded Geologic Solids Bom Sucesso Bom Sucesso Project Horizontal Geologic Sections Brazil and Extruded SolidsSRK Job No.: 162706File Name: Figure 15-4.doc Date: 4/16/2009 Approved: LEM Figure: 15-4
  • 126. Section 7 Section 19 Section 26 Bom Sucesso Bom Sucesso Project Vertical Cross-Sections with Brazil Block Model Fe GradesSRK Job No.: 162706File Name: Figure 15-5.doc Date: 4/16/2009 Approved: LEM Figure: 15-5
  • 127. Extruded Geologic Solids Bom Sucesso Bom Sucesso Project Horizontal Geologic Sections Brazil Elevation 1035SRK Job No.: 162706File Name: Figure 15-6.doc Date: 4/16/2009 Approved: LEM Figure: 15-6
  • 128. Bom Sucesso Project, Grade Tonnage Curve Brazil Inferred ResourcesSRK Job No.: 162706File Name: Figure 15-7.doc Date: 3/19/2009 Approved: LEM Figure: 15-7
  • 129. MMX Mineração e Metálicos S.A. 16-1Bom Sucesso Project NI 43-101 Technical Report on Resources16 Other Relevant Data and Information (Item 20)There is no other relevant information for the Bom Sucesso Project.SRK Consulting (US), Inc. May 11, 2009Bom Sucesso_NI 43-101 Technical Report on Resources_162706_MLM_011.doc
  • 130. MMX Mineração e Metálicos S.A. 17-1Bom Sucesso Project NI 43-101 Technical Report on Resources17 Interpretation and Conclusions (Item 21)17.1 Field Surveys and DrillingMMX has conducted surface geologic mapping over the entire extent of the itabirite within itsmineral license area at a scale of 1:5000. Mapping was focused on identifying contacts betweenthe Caraça, Itabira, and Piracicaba Groups and not on defining the individual occurrences offriable, semi-compact and compact itabirite. Pegamite dikes and faults were also mapped.LGA drilled 23 core holes with an average depth of 35.2m. The drilling was focused on thefriable itabirite and was halted when the compact itabirite was encountered. Core recovery wasgenerally poor.MMX has drilled 29 core holes with an average depth of 131.1m and drilling continued into thecompact itabirite. Core recovery was greater than 95%.All the drilling has been on sections that are irregularly spaced between 100 and 700m, with afew at 1000m.17.2 Analytical and Testing DataMMX inserted QA/QC samples throughout the drilling program. This includes 35 low ironstandards, 35 high iron standards, 35 pulp duplicates and 14 coarse duplicates. Anyinconsistencies in analytical results or control sample failures were identified, investigated and ifnecessary resubmitted for analysis to determine the reason for the failure. The samplepreparation and analyses follow industry guidelines and the QA/QC indicate that the results aresuitable for a resource database. The analytical techniques and sample preparation areappropriate for the mineralization and deposit type.17.3 Exploration ConclusionsA total of 52 holes have been drilled over the 5km strike length of the deposit. This density ofdrilling is adequate for an inferred resource in areas where the holes are more closely spaced.MMX’s mapping and drilling programs have been conducted according to industry best practicesand have produced results that are suitable for resource estimation.17.4 Resource EstimationThe resource estimation for the Project was prepared for MMX by Prominas, an independentgeologic and engineering consultant company in Belo Horizonte and was audited by SRK. Theestimation was conducted in two passes, with the first using a search distance of 1000m and thesecond a search distance of 2000m. The ID2 algorithm was used for the estimation, requiring aminimum of one sample in both passes. Resources were classified as Inferred if estimated in thefirst pass and if the closest composite was within 400m of the block centroid. Anotherqualification of inferred classification was that the block centroid had to lie above a surfacedefined by the base of the drilling. SRK considers that the estimation methodology andclassification meet CIM guidelines for estimating and classifying resources.SRK Consulting (US), Inc. May 11, 2009Bom Sucesso_NI 43-101 Technical Report on Resources_162706_MLM_011.doc
  • 131. MMX Mineração e Metálicos S.A. 18-1Bom Sucesso Project NI 43-101 Technical Report on Resources18 Recommendations (Item 22)SRK recommends the following for the Bom Sucesso Project: Infill drilling to a 400m by 200m grid – 50 drillholes at an average depth of 135m; and Additional metallurgical and process testing to define a process flowsheet. SRK recommends that QA/QC, be monitored and reviewed as it is received from the analytical lab during all exploration programs so that analytical failures can be quickly identified, investigated and resolved. In addition, 5% to 10% of the samples must be submitted to a secondary laboratory for analysis using the same analytical techniques used at the primary lab. This will help identify sample bias, procedural variations in analysis and sample mixups. Submission to a secondary lab should be done throughout the exploration program as part of QA/QC. SRK also recommends the insertion of sample blanks into the sample stream to monitor any contamination during sample preparation. SRK also recommends that CRM APHP continue to be monitored. Should the analytical results from SGS continue to be higher than the mean with a higher standard deviation, a new standard may need to be selected or APHP may need to be recertified. All results from standards should be monitored and graphed over time to identify possible instrument drift at the laboratory during analysis.18.1 Costs Drilling program – 6750m at a cost of US$300/m, including assays – US$2 million; and Metallurgical testwork – estimated $US200,000.SRK Consulting (US), Inc. May 11, 2009Bom Sucesso_NI 43-101 Technical Report on Resources_162706_MLM_011.doc
  • 132. MMX Mineração e Metálicos S.A. 19-1Bom Sucesso Project NI 43-101 Technical Report on Resources19 References (Item 23)Bloom, L., 2002, Analytical Services and QA/QC, Prepared for the Society of Exploration Geologists, April 2002, Unpublished Report, 24p.Carneiro, M.A., Barbosa, M.S.C. Implicacoes geologicas e tectonicas da interpretacao magnetometricada regiao de Oliveira, Minas Gerais. Revista Brasileira de Geoffsica - Rev. Bras. Geof. vol.26 no.1 Sao Paulo Jan./Mar. 2008.Erichsen. A.I., 1929. Geologia da Folha de São João del Rei. Serv. Geol.Miner do Brasil, DNPM, Bol. 36, 26 p.Fundacao Gorceix, 2008. Avaliacao do Potencial de Concentracao de uma Amostra de Minerio de Ferro Proveniente da Mina De Bonsucesso - Relatorio Tecnico. Arquivo digital "Iga- rev00.doc" Versao de 10 de julho de 2008. Relatorio Interno da LGA Mineração e Siderurgia Ltda., 5p.Guild P.W. (1960), Geologia e Recursos Minerais do Distrito de Congonhas, Estado de Minas Gerais: Departamento Nacional da Producao Mineral, memoria No. 1Gy, P., François- Bongarçon, D., 2008, Reference Material APHP Mineração MMX Certification Report – Rev1, Agoratek International Reference Material Certificate, 10p.LGA Mineração e Siderurgia Ltda., 2007. Minerio de Ferro da Serra de Bom Sucesso Minas Gerais Arquivo digital "livreto_web_2008.doc", de 13 de fevereiro de 2008, 37 p.MMX S.A., 2008. Relatorio de Avaliacao de Projeto - Projeto: LGA Mineração Ltda. (Bom Sucesso). Arquivo digital: "Laudo Aquisicao_Bom Sucesso.doc" e planilha "Projeto Bom Sucesso.xls". Versao de 23 de julho de 2008. Relatorio interno da Gerencia de Planejamento e Relacoes com Investidores. 3p.MMX S.A., 2008. Estudos Preliminares com Minerio de Bom Sucesso. Arquivo digital: "Relatorio Preliminar Concentracao do Minerio de Bom Sucesso.doc". Versao de 30 de setembro de 2008. Relatorio interno da Gerencia de Desenvolvimento Tecnologico. 11p.MMX S.A., 2008. Mercado Mundial e Brasileiro de Minerio de Ferro. Arquivo digital: "Mercado.doc". Versao de 22 de setembro de 2008. Relatorio interno da Gerencia de Planejamento e Orcamento. 5p.Moretzsohn, José Santos; Soares-Filho, B.S., 1982. Geologia da porção meridional da serra de Bom Sucesso, MG. In: II Simpósio de Geologia da Minas Gerais, Geologia do Precambriano, 1982, Belo Horizonte. Anais II Simpósio de Geologia da Minas Gerais, Geologia do Precambriano, Belo Horizonte: SBG, 1982. v. 3. p. 423-431.Noce C.M., 1995. Geocronologia dos eventos magmaticos, sedimentares e metamorficos na regiao do Quadrilatero Ferrifero, Minas Gerais. Sao Paulo. Tese de Doutoramento, Instituto de Geociencias/USP. 127p.Prominas, 2008. Relatorio M04 - Modelamento geologico, estimativa e classificacao de recursos. Arquivo digital: Relatorio_Bom_Sucesso_SET08_ M04.doc Versao de 22 de outubro de 2008. Relatorio Interno da MMX S.A., sob a coordenacao da Gerencia de Recursos e Reservas, 57p.SRK Consulting (US), Inc. May 11, 2009Bom Sucesso_NI 43-101 Technical Report on Resources_162706_MLM_011.doc
  • 133. MMX Mineração e Metálicos S.A. 19-2Bom Sucesso Project NI 43-101 Technical Report on ResourcesProminas, 2008. Relatorio_Bom_Sucesso_otimizacao de cavas_rev5.doc. Versao de 28 de outubro de 2008. Relatorio Interno da MMX S.A., sob a coordenacao da Gerencia de Recursos e Reservas, 9p.Quéméneur J.J.G., 1987. Petrography of the pegmatites from Rio das Mortes Valley, southeast Minas Gerais, Brazil. Rev. Bras. Geoc., 17(4):595-600.Quéméneur J.J.G., 1987. Esboco estratigrafico, estrutural e metamorfico da Serra de Bom Sucesso, MG. In: Simposio de TGeologia de Minas Gerais, 04., Belo Horizonte. Anais…, Belo Horizonte, 1987, p135-148.Quéméneur J.J.G., Baraud, R., 1983. Estrutura do Embasamento Arqueano e geologia economica da area pegmatítica de São João del Rei, MG. In: SBG-MG, Simpósio de Geologia de Minas Gerais, 2, Belo Horizonte, Anais, p. 449-460.Quéméneur J.J.G., Noce, C.M., 2000. Geochemistry and Petrology of Felsic and Mafic Suites Related to the Paleoproterozoic Transamazonian Orogeny in Minas Gerais, Brazil, Universidade Federal de Minas Gerais, Instituto de Geociências. Av. Antônio Carlos 6627, 31270-901 - Belo Horizonte (MG), Brazil, Marco de 2000.SGS Geosol, 2009, Online laboratory certification information, http://www.sgsgeosol.com.br., accessed May, 2009.UFMG, 2007. Amostras de Minerio de Ferro da LGA – Relatorio Final de Concentracao Bom Sucesso – UFMG.pdf e arquivo “Relatorio Final de Concentracao Bom Successo – UFMG.pdf” versao de 10 de outubro de 2007, Relatorio Interno da LGA Mineração e Siderurgia Ltda., 29p.UFMG, COMIG, 2003. Mapa Geológico, Folha Lavras, Projeto Sul de Minas, Impressão 2003.SRK Consulting (US), Inc. May 11, 2009Bom Sucesso_NI 43-101 Technical Report on Resources_162706_MLM_011.doc
  • 134. MMX Mineração e Metálicos S.A. 20-1Bom Sucesso Project NI 43-101 Technical Report on Resources20 Glossary20.1 Mineral Resources and Reserves20.1.1 Mineral ResourcesThe mineral resources and mineral reserves have been classified according to the “CIMStandards on Mineral Resources and Reserves: Definitions and Guidelines” (December 2005).Accordingly, the Resources have been classified as Measured, Indicated or Inferred, theReserves have been classified as Proven, and Probable based on the Measured and IndicatedResources as defined below.A Mineral Resource is a concentration or occurrence of natural, solid, inorganic or fossilizedorganic material in or on the Earth’s crust in such form and quantity and of such a grade orquality that it has reasonable prospects for economic extraction. The location, quantity, grade,geological characteristics and continuity of a Mineral Resource are known, estimated orinterpreted from specific geological evidence and knowledge.An ‘Inferred Mineral Resource’ is that part of a Mineral Resource for which quantity and gradeor quality can be estimated on the basis of geological evidence and limited sampling andreasonably assumed, but not verified, geological and grade continuity. The estimate is based onlimited information and sampling gathered through appropriate techniques from locations suchas outcrops, trenches, pits, workings and drillholes.An ‘Indicated Mineral Resource’ is that part of a Mineral Resource for which quantity, grade orquality, densities, shape and physical characteristics can be estimated with a level of confidencesufficient to allow the appropriate application of technical and economic parameters, to supportmine planning and evaluation of the economic viability of the deposit. The estimate is based ondetailed and reliable exploration and testing information gathered through appropriate techniquesfrom locations such as outcrops, trenches, pits, workings and drillholes that are spaced closelyenough for geological and grade continuity to be reasonably assumed.A ‘Measured Mineral Resource’ is that part of a Mineral Resource for which quantity, grade orquality, densities, shape, physical characteristics are so well established that they can beestimated with confidence sufficient to allow the appropriate application of technical andeconomic parameters, to support production planning and evaluation of the economic viability ofthe deposit. The estimate is based on detailed and reliable exploration, sampling and testinginformation gathered through appropriate techniques from locations such as outcrops, trenches,pits, workings and drillholes that are spaced closely enough to confirm both geological and gradecontinuity.20.1.2 Mineral ReservesA Mineral Reserve is the economically mineable part of a Measured or Indicated MineralResource demonstrated by at least a Preliminary Feasibility Study. This Study must includeadequate information on mining, processing, metallurgical, economic and other relevant factorsthat demonstrate, at the time of reporting, that economic extraction can be justified. A MineralReserve includes diluting materials and allowances for losses that may occur when the materialis mined.SRK Consulting (US), Inc. May 11, 2009Bom Sucesso_NI 43-101 Technical Report on Resources_162706_MLM_011.doc
  • 135. MMX Mineração e Metálicos S.A. 20-2Bom Sucesso Project NI 43-101 Technical Report on ResourcesA ‘Probable Mineral Reserve’ is the economically mineable part of an Indicated, and in somecircumstances a Measured Mineral Resource demonstrated by at least a Preliminary FeasibilityStudy. This Study must include adequate information on mining, processing, metallurgical,economic, and other relevant factors that demonstrate, at the time of reporting, that economicextraction can be justified.A ‘Proven Mineral Reserve’ is the economically mineable part of a Measured Mineral Resourcedemonstrated by at least a Preliminary Feasibility Study. This Study must include adequateinformation on mining, processing, metallurgical, economic, and other relevant factors thatdemonstrate, at the time of reporting, that economic extraction is justified.20.2 GlossaryTable 20.2.1: Glossary Term Definition Assay: The chemical analysis of mineral samples to determine the metal content. Capital Expenditure: All other expenditures not classified as operating costs. Composite: Combining more than one sample result to give an average result over a larger distance. Concentrate: A metal-rich product resulting from a mineral enrichment process such as gravity concentration or flotation, in which most of the desired mineral has been separated from the waste material in the ore. Crushing: Initial process of reducing ore particle size to render it more amenable for further processing. Cut-off Grade (CoG): The grade of mineralized rock, which determines as to whether or not it is economic to recover its gold content by further concentration. Dilution: Waste, which is unavoidably mined with ore. Dip: Angle of inclination of a geological feature/rock from the horizontal. Fault: The surface of a fracture along which movement has occurred. Footwall: The underlying side of an orebody or stope. Gangue: Non-valuable components of the ore. Grade: The measure of concentration of gold within mineralized rock. Hangingwall: The overlying side of an orebody or slope. Haulage: A horizontal underground excavation which is used to transport mined ore. Igneous: Primary crystalline rock formed by the solidification of magma. Kriging: An interpolation method of assigning values from samples to blocks that minimizes the estimation error. Lithological: Geological description pertaining to different rock types. Material Properties: Mine properties. Milling: A general term used to describe the process in which the ore is crushed and ground and subjected to physical or chemical treatment to extract the valuable metals to a concentrate or finished product. Mineral/Mining License: A area for which mineral rights are held. Mining Assets: The Material Properties and Significant Exploration Properties. Ore Reserve: See Mineral Reserve. RoM: Run-of-Mine. Sedimentary: Pertaining to rocks formed by the accumulation of sediments, formed by the erosion of other rocks. Sill: A thin, tabular, horizontal to sub-horizontal body of igneous rock formed by the injection of magma into planar zones of weakness. Stratigraphy: The study of stratified rocks in terms of time and space. Strike: Direction of line formed by the intersection of strata surfaces with the horizontal plane, always perpendicular to the dip direction. Tailings: Finely ground waste rock from which valuable minerals or metals have been extracted. Variogram: A statistical representation of the characteristics (usually grade).SRK Consulting (US), Inc. May 11, 2009Bom Sucesso_NI 43-101 Technical Report on Resources_162706_MLM_011.doc
  • 136. MMX Mineração e Metálicos S.A. 20-3Bom Sucesso Project NI 43-101 Technical Report on ResourcesAbbreviationsThe metric system has been used throughout this report. Currency is in U.S. dollars unlessotherwise stated. Tonnes are metric of 1,000kg, or 2,204.6lbs. The abbreviations presented inTable 20.2.2 are general mining terms and may be used within the text of this Technical Report.Table 20.2.2: Abbreviations Abbreviation Unit or Term AA atomic absorption Al2O3 alumina (aluminum oxide) °C degrees Centigrade CaO calcium oxide CoG cut-off grade cm centimeter cm2 square centimeter cm3 cubic centimeter ° degree (degrees) dia. diameter EIA/RIMA Environmental Impact Assessment and Environmental Impact Report Fe iron FeO ferrous oxide or wustite ft2 square foot (feet) ft3 cubic foot (feet) g gram gal gallon g/L gram per liter g/t grams per tonne ha hectares ICP induced couple plasma ID2 inverse-distance squared ID3 inverse-distance cubed kg kilograms km kilometer km2 square kilometer kt thousand tonnes kV kilovolt kW kilowatt kWh kilowatt-hour kWh/t kilowatt-hour per metric tonne L liter L/sec liters per second L/sec/m liters per second per meter lb pound LOI Loss On Ignition LoM Life-of-Mine m meter m2 square meter m3 cubic meter masl meters above sea level Ma million years before present Mn manganese MgO magnesium oxide mg/L milligrams/liter mm millimeter mm2 square millimeter mm3 cubic millimeter Mt million tonnes m.y. million years NI 43-101 Canadian National Instrument 43-101 OSC Ontario Securities Commission oz troy ounceSRK Consulting (US), Inc. May 11, 2009Bom Sucesso_NI 43-101 Technical Report on Resources_162706_MLM_011.doc
  • 137. MMX Mineração e Metálicos S.A. 20-4Bom Sucesso Project NI 43-101 Technical Report on Resources Abbreviation Unit or Term % percent P phosphorous ppb parts per billion ppm parts per million QA/QC Quality Assurance/Quality Control R$ Real/Reais (Brazilian currency) RQD Rock Quality Description SD Standard Deviation SEC U.S. Securities & Exchange Commission sec second SiO2 silica (silica dioxide) SG specific gravity t tonne (metric ton) (2,204.6 pounds) t/h tonnes per hour t/d tonnes per day t/y tonnes per year TiO2 titanium oxide µm micron or microns, micrometer or micrometers V volts W watt XRD x-ray diffraction y yearSRK Consulting (US), Inc. May 11, 2009Bom Sucesso_NI 43-101 Technical Report on Resources_162706_MLM_011.doc
  • 138. Appendix ACertificate of Author
  • 139. SRK Consulting (U.S.), Inc. 7175 West Jefferson Avenue, Suite 3000 Lakewood, Colorado USA 80235 e-mail: denver@srk.com web: www.srk.com Tel: 303.985.1333 Fax: 303.985.9947 CERTIFICATE of AUTHORI, Leah Mach, CPG, MSc do hereby certify that:1. I am currently employed as Principal Resource Geologist of: SRK Consulting (US), Inc. 7175 W. Jefferson Ave, Suite 3000 Denver, CO, USA, 802352. I graduated with a Master of Science degree in Geology from the University of Idaho in 1986.3. I am a member of the American Institute of Professional Geologists.4. I have worked as a Geologist for a total of 23 years since my graduation from the University of Idaho.5. I have read the definition of “qualified person” set out in National Instrument 43-101 (“NI 43-101”) and certify that by reason of my education, affiliation with a professional association (as defined in NI 43-101) and past relevant work experience, I fulfill the requirements to be a “qualified person” for the purposes of NI 43-101.6. I am responsible for all sections of the technical report titled “NI43-101 Technical Report on Resources, MMX Mineração e Metálicos S.A.,” dated May 11, 2009 (the “Technical Report”) relating to the Bom Sucesso Project. I visited the Bom Sucesso Project property on February 12, 2009.7. I have not had prior involvement with the property that is the subject of the Technical Report.8. I am independent of the issuer applying all of the tests in section 1.4 of National Instrument 43-101.9. I have read National Instrument 43-101 and Form 43-101F1, and the Technical Report has been prepared in compliance with that instrument and form.10. I consent to the filing of the Technical Report with any stock exchange and other regulatory authority and any publication by them for regulatory purposes, including electronic publication in the public company files on their websites accessible by the public, of the Technical Report. Group Offices in: North American Offices: Australia Denver 303.985.1333 North America Elko 775.753.4151 Southern Africa Reno 775.828.6800 South America Tucson 520-544-3688 United Kingdom Toronto 416.601.1445 Vancouver 604.681.4196 Yellowknife 867-699-2430
  • 140. SRK Consulting (US), Inc. Page 2 of 211. As of the date of this certificate, to the best of my knowledge, information and belief, the Technical Report contains all scientific and technical information that is required to be disclosed to make the Technical Report not misleading.Dated this 11th Day of May, 2009. “Signed” “Sealed”Leah Mach, CPG, MSc CPG 10940BomSucesso_COA_Mach_162700_060_esigned.doc
  • 141. Item 24MMX Mineraçò e Metálicos S. A., NI 43-101 Technical Report on Resources, Bom SucessoProject, Minas Gerais, Brazil, May 11, 2009.Dated this 11th Day of May, 2009. “Signed” “Sealed”Leah Mach, CPG, MSc CPG 10940
  • 142. MMX Mineração e Metálicos S.A. Resources and Reserves Audit Corumbá Iron Project, Mine 63 Brazil Prepared for: Mineração e Metálicos S.A. Praia do Flamengo 154/4° Rio de Janeiro Brasil 22210-030 SRK Project Number 162700.090 7175 West Jefferson Ave., Suite 3000 Lakewood, Colorado USA 80235 Tel: +1.303.985.1333 Fax: +1.303.985.9947 E-mail: Denver@srk.com Web site: www.srk.com Report Date: October 20, 010 Authors: Leah Mach, M.Sc., Geology, CPG Fernando Rodrigues, B.S. Mining, MAusIMM Afranio Machado Mike Elder, P.E.
  • 143. Mineração e Metálicos S.A. iCorumbá Iron Project, Mine 63 Resources and Reserves AuditTable of Contents1 INTRODUCTION ........................................................................................................... 1-1 1.1 Terms of Reference and Purpose of the Report ................................................... 1-1 1.2 Sources of Information ........................................................................................ 1-1 1.3 Effective Date ...................................................................................................... 1-1 1.4 Qualifications of Consultant (SRK) ..................................................................... 1-12 PROPERTY DESCRIPTION AND LOCATION ........................................................... 2-1 2.1 Property Location................................................................................................. 2-1 2.2 Mineral Titles ....................................................................................................... 2-13 GEOLOGICAL SETTING .............................................................................................. 3-1 3.1 Regional Geology ................................................................................................ 3-1 3.2 Local Geology ...................................................................................................... 3-1 3.2.1 Mineralization........................................................................................ 3-24 EXPLORATION.............................................................................................................. 4-1 4.1 Exploration of Mine 63 ........................................................................................ 4-1 4.2 Drilling ................................................................................................................. 4-1 4.3 Sampling Method and Approach ......................................................................... 4-2 4.4 Sample Preparation, Analysis and Security for Mine 63 ..................................... 4-2 4.4.1 Sample Preparation ................................................................................ 4-3 4.4.2 Sample Analysis .................................................................................... 4-4 4.4.3 Laboratory Quality Control and Quality Assurance .............................. 4-5 4.5 Conclusion ........................................................................................................... 4-95 DATA VERIFICATION ................................................................................................. 5-16 MINERAL PROCESSING .............................................................................................. 6-27 MINERAL RESOURCE ................................................................................................. 7-1 7.1 Density ................................................................................................................. 7-1 7.2 Topography .......................................................................................................... 7-1 7.3 Resource Database ............................................................................................... 7-2 7.4 Geological Model................................................................................................. 7-3 7.5 Compositing ......................................................................................................... 7-3 7.6 Variography ......................................................................................................... 7-3 7.7 Block Model......................................................................................................... 7-4 7.8 Resource Estimation ............................................................................................ 7-4 7.9 Resource Classification and Resource Statement ................................................ 7-5 7.10 Validation of Resource Model ............................................................................. 7-78 RESERVE ESTIMATION .............................................................................................. 8-1 8.1 Geotechnical Studies............................................................................................ 8-4 8.2 Mining Operations ............................................................................................... 8-5 8.3 Mining Method .................................................................................................... 8-5 8.4 Mine Planning ...................................................................................................... 8-6 8.5 Processing ............................................................................................................ 8-6 8.6 Infrastructure ........................................................................................................ 8-7 8.7 Tailings ................................................................................................................ 8-7 8.8 Shipment Logistics............................................................................................... 8-7SRK Consulting (U.S.), Inc. October 20, 2008Corumba_Resources and Reserves Audit_162700 09_MLM_008.docx
  • 144. Mineração e Metálicos S.A. iiCorumbá Iron Project, Mine 63 Resources and Reserves Audit 8.9 Environmental Management ................................................................................ 8-7 8.9.1 During the Operational Life of the Mine ............................................... 8-7 8.9.2 Mine Closure ......................................................................................... 8-8 8.10 Taxes and Royalties (OK) .................................................................................... 8-8 8.11 LoM Plan Economics........................................................................................... 8-8 8.12 Mine Life ............................................................................................................. 8-89 RECOMMENDATIONS ................................................................................................. 9-110 REFERENCES .............................................................................................................. 10-111 GLOSSARY .................................................................................................................. 11-1 11.1 Mineral Resources and Reserves ....................................................................... 11-1 11.2 Glossary ............................................................................................................. 11-2 11.3 Abbreviations ..................................................................................................... 11-3List of TablesTable 1: Mine 63 Resources on a Wet Tonnage Basis .................................................................IIITable 2: Mineral Reserves - Mine 63 Corumbá Project* ............................................................ IVTable 3: Mineral Reserves by Lithology - Mine 63 Corumbá Project* ........................................ VTable 4: Mine Production Schedule – Mine 63 .............................................................................VTable 1.4.1: Key SRK Project Personnel .................................................................................... 1-2Table 4.2.1: Drilling in Mine 63, Corumbá Project .................................................................... 4-1Table 4.4.1 Preparation and Analytical Laboratories .................................................................. 4-3Table 4.4.2.1: Limits Detection of SGS Iron Ore Analysis ........................................................ 4-4Table 4.4.2.2: Detection Limits of Iron Ore Analysis ................................................................ 4-5Table 4.4.3.1: Summary of Percent Difference Between SGS and UT Samples ....................... 4-7Table 4.4.3.2: Standard Reference Samples ............................................................................... 4-8Table 4.4.3.3: Percentage of Laboratory Pulp Duplicates within Specific Ranges .................... 4-9Table 6.1: Plant Main Operating Data ........................................................................................ 6-4Table 6.2: Mine and Concentration Main Operating Data ......................................................... 6-5Table 7.1.1: Density on a Wet Basis by Lithotype at Mine 63 ................................................... 7-1Table 7.3.1: Model Lithotypes .................................................................................................... 7-2Table 7.3.2: Average Grades by Lithotype ................................................................................. 7-2Table 7.5.1: Average Grades of Composites by Lithotype ......................................................... 7-3Table 7.6.1: Variogram Parameters ............................................................................................. 7-4Table 7.7.1: Block Model Origin and Dimensions ..................................................................... 7-4Table 7.9.1: Mine 63 Resources on a Wet Tonnage Basis, MMX License Area ....................... 7-6SRK Consulting (U.S.), Inc. October 20, 2008Corumba_Resources and Reserves Audit_162700 09_MLM_008.docx
  • 145. Mineração e Metálicos S.A. iiiCorumbá Iron Project, Mine 63 Resources and Reserves AuditTable 7.9.2: Mineral Resources by Lithology within Vale Infrastructure Area - Mine 63 Corumbá Project .............................................................................................................. 7-7Table 8.1: Correlations RoM Grades x Product Grades Grades* ............................................... 8-1Table 8.2: Optimized Pit for Mine 63, Corumbá Project End of June 2010............................... 8-2Table 8.3: Total Reserves as at September 23, 2010 - Mine 63 Corumbá Project* ................... 8-3Table 8.4: Mineral Reserves by Lithology - Mine 63 Corumbá Project* .................................. 8-3Table 8.5: Mine 63 Production, January to August 2010 ........................................................... 8-4Table 8.6: Mineral Reserves by Lithology within Vale Infrastructure Area - Mine 63 Corumbá Project* ............................................................................................................................ 8-4Table 8.4.1: Mine Production Schedule – Mine 63 .................................................................... 8-6Table 8.10.1: MMX Taxes .......................................................................................................... 8-8List of FiguresFigure 2-1: Location Map of the Corumbá Project ..................................................................... 2-2Figure 2-2: Mineral Rights Map - Mine 63 ................................................................................ 2-3Figure 3-1: Stratigraphic Column and Regional Map................................................................. 3-1Figure 3-2: Cross-Section of Mine 63 Area Showing Colluvium and Eluvium Deposits .......... 3-2Figure 3-3: Geologic Map of the Mine 63 Area ......................................................................... 3-3Figure 4-1: Drillhole and Sample Locations, Mine 63 Corumbá Project ................................. 4-10Figure 4-2: LCT and SGS vs. UT Analyses for Corumbá Samples ......................................... 4-11Figure 6-1: Plant Flow Sheet ...................................................................................................... 6-6Figure 7-1: Sample Locations, Topography and Mineral Boundaries, Mine 63 ........................ 7-8Figure 7-2: Mine 63 Mineral Resource Classification (A) and Fe Grades (B) ........................... 7-9Figure 7-3: MMX License Area with Block Classification and Vale Infrastructure Area ....... 7-10Figure 7-4: Mine 63 Mineral Resource Fe Swath Plots (A) and Location of Swath Plot Lines (B)7-11Figure 8-1: Spider Graph Showing Sensitivity of the Optimized Pit to Product Price............... 8-9Figure 8-2: Current Layout of Mine 63 Corumbá Project ........................................................ 8-10Figure 8-3: Mine Schedule of Mine 63 Corumbá Project......................................................... 8-11SRK Consulting (U.S.), Inc. October 20, 2008Corumba_Resources and Reserves Audit_162700 09_MLM_008.docx
  • 146. Mineração e Metálicos S.A. ICorumbá Iron Project, Mine 63 Resources and Reserves AuditSummarySRK Consulting (U.S.), Inc. (SRK) was commissioned by MMX Mineração e Metálicos S.A.(MMX) to audit the Mineral Resources and Reserves of Mine 63, an operating mine which is apart of the Corumbá Iron Project (Corumbá Project) located in Mato Grosso do Sul State, Brazil.Mine 63 is owned and operated by MMX Corumbá Mineração Ltda (MMX Corumbá) which is70% owned by MMX and 30% by Centennium Asset Mining Fund LLC. This report reflects themost recent Mineral Resource and Ore Reserve estimation based on data produced throughSeptember 23, 2010.Property Description and AccessibilityMine 63 is an operating mine, located about 19.5km from the city of Corumbá, the capital of thestate of Mato Grosso do Sul. The mine is close to the border of Brazil and Bolivia, atcoordinates 19º 11’ 41”S and 57º 36’ 50”W. Access to the property is by paved highway BR-262 for 16km and then by unpaved roads to the property.Geology and MineralizationMine 63 lies within the Urucum iron-manganese district which is located along the Brazilian-Bolivian border and extends into the eastern areas of both Paraguay and Bolivia covering200km2. The Urucum deposits are associated with banded iron formations (BIF), locally knownas jaspilites. The iron and manganese deposits are found in the plateaus which rise from theplains of the Paraguay River. The regional geology consists of Proterozoic-age igneous andmetamorphic rocks, granite intrusions, and acidic intrusives. The rocks are in faulted andunconformable contact with, and are overlain by, Quaternary sedimentary deposits whichaccount for approximately 60% of the cover in the area.The mineralization of the Corumbá Project is contained within eluvial and colluvial depositsfrom a jaspilite source. Weathering has increased the Fe grade through silica leaching. Theenrichment factor of the eluvial material, in relation to the primary rock, depends on thedimension of the fragments. The total iron content is directly proportional to the distance fromthe source and has been enriched by the leaching of silica. The breccia areas have undergonecementation and have a more consolidated nature than the colluvium.ExplorationExploration at Mine 63 consists of: Excavation of a series of hand dug exploration pits or shafts. The shafts, excavated with pick and shovel, are 1.5m2 in plan view and have vertical walls which are up to 6m deep in the colluvium and 10m in the eluvium; Drilling; Channel sampling of the pit faces; and Surface mapping.The core was split lengthwise with breaks at lithologic contacts, and one-half of the core wasbagged and the remainder was stored in wooden boxes. Intervals that were considered to beinternal waste were not sampled and intervals within the bedrock were not sampled. TheSRK Consulting (U.S.), Inc. October 20, 2008Corumba_Resources and Reserves Audit_162700 09_MLM_008.docx
  • 147. Mineração e Metálicos S.A. IICorumbá Iron Project, Mine 63 Resources and Reserves Auditsamples were numbered consecutively using a blind numbering sequence. Sample tags wereplaced in the sample bag and the bag was marked with the sample number as well.Samples from the shafts were collected from vertical channels in one wall of the shaft. Thechannel was 10cm wide and 15cm deep and was sampled over the entire length of themineralized zone in the shaft. The channel was made using a hammer and chisel and the samplewas collected in a wooden box. The sample was then transferred to plastic bags. The sampleswere also numbered consecutively with blind numbers as with the drill samples. The four wallsof the shafts are photographed meter by meter.The channel samples are vertical and were collected from outcrops and mine benches using thesame methodology as in the shaft samples.All samples have been prepared by the Mine 63 laboratory. The 2006 samples were analyzed atLCT in Sao Paulo, but those results were shown to be unreliable and the samples were reassayedat SGS. The 2007 and 2008 samples were analyzed at SGS and the 2010 samples were analyzedat the Mine 63 laboratory.ResourcesThe resources were estimated by MMX using data produced through September 2010. Thedrillhole assays were composited into 5m lengths from the top of the hole, with breaks at thelithologic contacts; intervals of 2.5m or less were included with the preceding composite if thelithologies were the same.Variography studies were done for each lithotype. A block model was created with a block sizeof 10m x 10m x 5m. The 3D geologic models were used to assign a lithotype code andpercentage to the blocks; there are two block partials for lithotype. Grade was estimated withordinary kriging in three passes. The search distance in the first pass was set at 100% of thevariogram range. Blocks estimated in the first pass were classified as Measured if the closestcomposite was within 25% of the variogram range and a minimum of three drillholes or shaftswere used in the estimation. Blocks were classified as Indicated if the closest composite waswithin 50% of the search range and a minimum of two drillholes or shafts were used in theestimation. Blocks not classified were re-estimated in the second pass in which the searchdistance was 150% of the variogram range. Blocks estimated in the second pass were classifiedas Inferred. The search distance in the third pass was set at 300% of the variogram range and allblocks were classified as Potential. The classification was reduced to Indicated where thesamples were on a 200m x 100m grid and to Inferred where the grid was larger.The Mineral Resources on a Wet Tonnage Basis are presented on Table 1.SRK Consulting (U.S.), Inc. October 20, 2008Corumba_Resources and Reserves Audit_162700 09_MLM_008.docx
  • 148. Mineração e Metálicos S.A. IIICorumbá Iron Project, Mine 63 Resources and Reserves AuditTable 1: Mine 63 Resources on a Wet Tonnage Basis Lithotype Classification Tonnage Fe SiO2 Al2O3 P LOI Measured 532,000 49.59 22.16 2.98 0.095 2.14 Indicated 3,325,000 49.25 23.03 2.82 0.108 2.03 BRE Total M&I 3,857,000 49.30 22.91 2.84 0.106 2.05 Inferred 5,915,000 49.26 22.60 3.12 0.110 2.20 Potential 396,000 49.43 22.07 3.21 0.097 2.18 Measured 30,949,000 53.69 15.65 3.58 0.057 1.98 Indicated 13,393,000 48.34 21.44 4.60 0.056 2.46 COLF Total M&I 44,341,000 52.07 17.40 3.88 0.056 2.12 Inferred 4,602,000 46.34 22.62 5.09 0.061 2.62 Potential 0 Measured 0 Indicated 8,182,000 54.87 16.77 2.49 0.069 1.37 COLU Total M&I 8,182,000 54.87 16.77 2.49 0.069 1.37 Inferred 3,902,000 53.18 19.26 2.29 0.063 1.21 Potential 549,000 54.29 17.65 2.57 0.069 1.31 Measured 0 Indicated 537,000 53.90 12.40 5.05 0.151 3.97 LIMO Total M&I 537,000 53.90 12.40 5.05 0.151 3.97 Inferred 18,000 61.32 5.96 2.63 0.107 2.54 Potential 0 Measured 0 Indicated 0 LIXI Total M&I 0 Inferred 87,000 61.85 9.77 0.46 0.075 0.53 Potential 0 Measured 0 Indicated 3,444,000 59.91 11.73 1.01 0.056 0.84 PLIX Total M&I 3,444,000 59.91 11.73 1.01 0.056 0.84 Inferred 429,000 60.99 9.69 1.31 0.065 1.00 Potential 0 Measured 18,758,000 48.73 24.34 2.09 0.057 1.34 Indicated 951,000 47.64 24.78 3.12 0.056 1.72 COLG Total M&I 19,709,000 48.68 24.37 2.14 0.057 1.36 Inferred 151,000 44.83 27.04 4.78 0.049 2.77 Potential 0 Measured 50,239,000 51.79 18.96 3.02 0.057 1.74 Indicated 29,832,000 51.64 19.16 3.37 0.067 1.93 Total Total M&I 80,071,000 51.74 19.04 3.15 0.061 1.81 Inferred 15,103,000 49.76 21.33 3.46 0.081 2.04 Potential 945,000 52.25 19.50 2.84 0.081 1.68SRK has validated the resource through visual comparison of composites to block grades onvertical cross-sections and by conducting a second estimation as a check. It is SRK’s opinionthat the estimation has been conducted according to industry best practices.SRK Consulting (U.S.), Inc. October 20, 2008Corumba_Resources and Reserves Audit_162700 09_MLM_008.docx
  • 149. Mineração e Metálicos S.A. IVCorumbá Iron Project, Mine 63 Resources and Reserves AuditReservesIn September 2010, a Gemcom Whittle® pit optimization routine was run on the Mine 63mineral resources using the following parameters: Mass recovery: 58% (49% Lump and 9% Bitolado (BTL); Average product value: R$122.14/t; Mine cost RoM: R$6.75/t; Plant cost: R$6.40/t RoM; G&A costs: o Logistics costs – are US$26.16/t-prod LoM, o Product transport – mine to port - US$3.00/t-prod LoM, o Port terminal cost is US$2.80/t-prod, and o Administrative expenses are - US$3.50/t-prod LoM. Pit slope: 40.5o colluvium; 40.5o eluvium; and Ore Definition cut-off (Silica) – material has to be below the silica cut-off mentioned below: o COLF - 10.2 SiO2 cut-off, o COLU = 7.6 SiO2 cut-off, and o LIMO/PLIX – 8.0 SiO2 cut-off.From the Whittle® Optimization pit shells, pit designs with ramp access were designed. Basedon the pit design, reserves were estimated. Only Measured and Indicated blocks that met themetallurgical plant blend constraint were classified as RoM material (Ore).The reserves reported below were depleted for mine production through September 23, 2010.The total reserves for Mine 63 are listed in Table 2.Table 2: Mineral Reserves - Mine 63 Corumbá Project* RoM Grades Product Grades** Class Volume Tonnes Fe SiO2 Al2O3 P.G LOI Fe SiO2 Al2O3 P.G LOI Mm3 Mt % % % % % % % % % % Proven 5.2 16.2 57.91 10.52 3.27 0.06 1.92 63.47 5.69 1.31 0.05 1.02 Probable 1.0 3.1 60.1 9.31 2.27 0.07 1.63 64.72 5.43 0.92 0.06 1.13 Total P&P 6.2 19.3 58.26 10.33 3.11 0.06 1.88 63.67 5.65 1.25 0.06 1.03*Tonnes are reported on a wet basis.**Product tonnes will be reduced by the mass recoveryAverage iron product price used in reserve is R$122.14.No dilution applied.No mining recovery applied.September 23, 2010 topography used.SRK Consulting (U.S.), Inc. October 20, 2008Corumba_Resources and Reserves Audit_162700 09_MLM_008.docx
  • 150. Mineração e Metálicos S.A. VCorumbá Iron Project, Mine 63 Resources and Reserves AuditTable 3 shows mineral reserves classified by lithology.Table 3: Mineral Reserves by Lithology - Mine 63 Corumbá Project* RoM Product Vol. Tonnes Fe SiO2 Al2O3 P LOI Fe SiO2 Al2O3 P LOI LITHOLOGY CLASSIFICATION (Mm3) (Mt) % % % % % % % % % % PROVEN 5.2 16.3 57.91 10.52 3.27 0.06 1.92 63.47 5.69 1.31 0.05 1.02 COLF PROBABLE 0.1 0.2 60.48 7.17 3.26 0.08 2.18 65.61 2.99 1.31 0.07 1.16 TOTAL 5.3 16.4 57.94 10.48 3.27 0.06 1.93 63.50 5.66 1.31 0.05 1.02 PROVEN - - - - - - - - - - - - COLU PROBABLE 0.3 1.0 59.58 9.48 3.03 0.08 1.90 63.91 5.61 1.34 0.07 1.08 TOTAL 0.3 1.0 59.58 9.48 3.03 0.08 1.90 63.91 5.61 1.34 0.07 1.08 PROVEN - - - - - - - - - - - - LIMO PROBABLE 0.1 0.3 55.39 10.15 5.07 0.15 4.26 62.83 6.05 1.94 0.10 2.21 TOTAL 0.1 0.3 55.39 10.15 5.07 0.15 4.26 62.83 6.05 1.94 0.10 2.21 PROVEN - - - - - - - - - - - - PLIX PROBABLE 0.5 1.7 61.09 9.34 1.26 0.06 1.00 65.39 5.51 0.47 0.05 0.98 TOTAL 0.5 1.7 61.09 9.34 1.26 0.06 1.00 65.39 5.51 0.47 0.05 0.98 PROVEN 5.2 16.3 57.91 10.52 3.27 0.06 1.92 63.47 5.69 1.31 0.05 1.02 TOTAL PROBABLE 1.0 3.1 60.10 9.31 2.27 0.07 1.63 64.72 5.43 0.92 0.06 1.13 TOTAL 6.2 19.3 58.26 10.33 3.11 0.06 1.88 63.67 5.65 1.25 0.06 1.03*Tonnes are reported on a wet basis.Average iron product price used in reserve is R$122.14.No dilution applied.No mining recovery applied.September 23, 2010 topography used.Waste material in the pits totasl 8.0Mt for a 0.41 strip ratio.Based on the pit design, a yearly schedule was developed. Table 4 shows the LoM schedule forMine 63.Table 4: Mine Production Schedule – Mine 63 Year RoM Mt/y Waste Mt/y Total Movement Mt/y 2010* 0.9 0.5 1.3 2011 3.4 1.7 5.1 2012 3.3 2.5 5.8 2013 3.2 1.2 4.4 2014 3.3 1.2 4.5 2015 3.3 1.2 4.5 2016 1.9 0.7 2.6 Total 19.3 9.1 28.4*2010 production is based on September 23, 2010 to December 31, 2010.Tonnes are reported on a wet basis.Average iron product price used in reserve is R$122.14.No dilution applied.No mining recovery applied.September 23, 2010 topography used.SRK Consulting (U.S.), Inc. October 20, 2008Corumba_Resources and Reserves Audit_162700 09_MLM_008.docx
  • 151. Mineração e Metálicos S.A. VICorumbá Iron Project, Mine 63 Resources and Reserves AuditMetallurgy and ProcessMetallurgical testing at Mine 63 consisted of: A study of the correlation between run-of-mine (RoM) and Lump to establish the cut-off grade; and A study of the mass recovery to define the product yield of Lump and BTL.The results of the tests indicate that at Mine 63 the average grade of the RoM must be 54.8% Fewith a maximum of 10.2% silica The mass recovery percentages for Lump and BTL are 49%and 9%, respectively.The plant treats the ore using crushing, screening and washing in screens and drums. Currently anew pneumatic jig station is treating the BTL in order to reduce the SiO2 content to about 4.5%.Economic Analysis – Mine 63SRK has reviewed MMX’s economic model and is in agreement with the methodology.SRK Consulting (U.S.), Inc. October 20, 2008Corumba_Resources and Reserves Audit_162700 09_MLM_008.docx
  • 152. Mineração e Metálicos S.A. 1-1Corumbá Iron Project, Mine 63 Resources and Reserves Audit1 IntroductionSRK Consulting (U.S.), Inc., (SRK) was commissioned by MMX Mineração e Metálicos S.A.(MMX) to audit the Mineral Resources and Reserves of Mine 63, an operating mine which is apart of the Corumbá Iron Project (Corumbá Project) located in Mato Grosso do Sul State, Brazil.Mine 63 is owned and operated by MMX Corumbá Mineração Ltda (MMX Corumbá) which is70% owned by MMX and 30% by Centennium Asset Mining Fund LLC. This report reflects themost recent Mineral Resource and Ore Reserve estimation based on data produced throughSeptember 23, 2010.1.1 Terms of Reference and Purpose of the ReportThis Report is intended to be used by MMX to further the development of the Property byproviding an audit of the mineral resource and ore reserve estimates, classification of resourcesand reserves in accordance with the Canadian Institute of Mining, Metallurgy and Petroleum(CIM) classification system, and evaluation of the project.MMX may also use the Technical Report for any lawful purpose to which it is suited.1.2 Sources of InformationThe underlying technical information upon which this Report is based represents a compilationof work performed by MMX. The studies and additional references for this Technical Report arelisted in Section 10. SRK has reviewed and audited the project data and procedures used toproduce the Mineral Resources and Ore Reserves.1.3 Effective DateThe effective date of the resources is June 17, 2010 and reserves is September 3, 2010.1.4 Qualifications of Consultant (SRK)The SRK Group comprises of 950 staff, offering expertise in a wide range of resourceengineering disciplines. The SRK Group’s independence is ensured by the fact that it holds noequity in any project and that its ownership rests solely with its staff. This permits SRK toprovide its clients with conflict-free and objective recommendations on crucial judgment issues.SRK has a demonstrated record of accomplishment in undertaking independent assessments ofmineral resources and mineral reserves, project evaluations and audits, technical reports andindependent feasibility evaluations to bankable standards on behalf of exploration and miningcompanies and financial institutions worldwide. The SRK Group has also worked with a largenumber of major international mining companies and their projects, providing mining industryconsultancy service inputs.This report has been prepared based on a technical and economic review by a team of consultantssourced from the SRK Group’s Denver and Belo Horizonte offices. These consultants arespecialists in the fields of geology, exploration, mineral resource and mineral reserve estimationand classification, open pit mining, mineral processing and mineral economics.Neither SRK nor any of its employees and associates employed in the preparation of this reporthas any beneficial interest in MMX or in the assets of MMX. SRK will be paid a fee for thiswork in accordance with normal professional consulting practice.SRK Consulting (U.S.), Inc. October 20, 2008Corumba_Resources and Reserves Audit_162700 09_MLM_008.docx
  • 153. Mineração e Metálicos S.A. 1-2Corumbá Iron Project, Mine 63 Resources and Reserves AuditThe individuals who have provided input to this technical report, who are listed below, haveextensive experience in the mining industry and are members in good standing of appropriateprofessional institutions. The key project personnel contributing to this report are listed in Table1.4.1.Leah Mach has visited Mine 63 three times and Fernando Rodrigues and Afranio Machadovisited the site once. During the site visits, they inspected the exploration shafts and drill core,laboratory, visited the processing plant, reviewed the general infrastructure of the mine, andtoured the mine site.Table 1.4.1: Key SRK Project Personnel Name Discipline Leah Mach Resources, Project Manager Fernando Rodrigues Reserves Michael Elder Technical Economic Model Afranio Machado ProcessingSRK Consulting (U.S.), Inc. October 20, 2008Corumba_Resources and Reserves Audit_162700 09_MLM_008.docx
  • 154. Mineração e Metálicos S.A. 2-1Corumbá Iron Project, Mine 63 Resources and Reserves Audit2 Property Description and Location2.1 Property LocationMine 63 is located near the city of Corumbá in the state of Mato Grosso do Sul, Brazil near theborder with Bolivia, at coordinates 19º 11’ 41”S and 57º 36’ 50”W, shown in Figure 2-1. Theproject consists of several prospects and one operating mine, Mine 63, which is the subject ofthis audit. Figure 2-2 shows the mining concessions at Mine 63.2.2 Mineral TitlesThe reserves described in this report are restricted to the area covered by mining permits004.019/48 and 004.084/58. The registered owner of mining permit 004.019/48 is SociedadeBrasileira de Imoveis (SBI) and the owner of 004.084/58 is MMX Corumbá. MMX Corumbácontrols 004.019/48 through a lease agreement with SBI.There are an additional five exploration licenses in the Mine 63 area. Applicatiob for icenses868.046/05, 868.090/05, 868.126/05 and 868.138/05 were originally made by Eike Batista, theprincipal shareholder of MMX, and the respective assignment of the right to MMX wasrequested from DNPM on June 23, 2006. Permit 868.251/05 is owned by EBX Corumba. Oneexploration licence, 868.138/05, was requested from DNPM in June 30, 2005.Permit 868.083/05 was originally owned by Albertina Maria Brazoli; the permit was purchasedfrom Brazoli and the assignment of the right to MMXCorumbá was requested from DNPM onNovember 22, 2006.SRK Consulting (U.S.), Inc. October 20, 2008Corumba_Resources and Reserves Audit_162700 09_MLM_008.docx
  • 155. Corumbá Project, Mine 63 Brazil Location Map of the Corumbá ProjectSRK Job No.: 162700.09 Source: MMX Mineração & MetálicosFile Name: Figure 2-1.doc S.A. Date: 10/14/2010 Approved: LM Figure: 2-1
  • 156. Corumbá Project, Mine 63 Mineral Concessions Brazil Mine 63SRK Job No.: 162700.09 Source: MMX Mineração &File Name: Figure 2-2.doc Metálicos S.A.S.A. Date: 10/14/2010 Approved: LM Figure: 2-2
  • 157. Mineração e Metálicos S.A. 3-1Corumbá Iron Project, Mine 63 Resources and Reserves Audit3 Geological Setting3.1 Regional GeologyThe Corumbá Project is in the state of Mato Grosso do Sul and lies within the Urucum iron-manganese district which is located along the Brazilian-Bolivian border and extends into theeastern areas of both Paraguay and Bolivia, and includes an area of 200km2. The Urucumdeposits are associated with banded iron formations (BIF), locally known as jaspilites. The ironand manganese deposits are found in the plateaus which rise from the plains of the ParaguayRiver.The regional geology consists of Proterozoic-age igneous and metamorphic rocks, graniteintrusions, and acidic intrusives. The rocks are in faulted and unconformable contact with, andare overlain by, Quaternary sedimentary deposits which account for approximately 60% of thecover in the area. Figure 3-1 shows the stratigraphic column for the project area based on workby CPRM and the Geological Map of the Corumbá Region.The basement rocks are a part of the southern Amazon Craton and are composed of the Lower toMiddle Proterozoic Rio Apa Complex of metamorphic rocks. These rocks include gneiss,granite gneiss, biotite gneiss, granite, diorite, and schist as well as quartz diorite and quartzgabbro dikes. The rocks have a complex evolutionary history including a period of ductiledeformation and simultaneous recrystalization during the transamazonic thermo-tectonic event.The deposits of iron and manganese are related to the Jacadigo Group, of upper Proterozoic age(about 900 Ma). The rocks of the Jacadigo Group form plateaus rising up to 950m over theplains. The youngest formation of the Jacadigo Group, the Banda Alta, comprises a package offerruginous sediments at least 320m thick. The Banda Alta is characterized by alternating layersof jaspilites with ferruginous clastic sediments, containing up to four layers of manganese in thebasal portion of the sequence, one of which is 4m in thickness.Quaternary sediments cover most of the lowlands and plains related to the Paraguay River. Theyinclude the Pantanal Formation, of Pleistocene age, and the Pantanal deposits, the XaraiésFormation and the Alluvial Deposits of Holocene age.3.2 Local GeologyThe Colluvial Domain is characterized by the detrital deposits around Urucum and RabichoMountains, with fan or elongate shapes distributed on the flanks of the Mountain and the plainsarea (Figure 3-2). They comprise packages of sediments, with thicknesses varying from 0.5 to32m and an average of 13m. These deposits are composed of ferruginous sediments from theBanda Alta Formation that were deposited on the Córrego das Pedras Formation.The angular fragments vary from pebble to boulder size and are primarily composed of bandedhematite, ferruginous jaspilite and rarely ferruginous arkose. The fragments are randomlydistributed, although the size tends to decrease in proportion to the distance from the base of theMountain.A sedimentary breccia occurs in the central west portion of Mine 63 area and iscontemporaneous with the colluvial deposits. This breccia consists of fine to medium sizedclasts of hematite jaspilite that are partially to totally leached, coarse clasts of ferruginoussandstone and hematite jaspilite partially leached with limonitic cement. The breccia trends east-SRK Consulting (U.S.), Inc. October 20, 2008Corumba_Resources and Reserves Audit_162700 09_MLM_008.docx
  • 158. Mineração e Metálicos S.A. 3-2Corumbá Iron Project, Mine 63 Resources and Reserves Auditwest and is about 2,500m long, 50 to 200m wide, and averages about 10m thick, with amaximum thickness of 16m.The colluvial deposits are classified as proximal, medial or distal deposits according to theirdistance from the source area. The higher Fe contents are related to the deposits near the sourcearea while the laterite deposits are far from the source area.The eluvial domain was generated by in situ weathering action through total and/or partialhydrolyzation, in a process of silica leaching and subsequent enrichment of iron in the hematitejaspilites of the Banda Alta Formation.In the area of Mine 63, the eluvium is located on the top and upper slope of the UrucumMountain, and has an average thickness of 15m. The effects of leaching decrease from the toptoward the base of the sequence, followed by an increase in the SiO2 concentration and adecrease of Fe. In general, the silica leaching increases with the increased frequency of thefractures. Figure 3-3 presents a geologic map of the Mine 63 area..3.2.1 MineralizationThe mineralization at Mine 63 is contained within eluvial and colluvial deposits from a jaspilitesource. Weathering has increased the Fe grade through silica leaching. The enrichment factor ofthe eluvial material, in relation to the primary rock, depends on the grain size and the dimensionof the fragments. At the marginal parts of the basin, where sedimentation was mainly clastic, theenrichment of the eluvial material is directly proportional to the iron content in the jaspilite fromwhich it originated. The same is not true in the central part of the basin, where sedimentation ismainly chemical. The colluvium is formed by recent clastic deposition composed mainly ofangular fragments of leached hematite jaspilites and arkose. The colluvial deposits which arericher in hematite fragments and jaspilite, leached or not, concentrate near the rock source, thatis, near the mountain. The total iron content is directly proportional to the distance from thesource and has been enriched by the leaching of silica. The breccia areas have undergonecementation and have a more consolidated nature than the colluvium.SRK Consulting (U.S.), Inc. October 20, 2008Corumba_Resources and Reserves Audit_162700 09_MLM_008.docx
  • 159. Rabicho Corumbá Project, Mine 63 Stratigraphic Column and Brazil Regional Map of the CorumbáSRK Job No.: 162700.09 Area Source: MMX Mineração &File Name: Figure 3-1.docx Metálicos S.A. Date: 10/14/2010 Approved: LEM Figure: 3-1
  • 160. Corumbá Project, Mine 63 Cross-Section of Mine 63 area Brazil showing Colluvium and EluviumSRK Job No162700.09 deposits Source: MMX Mineração &File Name: Figure 3-2.docx Metálicos S.A Date: 10/14//2010 Approved: LEM Figure: 3-2
  • 161. Corumbá Project, Mine 63 Geologic Map of the Mine 63 Brazil AreaSRK Job No162700.09 Source: MMX Mineração &File Name: Figure 3-3.docx Metálicos S.A Date: 10/14//2010 Approved: LEM Figure: 3-3
  • 162. Mineração e Metálicos S.A. 4-1Corumbá Iron Project, Mine 63 Resources and Reserves Audit4 Exploration4.1 Exploration of Mine 63The exploration methods of the previous owners of the Corumbá Project are unknown.However, it is the understanding of the MMX geologists that there was no exploration as suchand that mining proceeded based on the surface expression of the iron-bearing rock.Exploration at Mine 63 consists of: Excavation of a series of hand dug exploration pits. The pits, excavated with pick and shovel, are 1.5m2 in plan view and have vertical walls which are up to 6m deep in the colluvium and 10m in the eluvium; Drilling; Channel sampling in the pit faces; and Surface mapping.The drilling and sampling procedures used by MMX are further described in the followingsections.The exploration identified a large area of mineralization associated with the colluvium andeluvium. SRK considers the methods used by MMX to be appropriate for this type of deposit.4.2 DrillingThe drilling at Mine 63 was conducted in two phases, the first in 2005 and the second in 2009and 2010. All drillholes were vertical and no downhole surveys were taken because of the shortlength of the holes. The mineralization forms a shallow zone, from less than 1m to about 40mover the bedrock, and is best drilled with vertical holes. The lack of downhole surveys is not aconcern in these short holes. The resource database consists of drillholes, channel samples, andpits and will be referred to as drilling in this report. A summary of the drilling is given in Table4.2.1 and the locations are shown in Figure 4-1.Table 4.2.1: Drilling in Mine 63, Corumbá Project Total Average Depth Minimum Depth Maximum Depth Sample Type Number (m) (m) (m) (m) Channel Samples 530 1,853.5 3.5 4.4 5.4 Shafts 469 1,931.1 4.1 0.1 12.0 Drill Holes 121 2,157.3 17.8 4.1 41.0 Total 1,120 5,941.9The majority of the drilling in the colluvium area is on a north-south grid with sections 200mapart and the holes spaced at 100m on section. The drillholes in the eluvium area are on a 100mx 100m grid oriented N50oE. The holes in both areas were drilled into the bedrock before beinghalted, and thus penetrate the entire mineralized length.The drill core was placed in wooden boxes approximately 1m long with 3 sections to contain thecore. The drill intervals were marked with wooden plates and the recovery was measured by theSRK Consulting (U.S.), Inc. October 20, 2008Corumba_Resources and Reserves Audit_162700 09_MLM_008.docx
  • 163. Mineração e Metálicos S.A. 4-2Corumbá Iron Project, Mine 63 Resources and Reserves Auditdrill contractor with supervision by MMX personnel. The core was photographed, logged, split,and sampled by MMX personnel in a core facility at Mine 63.The drillhole collars are marked with a small concrete slab with the hole number inscribed on analuminum tag. The drill hole collars were surveyed by BXF.The shafts were excavated by pick and shovel to a maximum depth of 16m and were 1.5m x1.5m in plan view. The shafts were sampled in vertical channels by MMX personnel. The shaftshave infilled the drilling sections to 100m x 100m. MMX has excavated shafts on a 100m x100m grid in an additional area to the north and on a 200m x 100m grid in the northwest andsoutheast.Channel samples were taken during the pre-stripping phase of mining and in the pit faces duringmining.4.3 Sampling Method and ApproachThe core was split lengthwise with breaks at lithologic contacts. One-half of the core wasbagged and the remainder was stored in wooden boxes. Intervals that were considered to beinternal waste were not sampled and intervals within the bedrock were not sampled. Thesamples were numbered consecutively using a blind numbering sequence. Sample tags wereplaced in the sample bag and the bag was marked with the sample number as well.Samples from the shafts were collected from vertical channels in one wall of the shaft. Thechannel was 10cm wide and 15cm deep and was sampled over the entire length of themineralized zone in the shaft. The channel was made using a hammer and chisel and the samplewas collected in a wooden box. The sample was then transferred to plastic bags. The sampleswere also numbered consecutively with blind numbers as with the drill samples. The four wallsof the shafts are photographed meter by meter.The channel samples are vertical and were collected from outcrops and mine benches using thesame methodology as in the shaft samples.SRK considers the samples to be representative of the mineralized zones and sections. Thecolluvial and eluvial material was sampled over the entire length of the mineralization, with theexception of the internal waste zones as mentioned above. The core recovery and the size of theshaft and channel samples are sufficient to provide a reliable database for resource estimation.4.4 Sample Preparation, Analysis and Security for Mine 63The laboratories used in sample preparation and analysis have evolved during the project historyas shown in Table 4.4.1.SRK Consulting (U.S.), Inc. October 20, 2008Corumba_Resources and Reserves Audit_162700 09_MLM_008.docx
  • 164. Mineração e Metálicos S.A. 4-3Corumbá Iron Project, Mine 63 Resources and Reserves AuditTable 4.4.1 Preparation and Analytical Laboratories Type Prefix Number Meters Preparation Analysis Year CAE 6 25.9 MMX MMX 2010 Channels CAM 168 601.8 MMX MMX 2007-2009 CRCAM 356 1225.8 MMX MMX 2007-2009 FR 33 600.9 MMX SGS 2006 Drillholes FRT 88 1556.4 MMX SGS 2006 DENSI 2 20.0 NOT SAMPLED G-H-I-J 13 82.0 MMX SGS 2007 L2000-2600 42 111.0 MMX MMX 2006 L1-10 59 180.3 MMX SGS 2006 Shafts Linha 9 38.0 MMX SGS 2008 PC* 24 216.6 MMX LCT -SGS 2006 - 2008 POE 38 182.3 MMX MMX 2010 POM 10 39.7 MMX MMX 2010 T 272 1061.3 MMX SGS 2006-2008MMX originally used the Technological Characterization Laboratory (LCT) of the PolytechnicSchool at the University of São Paulo for analysis of the shaft and channel samples; the lab is notinternationally certified. The drill samples were analyzed at SGS Geosol Laboratorios Limitada(SGS); SGS has ISO 9001(2000) and ISO 14001(2001) certification. At the suggestion ofMMX’s Quality Control/Quality Assurance (QA/QC) consultant, 5% of the total samples weresent to the Ultra Trace Analytical Laboratories Pty Ltd (UT) in western Australia for checkassays. UT has ISO 17025 and National Association of Testing Authorities, AustraliaCertifications. At the suggestion of SRK, MMX decided to reassay all available pulps whichwere initially analyzed by LCT at SGS. Only 14 samples remain in the database with only theLCT analysis. The following sections describe sample preparation for the MMX and SGSlaboratories.4.4.1 Sample PreparationMMXThe 200kg-sample is dried and then crushed in a closed circuit with a 38mm screen until allmaterial is less than 38mm. The crushed material is then fed into a rotary splitter. Half thesample is filed as an archive and the other half is fed into rotary splitting again. The secondsplitting generates two portions, one is used for the global analysis and the other for the sizefraction test. The sample is screened at 25mm, 19mm, 12mm, 6.35mm and 4mm. A smallportion is taken from the 25mm to 19mm fraction for a crepitation test. The remainder of thatfraction is mixed with the 19mm to 12mm fraction. The <4mm fraction is wet screened togenerate three more fractions: 4mm to 1mm, 1mm to 0.15mm and <0.15mm. The resulting sizefractions are: 25mm to 12mm; 12mm to 6.35mm; 6.35mm to 4mm; 4mm to 1mm;SRK Consulting (U.S.), Inc. October 20, 2008Corumba_Resources and Reserves Audit_162700 09_MLM_008.docx
  • 165. Mineração e Metálicos S.A. 4-4Corumbá Iron Project, Mine 63 Resources and Reserves Audit 1mm to 0.15mm, and <0.15mm.All six size fractions and the global samples are sent to chemical analysis preparation. Thisprocess consists of successive crushing and splitting until the last stage when a pulp is taken forchemical analysis. The first stage is crushing to 8mm. All crushed material is fed into rotarysplitting until one 3kg portion is obtained. This portion is crushed again to 2mm and dried at105°C. Then the dried sample is fed into the rotary splitter until a 200g portion is obtained. Thisportion is pulverized and split again. One-half is sent for chemical analysis and the other half isstored as an archive.The global sample and the fractions 25mm to 19mm, 19mm to 12mm and 12mm to 6.35mm passthrough the chemical analysis preparation process from the beginning starting with the 8mm-crushing. The fraction 6.35mm to 4mm starts the process in the next stage, where the 3kgportion is obtained. The fractions 4mm to 1mm and 1mm to 0.15mm are sent directly to thedrying stage and the fraction <0.15mm is filtered before also being sent to the drying stage.All chemical analyses are done by XRF for the elements Fe, SiO2, Al2O3, P, MnO, CaO, MgO,K2O, Na2O, TiO2 and gravimetric analysis for LOI (Loss on Ignition).4.4.2 Sample AnalysisSGSThe sample is dried at 100+10oC and then a 0.50g sample is combined with a lithium tetraboratesolvent which is fused and poured into a mold to form a disk. The samples are analyzed byXRF, LOI is analyzed by heating the sample at 110oC for one hour, placing 1.5 to 2g of thesample in a crucible, heating at 1000+50oC for one hour, cooling, and weighing the sample andcrucible again. The data are transferred directly from the equipment and stored in the LaboratoryManagement and Information System (LIMS). SGS detection limits are given in Table 4.4.2.1.Table 4.4.2.1: Limits Detection of SGS Iron Ore Analysis Element Detection Limit (%) Upper Limit (%) Al2O3 0.10 90 Fe2O3 0.01 100 K2O 0.01 15 MgO 0.10 45 MnO 0.01 70 Na2O 0.10 15 P2O5 0.01 45 SiO2 0.10 100 TiO2 0.01 100MMXAll six size fractions and the global samples are sent to chemical analysis preparation. Thisprocess consists of successive crushing and splitting until the last stage when a pulp is taken forchemical analysis. The first stage is crushing to 8mm. All crushed material is fed into rotarysplitting until one 3kg portion is obtained. This portion is crushed again to 2mm and dried at105°C. Then the dried sample is fed into the rotary splitter until a 200g portion is obtained. ThisSRK Consulting (U.S.), Inc. October 20, 2008Corumba_Resources and Reserves Audit_162700 09_MLM_008.docx
  • 166. Mineração e Metálicos S.A. 4-5Corumbá Iron Project, Mine 63 Resources and Reserves Auditportion is pulverized and split again. One-half is sent for chemical analysis and the other half isstored as an archive.The global sample and the fractions 25mm to 19mm, 19mm to 12mm and 12mm to 6.35mm passthrough the chemical analysis preparation process from the beginning starting with the 8mm-crushing. The fraction 6.35mm to 4mm starts the process in the next stage, where the 3kgportion is obtained. The fractions 4mm to 1mm and 1mm to 0.15mm are sent directly to thedrying stage and the fraction <0.15mm is filtered before also being sent to the drying stage.All chemical analyses are done by XRF for the elements Fe, SiO2, Al2O3, P, MnO, CaO, MgO,K2O, Na2O, TiO2. The steps in the analytic procedure for LOI consist of: Drying the sample in an oven at about 110ºC for at least one hour; Weighing the empty container (CV); Placing 1g of the dried sample in the container and weighing again (C+A); Placing the container with the sample in a previously heated oven and waiting until the temperature reaches 1,000±50ºC and letting it calcine for more than one hour. Removing the container from the oven, resting it on the refractory plate until it loses incandescence, and then putting it in a closed dryer until the container and sample cool; Weighing and recording the final weight; and Calculating LOI using the following formula: (C A) (Final Weight) %FW x100 (C A) (CV)Data is entered into Microsoft Excel worksheets by a lab technician. Original, signed assaycertificates and worksheets are provided to MMX. The detection limits for analysis are shown inTable 4.4.2.2Table 4.4.2.2: Detection Limits of Iron Ore Analysis Analysis Lower Detection Limit Fe 0.01% SiO2 0.10% Al2O3 0.01% MnO 0.01% P 0.01% TiO2 0.01% LOI 0.10%4.4.3 Laboratory Quality Control and Quality AssuranceInternal SGS QA/QCSGS internal QA/QC procedures consist of: LIMS software is used during the acquisition of data in the laboratory to eliminate errors in the manual entry of data. The software is also used in statistical treatment of the Quality controls;SRK Consulting (U.S.), Inc. October 20, 2008Corumba_Resources and Reserves Audit_162700 09_MLM_008.docx
  • 167. Mineração e Metálicos S.A. 4-6Corumbá Iron Project, Mine 63 Resources and Reserves Audit Calibration of all critical equipment every six months; Daily verification of scales and spectrometers; 5% of the samples are weighed after each step of sample preparation, with 3% as an acceptable loss in sample weight; 5% of the samples are measured for sample size during preparation with 95% passing the mesh size being the acceptable value; The batch size is 40 samples. Duplicate samples are prepared for each 20 samples; standard reference samples are inserted in the sample stream at a rate of 1 in 20 samples and one blank sample is inserted in each batch; and Samples with anomalous results are repeated. If the repeat does not duplicate the original, then a new sample is prepared from the reject.Internal MMX QA/QCThe internal QA/QC procedures of the Mine 63 consists of inserting samples of CertifiedReference Materials (standards) into each lab batch and inserting a replicate for each 10 samples.The standard sample is IPT 123, a certified reference material produced by the Institute forTechnological Research in Brazil. In addition, one screen test is performed for each 10 samplesto verify that 95% of the sample passes through the 8.0, 2.0 and 0.106mm screens.MMX QA/QC 2006/2007Analytical Solutions Ltd reviewed the QA/QC data in 2007 and this section is taken from herreport. As mentioned in the introduction to this section, LCT analyzed the shaft and channelsamples and SGS analyzed the drillhole samples. Five percent of the samples were sent to theUT Laboratory in Australia for check analysis, including 17 pulps originally analyzed by LCT.In general, there was poor correspondence between the UT and LCT data (Figure 4-2). Assuggested by other MMX consultants, the LCT data was not considered reliable for resourceestimation and MMX decided to have all the pulps reanalyzed by SGS for use in the resourceestimation.For check analysis purposes, a total of 82 pulps analyzed by SGS in 2006 were reanalyzed byUT. Both SGS and UT used fused disk (glass bead) XRF for determination of the major oxides.In general, there is good agreement between the two sets of data. Figure 4-2 summarizes thepercentage difference between SGS and UT assays relative to the SGS determination (with noimplication that SGS or UT provided the preferred data). One sample is excluded for LOI wherevalues of 0.01 and 0.59% were reported which results in a large percentage difference and maybe due to data handling issues. Table 4.4.3.1 documents the percent difference between SGS andUT samples.Table 4.4.3.1 documents the percentage of samples within ± 5%, 10%, 20%, etc.SRK Consulting (U.S.), Inc. October 20, 2008Corumba_Resources and Reserves Audit_162700 09_MLM_008.docx
  • 168. Mineração e Metálicos S.A. 4-7Corumbá Iron Project, Mine 63 Resources and Reserves AuditTable 4.4.3.1: Summary of Percent Difference Between SGS and UT Samples > Element N 5% 10% 20% 25% 50% +50% 82 Fe 82 100% 59 61 70 74 81 1 MnO 82 72% 74% 85% 90% 99% 1% 76 80 82 SiO2 82 93% 98% 100% 49 72 78 80 82 Al2O3 82 60% 88% 95% 98% 100% 59 77 82 P 82 72% 94% 100% 41 65 77 78 82 TiO2 82 50% 79% 94% 95% 100% 38 57 71 75 79 3 LOI 82 46% 70% 87% 91% 96% 4%The key observations are: Eleven Fe values agree within 5%; 93% of SiO2 values agree within 5%; Al2O3 values show good correspondence above 1% and 88% of all the samples agree within +10%; The majority of P values are less than 0.1% and close to detection limits for the XRF method; there is a bias equal to approximately 3% of the P concentration with higher values reported by SGS than UT (similar to the observation for Minas-Rio); The majority of values of TiO2 are less than 0.2%. TiO2 show good correspondence and 79% of the agree within +10%. The majority of results which do not agree within +10% are almost within 10 times detection limit and precision is expected to be in the order of +100%; 74% of the Mn values agree within ±10%; values less than 0.1% do not agree within ±10% but are within ten times detection limits and precision is expected to be poor; and 65% of the LOI values reported by SGS are higher than those reported by UT. UT refers to the analyses as done by a robotic Thermogravimetric Analyzer (TGA) with the furnaces set 100o and 1000ºC. The temperature used for LOI at SGS should be determined and the two analytical methods compared. The majority of the LOI values are less than 2% and the variance between the laboratories is in the order of 5% of the reported values.In general, there is good correspondence between SGS and UT major oxide determinations.Some elements (MnO, P and TiO2) are found in concentrations within ten times the detectionlimit of the XRF method. If these determinations are required more accurately, it isrecommended that a lithium metaborate fusion – ICP method, with detection limits in the rangeof 1 to 10ppm, be used.SRK Consulting (U.S.), Inc. October 20, 2008Corumba_Resources and Reserves Audit_162700 09_MLM_008.docx
  • 169. Mineração e Metálicos S.A. 4-8Corumbá Iron Project, Mine 63 Resources and Reserves AuditSRK considers the sample preparation, analysis and security to follow industry standards andthat the assays are reliable for resource estimation.A standard, IPT21A developed by Agoratek international (Agoratek) was submitted with theSGS samples in 2006. Agoratek reviewed the results and had the following comments:The plots show a general mismatch between SGS variations and the 2-sigma rejection limitsthus derived. This is due to the large differences in analytical methods. At this point, only theaccuracy can be evaluated from these data. The rate of operational errors remains inaccessible.Table 3.1 summarizes the parameters that were calculated for the most obvious biases that couldbe observed on the plots. Two very different characteristics were evaluated in each case:meaningfulness, i.e. whether the amplitude of the bias warrants any concern; and statisticalsignificance, that was tested using Students t-test.The only possible real concern lies with MnO, for which there is a both meaningful andstatistically significant bias. However, SGS returned only two different values (0.02 and 0.03%MnO, with only two samples at 0.03 %MnO) while the certification of the standard using ICPvaried from 0.016 to 0.018 %MnO. Additional XRF data provided in the certificate indicated arange of 0.018 to 0.019 %MnO for XRF assaying. The low-grade value is also artificiallyresponsible for the large relative bias.The general conclusion, in spite of this minimal, only internal and quite imperfect QA-QCdataset, is that no accuracy concern seems to exist for the assaying of the Corumbá drillholes atSGS. This conclusion, however, needed to be validated with a limited, post-mortem re-assaying,accompanied with proper, external control samples.MMX QA/QC 2009/2010The MMX exploration team utilizes one standard reference sample: APHP is a standard preparedby Agoratek International from material from the Amapa deposit previously owned by MMX.Table 4.4.3.2 presents a summary of the test results for APHP. Failures are defined as more thanthree standard deviations from the certified average. There are no failures at the three standarddeviation level and one sample below two standard deviations for Fe and three for Al2O3.Table 4.4.3.2: Standard Reference Samples Certified Lab Sample Element/Oxide Total Average SD Average SD > 2 SD < 2 SD >3 SD < 3 SD Fe 30 35.000 0.380 34.98 0.320 1 0 0 0 SiO2 30 34.220 0.430 34.18 0.340 0 0 0 0 Al2O3 30 6.820 0.120 6.74 0.151 3 0 0 0 APHP P 30 0.124 0.003 0.125 0.004 0 0 0 0 Mn 30 1.540 0.050 1.58 0.078 0 0 0 0 TiO2 30 0.300 0.010 0.27 0.048 0 0 0 0MMX also submits duplicate pulp samples within the sample stream. The results show that 94%of the iron values, 100% of the silica, manganese and titanium dioxide and 97% of the aluminaand phosphorous fall within 10% of the original (Table 4.4.3.3).SRK Consulting (U.S.), Inc. October 20, 2008Corumba_Resources and Reserves Audit_162700 09_MLM_008.docx
  • 170. Mineração e Metálicos S.A. 4-9Corumbá Iron Project, Mine 63 Resources and Reserves AuditTable 4.4.3.3: Percentage of Laboratory Pulp Duplicates within Specific Ranges Number Falling Within Plus or Minus Element/Oxide Number 5% 10% 20% 25% 50% >50% 29 29 30 30 31 0 Fe 31 94% 94% 97% 97% 100% 0% 30 31 31 31 31 0 SiO2 31 97% 100% 100% 100% 100% 0% 29 30 30 31 31 0 Al2O3 31 94% 97% 97% 100% 100% 0% 26 30 31 31 31 0 P 31 84% 97% 100% 100% 100% 0% 30 31 31 31 31 0 Mn 31 97% 100% 100% 100% 100% 0% 26 31 31 31 31 0 TiO2 31 84% 100% 100% 100% 100% 0%4.5 ConclusionIt is SRK’s opinion that the sampling, preparation and analytical procedures meet industrystandards. The laboratory QA/QC procedures internal to the laboratory and instituted by theexploration group meet industry best practices.SRK Consulting (U.S.), Inc. October 20, 2008Corumba_Resources and Reserves Audit_162700 09_MLM_008.docx
  • 171. Channel Sampleoutlined in orangeDrillholeoutlined in blueShaft, not outlined Figure 4-1 Corumbá Project, Mine 63 Brazil Drillhole and Sample Locations, SRK Job No.: 162700.09 Mine 63 Corumbá Project File Name: Figure 4-1.doc Date: 10/14/2010 Approved: LM Figure: 4-1
  • 172. Corumba QAQC - LCT Check Assays (N = 17) (y-axis capped at +100%) 100 Fe MnO SiO2 Al2O3 80 Relative Percent Difference (LCT Assay less ULT Assay with respect to average assay) (%) P TiO2 LOI 60 40 20 0 -20 -40 -60 -80 -100 0.01 0.10 1.00 10.00 100.00 Original Assay (LCT) Corumba QAQC - SGS Check Assays Fe MnO SiO2 Al2O3 (N = 82) (y-axis capped at +100%) P TiO2 LOI 100 80 Relative Percent Difference (SGS Assay less ULT 60 Assay with respect to SGS Assay) (%) 40 20 0 -20 -40 -60 -80 -100 0.001 0.010 0.100 1.000 10.000 100.000 Original Assay (SGS) Figure 4-2 Corumbá Project, Mine 63 Brazil LCT and SGS vs. UT Analyses forSRK Job No.: 162700.09 Corumbá Samples Source: Analytical Solutions Ltd.File Name: Figure 4-2.doc Date: 10/14/2010 Approved: LM Figure: 4-2
  • 173. Mineração e Metálicos S.A. 5-1Corumbá Iron Project, Mine 63 Resources and Reserves Audit5 Data VerificationThe assays are received from the laboratory as electronic files and as hard copies of the assaycertificates. The assays are entered into an Acquire database where it is checked for errors induplication of fields, sample intervals, and total depth. SRK has verified 10% of the databaseagainst assay certificates and found no significant errors. The laboratory QA/QC results indicatethat the data is suitable for resource estimation.SRK Consulting (U.S.), Inc. October 20, 2008Corumba_Resources and Reserves Audit_162700 09_MLM_008.docx
  • 174. Mineração e Metálicos S.A. 6-2Corumbá Iron Project, Mine 63 Resources and Reserves Audit6 Mineral ProcessingThis section is a brief description of the Mineral Processing Route. Figure 6-1 is a flow sheet ofthe Mine 63 process.The run-of-mine (RoM) is transported by trucks to the primary crushing area and dischargedonto the ore bin. A RoM pile besides the bin allows the ore to be fed to the primary crushingcircuit by the use of shovels in case of emergency. The ore is reclaimed from the bin by theapron feeder AL-210C-01. The discharge of the feeder is transferred to the vibrating grizzly GR-210-01. The oversize of the grizzly goes to the primary jaw crusher BR-210C-01 and theundersize of the grizzly joins the crusher product and the ore is transferred to the two-deckvibrating screen PN-220C-01.The screen can run in dry or wet mode. When running dry, the lower deck undersize (-4mm) isdischarged as reject to a reject pile. When running wet, the lower deck undersize is pumped tothe spirals classifier circuit. The oversize of the upper deck (+ 38mm) is stockpiled as pebble orsent directly to the secondary cone crusher BR-220C-01. The pebble can be reclaimed back tothe circuit and fed to the secondary crusher by the use of shovels and the belt feeder AL-220C-02. The intermediate size fraction or the oversize of the lower deck (-38mm + 4mm) is sent tothe trommel washing circuit.The product of the secondary crusher is discharged onto the two-deck vibrating screen PN-230C-02 running in dry mode. The undersize of the lower deck (-4mm) is discharged as reject. Theintermediate fraction or the oversize of the lower deck (-38mm + 4mm) is sent to the trommelwashing circuit. The oversize of the upper deck (+ 38mm) is transported to the tertiary conecrusher BR-230C-02 that runs in closed circuit with the two-deck vibrating screen PN-230C-01.The product of the tertiary crusher feeds the screen PN-230C-01, whereas the oversize of theupper deck of the screen returns to the tertiary crusher thereby closing the circuit. The undersizeof the lower deck is rejected and transported to the reject pile. The intermediate size fraction orthe oversize of the lower deck (-38mm + 4mm) joins the other similar fractions and feeds thetrommel washing circuit.The trommel washing circuit is composed of two rotating drums running in parallel, being fed bythe ore reclaimed by two belt feeders AL-240C-01 & 02 from two bins SL-240C-01 & 02. Thetwo trommels TM-240C-01 & 02 discharge the washed product onto two two-deck vibratingscreens PN-240C-01 & 02. The screens run in dry mode and produce two size fractions, lump (-38mm + 8mm) and the bitolado (BTL) (-8mm + 4mm) which are stockpiled separately. Bothproducts are reclaimed and dispatched using both shovels and trucks. The third size fractions orthe undersize of the lower decks (mm4mm) are pumped to the classification area for furtherprocessing.The duplex spiral classifier CS-250C-01 receives the -4mm fractions in slurry form and providestwo size fractions: the underflow (-4mm + 0.15mm) and the overflow (-0.15mm). The underflowis discharged onto the horizontal vibrating screen PN-250C-01 where it is dewatered. Theoversize of the screen is transported by the belt conveyor TR-250C-01 to the reject pile. Theunderflow of the screen is pumped back to the spiral classifier. The overflow of the spiralclassifier is pumped to the tailings dam. Water is reclaimed from the tailings dam to be re-used inthe plant operation. Process water is kept in a water reservoir for distribution to the plant.SRK Consulting (U.S.), Inc. October 20, 2008Corumba_Resources and Reserves Audit_162700 09_MLM_008.docx
  • 175. Mineração e Metálicos S.A. 6-3Corumbá Iron Project, Mine 63 Resources and Reserves AuditThere are three kinds of water quality used at site. Raw water is collected from wells andpumped to the fresh make-up water reservoir. Potable water is also collected from wells andtreated in the water treatment station before being consumed. Process water is reclaimed fromthe tailings dam and pumped to the water reservoir for distribution as aforementioned.Coarse rejects (-4mm) are treated in a jigging station to produce the sinter feed product.According to the design mass balance the capacity of the plant is 3.3Mt/y of RoM and 1.9Mt/y ofwashed lump. Tables 6.1 and 6.2 as follows show the main plant and mine operating data asrecorded in 2010.SRK Consulting (U.S.), Inc. October 20, 2008Corumba_Resources and Reserves Audit_162700 09_MLM_008.docx
  • 176. Mineração e Metálicos S.A. 6-4Corumbá Iron Project, Mine 63 Resources and Reserves AuditTable 6.1: Plant Main Operating Data YEAR PRODUCTS UNIT MAY-10 JUNE-10 JULY-10 AUG-10 SEPT-10 YEAR TOTAL AVG. Lump t/day 89,076 129,335 145,288 168,698 140,948 134,669 673,346 Sinter-feed t/day 13,679 13,679 13,679 BTL t/day 17,797 29,211 20,654 24,772 21,078 22,702 113,512 Hematitinha t/day 2,343 6,643 12,781 7,256 21,767 Jigged Sinter-feed t/day 1,588 16,918 9,253 18,506 Total t/day 106,873 174,568 172,585 195,058 191,725 168,162 840,810 Fino Primário Area 220 t/day 29,946 42,034 42,513 54,734 38,175 41,480 207,402 Fino Secundário Área 250 t/day 20,099 25,552 23,732 26,377 21,207 23,393 116,967 Rejeito (Lama) t/day 29,940 50,962 44,559 59,466 46,167 46,219 231,093 FEED ROM t/day 179,508 277,462 276,614 330,672 278,531 268,557 1,342,787 Pebble t/day 7,350 1,975 6,775 3,375 1,825 4,260 21,300 Total t/day 186,858 279,437 283,389 334,047 280,356 272,817 1,364,087 PLANT DATA Plant Mass Yield % 59.54% 57.99% 62.39% 58.51% 62.76% 60.22% 60.22% Lump Mass Yield % 49.62% 46.61% 52.52% 51.02% 50.60% 50.15% 50.15% Lump II Mass Yield % 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% BTL Mass Yield % 9.91% 10.53% 7.47% 7.49% 7.57% 8.45% 8.45% Hematitinha Mass Yield % 0.00% 0.84% 2.40% 0.00% 4.59% 1.62% 1.62% Area 220 Primary Fines % 16.68% 15.15% 15.37% 16.55% 13.71% 15.45% 15.45% Area 250 Secondary Fines % 16.68% 9.21% 8.58% 7.98% 7.61% 549.14% 8.71% Reject % 16.68% 18.37% 16.11% 17.98% 16.58% 17.21% 17.21% RoM Solids Rate t/h 478.69 546.90 557.82 644.96 625.68 574.80 574.80 Lump Solids Rate t/h 237.54 254.93 292.99 329.04 316.62 288.24 288.24 BTL Solids Rate t/h 47.46 0.00 41.32 0.86 44.09 48.59 48.59 Hematitinha solids Rate t/h 57.58 36.88 % Availability % 90.82% 79.44% 79.61% 86.22% 71.76% 81.21% 81.21% % Utilization % 71.97% 89.69% 83.72% 79.93% 86.16% 83.18% 83.18% PLANT % Operating Yield % 65.36% 71.25% 66.65% 68.91% 61.83% 67.55% 67.55% Hours - Simple Circuit Calendar h/day 576.00 720.00 744.00 744.00 720.00 700.80 3504.00 Electrical h 7.32 21.34 17.18 6.30 14.57 13.34 66.71 Mechanics h 40.26 71.87 98.58 61.38 136.43 81.71 408.53 Mine - Operation h 18.33 18.86 10.63 10.75 16.40 14.99 74.97 Plant - Operation h 118.11 37.48 72.07 115.77 41.63 77.01 385.06 External h 0.82 2.40 1.73 2.23 13.47 4.13 20.65 Quality Control h 0.00 0.83 0.00 0.00 0.00 0.17 0.83 Process h 10.84 0.00 0.00 0.00 0.00 2.17 10.84 Transportation h 0.00 5.07 11.98 0.00 0.00 3.41 17.05 Planned Maintenance h 5.33 54.81 35.93 34.87 52.33 36.65 183.27 Total Shut Down Hours h 201.00 212.66 248.12 231.30 274.83 233.58 1167.91 Total Running Hours h 375.00 507.34 495.88 512.70 445.17 467.22 2336.09 MTBF h MTTR h QUALIDADE LUMP Fe % 63.08 64.42 64.94 64.01 64.83 64.25 Al2O3 % 0.77 0.86 0.83 0.91 0.77 0.83 SiO2 % 7.73 5.64 5.00 6.16 5.26 5.96 P % 0.046 0.062 0.048 0.061 0.049 0.05 Mn % 0.22 0.15 0.15 0.13 0.12 0.15 K % 0.04 0.03 0.03 0.02 0.03 0.03 > 38 mm % 0.13 0.43 1.02 1.22 1.82 0.92 < 6.35 mm % 1.18 1.19 1.96 1.75 1.49 1.52 TRANSPORTATION Mine - Port t 91,038 139,559 161,391 124,087 93,410 121,897 609,485 Shipping (Port) t 127,936 117,324 151,414 134,559 69,778 120,202 601,011 Sinter-feed Transportation t 12,431 184 16,237 15,350 11,051 44,203 Sinter-feed Dispatch t 15,346 15,607 9,038 13,330 39,991 Sold LUMP t 25,608 21,162 16,393 12,193 10,186 17,108 85,542 Sold BTL t 11,443 16,220 22,754 23,375 10,142 16,787 83,934 Sold Hematitinha t 2,968 7,382 5,175 10,350 Sold Jigged Sinter-feed t 0SRK Consulting (U.S.), Inc. October 20, 2008Corumba_Resources and Reserves Audit_162700 09_MLM_008.docx
  • 177. Mineração e Metálicos S.A. 6-5Corumbá Iron Project, Mine 63 Resources and Reserves AuditTable 6.2: Mine and Concentration Main Operating Data MINE STOCK Lump I t 355,246 323,860 291,363 323,781 361,134 - - Lump ll t 461,110 461,110 461,110 327,573 266,914 - - Sinter-feed t 839330 826899 810662 810662 808092 - - BTL t 62418 63966 61866 63264 74229 - - MINE Hematitinha t 8986 2968 8383 - - Jigged Sinter-feed t 2528 Total t 1,718,104 1,675,834 1,633,988 1,528,248 1,521,281 - - MINE ROM t/day 253,425 225,450 210,025 317,100 234,475 248,095 1,240,475 Storage t/day 92,125 46,200 33,825 57,383 172,150 Waste t/day 20325 10300 24875 12115 11080 15,739 78,695 Total t/day 273,750 235,750 327,025 375,415 279,380 298,264 1,491,320 INTERNAL TRANSPORTATION PRODUCT AND REJECTS Product t/day 213,000 180,775 196,888 393,775 Fine Reject t/day 99,595 74,900 87,248 174,495 Plant residuals t/day 34,675 73,550 54,113 108,225 Pebble Storage t/day 625 625 625 Total t/day 347,895 329,225 338,560 677,120 JIGGED SINTER-FEED UNIT QUALITY Fe % 61.70 61.70 CONCENTRATION Al2O3 % 1.61 1.61 SiO2 % 4.22 4.22 P % 0.06 0.06 Mn % 0.16 0.16 >9,53 mm % 1.19 1.19 FEED Lump ll t/day 1,983 20,936 11,460 11,460 BTL - R (Jig) t/day Total t/day 1,983 20,936 11,460 11,460SRK Consulting (U.S.), Inc. October 20, 2008Corumba_Resources and Reserves Audit_162700 09_MLM_008.docx
  • 178. Corumbá Project, Mine 63 Brazil Plant Flow SheetSRK Job No.: 162700.09 Source: Mineração & Metálicos S.A.File Name: Figure 6-1.doc Date: 10/14/2010 Approved: AM Figure: 6-1
  • 179. Mineração e Metálicos S.A. 7-1Corumbá Iron Project, Mine 63 Resources and Reserves Audit7 Mineral ResourceThe resource was estimated by MMX in August 2010. SRK reviewed the resource estimationprocedures and results and performed separate validation procedures. MineSight® software wasused by MMX and Vulcan® software by SRK. SRK received the database as a Microsoft Excelfile with four sheets containing the collar coordinates, downhole surveys, assays, and lithologicinformation. The MineSight® surfaces and 3D solids were exported as dxf files and wereimported into Vulcan® by SRK. The MineSight® block model was exported as an ascii file andwas imported into Vulcan® by SRK.Channel samples, shafts, and drillholes are all used in the resource database. Figure 7-1 islocation map of all channel samples, shafts, and drillholes in the database.7.1 DensityBulk density measurements were made on samples collected from the shafts in the colluvium andeluvium areas of Mine 63. The sampling and analysis were done by Projetos e Serviços deMineração Ltda (Prominas), a Brazilian company with experience in the procedures. Thespecific gravity (SG) measurements were done on a wet basis.The tests to determine density were carried out in accordance with the established BrazilianAssociation of Technical Standards (ABNT), listed below: NBR 7.185/1986 – Determination of Apparent Specific Mass, in situ, with use of sand flask; and NBR 10.838/1988 – Determination of Apparent Specific Mass of undeformed samples, with the use of a hydrostatic scale – displacement of volume in dense medium.For the eluvium, the test was displacement of volume in dense medium which is themethodology used for compact or hard samples. For colluvium material, the sand flask methodwas used because this type of material consist of unconsolidated rock.Table 7.1.1 lists the densities adopted by MMX for the resource estimation.Table 7.1.1: Density on a Wet Basis by Lithotype at Mine 63 Lithotype Density (t/m3) Colluvium 3.1 Eluvium 3.31 Breccia 3.86 Leached Jaspilite 3.31 Fresh Jaspilite 3.87 Arkose 1.727.2 TopographyThe initial topographic contours and locations of the drillhole collars, shafts and channel sampleswere surveyed by BXF Topographia Ltda (BXF), a topographic survey company withheadquarters in Ladário, MS. In June 2010, the Mine 63 area was flown by Esteio Engenharia eAerolevantamentos SA. to obtain 1m contours. The topographic data was subsequently updatedto September 23, 2010 by the mine surveyors.SRK Consulting (U.S.), Inc. October 20, 2008Corumba_Resources and Reserves Audit_162700 09_MLM_008.docx
  • 180. Mineração e Metálicos S.A. 7-2Corumbá Iron Project, Mine 63 Resources and Reserves Audit7.3 Resource DatabaseThe database contains the following information: Collar – drillhole identification, easting, northing, elevation, total length. Survey – drillhole identification, from, to, azimuth and inclination. Lithology – drillhole identification, from, to, lithotypes as described in drill logs, lithotypes as relogged, modeled Lithotypes and code for channel samples. Assays – drillhole identification, from, to, , global recovery and global Fe, SiO2, Al2O3, P, and LOI for all samples and Mn, CaO, MgO and TiO2 for about a third of the samples. The lithotypes used in modeling are shown in Table 7.3.1 and the average grades of the assays by lithotype are shown in Table 7.3.2.Table 7.3.1: Model Lithotypes Lithotype Type Abbreviation Code Argillite, friable Waste ARGI 12 Arkose Waste ARC 11 Colluvium - Fine Ore type COLF 2 Colluvium - Coarse Ore type COLG 7 Colluvium without arkose clasts Ore type COLU 3 Colluvium - argillic Waste COLA 13 Colluvium - waste Waste COLR 14 Colluvium - Jacare, Coarse Marginal COJG 23 Colluvium - Jacare, Fine Marginal COJF 22 Eluvium - Jacare Marginal ELUJ 17 Eluvium - Potential Potential ELPT 31 Granite Waste GRT 18 Hematita Jaspilite, leached Ore type LIXI 5 Hematita Jaspilite, limonitic Ore type LIMO 4 Hematita Jaspilite, not leached Waste NLIX 19 Hematita Jaspilite, partially leached Ore type PLIX 6 Manganese Waste MN 20 Sedimentary Breccia Marginal BRE 1Table 7.3.2: Average Grades by Lithotype Lithotype Fe SiO2 Al2O3 P LOI BRE 48.24 24.64 2.76 0.106 1.95 COLF 55.35 13.94 3.10 0.057 1.88 COLU 57.32 12.98 2.74 0.074 1.64 LIMO 56.96 9.99 4.21 0.125 3.28 LIXI 61.56 10.01 0.50 0.074 0.51 PLIX 59.84 11.98 0.90 0.057 0.85 COLG 49.58 22.96 2.07 0.054 1.47 Total 53.82 16.91 2.63 0.064 1.69SRK Consulting (U.S.), Inc. October 20, 2008Corumba_Resources and Reserves Audit_162700 09_MLM_008.docx
  • 181. Mineração e Metálicos S.A. 7-3Corumbá Iron Project, Mine 63 Resources and Reserves Audit7.4 Geological ModelMMX modeled all lithotypes in Table 7.3.1, except arkose. The lithotypes were modeled byconstructing geological cross sections on the principal section lines (about 100m spacing) andthen infilling those sections at 10m spacings. The base of the lithotype units was digitized oneach section and then a surface was generated for the base of each of the units. A solid wasgenerated for each lithotype using the base of that unit and the base of the next higher unit or thetopographic surface if there was only a single lithotype.Five stockpile areas containing organic material, RoM, rejects and product were modeled anddesignated as such in the block model.MMX has detected nine containment basins in the area used by Vale SA (Vale) for its facilities.MMX has modeled the colluvium in those areas considering the current topography as theoriginal. The original topography, prior to the basins’ construction, is not known. Therefore, inthe area where the nine basins are located the colluvium was modeled in a higher position thanthe real one. It is SRK’s opinion that this assumption does not affect the total amount ofcolluvium estimated by MMX in the resources and will have a neglible effect on the strip ratio inthat area.7.5 CompositingThe original sample length varies from 0.1m to 10m and averages 2.65m. In order to regularizethe sample length for the resource estimation, the samples were composited into 5m lengths fromthe top of the hole or shaft with breaks at changes in lithology. Samples less than 2.5m in lengthwere added to the previous sample if the lithotypes were the same. Samples greater than 2.5mwere maintained as such. Table 7.5.1 presents the average grades of the composites by lithotype.Table 7.5.1: Average Grades of Composites by Lithotype Lithotype Fe SiO2 Al2O3 P LOI BRE 48.23 24.67 2.761 0.106 1.944 COLF 55.3 14.01 3.108 0.057 1.887 COLU 57.5 12.89 2.632 0.075 1.573 LIMO 57.31 9.65 4.176 0.123 3.226 LIXI 61.65 9.89 0.505 0.074 0.509 PLIX 59.93 11.97 0.831 0.058 0.806 COLG 49.51 23.07 2.071 0.055 1.466 Total 53.79 16.97 2.627 0.064 1.6847.6 VariographyVariographic analysis and modeling were conducted for Fe, SiO2, Al2O3, P and LOI for eachlithotype using assay samples. Omni-directional variograms were selected because directionalvariograms did not result in good structure. Table 7.6.1 presents the nugget (C0), sill (C1) andrange for each of the variables.SRK checked the variograms for Fe and reproduced the variograms achieved by MMX. SRKalso notes that there are relatively few samples for the lithotypes other than COLF and COLGand that the variograms were poor for those lithotypes.SRK Consulting (U.S.), Inc. October 20, 2008Corumba_Resources and Reserves Audit_162700 09_MLM_008.docx
  • 182. Mineração e Metálicos S.A. 7-4Corumbá Iron Project, Mine 63 Resources and Reserves AuditTable 7.6.1: Variogram Parameters Fe SiO2 Al2O3 P LOILithotype Range Range Range Range Range C0 C1 (m) C0 C1 (m) C0 C1 (m) C0 C1 (m) C0 C1 (m)BRE 38.0 7.2 130 55.0 29.3 130 0.3 1.9 250 0.00 0.001 150 1.00 0.58 430COLF 11.2 40.5 600 17.0 53.0 600 1.3 1.8 600 0.00 0.000 400 0.00 0.37 500COLU 13.5 14.3 200 25.0 25.6 150 1.9 1.5 500 0.00 0.000 300 1.00 0.27 150LIMO 13.5 19.0 200 20.0 16.5 150 6.0 3.6 180 0.00 0.003 220 2.00 2.84 150LIXI 10.0 6.1 200 22.0 11.3 100 0.1 0.3 100 0.00 0.000 160 0.00 0.04 150PLIX 8.0 5.3 150 13.0 22.7 150 0.6 2.8 300 0.00 0.000 420 0.00 0.90 380COLG 18.0 30.1 500 33.0 37.0 360 0.7 0.9 600 0.00 0.000 420 0.00 0.43 6007.7 Block ModelA block model was constructed in MineSight® with origin and dimensions as shown in Table7.7.1.Table 7.7.1: Block Model Origin and Dimensions Direction Minimum Maximum Size Number Easting 432000 438000 12.5 480 Northing 7873500 7879000 12.5 440 Elevation 0 1000 5 200The block model contains the following variables: Fe, SiO2, Al2O3, P, LOI – global; Percentage of block below topography; Lithotype 1 and 2 and Waste – as block partials; Code for Stockpiles; Density of Lithotypes 1 and 2 and Waste; Density of Lithotypes 1 and 2 and Waste; Distance to the closest composite and average distance to composites; Number of samples used in the estimation; Number of drillholes used in the estimation; and Class of Lithotype 1 and 2Lithotypes 1 and 2 and Waste and the percentage for each were assigned from the wireframes foreach of the solids. MMX compared the volume of the lithotype solids to the volume of the blockand the difference was less than 1% for each of the lithotypes and about 0.2% overall.7.8 Resource EstimationThe grades were estimated with ordinary kriging using all shaft, drillhole and channel samplecomposites which were at least 1% below topography. The estimation was conducted in threepasses according to Table 7.8.1 and the variogram parameters in Table 7.6.1. The blocks wereSRK Consulting (U.S.), Inc. October 20, 2008Corumba_Resources and Reserves Audit_162700 09_MLM_008.docx
  • 183. Mineração e Metálicos S.A. 7-5Corumbá Iron Project, Mine 63 Resources and Reserves Auditestimated using only composites with the same lithotype as the blocks. The blocks wereclassified as Measured or Indicated after the first pass and then blocks which were not classifiedwere re-estimated in the second pass.Table 7.8.1: Search Distances and Resource Classification Search Range as % of Pass Class Criteria Fe Variogram Range Measured Nearest sample within 25% of the variogram range, and Minimum of 3 drillholes or shafts* 1 100% Indicated Nearest Sample within 50% of the variogram range, and Minimum of 2 drillholes or shafts* 2 150% Inferred All estimated blocks 3 300% Potential All estimated blocks*Blocks designated as LIMO, LIXI, PLIX, or COLU were estimated with a search range of 900m to eliminate bullseyes of Measured andIndicated blocks7.9 Resource Classification and Resource StatementThe resources were classified as described in Section 7.8 and then modified so that where thesamples were on a 200 x 100m grid, the classification was lowered to Indicated and where thesamples were on a larger grid, the blocks were lowered in Inferred. Figure 7-2 illustrates theclassification of the blocks and the Fe grades. Table 7.9.1 contains the total resources and bylithotype.SRK Consulting (U.S.), Inc. October 20, 2008Corumba_Resources and Reserves Audit_162700 09_MLM_008.docx
  • 184. Mineração e Metálicos S.A. 7-6Corumbá Iron Project, Mine 63 Resources and Reserves AuditTable 7.9.1: Mine 63 Resources on a Wet Tonnage Basis, MMX License Area Lithotype Classification Tonnage Fe SiO2 Al2O3 P LOI Measured 532,000 49.59 22.16 2.98 0.095 2.14 Indicated 3,325,000 49.25 23.03 2.82 0.108 2.03 BRE Total M&I 3,857,000 49.30 22.91 2.84 0.106 2.05 Inferred 5,915,000 49.26 22.60 3.12 0.110 2.20 Potential 396,000 49.43 22.07 3.21 0.097 2.18 Measured 30,949,000 53.69 15.65 3.58 0.057 1.98 Indicated 13,393,000 48.34 21.44 4.60 0.056 2.46 COLF Total M&I 44,341,000 52.07 17.40 3.88 0.056 2.12 Inferred 4,602,000 46.34 22.62 5.09 0.061 2.62 Potential 0 Measured 0 Indicated 8,182,000 54.87 16.77 2.49 0.069 1.37 COLU Total M&I 8,182,000 54.87 16.77 2.49 0.069 1.37 Inferred 3,902,000 53.18 19.26 2.29 0.063 1.21 Potential 549,000 54.29 17.65 2.57 0.069 1.31 Measured 0 Indicated 537,000 53.90 12.40 5.05 0.151 3.97 LIMO Total M&I 537,000 53.90 12.40 5.05 0.151 3.97 Inferred 18,000 61.32 5.96 2.63 0.107 2.54 Potential 0 Measured 0 Indicated 0 LIXI Total M&I 0 Inferred 87,000 61.85 9.77 0.46 0.075 0.53 Potential 0 Measured 0 Indicated 3,444,000 59.91 11.73 1.01 0.056 0.84 PLIX Total M&I 3,444,000 59.91 11.73 1.01 0.056 0.84 Inferred 429,000 60.99 9.69 1.31 0.065 1.00 Potential 0 Measured 18,758,000 48.73 24.34 2.09 0.057 1.34 Indicated 951,000 47.64 24.78 3.12 0.056 1.72 COLG Total M&I 19,709,000 48.68 24.37 2.14 0.057 1.36 Inferred 151,000 44.83 27.04 4.78 0.049 2.77 Potential 0 Measured 50,239,000 51.79 18.96 3.02 0.057 1.74 Indicated 29,832,000 51.64 19.16 3.37 0.067 1.93 Total Total M&I 80,071,000 51.74 19.04 3.15 0.061 1.81 Inferred 15,103,000 49.76 21.33 3.46 0.081 2.04 Potential 945,000 52.25 19.50 2.84 0.081 1.68The stated resources include an area within the MMX license that is currently being used by Valefor its plant. The resources contained in that area are given in Table 7.9.2 and shown in Figure7-3.SRK Consulting (U.S.), Inc. October 20, 2008Corumba_Resources and Reserves Audit_162700 09_MLM_008.docx
  • 185. Mineração e Metálicos S.A. 7-7Corumbá Iron Project, Mine 63 Resources and Reserves AuditTable 7.9.2: Mineral Resources by Lithology within Vale Infrastructure Area - Mine 63Corumbá Project Lithotype Classification Tonnage Fe SiO2 Al2O3 P LOI Measured 97,000 50.32 18.03 3.84 0.112 2.95 Indicated 384,000 47.98 21.44 3.96 0.120 2.99 BRE Total M&I 481,000 48.30 20.97 3.95 0.119 2.98 Inferred 763,000 47.07 21.87 4.92 0.113 3.32 Potential 5,000 43.94 25.87 5.65 0.131 3.01 Measured 5,516,000 57.69 9.81 3.88 0.056 2.16 Indicated 2,129,000 56.96 11.29 3.51 0.065 2.07 COLF Total M&I 7,646,000 57.47 10.25 3.77 0.059 2.13 Inferred 0 Potential 0 Measured 6,000 52.19 21.99 1.53 0.066 0.90 Indicated 0 COLG Total M&I 6,000 0.00 0.00 0.00 0.000 0.00 Inferred 0 Potential 0 Measured 5,620,000 57.56 9.96 3.88 0.057 2.17 Indicated 2,513,000 55.59 12.84 3.58 0.073 2.21 Total Total M&I 8,133,000 55.59 12.84 3.58 0.073 2.21 Inferred 763,000 47.07 21.87 4.92 0.113 3.32 Potential 5,000 43.94 25.87 5.65 0.131 3.017.10 Validation of Resource ModelMMX validated the block model by comparison of average composite and block grades and inswath plots on north-south lines (Figure 7-4).SRK validated the block model by visual inspection of composite and block grades in east-Westand north-south cross-sections and also conducted a second resource estimation as a check on theMMX model. In its estimation, SRK composited the samples into 5m lengths and used theInverse Distance Squared (ID2) algorithm with a 300m search range and a minimum of three anda maximum of eight composites for all lithotypes. The composites were length weighted in theestimation to account for different sample lengths. Blocks that were estimated with a minimumof three drillholes or shafts were classified as Measured or Indicated, undifferentiated. In acomparison to the MMX Measured and Indicated resource, SRK had about 8% more tonnes atslightly lower Fe and SiO2 grades.It is SRK’s opinion that the MMX resource model has been conducted according to industrystandards, but that the use of an unlimited number of composites has resulted in a model that hasvery smoothed grades. The use of fewer composites could result in a model with better localvariation.SRK Consulting (U.S.), Inc. October 20, 2008Corumba_Resources and Reserves Audit_162700 09_MLM_008.docx
  • 186. Figure 7-1 Corumbá Project, Mine 63 Sample Locations, Topography Brazil and Mineral BoundariesSRK Job No.: 162700.09 Mine 63 Source: MMX Mineração &File Name: Figure 7-1.doc Metálicos S.A. Date: 10/14/2010 Approved: LM Figure: 7-1
  • 187. A B Figure 7-2 Corumbá Project, Mine 63 Mine 63 Mineral Resource Brazil Classification (A) and SRK Job No.: 162700.09 Fe Grades (B) Source: MMX Mineração & File Name: Figure 7-2.doc Metálicos S.A. Date: 10/14/2010 Approved: LM Figure: 7-2
  • 188. Vale Infrastructure Area Figure 7-3 Corumbá Project, Mine 63 MMX License Area with Block Brazil Classification and ValeSRK Job No.: 162700.09 Infrastructure Area Source: MMX Mineração &File Name: Figure 7-3.doc Metálicos S.A. Date: 10/14/2010 Approved: LM Figure: 7-3
  • 189. A B Figure 7-4 Corumbá Project, Mine 63 Mine 63 Mineral Resource Brazil Fe Swath Plots (A) andSRK Job No.: 162700.09 Location of Swath Plot Lines (B) Source: MMX Mineração &File Name: Figure 7-4.doc Metálicos S.A. Date: 10/14/2010 Approved: LM Figure: 7-4
  • 190. Mineração e Metálicos S.A. 8-1Corumbá Iron Project, Mine 63 Resources and Reserves Audit8 Reserve EstimationThe reserve estimation was conducted by Prominas under the supervision of MMX. Measuredand Indicated Resources and material with a silica content of less than 10.2% were used in theWhittle® pit optimization program to define the pit limits. After Whittle® was run, a detailed pitdesign with ramps was developed. The pit optimization and pit design were conducted at theend of September 2010.The average grades required for the mined ore were established from correlation studies betweenRoM ore and product specifications. Table 8.1 summarizes the correlation of RoM and Product.MMX created a linear regression for each element and this regression was used in deriving theproduct grades.Table 8.1: Correlations RoM Grades x Product Grades Grades* Lithology Fe SiO2 AL2O3 P LOI BRE FEP = 0.830*(FEG) SIP = 0.804*(SIG) - ALP = 0.220*(ALG) + PP = 0.666*(PG) + LOIP = 0.565*(LOIG) +15.41 2.771 0.589 0.016 - 0.072 COLF FEP = 0.713*(FEG) + SIP = 0.794*(SIG) - ALP = 0.716*(ALG) - PP = 0.890*(PG) - LOIP = 0.839*(LOIG) 21.43 1.919 0.836 0.001 - 0.513 COLU FEP = 0.449*(FEG) + SIP = 0.668*(SIG) - ALP = 0.385*(ALG) - PP = 0.534*(PG) + LOIP = 0.377*(LOIG) 37.96 0.730 0.012 0.021 + 0.604 LIMO FEP = 0.449*(FEG) + SIP = 0.668*(SIG) - ALP = 0.385*(ALG) - PP = 0.534*(PG) + LOIP = 0.377*(LOIG) 37.96 0.731 0.013 0.022 + 0.605 PLIX FEP = 0.449*(FEG) + SIP = 0.668*(SIG) - ALP = 0.385*(ALG) - PP = 0.534*(PG) + LOIP = 0.377*(LOIG) 37.97 0.732 0.014 0.023 + 0.606 COLG FEP = 0.797*(FEG) + SIP = 0.863*(SIG) - ALP = 0.496*(ALG) - PP = 1.001*(PG) + 0 LOIP = 0.482*(LOIG) 16.08 2.423 0.111 + 0119*valueP is grade in the Product, valueG is the grade in the RoM.Based on the product specifications from each buyer, final blended cut-off grades wereestablished at 10.2% SiO2 for the COLF material, 7.6% SiO2 for the COLU material, 8.00% forthe LIMO, LIXI and PLIX material. To arrive at the correct blend for each product buyer,different cut-offs were simulated near to the cut-off values to maximize the mineable reserves,maintaining the required average grade for the RoM ore.For this version of the resource model, MMX decided to use a partial block model created inMintec MineSight® software where each 12.5m X 12.5m x 5m block contains a percentage ofeach material. Within each partial, grades were evaluated and estimated separately. The modelused for the reserve estimation had three partials: the first and second partial contains all materialthat can be considered ore and the third partial is all waste. Because less than 18% of the productis sold domestically, the higher product selling price for the international market was used tosimplify the pit optimization. Furthermore, the logistics costs were also applied to the domesticand international shipping products and this resulted in a conservative pit optimization andsimplified the pit optimization study. It is important to note that the main driver for the pitoptimization is the availability of low silica material that can be processed. On average anyRoM material with a silica above 10.2% is considered waste below this cut-off. The parametersbelow were used for the pit optimization. Mass recovery (MR)= 58% (49% Lump and 9% BTL); Average Product Value = R$122.14/t;SRK Consulting (U.S.), Inc. October 20, 2008Corumba_Resources and Reserves Audit_162700 09_MLM_008.docx
  • 191. Mineração e Metálicos S.A. 8-2Corumbá Iron Project, Mine 63 Resources and Reserves Audit Mining Cost/t RoM = R$6.75/t; including Royalty and CFEM; Mining Cost/t Waste = R$6.75/t; Plant Cost = R$6.40/t RoM; Sundry Costs (Sundry costs include: planning and quality control, administration and others)= R$6.32/t product; Transportation Cost = R$57.54/t product; and Pit Slope Angle = 40.5o.CFEM is a 2% tax applied to Gross Revenue after other taxes such as PIS and COFINS has beendeducted.Table 8.2 contains ore and waste in the optimized pit which was used as the base for thedesigned pit and subsequent mine planning. The average product value of US$122.14.02 is anaverage of the projected future prices used in the cash flow model. As a check on the sensitivityof the pit optimization to the product price, a spider graph was created to demonstrate theeconomic sensitivity. The results given in Figure 8-1, indicate that the pit is very robust inregard to product price and that the use of a higher iron price has no effect on the pitoptimization results.Table 8.2: Optimized Pit for Mine 63, Corumbá Project End of June 2010 Tonnes RoM Grade Product Grade Fe SiO2 Al2O3 P.G LOI Product Fe SiO2 Al2O3 P.G LOI Total Ore (Mt) (Mt) Waste(Mt) % % % % % (Mt) % % % % % 40.08 19.28 20.8 58.21 10.37 3.12 0.06 1.88 11.18 63.64 5.67 1.25 0.06 1.03After the pit was designed with the inclusion of ramps, the average grade of the mineable areaswas very close to the grade required for the product specifications. The cut-off grade (CoG)within the designed pit was kept the same since the difference was 0.02% in the silica grade.Table 8.3 presents the Ore Reserves for Mine 63 as of September 23, 2010. The strip ratiothrough the life of mine is estimated to be 0.41. This waste equates to 3.7 Mm3 or 8.0Mt.There is a difference in the waste tonnes reported in the pit optimization and the pit designresults. This difference is due to the way MMX chose to compile reserves within the pit designin the MineSight® software. Within MineSight®, there is the ability to select an option called“take ore first”. This option takes an ore partial and leaves the waste in situ. It is important tonote that the RoM material is at surface and for this reason minimal waste will be mined. Thispractice has been used for the last three years and it has proved to be accurate. This option is notavailable in Whittle® and this results in a difference in waste tonnes. Below is an explanationfrom the MineSight® software online help describing how “take ore first” works. Based on themining production from last three years, strip ratios have been around 0.05 and this reserve carrya 0.41 strip ratio which is very conservative in relation to the historical actual number.MineSight®’s online help explanation of “take ore first” states “If the ore has been interpreted sothat it is clipped at the topography, the user must make sure that all the ore is mined from thesurface blocks. The normal calculation is to take the block partial x topography and apply it to allSRK Consulting (U.S.), Inc. October 20, 2008Corumba_Resources and Reserves Audit_162700 09_MLM_008.docx
  • 192. Mineração e Metálicos S.A. 8-3Corumbá Iron Project, Mine 63 Resources and Reserves Auditmaterial types. For example, if ore had been clipped at topography such that ore%=60 andtopography %=80 and 100% of the block was being mined, the normal method would be to mine1.0 * 0.8 * 0.6 = 0.48 for ore and 1.0 * 0.8 * 0.4 = 0.32 for the waste. This means that 12% of theore is accounted as waste. If the "ore first option" is used, it takes all the ore (60%) first, and therest (20%) is considered to be waste. The "take ore first" for all blocks should be used when thepit bottom follows the footwall of the ore. The same example as above could be used reversingthe partial and the topography to 80% and 100% respectively.”Table 8.3: Total Reserves as at September 23, 2010 - Mine 63 Corumbá Project* Ore Grades Product Grades** Class Volume Tonnes Fe SiO2 Al2O3 P.G LOI Fe SiO2 Al2O3 P.G LOI Mm3 Mt % % % % % % % % % % Proven 5.2 16.2 57.91 10.52 3.27 0.06 1.92 63.47 5.69 1.31 0.05 1.02 Probable 1.0 3.1 60.1 9.31 2.27 0.07 1.63 64.72 5.43 0.92 0.06 1.13 Total P&P 6.2 19.3 58.26 10.33 3.11 0.06 1.88 63.67 5.65 1.25 0.06 1.03*Tonnes are reported on a wet basis.**Product tonnes will be reduced by the mass recoveryAverage iron product price used in reserve is R$122.14.No dilution applied.No mining recovery applied.September 23, 2010 topography used.Waste material found in reserves is 8.0Mt for a 0.41 strip ratio.Table 8.4 shows mineral reserves classified by lithology.Table 8.4: Mineral Reserves by Lithology - Mine 63 Corumbá Project* RoM Grades Product Grades** Vol. Tonnes Fe SiO2 Al2O3 P LOI Fe SiO2 Al2O3 P LOI LITHOLOGY CLASSIFICATION (Mm3) (Mt) % % % % % % % % % % PROVEN 5.2 16.3 57.91 10.52 3.27 0.06 1.92 63.47 5.69 1.31 0.05 1.02 COLF PROBABLE 0.1 0.2 60.48 7.17 3.26 0.08 2.18 65.61 2.99 1.31 0.07 1.16 TOTAL 5.3 16.4 57.94 10.48 3.27 0.06 1.93 63.50 5.66 1.31 0.05 1.02 PROVEN - - - - - - - - - - - - COLU PROBABLE 0.3 1.0 59.58 9.48 3.03 0.08 1.90 63.91 5.61 1.34 0.07 1.08 TOTAL 0.3 1.0 59.58 9.48 3.03 0.08 1.90 63.91 5.61 1.34 0.07 1.08 PROVEN - - - - - - - - - - - - LIMO PROBABLE 0.1 0.3 55.39 10.15 5.07 0.15 4.26 62.83 6.05 1.94 0.10 2.21 TOTAL 0.1 0.3 55.39 10.15 5.07 0.15 4.26 62.83 6.05 1.94 0.10 2.21 PROVEN - - - - - - - - - - - - PLIX PROBABLE 0.5 1.7 61.09 9.34 1.26 0.06 1.00 65.39 5.51 0.47 0.05 0.98 TOTAL 0.5 1.7 61.09 9.34 1.26 0.06 1.00 65.39 5.51 0.47 0.05 0.98 PROVEN 5.2 16.3 57.91 10.52 3.27 0.06 1.92 63.47 5.69 1.31 0.05 1.02 TOTAL PROBABLE 1.0 3.1 60.10 9.31 2.27 0.07 1.63 64.72 5.43 0.92 0.06 1.13 TOTAL 6.2 19.3 58.26 10.33 3.11 0.06 1.88 63.67 5.65 1.25 0.06 1.03*Tonnes are reported on a wet basis.**Product tonnes will be reduced by the mass recoveryAverage iron product price used in reserve is R$122.14.No dilution applied.No mining recovery applied.September 23, 2010 topography used.SRK Consulting (U.S.), Inc. October 20, 2008Corumba_Resources and Reserves Audit_162700 09_MLM_008.docx
  • 193. Mineração e Metálicos S.A. 8-4Corumbá Iron Project, Mine 63 Resources and Reserves AuditMine production from January to August 2010 is shown in Table 8.5.Table 8.5: Mine 63 Production, January to August 2010 Tonnes Mass Recovery % RoM Processed Product Total Lump BLT 2,262,578 2,018,055 1,184,372 59% 49% 9%The MMX license area includes a portion that is currently being used by Vale. These reserveswere included in the total reserves stated in Table 8.3. Table 8.6 shows the reserves within theVale area.Table 8.6: Mineral Reserves by Lithology within Vale Infrastructure Area - Mine 63Corumbá Project* RoM Grades Product Grades** Vol. Tonnes Fe SiO2 Al2O3 P LOI Fe SiO2 Al2O3 P LOI LITHOLOGY CLASSIFICATION (Mm3) (Mt) % % % % % % % % % % PROVEN 2.02 6.25 58.64 8.82 3.71 0.06 2.09 64.08 4.32 1.41 0.06 1.11 COLF PROBABLE 0.06 0.19 60.48 7.17 3.26 0.08 2.18 65.61 2.99 1.31 0.07 1.16 TOTAL 2.08 6.44 58.70 8.77 3.69 0.06 2.09 64.13 4.28 1.40 0.06 1.11 PROVEN - - - - - - - - - - - - COLU PROBABLE - - - - - - - - - - - - TOTAL - - - - - - - - - - - - PROVEN - - - - - - - - - - - - LIMO PROBABLE - - - - - - - - - - - - TOTAL - - - - - - - - - - - - PROVEN - - - - - - - - - - - - PLIX PROBABLE - - - - - - - - - - - - TOTAL - - - - - - - - - - - - PROVEN 2.02 6.25 58.64 8.82 3.71 0.06 2.09 64.08 4.32 1.41 0.06 1.11 TOTAL PROBABLE 0.06 0.19 60.48 7.17 3.26 0.08 2.18 65.61 2.99 1.31 0.07 1.16 TOTAL 2.08 6.44 58.70 8.77 3.69 0.06 2.09 64.13 4.28 1.40 0.06 1.11*Tonnes are reported on a wet basis.**Product tonnes will be reduced by the mass recoveryAverage iron product price used in reserve is R$122.14.No dilution applied.No mining recovery applied.September 23, 2010 topography used.Waste material found in the reserves within the Vale infrastructure area is 1Mt for a 0.3 stripratio.8.1 Geotechnical StudiesIn the area of Mine 63, the hillsides are steep and sustained by the competence of primaryhematite jaspilite which is the protolith of the eluvial ore. The thickness of the eluvium isbetween 15 and 20m. The material still presents a certain rocky continuity that conferscompetence, although inferior to the competence of the unleached jaspilite.The colluvium forms on the hillside below the almost vertical wall of Urucum Mountain. It iscomposed of reddish clayey soil, with gravel, blocks and small pebbles of jaspilite withdimensions of centimeters to tens of centimeters. The thickness of the colluvium is variablefrom a few meters at elevations between 500 and 620m, to a maximum of 25 to 30m locally.The average thickness is about 12m and the proportion of blocks of larger dimensions decreasesfrom the base of the cliff toward the toe of the colluvial fan.SRK Consulting (U.S.), Inc. October 20, 2008Corumba_Resources and Reserves Audit_162700 09_MLM_008.docx
  • 194. Mineração e Metálicos S.A. 8-5Corumbá Iron Project, Mine 63 Resources and Reserves AuditThere are two water levels: the first at the level of silica leaching of the jaspilite in the higherelevations and the second in the colluvium. The water level varies according to the season andthe lines of concentration of the subterranean flow, probably predominating at the base of thisformation.For the final pit design angles MMX used 56 degrees face angle and 3.45m berm widths.8.2 Mining OperationsMMX started iron ore mining and processing operations at Mine 63 in January 2006. Currentmine operations produce iron ore by surface mining methods. Initial production was processedthrough the refurbished mobile crushing plant (AZTECA plant) which is no longer in use. InJuly 2006, MMX started operating the main crushing and washing plant and the first batch ofLump ore was shipped through Ladário Port later that month.The reserve is based on annual ore production of 3.3Mt/y of ore from Mine 63, producing 1.6Mtof Lump and 0.3Mt of BTL. To meet the processing rate, the average mining rate for totalmaterial movement (ore and waste) will vary from 7,500t/d to 16,605t/d on an annual basis.Processing operations are scheduled 24 hours/day, and the mine production is scheduled todirectly feed the processing operations.The mine layout is shown in Figure 8-2.8.3 Mining MethodMMX uses contract mining at Mine 63. The surface operations include: Topsoil removal; Ripping, drilling and blasting (only the eluvium requires drilling and blasting – less than 10% of reserves); Loading and haulage; and General maintenance and services.Topsoil RemovalTopsoil operations consists of removing the cover in order to expose the ore and waste materialThe topsoil is stockpiled for future reclamation activities or direct placed during reclamationactivities. Mine 63 operations utilize CAT D6 and D8, or similar type of dozer equipment.Ripping, Drilling and BlastingMine 63 scarifies or rips waste and ore material with D8 dozer class equipment. Drilling andblasting for eluvium, as required, is conducted by drilling and blasting contractors. A hydraulicbreaker adapted to a 25t digging machine reduces the size of any remaining large blocks.Grade control samples are obtained from percussive drilling and channel samples are collectedand analyzed.Loading and HaulageOre and waste are separately loaded into haulage trucks. A CAT330 class backhoe with 2.4m3capacity is the primary loader. Alternatively, a CAT 980 class front-end loader with a 5m3bucket is used as a backup loader.SRK Consulting (U.S.), Inc. October 20, 2008Corumba_Resources and Reserves Audit_162700 09_MLM_008.docx
  • 195. Mineração e Metálicos S.A. 8-6Corumbá Iron Project, Mine 63 Resources and Reserves AuditOre is transported to the primary crusher pad and waste is transported to the waste dumps with25 to 30t rear dump haul trucks. Haul roads are 10m wide, with a maximum 12% grade and 1%drainage cross-slope.General Maintenance and ServicesOre is hauled continuously to the primary crusher. As required, RoM material will feed theprimary crusher. A CAT 980 type class loads the material from the RoM piles.Haul road construction and maintenance, waste dump operations, sedimentation pond operationsand other general maintenance activities utilize the reclamation dozer, Cat 140H class grader,water truck, various maintenance equipment and pickups.8.4 Mine PlanningThe RoM reserves have an average grade of 58.26% Fe, 10.33% SiO2, 3.11% Al2O3, 0.06% Pand 1.88% LOI. Grades in the individual sectors vary from 51.2 to 64.05% Fe and 4.08 to 10.2%SiO2. The average product grade is calculated at 63.67% Fe and 5.65 SiO2 for the LoM.Table 8.4.1 below presents the planned RoM, waste and total material mined in the LoM Plan.Table 8.4.1: Mine Production Schedule – Mine 63 Year RoM Mt/y Waste Mt/y Total Movement Mt/y 2010* 0.9 0.5 1.3 2011 3.4 1.7 5.1 2012 3.3 2.5 5.8 2013 3.2 1.2 4.4 2014 3.3 1.2 4.5 2015 3.3 1.2 4.5 2016 1.9 0.7 2.6 Total 19.3 9.1 28.4*2010 reserves based on September 23, 2010 to December 31, 2010.Tonnes are reported on a wet basis.Average iron product price used in reserve is R$122.14.No dilution applied.No mining recovery applied.September 23, 2010 topography used.Figure 8-3 shows the mine schedule by year.There is no dilution added to the reserves and there are no mining losses deducted from thereserves. MMX considers that internal dilution is adequately represented in the resourceestimation and they intend to recover all economic material in the LoM Plan.There are 284 employees from contractors and 172 MMX employees working for the mine,plant, port, shipping, administration, tailings and exploration. This number may fluctuatedepending on the total tonnes moved by year.8.5 ProcessingSee Section 6 for process flowsheet.SRK Consulting (U.S.), Inc. October 20, 2008Corumba_Resources and Reserves Audit_162700 09_MLM_008.docx
  • 196. Mineração e Metálicos S.A. 8-7Corumbá Iron Project, Mine 63 Resources and Reserves Audit8.6 InfrastructureThe operational infrastructure consists primarily of: Power transmission line 2km long and 34.5kV; connected to the main line which supplies the “Vale das Mineradoras” from Corumbá; Five sub-stations with a principal step-down sub-station of 1,100kVA (34.5kV/440V) and four of variable potency; Roads and access; Products stockpile areas before shipping, placed near Highway BR-262, with 600,000t capacity; Water well system, water treatment system, reservoirs for recovered water, and storage tanks; Industrial and administrative facilities (workshops, stockroom, offices and others.); and Two tailings facilities for rejects with storage capacity of 12Mt of solids, the first dam is currently at 50% capacity and the second dam constructed after 2 to 3 years of operation.8.7 TailingsThe main plant will produce approximately 200,000 to 400,000t of slurry tailings/yr, with fineparticles <0.15mm and a solids content of 6%. The total capacity is 0.5Mm3 . It is expected thatthe tailings will need to be raised by August of 2011. Currently, 50% of the capacity has beenused. The facility will also store rainwater which will be collected from the mine site.8.8 Shipment LogisticsDomestic sales are FOB Mine. The remaining product is transported by truck to the port terminalof Granel Química on the Paraguay River in Ladário, a distance of 28km from Mine 63. Part ofthe international product is sold FOB port and part is CIF.For the cash flow analysis, which considers FOB prices at the port terminal, the costs of portterminal movements are included. The port terminal belongs to the Norwegian company Odfjell,is fully authorized for exports and is capable of moving products by the waterway from eitherroad or rail access. The products can be stored in a 15,000m2 stockyard and then loaded onto theships.8.9 Environmental Management8.9.1 During the Operational Life of the MineThe plan for rehabilitation of areas impacted by mining includes the following activities duringmine operations: After the authorization to proceed with the vegetation removal in the mining areas is given, the topsoil is removed and stockpiled during the mining period; Training program for the orientation of professionals on operational planning and best practices for environmental administration of mining projects;SRK Consulting (U.S.), Inc. October 20, 2008Corumba_Resources and Reserves Audit_162700 09_MLM_008.docx
  • 197. Mineração e Metálicos S.A. 8-8Corumbá Iron Project, Mine 63 Resources and Reserves Audit As soon as the mine slopes and areas reach the final geometry, in any point of the mine life, those surfaces receive stabilization treatment, in a way to provide efficient drainage; and Once the re-contouring is done, a topsoil layer is applied and it will be revegetated with native seeds.8.9.2 Mine ClosureThe following areas will be recontoured and revegetated after the mine operations are completed: Tailings dam; Mining areas; and Plant and waste dumps.Every area cited above will be subjected to the following reclamation program: Topographic reconstruction; Vegetation species selection; and Conditioning of berms and pit walls.After the implementation of the reclamation plan, a monitoring program will be instituted forflora, fauna and human activity.8.10 Taxes and Royalties (OK)Taxes are included on Gross Revenues as well as the 34% Income Tax on Net Income BeforeTax (NIBT). There are four taxes identified by MMX as indicated in Table 8.10.1. The 34%Income Tax/Social Security Tax is calculated on the NIBT.Table 8.10.1: MMX Taxes Taxes and Royalties Percentage Comments PIS 1.65% Applied to Internal Production Only COFINS 7.60% Applied to Internal Production Only CFEM 2.00% Applied to Total Production Land Owner Rights 1.00% Applied to Total Production8.11 LoM Plan EconomicsSRK has reviewed MMX’s economic model and is in agreement with the methodology.8.12 Mine LifeMine 63 has a projected life of approximately six years. The mine will operate from the lastquarter of 2010 through 200 days into 2016.SRK Consulting (U.S.), Inc. October 20, 2008Corumba_Resources and Reserves Audit_162700 09_MLM_008.docx
  • 198. Corumbá Project, Mine 63 Brazil Spider Graph Showing Sensitivity of the Optimized Pit to Product PriceSRK Job No.: 162700.09File Name: Figure 8-1.doc Date: 10/14/2010 Approved: FR Figure: 8-1
  • 199. Corumbá Project, Mine 63 Brazil Current Layout of Mine 63 Corumbá ProjectSRK Job No.: 162700.09File Name: Figure 8-2.doc Date: 10/14/2010 Approved: FR Figure: 8-2
  • 200. Corumbá Project, Mine 63 Brazil Mine Schedule of Mine 63 Corumbá ProjectSRK Job No.: 162700.09File Name: Figure 8-3.doc Date: 10/14/2010 Approved: FR Figure: 8-3
  • 201. Mineração e Metálicos S.A. 9-1Corumbá Iron Project, Mine 63 Resources and Reserves Audit9 RecommendationsSome points that could be addressed in order to improve the plant and mine operationperformances are: Concentration by jigging of the current products (lump, BTL, ‘hematitinha’) according to promising results obtained in tests carried out by MMX. The said results show that it is possible to increase the ore reserves using concentration. Concentration of the fine fraction (-0.15mm) that is currently being discarded to the tailings dam should be tested in the laboratory in order to assess its technical feasibility. In such a case a new product could be produced and the overall metallurgical performance would be enhanced. The overall plant hour operating yield currently at 67.55% at the yearly basis could be increased (See Table 6.2 above). The yearly production rate would then be increased as a consequence.SRK also recommends the following: MMX should review the estimation parameters to see if a better local estimation could be achieved. This could result in a somewhat lower silica grades. Conduct a mined to model reconciliation of the resource model to determine if the model is performing efficiently in predicting grade and tonnage. Create sub-block models instead of partial models, possibly lowering the strip ratio. A study to evaluate if the processing plant can lower the silica content of the product by an extra 1%. If a lower silica grade product can be produced, it will increase the current reserves.SRK Consulting (U.S.), Inc. October 20, 2008Corumba_Resources and Reserves Audit_162700 09_MLM_008.docx
  • 202. Mineração e Metálicos S.A. 10-1Corumbá Iron Project, Mine 63 Resources and Reserves Audit10 ReferencesAgoratek International (2007). Memorandum, Corumbá QA-QC Review v2.MMX Mineração e Metálicos S.A. (May 2007). NI 43-101 Technical Report, Corumbá Iron Project, Brazil.MMX Mineração e Metálicos S.A. (September 2010). Relatorio de Recursos 2010 – Corumbá Mina 63 rev01,Internal Report.SRK Consulting (U.S.), Inc. October 20, 2008Corumba_Resources and Reserves Audit_162700 09_MLM_008.docx
  • 203. Mineração e Metálicos S.A. 11-1Corumbá Iron Project, Mine 63 Resources and Reserves Audit11 Glossary11.1 Mineral Resources and ReservesMineral ResourcesThe mineral resources and mineral reserves have been classified according to the “CIMStandards on Mineral Resources and Reserves: Definitions and Guidelines” (August 2000).Accordingly, the Resources have been classified as Measured, Indicated or Inferred, theReserves have been classified as Proven, and Probable based on the Measured and IndicatedResources as defined below.A Mineral Resource is a concentration or occurrence of natural, solid, inorganic or fossilizedorganic material in or on the Earth’s crust in such form and quantity and of such a grade orquality that it has reasonable prospects for economic extraction. The location, quantity, grade,geological characteristics and continuity of a Mineral Resource are known, estimated orinterpreted from specific geological evidence and knowledge.An ‘Inferred Mineral Resource’ is that part of a Mineral Resource for which quantity and gradeor quality can be estimated on the basis of geological evidence and limited sampling andreasonably assumed, but not verified, geological and grade continuity. The estimate is based onlimited information and sampling gathered through appropriate techniques from locations suchas outcrops, trenches, pits, workings and drillholes.An ‘Indicated Mineral Resource’ is that part of a Mineral Resource for which quantity, grade orquality, densities, shape and physical characteristics can be estimated with a level of confidencesufficient to allow the appropriate application of technical and economic parameters, to supportmine planning and evaluation of the economic viability of the deposit. The estimate is based ondetailed and reliable exploration and testing information gathered through appropriate techniquesfrom locations such as outcrops, trenches, pits, workings and drillholes that are spaced closelyenough for geological and grade continuity to be reasonably assumed.A ‘Measured Mineral Resource’ is that part of a Mineral Resource for which quantity, grade orquality, densities, shape, physical characteristics are so well established that they can beestimated with confidence sufficient to allow the appropriate application of technical andeconomic parameters, to support production planning and evaluation of the economic viability ofthe deposit. The estimate is based on detailed and reliable exploration, sampling and testinginformation gathered through appropriate techniques from locations such as outcrops, trenches,pits, workings and drillholes that are spaced closely enough to confirm both geological and gradecontinuity.Mineral ReservesA Mineral Reserve is the economically mineable part of a Measured or Indicated MineralResource demonstrated by at least a Preliminary Feasibility Study. This Study must includeadequate information on mining, processing, metallurgical, economic and other relevant factorsthat demonstrate, at the time of reporting, that economic extraction can be justified. A MineralReserve includes diluting materials and allowances for losses that may occur when the materialis mined.SRK Consulting (U.S.), Inc. October 20, 2008Corumba_Resources and Reserves Audit_162700 09_MLM_008.docx
  • 204. Mineração e Metálicos S.A. 11-2Corumbá Iron Project, Mine 63 Resources and Reserves AuditA ‘Probable Mineral Reserve’ is the economically mineable part of an Indicated, and in somecircumstances a Measured Mineral Resource demonstrated by at least a Preliminary FeasibilityStudy. This Study must include adequate information on mining, processing, metallurgical,economic, and other relevant factors that demonstrate, at the time of reporting, that economicextraction can be justified.A ‘Proven Mineral Reserve’ is the economically mineable part of a Measured Mineral Resourcedemonstrated by at least a Preliminary Feasibility Study. This Study must include adequateinformation on mining, processing, metallurgical, economic, and other relevant factors thatdemonstrate, at the time of reporting, that economic extraction is justified.11.2 GlossaryAssay: The chemical analysis of mineral samples to determine the metal content.Capital Expenditure: All other expenditures not classified as operating costs.Composite: Combining more than one sample result to give an average result over a larger distance.Crushing: Initial process of reducing ore particle size to render it more amenable for further processing.Cut-off Grade (CoG): The grade of mineralized rock, which determines as to whether or not it is economic to recover its gold content by further concentration.Dilution: Waste, which is unavoidably mined with ore.Dip: Angle of inclination of a geological feature/rock from the horizontal.Fault: The surface of a fracture along which movement has occurred.Grade: The measure of concentration of gold within mineralized rock.Haulage: A horizontal underground excavation which is used to transport mined ore.Kriging: An interpolation method of assigning values from samples to blocks that minimizes the estimation error.Lithological: Geological description pertaining to different rock types.LoM Plans: Life-of-Mine plans.Milling: A general term used to describe the process in which the ore is crushed and ground and subjected to physical or chemical treatment to extract the valuable metals to a concentrate or finished product.Mineral/Mining Lease: A lease area for which mineral rights are held.Mining Assets: The Material Properties and Significant Exploration Properties.Ongoing Capital: Capital estimates of a routine nature, which is necessary for sustaining operations.Ore Reserve: See Mineral Reserve.RoM: Run-of-Mine.SRK Consulting (U.S.), Inc. October 20, 2008Corumba_Resources and Reserves Audit_162700 09_MLM_008.docx
  • 205. Mineração e Metálicos S.A. 11-3Corumbá Iron Project, Mine 63 Resources and Reserves AuditSedimentary: Pertaining to rocks formed by the accumulation of sediments, formed by the erosion of other rocks.Shaft: An opening cut downwards from the surface for transporting personnel, equipment, supplies, ore and waste. In the case of this report the shafts were used for sampling the colluvial and eluvial deposits.Stratigraphy: The study of stratified rocks in terms of time and space.Strike: Direction of line formed by the intersection of strata surfaces with the horizontal plane, always perpendicular to the dip direction.Tailings: Finely ground waste rock from which valuable minerals or metals haveTotal Expenditure: All expenditures including those of an operating and capital nature.Variogram: A statistical representation of physical characteristics (usually grade).11.3 AbbreviationsThe metric system has been used throughout this report unless otherwise stated. All currency isin U.S. dollars. Market prices are reported in US$25.75/t fob and US$15.75/t fob of iron ore.Tonnes are metric of 1,000kg, or 2,204.6lbs. The following abbreviations are used in this report.Abbreviation Unit or TermA ampereAA atomic absorptionA/m2 amperes per square meterAl2O3 Aluminum Oxide°C degrees CentigradeCoG cut-off-gradecm centimetercm2 square centimetercm3 cubic centimeter° degree (degrees)dia. DiameterFe Irong gramGa billion years before presentgpt grams per tonneha hectaresID2 inverse-distance squaredID3 inverse-distance cubedkg kilogramskm kilometerkm2 square kilometerkt thousand tonneskt/d thousand tonnes per daykt/y thousand tonnes per yearkV kilovoltSRK Consulting (U.S.), Inc. October 20, 2008Corumba_Resources and Reserves Audit_162700 09_MLM_008.docx
  • 206. Mineração e Metálicos S.A. 11-4Corumbá Iron Project, Mine 63 Resources and Reserves AuditkW kilowattkWh kilowatt-hourkWh/t kilowatt-hour per metric tonnel literlps liters per secondLOI Loss On IgnitionLoM Life-of-Minelps liters per secondm meterm2 square meterm3 cubic metermg/l milligrams/litermm millimetermm2 square millimetermm3 cubic millimeterMn ManganeseMnO Manganese oxideMt million tonnesMt/y million tonnes per yearMW million wattsNI 43-101 Canadian National Instrument 43-101% percentP Phosphorousppb parts per billionppm parts per millionQA/QC Quality Assurance/Quality ControlRoM Run-of-Mines secondSiO2 SilicaSG specific gravityt tonne (metric ton) (2,204.6 pounds)TiO2 Titanium Oxidetph tonnes per hourt/d tonnes per dayt/y tonnes per yearµ micron or micronsV voltsW wattXRF x-ray diffraction fluorescencey yearSRK Consulting (U.S.), Inc. October 20, 2008Corumba_Resources and Reserves Audit_162700 09_MLM_008.docx
  • 207. MMX Mineração e Metálicos S.A. NI 43-101 Technical Report Corumbá Iron Project Brazil Mineração e Metálicos S.A. Praia do Flamengo 154/4° Rio de Janeiro Brasil 22210-030 SRK Project Number 162703 7175 West Jefferson Ave., Suite 3000 Lakewood, Colorado USA 80235 Tel: +1.303.985.1333 Fax: +1.303.985.9947 E-mail: Denver@srk.com Web site: www.srk.com Effective Date: September 30, 2007 Report Date: March 10, 2008Contributors: Endorsed by QP’s:Dr. Neal Rigby CEng, MIMMM, PhD Dr. Neal Rigby CEng, MIMMM, PhDLeah Mach MS Geology, CPG Leah Mach MS Geology, CPGAntonio Carlos Girodo S E E Johansson, MSAIMMJ. Michael Elder, P.E.George BorinskiS E E Johansson, MSAIMMAntonio Peralta, PhD_______________________________ _________________________________Project Consultants Qualified Persons
  • 208. Mineração e Metálicos S.A. iCorumbá Project Technical ReportTable of ContentsSUMMARY (ITEM 3) .......................................................................................................................... I1 INTRODUCTION AND TERMS OF REFERENCE (ITEM 4)........................................... 1-1 1.1 Terms of Reference and Purpose of the Report ......................................................... 1-1 1.2 Sources of Information .............................................................................................. 1-1 1.3 Effective Date ............................................................................................................ 1-1 1.4 Reliance on Other Experts (Item 5) ........................................................................... 1-1 1.5 Material Litigation ..................................................................................................... 1-1 1.6 Qualifications of Consultant (SRK)........................................................................... 1-12 PROPERTY DESCRIPTION AND LOCATION (ITEM 6)................................................. 2-1 2.1 Property Location....................................................................................................... 2-1 2.2 Mineral Titles............................................................................................................. 2-1 2.2.1 Brazilian Mining Legislation....................................................................... 2-1 2.2.2 Authorization for Exploration ..................................................................... 2-1 2.2.3 Concession for Mining Exploitation ........................................................... 2-2 2.2.4 MMX’s Mineral Claims in Corumbá .......................................................... 2-2 2.2.5 Maintenance of Mineral Claims .................................................................. 2-4 2.3 Location of Mineralization ........................................................................................ 2-4 2.4 Legal Surveys............................................................................................................. 2-5 2.5 Royalty Agreements and Encumbrances ................................................................... 2-5 2.6 Environmental Liabilities........................................................................................... 2-5 2.7 Permits and Licenses.................................................................................................. 2-5 2.8 Surface Access ........................................................................................................... 2-63 ACCESSIBILITY, CLIMATE, LOCAL RESOURCES, INFRASTRUCTURE ANDPHYSIOGRAPHY (ITEM 7) ............................................................................................................ 3-1 3.1 Access ........................................................................................................................ 3-1 3.2 Climate....................................................................................................................... 3-1 3.3 Physiography.............................................................................................................. 3-1 3.4 Vegetation .................................................................................................................. 3-1 3.5 Local Resources and Infrastructure ........................................................................... 3-2 3.5.1 Water Supply and Water Management........................................................ 3-2 3.5.2 Electrical Power Supply .............................................................................. 3-2 3.5.3 Buildings and Ancillary Facilities ............................................................... 3-3 3.5.4 Fuel Storage Area ........................................................................................ 3-3 3.5.5 Sewage and Waste Disposal........................................................................ 3-3 3.5.6 Laboratory ................................................................................................... 3-3 3.5.7 Communications.......................................................................................... 3-4 3.5.8 Security........................................................................................................ 3-44 HISTORY (ITEM 8).............................................................................................................. 4-1 4.1 Ownership .................................................................................................................. 4-1 4.2 Project Expenditures .................................................................................................. 4-2 4.3 Historic Exploration................................................................................................... 4-2 4.4 Historic Mineral Resource Estimates......................................................................... 4-25 GEOLOGICAL SETTING (ITEM 9).................................................................................... 5-1SRK Consulting (US), Inc. 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  • 209. Mineração e Metálicos S.A. iiCorumbá Project Technical Report 5.1 Regional Geology ...................................................................................................... 5-1 5.1.1 Lithology and Stratigraphy.......................................................................... 5-1 5.2 Structural Geology ..................................................................................................... 5-4 5.3 Local Geology............................................................................................................ 5-5 5.3.1 Santa Cruz Formation - Córrego das Pedras Member................................. 5-5 5.3.2 Santa Cruz Formation - Banda Alta Member.............................................. 5-5 5.3.3 Mine 63 Geology......................................................................................... 5-6 5.3.4 Urucum NE Geology................................................................................... 5-66 DEPOSIT TYPES (ITEM 10) ............................................................................................... 6-17 MINERALIZATION (ITEM 11)........................................................................................... 7-1 7.1 Eluvial Deposits ......................................................................................................... 7-1 7.2 Colluvial Deposits...................................................................................................... 7-18 EXPLORATION (ITEM 12) ................................................................................................. 8-1 8.1 Exploration of Mine 63.............................................................................................. 8-1 8.2 Exploration of Urucum NE........................................................................................ 8-1 8.2.1 Geophysics .................................................................................................. 8-29 DRILLING (ITEM 13) .......................................................................................................... 9-1 9.1 Mine 63 ...................................................................................................................... 9-1 9.2 Urucum NE ................................................................................................................ 9-110 SAMPLING METHOD AND APPROACH (ITEM 14)..................................................... 10-111 SAMPLE PREPARATION, ANALYSES AND SECURITY (ITEM 15).......................... 11-1 11.1 Sample Preparation, Analysis and Security for Mine 63......................................... 11-1 11.1.1 Sample Preparation.................................................................................... 11-1 11.1.2 Sample Analysis ........................................................................................ 11-2 11.1.3 Laboratory Quality Control and Quality Assurance.................................. 11-3 11.2 Sample, Preparation and Analysis for Urucum NE ................................................. 11-5 11.2.1 Sample Preparation Procedures................................................................. 11-5 11.2.2 Chemical Analysis Procedures .................................................................. 11-6 11.2.3 Quality Control Procedures (QA/QC) ....................................................... 11-7 11.2.4 Sample Security......................................................................................... 11-9 11.2.5 ISO 9000 Certification .............................................................................. 11-912 DATA VERIFICATION (ITEM 16) ................................................................................... 12-113 ADJACENT PROPERTIES (ITEM 17).............................................................................. 13-114 MINERAL PROCESSING AND METALLURGICAL TESTING (ITEM 18) ................. 14-1 14.1 Mineral Processing and Metallurgical Testing for Mine 63 .................................... 14-1 14.1.1 Technological Parameters of the Process .................................................. 14-1 14.1.2 Mineralogical Analysis.............................................................................. 14-3 14.1.3 Calculation of Mass Balance ..................................................................... 14-5 14.2 Mineral Processing and Metallurgical Testing - Urucum NE ................................. 14-5 14.2.1 Location and Preparation of Metallurgical Samples ................................. 14-5 14.2.2 Methodology.............................................................................................. 14-6 14.2.3 Results ....................................................................................................... 14-6 14.2.4 Conclusion............................................................................................... 14-1015 MINERAL RESOURCE AND RESERVE ESTIMATES (ITEM 19)................................ 15-1SRK Consulting (US), Inc. 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  • 210. Mineração e Metálicos S.A. iiiCorumbá Project Technical Report 15.1 Mineral Resource and Reserve Estimation for Mine 63.......................................... 15-1 15.1.1 Database .................................................................................................... 15-1 15.1.2 Geological Model ...................................................................................... 15-1 15.1.3 Resource Database..................................................................................... 15-1 15.1.4 Compositing .............................................................................................. 15-3 15.1.5 Density....................................................................................................... 15-4 15.1.6 Topography................................................................................................ 15-5 15.1.7 Variography............................................................................................... 15-5 15.1.8 Resource Estimation................................................................................ 15-10 15.1.9 Resource Classification ........................................................................... 15-12 15.2 Mineral Resource Estimation – Urucum NE ......................................................... 15-13 15.2.1 Database .................................................................................................. 15-13 15.2.2 Geologic Model ....................................................................................... 15-14 15.2.3 Gridded Seam Block Model .................................................................... 15-15 15.2.4 Density..................................................................................................... 15-15 15.2.5 Topography.............................................................................................. 15-16 15.2.6 Compositing ............................................................................................ 15-16 15.2.7 Variography............................................................................................. 15-17 15.2.8 Resource Estimation................................................................................ 15-17 15.2.9 Resource Statement ................................................................................. 15-18 15.3 Reserve Estimation Mine 63................................................................................. 15-1916 OTHER RELEVANT DATA AND INFORMATION (ITEM 20)..................................... 16-1 16.1 Potential Resources.................................................................................................. 16-1 16.1.1 Mine 63...................................................................................................... 16-1 16.1.2 Additional Targets ..................................................................................... 16-1 16.2 Process Improvements ............................................................................................. 16-117 ADDITIONAL REQUIREMENTS FOR OPERATING PROPERTIES ANDPRODUCTION PROPERTIES (ITEM 25)..................................................................................... 17-1 17.1 Geotechnical Studies................................................................................................ 17-1 17.2 Mining Operations ................................................................................................... 17-1 17.3 Mining Method ........................................................................................................ 17-2 17.4 Mine Planning.......................................................................................................... 17-2 17.5 Processing ................................................................................................................ 17-4 17.6 Infrastructure............................................................................................................ 17-5 17.6.1 Tailings ...................................................................................................... 17-5 17.7 Contracts .................................................................................................................. 17-5 17.8 Markets .................................................................................................................... 17-5 17.8.1 Shipment Logistics .................................................................................... 17-6 17.9 Environmental Management.................................................................................... 17-6 17.9.1 During the Operational Life of the Mine................................................... 17-6 17.9.2 Mine Closure ............................................................................................. 17-6 17.10 Economic Analysis .................................................................................................. 17-7 17.11 Taxes and Royalties ................................................................................................. 17-7 17.12 LoM Plan Economics............................................................................................... 17-7 17.13 Sensitivities ............................................................................................................ 17-10 17.14 Mine Life ............................................................................................................... 17-10SRK Consulting (US), Inc. March 10, 2008MMX.Corumba.NI 43-101 Technical Report.162703.KG.009.doc
  • 211. Mineração e Metálicos S.A. ivCorumbá Project Technical Report18 INTERPRETATION AND CONCLUSIONS (ITEM 21) .................................................. 18-119 RECOMMENDATIONS (ITEM 22) .................................................................................. 19-120 REFERENCES (ITEM 23) .................................................................................................. 20-121 GLOSSARY ........................................................................................................................ 21-1 21.1 Mineral Resources and Reserves ............................................................................. 21-1 21.2 Glossary ................................................................................................................... 21-2List of TablesTable 1: Mineral Resources – Mine 63- Corumbá Project* .............................................................. IIITable 2: Mineral Resources – Urucum NE- Corumbá Project* ........................................................ IIITable 3: Ore Reserves - Mine 63 Corumbá Project*......................................................................... IVTable 4: LoM Economic Results (US$000s) ..................................................................................... VITable 1.6.1: Key SRK Project Personnel.......................................................................................... 1-2Table 2.2.4.1: Mineral Rights – Corumbá Project, Mine 63 and Surroundings ............................... 2-3Table 4.4.1: Mineral Resources* – Mine 63- Corumbá Project as at December 2006..................... 4-3Table 4.4.2: Ore Reserves* – Mine 63 Corumbá Project as at December 2006............................... 4-3Table 5.3.1: Local Stratigraphy – Mine 63 Area .............................................................................. 5-5Table 9.1.1: Drilling in Mine 63, Corumbá Project.......................................................................... 9-1Table 9.2.1: Shafts at Urucum NE, Corumbá Project....................................................................... 9-2Table 10.1: Sample Interval Statistics for Mine 63 and Urucum NE ............................................. 10-1Table 11.1.3.1: Summary of Percent Difference Between SGS and UT Samples ......................... 11-4Table 11.2.2.1: Limits Detection of SGS Iron Ore Analysis .......................................................... 11-6Table 11.2.2.2: Detection Limits in ALS Chemex Iron Ore Analysis............................................ 11-7Table 14.1.1.1: Colluvial Ore –Chemical Analysis: RoM and Lump ............................................ 14-2Table 14.1.1.2: Eluvial Ore –Chemical Analysis: RoM and Lump................................................ 14-2Table 14.1.2.1: Mineralogical Analyses of Samples from Mine 63 ............................................... 14-4Table 14.1.3.1: Average Results of Mass Recovery – Lump and Sinter Feed ............................... 14-5Table 14.2.1.1: Characteristics of Samples Analyzed in Heavy Medium Concentration............... 14-6Table 14.2.3.1: Mass Yield of Different Products After Processing .............................................. 14-7Table 14.2.3.2: Average Chemical Analysis Before Gravimetric Concentration........................... 14-7Table 14.2.3.3: Average Chemical Quality of Sinter Feed............................................................. 14-7Table 14.2.3.4: Results of Heavy Medium Tests for the Fraction <38.00> - LUMP1 ................... 14-8Table 14.2.3.5: Results of Heavy Medium Tests for the Fraction < 25.00 >9.52 – LUMP3 ......... 14-9SRK Consulting (US), Inc. March 10, 2008MMX.Corumba.NI 43-101 Technical Report.162703.KG.009.doc
  • 212. Mineração e Metálicos S.A. vCorumbá Project Technical ReportTable 15.1.3.1: Resource Database, Mine 63 .................................................................................. 15-2Table 15.1.3.2: Basic Statistics – Original Assays– Colluvium Area ............................................ 15-2Table 15.1.3.3: Statistics – Original Assays – Eluvium Area......................................................... 15-3Table 15.1.4.1: Basic Statistics Composite Data Set – Colluvium Area ........................................ 15-4Table 15.1.4.2: Basic Statistics Length Composite Data Set – Eluvium Area ............................... 15-4Table 15.1.7.1: Variography – Colluvium Area .............................................................................. 15-7Table 15.1.7.2: Variography – Eluvium Area.................................................................................. 15-7Table 15.1.7.3: Telescoped Variograms – Colluvium Area ........................................................... 15-9Table 15.1.7.4: Telescoped Variograms – Eluvium Area............................................................... 15-9Table 15.1.8.1: Parameters of Block Model .................................................................................. 15-10Table 15.1.8.2: Statistics of the Colluvium Block Model............................................................. 15-11Table 15.1.8.3: Statistics of the Eluvium Block Model................................................................ 15-11Table 15.1.8.4: Mineral Resources – Mine 63 Corumbá Project*................................................ 15-12Table 15.2.1.1: Summary of Exploration Shafts, Urucum NE ..................................................... 15-13Table 15.2.1.2: Basic Statistics – Global Assay Urucum NE Area .............................................. 15-14Table 15.2.3.1: Parameters of Block Model ................................................................................. 15-15Table 15.2.6.1: Size Fractions of Sample Analyses....................................................................... 15-17Table 15.2.8.2: Basic Statistics for Block Model, Composites and Original Assays .................. 15-18Table 15.2.9.1: Summary of Resources Urucum NE.................................................................... 15-18Table 15.3.1: Correlations RoM x Lump...................................................................................... 15-19Table 15.3.2: Optimized Pit for Mine 63, Corumbá Project End of December 2006 .................. 15-20Table 15.3.3: Sensitivity of the Optimized Pit to Product Price in Colluvium Area Only........... 15-20Table 15.3.4: Total Reserves as at December 2006 - Mine 63 Corumbá Project*...................... 15-20Table 15.3.5: Mine 63 Production, January to September 2007................................................... 15-21Table 15.3.6: Total Proven and Probable Reserves at Mine 63 Corumbá Project*, September 30, 2007.................................................................................................................................... 15-21Table 17.4.1: Mine Production Schedule – Mine 63 ...................................................................... 17-3Table 17.4.2: Mine Personnel Requirements.................................................................................. 17-4Table 17.11.1: MMX Royalties ...................................................................................................... 17-7Table 17.12.1: Operating Costs (US$/t of product)......................................................................... 17-8Table 17.12.2: LoM Economic Results (US$000s) ........................................................................ 17-9Table 17.13.1: Project Sensitivity (NPV10% US$000’s) ............................................................... 17-10SRK Consulting (US), Inc. March 10, 2008MMX.Corumba.NI 43-101 Technical Report.162703.KG.009.doc
  • 213. Mineração e Metálicos S.A. viCorumbá Project Technical ReportList of FiguresFigure 2-1: Location Map of the Corumbá Project........................................................................... 2-7Figure 2-2: Mineral Rights Map - MMX Corumbá Project.............................................................. 2-8Figure 2-3: Surface Owners of Urucum NE and Mine 63 Areas...................................................... 2-9Figure 3-1: Location Map of MMX Corumbá Project...................................................................... 3-5Figure 4-1: Schematic View of Mine 63 Project and Urucum NE Exploration Targets .................. 4-4Figure 5-1: Stratigraphic Column and Regional Map....................................................................... 5-7Figure 5-2: Regional Structural Map Corumbá Project.................................................................... 5-8Figure 5-3: Geologic Map of the Mine 63 Area ............................................................................... 5-9Figure 9-1: Drillhole and Sample Locations, Mine 63 Corumbá Project ......................................... 9-3Figure 9-2: Shaft Locations, Urucum NE ......................................................................................... 9-4Figure 11-1: LCT and SGS versus UT Analyses for Corumbá Samples...................................... 11-10Figure 14-1: Location of Metallurgical Samples, Mine 63........................................................... 14-11Figure 14-2: Iron Percentage RoM Versus Lump, Mine 63 ......................................................... 14-12Figure 15-1: All Drillholes, Channel Samples, and Shafts – Mine 63 ......................................... 15-22Figure 15-2: Colluvium and Eluvium Areas of Mine 63.............................................................. 15-23Figure 15-3: Colluvium 3D Solids in Plan and Cross-Section ..................................................... 15-24Figure 15-4: Eluvium 3D Solids in Plan and Cross-Section......................................................... 15-25Figure 15-5: Location of Samples in Resource Database – Mine 63 ........................................... 15-26Figure 15-6: Iron Variograms - Colluvium................................................................................... 15-27Figure 15-7: Iron Variograms – Eluvium Area............................................................................. 15-28Figure 15-8: Colluvium and Eluvium Block Models Mine 63 ..................................................... 15-29Figure 15-9: Colluvium and Eluvium Block Grades Plan View .................................................. 15-30Figure 15-10: Colluvium and Eluvium Block Model Cross-Section ........................................... 15-31Figure 15-11: Swath Plots Mine 63 .............................................................................................. 15-32Figure 15-12: Colluvium Solid Urucum NE................................................................................. 15-33Figure 15-13: Final Colluvium Solid for Resource Estimation .................................................... 15-34Figure 15-14: Iron Variogram Urucum NE .................................................................................. 15-35Figure 15-15: Blocks by Classification Urucum NE .................................................................... 15-36Figure 15-16: CoG Curve Colluvium and Eluvium...................................................................... 15-37Figure 15-17: Mine 63 Pit Colluvium and Eluvium Areas........................................................... 15-38Figure 17-1: Layout of Mine 63 Corumbá Project ....................................................................... 17-11SRK Consulting (US), Inc. March 10, 2008MMX.Corumba.NI 43-101 Technical Report.162703.KG.009.doc
  • 214. Mineração e Metálicos S.A. viiCorumbá Project Technical ReportFigure 17-2: Plant Design ............................................................................................................. 17-12Figure 17-3: Simplified Process Flowsheet .................................................................................. 17-13List of AppendicesAppendix ACertificates of AuthorSRK Consulting (US), Inc. March 10, 2008MMX.Corumba.NI 43-101 Technical Report.162703.KG.009.doc
  • 215. Mineração e Metálicos S.A. ICorumbá Project Technical ReportSummary (Item 3)SRK Consulting (US), Inc., (SRK) was commissioned by MMX Mineração e Metálicos S.A.(MMX) to prepare a Canadian Securities Administrators (CSA) National Instrument 43-101 (NI 43-101) Technical Report for the Corumbá Iron Project (Corumbá Project) located in Mato Grosso doSul State, Brazil. The subject of this report is Mine 63, an operating mine producing Lump andSinter Feed, and an exploration property, Urucum NE. The project is owned and operated by MMXCorumbá Mineração Ltda (MMX Corumbá), a subsidiary of MMX.Property Description and AccessibilityThe Corumbá Project is located near the city of Corumbá in the state of Mato Grosso do Sul, closeto the border of Brazil and Bolivia, at coordinates 19º 11’ 41”S and 57º 36’ 50”W.The Corumbá Project consists of Mine 63, an operating mine, and the Urucum NE and Rabichoexploration areas. Mine 63 is located approximately 19.5km from the city of Corumbá, the capitalof Mato Grosso do Sul, Brazil; access is by paved highway BR-262 for 16km and then by unpavedroads to the property. Urucum NE is located at about 5 km eastern of Mine 63. Access is by pavedhighway BR-262 for 10 km from the city of Corumbá and then by unpaved road for 10 kmProject History and OwnershipMMX Corumbá controls 20 mineral rights in the Corumbá Project area, including two miningconcessions covering the mine area, 16 exploration permits, and two requests for surveys. Themining concessions and permits cover a total area of 9495.98ha. The mineral resources and orereserves reported in this report are completely contained within the mining and explorationconcessions. MMX Corumbá controls the surface rights at the mine through lease agreements withthe property owners and has permission from the landowners to conduct exploration on the UrucumNE resource area.Sociedade Brasileira de Imoveis (SBI) started mining in the area in 1958, with the extraction ofcolluvial iron ore, and production of pig iron at its plant near the SBI port. When the price of pigiron dropped in 1973, SBI constructed a beneficiation plant for iron and manganese ore, whichoperated between 1974 and 1986. Between 1986 and 2000, activity was limited to undergroundmining for manganese ore. After 2000, production was restricted to mining and beneficiation ofiron ore. MMX Corumbá acquired the mining concessions and the beneficiation plant in 2005 andstarted mining and processing operations in January 2006. Exploration at Urucum NE started in2007.Geology and MineralizationThe Corumbá Project lies within the Urucum iron-manganese district which is located along theBrazilian-Bolivian border and extends into the eastern areas of both Paraguay and Bolivia, andincludes an area of 200km2. The Urucum deposits are associated with banded iron formations(BIF), locally known as jaspelites, that are found in the Banda Alta Formation. The regionalgeology consists of Proterozoic-age igneous and metamorphic rocks, granite intrusions, and acidintrusives. The rocks are in faulted and unconformable contact and are overlain by Quaternarysedimentary deposits which account for approximately 60% of the cover in the area.The mineralization at Mine 63 is hosted in deposits of colluvium and eluvium, and themineralization at Urucum NE is hosted by colluvium. The Eluvium is located on the flank ofSRK Consulting (US), Inc. March 10, 2008MMX.Corumba.NI 43-101 Technical Report.162703.KG.009.doc
  • 216. Mineração e Metálicos S.A. IICorumbá Project Technical ReportUrucum Mountain and was formed by in situ silica leaching and the subsequent enrichment of ironin the jaspelite of the Banda Alta Formation. The Colluvium consists of a detrital deposit that formsan elongate fan at the base of Urucum Mountain. The iron grade in the colluvium is higher near thesource rock and decreases with distance from the source.ExplorationMMX Corumbá conducted the first exploration at Mine 63 in November 2005. Although miningoccurred on the property prior to the acquisition by MMX, no exploration had been done. MMX’sexploration program consisted of hand digging exploration pits, referred to as shafts, channelsampling, and diamond core drilling. Assaying was initially done by Laboratório de CaracterizaçãoTecnológica (LCT) in Sao Paulo and later by SGS Geosol Laboratorios Limitada (SGS) in BeloHorizonte. The pulps initially analyzed at LCT were subsequently sent to SGS/Geosol for checkanalysis. Laboratory QA/QC consisted of sending pulps to Ultra Trace Analytical Laboratories PtyLtd (UT) in Australia for analysis. There was generally good correspondence between SGS and UT,and the SGS results were deemed acceptable for resource estimation purposes.Exploration at Urucum NE started in 2007, with a program of shaft excavation. The samples wereprepared at the Mine 63 laboratory and were analyzed at SGS in Belo Horizonte. LaboratoryQA/QC consisted of inserting standards samples and duplicates into the sample stream, and a checkassay program with ALS Chemex Laboratory in Australia. Analysis of the QA/QC by AgoratekInternational indicated that there may be a low bias in Al2O3 and a high bias in P by SGS. The biasis being further investigated by Agoratek, and the database is considered acceptable for resource andreserve estimation.Resources and ReservesThe resources were estimated by Prominas, a geologic and engineering consulting company in BeloHorizonte, Brazil. The Mine 63 area was divided into two separate models: the Eluvium area andColluvium area. The Eluvium area has two rock types: eluvium and a smaller component ofcolluvium. The Colluvium area also has two rock types: colluvium and a smaller component ofcemented breccia. Three dimensional solids were constructed for the two areas based on drillholecross-sections.The drillhole assays were composited into 5m lengths from the top of the hole, with breaks at thelithologic contacts; intervals of 2m or less were included with the preceding composite if thelithologies were the same, resulting in a minimum length of 3m and a maximum of 7m. Shaft andchannel samples with lengths greater than 6m or which were located within 10m of a drillhole wereexcluded from the compositing routine. Internal waste intervals which were not assayed wereassigned a value of zero prior to compositing.Variography studies were done for each rock type in the Colluvium and Eluvium areas. Separateblock models were created for the Colluvium and Eluvium areas with block sizes of 50 x 50 x 5mand 25 x 25 x 5m respectively. The 3D geologic models were used to assign a rock code andpercentage to the blocks. Variography studies were done for each rock type in each area. Grade wasestimated with ordinary kriging. Classification into Measured, Indicated, and Inferred Resourceswas based on kriging variance and regression slope. The total mineral resources, including orereserves, of Mine 63 are tabulated in Table 1.SRK Consulting (US), Inc. March 10, 2008MMX.Corumba.NI 43-101 Technical Report.162703.KG.009.doc
  • 217. Mineração e Metálicos S.A. IIICorumbá Project Technical ReportTable 1: Mineral Resources – Mine 63- Corumbá Project* O2Classification Mt Fe (% ) SiO2 (% ) Al 2 O3 (% ) P (% ) Mn (% ) (% ) LOI (% )Measured 5.2 60.92 8.27 2.62 0.08 0.03 0.14 1.75Indicated 40.4 51.90 16.81 2.67 0.06 0.53 0.14 1.51 Stockpiles 0.1 60.40 9.28 2.53 0.08 0.05 0.14 1.69Total Indicated 40.5 51.92 16.79 2.67 0.06 0.53 0.14 1.51Measured and Indicated 45.6 53.06 15.85 2.67 0.06 0.47 0.14 1.54Inferred 14.0 53.26 16.08 2.83 0.06 0.55 0.15 1.67* Tonnes are reported on a wet basis Fe Cut-off grade is 30%At Urucum NE, there is a single geologic domain, the Colluvium. The deposit was modeled as agridded seam model (GSM), where the x and y dimensions of the block are fixed and the zdimension is variable. The assays were composited into a single composite for each shaft, resultingin an average length of 4.4m, with a minimum of 2m and a maximum of 5m. The 3D geologic solidwas used to assign a rock code and percentage to the blocks. Variography was conducted in allhorizontal directions and no preferred orientation was found was selected as best representing themineralization. Grade estimation was by ordinary kriging in a three-pass procedure where eachsucceeding pass used a longer search range. The blocks were were assigned a resourceclassification according to the pass in which they were estimated. The resources at Urucum NE aregiven in Table 2.Table 2: Mineral Resources – Urucum NE- Corumbá Project* Classification Tonnage (M t)* Fe(%) SiO2 (%) Al2O3 (%) P(%) Mn(%) TiO2 (%) LOI (%) Measured 3.17 55.23 15.2 3.09 0.056 0.12 0.18 1.72 Indicated 34.00 53.03 18.14 2.97 0.055 0.34 0.18 1.8 Measured and Indicated 37.17 53.22 17.89 2.98 0.055 0.32 0.18 1.79 Inferred 32.84 50.95 19.53 3.78 0.054 0.44 0.2 2.19*Tonnes are reported on a wet basis Fe cut-off grade (CoG) is 20%Ore Reserves – Mine 63In December 2006, a Lerchs Grossman pit optimization routine was run on the Mine 63 mineralresources in December 2006 using the following parameters: Mass recovery: 66%; Average product value: US$32/t; Mine cost RoM: US$1.38/t; Mine cost waste: US$1.00/t; Plant cost: US$3.39/t product; Transportation cost: US$3.12/t product;SRK Consulting (US), Inc. March 10, 2008MMX.Corumba.NI 43-101 Technical Report.162703.KG.009.doc
  • 218. Mineração e Metálicos S.A. IVCorumbá Project Technical Report GandA: US$0.68/t product; Density: Colluvium 3.16g/cm3; Eluvium 3.60g/cm3; and Pit slope: 47o Colluvium; 48o Eluvium.The reserves reported below were depleted for mine production through September 2007. The totalreserves for Mine 63 are listed in Table 2.Table 3: Ore Reserves - Mine 63 Corumbá Project*Classification Kt Fe (%) SiO2 (%) Al2O3 (%) P (%) Mn (%) TiO2 (%) LOI (%)Proven 4.3 61.03 8.26 2.55 0.08 0.03 0.14 1.67Probable 25.0 54.74 14.96 2.51 0.06 0.43 0.14 1.45 Stockpile 0.1 60.40 9.28 2.53 0.08 0.05 0.14 1.69Total Probable 25.1 54.76 14.94 2.51 0.06 0.43 0.14 1.45Total Proven and Probable 29.4 55.68 13.96 2.51 0.06 0.37 0.14 1.48* Tonnes are reported on a wet basis. Fe (CoG) for Eluvium is 48.0% and Fe (CoG) for Colluvium is 56.1%. Average Fe price used in reserve isUS$32.02.Metallurgy and ProcessMetallurgical testing at Mine 63 consisted of: A study of the correlation between run-of-mine (RoM) and Lump to establish the cut-off grade; and A study of the mass recovery to define the product yield of Lump and Sinter Feed.The results of the tests indicate that at Mine 63 the average grade of the RoM must be 54.8% Fe.The mass recovery percentages for Lump and Sinter Feed are 55% and 11%, respectively.EnvironmentalThe environmental program at Mine 63 includes reclamation concurrent with mining and at the endof the mine life. The reclamation plan consists of recontouring and revegetation of the tailingsfacility, the mine and plant areas and the waste dumps. The reclamation will be monitoredfollowing closure of the mine for a period of five years.Economic Analysis – Mine 63The LoM plan and economics are based on the following: Reserves of 29.4Mt at an average grade of 55.7% Fe; A mine life of 8 years, at a designed production rate of 4,101ktpy; An overall average process recovery rate of 55% for Lump product and 11% for Sinter product over the LoM; o Mining costs per tonne of product are based on contract mining and are US$3.46 for 2008 and US$3.30 for the remaining LoM, and o Process costs per tonne of product are US$3.79 for 2008 and US$2.98 for the remaining LoM.SRK Consulting (US), Inc. March 10, 2008MMX.Corumba.NI 43-101 Technical Report.162703.KG.009.doc
  • 219. Mineração e Metálicos S.A. VCorumbá Project Technical Report G&A costs are as shown; o Sundry costs - mine planning, quality control, administration - US$1.90/t-product for 2008 and US$1.58/t-product for the remaining LoM, o Product transport – mine to port - US$1.99/t-product for 2008 and US$1.69/t-product for the remaining LoM, o Port terminal cost are included in the sales expenses, and o Corporate costs – miscellaneous - US$2.22/t-product for 2008 and US$1.78/t-product for the remaining LoM. A cash operating cost of US$8.55/t-ore (US$12.97/t-product combined); Total capital expenditures of US$32.8M have been incurred in 2005, 2006, and 2007. These capital costs are amortized/depreciated in accordance with a straight-line depreciation method supplied by MMX. However, the capital costs are not included in the financial model; and Total sustaining capital costs of US$26.8M LoM are included. MMX included mine closure costs in the sustaining capital. There is no allowance for salvage value.The base case economic analysis results, shown in Table 4, indicate an after-tax net present value ofUS$76M at a 10% discount rate.SRK Consulting (US), Inc. March 10, 2008MMX.Corumba.NI 43-101 Technical Report.162703.KG.009.doc
  • 220. Mineração e Metálicos S.A. VICorumbá Project Technical ReportTable 4: LoM Economic Results (US$000s)Description LoM ValueOre Ore RoM (Mt) 29.4 Grade Iron 55.7%Lump Ore Process Recovery 55%Sinter Ore Process Recovery 11%Gross Revenue Lump Product $430,108 Sinter Product $77,272 Gross Revenue $507,380Royalty (Taxes) Royalties ($22,662) Gross Income from Mining $484.718 US$/-ore t $16.51 US$/t-product $25.03Gross Income from Mining $484,718Operating Costs Mining ($64,259) Process ($86,798) GandA (100,097) Operating Costs ($251,154) US$/t-ore $8.55 US$/t-product $12.97 Operating Margin $233,564 US$/t-ore $7.95 US$/t-product $1206Income Tax Income Tax ($71,847) Total Tax ($71,847) US$/t-ore $2.45 US$/t-product $3.71 NIAT $161,717 US$/t-ore $5.51 US$/t-product $8.35Capital Costs Sustaining $34,866 Equipment – sunk capital – operating mine $0 Mine Closure/Reclamation – incl in sustaining $0 Total Capital ($34,866) Cash Flow $126,738 NPV10% $76,069SRK Consulting (US), Inc. March 10, 2008MMX.Corumba.NI 43-101 Technical Report.162703.KG.009.doc
  • 221. Mineração e Metálicos S.A. VIICorumbá Project Technical ReportConclusionsThe Corumbá Project consists of an operating mine that has been in production since July 2006,Mine 63, and an exploration property, Urucum NE. The mineral resources and ore reserves havebeen estimated by Prominas under the direction of MMX. The project is well documented withoriginal sources of drill logs, assays, and various reports, as well as an electronic database.SRK has reviewed and validated the sample database, topography, geologic interpretation, and theresource estimation parameters. The resource block model has been verified through visualexamination and by construction of swath plots through the deposit. The resource estimate followsindustry standards and the resource classification is in accordance with CIM guidelines.The metallurgical testwork has been reviewed by SRK and found to be valid.MMX has the necessary mining and environmental permits and surface agreements to operate Mine63 at the Corumbá Project and to conduct exploration at the resource area of Urucum NE.The Corumbá Project team draws on its experience in the design and operation of Mine 63. TheLoM is relatively short, the initial capital has been spent, and as such, the project is straightforwardand does not require the extensive sensitivity analysis which is typical with long life projects. It isvery likely this ore body will be extracted in the manner and time frame proposed by the operators.The project economics indicate that: The Corumbá Project exhibits robust economics with a NPV10% of US$76M; and SRK considers the Corumbá Project to be a relatively low-risk project given its relatively short mine life, good mining conditions,and conventional mining and processing methods.RecommendationsThe resource database could be improved by the following procedures in future programs: Sample intervals should be no longer than the bench height at the mine. This procedure would eliminate the problem of sample support where intervals longer than 6m were excluded from the compositing routine; and Intervals of internal waste should be analyzed with the same procedures as the surrounding samples. This would eliminate the doubts about the grade and the subsequent assignment of zero gradeto these intervals. MMX has instituted this practice with the 2007 exploration programs.The resource estimate procedure at Mine 63 should be re-examined following future drilling andsampling programs to see if it could be simplified. The current estimation procedure is technicallycorrect, but may be more complex than required for this deposit.As mining progresses, a program of mined to model reconciliation should be instituted. This is astandard practice in mine operations and aids in evaluation and refining of the resource model.The laboratory quality assurance/quality control (QA/QC) at Urucum NE indicates that there may bea bias in analyses of Al2O3 and P by SGS. SRK recommends this bias be further investigated.SRK Consulting (US), Inc. March 10, 2008MMX.Corumba.NI 43-101 Technical Report.162703.KG.009.doc
  • 222. Mineração e Metálicos S.A. 1-1Corumbá Project Technical Report1 Introduction and Terms of Reference (Item 4)SRK Consulting (US), Inc., (SRK) was commissioned by MMX Mineração e Metálicos S.A.(MMX) to prepare a Technical Report for Mine 63 and Urucum NE of the Corumbá Iron Project(Corumbá Project) located in Mato Grosso do Sul State, Brazil to meet the requirements ofCanadian National Instrument 43-101 (NI 43-101). Mine 63 is a producing iron ore mine andUrucum NE is an exploration property, both owned and operated by MMX Corumbá MineraçãoLtda (MMX Corumbá) which is 70% owned by MMX and 30% by Centennium Asset MiningFund LLC. Certain definitions used in this executive summary are defined in the body of thistechnical report.This report reflects the most recent mineral resource and ore reserve estimation based on dataproduced through September 30, 2007.1.1 Terms of Reference and Purpose of the ReportThis Technical Report is intended to be used by MMX to further the development of the Propertyby providing an audit of the mineral resource and ore reserve estimates, classification ofresources and reserves in accordance with the Canadian Institute of Mining, Metallurgy andPetroleum (CIM) classification system, and evaluation of the project.MMX may also use the Technical Report for any lawful purpose to which it is suited. ThisTechnical Report has been prepared in general accordance with the guidelines provided in NI 43-101 Standards of Disclosure for Mineral Projects.1.2 Sources of InformationThe underlying technical information upon which this Technical Report is based represents acompilation of work performed by MMX and several independent consulting firms. The studiesand additional references for this Technical Report are listed in Section 20. SRK has reviewedthe project data and incorporated the results thereof, with appropriate comments and adjustmentsas needed, in the preparation of the Technical Report.1.3 Effective DateThe effective date of the resources and reserves stated in this report is September 30, 2007. Thereport date is March 10, 2008.1.4 Reliance on Other Experts (Item 5)SRK’s opinion contained herein is based on information provided to SRK by MMX throughoutthe course of SRK’s investigations. The sources of information include data and reports suppliedby MMX and MMX Corumbá personnel as well as documents cited in Section 20.1.5 Material LitigationSRK has been advised by MMX that there is no litigation concerning the Corumbá property.1.6 Qualifications of Consultant (SRK)The SRK Group comprises of 750 staff, offering expertise in a wide range of resourceengineering disciplines. The SRK Group’s independence is ensured by the fact that it holds noequity in any project and that its ownership rests solely with its staff. This permits SRK toSRK Consulting (US), Inc. March 10, 2008MMX.Corumba.NI 43-101 Technical Report.162703.KG.009.doc
  • 223. Mineração e Metálicos S.A. 1-2Corumbá Project Technical Reportprovide its clients with conflict-free and objective recommendations on crucial judgment issues.SRK has a demonstrated record of accomplishment in undertaking independent assessments ofmineral resources and mineral reserves, project evaluations and audits, technical reports andindependent feasibility evaluations to bankable standards on behalf of exploration and miningcompanies and financial institutions worldwide. The SRK Group has also worked with a largenumber of major international mining companies and their projects, providing mining industryconsultancy service inputs.This report has been prepared based on a technical and economic review by a team of consultantssourced principally from the SRK Group’s Denver US office. These consultants are specialistsin the fields of geology exploration, mineral resource and mineral reserve estimation andclassification, open pit mining, mineral processing and mineral economics.Neither SRK nor any of its employees and associates employed in the preparation of this reporthas any beneficial interest in MMX or in the assets of MMX. SRK will be paid a fee for thiswork in accordance with normal professional consulting practice.The individuals who have provided input to this technical report, who are listed below, haveextensive experience in the mining industry and are members in good standing of appropriateprofessional institutions. The key project personnel contributing to this report are listed in Table1.6.1.Dr. Neal Rigby, Leah Mach, and Sten Johansson are the Qualified Persons (QP) for this report.Leah Mach visited the site between September 25 and 27, 2007. During the site visit, Ms Machinspected the exploration shafts and drill core, laboratory, visited the processing plant, reviewedthe general infrastructure of the mine, and toured the mine site. Ms Mach is responsible for theoverall preparation of the report and specifically for Sections 1 through 13, 15.1 through 15.2, 16and 18 through 22 of this Technical Report. Dr. Rigby visited the Corumbá Project property onJanuary 6, 2006. Dr. Rigby inspected the exploration shafts, inspected the drill core, reviewedthe general infrastructure of the mine, and toured the mine site. Dr. Rigby is the QualifiedPerson responsible for the review of the report and specifically for Sections 15.3 and 17. StenJohansson, a qualified person for the report, also visited the site on September 25 through 27 andis responsible for Section 14. George Borinski visited the site on September 25 through 27,2007.Certificate of Authors are provided in Appendix A.Table 1.6.1: Key SRK Project PersonnelName DisciplineLeah Mach Resource Estimation, Project Manager, QPAntonio Carlos Girodo Resource Estimation and Reserve ConversionMichael Elder Mining and InfrastructureS E E Johansson Processing, QPGeorge Borinski Environmental and PermittingDr. Antonio Peralta Project Economics and ValuationDr. Neal Rigby Project Review, Mining, QPSRK Consulting (US), Inc. March 10, 2008MMX.Corumba.NI 43-101 Technical Report.162703.KG.009.doc
  • 224. Mineração e Metálicos S.A. 2-1Corumbá Project Technical Report2 Property Description and Location (Item 6)2.1 Property LocationThe Corumbá Project is located near the city of Corumbá in the state of Mato Grosso do Sul,Brazil near the border with Bolivia, at coordinates 19º 11’ 41”S and 57º 36’ 50”W, shown inFigure 2-1. The project consists of several prospects and one operating mine. The operatingmine, Mine 63, and the Urucum NE Project are the subjects of this Technical Report. Figure 2-2shows the mining concessions and Figure 2-3 shows surface property ownership.2.2 Mineral Titles2.2.1 Brazilian Mining LegislationAccording to Brazil’s Constitution, the survey, exploration and exploitation of mineral resourcesshall occur under federal authorization or concession and only Brazilian citizens or companiesorganized under Brazilian laws with headquarters located in the country may be entitled topractice such activities and, therefore, to obtain mining rights.In addition, mining rights in Brazil are governed by the Mining Code and further rules enactedby Brazil’s National Department of Mineral Production (DNPM), which is the governmentalagency which controls mining activities throughout the country.2.2.2 Authorization for ExplorationAs stipulated in Article 14 of the Mining Code and Article 18 of the Decree, mineral explorationcomprises the work necessary to measure and evaluate a resource and its technical and economicfeasibility. The cited legislation also determines that the exploration may be carried out bymeans of on-site and laboratory studies, geological and geophysical studies, and any other typeof geological exploration work.DNPM’s Local Officer grants the authorization to an interested party by means of an explorationpermit, the “Alvará de Pesquisa”. In order to obtain the Exploration Permit, the titleholder filesan application with the DNPM. After analysis of the application, DNPM may issue anExploration Permit valid for a period of one to three years. This period may be extended, subjectto analysis of the exploration by the DNPM. The holder of the Exploration Permit (i) may assignor transfer it, provided that the assignee fulfills the legal conditions to hold the title; (ii) may, atany time, waive the Exploration Permit; (iii) shall be exclusively responsible for damages causedto third parties as a result of the performance of the exploration; and (iv) that the holder shallsubmit to DNPM a detailed report on the exploration activities prior to the final term of theExploration Permit.After DNPM reviews the detailed technical report on the exploration activities, the agencydecides whether the development is technically and economically feasible. DNPM maywithhold approval of the exploration process in cases where the work is insufficient or in thecase of technical deficiencies in the report.If the exploitation is considered technically and economically feasible, DNPM will approve theproject. The holder of the Exploration Permit will then have one year to apply for the miningexploitation permit or negotiate the mining right with third parties. DNPM will only provide oneextension to this time period. The extension must be obtained prior to the expiration of the firstone-year term, and there is only one allowed extension for one additional year.SRK Consulting (US), Inc. March 10, 2008MMX.Corumba.NI 43-101 Technical Report.162703.KG.009.doc
  • 225. Mineração e Metálicos S.A. 2-2Corumbá Project Technical Report2.2.3 Concession for Mining ExploitationAfter DNPM’s approval of the exploration report, the interested party may apply for theconcession of the mining exploitation, which is granted by Brazil’s Ministry of Mines andEnergy by means of a specific permit titled “Concessão de Lavra”. Prior to granting theExploitation Permit, DNPM shall verify that all legal requirements are fulfilled, including theprior exploration and the approval of the technical report by DNPM.Under the Exploitation Permit, the holder of the mining rights shall be entitled to: (i) exploit themine until it is completely exhausted; (ii) assign or transfer the title, provided that the assigneefulfills the legal conditions to hold the title; and (iii) waive the Exploitation Permit, subject toauthorization by DNPM.The holder of the exploitation permit has the responsibility to (i) exploit the mine according to amining plan previously approved by DNPM; (ii) not interrupt the mining operation for a periodof more than six consecutive months after the beginning of the operation; (iii) extract onlyminerals expressly mentioned in the Exploitation Permit; (iv) respect the applicableEnvironmental Law; (v) pay a financial compensation for the exploitation, the FinancialCompensation for the Exploitation of Mineral Resources (CFEM).2.2.4 MMX’s Mineral Claims in CorumbáMMX controls twenty mineral rights in the Corumbá Project area listed in Table 2.2.4.1 below.The total area covered by the mineral rights is 9495.98ha.SRK Consulting (US), Inc. March 10, 2008MMX.Corumba.NI 43-101 Technical Report.162703.KG.009.doc
  • 226. Mineração e Metálicos S.A. 2-3Corumbá Project Technical ReportTable 2.2.4.1: Mineral Rights – Corumbá Project, Mine 63 and Surroundings Granting or DNPM Application Former / Actual Area Current Process Target Municipality Date Owner (ha) Substance Situation Mining 807.200/71 Urucum NE Ladário 26/03/1975 Luiz Arthur 995..62 Fe Request Exploration 823.955/71 Urucum NE Ladário 26/12/1975 Mário Sérgio 370.04 Fe, Mn Permit Exploration 868.253/05 Urucum NE Ladário 13/09/2006 MMX Corumbá 635.24 Fe Permit Eike Batista / Exploration 868.045/05 Urucum NE Ladário 08/09/2005 MMX Corumbá 406.69 Fe Permit Ladário / Mining 003.275/65 Rabicho Corumbá 28/02/1979 Gabrielle Haralyi 499.80 Fe Request Mining 003.276/65 Rabicho Corumbá 03/02/1975 Gabrielle Haralyi 500.10 Fe Request Mining 003.277/65 Rabicho Corumbá 29/09/1976 Gabrielle Haralyi 392.10 Fe Request Mineração Mining 806.106/68 Rabicho Ladário 31/08/1970 Dobrados 491.00 Fe Request Mineração Mining 806.107/68 Rabicho Ladário 31/08/1970 Dobrados 279.48 Fe Request Mineração Mining 806.108/68 Rabicho Ladário 18/11/1971 Dobrados 500.00 Fe Request Mineração Mining 824.873/71 Rabicho Corumbá 18/07/1973 Dobrados 999.45 Fe Request Exploration 868.252/05 Rabicho Ladário 13/09/2006 MMX Corumbá 867.44 Fe Permit SBI/ EBX 004.019/48 Mine 63 Corumbá/MS 6/02/84 Corumbaense (1) 349.33 Mn Mining Permit SBI/ EBX 004.084/58 Mine 63 Corumbá/MS 21/05/81 Corumbaense 375.74 Fe Mining Permit Mine 63 EFB / MMX (1) Exploration 868.046/05 Surroundings Corumbá/MS 08/09/05 Corumbá 930.20 Fe Permit Mine 63 Albertina / EBX Exploration 868.083/05 Surroundings Corumbá/MS 23/06/05 Corumbaense 58.98 Fe Permit Mine 63 EFB / MMX Exploration 868.090/05 Surroundings Corumbá/MS 08/09/05 Corumbá 25.46 Fe Permit Mine 63 EFB / MMX Exploration 868.126/05 Surroundings Corumbá/MS 03/11/05 Corumbá 116.34 Fe Permit Mine 63 EFB / MMX 868.138/05 Surroundings Corumbá/MS 30/06/05 Corumbá 700.95 Fe Survey Request Mine 63 868.251/05 Surroundings Ladário/MS 31/10/05 EBX Corumbaense 2.02 Fe Survey Request(1) CFEM – Financial Compensation for the Exploitation of Mineral ResourcesMine 63 and Surrounding AreaThe reserves described in this report are restricted to the area covered by mining permits004.019/48 and 004.084/58. Mining permit 004.019/48 was originally related to manganese ore.Subsequently, this was communicated to DNPM, as the first step to the new substanceamendment. The feasibility report for iron ore was provided to DNPM using appropriatereporting procedures and forms, on March 22, 2006, together with the request for amendment ofthe title to also include iron.The registered owner of mining permits 004.019/48 and 004.084/58 is Sociedade Brasileira deImoveis (SBI). MMX Corumbá is the present owner of 004.084/58 through a purchaseagreement and is awaiting the change of ownership in the DNPM. MMX Corumbá controls004.019/48 through a lease agreement with SBI.SRK Consulting (US), Inc. March 10, 2008MMX.Corumba.NI 43-101 Technical Report.162703.KG.009.doc
  • 227. Mineração e Metálicos S.A. 2-4Corumbá Project Technical ReportThere are an additional six exploration licenses in the Mine 63 area. The applications for permits868.046/05, 868.090/05, 868.126/05 and 868.138/05 were originally made by Eike Batista, theprincipal shareholder of MMX, and the respective assignment of the right to MMX wasrequested from DNPM on June 23, 2006.Permit 868.083/05 was originally owned by Albertina Maria Brazoli; the permit was purchasedfrom Brazoli and the assignment of the right to MMX was requested from DNPM on November22, 2006.Urucum NE and RabichoThere are four mineral permits in the Urucum NE area including three exploration permits andone application for mining. In the Rabicho area there are eight mineral permits including oneexploration permit and seven applications for mining. All these permits, except two in theUrucum NE area which are held by MMX Corumbá, are controlled by the Haralyi family asindividuals or through Mineração Dobrados. The permits held by individuals of the Haralyifamily are in the process of being transferred to Mineração Dobrados.MMX Corumbá executed a contract in July 2006 with the Haralyi family in which it was agreedthat MMX Corumbá would purchase all shares in Mineração Dobrados for US$14M once all thepermits were transferred to Mineração Dobrados. MMX Corumbá has paid US$1M as a downpayment and will pay the remainder immediately upon transferal of all permits to MineraçãoDobrados. MMX expects that the transfer will be complete in the first half of 2008.2.2.5 Maintenance of Mineral ClaimsIn order to maintain the exploration permits in good standing, the holder must: Pay an Annual Tax per Hectare (TAH) to the DNPM until the end of exploration. The TAH is charged in the amount of (i) R$1.55/ha during the original term of the permit and (ii) R$2.34/ha during the extensions of the term. Note that costs per hectare are in Brazilian Reais; Pay expenses incurred by DNPM during inspections of the exploration area; and Submit an exploration work report before the expiration date of the term.In order to maintain the exploitation permits (mining concessions) in good standing, the holdermust: Pay the CFEM tax mentioned in Section 2.2.3 of this report; Pay the surface owner a compensation of 50% of the CFEM tax; and Present an annual report by March 15th of each year, describing all aspects of the mineral exploitation.2.3 Location of MineralizationSRK reviewed correspondence, pertinent maps and agreements to assess the validity of landtenure and ownership of the mining rights for the properties held by MMX. Mine 63 is locatedwithin the area covered by the mining permits 004.019/48 and 004.084/58 (shown in Figure 2-2).The Urucum NE resource is contained within exploration permits 807.200/71 and 823.955/71.SRK Consulting (US), Inc. March 10, 2008MMX.Corumba.NI 43-101 Technical Report.162703.KG.009.doc
  • 228. Mineração e Metálicos S.A. 2-5Corumbá Project Technical Report2.4 Legal SurveysThe mineral concessions in Brazil are paper filings and do not require the actual location ofmonuments on the ground. The filing includes descriptions of the corners of the concessions inGeographical Coordinate System with the South American Provisional 1956 datum (DATUMSAD_69).The northern and eastern boundaries of the mineral concessions of Mine 63 are contiguous withCompanhía Vale do Rio Doce’s (Vale) boundaries and those corners are marked with concretemonuments. The monuments were established by Vale and have been confirmed by MMX.2.5 Royalty Agreements and EncumbrancesThere are no royalties as such on the Corumbá property. There is a tax, the Compensation forthe Exploitation of Mineral Resources (CFEM), levied on the sale of raw or improved minerals.This tax is based on the type of commodity. The holder of the permit also is required tofinancially compensate the holder of the surface rights by an amount equal to 50% of the CFEMtax.2.6 Environmental LiabilitiesMMX has informed SRK that there are no known environmental liabilities in relation to themineral rights and its previous owners.2.7 Permits and LicensesMMX Corumbá has been granted the following licenses and permits to conduct exploration andoperate Mine 63: Permit for disturbance of vegetation, ASV 073/2005, issued on October 26, 2005 by the Brazilian Institute for the Environment (IBAMA), for the installation of the mine infrastructure and for the development of mining operations covering 19.3ha; Permit for disturbance of vegetation, ASV 089/2006, issued on July 11, 2006 by IBAMA, for the execution of geological surveys covering 8.11ha; Operating License LO 002/1991 (Amended), issued on October 26, 2005 by IBAMA, authorizing 3.3Mtpy; Renewal of Operating License LO 002/1991 (Amended), issued on November 01, 2007 by IBAMA, authorizing 3.3Mtpy until November 1, 2011; Operating License LO 387/2006, issued on September 28, 2006 by Special Environment Secretariat/Mato Grosso do Sul (SEMA/MS) for the use of groundwater in the mine operations; Permit for vegetal suppression ASV 194/2007, issued on November 1, 2007 by IBAMA, for the construction of tailing dam, stockpile and opening new mining areas; and Statement of the State Environmental Agency authorizing exploration at Urucum NE area.MMX has informed SRK that no other permits are required to conduct exploration or operateMine 63 or conduct exploration at Urucum NE.SRK Consulting (US), Inc. March 10, 2008MMX.Corumba.NI 43-101 Technical Report.162703.KG.009.doc
  • 229. Mineração e Metálicos S.A. 2-6Corumbá Project Technical Report2.8 Surface AccessMMX Corumbá does not own the surface rights in the area of Mine 63, but has lease agreementswith the owners. Part of the area is on SBI land and part is on the Fazenda São Francisco doUrucum. The lease agreement with the owner of the farm includes access to the plant area, andpermission to use an area of 6ha for the tailings facility and to collect borrow material for thetailings dam from a 4ha area. MMX has exploration agreements with the surface owners atUrucum NE to open access roads, dig exploration shafts and collect samples.The area of the mining concessions and the surface agreements are shown in Figure 2-3.SRK Consulting (US), Inc. March 10, 2008MMX.Corumba.NI 43-101 Technical Report.162703.KG.009.doc
  • 230. Figure 2-1 Corumbá Project, Brazil Location Map of the Corumbá ProjectSRK Job No.: 162703.03File Name: Figure 2-1.doc Source: Mineração & Metálicos S.A. Date: 02-27-08 Approved: LM Figure: 2-1
  • 231. Figure 2-2 Corumbá Project, Brazil Mineral Rights Map - MMX Corumbá ProjectSRK Job No.: 162703.03File Name: Figure 2-2.doc Source: Mineração & Metálicos S.A. Date: 02-27-08 Approved: LM Figure: 2-2
  • 232. Figure 2-3 Corumbá Project, Brazil Surface Owners of Urucum NE and Mine 63 AreasSRK Job No.: 162703.03File Name: Figure 2-3.doc Source: Mineração & Metálicos S.A. Date: 02-27-08 Approved: LM Figure: 2-3
  • 233. Mineração e Metálicos S.A. 3-1Corumbá Project Technical Report3 Accessibility, Climate, Local Resources, Infrastructure and Physiography (Item 7)3.1 AccessThe Corumbá Project is located approximately 19.5km by road from the city of Corumbá, MatoGrosso do Sul, Brazil. Access is by paved highway BR-262 for 16km and then by unpavedroads owned by Vale (Figure 3-1). Urucum Ne is located about 5km east of Mine 63. Access isby paved highway BR-262 for 10km from the city of Corumbá and by unpaved road for anadditional 10km.3.2 ClimateThe climate in the project area is determined by factors related to geography and elevation,which ranges from less than 100m in the lowland depression near the city of Corumbá in Braziland Puerto Suarez/Puerto Quijarro in Bolivia, to more than a 1,000m in the iron-rich mountainsclose to the Bolivian border.The climate is tropical with marked rainy and dry seasons. The weather is controlled by theAmazon Basin to the north, the Brazilian plateau to the east, and the Andes Mountains to thewest. The dry period lasts for four to five months, from approximately May to September. Therainy season occurs from December to February. Annual average rainfall is 1,500mm at thehigher elevations and 1,000mm in the lowlands.Average temperatures range from 23° to 25°C with lower temperatures in the plateaus and highertemperatures in the Mato Grosso do Sul and Bolivian lowlands. The maximum temperature canexceed 40°C in the lowlands. Rarely, minimum temperatures may reach 0°C, mainly in theBolivian Chaco region.3.3 PhysiographyThree geomorphologic units are present in the study area: the Mato Grosso Plains and MatoGrosso Lowlands, the Paraguay River Depression, and the Urucum-Amolar Residual Plateaus.The elevation above mean sea level ranges from approximately 60 to 80m in the Paraguay RiverDepression to over 1,000m in the Residual Plateaus, which include Morraria do Urucum andSerra do Rabicho. Elevations in the study area range from 500 to 1,000m.3.4 VegetationThe Mato Grosso lowlands (Pantanal) are part of the upper Paraguay basin and are the largestcontinuous flooded plains in South America. The vegetation found in the Pantanal is a mosaic ofhabitats with differing flora defined by the large ecosystems of this area. The northern boundaryis dominated by vegetation of the Amazon Basin, while to the east is cerrado (savannah) typevegetation related to the Central Plateau. To the south lies the southern rainforests, and to thewest the lowland deciduous forests of the Chaco found in Bolivia and Paraguay.Mine 63 and Urucum NE lie in an area originally covered by cerrado type vegetation anddeciduous forests. The Brazilian cerrado biome is typically comprised of grasses, shrubs andsmall trees. In the upper parts of the iron-rich mountain ranges close to the city of Corumbá, thesoil supporting this vegetation tends to be acidic.SRK Consulting (US), Inc. March 10, 2008MMX.Corumba.NI 43-101 Technical Report.162703.KG.009.doc
  • 234. Mineração e Metálicos S.A. 3-2Corumbá Project Technical ReportThe deciduous and semi-deciduous forests in the project area are restricted to the remains ofgallery forests and pockets of forests found in environmental conservation areas and on theslopes of the mountain ranges. The forests have a distinct biotic characteristic, growing with adeficit of water in the dry season and an excess of water in the wet season.3.5 Local Resources and InfrastructureThe city of Corumbá has excellent transportation and infrastructure, and can be accessed by road,air or river (Figure 3-1). By road, Corumbá is accessed from the capital of the state, CampoGrande, via paved Federal Highway BR-262. The area is also accessed by the Northwest BrazilRailway (Estrada de Ferro Noroeste do Brasil), which connects Corumbá and Campo Grande toSão Paulo and the Port of Santos. The Paraguay River allows transportation by barge to ports inBolivia, Paraguay, Uruguay and Argentina, providing excellent logistic options for the shipmentof goods and products. Corumbá has a population sufficient to provide the work force for themine.3.5.1 Water Supply and Water ManagementThe water for the project comes from wells inside the project area. One well has been drilledand more will be drilled if required.The following three types of water will be used for the project: Untreated water – water pumped directly from the wells into the water storage tank; Drinking water – water from the wells that has been treated in the project treatment plant; and Process water – water recovered from the sedimentation ponds and pumped to the process water recovery tank.The water from the wells will be used for the following: drinking water, service water, processmake-up water, and firefighting water.Water distribution from the water storage tank is by gravity or pumping, according to its use, inindividual lines for each circuit.After passing through the treatment plant, the treated water is stored in a nearby dedicated tank.From here, the treated water is pumped to consumption points. Treatment consists of filtration,flocculation and chlorination.Process water is recovered from the sedimentation ponds, and used as re-pulping water in thetrommels, as washing water in the screens and for the maintenance of the required levels inpump boxes. Occasionally it is used to control dust in industrial areas.3.5.2 Electrical Power SupplyEmpresa Energética do Mato Grosso do Sul SA (ENERSUL) supplies electricity to the projectarea by a 34.5kV transmission line. There is a 2km conventional line from the distribution pointclose to BR-262 to the project’s sub-station. The first step-down to 13.8kV is performed at thesub-station before distribution to the load points. The main load is the processing plant sub-station where tension is further reduced to 440, 220, and 120V, to supply electricity to theelectrical motors, lighting circuits, process control equipment, auxiliary equipment and otherelectrical devices.SRK Consulting (US), Inc. March 10, 2008MMX.Corumba.NI 43-101 Technical Report.162703.KG.009.doc
  • 235. Mineração e Metálicos S.A. 3-3Corumbá Project Technical ReportTotal power required is estimated 2.3MW, as negotiated with ENERSUL.3.5.3 Buildings and Ancillary FacilitiesThe buildings for Mine 63 include: Central administrative office in the city of Corumbá; Maintenance shop for the plant facility; Kitchen and dining room for 200 employees; Change room; Laboratory; Warehouse; and Small administrative office at Mine 63.3.5.4 Fuel Storage AreaPetrobrás provides a mobile fuel station at Mine 63 with a capacity of 15,000L. Petrobrásmaintains the fuel station according to governmental requirements.3.5.5 Sewage and Waste DisposalSewage is treated through: Septic tank; and Anaerobic filter.3.5.6 LaboratoryThe laboratory at Mine 63 began operations May 15, 2007. The laboratory provides samplepreparation and analytical assays to support exploration and mining operations for MMXCorumbá, and quality control for the pig iron plant owned by MMX Metálicos.The laboratory has 30 employees, 23 in sample preparation, six in the assay laboratory and onesupervisor. The laboratory capacity per day is 240 sample preparations and 320 analyses. Theactual production rate is about 950 samples per month with a planned increase to about 2,000samples per month in 2008.The laboratory procedures include: Sample preparation; Size screening; Iron analysis; o Decrepitation index, and o Tumble and abrasion index. Loss on ignition (LOI); X-ray fluorescence (XRF) analysis; Pig iron analysis;SRK Consulting (US), Inc. March 10, 2008MMX.Corumba.NI 43-101 Technical Report.162703.KG.009.doc
  • 236. Mineração e Metálicos S.A. 3-4Corumbá Project Technical Report o Carbon and sulfur LECO analyses.3.5.7 CommunicationsThe office in Corumbá has complete access to telephone and internet. The communication in thearea of Mine 63 is by radio or mobile phone.3.5.8 SecuritySecurity is provided by a contracted company, Maxima Segurança e Vigilância Patrimonial Ltda,with headquarters in Corumbá. The main access to the mine has a gate which is manned by thesecurity company.SRK Consulting (US), Inc. March 10, 2008MMX.Corumba.NI 43-101 Technical Report.162703.KG.009.doc
  • 237. Figure 3-1 Corumbá Project, Brazil Location Map of MMX Corumbá ProjectSRK Job No.: 162703.03File Name: Figure 3-1.doc Source: Mineração & Metálicos S.A. Date: 02-27-08 Approved: LM Figure: 3-1
  • 238. Mineração e Metálicos S.A. 4-1Corumbá Project Technical Report4 History (Item 8)The Corumbá Project area is located in the Corumbá municipality, Mato Grosso do Sul State,Brazil. The main economic activity of the region is mining of iron ore, manganese ore,limestone, and sand. The iron and manganese deposits have been known since the end of thenineteenth century. All manganese ore is extracted using underground mining methods while theiron ore is mined from open pits. The principal mining companies active in the region are MMXCorumbá, Mineração Urucum (Vale), Minerações Corumbaenses Reunidas (RTZ) and Fábricade Cimento Itaú (Cement Factory -Votorantin Group).Mining has gone on in the region for some time, but the first mining decree was issued in 1881,for the area of Morraria do Urucum (Urucum Hill Ridge). This area has a long mining historyrelated to the Laiz and Ema Mines, which are located in the MMX mining concessions. In 1958,the mining company Sociedade Brasileira de Imoveis (SBI) started mining in the Laiz Mine area,with the extraction of colluvial iron ore. The RoM was dry beneficiated, producing 80,000t ofLump ore. The ore was transported by conventional trucks to a pig iron plant belonging to thesame group, located near the SBI Port, on the road connecting Ladario to Corumbá.In 1973, due to the low price of pig iron, work at the pig iron plant, the mine, and the orebeneficiation plant were suspended. After 1974, SBI constructed a processing plant tobeneficiate the iron and manganese ore, in place of the old steel plant. This plant had thecapacity to beneficiate 140,000tpy of iron ore and 30,000tpy of manganese ore. During thistime, the Laiz and Ema Mines were opened. Both mines were designed to produce iron ore byopen pit and manganese ore by underground methods. From 1974 to 1986, SBI produced425,000t of Lump ore and 420,500t of manganese ore.Between 1986 and 1993, the mining activities were restricted to underground manganese miningwhile the operations were leased to the Companhia Paulista de Ferro Ligas. From 1993 to 2000,SBI leased the underground manganese mine and open pit mine to Minefer LTDA.After 2000, the mining activities were restricted to mining and beneficiation of iron ore at theLaiz Mine. SBI sold the iron ore as RoM to the Sidersul/Vetorial Group, who processed the oreusing the Laiz Mine’s mobile plant. In August 2005, EBX Corumbaense, presently MMXCorumbá, acquired the mineral rights for these mines, as well as the existing beneficiation plant.After refurbishing the existing mobile crushing plant (the AZTECA plant) MMX started iron oremining and processing operations at Mine 63 in January 2006. In July 2006, MMX startedoperating the main plant, and the first batch of Lump ore was shipped through Ladario Port laterthat month.There has been no production at Urucum NE.Figure 4-1 shows a schematic view of the Mine 63 project area and Urucum NE.4.1 OwnershipMine 63SBI is the registered owner of mining concessions 004.019/48 and 004.084/58. MMX Corumbáis the present owner of 004.084/58 through a purchase agreement and is awaiting the change ofownership in the DNPM. MMX Corumbá controls 004.019/48 through a lease agreement withSBI.SRK Consulting (US), Inc. March 10, 2008MMX.Corumba.NI 43-101 Technical Report.162703.KG.009.doc
  • 239. Mineração e Metálicos S.A. 4-2Corumbá Project Technical ReportThe applications for exploration permits 868.046/05, 868.090/05, 868.126/05 and 868.138/05were originally made by Eike Batista, the principal shareholder of MMX. The assignment of thepermits to MMX was requested from DNPM on June 23, 2006.The exploration permit 868.083/05 was purchased from Albertina Maria Brazoli, and assignmentof the permit to MMX was requested from DNPM on November 22, 2006.Urucum NEThe transfer of ownership for the mining and exploration permits at Urucum NE is in progress,pending the approval of the Conselho de Defesa Nacional (National Defense Council) (CDN).The CDN is a federal bureau charged with verifying compliance with Law 6.634, which dealswith the border zone and controls the procedures and requirements that are followed bybusinesses located in this region. Although MMX holds a previously issued permit(assentimento prévio) allowing MMX to operate in the border zone, new documents must besubmitted to the CDN for each new mine acquisition. During the review process by the CDN,the mining and exploration permits in the DNPM remain in the name of former owner.Ownership will be transferred to MMX upon approval by the CDN after the completion of theirreview.4.2 Project ExpendituresThere are no records of investments by the former owner in this area. MMX has invested aboutUS$28M, on mineral rights acquisition, exploration, beneficiation plant, environmental workand other studies at Mine 63. MMX has spent about US$306,000 in exploration and $1.0M inacquisition of mineral rights at Urucum NE. An additional $13M must be paid once all mineralrights are transferred.4.3 Historic ExplorationThe exploration methods of the previous owners of Mine 63 are unknown. However, it is theunderstanding of the MMX geologists that there was no exploration as such and that miningproceeded based on the surface expression of the iron-bearing rock.Exploration activities in the Urucum NE area were initiated in the mid 1900’s by NicolasHaralyi, a mining engineer, and continued by his son Nicolau, a mining engineer and geologist.Exploration by the Haralyi’s consisted of hand-excavated shafts on a 200m grid. MMX becameinterested in the area for the potential to produce Lump ore. In February 2007, MMX initiatedan exploration campaign in this area, also digging had excavated shafts on 400m, 200m and100m grids.4.4 Historic Mineral Resource EstimatesThere were no published mineral resource or reserve statements for Mine 63 prior to MMX’sinvolvement. MMX presented the first mineral resource estimates to the Bolsa de Valores deSão Paulo (BOVESPA) in July 2006 during the Initial Public Offering of MMX common shares.The total geological resources of the Mine 63 were reported to be 65.0Mt of Measured andIndicated Resources and 23.7Mt of Inferred Resources at an average grade of 58% Fe. Theseresource numbers conform to the Brazilian Mining Code Definitions of Resources/ReservesClassification and are not compliant with NI 43-101 guidelines. MMX produced a NI 43-101Technical Report on Resources and Reserves as of December 2006 in May 2007 in conjunctionSRK Consulting (US), Inc. March 10, 2008MMX.Corumba.NI 43-101 Technical Report.162703.KG.009.doc
  • 240. Mineração e Metálicos S.A. 4-3Corumbá Project Technical Reportwith listing on the Toronto Stock Exchange (TSX). The resources and reserves listed in thatreport are contained in Tables 4.4.1 and 4.4.2 respectively.Table 4.4.1: Mineral Resources* – Mine 63- Corumbá Project as at December 2006 Tonnes Fe SiO2 Al2O3 P Mn TiO2 LOIClassification (Mt) (%) (%) (%) (%) (%) (%) (%)Measured 6.5 61.1 8.08 2.59 0.08 0.04 0.14 1.70Indicated 40.7 52.1 16.75 2.67 0.06 0.05 0.14 1.51Measured and Indicated 47.2 53.2 15.56 2.66 0.06 0.05 0.14 1.54Inferred 14.2 53.4 15.96 2.82 0.06 0.55 0.15 1.66* Tonnes are reported on a wet basis Fe CoG is 30%Table 4.4.2: Ore Reserves* – Mine 63 Corumbá Project as at December 2006 Tonnes Fe SiO2 Al2O3 P Mn LOI TiO2Classification (Mt) (%) (%) (%) (%) (%) (%) (%)Proven 5.7 61.1 8.07 2.56 0.08 0.03 1.68 0.14Probable 25.3 54.8 14.92 2.49 0.06 0.43 1.45 0.14Total 31.0 56.0 13.7 2.50 0.06 0.37 1.49 0.14*Tonnes are reported on a wet basis Fe CoG Eluvium is 48.0% and in Colluvium is 56.1%Average Fe price used in reserve is US$32.02The Haralyi family estimated resources at Urucum NE at 34.4Mt at 60% Fe and submitted thosenumbers to the DNPM in their Exploration Final Report. The iron content was estimatedthrough a correlation with density data. The volume of the area was based on surface mappingand the average thickness of the mineralized intervals in the exploration shafts. The Haralyiresource is not compliant with NI 43-101 guidelines and should not be relied upon.This report presents the mineral resources and ore reserves of Mine 63 updated by depletionthrough September 2007 and mineral resources at Urucum NE according to CIM standards andNI 43-101 guidelines.SRK Consulting (US), Inc. March 10, 2008MMX.Corumba.NI 43-101 Technical Report.162703.KG.009.doc
  • 241. Figure 4-1 Corumbá Project, Brazil Schematic View of Mine 63 Project and Urucum NE Exploration TargetsSRK Job No.: 162703.03File Name: Figure 4-1.doc Source: Mineração & Metálicos S.A. Date: 02-27-08 Approved: LM Figure: 4-1
  • 242. Mineração e Metálicos S.A. 5-1Corumbá Project Technical Report5 Geological Setting (Item 9)5.1 Regional GeologyThe Corumbá Project lies within the Urucum iron-manganese district which is located along theBrazilian-Bolivian border and extends into the eastern areas of both Paraguay and Bolivia, andincludes an area of 200km2. The Urucum deposits are associated with banded iron formations(BIF), locally known as jaspelites. The iron and manganese deposits are found in the plateauswhich rise from the plains of the Paraguay River and near Mutum Mountain.The iron ore deposits of Corumbá have been known since the end of the 19th century and theregion has been the object of numerous publications.The regional stratigraphy of the area is based on the 1:1,000,000 scale Geological Map of Brazilcompiled in 2004 by Companhia de Pesquisa e Recursos Minerais (Brazilian Geological Survey)(CPRM). The regional geology consists of Proterozoic-age igneous and metamorphic rocks,granite intrusions, and acid intrusives. The rocks are in faulted and unconformable contact andare overlain by Quaternary sedimentary deposits which account for approximately 60% of thecover in the area. Figure 5-1 shows the stratigraphic column for the project area based on workby CPRM and the Geological Map of the Corumbá Region.5.1.1 Lithology and StratigraphyBasement RocksThe basement rocks are a part of the southern Amazon Craton and are composed of the Lower toMiddle Proterozoic Rio Apa Complex of metamorphic rocks. These rocks include gneiss,granite gneiss, biotite gneiss, granite, diorite, and schist as well as quartz diorite and quartzgabbro dikes. The rocks have a complex evolutionary history including a period of ductiledeformation and simultaneous recrystalization during the Transamazonic thermo-tectonic event.Toward the end of this period, the rocks underwent potassic alteration. The complex has beendated at 1.7Ga.The regional stratigraphic sequence also includes the following, which are not observed in theCorumbá Project area: Pontes e Lacerda Group – metavolcanic sediments of Middle Proterozoic age; Santa Helena Intrusive Rocks – syenogranites and monzogranites with late aplite and pegmatite phases; Aguapei Group – metasedimentary rocks; and Cuiabá Group – metasedimentary rocks.In the Corumbá Project area, the rio Apa Comples is overlain by the following rock groups.Jacadigo GroupThe rocks of the Jacadigo Group of Upper Proterozoic age, host the iron and manganesedeposits. These rocks form plateaus rising up to 950m over the Pantanal plains, distributed in anarea of 500km². On the Brazil-Bolivia border, the Mountains of Santa Cruz, São Domingos,Grande, Rabichão, Urucum, Tromba dos Macacos and Jacadigo/Mutum are composed of theJacadigo Group. In the Yacuses area, in Bolivia, about 50km west of Mutum, small hills areSRK Consulting (US), Inc. March 10, 2008MMX.Corumba.NI 43-101 Technical Report.162703.KG.009.doc
  • 243. Mineração e Metálicos S.A. 5-2Corumbá Project Technical Reportfound, which are also composed of magnetic non-leached jaspelites. The presence of jaspelitesin this area of Bolivia indicates that the deposition basin of the iron sequence was large and notrestricted to the Corumbá region.Dorr (1945) divided this group into three formations, from base to top: Urucum, Córrego dasPedras and Banda Alta. This division is used by the other mining companies in the area and atMine 63 with some adaptations as described in Section 5.3 on Local Geology.The Urucum Formation, at the base of the Group, is composed of arkose and conglomerate withlimy cement and has a maximum thickness of 400m. Toward the top, the cement ispredominantly iron-manganese, characterizing the transition to a more ferruginous depositionalenvironment. The overlying Córrego das Pedras Formation is a package of ferruginous clasticrocks with iron-manganese cement, about 100m thick, composed of ferruginous arkose, quartzsandstone, and some intercalations of jaspelite. Near the top, the ferruginous arkose grades tosandstone and to ferruginous jaspelite with intercalations of manganese (criptomelane). TheBanda Alta Formation is a package of ferruginous sediments with manganese intercalations atthe. Locally, there are layers of jasper, some centimeters thick with irregular shapes due tofragmentation and deformation with subordinate dropstones of granite.The Banda Alta Formation has a maximum thickness of 320m and is characterized by thealternating layers of jaspelites and clastic ferruginous sediments. The jaspelite has an average Fecontent of 55% in the area of Mineração Corumbaense Reunida S/A - MCR, and is considered tobe one of the highest primary contents among the deposits in the world. In the Mutum area theaverage content found in the jaspelites is in the order of 46% Fe.Almeida in 1945 (cited by Del’Arco et al., 1982) proposed the division of the Jacadigo Seriesinto two groups: the lower, Urucum, composed of arkose, conglomerate, and limy andpyritiferous siltstones; and the upper, Santa Cruz, composed of jaspelite, arkose sandstone, withmanganese oxide lenses, layers of jasper and a package of alternating jasper and hematitelaminae, constituting a banded iron ore formation.The two above mentioned studies, performed by Dorr II (1945) and Almeida in 1945 (cited byDel’Arco et al., 1982), form the basis of subsequent studies. In recent studies, the JacadigoGroup has been subdivided into the Urucum Formation and Santa Cruz Formation. Thisnomenclature is used in more recent work, including the geological map of Brasil – CPRM(2004), which is the base for the regional geological map of the Corumbá region presentedherein.Puga FormationThe Puga Formation, which is not found in the Corumbá Project area, containsparaconglomerates and diamictites with boulders of granite, quartzite, schist, limestone andquartz with silty or sandy cement. To some authors, this formation is at the base of the CorumbáGroup.Corumbá GroupThe stratigraphic relation between the Jacadigo Group and the Corumbá Group has been thesubject of interest of various authors, but as of yet there is no consensus. Almeida in 1945 and in1965 (cited by Del’Arco et al., 1982), suggested an interdigitation between the Jacadigo Groupand the Corumbá Group. Other authors suggested joining the two groups into a single unit. TheCorumbá Group, of Upper Proterozoic age, contains three formations: Cerradinho, Bocaina andSRK Consulting (US), Inc. March 10, 2008MMX.Corumba.NI 43-101 Technical Report.162703.KG.009.doc
  • 244. Mineração e Metálicos S.A. 5-3Corumbá Project Technical ReportTamengo Formations. The Cerradinho Formation, which does not outcrop in the CorumbáProject area., is composed of sandstones, siltstones, shales, marls, limestones, dolomites and thinchert beds, with arkose and conglomerate at the base. The Bocaina Formation contains dolomite,dolomitic limestones with oolites and stromatolitic structures, and marls. This package ofcarbonate rocks is up to 300m in thickness. The Tamengo Formation is characterized by darkgrey limestone alternating with red and grey shales and siltstone and thin layers of micaceousand limy sandstone and oolites. This package, about 120m thick, presents parallel and crossstratification, ripple marks and intraformational breccia. Sedimentary deposits of the Quaternarycover Tamengo Formation.The following units are part of the regional stratigraphy, but are not present in the CorumbáProject area: The Upper Proterozoic Alto Paraguai Group - contains marls, limestone, dolomite sandstone, shale and conglomerate; São Vicente Intrusive Rocks – granitic rocks that intrude the metasediments of the Cuiabá Group and are related to Vulcanicas Mimoso, a group of volcanic rocks. The rocks have been dated at 506Ma; Coimbra Formation – Silurian age sandstone and conglomerate with silty-ferruginous cement; Paleozoic sedimentary rocks related to the Paraná sedimentary basin; Ponta do Morro Intrusives – granite and riebeckite dated at 84Ma; and Tertiary sediments – lateritic deposits, with local ferruginous concretions.Quaternary SedimentsThese sediments cover most of the lowlands and plains related to the lowlands of the ParaguayRiver. They include the Pantanal Formation, of Pleistocene age, and the Pantanal deposits, theXaraiés Formation and the Alluvial Deposits of Holocene age.Pantanal FormationThe Pantanal Formation consists of colluvium, eluvium and alluvium found in the lowlands andplains. Three facies can be distinguished: the Colluvial Deposits, the Alluvial Terraces and theAlluvial Deposits.The Colluvial Deposits consist of detrital sediments, partially laterized, of conglomerate, sand,silt and clay. The distribution of the deposits is irregular. They occur at the northwestern edgeof the Paraná Basin and at the foot of the slopes of the Urucum, Santa Cruz, Grande andRabichão Mountains.The colluvial deposits at the foot of the slopes of the Urucum Mountains contain detritalsediments, and boulders of jaspelite and banded hematite, which originated mainly from theSanta Cruz Formation. These rudaceous fragments, together with a ferruginous cement in theclay-sandy matrix, constitute a limonitic hardpan. The silica in the fragments has been leachedthereby increasing the Fe grade. These deposits host the highest-grade material in the CorumbáProject area.SRK Consulting (US), Inc. March 10, 2008MMX.Corumba.NI 43-101 Technical Report.162703.KG.009.doc
  • 245. Mineração e Metálicos S.A. 5-4Corumbá Project Technical ReportThe alluvium terraces are formed by semi-consolidated clay-sandy sediments, partially laterized,and with an irregular distribution around the mountains.The alluvium deposits are formed by clay, silt and sand sediments with a continuous distributionin the flood plain areas that are a part of the hydrographic basin of the Paraguay River.Lowland DepositsThe lowland deposits are related to the areas of seasonal floods and contain sand and claysediments, rich in organic material.Xaraiés FormationThe Xaraiés Formation is characterized by limestone tuff with fossil plants, travertine withgastropods, and conglomerates with limy cement. This formation occurs in the regions locatedbetween the Jacadigo Mountains and Morrinhos Stream, to the west of Lagoa Negra and to thesouth of Zanetti Mountains, overlaying rocks of the Corumbá and Jacadigo Group.Alluvial DepositsThe Alluvial Deposits are formed by unconsolidated material, such as sand, gravel, silt and clayrelated to the deposits of the flooded plain areas belonging to the hydrographic basin of theParaguay River.5.2 Structural GeologyThe Proterozoic units exhibit folds and faults related to the compressive and extensional eventsin the area. There is a direct correlation between the structures and the lithology. The rocks ofthe Rio Apa Complex are sheared and show cataclastic features related to different tectonicphases. Almeida in 1965, 1966 and 1967 (cited in Marini et al., 1984) and Almeida in 1968suggested that the sediments of the Cuiabá, Jacadigo, Corumbá and Alto Paraguai Groups arerelated to the Paraguay-Araguaia Geosyncline and each one of these groups present distinctstructural behavior. The Cuiabá Group located in the inner portion of the geosycline, representsthe earliest sedimentation and is highly folded and metamorphized to greenschist facies. Theother groups are younger than the Cuiabá Group and are located in the outer portion of theorogenic arch, near the Amazon craton. The Jacadigo and Corumbá Groups contain folds withaxes striking NNW-SSE and normal faults.The dominant regional structures are northeast-trending faults between the Mountains of Mutumand Jacadigo, Urucum and Tromba dos Macacos, and Urucum and Santa Cruz. One of the mostimportant structures is the Urucum Fault System, a set of northeast striking normal faults. Figure5-2, taken from the geological map of the RADAM Project (1982), illustrates the structuraltrends.Locally, the Urucum Mountains are cut by a set of normal faults that strike northeast. The faultseparating the Urucum and Santa Cruz Mountains trends N50°E with a maximum offset of300m, with the Urucum block down-dropped relative to the Santa Cruz block. Almeida in 1945(cited in Del’Arco et al., 1982), considered that the Urucum Fault System underwent reactivationthrough time with the last movement in the Tertiary period during the Andean Orogenesis.The rocks of the Jacadigo Group form a regional anticlinal structural cut by northeast-strikingfaults, sub-parallel to the anticlinal axis resulting in horst and graben structures. The faults andSRK Consulting (US), Inc. March 10, 2008MMX.Corumba.NI 43-101 Technical Report.162703.KG.009.doc
  • 246. Mineração e Metálicos S.A. 5-5Corumbá Project Technical Reportassociated fractures in the jaspelite bodies provided the ground preparation that favored theenrichment of the iron ore in the region.In the Corumbá region the limestones of the Corumbá Group also exhibit faults parallel to theUrucum Fault System. The Lajinha synclinal structure located northeastern of the UrucumMountain is triangular in shape with the axis striking N55°E. This fold is bound by faults to thenortheast and south. The southern limb is in fault contact with the gneiss-granites of the Rio ApaComplex.5.3 Local GeologyMine 63 and Urucum NE are located on the western and eastern flanks, respectively, of UrucumMountain which is composed of rocks of the Jacadigo Group overlying the basement granite andgneisses. MMX Corumbá uses Almeida’s (1945, cited by Del’Arco et al., 1982) description ofthe Jacadigo Group in which it is composed of the Urucum and Santa Cruz Formations with thelatter consisting of two members, the Córrego das Pedras and the Banda Alta. Table 5.3.1summarizes the local stratigraphy in the immediate area of Mine 63 and Figures 5-3 and 5-4show the geology in the immediate vicinity of Mine 63 and Urucum NE, respectively.Table 5.3.1: Local Stratigraphy – Mine 63 Area DepositGroup Formation Member Facies Heading Type Lithology Description Pantanal Colluvium Partially laterized conglomerates and sediments Morro Banda Alta Murucu Grande Banded Chert ÁguaJacadigo Santa Cruz Verde Eluvium Jaspelite/Eluvium Banded Mn/Nodular Mn and Córrego das Pedras Urucum Rabicho Arkose/Conglomerate with hematitic cement.5.3.1 Santa Cruz Formation - Córrego das Pedras MemberThe Córrego das Pedras Member of the Santa Cruz Formation outcrops near Highway BR-292and underlies the colluvium deposits that surround the nearby Urucum Mountain. These rocksconsist of ferruginous arkose, arkosic sandstone and conglomerate. The arkose is generallymassive, dark gray, fine- to coarse-grained and has a quartz-feldspar composition. Cross andparallel stratifications are commonly exhibited. The sandstones are predominantly gray, withsome red units, fine-grained to conglomeratic and occur as intercalated beds with the arkose.Some intercalations of siltstones are also found in the sequence.The colluvium deposits rest unconformably on the sandstones, arkoses and conglomeraticsandstones. Where exposed to surface weathering, this unit develops a yellowish clay-sandysoil.5.3.2 Santa Cruz Formation - Banda Alta MemberThe Banda Alta Member of the Santa Cruz Formation is characterized by jaspelites withmillimeter scale bandings and subordinate layers of quartz-feldspar sediments. The basal portionof the sequence contains clastic and ferruginous sediments, with up to four manganese layersvarying from 0.5m to 4m thick.SRK Consulting (US), Inc. March 10, 2008MMX.Corumba.NI 43-101 Technical Report.162703.KG.009.doc
  • 247. Mineração e Metálicos S.A. 5-6Corumbá Project Technical Report5.3.3 Mine 63 GeologyColluvial DomainThe Colluvial Domain is characterized by the detrital deposits around Urucum Mountain, withfan or elongate shapes distributed on the flanks of the Mountain and the plains area. Theycomprise packages of sediments, with thickness varying from 0.5 to 32m, with an average of13m. These deposits are composed of ferruginous sediments from the Banda Alta Formationthat were deposited on the Córrego das Pedras Formation.The angular fragments vary from pebble to boulder size and are constituted mainly of bandedhematite, ferruginous jaspelite and by rare ferruginous arkose. The fragments are randomlydistributed, although the size tends to decrease in proportion to the distance from the base of theMountain.A sedimentary breccia occurs in the central west portion of Mine 63 area. It is contemporary tothe colluvial deposits and it consists of fine to medium sized clasts of hematite jaspelite, partiallyto totally leached, and by coarse clasts of ferruginous sandstone and of hematite jaspelitepartially leached with limonitic cement. The breccia trends east-west and is about 2,500m long,50 to 200m wide, and averages about 10m thick, with a maximum thickness of 16m.The colluvial deposits are classified as proximal, medial or distal deposits according to theirdistance from the source area. The higher Fe contents are related to the deposits near the sourcearea while the laterite deposits are far from the source area.Eluvial DomainThe Eluvial Domain was generated by in situ weathering action through total and/or partialhydrolyzation, in a process of silica leaching and subsequent enrichment of iron in the hematitejaspelites of the Banda Alta Formation.In the area of Mine 63, the eluvium is located on the top and upper slope of the UrucumMountain, and has an average thickness of 15m. The effects of leaching decrease from the toptoward the base of the sequence, followed by an increase in the SiO2 concentration and adecrease of Fe. In general, the silica leaching increases with the increased frequency of thefractures.5.3.4 Urucum NE GeologyColluvial DomainThe geology of the Urucum Project area is related to the colluvial deposits of the northeastregion of the Santa Cruz Mountain. These colluvial deposits are composed of clastic hematite-jaspelite, arkoses, ferriferous sandstone, as well as erratic milky quartz and granitoid fragments.The bedrock consists of a saprolitic sequence formed from the arkose and, in some cases, thegranitoid basement.In the southern portion of the deposit, a morphologic depression is observed at the top of thecolluvial deposit. A colluvial channel was detected through a geophysical survey which may berelated to fault zones that increase the erosive processes on the hillside.SRK Consulting (US), Inc. March 10, 2008MMX.Corumba.NI 43-101 Technical Report.162703.KG.009.doc
  • 248. Figure 5-1 Corumbá Project, Brazil Stratigraphic Column andSRK Job No.: 162703.03 Regional MapFile Name: Figure 5-1.doc Source: Mineração & Metálicos S.A. Date: 02-27-08 Approved: LM Figure: 5-1
  • 249. Figure 5-2 Corumbá Project, Brazil Regional Structural MapSRK Job No.: 162703.03 Corumbá Project Source: RADAM Geological Map (1982)File Name: Figure 5-2.doc Date: 02-27-08 Approved: LM Figure: 5-2
  • 250. Figure 5-3 Corumbá Project, Brazil Geologic Map of the Mine 63SRK Job No.: 162703.03 AreaFile Name: Figure 5-3.doc Source: Mineração & Metálicos S.A. Date: 02-27-08 Approved: LM Figure: 5-3
  • 251. Corumbá Project, Figure 5-4 BrazilSRK Job No.: 162703.03 Geologic Map of Urucum NEFile Name: Figure 5-4.doc Source: Mineração & Metálicos S.A. Date: 02-27-08 Approved: LM Figure: 5-4
  • 252. Mineração e Metálicos S.A. 6-1Corumbá Project Technical Report6 Deposit Types (Item 10)According to Haralyi and Walde (1986), the iron ore of the Jacadigo Group is described asjaspelite, banded hematite or Banded Iron Formation (BIF). In the central part of the basin, thereis an interlayering of hematite laminae and ferruginous jasper. At the margin of the basin, thereis no banded character, passing to a chemical sedimentation with major clastic contribution.There is a polymictic conglomerate with ferruginous cement in the marginal parts of the basinand on top of the iron sequence.Haralyi and Barbour (1974), studying the Banda Alta Member at the Urucum Mountain, noted aprogressive increase of the average grade of silica in the depositional sequence corresponding toa diminishing of the relative thickness of hematite compared to jaspelite. The variation in layersis related to a gradual diminishment of the Fe++ element in the water of the basin, culminatingwith the deposition of only silica extracts. Laterally, the diminishing of the average thickness oflaminae of hematite and in the increase of jasper laminae can also be noted.In the area of the Urucum Mountain, the central part of the basin, the average Fe content in thebanded hematite ranges from 55% to 60.5%. At the margins of the basin, the Fe contents rangefrom 35% to 50%.The origin of the iron in this thick jaspelite sequence with high primary Fe content is quitecontroversial. The jaspelite package in the project area and surrounding areas is characterized byalternating layers of extremely fine hematite and jasper, without magnetite. Some jaspelitesexhibit small lenses of jasper eyes. No carbonates are observed, although some texturesresemble carbonate substitution by silica. There are two explanations for the absence ofcarbonate in the jaspelites: a) the carbonate was replaced by silica in the diagenetic process; b)the carbonate was totally destroyed by the climatic conditions, caused by the intense percolationof the meteoric waters, facilitated by the high degree of fracturing of the jaspelite package. Thepresence of carbonates in the Mutum area is outstanding, in the form of siderite, calcite and,dolomite, in percentages varying from 10 to 15%. The presence of magnetite in the jaspelites ofMutum and north of Rabicho is probably an indication of deeper more reducing waters, or couldalso be a result of the slightly higher metamorphic degree in Mutum area.The resource and reserves at Mine 63 and Urucum NE are contained within elluvial and colluvialdeposits related to the weathering of the jaspelites and BIF.SRK Consulting (US), Inc. March 10, 2008MMX.Corumba.NI 43-101 Technical Report.162703.KG.009.doc
  • 253. Mineração e Metálicos S.A. 7-1Corumbá Project Technical Report7 Mineralization (Item 11)7.1 Eluvial DepositsThe eluvium originates in the primary jaspelite which has been fractured and undergoneweathering and leaching of silica. The Fe content of the eluvium is directly related to the contentof the original primary rock. At the marginal parts of the basin, there is lateral variation andeven a banding in the Fe contents of the eluvial ore, indicating primary variations in the contentof the iron.The iron enrichment in the eluvium resulted from in situ silica leaching of the primary jaspeliteand therefore forms a nearly continuous zone over the bedrock of the jaspelite. At Mine 63, it islocated on the top and slopes of Urucum Mountain and has a thickness that varies from less than1m to over 30m, with an average of about 15m. There is no eluvium at the Urucum NE deposit.The enrichment factor of the eluvial material, in relation to the primary rock, depends on thegrain size and the dimension of the fragments. At the marginal parts of the basin, wheresedimentation was mainly clastic, the enrichment of the eluvial material is directly proportionalto the iron content in the jaspelite from which it originated. The same is not true in the centralpart of the basin, where sedimentation is mainly chemical.7.2 Colluvial DepositsThe colluvium is the material deposited at the base of Urucum Mountain where the Banda Altamember outcrops. The main source rock is the jaspelite, with a secondary contribution from thearkose of the Urucum Formation. The colluvium is formed by recent clastic depositioncomposed mainly of angular fragments of leached hematite jaspelites and arkose. The colluvialdeposits which are richer in hematite fragments and jaspelite, leached or not, concentrate near therock source, that is, near the mountain. The total iron content is directly proportional to thedistance from the source and has been enriched by the leaching of silica. The breccia area hasundergone cementation and has a more consolidated nature than the colluvium.The colluvium, including the breccia, at Mine 63 has an elongate shape, about 3km long and1.25km wide, and varies from less than 1m to over 30m in thickness, with the thickest sectionsclosest to the source rock and average thickness of 22m. The colluvium at Urucum NE is morethan 6km in length and 2km in width.SRK Consulting (US), Inc. March 10, 2008MMX.Corumba.NI 43-101 Technical Report.162703.KG.009.doc
  • 254. Mineração e Metálicos S.A. 8-1Corumbá Project Technical Report8 Exploration (Item 12)8.1 Exploration of Mine 63The exploration methods of the previous owners of the Corumbá Project are unknown.However, it is the understanding of the MMX geologists that there was no exploration as suchand that mining proceeded based on the surface expression of the iron-bearing rock.The first exploration work by MMX in the region of Mine 63 was the excavation of a series ofhand dug exploration pits. The pits, excavated with pick and shovel, are 1.5m2 in plan view andhave vertical walls which are 6m deep in the colluvium and 10m deep in the eluvium. Becauseof the shape of the pits, they are referred to as shafts. The shafts were excavated on a grid of100m x 100m in the eluvium area and on a grid of 200m x 100m in the colluvium, and wereexcavated through the mineralized zone and into the bedrock.Following this first stage of exploration, a core drilling program was implemented using aBrazilian contractor, Geosol – Geologia e Sondagens Ltda (Geosol). The drilling extended thegrid in the colluvium to the north and also twinned some of the exploration shafts.Additional exploration consisted of channel samples collected during the pre-stripping phase ofthe mine, where vertical samples were taken in the face of the mountain and surface mapping at ascale of 1:5000.The drilling and sampling procedures used by MMX are further described in the followingsections.The exploration identified a large area of mineralization associated with the colluvium andeluvium. SRK considers the methods used by MMX to be appropriate for this type of deposit.8.2 Exploration of Urucum NEThe exploration method employed by the former owners of Urucum NE consisted of theexcavation of more than one hundred exploration shafts on a 200m x 200m grid. The explorationmethods were not rigorous and the shaft grades and size fractions were inferred using acorrelation formula between density and iron grade.In February 2007, MMX Corumbá started an exploration campaign in which shafts weremanually excavated to bedrock or to a maximum depth of 5.0m. The shafts were centered on100m, 200m and 400m grids).Exploration lines with spacing at 400m, 200m and 100m, were surveyed by BXF TopographiaLtda (BXF), a topographic survey company with headquarters in Ladário, MS, with supervisionby the MMX exploration staff. The surveying was done with a total station Topcon, modelGPT3000LW and a total station Pentax, model PCS1S. The methodology was by openpolygonal, linked to the mark 1,065 IBGE (Brazilian Official Mark on Santa Cruz Hill) with theUTM coordinates N-7,876,829.21 and E-437,739.16, elevation of 1,065.44 m, DATUM SAD 69.The topographic surface was generated using points on the exploration lines, and a laser survey(ALTM - Airborne Laser Terrain Mappper) performed by GEOID Company, between the lines.The surface was generated using Autodesk software AutoCAD 2006.The locations of the shafts were surveyed by BXF with supervision of MMX team, using a totalstation Topcon. The exploration campaign was completed with 159 shafts.SRK Consulting (US), Inc. March 10, 2008MMX.Corumba.NI 43-101 Technical Report.162703.KG.009.doc
  • 255. Mineração e Metálicos S.A. 8-2Corumbá Project Technical Report8.2.1 GeophysicsGeophysical surveys in the Urucum NE project were conducted by HGeo – Tecnologia eInformação em Geociência Ltda (HGeo), a contracted company. They used IP method (InducedPolarization), an electrical geophysical method, in lines L27 (2,020m), L28 (2,480m), L29(2,480m) and L34 (1,400m). The main goal was to determine the contact between the colluvialcover and the arkose basement and, in some cases, the contact with granitic-gneissic basement.The results were presented in electroresistivity sections, where the scale of colors varies from red(more resistive) to blue (more conductive). The colluvial cover is more resistive than thebasement. The transition between the conductive and resistive regions of the sections can beinterpreted as the contact between two units.The preliminary results show an error of about 10% in the maximum depth in the more levelareas and about 15% in the regions with irregular relief. This means the interpreted contact in theresistivity sections in the exploration area could show an error up to 6m, depending on the relief.MMX will continue with this type of geophysical survey, developing more tests on the areaswith drilling information at Mine 63, to better calibrate the basal contact delineation. MMXhopes to use this methodology to complement drilling information and support inferred resourcesestimation.SRK Consulting (US), Inc. March 10, 2008MMX.Corumba.NI 43-101 Technical Report.162703.KG.009.doc
  • 256. Mineração e Metálicos S.A. 9-1Corumbá Project Technical Report9 Drilling (Item 13)9.1 Mine 63The first drilling at Mine 63 was initiated in November 2005 by MMX. All drilling wasconducted by Geosol, a Brazilian company with experience in iron ore drilling. The holes weredrilled to an average depth of 16m, with a maximum depth of 40m, with core size of 6.4cm(HQ). All drillholes were vertical and no downhole surveys were taken because of the shortlength of the holes. The mineralization forms a shallow zone, from less than 1m to about 40mover the bedrock, and is best drilled with vertical holes; the lack of downhole surveys is not aconcern in these short holes.Drilling in the colluvium area is on a north-south grid with sections 200m apart and the holesspaced at 100m on section. The drillholes in the eluvium area are on a 100m x 100m gridoriented N50oE. The holes in both areas were drilled into the bedrock before being halted, andthus penetrate the entire mineralized length.The drill core was placed in wooden boxes approximately 1m long with 3 sections to contain thecore. The drill intervals were marked with wooden plates and the recovery was measured by thedrill contractor with supervision by MMX personnel. The core was photographed, logged, split,and sampled by MMX personnel in a core facility at Mine 63.The drillhole collars are marked with a small concrete slab with the hole number inscribed on analuminum tag. The drill hole collars were surveyed by BXF.The shafts were excavated by pick and shovel to a maximum depth of 16m and were 1.5m x1.5m in plan view. The shafts were sampled in vertical channels by MMX personnel. Channelsamples were taken during the pre-stripping phase of mining.The resource database consists of drillholes, channel samples, and shafts and will be referred toas drilling in this report. A summary of the drilling is given in Table 9.1.1 and the locations areshown in Figure 9-1.Table 9.1.1: Drilling in Mine 63, Corumbá ProjectSample Type Number Total (m) Average Depth (m) Minimum Depth (m) Maximum Depth (m)Channel Samples 18 210.2 11.7 4.4 20.6Shafts 102 640.3 6.3 0.1 13.6Drill Holes 81 1312.0 16.2 4.1 41.0Total 201 2,162.59.2 Urucum NEThe excavation of exploration shafts in the Urucum NE area began in February 2007. Theexploration shafts were excavated manually with pickaxes and shovels to a maximum depth of5m and with plan dimensions of 1.5m x 1.5m. Material from the shafts was placed in separatepiles for each 1m of depth; this material was used for metallurgical tests. Geological sampleswere collected in vertical channel samples located in the center of one wall of the shaft. Thechannel was 0.2m wide and 0.3m deep, and the length of the sample was determined bylithology. Shafts where the colluvium was less than 1.5m were not sampled.SRK Consulting (US), Inc. March 10, 2008MMX.Corumba.NI 43-101 Technical Report.162703.KG.009.doc
  • 257. Mineração e Metálicos S.A. 9-2Corumbá Project Technical ReportThe shafts were located on three different grids: 400m x 400m, 200m x 200m and 100 x 100mThe 400 x 400 m spacing is the initial exploration grid. MMX later infilled the grid spacing to200 x 200m and 100 x 100m. A summary of the exploration shafts is given in Table 9.2.1 andthe locations are shown in Figure 9-2.Table 9.2.1: Shafts at Urucum NE, Corumbá ProjectSample Type Number Total (m) Average Depth (m) Minimum Depth (m) Maximum Depth (m)Shaft 159 703.42 4.4 0.09 5.0SRK Consulting (US), Inc. March 10, 2008MMX.Corumba.NI 43-101 Technical Report.162703.KG.009.doc
  • 258. Channel Sample Shaft Drillhole Figure 9-1 Corumbá Project, Brazil Drillhole and Sample Locations,SRK Job No.: 162703.03 Mine 63 Corumbá ProjectFile Name: Figure 9-1.doc Source: Mineração & Metálicos S.A. Date: 02-27-08 Approved: LM Figure: 9-1
  • 259. Corumbá Project, Figure 9-2 BrazilSRK Job No.: 162703.03 Shaft Locations Urucum NEFile Name: Figure 9-2.doc Source: Mineração & Metálicos S.A. Date: 02-27-08 Approved: LM Figure: 9-2
  • 260. Mineração e Metálicos S.A. 10-1Corumbá Project Technical Report10 Sampling Method and Approach (Item 14)The sampling of the core followed the customary procedures for iron ore in Brazil. The core wassplit lengthwise with breaks at lithologic contacts, and one-half of the core was bagged and theremainder was stored in wooden boxes. Intervals that were considered to be internal waste werenot sampled and intervals within the bedrock were not sampled. The samples were numberedconsecutively using a blind numbering sequence. Sample tags were placed in the sample bagand the bag was marked with the sample number as well.Samples from the shafts were collected from vertical channels in one wall of the shaft. Thechannel was 10cm wide and 15cm deep and was sampled over the entire length of themineralized zone in the shaft. The channel was made using a hammer and chisel and the samplewas collected in a wooden box. The sample was then transferred to plastic bags. The sampleswere also numbered consecutively with blind numbers as with the drill samples. The four wallsof the shafts are photographed meter by meter. The samples from Urucum NE were sent directlyto SGS in Belo Horizonte for preparation and analysis.The channel samples are vertical and were collected from outcrops and benches, using the samemethodology as in the shaft samples.At Urucum NE, a sample of 200kg is collected to provide enough material for a global sample,size fraction samples and for an archive with enough weight for duplicate tests if necessary. Thecolluvium with total thickness less than 2.0m was not sampled as 2m is considered to be aminimum mining thickness and because their metallogenic potential is considered lower. Thesedimentary breccia domain is not considered as resources in this estimation, because it is veryhard and massive making manual excavation difficult.The samples are identified by shaft number and depth and sent to the MMX preparationlaboratory. The pulps are bagged and are transported by a dispatching company to the SGS Labin Belo Horizonte, Minas Gerais State for analysis.Table 10.1 lists the statistics for the number and type of samples at Mine 63 and Urucum NETable 10.1: Sample Interval Statistics for Mine 63 and Urucum NE IntervalsSample Type Number Average (m) Minimum (m) Maximum (m)Mine 63Channel Sample 27 6.70 3.0 15.4Shaft 122 5.16 0.5 10.0Drill Hole 452 2.36 0.5 5.9Total Mine 63 595Urucum NEShaft 150 4.04 1.5 5.0The unsampled intervals are considered waste and assigned a value of zero for the compositingroutine. The channel samples and shaft samples tend to be long intervals over the entiremineralized section of the unit. The drillhole samples are nominal 2m intervals with breaks atchanges in lithology. The resulting database contains samples with highly variable sampleSRK Consulting (US), Inc. March 10, 2008MMX.Corumba.NI 43-101 Technical Report.162703.KG.009.doc
  • 261. Mineração e Metálicos S.A. 10-2Corumbá Project Technical Reportintervals, many of which are longer than the compositing length. SRK recommends the samplelength be uniform at 5m (with breaks for lithology) and that the internal waste intervals also beassayed to eliminate ambiguity in the assignment of a value to that material.All the drillholes, shafts, and channels shown in Figures 9-1 and 9-2 were sampled. The areasampled is more than 3km in length east-west and about 1.25km north-south at Mine 63 andabout 7km in length and 1.5km in width at Urucum NE.SRK considers the samples to be representative of the mineralized zones and sections. Thecolluvial and eluvial material was sampled over the entire length of the mineralization, with theexception of the internal waste zones as mentioned above. The core recovery and the size of theshaft and channel samples are sufficient to provide a reliable database for resource estimation.SRK Consulting (US), Inc. March 10, 2008MMX.Corumba.NI 43-101 Technical Report.162703.KG.009.doc
  • 262. Mineração e Metálicos S.A. 11-1Corumbá Project Technical Report11 Sample Preparation, Analyses and Security (Item 15)11.1 Sample Preparation, Analysis and Security for Mine 63The sample preparation and analysis procedures have evolved during the project history asshown below: First Stage Second Stage Third Stage May 2005 June to November 2005 December 2005 to Present First 5 shafts Shafts, Channel Samples All drillholes Project Preparation Project Preparation Project Preparation PCM Preparation LCT Preparation LCT Preparation SGS Preparation LCT Analysis LCT Analysis SGS AnalysisMMX originally used the Technological Characterization Laboratory (LCT) of the PolytechnicSchool at the University of São Paulo for analysis of the shaft and channel samples; the lab is notinternationally certified. The drill samples were analyzed at SGS Geosol Laboratorios Limitada(SGS); SGS has ISO 9001(2000) and ISO 14001(2001) certification. At the suggestion ofMMX’s Quality Control/Quality Assurance (QA/QC) consultant, 5% of the total samples weresent to the Ultra Trace Analytical Laboratories Pty Ltd (UT) in western Australia for checkassays. UT has ISO 17025 and National Association of Testing Authorities, AustraliaCertifications. At the suggestion of SRK, MMX decided to reassay all available pulps whichwere initially analyzed by LCT at SGS and to use that laboratory for future work. Only 14samples remain in the database with only the LCT analysis. Current laboratory QA/QC consistsof using SGS internal controls, the use of a standard reference sample, and check assays of 5% ofthe samples at UT. The following sections describe the sample preparation and analysisprocedures used for Corumbá samples. The final section reviews the QA/QC program.11.1.1 Sample PreparationThe initial sample preparation is done by MMX at the Mine 63 facility. The reduced sample isthen shipped to the commercial laboratory for further preparation and analysis.MMXThe current sample preparation consists of: Drying the sample in the sun for 4 to 12 hours; Jaw crushing to 2.5cm; and Homogenization and splitting with a Jones splitter to a 2kg sample.SRK Consulting (US), Inc. March 10, 2008MMX.Corumba.NI 43-101 Technical Report.162703.KG.009.doc
  • 263. Mineração e Metálicos S.A. 11-2Corumbá Project Technical ReportInitially a 10kg sample was sent to the laboratory Processamento e Caracterização Mineral Ltda(PCM) and later a 2kg sample was sent to LCT Laboratory. PCM does not have internationalcertification.PCMPCM Laboratory was used for sample preparation for the first five shafts to dry, crush andreduce the sample to 2kg before sending to LCT for analysis.LCTThe sample preparation at LCT consisted of: Drying in an oven at a temperature between 80 and 100oC; Jaw crushing; Disc or roller mill; Samples greater than 35g were split to 30g with a Jones splitter; Drying in oven for two hours; and Pulverization with Herzog mill to grain size less than 0.05mm.SGSThe sample preparation at SGS consist of: Drying in oven at 100+10oC; Crush to 90% less than 2mm; Homogenization and splitting with Jones splitter to 250 to 300g; Pulverization to 95% less than 150 mesh; and Splitting to 125g.11.1.2 Sample AnalysisLCTBetween 7 to 10g of sample is combined with Hoescht resin (10% of the sample weight) and theresulting mixture is then weighed. The sample and resin are homogenized and then pressed in aHerzog press to form a disk.The samples are analyzed with an X-ray Fluorescence Spectroscopy (XRF) spectrometer. LOI isanalyzed by placing 1.000g + 0.0001g of sample in a porcelain crucible, heating in a furnace forone hour at 1050oC and cooling with a dryer. The sample is reweighed and the LOI calculated.SGSThe sample is dried at 100+10oC and then a 0.50g sample is combined with a lithium tetraboratesolvent which is fused and poured into a mold to form a disk. The samples are analyzed byXRF, LOI is analyzed by heating the sample at 110oC for one hour, placing 1.5 to 2g of thesample in a crucible, heating at 1000+50oC for one hour, cooling, and weighing the sample andcrucible again. The LOI is calculated with a detection limit of 0.01%.SRK Consulting (US), Inc. March 10, 2008MMX.Corumba.NI 43-101 Technical Report.162703.KG.009.doc
  • 264. Mineração e Metálicos S.A. 11-3Corumbá Project Technical ReportThe data are transferred directly from the equipment and stored in the Laboratory Managementand Information System (LIMS).UTThe sample is fused in a Bradway electric rocking furnace and cast into 40mm diameter beadsusing 12.22 flux containing 5% sodium nitrate. The beads are analyzed with XRF. LOI isanalyzed by heating a pre-dried portion of the sample in an electric furnace set to the client’srequested temperature.11.1.3 Laboratory Quality Control and Quality AssuranceInternal SGS QA/QCSGS internal QA/QC procedures consist of: LIMS software is used during the acquisition of data in the laboratory to eliminate errors in the manual entry of data. The software is also used in statistical treatment of the Quality controls; Calibration of all critical equipment every six months; Daily verification of scales and spectrometers; 5% of the samples are weighed after each step of sample preparation, with 3% as an acceptable loss in sample weight; 5% of the samples are measured for sample size during preparation with 95% passing the mesh size being the acceptable value; The batch size is 40 samples. Duplicate samples are prepared for each 20 samples; standard reference samples are inserted in the sample stream at a rate of 1 in 20 samples and one blank sample is inserted in each batch; and Samples with anomalous results are repeated. If the repeat does not duplicate the original, then a new sample is prepared from the reject.MMX QA/QCAnalytical Solutions Ltd reviewed the QA/QC data and this section is taken from her report. Asmentioned in the introduction to this section, LCT analyzed the shaft and channel samples andSGS analyzed the drillhole samples. Five percent of the samples were sent to the UT Laboratoryin Australia for check analysis, including 17 pulps originally analyzed by LCT. In general, therewas poor correspondence between the UT and LCT data (Figure 11-1). As suggested by otherMMX consultants, the LCT data was not considered reliable for resource estimation and MMXdecided to have all the pulps reanalyzed by SGS for use in the resource estimation.For check analysis purposes, a total of 82 pulps analyzed by SGS in 2006 were reanalyzed byUT. Both SGS and UT used fused disk (glass bead) XRF for determination of the major oxides.In general, there is good agreement between the two sets of data. Figure 11-1 summarizes thepercentage difference between SGS and UT assays relative to the SGS determination (with noimplication that SGS or UT provided the preferred data). One sample is excluded for LOI wherevalues of 0.01 and 0.59% were reported which results in a large percentage difference and maybe due to data handling issues. Table 11.1.3.1 documents the percent difference between SGSand UT samples.SRK Consulting (US), Inc. March 10, 2008MMX.Corumba.NI 43-101 Technical Report.162703.KG.009.doc
  • 265. Mineração e Metálicos S.A. 11-4Corumbá Project Technical ReportTable 11.1.3.1 documents the percentage of samples within ± 5%, 10%, 20%, etc.Table 11.1.3.1: Summary of Percent Difference Between SGS and UT Samples Element N 5% 10% 20% 25% 50% > +50% 82 Fe 82 100% 59 61 70 74 81 1 MnO 82 72% 74% 85% 90% 99% 1% 76 80 82 SiO2 82 93% 98% 100% 49 72 78 80 82 Al2O3 82 60% 88% 95% 98% 100% 59 77 82 P 82 72% 94% 100% 41 65 77 78 82 TiO2 82 50% 79% 94% 95% 100% 38 57 71 75 79 3 LOI 82 46% 70% 87% 91% 96% 4%The key observations are: Eleven Fe values agree within 5%; 93% of SiO2 values agree within 5%; Al2O3 values show good correspondence above 1% and 88% of all the samples agree within +10%; The majority of P values are less than 0.1% and close to detection limits for the XRF method; there is a bias equal to approximately 3% of the P concentration with higher values reported by SGS than UT (similar to the observation for Minas-Rio); The majority of values of TiO2 are less than 0.2%. TiO2 show good correspondence and 79% of the agree within +10%. The majority of results which do not agree within +10% are almost within 10 times detection limit and precision is expected to be in the order of +100%; 74% of the Mn values agree within ±10%; values less than 0.1% do not agree within ±10% but are within ten times detection limits and precision is expected to be poor; and 65% of the LOI values reported by SGS are higher than those reported by UT. UT refers to the analyses as done by a robotic Thermogravimetric Analyser (TGA) with the furnaces set 100o and 1000ºC. The temperature used for LOI at SGS should be determined and the two analytical methods compared. The majority of the LOI values are less than 2% and the variance between the laboratories is in the order of 5% of the reported values.In general, there is good correspondence between SGS and UT major oxide determinations.Some elements (MnO, P and TiO2) are found in concentrations within ten times the detectionlimit of the XRF method. If these determinations are required more accurately, it isSRK Consulting (US), Inc. March 10, 2008MMX.Corumba.NI 43-101 Technical Report.162703.KG.009.doc
  • 266. Mineração e Metálicos S.A. 11-5Corumbá Project Technical Reportrecommended that a lithium metaborate fusion – ICP method, with detection limits in the rangeof 1 to 10ppm, be used.SRK considers the sample preparation, analysis and security to follow industry standards andthat the assays are reliable for resource estimation.11.2 Sample, Preparation and Analysis for Urucum NE11.2.1 Sample Preparation ProceduresSample preparation takes place at the MMX Corumbá Laboratory. SGS Laboratory, in BeloHorizonte, did all the chemical analysis and ALS Chemex Laboratory, in Australia, was used forcheck assaying as the second lab.The 200kg-sample is crushed in a closed circuit with a 38mm screen until all material is less than38mm. The crushed material is then fed into a rotary splitter. Half the sample is filed as anarchive and the other half is fed into rotary splitting again. The second splitting generates twoportions, one is used for the global analysis and the other for the size fraction test. The sample isscreened at 25mm, 19mm, 12mm, 6.35mm and 4mm. A small portion is taken from the 25mmto 19mm fraction for a crepitation test. The remainder of that fraction is mixed with the 19mmto 12mm fraction. The <4mm fraction is wet screened to generate three more fractions: 4mm to1mm, 1mm to 0.15mm and <0.15 mm. The resulting size fractions are: 25mm to 12mm; 12mm to 6.35mm; 6.35mm to 4mm; 4mm to 1mm; 1mm to 0.15mm, and <0.15mm.All six size fractions and the global samples are sent to chemical analysis preparation. Thisprocess consists of successive crushing and splitting until the last stage when a pulp is taken forchemical analysis. The first stage is crushing to 8mm. All crushed material is fed into rotarysplitting until one 3kg portion is obtained. This portion is crushed again to 2mm and dried at105°C. Then the dried sample is fed into the rotary splitter until a 200g portion is obtained. Thisportion is pulverized and split again. One-half is sent for chemical analysis and the other half isstored as an archive.The global sample and the fractions 25mm to 19mm, 19mm to 12mm and 12mm to 6.35mm passthrough the chemical analysis preparation process from the beginning starting with the 8mm-crushing. The fraction 6.35mm to 4mm starts the process in the next stage, where the 3kgportion is obtained. The fractions 4mm to 1mm and 1mm to 0.15mm are sent directly to thedrying stage and the fraction <0.15mm is filtered before also being sent to the drying stage.All chemical analyses are done by XRF for the elements Fe, SiO2, Al2O3, P, MnO, CaO, MgO,K2O, Na2O, TiO2 and gravimetric analysis for LOI (Loss on Ignition).SRK Consulting (US), Inc. March 10, 2008MMX.Corumba.NI 43-101 Technical Report.162703.KG.009.doc
  • 267. Mineração e Metálicos S.A. 11-6Corumbá Project Technical Report11.2.2 Chemical Analysis ProceduresSGS ProceduresSGS receives the pulverized samples and dries them at a temperature of 100 10ºC. A portionof 0.50g is taken from the dried samples and a solvent with a lithium tetraborate base is added ina quantity sufficient for the total fusion of the sample. The mixture of the sample and solvent isthen homogenized and fused in a platinum crucible, using an automatic fusion machine forbetween 15 and 20 minutes. The fused material is poured into a platinum mold, forming a diskwith a flat surface.The SGS internal laboratory QA/QC procedures consist of inserting a duplicate sample or areplicate sample, alternately, for each ten samples in a batch. At least one reference sample isinserted into each batch. The samples are stored individually in plastic bags and maintained in adryer until the spectrometer reading. The samples are analyzed by XRF.The data are transferred directly from the equipment and stored in the LIMS.Table 11.2.2.1: Limits Detection of SGS Iron Ore AnalysisElement Detection Limit (%) Upper Limit (%)Al2O3 0.10 90Fe2O3 0.01 100K2O 0.01 15MgO 0.10 45MnO 0.01 70Na2O 0.10 15P2O5 0.01 45SiO2 0.10 100TiO2 0.01 100Loss on Ignition is performed by a gravimetric method. The sample is heated to approximately110ºC for a minimum of one hour. A clean, dry crucible is weighed and the weight is recorded(CV). 1.5 to 2g of the heated sample is added to the crucible, which is then weighed again(C+A). The crucible with the sample is placed in an oven which is heated to a temperature of1000 50ºC. The sample is left to cremate for a period of more than one hour. The crucible isremoved from the furnace and placed on a refractory plate until it loses its incandescence. It isthen placed in a dryer until the crucible and sample are cooled and then it is weighed again (finalweight).The calculation of results is: C + A - Final Weightl % F.W. x 100 C + A - CVThe detection limit is 0.01% and the data are recorded in the LIMS.ALS Chemex ProceduresALS Chemex uses the lithium metaborate fusion method and XRF for its analysis of iron oresamples. A prepared sample (0.5g) is fused with a lithium metaborate flux at about 1000°Cwhich is then analyzed by RXR spectrometry.SRK Consulting (US), Inc. March 10, 2008MMX.Corumba.NI 43-101 Technical Report.162703.KG.009.doc
  • 268. Mineração e Metálicos S.A. 11-7Corumbá Project Technical ReportThe samples were analyzed with ALS Chemex 19 element package. The elements determinedby XRF are listed below in Table 11.2.2.2.The analysis includes a LOI determination at 1000°C, undertaken with a TGA. This allows foran addition of the oxides, generated at the ignition temperature and the LOI, to arrive at a total(oxides plus LOI). The LOI is due to the loss of water from hydrated minerals (goethite, gibbsiteand kaolinite), decomposition of carbonates (calcite, siderite and dolomite) and the volatilizationof organic compounds.Table 11.2.2.2: Detection Limits in ALS Chemex Iron Ore AnalysisElement Symbol Units Lower Limit Upper LimitAluminum Al2O3 % 0.01 30Arsenic As % 0.001 0.6Barium Ba % 0.005 0.3Calcium CaO % 0.01 10Cobalt Co % 0.005 2Chromium Cr % 0.005 5Copper Cu % 0.005 3Iron Fe % 0.01 75Potassium K2O % 0.001 5Magnesium MgO % 0.01 10Manganese MnO % 0.001 75Sodium Na2O % 0.01 5Nickel Ni % 0.005 3Phosphorus P % 0.001 5Sulphur S % 0.001 5Silicon SiO2 % 0.01 70Vanadium V % 0.005 1Zinc Zn % 0.005 511.2.3 Quality Control Procedures (QA/QC)SGS Quality Control SGS uses software developed by LIMS used by geochemical laboratories in various countries (such as Brazil, Chile, Canada and Germany) for on-line acquisition of data, eliminating errors in the manual entry of information. Information relative to quality control (blanks, duplicates and standards) is also retrieved with this software; Calibration of all critical equipment related to the process every six months; Daily verification of scales and spectrometers through standard weights or control samples; Control of mass in 5% of samples prepared in the steps of crushing and pulverization, through weighing samples before and after each step, a maximum loss of 3% of material being acceptable for each step; Control of screening in 5% of samples prepared in the steps of crushing and pulverization through the screening analysis of samples after each step, a minimum percentage of 95% below the mesh reference being acceptable;SRK Consulting (US), Inc. March 10, 2008MMX.Corumba.NI 43-101 Technical Report.162703.KG.009.doc
  • 269. Mineração e Metálicos S.A. 11-8Corumbá Project Technical Report With each 20 samples prepared, a sample is divided into two parts after the process of crushing and the final preparation is made of each of these parts (preparation of duplicates); The analyses are done in batches of up to 40 samples; Samples of internal reference and certified material are inserted in each 20 samples; Inclusion of blanks of reagents in each batch analyzed; and Anomalous results are repeated and when the result obtained does not confirm the first assay, the analysis of a new sample is prepared using the waste of the material received.ALS Chemex Quality ControlALS Chemex uses a web-based LIMS control system which is used by geochemical laboratoriesin various countries with on-line acquisition of data from equipment used in the laboratory,eliminating errors in the manual entry of information. The system provides additional assuranceof the quality of data by providing on-line access to complete audit trails and important QC dataand control charts.Standard specifications for sample preparation are clearly defined and monitored. ALS Chemexstandard operating procedures require that at least one sample per day be taken from each samplepreparation station.The ALS Chemex LIMS inserts quality control samples (reference materials, blanks andduplicates) in each analytical run, based on the rack sizes associated with the method. The racksize is the number of samples, including QC samples, included in a batch. The blank is insertedat the beginning, standards are inserted at random intervals, and duplicates are analyzed at theend of the batch. Quality control samples are inserted based on rack sizes specific to the method.XRF methods use two standards, one duplicate and one blank, with rack size of 39 samples.Quality Control Limits for reference materials and duplicate analyses are established accordingto the precision and accuracy requirements of the particular method.MMX Quality ControlMMX initialized a QA/QC program at the beginning of the Urucum NE exploration. Theprogram consists of introducing one iron ore standard, OREAS40, one blank, and one pulpduplicate per batch. Additionally 117 samples were sent to ALS Chemex in Australia for checkassaying.Agoratek International (Agoratek) reviewed the following laboratory QA/QC data for MMX: SGS internal QA/QC data; SGS vs ALS Chemex pairs of check assays; SGS assays of MMX standard OREAS40; and A few assays of OREAS40 and APHP standards at ALS Chemex.Agoratek made the following observations:SRK Consulting (US), Inc. March 10, 2008MMX.Corumba.NI 43-101 Technical Report.162703.KG.009.doc
  • 270. Mineração e Metálicos S.A. 11-9Corumbá Project Technical Report Standard IPT123, the SGS internal commercial standard, is ill-certified and can be used only as a measure of accuracy and cannot be used to assess SGS’s general performance; Standard OREAS40 has good certification and has been validated by Agoratek in the past. SGS performs well on this standard for Fe and SiO2, but may show bias with Al2O3 and P; A comparison of the SGS and ALS Chemex check assays indicates that there may be a high bias on P by SGS and a low bias on Al2O3; and The samples submitted as blanks actually were not blank and therefore the results are not usable.11.2.4 Sample SecurityMMX has maintained control of samples from collection to the production of individual samplesin sealed shipping packets at the MMX project site. These packets are delivered from the Minesite to the SGS Lab in Belo Horizonte by a transport company.MMX retains the pulps and coarse rejects from their samples at their secure office at Mine 63.11.2.5 ISO 9000 CertificationSGS has ISO 9001(2000) and ISO 14001(2001) Certification.SRK Consulting (US), Inc. March 10, 2008MMX.Corumba.NI 43-101 Technical Report.162703.KG.009.doc
  • 271. Corumba QAQC - LCT Check Assays (N = 17) (y-axis capped at +100%) 100 Fe MnO SiO2 Al2O3 80 Relative Percent Difference (LCT Assay less ULT Assay with respect to average assay) (%) P TiO2 LOI 60 40 20 0 -20 -40 -60 -80 -100 0.01 0.10 1.00 10.00 100.00 Original Assay (LCT) Corumba QAQC - SGS Check Assays Fe MnO SiO2 Al2O3 (N = 82) (y-axis capped at +100%) P TiO2 LOI 100 80 Relative Percent Difference (SGS Assay less ULT 60 Assay with respect to SGS Assay) (%) 40 20 0 -20 -40 -60 -80 -100 0.001 0.010 0.100 1.000 10.000 100.000 Original Assay (SGS) Figure 11-1 Corumbá Project, Brazil LCT and SGS vs. UT Analyses forSRK Job No.: 162703.03 Corumbá SamplesFile Name: Figure 11-1.doc Source: Mineração & Metálicos S.A. Date: 02-27-08 Approved: LM Figure: 11-1
  • 272. Mineração e Metálicos S.A. 12-1Corumbá Project Technical Report12 Data Verification (Item 16)The data is received from the laboratory as electronic files and as hard copies of the assaycertificates. The data is entered into Excel spreadsheets with four sheets for collar coordinates,assays, downhole surveys, and lithologic information. The laboratory certificates are received ashard copies.During SRK’s verification process for Mine 63 data in the previous Technical Report, someproblems were noticed with the values of the MnO variable where in some cases the valuesappeared to be for Mn and in others the values were for MnO. SRK rebuilt the entire databaseusing the original spreadsheets from SGS. After the database was rebuilt, SRK performedchecks on 10% of the data against the assay certificates. SRK also checked the drillhole collarsagainst the database and also reviewed selected lithologic intervals against the core photos anddrill logs.SRK has verified 10% of the Urucum NE database against assay certificates and found nosignificant errors.SRK did not independently collect samples for assay because the rock shows obviousmineralization and the database samples have undergone extensive assaying and check assaying.SRK Consulting (US), Inc. March 10, 2008MMX.Corumba.NI 43-101 Technical Report.162703.KG.009.doc
  • 273. Mineração e Metálicos S.A. 13-1Corumbá Project Technical Report13 Adjacent Properties (Item 17)Vale operates the Urucum Mine immediately northeast of Mine 63 and RTZ operates theCorumbaense Reunidas Mine in the nearby Santa Cruz Mountains. MMX did not utilize anyinformation from these mines in the preparation of this report.SRK Consulting (US), Inc. March 10, 2008MMX.Corumba.NI 43-101 Technical Report.162703.KG.009.doc
  • 274. Mineração e Metálicos S.A. 14-1Corumbá Project Technical Report14 Mineral Processing and Metallurgical Testing (Item 18)14.1 Mineral Processing and Metallurgical Testing for Mine 6314.1.1 Technological Parameters of the ProcessThis section describes the procedures and results of metallurgical tests to define the parametersused in the development of the process flowsheet and product recoveries and includes: Description and location of samples used in bench tests; Description of bench tests; Study of the correlation between RoM and Lump for the Eluvium and Colluvium ore types, with a view to obtaining the relation of enrichment and establish cut-offs; and Study of mass recovery, with the definition of factors of product yield of Lump and Sinter Feed.Bench Tests and Chemical AnalysesThe bench test samples were composed of coarse rejects from 35 shaft samples. Figure 14-1shows the location of the samples for the bench tests and the pit outline. The eluvial area is wellrepresented by the bench test samples. The samples in the colluvial area were taken in areasclose to the source material and also at points at some distance from the source. The overallrepresentativeness of the samples appears to be good. The procedures followed the standardNBR ISO 3082, which deals with the principles of iron ore sampling and preparation of samples.The samples were prepared by PCM Laboratory with the following procedure: An initial sample was taken from the coarse reject for the RoM sample; Homogenization of the remainder of each sample; The sample was dried and weighed to verify the initial volume of the sample; The sample was crushed to less than 25.4mm; The sample was combined with an alkaline dispersant, sodium silicate (ph~10), to about 50% solids; Scrubbing was conducted in a mixer with visual control of desegregation; Wet screening was accomplished with a Manupen type screen into the following sample bands 25.4 – 19.6 – 12.5 – 9.6 – 6.35 – 4.0 – 2.0 – 1.0 – 0.5 – 0.25 and 0.15mm; and The range for Lump was considered to be 25.4 to 6.35mm and Sinter Feed was 6.35 to 1.00mm.Samples of RoM and Lump were sent to the Technological Characterization Laboratory – (LCT)of the Polytechnic School at the University of São Paulo for chemical analysis. The results areshown in Tables 14.1.1.1 and 14.1.1.2.SRK Consulting (US), Inc. March 10, 2008MMX.Corumba.NI 43-101 Technical Report.162703.KG.009.doc
  • 275. Mineração e Metálicos S.A. 14-2Corumbá Project Technical ReportTable 14.1.1.1: Colluvial Ore –Chemical Analysis: RoM and Lump Coordinates RoM Lump X Y Z Hole Id Laboratory Name From To Fe SiO2 AI2O3 P MnO CaO MgO TiO2 LOI NºLCT Hole Id Fe SiO2 A12O3 P Mn TiO2 LOI 435800.8 7877646 618.03 Can_T6 EBX075 0.00 7.70 65.230 4.19 1.89 0.05 <0.10 na na 0.16 2.51 7084/05 CAN T6 67.498 2.12 1.01 0.054 <0.10 0.13 1 434600.1 7877503 403.06 T0_00 EBX118 0.00 10.00 58.309 13.36 1.87 0.05 <0.10 na na 0.15 1.42 7552/05 T0/00 65.135 5.8 0.61 0.053 <0.10 <0.10 0.58 434405 7877393 378.22 T01_100S EBX069 0.00 6.00 56.005 12.80 2.00 0.06 2.01 na na 0.17 2.48 7066/05 T01/100S 64.8 6.10 0.79 0.06 0.64 <0.10 1.20 434199.6 7877484 344.96 T02_00 EBX149 0.00 5.60 56.991 15.76 1.33 0.05 0.35 na na 0.12 1.60 7606/05 T02/00 62.578 9.030 0.62 0.054 0.115 <0.10 0.53 434204.3 7877384 357.41 T02_100S EBX090 0.00 6.00 54.001 15.03 3.31 0.07 0.70 na na 0.20 3.11 7129/05 T02/100S 63.062 8.28 0.48 0.056 0.342 <0.10 1.7 434209 7877284 352.99 T02_200S EBX079 0.00 6.00 52.563 16.83 1.59 0.07 2.14 na na 0.14 2.78 7096/05 T02/200S 62.954 7.8 0.46 0.051 0.831 <0.10 0.82 434004.5 7877375 330.5 T03_100S EBX089 0.00 5.05 61.320 7.90 2.46 0.08 0.42 na na 0.18 2.42 7126/05 T03/100S 65.442 3.49 1.32 0.062 <0.10 0.1 1.74 434982.3 7877772 458.93 T2_250N EBX086 0.00 2.47 63.803 4.90 2.49 0.08 <0.10 na na 0.16 2.68 7117/05 T2/250N 65.111 3.13 2.22 0.05 <0.10 0.12 2.37 435194.6 7877629 493.82 T3_100N EBX066 0.00 5.00 60.954 8.21 2.11 0.06 0.20 na na 0.18 2.59 7057/05 T3/100N 67.413 2.83 0.7 0.063 <0.10 <0.10 1.28 435181.8 7877765 491.54 T3_236N EBX057 0.00 2.90 65.523 3.66 1.40 0.06 0.15 na na 0.12 1.91 6668/05 T3/236N 67.9 2.16 1.19 0.06 <0.10 <0.10 0.99 435400.5 7877541 557.73 T4_00 EBX058 0.00 8.15 61.193 7.42 2.64 0.05 <0.10 na na 0.21 2.68 6671/05 T4/00 68.7 2.33 0.72 0.06 <0.10 0.09 0.84 435395.4 7877640 531.56 T4_100N EBX073 0.00 5.40 61.662 7.94 2.24 0.06 0.10 na na 0.18 2.11 7078/05 T4/100S 68.154 3.01 0.53 0.05 <0.10 <0.10 0.8 435410.7 7877341 596.65 T4_200S EBX059 0.00 6.00 59.334 8.48 4.12 0.06 <0.10 na na 0.25 3.75 6674/05 T4/200S 68.8 1.82 0.37 0.06 <0.10 <0.10 0.63 435387.6 7877791 527.78 T4_250N EBX061 0.00 2.60 59.009 7.98 2.96 0.09 0.51 na na 0.19 3.49 6680/05 T4/250N 65.2 4.97 1.05 0.08 <0.10 <0.10 1.39 435600.1 7877551 595.54 T5_00 EBX078 0.00 8.70 59.430 9.15 3.82 0.08 <0.10 na na 0.20 2.93 7093/05 T5/00 67.155 3.16 0.82 0.056 <0.10 <0.10 0.86 435605.3 7877451 619.66 T5_100S EBX062 0.00 6.00 60.292 7.17 3.50 0.05 <0.10 na na 0.26 3.18 6683/05 T5/100S 68.5 1.73 0.75 0.05 <0.10 <0.10 0.89 435610.4 7877351 635.34 T5_200S EBX065 0.00 6.00 62.793 6.87 1.70 0.05 <0.10 na na 0.16 2.28 7054/05 T5/200S 67.697 3.14 0.3 0.052 <0.10 <0.10 0.73 435799.9 7877561 641.54 T_00 EBX083 0.00 9.80 63.685 7.60 0.89 0.06 <0.10 na na 0.10 2.11 7108/05 T6/00 67.865 1.8 0.34 0.055 <0.10 <0.10 1.43 435805 7877461 672.88 T6_100S EBX068 0.00 6.00 63.109 5.17 2.61 0.05 <0.10 na na 0.21 2.59 7063/05 T6/100S 66.738 2.03 0.82 0.065 1.102 <0.10 1.01 435810.1 7877361 704.98 T6_200S EBX072 0.00 6.00 64.767 4.21 1.81 0.05 0.25 na na 0.16 2.14 7075/05 T6/200S 66.471 2.15 1.06 0.053 0.771 <0.10 2.45 435999.6 7877571 689.83 T7_00 EBX080 0.00 8.00 63.697 5.72 1.90 0.07 <0.10 na na 0.16 2.39 7099/05 T7/00 68.4 2.65 0.66 0.07 <0.10 <0.10 0.87 435994.4 7877671 672.51 T7_100N EBX088 0.00 6.00 64.355 4.62 2.03 0.06 <0.10 na na 0.17 2.14 7153/05 T7100N 68.55 1.61 0.4 0.052 <0.10 <0.10 1.39 436004.7 7877471 736.43 T7_100S EBX074 0.00 6.00 62.158 6.42 2.83 0.05 0.31 na na 0.25 3.02 7081/05 T7/100S 63.284 7.15 0.75 0.069 1.154 0.1 1.15Table 14.1.1.2: Eluvial Ore –Chemical Analysis: RoM and Lump Coordinates RoM Lump X Y Z Hole Id Laboratory Name From To Fe SiO2 AI2O3 P MnO CaO MgO TiO2 LOI NºLCT Hole Id Fe SiO2 A12O3 P Mn TiO2 LOI436368.1 7877088.2 890.33 A3 EBX3 0.00 10.00 59.900 6.12 4.22 0.09 0.04 na na 0.22 5.39 A3 65.1 3.39 2.48 0.08 3.28436306.0 7877164.5 863.04 A4 EBX4 0.00 10.00 64.200 6.20 1.33 0.07 0.04 na na 0.12 1.87 A4 67.32 3.42 0.35 0.06 1.2436122.0 7877380.2 827.40 A7_CAN4A EBX 107 0.00 4.20 64.587 4.390 2.320 0.040 <0.10 na na 0.190 2.020 7177/05 A7 (0-4.2m) 68.9 1.48 0.18 0.05 <0.10 <0.10 1.07436149.1 7877355.7 849.51 CAN_3A (0-6m) EBX104 0.00 6.00 66.370 4.96 0.97 0.04 <0.10 na na 0.11 1.08 7168/05 CAN_3A (0-6m) 67.5 2.68 0.32 0.04 <0.10 <0.10 1.70436149.1 7877355.7 849.51 CAN_3A (6-10.20m) EBX105 6.00 10.20 61.098 12.3 0.40 0.05 <0.10 na na <0.10 0.97 7171/05 CAN_3A (6-10.20m) 63.6 7.61 0.10 0.04 0.14 <0.10 1.99436075.8 7877285.9 857.79 CAN_3B EBX84 0.00 15.40 62.217 7.12 2.68 0.09 <0.10 na na 0.19 2.67 7111/05 CAN 3B 65.0 6.72 0.18 0.04 <0.10 <0.10 1.37436015.4 7877208.4 861.71 CAN_3C EBX87 0.00 11.30 64.072 6.78 0.95 0.05 <0.10 na na 0.11 2.00 7120/05 CAN 3C 65.7 4.55 0.58 0.04 <0.10 <0.10 1.62435949.3 7877141.8 846.56 CAN 3D (0.0 a 5.0m) EBX97 0.00 5.00 62.079 9.85 0.58 0.05 <0.10 na na <0.10 1.79 7147/05 CAN 3D (0.0 a 5.0m) 64.7 6.99 0.22 0.04 <0.10 <0.10 1.09435949.3 7877141.8 846.56 CAN 3D (5-11.65m) EBX98 5.00 11.65 66.536 3.25 1.06 0.05 <0.10 na na 0.10 1.63 7150/05 CAN 3D (5-11.65m) 67.5 2.16 0.67 0.05 <0.10 <0.10 1.70436049.8 7877306.6 833.66 CAN 4B (0-6.90m) EBX101 0.00 6.90 64.796 4.16 1.92 0.05 <0.10 na na 0.16 2.39 7159/05 CAN 4B (0-6.90m) 65.6 1.41 1.25 0.12 <0.10 0.10 1.34436049.8 7877306.6 833.66 CAN 4B(6.90-11.80m) EBX102 6.90 11.90 64.375 5.63 0.84 0.05 <0.10 na na 0.12 1.68 7162/05 CAN 4B(6.90-11.80m) 66.7 3.81 0.47 0.05 <0.10 0.10 1.13435945.2 7877145.8 844.36 CAN 4D (0.0 a 7.20m) EBX95 0.00 7.20 64.517 4.04 2.34 0.04 <0.10 na na 0.16 2.50 7141/05 CAN 4D 0.94(0.0 a 7.20m) 67.4 1.27 1.12 0.04 <0.10 <0.10 2.14435905.8 7877058.9 841.53 CAN 4E (0 a 6.20m) EBX125 0.00 6.20 60.571 9.31 2.01 0.05 <0.10 na na 0.17 2.15 7567/05 CAN 4E (0 a 6.20m) 66.3 3.31 0.94 0.04 <0.10 <0.10 0.98 CAN-4E (10.05 a435905.8 7877058.9 841.53 13.05) EBX125 10.05 13.05 64.628 7.80 0.43 0.05 <0.10 na na <0.10 1.30 7579/05 CAN-4E (10.05 a 13.05) 66.3 3.94 0.12 0.04 <0.10 <0.10 0.60436263.6 7876744.1 860.15 D1 EBX54 0.00 10.00 45.565 30.0 1.78 0.10 <0.10 na na 0.19 2.21 6659/05 D1 49.9 27.3 0.46 0.06 <0.10 <0.10 0.78436065.8 7876839.6 973.16 E3 EBX 1 0.00 10.00 63.500 4.07 2.91 0.10 0.02 na na 0.17 2.87 6665/05 E3 69.8 1.38 0.37 0.09 <0.10 <0.10 0.74435999.8 7876916.8 851.24 E4 EBX67 0.00 10.00 61.982 9.30 1.03 0.06 <0.10 na na 0.11 1.89 7060/05 E4 66.3 4.57 0.45 0.05 <0.10 0.10 0.63SRK Consulting (US), Inc. March 10, 2008MMX.Corumba.NI 43-101 Technical Report.162703.KG.009.doc
  • 276. Mineração e Metálicos S.A. 14-3Corumbá Project Technical ReportCorrelation RoM x LumpThe iron grade of RoM and Lump for each sample was plotted on separate graphs for colluviumand eluvium. The equations that relate the grade of Fe in RoM with the grade of Fe in the Lumpwas obtained by linear regression. The results for the two kinds of ore present in the area, eluvialand colluvial are discussed below.The first graph presented in Figure 14-2, shows the correlation curve for the grade of Fe of theeluvial type ore. A good correlation is shown between the tests. For the eluvial graph for Fe, thefollowing linear equation is observed: Lump = 0.85 x RoM + 12.454. Therefore, substituting theiron grade in RoM, the value of the iron grade in Lump is obtained. Considering that the gradeof iron expected in the product at Mine 63 is 64.2%, the average grade of feed for RoM shall be60.9% Fe.The second graph presented in Figure 14-2 shows the correlation curve for the grade of colluvialtype ore. In this case, the low correlation between the grades can be noted. This result can beexplained by the characteristics of this type of ore that presents high variability in the distributionof iron grades because of the clastic nature of the material.For the graph of Fe in Colluvium, the following linear equation is observed: Lump = 0.3657 xRoM + 44.144. Therefore, substituting the x for the grade of Fe in RoM, the value will beobtained of Fe in Lump. Considering that the grade of iron expected in the product of Mine 63 is64.2%, the average grade of feed for RoM should be 54.8% Fe. Because of the high variabilityobtained in the colluvium samples, additional tests are planned, using a larger number ofsamples. In addition, the particle size will be considered as well as the global chemistry.14.1.2 Mineralogical AnalysisThe mineralogical contents for seven samples with three product sizes each are presented inTable 14.1.2.1. The major contents of the samples are iron oxides and hydroxides in aggregateor in mixed particles. The principal mineral is hematite. Goethite/limonite is very porous and isfound free or interspersed among other iron oxide crystals and may show coloform texture,bordering hematite aggregates. Martitic hematite is extremely rare and occurs as very porouscrystals, with shapes varying from anhedric to subhedric and grain sizes ranging fromcryptocrystalline to very fine. Specular hematite is also rare, and occurs as elongate, orientedcrystals, which are rarely acicular. Quartz is anhedric and free of inclusions. Occasionally,quartz occurs within aggregates and shows a reddish coloration due to a fine goethite/limonitecover. Kaolinite occurs freely, associated with goethite/limonite and sometimes overlain by it.Cryptocrystalline and lamellar manganese oxides occur freely associated to goethite/limoniteand, rarely containing inclusions of hematite and quartz. Free leucoxene, probably a product ofan alteration process of rutile, is present with goethite/limonite aggregates. Phosphorous ispresent in the samples as apatite, which occurs in anhedric and subhedric crystals included inhematite or as an aggregate of cryptocrystalline crystals included or associated withgoethite/limonite.Yellow and red or brown agglomerates formed by an association of goethite/limonite,argillaceous minerals, hematite, quartz and manganese oxides are present in almost all the finessamples, except AM 0053 and AM 058.SRK Consulting (US), Inc. March 10, 2008MMX.Corumba.NI 43-101 Technical Report.162703.KG.009.doc
  • 277. Mineração e Metálicos S.A. 14-4Corumbá Project Technical ReportTable 14.1.2.1: Mineralogical Analyses of Samples from Mine 63 Hematite Goethite Goethite/Aggregate Free Quartz Quartz/Aggregate Manganese Kaolin Gibbsite Sample VOL (%) Weight (%) VOL (%) Weight (%) VOL (%) Weight (%) VOL (%) Weight (%) VOL (%) Weight (%) VOL (%) Weight (%) VOL (%) Weight (%) VOL (%) Weight (%)AM - 11 Lump 96.80 97.70 0.00 0.00 3.10 2.20 0.00 0.00 0.10 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Sinter Feed 76.20 81.30 7.90 7.00 13.30 10.00 11.30 0.60 0.00 0.00 0.00 0.00 1.70 0.90 0.20 0.20 Pellet Feed 46.10 57.10 1.30 1.30 33.80 30.10 0.00 7.00 0.00 0.00 0.00 0.00 7.50 4.50 0.00 0.00AM - 13 Lump 58.10 66.00 14.80 13.00 23.00 18.70 0.80 0.00 0.00 0.00 0.00 0.00 4.10 2.30 0.00 0.00 Sinter Feed 45.60 55.80 4.80 4.80 38.20 33.30 3.60 0.50 0.00 0.00 0.00 0.00 10.60 6.30 0.00 0.00 Pellet Feed 3.50 5.50 5.10 6.80 42.30 48.60 0.40 2.90 0.00 0.00 0.60 0.70 44.10 34.70 0.80 0.80AM - 20 Lump 90.50 93.10 0.30 0.30 8.00 6.00 10.30 0.20 0.30 0.10 0.20 0.20 0.30 0.10 0.00 0.00 Sinter Feed 56.00 65.90 0.00 0.00 31.30 26.60 19.30 6.10 1.30 0.80 0.00 0.00 1.10 0.60 0.00 0.00 Pellet Feed 24.40 35.10 0.00 0.00 32.90 34.20 25.10 14.00 0.00 0.00 0.20 0.20 23.20 16.50 0.00 0.00AM - 47 Lump 36.70 47.50 16.00 17.30 15.60 14.60 21.40 16.40 1.50 1.00 0.00 0.00 5.10 3.30 0.00 0.00 Sinter Feed 37.50 49.80 7.30 8.10 18.60 17.80 29.50 14.30 3.30 2.20 0.00 0.00 11.90 7.80 0.00 0.00 Pellet Feed 35.60 47.90 6.80 7.60 17.90 17.40 32.70 20.00 0.00 0.00 1.10 1.00 9.10 6.00 0.00 0.00AM - 48 Lump 59.40 74.00 0.00 0.00 1.70 1.60 19.20 20.50 2.60 1.60 0.00 0.00 3.60 2.20 0.00 0.00 Sinter Feed 62.00 73.90 0.00 0.00 12.50 10.80 33.70 11.50 2.60 1.60 0.50 0.40 3.10 1.80 0.00 0.00 Pellet Feed 32.50 44.40 6.40 7.20 21.30 21.00 5.10 23.20 0.00 0.00 0.10 0.10 6.00 4.10 0.00 0.00AM - 53 Lump 39.90 45.90 47.20 45.10 5.80 4.80 15.60 2.90 1.00 0.60 0.40 0.30 0.70 0.40 0.00 0.00 Sinter Feed 22.70 30.60 38.10 42.70 0.00 0.00 0.00 10.60 14.90 10.10 0.70 0.60 8.10 5.40 0.00 0.00 Pellet Feed 19.10 28.90 14.70 18.50 6.60 7.20 51.50 39.20 0.70 0.60 0.30 0.30 7.10 5.30 0.00 0.00AM - 58 Lump 98.30 98.90 0.40 0.30 0.50 0.40 0.50 0.20 0.20 0.10 0.00 0.00 0.10 0.10 0.00 0.00 Sinter Feed 67.50 77.30 0.00 0.00 15.50 12.80 16.60 9.60 0.00 0.00 0.10 0.10 0.20 0.10 0.00 0.00 Pellet Feed 18.10 28.40 3.40 4.50 15.50 17.60 53.40 42.20 1.70 1.40 0.00 0.00 7.80 6.00 0.00 0.00SRK Consulting (US), Inc. March 10, 2008MMX.Corumba.NI 43-101 Technical Report.162703.KG.009.doc
  • 278. Mineração e Metálicos S.A. 14-5Corumbá Project Technical Report14.1.3 Calculation of Mass BalanceThe mass balance is used to quantitatively establish the efficiency, yield and the dimensioning ofthe process plant.For this study several size fractions characteristic of Lump and Sinter Feed were considered, inorder to determine the mass recovery (product yield) of these materials. A total of 110 sampleswere analyzed; the results are summarized in Table 14.1.3.1 below and the sample locations areshown in Figure 14-3. The samples used in the mass balance calculation cover the entire minearea and are therefore quite representative of the material to feed the beneficiation plant.Table 14.1.3.1: Average Results of Mass Recovery – Lump and Sinter Feed Lump Fractions Lump Sinter Feed Fractions Sinter Feed <25.40m m >19.00m <19.00mm <12.50mm <9.50mm <25.40mm <6.35mm <4.75mm <3.35mm <2.00mm <6.35mm m >12.50mm >9.50mm >6.35mm >6.35mm >4.75mm >3.35mm >2.00mm >1.00mm >1mm Weight% Weight% Weight% Weight% Weight% Weight% Weight% Weight% Weight% Weight%MEAN 12.63 30.41 15.46 10.23 68.73 5.48 5.62 4.01 2.17 17.27STD.DEV. 6.15 4.27 2.85 2.05 5.68 1.51 1.41 1.08 0.69 3.93MIN 1.80 20.89 9.51 6.77 55.45 2.48 3.45 1.90 0.91 9.57MAX 27.95 42.29 22.60 16.23 83.57 10.01 10.92 7.46 4.28 31.83The size fractions for Lump are between 25.4 and 6.35mm and for Sinter Feed between 6.35 and1.00mm. In Lump, the average weight percent is 68.7%, with minimum and maximum values of55.5% and 83.6% respectively. The decision was to adopt 55%, the lowest value, as the projectpremise. The average weight percent in Sinter Feed is 17.3% with a minimum of 9.6% andmaximum of 31.8%. A mass recovery of 11% of Sinter Feed was adopted as the premise for theproject.14.2 Mineral Processing and Metallurgical Testing - Urucum NEMMX Corumbá performed bench scale tests of partition and gravimetric concentration in orderto evaluate the potential of the resources in Urucum NE area for the production of Lump andSinter Feed.These tests were designed to evaluate the concentration properties of the resource consideringmass and metallurgical recovery. The optimal methods obtained for concentration of the orewere based on gravity concentration processes.14.2.1 Location and Preparation of Metallurgical SamplesTwenty-five samples were collected in the Urucum NE area from the same exploration shaftsused in the geologic model. The sample locations are shown in Figure 14-4 and the principalchemical characteristics of these samples are presented in Table 14.2.1.1.SRK Consulting (US), Inc. March 10, 2008MMX.Corumba.NI 43-101 Technical Report.162703.KG.009.doc
  • 279. Mineração e Metálicos S.A. 14-6Corumbá Project Technical ReportTable 14.2.1.1: Characteristics of Samples Analyzed in Heavy Medium ConcentrationSample ID Fe Al2O3 SiO2 P Mn TiO2 LOI K2OL14_2400S 46.00 5.50 24.70 0.054 0.66 0.26 3.30 0.34L14_2600S 57.20 2.30 13.50 0.053 0.09 0.16 1.53 0.11L15_2400S A 59.60 2.30 10.10 0.055 0.15 0.15 1.28 0.11L15_2600S 60.20 2.30 8.50 0.055 0.37 0.16 1.55 0.13L15_2800S A 52.50 3.50 17.30 0.049 0.42 0.16 1.95 0.19L15_2800S B 60.10 2.80 7.60 0.051 0.37 0.16 1.65 0.13L16_2400S 49.60 2.70 21.30 0.055 1.50 0.18 1.74 0.28L16_2600S 53.70 2.50 15.60 0.055 1.10 0.17 1.55 0.23L17_2200S 52.50 2.70 17.00 0.053 1.01 0.18 1.68 0.26L17_2400S 59.90 2.10 8.40 0.059 0.85 0.17 1.41 0.16L17_3000S A 59.60 3.00 7.00 0.066 0.02 0.18 1.92 0.11L17_3000S B 60.00 3.00 9.50 0.059 0.02 0.20 1.60 0.15L17_3200S A 60.30 2.80 6.90 0.059 0.05 0.18 1.70 0.10L17_3200S B 59.30 2.40 8.40 0.059 0.02 0.16 1.46 0.14L18_2200S 52.20 2.30 17.40 0.054 1.32 0.16 1.47 0.25L18_2400S 53.80 2.10 16.50 0.055 0.46 0.15 1.96 0.22L18_3000S 62.40 2.10 7.50 0.053 0.02 0.14 1.11 0.08L18_3200S 58.30 1.90 13.40 0.056 0.02 0.13 1.33 0.08L19_2200S 55.00 4.70 13.40 0.066 0.27 0.24 2.49 0.14L19_2400S 60.30 2.70 8.70 0.052 0.12 0.15 1.45 0.06L19_2800S 55.20 2.00 15.80 0.051 0.08 0.13 1.52 0.11L19_3000S A 62.70 2.40 7.90 0.059 0.05 0.18 1.57 0.13L19_3200S 59.00 1.80 11.90 0.054 0.02 0.12 1.12 0.11L20_2600S 59.30 2.70 11.00 0.052 0.07 0.16 1.50 0.08L20_3000S 54.20 2.60 16.90 0.067 0.36 0.14 1.76 0.16Average 56.92 2.69 12.65 0.056 0.38 0.17 1.66 0.1514.2.2 MethodologyAll samples were prepared according to flowchart in Figure 14-5 before the gravimetricconcentration tests were carried out.The sample preparation resulted in three size fractions to be used in the gravimetric tests andone sample considered waste, as described below: Fraction <38 mm > 6.35 mm –concentration test - Lump 1; Fraction <25 mm >9.52mm –concentration