King_King_Copper-Gold_Project_Mindanao_101210

KING-KING COPPER-GOLD PROJECT
MINDANAO, PHILIPPINES

TECHNICAL REPORT
PURSUANT TO NATIONAL INSTRUMENT 43-101 OF
THE CANADIAN SECURITIES ADMINISTRATORS

Prepared For

RATEL GOLD LIMITED

and

RUSSELL MINING AND MINERALS, INC.

Prepared By

INDEPENDENT
MINING CONSULTANTS, INC.

Michael G. Hester, FAusIMM
Vice President and Principal Mining Engineer
Independent Mining Consultants, Inc.

Donald F. Earnest, P.G.
President
Resource Evaluation, Inc

John G. Aronson
President
AATA International, Inc.

October 12, 2010

King-king Copper-Gold Project i
Mindanao, Philippines
October 2010
Table of Contents
1.0 Summary . . . . . . . . . 1
1.1 General . . . . . . . . 1
1.2 Geology . . . . . . . . 2
1.3 Exploration 2
1.4 Mineral Resource . . . . . . . 3
1.5 Mineral Processing and Recovery to Saleable Product. . . 10
1.6 Environmental and Permitting . . . . . 11
1.7 Conclusions and Recommendations . . . . . 12
2.0 Introduction and Terms of Reference . . . . . . 14
3.0 Reliance on Other Experts. . . . . . . . 16
4.0 Property Description and Location . . . . . . 18
4.1 Property Location . . . . . . . 18
4.2 Land Area and Mining Claim Description . . . . 19
4.3 Agreements and Encumbrances . . . . . 23
4.4 Other Mineral and Mining Activities outside the Property Boundaries 24
4.5 Environmental Obligations . . . . . . 24
4.6 Permit Status . . . . . . . . 25
5.0 Accessibility, Climate, Local Resources, Infrastructure and Physiography . 28
5.1 Access . . . . . . . . . 28
5.2 Climate . . . . . . . . 28
5.3 Local Resources . . . . . . . 28
5.4 Infrastructure . . . . . . . . 29
5.5 Physiography . . . . . . . . 30
5.6 Mining Surface Rights and Mining Personnel 31
6.0 History . . . . . . . . . 31
7.0 Geologic Setting . . . . . . . . 34
7.1 Regional Geology . . . . . . . 34
7.2 Local Geology. . . . . . . . 36
8.0 Deposit Types . . . . . . . . . 51
9.0 Mineralization . . . . . . . . . 52
9.1 General . . . . . . . . 52
9.2 Oxide Zone . . . . . . . . 52
9.3 Mixed Zone . . . . . . . . 53
9.4 Sulfide Zone . . . . . . . . 54
9.4 Microthermometry . . . . . . . 54
10.0 Exploration . . . . . . . . . 55
11.0 Drilling . . . . . . . . . 56
12.0 Sampling Method and Approach. . . . . . . 60
12.1 General . . . . . . . . 60
12.2 Mitsubishi Metal Mining Corp . . . . . 61
12.3 Benguet Corporation . . . . . . . 61
12.4 Echo Bay Mines Ltd. (King-king Mines Inc) . . . . 62

Technical Report / Form 43-101F1
INDEPENDENT

King-king Copper-Gold Project ii
October 2010
Table of Contents (Continued)
13.0 Sample Preparation, Analyses and Security . . . . . 63
13.1 Mitsubishi Drilling Program . . . . . . 63
13.2 Benguet Drilling Programs . . . . . . 63
13.3 Echo Bay Drilling Programs . . . . . . 64
13.4 IMC/REI Opinion of Sample Preparation, Security and
Analytical Procedures . . . . . . 68
14.0 Data Verification . . . . . . . . 69
14.1 Comparison of Assays with Original Assay Certificates . . 69
14.2 Echo Bay Re-Assays of Benguet Samples . . . . 78
14.3 RMMI Check Assays . . . . . . . 87
14.4 Conclusions and Recommendations . . . . . 88
15.0 Adjacent Properties . . . . . . . . 91
16.0 Mineral Processing and Metallurgical Testing . . . . 92
16.1 Metallurgical Samples . . . . . . 93
16.2 Grinding . . . . . . . . 98
16.3 Flotation Area . . . . . . . . 99
16.4 Analytical Procedures for Process Testing . . . . 104
17.0 Mineral Reserves and Mineral Resource Estimates . . . . 106
17.1 Mineral Resource . . . . . . . 106
17.2 Mineral Reserve . . . . . . . 109
17.3 Description of the Block Model . . . . . 111
17.4 Resource Classification . . . . . . 123
17.5 Bulk Density . . . . . . . . 127
17.6 Impact of Various Drilling Campaigns . . . . 128
18.0 Other Relevant Data and Information . . . . . . 130
18.1 Review of 1997 Kilborn SNC Lavalin Feasibility Report. . . 130
18.2 Conservative Mineral Resource Calculation . . . . 134
18.3 Environment and Socioeconomic Issues. . . 134
19.0 Interpretation and Conclusions . . . . . . 162
20.0 Recommendations . . . . . . . . 163
21.0 References . . . . . . . . . 167
22.0 Date and Signature Page . . . . . . . 170
23.0 Additional Requirements for Technical Reports on Development Properties 171
23.1 Mining Operations . . . . . . . 171
23.2 Recoverability . . . . . . . . 172
23.3 Markets . . . . . . . . 175
23.4 Project Approach. . . . . . . . 177
23.5 Taxes and Other Payments. . . . . . . 179
23.6 Capital and Operating Costs, Economic Analysis. . . . 180
24.0 Certificates of Qualified Persons. . . . . . . 181
25.0 Figures . . . . . . . . . 185
Appendix 1. Head Assay Analysis Log . . . . . . 204
Appendix 2. Pertinent Legal Documents . . . . . . 207
Appendix 3. Environmental . . . . . . . . 220
Appendix 4. Relevant Samples . . . . . . . 275

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King-king Copper-Gold Project iii
October 2010

List of Tables
1-1 Mineral Resource . . . . . . . . 4
1-2 Economic Parameters for King-king . . . . . . 6
1-3 Proposed Mine and Plant Production Schedule . . . . 8
4-1 King-king Permits . . . . . . . . 27
11-1 Drilling by Campaign . . . . . . . . 56
11-2 Drilling History by Company . . . . . . . 56
14-1 Comparison of Drillhole Database with Assay Certificates – Echo Bay Drilling 73
14-2 Comparison of Drillhole Database with Geologic Logs – Benguet Drilling . 75
14-3 Changes to Database since 2009 Due Diligence Review . . . 76
14-4 RMMI Check Assays versus Original Assays – Total Copper . . 89
14-5 RMMI Check Assays versus Original Assays – Gold . . . 90
16-1 Sulfide Ore Sample Details . . . . . . . 93
16-2 1S Composite Sample Description . . . . . . 94
16-3 2S Composite Sample Description . . . . . . 94
16-4 Head Grade Assays of Sulfide Ore Composites . . . . 94
16-5 Mineralogy of Sulfide Ore Composite Samples . . . . 95
16-6 Oxide Ore Sample Details . . . . . . . 96
16-7 Oxide Composite Sample Description . . . . . 97
16-8 Head Grade Assays of Oxide Ore Composite. . . . . 97
16-9 Mineralogy of Oxide Ore Composite . . . . . . 97
16-10 History of Grinding Tests . . . . . . . 99
16-11 Oxide Flotation Results for New Reagents . . . . . 101
16-12 Concentrate Impurities in Lakefield Study . . . . . 102
16-13 Flotation Design Criteria . . . . . . . 103
16-14 History of Flotation/Leaching Tests . . . . . . 103
16-15 Head Assay Analysis Log . . . . . . . 105
17-1 King-king Mineral Resource . . . . . . . 106
17-2 Economic Parameters for King-king . . . . . . 109
17-3 King-king Lithology for Resource Modeling . . . . . 112
17-4 General Ore Type Criteria . . . . . . . 112
17-5 Specific Gravity Measurements by Rock Type . . . . 128
17-6 Comparison of Various Drilling Campaigns for Copper . . . 129
18-1 Parameters and Resource Estimates for 1997 Kilborn Study and 2010 Study 130
20-1 Proposed Drill Holes . . . . . . . . 164
20-2 Additional Drilling and Study Cost 166
23-1 Proposed Mine and Plant Production Schedule . . . . 173

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King-king Copper-Gold Project iv
October 2010

List of Figures
1-1 Final Pit . . . . . . . . . 9
1-2 Conceptual Process Flow Diagram . . . . . . 11
4-1 Project Location . . . . . . . . 18
4-2 Mining Tenement Location . . . . . . . 20
4-3 Major Deposit Areas with Respect to Tenement Boundary . . . 22
5-1 Physiography . . . . . . . . . 30
7-1 Regional Geology . . . . . . . . 35
7-2 Local Geology. . . . . . . . . 37
7-3 Commonly Referenced Deposit Areas . . . . . 38
7-4 District Alteration . . . . . . . . 45
7-5 Mineral Prospect Areas . . . . . . . 50
9-1 Mineral Zones from the Block Model . . . . . 53
11-1 Drillhole Locations by Campaign . . . . . . 57
11-2 EB-27 Collar . . . . . . . . . 59
14-1 Echo Bay Re-assay of Benguet Samples – Total Copper . . . 81
14-2 Echo Bay Re-assay of Benguet Samples – Total Copper – Log Base 10 . 82
14-3 %Half Relative Deviation vs Mean – Echo Bay Re-assays of Benguet Copper 83
14-4 %Half Relative Deviation vs Mean – Echo Bay Re-assays of Benguet Gold 83
14-5 Echo Bay Re-assay of Benguet Samples – Gold . . . . 84
14-6 Echo Bay Re-assay of Benguet Samples – Gold – Log Base 10 . . 85
14-7 Echo Bay Re-assay of Benguet Samples – Soluble Copper . . . 86
14-8 Total Copper – RMMI Check Assay vs Original Assays . . . 89
14-9 HRD% vs Mean Copper Grade for RMMI Check Assays . . . 89
14-10 Gold – RMMI Check Assays vs Original Assays . . . . 90
14-11 HRD% vs Mean Gold Grades for RMMI Check Assays . . . 90
16-1 Process Flow Diagram . . . . . . . 92
17-1 Resource Cone . . . . . . . . 110
17-2 Model Lithology – 325 Bench . . . . . . 113
17-3 Model Lithology on Section 10,300 . . . . . . 114
17-4 Structural Zones with GT Data . . . . . . 115
17-5 Box Plot of Total Copper by Rock Type – 15m Composites . . . 186
17-6 Box Plot of Soluble Copper by Rock Type – 15m Composites . . 187
17-7 Box Plot of Gold by Rock Type – 15m Composits . . . . 188
17-8 Probability Plot of Total Copper by Rock Type – 15m Composites . . 189
17-9 Probability Plot of Soluble Copper by Rock Type – 15m Composites. . 190
17-10 Probability Plot of Gold by Rock Type – 15m Composites . . . 191
17-11 Box Plot of Total Copper by Structural Zone – 15m Composites . . 192
17-12 Box Plot of Soluble Copper by Structural Zone – 15m Composites . . 193
17-13 Box Plot of Gold by Structural Zone – 15m Composites . . . 194
17-14 Probability Plot of Total Copper by Structural Zone – 15m Composites . 195
17-15 Probability Plot of Soluble Copper by Structural Zone – 15m Composites . 196
17-16 Probability Plot of Gold by Structural Zone – 15m Composites . . 197
17-17 Box Plot of Total Copper by Oxide/Sulfide Code – 15m Composites . 198

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King-king Copper-Gold Project v
October 2010
List of Figures (Continued)
17-18 Box Plot of Soluble Copper by Oxide/Sulfide Code – 15m Composites . 199
17-19 Box Plot of Gold by Oxide/Sulfide Code – 15m Composites . . 200
17-20 Probability Plot of Total Copper by Oxide/Sulfide Code – 15m Composites 201
17-21 Probability Plot of Soluble Copper by Oxide/Sulfide Code – 15m Composites 202
17-22 Probability Plot of Gold by Oxide/Sulfide Code – 15m Composites . . 203
17-23 Total Copper Variograms. Host Rocks in Sulfide Zone . . . 118
17-24 Total Copper Variograms. Intrusive Rocks in Sulfide Zone . . . 119
17-25 Copper Grades on Section 10,300 . . . . . . 121
17-26 Gold Grades on Section 10,300 . . . . . . 122
17-27 Resource Classification for Total Copper . . . . . 124
17-28 Resource Classification for Gold . . . . . . 125
17-29 Cross Section 10350 Showing Resource Classification . . . 126
17-30 Specific Gravity versus Ascu/Tcu Ratio . . . . . 127
18-1 Permitting Roadmap for the King-king Project . . . . 139
18-2 Illegal Small-Scale Mining at the King-king Site . . . . 141
18-3 View of Pantukan, Excessive Siltation in the King-king River . . 142
18-4 The King-king River in the Lowlands as It Enters the Davao Gulf . . 144
18-5 The King-king River in the Lowlands . . . . . 145
18-6 The King-king River in the Low Mountains . . . . . 145
18-7 The King-king River in the High Mountains Surrounding the Project Site . 146
18-8 The King-king Project Site (View 1) . . . . . . 147
18-9 The King-king Project Site (View 2) . . . . . . 147
18-10 The King-king Project Site – Showing Eroded Area . . . . 150
18-11 Illegal Small Miners’ Living Quarters and Processing Facilities . . 150
20-1 Proposed Holes . . . . . . . . 165
23-1 Final Pit Design . . . . . . . . 174
23-2 Copper Supply, Mt Contained Copper (from BHP-Billiton) . . . 176
23-3 Copper Prices and Inventories (from Freeport McMoRan) . . . 176

INDEPENDENT

King-king Copper-Gold Project 1
October 2010
1.0 Summary

1.1 General

This Technical Report presents a mineral resource estimate for the King-king Copper-Gold
Project in eastern Compostela Valley, Mindanao, Philippines. King-king has been
extensively drilled, sampled, and delineated and constitutes a significant copper-gold deposit.
This document summarizes the resource tonnage, grade, and classification and other
pertinent information consistent with NI 43-101. This report contains an initial life of mine
plan which utilizes the resource established herein by Independent Mining Consultants, Inc.
(IMC). The King-king Project is not currently an operating property and there has not been
any commercial scale production from the property.

This document follows the format of Form 43-101F1 for Technical Reports in Canada and
JORC Code guidelines for Public Reports in Australia. The mineral resource estimate was
prepared for Ratel Gold Limited (Ratel) and Russell Mining and Minerals, Inc, (RMMI).

The King-king Copper-Gold Project is held in a Mineral Production Sharing Agreement
(MPSA#009-92-XI, approved by the government May 27, 1992 and amended December 11,
2002) by The Philippine Government, NADECOR (Nationwide Development Corporation),
and Benguet Corporation. The MPSA grants the parties to the MPSA the exclusive right to
explore, develop and exploit minerals within the area comprising the King-king deposit. The
deposit size depicted in Figure 1-1 below is 2.5 square kilometers and the area of the Mineral
Property in the MPSA is 15.5 square kilometers (see Figure 4-2). There is a memorandum of
understanding (MOU) between NADECOR and St. Augustine Mines Ltd., a subsidiary of
Russell Mining and Minerals, Inc. (RMMI), that provides for formation of a Joint Venture
(JV) once Benguet Corporation is eliminated from the MPSA. Under the MOU, RMMI
retains the exclusive right to develop the project through itself or an associated entity. Ratel
and RMMI have agreed to complete a Share Exchange Agreement wherein Ratel will gain
100 percent control of SAML and RMMI will be compensated in Ratel equity.

This work was completed by three companies, Independent Mining Consultants (IMC),
AATA International, Inc. (AATA) and Resource Evaluation Inc. (REI). Their
responsibilities and the qualified persons are listed in Section 2.0 (Introduction).

The King-king Copper/Gold Project is located approximately 92 road kilometers from Davao
City, Mindanao, Philippines. King-king is a gold-rich porphyry copper deposit spatially
related to significant epithermal vein systems that can be potentially exploited by open pit
mining methods to produce economic concentrations of gold and copper. Most of the
mineralization is amenable to flotation and to gravity concentration to produce two
concentrates: 1) a copper-gold concentrate and 2) a gold concentrate. The porphyry deposit
is spatially related to significant epithermal vein systems which with further exploration
could prove to host economically important precious metal mineralization.

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October 2010

1.2 Geology

The King-king Deposit is a porphyry copper-gold deposit hosted by hornblende biotite
diorite porphyritic rocks that intrude interbedded sediments, submarine volcanic rocks, and
volcanoclastic sediments. The intrusive rocks are believed to be Miocene in age, while the
the wall rocks are Cretaceous to early Tertiary. Copper and gold mineralization occurs at or
near the apex of the composite diorite intrusive complex within the intrusive rocks and
extending well into the surrounding wall rocks.

The majority of the sulfide copper mineralization in the King-king deposit consists of
chalcopyrite and bornite, with lesser amounts of chalcocite, digenite, and covellite. Rapid
regional uplift and erosion likely caused the nearly complete removal of a classical leached
cap and prevented the development of typically thick oxide and supergene enriched zones
found in other major porphyry deposits. Copper mineralization in the oxide zone includes
malachite, chrysocolla, cuprite, and tenorite. Gold is relatively abundant in the oxide zone,
as evidenced by widespread gold panning and small-scale mining activities on the oxidized
slopes above the main King-king zone. Gold occurs in the sulfide zone of the deposit in free
form in close association with bornite and as exsolution intergrowths in other sulfides,
particularly chalcopyrite. Native gold is occasionally observed on fractures and in
quartz veinlets.

The King-king deposit is pyrite-poor, averaging less than one percent by volume for the
entire deposit. This is reflected by the relative absence of a pyrite halo that is commonly
developed around many porphyry copper deposits.

For process development purposes, two types of mineralization are considered: sulfide and
oxide (which includes mixed oxide-sulfide material).

1.3 Exploration

Exploration of the King-king deposit has spanned a few decades, and represents the efforts of
numerous companies and individuals. A wide variety of techniques have been employed,
including:

1) Surface mapping and sampling
2) Drilling (primarily diamond core)
3) Adit and raise sampling
4) Geochemistry (soil, stream, and down-hole)
5) Development of cross sections, long sections, and plan maps
6) Physical and computer-generated three-dimensional modeling.

A significant portion of past work focused on drilling to explore, define and confirm the
economic potential of the property.

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October 2010
The interpretation of the exploration work done to date is that the King-king deposit is a
significant copper-gold porphyry system with the potential to become an economic project.
The drilling done to date has also been used to develop an NI 43-101 compliant mineral
resource for the deposit, as presented in Section 1.4 and 17.

All of the exploration data collection, including the drilling data, is historic data compiled by
previous property owners. Ratel and its contractors were not involved in the compilation of
this data. The only work conducted by Ratel and its contractors is the interpretation of the
mapping and drilling data to develop the current mineral resource.

Future drilling will focus on geotechnical diamond drilling to obtain core samples for pit wall
stability analysis, final slope angle definition and hydrology-pore pressure studies, and
hydrogeological studies. Additional diamond drilling will collect samples for metallurgy
testing, in-fill certain areas of the deposit for confirmation of gold assays generated by the
earlier Benguet drilling, and to better define certain lithologic contacts.

1.4 Mineral Resource

A major task of IMC is the establishment of a mineral resource including tonnage, ore grade,
and classification. The mineral resource was developed based on historic drilling that was
completed by three companies from 1972 – 1997 (Mitsubishi Corporation, Benguet
Corporation and Echo Bay Mining. The assay information was on electronic files. These
files were checked and corrected by hand comparison to assay certificates and printed
scanned paper logs, and an electronic data base for assembly of a block model was produced.

An important aspect of IMC’s mandate is to verify the validity of drill and assay data. As
part of this project, 100 core samples for independent check assay analysis were recovered
from the core drilled by Benguet and Echo Bay that is currently stored at the core shed
located in Pantukan City, Compostela Valley. The results of those assays confirm the
presence of gold and copper. IMC and REI hold the opinion that these recent check assays
provide sufficient confidence that the data generated and compiled by Benguet and Echo Bay
are valid for the estimation of measured and indicated mineral resources.

The King-king Copper/Gold deposit is currently envisioned to be mined using large scale
open pit mining methods to produce ore to a flotation concentrator. Initial estimates of
mining, process, and overhead costs were applied along with initial estimates of process and
mining recovery to establish an estimate of mineral resources that have reasonable
expectation of economic extraction. Table 1-1 summarizes the mineral resources at the
King-king Copper/Gold Project as determined by IMC.

INDEPENDENT

October 2010

Table 1-1. King-king Mineral Resource 10/4/2010
Ore Ore Eq Cu Tot Cu Sol Cu Gold Eq Au
Type Ktonnes (%) (%) (%) (g/t) (g/t)
Measured Mineral Resource
Oxide 40,879 0.855 0.444 0.266 0.575 1.196
Sulfide 66,402 0.536 0.269 0.037 0.445 0.894
Total 107,281 0.658 0.336 0.124 0.495 1.009
Indicated Mineral Resource
Oxide 120,443 0.654 0.349 0.210 0.428 0.916
Sulfide 563,800 0.454 0.253 0.032 0.335 0.757
Total 684,243 0.489 0.270 0.063 0.351 0.785
Measured/Indicated Mineral Resource
Oxide 161,322 0.705 0.373 0.224 0.465 0.987
Sulfide 630,202 0.463 0.255 0.033 0.347 0.771
Total 791,524 0.512 0.279 0.072 0.371 0.815
Inferred Mineral Resource
Oxide 31,915 0.541 0.288 0.167 0.353 0.756
Sulfide 93,548 0.394 0.219 0.025 0.292 0.657
Total 125,463 0.431 0.237 0.061 0.308 0.682
Notes:
Eq Cu (oxide) = Total Copper + 0.715 x Gold, Cutoff = 0.27% Eq Cu
Eq Cu (sulfide) = Total Copper + 0.600 x Gold, Cutoff = 0.23% Eq Cu
Alternatively, as Equivalent Gold:
Eq Au (Oxide) = Gold + 1.399 x Total Copper, Cutoff = 0.37 g/t Eq Au
Eq Au (Sulfide) = Gold + 1.668 x Total Copper, Cutoff = 0.38 g/t Eq Au
Total Material in Cone Shell 1,429,845 Ktonnes
Waste:Ore Ratio 0.81 (Inferred as Waste)
Waste:Ore Ratio 0.56 (Inferred as Ore)

Measured and indicated mineral resource amounts to 791.5 million tonnes at 0.512% copper
equivalent, 0.279% total copper, 0.072% soluble copper, and 0.371 g/t gold. Inferred mineral
resource is an additional 125.5 million tonnes at 0.431% copper equivalent, 0.237% total
copper, 0.061% soluble copper, and 0.308 g/t gold. The measured and indicated mineral
resource consists of 4.9 billion pounds of contained copper and 9.4 million troy ounces of
contained gold. The last column of the table also shows that with metal grades defined in
terms of equivalent gold, instead of equivalent copper, the equivalent gold grade of the
measured and indicated mineral resource is 0.815 g/t gold equivalent (0.99 g/t for the oxide
resource and 0.77 g/t for the sulfide resource).

Based on current market conditions, Independent Mining Consultants, Inc. (IMC) would
classify the King-king deposit as a copper-gold co-product deposit. The historical
precedence is to rank the minerals in a deposit in order of economic significance, which is
generally defined in terms of gross revenue. Based on the measured and indicated mineral
resource for King-king and the October 1, 2010 closing spot prices of $3.68 per pound

INDEPENDENT

October 2010
copper and $1320 per ounce gold, and preliminary estimates of plant recovery and smelter
payable amounts (Table 1-2), about 60% of the potential revenue is due to copper and 40%
due to gold. Since the gold contribution is more than 25% of total revenue, gold is classified
as a co-product, instead of a by-product. At the $1320 gold price the copper price would
have to drop to about $2.50 per pound for gold to be the predominant revenue driver.

The resources are contained within a floating cone pit shell and are compliant with the
“reasonable prospects for economic extraction” clauses of Canada’s NI 43-101 regulations
and also Australia’s JORC code. The cone shell is based on a copper price of US$ 1.75 per
pound and a gold price of US$ 660 per troy ounce.

For $1.75 copper and $660 gold, copper equivalent grades are defined as:

Eq Cu (Oxide Ores) = Total Copper + 0.715 x Gold
Eq Cu (Sulfide Ores) = Total Copper + 0.600 x Gold

And breakeven copper equivalent cutoff grades are 0.27% and 0.23% for oxide and sulfide
respectively. Table 1-2 summarizes the economic parameters used.

Only measured and indicated resource blocks were allowed to contribute to the development
of the floating cone shell used for the resource tabulation; inferred blocks were treated as
waste to develop the cone shell.

There is no guaranty that any of the mineral resource will be converted to mineral reserve.
There is also no guaranty that inferred mineral resource will be upgraded to measured or
indicated mineral resource or mineral reserves.

IMC has also developed a preliminary mining production schedule (i.e. production forecast)
for the King-king Project. Seven mining phases were designed to do the scheduling. The
phases include haulage roads and adequate working room for large mining equipment.
Figure 1-1 shows the final pit design. The final pit design was based on the economic
parameters shown above, including commodity prices of $1.75 per pound copper and $660
per ounce gold. Only measured and indicated mineral resource was allowed to contribute to
the design.

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October 2010

Table 1-2. Economic Parameters for King-king
$1.75 Cu / $660 Au
Parameter Units Oxide/Mix Sulfide
Copper Price Per Pound (US$) 1.750 1.750
Gold Price Per Troy Ounce (US$) 660 660
Base Mining Cost Per Tonne Material (US$) 1.100 1.100
Mine Replacement Capital Per Tonne (US$) 0.150 0.150
Lift Cost Per Bench Below 250 (US$) 0.015 0.015
Process Cost Per Ore Tonne (US$) 4.200 4.200
G&A Cost Per Ore Tonne (US$) 0.600 0.600
Process Recovery of Copper (Average) (%) 74.3% 85.9%
Process Recovery of Gold (Average) (%) 83.4% 80.9%
Smelting/Refining Payable for Copper (%) 96.4% 96.4%
Smelting/Refining Payable for Gold (%) 95.0% 95.0%
SRF Cost Per Pound Copper (US$) 0.260 0.260
NSR Royalty (%) 3.0% 3.0%
NSR Factor for Total Copper (US$) 22.822 26.385
NSR Factor for Gold (US$) 16.308 15.819
Gold Factor for Copper Equivalent (none) 0.715 0.600
Total Copper Equivalent Cutoff Grades
Breakeven (without lift) (%Cu) 0.27 0.23
Internal (%Cu) 0.21 0.18
Copper Factor for Gold Equivalent (none) 1.399 1.668
Gold Equivalent Cutoff Grades
Breakeven (without lift) (g/t) 0.37 0.38
Internal (g/t) 0.29 0.30

Table 1-3 shows the mine production schedule. Ore production varies by year because it is
based on 8766 plant hours per year with an oxide/mixed ore processing rate of 48,300 ktpy
(0.1815 hrs/kt) and a sulfide processing rate of 36,500 ktonnes per year (0.2402 hrs/kt). Ore
mined during preproduction and Year 1 amounts to 36,800 ktonnes or about 80% of nominal
plant capacity. The copper equivalent cutoff grade varies by year to balance the mine and
plant production rates.

Preproduction stripping requirements are minimal at 12.7 million tonnes. Total material is
scheduled at 51.2 million tonnes for Year 1. Years 2 through 16 total material requirements
are about 72 million tonnes per year.

This schedule results in 812.5 million ore tonnes at 0.275% total copper, 0.367 g/t gold and
0.506% copper equivalent. This is measured and indicated resource only, inferred resource is
considered waste. Total material is 1.46 billion tonnes.

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October 2010

The table also shows that between a potential low-grade cutoff grade of 0.2% copper
equivalent and the operating cutoff grade for each year there is the potential to stockpile 49.7
million ore tonnes at 0.160% copper and 0.132 g/t gold.

The table also shows a proposed plant production schedule. Year 1 is shown as the ore
mined during preproduction and Year 1 and Years 22 and 23 include the low grade.
Including the low grade, total plant production amounts to 862.2 million ore tonnes at
0.268% total copper, 0.354 g/t gold, and 0.491% copper equivalent.

Total plant production is about 9% more ore tonnes than the measured/indicated mineral
resource. The mineral resource was tabulated at breakeven cutoff grades of 0.27% Eq Cu for
oxide and 0.23% Eq Cu for sulfide. Operating cutoff grades for the production schedule
were allowed to go down to 0.21% Eq Cu (internal cutoff) for oxide/mixed material and
0.20% Eq Cu for sulfide.

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Table 1-3. Proposed Mine and Plant Production Schedule
Mine Production Schedule Low Grade Stockpile Proposed Plant Schedule
Mining Cu Eq Ore Cu Eq Tot Cu Sol Cu Gold Ore Cu Eq Tot Cu Sol Cu Gold Waste Total Waste: Ore Cu Eq Tot Cu Sol Cu Gold Hours/ Plant
Year Cutoff (%) Ktonnes (%) (%) (%) (g/t) Ktonnes (%) (%) (%) (g/t) Ktonnes Tonnes Ore Ktonnes (%) (%) (%) (g/t) Ktonne Hours
PP 0.32 4,830 0.642 0.492 0.275 0.212 2,363 0.263 0.166 0.101 0.135 5,500 12,693 0.76
1 0.32 31,970 0.791 0.466 0.299 0.459 1,427 0.282 0.203 0.060 0.120 17,841 51,238 0.53 36,800 0.771 0.469 0.296 0.427 0.1897 6,979
2 0.36 43,874 0.875 0.412 0.226 0.676 9,871 0.295 0.228 0.138 0.097 17,750 71,495 0.33 43,874 0.875 0.412 0.226 0.676 0.1998 8,766
3 0.30 42,410 0.802 0.392 0.154 0.623 2,743 0.258 0.161 0.088 0.141 26,847 72,000 0.59 42,410 0.802 0.392 0.154 0.623 0.2067 8,766
4 0.26 42,700 0.556 0.227 0.082 0.492 6,353 0.233 0.116 0.037 0.176 22,947 72,000 0.47 42,700 0.556 0.227 0.082 0.492 0.2053 8,766
5 0.26 39,190 0.568 0.256 0.058 0.490 6,956 0.231 0.135 0.034 0.156 25,854 72,000 0.56 39,190 0.568 0.256 0.058 0.490 0.2237 8,767
6 0.25 40,490 0.483 0.332 0.094 0.241 5,416 0.227 0.172 0.048 0.086 26,094 72,000 0.57 40,490 0.483 0.332 0.094 0.241 0.2165 8,766
7 0.23 36,740 0.457 0.323 0.033 0.223 2,624 0.216 0.153 0.013 0.105 32,636 72,000 0.83 36,740 0.457 0.323 0.033 0.223 0.2386 8,766
8 0.20 37,300 0.506 0.326 0.050 0.297 34,700 72,000 0.93 37,300 0.506 0.326 0.050 0.297 0.2350 8,766
9 0.20 37,670 0.497 0.304 0.048 0.318 34,330 72,000 0.91 37,670 0.497 0.304 0.048 0.318 0.2327 8,766
10 0.20 37,770 0.444 0.300 0.043 0.235 34,230 72,000 0.91 37,770 0.444 0.300 0.043 0.235 0.2321 8,766
11 0.24 36,880 0.438 0.274 0.033 0.270 3,896 0.223 0.148 0.016 0.123 31,224 72,000 0.77 36,880 0.438 0.274 0.033 0.270 0.2377 8,766
12 0.24 36,630 0.436 0.245 0.029 0.317 3,252 0.222 0.137 0.012 0.142 32,118 72,000 0.81 36,630 0.436 0.245 0.029 0.317 0.2393 8,766
13 0.24 36,590 0.446 0.227 0.029 0.364 2,586 0.222 0.124 0.015 0.163 32,824 72,000 0.84 36,590 0.446 0.227 0.029 0.364 0.2396 8,767
14 0.24 36,510 0.468 0.227 0.029 0.401 2,215 0.222 0.113 0.015 0.182 33,275 72,000 0.86 36,510 0.468 0.227 0.029 0.401 0.2401 8,766
15 0.20 36,590 0.432 0.205 0.029 0.378 35,410 72,000 0.97 36,590 0.432 0.205 0.029 0.378 0.2396 8,767
16 0.20 36,690 0.419 0.210 0.032 0.348 35,310 72,000 0.96 36,690 0.419 0.210 0.032 0.348 0.2389 8,765
17 0.20 36,510 0.349 0.185 0.031 0.273 30,991 67,501 0.85 36,510 0.349 0.185 0.031 0.273 0.2401 8,766
18 0.20 36,500 0.373 0.205 0.033 0.280 25,321 61,821 0.69 36,500 0.373 0.205 0.033 0.280 0.2402 8,767
19 0.20 36,500 0.385 0.206 0.031 0.299 19,668 56,168 0.54 36,500 0.385 0.206 0.031 0.299 0.2402 8,767
20 0.20 36,500 0.408 0.217 0.027 0.318 14,994 51,494 0.41 36,500 0.408 0.217 0.027 0.318 0.2402 8,767
21 0.20 36,500 0.393 0.189 0.025 0.340 15,293 51,793 0.42 36,500 0.393 0.189 0.025 0.340 0.2402 8,767
22 0.20 15,112 0.458 0.244 0.038 0.357 8,458 23,570 0.56 39,058 0.327 0.193 0.050 0.219 0.2244 8,766
23 25,756 0.245 0.160 0.058 0.132 0.2145 5,524
TOTAL 812,456 0.506 0.275 0.069 0.367 49,702 0.245 0.160 0.058 0.132 593,615 1,455,773 0.69 862,158 0.491 0.268 0.068 0.354 0.2280 196,597


October 2010

Figure 1-1. Final Pit


October 2010

1.5 Mineral Processing and Recovery to Saleable Product

The ore is planned to be delivered to the primary crusher next to the final pit perimeter and
then crushed ore conveyed approximately 3.6 overland kilometers to the mill located in the
low lands at approximately 200 meter elevation. Process tailing would be pipeline conveyed
to a tailing management facility starting at an estimated 40 meters above sea level and also
located in the lowlands. The process plant will grind the ore utilizing a SAG mill followed
by three balls mill to reduce the ore for copper flotation to an estimated P80 150 microns.
The majority of the gold is expected to be recovered with the copper in the concentrate.
There will be some gold recovered by gravity concentrator circuits as shown in Figure 1-2, a
conceptual process flow diagram.

Additional ore throughput is expected in the early years of production because the grinding
circuit is designed at the higher bond work index of 16 kWh/tonne, which is for the sulfide
zone ore. The early years of production (1-6) will experience softer ore due to the higher
amount of oxide and mixed zone ore treated (bond work index of 12). There is significant
upside potential in that time period to process higher tonnages and the downstream processes
(screens, pumps, pipes, float cells, thickeners, etc.,) will be sized to accommodate 25%
higher throughput.

The flow sheet was based on sequential flotation circuits (sulfide copper first) for producing
copper concentrates containing gold from copper sulfide minerals (chalcopyrite and bornite)
and from copper oxide minerals (malachite principally). The copper sulfide mineral flotation
circuit was designed based on the feasibility level testing performed in 1997 at the Lakefield,
Ontario research facility. Copper oxide mineral flotation circuit design was based on RMMI
interpretation of the results from commercial mine reports and research reports on other
projects and mines utilizing typical reagents and flow sheets developed for oxide mineral
flotation.

The Lakefield studies indicated 85% of the total copper in the sulfide zone ore would report
to the final copper concentrate. The sulfide ores tested contained between 3 and 15 percent
acid soluble copper. The actual copper sulfide mineral recoveries would have been
significantly higher than 85% when factoring in the acid soluble portion that would have had
low recovery. In this study sulfide copper was defined as copper in sulfide minerals and
from a data base assay point of view it was total copper minus soluble copper.

RMMI research on flotation of malachite (predominant copper oxide mineral at King-king) at
commercial mines, recent feasibility studies and other reported copper oxide flotation studies
showed that 72 to 90 percent of malachite and chrysocolla are recovered in flotation. Most
of the results fall in the 75% recovery range. Soluble copper (copper oxide minerals)
flotation recoveries used in this resource estimate ranged mostly from the high 50’s percent
to the mid 60’s percent recovery depending on the soluble copper head grade. Therefore,
conservative estimates for recovery of soluble copper by flotation were assumed at this level
of study.

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Primary Sulfide Cleaner
SAG Mill Ball Mills
Crushing Flotation Flotation

Gold Gravity EW Type Oxide Concentrate
Circuit Gold Circuit Flotation Dewatering
at Port
Intensive Gold Dore
Cyanide Gold Gravity
Shipped to
Leach Circuit Concentrate
Refinery
Stored at Port
until Shipped to
Land Tailing Smelter
Legend: Management
Ore System
Concentrate
Tailing
Gold

Figure 1-2. Conceptual Process Flow Diagram

The copper-gold concentrate grade is expected to range from 29 to 33% copper and 13 to 71
grams per tonne gold and average 31% copper and 35 grams per tonne gold. The concentrate
grades were estimated by final concentrate results reported in the 1997 Lakefield studies
combined with the 2009 King-king Project mine plan and from final concentrate grades
reported for results from commercial mine reports and research reports on other projects and
mines utilizing typical reagents and flow sheets developed for copper oxide mineral flotation.

1.6 Environmental and Permitting

Based on the known information provided to date, AATA International, Inc (AATA).
(Environmental Consultants, See Section 2.0) sees no environmental issues that would
prevent the permitting of the proposed operations. Although AATA currently does not see
any permitting issues that would prevent the operation of the proposed King-king
Copper/Gold Project, AATA cannot predict all the concerns or issues the permitting agencies
may have with the proposed project during the permitting process, nor can AATA control
how long the agencies will take to issue the necessary permits. At this time, quantification of
all the environmental impacts of the proposed facilities and operations is not possible. A
better understanding of these will be developed during the permitting process.

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1.7 Conclusions and Recommendations

The results of this study indicate that the King-king Project has the potential to become an
economic producer of copper and gold. However, more information will be required to move
the project forward.

IMC and REI recommend an initial drill program of about 16 diamond drill holes that will
add confidence, and additional resources, particularly gold resources, to the King-king Gold-
Copper Deposit. In additional to geology and assay information, these holes will provide
information for a broad range of topics at King-king such as metallurgy, acid rock
characteristics, geotechnical issues, including slope stability, etc.

Following the recommended development work and studies, including metallurgical work, a
definitive project plan will be developed by the owner. This will include the definitive
studies for plant location, mine design, infrastructure, and construction plan. This will result
in a sufficient data for economic evaluation to bankable standards, concluding in a Bankable
Feasibility Study (BFS) within approximately 24 months.

A new topographic survey of the mine, valueless rock storage, plant, and tailings storage
areas will also be required. The last survey was conducted in 1997. Significant artisanal
mining activity and also natural erosion have impacted the surface topography.

Process testing on new core should address the following items:

 Optimum primary grinding size for various ore zones and lithology types
 Geo-statistical analysis of grinding and flotation
 Copper oxide mineral response to flotation with recently developed and
commercialized oxide flotation reagents and flow sheets
 A thorough study of regrind product size
 Optimized cleaner flotation reagent schemes and flow sheet for ore variations
 Evaluate centrifugal gravity and flash flotation recovery of gold from the primary
grinding circuit and from tailing streams in flotation
 Evaluate concentrate processing by hydrometallurgical methods to recover gold and
copper at site
 Rheology studies on tailing for settler design and tailing dam design
 Settling and filtration studies on concentrates for dewatering purposes

Benguet gold assays were not used in the current mineral resource estimate. Work done by
Echo Bay, and confirmed by IMC, shows the Benguet gold assays are biased high by about
10%. There were however about 1493 Echo Bay re-assays of Benguet samples that were
available for the current resource estimate. IMC recommends an initial re-assaying of a
about 200 Benguet drill hole pulps and their corresponding remaining half of core for total
copper and gold. The purpose is to determine if the bias observed in the Benguet gold assays
was due to sample preparation or the analytical work (or both). Based on the outcome of

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this, additional Benguet pulps and/or core will be assayed to supplement the existing
database and improve the confidence of mineral resource and mineral reserve estimates.

The proposed budget for the additional drilling, analysis of the drill results and above
mentioned studies is: $3.4 million USD. Ratel plans to implement the drill program during
the fourth quarter of 2010.

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2.0 Introduction and Terms of Reference

Ratel Gold Limited and Russell Mining and Minerals, Inc. requested the development of a
mineral resource estimate and Technical Report for the King-king Copper-Gold Project from
the following team of consulting firms:

Person / Company Summarized Responsibility

Donald Earnest Geology and History
Resource Evaluation, Inc. (REI)

John Aronson Environmental, Permitting
AATA International (AATA)

Michael G. Hester Resources and Report Assembly
Independent Mining Consultants, Inc. (IMC)

The mineral resource estimate is compliant with Canadian National Instrument 43-101 (NI
43-101).

The above group worked together as a team and each provided a qualified person for this
Technical Report under the definitions of NI 43-101. Michael Hester acted as the primary
author of the Technical Report.

The King-king Copper-Gold Project is a porphyry sulfide deposit that is potentially amenable
to large scale open pit mining. The project is located in southeastern Mindanao of the
Philippines.

This work was started in May of 2010 and this final Technical Report was completed in
September 2010.

Historic drill data was obtained from electronic drill logs and electronic drill hole data bases,
as well as, paper assay certificates that were on file under the control of RMMI. IMC
personnel transferred and keypunched the drill hole information into computer files for use in
the generation of the computer based block model and mineral resource estimate.

The King-king Copper-Gold Project has also been referred to historically as the King-king
Copper Gold Porphyry Project. The drilling for the project was conducted between 1969 and
1997 by a few different companies, including: Echo Bay, Benguet Corporation and
Mitsubishi Corporation.

A number of historic reports have been prepared that were of value as background in the
development of this report. Those reports are listed in the reference section of this Technical
Report.

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Don Earnest visited the property on June 4 - 7, 2010 in the company of SAMI management.
Don Earnest visited the core shed to review the condition of the drill core, confirm lithology
and alteration of the core and select core sample intervals for assay verification purposes.
Don Earnest and SAMI management reviewed the core, toured the property, and visited
potential mining infrastructure sites.

This report is in metric units. Tonnes are metric tons of 2204.6 pounds (lbs). Ktonnes means
1000 metric tons. Precious metal grades for gold and silver are presented in grams or troy
ounces per tonne and the abbreviation koz is 1000 troy ounces. Metal grades for copper are
in percent by weight. Quantities of copper are often expressed in pounds (lbs) since prices
are typically quoted in lbs on world markets.

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3.0 Reliance on Other Experts

This Technical Report was assembled by the team of consultants as outlined in Section 2.0.
Each was responsible for specific chapters in this report. Final assembly of the report was
accomplished by Michael Hester of Independent Mining Consultants, Inc. who also acted as
the primary author of the Technical Report.

The chapter responsibilities are summarized below:

Qualified Person Section Responsibilities
Donald Earnest, Resource Evaluation, Inc Sections 5 through 13
John Aronson, AATA International, Inc. Section 18.3
Michael Hester, Independent Mining Consultants, Inc. Sections 1, 2, 3, 4, 14, 15, 16,
17, 18, 19, 20, 23

Independent Mining Consultants, Inc, and the consultants listed above have not verified or
audited the property ownership as outlined in Section 4.0. The authors have relied on the
opinion of Land Council to Ratel as evidenced in the letter provided by Ramon Adviento,
land expert in the Philippines (his office is in Davao City, Mindanao) regarding the land
status in a letter to RMMI dated August 10, 2010 (Appendix 2, Exhibit 3). According to the
letter NADECOR has been granted the mineral rights by the government of the Republic of
the Philippines. Ratel, through its equity in SAML, will have the right to continue
exploration and development of the property once their Joint Venture agreement with
NADECOR is finalized.

Where possible, the authors have confirmed information provided by SAMI or previous
authors by comparison against other data sources or by field observation.

AATA has reviewed the environmental situation of the property as can be determined from
existing reports and tertiary data available. IMC has assumed that any operating permit and
reclamation requirements are properly accounted for in the information provided by AATA,
RMMI and Ratel and that any potential future operations will not be prejudiced by
environmental, permitting, or related constraints.

IMC has not audited the process plant or tailing design information presented in this
document. The developed concepts concerning these are typical for the industry. The testing
data presented in Section 16 is historic in nature; most of it was developed for the Echo Bay
study. The primary author has no reason to doubt its validity.

AATA currently does not see any permitting issues that would prevent the operation of the
proposed King-king Copper/Gold Mine, but AATA cannot predict all the concerns or issues
the permitting agencies may have with the proposed project during the permitting process,
nor can AATA control how long the agencies will actually take to eventually issue the
necessary permits. At this time, quantification of all the environmental impacts of the

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proposed facilities and operations is not possible. A better understanding of these will be
developed during the permitting process.

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4.0 Property Description and Location

4.1 Property Location

The King-king Project is centered at approximate geographical coordinates 7°11’31”N
Latitude and 125°58’40”E Longitude on the Philippine Island of Mindanao. Figure 4-1
shows the location. The project site is located at Sitio Gumayan, Barangay King-king,
Municipality of Pantukan, Province of Compostela Valley, in Mindanao.

Figure 4-1. Project Location

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4.2 Land Area and Mining Claim Description

The King-king tenement has a total land area of 1,548 hectares and is shown in Figure 4-1.

All mineral resources within the Republic of the Philippines are owned by the State and,
unless otherwise closed, withdrawn or claimed, are open to exploration by way of mining
claims, leases or agreements with the Philippine government. The King-king deposit is
located within the boundaries of the King-king MPSA (Mineral Production Sharing
Agreement No. 009-92-XI), which was approved by the government on May 27, 1992 for an
initial term of 25 years and covers approximately 1,656 hectares. The MPSA was amended
on December 11, 2002 to bring it in line with Republic Act No. 7942, otherwise known as
“The Philippine Mining Act of 1995.” The MPSA is in favor of NADECOR as Claim
Owner-Leaseholder and Benguet as Operator. It grants to NADECOR (owners) and Benguet
the exclusive right to explore, develop, mine and operate minerals within the tenement area,
including surface access to exercise such rights. Production from the MPSA is subject to a
government share (royalty) comprised of an excise tax, which is payable in addition to other
prescribed taxes and fees.

The King-king MPSA is a conversion of mining leases covering 184 mining claims that are
owned by NADECOR. Benguet would obtain a 50 percent earn-in through funding of 100
percent of the development and construction of the mine under an Operating Agreement
dated August 21, 1981 and amended December 11, 2002.

Subsequently, Echo Bay Mines Inc. (EBMI), TVI Pacific (TVI) and King-king Mines, Inc.
(KMI) entered into option agreements executed on October 25, 1995 with Benguet whereby
Benguet granted KMI the option to purchase within 24 months or up to October 25, 1997,
Benguet's interest in the agreement, and the NADECOR royalty, the government share, and
the right of Benguet to buy back a 20 percent (20%) interest in KMI.

After drilling the property, EBMI and TVI opted not to exercise the option that expired on
October 25, 1997. The property then reverted to original ownership.

On August 29, 2008 NADECOR terminated its Operating Agreement with Benguet
Corporation under the terms of the agreement due to the failure to execute on work plans for
six consecutive years. On May 26, 2008 and again on December 10, 2009, NADECOR filed
a motion with the Secretary of the DENR to remove Benguet from the MPSA as Operator for
their continued failure to implement the exploration and work program. The DENR in a
November 23, 2009 order declared NADECOR the sole operator on the MPSA for the term
of a renewed two year exploration period. The order was primarily based on a detailed report
completed September 30, 2009 by the Region 11 MGB which reviewed in detail the work
accomplished on the King-king tenement area. The November order was substantiated in
January 2009 when the Secretary of the DENR issued a finding sustaining the Order after a
Request for Reconsideration was submitted by Benguet rebutting the November Order. On
April 29, 2010, the Office of the President issued a Final and Executory Order Sustaining the
November Order.

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Figure 4-2. Mining Tenement Boundary

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A negotiated settlement heads of terms agreement was reached between Benguet and Strato
International Holdings, Ltd., of which RMMI has 50 percent ownership and NADECOR has
50 percent ownership, in July 2010 wherein Benguet would transfer their interest, if any, in
the Operating Agreement, MPSA, and surrounding claims to Strato in exchange for a cash
payment of $25 million USD, scheduled in several payments over 7 years and the surrender
of approximately 49% of the outstanding secured debt of Benguet, which has been secured
under contract by Strato. The surrender of the debt, under the agreement, provides for a
credit to the settlement payments of approximately $8 million USD. This agreement is
currently in the due diligence phase prior to final agreement. .

NADECOR and Russell Mining and Minerals Inc. (RMMI) signed an exclusive Letter of
Intent in April 2010 and an amended agreement in July 2010 to develop the project under a
JV arrangement. Under the agreement, RMMI will undertake the exploration and work
programs, feasibility studies and baseline studies for preparing an EIA, DMPF and a
bankable feasibility report as well as the funding of such efforts. In return for such funding,
RMMI would earn in a 60% interest in the planned JV. In March of 2010 the
aforementioned LOI was replaced with a Memorandum of Understanding between
NADECOR and St. Augustine Mining Ltd. (SAML), a subsidiary of RMMI, which provided
for the terms of the LOI as well as emplacing a Preferred Share Investment Agreement
wherein SAML could invest up to $30 million USD prior to the acquiring of clear title to the
MPSA and conclusion of a Joint Venture Agreement. RMMI retains the right to assign the
development of the King-king project to an affiliated entity under the MOU.

Ratel Gold Limited (Ratel) and RMMI have agreed to complete a Share Exchange
Agreement wherein Ratel will gain 100 percent control of SAML and RMMI will be
compensated in Ratel equity. Additionally, as part of the transaction, Ratel will acquire
RMMI’s 50 percent ownership of Strato.

Fees relative to the King-king mineral property and the Operator, NADECOR, have been
paid. The mining occupation fees for King-king MPSA No. 009-92-XI were paid by
NADECOR on February 9, 2010 for the period of May 27, 2008 – May 26, 2010, see exhibit
1 in Appendix 2. The fees for 2011 are due in February 2011. The performance bond for the
approved exploration and environmental work programs for the next two years beginning
May 2010 for the MPSA was paid on June 11, 2010; see Exhibit 2, also in Appendix 2. All
land and mineral exploration fees are in order for the King-king MPSA in regards to the
current property Operator and claim owner NADECOR.

A qualified person expert opinion letter is attached (Exhibit 3, Appendix 2) regarding the
claims and land status. There are no other private entities or corporations, other than
NADECOR, with a claim of possession over the said tenement area. This is evidenced from
the fact there are no records of taxes being paid to Compostela Valley Province on this land
by others. MPSA 009-92-XI awarded to NADECOR on May 27, 1992, defines the
ownership of the surface rights covering the lands within the 1,656 hectares rests with the
government of the Republic of the Philippines. NADECOR and the government have sole
control over this land and its development into a mineral producing mine and mill. RMMI
and NADECOR have an agreement to develop the property together. Based on this

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discussion, it appears that Benguet does not have any back-in rights to the property, once a
final agreement, as described above, is reached.

With respect to the tenement boundaries, the known King-king mineralized areas are located
on the south side of the tenement, as shown in Figure 4-3. This figure also shows some
commonly referenced deposit area names. There has not been any commercial scale
development of the deposit, so there are not any significant waste deposits or tailings ponds
on the property. Small scale mining, however, has resulted in numerous small pits, waste
deposits, spent ore piles, and plants within the tenement area. These are shown in several
photographs in Section 18.

Benguet developed some underground workings for sampling and testing the King-king ores.
These are limited in scale and occur in the main deposit area in the south.

Several buildings from Echo Bay’s tenure in 1997 remain at the project site, but these are in
disrepair. These buildings are located in the south east area of known mineralization and are
approximately 50 meters outside the currently designed open pit perimeter.

The King-king River is the major geographical feature of the mineral property area. It
transects the currently designed open pit approximately 100 meters from the western open pit
perimeter.

Figure 4-3. Major Deposit Areas With Respect to Tenement Boundary

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4.3 Agreements and Encumbrances

Owners of mining claims for land to be mined are permitted royalties in accord with their
operating agreement. The Memorandum of Understanding between NADECOR and SAML
provides that NADECOR fund their agreed upon portion of project costs and retain 40%
ownership, after Bankable Feasibility or to take a 3.5% royalty subject to a sliding scale
based on the price of copper, and adjusted annually to the commodity price index.
The Philippines Government takes an excise tax on metallic minerals. This excise tax is set
by Section 151 (A) (3) of Republic Act (RA) No. 8424 or the National Internal Revenue
Code of 1997 (1997 Tax Code), as amended by RA No. 9337 effective July 1, 2005. The
Code states that excise tax on metallic minerals would be “…based on the actual market
value of the gross output thereof at the time of removal,…in agreement with the following
schedule (for the King-king Gold-Copper Project): Gold and copper, two percent (2%).”
To calculate the tax base, no deductions are allowed for mining, milling, refining,
transporting, handling, marketing and other expenses. If the minerals are sold or consigned
overseas, costs of sea freight and insurance are deductible.

The King-king mineral property is accessed via the Buko-buko sa Anay-Lawaan dirt road.
Along this road outside the mineral property are 19 landowners that NADECOR has various
rights of way agreements with. Renewal of these rights of way is not a hindrance to the
status of MPSA 009-92-XI as covered by law. The aforementioned Exhibit 3 describes in
detail the law surrounding this matter. In summary, the mining rights holder will not be
prevented from access to the mineral property and conducting mining operations as long as
property damaged as a consequence of such access and mining operations is satisfactorily
compensated for. Again, as in the work programs mentioned above, a bond must be posted
with the regional Mines and Geosciences Bureau to guarantee the compensation.

There is an annual mining occupation fee of about 200 Philippine Pesos per hectare per year
that is paid to the province.

RMMI through its subsidiary, St. Augustine Mining Ltd. (SAML), has an option earn-in 60%
equity interest in the King-king project Joint Venture. This earn-in is defined by a
Memorandum of Understanding (MOU) signed in April 2010 by RMMI, SAML and
NADECOR. RMMI paid $400,000 to NADECOR for exclusivity to enter into the MOU in
November 2009. SAML will pay NADECOR an additional $7.1 Million in two phased
payments toward the earn-in. The entire $7.5 Million gives SAML 6% earn-in. SAML has
committed to spend $43.5 Million dollars toward completion of a Bankable Feasibility Study
for the project. Completion of the study earns SAML 45% earn-in of the total project.
SAML has made an additional commitment to spend a minimum of $32 Million or a
calculated amount based on planned tonnage throughput, as determined in the planned
feasibility study, in development capital. The calculated premium expenditure will be 0.457
X Planned Tonnage (Estimated at 100,000 tpd) X 1000 or 5% of Capital Cost, whichever is
less. These expenditures earn SAML the additional 9% needed for a 60% total earn-in. Any
over allocated variance between the amount spent toward BFS and the amount committed

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pays NADECOR first and the balance will be credited toward the development capital
commitment at 50%.

Ratel Gold Limited (Ratel) and RMMI have agreed to complete a Share Exchange
Agreement wherein Ratel will gain 100 percent control of SAML and RMMI will be
compensated in Ratel equity. Additionally, as part of the transaction, Ratel will acquire
RMMI’s 50 percent ownership of Strato.

4.4 Other Mineral and Mining Activities outside the Property Boundaries

There are small scale gold mining operations in the adjacent mining tenements next to the
King-king tenements. These tenements are called the SARC claims and the PMC claims.
Nadecor is in the process of acquiring these claims for use as possible sites for King-king
facilities.

There are no existing tailing ponds or waste deposits of note outside (or inside) the King-king
Mineral Property Area. The most notable feature from small scale mining in the King-king
and adjacent tenements is the sediment deposition visible along the King-king River banks.

The King-king River is the most notable natural feature outside the property area.

4.5 Environmental Obligations

Mineral Production Sharing Agreements (MPSA) are decided or entered into on the
stipulation that the mining activities are managed in a technically, financially, socially,
culturally and environmentally conscientious method. The King-king Gold-Copper Project
has an approved MPSA that was most recently amended in 2002 as already mentioned above.

The Department of Environment and Natural Resources (DENR) requires an Environmental
Compliance Certificate (ECC) for any mining activity except when an exploration permit has
been issued or through the exploration period of an MPSA. The ECC is issued by the DENR
based on an Environmental Impact Assessment (EIA) process, in which an Environmental
Impact Statement (EIS) is prepared by the contractor in agreement with procedures under the
ECC system. A completed biological profile of the proposed mining area is required as part
of these procedures.

NADECOR/Ratel will also complete an International Social and Environmental Impact
Assessment (I-SEIA), based on IFC Performance Standards (PS), the Equator Principles
(EP), and other international guidelines. The IFC PS and EP form the de facto standards
applied to many major operations seeking investments and guarantees from multilateral,
bilateral and commercial financial institutions worldwide. The I-SEIA will serve as a
complementary document to the National EIS to be presented to the Government of the
Philippines for project approval.

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October 2010
The Environmental Compliance Certificate is required for mining properties with an area of
1,548 hectares or more and, a project which includes open-pit mining, processing facilities,
coal fired power plants, land based tailing management systems, well fields, port facilities for
storing and loading concentrates and off-loading coal, infrastructure and other support
facilities.

Once the ECC is approved, NADECOR/Ratel will be required to submit for approval of an
Environmental Protection and Enhancement Program (EPEP) for the life of the mine. Once
the plan is approved, it will have to be implemented. Annual updates to this plan are
required.

Once the ECC is approved, NADECOR/Ratel will also be required to apply for approval of a
Social Development and Management Plan (SDMP) for the life of the mine. Once the plan is
approved, it will have to be executed.

NADECOR/Ratel is required to create a Mine Environment Executive Office within their
organization which collects the assets needed to put into operation the environmental
management programs and to handle the contractor’s environmental concerns. Any mining
practice not in agreement with anti-pollution laws and regulations will be required to be
remedied; and, failure to do so is also a case for the suspension of mining operations if there
is impending hazard to the environment.

Development of a modern large-scale mining operation at King-king will improve the current
baseline environmental and social conditions within and outside the mineral property area.
More than two decades of illegal small-scale miner activity has environmentally degraded the
mineral property area and downstream areas along the King-king River, particularly with
regards to sediments and E coli bacteria counts. Mine development will lead to gradual
cessation of small mining activities over a few years and subsequent departure of the small
miners and associated people, thus reducing E coli counts. Mine development will bring
sediment control structures to the streams and the King-king River in the mine area that will
much reduce downstream sediment flow in the waterways. Development will increase
employment, income and taxes in the municipality that will lead to improvements in social
conditions in the municipality and surrounding areas. See Section 18.3 for more details.

4.6 Permit Status

The MPSA document and the approved Work Plans (exploration and environmental) allow
work to be carried out that is necessary to obtain an approved DMPF (Declaration of Mine
Project Feasibility) and a ECC (Environmental Compliance Certificate), which allow the
future development of the mine. This work would include work proposed for the property,
i.e. to drill, sample, transport, survey, baseline studies, etc.

In the Philippine Constitution, minerals and mineral lands belong to the country. Private
individuals can embark on exploration, development and utilization of the mineral resources
under four modes of mineral agreements with the government: Mineral Production Sharing

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October 2010
Agreement (MPSA), Co-Production, Joint Venture and Financial or Technical Assistance
Agreement (FTAA). The first three modes of agreement are available only to Filipino
citizens or corporations where at least 60 per cent of the capital is owned by Filipinos. The
last mode is available to 100 per cent foreign owned corporations.

The Philippine Mining Act of 1995 is the chief law governing mineral lands in the
Philippines. In its transitory provisions, existing mining rights (i.e. leases and MPSA’s)
issued under prior mining laws shall remain valid, shall not be impaired and shall be
recognized by the government. The MPSA covering the King-king project falls under this
provision of the mining law, having been issued in 1992 and amended in 2002.

The Mineral Production Sharing Agreement (MPSA) has been the most common form in use.
The features of this method are as follows:

 The contractor has the exclusive right to conduct exploration, development and
operation in the contract area.
 The MPSA has a term of 25 years, renewable for another 25 years.
 The contractor is required to carry out activities according to an approved work
program (NADECOR/RMMI have an approved work plan and are executing it) and
commit expenditure for the environment, the community and the development of geo-
sciences
The financial requirement includes the payment of occupation fees (PhP100/hectare) and
excise tax at 2 per cent of gross revenue.

Prior to forming an MOU with RMMI, NADECOR was granted one of the major critical
agreements, permits, licenses and certificates vital in its mining operations. This was the
Mineral Production Sharing Agreement No. 009-92-XI, which was approved by the
government on May 27, 1992 (MPSA) 095-97-V, and amended on December 11, 2002.
NADECOR/RMMI have entered into agreements to acquire/control adjacent claims
surrounding the King-king claims for the purpose of managing the valueless rock from
mining operations to protect the environment. They also have gained control of 4,415
hectares of unclaimed land in the lowlands west of King-king for development of a tailing
management facility.
Other primary Permits of note required for operating the mine and process facilities are listed
in the table below. Many additional permits are required to bring the mine to production.
See Section 18.3 for more details.

INDEPENDENT

October 2010

Table 4-1
King-king Permits

Permit Date Issued / Submitted Term
Environmental Compliance Certificate After EIS Annual renewal
Environmental Protection and Enhancement Program After ECC approved
Permit to Construct Tailings Pond After design
Permit to Operate Tailings Pond After construction
Permit to Operate Power Plant After construction
Permit to Operate Oil – Water Separator After construction
Permit to Operate a Waste Disposal Facility (Landfill)
Use for Industrial Water – National Water Resources Board 1 Year
Wells for drinking Water – National Water Resources Board 1 Year
Permit to Cut Trees Monthly renewal

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October 2010

5.0 Accessibility, Climate, Local Resources, Infrastructure and Physiography

5.1 Access

The project area is approximately 35 aerial kilometers east-northeast of Davao City, and
some 1,000 aerial km southeast of Manila. Locally, it is about 10 aerial km northeast of the
Municipality of Pantukan, Province of Compostela Valley. Pantukan is about 92km by road
from Davao City via the well paved Tagum City–Mati National Road. From Pantukan town
proper, the project can be reached through the 18km Buko-buko sa Anay-Lawaan dirt road
which as of the date of this report can be negotiated in 35-45 minutes using motorcycles or
approximately three hours via conventional four-wheel drive vehicles.

5.2 Climate

The climate is tropical (Type I-B) with no pronounced wet and dry seasons. Maximum
rainfall usually comes between the months of June and December. Daytime temperatures
range from 18 to 35 degrees Celsius and the daily average is about 27oC (81oF). Rainfall
ranges from 2,000 to 3,200 millimeters per year within the mountains and 1,800 to 2,000
millimeters per year along the coastal plain. Normal precipitation is 2,100mm per year and
the average daily relative humidity is 81%.

Typhoons are extremely rare but torrential rains and subsequent flash floods are not
uncommon.

There are no climatic conditions that should cause the project great operational difficulty.
The greatest climatic issue will be managing storm waters that will result from excessive
rainfall at intermittent times during the life of the project. However, this is a common
operating issue at many tropical mine sites and should be manageable with proper controls
and planning.

5.3 Local Resources

The local unemployment is approximately 7% and underemployment is 22%. In 2009 the
local Pantukan Municipal government sent a letter to the Department of Environmental and
Natural Resources requesting the King-king Project be developed as swiftly as possible. The
local community is favorable to the project.

Primary employment in the region is on plantations growing bananas or coconuts.
Secondary jobs exist for a limited number of workers in the several small scale mines in the
mountains northeast of Pantukan City.

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October 2010

According to the National Statistics Office of the Philippines, the 2007 populations of
communities near the King-king Project were as follows:

Population
Pantukan Municipality 69,656
Magnaga 7,743
Napnapan 9,983
King-king 21,444
Davao City 1,366,153

5.4 Infrastructure

Some of the basic infrastructure is in-place for exploration and development of the King-king
deposit. A paved highway from Davao City runs 10 kilometers southwest of the project. The
project mine area in the 250- to 950-meter elevation range can be reached via the previously
mentioned 18km Buko-buko sa Anay-Lawaan dirt road, and with minor improvements it can
be made passable by large four-wheel drive vehicles such as drilling rigs and supply, fuel and
water trucks. Planned low-land facilities, including the tailings area, mill site, port facility,
and power plant location can be accessed via local area roads.

Water for exploration has been taken from low pressure artesian wells, including two wells
developed from exploration diamond drill holes located on the southern side of the deposit or
from nearby small surface drainage that runs through the southern and northern ends of the
project area. Potential sources for water for mining and processing include wells planned to
be situated in the alluvium deposits located southwest of the mineral area, or the King-king
River.

Power availability is currently too limited in Mindanao to assume that grid-supplied power
will be available for operation of King-king. Construction of a 120 MW coal fired power
plant is envisioned for the project.

Anticipated concentrate volumes and requirements for coal import necessitate the
construction of a dedicated port facility. The only port facility in the Pantuken area consists
of a concrete barge landing ramp, which should be available to handle barges from the
existing deep water port facilities at Davao and Tagum for transport of inbound materials for
construction and early mine operation.

Currently there is a drill core storage facility in Pantukan (approximately 1,000 square
meters). Expansion of this facility onto nearby grounds or complete relocation to another
area in Pantukan City is possible. Several buildings from Echo Bay’s tenure in 1997 remain
at the project site, but these are in disrepair.

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October 2010

5.5 Physiography

The coastal plain extends a length of 6 kilometers from Davao Gulf to the base of the
mountains where the King-king project is located. The majority of the population lives along
the coastal plain with significantly lower population densities in the mountains. Figure 5-1
below shows the topography of the local area.

The topography in the immediate project area is steep and rugged with elevations ranging
from 260-950 meters above mean sea level (AMSL) and averaging 800 meters AMSL. The
porphyry copper-gold mineralization outcrops between 400 m and 700 m elevations. The
terrain gradually transitions through moderately rugged to rolling moving westward toward
the coastline. The dominant drainage pattern in the area is dendritic. The property itself is
drained by the Casagumayan and Lumanggang creeks, tributaries of the King-king River
which enters the Davao Gulf at Pantukan.

The project area is covered generally by sparse tropical rainforest mostly left over from past
commercial logging operations. Old growth trees are mostly gone, and large areas of the
previously timbered slopes have been cleared, cultivated and planted with corn and other
crops by local mountain tribes and lowland settlers. In the foothills toward Davao Gulf, what
used to be forest-covered slopes are now dominated by cogon grass. Vegetables and fruit-
bearing trees are grown in some places but these are limited and concentrated in localized flat or
rolling terrain.

Figure 5-1. Physiography

INDEPENDENT

October 2010
5.6 Mining Surface Rights and Mining Personnel

The approved 1992 MPSA, amended in 2002, that NADECOR is a party to as the tenement
holder and as the operator, gives NADECOR exclusive right to develop the surface and
underground mineral resources at King-king.

Operations and maintenance staffing would be sourced from Pantukan and neighboring
municipalities, the province of Compostela Valley, from the island of Mindanao, from the
Philippines and from outside of the Philippines. The municipality of Pantukan is home to
60,000 people and approximately 22% are underemployed in this area and in the province.
There is a large craft trained work force to draw from in the Davao area. The population of
Davao is 1.4 million people. Thus, there is a sizable work force to draw from near the mine
site.

6.0 History

The project history can be briefly summarized as follows;

1966-1968 NADECOR discovers the King-king mineralization anomaly;
1969-1972 Mitsubishi Mining Corporation drilled 54 surface diamond drill
holes;
1981 NADECOR entered into an operating agreement with Benguet
Corporation (Benguet);
1981-1991 Litigation regarding ownership did not allow any activity
within the project. In 1991 all legal issues were resolved in
favor of NADECOR ownership of mineral claims;
1991-1994 Benguet drilled 69 diamond core holes and 25 reverse
circulation (RC) holes in addition to completing extensive
surface and underground exploration. An in-house feasibility
study was completed;
1992 The Mineral Production Sharing Agreement (MPSA) was
signed between NADECOR, Benguet and the Philippine
Government;
1995-1997 Echo Bay Mines, Inc. drilled approximately 128 holes (52,718
meters). All Echo Bay data were acquired by Kinross Gold,
which waived its option to proceed with the King-king project;
2005 NADECOR and Benguet applied for a conversion of the
MPSA into a Financial Technical Assistance Agreement
(FTAA) covering the porphyry area of the project;
2008 NADECOR terminated the Operating Agreement and applied
to the government to have Benguet removed from the MPSA
and became sole owner of the King-king project;

INDEPENDENT

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