Updated Mineral Resource estimate

Category

Gross

Net (attributable to Ferrum Crescent at 97%)

Tonne (Mt)

Fe (%)

SiO2 (%)

Al2O3 (%)

Contained Fe (Mt)

Tonne

(Mt)

Fe (%)

SiO2 (%)

Al2O3 (%)

Contained Fe (Mt)

Inferred

172.1

25.3

51.2

4.8

43.5

166.9

25.3

51.2

4.8

42.2

Indicated

83.0

27.4

50.1

4.0

22.7

80.5

27.4

50.1

4.0

22.1

Measured

52.6

31.3

47.3

2.5

16.5

51.0

31.3

47.3

2.5

16.0

Total

307.7

26.9

50.3

4.2

82.8

298.5

26.9

50.3

4.2

80.3

Section 1: Sampling techniques and Data

Sampling techniques

Nature and quality of sampling (eg cut channels, random chips, or specific specialised industry standard measurement tools appropriate to the minerals under investigation, such as down hole gamma sondes, or handheld XRF instruments, etc). These examples should not be taken as limiting the broad meaning of sampling.

Limited information on the sampling techniques for the KIOL data is known.

For the FCL exploration, sampling was limited to the sampling of RC chips and diamond core.

Include reference to measures taken to ensure sample representivity and the appropriate calibration of any measurement tools or systems used.

Limited information on the sampling techniques for the KIOL data is known.

For the FCL exploration, representivity was ensured by appropriate sub-sampling protocols.

Aspects of the determination of mineralisation that are Material to the Public Report. In cases where 'industry standard' work has been done this would be relatively simple (eg 'reverse circulation drilling was used to obtain 1 m samples from which 3 kg was pulverised to produce a 30 g charge for fire assay'). In other cases more explanation may be required, such as where there is coarse gold that has inherent sampling problems. Unusual commodities or mineralisation types (eg submarine nodules) may warrant disclosure of detailed information.

Limited information on the sampling techniques for the KIOL data is known.

For the FCL exploration, industry standard sampling techniques were adopted. RC samples (1m-2m) were riffle split on site and diamond core samples were halved with a diamond saw.

Drilling techniques

Drill type (eg. core, reverse circulation, open-hole hammer, rotary air blast, auger, Bangka etc.) and details (eg. core diameter, triple or standard tube, depth of diamond tails, face-sampling bit or other type, whether core is oriented and if so, by what method, etc.

Drilling data from KIOL and three phases of FCL exploration inform the estimates.

The drilling comprised open hole, RC and diamond core drilling and was all vertical. A total of 122 RC holes and 89 diamond core holes were accepted for the estimates.

Drill sample recovery

Method of recording and assessing core and chip sample recoveries and results assessed.

Limited information on the sample recovery for the KIOL data is known.

Measures taken to maximise sample recovery and ensure representative nature of the samples.

With the exception of surficial rubble, the sample recovery through the mineralised zones for the FCL exploration was acceptable.

Whether a relationship exists between sample recovery and grade and whether sample bias may have occurred due to preferential loss/gain of fine/coarse material.

No recovery information for the KIOL database is known. Due to the generally high sample recovery, this relationship was not investigated.

Logging

Whether core and chip samples have been geologically and geotechnically logged to a level of detail to support appropriate Mineral Resource estimation, mining studies and metallurgical studies.

The KIOL data included electronic codes for the main lithological unit, certain sub-units, and the core bedding angles.

Whether logging is qualitative or quantitative in nature. Core (or costean, channel, etc) photography.

All geological information during FCL exploration was logged in acceptable detail, and stored in an MS Access database. This included lithological, structural and geotechnical information.

The total length and percentage of the relevant intersections logged.

In both KIOL and FCL exploration, all drilling was logged.

Sub-sampling techniques and sample preparation

If core, whether cut or sawn and whether quarter, half or all core taken.

No information regarding sub-sampling is known for the KIOL holes.

For the FCL data, core was cut.

If non-core, whether riffled, tube sampled, rotary split etc. and whether sampled wet or dry.

No information regarding sub-sampling is known for the KIOL holes.

For FCL data, RC samples were split by rotary or riffle splitters.

For all sample types, the nature, quality and appropriateness of the sample preparation technique.

No information regarding sub-sampling is known for the KIOL holes.

For the FCL data, the protocols are considered acceptable for the style of mineralisation

Quality control procedures adopted for all sub-sampling stages to maximise representivity of samples.

No information regarding sub-sampling is known for the KIOL holes.

For the FCL data, the protocols are considered acceptable for the style of mineralisation

Measures taken to ensure that the sampling is representative of the in situ material collected.

No information regarding sub-sampling is known for the KIOL holes.

For the FCL data, the protocols are considered acceptable for the style of mineralisation

Whether sample sizes are appropriate to the grain size of the material being sampled.

No information regarding sub-sampling is known for the KIOL holes.

For the FCL data, the protocols are considered acceptable for the style of mineralisation

Quality of assay data and laboratory tests

The nature, quality and appropriateness of the assaying and laboratory procedures used and whether the technique is considered partial or total.

No information on the quality of assay data for the KIOL data was obtained.

Primary samples and quality control samples were submitted for analysis to Genalysis Laboratory Services (Johannesburg) for analysis by Intertek Utama Services (Jakarta).

For geophysical tools, spectrometers, handheld XRF instruments, etc, the parameters used in determining the analysis including instrument make and model, reading times, calibrations factors applied and their derivation, etc.

No non-laboratory techniques have been applied.

Nature of quality control procedures adopted (eg standards, blanks, duplicates, external laboratory checks) and whether acceptable levels of accuracy (ie lack of bias) and precision have been established.

No information on the quality of assay data for the KIOL data was obtained.

The FCL samples were analysed at an accredited laboratory (Genalysis / Intertek), and appropriate standards, blanks and duplicates inserted in the sample stream. The Mineral Corporation has reviewed the results from these control samples and considers the accuracy and reliability of the analyses to be acceptable.

Verification of sampling and assaying

The verification of significant intersections by either independent or alternative company personnel.

The KIOL data was verified by means of the identification and re-surveying of borehole collars in the field, and by means of twin-drilling.

The use of twinned holes

On the basis of the twinning, the open-hole data from KIOL (142 holes) was considered unacceptable for Mineral Resource estimation. The remaining RC and diamond core drilling showed reasonably good correlation of mineralisation depth and abundance, and was considered acceptable.

Documentation of primary data, data entry procedures, data verification, data storage (physical and electronic) protocols.

No access to the core, nor the raw geological logs for the KIOL data is possible and the accuracy of the input of this data into the FCL database cannot be verified. The procedures adopted by those executing FCL's 2008 and 2009 exploration campaigns are well documented and the data entry and validation for those phases of exploration is considered to be acceptable. The Mineral Corporation supervised the 2011 exploration and considers that portion of the database to be acceptable.

Discuss any adjustment to assay data.

No adjustments to assay data were made

Location of data points

Accuracy and quality of surveys used to locate drill holes (collar and down-hole surveys), trenches, mine workings and other locations used in Mineral Resource estimation.

All FCL boreholes were surveyed by a registered surveyor. Of the KIOL holes, 127 collars were re-surveyed by a registered surveyor, and good correlation between the historical and FCL survey locations were found.

Specification of the grid system used.

The co-ordinate system applied for the survey was the South African Local Grid (Lo29) using the Hartebeeshoek 1994 datum.

Quality and adequacy of topographic control.

The topographic control is derived from LiDAR data and is considered adequate.

Data spacing and distribution.

Data spacing for reporting of Exploration Results.

The combination of Ferrum Crescent's exploration and the KIOL data has provided a drillhole spacing which ranges from 100m x 100m to 200m x 300m.

Whether the data spacing and distribution is sufficient to establish the degree of geological and grade continuity appropriate for the Mineral Resource and Ore Reserve estimation procedure(s) and classifications applied.

The data spacing and distribution is sufficient to establish the degree of continuity appropriate for the Mineral Resources, as classified.

Whether sample compositing has been applied

Sample compositing has been applied in the Mineral Resource estimates.

Orientation of data in relation to geological structures

Whether the orientation of sampling achieves unbiased sampling of possible and the extent to which this is known, considering the deposit type.

Vertical intersections are not "true" thicknesses, normal to the dip of the mineralised zones;

If the relationship between the drilling orientation and the orientation of key mineralised structures is considered to have introduced a sampling bias, this should be assessed and reported if material.

As the dip is relatively shallow, and the block model was built in 3-dimensions, the use of vertical composites did not bias the volumetric estimates.

Sample security

The measures taken to ensure sample security.

No information regarding sample security is known for the KIOL holes. For the FCL data, samples were stored in a locked core facility until being collected for delivery to the laboratory by courier.

Audits or reviews

The results of any audits or reviews of sampling techniques and data.

No audits of the KIOL exploration results, with the exception of the verification described above have been undertaken.

The Mineral Corporation reviewed the results of the first two phases of Ferrum Crescent's drilling prior to carrying out the estimates. Phase 3 of Ferrum Crescent's exploration was carried out by The Mineral Corporation.

Section 2: Reporting of Exploration Results

Mineral tenement and land tenure status

Type, reference name/number, location and ownership including agreements or material issues with third parties such as joint ventures, partnerships, overriding royalties, native title interests, historical sites, wilderness or national park and environmental settings.

FCL has an effective 97% share, in Ferrum Iron Ore (Pty) Limited, the holder of Mining Right LP30/5/1/2/2/201. The Project's Mineral Resources are entirely contained within this Mining Right. A legal due diligence on the mineral title has not been conducted by The Mineral Corporation, but The Mineral Corporation is not aware of any issues that may prejudice the Mining Right and the title circumstances are understood to be sound.

The security of the tenure held at the time of reporting along with any known impediments to obtaining a licence to operate in the area.

The Project is covered by a Mining Right that was executed on 10 October 2012. The Mining Right is valid for 30 years commencing 10 October 2012 to 9 October 2042.

Exploration done by other parties

Acknowledgment and appraisal of exploration by other parties.

Previous exploration by KIOL has been documented and integrated into the FCL database.

Geology.

Deposit type, geological setting and style of mineralisation.

Rocks of the Mount Dowe Group, within the Central Zone of the Limpopo Mobile Belt, are interpreted to have been tightly-folded, parallel to the east-northeast to west-southwest orientation of the Limpopo Mobile Belt.

Magnetite mineralisation is identified in five mineralised zones, which are interpreted to be the result of the duplication by folding of one or more magnetite-bearing layers. The mineralised zones are cut by younger faults, which have two dominant orientations, broadly parallel to and orthogonal to, the trend of the Limpopo Mobile Belt.

Magnetite concentrations within the mineralised zones are interpreted to be parallel with the contacts with the host rocks and zones of unmineralised material are found within the mineralised zones.

Drill hole

Information

A summary of all information material to the understanding of the exploration results including a tabulation of the following information for all Material drill holes:easting and northing of the drill hole collar

elevation or RL (Reduced Level - elevation above sea level in metres) of the drill hole collar dip and azimuth of the hole down hole length and interception depth

hole length.

A summary of all material intersections is provided in Appendix 3.

If the exclusion of this information is justified on the basis that the information is not Material and this exclusion does not detract from the understanding of the report, the Competent Person should clearly explain why this is the case

This information has not been excluded.

Data aggregation methods.

In reporting Exploration Results, weighting averaging techniques, maximum and/or minimum grade truncations (eg. cutting of high grades) and cut-off grades are usually material and should be stated.

5m vertical borehole composites were utilised, informed by an assumed minimum mining height.

Where aggregate intercepts incorporate short lengths of high grade results and longer lengths of low grade results, the procedure used for such aggregation should be stated and some typical examples of such aggregations should be shown in detail.

Not applicable to this grade distribution

The assumptions used for any reporting of metal equivalent values should be clearly stated.

No metal equivalent values were considered

Relationship between mineralisation widths and intercept lengths

These relationships are particularly important in the reporting of Exploration Results. If the geometry of the mineralisation with respect to the drill hole angle is known, its nature should be reported.

These composites were not at right angles to the mineralised zones,

If it is not known and only the down-hole lengths are reported, there should be a clear statement to this effect (eg. 'downhole length, true width not known').

As the dips are shallow (7° to 30° and typically less than 20°) and a 3-dimensional block model was used, the use of vertical composites is unlikely to introduce any bias.

Diagrams.

Appropriate maps and sections (with scales) and tabulations of intercepts should be included for any significant discovery being reported These should include, but not be limited to a plan view of drill hole collar locations and appropriate sectional views.

Plans and sections of the interpretive geological model are provided.

Balanced reporting

Where comprehensive reporting of all Exploration Results is not practicable, representative reporting of both low and high grades and/or widths should be practised to avoid misleading reporting of Exploration Results.

All material intercepts are reported Appendix 3

Other substantive exploration data

Other exploration data, if meaningful and material, should be reported including (but not . limited to): geological observations; geophysical survey results; geochemical survey results; bulk samples - size and method of treatment; metallurgical test results; bulk density, groundwater, geotechnical and rock characteristics; potential deleterious or contaminating substances.

All know material exploration data, or summaries thereof, have been provided.

Further work

The nature and scale of planned further work (eg. tests for lateral extensions or depth extensions or large-scale step-out drilling).

Recommendations for further work are provided.

Diagrams clearly highlighting the areas of possible extensions, including the main geological interpretations and future drilling areas, provided this information is not commercially sensitive.

A figure showing possible extensions is included

Section 3: Reporting of Mineral Resources

Database integrity

Measures taken to ensure that data has not been corrupted by, for example, transcription or keying errors, between its initial collection and its use for Mineral Resource estimation purposes.

The compiled database for the estimates was housed in an MS Access database.

Data validation procedures used.

In addition to the verification and QA/QC already described, validation of the sampling data for over-lapping sampling intervals, duplicate samples and spurious data was carried out.

Site visits

Comment on any site visits undertaken by the Competent Person and the outcome of those visits.

If no site visits have been undertaken indicate why this is the case.

Stewart Nupen has undertaken two site visits to the Project, to inspect outcrop, observe RC and diamond drilling and sampling activities and view all of the available diamond core. These site visits were undertaken during the first quarter of 2012.

Geological interpretation

Confidence in (or conversely, the uncertainty of) the geological interpretation of the mineral deposit.

The geological interpretation is considered appropriate for the level of estimates, and the Mineral Resource classification takes the confidence in the interpretation into account.

Nature of the data used and of any assumptions made.

Borehole data was used for the geological interpretation. The regional structural framework was applied.

The effect, if any, of alternative interpretations on Mineral Resource estimation.

No alternative interpretation was considered.

The use of geology in guiding and controlling Mineral Resource estimation.

A thorough re-interpretation of the geological structure and correlation between mineralised zones was carried out.

The factors affecting continuity both of grade and geology

Grade continuity within zones is high. Continuity of zones is affected by geological structures

Dimensions

The extent and variability of the Mineral Resource expressed as length (along strike or otherwise), plan width, and depth below surface to the upper and lower limits of the Mineral Resource.

D Zone is approximately 200m x 400m x 30m

C Zone (West) is approximately 1400m x 250m x 35m

C Zone (East) is approximately 1100m x 700m x 30m

B Zone is approximately 1500m x 800m x 25m

A Zone is approximately 1600m x 1200m x 17m

Estimation and modelling techniques

The nature and appropriateness of the estimation technique(s) applied and key assumptions, including treatment of extreme grade values, domaining, interpolation parameters, maximum distance of extrapolation from data points. If a computer assisted estimation method was chosen include a description of computer software and parameters used.

Variograms parallel to the dip of the mineralised zones were calculated and modelled. Vertical grade distribution utilised downhole variograms. Variograms of between 150m and 250m were obtained in the plane of the mineralised zone and between 7m and 30m downhole.

The availability of check estimates, previous estimates and/or mine production records and whether the Mineral Resource estimate takes appropriate account of such data.

No check estimates or production records were available

The assumptions made regarding recovery of by-products.

No by-products are expected

Estimation of deleterious elements or other non-grade variables of economic significance (eg sulphur for acid mine drainage characterisation).

All zones show low abundance of Mn, P and TiO2. Abundance of base metals, such as Cu, are insignificant

In the case of block model interpolation, the block size in relation to the average sample spacing and the search employed.

Horizontal block dimensions were 50m x 50m and 5m in the vertical, informed by borehole spacing and a. The block model was rotated to the average dip (12°).

Any assumptions behind modelling of selective mining units.

Conceptual minimum mining unit had a minimum height of 5m

Any assumptions about correlation between variables.

No correlation between variables was assumed or modeled

Description of how the geological interpretation was used to control the resource estimates.

Wireframes representing the geological interpretation were generated to constrain the block model. Ordinary Kriging was employed for grade estimates. A three stage search strategy was employed. A minimum of 5 and a maximum of 20 samples was used within the range of the variogram for the first search. The second search was twice the volume of the first, and the third extended to the limits of the mineralised zones. The search and variogram ellipse were oriented to local dip and strike variations using "Dynamic Anisotropy" in Datamine Studio v3.

Discussion of basis for using or not using grade cutting or capping.

No cutting or capping was applied, as the composite grades were normally distributed, and no outliers were identified.

The process of validation, the checking process used, the comparison of model data to drillhole data, and use of reconciliation data if available.

Plan and section plots were analysed to evaluate the adherence of the estimation methodology to the geological model. The methodology was found to honour the grade continuity trends, which are assumed to be parallel to the dip of the mineralised zones.

Moisture

Whether the tonnages are estimated on a dry basis or with natural moisture, and the method of determination of the moisture content.

Tonnage was calculated on a dry basis.

Cut-off parameters

The basis of the adopted cut-off grade(s) or quality parameters applied

A cut-off of 16% Fe and a maximum depth of between 250m and 100m depending upon dip and the number of mineralised zones was applied.

Mining factors or assumptions

Assumptions made regarding possible mining methods, minimum mining dimensions and internal (or, if applicable, external) mining dilution. It is always necessary as part of the process of determining reasonable prospects for eventual economic extraction to consider potential mining methods, but the assumptions made regarding mining methods and parameters when estimating Mineral Resources may not always be rigorous. Where this is the case, this should be reported with an explanation of the basis of the mining assumptions made.

A minimum mining unit of 50m x 50m x 5m aided in the selection of block size. Approximate stripping ratios were calculated to inform the maximum depth constraint for the Mineral Resources.

Metallurgical factors or assumptions

The basis for assumptions or predictions regarding metallurgical amenability. It is always necessary as part of the process of determining reasonable prospects for eventual economic extraction to consider potential metallurgical methods, but the assumptions regarding metallurgical treatment processes and parameters made when reporting Mineral Resources may not always be rigorous. Where this is the case, this should be reported with an explanation of the basis of the metallurgical assumptions made.

On the basis of preliminary test work, The Mineral Corporation has assumed that the Fe can be extracted by means of comminution and magnetic separation to form a magnetite concentrate.

Environmental

factors or

assumptions

Assumptions made regarding possible waste and process residue disposal options. It is always necessary as part of the process of determining reasonable prospects for eventual economic extraction to consider the potential environmental impacts of the mining and processing operation. While at this stage the determination of potential environmental impacts, particularly for a greenfields project, may not always be well advanced, the status of early consideration of these potential environmental impacts should be reported. Where these aspects have not been considered this should be reported with an explanation of the environmental assumptions made.

Environmental commitments made in the Mining Right do not materially change the economics of the Project, and hence the reasonable prospects for eventual economic extraction.

Bulk density.

Whether assumed or determined. If assumed, the basis for the assumptions. If determined, the method used, whether wet or dry, the frequency of the measurements, the nature, size and representativeness of the samples.

The KIOL data included density measurements for all diamond core holes. No information was provided on the methodology used to obtain these density data.

The diamond core data from FCL exploration included density measurements obtained by the 'water immersion' method. A strong correlation between density and Fe was observed, and used to estimate block density after grade estimation.

The bulk density for bulk material must have been measured by methods that adequately account for void spaces (vugs, porosity, etc), moisture and differences between rock and alteration zones within the deposit.

Discuss assumptions for bulk density estimates used in the evaluation process of the different materials

The density data from the FCL adequately accounted for void spaces, and as the regression based on the KIOL data was almost identical to the regression based on the FCL data, it has been assumed that the KIOL method also accounted for the same.

Classification

The basis for the classification of the Mineral Resources into varying confidence categories.

Whether appropriate account has been taken of all relevant factors (ie relative confidence in tonnage/grade estimations, reliability of input data, confidence in continuity of geology and metal values, quality, quantity and distribution of the data).

Whether the result appropriately reflects the Competent Person's view of the deposit.

The borehole spacing, surface mapping, structural interpretation, variography and kriging error estimates inform Mineral Resources which are classified as Inferred, Indicated and Measured. In areas of well-defined geological structure and modest grade variability, the 100m x 100m grid is sufficient for Measured Mineral Resources.

Audits or reviews

The results of any audits or reviews of Mineral Resource estimates

No audits have been undertaken as yet

Discussion of relative accuracy/confidence

Where appropriate a statement of the relative accuracy and/or confidence in the Mineral Resource estimate using an approach or procedure deemed appropriate by the Competent Person. For example, the application of statistical or geostatistical procedures to quantify the relative accuracy of the resource within stated confidence limits, or, if such an approach is not deemed appropriate, a qualitative discussion of the factors which could affect the relative accuracy and confidence of the estimate.

Kriging Efficiency (KE) was used as a guide to Mineral Resource classification. Regions of blocks where KE is generally >0.5 are considered for the Measured category, while regions of blocks where KE >0.25 are considered for the Indicated category and regions with a KE

The statement should specify whether it relates to global or local estimates, and, if local, state the relevant tonnages or volumes, which should be relevant to technical and economic evaluation. Documentation should include assumptions made and the procedures used.

The estimates are local estimates. Blocks are categorized as Measured, Indicated or Inferred, and their use in technical or economic evaluation should be determined by the relevant code.

These statements of relative accuracy and confidence of the estimate should be compared with production data, where available

No production data is available.