liberty molybdenum project - minedocs.com

M3-PN140031 Issue Date: 7-30-14

Effective Date: 7-25-14 Revision 0

Liberty Molybdenum Project

INDEPENDENT MINING CONSULTANTS, INC.

NI 43-101 Technical Report Pre-Feasibility Study – 2014 26,500 TPD Production Rate

Nye County, Nevada

Qualified Persons: John Marek, P.E.

Gabriel Secrest, P.E. Richard Zimmerman, SME-RM

Ken Edmiston, P.E. Don Earnest, P.G., SME-RM

Prepared For:

LIBERTY MOLYBDENUM PROJECT FORM 43-101F1 TECHNICAL REPORT – PRE-FEASIBILITY STUDY

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DATE AND SIGNATURES PAGE

The issue date of this Report is July 30, 2014. The effective date of this Report is July 25, 2014. The effective date of the Mineral Reserve estimate is June 24, 2014. See Appendix A, Feasibility Study Contributors and Professional Qualifications, for certificates of Qualified Persons. These certificates are considered the date and signature of this Report in accordance with Form 43-101F1.

(Signed) “John Marek” July 30, 2014 John Marek, P.E. Date

(Signed) “Gabriel Secrest” July 30, 2014 Gabriel Secrest, P.E. Date

(Signed) “Richard K. Zimmerman” July 30, 2014 Richard K. Zimmerman, SME-RM Date

(Signed) “Ken Edmiston” July 30, 2014 Ken Edmiston, P.E. Date

(Signed) “Donald F. Earnest” July 30, 2014 Donald F. Earnest, P.G., SME-RM. Date


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LIBERTY MOLYBDENUM PROJECT FORM 43-101F1 TECHNICAL REPORT

PRE-FEASIBILITY STUDY

TABLE OF CONTENTS

SECTION PAGE

DATE AND SIGNATURES PAGE ............................................................................................................................................. I

TABLE OF CONTENTS ............................................................................................................................................................ II

LIST OF FIGURES AND ILLUSTRATIONS .......................................................................................................................... VIII

LIST OF TABLES ...................................................................................................................................................................... X

1 SUMMARY .................................................................................................................................................................. 1

1.1 KEY RESULTS ................................................................................................................................................ 2

1.2 HISTORY ........................................................................................................................................................ 5

1.3 MINERAL RESOURCES AND RESERVES ......................................................................................................... 6

1.4 MINE PLAN .................................................................................................................................................... 8

1.5 RECOVERY METHODS .................................................................................................................................... 9

1.6 PROJECT INFRASTRUCTURE ........................................................................................................................ 11

1.7 ENVIRONMENTAL AND PERMITTING REQUIREMENTS ................................................................................... 11

1.8 OPERATING COSTS ..................................................................................................................................... 12

1.9 CAPITAL COSTS .......................................................................................................................................... 12

1.10 FINANCIAL ANALYSIS .................................................................................................................................. 13

1.11 CONCLUSIONS AND RECOMMENDATIONS .................................................................................................... 14

2 INTRODUCTION ....................................................................................................................................................... 15

2.1 SOURCES OF INFORMATION ......................................................................................................................... 15

2.2 INSPECTIONS ............................................................................................................................................... 16

2.3 TERMS OF REFERENCE AND UNITS OF MEASURE ........................................................................................ 16

3 RELIANCE ON OTHER EXPERTS ......................................................................................................................... 18

4 PROPERTY DESCRIPTION AND LOCATION ...................................................................................................... 19

4.1 PROPERTY ................................................................................................................................................... 19

4.2 WATER ........................................................................................................................................................ 20

4.3 ROYALTIES, AGREEMENTS AND ENCUMBRANCES ....................................................................................... 20

4.4 ENVIRONMENTAL LIABILITIES ...................................................................................................................... 20

4.5 PERMITTING ................................................................................................................................................. 21

5 ACCESSIBILITY, CLIMATE, LOCAL RESOURCES, INFRASTRUCTURE AND PHYSIOGRAPHY ............... 22

5.1 ACCESSIBILITY ............................................................................................................................................ 22


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5.2 CLIMATE AND PHYSIOGRAPHY ..................................................................................................................... 22

5.3 LOCAL RESOURCES .................................................................................................................................... 22

5.4 INFRASTRUCTURE ........................................................................................................................................ 22

6 HISTORY ................................................................................................................................................................... 23

7 GEOLOGICAL SETTING AND MINERALIZATION ............................................................................................... 25

7.1 REGIONAL GEOLOGY .................................................................................................................................. 25

7.2 PROJECT AREA GEOLOGY .......................................................................................................................... 26

7.2.1 Lithology ........................................................................................................................... 26 7.2.2 Alteration .......................................................................................................................... 28 7.2.3 Structure ........................................................................................................................... 30

7.3 MINERALIZATION ......................................................................................................................................... 31

8 DEPOSIT TYPES ...................................................................................................................................................... 33

9 EXPLORATION ........................................................................................................................................................ 34

10 DRILLING .................................................................................................................................................................. 35

11 SAMPLE PREPARATION, ANALYSES AND SECURITY .................................................................................... 37

11.1 SUMMARY .................................................................................................................................................... 37

11.2 SAMPLE PREPARATION AND ANALYSIS – HISTORIC AND GMI DRILLING CAMPAIGNS ................................. 39

11.3 SAMPLE PREPARATION AND ANALYSIS – GMI CHECK ASSAY PROGRAM (2014) ....................................... 41

12 DATA VERIFICATION ............................................................................................................................................. 42

12.1 VERIFICATION OF HISTORIC ELECTRONIC DATABASE ENTRIES ................................................................... 42

12.2 VERIFICATION OF HISTORIC DRILL HOLE DATA ........................................................................................... 42

12.3 GMI QA/QC PRACTICES ............................................................................................................................. 45

12.4 QA/QC RESULTS FOR PHASES 1, 2, AND TWINS ......................................................................................... 46

12.4.1 Standards for Phases 1, 2, and Twins .......................................................................... 46 12.4.2 Blanks for Phases 1, 2, and Twins ................................................................................ 47 12.4.3 Check Assays for Phases 1, 2, and Twins .................................................................. 49

12.5 QAQC RESULTS FOR PHASE 3 DRILLING ................................................................................................... 53

12.5.1 Standards ......................................................................................................................... 53 12.5.2 Duplicate Assays ............................................................................................................ 54 12.5.3 Phase 3 Nearest Neighbor ............................................................................................. 58

12.6 GMI RC DRILLING ....................................................................................................................................... 58

12.7 DDH DRILLING COMPARED TO HISTORIC DRILLING DATA ........................................................................... 59

12.8 ACID SOLUBLE COPPER, RECENT DRILLING COMPARED TO HISTORIC ANACONDA DRILLING DATA ........... 61

12.9 GMI ASSAY OF EQUATORIAL CORE – QA/QC OF MOLYBDENUM ASSAYS .................................................. 62

12.10 GMI ASSAY OF EQUATORIAL CORE – QA/QC OF COPPER ASSAYS ........................................................... 62

13 MINERAL PROCESSING AND METALLURGICAL TESTING ............................................................................ 63


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13.1 GENERAL .................................................................................................................................................... 63

13.2 PROCESSING FLOW SHEETS ....................................................................................................................... 63

13.3 METALLURGICAL TESTS .............................................................................................................................. 65

13.3.1 Grinding – Molybdenum Pit ........................................................................................... 65 13.3.2 Flotation ............................................................................................................................ 65

13.4 REAGENTS .................................................................................................................................................. 66

13.5 GRINDING AREA .......................................................................................................................................... 67

13.5.1 Grinding Testing and Historical Comparison – Molybdenum Pit ............................ 67 13.5.2 Design of Circuit .............................................................................................................. 70

13.6 FLOTATION AREA ........................................................................................................................................ 70

13.6.1 Molybdenum Flotation Testing and Historical Comparison – Molybdenum Pit .............................................................................................................. 70

13.6.2 Flotation Testing and Historical Comparison – Copper ............................................ 85 13.6.3 Flotation Circuit Description ......................................................................................... 89

13.7 MOLYBDENUM PRODUCT SPECIFICATIONS .................................................................................................. 89

14 MINERAL RESOURCE ESTIMATES ..................................................................................................................... 91

14.1 BLOCK MODEL SIZE AND LOCATION ........................................................................................................... 91

14.2 DATA BASE ................................................................................................................................................. 91

14.3 GEOLOGIC INTERPRETATION ....................................................................................................................... 92

14.4 MINERALIZATION ......................................................................................................................................... 93

14.5 BLOCK GRADE ESTIMATION ........................................................................................................................ 94

14.5.1 Molybdenum .................................................................................................................... 94 14.5.2 Oxide Molybdenum Estimation ..................................................................................... 96 14.5.3 Copper Estimation .......................................................................................................... 97

14.6 CLASSIFICATION .......................................................................................................................................... 98

14.6.1 Molybdenum Classification Codes ............................................................................... 98 14.6.2 Copper Classification Codes ......................................................................................... 99

14.7 DENSITY ...................................................................................................................................................... 99

14.8 PROCESS RECOVERY AND RECOVERABLE GRADES FOR MOLYBDENUM AND COPPER ............................. 100

14.9 MINERAL RESOURCES ............................................................................................................................... 101

15 MINERAL RESERVE ESTIMATES ....................................................................................................................... 103

16 MINING METHODS ................................................................................................................................................ 107

16.1 PHASE DESIGN .......................................................................................................................................... 111

16.2 MINE PRODUCTION SCHEDULE .................................................................................................................. 112

16.3 WASTE AND LOW GRADE STORAGE .......................................................................................................... 114

16.4 MINE EQUIPMENT REQUIREMENTS ............................................................................................................ 116


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16.5 MINE MANPOWER REQUIREMENTS ............................................................................................................ 118

16.6 MINE PLAN DRAWINGS .............................................................................................................................. 120

17 RECOVERY METHODS ........................................................................................................................................ 131

18 PROJECT INFRASTRUCTURE ............................................................................................................................ 134

18.1 EXISTING INFRASTRUCTURE ...................................................................................................................... 134

18.2 CRUSHING AND MILLING FACILITIES .......................................................................................................... 134

18.3 MINE / MILL SUPPORT BUILDINGS ............................................................................................................. 134

18.3.1 Office Change-house Complex ................................................................................... 134 18.3.2 Warehouse and Maintenance Facility ........................................................................ 135 18.3.3 Laboratory Facility ........................................................................................................ 135 18.3.4 Support Facility(s) ......................................................................................................... 135

18.4 FRESH WATER .......................................................................................................................................... 135

18.5 POWER ...................................................................................................................................................... 136

18.6 ROADS, RAILROAD, AIR ACCESS .............................................................................................................. 136

18.7 TAILINGS DAM ........................................................................................................................................... 136

18.7.1 Tailing Dam Geotechnical ............................................................................................ 137

18.8 MINE WASTE DUMPS AND LOW GRADE ORE STOCKPILE .......................................................................... 137

18.9 COMMUNICATIONS ..................................................................................................................................... 137

18.9.1 Description of the Liberty Communication System ................................................. 137 18.9.2 Business Network ......................................................................................................... 138 18.9.3 Process Control Systems ............................................................................................ 139

19 MARKET STUDIES AND CONTRACTS .............................................................................................................. 140

19.1 MARKET STUDIES ...................................................................................................................................... 140

19.2 CONTRACTS .............................................................................................................................................. 142

19.2.1 Introduction .................................................................................................................... 142 19.2.2 Molybdenum Concentrate ........................................................................................... 142 19.2.3 Copper Concentrate ..................................................................................................... 143 19.2.4 Other Contracts ............................................................................................................. 143

20 ENVIRONMENTAL STUDIES, PERMITTING AND SOCIAL OR COMMUNITY IMPACT ................................ 144

20.1 ENVIRONMENTAL STUDIES ........................................................................................................................ 144

20.2 PERMITTING REQUIREMENTS ..................................................................................................................... 144

20.3 PERMITS AND APPROVALS ........................................................................................................................ 145

20.3.1 Plan of Operations Approval ....................................................................................... 146 20.3.2 State of Nevada Permits ............................................................................................... 147

20.4 ENVIRONMENTAL ISSUES AND MITIGATION MEASURES ............................................................................. 149

20.4.1 Groundwater Level Lowering ...................................................................................... 149 20.4.2 Pit Lake Water Quality .................................................................................................. 149


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20.4.3 Pre-existing Leach Facility .......................................................................................... 149 20.4.4 Acid Rock Drainage ...................................................................................................... 149

20.5 WATER MANAGEMENT AND MONITORING .................................................................................................. 150

20.6 SOCIAL AND COMMUNITY RELATIONS ....................................................................................................... 150

21 CAPITAL AND OPERATING COSTS ................................................................................................................... 152

21.1 MINE CAPITAL COSTS ............................................................................................................................... 156

21.2 PROCESS AND INFRASTRUCTURE CAPITAL ............................................................................................... 159

21.2.1 Assumptions (Basis of Capital Cost Estimate) ........................................................ 159 21.2.2 Estimate Accuracy ........................................................................................................ 161 21.2.3 Documents ..................................................................................................................... 161

21.3 MINE OPERATING COSTS .......................................................................................................................... 162

21.4 PROCESS PLANT, INFRASTRUCTURE, AND OWNERS OPERATING COSTS .................................................. 165

21.4.1 Process Labor and Fringes ......................................................................................... 165 21.4.2 Reagents......................................................................................................................... 165 21.4.3 Maintenance Wear Parts and Consumables ............................................................. 166 21.4.4 Electrical Power ............................................................................................................. 166 21.4.5 Process Supplies and Services .................................................................................. 166

21.5 SITE GENERAL AND ADMINISTRATION COST ............................................................................................. 167

22 ECONOMIC ANALYSIS ......................................................................................................................................... 168

22.1 BASIS OF FINANCIAL MODEL ..................................................................................................................... 168

22.1.1 Economic Start Date and Life of the Project ............................................................. 170 22.1.2 Exchange Rate ............................................................................................................... 170 22.1.3 Date of Estimate ............................................................................................................ 170 22.1.4 Key Assumptions .......................................................................................................... 170 22.1.5 Revenue .......................................................................................................................... 171 22.1.6 Initial Capital .................................................................................................................. 171 22.1.7 Sustaining Capital ......................................................................................................... 171 22.1.8 Working Capital ............................................................................................................. 171 22.1.9 Salvage Value ................................................................................................................ 171 22.1.10 Operating Cost .............................................................................................................. 171 22.1.11 Cost Applicable to Sales .............................................................................................. 171 22.1.12 Reclamation ................................................................................................................... 171 22.1.13 Royalties ......................................................................................................................... 172 22.1.14 Depreciation ................................................................................................................... 172 22.1.15 Project Financing .......................................................................................................... 172 22.1.16 Nevada Net Proceeds Mineral Tax .............................................................................. 172 22.1.17 Federal Income Tax....................................................................................................... 172 22.1.18 Tax Loss Carry Forward ............................................................................................... 172 22.1.19 Depletion ........................................................................................................................ 172

22.2 TOTAL CASH FLOW ................................................................................................................................... 173

22.3 ECONOMIC INDICATORS ............................................................................................................................. 173

22.4 SENSITIVITY ANALYSIS .............................................................................................................................. 175


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23 ADJACENT PROPERTIES .................................................................................................................................... 178

24 OTHER RELEVANT DATA AND INFORMATION ............................................................................................... 179

24.1 PROJECT SCHEDULE ................................................................................................................................. 179

25 INTERPRETATION AND CONCLUSIONS .......................................................................................................... 180

25.1 GENERAL .................................................................................................................................................. 180

25.2 MINERAL RESERVES ................................................................................................................................. 180

25.3 FLOW SHEETS ........................................................................................................................................... 180

25.4 ECONOMICS ............................................................................................................................................... 180

25.5 METALLURGICAL TESTING ......................................................................................................................... 180

25.6 PERMITTING RISK ...................................................................................................................................... 180

25.7 OPPORTUNITIES......................................................................................................................................... 181

25.8 CHALLENGES ............................................................................................................................................ 181

26 RECOMMENDATIONS .......................................................................................................................................... 183

26.1 DRILLING AND GEOLOGIC INFORMATION ................................................................................................... 183

26.1.1 Infill Drilling .................................................................................................................... 183 26.1.2 Geotechnical Drilling .................................................................................................... 183 26.1.3 Compilation of Samples for Metallurgical Testing ................................................... 183 26.1.4 Refinements to Geologic Interpretations .................................................................. 183

26.2 MINE PLANNING RECOMMENDATIONS ....................................................................................................... 184

26.3 METALLURGICAL TESTING RECOMMENDATIONS ....................................................................................... 184

26.4 ENGINEERING RECOMMENDATIONS ........................................................................................................... 185

26.5 PERMITTING RECOMMENDATIONS ............................................................................................................. 185

27 REFERENCES ........................................................................................................................................................ 187

APPENDIX A: FEASIBILITY STUDY CONTRIBUTORS AND PROFESSIONAL QUALIFICATIONS ........................... 188


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LIST OF FIGURES AND ILLUSTRATIONS

FIGURE DESCRIPTION PAGE

Figure 1-1: Project Site Location .................................................................................................................................... 2

Figure 1-2: Final Pit and Material Storage Designs ........................................................................................................ 7

Figure 1-3: Mine Production Illustrations ........................................................................................................................ 9

Figure 4-1: Project Site Location .................................................................................................................................. 19

Figure 4-2: Project Area/Claim Map ............................................................................................................................. 20

Figure 7-1: Regional Geology & Location of Liberty Project ........................................................................................ 26

Figure 7-2: Surface Geology ........................................................................................................................................ 29

Figure 7-3: Schematic Cross Section ........................................................................................................................... 31

Figure 12-1: Anaconda Check Assays (1970) ............................................................................................................. 44

Figure 12-2: Liberty Total Molybdenum Standards by Chemex – Phases 1 and 2 and Twin Drilling ........................... 47

Figure 12-3: Liberty Oxide Molybdenum Standards by Chemex – Phases 1 and 2 and Twin Drilling ......................... 47

Figure 12-4: Liberty Total Molybdenum Blanks by Chemex – Phases 1 and 2 and Twin Drilling ................................ 48

Figure 12-5: Liberty Oxide Molybdenum Blanks – Phases 1 and 2 and Twin Drilling .................................................. 48

Figure 12-6: Check Assay Results – Total Molybdenum – Phases 1, 2, Twins ........................................................... 50

Figure 12-7: Check Assay Results – Oxide Molybdenum – Phases 1, 2, Twins .......................................................... 51

Figure 12-8: Check Assay Results – Total Copper – Phases 1, 2, Twins .................................................................... 52

Figure 12-9: Liberty Total Molybdenum Standards by American Assay Labs – Phase 3 Drilling ................................. 53

Figure 12-10: Liberty Oxide Molybdenum Standards by American Assay Labs – Phase 3 Drilling ............................. 54

Figure 12-11: Duplicate Assay Results – Total Molybdenum – Phases 3 .................................................................... 55

Figure 12-12: Duplicate Assay Results – Oxide Molybdenum – Phases 3 .................................................................. 56

Figure 12-13: Duplicate Assay Results – Total Copper – Phases 3 ............................................................................ 57

Figure 13-1: Process Flow Diagram ............................................................................................................................. 64

Figure 13-2: CP Holes – QMP, Sulfide – Head vs. Mo-Cu Rougher Recovery ............................................................ 74

Figure 13-3: CP Holes – Amp, Sulfide – Head vs. Mo-Cu Rougher Recovery ............................................................. 75

Figure 13-4: CP Holes – Met, Sulfide – Head vs Mo-Cu Rougher Recovery ............................................................... 75

Figure 13-5: Molybdenum Pit – Sulfide Zone – Total Mo Rec vs Mo Head Grade – Ind. Composites ......................... 85

Figure 15-1: Final Pit Design, For the Mineral Reserve ............................................................................................. 104

Figure 16-1: Mine Production Illustrations .................................................................................................................. 110

Figure 16-2: Liberty Phase Designs Sliced on the 5800 Bench Elevation – Phase Number and Extraction order is Shown – Each Grid Square is 1,000 Ft ......................................................................................... 112

Figure 16-3: End of Preproduction ............................................................................................................................. 121

Figure 16-4: End of Year 1 ......................................................................................................................................... 122


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Figure 16-10: End of Year 10 ..................................................................................................................................... 128

Figure 16-11: End of Year 20 ..................................................................................................................................... 129

Figure 16-12: End of Year 32 (Final Pit) .................................................................................................................... 130

Figure 18-1: Existing Liberty Infrastructure ................................................................................................................ 134

Figure 18-2: Communication between Liberty and Mt. Brock .................................................................................... 138

Figure 18-3: Line of Site Communication at Liberty Mine .......................................................................................... 139

Figure 19-1: Molybdenum – First Use ........................................................................................................................ 141

Figure 19-2: Molybdenum – Second Use ................................................................................................................... 141

Figure 22-1: NPV Sensitivities ................................................................................................................................... 176

Figure 22-2: NPV Molybdenum Price Sensitivities ..................................................................................................... 177


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LIST OF TABLES

TABLE DESCRIPTION PAGE

Table 1-1: Operational Parameters ................................................................................................................................ 3

Table 1-2: Mineral Reserves – NI 43-101 Definitions ..................................................................................................... 3

Table 1-3: Mineral Resources – NI 43-101 Definitions – Inclusive of Mineral Reserves ................................................ 4

Table 1-4: Key Project Parameters ................................................................................................................................ 4

Table 1-5: Project Production Summary ........................................................................................................................ 5

Table 1-6: Operating Cost Summary ........................................................................................................................... 12

Table 1-7: Capital Cost Summary ................................................................................................................................ 13

Table 1-8: NPV Sensitivity to Cost Drivers ................................................................................................................... 14

Table 2-1: Sources of Information ................................................................................................................................ 16

Table 2-2: Abbreviations .............................................................................................................................................. 17

Table 6-1: Timeline of Historical Activity in the Liberty Molybdenum Project Area ....................................................... 24

Table 10-1: Summary of Drill Hole History by Company .............................................................................................. 35

Table 12-1: GMI Drilling Phases .................................................................................................................................. 45

Table 12-2: Phase 3 Nearest Neighbor – 40 ft Sample Spacing Results ..................................................................... 58

Table 12-3: GMI RC Drilling – 40 ft Sample Spacing Results ...................................................................................... 58

Table 12-4: General Molybdenum DDH Holes Compared to Historic Drilling .............................................................. 60

Table 12-5: Acid Soluble Copper of 40 ft Composites – Tabulated by Company and Drilling Type ............................. 61

Table 12-6: Nearest Neighbor Comparison, Anaconda Acid Sol to Other Company Data .......................................... 61

Table 13-1: Reagent Consumption .............................................................................................................................. 67

Table 13-2: History of Crushing and Grinding Tests .................................................................................................... 68

Table 13-3: GMI Bond Ball Mill Work Index Test Results ............................................................................................ 68

Table 13-4: History of Flotation Testing ....................................................................................................................... 70

Table 13-5: Anaconda CP Mo-Cu Rougher Flotation Test Results for July 1981 through July 1983 ........................... 72

Table 13-6: Comparison of Mo Recovery for Different Rock Types ............................................................................. 76

Table 13-7: ICP Head Assay ........................................................................................................................................ 77

Table 13-8: MC-01 Flotation Response ....................................................................................................................... 78

Table 13-9: Ore Grade Variability Rougher Test Results ............................................................................................. 80

Table 13-10: Pit Variability Testing .............................................................................................................................. 81

Table 13-11: Combined Composites for Measuring Variability .................................................................................... 82

Table 13-12: Historical Mill Molybdenum Production and Recovery ............................................................................ 83

Table 13-13: GMI Flotation Equipment versus Anaconda Installation.......................................................................... 84


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Table 13-14: Historical Copper Recovery and Concentrate Grade .............................................................................. 85

Table 13-15: Copper Pit - Trench Sample Open Circuit Cleaner Tests ....................................................................... 87

Table 13-16: Historical Molybdenite Concentrate Analysis .......................................................................................... 90

Table 14-1: Liberty Molybdenum Project – Model Size and Location .......................................................................... 91

Table 14-2: Liberty Drilling and Assay Data ................................................................................................................. 92

Table 14-3: Rock Type and Alteration .......................................................................................................................... 93

Table 14-4: Liberty 40 ft Composite Statistics, F or Molybdenum Zone Estimation ..................................................... 94

Table 14-5: Indicator Kriging of Total Molybdenum at 0.020% Discriminator ............................................................... 95

Table 14-6: Molybdenum Zone, Grade Estimation Parameters, Total Moly and Total Copper .................................... 96

Table 14-7: Kriging Parameters for Molybdenum Oxide Ratio – Molybdenum Zone ................................................... 96

Table 14-8: Copper Zone – Total Copper Estimation Parameters ............................................................................... 97

Table 14-9: Copper Zone – Acid Soluble Copper Ratio ............................................................................................... 98

Table 14-10: Block Density Assignment .................................................................................................................... 100

Table 14-11: Process Recovery Assigned to the Block Model ................................................................................... 101

Table 14-12: Total Mineral Resources ....................................................................................................................... 102

Table 15-1: Floating Cone Input Parameters ............................................................................................................. 105

Table 15-2: Mineral Reserves .................................................................................................................................... 106

Table 16-1: Mine Production Schedule – Proven and Probable Mineralization ......................................................... 108

Table 16-2: Mill Feed Schedule ................................................................................................................................. 109

Table 16-3: Waste and Low Grade Storage Allocation .............................................................................................. 115

Table 16-4: Mine Equipment Requirements, Summary of Units on Hand .................................................................. 117

Table 16-5: Mine Personnel Requirements ................................................................................................................ 119

Table 17-1: Process Design Criteria .......................................................................................................................... 132

Table 17-2: Major Equipment List .............................................................................................................................. 133

Table 20-1: GMI-Liberty Project Environmental Permits ............................................................................................ 144

Table 20-2: Permitting Milestone Schedule ............................................................................................................... 146

Table 21-1: Project Capital Cost Summary ................................................................................................................ 153

Table 21-2: Project Operating Cost Summary ........................................................................................................... 156

Table 21-3: Project Preliminary Mining Capital Cost Estimates ................................................................................. 157

Table 21-4: Mine Capital Costs .................................................................................................................................. 158

Table 21-5: Mine Operating Costs ............................................................................................................................. 163

Table 21-6: Process Operating Cost Summary .......................................................................................................... 165

Table 21-7: Process Labor Summary ........................................................................................................................ 165

Table 21-8: Process Plant Reagents – Typical Year of Operation ............................................................................. 166


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Table 21-9: Grinding Media and Wear Items ............................................................................................................. 166

Table 22-1: Cash Flow Model .................................................................................................................................... 169

Table 22-2: Production and Cost Summary ............................................................................................................... 173

Table 22-3: NPV Sensitivity to Cost Drivers ............................................................................................................... 175

Table 22-4: NPV Sensitivity to Metal Prices ............................................................................................................... 176

Table 25-1: Liberty Reserve Summary ...................................................................................................................... 180


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LIST OF APPENDICES

APPENDIX DESCRIPTION

A Feasibility Study Contributors and Professional Qualifications

Certificate of Qualified Person (“QP”)


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1 SUMMARY

This Technical Report presents a refinement and update of the November 2011 Liberty Pre-feasibility Study for the Liberty Molybdenum project near Tonopah, Nevada. The property owner is General Moly, Inc. (GMI), a public company traded in Canada and the U.S. GMI assembled a team of companies and qualified persons to complete this work. This report adheres to the definitions and formats as prescribed by Canadian NI 43-101 and the associated CIM definitions for best practices.

The Introduction (Section 2) and signature page summarizes the team members and their responsibilities. John Marek of Independent Mining Consultants, Inc. (IMC) is the primary author and qualified person for this Technical Report.

This report presents a plan to develop the Liberty project to produce molybdenum sulfide and copper sulfide concentrates. A conventional, hard rock, open pit mine will supply 26,500 st/d of ore to the sulfide concentrator. The company will ship molybdenum concentrates to toll roasters for processing into technical grade molybdenum oxide (TMO), and the company will ship copper concentrates to overseas copper smelters-refineries for smelting and refining.

The Liberty project is located in western Nye County, Nevada, approximately 25 miles northwest of Tonopah. See Figure 1-1. The proposed pit lies at Latitude 38o-19’, Longitude 117o-19’.



(Source: Nationalatlas.gov, 2014)

Figure 1-1: Project Site Location

1.1 KEY RESULTS

The key results of this study are as follows:

Total capital costs to construct the project are estimated at $366 million, reflecting the use of extensive existing infrastructure.

Sustaining capital costs are estimated at $224 million over the Liberty Project's 32 year life of mine (LOM).

For the first five full years of production:

o Annual salable production of approximately 14.0 million pounds of molybdenum and 7.5 million pounds of copper per year is expected, based on a mill capacity to process 26,500 tons per day.

o Average on-site cash costs of $6.32 per pound are expected, using copper as a by-product credit.

o Total cash costs of $7.79 per pound are expected, which includes off-site roasting, smelting, and shipping costs.

N

LIBERTY PROJECT SITE



The updated mine plan results in a total of 402 million pounds of salable molybdenum and 308 million pounds of salable copper to be produced during the LOM, with total contained molybdenum grade of 0.078% and total contained copper grade of 0.098%.

The Liberty Project generates an after tax net present value (NPV) at an 8% discount rate of $325 million, and an internal rate of return (IRR) of $17.4%, assuming toll roasting, based on a long-term molybdenum price of $15.00 per pound and a long-term copper price of $3.25 per pound.

There is potential to increase the Liberty Project's NPV and IRR on the basis that molybdenum concentrates from the Liberty Project could be toll roasted at the Mt. Hope Project, once constructed, which could increase the after tax NPV of the Liberty Project by $36 million to $361 million, increase the IRR of the Liberty Project to 18.4%, and decrease the total cash costs to $7.41 per pound for the first five full years of production.

The Liberty Project has an after tax NPV breakeven molybdenum price of $11.64 per pound, at an 8% discount rate, and a non-discounted cash flow breakeven molybdenum price of $9.58 per pound.

The Liberty Project is expected to produce an annual average of 14.0 million pounds of salable molybdenum and 7.5 million pounds of salable copper over the first five years of operations and is estimated to average 12.6 million pounds of salable molybdenum and 9.6 million pounds of salable copper annually over the LOM. Additional operating parameters are set forth in Table 1-1.

Table 1-1: Operational Parameters

First 5 Years

First 10 Years

LOM

Average Mill Mo Grade %tMo[1] 0.090% 0.087% 0.078%

Average Mill Cu Grade %tCu[2] 0.074% 0.068% 0.098%

Mill Molybdenum Recovery (total Mo content) % 83.5% 84.6% 84.0% Downstream Molybdenum Recovery % 99.0% 99.0% 99.0% Total Molybdenum Recovery % 82.6% 83.7% 83.2% Mill Copper Recovery (total Cu content) % 56.0% 55.5% 53.6% Downstream Copper Recovery % 95.1% 95.1% 95.1% Total Copper Recovery % 53.3% 52.7% 50.9% Salable Molybdenum M lb/y 14.0 13.9 12.6 Salable Copper M lb/y 7.5 6.9 9.6 Salable Molybdenum M lb 70 139 402 Salable Copper M lb 37 69 308 Notes:

[1] Total molybdenum concentration. [2] Total copper concentration.

Table 1-2: Mineral Reserves – NI 43-101 Definitions

Category K tons Total Mo

Grade (%) Total Cu

Grade (%)

Lb Moly Contained (millions)

Lb Cu Contained (millions)

Saleable Moly Lb

(millions)

Saleable Copper Lb (millions)

Proven 92,489 0.101 0.056 187 104 NA NA

Probable 216,727 0.068 0.116 295 503 NA NA

Proven & Probable 309,216 0.078 0.098 482 606 402 308



Notes: 1) Cutoff Grade is $8.83 NSR / ton, based on metal prices of $12.00/lb molybdenum and $3.00/lb copper. 2) Mineral Reserves are based on the total of all Proven and Probable Material Reserves planned for processing within the mine plan. 3) Table figures may not add due to rounding. 4) Tons are U.S. short tons.

Table 1-3: Mineral Resources – NI 43-101 Definitions – Inclusive of Mineral Reserves

Category Ktons

Total Mo Grade

(%)

Total Cu Grade

(%)



Measured 125,538 0.093 0.051 233.5 128.0

Indicated 440,621 0.060 0.094 528.7 828.4

Measured & Indicated 566,159 0.067 0.084 762.2 956.4

Inferred 148,598 0.052 0.115 154.5 341.8 Notes:

1) Cutoff Grade is $7.05 NSR / ton, based on metal prices of $15.00/lb molybdenum and $3.00/lb copper. 2) Mineral Resources on the table above include the mineral reserve. 3) Mineral Resources are contained within a computer generated pit and meet the requirements for reasonable expectation of economic

extraction. 4) Table figures may not add due to rounding. 5) Tons are U.S. short tons. 6) Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability.

Table 1-4 summarizes key project parameters.

Table 1-4: Key Project Parameters

Open Pit Mine Life 31 years

Milling of Low Grade stockpile 1 years

Total Life 32 years

Ore Density 2.53 g/cc average

Mine Open Pit

Process Description Crushing, Grinding, Flotation, Dewatering

Mill Throughput 26,500 short tons per day

Material Mined 32 to 42 million short tons per year

Costs in Constant US Dollars Indexed to 2014 Q1

Initial Capital $359 million

Reclamation Bond Collateral and Prepaid Power $7 million

Sustaining Capital Costs $224 million

Working Capital $21 million

NPV at 8% Discount Rate $325 million

Benefit Cost Ratio* at 8% Discount Rate 2.00

IRR 17.4%

Payback from First Production 4.8 years * Benefit Cost Ratio is the quotient of the discounted value of incremental benefits divided by the discounted value of incremental costs. A BCR greater than 1.0 shows favorable economics.

Table 1-5 summarizes production.



Table 1-5: Project Production Summary

Parameter Unit First 5 Years

First 10 Years LOM

HG ore mined, Excluding Preprod Million st 46.2 94.5 300

LG ore mined Million st 2.6 8 10

Waste mined Million st 111.2 256 550

Material mined Million st 160.0 358 859

Stripping ratio 2.46 2.79 1.78

Ore Milled Million st 47 96 309

Million lb tMo 85 166 483

Million lb rMo 71 141 406

Million lb tCu 70 130 605

Average Mill Mo Grade %tMo 0.090% 0.087% 0.078%

Average Mill Mo Grade %rMo 0.075% 0.073% 0.066%

Average Mill Cu Grade %tCu 0.074% 0.068% 0.098%

Mill Molybdenum Recovery % 83.5% 84.6% 84.0%

Downstream Molybdenum Recovery % 99.0% 99.0% 99.0%

Total Molybdenum Recovery % 82.6% 83.7% 83.2%

Mill Copper Recovery % 56.0% 55.5% 53.6%

Downstream Copper Recovery % 95.1% 95.1% 95.1%

Total Copper Recovery % 53.3% 52.7% 50.9%

Salable Molybdenum Million lb/y 14.0 13.9 12.6

Salable Copper Million lb/y 7.5 6.9 9.6

Salable Molybdenum Million lb 70 139 402

Salable Copper Million lb 37 69 308

1.2 HISTORY

Anaconda Mining Company (Anaconda) and Cyprus Tonopah Mining Company (Cyprus) operated the Liberty property between 1981 and 1991. A pre-stripped open pit mine and substantial infrastructural components are in place at Liberty.

GMI acquired 100% interest in the property in 2007 and prepared pre-feasibility evaluations in 2008 and 2011. This report builds on the previous work and incorporates the following major changes since 2011:

1. Refined geologic interpretation 2. Additional analysis of process test results 3. A more complete evaluation of the associated copper deposit 4. A reduced throughput rate to reduce project capital 5. A refined mine plan unconstrained by claim boundaries (as in previous work) 6. Updated capital and operating costs at the new production rate and at current economic conditions



1.3 MINERAL RESOURCES AND RESERVES

This pre-feasibility evaluation updates the mineral reserves and mineral resources previously announced in 2011. The mineral resource is based on the recently assembled block model and is contained within a floating cone pit that was established using $15.00/lb molybdenum and $3.00/lb copper prices. Section 14 summarizes the procedure.

The mineral reserve is the sum of all proven and probable category mineralization that is planned for production within this plan. There is no inferred class material within the mineral reserves. Inferred class material is treated as waste within the mine plan. The mineral reserves are based on the mine plan and production schedule that is summarized on Figure 1-3 and detailed in Sections 15 and 16. Figure 1-2 illustrates the final pit design that results in the mineral reserve. The final pit design is guided by a floating cone that utilizes $12.00/lb molybdenum and $3.00/lb copper prices. A molybdenum price of $15.00/lb and a copper price of $3.25/lb was used in the economic analysis.

Table 1-2 summarizes the mineral reserves, and Table 1-3 summarizes the mineral resources that include the mineral reserves. The qualified person for the estimation of the mineral reserves and mineral resources is John Marek of Independent Mining Consultants, Inc. The mineral reserve will be modified as more drilling is completed and as more detailed process recovery information becomes available. Metal price changes could materially change the estimated mineral reserves in either a positive or a negative way.

At this time, there are no unique situations relative to environmental or socio-economic conditions that would put the Liberty mineral reserve at a higher level of risk than any other North American developing projects. The primary risk on any U.S. project is the uncertainty regarding the time required to obtain all necessary operating permits.

U.S. Investors are cautioned that this report utilizes the definitions of mineral reserves and mineral resources as defined in Canadian NI 43-101. United States SEC rules to not recognize these definitions, and as a result, the Liberty Project is not a mineral reserve under SEC guidelines.



Figure 1-2: Final Pit and Material Storage Designs



1.4 MINE PLAN

A deposit of mixed transition and supergene copper lies to the immediate east of the existing Liberty Molybdenum Pit. During the course of this evaluation, that material was studied in more detail to determine if it might offer a more cost effective starting location for mining at Liberty. Subsequent geologic interpretation and metallurgical testing confirmed that both copper and molybdenum can be produced from the eastern copper area but it was determined that it is not of sufficient value to be the starting point for mining activities.

Evaluations indicated that the mine plan should be a continuation and expansion of the existing Liberty pit. The eastern copper mineralization is incorporated into the larger molybdenum project and the material is contained within the stated mineral reserves and mineral resources.

The Liberty molybdenum deposit is associated with a Cretaceous age quartz monzonite porphyry stock (the Hall Stock) that intruded into Devonian-age to Triassic-age metasediments. The deposit has been tilted and cutoff by later faulting. The deposit is generally of the Climax-Urad deposit type where the primary economic mineral is molybdenite (MoS2). The primary mineralization also includes minor chalcopyrite, which near surface has been oxidized and locally enriched.

A new model was assembled for the Liberty deposit incorporating refined geologic interpretation in the molybdenum zone and additional data and improved mineral interpretation in the eastern copper area. The model was converted to 40-ft bench heights from the earlier work at 50-ft benches to better match planned equipment for this mine plan. The mineral resource and mineral reserve presented in this document is based on the updated 2014 block model.

Liberty is planned for production by conventional hard rock open pit methods. Figure 1-3 summarizes the mine plan and the general profile of metal production over the mine life. Cutoff grades were established in an effort to maximize project return on investment. Waste movement and consequent total material movement were established to assure sustained ore release to the concentrator throughout the mine life. Ore production ramps up in the first year to 26,500 st/d (9,375 kst/y). The mine total material starts at 32 M st/y for 6 years and expands to 42 M st/y for 6 more years. After that time, the required total material rate drops substantially. A small low-grade stockpile is maintained at the breakeven cutoff grade. That material is shown as processed at the end of the pit life, or it can act as a backup ore source during the project life. Details of the mine plan and schedule are presented in Section 16.



0

5000

10000

15000

20000

25000

30000

35000

40000

45000

Preprod 1 2 3 4 5 6 7 8 9

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32

Ktons of Material

Years

Mine Plan Material Movement Schedule

Mill Ore Total Material

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10,000

15,000

20,000

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Preprod 1 2 3 4 5 6 7 8 9

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Lbs x 1000 of Metal

Years

Moly and Copper Saleable Metal

Mo Lbs Cu Lbs

Figure 1-3: Mine Production Illustrations

1.5 RECOVERY METHODS

The process plant is a conventional crush-grind-flotation operation, which makes the best use of existing foundations to construct a low-cost facility. Major equipment includes:

Primary Crusher, 54 in X 74 in, 500 HP



2 SAG Mills, 28 ft X 10 ft, 4,600 HP each

2 Ball Mills, 16.5 ft X 27 ft, 4,600 HP each

16 Bulk Rougher Flotation Cells, 3,530 ft3 each

1 Tailing Thickener, 400 ft-dia.

The proposed process operations are summarized as follows:

Crushing of the feed by primary gyratory crusher to reduce the feed size from run of mine to minus 6 inch.

Stacking of primary crushed feed in a coarse ore stockpile and then reclaiming by in-tunnel feeders and conveyor belts, with one feed system for each of the two grinding lines.

Grinding is accomplished using two semi-autogenous grinding (SAG) mill and ball mill circuits, with each circuit consisting of a single SAG mill and a single ball mill. The SAG mill will operate in closed circuit with a vibrating screen. Oversize material will be recirculated via conveyor belt to be fed back through the SAG mill. The ball mill will operate in closed circuit with a hydrocyclone cluster to produce the desired grinding product size distribution of 80% (P80) passing 147 micrometers.

Each grinding circuit cyclone overflow reports to a bank of eight bulk rougher flotation cells. The bulk rougher concentrate from each bank is re-ground in closed circuit with a vertical mill.

The molybdenum-copper re-ground concentrate is up-graded in two cleaner flotation circuits, with the tailing for the first cleaner section undergoing a scavenger flotation step prior to exiting the mill with the bulk rougher tailing.

The up-graded molybdenum-copper concentrate is thickened and then conditioned with reagents prior to entering the molybdenum-copper separation stage.

The molybdenum-copper separation section is composed of a flotation section where the copper minerals are depressed, while the molybdenite is floated. The tailing from the molybdenum-copper separation step is sent to a copper enrichment section.

The molybdenum first cleaner concentrate is thickened and then undergoes four additional cleaning flotation steps to produce a final molybdenum concentrate.

The final molybdenum concentrate is thickened, the underflow filtered, and the filter cake dried using a hollow screw dryer. The dryer discharge is stored and then packaged into super-sacks.

The copper concentrate up-grading circuit incorporates a thickener, conditioning tanks, up-grade flotation cells, one stage of concentrate cleaning, and a scavenger circuit on the cleaner tailing.

The final copper concentrate is thickened and filtered with a pressure filter to yield a cake containing no more than 8% moisture. The filter cake is conveyed to a storage building from which it is loaded into over-the-road trucks.

Facilities are provided for the storing, preparing and distributing of reagents to be used in the process.



1.6 PROJECT INFRASTRUCTURE

Existing infrastructure at site includes paved roads, power to the property, water wells, truck shop, laboratory, and offices. All can be brought up to operating condition, and this study includes these costs.

1.7 ENVIRONMENTAL AND PERMITTING REQUIREMENTS

The Liberty Project Area is currently controlled by GMI through their ownership of fee land, patented lode claims, patented mill-site claims, and unpatented claims. The majority of the Project Area is located on fee lands and patented mill-site and lode claims. The unpatented claims, which are largely surrounding the open pit and waste stockpile areas, are on public lands administered by the Bureau of Land Management (BLM). The proposed Liberty Project falls under State and Federal agency jurisdictions.

Mining will occur on both private and public lands, and BLM approval is required before public lands can be disturbed. BLM approval would require completion of an Environmental Impact Statement (EIS), as required under the National Environmental Policy Act (NEPA). Construction could be initiated on private lands once State permits have been acquired, thereby, providing a potential advantage in the construction schedule. Sufficient water rights have been obtained for construction and operations.

The project will require the following permits:

Federal Permits o Plan of Operations / Record of Decision o Explosives Permit o EPA Hazardous Waste ID Number

Nevada State Permits o Reclamation Permit o Water Pollution Control Permit (WPCP) o Air Permit (Class II Operating) o Public Drinking Water System Permit o HAZ/MAT Storage Permit o Artificial Industrial Pond Permit o Dam Construction Permits o Septic System Permit o Radioactive Materials License: o Water Appropriations Permit o Solid Waste Landfill Waiver

The project will utilize existing infrastructure and areas of previous disturbance.

The project is located in a mining-friendly jurisdiction with local citizens supportive of mining. Furthermore, the area is arid, sparsely vegetated, and previously disturbed by mining. These attributes support a reasonable timeline for EIS and other permits.



1.8 OPERATING COSTS

The Life of Mine (LOM) total operating cost is $13.57 per short ton of ore. The LOM total operating cost net of copper credit is $10.33 per short ton of ore, as summarized below.

Table 1-6: Operating Cost Summary

Area Unit First 5 Years

First 10 Years LOM

Operating Cost by short ton of ore Mining $/st ore 5.21 5.59 4.88 Milling $/st ore 5.74 5.68 5.64 Roasting $/st ore 1.04 1.02 0.91 Laboratory $/st ore 0.15 0.15 0.15 Copper TCRCs (net of precious metal credits) $/st ore 0.23 0.21 0.29 Site G&A (includes reclamation bond policy) $/st ore 0.82 0.81 0.75 Shipping - Molybdenum concentrate $/st ore 0.54 0.53 0.47 Shipping - Copper concentrate $/st ore 0.36 0.32 0.45 Marketing $/st ore 0.02 0.02 0.02 Corporate G&A $/st ore 0.00 0.00 0.00 Total Operating Cost $/st ore 14.09 14.32 13.57 Copper Credit* $/st ore -2.56 -2.33 -3.24 Total Operating Cost (net of copper credit) $/st ore 11.54 12.00 10.33 Operating Cost by lb Molybdenum Mining $/lb Mo 3.52 3.84 3.75 Milling $/lb Mo 3.88 3.90 4.34 Roasting $/lb Mo 0.70 0.70 0.70 Laboratory $/lb Mo 0.10 0.10 0.11 Copper TCRCs (net of precious metal credits) $/lb Mo 0.16 0.14 0.22 Site G&A (includes reclamation bond policy) $/lb Mo 0.55 0.55 0.58 Shipping - Molybdenum concentrate $/lb Mo 0.36 0.36 0.36 Shipping - Copper concentrate $/lb Mo 0.24 0.22 0.35 Marketing $/lb Mo 0.01 0.01 0.02 Corporate G&A $/lb Mo 0.00 0.00 0.00 Total Operating Cost $/lb Mo 9.52 9.85 10.43 Copper Credit* $/lb Mo -1.73 -1.60 -2.49 Total Operating Cost (net of copper credit) $/lb Mo 7.79 8.25 7.94 * Net proceeds and copper credits assume a molybdenum price of $15.00/lb and a copper price of $3.25/lb, where applicable.

The LOM total operating cost net of copper credit is $7.94 per pound of molybdenum. Copper provides a credit of $2.49 per pound of molybdenum.

1.9 CAPITAL COSTS

As summarized below, initial capital totals $359 million and the total budget totals $366 million. Sustaining capital totals $224 million.



Table 1-7: Capital Cost Summary

Area $000 Mine Civil and Mine Equipment 36,055 Plant Equipment, Construction, EPCM, Contingency 279,521 Pre-production Stripping 16,956 Owner's Cost 26,666 Total Initial Capital 359,198 Reclamation Bond Collateral 5,800 Pre-paid Power 1,400 Subtotal 7,200 Total Budget 366,398 Sustaining Capital for Mine 189,263 Sustaining Capital for Tailing and Waste Rock Storage 35,001 Total Sustaining Capital 224,264

1.10 FINANCIAL ANALYSIS

GMI prepared the economic evaluation, and IMC and M3 reviewed and approved the analysis. Key assumptions include:

Capital and operating costs indexed to 2014 Q1 Time zero (date which the analysis uses to discount cash flows) December 15, 2016 The analysis treats all expenditures prior to January 1, 2017 as sunk capital Molybdenum price $15/lb Copper price $3.25/lb West Texas Intermediate Crude Oil (WTI) price $100/barrel Diesel cost $3.30/gallon Electricity cost $65/MWh

Key economic indicators are:

NPV at 10% $210 million NPV at 8% $325 million IRR 17.4% Benefit Cost Ratio (BCR) at 8% 2.00 Payback from First Production 4.8 years

The project is most strongly sensitive to molybdenum price, ore grade, mill recovery, and operating cost, while the project is less sensitive to capital and sustaining capital, as illustrated by Table 1-8.



Table 1-8: NPV Sensitivity to Cost Drivers

Change of NPV8 Parameter

Change Parameter

Change

Impact from Parameter Decrease

Impact from Parameter Increase



$million $million Minus Plus Sustaining Capital -20% 20% 16 -16 5% -5% Capital -10% 10% 25 -25 8% -8% Operating Cost -10% 10% 94 -96 29% -30% Mill Recovery -5% 5% -66 66 -20% 20% Ore Grade -10% 10% -132 131 -41% 40% Molybdenum Price -20% 20% -289 281 -89% 86%

1.11 CONCLUSIONS AND RECOMMENDATIONS

The Liberty project is a relatively low capital cost project with attractive economics. Exploration drilling and mine planning have well defined the ore deposit. However, additional infill and geotechnical drilling is recommended to advance the project to a full feasibility study. The additional drilling and metallurgical testing will improve the reliability of metal grade and recovery, respectively, in the early years.

Past operating records and recent metallurgical testing indicate that conventional grinding and flotation can efficiently recover the mineralization to economically produce salable molybdenum and copper concentrates.

Permitting is straightforward on this brownfield mine. This pre-feasibility study suggests that GMI proceed with final feasibility and start the process to obtain necessary state and federal permits in a timely fashion.



2 INTRODUCTION

This Technical Report presents a refinement and update of the November 2011 Liberty Pre-feasibility Study for the Liberty Molybdenum project near Tonopah, Nevada. This Technical Report has been prepared for General Moly, Inc. (GMI), a public company in Canada and the U.S., which owns the property. GMI assembled a team of companies and qualified persons to complete this work. This report adheres to the definitions and formats as prescribed by Canadian NI 43-101 and the associated CIM definitions for best practices.

This report has been prepared in accordance with the guidelines provided in NI 43-101 Standards of Disclosure for Mineral Projects, and conforms to Form 43-101F1 for technical reports. The Resource and Reserves definitions are as set forth in the Appendix to Companion Policy 43-101CP, CIM – Definitions Adopted by CIM Council, June 30, 2011.

GMI may also use this Feasibility Study Report for any lawful purpose to which it is suited. The intent of this report is to provide the reader with a comprehensive review of the potential economics of this mining operation and related project activities and to provide recommendations for future work programs to advance the project.

2.1 SOURCES OF INFORMATION

The sources of information include data and reports supplied by GMI personnel and documents referenced in Section 27. The contractor team used its experience to determine if the information from previous reports was suitable for inclusion in this report and adjusted information that required amending. Revisions to previous data were based on research, recalculations, and information from other projects. The level of detail utilized was appropriate for this level of study.

This pre-feasibility study report is based on the following sources of information.

Personal inspection of the Liberty project site and surrounding area.

Technical information provided by GMI through various reports.

Drill hole and assay data collected by previous operators and GMI.

Budgetary quotes from vendors for engineered equipment.

Information provided by GMI and prior geotechnical reports concerning the tailings disposition and water reclamation design.

Technical and cost information provided by GMI discussion with local power utility concerning power supply for the project.

Technical and economic information subsequently developed by the contractor team.

Information provided by other experts with specific knowledge and expertise in their fields as described in Section 3 of this report, Reliance on Other Experts.

Additional information obtained from public domain sources.

The contractor team and the qualified persons for this report are:



Table 2-1: Sources of Information

QP Name Company Qualification Site Visit Date Area of Responsibility

John Marek IMC P.E. 12 May 2014 Sections, 1, 2, 3, 4, 5, 6, 11, 12, 14, 15, 16, 19, 21, 22, 23, 24, 25, 26, and 27.

Gabriel Secrest M3 P.E. 12 May 2014

Sections 17, 18 and part of 21, as well as portions of summary, conclusions, references and recommendations that pertain to those sections.

Richard Zimmerman M3 SME-RM NA Section 20, as well as portions of the summary, conclusions, references and recommendations that pertain to that section.

Ken Edmiston Consultant P.E. NA Sections 13 and part of 21, as well as portions of the summary, conclusions, references and recommendations that pertain to those sections.

Donald F. Earnest Resource

Evaluation, Inc.

P.G., SME-RM 10 April 2014 – 12 April 2014

Sections 7, 8, 9, and 10, as well as portions of the summary, conclusions, references and recommendations that pertain to those sections.

2.2 INSPECTIONS

John Marek of IMC visited the Liberty project on May 12, 2014. The storage facilities for drill core were visited, and historic core was reviewed. The visit provided familiarity with the local terrain and site conditions for mine and waste storage design. The primary rock types were observed in both core and in pit wall exposure.

Gabriel Secrest of M3 visited the property with John Marek on 12 May 2014.

Don Earnest of Resource Evaluation Inc. (REI) visited the Liberty project site on April 10 to 12, 2014. During this site visit, existing trenches previously excavated by GMI in the Equatorial open pits in the copper zone for the purpose of collecting samples for metallurgical testing were examined and locations for two additional trenches in the Equatorial pits were established in the field, examined after excavation and then sampled. Also, the remaining core from 34 holes drilled by Equatorial in 1997 and 1998 was examined and sampled to provide data for oxide and sulfide molybdenum in the copper zone and for check analysis of oxide and sulfide copper.

Ken Edmiston visited the property while the property was owned by Equatorial, but has not recently visited the site.

Rick Zimmerman has not visited the site and has relied on the observations of the other project QPs.

2.3 TERMS OF REFERENCE AND UNITS OF MEASURE

This Feasibility Study Report is intended for the use of General Moly for the further development and advancement of the Liberty project towards the detailed feasibility stage. It provides a mineral resource estimate, a classification of resources in accordance with the Canadian Institute of Mining, Metallurgy and Petroleum (CIM) classification system, and an evaluation of the property, which presents a current view of the potential project economic outcome.

Imperial units (American System) of measurement are used in this report. All monetary values are in U.S. dollars ($) unless otherwise noted. All tonnages are in short tons of 2000 lbs. Ktons means 1,000 short tons. Base metal grades are in percent by weight. Other notable terms are as shown in Table 2-2.



Table 2-2: Abbreviations

Term Abbreviation

feet ft or ‘

inches inch or “

above mean sea level amsl

acre feet per annum afa



3 RELIANCE ON OTHER EXPERTS

The Liberty Molybdenum Technical Report relies on reports and statements from legal and technical experts who are not Qualified Persons as defined by NI 43-101. The Qualified Persons responsible for preparation of this report have reviewed the information and conclusions provided and determined that they conform to industry standards, are professionally sound, and are acceptable for use in this report.

IMC and the contractor team have not reviewed the ownership documents or title to the Liberty project. We have relied on the information provided by GMI as outlined in Section 4. That information was previously published in Technical Reports regarding the Liberty property dated April 15, 2008 and 11 November 2011.

IMC has relied on a geotechnical memoranda prepared by Call & Nicholas, Inc. “Slope Design Initial Evaluation of the Liberty Deposit”, September 12, 2007 for open pit slope angles for the pre-feasibility design. The open pit mine plan presented in Section 16 has relied upon the Call & Nicholas memorandum.

The financial analysis was prepared by Charles Maxwell, an employee of GMI and an accomplished expert in the field of economic analysis. John Marek of IMC and Joaquin Leyba of M3 reviewed the economic and cash flow analysis in sufficient detail with Mr. Maxwell so that John Marek will act as the qualified person for Section 22.



4 PROPERTY DESCRIPTION AND LOCATION

The Liberty project is located in western Nye County, Nevada, approximately 25 miles northwest of Tonopah. See Figure 4-2. The proposed pit lies at Latitude 38o-19’, Longitude 117o-19’.

(Source: Nationalatlas.gov, 2014)

Figure 4-1: Project Site Location

4.1 PROPERTY

Mineral rights are held by patented mining claims and unpatented mining claims on Bureau of Land Management (BLM) land. The project area consists of 48 patented lode claims, 16 patented mill site claims, 417 unpatented lode claims, and approximately 5051 acres of fee owned land.

These claims are located in Mount Diablo Meridian (MDM), T5NR41E sections: 2, 3, 10 and 11; T5NR42E sections: 3, 4, 5, 6, 7, 8, 9, 10, 15, 16, 17, 18; T6NR42E section: 27, 28, 29, 30, 31, 32, 33; T6R41E section: 25. The total area of GMI owned and controlled land at Liberty is approximately 6,060 of private and 7,992 acres of public for a total of 14,052 acres.

N

LIBERTY PROJECT SITE



Figure 4-2: Project Area/Claim Map

GMI has maintained the assessment fees and as such the claims will not expire.

4.2 WATER

See Section 18.4 for details on water for the Project.

4.3 ROYALTIES, AGREEMENTS AND ENCUMBRANCES

As of December 31, 2006, the Hall-Tonopah Property was subject to a 12 percent royalty payable with respect to the net revenues generated from molybdenum or copper minerals removed from the properties purchased. In January 2007, GMI completed the acquisition of all of the issued and outstanding shares of the corporation that held the 12-percent smelter royalty interest in the mineral rights of the Hall-Tonopah Property and, because of this purchase, GMI now owns the Hall Tonopah Property and all associated mineral rights without future royalty obligations. As set forth in the Purchase Agreement, GMI paid approximately $3,691,000 in cash at closing, net of cash acquired of $1,246,000. At first commercial production of the property, GMI has agreed to pay an additional $6,000,000. Because GMI cannot determine beyond a reasonable doubt that the mine will attain commercial production, GMI has not recognized the $6,000,000 liability in its financial statements; however, the financial analysis supporting this report includes the $6,000,000 payment as a project cost.

There are no other legal encumbrances required to retain the property.

4.4 ENVIRONMENTAL LIABILITIES

There are no pending environmental liabilities. See Section 20 for a discussion of environmental permitting.



4.5 PERMITTING

See Table 20-1 in Section 20 for a listing of permits that must be acquired to conduct the work proposed on the property.



5 ACCESSIBILITY, CLIMATE, LOCAL RESOURCES, INFRASTRUCTURE AND PHYSIOGRAPHY

5.1 ACCESSIBILITY

The Liberty Molybdenum site is accessible just north of Tonopah, NV from Highway 95 that runs between Reno and Las Vegas. The mine site is located approximately 25 miles northwest of Tonopah. There is a paved access road to the mine administration office from Gabbs Pole Line Road. Primary means of travel in the general area is by vehicle. A public airstrip is located approximately 5 miles west of Tonopah.

5.2 CLIMATE AND PHYSIOGRAPHY

The area has a cold, high desert climate with average highs in July of about 85F and lows in January of about 19F. Precipitation in the area is relatively low, with average annual rainfall of about 6 inches.

The project area is located within a basin and range physiographic province, which is characterized by broad valleys separated by mountain ranges that generally trend north and south. Elevations range from about 4,800 ft above mean sea level (amsl) in Smoky Valley to over 6,253 ft amsl at the top of Tonopah Summit. Vegetation in the project area is predominantly a mixed salt desert scrub community that is typically open to moderately dense shrub land composed of shadscale, fourwing saltbrush, big sagebrush, and rabbitbrush.

5.3 LOCAL RESOURCES

Nye County has a 2012 estimated population of 43,000. The Town of Tonopah, population 2,500, is the county seat and largest community close to the project. The economy of Nye County is natural resource-based. Mining, farming, ranching, and tourism/recreation rely on the land and associated resources. Nye County is the third largest county in area in the continental United States. Just over 7% of the land is private, with the remainder public lands managed by the Federal Government.

Current unemployment rates in Nye County are approximately 10%. Employment statistics vary with short-term Federal projects within Nye County. The primary workforce will be recruited locally as well as from outside the immediate area. Significant planning will be required to recruit and train the workforce prior to initiation of operations.

Permanent and temporary housing in Tonopah is limited. There is an inventory of apartments in Tonopah whose availability can change relative to the number of local construction projects. Nye County is working with Nevada Rural Housing Authority to add additional housing in the near future.

5.4 INFRASTRUCTURE

The total area within the project boundary is 14,052 acres with fee owned land comprising 5,051 acres. All planned mine facilities and structures are already or will be located on the fee owned land, along with most of the mine waste dumps.

The existing infrastructure includes a developed water supply with associated water rights adequate for the mining and processing requirements. See Section 18.4 for additional detail with regards to water.

Power for the site is readily available from an NV Energy substation located at the western edge of the fee owned land. GMI will upgrade the system, and the project estimate includes capital for this work.



6 HISTORY

Documented mining in the Tonopah area began in the 19th Century. It was “Queen of the Silver Camps”. In the years leading up to World War I, the mines averaged $38,000,000 in production annually. By 1947, all of the mines had closed. There was $150,000,000 in silver mined from the area.

The area near Liberty Springs, a mile south of the Hall mine area, was the site of sporadic silver mining from 1876 to around 1900, producing about 100,000 ounces of silver. Clarence Hall developed an underground silver mine on the property that later became the Hall deposit. It was explored by U.S. Vanadium Corp. in 1935-38, by the USBM in 1942, and by the Metals Reserve Corp. (Desert Silver Inc.) in 1943. During World War II, the Hall deposit was identified as a molybdenum resource with 354 ft of diamond drilling completed on the property by 1945.

Anaconda acquired what would become the Hall-Tonopah property in 1955 and explored and developed the molybdenum deposit until 1980, when they constructed and began operating the Hall-Tonopah mine. Anaconda’s capital investment was over $250 million. Housing was at a premium in Tonopah at the time, so Anaconda also built a 500-acre subdivision of new homes. Anaconda operated the molybdenum mine until 1985 when low molybdenum prices resulted in its closure. In 1986, Cyprus acquired the mine, re-opened it in 1988 and operated the property until 1991, again closing the property due to low metal prices.

At the Hall Tonopah mine, during the period of 1981 to 1991, 29 million tons of ore was mined to produce a total of 53 million pounds of molybdenum at an average grade of 0.11% Mo. In addition, both Anaconda and Cyprus evaluated a substantial copper resource near the molybdenum pit and Cyprus obtained permits to develop this area.

Equatorial Tonopah, Inc. (Equatorial) negotiated a purchase option agreement with Cyprus in 1996 to purchase the mining claims containing the copper resource on the east side of the molybdenum pit. A feasibility study was completed the following year. Based on the results of that study, Equatorial exercised the purchase option. Equatorial also purchased the water rights to the property and the facilities that had been used when the molybdenum mine had been in operation. Cyprus retained ownership of the molybdenum resource and related facilities, including the waste dumps, tailings dam, and existing open pit. In 1999 Equatorial agreed to take responsibility for closure and reclamation of the site in return for transference of permits and certain facilities. This agreement included both the existing molybdenum pit and any future copper mining related disturbances.

In 1999 Equatorial constructed Nevada’s first synthetic-lined copper heap leach pad and opened a copper open pit mine. Leaching started in December 1999 and the first copper was produced from the heap in January 2000.

Equatorial operations based upon mining copper and processing via heap leaching from 1999 to 2002 from the east ore body were unsuccessful because of the unanticipated effect of fluorine in the ore and poor percolation of leach solutions. The fluorine reportedly killed the naturally occurring bacteria (thiobacillus ferrooxidans) required to leach the ore. Equatorial closed the property in 2002. The Anaconda/Cyprus operations were only partially dismantled, leaving behind infrastructure, buildings, and facilities that are serviceable and remain in good condition.

Prior to mining, Equatorial estimated the copper reserves at 90.5 million tons of ore with a total copper grade of 0.33%. Of the reserve, 14.5 million tons were placed on the heap prior to closure.

Idaho General Mines (now GMI) gained control of the Hall-Tonopah project in January 2007 and re-named the project the Liberty project with the completion of a pre-feasibility study in 2008.

While all of the historic exploration and drilling records are available to GMI, most of the core had been destroyed. This prompted GMI to perform infill and confirmation drilling on the property. As of 2011 GMI had drilled 13 reverse circulation (RC) holes totaling 11,720 ft and 73 core holes drilled, totaling 70,852 ft, of which 2,980 ft consisted of pre-



collar RC drilling toe pre-determined depths prior to commencement of coring in four core holes, as described in Section 10 – Drilling.

A technical report followed the drill GMI drill program based on two different mining cases constrained and unconstrained by permitting. M3 issued that report in November 2011.

Table 6-1 shows a brief timeline which describes past to present historical activity that has occurred in the project area.

Table 6-1: Timeline of Historical Activity in the Liberty Molybdenum Project Area

1850s Historical exploration and mining began

1955 Anaconda Mining Company acquired property

1970s Anaconda initiated evaluation of molybdenum mine and processing facility

1980 – 1985 Mine and processing facility constructed and operated by Anaconda

1988 Cyprus Tonopah Mining Company acquired the property and mining rights on the property

1988-1991 Cyprus operated the molybdenum mine and processing facility

1990-1993 Cyprus evaluated copper mining feasibility and conducted a drilling program

1997 Equatorial Tonopah acquired mineral and mining rights for the copper deposit

2000-2002 Equatorial operated copper mining and leaching operations

2002 Plant closed and reclamation done

2006 Hall Tonopah property purchased by IGMI

2011 GMI drilling completed and technical report published

2014 GMI and its consultants restudied Liberty and issued this report



7 GEOLOGICAL SETTING AND MINERALIZATION

7.1 REGIONAL GEOLOGY

The geology of southwestern Nevada is structurally complex, dominated by mid to late Tertiary (less than 6Ma (millions of years ago) to 17Ma) extrusive and volcanic sedimentary rocks, and Mesozoic to Tertiary intrusive rocks. Outcrops of older rocks consisting largely of lower Paleozoic sedimentary and volcanic assemblages are present as remnant windows in the younger volcanics. Exposures of Mesozoic and upper Paleozoic rocks are sparse.

The structural development of the region has been complex, beginning with the Antler Orogeny (from Late Devonian to Early Mississippian), during which time the rocks in the region were deformed by folding and thrusting from the west to the east. The Roberts Mountains Thrust, with which many of the gold deposits in north-central Nevada are associated, formed during this period, resulting in subsequent deposition of conglomerates, sandstones, siltstones, and shales off of the Antler Highland into the basin to the east. Subsequent to the Antler Orogeny, contact between the Pacific Plate (moving generally northwest) and the North American Plate (moving southeast) created major northwest-trending faults in California and western Nevada, with the majority of the displacement caused by the interaction of the two crustal plates occurring along the San Andreas Fault in California. In western Nevada, significant displacement has taken place along the northwest-trending Walker Lane structural belt, a major regional structure that extends from the southern end of the Cascade Arc in northern California, through western Nevada, to its intersection with the East California Shear Zone. The Walker Lane displays right lateral movement that ranges from 50 km to 75 km. It hosts numerous precious metal and base metal deposits and geothermal activity along its strike extent and forms a distinct break between the north-south-trending basins and mountain ranges (shown in pink and dark blue in Figure 7-1) and the northwesterly-trending rocks also shown in pink, red, and gold in Figure 7-1.

The Liberty deposit is situated near the intersection of the Golconda and Roberts Mountain thrust plates, immediately south of an east-west trending flexure in the central Walker Lane structural belt in the historic San Antonio (also known as the San Antone) Mining District, located at the northern end of the San Antonio Mountains in western Nye County, Nevada. The rock units exposed along the central portion of the Walker Lane are predominately arc-type volcanic, marine and continental sedimentary rocks that are mostly mid-Paleozoic to early Mesozoic in age.

The oldest rocks in the immediate vicinity of the Liberty project consist of a sequence of Devonian to Triassic-age metasediments which have undergone significant isoclinal folding and faulting, as well as low-grade metamorphism. These rocks have been correlated by different geologists with either the Permian Mina Formation or the Permian/Triassic Diablo Formation, while the dolomitic limestones in the north end of the San Antonio Mountains are generally considered to be equivalent to the Early Devonian Nevada Formation. Emplacement of the quartz monzonite stock and associated later aplite-monzonite porphyry intrusives that host the Liberty deposit occurred during granitic Laramide plutonic activity. The metasediments, quartz monzonite, and aplite-monzonite intrusives that host the Liberty deposit are unconformably capped locally by Tertiary volcanic rocks that range in age from Oligocene to Miocene. Due to regional tilting, these volcanics now dip up to 70˚ to the east in the vicinity of the Liberty deposit.



(Excerpted and Modified from: Nevada Bureau of Mines and Geology Map 57, Million-Scale Geologic Map of Nevada, J.Stewart & J.Carlson, 1977))

Figure 7-1: Regional Geology & Location of Liberty Project

7.2 PROJECT AREA GEOLOGY

7.2.1 Lithology

7.2.1.1 Pre-Cretaceous Units

The oldest rocks in the vicinity of the Liberty project consist of a sequence of Devonian- to Triassic-age metasediments which have undergone significant isoclinal folding and faulting, as well as low-grade metamorphism. Undifferentiated prior to exploration and development of the Liberty deposit, these metasediments consist of a series of interbedded volcaniclastic units comprised of tuffs, pyroclastics, siltstones, argillites, schists, and limestones. The mineralogy of these rocks is highly variable, but primarily consists of varying amounts of sand to silt-sized grains of quartz, plagioclase, augite, clays (illite, chlorite, and smectite), and carbonate minerals, as well as rock fragments comprised of hornblende andesite porphyry and unwelded andesite/latite tuffs. The QP’s responsible for this Technical Report note that various Anaconda documents (particularly metallurgical test reports) commonly referred to the entire package of metasediments as “schists”, and this historic usage has been maintained in this Technical Report where appropriate.



Previous geologists have proposed possible correlations of the non-carbonate assemblages in the metasedimentary sequence with the Permian Mina Formation to the north, while the dolomitic limestones in the north end of the San Antonio Mountains perhaps correlate with the Early Devonian Nevada Formation. Local correlations of individual units across the area of the deposit have been difficult due to local structural disruptions and alteration overprints caused by Cretaceous intrusives, which are described in the following section.

7.2.1.2 Cretaceous Intrusive Rocks

The Hall stock (named after Clarence H. Hall, Chief Engineer of U.S. Vanadium Corporation) intruded the metasedimentary sequence of rocks in the Late Cretaceous Period (66-70 my), based on K/Ar and U/Pb age dates. The 2,500 ft-diameter stock complex consists of two spatially and temporally-distinct bodies – the earlier North stock and the younger South stock, which is reported to truncate the molybdenum mineralization hosted by the North stock. Early Anaconda Copper Company (Anaconda) geologists distinguished the following three phases of intrusive rocks based on surface mapping and diamond drill core logging, in order of oldest to youngest:

Quartz Monzonite Porphyry (Kqmp) – The QP’s responsible for this Technical Report note that previous technical personnel (particularly those working for Anaconda) commonly referred to the quartz monzonite porphyry (Kqmp) as “Qmp” on drill hole logs, cross sections and plan maps, and in metallurgical reports and other technical documents. The QP’s responsible for this Technical Report have maintained this historic usage (Qmp) where appropriate.

Quartz monzonite porphyry is the most abundant igneous lithology in the general deposit area, with textures ranging from equi-granular to coarse-grained porphyritic. Major mineral constituents consist of quartz (20%), plagioclase (50%), orthoclase (25%), biotite (1-5%), and trace amounts of zircon and apatite. Orthoclase occurs as porphyritic clots up to 0.25" in diameter or as interstitial growths. Quartz similarly exhibits porphyritic textures, as 0.10” to 0.25” eyes or rounded dipyramids, but it also occurs interstitially. Locally the quartz content of the Kqmp increases to 40-45% and the ultramafics decrease, resulting in compositions more indicative of a granodiorite.

Aplite-Monzonite Porphyry (Kamp) – The QP’s responsible for this Technical Report note that previous technical personnel (particularly those working for Anaconda) commonly referred to the aplite- monzonite porphyry (Kamp) as “Amp” on drill hole logs, on cross sections and plan maps, and in metallurgical reports and other technical documents. The QP’s responsible for this Technical Report have maintained this historic usage (Amp) where appropriate.

These rocks, which Anaconda geologists interpreted to intrude the older Kqmp, have highly variable textures. Grain sizes range from fine to very coarse, with phenocrysts up to 0.5" diameter in the porphyritic portions. The major mineral constituents are feldspars (abundant orthoclase with lesser plagioclase) and quartz.

Geologists working with the deposit more recently believe that the orthoclase-rich rocks previously described as “aplite-monzonites” or “aplite-granites” are actually Kqmp that has undergone various episodes and intensities of potassic alteration. Unfortunately, the destruction of all core drilled prior to GMI’s acquisition of the project makes investigation and understanding of the earlier Anaconda lithologic descriptions impossible. In cross section, the hole-to-hole correlations of the various orthoclase-rich (Kamp) intercepts logged in diamond drill holes by earlier geologists strongly suggest alternating inverted-cup geometries between the Kamp and the Kqmp that are draped over an orthoclase-rich intrusive core. However, the QP responsible for this section of the Technical Report notes that regardless of the genetic interpretation of the Kamp, these rocks in general have lower average molybdenum grades (0.064% Mo) than the Kqmp (0.080% Mo), as described in Section 7.3 – Mineralization. Also, metallurgical testing on



samples collected from CP-series drill holes (see Section 10 - Drilling) indicates that material designated as “Amp” (Kamp) exhibits lower metallurgical recoveries than “Qmp” (Kqmp) material having an average production mill grade of 0.100% Mo (87% for Kamp vs. 93% for Kqmp).

Felsic Dikes (Kf) – These late-stage cross-cutting intrusives consist of varying amounts of quartz and orthoclase (85% combined) in a matrix of plagioclase and ultramafics (15% biotite/hornblende). Early geologists working with the deposit assigned the terms “aplite” and “aplite/alaskite” to these dikes, noting the presence of local graphic textures.

7.2.1.3 Tertiary Rocks

Extrusive Tertiary-age rocks in the deposit area unconformably overlie the metasediments and the intrusive stocks. The oldest unit is a basal mafic-rich ignimbrite that has been K/Ar dated at 24 million years to 29 million years old. Overlying the basal ignimbrite are a mafic-poor ignimbrite, andesite pyroclastics and flows and lapilli tuffs and latite flows dated at 16.8 million years. Tertiary intrusive rocks include Miocene-age rhyodacite plugs and dikes, latite/quartz latite dikes and sills, andesite dikes, and basalt/diabase dikes (Cameron, 1979).

7.2.2 Alteration

In general, alteration of the metasediments and intrusive rocks (Kqmp, Kamp, and Kf) related to the emplacement of molybdenum/copper mineralization in the deposit consists of the following types:

1. Secondary quartz introduced as filling in veins and veinlets and as local silica flooding in wallrocks;

2. Potassic vein/veinlet selvages (envelopes) in the form of secondary K-feldspar (orthoclase) and lesser secondary biotite;

3. “Greisen” alteration selvages, which consist of quartz and coarse-grained muscovite replacing wallrock plagioclase, orthoclase, and biotite;

4. Epidote/chlorite/kaolinite/sericite wallrock alteration of the primary feldspars and biotite;

5. Introduction of less common alteration minerals such as magnetite, creedite and fluorite.

These alteration types were developed during multiple pulses of high temperature (>300˚C) hydrothermal fluids, with most occurring within a broad mineralizing event referred to as the Main Stage (Shaver, 1991). The potassic alteration envelopes bordering quartz-molybdenum veins/veinlets appear to be more prevalent in the North stock than in the younger South stock, decreasing in occurrence inwards from the margins of both stocks. Shaver, Cameron and others made no mention of more widespread, locally pervasive potassic alteration events that could contribute to different interpretations of the genetic origin of the Kamp.

In addition to these higher-temperature assemblages that are directly related to fracturing and vein emplacement, more pervasive alteration types that are the product of the mixing of hydrothermal fluids with much cooler meteoric waters are common in the Liberty deposit. These include albitization (albite overgrowths on plagioclase feldspars), argillization (montmorillonite/kaolinite alteration of biotite and plagioclase), and propylitization (chlorite alteration of biotite and plagioclase).

Post-mineral pervasive oxidation of the deposit to depths ranging from 50' to 300' below the present ground surface resulted in the alteration of feldspars, mafic minerals, and sulfides to clays and iron oxides. Redistribution of copper from the oxidation of chalcopyrite in the near-surface portion of the deposit formed a blanket of weak to locally significant supergene copper mineralization over the southeast portion of the deposit (see Section 7.3 – Mineralization).



(Excerpted and Modified from Surface Geologic Map by L. night, Anaconda Copper Company, 1972)

Figure 7-2: Surface Geology



7.2.3 Structure

7.2.3.1 Folding

A major anticline located 3,000' to the south of the Hall stock has an axis that trends N20˚W and plunges 50˚ to 70˚ to the northwest. There is evidence that the Hall stock may have been intruded along the trend of a broad syncline situated adjacent to this anticline (Cameron, 1979). Locally, the pre-Cretaceous rocks exhibit complex tight folding, most of which likely pre-dates the larger northwest-southeast trending folds. Post-Cretaceous tilting of the northern San Antonio Mountains and other structural disruptions have resulted in the rotation of the Liberty deposit so that it now plunges to the east. This rotation has caused erosion of the deposit along its flank, exposing both the shallow and deep-emplaced portions of the mineralization.

7.2.3.2 Faulting

During the eastward post-Cretaceous tilting of the area the Liberty deposit was segmented by faulting. The earliest of these structures is the Basement fault, originally a west-dipping normal fault that is now overturned, dipping 10˚ to 20˚ to the east. The Liberty deposit is situated in the current hanging wall of this fault. The Basement fault is truncated to the west by the 35˚-40˚ west-dipping Liberty fault, originally a steeply-dipping range-front structure which has been flattened by the eastward tilting of the area. The Liberty fault has displaced the crown of the Liberty deposit nearly 10,000’ in a dip-slip direction to the west, where it now lies buried by a thick sequence of valley-fill alluvium.

In addition to these major structures, a number of N40˚E- to N30˚W-trending normal faults and several east-west-trending normal faults transect the Liberty deposit. These include the North fault, the Northside fault, the Eastside fault, the Septum fault, and a series of younger normal structures numbered from west to east, of which the No. 15 fault is the most prominent. Displacement on these faults ranges from tens of feet to nearly 1,000 feet on the Northside fault.



(Excerpted and Modified from: “Monitor Well Construction, Sampling and Testing, Liberty Project”, Figure 3, Section B-B, Barranca Group LLC, January 31,

2012)

Figure 7-3: Schematic Cross Section

7.3 MINERALIZATION

Base metal mineralization in the Liberty deposit consists of molybdenite (MoS2), chalcopyrite (CuFeS2), chalcocite (Cu2S), galena (PbS), sphalerite (ZnS), tetrahedrite (Cu8Sb2S7), and pyrite (FeS2). Molybdenite occurs mainly in 0.1" to 1.2"-wide quartz veins and veinlets in amounts that range from 0.1% to more than 40% by volume, typically as a selvage on vein walls. Molybdenite is also found in wider (+1.2”) quartz veins, but these are much less common in occurrence. Chalcopyrite and pyrite also are common but lesser vein/veinlet constituents. Galena, sphalerite, and lesser tetrahedrite occur with quartz in separate generations of base metal veins and veinlets that were emplaced at the end of each mineralization pulse (Shaver, 1991).

In general, molybdenum-bearing quartz veins and veinlets are more concentrated along the margins of the Hall stock, forming an irregular shell or sleeve of higher grade mineralization around a lower grade core. However, the intensity of quartz veining does not correlate directly with higher grade molybdenum – barren quartz veins are common within the deposit. Disseminated molybdenite is rare, occurring only in a 100'- to 200'- thick portion of the North Hall stock as replacements in biotite and/or plagioclase sites (Shaver, 1991). In addition to quartz, minor gangue minerals present in the veins and veinlets include fluorite, scheelite, tourmaline, gearksutite, and creedite, with siderite, dolomite, and calcite occurring as vug fillings.



As mentioned in Section 7.2, the average grade (0.080% Mo) of the quartz monzonite porphyry (Kqmp) is higher than the average grade (0.064% Mo) of the orthoclase-rich intrusive rocks (Kamp). Part of the reason for this may be that the Kamp is more prevalent in the interior portion of the stock, while Kqmp is the dominant rock type along this portion of the stock margins (particularly the west and southwest sides), where quartz-molybdenum veining is more concentrated.

Although chalcopyrite can occur with molybdenite in minor amounts in veins and veinlets within the main body of molybdenum mineralization in the Hall stock, it is much more prevalent in quartz veins in the metasediments on the northeast and east sides of the stock. Here it occurs in the remnant of the copper-dominant shell that originally surrounded the Hall stock before it was tilted and disrupted by faulting. In addition to chalcopyrite, chalcocite occurs as disseminations and as secondary coatings on pyrite within a roughly horizontal blanket of secondary supergene copper enrichment just below the bottom of oxidation. Definition of this supergene copper blanket is based on a combination of reverse circulation and diamond core drill holes that penetrate this portion of the deposit and on pit bench exposures from mining by Equatorial in 2000 – 2002. The thickness of the supergene blanket ranges from a few feet to 170 ft, and averages approximately 85 ft. Although generally horizontal and laterally continuous, the supergene blanket is locally offset by post-mineral faulting, particularly towards the main body of molybdenum mineralization to west. Copper grades in the supergene zone range from 0.06% Cu to 1.71% Cu, and average around 0.31% Cu. Beneath the supergene blanket, the chalcopyrite content of the sulfide zone is generally very low.



8 DEPOSIT TYPES

The Liberty molybdenum deposit appears to conform to a class of deposit that is generally termed in ore deposit literature as a “Climax-Urad” type, where better-grade molybdenum mineralization in the form of molybdenite (MoS2) is concentrated in and along the margins of an irregularly-shaped “sleeve” or “shell” around a central lower-grade to nearly barren core of silicic-alkalic intrusive rocks. In some cases, an outer shell of copper-dominant mineralization surrounds the interior molybdenum-dominant shell(s). The Liberty deposit most closely resembles the Urad deposit model in terms of geometry, displaying the form of an inverted water-glass (albeit rotated and segmented by post-emplacement tilting and faulting, respectively), and originally broader in the vertical dimension than in the plan.



9 EXPLORATION

After discovery and delineation of the main portion of the deposit by Anaconda, but prior to its decision to develop the project (see Section 6 – History), Anaconda’s exploration efforts focused primarily on two targets:

Finding the location of the displaced mineralized crown of the Hall stock beneath the valley gravels on the hanging wall side of the Liberty Fault;

Definition of the supergene copper blanket situated on the southeast and south margins of the Hall stock.

Although minor remnant slivers of the displaced mineralized crown of the Hall stock were discovered immediately adjacent to the hanging wall of the Liberty Fault as a result of diamond drilling, Anaconda concluded that the projected depth to the rest of the displaced mineralization was too great to warrant further exploration. On the southeast and south margins of the Hall stock, drilling to delineate a viable supergene copper target similarly failed to encounter copper grades that were high enough to warrant development under then-current copper prices, which were less than $1.00/lb Cu. After development of the molybdenum deposit in 1979-1980, Anaconda conducted only very limited exploration around the Liberty deposit.

Subsequent to Anaconda’s cessation of mining operations, Cyprus Minerals Company (Cyprus) acquired the project and explored by drilling for extensions of the molybdenum mineralization to the south of the Anaconda open pit. After resuming production of molybdenum from the Anaconda pit under the corporate banner of Cyprus Tonopah, Cyprus also focused considerable drilling to further define the oxide and supergene copper mineralization adjacent to the Hall stock. Like Anaconda, Cyprus did not encounter copper grades that were high enough to warrant development of the copper resource at early 1990’s copper prices.

After Cyprus terminated operations in 1991, the deposit was acquired by Equatorial Mining Ltd. (Equatorial), a junior mining company headquartered in Australia. Equatorial focused all of its exploration work on further delineation of the oxide and supergene copper mineralization. After development and limited mining of the copper mineralization, Equatorial ceased operations in 2001. Between that time and GMI’s acquisition of the project, nearly all existing diamond drill core from the deposit was destroyed.

GMI acquired the Hall molybdenum deposit (including the area covering the oxide/supergene copper resource) in 2006 and adopted the original Liberty name for the project. Since then, GMI has drilled a total of 90 additional holes that focused on confirming molybdenum and copper mineralization intersected by the earlier Anaconda, Cyprus, and Equatorial drilling, and further defining molybdenum mineralization within the main body of the Liberty deposit where spacing from previous drilling was wider. The details related to these 90 holes are discussed in Section 10 – Drilling. As of the effective date of this Technical Report, GMI has not conducted any soil or rock geochemical sampling, airborne geophysical surveys, or ground geophysical surveys on the Liberty project lands.

A discussion of current and historic sample handling and preparation is included in Section 11.



10 DRILLING

The drilling in the Liberty deposit for which there are known records was done by Anaconda (1957-1985), Cyprus (1989-1992), Equatorial (1997-2000), and GMI (2007- 2008). Summaries of all documented drilling by company are shown below.

Table 10-1: Summary of Drill Hole History by Company

Anaconda 391 269,808

Cyprus 151 52,424

Equatorial 234 68,601

GMI 86 82,572

Total All Companies 862 473,405

DD, TH, RC, RV, CP, NM, AT

DDH, RH, RCH, RDH, CRC

ED, ER

HT, LM

CompanyTotal Holes

Drilled

Total Feet

DrilledDrill Hole Series

The 862 total drill holes include 284 diamond core holes, and a total of 578 reverse circulation (RC) holes, small-diameter conventional rotary (airtrack) holes, and NM-series holes of uncertain type (believed to be Anaconda RC holes). Although previous technical reports listed the TH-series holes as having been drilled by Cyprus, recent investigations by the QP responsible for this section found evidence that these holes were the last ones drilled by Anaconda in 1987 for claim assessment purposes on Treasury Hill. The above totals do not include a small number (±10) of large-diameter churn drill holes drilled by Anaconda in the very early stage of its tenure. These churn drill holes were excluded from the database due to the suspect quality of the samples generated by these large-diameter holes, where flakes of molybdenite could have easily been lost by flotation on the surface of water discharged from the holes during drilling. Certain holes included in the above summary are located outside of the area modeled for the mineral resource estimate discussed in Section 14 of this Technical Report.

Four of the diamond drill holes completed by GMI (HT-771, HT-784, LM-786, LM-787) were collared and drilled to pre-determined depths (“pre-collared”) using an RC drill rig, below which the holes were completed using a diamond drill rig. These holes are considered to be diamond core holes for the purpose of hole counts by drilling method, but the total footage drilled as pre-collars is included in the RC footage tally. Because records for a number of historic holes were found since earlier work on the project in 2007, the totals summarized in Table 10-1 above slightly exceed those publicly disclosed in previous NI 43-101 Technical Reports or press releases.

Written documentation of drilling procedures for the holes drilled by Anaconda, Cyprus, and Equatorial were not found in the existing records for the project. However, knowledge of standard Anaconda drilling procedures (on the part of the QP responsible for this section, who was employed by Anaconda as a geologist in the 1970’s) and the drilling procedures used by Cyprus that were gleaned from conversations with former Cyprus personnel allow the compilation of the following procedures that were likely followed:

Diamond core holes were collared using either HQ- or NQ-diameter tools, with HQ holes reduced to NQ and NQ reduced to BQ as required by ground conditions;

Core recovery was maximized to the extent possible using drilling additives (muds, polymers, etc.) and technology available at the time the holes were drilled;

RC holes were drilled using 4.75"- to 5.25"-diameter bits, with samples collected and reduced in size (split) at the drill rig;



Conventional circulation holes were drilled with a track-mounted rig (airtrack) using small-diameter (3.5") tools to shallow depths (190' to 330'), primarily to test for and delineate supergene copper mineralization along the southern and eastern periphery of the molybdenum deposit.

As described in Section 7.3 (Mineralization), the remnant of the copper-dominant shell that is present on the northeast and east sides of the Hall stock consists of a roughly horizontal blanket of secondary supergene copper enrichment situated just below the bottom of oxidation. Definition of the supergene copper blanket is based on a combination of a collection of historic core, RC, and conventional rotary holes drilled by Anaconda and Cyprus, and 34 diamond core drill holes and 197 RC drill holes drilled from 1997 through 2000 by Equatorial. According to verbal conversations with geologists who worked for Equatorial and for The Winters Company (a now defunct mining consulting firm from Tucson, Arizona, which directly managed a portion of the Equatorial drilling campaigns), the procedures used for drilling, logging, and sampling the Equatorial core and RC holes were acceptable. Evaluation of this zone of enriched copper mineralization was a major focus of the copper portion of this revised pre-feasibility study.

The procedures used by GMI for its drilling programs since 2007 are well documented:

Diamond core holes were collared using HQ-diameter tools, with reduction to NQ tools where required by ground conditions;

Core recovery was maximized to the extent possible using drilling additives (muds, polymers, etc.) and technology currently available;

RC holes were drilled using 5.25"-diameter tools, with samples collected and reduced 50% in size at the drill rig.

Although the molybdenum mineralization in the Liberty deposit is primarily associated with veins and veinlets, these structures are narrow in width (<0.5") and randomly oriented within broad, irregular patterns. Because of the random orientation of the molybdenum veins/veinlets, and the associated blanket-like supergene copper mineralization, the calculation of true widths of individual drill hole intercepts is neither necessary nor meaningful.



11 SAMPLE PREPARATION, ANALYSES AND SECURITY

11.1 SUMMARY

All of the data that were used to estimate mineral resources and mineral reserves were generated from samples taken from the various types of drill holes that are described in Section 10 - Drilling. The sampling methods used for each drill hole type are described below, to the extent which those methods are known. Unfortunately, nearly all remaining Anaconda diamond drill core and all Cyprus core was destroyed between the time Equatorial ceased operations and GMI acquired the Liberty project, so no comprehensive checking of the quality of core sampling, confirmation of sample lengths, or core recovery from the pre-GMI drilling was possible.

The following summarizes what is known of the procedures applied to the historic drilling, as well as the recent practices employed by GMI at the Liberty project:

Anaconda Diamond Drill Holes (DD- and TH-series) – The standard sample length was 5.0'. Where sample breaks were required to allow for geologic contacts (lithology, mineralization, alteration, etc.), shorter samples (as small as 0.1' long) were collected. Although no written documentation of Anaconda’s core sampling (splitting) procedures has been found, it is known that Anaconda’s standard procedure for projects was to manually split core using a conventional screw-feed or hydraulic knife-blade splitter;

Anaconda Reverse Circulation Holes (CP-, R-, RH-, and RV- series) – The standard sample length in the CP-series holes (drilled primarily to collect samples for metallurgical test work) was 5.0', but longer samples (up to 40' in 5.0' increments) were composited in non-mineralized zones. No written documentation has been found that addresses Anaconda’s sample splitting procedures as they applied to RC samples prior to sample preparation and assay;

Anaconda Airtrack Holes (AT-Series) – The standard sample length was 5.0', with longer samples (up to 30') collected and/or composited in non-mineralized zones. Although no written documentation has been found that addresses Anaconda’s airtrack sample collection procedures, it is known that samples from drill rigs of this type were typically not split at the rig prior to being sent for preparation and analysis, as the amount of sample recovered was relatively small compared to samples from larger-diameter RC drill holes. However individual samples from the longer 30' intervals may have been split in some fashion prior to preparation and analysis, if these samples were not composites of smaller 5.0' samples;

Cyprus Diamond Drill Holes (DDH-series) - The standard sample length for all Cyprus diamond drill holes was 5.0'. Where sample breaks were required to allow for geologic contacts (lithology, mineralization, alteration, etc.) that interrupted these regular sample lengths, shorter samples (minimum 0.1') were collected. No written documentation of Cyprus’s core splitting/sampling procedures has been found;

Cyprus Reverse Circulation Holes (RDH-, NM- and CRC-series) - The standard sample length in the RDH-series holes was 5.0', with longer samples (up to 40' in 5.0' increments) collected in non-mineralized zones. In the CRC-series holes, all sample lengths were 10'. As with the Anaconda RC holes, no written documentation has been found that addresses the Cyprus RC sample splitting procedures used prior to sample preparation and assay. Sampling in the NM-series holes (believed but not confirmed by the QP responsible for this section of the Technical Report to be RC holes) was done on consistent 5.0' intervals, although long portions at the tops and/or bottoms of certain holes were not sampled;

Equatorial Diamond Drill Holes (ED-series) – Samples were routinely collected on 10' down-hole intervals, except in areas of copper oxide and copper sulfide mineralization, where shorter sample intervals was the norm. Samples rarely exceeded 10' in length, except at the ends of holes, where longer samples



(>10' but <20') were collected. These holes contribute total copper and oxide copper data for the upper northeast and east periphery of the Liberty deposit, where molybdenum occurs in only scattered sparse amounts. No written documentation of Equatorial’s core splitting/sampling procedures has been found. Equatorial submitted no samples for molybdenum analysis from any of the ED-series core holes. However, as discussed in Section 11.2, GMI submitted 532 samples collected from the remaining ED-series core holes for oxide and sulfide molybdenum analysis and check analysis of oxide, cyanided soluble, and sulfide copper;

Equatorial Reverse Circulation Holes (ER-series) – A uniform 10' sample length was used in the RC holes drilled by Equatorial. As with the Equatorial diamond drill holes, no written documentation of Equatorial’s sampling procedures has been found, and these RC holes likewise contribute total copper and oxide copper data for the upper northeast and east portion of the Liberty deposit, where molybdenum occurs in only sparse amounts. No molybdenum analyses were performed on any of the Equatorial RC samples.

General Moly Diamond Drill Holes (HT, LM-series) – All sampling was done on 5.0' lengths, except at the ends of holes, where the last sample collected was either slightly shorter or longer in holes having total depths that were not multiples of five. Sample intervals were marked by the project geologist and core was subsequently sampled by technicians using a diamond saw. The twin-hole drilling program completed by GMI in 2007 and the corresponding logging, sawing, and sampling procedures employed by GMI were examined during a 2007 site visit by the QP responsible for this section of the Technical Report, and these procedures were found to be in accordance with NI 43-101 and CIM guidelines. Core from holes drilled during 2008 was reviewed during a 2011 site visit by the same QP responsible for this section. Although actual drilling of holes was not observed, evidence from existing core stored in boxes at the Liberty project site indicated that procedures identical to those followed 2007 were used;

General Moly Reverse Circulation Holes (HT-Series) – All sampling was done on regular 5.0' intervals. Samples were reduced in size (split) by 50% at the drill rigs prior to being shipped to independent assay laboratories.

Sample security (chain of custody) during the tenures of Anaconda and Cyprus is impossible to verify. In the opinion of the QP responsible for this section of the Technical Report, it is safe to assume that the samples prepared and analyzed at the operations laboratories owned by Anaconda and/or Cyprus never left the possession of these companies prior to delivery of the samples at the respective laboratories. However, the chains of custody for samples submitted by Anaconda and Cyprus to independent laboratories are not known. In the opinion of the QP responsible for this section, the chances that the drill hole samples from this molybdenum deposit were intentionally tampered with in any fashion (“salted”, diluted, etc.) are very remote.

GMI maintained custody of all samples from its ongoing drilling programs up to the moment the samples were delivered to the laboratory, or transferred to the laboratory transport representative.

The degree of detail in the geologic logs of the diamond drill holes drilled by the various companies is adequate for the interpretation of the geology of the Liberty deposit. The molybdenum mineralization in the deposit is primarily associated with narrow (<0.5" wide), randomly oriented veins and veinlets that occur in broad, irregular patterns having dimensions on the order of tens of ft. Thus, the sample lengths used for each drill hole type are acceptable for the estimation of the grade and volume of the mineral resources contained in the deposit. There are no known drilling, sampling, or recovery issues that could materially impact the accuracy and reliability of the sample data - the overall core recovery and resulting quality of the samples are acceptable. Sample bias issues related to some of the early Anaconda core drilling and GMI RC drilling are discussed later in Section 12.



Except for the central core of the deposit (which is essentially barren or very low in molybdenum content), the drill hole sample spacing in the Liberty deposit averages approximately 100 ft or less for the drilling completed to date, which covers an area of approximately 5,000 by 3,000 ft. This spacing is adequate for the estimation of Measured and Indicated mineral resources and Proven/Probable mineral reserves.

11.2 SAMPLE PREPARATION AND ANALYSIS – HISTORIC AND GMI DRILLING CAMPAIGNS

No documentation has been found of the sample preparation procedures or the laboratory analytical procedures used by either Anaconda or Cyprus for molybdenum analyses. It is known that numerous laboratories were used by Anaconda during its tenure on the project, including:

International Smelting and Refining Laboratory, Salt Lake City, Utah (a subsidiary of Anaconda) Yerington Operations Laboratory, Yerington, Nevada (Anaconda-owned) Carr Fork Operations Laboratory, Tooelle, Utah (Anaconda-owned) Nevada Moly Operations Laboratory, Tonopah, Nevada (Anaconda-owned) Climax Molybdenum Operations Laboratory, Climax, Colorado (owned and operated by Climax

Molybdenum Corp.) Union Assay Laboratory, Salt Lake City, Utah (Independent) Bondar Clegg Laboratories, Vancouver, B.C., Canada (Independent) Research Analytical Laboratories (Independent) Chemical and Mineralogical Services (Independent) Skyline Laboratories, Tucson, Arizona (Independent)

During its tenure, Cyprus used the following laboratories for analysis of drill hole samples:

Mountain States Research and Development Laboratory, Vail, Arizona (Independent) Cyprus Tonopah Operations Laboratory (Cyprus-owned)

Contact with individuals known to have worked at the above laboratories owned by Anaconda or Cyprus failed to produce reliable information regarding sample preparation and analytical procedures. While verification of the precise sample preparation and analytical procedures used by the above laboratories is not possible, this is not viewed as a material issue for the Liberty project going forward for the following reasons:

All of the independent laboratories cited above are known to have solid reputations in the mining industry; The various operations laboratories owned by either Anaconda or Cyprus were responsible on a daily basis

for providing accurate analyses of samples from the mining and milling operations they supported. Documented issues with sample analysis at laboratories that occurred during the exploration and operating phases of the Liberty project are discussed later in text.

As a check of the historic drill hole sampling, sample preparation, and analytical procedures and to add confidence to the estimates of mineral resources and mineral reserves, GMI has completed twin-hole drilling and infill drilling programs, which are discussed in Section 12 – Data Verification..

The sample preparation and analytical procedures used at the laboratories that have analyzed samples from GMI’s drilling program are summarized as follows:

GMI’s geology staff worked with ALS Chemex and American Assay Lab (AAL) to develop coordinated procedures for sample preparation, handling, and analysis. Both of these labs are ISO-9001 certified;



At the Liberty project site, samples were collected from drill core by splitting the core in 5 ft intervals or smaller as directed by the logging geologist;

Steps were taken to ensure that core was immediately deposited in bags and marked appropriately, after which the samples were counted and checked against the sample logs prior to shipment to the lab. The sample chain of custody was ensured by the laboratories picking samples up from the site and maintaining continuous possession of the samples until their delivery to the laboratories’ preparation facilities;

GMI drill holes completed in 2007 as part of the twin program and Phases 1 and 2 were analyzed according to the following ALS Chemex coded procedures:

1. PREP 31 - Crush to 70% less than 2mm, 250g split (riffle), pulverize 250g split to better than 85% passing 75 micrometers;

2. DRY 21 - Drying of excessively wet samples in drying ovens (no maximum temperature limit);

3. ME ICP 61 – Four-acid digestion (HNO3+HCl+HF+HClO4) with Multi-Element Inductively Coupled Plasma Atomic Emission Spectroscopy (ICP-AES) analysis;

4. MO ICP 05A – Four-acid digestion with ICP-AES analysis for Single Element (Mo) on 5-gram samples;

5. 08 GRA 09 - Run on every 10th sample.

6. F ELE 81A - KOH fusion and ion selective electrode analysis for Fluorine (run on 25-ft sample intervals);

7. Additional special analyses (gold, etc.) as directed by the Project Geologist.

Duplicates were run on every 25th sample (exclusive of standards and blanks) on high grade molybdenum intervals using ALS procedure Mo AA 62 – Four acid digestion with AA analysis;

Check assays during this period were completed at ACME assay laboratory in Vancouver, B.C.;

Measures were taken to manage storage and handling of core on-site and coarse rejects returned from the laboratories to ensure quality control of stored sample material.

During GMI’s tenure, data management and analyses were directed by the Chief Geologist, who analyzed the assay data, transcribed these data to conforming spreadsheets and managed any revisions of the spreadsheets. Discrepancies were identified and sorted out as necessary. If re-analysis of samples was required, these analyses were performed on original primary sample coarse rejects. Records of multi-element analysis were entered into both electronic and hard copy files for the corresponding drill holes. Certificates of analysis were managed concurrently in both electronic and hard copy files.

Starting in the last quarter of 2008, GMI changed its primary assay laboratory to the American Assay Laboratory (AAL) in Reno, Nevada. This change occurred during the Phase 3 drill program, resulting in approximately 90% of the assays from this program being completed at AAL and 10% at ALS-Chemex. QA/QC procedures were temporarily discontinued during much of Phase 3, although duplicate assays were later sent to AAL as part of a follow up QA/QC program. The GMI QA/QC procedures are described more completely in Section 12- Data Verification.

During the Phase 3 drilling program, the AAL assay procedures included:

1. Total molybdenum analyses by Four-acid digestion and ICP analysis;

2. Molybdenum oxide analyses by 20% HCL dissolution and ICP analysis;

3. Total copper by Four-acid digestion and ICP analysis.



The laboratories used by Equatorial for the analysis of total copper, sulfide copper, and oxide copper were:

Actlabs (Formerly Skyline Laboratories), Tucson, Arizona (Independent)

American Assay Laboratories, Reno, Nevada (Independent)

The sample preparation and analytical procedures followed by these laboratories was reviewed and found to be acceptable for the analysis of copper content. As stated previously, no molybdenum analyses were performed during Equatorial’s tenure.

11.3 SAMPLE PREPARATION AND ANALYSIS – GMI CHECK ASSAY PROGRAM (2014)

In April and May of 2014, portions of the core remaining from the 34 ED-series holes drilled by Equatorial in the copper zone were submitted by GMI for check analysis. Because Equatorial used continuous portions of the entire core from certain sections of these holes for the make-up of composite samples for metallurgical testing, leaving 1.0-ft-long portions of whole core as “skeletal” remains for future reference, only the portions of these holes above and below these “skeletonized” intervals could be sampled by sawing the remaining core halves for check analyses. The 532 total samples of drill core that were selected and then quartered were bagged and sent for multi-element (34) analysis to AAL in Sparks, Nevada, using Inductively Coupled Plasma Optical Emission Spectroscopy (ICP-OES) techniques after four-acid digestion. In addition to the 34 elements analyzed by ICP-OES, acid soluble copper and oxide molybdenum were also analyzed by AAL using a dilute acid leach for the oxide copper and molybdenum analyses.



12 DATA VERIFICATION

This section will address the data verification of both the historic data and the more recent drilling completed by GMI and the GMI assay of Equatorial core from 2007 through 2011. GMI also added 532 assays during 2014 by reasssaying existing historic core that had been drilled by Equatorial.

As a check against historic drilling data, GMI has completed a seven-hole twin program plus three additional phases of drilling since 2007. The twin holes and all other GMI information has been paired with closely located historic drill holes. The resulting data pairs have been analyzed to add confidence to the use of the historic drill hole data.

The historic and more recent drilling will be discussed separtely and then the data components will be compared on a nearest neighor basis. Since there are gaps in the historic QAQC information, the nearest neighbor comparison between the old data and verified new data are intended to add confidence to the use of the historic data in the block model. Some of the analysis in the section was completed by IMC as far back as 2007. Recent data additions during 2014 are addressed at the end of this sectioon.

The qualified person for Sections 12.1 and 12.2 is Don Earnest. The qualified person for Sections 12.3 through 12.10 is John Marek, of IMC. As a result of the information presented in this section, the Qualified Persons have formed the opinion that the data selected by IMC are reliable for the estimation of mineral resources and mineral reserves. Two separate drill data sets have been eliminated from the estimation of mineral reserves as the result of the data verification work. The data sets that were removed from the analysis are:

1. General Moly Reverse Circulation drilling is used for inferred resources but cannot contribute to mineral reserves.

2. Anaconda acid soluble copper assays were eliminated from the estimateion of mineral reserves and mineral resources.

12.1 VERIFICATION OF HISTORIC ELECTRONIC DATABASE ENTRIES

The molybdenum assay data in the historic electronic database (pre-GMI) were checked against laboratory assay certificates for 6,450 samples, which represented approximately 14% of the total historic molybdenum data (44,763 samples) at that time. For samples generated during Anaconda’s tenure, assay certificates from Union Assay Laboratory, Bondar Clegg, Research Analytical Laboratories, Chemical and Mineralogical Services, and International Smelting and Refining were found in the files acquired by GMI. For sample analyses performed by the various Anaconda operations laboratories, no formal laboratory certificates of analysis were found. However, data from these laboratories were recorded on standard “Sample Progress” forms that were found in a sufficient number of the drill hole log files, and the data on these forms were checked against entries in the electronic database. No laboratory certificates for molybdenum analyses could be located for the drill hole samples generated by Cyprus. However, because the spatial distribution of the Cyprus drilling was generally interspersed with the earlier Anaconda drilling, this is not a material issue in the opinion of the Qualified Person (QP).

The results of the cross-checking between the laboratory assay certificates and the electronic database, the error rate was found to be approximately 3%, which is acceptable. Most of the discrepancies are believed to be due to re-assaying of groups of samples in certain drill holes, where the certificates for either the original analyses or the re-assays are missing from the files.

12.2 VERIFICATION OF HISTORIC DRILL HOLE DATA

No documentation was found of any formal or regular quality assurance/quality control (QA/QC) programs in place at the mine operation during the tenures of Anaconda and Cyprus. However, prior to development and mining of the



Liberty deposit, Anaconda consistently ran check assays with secondary laboratories (both company-owned and independent) during its exploration tenure. As an example of this process, a bias was detected in 1970 in the molybdenum analyses from the earliest drill holes that were analyzed at the Anaconda operations laboratory at Tooele, Utah. This was determined after sending a suite of 25 samples ranging in grade from 0.01% Total Mo to 0.15% Total Mo to a number of laboratories for check analysis. These labs included the International Smelting and Refining Laboratory in Salt Lake City, the Skyline Laboratory in Tucson, Arizona, the Climax Molybdenum Corporation operations laboratory in Climax, Colorado, the Union Assay Laboratory in Salt Lake City, Utah, and the Chemical and Mineralogical Services Laboratory in Salt Lake City. The results of these early check analyses are shown in Figure 12-1.

As Figure 12-1 indicates, Anaconda’s Tooele laboratory appeared to be biased high across the range of grades compared to the other five laboratories. However, the overall spread of assays sample by sample indicated fairly loose agreement overall between all laboratories.



Figure 12-1: Anaconda Check Assays (1970)



12.3 GMI QA/QC PRACTICES

The GMI drilling commenced in 2007 with 7 twin holes to confirm the reliability of the historic data. Since that time, GMI has completed both diamond (DDH) and reverse circulation drilling (RC) in three phases of drilling. This section will address the diamond drilling programs, because they were used for both mineral reserves and mineral resources. The 13 RC holes that were drilled in GMI Phase 1 will be discussed later. IMC found that they were not reliable for determination of mineral reserves.

The GMI assay laboratory and the QAQC procedures were changed over time. The primary assay labs were ALS Chemex and American Assay Labs (AAL). Both Labs are ISO 9001 certified. The drill phases and assay lab are as follows:

Table 12-1: GMI Drilling Phases

Phase Holes Lab

Twin Program 7 DDH Chemex

Phase 1 10 DDH, 13 RC Chemex

Phase 2 29 DDH Chemex

Phase 3 37 DDH 10% Chemex, 90% AAL

The Phase 3 drill program was initiated in the fall of 2007. Although about 10% of the assays in Phase 3 were from Chemex, the majority were from AAL. The holes and assays that were completed at AAL will be referred to as Phase 3 holes in this text for simplicity. They reflect drilling in the last quarter of 2007 and all of 2008.

The assay lab and QA/QC program for the Twin program through Phase 2 were:

Primary Assay Lab, ALS Chemex

Independent Check Assays: Roughly 1 in 10 basis to AAL Vancouver

Duplicates on a 1 in 50 basis (approximately)

Standards on a 1 in 30 basis (approximately)

Blanks on a 1 in 20 basis (approximately)

The assay lab and QA/QC program for the Phase 3 drilling were:

Primary Assay Lab, American Assay Lab, Reno (AAL)

Duplicates on a 1 in 10 basis at AAL

Standards inserted by GMI, 80 standards out of 5921 assays.

IMC holds the opinion that the procedures for Phase 3 are just barely sufficient for application to measured and indicated mineral resources. During the drill program, no GMI controlled QA/QC was applied and the AAL internal QA/QC was the only effort completed.

At a later time, IMC suggested running independent 3rd party check assays for the Phase 3 program. That effort was completed, however, the samples were resent to AAL rather than another check lab. As a result, the samples constitute same lab duplicates rather than check lab results. They confirm the repeatability of the AAL lab, but do not measure the potential for assay bias at the lab. The duplicates were assayed at a substantially later time than the original assays so that it would be difficult for the lab to know the previous results.



The majority of standards applied to the Phase 3 drilling were internal AAL standards, inserted into every assay tray by AAL as a standard practice. IMC review of the standards data showed that there are 80 standards with Liberty Molybdenum Sample numbers that were run by AAL implying that these standards were inserted in the submitted sample streams by GMI personnel.

IMC has found no bias in the reporting of the 77 standards or of the duplicates. As a result the Phase 3 drilling was accepted for application to the determination of mineral resources and mineral reserves. However, the QA/QC procedures for the Phase 3 program of 37 holes is minimum at best and IMC recommends that all of the duplicate samples that were sent to AAL be sent to a third party lab for outside confirmation.

Future drilling programs should adhere to the QA/QC practices that were employed during Phases 1, 2, and twinned holes of the GMI drill programs.

12.4 QA/QC RESULTS FOR PHASES 1, 2, AND TWINS

12.4.1 Standards for Phases 1, 2, and Twins

Standards were inserted into the sample stream for submission to ALS Chemex during the Twin program, Phase 1, and Phase 2. The submission rate appears to have been roughly 1 in 30 for total molybdenum amounting to a total of 233 total molybdenum standards. Not all standards were assayed for oxide molybdenum so that there are only 82 standards for oxide molybdenum from these drill programs.

Figure 12-2 and Figure 12-3 summarize the results of the standard assay program for these drill phases. Figure 12-2 indicates little bias up to 0.080% Mo. One standard is reported slightly high at the 0.100% basis by Chemex. Figure 12-2 however does indicate a number of sample swaps in the insertion and labeling process. IMC counts roughly 10 values that are sample swaps out of a total of 315 samples or about 3% of the total molybdenum standards that were submitted.

Although at the margin of acceptance, this issue may indicate a broader problem in the submission of sample numbers and reporting of assay results in the entire database.

Figure 12-3 indicates relatively sound results for the oxide molybdenum standards for the Twin program plus Phases 1, and 2.



0.000

0.020

0.040

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0.000 0.020 0.040 0.060 0.080 0.100 0.120 0.140

Total Moly Certified Reference Values

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em

ex

To

tal

Mo

ly %

Mo

Figure 12-2: Liberty Total Molybdenum Standards by Chemex – Phases 1 and 2 and Twin Drilling

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0.000 0.010 0.020 0.030 0.040 0.050 0.060 0.070 0.080

Oxide Moly Certified Reference Values

Ch

emex

Oxi

de

Mo

ly %

Mo

Figure 12-3: Liberty Oxide Molybdenum Standards by Chemex – Phases 1 and 2 and Twin Drilling

12.4.2 Blanks for Phases 1, 2, and Twins

Blanks were submitted in the sample stream to ALS Chemex during Phases 1, 2, and Twins by GMI personnel on a roughly 1 in 20 basis. The purpose of the blanks submissions is to assure that there is no carry over between sample results in the preparation and assay process.

Figure 12-4 summarizes the results of the total molybdenum blanks by drill hole. The X axis reflects the drill hole number. Figure 12-5 summarizes the similar results for oxide molybdenum assays.

In summary, there were 5 blanks that reported as ore grade out of 428 total molybdenum blanks. This is about 1.2% of the total molybdenum, blanks submitted during these campaigns.



Figure 12-5 indicates that two drill holes (LM-776 and LM-778) have a series of molybdenum oxide results that are higher than expected for blanks. This result indicates that ALS Chemex may have had a period of time where molybdenum oxide results could be questioned.

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670 680 690 700 710 720 730 740 750 760 770 780 790 800 810 820 830 840 850

Hole ID

To

tal

Mo

ly %

Figure 12-4: Liberty Total Molybdenum Blanks by Chemex – Phases 1 and 2 and Twin Drilling

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0.002

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0.014

670 680 690 700 710 720 730 740 750 760 770 780 790 800 810 820 830 840 850

Hole ID

To

tal

Mo

ly %

Figure 12-5: Liberty Oxide Molybdenum Blanks – Phases 1 and 2 and Twin Drilling



12.4.3 Check Assays for Phases 1, 2, and Twins

IMC completed XY and QQ plots for the diamond drilling check assays completed during the Phase 1, 2, and Twin programs. Total Molybdenum, Oxide Molybdenum, and Total Copper results were addressed by IMC. Figure 12-6, Figure 12-7, and Figure 12-8 summarize the results of the check assays of those metals.

Duplicate assays were also submitted to ALS Chemex during this period. However, IMC has chosen to focus in the check assay results as they provide a more meaningful verification of the assay results from an independent laboratory.

Figure 12-6 indicates that Acme labs did not report values higher than 0.40% Mo. However, the XY and QQ results indicate reasonable results and hypothesis tests indicate that means from the two labs represent the same population with 85% confidence.

Figure 12-7 illustrates the results for Molybdenum oxide assays. The student’s T test indicates both means represent the same population with 95% confidence. However, of concern are the roughly 15 values where Chemex has near zero molybdenum oxide and Acme reports higher than 0.050% Mo. All of these occurrences are isolated 1 assay intervals and the majority of these occurrences are within drill holes LM-797 and LM-816. The cause of this issue warrants further investigation.

Copper check assay results for this series of holes on Figure 12-8 are sound results.



Figure 12-6: Check Assay Results – Total Molybdenum – Phases 1, 2, Twins

XY Plot

QQ Plot

Chemex Tmo = 0.097 %

Acme Tmo = 0.094 %

840 Check Results



Figure 12-7: Check Assay Results – Oxide Molybdenum – Phases 1, 2, Twins

XY Plot

QQ Plot

Chemex Omo = 0.015 %

Acme Omo = 0.017 %

840 Check Results



Figure 12-8: Check Assay Results – Total Copper – Phases 1, 2, Twins

Chemex Tcu = 0.065 %

Acme Tcu = 0.064 %

840 Check Results

XY Plot

QQ Plot



12.5 QAQC RESULTS FOR PHASE 3 DRILLING

12.5.1 Standards

Ninety percent of the assays for Phase 3 drilling were completed at AAL. AAL routinely inserts blanks and standards into their assay trays. That information was provided to IMC. Within that data, IMC found 80 standards with Liberty Molybdenum sample numbers which imply that these samples were blind standards submitted by GMI as part of the GMI program. These 80 likely correspond to the period when the company was changing labs from Chemex to AAL.

Analysis of the 80 standards samples do not indicate a bias in reporting blind standards from the AAL lab. Although few in number, they do add some confidence to the AAL results. Figure 12-9 and Figure 12-10 summarize the results of the Phase 3 standards for total molybdenum and oxide molybdenum.

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Total Moly Certified Reference Values

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L T

ota

l M

oly

% M

o

Figure 12-9: Liberty Total Molybdenum Standards by American Assay Labs – Phase 3 Drilling



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0.000 0.010 0.020 0.030 0.040 0.050 0.060 0.070 0.080

Oxide Moly Certified Reference Values

AA

L T

ota

l Mo

ly %

Mo

Figure 12-10: Liberty Oxide Molybdenum Standards by American Assay Labs – Phase 3 Drilling

12.5.2 Duplicate Assays

As noted earlier, the Phase 3 drilling did not receive the same level of QAQC processing as the previous GMI drilling. Once that fact was discovered, a series of 1 in 10 check assays were intended to be implemented to provide confirmation of the Phase 3 results. However, the check assays were not sent to a second check lab, but were sent back to the original laboratory where the first assay had been completed. Although there was a time delay between submissions, this data set constitutes a delayed set of duplicates rather than outside lab checks. Since identical methods were applied, the results are a measure of lab repeatability rather than a test of overall accuracy.

Figure 12-11 through Figure 12-13 present the duplicate assay results of the total molybdenum, oxide molybdenum, and total copper duplicates at the AAL Lab. The results are as expected for duplicate submissions with no bias and minimal scatter.



Figure 12-11: Duplicate Assay Results – Total Molybdenum – Phases 3

Orig Tmo = 0.083 %

Dup Tmo = 0.084 %

664 Duplicate Results

XY Plot

QQ Plot



Figure 12-12: Duplicate Assay Results – Oxide Molybdenum – Phases 3

Orig Omo = 0.007 %

Dup Omo = 0.007 %


XY Plot

QQ Plot



Figure 12-13: Duplicate Assay Results – Total Copper – Phases 3

Orig Tcu = 0.042 %

Dup Tcu = 0.042 %


XY Plot

QQ Plot



12.5.3 Phase 3 Nearest Neighbor

An additional check was completed in order to provide more verification to the Phase 3 drilling. A nearest neighbor comparison was completed between the GMI drilling in Phases 1, 2, and Twins versus nearby assays from Phase 3 drilling. This work was completed using the GMI diamond drill assays only.

All pairs of assays that were within 40 ft (one model block) were sorted. Statistical hypothesis tests were applied to the paired data to confirm if they represented similar populations with 95% confidence. The term “Pass” in the table below means that the Students-T test and the Paired-T tests pass with a 95% confidence level. These indicate that the means of the two data sets are similar, and that the individual differences between paired samples are sufficiently small.

The results are as follows for the 40 ft sample spacing:

Table 12-2: Phase 3 Nearest Neighbor – 40 ft Sample Spacing Results

Metal Unit

Number

of pairs

Phase

1,2,Twin

Mean

Phase 3

Mean

Smith‐Satter T‐

Stat Paired ‐ T

tmo % Mo 142 0.170 0.185 pass pass

omo % Mo 84 0.002 0.002 pass pass

tcu % Cu 142 0.043 0.040 pass pass

The results above provide more support for the acceptance of the Phase 3 drilling program.

12.6 GMI RC DRILLING

During 2007, GMI drilled 13 RC holes and pre-collared 4 holes with RC and completed the hole with DDH drilling. IMC completed a comparison of RC to DDH on a nearest neighbor basis for the intervals that were drilled with RC compared to nearby DDH.

The 40 ft composites that were used for block grade estimation were used for this comparison. All pairs of composites that were within 40 ft (one model block) were sorted. Statistical hypothesis tests were applied to measure the results of the two drill methods.

The results are as follows for the 40 ft sample spacing:

Table 12-3: GMI RC Drilling – 40 ft Sample Spacing Results

Metal Unit

Number

of pairs

DDH

Mean RC Mean

Smith‐Satter T‐

Stat Paired ‐ T

tmo % Mo 71 0.072 0.061 pass fail

omo % Mo 53 0.019 0.016 pass pass

tcu % Cu 71 0.061 0.072 pass pass

The hypothesis tests indicate that the means of the two data sets could represent the same population. However, more detailed review of the XY plots of the paired data indicate that for grades less than about 0.080% Tmo, the RC data reports high compared to DDH and above 0.080% Tmo, the RC data reports substantially low. Consequently, the failure in the Paired-T test reported above.



In the case of copper, the RC data pairs well with DDH up to about 0.02% copper. Above that level, the RC data are substantially higher than the DDH.

As a result of these tests, the GMI RC assay information was not used for the estimation of measured or indicated mineralization within the block model. It was however, used in a second pass of estimation to contribute to inferred mineralization in the district.

12.7 DDH DRILLING COMPARED TO HISTORIC DRILLING DATA

The work presented so far in this text develops a reasonable argument that the GMI diamond drilling data is reliable and repeatable. IMC has formed the opinion that the GMI DDH data can be used for the determination of mineral resources and mineral reserves.

The GMI DDH database been compared to the historic drill hole data to check the reliability of the historic information where the QAQC information is no longer available.

The nearest neighbor pairing procedure was applied to the 40 ft composites of the assay data. GMI DDH was compared against each of the other company and drill types for total molybdenum, oxide molybdenum, and total copper. Data was paired within 80 ft or two model blocks.



Table 12-4: General Molybdenum DDH Holes Compared to Historic Drilling

Company Tested

Company

Drill

Method

Number of

Pairs

GMI DDH

Total Moly

(%Mo)

Historic Total

Moly (%Mo)

Summary of

Hypothesis

Test

Anaconda DDH 218 0.090 0.088 pass

RC 127 0.067 0.068 pass

Cyprus DDH 57 0.075 0.079 pass

RC 22 0.079 0.075 pass

Equatorial DDH 0

RC 0 No Total Moly Assays by Equatorial

Company

Drill

Method

Number of

Pairs

GMI DDH

Total Moly

(%Mo)

Historic

Oxide Moly

(%Mo)

Summary of

Hypothesis

Test

Anaconda DDH 29 0.048 0.041 pass

RC 109 0.018 0.020 pass


RC 21 0.006 0.004 pass

Equatorial DDH 0

RC 0 No Oxide Moly Assays by Equatorial

Company

Drill

Method

Number of

Pairs

GMI DDH

Total Copper

(%Cu)

Historic Total

Copper (%

Cu)

Summary of

Hypothesis

Test

Anaconda DDH 136 0.035 0.049 fail

RC 123 0.075 0.085 pass


RC 22 0.067 0.066 pass

Equatorial DDH 5 0.22 0.161 pass

RC 10 0.05 0.034 pass

Total Moly (tmo)

Oxide Moly (omo)

Total Copper (tcu)

XY plots were completed for all of the comparisons on the table. All were reviewed as part of the above analysis. A number of items become apparent when reviewing the above table.

There is very little Cyprus RC data and as a consequence it will have little impact on mineral resources or reserves. What information there is appears to be reliable when compared with the GMI DDH data.

One will note that the Anaconda total copper results are higher than the GMI total copper results. Further investigation determined that above about 0.025% Tcu, the two data sets compare well. The source of difference is in the low grade data below 0.025% Tcu. The historic assaying at Anaconda would have almost certainly used the



titration method rather than AA or ICP finish. The titration method often slightly overestimates in the low grade range around 0.020% Cu. IMC holds the opinion that these low grade values will have minimal impact on the statement of copper resources and since grades above 0.025% Tcu track well, the Anaconda total copper data can be used for the estimation of the model.

12.8 ACID SOLUBLE COPPER, RECENT DRILLING COMPARED TO HISTORIC ANACONDA DRILLING DATA

This resource estimate studied the eastern copper area in more detail to determine its impact on project economics. Particular attention was paid to both total copper and acid soluble copper in this zone. Table 13-2 summarizes the basic statistics of the acid soluble copper data by company and drill type.

Table 12-5: Acid Soluble Copper of 40 ft Composites – Tabulated by Company and Drilling Type

Company

Drill

Method Number Mean

Standard

Deviation Maximum

Anaconda DDH 460 0.064 0.091 0.838

RC 1273 0.073 0.092 0.705

Cyprus DDH 111 0.004 0.010 0.065

RC 237 0.005 0.007 0.043

Equatorial DDH 128 0.084 0.061 0.335

RC 1212 0.061 0.071 0.611

Acid Soluble Copper %

The Anaconda drill holes have acid soluble copper grades that were generally higher than the other company data. This is likely attributed to the fact that Anaconda used more aggressive analytical methods for assaying of acid soluble copper.

The nearest neighbor pairing procedure was applied to the assay data for data pairs up to 80 ft (or two model blocks apart). All Anaconda drilling types were compared against each of the other combined company and drill types for acid soluble copper. In summary, the Anaconda acid soluble copper data were found to be high biased relative to the surrounding data. The surrounding data were completed with known methods and those methods have been correlated to process recovery response of the copper in flotation.

Table 12-6: Nearest Neighbor Comparison, Anaconda Acid Sol to Other Company Data

Company Drill Method

Number of

Pairs

Anaconda Acid

Soluble Copper

(% Cu)

All Other Acid

Soluble Cu

(%Cu)

Summary of

Hypothesis

Test

All Other Drilling Combined 164 0.190 0.073 fail

DDH and RC

Acid Soluble Copper (scu)

The Anaconda acid soluble data were consequently removed from the database. Total copper from Anaconda was used, however.



12.9 GMI ASSAY OF EQUATORIAL CORE – QA/QC OF MOLYBDENUM ASSAYS

The interest in the eastern copper area prompted GMI to identify existing drill core that had been drilled by Equatorial in the eastern copper area. GMI contractors selected remaining intervals of half core for quartering and assaying in order to obtain additional molybdenum data in the area.

During this assay program, GMI standards samples were inserted as QA/QC control on the molybdenum assays. Two GMI standards that have been on hand since the 2007 program were inserted on a roughly 1 in 20 to 25 basis. Standards results for total copper, acid soluble copper, and oxide molybdenum were all with acceptable.

However, the AAL results for the total molybdenum standards were higher than the recorded standards values by 10 to 20%. IMC has not been able to determine the cause of this result. GMI and their contractors report that both the standard value and the AAL lab procedure applies 4 acid digestion.

A review of the standards results that were presented on Figure 12-2 for the GMI Phase 1 and 2 drilling indicates that there was a certified standard in the GMI archives that almost precisely matches the reported current results for one of the standards. There is possibility that the inserted standards were somehow swapped or mislabeled with inserted into data submissions.

The AAL lab internal standards are consistent. The duplicate assays are consistent. Total molybdenum assays from other companies that are paired and 40 and 80 ft away have almost identical means as reported in this Equatorial re-assay program. With all other data sets indicating reliable total molybdenum results, we have accepted the 532 assays that were added to the database. Future drilling should identify and prepare additional standards to eliminate any confusion in the future.

12.10 GMI ASSAY OF EQUATORIAL CORE – QA/QC OF COPPER ASSAYS

The re-assay process for 532 samples of Equatorial core by GMI also assayed for total copper and acid soluble copper assays. The GMI assays can be treated as a check on the original results obtained by Equatorial in the original half core assays.

The re-assay data was not used for resource estimation unless there was no original Equatorial data in that interval. If Equatorial data was missing, then copper re-assays by GMI could be applied.

The original total copper assays have nearly identical means for 530 samples and pass all applied hypothesis tests within 95% confidence.

Acid soluble copper comparisons indicate that there were 387 intervals where both the original Equatorial assay and the GMI re-assay are both present. The data that were in the leach cap and the primary zone resulted in nearly identical results with the re-assay program.

Within the transition-secondary zone the original acid soluble copper results were higher than the 47 re-assay results that are available. IMC does not have an explanation of this response.

There are 145 intervals where the re-assay data would be used as there were no originals for acid soluble copper in those intervals.



13 MINERAL PROCESSING AND METALLURGICAL TESTING

13.1 GENERAL

This section discusses the metallurgical test work and past operating data used as a basis for the current process design. The metallurgical testing is composed of historical work completed by Anaconda Minerals for their design of the original concentrator, plus flotation testing completed on drill holes during the early years of the mine operation and recent testing by GMI. An extensive history for the past operations exists, although much of the property records have been lost over the years. Historical actual production results of the mill have been included in this section as it relates to supporting test work findings. Between Anaconda and Cyprus, approximately 29 million tons of ore were milled at Tonopah and 53 million pounds of molybdenum in a flotation concentrate were produced. All of the molybdenum concentrate was sold into the market.

Anaconda testing on the property extends back to 1957; however, the majority of the testing was completed in 1978 through 1981. The early work tended to focus on the copper portion of the deposit and less on molybdenum.

GMI completed testing in 2012 and 2013 on samples from the molybdenum pit and this section includes that information. In 2014, GMI completed scoping tests on samples taken from the copper pit for evaluation of recovery of the eastern copper pit material.

Figure 13-1 provides a generalized process flow diagram.

The plant throughput is set at the rate of 26,500 st/d, and the plant design mirrors many of the features for the original Anaconda mill. The design used in this report incorporates as many of the existing concrete foundations and slabs as possible, together with existing infrastructure.

13.2 PROCESSING FLOW SHEETS

The Liberty molybdenum process utilizes standard crushing, grinding, and flotation.

Mine haul trucks dump run of mine (ROM) ore directly into a gyratory crusher. Crushed ore is conveyed to a coarse ore stockpile. Reclaim conveyors move stockpiled ore to the SAG mill and ball mill grinding circuits. Finely ground ore advances to flotation where the process separates a combined molybdenum and copper rougher concentrate from tailing. Subsequently, the process separates molybdenum concentrate from the copper concentrate. The separation requires regrinding the bulk concentrate and further stages of cleaner flotation. This study includes the addition of cleaner flotation equipment to upgrade the copper concentrate grade; this will use the same flow sheet Cyprus practiced during the last year of operation for the molybdenum pit and a flow sheet historically employed in other copper properties when treating the copper pit ore.



Figure 13-1: Process Flow Diagram



13.3 METALLURGICAL TESTS

13.3.1 Grinding – Molybdenum Pit

13.3.1.1 Historical Grinding Testing

The original design work for the Anaconda mill indicated Bond ball mill work index values of 11.8 kWh/st for the porphyry ore and 11.4 kWh/st for the schist ore. Anaconda performed pilot testing in two campaigns to evaluate semi-autogenous grinding. Anaconda provided two SAG mills and two ball mills with a combined installed grinding power of 13.5 kWh/st of ore when milling 1,020 dst/h (equal to 22,032 dst/d at 90% operating time, which were Anaconda design values). In actuality, the mill typically consumed 8.1 to 8.6 kWh/st of ore (as indicated by Anaconda budgetary data). This study provides for installing the SAG and ball mills similar to those used by Anaconda since the mill foundations are still intact and suitable for re-use.

13.3.1.2 GMI Grinding Testing

GMI prepared composites from the molybdenum pit in 2013 for the three main lithologies (phyllic, potassic, and silicified). FLSmidth completed two Bond ball mill work index tests on each lithology, which produced a range of results of from 9.53 to 11.73 kWh/st. Using the deposit distribution of lithologies, GMI estimates the weighted average ball mill work index to be 11.42 kWh/st. The 2013 test results agree with the Anaconda historical tests.

13.3.2 Flotation

13.3.2.1 Historical – Molybdenum Pit

Anaconda completed a number of bench scale and pilot plant programs to evaluate the flotation characteristics of the molybdenum ore. The historical production under Anaconda was 14.03 million tons of ore at 0.10% Mo sulfide and a recovery of 84.6%, while Cyprus milled 14.91 million tons of ore at a grade of 0.118% Mo sulfide and a recovery of 82.5%. During the last six months of the Cyprus operation, a mill improvement program raised the molybdenum recovery to 85.9% on an ore grade of 0.111% Mo sulfide.

The project team used historical data on 47 CP drill hole batch flotation tests, covering ore still in-situ, to develop head grade versus recovery estimates for the three dominant rock types. Anaconda completed the CP batch, rougher flotation tests between 1981 and 1983. Using the results of the CP hole data, the indicated annual average recovery is 88% of sulfide molybdenum content on ore grading 0.083% Mo total and 0.080% sulfide Mo%.

Historical assay data indicate the molybdenum flotation concentrate will grade 51 to 53% Mo. Anaconda and Cyprus produced a total of 53 million pounds of contained molybdenum at the property. Anaconda concentrate data for September 1983 through December 1984 indicates that the concentrate did not contain impurities that prevented it from being sold. During that time, the copper in the molybdenite concentrate averaged 0.25%, and lead ran 0.02%. For part of the mill life, Anaconda operated a ferric chloride leach at Tonopah, and Cyprus shipped the concentrate to their Sierrita operation, allowing them to use their ferric chloride leach plant as needed.

Records indicate copper recovery was low both during Anaconda’s and Cyprus’ operation, until Cyprus developed a process which uses hydrogen peroxide to improve the concentrate grade and made other process enhancements to improve the copper recovery. Until this time, copper recovery typically ranged from 32 to 41% on copper ore grades of 0.06 to 0.09%, and the copper concentrate grade typically was 12 to 14%. During the last six months of Cyprus’ operation, the copper recovery improved to 67% and the concentrate grade averaged 22.8% copper.



13.3.2.2 GMI Flotation Tests – Molybdenum Pit

Testing at FLSmidth’s Midvale, Utah laboratory, completed in 2012 and 2013, and still on-going, included 118 batch flotation tests, which GMI primarily directed at measuring variability in the deposit and confirming molybdenum recovery. These tests indicate that at a grade of 0.08% sulfide Mo the current tests equate in recovery to the PFS recovery formulas for the sulfide zone. The use of these recovery formulas provides an average sulfide molybdenum recovery of 88.3% at a sulfide head grade of 0.078%.

In 2014, GMI chose a different reagent suite for testing higher grade copper ores. In the 2014 testing, copper recovery is based on total copper assays and not sulfide copper content. Future testing will complete the program by measuring the acid soluble copper content of the rougher tailings and re-estimating copper recovery based on sulfide copper content. After this adjustment is made, the historical copper recovery and estimate from the new testing will likely be equal. For this study, the copper recovery in the molybdenum pit was set at 56%. The copper in the copper concentrate set at 23% copper and assumes the use of a copper concentrate up-grading circuit.

13.3.2.3 GMI Flotation Tests – Copper Pit

Testing performed in 2014 was on shallow pit trenches and existing drilling reject samples, none of which could be considered to be fresh material. These samples are included in the discussion of the molybdenum deposit since some of the eastern copper pit material will be mined with the molybdenum deposit. Using the results from open circuit testing, the sulfide copper recovery is projected to be 70%. The tests to date are of a scoping nature, and no work has been performed to optimize the flotation parameters, such as grind size, reagent type, reagent dosage, pH, and flotation time. Future tests are scheduled to be performed on fresh drill hole samples taken from the eastern pit, which will provide more confidence in the metal recoveries.

13.4 REAGENTS

Table 13-1 lists the reagent consumptions that are primarily based on the results of the 2012 and 2013 testing. The testing incorporated over 118 batch tests. GMI has provided allowances for the reagents consumed by Anaconda (such as sodium silicate for ores that contain higher levels of clay). For the molybdenum pit, lime is not normally used. However, for conservatism, the estimate includes a small amount of lime to process higher copper content ore.

GMI intends to upgrade the copper concentrate using the Cyprus process, which uses hydrogen peroxide as a pre-treatment ahead of a separate flotation circuit.



Table 13-1: Reagent Consumption

Reagent Plant Area

Molybdenum Pit

Consumption Value Units

Pine oil Cu-Mo Flotation 0.008 lb/ton ore milled

MIBC Cu-Mo Flotation 0.043 lb/ton ore milled

Lime Cu-Mo Flotation 1.83 lb/ton ore milled

Flomin 4132 Cu-Mo Flotation 0.02 lb/ton ore milled

Molyflo or Flomin C4401 Cu-Mo Flotation 0.04 lb/ton ore milled

Sodium silicate Cu-Mo Flotation 0.01 lb/ton ore milled

Flocculant Cu-Mo Flotation 0.01 lb/ton ore milled

Pine oil Molybdenum separation 0.003 lb/ton Cu-Mo Conc

Molyflo or Flomin C4401 Molybdenum separation 0.02 lb/ton Cu-Mo Conc

MIBC Molybdenum separation 0.017 lb/ton Cu-Mo Conc

Nitrogen Molybdenum separation 850 scf per hour

NaHS Molybdenum separation 17 lb/ton Cu-Mo Conc

Hydrogen peroxide Copper Conc. Up-grade 40 lb/ton Cu Conc.

Reagents used in the process include lime, sodium hydrosulfide (NaHS), methyl isobutyl carbonyl (MIBC), frother (pine oil), hydrogen peroxide, sodium silicate, a flocculant, collectors for both molybdenite and copper minerals, and nitrogen (in molybdenum-copper separation).

13.5 GRINDING AREA

13.5.1 Grinding Testing and Historical Comparison – Molybdenum Pit

13.5.1.1 Historical Grind Test Results

Table 13-2 lists the grinding testing that supported the original Anaconda Minerals design. The typical Bond ball mill work index estimate for Liberty porphyry ore is 12.2 kWh/st, and for schist ore, the value ranged from 8.8 to 11.4 kWh/st. In 1980, Anaconda estimated the ore blend to be 70% porphyry and 30% schist.

13.5.1.2 GMI Grind Test Results

In 2013, FLSmidth performed tests on PQ core samples to evaluate the Bond ball mill work index. Taking the composites from existing core from the molybdenum pit, GMI divided the material by lithology, as noted below. FLSmidth performed Bond ball mill work index determinations at a closing size of 212 micrometers, as presented in Table 13-3.



Table 13-2: History of Crushing and Grinding Tests

Test Description/Purpose Performed by Date Results

Ball mill work index Anaconda 1962 Porphyry work index of 11.9 kWh/st.

Ball mill work index Anaconda 1964 Porphyry ball mill work index of 12.4. Tuff work index of 12.3 kWh/st.

Ball mill work index Anaconda 1964 Ball mill work index of 11.9 kWh/st for porphyry ore

Rock Competency Tests Allis Chalmers Test Center

1978 Rock media index of 51.1, Bond impact work index of 4.5 kWh/st, abrasion index of 0.33, Rod mill work index at 14 mesh of 11.4 kWh/st and ball mill work index at 100 mesh of 11 kWh/st.

Autogenous and Semi-autogenous testing

Colorado School of Mines Research Institute

1979 Pilot 6ft x 2ft SAG mill and ball mill. Ran 11 tests both Autogenous and Semi-autogenous at typically 1 to 2.5 st/h. SAG power draw was typically 3.4 to 4.4 kWh/st making product 38 to 50% passing 65 mesh. Ball mill work indices (kWh/st) of 12.1 for porphyry and 11.4 for schist, which was for the sands fraction of SAG mill discharge, not for whole ore.

Autogenous Grinding Tests on Anaconda Hall Property Ore

A.R. MacPherson Feb. 1979 Estimated autogenous (not semi-autogenous) work index of 9.15 kWh/st for average ore composition.

Ball mill work index Anaconda March 1979

Porphyry ball mill work indices of 11.6 to 12.1 kWh/st, white schist ball mill work index of 8.8 kWh/st and brown schist ball mill work index of 10.9 kWh/st.

Autogenous Grinding Test on Primary Ore

A.R. MacPherson May 1979 Tested sample used at CSMRI to estimate autogenous work index of 8.42 kWh/st.

Hall Property - Autogenous Grinding Report

A.R. MacPherson May 1979 For 22,000 st/d estimated gross power consumption of 9.1 kWh/st for SAG and ball circuit based on A.R. MacPherson Testing

Pilot plant operation Anaconda 1981 Ran pilot plant with 6ft x 2 SAG mill for eight tests with feed rates of 1.8 to 2.2 dst/h. Bond work index for porphyry ore was 12.8 kWh/st.

Table 13-3: GMI Bond Ball Mill Work Index Test Results

Sample Sample Composition of Composite BWI Ave kWh/st

Lithology ID Percent Percent Percent kWh/short ton

QMP Amp Met

Phyllic PHY 01 52.3 38.8 8.9 11.43

Phyllic PHY 02 56.0 40.0 4.0 11.24 11.34

Potassic POT 01 57 43 11.73

Potassic POT 02 57 43 11.66 11.70

Silicified Sil 01 100 9.53

Silicified Sil 02 77 23 12.17 10.85

Weighted average for deposit 11.42



Anaconda installed the following equipment.

Original Anaconda Minerals Mill Grinding Equipment and Criteria (1979):

Throughput rate, dst/h 1,020

Operating hours per day 21.6

Throughput rate at 90% operating time, dst/d 22,032

Work index, kWh/short ton 12.0

SAG mills

Number 2

Design power consumption, kWh/st 6.7

Motor HP each 4,600

Ball mills

Number 2

Design power consumption, kWh/st 6.7

Motor HP each 4,600

Final grind circuit product, 80% passing-micrometers 147

Actual operation of the Anaconda mill resulted in a lower power consumption. In 1985, the operation reflected a total grinding power consumption of 8.1 kWh/st when milling a budgeted 28,000 dst/d, with typical values being in the 8.6 kWh/st at lower throughputs.

Historical production through the original mill was often limited by molybdenum market conditions (low metal prices) under both Anaconda and Cyprus. In the first year of the Anaconda operation, the mill typically averaged 22,200 dst/d. Cyprus for the 21 months prior to commencing ramp-down in 1990, operated at 23,900 dst/d or 1,110 dst/h. During periods when the mill was not limited by ore availability or other economic limits, it typically operated at greater than 26,500 to 27,000 dst/d, which Cyprus did for two continuous runs of 5 to 6 months in duration. As noted above for the 1985 Anaconda operation, the grinding mills typically did not operate at full power draw when milling these rates. This was particularly true for the ball mills, which were purchased with a large trunnion opening (larger than other 16.5-ft diameter ball mills in operation), which prevented the mill from operating with a maximum ball charge.

The proposed Liberty mill will install the same number and size of SAG mills and ball mills as utilized by Anaconda. GMI will use the existing grinding mill foundations for the new mills. The historical performance of the Anaconda and Cyprus operations is commensurate with the proposed GMI milling rate, and ore hardness testing has confirmed ore hardness will remain unchanged.

Future testing will utilize existing samples to measure the SAG mill work index or measures of impact breakage. The samples will be similar to those tested for ball mill work index.



13.5.2 Design of Circuit

GMI based the plant design on the decision to use the existing mill foundations and on a review of the mill throughput from historical operating data.

To provide an average mill throughput rate of 26,500 dst/d at 92% availability, an average hourly rate of 1,200 dst/h is required. Historical data demonstrate that the two SAG mills and two ball mills originally installed have this capability.

13.6 FLOTATION AREA

13.6.1 Molybdenum Flotation Testing and Historical Comparison – Molybdenum Pit

13.6.1.1 Molybdenum Historical Testing

Table 13-4 lists flotation testing reports available prior to the startup of the Anaconda mill.

Table 13-4: History of Flotation Testing


Pilot plant flotation testing Anaconda Extractive Metallurgy Research Div - Montana

July 1962 Tested two 50-ton underground samples averaging 0.181 % Mo. Locked cycle testing produced final molybdenum concentrates of 51.6% Mo with 95.3% recovery at grind size of 11.1%+100 mesh.

Bench testing porphyry ore Anaconda Extractive Metallurgy Research Div - Montana

July 1962 Ran grind vs recovery and locked cycle testing (12 tests) and seven-stage lock cycle test. Locked cycle produced 53.6% Mo concentrate with 89.1% recovery from 0.15 % Mo head. Grind size was 24% +100 mesh. Later reports indicate this was a porphyry ore sample.

Copper flotation Anaconda Co. April 1974 Testing on copper ores with low molybdenum content.

Flotation of CSMRI autogenous and semi-autogenous ores

Anaconda Copper May & July 1979

Autogenous grinding produced large quantity of slimes. SAG milling appeared equal to conventional grinding.

Schist ore testing Anaconda Copper Feb 1979 Preliminary scoping tests on 130-ton schist sample for pilot plant.

Molybdenum up-grading tests Anaconda Copper July 1979 Pilot plant rougher concentrates were tested for up-grading. Areas identified for review were not using flocculants on Cu-Mo concentrate, regrinding, insol depressants, and examination of carbon content.

Major pilot plant Anaconda Copper Feb - April 1979

Ran pilot plant that serve as the main metallurgical support document for AFE for construction of mill. Significant number of pilot and batch tests. Overall summary report indicated 80 to 85% recovery of Mo. Rod/ball grinding.

Molybdenum circuit reagents Anaconda Copper July 1981 Examined use of NaHS, sodium ferro-cyanide and Nokes. NaHS appeared best. Sample was from 1981 pilot plant testing.




Pilot Plant Semi-autogenous and Flotation Studies

Anaconda Copper Co. Research Laboratory

Sept. 1981 Porphyry ore sample of 1,000 tons from mine blast holes. Used 600 tons for nine runs averaging 0.135% total Mo and 0.101% sulfide Mo. Concluded regrinding of bulk rougher required, salable final Mo conc could be made, NaHS most effective depressant.

Use of SO2 to reduce NaHS consumption

Anaconda Minerals April 1984 Lab tests showed 50% reduction in NaHS use when SO2 also used.

Because of the limited flotation variability testing developed prior to the Anaconda project approval, testing of drill hole composites continued during mill construction and through 1983. GMI found assay report sheets, including metal balances in the records obtained by Equatorial. The batch flotation test results were for CP holes, blast holes, and grab, “shovel face” samples. Of the three sets, the CP holes are the most important and were used for estimating recoveries for the current IMC cone model.

GMI prepared a list of the CP holes and the footage included in the composites, and a GMI consulting geologist reviewed the list to determine which composites represented ore still in-place. The review resulted in the selection of 47 composites, which include 7,306 ft of drilling and have an average grade of 0.081% total molybdenum, 0.074% sulfide molybdenum, and 0.127% copper. The 47 composites’ locations were well spaced in plan view across the anticipated mining areas, but did not penetrate the lower approximate 15% of the ore.

To better define a relationship between head grade and recovery, the composites were subdivided by rock type, using the following three rock type descriptions:

Quartz Monzonite Porphyry (Qmp) – Qmp is the major host rock for ore in the Liberty deposit. Rock textures range from equi-granular to coarse-grained porphyritic, with the major constituents consisting of quartz, feldspars (plagioclase/orthoclase), and biotite. Alteration products consist mostly of secondary quartz introduced in the form of veins and veinlets, chlorite/kaolinite/sericite alteration of the feldspars and biotite, and lesser alteration minerals such as creedite and fluorite. Molybdenum occurs almost exclusively as molybdenite within and adjacent to quartz veins and veinlets. Other sulfides include minor pyrite and chalcopyrite with lesser galena and sphalerite, found mostly in the quartz veins and veinlets. Oxide minerals occur from 50 ft to 300 ft below the surface and include iron oxides (hematite, goethite) and jarosite, and rare ferrimolybdite. Metallurgical (Mo) recoveries for mineralization hosted by Qmp will be adversely affected by the degree of oxidation for material mined above the oxide/sulfide boundary or from deeper oxidized fracture zones. Ore from areas of the deposit that contains abundant chlorite/kaolinite/sericite alteration might contribute to settling problems in the thickeners.

Aplite Monzonite Porphyry (Amp) – These rocks, which intrude the older Qmp, have highly variable textures. Grain sizes range from fine to coarse, with phenocrysts up to 0.5" diameter in the porphyritic portions. The major mineral constituents are feldspars (abundant orthoclase with lesser plagioclase) and quartz. The same alteration and sulfide/oxide assemblages found in the Qmp are present in these rocks, although average molybdenum grades generally are lower. The same metallurgical recovery issues that pertain to Qmp are also applicable for Amp material.

Metasediments (Met) – The metasediments, which comprise the rocks into which the Qmp and Amp were intruded, consist of a mixture of rock types that include low-grade fine-grained metamorphic rocks (schists and argillites), limestones, and extrusive pyroclastic volcanic rocks (mostly tuffs). The mineralogy of these rocks is highly variable, but primarily they consist of varying amounts of quartz, clay, and carbonate minerals as sand to silt-sized grains. Alteration products include secondary quartz veins and veinlets, chlorite,



kaolinite, sericite, biotite, epidote, and magnetite. The metasediments host molybdenum mineralization in quartz veins and veinlets near the margins of the intrusive rocks (Qmp and Amp). Pyrite content can locally range from 1% to 5%. From a metallurgical standpoint, the metasediments are the most difficult to treat of the ore hosts and could contribute to lower Mo recoveries when large batches of this material are processed.

After subdividing by rock type, it was determined that the molybdenite recovery was influenced by the degree of oxidation of the total molybdenum, and therefore the composites were further subdivided for each rock type as to whether the molybdenum present as oxides was greater or less than 10% of the total molybdenum (a break point that appeared by graphical analysis and statistical analysis of the data). Using the six subsets (three rock types and two levels of oxidation), the influence of head grade on recovery was estimated and regression curves prepared. All of the CP tests involved roughing and one stage of cleaning to produce a molybdenum-copper concentrate. The regression analysis used only the rougher recovery. To estimate the final recovery, an examination of historical production data, historical plant sampling data, and earlier test data indicated that the molybdenum recovery in the molybdenum-copper cleaners was typically 98% of the metal contained in the rougher concentrate and the recovery of molybdenum in the molybdenum plant attained 99% of the molybdenum contained in the molybdenum-copper cleaner concentrate. Therefore to estimate the final molybdenum recovery using the rougher recoveries calculated from the CP hole analysis, the molybdenum rougher recovery was multiplied by 0.98 times 0.99 to give the final recovery into the molybdenum concentrate. Table 13-5 lists the results of the CP hole molybdenum-copper rougher tests. Figure 13-2, Figure 13-3 and Figure 13-4 illustrate the sulfide recovery for all samples, including those with high oxide contents. To calculate the annual and overall recovery, the recovery equations were applied to each block of ore using the appropriate curve for rock type and degree of molybdenum oxidation (see Table 16-1: Mine Production Schedule – Proven and Probable Mineralization).

Table 13-5: Anaconda CP Mo-Cu Rougher Flotation Test Results for July 1981 through July 1983

CP Hole No.

Hole Ft

Rock Type

Material Type

Head Recovery Tail Mo, tot

% Mo,

S= % Cu, % Mo,

tot % Mo,

S= % Cu, % Mo,

tot % Mo,

S= % Mo, Ox

% Cu, %

335 440-645 Amp Sulfide 0.136 0.119 0.191 67.4 77.0 55.4 0.047 0.029 0.018 0.090 337 150-245 Amp Sulfide 0.129 0.126 0.265 90.8 92.6 75.7 0.014 0.011 0.003 0.117 341 280-370 Amp Sulfide 0.113 0.110 0.129 93.1 95.5 84.2 0.008 0.005 0.003 0.021 344 5-250 Amp Sulfide 0.146 0.145 0.070 93.4 94.7 87.7 0.010 0.008 0.002 0.009 348 285-375 Amp Sulfide 0.078 0.077 0.008 82.3 83.4 87.0 0.014 0.013 0.001 0.001 358 340-500 Amp Sulfide 0.112 0.104 0.182 78.8 83.9 48.8 0.028 0.020 0.008 0.110 387 330-500 Amp Sulfide 0.069 0.065 0.035 83.0 88.0 66.8 0.012 0.008 0.004 0.012 388 335-360, 380-

400 Amp Sulfide 0.068 0.058 0.192 78.6 91.6 43.2 0.015 0.005 0.010 0.112

389 410-435 Amp Sulfide 0.041 0.038 0.020 81.1 87.2 52.0 0.008 0.005 0.003 0.010 399 235-305, 370-

415 Amp Sulfide 0.071 0.068 0.152 90.4 94.3 71.9 0.007 0.004 0.003 0.044

366 185-230, 295-400

Amp Sulfide 0.054 0.052 0.095 75.7 78.3 90.0 0.014 0.012 0.002 0.010

323 275-375 Amp Sulfide 0.142 0.134 0.078 90.3 95.6 72.5 0.014 0.006 0.008 0.022

359 50-70, 255-280, 300-500

Amp Mixed & Sulfide

0.123 0.091 0.270 65.6 87.5 20.2 0.044 0.012 0.032 0.223

357 115-235, 325-450

Amp Mixed & Sulfide

0.070 0.066 0.085 67.6 71.5 43.8 0.024 0.020 0.004 0.050

368 120-425 Amp Mixed & Sulfide

0.063 0.051 0.040 62.3 76.1 52.6 0.025 0.013 0.012 0.020


0.079 0.072 0.150 87.7 97.2 74.8 0.010 0.002 0.008 0.027



CP Hole No.

Hole Ft

Rock Type

Material Type


% Mo,

S= % Cu, % Mo,

tot % Mo,

S= % Cu, % Mo,

tot % Mo,

S= % Mo, Ox

% Cu, %


0.120 0.110 0.146 82.1 91.0 73.9 0.022 0.010 0.012 0.039

324 165-190, 300-325, 345-370,

Amp Mixed & Sulfide

0.050 0.048 0.056 65.0 73.2 57.8 0.019 0.013 0.006 0.024

398 id 9913, 9920, 9922, 9925-6

Amp Mixed & Sulfide

0.094 0.047 0.039 49.5 98.9 74.7 0.048 0.048 0.000 0.010

342 5-230 Qmp Sulfide 0.098 0.095 0.093 91.1 93.9 82.4 0.009 0.006 0.003 0.017 353 200-240, 285-

305 Qmp Sulfide 0.045 0.039 0.074 64.4 73.1 24.1 0.018 0.012 0.006 0.064

356 140-345, 435-500

Qmp (+Met?)

Sulfide 0.082 0.071 0.061 67.1 76.7 48.9 0.029 0.018 0.011 0.034

383 80-230 Qmp Sulfide 0.054 0.049 0.044 80.8 88.5 48.0 0.011 0.006 0.005 0.024 403 140-435 Qmp Sulfide 0.069 0.062 0.042 70.3 77.6 46.3 0.022 0.015 0.007 0.024 406 70-115, 165-

400 Qmp Sulfide 0.069 0.064 0.083 89.4 95.6 57.1 0.008 0.003 0.005 0.038

409 160-475 Qmp Sulfide 0.080 0.077 0.087 86.1 89.3 58.8 0.012 0.009 0.003 0.039 326 90-185, 255-

275 Qmp Sulfide 0.069 0.060 0.044 52.6 60.4 52.5 0.033 0.024 0.009 0.021

328 90-110, 275-340

Qmp Sulfide 0.050 0.049 0.056 78.2 79.8 84.4 0.011 0.010 0.001 0.009

349 290-310, 380-475

Qmp Sulfide 0.068 0.067 0.081 91.5 92.8 72.8 0.006 0.005 0.023

336 5-250 Qmp/ Amp Sulfide 0.102 0.102 0.115 90.5 92.1 82.1 0.011 0.009 0.002 0.023 381 25-140 Qmp/ Amp Sulfide 0.058 0.056 0.033 84.7 87.7 85.2 0.009 0.007 0.002 0.005

386 185-255 Qmp/Amp Mixed &

Sulfide 0.061 0.050 0.919 36.2 44.5 24.0 0.041 0.029 0.012 0.626

396 id 9713-9718 Qmp Oxide-

Mixed 0.185 0.161 0.125 85.2 97.6 68.7 0.028 0.004 0.024 0.040

345 150-245 Met Sulfide 0.054 0.049 0.067 89.3 98.0 78.6 0.006 0.001 0.005 0.015 346 160-200 Met Sulfide 0.066 0.063 0.114 77.7 81.1 74.4 0.016 0.013 0.003 0.032 347 140-300, 325-

370, 415-475 Met Sulfide 0.057 0.054 0.095 74.4 78.6 60.3 0.015 0.012 0.003 0.039

351 150-175, 264-310

Met Sulfide 0.046 0.043 0.039 72.7 77.4 61.0 0.013 0.010 0.003 0.016

377 145-190 Met Sulfide 0.070 0.067 0.101 88.9 92.7 74.8 0.008 0.005 0.003 0.026 378 50-75, 95-

165, 210-255, 280-500

Met Sulfide 0.057 0.055 0.139 85.0 87.9 68.6 0.009 0.007 0.002 0.046

404 125-370 Met Sulfide 0.077 0.075 0.104 84.5 87.7 68.8 0.013 0.010 0.003 0.035 327 95-120, 140-

370 Met Sulfide 0.087 0.084 0.067 81.9 84.8 82.5 0.016 0.013 0.012

354 140-185, 205-

255, 325-500 Met

(+Qmp?) Sulfide 0.083 0.074 0.215 72.9 81.5 53.2 0.023 0.014 0.009 0.103

349 175-265 Met/Qmp Sulfide 0.043 0.042 0.410 86.9 90.9 92.0 0.006 0.004 0.002 0.035

352 115-140, 160-185, 210-230,

325-500

Met & Amp Mixed & Sulfide

0.085 0.081 0.122 81.0 84.8 57.1 0.017 0.013 0.004 0.055



CP Hole No.

Hole Ft

Rock Type

Material Type


% Mo,

S= % Cu, % Mo,

tot % Mo,

S= % Cu, % Mo,

tot % Mo,

S= % Mo, Ox

% Cu, %

363 50-70, 95-205, 345-370,

390-415


0.052 0.044 0.219 67.8 79.1 60.5 0.018 0.010 0.008 0.092

365 55-80, 140-165, 385-420,


0.076 0.064 0.142 72.6 85.3 67.9 0.022 0.010 0.012 0.048

411 130-380 Met/Amp Sulfide 0.087 0.085 0.065 90.9 92.7 81.2 0.009 0.007 0.002 0.014

0.081 0.074 0.127 78.3 85.3 64.9 0.017 0.011 0.006 0.053

Figure 13-2: CP Holes – QMP, Sulfide – Head vs. Mo-Cu Rougher Recovery



Figure 13-3: CP Holes – Amp, Sulfide – Head vs. Mo-Cu Rougher Recovery

Figure 13-4: CP Holes – Met, Sulfide – Head vs Mo-Cu Rougher Recovery

For a sulfide molybdenum head grade of 0.10% Mo, the range of total molybdenum sulfide recoveries ranges from 76 to 93% as shown in Table 13-6 when using the equations stated in Section 13.6.2.2.1. QMP rock has the highest recovery, followed by Amp and Met.



For a sulfide Mo head grade of 0.10% Mo, the range of total Mo sulfide recoveries ranges from 76 to 93% as shown in Table 13-6.

Table 13-6: Comparison of Mo Recovery for Different Rock Types

Rock Type Estimated Molybdenum Sulfide Recovery for a Sulfide Mo Head of 0.10%

For mineralization where the oxide Mo fraction is less than or equal to 10 % of

the total Mo

For mineralization where the oxide Mo fraction is greater than 10 % of the total

Mo

QMP 93 85

Amp 87 79

Met 84 76

Since it is known that any molybdenum oxide is essentially lost in the flotation circuit, the total molybdenum grades listed in the mine model have been adjusted to reflect a sulfide molybdenum grade, which is subsequently used with the above cited recovery formulas to arrive at a predicted molybdenum recovery. Anaconda imposed an “oxide boundary” in their analysis of reserves, which essentially positioned the point above which 90% of the total molybdenum analysis is present as oxide molybdenum and is considered as waste. Given that historically the ores just below this boundary caused recovery problems in the mill, and given that a review of the CP hole tests indicated that when the oxide content exceeded 10% of the total molybdenum content that the sulfide molybdenum recovery was negatively impacted, it was decided to divide the ore below the Anaconda oxide boundary into two zones. To accomplish this, a sulfide boundary was estimated that indicated the transition of the oxide molybdenum to less than 10% of the total molybdenum. Below this sulfide boundary it is anticipated that the sulfide molybdenum recovery will be that associated with the higher recovery estimates for the CP hole tests. Above the sulfide boundary, the ore is termed “transition” and represents ore with a percentage of the total molybdenum present as oxide from 10% to 90%. In this transition zone, the sulfide molybdenum recovery will be lower than in the sulfide zone.

The block model was updated with oxide molybdenum assays. Oxide molybdenum is subtracted from the total molybdenum assay and the recovery formulas for the remaining sulfide component are assigned to the block or nearest block in the block model. Sections 14 and 15 discuss this further.

Approximately 2.5% of the recoverable molybdenum lies in the transition zone.

As noted earlier, assay reports and balances were also found for part of the mine blast hole samples. A total of 67 tests performed from July 1982 through January 1985 were found. The average grade of the 67 tests was 0.118% sulfide molybdenum (total molybdenum of 0.121%) and had an associated rougher recovery of 93.1%. The rock type of the blast holes could not be ascertained. The grab samples taken at the mining face during November and December 1981 also had no mineralogy and were less useful as they were simple grab samples.

13.6.1.2 GMI Molybdenum Flotation Testing

In 2012 and 2013, FLSmidth (Dawson Metallurgical Laboratories) performed flotation testing on molybdenum pit samples to validate earlier historical data and to provide details on ore variability. The programs consisted of:

Acquisition of samples from GMI PQ core rejects by independent consulting geologists employed by GMI. The samples were selected to represent the various attributes that each composite was to represent. All samples were taken from holes drilled in the molybdenum pit.

Optimization of flotation parameters primarily using a master composite (MC-01) that represented the overall molybdenum deposit make-up of 43% QMP, 41% Amp and 16% Meta. Testing on the MC-01



composite include primary grind evaluations, molybdenum and copper reagent screening, and cleaner flotation testing.

Testing of eight ore types at varying molybdenum content (30 tests) using the optimum conditions from the MC-01 testing.

Testing (rougher only) of fifty composites taken across the deposit for the purposes of evaluating variability in recovery and for use in evaluating the influence of head grade on recovery (together with the above 30 head grade tests).

Optimization of copper reagents on five composites of higher copper content.

Flotation evaluations on three metasediment composites.

FLSmidth performed 118 flotation tests with nearly all being staged rougher flotation tests.

13.6.1.2.1 MC-01 Testing

The master composite Mc-01 had a head grade of 0.077% total molybdenum, 0.0012% molybdenum oxide, 0.038% copper, and 1.61% iron. Table 13-7 presents the results of an ICP scan. The molybdenum rougher recovery of 96.7% is for total molybdenum. The rougher tailing assayed 0.0003% Mo oxide, which has not been accounted for in calculating a sulfide molybdenum recovery. The average molybdenum oxide content of the 71 individual composites tested in the study was 0.00052%.

The first phase of testing evaluated seven molybdenum collectors in ten rougher tests, with the selection of Molyflo as the preferred reagent and with a natural pH for the ore (typically 7.6). The second phase of testing ascertained the optimum primary grind over a range of 80% passing sizes of 115 to 262 micrometers. GMI evaluated the results of the rougher tests in a trade-off study, which examined the benefits of a higher recovery versus the added operating and capital cost for grinding finer. The trade-off also examined the influence of molybdenum pricing. It resulted in a grind size of 151 micrometers being the best of the grind sizes tested. For all later tests, GMI selected a primary grind size of 147 micrometers (K80).

GMI evaluated the benefit of regrinding the rougher concentrate at 20, 25, and 40 micrometers (K80), and selected 40 micrometers. The regrind tests consisted of regrinding the rougher concentrate, followed by two stages of cleaner flotation in open circuit.

Table 13-7: ICP Head Assay

Liberty Pit Liberty Pit

Element Units MC-01 Method Element Units MC-01 Method

Ag ppm 0.34 ICP-MS Na % 0.46 ICP-MS

Al % 4.25 ICP-MS Nb ppm 6.6 ICP-MS

As ppm 3.5 ICP-MS Ni ppm 11.7 ICP-MS

Ba ppm 900 ICP-MS P ppm 500 ICP-MS

Be ppm 1.66 ICP-MS Pb ppm 16.3 ICP-MS

Bi ppm 0.21 ICP-MS Rb ppm 129.5 ICP-MS

Ca % 0.84 ICP-MS Re ppm 0.073 ICP-MS

Cd ppm <0.5 ICP-MS S % 0.97 ICP-MS

Ce ppm 22.0 ICP-MS Sb ppm 1.17 ICP-MS



Liberty Pit Liberty Pit

Element Units MC-01 Method Element Units MC-01 Method

Co ppm 7.8 ICP-MS Sc ppm 1.8 ICP-MS

Cu ppm 358 ICP-MS Se ppm 3 ICP-MS

Cr ppm 96 ICP-MS Sn ppm 2 ICP-MS

Cs ppm 3.05 ICP-MS Sr ppm 184.5 ICP-MS

Fe % 1.41 ICP-MS Ta ppm 0.27 ICP-MS

Ga ppm 10.95 ICP-MS Te ppm <0.05 ICP-MS

Ge ppm 0.08 ICP-MS Th ppm 4.4 ICP-MS

Hf ppm 0.2 ICP-MS Ti % 0.046 ICP-MS

Hg ppm 0.01 CV Tl ppm 0.64 ICP-MS

In ppm 0.041 ICP-MS U ppm 2.9 ICP-MS

K % 3.53 ICP-MS V ppm 24 ICP-MS

La ppm 12.6 ICP-MS W ppm 4.8 ICP-MS

Li ppm 17.5 ICP-MS Y ppm 6.6 ICP-MS

Mg % 0.16 ICP-MS Zn ppm 220 ICP-MS

Mn ppm 375 ICP-MS Zr ppm 5.9 ICP-MS

Mo ppm 762 ICP-MS

ICP-MS - ICP - Mass Spec.

CV - Cold Vapor

Table 13-8 presents the overall response of the MC-01 composite.

Table 13-8: MC-01 Flotation Response

Rougher Flotation - 12 minutes - 151 micrometer grind (K80)

2nd Cleaner Concentrate - Open Testing - 40

micrometer regrind (K80)

Recovery, %

Molybdenum, total 96.7 85.7

Copper 76.8 55.4

Concentrate grade, %

Molybdenum 2.78 22.3

Copper 1.23 7.5

Iron 6.44 16.9

13.6.1.2.2 Ore Variability Testing

Per instructions prepared by GMI, FLSmidth prepared 30 composites varying alteration, lithology, and ore grade and ran the standard rougher flotation test (developed using MC-01) on each composite. Table 13-9 shows the results of these tests. One composite, which had a head grade of 0.009% Mo, was dropped from further analysis.



FLSmidth prepared 50 more composites with the objective of measuring the metallurgical character across the deposit (see Table 13-10). A review of the 50 pit variability composites determined that 46 of the composites were constructed entirely of one ore type as used in the ore variability testing. GMI therefore decided to review the two sets of samples as one lot in order to ascertain recoveries as a function of ore type, ore grade, and rougher concentrate molybdenum concentration. Table 13-11 lists the composites utilized in the variability study of head grade versus recovery by ore type. GMI gave equal weight to each composite within an ore type when averaging the test results. For determining the overall deposit response, GMI weighted the individual ore types by the fraction of in-situ molybdenum contained within each ore type.



Table 13-9: Ore Grade Variability Rougher Test Results

Combined Ro Concentrates (12 min) Scav Tails Assay, % % Distribution

Ore Sample ID P80, µm Wt % Mo, Tot

Cu, Tot Fe Mo Cu Fe

(Fun is unclassified lithology) GR-AmpFun01 142 1.65 2.33 1.10 4.39 93.5 73.6 4.4 GR-AmpFun02 140 1.49 3.07 0.99 3.36 92.1 76.2 3.7 AVERAGE AMP Fun 141 1.57 2.70 1.05 3.88 92.8 74.9 4.0 GR-AmpPhy01 160 2.03 1.46 0.81 3.99 94.4 64.3 5.0 GR-AmpPhy02 176 1.27 3.44 1.98 6.42 88.3 84.8 4.1 GR-AmpPhy03 164 1.48 4.28 0.96 3.39 93.5 68.7 4.3 GR-AmpPhy04 175 1.86 3.48 1.56 5.15 86.2 77.5 4.8 AVERAGE AMP PHY 169 1.66 3.17 1.33 4.74 90.6 73.8 4.6 GR-AmpPot01 178 1.07 1.92 1.69 5.51 92.5 72.6 5.2 GR-AmpPot02 143 1.70 3.47 0.87 3.06 91.7 69.5 4.9 GR-AmpPot03 120 2.29 1.69 0.99 3.00 83.4 29.6 5.7 GR-AmpPot04 160 1.28 4.39 1.76 4.83 88.9 87.1 3.7 AVERAGE AMP POT 150 1.585 2.87 1.33 4.10 89.1 64.7 4.9 GR-Meta01 99 4.68 0.97 1.41 22.85 98.0 24.8 22.8 GR-Meta02 111 1.21 2.03 1.94 7.77 90.2 66.4 3.2 GR-Meta03 117 3.19 1.24 1.18 27.76 94.9 34.9 16.8 GR-Meta04 113 2.91 2.99 4.15 9.46 92.9 81.1 5.4 AVERAGE META 110 2.9975 1.81 2.17 16.96 94.0 51.8 12.1 GR-QmpFUn01 155 1.63 1.16 0.35 2.13 91.4 60.7 4.3 GR-Qmp FUn02 154 1.51 2.50 0.77 3.62 86.1 61.4 4.0 GR-QmpFUn03 123 2.44 2.14 1.18 5.45 88.7 34.2 5.7 GR-Qmp FUn04 133 2.10 2.76 0.90 3.72 93.8 51.7 7.1 AVERAGE QMP Fun 141 1.92 2.14 0.80 3.73 90.0 52.0 5.3 GR-QmpPhy01 154 1.01 1.86 0.94 4.81 82.9 34.8 3.8 GR-QmpPhy02 163 0.95 4.04 1.18 4.71 88.6 30.5 3.3 GR-QmpPhy03 163 1.83 2.47 1.05 4.38 85.4 74.2 3.9 GR-QmpPhy04 160 1.64 5.87 1.28 3.94 93.1 64.0 4.7 AVERAGE QMP PHY 160 1.3575 3.56 1.11 4.46 87.5 50.9 3.9 GR-QmpPot01 143 0.96 1.71 1.07 5.25 94.3 64.3 2.4 GR-QmpPot02 137 1.48 3.79 0.88 3.97 95.6 67.7 3.5 GR-QmpPot03 152 3.02 1.86 0.54 5.28 97.3 66.9 9.9 GR-QmpPot04 147 1.75 4.97 0.62 2.68 95.2 71.4 4.3 AVERAGE QMP POT 145 1.8025 3.08 0.78 4.30 95.6 67.6 5.0 GR-QmpSil01 189 0.88 0.88 0.71 3.97 83.0 65.8 2.5 GR-QmpSil02 176 1.66 7.16 1.52 8.22 94.7 77.3 5.5 GR-QmpSil03 201 1.44 4.09 1.46 7.00 85.6 43.6 9.5 GR-QmpSil04 165 2.30 3.82 0.67 4.40 95.0 66.2 3.9 AVERAGE QMP SIL 183 1.57 3.99 1.09 5.90 89.6 63.2 5.4 AVERAGE ALL 145 1.84 2.76 1.22 6.02 91.4 62.2 5.7



Table 13-10: Pit Variability Testing

Combined Ro Concentrates (12 min)

Scav Tails Assay,

% %

Distribution Back Calc Head Assays PV Ore Sample ID P80, µm Wt% Mo Tot Cu Tot Fe Mo Cu Fe Mo, % Cu, % Fe, % 1 Qmp Phy 155 4.7 1.37 0.43 3.56 85.0 71.0 9.6 0.076 0.029 1.75 2 Qmp Phy 150 2.7 6.29 1.11 3.67 92.2 95.7 7.1 0.186 0.032 1.41 3 Met Pot 91 3.3 2.47 1.54 9.65 91.0 72.2 5.6 0.090 0.070 5.65 4 Qmp Sil 154 1.7 2.35 4.16 10.15 90.8 30.6 12.4 0.044 0.231 1.39 5 Qmp Phy 148 2.6 4.21 0.99 5.92 95.2 50.2 9.9 0.115 0.051 1.57 6 Qmp Pot 137 2.1 1.13 0.61 3.13 81.7 64.4 5.1 0.028 0.020 1.28 7 Amp Phy/Pot 134 2.2 4.78 0.93 3.57 91.7 75.8 5.0 0.113 0.027 1.54 8 Amp Phy/Pot 133 1.3 5.64 0.94 5.40 90.5 28.0 5.8 0.079 0.043 1.18 9 Qmp Phy 127 1.9 2.89 0.60 2.63 78.3 52.5 4.0 0.070 0.022 1.26 10 Qmp Phy 112 3.5 2.30 2.07 8.53 82.2 34.9 22.9 0.098 0.209 1.31 11 Met Sil 116 4.3 1.57 1.00 11.80 87.6 80.4 14.2 0.077 0.053 3.56 12 Qmp Sil 153 1.5 3.49 0.69 5.07 87.1 49.1 3.5 0.061 0.021 2.18 13 Met Sil 153 1.7 6.65 1.62 5.74 89.1 73.5 6.1 0.126 0.037 1.58 14 Qmp Phy 103 2.1 2.40 1.67 7.36 89.0 13.8 7.9 0.056 0.253 1.93 15 Qmp Sil 187 1.8 1.88 1.57 21.30 84.0 37.6 15.1 0.040 0.074 2.51 16 Qmp Phy/Pot 200 1.4 2.38 1.03 5.39 90.9 25.2 5.5 0.037 0.057 1.38 17 Qmp Phy 135 1.7 2.07 0.95 7.13 97.5 42.2 7.9 0.036 0.038 1.52 18 Qmp Phy 131 2.3 4.19 0.90 2.54 94.3 62.5 3.8 0.100 0.032 1.52 19 Qmp Pot 145 1.9 4.02 0.65 2.71 87.5 66.8 4.3 0.089 0.019 1.22 20 Amp Pot 174 2.5 2.15 0.09 3.75 69.6 32.1 4.6 0.076 0.007 2.04 21 Amp Pot 156 1.4 6.41 1.33 4.08 95.1 75.0 4.8 0.096 0.025 1.20 22 Qmp Pot 165 1.3 1.38 0.48 5.02 66.6 56.9 4.0 0.027 0.011 1.63 23 Qmp Pot 159 1.1 4.10 1.57 4.99 95.5 55.3 3.3 0.048 0.032 1.71 24 Amp Pot 153 6.9 2.54 0.21 1.91 92.5 63.6 12.0 0.188 0.023 1.09 25 Amp Pot 124 2.8 4.67 0.30 2.22 88.4 34.4 5.3 0.149 0.025 1.17 26 Amp Pot 150 2.7 2.14 0.47 2.20 83.3 62.3 6.3 0.070 0.020 0.96 27 Qmp Pot 125 2.0 3.37 0.70 3.09 85.1 52.2 4.8 0.078 0.027 1.28 28 Amp Pot 102 5.8 2.10 0.23 1.90 91.1 68.3 8.2 0.133 0.020 1.33 29 Amp Pot 132 1.0 5.24 1.76 3.92 87.9 75.7 4.4 0.061 0.024 0.88 30 Qmp Pot 142 1.1 4.79 2.60 5.88 89.4 78.8 3.0 0.057 0.035 2.1 31 Qmp Pot 136 2.5 4.67 1.43 3.77 88.4 73.8 7.5 0.131 0.048 1.24 32 Qmp Pot 122 1.7 6.03 0.55 2.52 89.6 64.9 5.0 0.113 0.014 0.84 33 Qmp Pot 137 1.7 3.81 1.15 3.47 87.2 71.5 5.1 0.076 0.028 1.19 34 Qmp Pot 151 2.0 8.93 0.54 2.40 90.7 63.6 6.7 0.199 0.017 0.73 35 Qmp Pot 155 3.0 5.16 2.58 5.86 90.3 73.2 9.2 0.170 0.105 1.91 36 Amp Phy 147 2.0 1.02 1.00 3.47 88.7 68.4 4.2 0.023 0.030 1.67 37 Amp Phy 144 1.9 2.46 0.82 2.58 96.5 69.8 4.8 0.048 0.022 1.00 38 Amp Phy 123 5.6 0.57 0.15 6.10 90.3 54.5 15.3 0.035 0.015 2.25 39 Amp Phy 146 2.3 4.26 1.50 5.67 94.3 79.5 7.3 0.104 0.043 1.8 40 Amp Phy 160 1.9 4.06 2.17 5.44 94.4 75.3 5.7 0.082 0.055 1.8 41 Met Pot 154 2.9 0.31 0.18 2.35 62.6 49.0 6.6 0.014 0.011 1.02 42 Met Phy 165 2.1 2.28 3.22 9.50 92.5 70.5 5.3 0.052 0.096 3.79 43 Met Unc 127 2.9 2.34 1.60 10.05 97.5 59.9 5.6 0.069 0.076 5.12 44 Met Unc 104 2.2 2.32 0.58 4.64 95.7 37.2 3.2 0.054 0.035 3.21 45 Met Unc 90 3.5 1.07 1.76 16.58 97.5 56.9 13.8 0.038 0.107 4.17 46 Qmp Pot 167 1.6 2.35 2.68 7.08 89.5 75.5 4.1 0.043 0.058 2.79 47 Qmp Pot 162 1.2 2.41 1.48 4.36 86.2 70.9 4.2 0.033 0.025 1.22 48 Amp Pot 178 1.2 3.58 0.96 3.28 82.8 68.2 4.5 0.051 0.017 0.86 49 Qmp Pot 162 1.8 2.78 0.78 2.87 78.9 57.8 4.2 0.062 0.024 1.22 50 Qmp Pot 152 2.5 4.30 1.07 4.82 88.5 79.3 8.6 0.124 0.034 1.42



Table 13-11: Combined Composites for Measuring Variability

Pit Var. Ore Sample ID Scav Tails Combined Rougher Concentrates at 12 minutes Head Assays Series GR is for Head vs K80 Wt % Assay, % Distribution, % Mo Tot., % Cu Tot., %

ID Recovery Series micrometers Mo, Tot

Cu, Tot Fe Mo Cu Fe

Back Calc

Back Calc

GR-AmpFun01 142 1.65 2.33 1.10 4.39 93.5 73.6 4.4 0.041 0.025 GR-AmpFun02 140 1.49 3.07 0.99 3.36 92.1 76.2 3.7 0.050 0.019 GR-AmpPhy01 160 2.03 1.46 0.81 3.99 94.4 64.3 5.0 0.031 0.026 GR-AmpPhy02 176 1.27 3.44 1.98 6.42 88.3 84.8 4.1 0.050 0.030 GR-AmpPhy03 164 1.48 4.28 0.96 3.39 93.5 68.7 4.3 0.068 0.021 GR-AmpPhy04 175 1.86 3.48 1.56 5.15 86.2 77.5 4.8 0.075 0.037 37 Amp Phy 144 1.9 2.46 0.82 2.58 96.5 69.8 4.8 0.048 0.022 39 Amp Phy 146 2.3 4.26 1.50 5.67 94.3 79.5 7.3 0.104 0.043 40 Amp Phy 160 1.9 4.06 2.17 5.44 94.4 75.3 5.7 0.082 0.055 38 Amp Phy 123 5.6 0.57 0.15 6.10 90.3 54.5 15.3 0.035 0.015 36 Amp Phy 147 2.0 1.02 1.00 3.47 88.7 68.4 4.2 0.023 0.030 GR-AmpPot01 178 1.07 1.92 1.69 5.51 92.5 72.6 5.2 0.022 0.025 GR-AmpPot02 143 1.70 3.47 0.87 3.06 91.7 69.5 4.9 0.064 0.021 GR-AmpPot03 120 2.29 1.69 0.99 3.00 83.4 29.6 5.7 0.047 0.076 GR-AmpPot04 160 1.28 4.39 1.76 4.83 88.9 87.1 3.7 0.063 0.026 20 Amp Pot 174 2.5 2.15 0.09 3.75 69.6 32.1 4.6 0.076 0.007 21 Amp Pot 156 1.4 6.41 1.33 4.08 95.1 75.0 4.8 0.096 0.025 24 Amp Pot 153 6.9 2.54 0.21 1.91 92.5 63.6 12.0 0.188 0.023 25 Amp Pot 124 2.8 4.67 0.30 2.22 88.4 34.4 5.3 0.149 0.025 26 Amp Pot 150 2.7 2.14 0.47 2.20 83.3 62.3 6.3 0.070 0.020 28 Amp Pot 102 5.8 2.10 0.23 1.90 91.1 68.3 8.2 0.133 0.020 29 Amp Pot 132 1.0 5.24 1.76 3.92 87.9 75.7 4.4 0.061 0.024 48 Amp Pot 178 1.2 3.58 0.96 3.28 82.8 68.2 4.5 0.051 0.017 GR-Meta01 99 4.68 0.97 1.41 22.85 98.0 24.8 22.8 0.047 0.266 GR-Meta02 Sil, BiHf 111 1.21 2.03 1.94 7.77 90.2 66.4 3.2 0.027 0.035 GR-Meta03 chlorite 117 3.19 1.24 1.18 27.76 94.9 34.9 16.8 0.042 0.108 GR-Meta04 Prop 113 2.91 2.99 4.15 9.46 92.9 81.1 5.4 0.093 0.149 11 Met Sil 116 4.3 1.57 1.00 11.80 87.6 80.4 14.2 0.077 0.053 3 Met Pot 91 3.3 2.47 1.54 9.65 91.0 72.2 5.6 0.090 0.070 42 Met Phy 165 2.1 2.28 3.22 9.50 92.5 70.5 5.3 0.052 0.096 43 Met Unc 127 2.9 2.34 1.60 10.05 97.5 59.9 5.6 0.069 0.076 44 Met Unc 104 2.2 2.32 0.58 4.64 95.7 37.2 3.2 0.054 0.035 45 Met Unc 90 3.5 1.07 1.76 16.58 97.5 56.9 13.8 0.038 0.107 GR-QmpFUn01 155 1.63 1.16 0.35 2.13 91.4 60.7 4.3 0.021 0.010 GR-Qmp FUn02 154 1.51 2.50 0.77 3.62 86.1 61.4 4.0 0.044 0.019 GR-QmpFUn03 123 2.44 2.14 1.18 5.45 88.7 34.2 5.7 0.059 0.084 GR-Qmp FUn04 133 2.10 2.76 0.90 3.72 93.8 51.7 7.1 0.062 0.037 GR-QmpPhy01 154 1.01 1.86 0.94 4.81 82.9 34.8 3.8 0.023 0.027 GR-QmpPhy02 163 0.95 4.04 1.18 4.71 88.6 30.5 3.3 0.043 0.037 GR-QmpPhy03 163 1.83 2.47 1.05 4.38 85.4 74.2 3.9 0.053 0.026 GR-QmpPhy04 160 1.64 5.87 1.28 3.94 93.1 64.0 4.7 0.103 0.033 1 Qmp Phy 155 4.7 1.37 0.43 3.56 85.0 71.0 9.6 0.076 0.029 2 Qmp Phy 150 2.7 6.29 1.11 3.67 92.2 95.7 7.1 0.186 0.032 9 Qmp Phy 127 1.9 2.89 0.60 2.63 78.3 52.5 4.0 0.070 0.022 10 Qmp Phy 112 3.5 2.30 2.07 8.53 82.2 34.9 22.9 0.098 0.209 5 Qmp Phy 148 2.6 4.21 0.99 5.92 95.2 50.2 9.9 0.115 0.051 14 Qmp Phy 103 2.1 2.40 1.67 7.36 89.0 13.8 7.9 0.056 0.253 17 Qmp Phy 135 1.7 2.07 0.95 7.13 97.5 42.2 7.9 0.036 0.038 18 Qmp Phy 131 2.3 4.19 0.90 2.54 94.3 62.5 3.8 0.100 0.032 GR-QmpPot01 143 0.96 1.71 1.07 5.25 94.3 64.3 2.4 0.017 0.016 GR-QmpPot02 137 1.48 3.79 0.88 3.97 95.6 67.7 3.5 0.058 0.019 GR-QmpPot03 152 3.02 1.86 0.54 5.28 97.3 66.9 9.9 0.058 0.024



Pit Var. Ore Sample ID Scav Tails Combined Rougher Concentrates at 12 minutes Head Assays Series GR is for Head vs K80 Wt % Assay, % Distribution, % Mo Tot., % Cu Tot., %

ID Recovery Series micrometers Mo, Tot

Cu, Tot Fe Mo Cu Fe

Back Calc

Back Calc

GR-QmpPot04 147 1.75 4.97 0.62 2.68 95.2 71.4 4.3 0.092 0.015 6 Qmp Pot 137 2.1 1.13 0.61 3.13 81.7 64.4 5.1 0.028 0.020 19 Qmp Pot 145 1.9 4.02 0.65 2.71 87.5 66.8 4.3 0.089 0.019 22 Qmp Pot 165 1.3 1.38 0.48 5.02 66.6 56.9 4.0 0.027 0.011 23 Qmp Pot 159 1.1 4.10 1.57 4.99 95.5 55.3 3.3 0.048 0.032 27 Qmp Pot 125 2.0 3.37 0.70 3.09 85.1 52.2 4.8 0.078 0.027 30 Qmp Pot 142 1.1 4.79 2.60 5.88 89.4 78.8 3.0 0.057 0.035 31 Qmp Pot 136 2.5 4.67 1.43 3.77 88.4 73.8 7.5 0.131 0.048 32 Qmp Pot 122 1.7 6.03 0.55 2.52 89.6 64.9 5.0 0.113 0.014 33 Qmp Pot 137 1.7 3.81 1.15 3.47 87.2 71.5 5.1 0.076 0.028 34 Qmp Pot 151 2.0 8.93 0.54 2.40 90.7 63.6 6.7 0.199 0.017 35 Qmp Pot 155 3.0 5.16 2.58 5.86 90.3 73.2 9.2 0.170 0.105 46 Qmp Pot 167 1.6 2.35 2.68 7.08 89.5 75.5 4.1 0.043 0.058 47 Qmp Pot 162 1.2 2.41 1.48 4.36 86.2 70.9 4.2 0.033 0.025 49 Qmp Pot 162 1.8 2.78 0.78 2.87 78.9 57.8 4.2 0.062 0.024 50 Qmp Pot 152 2.5 4.30 1.07 4.82 88.5 79.3 8.6 0.124 0.034 GR-QmpSil02 176 1.66 7.16 1.52 8.22 94.7 77.3 5.5 0.125 0.032 4 Qmp Sil 154 1.7 2.35 4.16 10.15 90.8 30.6 12.4 0.044 0.231 12 Qmp Sil 153 1.5 3.49 0.69 5.07 87.1 49.1 3.5 0.061 0.021 15 Qmp Sil 187 1.8 1.88 1.57 21.30 84.0 37.6 15.1 0.040 0.074 13 Qmp Sil 153 1.7 6.65 1.62 5.74 89.1 73.5 6.1 0.126 0.037 GR-QmpSil03 201 1.44 4.09 1.46 7.00 85.6 43.6 9.5 0.069 0.048 GR-QmpSil04 165 2.30 3.82 0.67 4.40 95.0 66.2 3.9 0.092 0.023 AVERAGE ALL 144 2.2 3.19 1.23 6.02 89.7 61.4 5.7 0.072 0.048

13.6.1.3 Molybdenum Recovery Estimates

13.6.1.3.1 Historical Basis

Table 13-12 presents a summary of the historical mill molybdenum recovery. As can be seen from Table 13-12, and as documented in the Cyprus monthly operating reports reviewed for this study, the mill made significant improvements in both the molybdenum and copper sections at the end of the operation. Cyprus closed the operation due to low metal prices.

Table 13-12: Historical Mill Molybdenum Production and Recovery

Mine Operator Period Tons Milled Tons (000)

Ore Grade Mo, %

Million Lbs Mo

Recovery Total Mo, %

Cyprus Tonopah Mining Last 6 months of 1990 3,234 0.111 6.2 85.9

Cyprus Tonopah Mining 1989 & 1990 14,910 0.118 29.1 82.5

Anaconda Minerals, Nevada Moly 1982, 1983, and 1984 (1) 14,030 0.100 23.8 84.6

Total 1982-1984, 1989, 1990 28,940 0.109 52.9 83.6

Note 1: Mill closed for 10 months during this period.

An important issue is the capture of the molybdenite in the roughers and the flexibility to handle clay ores that require lower flotation densities. The Anaconda operation provided for thirty-six 1,000-cubic-ft rougher flotation cells, which equates to 1.64 cubic-ft of roughers per dst/d of mill feed. The Liberty design provides for sixteen 3,530-cubic-ft roughers, which equates to 2.13 cubic ft of roughers per dst/d of mill feed (see Table 13-13). The increased residence time for the Liberty mill will provide improved recovery and control, plus the potential for operating a



rougher/scavenger type circuit. In addition, these design factors provide added operating flexibility and potential recovery and concentrate grade improvements. For head grade of 0.111% Mo, which records show was the feed to the Cyprus mill in the last six months of 1990, the average recovery as estimated by the GMI sulfide formulas in Section 14 would be 89.4%. Unfortunately, historical data do not exist for the molybdenum oxide content of the Cyprus mill feed, so an accurate comparison to historical is not possible. The composites tested by FLSmidth in 2012 and 2013 demonstrated low molybdenum oxide content.

Table 13-13: GMI Flotation Equipment versus Anaconda Installation

Equipment Item Units Anaconda Installation GMI Current Design

FLOTATION CELLS

Bulk Mo-Cu roughers cubic ft 36,000 56,480

Bulk Mo-Cu first cleaners and scavengers cubic ft 2,250 4,770

Bulk Mo-Cu second cleaners cubic ft 300 1,060

Mo separation rougher/scavengers cubic ft 900 1,225

REGRIND MILL

Bulk Mo-Cu rougher concentrate regrind mill HP one ball mill, 600 HP vertical mill, 650 HP

13.6.1.3.2 Current Testing Basis – Molybdenum Pit

GMI adjusted the results of the 75 composites tested in 2012 and 2013 to equalize the influence of grind variation by using the results of the grind versus recovery curves from current testing. Performing this adjustment removed much of the scatter in the data. GMI then lowered the overall recovery by a 0.98 factor to account for losses in the copper-molybdenum cleaner sections and a 0.99 factor that reflects losses in the molybdenum recovery flotation section. Figure 13-5 plots the resulting data. The 2012-2013 tests have a flatter profile than the equation used in the 2008 PFS. For the lower grade mill feed, the current testing indicates a higher recovery, while for the higher grade, the opposite is true. At the mean grade of the deposit, the two sets give equivalent molybdenum recovery.

The data in Figure 13-5 for the current testing are based on total molybdenum recoveries. The rougher tailing typically contains 0.0005% acid soluble Mo (Mo oxide). Adjusting for the molybdenum oxide in the rougher tailing raises the average of the new tests from 86.8 to 87.3%. The equation used in the original PFS is for sulfide molybdenum recovery. The recent testing supports the molybdenum sulfide recovery, which for a 0.082% sulfide molybdenum ore grade equals 88% (weighted average calculation from mine model). The on-going test program provides for locked-cycle testing to confirm the recovery in the copper-molybdenum cleaner sections and molybdenum separation tests to confirm the molybdenum recovery in the molybdenum separation circuit. The values used in this study are typical of industry practice.



Figure 13-5: Molybdenum Pit – Sulfide Zone – Total Mo Rec vs Mo Head Grade – Ind. Composites

13.6.2 Flotation Testing and Historical Comparison – Copper

13.6.2.1 Historical Copper Recovery

The recovery of copper at Tonopah historically was of secondary importance given the low copper content of the ore as compared to molybdenum. During the Anaconda operation, the company shipped the copper concentrate to a copper smelter at Ely, Nevada, which accepted low-grade copper concentration. The low concentration of copper in the concentrate is due to chalcocite rimming or tarnishing pyrite. Table 13-14 summarizes the historical copper recovery and concentrate grade.

Table 13-14: Historical Copper Recovery and Concentrate Grade

Operating Period - Recent First Ore Milled Tons

x 1,000 Ore Grade, %

Cu Recovery, %

Cu Concentrate Grade, % Cu

Cyprus last six months 1990 3,234 0.064 67.2 22.8 Cyprus all of 1990 7,028 0.073 56.3 23.0 Cyprus Jan 1989 thru Dec 1990 14,910 0.083 41.0 12.1

Cyprus did not have the opportunity to ship the low grade concentrate under the favorable terms Anaconda enjoyed. Cyprus performed laboratory and plant testing that led to the use of hydrogen peroxide to treat the molybdenum rougher tailing (copper concentrate), which removed and lessened the influence of the chalcocite rimming (U.S. Patent 5,110,455 May 5, 1992). The last 12 months of the Cyprus operation show the influence this process change made (Table 13-13) which indicates that the copper concentrate grade increased from 12.1% to 23.0% copper. In the last six months of the Cyprus operation, a number of modifications were made to flotation circuits, primarily in the Mo-Cu bulk roughers. These modifications included improved concentrate gathering with cross-launders and



paddles on end cells, increased speed for the cell agitators, and modification in flotation reagent addition points. For the last six months, Cyprus increased the copper recovery to 67.2% versus 41% in the preceding two years.

It is anticipated that the concentrate grade will be 23% Cu. This concentrate grade value agrees with the last 12 months of the Cyprus operation and the use of hydrogen peroxide is included in the GMI mill design.

13.6.2.2 GMI Current Copper Flotation Testing

13.6.2.2.1 Molybdenum Pit Composites

The average rougher recovery from the GMI tests listed in Table 13-9 is 61.4% for a head grade of 0.048% total copper. When the data are weighted by the ore types in the deposits, the copper recovery in the bulk molybdenum-copper separation calculates to 59.3%. Allowing for 98% recovery in the bulk cleaner sections, 99.5% recovery in the molybdenum separation circuit and 98% in the copper concentrate up-grading flotation, the overall copper recovery is estimated to be 56.6%. The mine plan copper content is 0.10% total copper, which is higher than the tested ore grades. The scatter of the test data does not predict a relationship between copper head grade and recovery. Additionally, the model does not contain information to calculate the sulfide copper grades. Further testing will quantify the sulfide copper recovery and test higher head grades with the goal of developing a relationship of copper head grade to recovery.

Currently planned testing includes large scale testing for development of the copper concentrate up-grade circuit and locked-cycle testing to confirm the final copper recovery.

13.6.2.2.2 Eastern Copper Pit

As part of pushing back the pit, some of the eastern copper pit material will be fed to the mill. To obtain an estimate of how this material may perform, samples were taken as described below. The samples taken may not fully represent the eastern pit ore and additional drilling and metallurgical testing is planned. The tests performed below indicate a sulfide copper recovery of 70% is attainable. The molybdenum recovery is more variable and was difficult to confirm given the low molybdenum head grades. For the trench samples, the molybdenum sulfide recovery was equal to the transition molybdenum recoveries estimated for the molybdenum pit. The drill hole samples produced a lower recovery than estimated by the transition molybdenum recovery formulas. The issue will be resolved by drilling holes into the now identified areas of the eastern copper pit that are to be mined.

Trench Samples – Using the block model and drill hole copper grades at the current topographic surface in the existing copper pit, six areas with moderate to strong supergene or primary copper mineralization were selected for sampling. GMI dug trench samples with an excavator to depth of refusal, between 2 and 18 ft below ground surface. The maximum depth that the excavator could reach was about 25 ft below ground surface. All samples were meta-sedimentary rock with iron oxide staining from surface weathering and oxidation of pyrite, but the material interior to the fractures was unoxidized. From each of the six trench locations, GMI collected material in a 55-gallon drum. GMI sent grab samples from each location to American Assay Labs for analysis of copper and molybdenum. GMI submitted two 5-gallon buckets of material from each drum, about 45 kg total to the FLSmidth for flotation testing.

Coarse Reject Composites – SRK used preliminary pit designs to identify available drill holes in the planned copper pit area. Most of the recent General Moly drill holes in that area were reverse-circulation (RC), and the available material was coarse rejects of 5-ft drill sample intervals. Selected intervals had total copper grades greater than 0.2% Cu and were unoxidized according to the oxide to total molybdenum ratio (<10%). There was sufficient mineralized material from one core hole and three RC holes to make six composite samples between 36 and 45 kg. GMI created each composite from bracketed intervals of



consistent lithology from one drill hole. The company made the seventh drill hole composite from mineralized intervals from three of the Equatorial RC holes drilled in 2000.

13.6.2.3 GMI Testing Results – Copper Pit

The tests performed on the copper pit material are considered to be scoping in nature. New drilling and metallurgical testing is schedule for samples taken from the eastern copper pit.

Table 13-15: Copper Pit - Trench Sample Open Circuit Cleaner Tests

ID Trench 3 Trench 4 Trench 5 Trench 6 Test Number 3 4 5 6 Primary grind, K80 micrometers 137 137 134 119 COPPER Direct head sequential copper analysis Direct sequential AS Cu, % 0.021 0.100 0.019 0.018 Direct sequential total Cu, % 0.132 0.301 0.206 0.173 Sequential Sulf Cu, % 0.111 0.201 0.187 0.155 Testing Results Rougher tail AS Cu, % 0.022 0.117 0.012 0.012 Calc head total Cu, % 0.129 0.279 0.194 0.171 Second Cleaner conc grade, % Cu 13.4 13.1 16 15.8 Cu recovery based on sulfide head grade, % Rougher 82.0% 76.2% 85.7% 88.1% Second cleaner concentrate (est. closed circuit) 74.8% 67.7% 81.7% 84.5% Recovery allowance for concentrate upgrade 98.0% 98.0% 98.0% 98.0% Overall recovery into product, % 73.3% 66.4% 80.0% 82.8% MOLYBDENUM Direct head sequential copper analysis Direct sequential AS Mo, % 0.0003 0.0008 0.0002 0.0003 Direct sequential total Mo, % 0.0144 0.0338 0.0062 0.0144 Sequential Sulf Mo, % 0.0141 0.0330 0.0060 0.0141 Testing Results Rougher tail AS Mo, % 0.0003 0.0008 0.0002 0.0003 Calc head total Mo, % 0.0157 0.0302 0.0044 0.0083 Second Cl conc grade, % Mo 13.4 13.1 16 15.8 Mo recovery Est 2nd cleaner Cu-Mo conc recovery, % 78.1 73.3 54.3 72.2 Recovery Mo plant, % 99% 99% 99% 99% Overall recovery, % 77.3 72.6 53.7 71.4



Table 13-15 Copper Pit - Drill Hole Sample Open Circuit Cleaner Tests

ID ER00

North Pit

HT-773 interval 165-170



LM-854 interval 200-365

Test Number 9 12 13 14 15 Primary grind, K80 micrometers 149 151 151 156 144 COPPER Direct head sequential copper analysis Direct sequential AS Cu, % 0.075 0.059 0.096 0.109 0.072 Direct sequential total Cu, % 0.271 0.362 0.523 0.633 0.372 Sequential Sulf Cu, % 0.196 0.303 0.427 0.524 0.300 Testing Results Rougher tail AS Cu, % 0.054 0.032 0.072 0.047 0.077 Calc head total Cu, % 0.250 0.358 0.506 0.594 0.493 Second Cleaner conc grade, % Cu 10.8 11.0 12.6 16.6 11.8 Cu recovery based on sulfide head grade, % Rougher 74.7% 81.8% 92.0% 89.9% 80.7% Second cleaner concentrate (est. closed circuit) 60.5% 64.4% 73.4% 78.0% 72.1% Recovery allowance for concentrate upgrade 98.0% 98.0% 98.0% 98.0% 98.0% Overall recovery into product, % 59.3% 63.1% 71.9% 76.4% 70.7% MOLYBDENUM Direct head sequential copper analysis Direct sequential AS Mo, % 0.0016 0.0006 0.0011 0.0006 0.0006 Direct sequential total Mo, % 0.0439 0.0316 0.0253 0.0196 0.0368 Sequential Sulf Mo, % 0.0423 0.0310 0.0242 0.0190 0.0362 Testing Results Rougher tail AS Mo, % 0.0012 0.0003 0.0011 0.0006 0.0006 Calc head total Mo, % 0.0550 0.0365 0.0263 0.0231 0.0457 Second Cl conc grade, % Mo 10.8 11.0 12.6 16.6 11.8 Mo recovery Est 2nd cleaner Cu-Mo conc recovery, % 34.3 35.8 48.8 48.5 82.6 Recovery Mo plant, % 99% 99% 99% 99% 99% Overall recovery, % 33.9 35.4 48.3 48.0 81.8

Table 13-15 and Table 13-16 summarize the tests performed on the copper pit composites where second cleaner concentrates were produced. Averaging the results, and allowing for a 98% recovery in the copper concentrate up-grading flotation section, provides for an estimated overall copper sulfide recovery of 71.5%. To arrive at this estimate from the open circuit testing, typical allowances for recovery were applied to the open circuit second cleaner tailing and the first cleaner scavenger concentrate. The overall recovery from a rougher concentrate to a second cleaner molybdenum-copper concentrate would average 87.4%, which will probably improve when fresh ore samples are tested in the future. For trench samples 1 and 2, only rougher tests were performed. For an average sulfide head grade of 0.568% copper, the rougher sulfide copper recovery averaged 77%. For this report, a sulfide copper recovery of 70% was adopted.



The sulfide molybdenum recovery is estimated to be 58% and includes a molybdenum separation recovery of 99%. The samples tested were relatively low grade. Currently the molybdenum recovery is estimated using the transition molybdenum recovery formulas. To better understand the recoveries from the eastern copper pit areas, which will enter the mill as the pit pushes back, additional drilling and metallurgical testing is planned.

13.6.3 Flotation Circuit Description

The flotation plant will consist of bulk, molybdenum-copper separation, molybdenum, and copper flotation circuits.

Final molybdenum concentrate will be thickened and pumped to a molybdenum filter feed tank. The filter cake can be bypassed to an indoor stockpile or dried in a Holoflite dryer to approximately 5% moisture. A wet scrubber will process the dryer off-gas. The wet scrubber will discharge slurry to the final concentrate thickener.

Final molybdenum concentrate will be placed into super-sacks, and loaded into trucks for shipment to a roaster.

The molybdenum-copper bulk rougher flotation tailing will flow by gravity to a tailing thickener. The tailing thickener underflow will flow by gravity to a tailing storage facility.

The molybdenum-copper separation tailing, which is normally the final copper concentrate, will go through an additional stage of flotation for upgrading the concentrate grade to 20% copper for ore from the eastern copper deposit and 23% copper for ore from the molybdenum deposit. For ores originating from the molybdenum pit, the flotation process will include a pre-treatment of the copper concentrate with hydrogen peroxide. For ores mined from the copper pit, the pretreatment may utilize sulfur dioxide.

Tailing thickener overflow and water from the tailing pond will be recycled for reuse in the process. Plant water stream types include process water, fresh water, and potable water.

13.7 MOLYBDENUM PRODUCT SPECIFICATIONS

Table 13-16 summarizes the available historical data on molybdenite flotation concentrates produced. The data indicate that the 43.6 million pounds of contained molybdenum metal historically produced averaged 52% Mo. More molybdenum was produced, but this could not be included in Table 13-16, since chemical analysis for this molybdenite concentrate production was not available (1982 Anaconda production). The total estimated contained molybdenum production over the operating life is 53 million lbs.

Trace metal analysis for the Anaconda period shows that the concentrate was clean and marketable. For a short time, Anaconda operated a ferric chloride leach on the molybdenite flotation product that successfully lowered the copper to acceptable levels, typically 0.05%. Cyprus sent the concentrate to their Sierrita operation, where they operated a ferric chloride leach facility ahead of a roaster.



Table 13-16: Historical Molybdenite Concentrate Analysis

Flotation Concentrate Analysis

Company Anaconda Cyprus

Dates Sept 1983- Dec 1984 Jan 1989 - Dec 1990

Million lbs of Mo produced in period 14.4 29.2

Concentrate analysis

Mo,% 53.3 51.3

Iron,% 1.38

Insolubles,% 5.42

Copper,% 0.25

Lead,% 0.02

Zinc,% 0.01

Flotation Concentrate Analysis

Phosphorous,% 0.01

Sulfur,% 36.6

Carbon,% 1.14



14 MINERAL RESOURCE ESTIMATES

This section summarizes the development of the mineral resources for the Liberty project. The model has been updated since the November 2011 Pre-feasibility study in order to:

1. Incorporate the copper zone that is east of the Liberty Molybdenum pit.

2. Incorporate updated geologic interpretation of rock type, alteration, and oxidation state in the molybdenum deposit.

3. Convert to 40 ft benches (from 50 ft benches) to better match the anticipated mining equipment at Liberty.

This study first addressed the eastern copper zone as a separate potential copper target. It was then determined that the copper area was best treated as a bi-product zone of the molybdenum production. The east copper zone is included in the mineral resources and reserves as a bi-product of the production of molybdenum in this study.

Both the copper deposit and the molybdenum deposit are contained within a single block model. A consistent block size has been used throughout both deposits.

14.1 BLOCK MODEL SIZE AND LOCATION

A conventional block model was assembled for the Liberty deposit based on the geologic information and drill hole data. The model location and block size is summarized below:

Table 14-1: Liberty Molybdenum Project – Model Size and Location

Block Size 50 x 50 ft on planBench Height 40 ftNumber of Rows, North South 132 RowsNumber of Columns, East-West 170 ColumnsModel Coordinate Limits, Outside Edge of Blocks Northing Limits 13,912,000 To 13,618,600 Easting Limits 1,553,500 To 1,562,000

The model and database utilize the UTM coordinate system converted directly to ft. Drill hole collar elevations were based on NAD 27. This model was expanded eastward by 1,400 ft compared to previous models. This was done to assure inclusion of all available drill hole data in the eastern copper zone.

14.2 DATA BASE

The drill hole database at Liberty is a combination of historic and relatively recent information. No new drilling has been completed since the previous Technical Report in November of 2011. However, 532 additional assays have been added to the database by quartering selected Equatorial drill core and assaying for molybdenum, oxide molybdenum, copper, and acid soluble copper. These intervals were not previously assayed for molybdenum or oxide molybdenum.



Table 14-2: Liberty Drilling and Assay Data

Amount of DrillingCompany Drill Type Number Drilling Total Mo Oxide Total Acid Sol Cyanide Sol

of Holes Feet Assay Mo Assay Copper Copper Copper

Anaconda DDH 147 169,709 32,699 3,605 24,693 3,778RC+Airtrack 226 89,654 5,658 2,296 7,212 2,317

Cyprus DDH 30 16,964 394 291 1,025 424 471RC+Other 140 49,444 1,584 1,606 4,513 1,584 1,116

Equatorial DDH 34 9,801 1,021 873 1,021RC 197 58,040 5,759 4,496 3,200

GMI DDH 73 70,852 14,174 12,696 13,525RC 17 17,737 3,547 3,547

Equatorial Core DDH 34 9,801 532 532 532 532 2014 Assays by GMINotes: DDH + RC hole counts exceed totals because holes collared RC and finished DDH are counted in both categoriesGMI RC drilling is not used for mineral reserves. GMI RC is used for inferred resourcesAnaconda Acid soluble copper assays are not used.

Count of Assays

After IMC’s data verification review, two sets of data were rejected from the database update:

1. RC data collected by GMI. These data are high biased compared to diamond drilling at grades below 0.080 % Mo. They are low biased at grades above 0.080% Mo.

2. Anaconda acid soluble assays. These assays are high biased relative to the acid soluble assays of surrounding drill holes.

The Equatorial drilling was targeted for copper production by heap leaching and did not assay for molybdenum so it was not included in earlier studies. This study is intended to evaluate the potential for combined production of copper and molybdenum by flotation. As a result, GMI capitalized on the remaining core that was available from Equatorial drilling to add 532 molybdenum and oxide molybdenum assays.

IMC holds the opinion that final data selection is reliable for the determination of mineral reserves and mineral resources.

14.3 GEOLOGIC INTERPRETATION

During 2012, a detailed effort was completed by geologic contractors, Brooke Miller and Don Earnest, to prepare a comprehensive interpretation of the lithology and alteration within the Liberty porphyry system.

Detailed cross sections, level maps, and three-dimensional software were all used to develop a set of wire frames that reflect the current best understanding of the geology. IMC participated in that work and has utilized the results.

The following rock type and alteration codes were assigned to the block model on a nearest whole block basis from the wire frames.



Table 14-3: Rock Type and Alteration yp

Rock Type Abreviation ModelCode

Quartz Monzonite Porphyry Qmp 1Aplite Monzonite Porphyry Amp 2Metasediments Met 3Alluvium Alv 5Andesite Dike And 6Felsic Dike Fed 8

Alteration type Abreviation ModelCode

Potassic Pot 1Phyllic Phy 2Silic Sil 3

There are three major boundary structures within the Liberty deposit: 1) Liberty Fault, 2) The Basement Fault, and 3) The North boundary Fault. The rock type boundaries often reflect structural boundaries. For example, the Liberty Fault is reflected in the alluvium versus hard rock boundary. The north boundary fault is reflected in the limits of the porphyry units. Mineralization is cutoff by the basement fault at depth.

14.4 MINERALIZATION

This Liberty model encompasses the Liberty Molybdenum zone and expands to the east to include the copper mineralization that is located just east of the Liberty Molybdenum pit. The mineralization in both areas has been weathered, oxidized, and in the case of copper, locally enriched. Structure has controlled some of these occurrences, but the impacts have been different in the molybdenum zone versus the copper zone.

Within this model, there are two sets of mineral interpretation: 1) Molybdenum and 2) Copper. The interpreted surfaces are in two different variables and are treated independently of each other.

The interpretation and codes assigned to reflect molybdenum oxidation are:

1. Oxide zone – ground surface to bottom of oxide: >90% of the total molybdenum has been oxidized. 2. Transition zone – bottom of oxide to top of sulfide: <10% of the total molybdenum has been oxidized. 3. Sulfide Zone – below top of sulfide, <10% of the total molybdenum is oxidized.

The molybdenum mineralization codes have been assigned to the model on a nearest whole block basis.

Within the copper zone the following units have been interpreted.

1. Leached zone – Surface to top of first interesting copper grade. Typically around 0.10% total copper. The leach zone is sub 0.10% grade and nearly 100% acid soluble.

2. Transition + Supergene – From bottom of leach cap to the top of primary copper. This zone contains copper grades that are potentially economic with mixed amounts of acid soluble copper. Typically, the supergene zone lies just above the interpreted primary contact.

3. Primary – Copper grades less than 0.10% total copper and near zero acid soluble copper.



The Transition+Supergene zone has been assigned to the model on a fractional block basis, meaning that the fraction of each block that is Trans+Super has been stored in the model (cu_znfrac). A variable labled “cu_znout” is assigned the following codes and is used in conjunction with the Trans+Super fraction: Cu_znout Codes:

1 = Leached zone,

12 = Leached, Trans+Super contact with a fraction assigned to cu_znfrac,

2 = Tran+Super, 100% of the block in the zone,

23 = Trans+Super-Primary contact with a fraction assigned to cuznfrac, and

3 = Primary zone.

The codes and fractions for copper have been assigned to the eastern half of the model where there is sufficient copper assay information to complete the interpretation. In general, the zones are defined by all available total copper assays and the Equatorial and Cyprus acid soluble assays. This eastern portion of the model where the Transition+Supergene zone exists is broadly referred to as the “copper zone” or “eastern copper area”.

14.5 BLOCK GRADE ESTIMATION

The block grade procedures for copper and molybdenum were different. Each will be discussed in the following paragraphs. The procedures for molybdenum were not changed since previous models other than the use of 40 ft benches compared to the previous 50-ft bench model. Copper estimation reflected the tight control of the Transition+Supergene boundary.

Two different composite files were used for the estimation, one each for copper and moly.

14.5.1 Molybdenum

The molybdenum block grades were estimated by ordinary linear kriging respecting both sides of a 0.020% total molybdenum grade boundary. The 0.020% total molybdenum boundary was assigned using indicator kriging. There is minor copper associated with the molybdenum mineralization in the molybdenum zone of the pit. Estimation of that associated copper grade is summarized in these paragraphs in the discussion of molybdenum grade estimation.

Drill holes were composited to 40-ft bench intercept composites for drill holes with plunge steeper than 75 degrees. Holes more shallow than 75 degrees utilized 40-ft down hole composites.

The basic statistics of the 40-ft composites used in estimation of the molybdenum zone are summarized below. RC drilling completed by GMI is listed separately as it was only utilized in a second pass of estimation to add inferred category blocks to the model.

Table 14-4: Liberty 40 ft Composite Statistics, F or Molybdenum Zone Estimation

Data Source Rock Total Moly Oxide Moly Total CopperType Number Grade % Number Grade % Number Grade %

All Data with Qmp+Amp 5,323 0.072 2,886 0.014 4,622 0.053No GMI RC Metaseds 1,677 0.043 690 0.013 4,022 0.176

Dikes, And+Fel 33 0.019 9 0.001 25 0.032

GMI RC Qmp+Amp 246 0.043 184 0.007 246 0.046Metaseds 120 0.028 103 0.004 120 0.107

Dikes, And+Fel 2 0.050 2 0.001 2 0.057



The rock type and alteration type boundaries were tested to determine if they were controls or limits on molybdenum grade. Boundary analysis was completed using closely spaced composites from opposite sides of the tested boundaries. The following three populations were developed for the estimation of total molybdenum.

Grade Estimation Populations for Total Molybdenum:

1. QMP and AMP Combined

2. Metasediments

3. Dikes: Andesite and Felsic combined

4. Alluvium was not estimated and is barren

The indicator estimate to assign the 0.020% total molybdenum boundary respected the rock type populations above. The procedure was as follows:

Table 14-5: Indicator Kriging of Total Molybdenum at 0.020% Discriminator

Primary Nugget Distances Search and Variogram RangeRock Type Orientation Total Sill Major Sub-Major Minor

Qmp+Amp N 30 W 0.3 Search= 500 200 1501.0 Range= 650 300 200

Metasediments N 30 W 0.3 Search= 500 200 1501.0 Range= 650 300 200

Dikes, And+Fel N 30 W 0.3 Search= 500 200 1501.0 Range= 650 300 200

Max composites = 10. Min Composites = 1, Max Composites per hole = 3 All variograms are "flat", no plunge assigned

The results of the indicator kriging run above create a fraction in the estimated blocks from 0 to 1.0. The blocks with indicator fractions greater than 0.50 were assigned a code for inside and those less than 0.50 were assigned a code as outside. During this indicator run, the GMI RC drilling was used. It was not used during the grade estimation steps for measured or indicated ore.

The composites were assigned the indicator code based on the code of the block that contained the composite. Grade assignment for each block was based on ordinary linear kriging respecting both the 0.020% boundary and the rock type boundaries.

Table 14-6 summarizes the grade kriging parameters that were used to assign both total molybdenum and total copper grade to the model. The same parameters were used for both molybdenum and copper, and both respected the 0.020% Mo boundary.



Table 14-6: Molybdenum Zone, Grade Estimation Parameters, Total Moly and Total Copper y pp

Rock Search vsZone Variogram Orientation C0,C1 Major Semi Maj Minor

Stk, Plun Dip C2 Feet Feet FeetQMP/AMP

Qtz Monz Por Search N 30 W 500 200 150Aplitic Monz Por Vario Struct 1 0.200 0.800 650 300 200

METmetasediments Search N 30 W 500 200 150

Vario Struct 1 0.200 0.800 650 300 200

DikeAndesite Dike Search N 30 W 500 200 150Felsite Dike Vario Struct 1 0.200 0.800 650 300 200

Max Composites = 10, Min Composites = 1, Max Composites per hole = 3Same parameters applied inside and outside of the Indicator Boundary

14.5.2 Oxide Molybdenum Estimation

The oxidation state of the molybdenum mineralization was estimated based on the oxide molybdenum assays within the database and the interpreted molybdenum mineralization zones.

Within the composite file, the oxidation ratio was calculated and assigned to a variable called “oxrat” (Oxrat = Oxide Molybdenum / Total Molybdenum). This composite ratio was then checked and capped to not exceed 1.00. The oxrat value was then assigned to the model using ordinary linear kriging while respecting the interpreted molybdenum mineralization – oxidation zones.

The oxide and transition zone were combined for estimation of oxrat. The transition versus sulfide boundary was treated as a hard boundary for estimation.

The parameters for estimation of oxide ratio area follows:

Table 14-7: Kriging Parameters for Molybdenum Oxide Ratio – Molybdenum Zone y

Mineral Primary Nugget Distances Search and Variogram Rangezone Orientation Total Sill Major Sub-Major Minor

Oxide+Transition N 30 W 0.2 Search= 500 200 45mo_oxzone = 1,2 1.0 Range= 650 300 200

Sulfide N 30 W 0.2 Search= 500 200 45mo_oxzone = 3 1.0 Range= 650 300 200

Max composites = 10. Min Composites = 1, Max Composites per hole = 3 All variograms are "flat", no plunge assigned

Once the oxide ratio was estimated, it was used to determine the oxide and sulfide grade of each block estimated.

Block oxide estimate = kriged oxide ratio x kriged total molybdenum (If oxide ratio was estimated)

Block sulfide estimate = kriged total molybdenum – block oxide molybdenum (If the block oxide value exists)



14.5.3 Copper Estimation

Grade estimation of the eastern copper area was controlled by the copper mineralization codes of oxide, transition+supergene, and primary. Rock type was used only to assure that copper grades were not assigned to the alluvium. Otherwise, the copper zone is hosted within the metasedimentary rock type.

The eastern copper area utilized a different composite procedure than the molybdenum estimation. Copper area composites respected the copper mineral zone codes. Composites were nominally 20-ft down hole length composites but they can vary from 10 ft to 26 ft in length in order for the composites to start and end on the interpreted copper mineralization boundaries. Copper composites did not cross the mineralization boundaries, and there are no short composites at the boundaries.

The purpose of this approach was to minimize the grade averaging at the boundary of the copper zones, because the grade change was often abrupt at the grade estimation boundary.

Grades were assigned to the model blocks using ordinary linear kriging, bounded by the copper mineral zones. Copper grades within the molybdenum area of the deposit were estimated using the same composite procedure as applied to molybdenum and the same search as applied to the molybdenum.

Table 14-8 summarizes the estimation parameters that were applied to total eastern copper area.

Table 14-8: Copper Zone – Total Copper Estimation Parameters

Rock Search vs Parameters for Total CopperZone Variogram Orientation C0,C1 Major Semi Maj Minor

Stk, Plun Dip C2 Feet Feet FeetLeached Zone

Composites cu_zonetag=1 Search N 30 W 500 200 30Model cu_znout=1,12 Variogram 0.200 0.800 650 300 200

Transition + SecondaryComposites cu_zonetag=2 Search N 30 W 500 200 30

Model cu_zone=2 Variogram 0.200 0.800 650 300 200

Primary ZoneComposites cu_zonetag=3 Search N 30 W 500 200 30

Model cu_znout=23,3 Variogram 0.200 0.800 650 300 200

Max Composites = 10, Min Composites = 1, Max Composites per hole = 3

The copper area used nominal 20 ft long composites bounded by the mineral zone.

Acid soluble copper in the copper zone was estimated using the ratio of acid soluble copper / total copper. As noted earlier, acid soluble information that was within the Anaconda data set was not utilized and was treated as “no assay”. Surround information from other drill programs could be used if it was inside the search radius.

The acid soluble ratio estimate respected the copper mineral zone boundaries as did total copper.



Table 14-9: Copper Zone – Acid Soluble Copper Ratio

Rock Search vs Acid Soluble RatioZone Variogram Orientation C0,C1 Major Semi Maj Minor

Stk, Plun Dip C2 Feet Feet FeetLeached


Max Composites = 10, Min Composites = 1, Max Composites per hole = 3Transition+Secondary, First Search

Composites cu_zonetag=2 Search N 30 W 500 200 30Model cu_zone=2 Variogram 0.200 0.800 650 300 200

Max Composites = 5, Min Composites = 1, Max Composites per hole = 3Primary


Max Composites = 10, Min Composites = 1, Max Composites per hole = 3Long Search - Acid Soluble Copper RatioAll Composites cu_zonetag=1,2,3

Trans+Secondary Only Search N 30 W 500 500 50cu_znout = 12,2,23 Variogram 0.200 0.800 650 300 200

Max Composites = 5, Min Composites = 1, Max Composites per hole = 3 The copper area used nominal 20 ft long composites bounded by the mineral zone.

Once the acid soluble ratio was estimated, a value for acid soluble copper was assigned to each block where there was an acid ratio with the equation: acid soluble copper – total copper x acid soluble ratio.

There was an additional long search radius pass applied to the acid soluble ratio within the transition+secondary zone in the copper zone. Since the Anaconda acid soluble information was not available, a second longer search was applied to the acid soluble ratio. This material was set as inferred and was used for initial evaluations of the copper zone as a starter pit. Due to its inferred status, it has not been incorporated into the mine plan.

The final block grade estimate for the transition+supergene blocks was a weighted average of the transition+supergene fraction and the remaining block fraction and outside grade. Each block on the boundary of transition+supergene has a fraction assigned to (cu_znfrac) that reflects the component of the block that is in the transition+supergene area. There is a copper grade assigned to that fraction and to the remaining portion of the block in the grade estimation process. The final mine planning block grade is a weighted average at the boundary.

14.6 CLASSIFICATION

Classification categories of measured, indicated, and inferred were established for each block in the model. Different procedures were used in the molybdenum zone versus the eastern copper area, which reflected the drill information and geometry of the mineralization.

14.6.1 Molybdenum Classification Codes

The classification code for each block was set in two steps:

1. An estimate of measured, indicated, and inferred was set based on the number of composites and the kriged standard deviation from the estimation of total molybdenum and from the molybdenum oxide ratio.

2. A second estimation run where the GMI RC data were added to the data set. Any total molybdenum grade that was added to the model in this second pass was also coded as inferred.

The molybdenum procedure was as follows:

Inferred blocks: A total molybdenum grade was assigned



Indicated blocks: Total molybdenum kriged standard deviation < = 0.90 At least 3 or more composites used to estimate the block. The parameters above exclude GMI RC data.

Measured blocks: Total molybdenum kriged standard deviation <=0.49 10 composites used to set the block. The parameters above exclude GMI RC data.

The procedure for molybdenum oxide ratio confidence was:

Inferred blocks: A total molybdenum grade was assigned Oxr_conf = 3

Indicated blocks: Molybdenum oxide ratio kriged standard deviation < = 0.90 At least 3 or more composites used to estimate the block. Oxr_conf = 2. Excludes GMI RC.

Measured blocks: Molybdenum Oxide ratio kriged standard deviation <=0.49 10 composites used to set the block. Oxr_conf = 1. Excludes GMI RC.

Once both codes were established, they were merged.

Where the molybdenum oxide zone is: Oxide or Transition The Oxr_conf code for oxide molybdenum ratio kriging is used instead of the total molybdenum code.

14.6.2 Copper Classification Codes

The copper in the molybdenum zone and in the primary zone below the eastern copper area utilized the molybdenum classification code. The transition-supergene zone for copper was estimated using the results of the copper acid ratio estimation. The steps were:

In the Transition-Supergene zone, cu_znout = 12, 2, 23

Inferred blocks: Total copper > 0

Indicated blocks: Acid soluble ratio was estimated At least 2 or more holes used to estimate the block.

The nearest composite was less than 375 ft away.

Measured block: There are no measured blocks in the transition-supergene zone

14.7 DENSITY

Two sets of density data were used for determination of the block density at Liberty. There were 252 density determinations from the Cyprus drilling, and 204 density measurements from the GMI drilling. Both data sets provided similar results, so they were combined into a single database. The density assignment procedure for this model is unchanged from the previous 2011 model.

Average density determinations were completed for each rock type relative to the molybdenum mineral zones of oxide, transition, and sulfide. The average density was calculated for each combination of rock type and oxidation



state. Once the average was determined, the block assignment value was reduced about 1.25% to account for fracturing in the rock mass. The reduction varied slightly by rock type.

The table that follows summarizes the density assignments applied to the block model.

Table 14-10: Block Density Assignment

Oxide Mean Block Ktonmo_oxzone = 1 SG Cuft/Ton Block

QMP 2.495 13.00 7.692AMP 2.595 12.50 8.000Metasediments 2.554 12.71 7.868Alluvium 2.030 16.03 9.238Dikes 2.601 12.46 8.026

Transition and Sulfide Mean Block Ktonmo_oxzone = 2 and 3 SG Cuft/Ton Block

QMP 2.574 12.60 7.937AMP 2.569 12.62 7.924Metasediments 2.613 12.41 8.058Alluvium 2.030 16.03 6.238Dikes 2.601 12.46 8.026Block Densities are 1.2 to 1.6% lighter than test results Allowance for fracturing

14.8 PROCESS RECOVERY AND RECOVERABLE GRADES FOR MOLYBDENUM AND COPPER

The flotation process recovery was assigned to the block model for both molybdenum and copper as a recoverable grade. The recoverable grade for molybdenum was based on the estimated sulfide molybdenum and the recoverable grade for copper was based on the estimated sulfide copper grade. Those grades were multiplied by the estimated mill recovery and divided by 100.

The recoverable grade is an algebraically correct method of calculating the weight average of recovered metal when each block has a different recovery applied.

Tabel 14-11 summarizes the recovery functions and estimates that were used to set the variables of recmo and reccu that represent recoverable molybdenum and copper respectively.



Table 14-11: Process Recovery Assigned to the Block Model

Oxide Zone Moly 0 %

Transition Zone MolyQMP 12.3*ln(Sulfide Mo)+113.1AMP+Dikes 4.07*ln(Sulfide Mo)+88.2Metaseds 1.50*ln(Sulfide Mo)+79.7

Sulfide Zone MolyQMP 13.5*ln(Sulfide Mo)+124.2AMP+Dikes 4.47*ln(Sulfide Mo)+96.9Metaseds 1.65*ln(Sulfide Mo)+87.6

Moly in Copper Pit Area 58.0% of Sulfide Moly

Copper Liberty Pit and Copper Pit Primary 66.7% of Totcu Copper Pit, Secondary 70.0% of Sulfide Copper

14.9 MINERAL RESOURCES

Mineral resources were developed with the floating cone algorithm to determine the component of the deposit with reasonable prospects of economic extraction. For the resource cone, economic benefit was applied to measured, indicated, and inferred class mineralization.

The resource cone applied metal prices of $15.00/lb molybdenum and $3.00/lb copper. The cost parameters are identical to those presented in Section 15 with the following exceptions:

Resource Cone differences from the Reserve Guidance Floating Cones:

1. Molybdenum price of $15.00/lb

2. Bench discounting is not activated (0.0% per bench)

3. Inferred receives economic credit for the resource estimate

The cutoff grade for the resource is the NSR cutoff of $7.05/ton based on the processing cost plus the general and administration charges per ton.

Table 14-12 summarizes the statement of total mineral resources, inclusive of the mineral reserve.

The qualified person for the estimation of the mineral resource is John Marek of Independent Mining Consultants, Inc. The mineral resource will be modified in the future as additional drilling is completed and as more detailed process recovery information becomes available. Metal price changes could also materially change the estimated mineral resource in either a positive or negative way.

At this time, there are no unique situations relative to environmental or socio-economic conditions that would put the Liberty mineral resource at a higher level of risk than any other North American developing project. The primary risk on any U.S. project is the uncertainty regarding the time required to obtain all necessary operating permits.

Mineral resources that are not mineral reserves do not have demonstrated economic viability.



Table 14-12: Total Mineral Resources

Total Mineral ResourcesCandian Definitions, NI43-101

24 June 2014Units = Short Tons

Total Mineral Resources, Including Contained Mineral ReservesClassification Cutoff Grade Total Mo Sulfide Mo Total Cu

$NSR/Ton Ktons Grade% Grade% Grade %

Measured $7.05 125,538 0.093 0.091 0.051

Indicated $7.05 440,621 0.060 0.057 0.094

Total Meas+Indicated 566,159 0.067 0.065 0.084

Inferred $7.05 148,598 0.052 0.050 0.115

Tonnages are Dry Short Tons of 2000 lbsMolybdenum Grades are in % of dry weightCopper Grades are in % of dry weightMineral Resources based in Measured, Indicated, and Inferred, contained within a floating cone pit at $15.00/lb Mo and $3.00/lb Cu.



15 MINERAL RESERVE ESTIMATES

Using the floating cone algorithm as a guide, a series of 6 phase or pushback designs were developed for the Liberty project. The final phase is the ultimate pit design for Liberty and incorporates mine haul roads and allows adequate operating room for the mining equipment.

A mine production schedule was developed from the phase designs. That schedule is discussed in Section 16 in more detail. The total of proven and probable ore that is planned for processing within the mine plan constitutes the mineral reserve at Liberty.

The mine schedule utilizes a variable cutoff grade to the mill. However, a small low-grade stockpile is maintained throughout the mine life at the breakeven cutoff grade of $8.83 NSR/ton. That stockpile is planned to be processed at the end of the mine life and is included in the mineral reserves.

The economic input parameters to the floating cone that guided the design of the final pit are summarized on Table 15-1. The final pit design is guided by a floating cone that utilizes metal prices of $12.00/lb molybdenum and $3.00/lb copper.

The reserve is based on the design of Phase 6 (the final phase) and incorporates working room for equipment, proper haul roads, and the recommended slope angles from the geotechnical contractor. The final pit geometry and that was used for the mineral reserve pit is summarized on Figure 15-1.

The resulting mineral reserve is summarized on Table 15-2. This table also contains the mineral resources outside of the ultimate pit but within the resource boundary discussed in Section 14. Mineral resources on Table 15-2 do not include the mineral reserve as they do in Table 14-12.

The qualified person for the estimation of the mineral reserve is John Marek of Independent Mining Consultants, Inc. The mineral reserve will be modified in the future as additional drilling is completed and as more detailed process recovery information becomes available. Metal price changes could also materially change the estimated mineral reserves in either a positive or negative way.

At this time, there are no unique situations relative to environmental or socio-economic conditions that would put the Liberty mineral reserve at a higher level of risk than any other North American developing project. The primary risk on any U.S. project is the uncertainty regarding the time required to obtain all necessary operating permits.



Figure 15-1: Final Pit Design, For the Mineral Reserve



Table 15-1: Floating Cone Input Parameters

Mining Cost Mine Opex Cost, Flat Cost in Copper Pit $1.780 / ton material Haul Increment per bench below 5750 $0.030 / 40ft bench

Processing Cost Processing $5.71 /ton ore G & A $1.34 /ton ore Total $7.05 /ton ore

Process Recovery Oxide Zone Moly 0 % Transition Zone Molybdenum

QMP 12.3*ln(Sulfide Mo)+113.1 AMP+Dikes 4.07*ln(Sulfide Mo)+88.2 Metaseds 1.50*ln(Sulfide Mo)+79.7

Sulfide Zone Moly QMP 13.5*ln(Sulfide Mo)+124.2 AMP+Dikes 4.47*ln(Sulfide Mo)+96.9 Metaseds 1.65*ln(Sulfide Mo)+87.6

Molybdenum in Copper Pit Area 58.0% of Sulfide Moly Copper Liberty Pit and Copper Pit Primary 66.7% of TotCu Copper Pit, Secondary 70.0% of Sulfide Copper

Smelting and Refining Terms Molybdenum

Roast Cost $1.530 /lb Moly Roast Recovery 99.0%

Copper Liberty Pit and Copper Pit Primary 23 % Con Grade Copper Pit, Secondary 20 % Con Grade Losses at 1% Smelter Deduct, Amended by IMC Copper Smelting Refining and Freight Liberty Pit and Copper Pit Primary

253/(23*20*(22/23))+.095 $0.670 /Lb Copper Copper Pit, Secondary

253/(20*20*(19/20))+.095 $0.761 /Lb Copper Metal Prices for Base Case

Molybdenum $ 12.00 /lb Copper $ 3.00 /lb

Slope Angles for Cones Reduced 3 deg From Interranp Degrees West & Southwest Walls 33 North & Northwest Walls 37 East, Northeast, & Southeast Walls 40 South Wall 40

Bench Discount per bench below 5750 3% /40ft bench Not applied to the Copper Pit



Table 15-2: Mineral Reserves

Mineral Reserves Canadian Definitions, NI43-101

24 June 2014 Units = Short Tons Mineral Reserves

Classification Cutoff Grade Total Mo Sulfide Mo Recovered Total Cu Recovered $NSR/Ton Ktons Grade% Grade% Mo Grade% Grade % Cu Grade%

Proven $8.83 92,489 0.101 0.098 0.088 0.06 0.03 Probable $8.83 216,727 0.068 0.065 0.057 0.12 0.06 Total Proven + Probable 309,216 0.078 0.075 0.066 0.10 0.05

Mineral Resources in Addition to Reserves Units = Short Tons

Mineral Resources, In Addition to Mineral Reserves Classification Cutoff Grade Total Mo Sulfide Mo Recovered Total Cu Recovered

$NSR/Ton Ktons Grade% Grade% Mo Grade% Grade % Cu Grade%

Measured $7.05 33,049 0.071 0.071 0.061 0.04 0.02 Indicated $7.05 223,894 0.052 0.049 0.042 0.07 0.04 Total Measured + Indicated 256,943 0.054 0.052 0.044 0.07 0.04 Inferred $7.05 148,598 0.052 0.050 0.042 0.12 0.06 Tonnages are Dry Short Tons of 2000 lbs. Molybdenum Grades are in % of dry weight. Copper Grades are in % of dry weight. Mineral Reserves based on Measured and Indicated contained within a designed pit at $12.00/lb Mo and $3.00/lb Cu. Mineral Resources based on Measured, Indicated, and Inferred, contained within a floating cone pit at $15.00/lb Mo and $3.00/lb Cu. Mineral Resources on this Table Do Not Include the Mineral Reserves.



16 MINING METHODS

The Liberty mine project will employ conventional hard rock, open pit mining methods. Ore production to the mill is planned at 26,500 short tons per day (st/d) (9,673,000 short tons per year). The mine plan and production schedule was developed with the goal of filling the mill at the required ore rate and maximizing the project return on investment. The total material rate starts at 32 million short tons per year (Mst/y) for the first six years and then ramps up to 42 Mst/y for six years before reducing to lower levels for the last half of the mine life.

This mine plan is not constrained by property or claim boundaries. There is a boundary between patented mining claims and un-patented claims that zig-zags around the core of the molybdenum deposit. Previous mine plans have tried to sustain the mine operation on the patented land for as long as possible. This mine plan does not respect that patented boundary and assumes that all necessary permits are in place for all claims when the mine plan is implemented. Removing that constraint results in an improved mine plan.

The mine production schedule is summarized on Table 16-1. The annual mill feed tonnage is summarized on Table 16-2. Some material that is produced during preproduction is combined with ore from the pit and is processed in Year 1. The final year of the process schedule also includes re-mining of the low-grade stockpile for processing in the last year. Table 16-2 shows the mill feed to be slightly high in the last year (year 32); however the 3 weeks of production that would fall in to Year 33 is not practical to separate.

Figure 16-1 summarizes the mine production plan in graphic form showing the ore rate and total material rate. The metal production profile is also shown on the bottom of the figure.

The copper recovery was modified later in the project life after completion of the floating cones and phase designs. The floating cones and NSR calculations used the recoveries for copper as shown on Table 15-1. The later change was to reduce the copper recovery in the molybdenum pit area from 66.7% to 56% of total copper. That change has been reflected in the recoverable copper variable on Table 16-1, Table 16-2, and Figure 16-1.

IMC did not recalculate the NSR or the mine schedule with the later lower copper recovery. To do so would result in a reduction of 3% to mine plan tonnage over the course of the mine life. The change was judged by IMC and John Marek (QP) as not material to the project.

The mining bench height is 40 ft high. Drilling will be completed with 2 and later 3 rotary blast hole rigs with 75,000 lb pull down capacity. Blasted rock will be loaded into 150-ton haul trucks using 2 hydraulic shovels of 27 cubic yard capacity and 1 front-end-loader of with a 27 cubic yard bucket.

The mine plan was developed using a phase approach. The phase designs, mine schedule, mine equipment, and manpower are summarized in the next sections.



Table 16-1: Mine Production Schedule – Proven and Probable Mineralization

To Mill Low Grade Stockpile @ $8.83 NSR/Ton = Breakeven Cutoff NSR Mill Total Sulfide Recovered Total Recovered Low Grade Total Sulfide Recovered Total Recovered Total

Year Cutoff Ore NSR Moly Moly Moly Copper Copper Ore NSR Moly Moly Moly Copper Copper WASTE Material $/ton Ktons $/ton % % % % % Ktons $/ton % % % % % Ktons Ktons

Preprod $8.83 1,211 11.632 0.066 0.048 0.037 0.13 0.07 10,789 12,000 1 $8.83 7,495 14.680 0.077 0.070 0.059 0.08 0.05 24,505 32,000 2 $9.75 9,673 20.608 0.104 0.101 0.090 0.07 0.04 747 9.282 0.049 0.046 0.038 0.05 0.03 21,580 32,000 3 $9.00 9,673 18.881 0.093 0.091 0.081 0.07 0.04 132 8.914 0.045 0.043 0.036 0.05 0.03 22,195 32,000 4 $8.83 9,673 19.073 0.096 0.090 0.081 0.08 0.04 22,327 32,000 5 $9.75 9,673 15.422 0.078 0.074 0.064 0.07 0.04 1,710 9.262 0.051 0.048 0.040 0.03 0.02 20,617 32,000 6 $9.75 9,673 16.568 0.081 0.081 0.071 0.06 0.03 809 9.261 0.048 0.047 0.039 0.04 0.02 21,518 32,000 7 $9.75 9,673 19.212 0.096 0.095 0.085 0.05 0.03 631 9.332 0.047 0.044 0.037 0.07 0.04 29,696 40,000 8 $9.75 9,673 19.309 0.097 0.095 0.085 0.06 0.03 713 9.334 0.049 0.045 0.037 0.07 0.04 31,614 42,000 9 $9.75 9,673 14.902 0.077 0.072 0.063 0.08 0.04 1,704 9.312 0.048 0.043 0.035 0.11 0.05 30,623 42,000 10 $9.25 9,673 13.462 0.070 0.066 0.057 0.06 0.03 1,189 9.029 0.049 0.045 0.037 0.05 0.03 31,138 42,000 11 $9.75 9,673 19.703 0.100 0.096 0.087 0.06 0.03 912 9.256 0.048 0.042 0.034 0.08 0.05 31,415 42,000 12 $9.75 9,673 16.310 0.077 0.074 0.065 0.12 0.07 1,002 9.282 0.039 0.036 0.029 0.14 0.07 30,812 41,487 13 $8.83 9,673 20.828 0.101 0.097 0.087 0.13 0.07 11,441 21,114 14 $8.83 9,673 14.621 0.073 0.069 0.060 0.10 0.06 16,994 26,667 15 $8.83 9,673 13.602 0.063 0.060 0.051 0.16 0.08 18,688 28,361 16 $8.83 9,673 12.867 0.055 0.053 0.044 0.22 0.12 22,107 31,780 17 $8.83 9,673 11.483 0.044 0.042 0.034 0.30 0.15 17,283 26,956 18 $8.83 9,673 11.640 0.047 0.044 0.036 0.25 0.12 21,956 31,629 19 $8.83 9,673 12.679 0.052 0.049 0.041 0.23 0.12 16,576 26,249 20 $8.83 9,673 20.721 0.104 0.101 0.090 0.09 0.05 10,362 20,035 21 $8.83 9,673 27.091 0.137 0.132 0.120 0.10 0.05 4,968 14,641 22 $8.83 9,673 18.664 0.089 0.086 0.077 0.14 0.08 9,519 19,192 23 $8.83 9,673 12.684 0.060 0.058 0.049 0.10 0.06 15,820 25,493 24 $8.83 9,673 13.487 0.068 0.066 0.057 0.06 0.03 14,318 23,991 25 $8.83 9,673 13.576 0.070 0.068 0.058 0.05 0.03 10,031 19,704 26 $8.83 9,673 14.128 0.071 0.069 0.060 0.06 0.03 7,813 17,486 27 $8.83 9,673 14.012 0.072 0.071 0.061 0.05 0.03 6,576 16,249 28 $8.83 9,673 14.115 0.074 0.072 0.062 0.04 0.02 4,727 14,400 29 $8.83 9,673 14.420 0.075 0.073 0.063 0.04 0.02 3,729 13,402 30 $8.83 9,673 14.495 0.076 0.074 0.064 0.04 0.02 3,972 13,645 31 $8.83 9,673 14.795 0.078 0.075 0.066 0.04 0.02 4,184 13,857 32 $8.83 771 13.182 0.068 0.067 0.058 0.04 0.02 277 1,048

TOTAL 299,667 16.050 0.079 0.076 0.067 0.10 0.05 9,549 9.250 0.048 0.044 0.036 0.07 0.04 550,170 859,386



Table 16-2: Mill Feed Schedule

Direct Mill Feed NSR Mill Total Sulfide Recovered Total Recovered Cutoff Ore NSR Moly Moly Moly Copper Copper

YEAR $/ton Ktons $/ton % % % % %

Preprod 8.830 1 8.830 8,706 14.256 0.075 0.067 0.056 0.09 0.05 2 9.750 9,673 20.608 0.104 0.101 0.090 0.07 0.04 3 9.000 9,673 18.881 0.093 0.091 0.081 0.07 0.04 4 8.830 9,673 19.073 0.096 0.090 0.081 0.08 0.04 5 9.750 9,673 15.422 0.078 0.074 0.064 0.07 0.04 6 9.750 9,673 16.568 0.081 0.081 0.071 0.06 0.03 7 9.750 9,673 19.212 0.096 0.095 0.085 0.05 0.03 8 9.750 9,673 19.309 0.097 0.095 0.085 0.06 0.03 9 9.750 9,673 14.902 0.077 0.072 0.063 0.08 0.04 10 9.250 9,673 13.462 0.070 0.066 0.057 0.06 0.03 11 9.750 9,673 19.703 0.100 0.096 0.087 0.06 0.03 12 9.750 9,673 16.310 0.077 0.074 0.065 0.12 0.07 13 8.830 9,673 20.828 0.101 0.097 0.087 0.13 0.07 14 8.830 9,673 14.621 0.073 0.069 0.060 0.10 0.06 15 8.830 9,673 13.602 0.063 0.060 0.051 0.16 0.08 16 8.830 9,673 12.867 0.055 0.053 0.044 0.22 0.12 17 8.830 9,673 11.483 0.044 0.042 0.034 0.30 0.15 18 8.830 9,673 11.640 0.047 0.044 0.036 0.25 0.12 19 8.830 9,673 12.679 0.052 0.049 0.041 0.23 0.12 20 8.830 9,673 20.721 0.104 0.101 0.090 0.09 0.05 21 8.830 9,673 27.091 0.137 0.132 0.120 0.10 0.05 22 8.830 9,673 18.664 0.089 0.086 0.077 0.14 0.08 23 8.830 9,673 12.684 0.060 0.058 0.049 0.10 0.06 24 8.830 9,673 13.487 0.068 0.066 0.057 0.06 0.03 25 8.830 9,673 13.576 0.070 0.068 0.058 0.05 0.03 26 8.830 9,673 14.128 0.071 0.069 0.060 0.06 0.03 27 8.830 9,673 14.012 0.072 0.071 0.061 0.05 0.03 28 8.830 9,673 14.115 0.074 0.072 0.062 0.04 0.02 29 8.830 9,673 14.420 0.075 0.073 0.063 0.04 0.02 30 8.830 9,673 14.495 0.076 0.074 0.064 0.04 0.02 31 8.830 9,673 14.795 0.078 0.075 0.066 0.04 0.02 32 8.830 10,320 9.544 0.049 0.046 0.038 0.07 0.04

TOTAL 309,216 15.840 0.078 0.075 0.066 0.10 0.052



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Figure 16-1: Mine Production Illustrations



16.1 PHASE DESIGN

Six phase designs were completed by IMC that were guided by the results of multiple floating cones. Table 15-1 summarizes the floating cone input parameters. The phases incorporate mine haul roads and assure access to every bench. Proper room is incorporated into the phase designs to assure efficient and safe use of the mining equipment.

The current status of the existing Liberty pit has a pushback that was started on the east wall of the pit just prior to the project shutdown. This plan starts by cleaning up in that area and continues mining of that exposed phase downward to the pit bottom. This area is now called Phase 1 within this plan. As noted above, there were no property or claim constraints applied when designing the phases. Phase 1 requires road development on the non-patented claims.

The phase designs were based on the following parameters

Road widths and Grades: 109 ft wide 10% Grade

Interramp Slope Angles North and Northwest Walls 39 degrees South Wall 42 degrees East, Northeast, and Southeast Walls 42 degrees West and Southwest Walls 35 degrees

Slope angles were developed by geotechnical contractor Call & Nicholas, Inc. (CNI) during earlier work in September 2007. That work supported the pre-feasibility study that was prepared at that time. No additional work has been done and there has been no activity in the pit since that time. IMC and John Marek (QP) hold the opinion that the slope stability analysis is still valid for this pre-feasibility update.

Figure 16-2 illustrates the phase designs on the 5800 ft bench elevation. All phases have been sliced on that bench and their outline plotted. Figure 16-2 illustrates the extraction sequence and operating width associated with each pushback.

Road widths were selected to be able to utilize 240-ton haul trucks for phases 2 through 6. Phase 1 utilizes road widths of 105 ft only because it was completed prior to the decision to use wider roads. Haul trucks at Liberty are currently planned to be 150-ton units so all road widths are sufficiently wide for the planned haul trucks.



Figure 16-2: Liberty Phase Designs Sliced on the 5800 Bench Elevation – Phase Number and Extraction

order is Shown – Each Grid Square is 1,000 Ft

16.2 MINE PRODUCTION SCHEDULE

The phase designs and the required daily ore production were used as the starting points to develop the mine production schedule. The total material rate was established that would consistently release the planned ore at the selected cutoff grade on a continuous basis throughout the mine life. Total material rates were also selected that correspond to the production capacity of the primary loading units.

Multiple schedules were evaluated on a net present value basis applying the economic parameters that are shown on Table 15-1. The schedule that met the constraints of practicality and maximized the NPV was selected. That schedule is summarized on Table 16-2.

Existing Pit 1

2

3 5 4 6



Preproduction stripping was established so that there will be two phases with available mill ore during years 1 and 2 of the mine plan. The schedule shows 1,211 ktons of ore produced during preproduction. This material is incurred during waste removal but is not sufficient to feed the mill on a continuous basis. The preproduction ore will be stockpiled or left as inventory in the pit so that it can be sent to the mill during year 1. Table 16-2 shows the combined mill feed from the production and year 1 ore as sent to the mill.

There is a portion of phase 1 where there is not a month’s ore tonnage on every bench. In that case, the second phase was opened and developed into ore to assure that there would be sufficient ore available at all times.

There are a few periods during the mine life where vertical development is 12 benches per year. That rate has been achieved at a number of mines elsewhere. However, it is aggressive and was implemented within this mine plan in an effort to move grade forward in time. In the time period with the aggressive vertical development, there is a second phase available with exposed ore. That ore may be slightly lower grade than the preferred phase, but there is assurance that the mill feed can be maintained.

Most of the first 12 years of the mine plan operate at a cutoff grade that is above the breakeven cutoff value of $8.83 NSR/ton ore. This is an effort to maximize the project NPV. During those periods, the material that is above the breakeven cutoff and less than the mill cutoff is planned to be stockpiled. Breakeven cutoff is established by IMC to cover mill cost, mine site G&A, and the direct cost of mining that ton of ore.

Some projects use internal cutoff for stockpiling (excluding the mining cost). Using breakeven cutoff assures that there is sufficient value in the ore to cover the re-mining costs and provide some positive benefit when the stockpile is processed. The resulting stockpile contains about 1 year of ore flow that is shown as processed in the last year of the mill schedule. The stockpile also provides a backup in case of unforeseen ore interruptions.

As noted in Section 14, the recovered grades of both molybdenum and copper are stored in the model. Consequently, applying the economics that are on Table 15-1 results in the following equation for Net Smelter Return (NSR). The NSR equation was not amended with the change in copper recovery in the molybdenum pit zone that was reported earlier in this section.

NSR = ($12.00 – 1.53) x 20 x 0.99 x recmo Molybdenum Component +($3.00-0.67) x 20 x 0.9565 x reccu Copper Component in Molybdenum Pit

The copper equation changes in the eastern copper area to: +($3.00-0.761) x 20 * 0.9500 x reccu

The following costs make up the $8.83 NSR cutoff:

Process Cost $5.71 /ton ore G&A $1.34 /ton ore Mining $1.78 /ton material Breakeven cutoff $8.83 /ton of ore

The total of all proven and probable classification ore that is planned for processing on Table 16-2 is the mineral reserve as summarized in Section 15. Inferred mineralization is treated as waste within the mine plan and mineral reserve statement.

The mine plan and production schedule is illustrated on the time sequenced mine drawings that are presented at the end of this section in Figure 16-3 through Figure 16-12.



16.3 WASTE AND LOW GRADE STORAGE

Three types of material are generated by the mine plan that are not mill feed ore; 1) Low Grade, 2) Alluvium Waste, and 3) Rock Waste. Each has a storage area as shown on the time sequenced mine drawings.

The waste rock is stored to the north and northwest of the open pit. The waste storage areas that were started by Anaconda and Cyprus are continued within this mine plan. There is a power line on the west side of the rock waste storage area that is respected and need not be moved for this dump. The waste rock storage area is currently planned to hold 479 million tons of rock. The rock is not segregated by type or grade in this area.

Southwest of the pit will be the small Low Grade Stockpile of about 9.5 million tons. This material is located for easy re-mining with a short haul to the crusher at the end of the pit life.

South of the Low Grade Stockpile is an area allocated for alluvial storage. This material is stored separately so that it can be used for reclamation at the end of the mine life. The alluvium stockpile amounts to about 72 million tons of material.

Table 16-3 illustrates the tonnage of low grade and waste material types that are sent to each storage area over the mine life.



Table 16-3: Waste and Low Grade Storage Allocation

Low Grade Alluvium Rock Total Year Stockpile Waste Waste Waste

Ktons Ktons Ktons Ktons

Preprod 2,379 8,410 10,789 1 4,820 19,685 24,505 2 747 10,646 10,934 21,580 3 132 9,019 13,176 22,195 4 7,772 14,555 22,327 5 1,710 5,887 14,730 20,617 6 809 3,383 18,135 21,518 7 631 1,023 28,673 29,696 8 713 2,626 28,988 31,614 9 1,704 1,789 28,834 30,623

10 1,189 740 30,398 31,138 11 912 5,218 26,197 31,415 12 1,002 8,206 22,606 30,812 13 2,164 9,277 11,441 14 2,211 14,783 16,994 15 1,265 17,423 18,688 16 1,051 21,056 22,107 17 1,234 16,049 17,283 18 592 21,364 21,956 19 16,576 16,576 20 10,362 10,362 21 4,968 4,968 22 9,519 9,519 23 15,820 15,820 24 14,318 14,318 25 10,031 10,031 26 7,813 7,813 27 6,576 6,576 28 4,727 4,727 29 3,729 3,729 30 3,972 3,972 31 4,184 4,184 32 277 277

TOTAL 9,549 72,025 478,145 550,170



16.4 MINE EQUIPMENT REQUIREMENTS

Mine equipment requirements were established based on the mine production requirements and estimated productivity of the selected equipment units. All of the selected mine equipment items are standard off-the-shelf units.

The primary loading units are 2 hydraulic shovels equipped with 27 cubic yard dippers. A front-end-loader is incorporated throughout the mine life for loading functions that require more mobility than the shovels. The front-end-loader will also function as a backup unit for a hydraulic shovel during periods of maintenance.

The blast hole drills are rotary units with 75,000 lb pull down capacity. Blast holes are planned to be 9-7/8 inch diameter. Haul trucks are 150-ton units.

GMI staff calculated the equipment requirements which were checked and verified by IMC. Table 16-4 summarizes the requirements for the major mine equipment. There are a number of minor equipment units in the capital list that are not shown on Table 16-4.



Table 16-4: Mine Equipment Requirements, Summary of Units on Hand

Major Mining Equipment Mine Plan Year of Operation Units On Hand PP 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32

Drilling Blast Drill Atlas Copco PV 271 2 2 2 2 2 2 2 3 3 3 3 3 3 3 3 3 3 3 3 3 2 2 2 2 2 2 2 2 2 2 2 2 1 Loading Hydraulic Shovel Cat 6040 1 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 Spare Hyd Shovel Bucket 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 LeToruneau 1350 Class 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 Spare Loader Bucket 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 Hauling Haul Truck - Cat 785D 4 11 11 13 13 13 13 13 14 14 17 17 17 17 17 17 17 14 14 14 12 12 12 12 12 12 11 11 11 8 8 8 8 Spare Dump Body 1 1 1 1 1 1 1 1 1 1 1 1 1 2 2 2 2 2 2 2 2 2 2 2 2 2 1 1 1 1 Mine Operations Support Equipment Track-type Tractor D10T 2 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 3 3 3 3 3 RT Tractor Cat 834H 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 Motor Grader, Cat 16M 1 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 1 1 Wheel Scraper (Used) 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 Water Truck 20,000 gal , Cat 777F 1 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 1 1 1 1 1 Track Hoe, Cat 345BL 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 Light Plants (New) 3 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 4 4 4 4 Water Truck Loadout 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 Cat RT Backhoe 430D 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 Blast hole Stemmer (Cat 908) 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 D&B Flat Bed Truck F-350 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1



16.5 MINE MANPOWER REQUIREMENTS

Mine hourly manpower requirements were calculated based on the equipment fleet and the mine work schedule. The mine will utilize 2 shifts/day that are 12 hours long and will schedule to work 365 days/year. There is allowance for 5 days of loss time for weather or holidays so the equipment and manpower is based on running 720 shifts per year that are 12 hours long.

Table 16-5 summarizes the mine personnel requirements for both hourly workers and staff positions. The ratio of maintenance labor to operating labor is varies between 40% and 42% for most of the mine life. This is accomplished by using contract services for tires and component exchange for major parts.



Table 16-5: Mine Personnel Requirements

Mine Personnel Required Type Mine Plan Year of Operation -1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 Mine and Maintenance Supervision, and Engineering Management Administrative Assistant NE 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 Mine Operations Supervision Superintendent, Mine Operations S 0.5 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 Supervisor, Mine Ops S 3 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 Mine Maintenance Supervision Superintendent, Mine Maintenance S 0.5 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 Sr Planner, Mine Maintenance S 0.5 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 Supervisor, Mine Maintenance S 2.5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 Administrative Assistant (2) NE 0.5 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 Geology Chief Mine Geologist S 0.5 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 Geologist S 0.5 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 Technician, Ore Control NE 2 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 Engineering Chief Mine Engineer S 0.5 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 Chief Surveyor S 0.5 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 Sr. Engineer, Mine S 0.5 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 Mine Engineer S 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 Technician, Survey NE 1 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 Total Supervision, and Engineering 13 28 28 28 28 28 28 28 28 28 28 28 28 28 28 28 28 28 28 28 28 28 28 28 28 28 28 28 28 28 28 28 28 Mine and Maintenance Hourly Personnel Mine Operations Operator 3 H 2 10 10 11 10 10 11 11 11 11 13 12 12 9 10 10 11 10 11 10 9 8 9 11 10 9 9 9 8 7 7 8 6 Operator 4 H 9 40 38 43 40 41 43 44 45 44 50 48 47 36 39 41 44 41 44 41 36 32 37 42 41 37 36 34 31 28 28 30 25 Operator 5 H 7.5 35 34 37 35 36 37 38 40 38 44 42 41 32 34 36 39 36 39 36 31 28 33 37 36 33 31 30 27 25 25 27 22 Operator 6 H 3.5 15 14 16 15 15 16 16 17 16 19 18 18 14 15 15 17 15 17 15 13 12 14 16 15 14 13 13 12 11 11 11 9 Mine Maintenance Mechanic 4 H 2.5 10 10 11 10 11 11 11 12 11 13 12 12 9 10 11 11 11 11 10 9 8 10 11 10 10 9 9 8 7 7 8 7 Mechanic 5 H 4.5 20 20 22 20 21 22 22 23 22 25 25 24 18 20 21 23 21 23 21 18 16 19 22 21 19 18 17 16 15 15 16 13 Mechanic 6 H 2.5 10 10 11 10 11 11 11 12 11 13 12 12 9 10 11 11 11 11 10 9 8 10 11 10 10 9 9 8 7 7 8 7 Total Hourly Personnel 32 140 126 140 130 145 151 142 149 142 177 169 154 118 128 145 156 135 145 133 125 112 123 139 133 132 125 112 102 93 100 108 83

S = Salaried, H = Hourly, NE = Non-Exempt Hourly Fraction personnel numbers reflect half a year of employment during preproduction



16.6 MINE PLAN DRAWINGS

Figure 16-3 through Figure 16-12 illustrate the mine plan and material storage development over the mine life. Changes to tailing volume are not shown on the drawings.



Figure 16-3: End of Preproduction



Figure 16-4: End of Year 1



Figure 16-12: End of Year 32 (Final Pit)



17 RECOVERY METHODS

The results of metallurgical testing have indicated that conventional flotation technology can be used to recover copper and molybdenum from the project feed material. The design basis for the processing facility is 26,500 dry short tons per day (dst/d) or 9.67 million dry short tons per year (st/y). It is contemplated that feed will be transported from the mine to the concentrator facility by off-highway haulage trucks. Mineralized material would then be processed to produce copper and molybdenum sulfide concentrates, with the copper concentrate being shipped by truck and the molybdenum concentrate packaged in super-sacks.

The proposed process operations are as follows:

Crushing of the feed by primary gyratory crusher to reduce the feed size from run of mine to minus 6 inch.

Stacking of primary crushed feed in a coarse ore stockpile and then reclaiming by in-tunnel feeders and conveyor belts, with one feed system for each of the two grinding lines.

Grinding is accomplished using two semi-autogenous grinding (SAG) mill / ball mill circuits, with each circuit consisting of a single SAG mill and a single ball mill. The SAG mill will operate in closed circuit with a vibrating screen. Oversize material will be recirculated via a conveyor belt to be fed back through the SAG mill. The ball mill will operate in closed circuit with a hydrocyclone cluster to produce the desired grinding product size distribution of 80% (P80) passing 147 micrometers.

Each grinding circuit cyclone overflow reports to a bank of eight bulk rougher flotation cells. The bulk rougher concentrate from each bank is re-ground in closed circuit with a vertical mill.

The molybdenum-copper re-ground concentrate is up-graded in two cleaner flotation circuits, with the tailing for the first cleaner section undergoing a scavenger flotation step prior to exiting the mill with the bulk rougher tailing.

The up-graded molybdenum-copper concentrate is thickened and then conditioned with reagents prior to entering the molybdenum-copper separation stage.

The molybdenum separation section is composed of a rougher flotation section where-in the copper minerals are depressed, while the molybdenite is floated. The tailing from the molybdenum-copper separation step is sent to a copper up-grading section.

The molybdenum first cleaner concentrate is thickened and then undergoes four additional cleaning flotation steps to produce a final molybdenum concentrate.

The final molybdenum concentrate is thickened, the underflow filtered, and the filter cake dried using a hollow screw dryer. The dryer discharge is stored and then packaged into super-sacks.

The copper concentrate up-grading circuit incorporates a thickener, conditioning tanks, up-grade flotation cells, one stage of concentrate cleaning, and a scavenger circuit on the cleaner tailing.

The final copper concentrate is thickened and filtered with a pressure filter to yield a cake containing no more than 8% moisture. The filter cake is conveyed to a storage building from which it is loaded into over-the-road trucks.

Facilities are provided for storing, preparing, and distributing reagents.



Figure 13-1 shows the overall process flow sheet. Table 13-1 shows the reagents used in the process and other main process consumable items, while Table 17-1 identifies the general design criteria used for equipment selection. Table 17-2 lists major equipment.

Table 17-1: Process Design Criteria

Variable Nominal Value General Ore head grade Total Mo, percent 0.078 Sulfide Mo, percent 0.075 Total Cu, percent 0.10 Ball mill work index, average, kWh/st 11.4 Production schedule Milling rate Annual, million dst/y 9.67 Daily, dst/d 26,500 Hourly, dst/h 1,200 Operating schedule Primary crusher Operating time, percent 75.0 Operating hours/day 18.0 Feed rate, dst/h 1,472 Grinding, flotation, and concentrate handling Operating time, percent 92.0 Operating hours/day 22.1 Primary crushing Crusher feed size, F80, mm 500 Crusher product size, P80, mm 175 Grinding Type of circuit SAG and ball mills SAG mill operation closed with vibrating screen Ball mill operation closed with hydrocyclones Number of mills (SAG/BM) 2/2 Grinding circuit product size, P80, micrometers 147 Mo-Cu flotation Rougher Cell configuration, number of row/cells per row 2 rows with 8 in each row Net retention time, minutes 22 Feed percent solids, percent solids 25 Stages of regrind 1, vertical mill Number of cleaning sections two cleaning and one cleaner scavenger Retention time in each cleaning stage, 1st Cl & 2nd Cl, minutes 12 and 22 Molybdenum separation First stage (rougher/scavenger) retention time, minutes 45 Stages of regrind 1 Stages of cleaning 4 Copper concentrate up-grading Pre-conditioning reagent hydrogen peroxide Number of stages of flotation 2 Final copper concentrate grade, percent copper 23 Copper concentrate handling Thickening and pressure filter Molybdenum concentrate handling Thickening, filtration, dryer



Table 17-2: Major Equipment List

Description Size Quantity Comments Primary Crusher 54 in X 74 in 1 500 HP SAG Mill 28 ft X 10 ft 2 4,600 HP Ball Mill 16.5 ft X 27 ft 2 4,600 HP Double Deck Screen 7 ft X 16 ft 2 Primary Cyclone Feed Pumps 20 in X 18 in X 54 in 2 700 HP Bulk Roughers 3,530 ft3 16 Rougher Regrind Mill Vertical Mill 1 800 HP Bulk Mo-Cu 1st Cleaner 530 ft3 5 Bulk Mo-Cu Scavenger 530 ft3 4 Bulk Mo-Cu 2nd Cleaner 530 ft3 2 Mo-Cu Thickener 20 ft dia 1 High Capacity Storage Tank 17 ft-dia X 18 ft 1 Mo-Cu Conditioner 8 ft-dia X 8 ft 2 Mo-Cu Separation 175 ft3 7 1st Moly Cleaner Thickener 60 ft-dia 1 Moly Regrind Mill NA 1 100 HP 1st Moly Cleaner 50 ft3 10 2nd Moly Cleaner 50 ft3 8 3rd Moly Cleaner 50 ft3 6 4th Moly Cleaner 50 ft3 6 5th Moly Cleaner 50 ft3 12 Moly Con Thickener 45 ft3 1 Moly Concentrate Filter 3.8 dst/h 1 Drum Filter Moly Dryer 3.8 dst/h 1 Holoflite Hot Oil Moly Concentrate Bin 45 st 2 Moly Con Super-sack Filling Station 10 dst/h 1 Cu Upgrade Thickener 60 ft3 1 Cu Feed Conditioning 8 ft X 8 ft 2 Cu Upgrade Flotation 100 ft3 6 1st Cu Cleaner 100 ft3 2 1st Cu Scavenger 100 ft3 3 Final Cu Con Thickener 50 ft-dia 1 High Capacity Cu Concentrate Filter 1030 ft3 1 Plate Pressure Filter Tailing Thickener 400 ft-dia 1 High Capacity



18 PROJECT INFRASTRUCTURE

18.1 EXISTING INFRASTRUCTURE

Much of the power, water, and building infrastructure at Liberty originally constructed by past property owners still exists and can be made serviceable with relatively modest amounts of construction capital. Figure 18-1 shows a map of this infrastructure.

Figure 18-1: Existing Liberty Infrastructure

18.2 CRUSHING AND MILLING FACILITIES

The major foundation and concrete works for the primary crusher and mill are still largely intact requiring only minor repair to support planned process equipment and building structures. The concrete pedestals in the flotation area will be utilized in combination with new support steel for the flotation cells. Tailings thickener vessels and underflow tunnels are largely intact and will require only minor repair to support operation.

18.3 MINE / MILL SUPPORT BUILDINGS

18.3.1 Office Change-house Complex

The office / change-house complex has an area of 32,000 sf that includes the following:

Men’s change room

Women’s change room



Security office

Safety rooms

Training rooms

Meeting rooms

Offices

Reception area

18.3.2 Warehouse and Maintenance Facility

A 57,600 sf warehouse / maintenance structure along an attached 23,400 sf truck repair facility will easily support the mining and milling operations. These facilities are comprised of the following:

Warehouse

Support equipment maintenance bays

Mill maintenance bays

Mine truck repair bays

28 offices

18.3.3 Laboratory Facility

An existing 4,320 sf building can be utilized to support a laboratory facility, as well as offices for lab and mill personnel.

18.3.4 Support Facility(s)

To fully support operations, the following facilities are planned to be constructed:

Equipment wash pad

Tire repair pad

Equipment parking line

Diesel fueling facility

Small vehicle fueling facility

18.4 FRESH WATER

Water rights in the State of Nevada are considered real property. A water right provides the legal right to use the water and is granted in Nevada by the State Engineer. The Liberty project, for water rights purposes, had the warranty deed recorded 17 March 2006 in Docket 652114. The following permits are included: 35776, 40520, 40521, 40524, 42480, 42835 and 42836. The historical water rights allow for 2.0 billion gallons annually for mining and milling use, or 6,200 acre ft per annum (afa). They date back to the original Anaconda Company water rights from 1982. In October 2007, the Nevada State Engineer granted an additional 2,170 afa, making available a total of 8,370 afa.

The existing infrastructure includes a developed water supply consisting of:



Six established fresh water wells with 20-inch nominal casing to approximate depth of 1,000 ft below the surface

Two concrete booster tanks with a combined capacity of approximate 250,000 gallons

Concrete foundations for booster pumps

One 610,000-gallon steel fresh and fire water head tank

One 20,000-gallon fresh and potable water tank

One approximately 2,000,000-gallon steel process water tank

Limited above and below ground sections of water piping are still in place and re-usable.

18.5 POWER

The local power provider, Nevada Energy, has transmission and substation equipment in the Utility Substation (Anaconda Substation) adjacent to the property adequate to service the estimated 20 MW load (connected load 25 MW) requirement. The Anaconda Substation is comprised of 230 kV main feed stepping down via transformer to 120 kV bus. There is one 120 kV oil breaker, CTs, and PTs and one switch tying the approximate 1.4 mile-long 120 kV power line to the main substation at the project site (Liberty Substation). An additional 63 kV transmission line is coming in from Miller Utility Substation approximate 17 miles south of the project, which feeds an existing 7.5 MVA transformer that could be utilized. Electrical underground duct banks extend from Liberty Substation to the truck shop, administration building, laboratory, and former concentrator building.

18.6 ROADS, RAILROAD, AIR ACCESS

The Liberty Molybdenum site is accessible just north of Tonopah, NV from Highway 95 that runs between Reno and Las Vegas. The mine site is located approximately 25 miles northwest of Tonopah. There is a paved access road to the mine administration office from Gabbs Pole Line Road.

The Union Pacific railroad lies east and west across northern Nevada. Accesses for shipping mine concentrates by rail are located at Dunphy, Wabuska, and Wendover, Nevada.

A public airstrip is located approximately 5 miles west of Tonopah.

18.7 TAILINGS DAM

The new tailings facility will be constructed on top of the existing tailings surface used by Anaconda and Cyprus on private ground. Smith Williams Consultants, Inc. (Smith Williams) completed a pre-feasibility study for General Moly in 2008 for the design of the Liberty Tailings Impoundment and associated ancillary facilities (Liberty Moly Project Tailings Storage Facility Pre-Feasibility Study, May 13, 2008). The facility will have an embankment height of approximately 300 ft. The downstream embankment slope will be 3.5:1 (3.5 horizontal to 1 vertical) and the crest width will be 30 ft. It is assumed that the tailings facility would be constructed without a synthetic liner or compacted base, as the environmental conditions support this approach. As sited, the proposed tailing storage facility has a capacity of approximately 433 million tons of tailings.

For design purposes, the tailings characteristics were assumed to be identical to the Mount Hope project summarized in “Mount Hope Project South and North Storage Facilities Located in Kobeh Valley Bankable Feasibility Study”, issued on May 13, 2008. In addition, the sand fraction of the tailings was assumed suitable for use as embankment construction material. The proposed 300-ft high TSF expansion is stable under both static and pseudostatic loading conditions since the computed values exceed the prescriptive factors of safety.



Tailings conveyance and distribution will be directed from the mill overland through a pressure rated high density polyethylene (HDPE) pipeline to the tailings impoundment embankment. The underflow from the tailings thickener will be directed to cyclones on the tailings dam embankment and the overflow will be deposited into the TSF. The underflow from the cyclones will be used to construct the embankment raises and the overflow will be deposited into the TSF.

The embankments will be constructed using the sand portion of the cyclone split going to the upstream side of the existing embankment. The sands will be used for the continual raising of the embankment to impound the slimes. The sands will be spread mechanically using low ground pressure dozers and compacted to obtain the necessary strength.

Rotational distribution of the overflow tailings will be utilized to direct the supernatant pond to the reclaim slot. The reclaim slot will store the supernatant solution for reuse as dust suppression and/or process recycle water.

18.7.1 Tailing Dam Geotechnical

A preliminary geotechnical investigation was completed by Smith Williams, Inc. between June 5th and June 23rd, 2007, for the proposed Liberty TSF site. The investigation included the excavation of 20 test pits within the proposed footprint and its close proximity, as well as five test borings within the proposed basin and embankment areas. Samples obtained from the geotechnical borings and test pits were examined and classified in the geotechnical laboratory.

Cursory slope stability analyses were conducted in support of the pre-feasibility design of the proposed Liberty TSF embankment. These analyses required the selection of design parameters based on the geotechnical investigation and the associated laboratory testing completed, from the work on other projects similar in scope, as well as from the previous studies by Sergent, Hauskins & Beckwith for the Anaconda Company, Bechtel Incorporated for the Anaconda Copper Company, and EIC Corporation for Cyprus Tonopah. This assessment examined the stability of the proposed ultimate embankment under both static and seismic loading conditions. The analyses indicate that the TSF will demonstrate adequate stability under both static and seismic loading conditions.

18.8 MINE WASTE DUMPS AND LOW GRADE ORE STOCKPILE

Alluvium, located over much of the deposit, is suitable as growth media. When encountered during waste removal, it will be stockpiled separately on private ground southeast of the copper starter pit where it can be recovered and used for reclamation.

All rock waste will be hauled northwest of the mine. A waste dump from previous operations is located there. That dump will be extended to the north and west. The low grade ore stockpile will be located southwest of the pit between the mine and tailings area. It is assumed that the waste rock disposal facilities would be constructed without liners. This approach is supported by environmental conditions at the site.

18.9 COMMUNICATIONS

18.9.1 Description of the Liberty Communication System

Liberty will use several communication systems; including a business network providing data and telephone, a two-way voice radio system, and a process control network. All systems will use some form of radio communication but will reside on different frequencies and channels in order to avoid conflicts.



18.9.2 Business Network

The Business Network refers to the Multi-Protocol Label Switching (MPLS) network which provides data, internet, and Voice Over Internet Protocol (VOIP) digital telephones systems. Voice radio will refer to the Motorola radio system utilized to communicate across the site. The MPLS network for the Liberty project will be configured via a licensed microwave link and a series of line-of-sight radios. The licensed radio link will provide the backbone for the business network. The second microwave hop, on unlicensed links, will terminate in the existing Truck Shop facility. From there, either additional radio hops, (or fiber if it is more cost effective), will connect the administration building, laboratory, mill and the primary crusher to form the Local Area Network (LAN).

As shown below, a third-party circuit will connect Liberty to the General Moly Wide Area Network (WAN) via the licensed microwave link on Mt Brock and terminating on a tower at the Liberty site near the fresh water tank (Figure 18-2). From there, the LAN is created and routed using radio links from the Truck Shop to various other facilities, as shown in Figure 18-3. The LAN will support the required switches, routers, file servers, and remote applications via the business network.

Figure 18-2: Communication between Liberty and Mt. Brock



Figure 18-3: Line of Site Communication at Liberty Mine

18.9.3 Process Control Systems

Process control systems will use their own dedicated line-of-sight radio communications to facilitate data transfer between operational areas like the primary crusher, tailings facility, and the fresh water well fields. Wherever possible, these systems will use existing structures on which to place antennas or small poles, as required, to provide the line-of-sight between the various radios. Dedicated servers will host the server operating systems, process control applications, and supporting databases. These servers will reside on a Virtual Local Area Network (VLAN) dedicated to supporting process operations, and will not be a part of the business network. Creating this virtual network ensures that it cannot be connected to unwanted outside sources. These considerations will ensure high availability for the process plant, because the control network is independent of the business network and not accessible by unwanted outside sources.



19 MARKET STUDIES AND CONTRACTS

19.1 MARKET STUDIES

Molybdenum is primarily used as an alloying agent in a wide range of steels and alloys. The grayish non-toxic metal is employed in various steels, including many stainless steel grades, because of durability, strength and robust qualities. Molybdenum alloys are resistant to extremely high temperatures as molybdenum has both a very low thermal expansion and one of the highest melting points of all elements. These qualities, in conjunction with the other properties of molybdenum, limit consumers’ ability or desire to substitute for other metals in its numerous applications. Demand for molybdenum was growing at nearly a 7% compound average growth rate (CAGR) prior to the financial recession of 2008. Since then, demand has again begun to grow, although at lower rates, as many industries have sought to develop new materials that benefit from molybdenum’s alloying properties. The two use charts below are provided by SMR Research and the CPM Group.



Figure 19-1: Molybdenum – First Use

Figure 19-2: Molybdenum – Second Use

Molybdenum’s composition and characteristics make it an ideal and pragmatic choice for utilization in jet and turbine engines, aircraft parts, electrical contacts, industrial motors, nuclear energy reactors, lighting, glass manufacturing, and other hot-zone applications where molybdenum is commonly alloyed with titanium, zirconium, and carbon. Molybdenum is also utilized in non-metallurgical applications; importantly as a catalyst in the hydrodesulphurization of crude oil in the petroleum refining industries, specialty lubricants, and plastics. Over 80% of all molybdenum is used in metallurgical applications, while over 40% of all molybdenum is utilized within the energy industry, leading some industry participants to name molybdenum as “the energy metal.”

According to CPM Group, an industry consultant, molybdenum demand is anticipated to grow at approximately 4.1% CAGR over the next ten years. Increased consumer awareness of the desirable properties of molybdenum-bearing products has strengthened the demand.

Industrial analysis of molybdenum end-uses shows the steel industry holding the largest market share, accounting for approximately 88% of world molybdenum consumption in 2012. This is led by full alloy steel, which accounts for 22% of global demand, closely followed by stainless steel, accounting for 19% of global demand. Specialty steels such as



tool and high strength steels, super alloys, and pure molybdenum metal jointly comprise approximately 30% of global demand with cast iron and carbon steel rounding out the metallurgic component of molybdenum demand. Chemicals represent the remaining 12% of global demand, which is primarily comprised of catalysts utilized in oil refining.

Increased knowledge of specialty steels, like duplex steels, are being employed more extensively in applications around the world. Duplex steels have much higher content of molybdenum than traditional stainless steels and lower levels of nickel.

Molybdenum will play a critical role as the world seeks more environmentally friendly energy sources, including both conventional and renewable sources. More pipelines will be required to exploit the world’s growing sources of natural gas. Using molybdenum in the pipelines increases the strength of the steel while providing for corrosion protection, allowing producers to use lower weight steels that last longer. Molybdenum bearing steels are also extensively utilized in both coal and nuclear power facilities.

Meanwhile, growth in the world’s demand for crude oil, in combination with the tightening of global emissions standards, will substantially increase the demand for molybdenum in catalyst form to produce the cleaner fuels required to meet lower emissions targets across the globe.

In renewable energy, molybdenum is finding uses in solar CGIS solar cells, where a thin layer of molybdenum near the bottom of the cell helps to transfer the electricity generated from the solar cell to circuits external to the panel. In wind power, molybdenum helps to create more efficient wind turbines by lowering the weight of turbine blades and decreasing the turbine’s resistance to air flows. Lastly, both biofuels and ethanol production are highly corrosive, and molybdenum steels are utilized extensively in that industry’s production, transportation, and storage facilities.

19.2 CONTRACTS

19.2.1 Introduction

Liberty Molybdenum LLC retained Loewen Associates, LLC and Randy Larson to study the transportation aspects of the project. The study covered a number of possible transport options and destinations depending on the material being shipped. The outcome suggests two primary logistics streams; one for molybdenum and a separate stream for copper concentrate. This strategy is driven primarily by the quality of the concentrates and the market constraints as they exist today. Molybdenum concentrate is assumed as high quality and copper concentrates considered as average to low quality.

19.2.2 Molybdenum Concentrate

The project will produce a high-grade, low-copper molybdenum concentrate. Indicative historical data suggest this material will be highly desirable, ensuring ready market access to North American roasters. It is assumed that the concentrates will be sold FOB mine site. The associated costs were developed based on transport costs (truck/rail) using per mile rates to North American roasters. An additional broker fee was added to cover the overhead and profit anticipated for using a metal trader.

Three main destinations for molybdenum concentrates were identified as being the most viable in North America; Douglas, Arizona (for transfer to Cumpas, Sonora, Mexico); Sahuarita, Arizona; and Langeloth, Pennsylvania. An average distance of 1,500 miles from the Liberty mine at $0.133 per mile is reflected in the freight calculation. Assuming 10% concentrate moisture, the shipping cost is estimated to be $221.67/dry-st-concentrate or $0.213/lb saleable molybdenum. An additional TMO deduct for handling through a broker is $0.15/lb-salable molybdenum bringing the total TMO freight and fees to $0.36/lb-Mo. Roasting costs are estimated to be $0.70/lb-salable molybdenum.



19.2.3 Copper Concentrate

Given the shortage of North American copper smelting capacity and the average to possibly relatively low copper content in the Liberty copper concentrates, GMI assumed that the material will be exported. Nevertheless, the low copper and precious metals contents (no silver credits are assumed in the financial model, although historical data indicate about 3 oz Ag per short ton of concentrate), and very low impurity levels assure market acceptance in China.

The logistics stream will require three modes of transport, which include truck, rail, and ocean vessel. The concentrate will be loaded at the mine site in 22.5 ton truckloads and transported to a Union Pacific RR (UP) loading facility in Wabuska, NV (approximately 185 miles at $0.130/mile). Trans loading ($0.45/wet-st-conc) into 100-ton gondola rail cars will be required for shipment to the port in Vancouver, WA (approximately 700 miles at $0.08/mile). The material will be loaded onto ocean vessels and shipped to China (approximately 6,500 miles at $0.0088/mile). Total freight costs from mill site to China are $138.35/wet-st-conc. Additional fees, such as insurance US/Chinese port fees and other terminal costs equal $44.24/wt.-st-conc. This totals to $182.59/wt.-st-conc ($198.47/dry-st-conc.) or $0.45/lb Cu.

19.2.4 Other Contracts

In order to ensure consistent supply and ratable pricing for key commodities, mid to long term contracts will need to be let. These contracts are not in place as of the date of this filing, but are summarized below:

Mining:

o Maintenance contract for mining equipment. o Long-term diesel fuel contract for 3 to 4 million gallons per year.

Milling:

o Quicklime contract sourced out of Pilot Peak, Nevada for approximately 21,000 tons per year. o Pine oil contract for approximately 109,000 lbs per year. o Hydrogen peroxide contract for approximately 1.2 million lbs per year. o Grinding media contract for approximately 19.8 million lbs per year. o Propane contract for approximately 90,000 gallons per year.

Transportation:

o Contract with local trucking firm to transport concentrates from the mine site to Wabuska, Nevada. o Union Pacific contract for the transport of concentrates from Wabuska, Nevada to Vancouver,

Washington. o Ocean vessel freight contract for shipping material from Vancouver, Washington to China. o Freight forwarding contract for tracking material from the mine site to final destinations in North

America and China.

Sales Contracts:

o Sales agreements with North American roasters for molybdenum concentrates. o Sales agreements with China customers for copper concentrates.



20 ENVIRONMENTAL STUDIES, PERMITTING AND SOCIAL OR COMMUNITY IMPACT

20.1 ENVIRONMENTAL STUDIES

The project area has been operated as an open-pit mining property on two separate occasions, the most recent from 1999 to 2001. No environmental studies have been conducted to support the current permitting programs. Baseline environmental studies and data collection will be conducted in conjunction with the permitting efforts described below. No environmental issues have been identified that present a significant obstacle to development of the project as described in this document.

20.2 PERMITTING REQUIREMENTS

The Liberty project area is currently controlled by GMI through their ownership of fee land, patented lode claims, patented mill-site claims, and unpatented claims. The majority of the project area is located on fee lands and patented mill-site and lode claims. The unpatented claims which are largely surrounding the open pit and waste stockpile areas are on public lands administered by the Bureau of Land Management (BLM). The proposed Liberty project falls under State and Federal agency jurisdictions.

The current plan envisages mining on both private and public lands. BLM approval is required before public lands can be disturbed, which includes completion of an Environmental Impact Statement (EIS), as required under the National Environmental Policy Act (NEPA). Once the State permits have been acquired, construction and/or mine development can be initiated on private land without the completion of the EIS. While not part of the current plan, this provides a potential advantage in expediting the construction schedule, if there is a significant delay in the permitting process. Sufficient water rights have been obtained for construction and operations.

To the extent practical, the project has been configured to utilize existing mining infrastructure and areas of previous disturbance. The project is located in a mining-friendly jurisdiction with a local culture tied to, and supportive of, the mining industry. Because the area is quite arid, sparsely vegetated, and has been previously disturbed by mining, it is not likely to draw substantive or well-organized opposition from non-governmental organizations (NGOs). It is anticipated that strong local support for the project would facilitate expeditious completion of the EIS and other permits.

Table 20-1: GMI-Liberty Project Environmental Permits

Permit Agency Comments Federal Permits Plan of Operations/Record of Decision

U.S. Bureau of Land Management Federal process for analysis of potential environment impacts, authorizes disturbance based on the Preferred Alternative and identifies mitigation requirements on federal lands.

Explosives Permit U.S. Bureau of Alcohol, Tobacco and Firearms

Authorizes the storage and use of explosive materials.

EPA Hazardous Waste ID Number

U.S. Environmental Protection Agency

Required for generation, transporting, storing and disposal of hazardous materials.

State Permits Reclamation Permit Nevada Division of Environmental

Protection (NDEP) Bureau of Mining Regulation and Reclamation (BMMR)

Authorizes disturbance and approves reclamation methods based on description of each disturbance type and specific facilities that will be built and reclaimed. After issuance, a reclamation bond, in the amount determined during the permitting process must be posted before disturbance is conducted.



Water Pollution Control Permit (WPCP)

Bureau of Water Pollution Control (NDEP)

Authorizes construction and operation of mining and processing facilities and discharge of stormwater. Approval is based on engineering design.

Air Permit (Class II Operating)

Bureau of Air Pollution Control (NDEP)

Authorizes surface disturbance and discharge of emissions from process components. It is anticipated that Liberty will be considered a minor source (Class II) due to less than 100 tons of any regulated pollutant.

Public Drinking Water System Permit

Nevada Division of Environmental Safety (NDES)

Provides for the storage and distribution of potable water for the administrative and process facilities.

HAZ/MAT Storage Permit

State Fire Marshal, Hazardous Materials Section

Allows the temporary on-site storage of hazardous materials (product and waste).

Artificial Industrial Pond Permit

Nevada Department of Wildlife Authorizes the development and operation of ponds related to process components.

Dam Construction Permits

Nevada Division of Water Resources

Allows construction of dams greater than 20 ft in height and/or ponds that impound 20acre-ft of water or more. Approval is based on submittal of design demonstrating safety in engineering design.

Septic System Permit Nevada Division of Health, Bureau of Health Protection Services

Authorizes the construction and operation of on-site sewage disposal systems.

Radioactive Materials License:

Nevada Division of Health, Bureau of Health Protection Services

Allows the use and storage of low level radioactive devices used for measuring flow of slurry in process components.

Water Appropriations Permit

Nevada Division of Water Resources

Authorizes the appropriation and beneficial use of water resources for mining activities.

Solid Waste Landfill Waiver

NDEP - Bureau of Waste Management

Authorizes the on-site disposal of non-hazardous, non-petroleum solid waste.

20.3 PERMITS AND APPROVALS

Table 20-1 presents requisite Federal and State permits/approvals and includes both major and minor permits. Several of the State of Nevada permits/approvals are considered major permits, as each requires substantial engineering and other technical detail in the permit applications, a comprehensive evaluation of design and operational factors, and assessment of impacts and mitigation. In addition, the EIS required for BLM approval is considered a major permit process, will require GMI to complete substantial environmental studies to document baseline conditions and will provide extensive opportunities for public input.

Permit application procedures are well-defined and understood. The project site has been previously permitted, mined, and reclaimed, and previous operations have achieved bond release for this property from State and Federal agencies for reclamation of past disturbance. Past mine permitting, with subsequent successful reclamation, is considered an advantage for this project’s permitting needs.

The anticipated environmental permitting milestone schedule is outlined in Table 20-2. The project execution strategy envisages approximately three years from baseline study kickoff to receive all state permits required to commence construction and four and a half years to receive federal permits.



Table 20-2: Permitting Milestone Schedule

Task Begin End Months Environmental Baseline Studies Dec-2014 Apr-2016 16 Develop Mine Plans and Permit Level Design Aug-2014 Apr-2016 20 Prepare Reclamation Cost Estimate Oct-2015 Jan-2016 2 Prepare State Permit Applications Dec-2015 Jul-2016 7 Submit State Permit Applications Jul-2016 State Agencies Review Permit Applications Jul-2016 Jan-2018 17 State Permits Issued - Private Lands Authorized Jan-2018 Construction Period 20 Months Apr-2018 Dec-2019 20 Prepare Plan of Operations (PoO) Apr-2016 Jan-2017 9 Submit PoO / Start EIS Jan-2017 EIS Jan-2017 Jun-2019 29 RoD - Public Lands Authorized Jun-2019 Mine Pre-stripping Jun-2019 Dec-2019 6 Plant Starts Operation Dec-2019

20.3.1 Plan of Operations Approval

Operation on BLM-managed lands requires preparation of a Plan of Operations (PoO) and approval of that plan by the BLM. That approval process is facilitated by completion of an EIS, as required under NEPA. The EIS will analyze potential environmental impacts from the Liberty project and disclose those impacts to the public. The EIS will be prepared by a 3rd party contractor under direction of the BLM. The BLM would be responsible for determining the level of technical analysis required, but would consider input from any other agencies that are granted Cooperating Agency status for the EIS.

GMI would conduct baseline environmental studies to provide the information needed to evaluate impacts to environmental resources. Baseline resources to be evaluated include vegetation, cultural resources, soils, socio-economic, hydrology, air quality, transportation, terrestrial wildlife, fisheries, migratory birds, sensitive species, wetlands, visual resources, noise, and vibration. Additional studies may be required based on concerns identified during the scoping period.

GMI will develop a Plan of Operations and submit it to the BLM pursuant to surface mining regulations (43 CFR 3809.11). The EIS process is initiated by a scoping period that allows the public, tribes, and other agencies to comment on the proposed action and impacts to be analyzed, and suggest alternatives and potential mitigation measures. As part of the scoping process, a Notice of Intent is published in the Federal Register announcing the initiation of the EIS process. Scoping comments are used to determine specific studies or data that are required to adequately analyze the stated concern.

A draft EIS is then prepared and made available for public comment. The draft EIS will identify the Purpose and Need for the project and describe the Proposed Action as well as multiple alternatives including the No Action Alternative. The draft EIS will also present environmental impacts and mitigation measures for the Proposed Action and for each alternative.

Upon release of the draft EIS, a Notice of Availability is published in the Federal Register, which starts the public comment period, typically lasting 60 to 90 days. Comments are reviewed and, as determined appropriate by the BLM as lead agency, addressed via preparation of the final EIS. Once the final EIS is published, the BLM would



prepare a Record of Decision to authorize the project or one of the alternatives. Additional studies to adequately evaluate probable impacts may be required at any time during the EIS process.

20.3.2 State of Nevada Permits

Permit application procedures are well-defined and understood. Table 20-1 presents a list of potentially applicable permits. This table presents both major and minor permits. Several of the State of Nevada permits/approvals are considered major permits, as each requires substantial engineering and other technical detail in the permit applications, a comprehensive evaluation of design and operational factors, and assessment of impacts and mitigation.

The major State of Nevada permits/approvals required for the Liberty project are:

Air Quality Permit

Water Pollution Control Permit

Reclamation Permit

These major permits are discussed below.

20.3.2.1 Air Quality Permit

An Air Quality Control Permit is required for any process or activity that has the potential to emit (PTE) any regulated air contaminant. The Nevada Division of Environmental Protection (NDEP) - Bureau of Air Pollution Control (BAPC) has been delegated authority over air permitting by the US EPA, and requires that an air permit be in place before a regulated source begins construction. The type of air permit required is dependent on the attainment status of the region where a source is located and a source’s PTE of regulated criteria pollutants and hazardous air pollutants (HAPs). It is anticipated that emissions from the Liberty project will be below the threshold for a Class I permit, and that a Class II Air Quality Permit will be required.

Class II permitting application requirements include identification of all emission units for industrial processes, combustion equipment, storage silos, liquid storage tanks, surface area disturbances, insignificant or trivial activities, a narrative description of the process, process flow diagrams for all emissions units, and a plot plan/facility layout diagram. Detailed emission calculations for each unit must be performed to identify the facility wide PTE. Air quality dispersion modeling for the project must be completed to demonstrate compliance with Federal and State air quality standards for all applicable pollutants, allowable ambient-concentration increases for particulate matter. Based on preliminary emissions estimates, and previous comparable modeling efforts completed, it is expected that modeled impacts will not exceed any applicable air quality significance levels or standards.

Upon completion of the facility design, an air quality permit application will be prepared with the above mentioned permit application requirements. It is expected that a permit application will be completed and submitted within 90 days. Subsequent agency review time for administrative and technical completeness is 10 days, permit preparation is 60 days, and public comment period is 30 days, if requested by the director. Overall, it is expected that a permit to construct would be issued within six to 12 months following the completion of the facility design.

20.3.2.2 Water Pollution Control Permit

The Water Pollution Control Permit (WPCP) program is administered by NDEP - Bureau of Mining Regulations and Reclamation (BMRR). The permit application will include information about the operator, background meteorological conditions, and background hydrogeological information. In addition, an engineering design report and draft operating plans are also required. The engineering design report includes secondary containment design and other



environmental control elements for process solution facilities (ore processing and disposal facilities). Operating plans address stormwater control, monitoring, waste rock management, seasonal closure methods, and permanent closure methods.

The requisite information will be developed in conjunction with development of the facility design. Specific requirements for engineering design, operating plans and other information are well defined by regulation (NAC 445A). Once this information has been developed, the WPCP application is estimated to require six months to complete. Agency review and processing typically takes six to nine months and includes a public notification process.

20.3.2.3 Reclamation Permit

The Reclamation Permit is administered by NDEP-BMRR. The Reclamation Permit Application will include a description of the proposed reclamation methods, a schedule for reclamation and a cost estimate for reclamation based on third-party costs. The reclamation cost estimate will be developed using the Standard Reclamation Cost Estimator (SRCE), a spreadsheet based model adopted by the BMRR and BLM in an effort to standardize cost estimating parameters, thereby streamlining the review and approval process. Reclamation at the site will consist of common practices that are well known and accepted by regulatory agencies in Nevada. Reclamation for most surface disturbance will consist of recontouring, placing a layer of growth media as cover, and seeding to establish vegetation. In addition, process fluids from the tailings facility will be managed to prevent releases to the environment. Consistent with accepted and proven practice in the arid Nevada climate, solution inventories will be decreased by using forced evaporation. The closure assumptions include the establishment of permanent surface water controls, erosion protection on the impoundment and embankment areas, and disturbed areas will be reclaimed and revegetated.

Use of proven reclamation methods and cost estimating methods will facilitate agency review and acceptance. The BMRR will complete a preliminary review of reclamation methods and cost estimate assumptions. This preliminary review will identify agency concerns that will be incorporated in reclamation planning, design, and permit application.

Upon completion of the plan of operations, facility design, waste rock management planning, etc. a reclamation plan and application will be prepared and submitted for agency review. Reclamation plan and application preparation is estimated to require 8 to 12 months; however, some of the required information may be developed concurrently with engineering design, waste rock planning, etc., thus reducing the overall time necessary for permit preparation. Subsequent agency review time for administrative and technical reviews and the public notification period is 180 days. Upon permit issuance, a reclamation bond in the amount determined during the permitting process must be established prior to creating any surface disturbance.

Preliminary reclamation unit costs are based on the most recent updated (Q2 2014) reclamation cost estimate for the Mt. Hope reclamation permit which has been approved by the Nevada Bureau of Mining Regulations and Reclamation. The direct reclamation costs were developed using the Nevada SRCE model which is a Bureau approved method for calculating reclamation bonding requirements. The SRCE model includes region specific Davis-Bacon Labor Rates, applicable fuel costs, equipment rental rates, and mobilization/demobilization costs. An indirect cost of 29% for third party administration is also included in the total costs.

Mt Hope (GMI project in Eureka County, Nevada and fully permitted and bonded) and Liberty reclamation methods are essentially the same. Therefore, the Mt Hope reclamation unit costs provide an appropriate comparable method for calculating preliminary estimated Liberty reclamation unit costs. Total direct costs for Liberty reclamation activities are calculated to be $53.8 million with indirect add-on costs of $15.6 million for a preliminary estimated reclamation bond total cost of $69.5 million.



20.4 ENVIRONMENTAL ISSUES AND MITIGATION MEASURES

Potential effects on regional groundwater levels, the water quality of the post-mining pit lake, waste rock management, water management and monitoring, and social-economics are anticipated to have the greatest level of environmental impacts. During the State and Federal permitting process, it may be determined that other resource impacts are significant and require specific mitigation measures. A preliminary assessment of waste rock and the potential for acid rock drainage (ARD) has been conducted. Otherwise, no environmental studies have been conducted that are applicable to permitting efforts.

20.4.1 Groundwater Level Lowering

Groundwater levels in local hydrological basin will likely be lowered due to groundwater extraction for construction and operations, including pit dewatering. An understanding of groundwater response to the proposed pumping would be needed to adequately assess these impacts. Because the area is sparsely populated and it is a substantial distance to neighboring wells, the effect on other users is anticipated to be minor and not trigger any mitigation requirements. Seeps and springs are not prevalent in the area, so it is anticipated that impacts to surface waters from lowering of the groundwater table will be minimal. Groundwater levels are expected to rebound to pre-mining or near pre-mining levels at some point after the cessation of mining and milling.

20.4.2 Pit Lake Water Quality

The pit will be actively dewatered during operations to keep the groundwater level below the level of the lowest mine bench. The rate of groundwater removal that will be required to keep the pit dry is not known, but the geo-hydrologic conditions are consistent with relatively low volumes at other mines in Nevada. A shallow water pond has formed in the existing open pit at Liberty and will be removed prior to operation.

Following cessation of mining and active dewatering, it is anticipated that a pit lake would establish itself as groundwater levels rebound. Current monitoring indicates the existing ponded water is slightly acidic and has elevated concentrations of several metals. Further investigation is needed to predict the water quality of the pit lake that would be formed after mining. This investigation could determine that the post-mining pit lake water quality does not meet drinking water or other beneficial use standards. However, it is also likely that the post-mining pit lake would be a hydrological sink so that discharge to groundwater or surface water from the post mining pit lake is not possible.

20.4.3 Pre-existing Leach Facility

Facilities that remain from the historical Equatorial Tonopah copper mine project include a heap leach circuit with process ponds that have been converted to a passive treatment system for the residual drain down from the heap leach pad. The leach pad currently drains a small amount (approximately 2 gpm) of process solution, which has a relatively high pH level and is elevated in several constituents, most notably copper, iron, arsenic, and fluoride. This solution is routed into the Pregnant Leach Solution (PLS) pond, which had been backfilled with a substrate to treat the drain down solution. After the solution is passively treated, it is routed through the Intermediate Leach Solution (ILS) Pond and discharged to infiltration galleries located within the original tailings impoundment. Current permit compliance requires semi-annual sampling of the solution before and after treatment, and monitoring of the drain down rates. The leach pad would be entombed within the Liberty tailing and is not anticipated to pose a long-term environmental concern or otherwise cause a permitting delay.

20.4.4 Acid Rock Drainage

The potential for ARD is being evaluated by GMI. Preliminary evaluation of the geology, mineralogy, and previous waste rock management at the site indicates that a substantial amount of the waste rock to be mined will have the



potential to generate acidic leachate if exposed to the environment. Therefore, a Waste Rock Characterization Program was implemented to characterize geologic materials that represent interburden, overburden and the ore zone as well as pit-wall zones for future pit lake settings. Information derived from this characterization effort will be used to optimize the development of waste rock dumps, and minimize the potential for constituent release, while supporting final closure actions.

Preliminary sampling and analytical testing objectives were implemented in December 2007. A total of 53 samples were collected from within and outside of the existing pit, including 35 un-weathered, 14 weathered, and 4 QA/QC samples were submitted for Static (ABA) and Meteoric Water Mobility Procedure (MWMP) analyses. Sample lithologies included two major rock types (siltstone and porphyry) and three minor rock types/zones (fluid vent zone, copper stain zone, and volcanics). In addition, alluvium will be mined in minor amounts.

Regardless of location within or outside of the pit, all of these two major and three minor rock types meet the Nevada NDEP and BLM definitions of acid generating and each has limited acid-buffering potential. Results from the five alluvial samples collected indicate an overall acid-buffering potential. Based on these preliminary results, the types, quantity, and need for additional analytical testing is being determined.

Even though analytical results indicate that there is acid generating potential for some of the rock types evaluated, the site conditions that include very low rainfall, alkaline soils, and a relatively deep water table suggest that a low-permeability liner may not be necessary. In addition, the reclamation cover is designed to prevent precipitation from percolating through the waste rock, cutting off the supply of interstitial moisture for the generation of acid drainage. Reclamation of waste rock from the former operation is already using this mitigation strategy. The pre-feasibility design is based on the assumption that a low permeability sub-base will not be required. If the results of further evaluation indicate this is not the case, the waste rock disposal facility (WRDF) could be constructed with a liner or designed to encapsulate the reactive waste rock within less reactive material.

20.5 WATER MANAGEMENT AND MONITORING

The Liberty mine would be designed, permitted, and operated as a Zero-Discharge Facility. Secondary containment would be engineered for reagent and petroleum storage and for facilities that store or convey process solution. Water removed from the open pit would be used in the mine and mill operations. Facilities would be designed with up-gradient diversions to preclude stormwater runoff from contacting process materials or solutions. This standard approach for Nevada mines is well accepted by the agencies, which will expedite permitting.

GMI has sufficient water rights granted to support the proposed mining operation. A water supply well field is located on private land in the alluvial basin west of the proposed mine site. Groundwater will also be pumped to dewater alluvial materials on the basin side of the proposed pit to mitigate infiltration to the pit and enhance pit slope stability.

Groundwater and process water monitoring will be part of the ongoing operation. Specific monitoring requirements would be determined by permit. It is expected that the Water Pollution Control Permit would contain most, if not all, of the water monitoring requirements. Based on experience at other mines, it is anticipated that sampling would be required from 10 to 20 groundwater wells on a quarterly basis. Quarterly sampling and analysis would also likely be required for process solutions at a few locations throughout the circuit. Quarterly sampling and analysis of waste rock and tailing would also be expected. GMI staff would collect samples and analyses would be conducted by a third party independent laboratory.

20.6 SOCIAL AND COMMUNITY RELATIONS

The nearby town of Tonopah and Nye County have a long history of supporting mining. It is anticipated that the community will be supportive of renewed mining at the site. Nye County and the State of Nevada will receive significant benefit from the employment of construction workers and long-term operating employment resulting from



the Liberty project. The operation will initially employ 315 people, including a range of laborers, skilled workers, and professionals. Indirect employment reportedly is 523% over direct employment (Dobra, 2011). Other economic benefits include sales and use taxes, property taxes, income taxes, and state proceeds tax, in aggregate contributing an estimated $17 million annually.

The construction and operations workforce will increase demands for housing and public and social services and create positive and sustainable growth in the area. GMI will work with Nye County to determine housing and infrastructure needs along with effects on public services. GMI will communicate with the local government (Nye County Commission) officials and staff to provide an open and comprehensive description of the project and the anticipated social and environmental impacts. Such outreach would be augmented by similar communications to appropriate local organizations (service groups, clubs, trade or industry groups, and business councils). Other local business development in the community will spur additional growth and GMI will work with business leaders to support the community planning necessary to plan for this growth. GMI will continue with its existing Community Contributions Program in Tonopah to develop goodwill, as well as work with the community supporters. Open houses will be hosted to provide periodic updates. This plan is the same approach GMI successfully used for the Mt. Hope project to engage with local stakeholders in that project.



21 CAPITAL AND OPERATING COSTS

Multiple project team resources prepared the project capital and operating cost estimates:

Capital

o Mining civil and equipment – GMI calculated; IMC and M3 reviewed and approved

o Process plant – M3 calculated

o Owners cost – GMI calculated

Operating Costs

o Mine – GMI calculated and IMC reviewed and approved

o Process plant – GMI calculated and Ken Edmiston reviewed and approved

o Site general and administration (G&A) – GMI calculated

o Downstream (molybdenum roasting, copper smelting and refining, and concentrate freight) – calculated by GMI consultants

Table 21-1 summarizes the project capital cost. Table 21-2 summarizes the project operating cost. Mine operating costs change by year as the pit gets deeper and the required total material movement changes. Table 21-2 is an overall summary using average mine life operating costs.

The process plant and infrastructure capital estimate is based on M3 knowledge and experience of similar types of facilities and work in similar locations. Resources available to M3 included budgetary quotes for major plant processing equipment, take-offs based on scoping-level design and engineering, historic site-specific data, and test-work supplied by others. To assist in the estimating, M3 used quantity estimates, and in some case costs provided by specialist sub-consultants, including IMC.



Table 21-1: Project Capital Cost Summary

Plant Construction Description Man-hours Equipment Material Labor Subcontract Equipment Total

DIRECT COST General Site 11,035 $1,341,100 $680,248 $889,415 $0 $480,092 $3,390,855 Mine 21,293 $33,638,803 $70,061 $1,658,119 $0 $687,900 $36,054,882 Primary Crushing 25,630 $6,006,505 $1,987,600 $2,394,376 $0 $455,056 $10,843,536 Reclaim Stockpile 16,495 $2,843,364 $1,242,480 $1,374,028 $0 $239,973 $5,699,844 Grinding & Classification 198,859 $24,536,628 $17,202,914 $18,252,886 $0 $2,358,861 $62,351,289 Flotation & Regrind 39,302 $7,677,336 $3,667,672 $3,454,399 $0 $454,380 $15,253,787 Moly - Copper Separation 15,269 $1,528,800 $929,353 $1,297,214 $0 $202,937 $3,958,305 Copper Enrichment 8,077 $1,475,200 $674,869 $699,437 $0 $97,291 $2,946,797 Molybdenum Enrichment 12,017 $2,733,712 $1,073,410 $1,051,128 $0 $169,378 $5,027,628 Copper Concentrate Handling 13,645 $1,195,600 $1,049,740 $1,233,488 $0 $170,556 $3,649,384 Molybdenum Concentrate Handling 9,385 $3,251,800 $725,079 $763,064 $0 $107,145 $4,847,088 Tailing Disposal 83,423 $5,405,400 $6,556,195 $6,713,272 $0 $1,730,936 $20,405,803 Water Systems 19,266 $969,600 $1,196,029 $1,544,110 $0 $247,685 $3,957,423 Main Substation 2,054 $1,443,600 $367,714 $183,573 $0 $1,200 $1,996,087 Reagents 27,583 $2,157,400 $2,511,940 $2,594,655 $0 $328,641 $7,592,636 Ancillary Facilities 10,507 $6,931,142 $1,412,189 $851,630 $0 $243,227 $9,438,189 Freight $8,250,879 $3,307,799 $0 $0 $0 $11,558,679 SUBTOTAL DIRECT COST 513,841 $111,386,870 $44,655,290 $44,954,794 $0 $7,975,258 $208,972,212



TOTAL DIRECT FIELD COST w/o Mine Equip. $172,917,329 ADDITIONAL INDIRECT FIELD COST (1,2) $3,458,347 MOBILIZATION (3) $1,729,173 PER DIEM COST @ $70/DAY (4) $3,596,885 CAMP/BUSING (4) $2,055,363 FEE - CONTRACTOR (5) $0 NEVADA SALES TAX (6) $10,962,041 TOTAL CONSTRUCTED COST $194,719,138

MANAGEMENT & ACCOUNTING (7) $1,460,394 ENGINEERING (8) $11,683,148 PROJECT SERVICES (9) $1,947,191 PROJECT CONTROLS & ACCOUNTING (10) $1,460,394 CONSTRUCTION MANAGEMENT (11) $12,656,744 EPCM FEE (12) $1,947,191 EPCM CONSTRUCTION TRAILERS (13) $0 TEMPORARY FACILITIES & SUPPORT (14)

$973,596

CONSTRUCTION POWER (15) In Owner's Cost TOTAL CONTRACTED COST $226,847,796

SUPERVISION OF SPECIALTY CONST. (16)

$777,481

PRECOMMISSIONING (17) $233,244 COMMISSIONING (18) $233,244 COMMISSIONING SPARE PARTS (19) $388,740 CAPITAL SPARE PARTS (20) - Working Capital $1,943,702 Subtotal $230,424,207

CONTINGENCY (21) $51,040,754 BONDS & INSURANCE In Owner's Cost ADDED OWNER'S COST (22) $26,665,831

MINE PRE-STRIPPING $16,956,000 MINE EQUIPMENT $36,054,882 TOTAL CONTRACTED AND OWNER'S COST $361,141,675

ESCALATION (23) $0 TOTAL EVALUATED PROJECT COST (24) $361,141,675 Initial Capital without Working Capital $359,197,973



Notes

1 Specific Indirect Field Costs have been added to the direct labor rates listed for each Area. Indirects added to direct labor include: field payroll burden, overtime adjustment, small tools and expendables allowance, field supervisory labor & burden, contractor operating overheads and profit.

Contractor Indirect Costs have been included at 2% of Total Direct Field Cost w/o Mine Equipment. 2 Construction labor hours do not include subcontract hours 3 Mobilization included at 1% of Total Direct Cost without Mine Equipment. 4 Per Diem costs calculated at $70 per day with a 10 hr workday. Camp Operation & Busing costs

included at $4 per labor hour. 5 Contractors' fee included in Labor Rate and Subcontract unit cost. 6 Nevada Sales Tax is calculated at 6.85% of Plant Equipment, Materials, and Construction Equipment. 7 Management & accounting included at 0.75% of Total Direct Field Cost w/o Mine Equipment. 8 Engineering included at 6% of Total Direct Field Cost w/o Mine Equipment. 9 Project services included at 1% of Total Direct Field Cost w/o Mine Equipment. 10 Project control included at 0.75% of Total Direct Field Cost w/o Mine Equipment. 11 Construction Management included at 6.5% of Total Direct Field Cost w/o Mine Equipment. 12 EPCM Fee included at 1% of Total Direct Field Cost w/o Mine Equipment. 13 EPCM Construction Trailers included at 0.2% of Total Direct Field Cost w/o Mine Equipment. 14 Temporary Facilities & Support Cost at 0.5% of Total Direct Field Cost w/o Mine Equipment. 15 Construction Power included at 0.1% of Direct Costs w/o Mine Equipment. 16 Supervision of Specialty Construction included at 1% of Plant Equipment Costs. 17 Pre-commissioning included at 0.3% of Plant Equipment Costs. 18 Commissioning included at 0.3% of Plant Equipment Costs. 19 Commissioning Spare Parts are included at 0.5% of equipment purchase costs (2 yr spares excluded) 20 Capital Spares included at 2.5% of total Plant Equipment Costs. 21 Contingency included at 22.5% of Total Contracted Costs. 22 Added Owner’s Cost data provided by Owner for specific items including owner's construction

and administrative costs, accounting and legal, furniture and equipment, tools, staffing and operator training cost, initial fills, and wear steel spares. All other Owner's Costs are excluded from the estimate.

23 All costs are in first quarter 2014 dollars with no escalation added. 24 Total Evaluated Project Cost is projected to be in the range of -25% to +25%.



Table 21-2: Project Operating Cost Summary

Operating Cost per Short Ton of Ore Unit First 5 Years

First 10 Years

Life of Mine

Mining $/st ore 5.21 5.59 4.88 Milling $/st ore 5.74 5.68 5.64 Roasting $/st ore 1.04 1.02 0.91 Laboratory $/st ore 0.15 0.15 0.15 Copper TCRCs (net of precious metal credits) $/st ore 0.23 0.21 0.29 Site G&A (includes reclamation bond policy) $/st ore 0.82 0.81 0.75 Shipping - Molybdenum concentrate $/st ore 0.54 0.53 0.47 Shipping - Copper concentrate $/st ore 0.36 0.32 0.45 Marketing $/st ore 0.02 0.02 0.02 Corporate G&A $/st ore 0.00 0.00 0.00 Total operating cost $/st ore 14.09 14.32 13.57 Copper Credit $/st ore -2.56 -2.33 -3.24 Total Operating Cost (net of copper credit) $/st ore 11.54 12.00 10.33 Operating Cost per Pound of Molybdenum Mining $/lb Mo 3.52 3.84 3.75 Milling $/lb Mo 3.88 3.90 4.34 Roasting $/lb Mo 0.70 0.70 0.70 Laboratory $/lb Mo 0.10 0.10 0.11 Copper TCRCs (net of precious metal credits) $/lb Mo 0.16 0.14 0.22 Site G&A (includes reclamation bond policy) $/lb Mo 0.55 0.55 0.58 Shipping - Molybdenum concentrate $/lb Mo 0.36 0.36 0.36 Shipping - Copper concentrate $/lb Mo 0.24 0.22 0.35 Marketing $/lb Mo 0.01 0.01 0.02 Corporate G&A $/lb Mo 0.00 0.00 0.00 Total operating cost $/lb Mo 9.52 9.85 10.43 Copper Credit $/lb Mo -1.73 -1.60 -2.49 Total Operating Cost (net of copper credit) $/lb Mo 7.79 8.25 7.94 On site costs (net of copper credit) 6.32 6.80 6.29 On site costs 8.05 8.40 8.78 Roasting, shipping, marketing, TCRCs 1.47 1.44 1.65 Total Operating Cost (net of copper credit) 7.79 8.25 7.94

21.1 MINE CAPITAL COSTS

Mine capital costs for mine mobile equipment is summarized on Table 21-3. The unit costs for equipment are based on recent quotes obtained by GMI working with equipment vendors. IMC has verified the equipment requirements and the replacement schedule and has sufficient confidence in the results that the QP for Section 21.1 is John Marek of IMC.

Preproduction stripping is not shown on the table as part of the operating cost, because according to US tax law preproduction is 30% capitalized and 70% expensed prior to production.

Mine capital costs include:

1. All mine and mobile equipment required to drill, blast, load, and haul the material from the pit to the appropriate destinations.



2. Auxiliary equipment to maintain the mine and material storage areas in good working order as well as construct the mine haul roads and maintain them.

3. Equipment to maintain the mine fleet such as mechanic trucks and forklifts.

4. Light vehicles for mine operations and staff personnel.

5. Truck shop tools.

6. Spare loading unit buckets and truck beds.

7. Mine engineering equipment (computers, survey equipment, etc.).

8. Equipment replacements are included as required based on the useful life of the equipment.

Mine capital costs exclude:

1. Mobile equipment that is not required by the mine. (i.e. no mobile units for the plant).

2. Infrastructure or process plant related costs.

The equipment is shown as purchased in the year it is required for operation. The assumption is made that during preproduction and year 1, a limited number of used but refurbished equipment will be purchased at 70% of the new price. That equipment includes 4 haul trucks, 4 track dozers, 2 graders, and 2 water trucks. Future sustaining capital is assumed to be new equipment pricing.

Estimated mining capital costs are summarized in Table 21-3.

Table 21-3: Project Preliminary Mining Capital Cost Estimates

Item Value ($M)

Mine Pre-Stripping 16.96

Mine Civil & Equipment 36.05

Total 53.01

The mining capital costs are based on estimated quantities and fleet definition from GMI. Mining capital costs by year are shown in Table 21-4. Table 21-3 differs in from Table 21-4 because equipment freight and facilities costs on Table 21-4 have been moved to other categories for the cash flow analysis. Table 21-3 reflects the category inputs to the cash flow analysis.



Table 21-4: Mine Capital Costs

Mine Equipment Capital Preprod Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15

Mine Capital ($000)

Drilling $4,735.8 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $2,367.9 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0

Blasting $151.9 $0.0 $0.0 $0.0 $0.0 $49.2 $0.0 $102.7 $0.0 $0.0 $49.2 $0.0 $0.0 $0.0 $102.7 $49.2

Loading $12,973.5 $6,874.8 $882.3 $1,588.7 $0.0 $0.0 $0.0 $0.0 $882.3 $882.3 $706.4 $6,098.8 $13,749.6 $0.0 $882.3 $882.3

Hauling $9,397.1 $23,492.7 $327.1 $6,712.2 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $10,068.3 $13,424.4 $0.0 $0.0 $0.0 $0.0

Operations Support Equipment $7,876.3 $5,122.9 $0.0 $0.0 $3,822.0 $3,915.6 $2,258.8 $0.0 $2,309.0 $3,841.3 $93.6 $62.4 $510.0 $0.0 $3,822.0 $6,112.0

Operations Technical Support $0.0 $1,093.4 $0.0 $11.2 $0.0 $15.3 $17.4 $0.0 $11.2 $0.0 $15.3 $17.4 $1,076.0 $11.2 $0.0 $15.3

Engineering Support $207.1 $201.8 $0.0 $0.0 $5.4 $0.0 $0.0 $5.4 $403.5 $0.0 $5.4 $0.0 $0.0 $5.4 $0.0 $403.5

Geology Support $80.7 $80.7 $0.0 $0.0 $0.0 $0.0 $161.4 $0.0 $0.0 $0.0 $0.0 $161.4 $0.0 $0.0 $0.0 $0.0

Operational Training Support $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0

Pit Dewatering $102.4 $204.4 $0.0 $545.5 $0.0 $0.0 $102.4 $43.0 $0.0 $0.0 $0.0 $102.4 $43.0 $0.0 $0.0 $0.0

Mine Electrical $61.3 $92.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0

Maintenance Support Equipment $1,972.5 $1,404.2 $85.3 $0.0 $0.0 $0.0 $0.0 $210.3 $2,184.4 $50.1 $0.0 $517.6 $641.4 $0.0 $210.3 $1,428.0

Mine Facilities $1,787.0 $1,487.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $726.5 $0.0 $0.0 $0.0 $0.0 $0.0

Small Vehicles $843.4 $43.9 $87.8 $279.3 $279.3 $328.6 $279.3 $279.3 $279.3 $328.6 $279.3 $279.3 $279.3 $328.6 $279.3 $279.3

Support Vehicles $251.4 $128.6 $65.9 $0.0 $0.0 $49.3 $49.3 $0.0 $79.3 $115.1 $207.9 $92.8 $0.0 $49.3 $49.3 $79.3

Total Capital ($000) $40,440.5 $40,226.3 $1,448.3 $9,137.0 $4,106.7 $4,358.0 $2,868.6 $3,008.6 $6,149.1 $5,217.4 $12,151.9 $20,756.4 $16,299.4 $394.5 $5,345.9 $9,249.0

Years 16 to 30

Mine Equipment Capital Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year

16 17 18 19 20 21 22 23 24 25 26 27 28 29 30

Mine Capital ($000)

Drilling $0.0 $0.0 $0.0 $2,367.9 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0

Blasting $0.0 $0.0 $0.0 $0.0 $49.2 $102.7 $0.0 $0.0 $0.0 $49.2 $0.0 $0.0 $102.7 $0.0 $49.2

Loading $0.0 $706.4 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $882.3 $0.0 $0.0 $0.0 $0.0

Hauling $0.0 $0.0 $13,424.4 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0

Operations Support Equipment $223.8 $548.8 $1,532.2 $0.0 $93.6 $2,371.5 $6,131.1 $3,822.0 $2,196.4 $503.0 $163.0 $0.0 $0.0 $0.0 $0.0

Operations Technical Support $17.4 $0.0 $11.2 $0.0 $15.3 $17.4 $0.0 $1,087.2 $0.0 $15.3 $17.4 $0.0 $11.2 $0.0 $15.3

Engineering Support $5.4 $0.0 $0.0 $5.4 $0.0 $0.0 $408.9 $0.0 $0.0 $5.4 $0.0 $0.0 $5.4 $201.8 $0.0

Geology Support $161.4 $0.0 $0.0 $0.0 $0.0 $161.4 $0.0 $0.0 $0.0 $0.0 $161.4 $0.0 $0.0 $0.0 $0.0

Operational Training Support $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0

Pit Dewatering $455.9 $43.0 $0.0 $0.0 $0.0 $102.4 $43.0 $0.0 $43.0 $0.0 $102.4 $43.0 $0.0 $43.0 $0.0

Mine Electrical $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0

Maintenance Support Equipment $50.1 $0.0 $85.3 $0.0 $442.2 $1,042.0 $1,931.0 $0.0 $188.5 $0.0 $0.0 $0.0 $105.1 $0.0 $0.0

Mine Facilities $743.5 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0

Small Vehicles $279.3 $328.6 $279.3 $279.3 $279.3 $328.6 $279.3 $279.3 $377.9 $328.6 $279.3 $279.3 $377.9 $328.6 $279.3

Support Vehicles $65.9 $65.9 $49.3 $49.3 $92.8 $92.8 $79.3 $115.1 $115.1 $0.0 $0.0 $0.0 $49.3 $79.3 $0.0

Total Capital ($000) $2,002.6 $1,692.7 $15,381.7 $2,701.9 $972.5 $4,218.8 $8,872.6 $5,303.7 $2,920.9 $901.5 $1,605.9 $322.4 $651.7 $652.7 $343.9



21.2 PROCESS AND INFRASTRUCTURE CAPITAL

21.2.1 Assumptions (Basis of Capital Cost Estimate)

The estimate assumes that the construction will be managed by an engineering, procurement, and construction management (EPCM) contractor with multiple subcontracts awarded to mid-sized local contractors and specialty contractors. Multiple mobilizations will therefore be required. It is also assumed that there will be a continuity of construction activity once the project begins.

Construction subcontracts anticipated for the project include civil, concrete, structural steel, mechanical, piping, electrical, and instrumentation. Design, supply and erect contracts are anticipated for clean-up and refurbishment of existing ancillary facilities to operable condition.

Costs incurred to date by the Owner are considered sunk costs and have not been included in this capital cost estimate.

Initial Capital is defined as all capital costs through to the end of construction and point where commercial scale production begins. Capital costs predicted for later years are carried as sustaining capital in the financial model.

Insurance spares are included in the M3 capital estimate, as they are purchased during the capital period for insurance during the construction and commissioning phase.

Existing concrete in former facilities is assumed to be reusable. Concrete structures assumed to be reused for this estimate are the primary crusher foundation, reclaim tunnel, concentrator slab, mill foundations, tailing thickener tank walls, fresh water booster sump, substation foundations, electrical distribution duct banks, and concrete foundations beneath existing buildings (i.e. truck shop, laboratory, administration building). Existing steel in former process facilities will require demolition and is assumed to be unusable for the project.

Construction labor rates are based on M3 experience with recently quoted costs for similar projects nearby including burden, overhead, field supervision, supervisory burden, small tools, expendables, and profit.

A permanent camp and a construction camp with mess hall will not be necessary due to the project site’s close proximity to Tonopah, and these costs have been excluded from the capital cost estimate.

Temporary construction sanitary facilities will be provided by the various subcontractors. Any existing Owner’s facilities are for Owner’s use and in general will not be available to construction personnel.

Temporary construction water will be provided by existing or new well(s) on site with provisions to fill temporary elevated tanks and water trucks. The various subcontractors will be responsible to haul temporary water from the temporary elevated tanks as necessary for their use.

The Owner will provide site security services during construction, the source of construction water, and temporary power for the contractors. The contractors will provide their own radios and radio frequencies. The contractors are responsible for their own drinking water and portable toilets and all utility hookups (e.g., power into construction trailers) as well as delivery of construction water.

The Owner will not supply any construction equipment (such as forklifts and crane for unloading or water trucks for dust suppression).



It has been assumed that construction work areas would be accessible to the contractors 24 hours per day, seven days per week. Allowance is not included in the estimate for stand-by time for inefficiencies resulting from work stoppages or interferences initiated by operations or others.

Appropriate areas have been allotted for Contractor trailer and lay down yards in close proximity to the construction site. Construction personnel can park their construction vehicles near the construction site. Personal vehicles will be parked in a common area near the work site.

General Moly will provide a condensed version of the environmental and permit requirements for the Contractors during the bidding stage to reduce the possibility for extras. It is also assumed that the bulk civil Contractors will have the opportunity to visit the site, with major facilities staked, to evaluate the work conditions prior to bidding.

A new potable well will be drilled during construction near the plant-site and treated for arsenic prior to distribution to plant facilities.

The tailing facility design is to utilize spigots with local cycloning. The facility is to be an unlined facility.

No power distribution or electrical equipment for the mine has been included. It is assumed that all electrical needs will be served by local generator (included in mine estimate).

Fresh water delivery is handled by 4 existing wells (3 operating and 1 standby from a total of 8 originally drilled and 6 currently existing wells) each sized to deliver 1,000 gpm.

No allowance has been made in the estimate for specialized fire protection during construction. Typical fire extinguishers, construction water trucks, and mine water trucks will be used to supply fire protection support.

Contractors are responsible for receiving of materials and equipment under their control. The construction manager will be responsible for receiving materials and equipment under their control and then turning it over to the Contractor. Any such items that have been received prior to construction or inadvertently by Owner, must be loaded and transported to the construction site by the Contractor. In general, Owner personnel will not receive shipments during Contractor off-hours.

Contractors are to be responsible for the storage and security of received materials and goods.

Mine civil quantities and equipment costs were provided by GMI and assume inclusion of erection but do not include freight. An allowance of 1% of the mobile equipment cost was utilized for equipment tires. Used mobile equipment is assumed to come already equipped with tires. Factors were applied by GMI to estimate use of used equipment where applicable.

Mobilization to site will occur in 2018 during the 2nd quarter. Geotechnical work and archeological work is assumed to be complete prior to mobilization.

Owner’s costs were provided by GMI. Owner’s costs include administration, Owner engineering, geological work, on-site maintenance, permitting, initial fills of lubricants and reagents, right of way costs, construction power, project insurance and a 15% contingency.

Redundant main power transformers are not included in the estimate.

Existing 60-kV power transformer to be utilized for primary crusher, tailing reclaim and fresh water power loads.

Civil quantities for the mine area were provided by GMI and costed by M3.



All costs are in 2014 1st quarter US dollars.

Project estimated capital costs are summarized in Table 21-1. No escalation is included.

21.2.2 Estimate Accuracy

The accuracy of this estimate is estimated to be within range of plus 25% to minus 25%; i.e. the cost could be 25% higher than the estimate or it could be 25% lower. Accuracy is an issue separate from contingency, the latter accounts for undeveloped scope and insufficient data (e.g. status of untested existing equipment or foundations). The following is a summary of the approach used to estimate the costs of the project.

Processing Facilities: Costs for the processing facilities were developed by populating a project equipment list, generating general arrangements with high level material estimates, and retrieving specified equipment costs from Vendors.

Mining: Quantities for the initial development of the mine and required haulage equipment was provided by IMC and GMI.

Indirect: Indirect costs are based on standard percentages of direct level costs. EPCM, mobilization, commissioning, per diem, Owner’s costs and first fills are included in indirect costs.

Contingency: Contingency was assumed to be 22.5% of the total contracted cost.

21.2.3 Documents

Documents available to the estimators included the following:

a) Process Design Criteria No b) Discipline Design Criteria No c) Equipment List Yes d) Equipment Specifications No e) Construction Specifications No f) Flow sheets Yes g) P&IDs No h) General Arrangements Partial i) Architectural Drawings No j) Civil Drawings No k) Concrete Drawings No l) Structural Steel Drawings No m) Mechanical Drawings No n) Electrical Single Lines Partial o) Electrical Physicals No p) Instrumentation Schematics No q) Instrument List No r) Pipeline Schedule No s) Valve List No t) Cable and Conduit Schedule No



21.3 MINE OPERATING COSTS

Mine operating costs were developed from first principals with the mine plan, equipment requirements, and personnel requirements presented in Section 16. Mine operating costs were calculated by GMI in conjunction with IMC input. IMC has reviewed the final estimate of mine operating cost and has sufficient comfort with the results that John Marek of IMC is the QP for Section 21.3.

The unit costs for labor were provided by GMI. Diesel fuel costs were set at $3.30 per gallon. The mine is planned to work 2 shifts per day for 365 days per year. Five days (10 shifts) of lost time are assumed due to weather delays.

The mine operating costs include:

1. Drilling, blasting, loading, and hauling of material from the mine to the crusher or waste storage facilities. Maintenance of the waste storage areas is included in the mining costs. Maintenance of mine mobile equipment is included in the operating costs.

2. Mine supervision, mine engineering, geology, and ore control are included in the G&A category.

3. Operating labor and maintenance labor for the mine mobile equipment are included.

4. Mine access road construction and maintenance is included. If mine haul trucks drive on the road, its cost and maintenance is included in the mine operating costs.

5. The small stockpile of ore (1,211,000 tons) that is generated during preproduction stripping is rehandled to the plant in Year 1.

6. Mine general operating costs such as pit dewatering, electrical, facilities, support vehicles and miscellaneous supplies are included.

7. Mine maintenance general operating costs for maintenance support equipment such as mechanics trucks, fuel trucks, tools, and etc. are included.

The mine operating costs exclude:

1. Crushing, conveying, or processing.

2. There is currently no reclamation or recontouring cost within the mine operating cost estimate.

Table 21-5 summarizes the estimated mine operating costs by year.



Table 21-5: Mine Operating Costs

MINE COST SUMMARY Preprod Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15

Mine Operating Costs ($000)

Drilling $930.4 $2,549.4 $2,481.5 $2,481.0 $2,481.0 $2,481.0 $2,481.0 $3,101.3 $3,256.4 $3,256.4 $3,256.4 $3,256.4 $3,216.6 $1,637.0 $2,067.5 $2,198.9

Blasting $1,227.8 $3,364.0 $3,274.4 $3,273.8 $3,273.8 $3,273.8 $3,273.8 $4,092.0 $4,296.6 $4,296.6 $4,296.6 $4,296.6 $4,244.1 $2,160.4 $2,728.3 $2,901.6

Loading $2,988.3 $7,218.8 $6,420.2 $6,098.1 $6,098.1 $6,098.1 $6,098.1 $7,657.2 $8,112.8 $8,112.8 $8,112.8 $8,112.8 $7,977.8 $4,023.6 $5,081.8 $5,404.6

Hauling $3,863.4 $10,246.2 $8,866.2 $12,167.2 $10,079.4 $11,647.3 $13,410.4 $13,019.4 $14,919.2 $13,798.3 $18,233.0 $18,102.7 $17,106.2 $9,814.7 $12,452.6 $13,201.7

Operations Support Equipment $1,775.2 $5,518.2 $5,397.3 $5,348.7 $5,348.7 $5,348.7 $5,348.7 $5,550.4 $5,546.1 $5,546.1 $5,546.1 $5,546.1 $5,562.3 $5,035.2 $5,195.1 $5,243.9

Operations Technical Support $18.0 $36.0 $48.0 $48.0 $48.0 $48.0 $48.0 $48.0 $48.0 $48.0 $48.0 $48.0 $48.0 $48.0 $48.0 $48.0

Engineering Support $150.0 $300.0 $300.0 $300.0 $300.0 $300.0 $300.0 $300.0 $300.0 $300.0 $300.0 $300.0 $300.0 $300.0 $300.0 $300.0

Geology Support $48.5 $97.0 $97.0 $97.0 $97.0 $97.0 $97.0 $97.0 $97.0 $97.0 $97.0 $97.0 $97.0 $97.0 $97.0 $97.0

Operational Training Support $97.5 $195.0 $195.0 $195.0 $195.0 $195.0 $195.0 $195.0 $195.0 $195.0 $195.0 $195.0 $195.0 $195.0 $195.0 $195.0

Pit Dewatering $41.3 $133.1 $133.1 $163.1 $163.1 $163.1 $163.1 $163.1 $163.1 $163.1 $163.1 $163.1 $163.1 $163.1 $163.1 $163.1

Maintenance Support Equipment $119.0 $301.6 $301.6 $301.6 $301.6 $301.6 $301.6 $301.6 $301.6 $301.6 $298.6 $298.6 $298.6 $298.6 $298.6 $298.6

Mine Misc. Supplies $169.4 $448.4 $418.3 $461.8 $431.1 $455.7 $481.7 $524.0 $564.2 $547.7 $613.1 $611.3 $593.5 $366.3 $435.9 $460.5

Mine Facilities $195.2 $390.3 $390.3 $390.3 $390.3 $390.3 $390.3 $390.3 $390.3 $390.3 $390.3 $390.3 $390.3 $390.3 $390.3 $390.3

Small Vehicles $65.6 $138.0 $138.0 $138.0 $138.0 $230.8 $230.8 $230.8 $230.8 $230.8 $230.8 $230.8 $230.8 $230.8 $230.8 $230.8

Support Vehicles $5.9 $23.8 $28.2 $28.2 $28.2 $28.2 $28.2 $28.2 $28.2 $28.2 $28.2 $28.2 $28.2 $28.2 $28.2 $28.2

Total Operating ($000) $11,695.5 $30,959.8 $28,489.4 $31,491.9 $29,373.4 $31,058.7 $32,847.8 $35,698.4 $38,449.3 $37,312.0 $41,809.0 $41,676.8 $40,451.5 $24,788.2 $29,712.3 $31,162.2

Mine Specific Support Costs ($000)

Operations $251.0 $502.0 $502.0 $502.0 $502.0 $502.0 $502.0 $502.0 $502.0 $502.0 $502.0 $502.0 $502.0 $502.0 $502.0 $502.0

Maintenance $194.5 $420.5 $420.5 $426.5 $420.5 $425.0 $426.5 $426.5 $431.0 $426.5 $437.0 $434.0 $432.5 $414.5 $420.5 $425.0

Engineering / Geology $89.0 $928.0 $178.0 $678.0 $178.0 $178.0 $178.0 $178.0 $178.0 $178.0 $178.0 $178.0 $178.0 $178.0 $178.0 $178.0

Total Mine Specific A&G ($000) $534.5 $1,850.5 $1,100.5 $1,606.5 $1,100.5 $1,105.0 $1,106.5 $1,106.5 $1,111.0 $1,106.5 $1,117.0 $1,114.0 $1,112.5 $1,094.5 $1,100.5 $1,105.0

Mine Labor Costs ($000)

Management $0.0 $71.9 $71.9 $71.9 $71.9 $71.9 $71.9 $71.9 $71.9 $71.9 $71.9 $71.9 $71.9 $71.9 $71.9 $71.9

Mine Operations Supervision $436.2 $872.3 $872.3 $872.3 $872.3 $872.3 $872.3 $872.3 $872.3 $872.3 $872.3 $872.3 $872.3 $872.3 $872.3 $872.3

Mine Maintenance Supervision $470.1 $940.3 $940.3 $940.3 $940.3 $940.3 $940.3 $940.3 $940.3 $940.3 $940.3 $940.3 $940.3 $940.3 $940.3 $940.3

Geology $307.6 $615.3 $615.3 $615.3 $615.3 $615.3 $615.3 $615.3 $615.3 $615.3 $615.3 $615.3 $615.3 $615.3 $615.3 $615.3

Engineering $303.9 $723.5 $723.5 $723.5 $723.5 $723.5 $723.5 $723.5 $723.5 $723.5 $723.5 $723.5 $723.5 $723.5 $723.5 $723.5

Mine Operations $2,189.1 $9,940.1 $9,537.9 $10,631.1 $9,940.1 $10,138.2 $10,631.1 $10,829.2 $11,237.1 $10,829.2 $12,523.0 $11,928.1 $11,730.1 $9,051.1 $9,742.0 $10,138.2

Mine Maintenance $1,018.9 $4,291.6 $4,291.6 $4,720.8 $4,291.6 $4,612.8 $4,720.8 $4,720.8 $5,042.0 $4,720.8 $5,471.1 $5,258.0 $5,150.0 $3,862.5 $4,291.6 $4,612.8

Total Exempt Labor ($000) $4,725.8 $17,454.9 $17,052.7 $18,575.1 $17,454.9 $17,974.1 $18,575.1 $18,773.1 $19,502.3 $18,773.1 $21,217.3 $20,409.3 $20,103.2 $16,136.7 $17,256.9 $17,974.1

Total Material Mined Per Year, ktons 12,000 32,000 32,000 32,000 32,000 32,000 32,000 40,000 42,000 42,000 42,000 42,000 41,487 21,114 26,667 29,361

Total Mine Costs ($000) w/out Capital $16,955.9 $50,265.2 $46,642.6 $51,673.5 $47,928.8 $50,137.8 $52,529.4 $55,578.0 $59,062.6 $57,191.6 $64,143.2 $63,200.1 $61,667.2 $42,019.4 $48,069.6 $50,241.3

Mine Operating Cost per Ton Material $1.41 $1.57 $1.46 $1.61 $1.50 $1.57 $1.64 $1.39 $1.41 $1.36 $1.53 $1.50 $1.49 $1.99 $1.80 $1.71



Years 16 to 32

MINE COST SUMMARY Preprod Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year

16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32

Mine Operating Costs ($000)

Drilling $2,464.4 $2,090.0 $2,452.7 $2,035.5 $1,553.4 $1,135.1 $1,488.0 $1,976.5 $1,860.1 $1,527.7 $1,355.7 $1,259.8 $1,116.5 $1,039.1 $1,057.9 $1,074.2 $81.3

Blasting $3,251.9 $2,757.9 $3,236.5 $2,686.1 $2,050.0 $1,498.3 $1,963.8 $2,608.3 $2,454.6 $2,016.2 $1,789.3 $1,662.8 $1,473.7 $1,371.6 $1,396.4 $1,417.9 $107.6

Loading $6,057.3 $5,136.9 $6,028.5 $5,003.1 $3,818.0 $2,657.2 $3,483.2 $4,626.7 $4,354.1 $3,576.1 $3,332.2 $3,096.5 $2,744.1 $2,553.9 $2,600.3 $2,640.3 $1,896.1

Hauling $15,472.5 $12,905.7 $15,392.2 $12,532.6 $9,227.7 $7,672.2 $10,287.8 $13,909.1 $13,045.9 $10,582.0 $9,278.5 $8,368.3 $7,129.6 $6,382.5 $6,564.4 $8,962.0 $4,553.2

Operations Support Equipment $5,342.6 $5,203.4 $5,338.2 $5,183.2 $5,004.1 $4,828.6 $4,953.5 $5,126.3 $5,085.1 $4,967.5 $4,930.6 $4,895.0 $4,024.1 $3,980.6 $3,987.6 $3,592.3 $3,479.8

Operations Technical Support $48.0 $48.0 $48.0 $48.0 $48.0 $48.0 $48.0 $48.0 $48.0 $48.0 $48.0 $48.0 $48.0 $48.0 $48.0 $48.0 $48.0

Engineering Support $300.0 $300.0 $300.0 $300.0 $300.0 $300.0 $300.0 $300.0 $300.0 $300.0 $300.0 $300.0 $300.0 $300.0 $300.0 $300.0 $300.0

Geology Support $97.0 $97.0 $97.0 $97.0 $97.0 $97.0 $97.0 $97.0 $97.0 $97.0 $97.0 $97.0 $97.0 $97.0 $97.0 $97.0 $97.0

Operational Training Support $195.0 $195.0 $195.0 $195.0 $195.0 $195.0 $195.0 $195.0 $195.0 $195.0 $195.0 $195.0 $195.0 $180.0 $0.0 $0.0 $0.0

Pit Dewatering $183.1 $183.1 $183.1 $183.1 $183.1 $183.1 $183.1 $183.1 $224.0 $224.0 $224.0 $224.0 $224.0 $183.1 $183.1 $183.1 $142.2

Maintenance Support Equipment $298.6 $298.6 $298.6 $298.6 $298.6 $298.6 $298.6 $298.6 $298.6 $298.6 $298.6 $298.6 $298.6 $298.4 $298.4 $298.4 $298.4

Mine Misc. Supplies $515.4 $448.0 $513.3 $438.2 $351.4 $293.4 $359.2 $450.3 $429.7 $367.8 $338.0 $317.0 $274.9 $257.3 $258.8 $290.0 $212.9

Mine Facilities $390.3 $390.3 $390.3 $390.3 $390.3 $390.3 $390.3 $390.3 $390.3 $390.3 $390.3 $390.3 $390.3 $390.3 $390.3 $390.3 $390.3

Small Vehicles $230.8 $230.8 $230.8 $230.8 $230.8 $230.8 $230.8 $230.8 $267.3 $267.3 $267.3 $267.3 $267.3 $267.3 $267.3 $267.3 $205.4

Support Vehicles $28.2 $28.2 $28.2 $28.2 $28.2 $28.2 $28.2 $28.2 $28.2 $28.2 $28.2 $28.2 $21.8 $21.8 $21.8 $17.4 $17.4

Total Operating ($000) $34,875.1 $30,312.8 $34,732.5 $29,649.8 $23,775.5 $19,855.9 $24,306.4 $30,468.2 $29,077.9 $24,885.6 $22,872.8 $21,447.8 $18,604.8 $17,371.0 $17,471.3 $19,578.1 $11,829.5

Mine Specific Support Costs ($000)

Operations $502.0 $502.0 $502.0 $502.0 $502.0 $502.0 $502.0 $502.0 $502.0 $502.0 $502.0 $502.0 $502.0 $502.0 $502.0 $502.0 $502.0

Maintenance $428.0 $425.0 $428.0 $422.0 $414.5 $408.5 $419.0 $426.5 $422.0 $419.0 $414.5 $413.0 $408.5 $404.0 $404.0 $408.5 $401.0

Engineering / Geology $178.0 $178.0 $178.0 $178.0 $178.0 $178.0 $178.0 $178.0 $178.0 $178.0 $178.0 $178.0 $178.0 $178.0 $178.0 $178.0 $178.0

Total Mine Specific A&G ($000) $1,108.0 $1,105.0 $1,108.0 $1,102.0 $1,094.5 $1,088.5 $1,099.0 $1,106.5 $1,102.0 $1,099.0 $1,094.5 $1,093.0 $1,088.5 $1,084.0 $1,084.0 $1,088.5 $1,081.0

Mine Labor Costs ($000)

Management $71.9 $71.9 $71.9 $71.9 $71.9 $71.9 $71.9 $71.9 $71.9 $71.9 $71.9 $71.9 $71.9 $71.9 $71.9 $71.9 $71.9

Mine Operations Supervision $872.3 $872.3 $872.3 $872.3 $872.3 $872.3 $872.3 $872.3 $872.3 $872.3 $872.3 $872.3 $872.3 $872.3 $872.3 $872.3 $872.3

Mine Maintenance Supervision $940.3 $940.3 $940.3 $940.3 $940.3 $940.3 $940.3 $940.3 $940.3 $940.3 $940.3 $940.3 $940.3 $940.3 $940.3 $940.3 $940.3

Geology $615.3 $615.3 $615.3 $615.3 $615.3 $615.3 $615.3 $615.3 $615.3 $615.3 $615.3 $615.3 $615.3 $615.3 $615.3 $615.3 $615.3

Engineering $723.5 $723.5 $723.5 $723.5 $723.5 $723.5 $723.5 $723.5 $723.5 $723.5 $723.5 $723.5 $723.5 $723.5 $723.5 $723.5 $723.5

Mine Operations $11,039.1 $10,138.2 $11,039.1 $10,138.2 $8,841.1 $7,952.1 $9,249.1 $10,534.9 $10,138.2 $9,249.1 $8,841.1 $8,546.9 $7,754.0 $7,063.0 $7,063.0 $7,549.9 $6,162.1

Mine Maintenance $4,828.8 $4,612.8 $4,828.8 $4,399.7 $3,862.5 $3,433.3 $4,183.6 $4,720.8 $4,399.7 $4,183.6 $3,862.5 $3,754.5 $3,433.3 $3,112.2 $3,112.2 $3,433.3 $2,896.1

Total Exempt Labor ($000) $19,091.1 $17,974.1 $19,091.1 $17,761.0 $15,926.8 $14,608.6 $16,655.9 $18,478.9 $17,761.0 $16,655.9 $15,926.8 $15,524.6 $14,410.5 $13,398.4 $13,398.4 $14,206.3 $12,281.4

Total Material Mined Per Year, ktons 31,780 26,956 31,629 26,249 20,035 14,641 19,192 25,493 23,991 19,704 17,486 16,249 14,440 13,402 13,645 13,857 10,320

Total Mine Costs ($000) w/out Capital $55,074.1 $49,392.0 $54,931.5 $48,512.7 $40,796.8 $35,553.0 $42,061.3 $50,053.6 $47,940.9 $42,640.6 $39,894.1 $38,065.3 $34,103.8 $31,853.3 $31,953.7 $34,873.0 $25,192.0

Mine Operating Cost per Ton Material $1.73 $1.83 $1.74 $1.85 $2.04 $2.43 $2.19 $1.96 $2.00 $2.16 $2.28 $2.34 $2.36 $2.38 $2.34 $2.52 $2.44



21.4 PROCESS PLANT, INFRASTRUCTURE, AND OWNERS OPERATING COSTS

This section addresses process plant operating and maintenance costs. Table 21-6 summarizes the process plant operating cost. Included are labor, grinding balls, wear liners reagents, operational supplies, repair supplies, electric power, propane, diesel, gasoline, tailing dam raises, and other. The plant basis of design is 26,500 st/d with 92% availability.

Table 21-6: Process Operating Cost Summary

Element Detail $/year $/st Labor 114 Employees 12,416,598 1.28 Supplies Grinding balls 9,540,954 0.99 Wear liners 2,174,879 0.22 Reagents 3,701,354 0.38 Operating supplies 673,440 0.07 Repair supplies 9,672,500 1.00 Energy Electricity 11,077,510 1.15 Propane 153,221 0.02 Diesel 316,342 0.03 Gasoline 159,042 0.02 Other Tailing dam raising 3,590,250 0.37 Other 900,000 0.09 Total 54,376,089 5.62

21.4.1 Process Labor and Fringes

The process plant operating and maintenance labor costs assume a staffing plan totaling 114 employees and labor rates, which reflect an industry survey for the region, as summarized by Table 21-7. The annual salaries include overtime based upon 12-hourr shifts and benefits (including vacations) for both salaried and hourly employees. The benefits rate used is 30%.

Table 21-7: Process Labor Summary

Description Employees $/Year Operation 80 8,688,771 Maintenance 34 3,727,827 Total 114 12,416,598

21.4.2 Reagents

Metallurgical test data, industry practice, and actual data and budgetary predictions from Anaconda for years 1982-1985 provide good estimates for reagent consumption. GMI obtained budget quotations and included freight allowances or used historical data from similar projects. Table 21-3 summarizes the reagent consumption and cost.



Table 21-8: Process Plant Reagents – Typical Year of Operation

Description Consumption Units $/Unit $/Year $/st Pine Oil 0.008 lb/st 0.83 60,560 0.006 MIBC 0.043 lb/st 0.91 374,084 0.039 Lime 1.83 lb/st 0.07 1,150,544 0.119 Flomin 4132 0.020 lb/st 1.71 330,800 0.034 Mo Collector Bulk 0.040 lb/st 0.80 307,586 0.032 Nitrogen 850.000 SCF/hr 0.01 40,032 0.004 Moly Collector Mo 0.020 lb/st Bulk Conc 0.80 1,527 0.000 NaHS 17.000 lb/st Bulk Conc 0.01 16,330 0.002 Pine Oil 0.003 lb/st Bulk Conc 0.83 241 0.000 MIBC 0.017 lb/st Bulk Conc 0.91 1,486 0.000 Hydrogen Peroxide 40 lb/st Cu Conc 0.38 961,220 0.099 Sodium Silicate 0.010 lb/st 0.55 53,199 0.006 Flocculant 0.010 lb/st 2.52 243,747 0.025 Water Treatment 160,000 0.017 Total 3,701,354 0.383

21.4.3 Maintenance Wear Parts and Consumables

GMI estimated grinding media and wear liner consumption using Anaconda budgetary information from 1982-1985. The company based unit costs upon quotations. Table 21-9 summarizes these results.

Table 21-9: Grinding Media and Wear Items

Description Consumption Units $/Unit $/Year $/st Grinding Balls 4-inch 0.700 lb/st 0 3,114,545 0.322 Grinding Balls 2.5-inch 1.100 lb/st 1 5,660,347 0.585 Regrind Balls 1-inch 0.110 lb/st 1 766,062 0.079 Primary Crusher Liners 1.000 lot/y 200,000 200,000 0.021 Sag Mill Liners' 2.000 lot/y 617,905 1,235,810 0.128 Ball Mill Liners 2.000 lot/y 361,800 723,600 0.075 Regrind Mill Liners 1.500 lot/y 10,313 15,469 0.002 Total 11,715,833 1.211

In addition, GMI provided a $1.00/st allowance for plant maintenance.

21.4.4 Electrical Power

GMI benchmarked electrical power costs in area and estimates a rate of $0.065 per kWh. M3 developed a detailed equipment list with connected loads and estimated operating load level using Anaconda budgetary values from 1982 to 1985. This results an estimated power consumption of 17.6 kWh/st and an annual cost of $11 million.

21.4.5 Process Supplies and Services

The plant operating cost estimate includes allowances for other operating supplies (such as lubricants), fuels (diesel, gasoline, and propane), tailing dam raising, outside services, and other miscellaneous costs.



21.5 SITE GENERAL AND ADMINISTRATION COST

GMI estimated the Site General and Administration (G&A) cost from a detailed labor forecast schedule and from historical costs. The estimate, which varies year by year, ranges from $7 million to $8 million per year. Costs cover such items as books, publications, subscriptions, company functions, contracted services, dues, memberships, employee transportation, furniture, fixtures, insurance, building leases, equipment leases, legal services, postage, courier service, printing, reproduction, supplies, travel, advertising, boot allowance, employee development, professional development, hiring costs, recruitment, housing subsidy, legal services, medical costs, prescriptions safety glasses, professional certifications, relocation expense, scholarships, sign-on bonus, uniforms and coveralls, computer hardware, computer software, data communications equipment lines, phones, internet, software, hardware maintenance fees, medical costs, penalties, fines, rescue team, safety awards, property taxes, other taxes, consulting services, testing, and environmental licenses.



22 ECONOMIC ANALYSIS

GMI prepared the financial model and this section of the report, while M3 verified and approved the model, and IMC and M3 reviewed and approved this section of the report. The financial model supporting this report is revision 07.

22.1 BASIS OF FINANCIAL MODEL

The Liberty project financial model is based on a discounted cash flow model coded as an Excel 2010 workbook. Costs are in constant 2014 Q1 U.S. dollars with no provision for future escalation, as shown in Table 22-1. The economic analysis assumes a 100% project view and 100% equity.

The base case is an unconstrained mine plan, which creates new disturbance on BLM land during the pre-production stripping and early years of production. The processing rate is 26,500 short tons per day of ore.



Table 22-1: Cash Flow Model



22.1.1 Economic Start Date and Life of the Project

The analysis time zero is December 15, 2016, which is an approximate forecast of when GMI anticipates receiving Board approval to proceed with detailed engineering, procurement, and construction. The model captures development cash flows for the years 2017 through 2019 and production and reclamation thereafter. The model assumes production commences January 1, 2020, and the plant achieves full production March 1, 2020. This is slightly more conservative than the permitting schedule, which provides for construction to start during December 2019.

The project includes 31 years of mining and 32 years of mill production, with stockpiled low-grade ore supplying the process plant for one year following exhaustion of the mine. Reclamation, which commences in production year 11 at a low rate, increases after the mill ceases operations and terminates five years after the mill processes the last available stockpiled low-grade ore.

22.1.2 Exchange Rate

The model expresses all funds in U.S. dollars. Although the project may be subject to future currency exchange rate risk, the financial model excludes all currency risk, due to uncertainty of forecasting future exposure.

22.1.3 Date of Estimate

M3 and IMC indexed all project costs to 2014 Q1 constant dollars.

22.1.4 Key Assumptions

Key assumptions include:

Flat molybdenum price of $15/lb. This is based upon a long-term price forecast by the CPM Group.

Flat copper price of $3.25/lb. This is based upon a 36-month historical LME monthly average price of $3.48/lb.

Time zero (date which the analysis uses to discount cash flows) is December 15, 2016. As previously stated in Section 22.1.1, this is based upon GMI’s expectation of receiving Board approval to proceed with detailed engineering, procurement, and construction on that date.

The analysis treats all expenditures prior to January 1, 2017 as sunk capital. This is based upon GMI’s expectation of receiving Board approval to proceed with detailed engineering, procurement, and construction during December 2016.

West Texas Intermediate Crude Oil (WTI) price $100/barrel (used as key assumption to indexing fuels). This is based upon WTI NYMEX CM monthly average prices, which have ranged from $94.857 to $105.083/barrel between January and June 2014, as reported by GASearch Energy Intelligence.

Off-road diesel price of $3.30/gal. This is based upon a GMI-derived regression of diesel price to WTI.

Gasoline at $3.47/gal. This is based upon a GMI-derived regression of diesel price to WTI.

Propane at $1.75/gal. This is based upon a GMI-derived regression of diesel price to WTI.

Electricity at $65/MWh. As stated in Section 22.1.10, this is based upon benchmarking power costs for neighboring mines.

LOM mining cost at $1.76/st. As discussed in section 21.3.

LOM milling cost at $5.62/st. As discussed in section 21.4.

Molybdenum roasting cost of $0.70/lb-Mo. As discussed in section 19.2.2.



Copper smelting cost of $95/mt-conc. As discussed in section 19.2.3.

Copper refining cost of $0.095/lb-Cu. As discussed in section 19.2.3.

22.1.5 Revenue

Annual revenue is the mathematical product of sales price multiplied by the annual product volume. The analysis assumes flat metal prices of $15.00/lb for molybdenum and $3.25/lb for copper. Molybdenum generates 86% of the project’s revenue.

22.1.6 Initial Capital

Initial capital totals $359 million. The model treats expenditures prior to January 1, 2017 as sunk costs.

22.1.7 Sustaining Capital

The model includes $224 million in sustaining capital over the life of the project, with $189 million required for replacement of mine equipment and $35 million required for expanding the tailing storage facility and storm water diversions for the mine and waste rock storage piles.

22.1.8 Working Capital

The model assumes 12 days for accounts receivable (AR) for molybdenum production and 18 days for copper production. These durations assume 90% provisional payment at shipment and 10% payment at 60 days for molybdenum and 90% provisional payment at shipment and 10% payment at 120 days for copper. The model assumes 30 days of accounts payable (AP), warehouse supplies inventory of $7 million, and insurance spares of $1.9 million. The model excludes work in progress (WIP).

22.1.9 Salvage Value

The model ignores all potential salvage value.

22.1.10 Operating Cost

The average cash operating cost over the life of the mine (LOM) is $13.57 per short ton of ore processed or $10.43 per pound of molybdenum. Applying copper revenues as a credit, the LOM cost drops to $10.33 per short ton or ore and $7.94 per pound of molybdenum. The total cash operating cost includes mining, milling, chemical analysis, site G&A, shipping, molybdenum roasting, copper smelting, copper refining, and marketing.

GMI estimated the mine operating costs, and IMC reviewed and approved the estimates. GMI estimated the processing cost, and Ken Edmiston reviewed and approved the estimates. GMI estimated the unit electricity cost of $65/MWh by benchmarking similar mines in western Nevada. GMI estimated the site G&A cost.

22.1.11 Cost Applicable to Sales

The LOM cost applicable to sales, which includes operating cost plus royalties, is $7.95 per pound of molybdenum.

22.1.12 Reclamation

GMI estimate the reclamation cost by factoring parameters of the mine design, plant design, and tailing dam to those for a detailed estimate of Mt. Hope, which is based upon the Nevada 2007 Standardized Reclamation Cost Estimator



Version 1.1.1. The Liberty reclamation cost totals $69.5 million. This includes $53.8 million in direct reclamation costs and a 29% contingency equal to $15.6 million.

22.1.13 Royalties

The financial model includes a one-time payment of $6 million in royalties to Equatorial payable within 30 days after initial production.

22.1.14 Depreciation

The model calculates depreciation using the MACRS rates according to U.S. Master Depreciation Guide. The categories include:

Land improvements depreciated 15 years using 150% declining balance switching to straight-line

Electrical distribution depreciated 15 years using 150% declining balance switching to straight-line

Mine and process equipment depreciated 7 years using 150% declining balance switching to straight-line

Buildings depreciated straight-line over 39 years

According to U.S. tax law, the financial model expenses 70% of mining development costs (which include pre-production stripping and owner’s cost) and amortizes the remaining 30% over 5 years.

22.1.15 Project Financing

The financial model assumes 100% equity.

22.1.16 Nevada Net Proceeds Mineral Tax

The Nevada net proceeds mineral tax uses a rate depending on the ratio of net proceeds to gross proceeds, in lieu of general property taxes on mineral land. Nevada taxes operations with net proceeds (taxable income excluding depletion) exceeding $4 million at a 5% rate. GMI expects the net proceeds will exceed $4 million every production year. Total net proceeds mineral tax over life of the mine is $115 million.

22.1.17 Federal Income Tax

Taxable income for income tax is revenue minus operating expenses, royalty, property taxes, net proceeds mineral tax, reclamation, depreciation, and depletion. The income tax rate for federal taxes is 35%. Income tax totals $398 million.

22.1.18 Tax Loss Carry Forward

The analysis ignores the tax losses generated by exploration and development by GMI prior to production development.

The financial model treats as a loss the non-capitalized portion of pre-production mine development and owner’s cost. These total $42 million. The model carries forward the losses and uses them to offset earnings once production begins.

22.1.19 Depletion

According to US tax law, the evaluation includes percentage depletion. The depletion allowance for molybdenum is 22% and for copper is 15%. Percentage depletion is determined as a percentage of gross income from the property,



not to exceed 50% of taxable income before the depletion deduction. The gross income from the property is metal revenues minus royalties and downstream costs (i.e., roasting, smelting, refining, concentrate freight, TMO freight, and marketing). Taxable income is gross income minus operating expenses, overhead expenses, depreciation, and state taxes.

The model ignores cost depletion, since it is insignificant.

22.2 TOTAL CASH FLOW

The LOM after-tax cash flow totals $1,689 million.

22.3 ECONOMIC INDICATORS

The project after-tax economic indicators include:

Net present value (NPV) at an 8% discount rate is $325 million

Internal rate of return (IRR) is 17.4%

Benefit cost ratio at an 8% discount rate is 2.00

Payback period is 4.8 years from the beginning of production

Table 22-2: Production and Cost Summary

Parameter Unit First 5 Years First 10 Years LOM Production Years 5 10 32 HG ore mined Million st 46.2 94.5 300 LG ore mined Million st 2.6 8 10 Waste mined Million st 111.2 256 550 Material mined Million st 160.0 358 859 Material mined Million st 160.0 358 859 Check OK OK OK Stripping ratio 2.46 2.79 1.78 Ore Milled Million st 47 96 309 Mlb tMo 85 166 483 Mlb rMo 71 141 406 Mlb tCu 70 130 605 Average Mill Mo Grade %tMo 0.090% 0.087% 0.078% Average Mill Mo Grade %rMo 0.075% 0.073% 0.066% Average Mill Cu Grade %tCu 0.074% 0.068% 0.098% Mill Molybdenum Recovery % 83.5% 84.6% 84.0% Downstream Molybdenum Recovery % 99.0% 99.0% 99.0% Total Molybdenum Recovery % 82.6% 83.7% 83.2% Mill Copper Recovery % 56.0% 55.5% 53.6% Downstream Copper Recovery % 95.1% 95.1% 95.1% Total Copper Recovery % 53.3% 52.7% 50.9% Salable Molybdenum Million lb/y 14.0 13.9 12.6 Salable Copper Million lb/y 7.5 6.9 9.6 Salable Molybdenum Million lb 70 139 402 Salable Copper Million lb 37 69 308 Operating Cost



Parameter Unit First 5 Years First 10 Years LOM Mining $M 247 535 1,509 Milling $M 272 544 1,744 Roasting $M 49 98 282 Laboratory $M 7 14 46 Copper TCRCs (net of precious metal credits) $M 11 20 90 Site G&A (includes reclamation bond policy) $M 39 77 233 Shipping - Molybdenum concentrate $M 25 51 146 Shipping - Copper concentrate $M 17 31 140 Marketing $M 1 2 6 Corporate G&A $M 0 0 0 Total Operating Cost $M 668 1,372 4,196 Total Check $M 668 1,372 4,196 Total Check OK OK OK

Copper Credit* $M 121 223 1,001 Operating Cost Mining $/st mtrl 1.54 1.50 1.76 Operating Cost Mining $/st ore 5.21 5.59 4.88 Milling $/st ore 5.74 5.68 5.64 Roasting $/st ore 1.04 1.02 0.91 Laboratory $/st ore 0.15 0.15 0.15 Copper TCRCs (net of precious metal credits) $/st ore 0.23 0.21 0.29 Site G&A (includes reclamation bond policy) $/st ore 0.82 0.81 0.75 Shipping - Molybdenum concentrate $/st ore 0.54 0.53 0.47 Shipping - Copper concentrate $/st ore 0.36 0.32 0.45 Marketing $/st ore 0.02 0.02 0.02 Corporate G&A $/st ore 0.00 0.00 0.00 Total operating cost $/st ore 14.09 14.32 13.57 Copper Credit* $/st ore -2.56 -2.33 -3.24 Total Operating Cost (net of copper credit) $/st ore 11.54 12.00 10.33 Operating Cost Mining $/lb Mo 3.52 3.84 3.75 Milling $/lb Mo 3.88 3.90 4.34 Roasting $/lb Mo 0.70 0.70 0.70 Laboratory $/lb Mo 0.10 0.10 0.11 Copper TCRCs (net of precious metal credits) $/lb Mo 0.16 0.14 0.22 Site G&A (includes reclamation bond policy) $/lb Mo 0.55 0.55 0.58 Shipping - Molybdenum concentrate $/lb Mo 0.36 0.36 0.36 Shipping - Copper concentrate $/lb Mo 0.24 0.22 0.35 Marketing $/lb Mo 0.01 0.01 0.02 Corporate G&A $/lb Mo 0.00 0.00 0.00 Total operating cost $/lb Mo 9.52 9.85 10.43 Copper Credit* $/lb Mo -1.73 -1.60 -2.49 Total Operating Cost (net of copper credit) $/lb Mo 7.79 8.25 7.94 On site costs (net of copper credit) 6.32 6.80 6.29 On site costs 8.05 8.40 8.78 Roasting, shipping, marketing, TCRCs 1.47 1.44 1.65 Total Operating Cost (net of copper credit) 7.79 8.25 7.94 * Net proceeds and copper credits assume a molybdenum price of $15.00/lb and a copper price of $3.25/lb, where applicable.



22.4 SENSITIVITY ANALYSIS

Table 22-3 and Figure 22-1 show the project sensitivity. The data illustrate that the NPV is strongly sensitive to molybdenum price, ore grade, mill recovery, and operating cost. The project is less sensitive to capital and sustaining capital.

Table 22-3: NPV Sensitivity to Cost Drivers

Change of NPV8 Parameter

Change Parameter

Change





$million $million Minus Plus Sustaining Capital -20% 20% 16 -16 5% -5% Capital -10% 10% 25 -25 8% -8% Operating Cost -10% 10% 94 -96 29% -30% Mill Recovery -5% 5% -66 66 -20% 20% Ore Grade -10% 10% -132 131 -41% 40% Molybdenum Price -20% 20% -289 281 -89% 86%



Figure 22-1: NPV Sensitivities

Table 22-4 and Figure 22-2 illustrate that increasing the molybdenum price to $20 per pound can more than double the NPV. The project NPV breaks even at $11.64 per pound of molybdenum, assuming a copper price of $3.25 per pound.

Table 22-4: NPV Sensitivity to Metal Prices

NPV at 8% $Millions Molybdenum Price, $/lb 325 $10.00 $12.50 $15.00 $17.50 $20.00 Copper 2.50 (235) 34 276 511 744 Price 2.75 (214) 51 292 527 759 $/lb 3.00 (193) 68 309 543 775 3.25 (172) 85 325 559 791 3.50 (152) 102 341 575 806 3.75 (134) 119 358 591 822



Figure 22-2: NPV Molybdenum Price Sensitivities

If GMI toll roasts the Liberty molybdenum concentrates at Mt. Hope mine, the Liberty NPV would increase by $36 million to $361 million and the IRR would increase to 18.4%.



23 ADJACENT PROPERTIES

There are no active mineral properties near the Liberty Project. The closest active metal mine is at Round Mounain, Nevada, some 60 miles northeast of Liberty.



24 OTHER RELEVANT DATA AND INFORMATION

24.1 PROJECT SCHEDULE

The project completion target is December 2019, and the production is scheduled to start up during December 2019.

Critical paths are through permitting and delivery of long-lead equipment, such as the grinding mills and mining equipment. The project milestones include:

Start environmental baseline studies Dec 2014

Complete environmental baseline studies Apr 2016

Submit state permit application Jul 2016

Complete bankable feasibility study Sep 2016

Start detailed engineering Sep 2016

Received notice to proceed Dec 2016

Submit Plan of Operation Jan 2017

Order long-lead equipment Mar 2017

Start construction Apr 2018

Receive EIS Record of Decision Jun 2019

Start pre-production stripping Jun 2019

Start production Dec 2019

Achieve full production Mar 2020



25 INTERPRETATION AND CONCLUSIONS

25.1 GENERAL

The Liberty molybdenum project is viable technically, environmentally, and economically. Permitting and feasibility engineering should proceed. Past operating records and recent metallurgical testing indicate the ore can be processed economically to produce salable molybdenum and copper concentrates, although further testing is required to validate upgrade of copper concentrates. The project scope suggests that GMI can obtain necessary state and federal permits in a timely fashion.

25.2 MINERAL RESERVES

The reserves of the Liberty project are as follows:

Table 25-1: Liberty Reserve Summary

Category K tons Total Mo

Grade (%) Total Cu

Grade (%)



Saleable Moly Lb

(millions)

Saleable Copper Lb (millions)

Proven 92,489 0.101 0.056 187 104 NA NA

Probable 216,727 0.068 0.116 295 503 NA NA

Proven & Probable 309,216 0.078 0.098 482 606 402 308

Sections 14 and 15 present further details.

25.3 FLOW SHEETS

The mining and process methods are typical and do not require specialized technology. GMI selected only proven technologies for the process facilities. Many mining companies throughout the world use the same or similar mining and processing equipment.

25.4 ECONOMICS

The economics are favorable. Using $15.00/lb molybdenum and $3.25/lb copper prices, the project IRR is 17.4%, the benefit cost ratio at an 8% discount rate is 2.00, and the NPV at an 8% discount rate is $325 million. The mine plan can deliver sufficient ore at a processing rate of 26,500 st/day for 32 years.

25.5 METALLURGICAL TESTING

Future metallurgical testing will use sample material from new drill holes positioned to twin some of the CP holes, which the project team used to forecast recovery. A third-party metallurgical laboratory will perform flotation tests on these twin holes to verify recovery and concentrate quality. Verifying copper concentrate grade and mineralogy is considered an important future task to evaluating the project economics and recovery. A laboratory also will perform ore hardness and grind tests.

25.6 PERMITTING RISK

To obtain the Liberty project state and federal permits is considered low risk. The timely issuance of state permits within a three-year period is considered normal in the State of Nevada. To obtain federal permits within five years is considered a moderate project risk, given other timelines experienced for federal permitting within the State of



Nevada. The ability to obtain permits is considered very low risk, given the Liberty mine has been operated before and has existing disturbance on both privately held lands and federal lands.

1. Outright denial of permits is unlikely.

2. The project contains flexibility to accommodate permitting delays.

3. Excessive and costly mitigation is unlikely.

4. GMI does not expect a highly publicly challenged permitting process given the strong local public support for mining.

Project advantages include:

1. The Liberty project is located in Nevada, a political subdivision with a long and positive history of mining and statutes supporting mining, as demonstrated by top scoring on the Frasier Institute risk scale.

2. The project is located in Nye County, which is sparsely populated, proud of its mining heritage, and receptive to mine development.

3. The project is located primarily on patented claims and fee lands.

4. Three other companies have responsibly mined on the project area, and site possesses extensive existing surface disturbance and well-developed infrastructure.

5. The site has no substantial environmental or reclamation liabilities from previous operations.

6. Many mines throughout the world use the proposed mining and milling methodology, and the former operators used identical methods.

7. No known endangered species occur on or near the project that could trigger compliance with the Endangered Species Act.

8. No Waters of the United States occur within the project area that could trigger compliance with Sections 402 and 404 of the Clean Water Act.

9. GMI possesses extensive environmental baseline information collected by previous mine operators and their consultants applicable to future permitting.

10. GMI has a team of professionals with a successful history of previous permitting in Nevada.

25.7 OPPORTUNITIES

A better understanding of SAG mill work indices could enable the plant to be constructed using one larger SAG mill and one reclaim tunnel allowing for better layout for a future expansion of the milling rate. Much of the existing infrastructure can support increased throughput, thus providing some economies of scale and capital deployment.

GMI currently has experienced technical experts and engineers to advance some of the preliminary development studies to refine the scope of the project and enhance its economics providing initial low development costs. This advantage will be leveraged in the first few months of project development.

25.8 CHALLENGES

The timing of this project with respect to finance availability is likely the primary challenge. Coordinating capital expenditures with financing resources will likely drive the efficient development and schedule of the project.



Baseline study schedules and metallurgical testing is dependent upon drilling to obtain the necessary samples to begin time-critical first steps to development. Interim funding to finance these initial studies is necessary to advance the project.



26 RECOMMENDATIONS

26.1 DRILLING AND GEOLOGIC INFORMATION

26.1.1 Infill Drilling

Infill drilling is recommended to better define local portions of the porphyry molybdenum mineralization as well as the supergene and primary copper mineralization situated in the zone to the east and southeast of the PFS open pit. This drilling would amount to approximately 19,400 feet in 24 HQ-diameter diamond core holes. The major focus of these holes would be to upgrade the more cohesive portions of the material currently classified as Inferred Mineral Resources to Probable Mineral Reserves that are scheduled to be mined in Years 1 through 5 from within the PFS open pit shell. The total cost for drilling, sampling, and sample assaying is estimated at $1,240,000. It is assumed that drill site preparation and geologic supervision for this drilling will be provided by existing General Moly employees. Cost estimates are contracted costs only. It should be noted that this drilling is the minimum required during the pre-development period of the project. The GMI development team will further define essential drilling during the scoping phase of feasibility study preparation, inclusive of the program outlined below.

26.1.2 Geotechnical Drilling

In accordance with a 2010 recommendation and estimate by Call & Nicholas Inc. (CNI), five geotechnical oriented core holes should be drilled at prescribed azimuths and inclinations to provide additional structural and rock strength data for feasibility-level pit slope designs. This drilling will total 5,000 feet at an estimated cost of $275,000, in addition to the drilling noted above. CNI’s estimated costs for performing the core orientations and subsequent geotechnical analyses are included elsewhere in this section. It is assumed that support for the geotechnical drilling and core orientation will be by existing GMI technical personnel. Cost estimates are contracted costs only.

26.1.3 Compilation of Samples for Metallurgical Testing

The proposed additional metallurgical testing discussed in this section requires a minimum of approximately 310 kg of HQ-diameter core. A total of approximately 180 kg required for the assembly of composite samples for this test work can be obtained from the Years 1-5 infill drilling discussed in Section 26.1.1 above. The remaining 130 kg (approximate) will have to be obtained from additional HQ-diameter core holes to be drilled in the more copper-rich portion of the deposit situated within the PFS pit shell to the east. If these additional holes are drilled during the pre-development period of the project, the amount of drilling required will be five holes totaling approximately 3,500 feet, at a cost of approximately $225,000. As with the geotechnical drilling discussed in Section 26.1.2, it is assumed that General Moly can use existing staff for compilation of these composites.

26.1.4 Refinements to Geologic Interpretations

An assessment of the overall quality and completeness of the surface geological mapping in the general project area should be made. This would include the historic Anaconda pre-mining surface geologic mapping (by Knight, Cameron, Shaver, et al) and pit bench mapping performed by Anaconda, Cyprus and Equatorial (if any is available), and GMI.

It is recommended that the major and intermediate faults that have not yet been modeled as two-dimensional surfaces be better defined by first compiling all structural intercepts described in historic and GMI diamond core logs and posted on existing surface geological maps (including pit bench maps). Interpreting these faults as two-dimensional surfaces will provide for better constraints to resource block model grades in future mineral resource and mineral reserve estimates. Where gaps in historic surface geologic map coverage exist or detail is lacking in existing pit bench mapping, additional detailed pit bench and/or surface mapping may be required.



Along these same lines, the current interpretations of the post-mineral igneous dikes that cut through the molybdenum and copper mineralization should be improved, using the same approach described above for the major and intermediate faults. These reinterpretations will prevent the extension of copper and molybdenum mineralization into barren post-mineral intrusive rocks in local areas of the deposit.

26.2 MINE PLANNING RECOMMENDATIONS

The drilling data presented in the previous subsection are required to improve the reliability of the block model and consequently the mine plan. The Liberty project mine plan utilizes estimates of process recovery to establish economic material. Those estimates relied on oxide or acid soluble assays for molybdenum and copper. The recommended infill drilling would improve the confidence of those estimates and provide more confidence in early year recoveries and cash flows.

Once the additional drilling and assaying is complete, the block model should be updated followed by updates to the mine plan to incorporate that information. There is a high likelihood that this additional information will improve the economic assessment of the first few years of the mine plan. Model assembly and update to the mine plan would likely cost about $150,000 using third-party consultants.

More detailed slope stability work is warranted. Drilling for oriented core has been included in the recommended drill program. Geotechnical analysis of that data along with surface mapping and testing should be completed. GMI has an estimate from geotechnical contractor CNI dated October 2010 that has not been completed. Inflating that estimated cost for 4 years would provide a reasonable budget of roughly $385,000.

26.3 METALLURGICAL TESTING RECOMMENDATIONS

As noted in Section 13, the metallurgical testing program is on-going using the currently available 900 kilograms of composites. New drilling is proposed for the areas of the molybdenum pit and for the eastern copper pit material to be mined with the molybdenum pit. The new drilling samples will be tested as well as completion of the following items:

Locked cycle testing for the molybdenum-copper circuit using composites representing different lithologies. Composites will also be tested.

Testing to develop and confirm the molybdenum flotation and concentrate characteristics, using the historical conditions as a starting point.

Testing to confirm the results on the GMI composites of the Cyprus hydrogen peroxide process, used in later months of Cyprus operation, to increase the copper concentrate grade.

Testing of molybdenum separation and copper concentrate up-grading on composites that represent pit variability.

Small-scale batch tests to optimize recovery and provide data for the next level of flowsheet design and plant engineering.

Added testing for determination of Bond ball mill work index values, abrasion indices, and SAG mill power requirements.



26.4 ENGINEERING RECOMMENDATIONS

Throughout the pre-feasibility study engineering effort areas of further investigation were noted. These include both opportunities to improve the prefeasibility design as well as key assumptions made requiring further query to prove as adequate for the design concept presented. The following exercises are recommended to accomplish a fully optimal design:

Project flow sheets should be further developed based on additional metallurgical test work recommended to fully understand the mineral processing circuit. This process refinement should help optimize project capital cost by providing a higher resolution into the project’s detailed technical needs as well as previous unidentified deficiencies. Special consideration should be given to the potential need for ferric chloride leaching and determination of how this would impact operations.

Detailed survey work centered on identification of all existing foundations and structural steel should be performed to improve understanding of how these can be incorporated into the overall plant layout. This would include complete unearthing of pertinent structures proposed for use including the primary crusher concrete and reclaim tunnel.

Test work should be done to verify the integrity of all existing foundations proposed as included in future design work.

Study should be conducted on housing and local infrastructure to support a full scale construction effort.

Fresh water well pump testing should be conducted to verify adequacy of existing wells to meet process demands and provide data for ground water modeling.

Completion of NV Energy study to identify detailed scope of utility substation improvements and capital costs.

GMI has budgeted $1.3 million for engineering for the next level of feasibility.

26.5 PERMITTING RECOMMENDATIONS

It is recommended that the permitting process begin immediately upon feasibility study kick-off to ensure that construction and operating permits meet the overall project schedule. Sampling locations for waste rock characterization should also be carefully planned in the drilling program for ore definition and metallurgical sampling, outlined above. The potential for Acid Rock drainage from the waste storage facilities should also be quantified. Samples for testing could be sourced from the drilling recommended earlier in this section. Some geotechnical drilling to characterize the soil and subsoil conditions underneath the tailings dam and waste stockpile areas should be conducted early in the environmental program.

The permitting process should focus initially on the time-sensitive baseline studies required for both federal and state permits. It is recommended that a conceptual ground water model be developed. This model would identify best locations for monitoring and observation wells prior to the drilling of these wells. It would also test the response from observation wells against the ground water conceptual model followed by further refinement of the ground water model. It is also recommended that the model be used to project pit dewatering quantity and quality, as well as pit lake quantity and quality. Test wells and observations wells can also be incorporated into the pump testing planned for fresh water wells.

The local and regional area public weather data stations are considered sufficient for air modeling purposes. This assumption will be verified during feasibility design. It is recommended that feasibility design be advanced for all dust



collection systems and other potential air emission sources to define the air modeling at a level required for permit applications in Nevada.

The cost of the permitting program is estimated at $3.6 million through feasibility design.



27 REFERENCES

Call and Nicholas, Inc. “Slope Design Initial Evaluation for the Liberty Project”, Sept. 12, 2007.

Cameron, D.E., 1979, Progress Report on the Hall Molybdenum Property, Nye County, Nevada, Unpublished Anaconda Copper Company Report, 59p.

Catherine Virga, Mu Li, and Justin Honrath, CPM Group, “Molybdenum Market Outlook,” December 2013.

CPM Group, “Molybdenum Market Outlook Update,” June 2014.

Dobra, John L., 2011. “An Economic Overview of Nevada’s Minerals Industry, 2010 – 11.” National Resource Industry Institute, University of Nevada, Reno. 2011.

Drummond, S, et al 2003. Equatorial Tonopah Mine Copper Heap Leach Closure – A project of Firsts, Heap Leach Closure Workshop, The International Network for Acid Prevention and Mining Life-Cycle Center, Mackay School of Mines.

FLSmidth, 2013. “Report on Metallurgical Test Work on Samples from General Moly’s Liberty Pit.” Project No. P-12003. Dawson Metallurgical Laboratories. September 18, 2013.

M3 Engineering and Technology Corp. “Liberty Moly Project Molybdenum Mine and Process Plant, Technical Report”, April 15, 2008

M3 Engineering and Technology Corp. “Liberty Moly Project Molybdenum Mine and Process Plant, Technical Report”, November 11, 2011

Shaver, S.A. 1991. Geology, alteration, mineralization, and trace element geochemistry of the Hall (Nevada Moly) deposit, Nye County, Nevada: in Raines, G.L., et al.,Geology and Ore Deposits of the Great Basin, Symposium Proceedings, Geological Society of Nevada, Reno, Nevada, p. 303-332.

Smith Williams Consultants, Inc. (Smith Williams), 2008, “Liberty Moly Project Tailings Storage Facility Pre-Feasibility Study,” May 13, 2008.

SMR staff, Steel & Metals Market Research, “Mo End Use Analysis 2013,” September 2013.



APPENDIX A: FEASIBILITY STUDY CONTRIBUTORS AND PROFESSIONAL QUALIFICATIONS

CERTIFICATE OF QUALIFIED PERSON

I, John M. Marek P.E. do hereby certify that:

a) I am currently employed as the President and a Senior Mining Engineer by:

Independent Mining Consultants, Inc.

3560 E. Gas Road

Tucson, Arizona, USA 85714

b) This certificate is part of the report titled titled "Liberty Molybdenum Project, NI 43-

101 Technical Report, Pre-Feasibility Study - 2014, 26,500 TPD production rate, Nye

County, Nevada”, with an effective date of 25 July 2014.

c) I graduated with the following degrees from the Colorado School of Mines

Bachelors of Science, Mineral Engineering – Physics 1974

Masters of Science, Mining Engineering 1976

I am a Registered Professional Mining Engineer in the State of Arizona USA

Registration # 12772

I am a Registered Professional Engineer in the State of Colorado USA

Registration # 16191

I am a Registered Member of the American Institute of Mining and Metallurgical

Engineers, Society of Mining Engineers

I have worked as a mining engineer, geoscientist, and reserve estimation specialist for

more than 37 years. I have managed drill programs, overseen sampling programs, and

interpreted geologic occurrences in both precious metals and base metals for numerous

projects over that time frame. My advanced training at the university included

geostatistics and I have built upon that initial training as a resource modeler and

reserve estimation specialist in base and precious metals for my entire career. I have

acted as the Qualified Person on these topics for numerous Technical Reports.

My work experience includes mine planning, equipment selection, mine cost

estimation and mine feasibility studies for base and precious metals projects world

wide for over 37 years. I have experience with the overall management, review, and

assembly of feasibility studies.

d) I last visited the Liberty Project site on 12-13 May 2014. Two days were spent

reviewing geology and available infrastructure.

e) I am responsible for the following sections of the report titled titled "Liberty

Molybdenum Project, NI 43-101 Technical Report, Pre-Feasibility Study - 2014, 26,500

TPD production rate, Nye County, Nevada”, with an effective date of 25 July 2014:

1, 2, 3, 4, 5, 6, 11, 12, 14, 15, 16, 19, 21, 22, 23, 24, 25, 26, 27

25 July 2014 31 Dec 2014

f) I am independent of General Moly, Inc. applying the tests in Section 1.5 of National

Instrument 43-101.

g) Independent Mining Consultants, Inc. and John Marek have worked on the Liberty

Molyndenum Project with previous pre-feasibility studies in 2007 and 2011..

h) I have read National Instrument 43-101 and Form 43-101F1, and to my knowledge, the

Technical Report has been prepared in compliance with that instrument and form.

i) As of the effective date of the Technical Report, to the best of my knowledge,

information and belief, the Technical Report contains all scientific and technical

information that is required to be disclosed to make the Technical Report not misleading.

Dated: July 25, 2014.

John M. Marek

Registered Member of the American Institute of Mining and Metallurgical Engineers,

Society of Mining Engineers

CERTIFICATE OF QUALIFIED PERSON I, Gabriel A. Secrest, P.E., do hereby certify that: 1. I am currently employed as an Engineer and Project Manager by: M3 Engineering & Technology Corporation

2051 W. Sunset Road, St 101 Tucson, Arizona 85704 U.S.A.

2. I am a graduate of the University of Arizona and received a Bachelor of Mechanical Engineering in 2006. 3. I am a:

Registered Professional Engineer in the States of Arizona (No.52776), Nevada (No.21989) and South

Carolina (No.30039) Registered Member in good standing of the Society for Mining, Metallurgy and Exploration, Inc. (No.

4197368)

4. I have practiced engineering and project management at M3 Engineering for 8 years. Throughout my tenure my job responsibilities have included mechanical systems design, project management for mine processing plant facilities, generation of capital and operating cost estimates, procurement and engineering of mining equipment, support and coordination of facility construction efforts, and review of documentation to support final operation of designed plant facilities.

5. I have read the definition of "qualified person" set out in National instrument 43-101 ("NI 43-101") and certify that

by reason of my education, affiliation with a professional association (as defined in NI 43-101) and past relevant work experience, I fulfill the requirements to be a "qualified person" for the purposes of NI 43-101.

6. I visited the Liberty site on June 12th for approximately four hours and June 13th, 2014 for approximately 5 hours.

The trip was focused on evaluation of existing infrastructure and review of material samples for the purposes of this study.

7. I am responsible for the preparation of Sections 17, 18 and part of 21, as well as portions of summary, conclusions, references and recommendations that pertain to those sections of the technical report titled "Liberty Molybdenum Project, NI 43-101 Technical Report, Pre-Feasibility Study - 2014, 26,500 TPD production rate, Nye County, Nevada" dated effective 25 July 2014.

8. I am independent of General Moly, Inc. applying all of the tests in section 1.5 of National Instrument 43-101. 9. I participated in the layout and study design work for the preparation of the former technical report conducted for

this property in 2007. Other than this effort I have had no prior involvement with the property that is the subject of the technical report.

10. I have read NI 43-101 and Form 43-101F1, and those parts of the technical report for which I am responsible

have been prepared in compliance with NI 43-101 and Form 43-101F1.

11. As of the date of this certificate, to the best of my knowledge, information and belief, those parts of the technical report for which I am responsible contain all scientific and technical information that is required to be disclosed to make the technical report not misleading.

12. I consent to the filing of the technical report with any stock exchange and other regulatory authority and any

publication by them for regulatory purposes, including electronic publication in the public company files on their websites accessible by the public, of the technical report.

Dated this 30th day of July, 2014.

Âf|zÇxw tÇw fxtÄxwÊ Signature of Qualified Person Gabriel A. Secrest Print name of Qualified Person

CERTIFICATE of QUALIFIED PERSON I, Richard K. Zimmerman, R.G., do hereby certify that: 1. I am currently employed as a Registered Professional Geologist by: M3 Engineering & Technology Corporation

2051 W. Sunset Road, Ste. 101 Tucson, Arizona 85704 U.S.A.

2. I am a graduate of Carleton College and received a Bachelor of Arts degree in Geology in 1976. I am also a graduate of the University of Michigan and received a M.Sc. degree in Geology 1980.

3. I am a:

Registered Professional Geology in the State of Arizona (No. 24064) Registered Member in good standing of the Society for Mining, Metallurgy and Exploration, Inc.

(No. 3612900RM) 4. I have practiced geology, mineral exploration, environmental remediation, and project management

for 32 years. I have worked for mining and exploration companies for 8 years, engineering consulting firms for 22 years, and for M3 Engineering & Technology Corporation for 3 years. My experience includes environmental consulting including compliance, hydrogeological investigations, and environmental permitting.

5. I have read National Instrument 43-101 (NI 43-101) and Form 43-101F1, and the Technical Report has been prepared in compliance with that instrument and form.

6. I have read the definition of “qualified person” set out NI 43-101 and certify that by reason of my

education, affiliation with a professional association (as defined in NI 43-101) and past relevant work experience, I fulfill the requirements to be a “qualified person” for the purposes of NI 43-101.

7. I am responsible for Sections 20, and corresponding items in Sections 1, 25, and 26 of the

technical report titled “Liberty Molybdenum Project, NI 43-101 Technical Report, Pre-Feasibility Study - 2014, 26,500 TPD production rate, Nye County, Nevada” (the “Technical Report”), dated effective July 25, 2014, prepared for General Moly Inc.

8. I have not visited the project site. I have had no prior involvement with the property that is subject

of the Technical Report.

9. As of the effective date of the technical report, to the best of my knowledge, information and belief, the Technical Report contains all scientific and technical information required to be disclosed to make the report not misleading.

10. I am independent of the issuer applying all of the tests in section 1.5 of National Instrument 43-101.

11. I consent to the filing of the Technical Report with any stock exchange and other regulatory authority and any publication by them of the Technical Report for regulatory purposes, including electronic publication in the public company files on their websites accessible by the public.

Dated this 30th day of July, 2014 “Richard K Zimmerman” (signed and sealed) Richard K Zimmerman, M.Sc., R.G., SME-RM No. 3612900RM Name of Qualified Person

CERTIFICATE of QUALIFIED PERSON I, Kenneth J. Edmiston, P.E., do hereby certify that:

1. I am an independent consulting metallurgist established at 5970 East Pima Street, Tucson,

Arizona, 85712 U.S.A.

2. I am a graduate of the University of Arizona and received a Bachelor of Metallurgical Engineering in 1970.

3. I am a professional engineer in good standing with the State of Arizona in metallurgical engineering (expiring on September 30, 2017).

4. I have worked as a metallurgical engineer for a total of forty four years. I was employed by the Duval Corporation (mining company) in various positions for nine years, by Pincock, Allen and Holt (mining consultants) for nine years and have been an independent consultant/contractor for the remaining years. I am experience in the copper and molybdenum processing methods utilized in the project having worked on numerous similar projects.

5. I have read the definition of “qualified person” set out in National Instrument 43-101 (“NI 43-101”) and certify that, by reason of my education, affiliation with a professional association (as defined in NI 43-101) and past relevant work experience, I fulfill the requirements to be a “qualified person” for the purposes of NI 43-101.

6. I have not visited the site for the preparation of this report.

7. I am responsible for the preparation of sections numbered 13.0, part of 21.4 and 26.3, as well as portions of summary, conclusion, references and recommendations that pertain to those sections of the technical report entitled “Liberty Molybdenum Project, NI 43-101 Technical Report, Pre-Feasibility Study – 2014, 26,500 TPD production rate, Ney County, Nevada: dated effective 25 July 2014.

8. I am independent of General Moly Inc. per the tests in Section 1.5 of National Instrument 43-101.

9. I participated in the former technical report conducted for this project in 2007. I also consulted on this property when employed by other engineering firms and this work did include numerous site visits.

10. I have read National Instrument 43-101 and Form 43-101F1, and those parts of the technical report for which I am responsible have been prepared in compliance with NI 43-101 and Form 43-101F1.

11. As of the date of this certificate, to the best of my knowledge, information and belief, those parts of the technical report for which I am responsible contain all scientific and technical information that is required to be disclosed to make the technical report not misleading.

12. I consent to the filing of the technical report with any stock exchange and other regulatory authority and any publication by them for the regulatory purposes, including electronic publication in the public company files on their websites accessible by the public, of the technical report.

Dated this 29th day of July 2014

Kenneth J. Edmiston, P.E______

Expires on September 30, 2017

CERTIFICATE OF QUALIFIED PERSON I, Donald F. Earnest, do hereby certify that:

1. I am the President of Resource Evaluation, Inc., 1955 W. Grant Rd., Suite 125X, Tucson, AZ. 85745, USA;

2. I am a graduate of The Ohio State University with the degree of Bachelor of Science, Geology, 1973;

3. I have worked for various companies in mine operations as a Mine Geologist, Senior Mine Geologist, Resident Manager,, at the corporate level as Manager, Exploration, as Vice President, Geology for a major mining consulting firm, and President of a mining geology consulting firm;

4. I have read the definition of a "Qualified Person" set out in Canada National Instrument 43-101 ("NI 43-101") and certify that by reason of my education, affiliation with the Society for Mining, Metallurgy, and Exploration, Inc. (SME) as a Registered Member (No.883600RM) and past relevant professional experience, I fulfill the requirements to be a "Qualified Person" (QP) for this Technical Report;

5. I am responsible for Sections 7, 8, 9, and 10, 11, as well as portions of the summary, conclusions, references and recommendations that pertain to those sections of the Technical Report titled "Liberty Molybdenum Project, NI 43-101 Technical Report, Pre-Feasibility Study - 2014, 26,500 TPD production rate, Nye County, Nevada" dated effective July 25, 2014 (the "Technical Report"). I visited the Liberty property on April 10 to April 12, 2014;

6. As of the date of this certificate, to the best of my knowledge, information and belief, the Technical Report contains all scientific and technical information that is required to be disclosed to make the Technical Report not misleading;

7. I am independent of the issuer and do not own any stock shares or other securities in the company;

8. I have read National Instrument 43-101 and Form 43-101F1, and the Technical Report has been prepared in compliance with that instrument and form.

9. I consent to the filing of the Technical Report with any stock exchange or other regulatory authority and any publication by these authorities for regulatory purposes, including electronic publication in the public company files on the SEDAR website, and publication by General Moly, Inc. on the company's website.

Dated this 30th day of July, 2014. “Donald F. Earnest” (Signed) Donald F. Earnest