Index of the document РИ-ИСУ-06.02.01.00.00/3-1 Asarel-Medet JSC, town of Panagyurishte Registration Number93-00 –7700/ 18.11.2009 APPROVED BY: EXECUTIVE DIRECTOR: /Dr. eng. L.Tsotsorkov/ REQUEST FOR QUOTATION REGARDING: „Preparation of a working plan for development of the Assarel mine and the West Section along outline “Stage 1” for overall mining of the remaining cost-effective reserves with alternatives to proceeding to a larger outline (Stage 2) or a smaller outline (Stage 6)”. 1. CURRENT STATE The Assarel copper ore deposit is located in the Sashtinska Sredna Gora Mountain in the Central part of Bulgaria, district of Pazardzhik to 20 km away south from the town of Zlatitza and to 10 km away to northwest of the town of Panagyurishte. The region of the deposit is an average mountainous and it altitude varies from 800 to 1,080 km. The geographical boundaries of the deposit are as follows: - to the north - the saddle to the north from the peaks Razslatitza and Koychov Kamak; - to the east – the Assarelska River; - to the south – the saddle between the peaks Razslatitza and Lisa Mogila; - to the north – the Panova River. The deposit was studied during the period from 1969 to 1977 and as a result a small open pit was commissioned with an annual throughput of 1 mln. tonnes of copper ore. The ore was processed at the Medet Concentrator Plant located at 12 km to the northeast from the Assarel deposit. The construction of an open pit and a concentrator plant with planned annual throughput of 15 mln of copper ore started in the early 1982. The first stage of the complex was commissioned in 1989 and its annual throughput was 7.5 mln tonnes ore. A decision was made to limit the annual throughput to 10 mln. tonnes of ore as a result from the new economic situation in 1991. The planned production capacity of 10 mln. tonnes of ore was achieved in 1997 as the current throughput is 13 mln. tonnes of ore. 1.1 Mineralization of the Assarel deposit The Assarel structure is orientated to the north—west and it is built mainly of Paleozoic granites, Upper Cretaceous effusive vulcanites (andesites, lavobreccia and tuffs), sub-vulcanic rocks (diorite, quartz-diorite and quartz-sienodiorite porphyrites). The Assarel deposit ore body which has a copper cut-off grade of 0.10% has an irregular column-like shape. The long axis of the horizontal ellipse-like sections is orientated to the north-northwest and their short axis is orientated to the east-northeast. The vertical scope of industrial mineralization has not been defined yet but industrial mineralization down to level 510 has been reached which was a subject of previous planning. However, mineralization has been found down to level 405 using a small number of drill holes. The ore body has a complex internal structure, which was predetermined by various tectonic disturbances, litological and mineralogical varieties, the nature and special location of the rock type bodies. More than 33 ore minerals have been found in it. The copper and gold bearing minerals are of industrial importance. Two endogenetic (pre-ore and ore) and one supergenetic stages with a total number of 10 parageneses were distinguished in the ore-formation process (Bogdanov, 1975 , 1987 .), Kr. Angelkov distinguished four spatially differentiated mineral associations in 1973 and 1988: - quartz-alunite-pyrite association with a small quantity of chalcopyrite distributed only in effusive rocks; - quartz-feldspar-chalcopyrite association, localized within the deep levels of the deposit; - quartz-sericite-chalcopyrite-bornite association, embedded in the sericite quarzites; - caolinite-chalcozine association – in the argillites and sericite quarcites in the upper parts of the deposit; - copper-carbonate-oxide association corresponding with the oxidized zone. The industrial mineralogical classification of the ores from the Asarel deposit is represented by three mineral associations: - chalcopyrite association (zone of primary-sulphide mineralization) - chalcozine-bornite-covelline association (zone of secondary-sulphide mineralization) - copper-oxide-carbonite (oxidation zone). The chalcopyrite association (ores of I type) contains less than 50% of secondary sulphide copper. Chalcopyrite is the main ore mineral, chalcosine, coveline and bornite are secondary minerals. This association is distributed from level 930 down to level 510. The chaclosine association (ores of II type) contains more than 50% of secondary sulphide copper. The main ore minerals are chalcosine, coveline, bornite, copper sulphosalts, chalcopyrite. The association is located in the upper part of the ore body from level 1085 down to level 945. A column is formed in the central part of the ore body down to level 805. The carbonate-oxide association corresponds with the oxidation zone. The main ore minerals are chalcosine, coveline, malachite, azurite and rarely cuprite, native copper. It is distributed in the south part of the ore body and it makes a smooth transition to the areas of chalcosine and chalcopyrite associations. The rocks are hydrothermally altered and they have been converted into metasomatites built up exclusively of secondary minerals: quartz, sericite, montmorillonite, other clay minerals, chorite, epidote, alunite, diaspore, ore minerals. Depending on the quantitative ratios between the rock forming minerals, the metasomatites are distributed into three groups: propylites, argillites and secondary quarzites. The last two varieties are alunite-diaspore and sericite. The ore bodies which build up the Assarel deposit are represented by the following rock varieties: Propylites form a monolithic body in the east half of the deposit and in the peripheral northwest and south-north parts. Separate elongated bodies of irregular shape are preserved in the central part of the deposit. They are mainly subvulcanic dykes and apophyses here. Argillites occupy the west half of the deposit. They are located down to the studied depth but they are more widely spread at the deposit higher levels. Argillites are supergenetic in the oxidation zone. Alunite-diaspore quarzites form eight layer-like and lens-like bodies in the west half of the deposit as all of them are embedded in argillites. They are distributed mainly at the higher levels of the deposit down to the depth of 250 m. Sericite quarzites form eight lens-like bodies in the central part of the deposit. They differ by size and they are arranged in an array of beads orientated to the southeast-northeast. Bodies 1 and 2 are developed on the earth surface. The rest of the bodies are located by the geological exploration drill holes. Their vertical scope is longer than the studied one by the drill holes. The sericite quarzites are the main ore-embedding rocks in the deposit. Having a cut-off grade of 0.10 % Сu they contain 31 % of the copper reserves in the deposit at an average grade of 0.55 % Сu. Due to this reason the sericite quarzites are referred to as eight geological, morphologically differentiated ore bodies, embedded in mineralized mine material with a lower copper grade. 1.2 Engineering and geological conditions The Asarel deposit and the ore field which pertains to it are considered as a small grabensynclinale located between the anticlynoriun of the Central Sredna Gora Mountain and the 2 Panagyurishte graben-synclinorium in the scope of the Panagyurishte depth fault with a submeridinional orientation. This predetermines the strong tectonic alteration of the rocks. Ground zones are formed as their depth varies from several to several tens of meters. The exploration works carried out in 1978 showed that the Asarel deposit is limited to the northeast by the Mial fault with a northwest-southwest orientation (130º-150º) and by the Petich upthrust with the same orientation to the southwest. The structure is significantly complicated by a number of secondary faults parallel to the Mial fault and also by such which have a northeast andsub-equatorial orientation. Such are the Panovski fault and the Razslatitza fault which together with the Mial and Petrich faults for several structural blocks. Those blocks are cracked by submeridional faults like the Dabravski, Hadgimitov faults, etc. The most clearly expressed faults in the area of the pit are the Mial, Razsaltitza, Razlozhkovsi and Dabravski faults. All of them are observed through the entire kettle. The Mial fault is open in the northeast part of the pit. In this part it is a beam of several parallel faults as it subsides to the south at a gradient of 50º-60º. The fault plane itself slightly shifts its orientation from 210/80 in the west parts through 215/70 and reaches 195/70. Strips with orientation of 175/75 and 215/65 are located upon it. The very smooth planes reaching a length of 30-40 meters and a height of 15 meters are typical for the fault. The macro- and mesostructures allow this disturbance to be defined as a fault – fault-shift. The block located to the north (the recumbent wing), in which Sivata gramada peak falls, is relatively elevated. The granitodiorites in proximity to the fault and the contact with the Smilovenski granite (represented as a separate strip) are cataclised and slated which makes them look like gneisses. The Razslatitza fault has opened in the south and southwest part of the pit. The entire fault zone is filled with black tectonic clay. Its thickness increases from the bottom to the top – from 2030 cm to 1,5-2 meters. It subsides to the north-northeast (20-30º) at an angle of 60º and it separates granites and granitodiorites to the north from microdiorites to the south. A multitude of dykes with microdiorite composition occurs parallel to the fault which follow its propagation direction. Mesoscopic criteria allow it to be defined as an upthrust. It merges with the microdiorites in the south-southeast part while in the southeast part it serves as a boundary between the Smilovenski granite and the microdiorites. The Panovski fault within the deposit is observed between the Razslatitza and Mial fault which is also a fault beam which subsides to the south. It is orientated to 130º and its gradient varies from 60º to almost vertical position (beneath the Dispatch Building). A contact is observed between the granites from the Smilovenski plutonic body and the granitodiorides under the Panovski fault in the east part of the deposit. A 10-meter thick zone, built up of parallel veins filled with quartz, pyrite and chalcopyrite is located parallel to the fault surface. The availability of this zone confirms its sinnore nature. The Macroscopic criteria allow it to be defined as an upthrust. The Razlozhkovski fault is observed in the southwest part of the mine. So far it has been developed only in its upper levels. Its orientation is to 150º, as it subdues to the east-northeast at an average gradient of 60º. It is easy to follow it on the terrain because of its thick layer of tectonic clay (reaching up to 4 m of thickness) and because of the sub-parallel strongly mineralized dyke with microdiorite composition. No absolute criteria have been established for its nature of movement. In conclusion we can say that the structures with orientation between 130º-150º are predominant for the entire pit which are typical for this part of the Sredna Gora Mountain. Structures with orientation to 70º, 90º and 110º can be considered secondary ones. Based on a conjunction of indications and taking into account the major considerations of the engineering and geological systematization from 1977, the compression strength from the report from 1995 and the information for the exact names and distribution of metasomatites the rocks were differentiated into four major groups: First group – very strong and strong rocks (not altered or slightly altered), with an average compression strength of 84 МРа which includes mainly propylites and more rarely quarzites. Indeed, these are the densest and strongest rocks. 3 Second group – strong rocks (significantly alteres) with a compression strength of 60 МРа including mostly propylites. Those are cracked rocks, the strength of which refers to separate strong pieces and does not correcpond to the compression strong of the predominant rocks in situ. Third group – rocks of average strength (strongly altered) with average compression strength about 36 МРа, which includes the three types of metasomatites: propylties, quarzites, argillites. Their low compression strength is due to a number of cracks which explain their behavior in situ as intensively cracked. Fourth group – weak (very strongly altered) rocks which includes mainly argillites and weak quarzites as propylites make an exclusion. They are not water-resistant – if they get wet and stay in the open air, they fall apart completely and this is due to the significant contents of clay in them. The tectonic clays, found in the Razslatitza fault in the southwest part in the mine also belong to this group. 1.3 Hydrogeology of the pit The hydrogeological evaluation of the massive was initially based on data from the studies from 1977 and two visual checks made in 1995. A map was prepared based data of the studies prior to 1977 in which some hydrogeological peculiarities of the site were reflected. Regardless the fissure nature of underground water, a single filtration flow used to exist in the massif. It can be characterized as radial, convergent and non-pressure. Two elongated zones with increased pressure and orientation west-south are outlined on the backgrounds of this flow. The first zone is located in the west part of the pit. The levels reach elevation 1030 here. The second zone is located in the center of the pit about elevation 1000. Those zones can be attributed to the availability of ascending circulation of underground waters in the massif (concealed discharge of pressure fissure waters). As a whole the massif is anisotropic with high conductivity of some tectonic disturbances at a predominantly low filtering capacity. It is presumed that the water contents of the slopes in the southwest part of the pit can be attributed to the first zone with increased pressure and those in the north part – to the second zone. The visual checks carried out in 1995 and the rough hydrogeological calculations made for the purposes of orientation give us a reason to suppose that the constructed drainage gallery at level 710 does not dewater the mine efficiently. A comprehensive analysis of the information collected as of that moment about the hydrofeological and engineering and geological peculiarities of the deposit was assigned to the American company Vector Colorado, LLC. Hydrogeological models prior to the start and after stopping its operation, forecast models of the underground waters according to several scenarios (with and without using the drainage gallery) ways for observance of underground waters and their testing, geotechnical analysis of the pit slopes were made. The summarization of the gathered information enabled us to obtain a clearer idea about the specific hydrogeological conditions in the region of the Assarel pit. The underground waters in the pit region and the adjacent territories are non-pressure and at separate places in the massive they are weakly pressurized up to pressurized. The levels are established at different depths of the terrain – from several meters to 100 m in proximity to the cup of the open pit. The general orientation of the underground flow is from north-northeast to south-southwest. Based on the above-said, taking into consideration the conditional terminology four zones were distinguished with different permeability: zone 1, zone2, zone3, zone 4. Each of the so determined low rank hydrogeological units (zones) has a very complex spatial shape, predetermined by the geometry of the natural relief f the terrain, the lateral boundaries between adjacent zones and of the pit cup (at different levels of it operation). The first zone (zone 1) is formed in the weathering zone of the rock massif (the so called oxidation zone). It occupies the upper parts of the section and varies within the boundaries for several tens of meters to 100-150 m. In these parts the rocks are weathered and crack to different extents which is a prerequisite for the relatively high permeability of the media. The filtration factor varies within wide ranges from 1х10-3 to 1х10-1 m/d but most often it is about 5х10-2 m/d. The other 4 3 zones are established in different metasomatite rocks: zone 2 is built up of secondary quarzites, zone 3 – of argillites and zone 4 – of propylites. The different rock varieties are distinguished also by the fact that they are cracked to various extents but in general they are weakly cracked which predetermines they relatively low filtration characteristics. The filtration factor in the three zones varies within a relatively small scope– from 1х10-3 to 2х10-2 m/d as the low values are more representative for zone 3 and the high ones for zone 4. Under natural conditions (before constructing the pit) the average pressure gradient was high – about 0.075 which is typical for the mountainous regions. After staring the mining activities, the structure of the underground flow was strongly disturbed as a result from the drainage of part of the flow in the built drainage gallery or directly along the slopes in the lower parts of the pit. A largescale depression was formed in the central parts of the considered territory of the accumulated underground waters in the rock massif. The feeding of the underground waters within the modeled area is done from various sources: natural underground flow along the northwest boundary, infiltration of the rainfalls and draining waters along the slope, a river with constant run-off. Under natural conditions the major drainage of the rock massif is made predominantly to the southwest. When mining activities are carried out, the larger part of the underground flow is drained along the drainage gallery (the flow is about 25 l/s). 1.4 Reserves of the deposit The industrial evaluation of the deposit reserves was made in 1977, an evaluation based on the conditions was made in 1973 at a cut-off grade of 0.15% Cu for a 15-meter section. The reserves were calculated based on two natural types of ore – primary sulphide ore and secondary sulphide ores. In the approved by the State Reserves Committee “Report for the results from the geological studies of the Assaarel copper deposit”, the reserves down to level 510 as of July 1, 1977 are accepted as follows: - category В + С - 377.3 mln. tonnes of ore 0.38 % Сu -category С2 - 41.2 mln. tonnes of ore 0.26 % Сu In compliance with the extent to which the reserves were studied and proven the reserves were additionally divided into the following groups: proven reserves, probable reserves and preliminarily evaluated reserves. Balance ores (flotation ores and leach ores) are included in the group of the proven reserves. The overbalanced ores within the pit outline are included in the group of the evaluated in details resources. The ores outside the pit outline with balance grade refer to the group of the probable reserves and those with overbalance grade – to the preliminarily evaluated reserves. In addition, the ores from the pit were further recalculated and grouped based on the requirements for “Conditions for calculating the reserves in the Assarel copper-porphyry deposit when mined from an open pit” approved in 1993 by the Executive Director of Assarel-Medet. Dr. eng. Lachezar Tsotsorkov. There are two natural types and seven technological sorts: І type - primary sulphide ores (chalcopyrite) are the ores in which the relative grade of primary sulphide copper exceeds the grade of the secondary sulphide ores. ІІ type - secondary sulphide ores (chalcosine) are the ores in which the relative grade of secondary sulphide copper exceeds the grade of the primary sulphide ores. - sort 1 - primary sulphide ores with oxide copper to 5 relative %; - sort 2 - primary sulphide ores with oxide copper from 5 to 10 relative%; - sort 3 - secondary sulphide ores with oxide copper to 5 relative %; - сорт 4 - secondary sulphide ores with oxide copper from 5 to 10 relative %; - sort 5 - secondary sulphide ores with oxide copper from10 to 15 relative %; - sort 6 - secondary sulphide ores with oxide copper from15 to 20 relative %; - окисни руди with oxide copper to 20 relative %. 5 The leach ores are secondary sulphide (7th sort) with oxide copper excceding 20 relative % and secondary sulphide (8th sort), limited between cut0off grade 0.10 % copper (the boundary with the waste) and the cut-off grade for the respective sort. 1.5 Ways of mining the deposit The mining activities on developing the Assarel deposit is divided into two stages: А. Experimental mining works from 1976 to1981; B. Mining works from 1982. The experimental mining works were performed by the Medet Mining and Proecessing Complex according to a plan prepared by Niproruda JSC, Sofia. A total amount of 2.4 mln. tonnes of ores with average copper grade of 1.237 % were mined containing 29,989 tonnes of copper. They were processed n the Medet concentrator plant mixed with the ores from the Medet pit. The regular mining activities started in 1982 and were performed accordint to a plan prepared by Niproruda JSCa and Giprotzvet, Moscow. The plan was approved by the Council of Ministers aith Oreder No. 44 from March 20, 1981 as the outline of the pit was narrowed and its bottom was made higher with three benches from level 510 to level 555 fro the purposes of achieving better financial results. Thus 61..5 mln tonnes of ores from category В + С1 with average copper grade of 0.35% were excluded from the approved balance reserves at the amount of 377.3 mln. tonnes. A specialized council of experts at the Ministry of Industry with report from October 10, 1997 decided to accept outline B with reserves of 272 mln. tonnes of ore and pit botton at level 555 as of January 1, 1996 under the conditions for mining of the Asarel deposit. A recalculation of the reserves was made in 1998–99 using the method of polygons along outline B anf the state of the mine as of January 1, 1998 by Geotechmine KI, Sofia. The new geological plan was approved by the Ministry of Environment and Waters in 2000. The recalculated balance reserves include flotation ores and leach ores. The process ores are primary and secondary suplphide and contain less than 20% oxide copper at a conditional cuy-off grade of 0.22 % copper and cut-off grades according the the conditions from1993 stated above. We should note that under the conditions of market economy the conditions are a variable depending on the copper prices at the London Metal Exchange and the costs for ore mining and processing. The mining activities in the Asarel pit are carried out in the co called outline B for which also the mining concession was granted. Currently, the pit is mined from level 1095 to level 720, as the levels beneath 915 fall within the deep part of the mine. The benches in the pit are 150meters high. The technology of the mining activities in the pit is as follows: Drilling activities – 2 DRILTEH D 75 KS drills with a bit diameter of 251 mm for the main blasting and 2 Atlas Copco ROC L8 drills for auxiliary blasting activities are used; Blasting activities – blasting substances and blast materials produced by Dyno NitroMed JSC, built in the region of the village of Panagyurski Kolonii are used. Digging and loading activities – three types of loading units are used: – 2 LIEBHERR ER 994 BE hydraulic shovels; – 2 O&K RН 120 C and 1 LIEBHERR R 994 B hysraulic shovels; – 2 САТ 992 D and 994 D front-end loaders; Ore transportation to the concentrator plant and the leach ore – 130-tonne BelAZ 75131 trucks and a Cyclic Flow Conveyor Technology with capacity 3000 tonnes per hour. The main technological processes are carried out by the respective auxiliary machines and the auxiliary units and shops like: – Maintenance crews and central maintenance shop; – A unit for construction and maintenance of the roads, working sites and preparation of drill fields; 6 – Power supply; – Pit and slopes dewatering. In 2010 the new Cyclic Flow Conveyor Technology for waste haulage to the West Dumpfield with capacity of 5 000 per hour is to be commissioned and the efficiency of the mine is to be increased with up to 15 mln tonnes of ore according to the modernization plan of the current concentrator plant. At a meeting of the Board of Directors of Assarel-Medet JSC (Report No. 249/ 15.07.2009 ) a decision was made, item 1.4 of which states: To proceed to a new Working Plan for carrying out mining activities in the Asarel mine along outline “Stage 1” including preliminarily calculated reserves with cut-off grades of 0.17 % Cu and 0.15 % Cu accoriding the the table: Assarel Mine State of the reserves as of Janyary 1, 2010 along outlines “Stage 1”, “Stage 2” and “Stage 6” Outline Етапен 2 Stage 1 Stage 6 0.11 0.15 0.17 0.15 0.17 Copper grade, % Cu 520.7 295.8 270.3 235.4 217.5 Process ore, mln. tonnes including argillites 177.0 109.5 97.9 78.6 71.0 Secondary quarzites 95.0 71.2 68.1 63.5 61.8 propylites 248.7 115.1 104.3 93.3 84.7 1 554 077 1 046 708 1 006 764 860 658 840 988 Metal copper including argillites 449 580 320 835 301 967 235 800 227 003 Secondary quarzites 405 650 331 080 326 648 306 705 305 969 propylites 698 847 394 793 378 149 318 153 308 016 Average copper grade in the pit, % 0.298 0.354 0.372 0.366 0.387 copper 1.9 9.4 13.6 6.5 10.1 Leach ore, mln. tonnes Metal copper, mln. tonnes 2 071 11 844 18 518 8 255 13 890 Copper grade, % 0.109 0.126 0.136 0.127 0.138 754.3 364.8 386.1 242.3 256.6 Waste, mln. tonnes 1 276.9 670.0 670.0 484.2 484.2 Mined material, mln. tonnes 1.44 1.20 1.36 1.00 1.13 Stripping ratio 2. OBJECTIVE OF THE TASK The objective of the task is: I. To develop alternatives for the overall mining of the reserves of the Assarel deposit at different cut-off grades and prices at the London Metal Exchange within the boundaries of the outlines, suggested by the Client, i.e. “Stage 1”, “Stage 2” and “Stage 6”. A justified from economic point of view initial variant shall be suggested which is to be reviewed and accepted by the client. II. “Working plan for the overall mining of the Assarel Deposit and the West Section along outline “Stage 1” fro digging out the remaining cost-effective and subject to processing ores with alternatives to proceeding to a larger outline (Stage 2) or a smaller outline (Stage 6)” shall be prepared through scientifically justified, technologically and practically feasible and environmentally friendly solutions taking into consideration the following limitations: - boundaries of the surface – outline “Stage 1”, “Stage 2” and “Stage 6” (Attachment 1); - remaining reserves at the Assrel deposit; - annual capacity of the concentrator plant: 15-16 mln. tonnes. 3. SCOPE OF THE TASK The task shall include: А) General part - Analysis of all processes and activities along the entire technological flow, including preliminary and actual study, short-term and long-term planning and reporting of the mined 7 quantities, ore mixing of the flotation ores, monitoring the slopes for deformations, mapping ot the deposit, performing the mining and auxiliary activities in the mine: - Detailed weather and hydrogeological characteristics of the deposit region. B) Geological part - Analysis of the current geological model of the deposit and preparation of a current model including the data from the newly made exploration drill holes and mapping of the deposit based on metasomatites and tectonic disturbances; - Analysis, evaluation and calculation of the ore reserves falling within the boundaries of outlines “Stage1”, “Stage2” and Stage 6”. - Preparation of new conditions for calculating the reserves and resources in the Assarel deposit. C) Hydrogeological and engineering and geological characteristics of the deposit - Analysis of the current hydrogeological model of the deposit: - Forecast measurements as a result from transferring to outline B-average to outlines outlines “Stage1”, “Stage2” and Stage 6”. - Analysis of the current hydrogeological and engineering and geological peculiarities of the deposit as well, as physical and chemical properties of the rocks: - Defining the region of the deposit depending on each stage of mining activities along outlines “Stage1”, “Stage2” and Stage 6”; - Analysis of the general slope angles in the various sections of the pit in compliance with the local engineering and geological conditions and stages of mining activities. D) Mining and technological part - General organization of the processes and activities at the Assarel mine. Production capacities, schedule of mining activities, calendar schedule of development and life of mine taking into consideration the capacity of the concentrator plant and the cyclic flow conveyor technology for waste haulage: - Mining of the deposit and development system; - Drilling and blasting activities (main and auxiliary); - Loading activities; - Calendar schedule for mining activities – options shall be suggested for development at various copper prices at the London Metal Exchange and cut-off grades of 0. 15% Cu and 0.17% Cu as well as ways for transition from one stage development to another; - The critical threshold for cost-effective mining of the deposit along outlines “Stage 1”, “Stage 2” and “Stage 6” as well as the minimal cut-off copper grades at the individual stages of development shall be forecasted; - Transportation of mined material – recommendations for increasing the utilization of the transport activities. Options for the following shall be prepared and evaluated: Haulage of ore to the concentrator plant using combined transportation: Trucks – Cyclic Flow Conveyor Technology with capacity 3000 tonnes per hour and mobile loading unit; Trucks – Cyclic Flow Conveyor Technology with capacity 3000 tonnes per hour and mobile loading unit – inclined hoist or skip hoist; Trucks – inclined hoist or skip hoist. Haulage of waste to the west dumpfield Trucks – Cyclic Flow Conveyor Technology with capacity 5000 tonnes per hour and stationary loading unit located outside the pit outline; Trucks – Cyclic Flow Conveyor Technology with capacity 5000 tonnes per hour and stationary loading unit located outside the pit outline– inclined hoist or skip hoist; Trucks – Cyclic Flow Conveyor Technology with capacity 5000 tonnes per hour and mobile loading unit located within the pit outline and its regular relocation; Trucks – Cyclic Flow Conveyor Technology with capacity 5000 tonnes per 8 hour and mobile loading unit located within the pit outline and its regular relocation;- Specification of the mining equipment and a calendar schedule for its gradual replacement - inclined hoist or skip hoist; - Mixing of flotation ores – performing cost-effective and profitable flotation ore mixing taking into consideration the concentrator plant requirements. The necessity for building a ore mixing shop shall be evaluated and a technology to work with it shall be suggested; - Slope stability of the open pit at various options of its development; ways and metods for its monitoring shall be suggested; - Construction activities – building and maintaining the road infrastructure, water drainage and mining-construction activities. Evaluation of the project for pit drainage and dewatering for the three options (Stage 1, Stage 2 and Stage 6) - Designing the relocaton of the pertaining auxiliary devices servicing the whole mine and the concentrator plant – options; E) Maintenance activities and power supply of the pit – Organization of the maintenance activities and power supply of the open pit. Improvement of the availability of mining units. F) Technical and economic parameters of the work plan – the task needs to include several options for the Assarel pit mining and the most optimal option fro m economic point of view based on the NPV shall be suggested. Constant grade of the ore fed to the concentrator plant shall be ensured. Each option needs to contain information about the needed investment and annual operation costs for performing the mining activities. G) Labor safety when performing mining activities - designing an efficient ventilation system for the pit and reducing deleterious emissions in the air and the adjacent regions for each stage for the suggested development of mining activities. Ways and methods fro reducing technological delays of the main mining equipment shall be suggested for the conditions of reduced visibility (fogs, adverse weather conditions). H) Environment and water protection and rehabilitation after mining activities – The work plan has to contain initiatives (methods, means and compensatory initiatives) to reduce the negative impact of the activity of the pit, dumpfields, tailings dam, industrial site, wastes and auxiliary activities upon the environment – surface and underground waters, atmosphere air, natural resources and biodiversity; - The work plan has to contain a Plan for managing mining wastes in compliance with the regulations in force – the Underground resources act and the Regulations for managing of mining wastes; - The working plan has to contain over all projects for operation, closing ands rehabilitation of the terrains, damaged by the mining activities including selection of a method, technology and machines; - The working plan shall contain alternatives I terms of location, scope, production capacity, technologies, financial and economic parameters including “zero alternative” as well. - Alternatives for resolving the issue of the water supply area of the Panova river have to be suggested in the work project. - В работният проект следва да бъдат предложени алтернативи за решаване на въпроса с вододайната зона на р. Панова. I) The contractor may add tasks which he considers appropriate to be resolved together with the project preparation 4. REQUIREMENTS FOR COMPETABILITY TO PARTICULAR QUALITY INDICES The suggested project solutions shall ensure operational safety and cost effectiveness when performing drilling and blasting activities, digging and loading activities, transportation, dumping and rehabilitation activities in the Assarel Mine. 5. QUALITY (QUOTATION) REQUIREMENTS TO THE SERVICE = 9 5.1. Competition part The quoting company shall make a mandatory visual check of the site, to get acquainted with the available documentation and to assess well the scope of work. It shall also sign a Declaration for visit and visual check, provided by the Client. A suggestion for prices for the separate sections and the final price for the task completion. Quoted time for completion of the task in work days. Readiness to start work; Terms and ways of payment (advance payment, etc.) Evidence for technical experience, qualification and abilities of the applicant. The quotation shall be valid at least 90 days. The applicant shall present references from five previous or present clients with addresses, telephone numbers and contact persons for project with similar nature. The quoting organization shall present an insurance policy according to Articles 171 and 172 of the Territorial Organization Act. 5.2. Non-competition part Registration under BULSTAT; Exact address, contact persons, telephone, fax and e-mail. Court registration of the Contractor. Certificate of actual standing of the company. Requirements for assistance by the Client and conditions for the task implementation. The prior experience with such type of work shall be an advantage foe the company. The design company shall carry out a 60-minute presentation after the project completion to the respective mine personnel for the key points when implementing the project and the world trend in this area. 6. WAYS AND CRITERIA FOR ACCEPTING THE PERFORMED WORK The final reporting and acceptance of the prepared project shall be made with a report at a technical and economic expert council meeting for the accomplished task approved by the Executive Director of the client company. 7. MISCELLANEOUS The requirements for activities performed by hired partners on the territories controlled by Assarel-Medet shall be observed in terms of occupational safety and health conditions, environment protection, access control and security and ensuring the availability of personnel. Those requirements shall be introduced to the contractor when signing the contract. The materials shall be presented in four copies and on electronic media (CD); The observance of the requirements of the Occupational Safety and Health, Environment and Corporate Security departments as well as the control authorities is mandatory. The quoting companies shall be granted access to the site and the selected contractor will be able to visit the company within the official working time of the Company; The quotation shall be presented by 4 pm on December 30, 2009 in a sealed envelope addressed to the Executive Director of Asarel –Medet JSC, 4500 Panagyusrishte via one of the following way: o To fax 0357 60 250 to the personal attention of the Executive Director of AssarelMedet JSC, Dr. eng. L. Tsotsorkov. o To e-mail: rshumanov@asarel.com to the personal attention of the Executive Director of Assarel-Medet JSC, Dr. eng. L. Tsotsorkov. o By post in a sealed envelope with the following address: 4500 Panagyusrishte 10 Assarel-Medet JSC Executive Director Dr. eng. L. Tsotsorkov With the following note: Quotation for task implementation: „Preparation of a working plan for development of the Assarel mine and the West Section along outline “Stage 1” for overall mining of the remaining cost-effective reserves with alternatives to proceeding to a larger outline (Stage 2) or a smaller outline (Stage 6)”. The quotations shall be reviewed by the appointed for the purpose committee. The results shall be announced after the committee finishes its work as the selection of the submitted quotations shall be performed at one round. At the second round there will be discussions for improving and further clarifying the parameters only with the companies ranked at the first three places after the selection. We note that the established order for storing the quotations in the company, transparency and adhering to principles during their reviewal excludes the possibility for any influence upon the contractor selection or upon the ingoing control quality through corruption. Moreover, if such attempts are found out, the respective employees shall be disciplinary dismissed from work and the contracts with the respective partners shall be cancelled. Contacts: Assarel-Meder JSC, telephone: (0357) 60 210/ extension: 138 – Dr. eng. Krasimir Karparov, eng. Em. Valcheva, eng. Iv. Yordanov. November 19, 2009 PREPARED BY, Head of Department Technical Activities /. eng. Krasimir Karparov / COORDIJNGTED WITH, DIRECTOR OPERATIONS /eng. D. Nikolov/ 11