This document compares the economics of a proposed 10,000 tonnes per day heap leach gold operation in Panama using either heap leaching or continuous vat leaching. It finds that using continuous vat leaching at 10,000 tpd would increase initial capital costs by 12.4% but reduce operating costs, resulting in similar overall economics. Using continuous vat leaching at 5,000 tpd would decrease initial capital costs by 19.4% and also lower operating costs, improving the project economics. The analysis is based on engineering studies and a pilot plant test conducted for the project between 2007-2013.

1. INNOVAT MINERAL PROCESS SOLUTIONS LIMITED
760 Brant St., Suite 405C, Burlington ON, L7R 4B8, Canada
Tel 905-333-7133
Fax 905-333-9336
www.vatleach.com
INN14-CS-001 Sept 30, 2014
Document: TECHNICAL MEMORANDUM
Project: INNOVAT Case Study – 10,000 t/d Heap Leach – Panama
This memorandum presents an economic comparison based on a 10,000 t/d heap leach operation
located in Latin America. All assumptions, equipment layouts, mining, and costing, for the
purposes of this comparison, have been accepted from the pre-feasibility base case and have not
been adjusted except as required to implement a Continuous Vat Leaching (CVL) based process.
INNOVAT was directly engaged in engineering activities related to the project from 2007
through 2013, including bulk pilot plant testing, and believes that the cost estimates associated
with the implementation of Continuous Vat Leaching have been conservatively estimated, and
that potentially significant savings in both processing, and material handling can be realized with
modification to the base case.
1.0 INTRODUCTION
Three economic analyses are presented in this memo, two of which have been prepared by
INNOVAT, and one of which was presented as a heap leach, prefeasibility study by the owner.
All costing where possible has been carried forward, or based on the base case. The models are
as follows:
• Base case: 10,000t/d Heap Leach Facility (unadjusted)
• Direct Comparison: 10,000t/d Continuous Vat Leaching
• Alternate: 5,000t/d Continuous Vat Leaching
The following considerations were used when evaluating the alternate methods:
• Maintain design criteria of the original project plan
• Use direct cost from original project plan where feasible

2. CASE STUDY – 10,000t/d HEAP LEACH COMPARISON – INN14CS 2
INNOVAT MINERAL PROCESS SOLUTIONS LIMITED
• Use unit cost from original project plan where direct cost is not feasible
2.0 BASIS OF COMPARISON
INNOVAT has not modified the flow sheets in any way beyond addition of components which
are required for Continuous Vat Leaching, and removal of components related specifically to
Heap Leaching.
The mining and material handling process has been unmodified for the 10,000t/d Continuous Vat
Leach case, and modified only as a result of the reduction in processing rate for the 5,000t/d
CVL case.
The crushing circuit has been modified as a result of the Continuous Vat Leaching process feed
size requirement of -6mm. In order to use the primary and secondary crusher from the base case,
an additional tertiary, and quaternary crushing stage have been added to both of the CVL
scenarios. The cost of this inclusion has been captured in both the CAPEX and OPEX within the
comparison. It is expected that a crushing circuit designed specifically to reduce the particle size
from ROM to -6mm would require three stages and have a small cost savings over the crushing
circuit utilized in this comparison.
The CVL facility has been placed near the base of the proposed heap leach facility, and receives
ore from the crushed ore stockpile. No modification has been made to the material handling /
conveyor system as presented in the base case. The CVL is expected to discharge the material to
a tailings pile which has been modelled to occupy the space currently designed for the heap leach
facility. The costing associated with this tailings pile has been developed based on a
combination of the costs reported for the heap leach facility, and the costs reported for the waste
rock dump.
3.0 COMPARISON OF COSTS
3.1 PRE-PRODUCTION CAPITAL EXPENDITURE - PROCESS
In the case of the 10,000t/d CVL system, cost reductions associated with the centralization of the
process were included and amounted primarily to a minor reduction in the cost of the reagent

3. CASE STUDY – 10,000t/d HEAP LEACH COMPARISON – INN14CS 3
INNOVAT MINERAL PROCESS SOLUTIONS LIMITED
system. The pre-production direct cost comparison between the base case and 10,000t/d CVL
case excluding Area 30 – Heap Leach & Solution Handling, and Area 60 – Detoxification,
produces a difference of 0.33% capital expense. If we look at only Area 30 and 60, the
preproduction cost of the CVL scenario represents a 50% cost premium over the base case. It is
important to note however, that this cost premium is almost completely offset in year one during
the heap leach expansion. The difference between the total process & infrastructure capital cost
(pre-production) between the base case and 10,000t/d CVL case is a 12.4% increase in capital
cost.
In the case of the 5,000t/d CVL system, direct cost of associated equipment was reduced as a
result of the 50% reduction in processing rate. The aggregate reduction in direct cost associated
with this throughput reduction is 20.8%, excluding Area 30 – Heap Leach & Solution Handling,
and Area 60 – Detoxification. The capital cost difference associated with Area 30 & 60 is 9.2%
in favour of the 5,000t/d CVL case. Further savings occur following year one, where leach pad
expansion must occur with the base case. The difference between the total process &
infrastructure capital cost (pre-production) between the base case and 5,000t/d CVL case is a
19.4% decrease in capital cost.
3.2 PRE-PRODUCTION CAPITAL EXPENDITURE – MINING
As the mining schedule and mining method were not modified, the mining costs have been
carried directly for the 10,000t/d case, and reduced only by decreasing the number of required
haul trucks in the 5,000t/d case. The 10,000t/d CVL case shares a common mining capital
expenditure throughout life of mine in comparison to the base case, whereas the 5,000t/d case
includes a capital savings of 19.6% as the equipment requirement for 5,000t/d has decreased with
respect to the base case.
3.3 OPERATING EXPENSE - MINING
Mining costs have not been modified for the 10,000t/d comparison as the mining and material
handling process has not been altered. Additional mining cost was included in the 5,000t/d case
owing to the reduced equipment efficiency. This increase over the mine life amounts to a mining
operating cost increase of 6.9%.

4. CASE STUDY – 10,000t/d HEAP LEACH COMPARISON – INN14CS 4
INNOVAT MINERAL PROCESS SOLUTIONS LIMITED
3.4 OPERATING EXPENSE – PROCESS LABOUR
Process labour has been adjusted based on the removal of all of the tasks specifically associated
with the heap leach, offset by the workers required for continuous vat leaching. The main
difference is the removal of the piping crew which accounts for 10% of the process staff. In
comparison to the base case, the 10,000t/d CVL case total life of mine (LOM) process labour
expenditure is reduced by 12%. In comparison to the 5,000t/d CVL case, the total LOM process
labour expenditure increases by 62% exclusively as a result of an additional 6 years of operation.
It is expected that optimization of the project for a 5,000t/d operation would reduce this process
labour expense to a more comparable level.
3.5 OPERATING EXPENSE - PROCESSING
Processing cost was modified primarily to account for the switch from heap leaching to CVL. A
minor cost savings in the case of 10,000t/d of 3.8% over LOM is expected. This savings is
attributed to a reduction in power consumption, use of hydrated lime, and removal of heap
specific expenses. A similar savings is expected in the 5,000t/d case, with a 1.6% reduction in
total processing cost.
3.6 OPERATING EXPENSE - LABORATORY
Laboratory costs were reduced in both cases primarily by a reduction in the number of samples
taken. Given the rapid leach characteristics of the ore within the vat, and the ability of the
system to tolerate feed variation, the number of samples has been reduced. In the case of 10,000
t/d, this equates to 75 solids assays, and 125 solution assays per day. This results in a savings
over the base case of 19.4% and 33.9% for the 10,000t/d and 5,000t/d comparison respectively.
3.7 OPERATING EXPENSE – SERVICES & SUPPORT
Services and Support costs have not been affected by the change in processing method and
therefore the 10,000t/d CVL case cost remains identical to the base case. In comparison to the
5,000t/d CVL case, the LOM cost has increased 15.7% as a result of yearly expenditures
occurring for an additional 6 years.

5. CASE STUDY – 10,000t/d HEAP LEACH COMPARISON – INN14CS 5
INNOVAT MINERAL PROCESS SOLUTIONS LIMITED
3.8 OPERATING EXPENSE – G & A
G&A costs have not been modified in the case of the 10,000t/d comparison. The G&A costs
have been carried directly. For the 5,000t/d case, the yearly expenditure has been reduced to
accommodate the changes required for a 50% reduction in processing, with the total G&A
expenditure increasing by 74%. This is one area where significant additional savings can be
realized in the 5,000t/d case, as yearly costs from the base case have been extended over 12
years, resulting in much higher total expense per category. It is expected that these costs can be
reduced by virtue of the smaller plant, or distributed over the project life resulting in a more
accurate G&A cost comparison.
3.9 MONITORING/RECLAMATION & CLOSURE
The total cost of monitoring/reclamation & closure has not been adjusted in any way. This
activity is expected to take place following leaching and as such has been moved where required
to begin at the end of leaching activity. It should be noted that reclamation on an ongoing basis
can take place with either CVL scenario.
3.10 OTHER TAXES
The calculation of other taxes is done using the same formula as applied to the base case. The
total tax expenditure does not vary significantly between cases.
3.11 TRANSPORT, INSURANCE, REFINING
The same formula for determining the total cost of this category has been used across all cases.
Since the CVL installation has a higher total recovery, the total cost over the life of the project
has increased, but remains the same on a per ounce basis.
3.12 ONGOING CAPITAL EXPENDITURE
Mining capital expenditure on an ongoing basis remains unchanged in the 10,000t/d CVL case in
comparison to the base case. Closure cost is expected to reduce significantly, as the tailings pile
does not require the same treatment as the heap leach facility at project completion. In addition,

6. CASE STUDY – 10,000t/d HEAP LEACH COMPARISON – INN14CS 6
INNOVAT MINERAL PROCESS SOLUTIONS LIMITED
costs related to heap leach pad expansions have been modified to reflect tailings dump
expansion. The tailings area as designed for the CVL will undergo identical pad expansions, but
these expansions will consist only of appropriate clearing, and placement of a geotextile, more
closely resembling the preparation of the existing WRD site. The combined savings from
adjustment of the leach pad expansions, and reduction in closure requirements results in a
savings of approximately $12,950,644 LOM.
A similar savings is realized in the 5,000t/d CVL comparison. At this scale, $12,669,875 is
saved LOM on ongoing expenditures as a result of the transition from heap leach to tailings pile.
4.0 SUMMARY OF COMPARISON
A summary of the key financial parameters is shown in Table 1. Here you can see that the
10,000t/d CVL case offers superior economics in comparison to the base case, and that while the
average cost per ounce of gold is 7% higher in the 5,000t/d case, the overall economics are better
thanks to the reduced capital expenditure both initially and ongoing. In all cases the NPV of the
CVL installation betters the base case, which is aided by the short leach duration, which leads to
a rapid realization of gold production. A complete cash flow analysis for each case is attached in
the Appendix.
Table 1 - Key Financial Parameters
Base Case Heap
Leach (10,000t/d)
CVL Case
(10,000t/d)
CVL Case
(5,000t/d)
Mine Life 5.3 year 5.3 year 11.1 year
CAPEX (Pre-Production) $ 117 093 032 $ 129 531 835 $ 94 342 955
After-tax IRR 33.7% 47.1% 36.5%
Operating Years to Payback (5%) 2.2 1.42 2.13
After Tax NPV of Project Cash Flow
At 0% Discount Rate $ 152 011 800 $ 195 372 180 $ 191 045 234
At 5% Discount Rate $ 109 789 300 $ 148 918 522 $ 128 788 489
At 10% Discount Rate $ 77 822 500 $ 113 266 205 $ 86 976 345

7. CASE STUDY – 10,000t/d HEAP LEACH COMPARISON – INN14CS 7
INNOVAT MINERAL PROCESS SOLUTIONS LIMITED
Base Case Heap
Leach (10,000t/d)
CVL Case
(10,000t/d)
CVL Case
(5,000t/d)
At 15% Discount Rate $ 53 275 200 $ 85 487 409 $ 57 993 134
Average cash cost per oz $ 402 $ 359 $ 430
Cost per oz (including Capital) $ 981 $ 905 $ 865
5.0 APPENDIX

8. APPENDIX – 10,000t/d HEAP LEACH COMPARISON – INN14CS A
INNOVAT MINERAL PROCESS SOLUTIONS LIMITED
10,000 t/d – Heap Leach (Base Case)

9. APPENDIX – 10,000t/d HEAP LEACH COMPARISON – INN14CS B
INNOVAT MINERAL PROCESS SOLUTIONS LIMITED
10,000t/d – Continuous Vat Leaching

10. APPENDIX – 10,000t/d HEAP LEACH COMPARISON – INN14CS C
INNOVAT MINERAL PROCESS SOLUTIONS LIMITED
5,000t/d – Continuous Vat Leaching