ORE RESERVES AND MINERAL RESOURCES

Dragon Mining has ensured that the Mineral Resources and Ore Reserves estimated are subject to good governance arrangements and internal controls. The Mineral Resources and Ore Reserves estimates have been compiled by independent mining consultants RPM Global in Western Australia and Hong Kong, an organisation whose personnel have exposure to best practices in modelling and estimation methods. RPM Global has also undertaken reviews of the quality and suitability of the underlying information, which included a site visit of the Company’s mining projects in 2015, 2016 and 2017. In addition, Dragon Mining’s management regularly carries out reviews and audits of internal processes and of external contractors that are utilised by the Company.

Dragon Mining reports Mineral Resources and Ore Reserves at least annually in compliance with the requirements of the reporting guidelines as set-out in the 2012 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (“JORC Code”).  If there are any material changes to its Mineral Resources or Ore Reserves during the course of the year the Company is required to, and promptly reports these changes.

Ore Reserves

The Company’s total Proved and Probable Ore Reserves as at 30 April 2018 are 2,175kt grading 3.1 g/t gold for 216 kozs.

Statement of Ore Reserves, as at 30 April 2018
Proved Probable Total

Tonnes (kt) Gold (g/t) Ounces (kozs) Tonnes (kt) Gold (g/t) Ounces (kozs) Tonnes (kt) Gold (g/t) Ounces (kozs)
Vammala Production Centre
Orivesi Gold Mine (Underground)
3 5.2 1 40 6.6 9 43 6.5 9
Jokisivu Gold Mine (Underground) 149 2.7 13 751 2.9 70 900 2.9 83
Kaapelinkulma Gold Project (Open Pit) 52 3.9 7 19 4.3 3 71 4.0 9.0
Svartliden Production Centre
Fäboliden Gold Project (Open Pit)
- - - 1,160 3.1 115 1,160 3.1115
Group Total    204   3.1 20 1,971 3.1 196 2,175 3.1 216


Ore Reserve estimates have been rounded to reflect accuracy. All estimates are reported on a dry tonne basis.

Ore Reserve In-situ Cut-off Grades - Underground operations

Project Gold (g/t)Operating Gold (g/t)Stoping Gold (g/t)Development Gold (g/t)
Orivesi Gold Mine5.44.43.71.0
Jokisivu Gold Mine
Arpola - Area A3.62.72.31.0
Arpola - Area B3.72.72.41.0
Arpola - Area C3.12.32.00.9
Arpola - Area D3.62.72.31.0
Kujankallio3.62.72.31.0

Development cut-off grade assumes that all mining costs have been otherwise included and hence provides an indicator of whether development ore is economical to mill and refine. The Stoping cut-off grade includes the operating cost without ore development. That is, the average grade of a stope must be above this value for it to be economic to mine.  It assumes stope access development has been completed for the level.  The Operating cut-off grade includes all the operating costs inclusive of ore development and hence provides an indicator of whether an entire level is economic to be mined.  The Project costs include direct underground capital and operating costs.

Ore Reserver In-situ Cut-off Grades - Open Pit Operations

Gold (g/t)
Kaapelinkulma Gold Project1.14
Fäboliden Gold Project1.47

In addition to site specific mining, metallurgical, cost and revenue factors, the Ore Reserve estimates for the Orivesi Gold Mine and the Jokisivu Gold Mine used a gold price of US$1,280 per ounce.  For the future mining operations, a gold price of US$1,260 per ounce was used for the Ore Reserves for the Kaapelinkulma Gold Project and  the Fäboliden Gold Project.

Mineral Resources

The statement of Mineral Resources for the Company totals 13,499,000 tonnes grading 3.3 g/t gold for 1,408,000 ounces as at 30 April 2018, inclusive of Ore Reserves.

Statement of Mineral Resources, as at 30 April 2018 and Inclusive of Ore Reserves
Measured Indicated Inferred Total
Tonnes   Gold (g/t) Ounces Tonnes Gold (g/t) Ounces Tonnes Gold (g/t) Ounces Tonnes Gold (g/t) Ounces
Vammala Production Centre
Kujankallio 323,000 4.4 45,000 776,000 3.8 94,000 239,000 3.6 29,000 1,337,000 3.9 155,000
Arpola 119,000 4.7 18,000 387,000 5.1 64,000 147,000 5.3 24,000 653,000 5.1 112,000
Jokisivu Gold Mine 442,000 4.5 63,000 1,163,000 4.2 158,000 386,000 4.2 53,000 1,990,000 4.3 267,000
Kutema 44,000 5.1 7,000 56,000 5.3 10,000 8,000 5.5 1,000 107,000 5.2 19,000
Sarvisuo 22,000 6.2 4,000 63,000 8.1 16,000 28,000 6.5 7,000 113,000 7.4 24,000
Orivesi Gold Mine 66,000 5.5 11,000 119,000 6.8 26,000 36,000 6.3 8,000 220,000 6.3 43,000
Kaapelinkulma Gold Project 76,000 3.8 9,000 59,000 4.2 8,000 34,000 3.0 3,000 168,000 3.8 21,000
Vammala Total 584,000 4.5 83,000 1,341,000 4.5 192,000 456,000 4.3 64,000 2,378,000 4.4 331,000
Svartliden Production Centre
Above 350 mRL - - - 3,807,000 2.8 340,000 887,000 2.4 69,000 4,694,000 2.7 409,000
Below 350 mRL - - - 961,000 3.1 96,000 4,978,000 3.2 514,000 5,938,000 3.2 609,000
Fäboliden Gold Project - - - 4,768,000 2.8 436,000 5,864,000 3.1 583,000 10,632,000 3.0 1,019,000
Open-pit 83,000 3.1 8,000 160,000 3.0 16,000 - - - 244,000 3.0 24,000
Underground 36,000 4.3 5,000 150,000 4.6 22,000 60,000 4.0 8,000 245,000 4.4 35,000
Svartliden Gold Mine 119,000 3.5 13,000 311,000 3.8 38,000 60,000 4.0 8,000 489,000 3.7 59,000
Svartliden Total 119,000 3.5 13,000 5,078,000 2.9 474,000 5,924,000   3.1 591,000 11,121,000 3.0 1,077,000





Group Total 703,000 4.3 96,000 6,419,000 3.2 666,000 6,381,000 3.2 655,000 13,499,000 3.3 1,408,000
 

Note: Mineral resources may not sum to equal totals due to rounding. Mineral Resources reported on a dry in-situ basis.

Reporting Cut-off Grades

Gold (g/t)
Orivesi Gold Mine3.0
Jokisivu Gold Mine1.9
Kaapelinkulma Gold Project1.0
Fäboliden Gold Project
Above the 350mRL1.25
Below the 350mRL2.10
Svartliden Gold Mine
Open-pit1.0
Underground1.70

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