Kapulo Project

The Kapulo Project is located in the south-eastern corner of the DRC - Haut Katanga District, Katanga Province, between Lake Mweru and Lake Tanganyika, approximately 15 km from the Zambian border. The Kapulo Project can be accessed through road infrastructure in Zambia and by air from Lubumbashi via Pweto (50 km from the Kapulo Project site). The Kapulo Project consists of three deposits, being Shaba, Safari North and Safari South. Situated 124 km north-east of Mawson West's operating mine at Dikulushi, the Kapulo Project is also governed by the Dikulushi Mining Convention.

The Kapulo Project involves the development of an open cut mine. Proved and Probable Mineral Reserves at Kapulo are 3.6 million tonnes at 3.6% copper and 8.3 grams per tonne silver(Shaba open cut only). According to the definitive feasibility study ("DFS") relating to the Kapulo Project, the average annual production from Mineral Reserves was expected to be around 15,800 tonnes copper and 78,000 ounces silver, with a life of mine of over 7.5 years, utilizing a plant with a 0.5 million tonnes per annum capacity.

The plant is now being designed and built with a processing capacity of 0.444 million tonnes per annum of oxide ore or 0.6 million tonnes per annum of sulphide ore. Commensurate with the higher processing rate (0.6 million tonnes per annum), annual copper production is expected to be in the order of 19,500 tonnes with a mine life of 6 years. This is currently the subject of a review with a Mineral Reserve update for Kapulo scheduled for release in Q4 2014.

Accelerated construction activities at Kapulo have commenced, with commissioning expected to commence in Q4 2014.

Local Geology
Kapulo comprises two known orebodies, Shaba and Safari, which are separated by a sequent of the Kapulo Fault ~2 kms long that is only weakly mineralized. The deposits are each ~20 m wide and ~200 m long. Shaba extends down-plunge for at least 370 m, whereas Safari pinches and narrows below ~100 m. They occur at places where the Kapulo Fault strikes NNW, in contrast to its overall NNE orientation.

At surface, the Kapulo orebodies comprise wide clay-altered zones containing abundant copper carbonates (malachite and azurite) and oxides (cuprite). This oxidized zone passes abruptly downwards into primary mineralization dominated by Cu-Fe sulfides (bornite and chalcopyrite) with little or no transition zone. The sulfide minerals occur as massive to semimassive stratiform replacements of the greywacke and occasionally as breccia cements and veinlet networks in greywacke and granite.

The hangingwall to the Kapulo deposits is a quartz sandstone. This is separated from mineralised carbonaceous, laminated greywacke by the main strand of the Kapulo Fault. The footwall of the deposits is marked by a subordinate fault strand, along which the sedimentary rocks have been juxtaposed against massive syenogranite. The hangingwall fault marks a knife-edge boundary of the mineralization, whereas the lower fault strand commonly hosts, or is cut by copper mineralization.