John Wyche, General Manager, Australian Mine Design and Development, Kerry Mining

1. KERRY MINING
Bayan Airag Gold Project
October 2010

2. Bayan Airag Gold Project

3. Bayan Airag Gold Project
• Kerry Mining acquired the Bayan Airag gold / copper
exploration tenements in late 2008 as part of the
Mongolian portfolio developed by the Canadian
company QGX.
• QGX had identified a number of prospective areas and
selected the Central Valley Zone (CVZ) as the first area
to be explored in detail.
• By the end of 2007 QGX had drilled over 100 holes in
the CVZ, developed oxide and sulphide resource
models, conducted preliminary metallurgical test work
and completed a prefeasibility study based on an
opencut mine to extract the oxide gold resource.

4. Central Valley Zone (CVZ)

5. Bayan Airag Gold Project
• Since Kerry Mining’s acquisition of QGX Mongol
Llc in late 2008:
– Over 100 new holes have been drilled, mainly to
define the CVZ oxide gold resource.
– Ore samples have been sent to Australia for extensive
metallurgical testing of the oxide gold ore and
preliminary testing of the sulphide resource.
– Geological, geotechnical, mining, process,
infrastructure, environmental, water, logistics and
permitting studies have been commissioned and are
either complete or at an advanced stage.

6. Bayan Airag Gold Project
Following reviews of the QGX Canada work and
preliminary assessment of exploration results
across over 2,000 km2 of tenements, Kerry
Mining concluded that the oxide gold section of
the CVZ is well enough defined to progress to a
detailed study but the sulphide zone and the
other exploration targets so far defined require
further work.

7. Bayan Airag Gold Project
A three part definition and development
program was proposed:
•Project 1 – CVZ Oxide Gold. A detailed
feasibility study is being prepared by a team of
Australian geologists, mining engineers,
metallurgists, process and infrastructure
engineers and environmental specialists. This
is designed to lead to early development of the
oxide gold project.
•Project 2 – CVZ Sulphide Zone. Metallurgical
test work is being done in Australia.
Preliminary mining and process studies will be
prepared to assess development of the
Sulphide Zone as the oxide resource is
depleted.
•Project 3 – Near Mine Targets. Four targets
defined by geophysics and scout drilling are
currently being drilled to provide oxide gold
and sulphide copper/gold resource additions.

8. Bayan Airag Gold Project
Feasibility Study Team:
• Hellman & Schofield – Resource
Geology
• Pells Sullivan Meynink - Geotechnical
• Australian Mine Design and
Development - Mining
• Peter Lewis and Associates -
Metallurgy
• Arccon – Process and Infrastructure
• SMEC – Water Supply and
Environment
• Metcon, Optimet, Outetec, Delkor,
Ammtec – Process test work
• Kappes Cassiday snd Associates–
Heap Leach testing and design

9. Project 1
CVZ Oxide Gold Orebody
• The Central Valley Zone (CVZ) contains the
first exploration target to be defined to a
commercial status.
• Oxide resource is the weathered top 50
metres of a the larger underlying sulphide
copper / gold resource.
• Currently defined oxide resource of 450,000
oz of gold and 2.3 million oz of silver at a cut
off grade of 0.8 g/t Au.

10. CVZ Oxide Gold Resource

11. CVZ Oxide Gold Resource

12. CVZ Oxide Gold Resource
• Defined by 211 drill holes with 39,400 metres
of drilling which is mostly core.
• Exploration drilling and interpretation by QGX
Mongol. Assays by SGS and others in
Mongolia.
• Resource modelling by Hellman & Schofield
(Australia).
• Resource compilation and verification
procedures in compliance with Australian
JORC Code and Canadian NI43-101.

13. CVZ Oxide Gold Resource
Category Tonnes (Mt) Gold g/t Silver g/t Au ozs Ag ozs
Indicated 5.4 2.42 12.4 422,000 2,154,000
Inferred 0.4 1.94 11.3 28,000 162,000
Total 5.8 2.39 12.3 450,000 2,316,000
(recoverable gold cut of = 0.8g/t; average density 2.31t/m3; use of significant figures does not imply precision)

14. CVZ Oxide Gold Mine
• Mine planning by Australian
Mine Design and
Development (Australia).
• Geotechnical modelling by
Pells Sullivan Meynink
(Australia).
• Opencut mining of oxide
gold resource with pit shell
defined by Whittle pit
optimisation.
• Standard mining system
using hydraulic excavators
and off highway dump
trucks.

15. CVZ Oxide Gold Mine

16. Oxide Gold Processing
• Process test work shows very low gold recovery by
gravity so process must be by cyanide leaching.
• Process options are:
– Carbon in Leach (CIL) on finely ground ore
– Heap leach on coarsely crushed ore
• Most of the work to date has been on CIL but a heap
leach column test gave a high, rapid gold recovery.
• A comparison study based on this result shows heap
leach may have much higher value than CIL.
• A study program has commenced to bring heap leach
up to the same level of confidence as CIL.

17. Carbon in Leach Option
• Higher gold and silver
recovery (83.9% for gold,
83.5% for silver).
• Standard, proven
technology.
• Operates 12 months per
year.
• More expensive to build
(approx US$40 million)
and operate (>US$22 per
tonne of ore).

18. Carbon in Leach Option
Preliminary
Process Plant
Layout

19. CIL Cyanide Management
• A major feature of the Bayan Airag CIL process
plant design is the tailings treatment and
handling system.
• Once the gold and silver is extracted most of
the water and cyanide will be recovered for re-
use when the liquid is separated from the
tailings in the the thickener. The tailings report
to the thickener underflow at about 35% to
40% moisture.
• These tailings are subjected to cyanide
destruction using either the Inco process or
Caro’s Acid to lower the cyanide level to 1
ppm. This is lower than most gold plants
around the world.
• The biggest difference in the Bayan Airag
plant will be that the detoxified tailings will
then be filtered to produce a dry (21%
moisture) filter cake which can be stored
permanently in the mine waste rock
emplacement.

20. CIL Cyanide Management
The full cyanide management system proposed is:
1. Cyanide destruction by Inco Process on the thickener underflow
reduces cyanide level to less than 1 ppm.
2. Detoxified tailings filtered to remove remaining free moisture and
produce dry filter cake (215 moisture).
3. Filter cake stored in waste rock heap to prevent dust generation
and minimise potential for re-wetting of tailings. Any remaining
cyanide breaks down in the heap.
4. Monitoring bores and final trap dam below the waste rock dump
as final safeguard to ensure that if the above measures fail no
cyanide leaves the site.
This will possibly be the most rigorous cyanide management system
at any mine in the world.

21. Heap Leach Option
• Higher gold and silver recoveries
than expected from column test
(80% for gold, 65% for silver
reduced to 75% and 60% for heap
modelling).
• Rapid leaching (7 days in column, 8
weeks assumed for real heap)
• Standard, proven technology.
• Gold heap leach operations have
been successfully operated in
similar cold environments.
• Less expensive to build (approx
US$26 million) and operate (approx
US$12.50 per tonne of ore).
• May not be able to leach gold
during the four coldest months
each year.

22. Heap Leach Studies
Work in progress to confirm heap leach results:
1. Column test program on 1 tonne of drill core samples to
confirm recovery and leach time results at different crush
sizes and gold grades.
2. Operational analyses to assess “scale up” from columns to
actual heaps.
3. Heap design options to minimise affected area.
4. Assessment of cold weather operation.
5. Cyanide management and heap closure strategies to achieve
same level of safety and environmental security as CIL plan.
6. Engineering to reach +- 20% on capital and operating costs.

23. CIL / Heap Leach Trade Off Study
Process CIL Heap Leach Difference Relative
Mill Throughput tpa 750,000 890,000 140,000 119%
Metal Prices
Gold US$/oz 950.000 950.000 0 100%
Silver US$/oz 13.000 13.000 0 100%
Transport and Refining Costs
Gold US$/oz 5.000 5.000 0 100%
Silver US$/oz 0.500 0.500 0 100%
Opencut tonnes and Grades (preliminary)
Cut off Grade g/t Au 1.00 0.70 0 70%
Ore tonnes tonnes 3,800,000 4,500,000 700,000 118%
Gold Grade g/t Au 2.93 2.62 -0.31 89%
Silver Grade g/t Ag 13.82 13.04 -0.78 94%
Waste tonnes tonnes 19,300,000 18,600,000 -700,000 96%
Total tonnes tonnes 23,100,000 23,100,000 0 100%
Waste : Ore Ratio 5.08 4.13 -0.95 81%
Project operating life years 5 to 6 5 to 6
Cost and Recovery Indicators
Gold Process Recovery 83.9% 75.0% -8.90% 89%
Silver Process Recovery 75.0% 60.0% -15.00% 80%
Process Cost US$/tonne of ore 22.50 12.50 -10 56%
Annual Fixed G&A Costs US$ 5,100,000 5,100,000 0 100%
Mining Cost Ore and Waste US$/tonne 2.60 2.40 -0.20 92%
Total Capital Costs (preliminary only) US$ 67,000,000 58,000,000 -9,000,000 87%
Results
Gold Produced oz 300,400 284,000 -16,400 95%
Silver Produced oz 1,410,000 1,180,000 -230,000 84%
Gold Equivalent oz 319,695 300,147 -19,547 94%
Operating cost per Au oz (net of Ag credits) US$ 523 446 -77 85%

24. Oxide Gold Project
Infrastructure
• Water supply
– Low total usage (<25 litres per second)
– Adequate groundwater supply located 10 km from process
plant.
– Aquifer pump testing is in progress.
• Power options
– Approximately 4 MW required for CIL option. Less for heap
leach.
– Small coal fired power plant being assessed as cheaper
alternative to diesel generators.
• Camp
– Site located in the valley adequate for over 400 people.
– Accommodation options being assessed.
• Freight logistics and permitting studies in progress.

25. Site Layout for CIL Option

26. Oxide Gold Project
Production Profile
• Final reserves for the CIL and heap
leach options are close to
completion.
• Pit optimisation work suggests that
the CVZ oxide zone should support
55,000 to 60,000 oz of gold and
235,000 to 280,000 oz of silver
production per year over a five year
mine life.
• Initial operating cost estimates
deliver a C1 cost of US$523 per oz of
gold for CIL and US$446 per oz for
heap leach (net of silver credits).
• Modelling based on test work and
cost estimation in the current study.
Key assumptions:
•US$950/oz for gold
•US$13.00/oz for silver
•750,000 tpa mill feed rate CIL
•890,000 tpa crushed heap leach

27. Oxide Gold Project
Environmental Management
• ESIA being compiled by
SMEC
• Social Aspects:
– Community involvement
– Co-existing with existing
land use
– Employment of Mongolians
as priority
• Physical Aspects
– Dust, water quality, noise,
contaminants, mine closure

28. Reserves Status
• Process recoveries for CIL are based on extensive test work.
Heap leach recovery is based on limited testing but this is
being upgraded.
• Mining, processing and other costs have been developed
using Mongolian suppliers.
• A comprehensive geotechnical program has been conducted
to define pit slopes.
• Pit shells have been defined using Whittle optimisation
software.
• 97% of the contained metal in the studies to date is in at least
Indicated Resource status. The remaining 3% of Inferred can
be readily upgraded to support a JORC or NI43-101 compliant
Mineral Reserve.
• Schedules have been run to define equipment, labour and
consumables and to confirm project viability.

29. Reserves – Next Steps
• Complete heap leach test work and modelling to
support heap leach case.
• Select final process route.
• Finalise estimation of mining, process and
administration costs.
• Finalise geotechnical report.
• Complete detailed pit and waste rock emplacement
designs.
• Upgrade remaining Inferred resource in the pit to at
least Indicated.
• Prepare formal JORC Reserves Statement.

30. Project 2
CVZ Sulphide Orebody
• The base of the oxide zone in the CVZ occurs as a sharp
transition from highly weathered with no copper to massive
sulphides with significant copper.
• Extensive lenses of low grade copper gold mineralisation have
been defined. Resource definition focuses on areas with
higher copper or gold grades which are more likely to support
the costs of mining and processing.
• Flotation tests are being conducted on a representative
sulphide sample at the Optimet laboratory in Adelaide,
Australia. Initial results indicate that it will be possible to
form a saleable copper gold concentrate with a standard
flotation system.

31. CVZ Sulphide Orebody

32. CVZ Sulphide Resource
Category Tonnes (Mt) Cu % Au g/t Ag g/t Cu tonnes Au ozs Ag ozs
Indicated 2.8 1.73 0.43 6.2 50,000 40,000 572,000
Inferred 4.1 1.90 0.48 5.6 78,000 63,000 742,000
Total 6.9 1.83 0.46 5.9 128,000 103,000 1,314,000
(copper cut off = 1%; average density 3.9t/m3; minor rounding errors)

33. CVZ Sulphide Options
Mining:
• Opencut by deepening the oxide gold
pit.
• Underground. More expensive but
recovers more ore.
Processing:
• All options would be flotation to
produce a copper / gold and possibly a
zinc concentrate for sale to smelters.
• Flotation banks could be built onto the
oxide gold CIL plant to share the
crushing and grinding circuit.
• If sufficient ore is defined it may be
preferable to build a separate
processing plant.

34. Project 3
Near Mine Exploration
1. CVZ high grade gold telluride veins
– An Inferred resource estimate of 88,000 tonnes at 10.3 g/t Au
has been assigned to these veins to give 29,000 oz of gold in
addition to the oxide gold resource. However they are too
discontinuous to model at a higher level of confidence and may
not reach reserve status until they can be exposed in the
operating opencut mine.
2. Copper Ridge North and South
– Looking for extensions of the CVZ oxide and sulphide
mineralisation. First assays back from current drilling confirm
additional sulphide copper / gold.
3. 12921 and 12320
– Drilling on geophysical targets. Initial results confirm
mineralisation but awaiting assays.

35. Project 3
Near Mine Exploration

36. Bayan Airag Gold Project
The Start of a New Force
in Asian Mining