ni43 101 technical report tujuh bukit pdf

PRELIMINARY ECONOMIC

ASSESSMENT Tujuh Bukit Oxide Project

EAST JAVA, INDONESIA

Prepared for Intrepid Mines by

Kappes, Cassiday & Associates

Daniel Kappes, PEng, Kappes Cassiday and Assoc

Phillip Hellman, PGeo, Hellman & Schofield

Peter Allen, MAusIMM, Australian Mine Design and Development

EFFECTIVE DATE : 1 JUNE 2011

TUJUH BUKIT PRELIMINARY ECONOMIC ASSESSMENT (PEA)

KAPPES, CASSIDAY & ASSOCIATES | JUNE 2011

Contents Contents .................................................................................................................................................................. 2 List of Figures ......................................................................................................................................................... 4 List of Tables ........................................................................................................................................................... 5 1.0 SUMMARY .............................................................................................................................................. 1

1.1 Project Overview ...................................................................................................................................... 1 1.2 Property Description, Ownership & Location ........................................................................................... 2 1.3 Geology ................................................................................................................................................... 3 1.4 Resource Estimate .................................................................................................................................. 6 1.5 Mining and Optimized Mine Plan from Inferred Resource ....................................................................... 7 1.6 Metallurgy ................................................................................................................................................ 8 1.7 Process Description ................................................................................................................................. 8 1.8 Infrastructure ............................................................................................................................................ 9 1.9 Environmental and Permitting .................................................................................................................. 9 1.10 Reclamation and Closure ...................................................................................................................... 10 1.11 Capital Costs ......................................................................................................................................... 10 1.12 Operating Costs ..................................................................................................................................... 12 1.13 Financial Analysis .................................................................................................................................. 12 1.14 Project Development Schedule ............................................................................................................. 12 1.15 Recommendations, Risks and Opportunities ......................................................................................... 13

2.0 INTRODUCTION ................................................................................................................................... 15 2.1 Qualified Persons .................................................................................................................................. 15 2.2 Effective Dates ....................................................................................................................................... 15 2.3 Units and Abbreviations ......................................................................................................................... 16 2.4 Project Background ............................................................................................................................... 17 2.5 Scope of Work ....................................................................................................................................... 18

3.0 RELIANCE ON OTHER EXPERTS AND CAUTIONARY NOTES ........................................................ 19 3.1 Reliance on Other Experts ..................................................................................................................... 19 3.2 Cautionary Notes ................................................................................................................................... 20

4.0 PROPERTY DESCRIPTION AND LOCATION ..................................................................................... 21 5.0 ACCESSIBILITY, CLIMATE, LOCAL RESOURCES, AND PHYSIOGRAPHY .................................... 21 6.0 HISTORY ............................................................................................................................................... 21 7.0 GEOLOGICAL SETTING ...................................................................................................................... 21 8.0 DEPOSIT TYPES .................................................................................................................................. 21 9.0 MINERALIZATION ................................................................................................................................ 21 10.0 EXPLORATION ..................................................................................................................................... 22

10.1 Historical Exploration ............................................................................................................................. 22 10.2 Recent Exploration (2006-2010) ............................................................................................................ 23

11.0 DRILLING .............................................................................................................................................. 26 11.1 Downhole Surveys ................................................................................................................................. 27 11.2 Drill Hole Collar Survey and Topographic Survey .................................................................................. 27 11.3 Summary Results of Drilling................................................................................................................... 27

12.0 SAMPLING METHOD AND APPROACH ............................................................................................. 28 12.1 Descriptions of Method and Approach ................................................................................................... 28 12.2 Core Processing Protocol ...................................................................................................................... 29 12.3 Specific Gravity Measurements ............................................................................................................. 30 12.4 Sampling Intervals ................................................................................................................................. 30 12.5 Core Recovery Data .............................................................................................................................. 31 12.6 Comparison of Sludge Samples versus Core Samples ......................................................................... 31



13.0 SAMPLE PREPARATION AND SECURITY ......................................................................................... 33 13.1 Description of Sample Preparation ........................................................................................................ 33 13.2 Procedures Employed to Ensure Sample Integrity ................................................................................ 33 13.3 Sample Security and Transport ............................................................................................................. 34 13.4 Analytical Laboratories .......................................................................................................................... 34 13.5 Analytical Methods ................................................................................................................................. 34 13.6 QA/QC Procedures Employed ............................................................................................................... 35

14.0 DATA VERIFICATION .......................................................................................................................... 37 15.0 ADJACENT PROPERTIES ................................................................................................................... 39 16.0 METALLURGY ...................................................................................................................................... 40

16.1 Summary ............................................................................................................................................... 40 16.3 Metcon Metallurgical Program ............................................................................................................... 45 16.4 KCA Metallurgical Test Program ............................................................................................................ 49 16.5 Ore and Waste Acid Neutralization Potential ......................................................................................... 61 16.6 Future Work ........................................................................................................................................... 61 16.7 Ore Processing ...................................................................................................................................... 62

17.0 MINERAL RESOURCE ......................................................................................................................... 82 17.1 Description of the Database .................................................................................................................. 82 17.2 Spatial Distribution of Mineralization ...................................................................................................... 83 17.3 Mineralized Zones ................................................................................................................................. 84 17.4 Hellman & Schofield Block Model .......................................................................................................... 85 17.5 Hellman & Schofield Model Results ....................................................................................................... 85 17.6 Mineral Reserves ................................................................................................................................... 86

18.0 OTHER RELEVANT DATA AND INFORMATION ............................................................................... 88 18.1 Mining Information ................................................................................................................................. 88 18.2 Mining Operations .................................................................................................................................. 91 18.3 Pit Design .............................................................................................................................................. 91 18.4 Mining Infrastructure .............................................................................................................................. 94 18.5 Mine Operating Costs .......................................................................................................................... 106 18.6 Site Infrastructure ................................................................................................................................ 107 18.7 Environmental Considerations ............................................................................................................. 115 18.8 Reclamation and Closure .................................................................................................................... 119 18.9 Capital Costs ....................................................................................................................................... 124 18.10 Operating Costs ................................................................................................................................... 133 18.11 Financial Analysis ................................................................................................................................ 146

19.0 Interpretations, Conclusions and Recommendations .................................................................... 156 19.1 Interpretations and Conclusion ............................................................................................................ 156 19.2 Recommendations ............................................................................................................................... 156 19.3 Risks .................................................................................................................................................... 161 19.4 Opportunities ....................................................................................................................................... 162

20.0 References ......................................................................................................................................... 163 21.0 Date and Signature Page .................................................................................................................. 165



List of Figures Figure 1 : Location of the Tujuh Bukit Project, Banyuwangi, East Java, Indonesia. .................................................................... 1Figure 2 : IUP Production Operation outlined in red. Green areas are representations of areas of Protection Forest ................ 2Figure 3 : IUP Exploration outlined in red. Green areas are generalised representations of areas of Protection Forest. ........... 2Figure 4: Lithology of the Tumpangpitu Prospect ........................................................................................................................ 4Figure 5: Lithology Section 11040mN at Tumpangpitu ................................................................................................................ 6Figure 6 : Soil Anomalies at Tumpangpitu ................................................................................................................................. 24Figure 7 : Aeromagnetic Survey Data ........................................................................................................................................ 25Figure 8 : Location of Collars of completed drill holes at Tumpangpitu (20th April 2011) ........................................................... 26Figure 9 : Plot of Sludge versus Core Assays ........................................................................................................................... 32Figure 10 : Gold Extraction Based on Carbon Assays Versus Days of Leach .......................................................................... 57Figure 11 : Silver Extraction Based on Carbon Assays Versus Days of Leach ......................................................................... 58Figure 12 : Cumulative Percent Gold Recovery Versus Cumulative Tonnes of Solution per Tonne of Ore .............................. 59Figure 13 : Cumulative Percent Silver Recovery Versus Cumulative Tonnes of Solution per Tonne of Ore ............................. 60Figure 14 : Heap Leaching Flowsheet ....................................................................................................................................... 64Figure 15 : Average Daily Water Balance Schematic ................................................................................................................ 74Figure 16 : Gold Grades in the Oxide Zones ............................................................................................................................. 83Figure 17 : Silver Grades in the Oxide Zones ............................................................................................................................ 84Figure 18 : Pit Design Layout - Plan View ................................................................................................................................ 92Figure 19 : Waste Disposal ........................................................................................................................................................ 94Figure 20 : Pre-Production Haul Roads and Access Roads ...................................................................................................... 95Figure 21 : Production Haul Roads and Access Roads ............................................................................................................. 96Figure 22 : End of Year 1 Pit Progress ...................................................................................................................................... 98Figure 23 : End of Year 2 Pit Progress ...................................................................................................................................... 99Figure 24 : End of Year 3 Pit Progress .................................................................................................................................... 100Figure 25 : End of Year 4 Pit Progress .................................................................................................................................... 101Figure 26 : End of Year 5 Pit Progress .................................................................................................................................... 102Figure 27 : End of Year 6 Pit Progress .................................................................................................................................... 103Figure 28 : End of Year 7 Pit Progress .................................................................................................................................... 104Figure 29 : End of Year 8 Pit Progress .................................................................................................................................... 105Figure 30 : Tujuh Bukit Project Location and Access .............................................................................................................. 107Figure 31 : Existing East Java Transmission Lines (blue: 500 kV; red: 150 kV; green: 70 kV) .............................................. 108Figure 32 : Project Development Schedule ............................................................................................................................. 148Figure 33 : Gold Price Sensitivity ............................................................................................................................................. 154Figure 34 : irr vs. Operating cost, capital cost, and recovery based on bulk recovery .......................................................... 154Figure 35 : npv @ 0% vs. Operating cost, capital cost, and recovery based on bulk recovery ............................................ 155



List of Tables Table 1: Total Inferred Resources ............................................................................................................................................... 7Table 2: Production Statistics ...................................................................................................................................................... 8Table 3: Summary of Pre-Production Capital Costs .................................................................................................................. 11Table 4 : Operating Costs .......................................................................................................................................................... 12Table 5 : Summary of Financial Results .................................................................................................................................... 12Table 6 : Units and abbreviations .............................................................................................................................................. 16Table 7 : Responsible Parties .................................................................................................................................................... 19Table 8 : Tujuh Bukit Drilling Summary ...................................................................................................................................... 23Table 9 : Core Recovery Data ................................................................................................................................................... 31Table 10 : Laboratory Methods used for Tumpangpitu Drill Core Samples ............................................................................... 35Table 11 : Performance Statistics for Internal Standards for Au ................................................................................................ 37Table 12 : Internal Blanks .......................................................................................................................................................... 38Table 13 : Field Duplicates Core and Sludge Samples ...................................................................................................... 38Table 14 : Laboratory Repeatability Summary Report (Lab Intertek) ........................................................................................ 38Table 15 : Summary Results of Metcon Test Program .............................................................................................................. 40Table 16 : Tujuh Bukit Project Composite Description and Weights .......................................................................................... 41Table 17 : Summary of KCA Test Work ..................................................................................................................................... 42Table 18 : Summary of KCA Column and Projected Field Recoveries ...................................................................................... 43Table 19 : KCA Core Photograph Category Summary .............................................................................................................. 44Table 20 : Metcon Composite Samples ..................................................................................................................................... 45Table 21 : Head Assays ............................................................................................................................................................. 46Table 22 : Comparison of Expected, Assayed, & Average Calculated Head Grades ................................................................ 46Table 23 : Metcon Baseline Cyanidation Test Summary ........................................................................................................... 47Table 24 : Effect of Higher Cyanide Concentration on Residue Grades .................................................................................... 47Table 25 : Metcon Comminution Test Summary ........................................................................................................................ 48Table 26 : Metcon Analyses of Final Leach Solutions ............................................................................................................... 48Table 27 : Head Analyses Gold and Silver ............................................................................................................................. 49Table 28 : Head Screen Analyses Gold and Silver ................................................................................................................. 50Table 29 : Summary of Bottle Roll Leach Tests Gold ............................................................................................................. 51Table 30 : Summary of Bottle Roll Leach Tests Silver ............................................................................................................ 52Table 31 : Summary of Agglomeration Test Work ..................................................................................................................... 54Table 32: Summary of Compacted Permeability Test Work ...................................................................................................... 55Table 33 : Column Leach Test Parameters ............................................................................................................................... 56Table 34 : Column Leach Test and Expected Field Recoveries ................................................................................................ 56Table 35 : Cyanide Consumption ............................................................................................................................................... 61Table 36 : Crushing Circuit Set Points ....................................................................................................................................... 66Table 37 : Rainfall Data ............................................................................................................................................................. 70Table 38 : Water Balance Average Banyuwangi Rainfall .......................................................................................................... 71Table 39 : Water Balance Wet Year Banyuwangi ...................................................................................................................... 72Table 40 : Indonesia Discharge Standards ................................................................................................................................ 73Table 41 : Projected Annual Reagents and Consumables ........................................................................................................ 76Table 42 : Raw Assay - Sorted in Decreasing Oxidation ........................................................................................................... 82Table 43 : Summary of Mineralized Domains ............................................................................................................................ 85Table 44 : Summary of Inferred Resource Estimates by Hellman & Schofield .......................................................................... 86Table 45 : Block Model Field Codes .......................................................................................................................................... 89Table 46 : Project Assumptions ................................................................................................................................................. 90Table 47 : Conceptual Mining Fleet ........................................................................................................................................... 91Table 48 : Mine Design Criteria ................................................................................................................................................. 92Table 49 : Pit Characterization ................................................................................................................................................... 94Table 50 : Annual Mine Production Schedule ............................................................................................................................ 97Table 51 : Annual Mining Costs ............................................................................................................................................... 106Table 52 : Heap Leach Power Demand Based on 24 hr/d and 75% utilization ....................................................................... 110Table 53 : Summary of Rainfall and Wind Simulation Wet Season ...................................................................................... 116Table 54 : Summary of Rainfall and Wind Simulation Dry Season ....................................................................................... 116Table 55 : Contaminant Concentrations (mg/wet kg) in Selected Coral Samples ................................................................... 117Table 56 : Concentrations of Dissolved Trace Elements in the Fresh Water and Sea Water Samples .................................. 118Table 57 : Concentrations of Trace Elements in the Sediment Samples ................................................................................. 118



Table 58 : Summary of Initial Capital Costs ............................................................................................................................. 125Table 59 : Earthwork Unit Rates .............................................................................................................................................. 127Table 60 : Buildings ................................................................................................................................................................. 128Table 61 : Field Indirect Costs ................................................................................................................................................. 130Table 62 : Summary of Capital Costs by Discipline ................................................................................................................. 132Table 63 : Estimate of Initial Fills ............................................................................................................................................. 132Table 64 : Average Unit Operating Costs Life of Mine .......................................................................................................... 134Table 65 : Tujuh Bukit Operating Cost Summary (US$/t) ........................................................................................................ 135Table 66 : Tujuh Bukit Project Staffing Levels & Salary Schedules ......................................................................................... 137Table 67 : Summary of Mine Operating Costs US$/tonne mined ......................................................................................... 139Table 68 : Processing Power and Consumption ...................................................................................................................... 140Table 69 : G&A Power Load and Consumption ....................................................................................................................... 140Table 70 : Process Consumable Items .................................................................................................................................... 141Table 71 : Support Equipment Operating Costs ...................................................................................................................... 143Table 72 : Maintenance Supplies Process Area Cost Basis ................................................................................................. 143Table 73 : Tujuh Bukit Power Consumption ............................................................................................................................. 145Table 74 : Capital Cost to Completion ..................................................................................................................................... 146Table 75 : Life-of-Mine Summary ............................................................................................................................................. 147Table 76 : General Assumptions .............................................................................................................................................. 149Table 77 : Cash Flow Analysis ................................................................................................................................................. 151

TUJUH BUKIT PRELIMINARY ECONOMIC ASSESSMENT (PEA) Page 1

KAPPES, CASSIDAY & ASSOCIATES | JUNE 2011 SECTION ONE

1.0 SUMMARY Intrepid Mines (Intrepid) commissioned Kappes, Cassiday & Associates (KCA) to prepare a Preliminary Economic Assessment (PEA) study for the Tujuh Bukit Oxide Project, located in the East Java Province, along the south coast of the island of Java, Indonesia. This project contemplates only the mining and processing of oxide and minor transition material by heap leaching. Mentions are made of ongoing exploration of the deeper sulfide material but processing of sulfide material is not considered in this report.

In addition to KCA, major contributors to the report include: Hellman and Schofield Pty Ltd., who prepared the mineral resource estimate (as detailed in the previous NI 43-101 Report on 27 January 2011); Australian Mine Design & Development Pty Ltd, who prepared the mine designs, mine costs and mine schedule; Golder Associates Pty Ltd. (Golder) who prepared several environmental baseline studies for the project; and in addition to metallurgical work by KCA, Metcon, who conducted some previous grinding based metallurgical tests.

1.1 Project Overview

This report is a study of the Tujuh Bukit Oxide Project, of which Intrepid Mines holds an 80% economic interest. Tujuh Bukit is located approximately 90 kilometers due west of the island of Bali, and 200 kilometres southeast of the city of Suyabaya, East Java, Indonesia.

Figure 1 : Location of the Tujuh Bukit Project, Banyuwangi, East Java, Indonesia.

The PEA study contemplates Life of Mine production in the order of 1.29 million ounces of gold and 10.5 million ounces of silver in 57 million tonnes of heap feed material. The 63 million tonnes of waste to be mined results in a heap feed to waste ratio of 1:1.1. Metallurgical testing has demonstrated the project is amenable to cyanidation using heap leaching with projected field recoveries of 86% for gold and 17% for silver for the oxide zones and 72% of the gold and 31% of the silver for the transition Zone A.



1.2 Property Description, Ownership & Location

The Tujuh Bukit Project comprises two adjoining IUPs (Izin Usaha Pentambangan, or Business License) an IUP Exploration of 6,623.45 hectares and an IUP Production Operation of 4,998 hectares. These IUPs were granted to PT. Indo Multi Niaga (IMN) on 25 January 2010 under decree number 185/05/KP/429.012/2007. Intrepid Mines and PT IMN have signed a joint venture agreement enabling Intrepid to hold an 80% economic interest in the Tujuh Bukit Project.

Figure 2 : IUP Production Operation outlined in red. Green areas are representations of areas of Protection Forest

Figure 3 : IUP Exploration outlined in red. Green areas are generalised representations of areas of Protection Forest.



The property is located approximately 205 kilometers southeast of Surabaya, the capital of the province of East Java, Indonesia and 60 kilometers southwest of the regional center of Banyuwangi. The property is centered near 8 35 20.6 S and 114 01 08 N and is bound within UTM co-ordinates 163,000-179,000 E and 9042000-9055000 N.

Surface rights in the area are held by the Department of Forestry and include farmland, production forests, protected forest areas, and some villages. The villages are located within the IUP area but not in any of the areas identified for exploration at this point. The IUPs require annual rent payments and submissions of quarterly reports regarding the companys activities on the tenement to the regional government. The tenement boundaries were located with GPS coordinates and the boundary of the tenements has subsequently been surveyed and marked with concrete pegs.

The main mineralized prospect, Tumpangpitu, is located in the southeast corner of the tenement and covers an area of about 3 by 2 kilometers and is now referred to as Tujuh Bukit, the subject of this study.

1.3 Geology

The Tujuh Bukit project lies on the south coast of East Java, within the central portion of the Sunda-Banda magmatic arc which trends southeast from northern Sumatra to west Java then eastward through east Java, Bali, Lombok, Sumbawa and Flores. The Sunda-Banda arc comprises both Miocene to Quaternary volcanics.

The Tujuh Bukit project is located near the southeast margin of a ~50-km wide annular zone interpreted to represent the relics of a former andesitic stratovolcanic center.

1.3.2 Local Geology

A lithology map identifies a dominantly diorite and microdiorite substrate intruded by extensive granodiorite bodies east of the project area and by smaller quartz-diorite bodies in and around Tumpangpitu. The figure below shows the lithology of the Tumpangpitu prospect region These mapped sequences comprise volcanic breccias of the Batuampar Formation and more abundant Batuan Intrusives.



Figure 4: Lithology of the Tumpangpitu Prospect

1.3.3 Deposit Geology

The Tumpangpitu deposit comprises a high-sulfidation Cu-Au-Ag epithermal system that is telescoped onto a large underlying and Au-rich porphyry Cu-Au-Mo system.

In general terms, the overall mineralizing system broadly comprises a deep, magnetic tonalite intrusion into an older and more extensive feldspar-hornblende diorite stock. This older diorite intrusion has in turn intruded a cover sequence of lithic and crystal-lithic volcanic breccias at shallow levels of the deposit. These volcaniclastic tuffs and breccias conformably overlie a sequence of sediments that are partly constrained to dip inward towards the tonalitic intrusive center.

The interface between the tonalite stock, interpreted to be the progenitor of porphyry ore, and the overlying intrusive and extrusive country rocks is characterized by the presence of one or more extensive diatreme breccias bodies and numerous smaller hydrothermal breccias bodies.

The high-sulfidation epithermal component of the Tumpangpitu mineralizing system can be divided into four sub-types based on oxidation intensity, metal grade and metal suite.

Completely oxidized high-sulfidation ore (Au-Ag strongly enriched; Cu severely leached). Partially oxidized high-sulfidation mineralization (Au-Ag +/- Cu; Cu is strongly leached).



Unoxidized but low-grade high-sulfidation mineralization (Au-Ag-Cu). Au-Ag grade is significantly lower than the overlying oxide component.

Unoxidized but higher-grade high-sulfidation mineralization (Au-Ag-Cu) in deeper structural conduits and proximal to inferred upflow zones.

Porphyry Cu-Au-Mo mineralization occurs within a carapace or shell of magnetite, quartzmagnetite and quartz vein stockwork that occurs within and around the periphery of the tonalite intrusion, overprinting both the outer margins of the intrusion as well as the proximal country rock.

This mineralization occurs dominantly within areas characterized byphyllic overprint of potassic alteration and lesser areas of potassic alteration within the tonalite intrusion.

1.3.3.1 High-Sulfidation Oxide Mineralization

The oxide mineralization at Tumpangpitu occurs on topographic ridges, in close association with Au and Ag soil anomalies. This oxide mineralization occurs in a series of pods or pockets that are labelled as Zones A through F. These pods of oxide mineralization have two gross forms:

1. As tabular dipping shelves or ledges of mineralized and advanced argillic altered lithic tuff and hydrothermal breccia (Zones C and A). At Zone A these mineralized zones dip moderately to the southwest. At Zone C these mineralized zones dip moderately to the northwest.

2. As steep structurally controlled loads that are best defined in the Zone B area. At Zone B these mineralized zones strike north-south and dip steeply to the east.

Two surfaces are defined from logging of oxidation through the upper high-sulfidation portion of the deposit, Base of Complete Oxidation (BOCO) and Base of Semi-Oxidation (BOSO).

At Zones A and C, for the most part, these surfaces are relatively smooth and plunge deeply but smoothly beneath the ridge tops to depths of between 50 and 300m below surface. The mineralized dipping silica ledges described above are highly fractured and sulfide-rich, so oxidation appears to extend pervasively down into these ledges.

In contrast, at Zone B where the mineralized structures are narrower and very steep, the BOCO and BOSO surfaces have complex and high relief morphologies, yielding very complex oxidation surfaces, with islands of transitional material lying above BOCO and islands of oxidized material lying below BOCO.

The orientation of high-sulfidation mineralization (oxide + sulfide) at Zones E and F await further drilling to improve cross-section resolution.

The character of oxide mineralization was described in detail in the reports by H&S (2008 & 2009). Au and Ag is enriched in intervals of core that exhibit increased degrees of oxidation as well as increased intensity of sulfide fracture networks, to the degree that visual inspection of the core can provide a qualitative estimate of likely Au grade (low, medium, high).

Mineralization in the oxide zone mimics the form and distribution of mineralization in the underlying HS-sulfide zone except that it has an oxidation overprint which has upgraded Au and Ag grades.

Mineralized intervals of core tend to be tens to locally hundreds of meters thick. The intersected thickness is believed to be close to true thickness at Zone C since drilling was perpendicular to the NE-dipping ledge. At Zone A, mineralization is thought to dip in the same direction as the larger fraction of the holes (i.e. towards the southwest), however because of the continuity of mineralization between holes and the style of mineralization



(widely dispersed fracture networks within a deep and extensive oxidation zone), the intersected widths are likely to be close to the true widths. Detailed resolution of the dip and geometry of these wide fracture networks, both in the oxide and sulfide HS zones, awaits further infill drilling.

1.3.3.2 High-Sulfidation Sulfide Mineralization

As described above for the oxide zone, advanced argillic alteration at Zones A and C forms extensive and thick silica ledges which dip to the SW and NE respectively, and appear to emanate or flare upward, away from the deep porphyry tonalite core that is centered at depth below Zones A and C. These ledges are zoned perpendicular to their dip, with cores of silica and silica-alunite that zone outward to silica-alunite-clay, silica-clay, clay-silica, clay-chlorite and finally in distal areas to propylitic alteration, typical of high-sulfidation systems where neutralization of acid fluids is the dominant control on alteration patterns.

The figure below shows the strongly mineralized porphyry stockwork shell is about 800 meters wide on section and about 200 meter in vertical width around the carapace of the tonalite intrusion. The green outline is the estimated 0.1% Cu grade boundary, the upper half of which comprises high-sulfi dation sulfide mineralization.

Figure 5: Lithology Section 11040mN at Tumpangpitu

1.4 Resource Estimate

Interpreted alteration zones were used in conjunction with distribution of grades to define ten mineralized domains. A block model was constructed. The block model extents were chosen to cover the mineralized domains. As drilling is currently inadequate to define indicated or measured resources, an Inferred Resource Estimate at various gold grades is presented below.



Table 1: Total Inferred Resources

Total Inferred Resource Cut-Off

(Au) Tonnage

(Mt) Au

(g/t) Ag

(g/t) M Oz

Au M Oz

Ag 0.2 130 0.55 18 2.4 80 0.3 85 0.74 21 2 55 0.4 60 91 23 1.7 45 0.5 45 1.06 24 1.5 35

0.75 25 1.39 27 1.1 20 1 15 1.69 29 0.9 15

Oxide Zone Inferred Resource Cut-Off

(Au) Tonnage

(Mt) Au

(g/t) Ag

(g/t) M Oz

Au M Oz

Au 0.2 95 0.61 17 1.9 50 0.3 65 0.79 20 1.6 40 0.4 45 0.95 22 1.4 35 0.5 35 1.09 24 1.3 30

0.75 20 1.42 27 1 20 1 15 1.71 30 0.8 15

Transition Zone Inferred Resource Cut-Off

(Au) Tonnage

(Mt) Au

(g/t) Ag

(g/t) M Oz

Au M Oz

Au 0.20 40 0.42 20 0.5 25 0.30 20 0.57 33 0.4 15 0.40 10 0.74 27 0.3 10 0.50 7 0.91 28 0.2 10 0.75 4 1.24 27 0.1 5 1.00 2 1.53 27 0.1 0

Notes :

1. Rounding as required by reporting guidelines may result in apparent differences between tonnes, grade and contained metal content.

2. Tonnage and grade measurements are in metric units. Ounces are reported as troy ounes.

1.5 Mining and Optimized Mine Plan from Inferred Resource

The Tujuh Bukit Heap Leach Project is planned as an open-pit gold operation processing 20,000 t/d of oxide material. A total of up to 17.4 million tonnes of material (heap feed and waste) are scheduled to be mined per year with an average strip ratio of 1:1.1. Use of industry-proven mining practices and equipment are planned. The capital costs are developed assuming contractor mining with all new equipment maintained under maintenance and repair contracts (MARC) with the vendors. It is assumed that management of explosives will be performed by a sub contractor.

The overall mineral resource, as described by Hellman and Schofield, is the basis for the pit optimization, mine design and production schedule developed by Australian Mine Design & Development Pty Ltd, which is discussed in detail in the mining chapters of Section 18.



Mining costs include management, supervisory and mining technical staff salaries and overheads and the costs of drilling, blasting, loading, hauling, ancillary and support activities.

Contractor mining is assumed, where the cost estimation for the contractor mining has been derived by AMDAD using the following methodology:

Mining equipment costs include ownership costs and hourly operating costs. Ownership costs are modelled by assuming rolling leases for each item, with the capital cost repaid quarterly, plus a lease rate of 10%. An additional margin of 20% is applied to the total operating and ownership costs to arrive at an estimate of total contract mining costs.

1.6 Metallurgy

Metallurgical testing of the potentially economic material from the Tujuh Bukit project has been conducted by Metcon and KCA. Testing has demonstrated that metallurgical recovery is amenable to heap leach recovery techniques with gold estimated field recovery of 86% on oxide material and 72% on transition material. Silver recovery is lower, with estimated field recovery of 17% on the oxide and 31% on transition material.

Table 2: Production Statistics

Item Recovery Recoverable Ounces Metal Oxide Heap Feed (Mt) 52 Mt Oxide Gold Grade 0.84 g/t 86% 1.2 M oz Au Oxide Silver Grade 22.8 g/t 17% 7.2 M oz Ag Transition Heap Feed (Mt) 5 Mt Transition Gold Grade 0.70 g/t 72% 0.1 M oz Au Transition Silver Grade 28.1 g/t 31% 1.4 M oz Ag

Total Heap Feed Tonnes 57 Mt Total Gold Grade 0.83 g/t 84% 1.3 M oz Au Total Silver Grade 23.5 g/t 18% 8.6 M oz Ag

Cyanide consumption is estimated to be 0.49 kg/t, and cement for agglomeration is estimated to be 4.5 kg/t. The cement is conservatively estimated as many tests show little or no cement required depending on clay content. Metallurgy is discussed in detail in Section 16.

1.7 Process Description

Mining will take place at a rate of 20,000 heap feed tonnes per day. Material for processing will be delivered and direct dumped to a modular-style 3-stage crushing plant nearby the pit. The targeted product size will be 100% passing 20 mm. The crushed material will be transported three kilometers via an overland conveying system to the two agglomeration drums. Cement and barren solution will be added to the material at the drums. The agglomeration drums discharge to a mobile stacking system (grass-hopper field conveyors and a mobile radial stacker). The material will be stacked on the leach pad in 10 meter lifts and irrigated for 90 days with dilute cyanide solution using sprinklers on top and dripper tubes on the side-slopes. A total of ten 10 meter lifts are planned for a maximum heap height of 100 meters in the deepest part of the heap. After percolation through the



material, gold and silver bearing solutions collect on an HDPE plastic liner and are channeled to a pregnant solution collection pond and pumped to a Merrill Crowe plant. Zinc dust is used to precipitate the gold and silver as precious metals sludge. The precipitate is dried and smelted into dore bars onsite. The reader is referred to Section 16 for additional process details.

1.8 Infrastructure

Power for the project will be supplied via a new installation of a 31 km long, 20 kV powerline. This line connects to an existing 150 kV line to the North. It is assumed that sufficient capacity will continue to exist to support the project as the project progresses. Back-up generators will provide power to only the solution circuits in the event of power outages.

Process water will be supplied with a combination of stored rainfall, groundwater wells, and seawater as required. Dedicated fire water will be stored in reserve for emergencies. Waste water treatment facilities, diesel fuel, and gasoline storage facilities will be constructed. External voice and data communications will be supplied through a dedicated satellite system.

Site buildings will include:

Administration Building Mine Shop Refinery Process Warehouse and Workshop Process Offices Locker Rooms Crusher Maintenance Workshop Merrill-Crowe Shed roof only Reagent Storage Area Shed roof only

A man camp is also included, for first use as a construction camp, and later portions of it can be maintained as a permanent camp.

Further details of the infrastructure are described in Section 18.

1.9 Environmental and Permitting The operation is designed to comply with Indonesian environmental requirements, Intrepid Mines corporate environmental policy, and industry best practice standards. Golder and URS have documented most environmental conditions and permit requirements for the project. Section 18 contains commentary on studies to date regarding environmental baselines. In general, regarding mining and large heap leach projects, there are four negative environmental aspects that have a high relevance to public perception:

1. The use of cyanide and the perceived potential to contaminate water resources. 2. The overall impact on the landscape created by the mine and leach facilities. 3. The generation of dust from the mine and process.



4. The potential for acid generation from the pits, waste dumps, and leach pad capable of contaminating surface or groundwater.

Conversely, there are three potentially positive aspects to perception, which are:

1. The generation of employment. 2. The generation of improved services to the communities. 3. The overall economic benefits to the communities.

With due care in the design, construction, operation, monitoring, and closure of the project, as well as judicious management of community expectations it is believed that all of the identified environmental and social risks can be mitigated. Environmental and reclamation requirements are discussed in detail in Section 18.

1.10 Reclamation and Closure Reclamation and closure will include removing the buildings, power lines, pipe lines and process components, securing the pit and waste dumps, assuring the spent leach pad and tailings storage facility are chemically and structurally stabilized, and returning the area to its previous land use. Portions of the reclamation and closure work will be completed concurrently with operations.

1.11 Capital Costs

Pre-production capital cost details are presented in Section 18 and are summarized below. All costs are in fourth quarter 2010 US dollars. Capital costs based on the design outlined in this report are considered to have accuracy of +/- 30%.

The capital costs include a contingency of 20%.



Table 3: Summary of Pre-Production Capital Costs

Plant Totals Direct Costs Total Supply Cost ($M) Install ($M)

Grand Total ($M)

Area 00 - Site & Utilities General 1.2 1.2 2.4

Area 03 Camp 1.9 0.2 2.1

Area 05 - Water Supply & Distribution 0.7 0.1 0.8

Area 06 - Process Area General 0.2 0.1 0.3

Area 08 - Mobile Equipment 1.5 0.1 1.5

Area 10 - Crushing 13.9 2.8 16.6

Area 15 Heap Feed Reclaim and Stacking 23.4 1.9 25.3

Area 20 - Heap Leach and Solution Handling 3.5 28.2 31.6Area 25 - Merrill Crowe 5.4 1.0 6.4

Area 35 - Refining 1.4 0.1 1.6

Area 45 - Detoxification 0.7 0.1 0.8

Area 50 - Electrical 1.7 0.2 1.9

Area 70 - Reagents 0.5 0.1 0.5

Area 75 - Laboratory 1.2 0.1 1.4

Area 80 - Ancillaries 6.3 1.0 7.3

Plant Total Direct Costs 63.5 44.9 100.5

Spare Parts 2.5 2.5

Contingency 21.7 21.7

Plant Total Direct Costs with Contingency 124.8

Indirect Field Costs 3.5

Indirect Field Costs Contingency 0.7

Plant Total Indirect Costs 4.2

Initial Fills 1.0

Owners Costs 20.0

EPCM 16.4

Sub Total Plant Cost 166.4

Working Capital 60 Days 13.0

Pre-Production Mining Provision 6.5

Contractor Mobilization Provision 1.0

Total Pre-Production Capital Costs 186.9

VAT (Pre-Production Capital Costs) 16.7

Total (Pre-Production Capital Costs inc VAT) 203.6



1.12 Operating Costs

Operating costs details are provided in Section 18. The table below summarizes the estimated project operating costs. Operating costs are estimated to have an accuracy of +/- 30%.

Table 4 : Operating Costs

Area Unit Cost ($/heap feed tonne) Labor 0.499 Crushing and Stacking 1.237 Leaching 0.165 Merrill-Crowe Plant 0.177 Refinery 0.075 Reagents 1.938 Water Distribution 0.028 Laboratory 0.088 Support 0.072 Total Processing 4.279 G&A 0.800 Mining Cost (Contractor Mining) 5.76 Total 10.84

1.13 Financial Analysis

The Table below is a summary of financial results. The complete financial analysis is presented in Section 18.

Table 5 : Summary of Financial Results

Financial Summary Long-term gold price per ounce $1,050 $1,450 Long-term silver price per ounce $16.50 $38.00 NPV - after tax @ 0% (Million) $445 $942 NPV - after tax @ 10% (Million) $180 $446 Payback (years) 3.03 2.70 Mine Life (years) 9 9

1.14 Project Development Schedule

Project development is expected to require 17 months for engineering and construction. During the construction period, modular tent-style housing will be provided for the estimated 456 construction workers.

A jetty/receiving port will be constructed to receive equipment and construction components. The power line will be constructed. Pioneering work on the pits and pre-production haul roads will be constructed. The administration, mine shop and other ancillary buildings will be constructed. The first phase of the leach pad and process ponds will be built. The crushing and recovery plant will be installed. It is estimated that once the mining operation begins delivering material to the operating crusher, dore metal production could be within four months.



1.15 Recommendations, Risks and Opportunities

No fatal flaws have been discovered in the project evaluation to date. Recommendations primarily involve additional detail with respect to resources, operations, permitting and Indonesian business protocols and regulations.

A number of opportunities have been identified for further evaluation during the next stage of feasibility.

The recommendations, risks and opportunities are more fully discussed in Section 19, and are summarized below.

1.15.1 Recommendations

After completing this PEA and the associated technical and economic review of the project, recommendations are made for additional review of the following topics:

Complete drilling sufficient to convert inferred resources to measured and indicated resources; Column testing on materials that are near average mine grades; Metallurgical testing and process testing using seawater; The need for agglomeration; Determine the crushing index; Testing for mercury in the heap feed material; Collect additional site information for the water balance; Design a solution neutralization system; Full review of permit requirements; Tsunami studies; Detailed closure plan; Review and augmentation of baseline environmental studies; Continued exploration for groundwater; Additional geotechnical drilling; Earthwork contractor costs; Cyanide delivery systems; Project consumables specifics; Seaport scale and timing of construction review.

1.15.2 Risks

At the present stage of evaluation of the Tujuh Bukit Project a number of risks have been identified. It is believed that most of these can be mitigated through additional metallurgical testing, further design work and advancing negotiations regarding power, water and permits. The primary risks include:

Power availability and cost; Water balance;



Tsunami design; Solution containment; Acid rock drainage; Permitting risks; Community relations.

1.15.3 Opportunities

The Tujuh Bukit Project has numerous opportunities to evaluate. These include:

Potential to increase overall processing rate and refinement of operating costs; Earthworks optimizations, considering mine scheduling and owner vs. contractor mining costs; Value engineering of facilities, and consideration of regenerative motors on the downhill conveyors.

The results of the PEA indicate that at a gold price of $1,050 per ounce the Tujuh Bukit heap leach concept is a robust project worthy of investment and warrants continued studies to a feasibility level.


KAPPES, CASSIDAY & ASSOCIATES | JUNE 2011 SECTION TWO

2.0 INTRODUCTION Kappes Cassiday and Associates (KCA) was commissioned by Intrepid Mines Ltd (Intrepid) to provide an independent Qualified Persons Technical Report for the Tujuh Bukit Oxide Project located in East Java, Indonesia.

The report has been prepared in compliance with National Instrument NI 43-101, Standards of Disclosure for Mineral Projects and documents the results of a Preliminary Economic Assessment on the project in 2010 and early 2011.

The purpose of the preliminary economic assessment and this report was to determine the viability of progressing the Tujuh Bukit Oxide Project to the pre-feasibility study stage. The results of the preliminary economic assessment of the Project are encouraging and warrant the progression of the Tujuh Bukit Project to the pre-feasibility study stage. The assessment has met its original objective.

2.1 Qualified Persons

The Qualified Persons (QPs), as defined in NI 43-101 and in compliance with Form 43-101F1 (the Technical Report), responsible for the preparation of the technical report include:

Daniel Kappes, PEng, Kappes Cassiday and Associates, President of KCA and Project Manager Tujuh Bukit Oxide Preliminary Economic Assessment

Dr Phillip Hellman, FAIG, Hellman and Schofield, Director of H&S, Mineral Resources Peter Allen, MAusIMM, Australian Mine Design and Development Pty Ltd., Senior Geologist, Mine

Planning, Mine Costs, Mine Scheduling

Daniel Kappes visited the property in December 2010, and inspected drill core, orebody location, possible infrastructure locations, conditions of local access and met with project staff and other consultants.

Phillip Hellman has visited the property on several occasions since November 2007. The latest visit was in December 2010 where Dr Hellman observed drilling activities, drill core and participated with on-site discussions with staff.

Peter Allen visited the property in December 2010, and inspected drill core, orebody location, possible infrastructure locations, conditions of local access and met with project staff and other consultants.

2.2 Effective Dates

Two effective dates are appropriate for this report, as shown below;

Effective Date of the Mineral Resources 27 January 2011; Effective Date of the Preliminary Economic Assessment 1 June 2011.



2.3 Units and Abbreviations

All costs are in United States dollars. Units of measurement are metric. Only common and standard abbreviations were used wherever possible. A list of abbreviations used is as follows:

Table 6 : Units and abbreviations Measurement Description Distances: mm millimeter cm centimeter m meter km kilometer Areas: m2 or sqm square meter ha hectare km2 square kilometer Weights: oz troy ounces Koz 1,000 troy ounces g grams; kg kilograms T or t tonne (1000 kg) Kt 1,000 tonnes Mt 1,000,000 tonnes Time: min minute h or hr hour op hr operating hour d day yr - year Volume/Flow: m3 or cu m cubic meter m3/h cubic meters per hour Assay/Grade: gpt or g/t grams per tonne ppm parts per million; ppb - parts per billion Other: TPD or tpd tonnes per day m3/h/m2 cubic meters per hour per square meter kWh kilowatt hour Au gold Ag silver Cu copper AuEq gold equivalent US$ or $ - United States dollar ASL Above Sea Level



2.4 Project Background

The project area was first explored by PT. Hakman Platina Metalindo and its JV partner, Golden Valley Mines of Australia. Golden Valley Mines identified the potential of the area as a prospective target for porphyry copper type mineralization following a regional drainage and rock-chip geochemical sampling program conducted during 1997 and 1998.

Subsequently, a rapid detailed surface geochemical sampling program was conducted resulting in seven targets being identified for drilling. An initial drilling program of 5 diamond drill holes was conducted during 1999.

In February 2000 Placer Dome Inc. (Placer) entered into a Joint Venture with Golden Valley Mines (GVM) to earn 51% of the project and assumed operational control of the exploration program. A total of 32.75 kilometers geochemical and IP grids were completed during 2000.

Strong correlation between the near-surface resistivity anomalies and outcropping vuggy silica zones was observed in the IP results. Deeper chargeability anomalies (>200-400 m below surface) were recorded in the northern portion of the grid. Placer targeted the shallow resistivity anomalies with a further 10 diamond drill holes.

There is no report or record of further work being conducted on the project by Placer-GVM and the area became vacant by the time PT IMN applied for a KP General Survey in 2006 over the project area.

During 2006 Hellman and Schofield Pty assisted a previous Joint Venture of PT IMN with an Australian company in assembling exploration data and designing a drilling program aimed at advancing the prospect in order to report resource estimates according to the JORC Code and Guidelines.

During 2007 a Term Sheet was signed between Emperor Mines Ltd. (later to become Intrepid Mines Ltd. through the merger of Emperor Mines and Intrepid Mines) and PT IMN and IndoAust Pty. Ltd., which was followed by an Alliance Agreement between Emperor Mines Ltd, and PT IMN in April 2008. Drilling on the project by PT IMN and Intrepid Mines commenced in September 2007.

Additional historical drill hole assays became available during 2007 enabling a slightly more objective view of the geological potential. The September 2007 Hellman & Schofield study of Geological Potential used ordinary block kriging of 2m composited AuEq data within polygon extrusions.

At the present time the project comprises:

An undeveloped oxide gold/ silver deposit An undeveloped deep sulfide Copper/Gold/Molybdenum deposit An exploration camp with little other permanent infrastructure

Intrepid has carried out five phases of diamond drilling at the Tujuh Bukit property, from September 2007 and is continuing to drill as at the date of this report.

Intrepid has advanced study of the oxide portion of the project with metallurgical testing by Metcon (milling extraction testwork), and later at KCA for detailed heap leaching testwork.

Due to the relatively small incremental gold recoveries seen between the heap leach testwork and milling extraction testwork, this PEA does not examine a grinding scenario, and only evaluates a 7.1 Mtpa crushing / agglomeration and heap leaching project.



2.5 Scope of Work

Intrepid Mines Ltd. commissioned KCA to evaluate the heap leach process for the Tujuh Bukit project to Preliminary Economic Assessment (PEA) standards. In this PEA the processing details are refined sufficiently to be used as the basis for preparation of a Prefeasibility Study (PFS). The PEA is led by KCA and incorporates work from other groups including major contributors Australian Mine Design and Development (AMDAD) and Hellman and Schofield Pty Ltd (H&S).

The PEA presents:

Information from others to give a complete review of all parts of the project; Project design criteria; Preliminary site plans, showing all roads, buildings, facilities, access road; Preliminary drawings including flow sheets and GAs; Preliminary estimate of overall site power requirements based on similar operations; List of major equipment; Cost estimate within a 30% cost range subject to further study to resolve unknowns which will be

identified in the PEA, for: Capital costs; including Owners costs and working capital; Operating costs.

It should be noted that quotes have been obtained for most of the major equipment and infrastructure items and other major capital such as earthworks. The PEA is intended to provide a view of potential project economics and to give guidance for future metallurgical testing, project design and feasibility.


KAPPES, CASSIDAY & ASSOCIATES | JUNE 2011 SECTION THREE

3.0 RELIANCE ON OTHER EXPERTS AND CAUTIONARY NOTES

3.1 Reliance on Other Experts

This report was prepared by Kappes, Cassiday & Associates (KCA) as a preliminary economic assessment (PEA) for Intrepid Mines Ltd. (Intrepid Mines). The information, conclusions, and estimates contained in this report are consistent with the level of effort and quality involved in KCA services, based on the information available at the time of preparation, the data supplied by outside sources, and the assumptions, conditions, and qualifications set forth in this report.

This report is intended for use by Intrepid Mines subject to the terms and conditions of its contract with KCA. Any other uses of this report by any third party are at that partys sole risk.

KCA has taken all reasonable care in producing the information contained in this report. No inferences or conclusions should be drawn from reading any one section or part of this report.

The information in this report is not a substitute for independent professional advice before making any investment decisions.

Furthermore, any information contained in this report may not be modified without permission from Kappes, Cassiday and Associates. General information and data in this report were derived from many sources including qualified person/consultants and non- QP sources including the Intrepid Mines staff and the authors of and contributors to previous reports prepared on their behalf.

The following list outlines the various contributors to this report that assisted KCA and their respective responsibilities. The list also includes other groups that provided support studies that are referenced within the report and included within the appendices.

Table 7 : Responsible Parties

Metcon Metallurgy with respect to mill and CIL leaching testwork, Section 16, particularly with regards to pre-KCA testwork.

Hellman & Schofield Pty Ltd. Property location, history, geology, mineralization, exploration, resources and reserves. Sections 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, and 18 were taken from previous H&S reports on the project.

Australian Mine Design and Development Pty Ltd

Mining capital and operating costs Mining Section 18

PT Intertech Utama Services Preliminary Flora and Fauna Environmental Section

Golder Associates Aquatic baseline, environmental baseline

Dr Phillip Hellman is the Qualified Person for sections 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15 and 17 of this report is an Independent Qualified Person and has relied on various datasets and reports that were provided by Intrepid Mines, and project consultants to support the interpretation of exploration results discussed in this report on mineral resources. The data that was provided to Dr Hellman was deemed to be in good stead, and is considered to be reliable. Dr Hellman is not aware of any critical data that has been omitted so as to be detrimental to the


KAPPES, CASSIDAY & ASSOCIATES | JUNE 2011 SECTION THREE

objectives of this report. There was sufficient data provided to enable credible and well constrained interpretations to be made in respect of data. Assay data is handled by an independent database bureau that receives electronic results directly from the laboratory. The data is then directly transferred to Dr Hellman.

Intrepid advises that there is no knowledge of any environmental liabilities associated with the project. A permit is required to conduct exploration activities within areas of protected and production forest and these have been issued by the Department of Forestry for work on this project.

Statements regarding tenement status, legal right to mine and explore, environmental liability have been accepted in good faith from Intrepid and are outside the expertise of Hellman & Schofield Pty Ltd or Kappes Cassiday and Associates.

The Indonesian Forestry Law restricts non forestry activities within protected forests and prohibits mining using an open pit method in protected forest areas. The area of the Zone A, Zone B and Zone C oxide resource estimate areas and the mining areas contemplated by the Preliminary Economic Assessment fall within a protected forest area. Intrepids Alliance partner, PT IMN, is working with relevant Indonesian authorities regarding a potential review of forest land status. There is no assurance that the forestry reclassification will take place in this instance.

3.2 Cautionary Notes

This preliminary economic assessment is preliminary in nature and includes inferred mineral resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves, and there is no certainty that the preliminary assessment will be realized. Actual results may differ significantly.

Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability.

Due to the uncertainty that may be attached to Inferred Mineral Resources, it cannot be assumed that all or any part of an Inferred Mineral Resource will be upgraded to an Indicated or Measured Mineral Resource as a result of continued exploration. Confidence in the estimate is insufficient to allow meaningful application of the technical and economic parameters to enable an evaluation of economic viability worthy of public disclosure, except in the case of the preliminary economic assessment. Inferred Mineral Resources are excluded from estimates forming the basis of a feasibility study.


KAPPES, CASSIDAY & ASSOCIATES | JUNE 2011 SECTIONS FOUR TO NINE

4.0 PROPERTY DESCRIPTION AND LOCATION The property description and location of the Tujuh Bukit project is as stated in the Report on Mineral Resources by Phillip L. Hellman, BSC (Hons 1), Dip Ed, PhD, MGSA, MAEG, FAIG, dated January 27 2011, which is filed on SEDAR.

5.0 ACCESSIBILITY, CLIMATE, LOCAL RESOURCES, AND PHYSIOGRAPHY The accessibility, climate, local resources and physiography of the Tujuh Bukit project is as stated in the Report on Mineral Resources by Phillip L. Hellman, BSC (Hons 1), Dip Ed, PhD, MGSA, MAEG, FAIG, dated January 27 2011, which is filed on SEDAR.

6.0 HISTORY The history of exploration at the Tujuh Bukit project is as stated in the Report on Mineral Resources by Phillip L. Hellman, BSC (Hons 1), Dip Ed, PhD, MGSA, MAEG, FAIG, dated January 27 2011, which is filed on SEDAR.

7.0 GEOLOGICAL SETTING The geological setting of the Tujuh Bukit project remains as stated in the Report on Mineral Resources by Phillip L. Hellman, BSC (Hons 1), Dip Ed, PhD, MGSA, MAEG, FAIG, dated January 27 2011, which is filed on SEDAR.

8.0 DEPOSIT TYPES The deposit type of the Tujuh Bukit project remains as stated in the Report on Mineral Resources by Phillip L. Hellman, BSC (Hons 1), Dip Ed, PhD, MGSA, MAEG, FAIG, dated January 27 2011, which is filed on SEDAR.

9.0 MINERALIZATION The mineralization of the Tujuh Bukit project remains as stated in the Report on Mineral Resources by Phillip L. Hellman, BSC (Hons 1), Dip Ed, PhD, MGSA, MAEG, FAIG, dated January 27 2011, which is filed on SEDAR.


KAPPES, CASSIDAY & ASSOCIATES | JUNE 2011 SECTION TEN

10.0 EXPLORATION This section is a summary of the same NI 43-101 item from the Report on Mineral Resources by Phillip L. Hellman, BSC (Hons 1), Dip Ed, PhD, MGSA, MAEG, FAIG, dated January 27 2011, which is filed on SEDAR.

10.1 Historical Exploration

The project area was first explored by PT Hakman Platina Metalindo and its JV partner, Golden Valley Mines of Australia. Golden Valley Mines identified the potential of the Tumpangpitu and Salakan areas as prospective targets for porphyry copper type mineralization following a regional (1:50,000) drainage and rock-chip geochemical sampling program conducted during December 1997 to May 1998. Subsequently, a rapid detailed surface geochemical sampling program was conducted over Gunung Tumpangpitu resulting in seven targets being identified for drilling. An initial drilling program of 5 diamond drill holes GT-001 to GT-005 was conducted during March to June 1999.

In February 2000 Placer Dome Inc. (Placer) entered into a Joint Venture with Golden Valley Mines to earn 51% of the project and assumed operational control of the exploration program. In order to better define targets for follow-up drilling on Tumpangpitu 32.75 kilometers of grid-based geochemical and IP surveys were completed between April and May 2000. Anomalous bedrock geochemistry demonstrated marked consistency with prominent ridges or topographic highs, trending to the northwest, consisting dominantly of vuggy silica altered breccia.

The results of the IP survey demonstrated strong correlation between the near-surface resistivity anomalies and the outcropping vuggy silica zones. Deeper chargeability anomalies (>200-400 m below surface) were recorded in the northern portion of the grid. Placer targeted the shallow resistivity anomalies for high sulfidation style Au-Ag mineralization with a further 10 diamond drill holes GT-006 to GT-014.

On the basis of the results from the second drilling program a further 14 holes were designed (2,700m). However, Placer withdrew from the project possibly due to the combined influences of the relatively low metal prices at the time (i.e., the project did not appear to meet corporate thresholds of size and grade) together with an unstable economic and political climate across much of south-east Asia (the Asian Financial Crisis). There is no report or record of further work being conducted on the project by Placer-GVM and the area became vacant by the time PT IMN applied for a KP General Survey in 2006 over the project area.

In June 2006 Hellman and Schofield Pty Ltd assisted a previous Joint Venture of PT IMN with an Australian company in assembling exploration data and designing a drilling program aimed at advancing the Tumpangpitu prospect in order to report resource estimates according to the JORC Code and Guidelines.

H&S were able to provide an indication of Potential Mineralization within the variably oxidized gold-silver enriched zone above the deeper copper mineralization by using the limited available drilling data along with soil sample geochemical results. This study suggested that approximately 3m oz Au Equivalent (AuEq was based on $650/Oz Au and $10/Oz Ag) was a reasonable amalgamated target size in oxide Zones A, B & C. This oxidized gold-silver enriched zone is the subject of this PEA.



10.2 Recent Exploration (2006-2010)

Since involvement of PT IMN in the Tujuh Bukit project (2006-2010) and the involvement of Intrepid Mines (formerly Emperor Mines Ltd) in 2007-2010, the following exploration programs have been undertaken over the Tumpangpitu prospect:

Re-establishment of the Tumpangpitu grid (initially established by Placer); Completion of 475 soil grid samples at a density of 200m x 25m over the Tumpangpitu prospect. The soil

samples were acquired along 17 cross-lines oriented at 050-230 magnetic. Soil samples were analyzed for Au, Cu, Pb, Zn, Ag, As, Sb, Mo and Ba;

Regional rock-chip sampling: A total of 1137 rockchip samples were collected by IMN or Intrepid Mines during the period 2006 to 2010 from the Tujuh Bukit project. These includes suites of rockchip samples collected at Tumpangpitu, Salakan, Katak, Gunung Manis and other regional areas in between these main prospects;

Preparation for and completion of five main phases of diamond drilling at Tumpangpitu that extended from September 2007 to September 2010.

The Table below summarizes recent drilling at Tujuh Bukit since September 2007

Table 8 : Tujuh Bukit Drilling Summary

Target # of Drill Holes Meters Dates

Zone A Oxide 30 9,928.87 2007-2011

Zone B Oxide 56 13,047.05 2008-2011

Zone C Oxide 33 8,702.1 2007-2011

Zone E Oxide & Zone F Oxide 28 4,483.55 2010-2011

Regional Oxide Holes 5 788.85 2009

Porphyry Holes 34 28,418.85 2008-2011

Extensive regional -80 mesh soil sampling was conducted in 2009 to 2010 at Tumpangpitu and east of Tumpangpitu. Soil samples were collected by both hand-operated auger and petrol-driven mechanical auger for the Tumpangpitu program. Soil samples were taken from the C-horizon in most cases, though in areas of deep saprolite clay development samples were taken from the B soil horizon. Soil samples were analyzed for Au, Cu, Pb, Zn, Ag, As, Sb, Mo and Ba at the Intertek Laboratory in Jakarta. Two types of duplicate soil samples were routinely acquired, a within hole duplicate and a duplicate located ~1 meter from the auger hole as part of the procedure to assess anomaly reproducibility. Several orientation surveys were also done whereby some auger holes were sampled at 20cm intervals from surface to ~1.4m depth to assess the behavior of metal depletion or enrichment through the soil profile. The figure below shows the Distribution of Au anomalies in -80 mesh soil samples at Tumpangpitu (southern gridded area). The principal prospects at Tumpangpitu and east of Tumpangpitu are shown by the black dotted outlines. Labels A-F refers to the naming of mineralized oxide zones at Tumpangpitu. The Au-Ag mineralized oxide zones at Tumpangpitu are clearly delineated by Au soil anomalism.



Figure 6 : Soil Anomalies at Tumpangpitu



In September 2009, Intrepid Mines Ltd and their partner PT Indo Multi Niaga conducted a heliborne aeromagnetic survey to cover the entire Tujuh Bukit property. The aerial survey was flown by GPX Surveys Pty Ltd (Perth). The survey was flown along 100m-spaced north-south flight lines (2530 line kilometers). Radiometric and DTM data were also acquired together with the magnetic data. The magnetic data were processed by Moore Geophysics, the data processing yielding Raw TMI, 1st-Vertical Derivative, Analytical Signal and Reduced-to-Pole imagery as well as U-count, Th-count, K-count and Total Count images for the radiometric data. The helimagnetic survey yields far more detailed magnetic data that will allow more definitive 3D modeling of magnetic anomalies and more robust interpretation of regional structure as well as confident definition of the loci of intrusive centers within the district. Ongoing soil sampling programs are progressively being undertaken to screen these new regional targets.

Figure 7 : Aeromagnetic Survey Data


KAPPES, CASSIDAY & ASSOCIATES | JUNE 2011 SECTION ELEVEN

11.0 DRILLING This section is a summary of the same NI 43-101 item from the Report on Mineral Resources by Phillip L. Hellman, BSC (Hons 1), Dip Ed, PhD, MGSA, MAEG, FAIG, dated January 27 2011, which is filed on SEDAR.

Intrepid and their Joint Venture partner PT Indo Multi Niaga (IMN) have conducted an ongoing diamond drilling program at the Tumpangpitu prospect since September 2007. Drilling has progressively expanded from one drill-rig to the current six operating drill rigs on this prospect.

A total of 186 diamond drill holes were completed by Intrepid-IMN on the Tumpangpitu prospect between September 2007 and 18th April 2011. The total drill meterage by Intrepid-IMN on the Tumpangpitu prospect during this period was 65,369.27m. The location of these drill holes is shown below. This drilling at Tumpangpitu covers an area of approximately 2.3 km2. In positioning the drill holes, Intrepid-IMN reviewed all existing data, including surface alteration data from prior mapping by Placer, previous drilling results of Golden Valley Mines and Placer.

Figure 8 : Location of Collars of completed drill holes at Tumpangpitu (20th April 2011)


KAPPES, CASSIDAY & ASSOCIATES | JUNE 2011 SECTION ELEVEN

11.1 Downhole Surveys A total of 1479 down-hole surveys points (that include set-up collar positions at the surface) were acquired from drill holes GT-001A through to GTD-11-202 (excluding holes GTD-11-194 and GTD-11-201). Down-hole survey data existed for the historical holes GT001A through to GT014 although it is not known what type of survey tool was used for these old GVM and Placer holes (it is assumed that the survey data were recorded using the widely used Eastman single-shot system). All drill holes drilled by Intrepid Mines Ltd from 2007 to 2011 were surveyed using a REFLEX EZ-ShotTM down-hole survey instrument which recorded azimuth, inclination, roll-face angle, magnetic field strength and bore-hole temperature.

11.2 Drill Hole Collar Survey and Topographic Survey The collar positions of drill holes at Tumpangpitu were picked up by two separate survey companies, PT GEOINDO GIRI JAYA and PT SURTECH UTAMA INDONESIA. All drill holes used in this current resource estimation were surveyed by ground-based geodetic surveying. Surface topographic data were also surveyed on the ground during a series of ongoing survey campaigns contracted initially to PT Geoindo and subsequently to PT Surtech. These data were used to construct a digital elevation model for resource estimates.

11.3 Summary Results of Drilling The results of drilling to date have defined two preliminary shallow Au-Ag oxide resources that have been reported previously (Hellman 2008 and 2009) and a third global oxide resource that encompasses oxide zones A, B, C, E, F and intervening areas (Hellman, Jan 2011).

Typical intersections for the oxide drilling were reported by Hellman (2008) as accumulated intercepts exceeding 0.3 g/t Au and accumulated intercepts exceeding 0.3 % Cu, and again by Hellman (2009) as accumulated intercepts exceeding 0.3 g/t Au, accumulated intercepts exceeding 20 g/t Ag and selections of higher grade Au intercepts from Zone A. The reader is encouraged to view these results in those reports.


KAPPES, CASSIDAY & ASSOCIATES | MJUNE2011 SECTION TWELVE

12.0 SAMPLING METHOD AND APPROACH This section is a summary of the same NI 43-101 item from the Report on Mineral

ni43 101 technical report tujuh bukit pdf

Documents

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project development

contents contents

project overview

inferred resource

property description

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resource estimate