QUALIFIED PERSON’S REPORT
111
ANNUAL REPORT 2014
Sokor Project – Updated Mineral Resource and Ore Reserve Estimates as at 31 December 2014
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3.
PROPERTY DESCRIPTION
3.1.
PROJECT LOCATION
The Sokor Project is located approximately 80 km southwest of Kota Bharu, the capital of Kelantan
State in northern Peninsular Malaysia (Figure 3.1). The project is accessed by a sealed road from
Kota Bhara to Kampong Bukit, which is approximately 18 km from site, and then by gravel track from
Kampong Bukit to site. Kota Bharu is connected to Kuala Lumpur by a 55 minute flight. The nearest
town, Tanah Merah, is located approximately half way between the project site and Kota Bharu.
The Sokor Project is situated in the upper catchment of the Sungai Sokor River, where topography
consists of moderately steep hill ridges and narrow valleys, with elevations ranging from 200 m to
900 m above sea level. The project area experiences a hot, tropical monsoonal climate with dense
tropical rainforest vegetation cover. Annual rainfall in Kelantan State averages between 2,000 mm
to 2,500 mm with November to January being the wettest months.
3.2.
PROJECT OWNERSHIP AND STATUS
The Sokor Project consists of a Mining Licence (ML 2/2008) covering approximately 10 km
2
(known
as the “Sokor Block”) and an Exploration Licence (EL 2/2006) approximately 62.8 km
2
(known as the
“Sokor Gold Field Project”). CNMC was granted mining rights on 8 April 2008 for a period of 10 years
to the Sokor Block and the granting of the first right of refusal for a 21 year mining rights renewal
extension.
A gold royalty of 5% of gross revenue is payable to the Kelantan State Government (KSG) and an
additional tribute payment of 3% of gross revenue is payable to the Kelantan State Economic
Development Corporation (KSEDC). Mining approval was obtained from KSG in January 2010 and
allows for initial mine production of up to 300,000 tpa of mined ore.
Environmental approval was obtained from KSG in April 2010. Environmental approvals for the
project included the submission of an Environmental Impact Assessment (EIA) in January 2008 and a
supplementary EIA report in March 2009 with approval received in June 2009. An Environmental
Management Plan (EMP) was submitted in February 2010 and an EMP Additional Information report
submitted in March 2010, with approval received in April 2010. The EIA and EMP include approval
for both heap leach and pond (vat) leach processing of gold ore at the Sokor mine site. Where
possible CNMC will progressively rehabilitate disturbed areas and some areas, such as the process
plant, will be rehabilitated when the mine is closed and the plant is decommissioned.
The Corporate income tax rate in Malaysia is 25%.
CNMC, through its subsidiary CMNM Mining Group Sdn. Bhd., Holds an 81% interest in ML 2/2008
and the KSG holds a 10% share and other investors in Kelantan State hold the remaining 9%
(Table 3.1). The 19% interest not held by CNMC is a non-contributory share during exploration and
mine development and production stages. Exploration Licence EL 2/2006 has expired and is in the
process of being renewed by CNMC through its subsidiary MCS Mining Group Sdn. Bhd. The location
and exact area of EL 2/2006 will be dependent on availability of and access to land surrounding the
Sokor Block.
Table 3.1
Sokor Project tenement schedule
Tenement ID
CNMC
Interest
Status
Expiry Date
Area
km
2
Type of Mineral
deposit
Remarks
ML 2/2008
81%
Development
7/4/2018
10.0
Gold
Mining rights
EL 2/2006
80%
Exploration
Application for
renewal submitted
62.8
Gold
Exploration
rights
