DIRECTIONAL CORING WHILE CORE DRILLING - National Hub

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DIRECTIONAL CORE DRILLING CORING WHILE STEERING DEVICO DELIVERS THE COMPLETE SOLUTION TO YOUR DRILLING PROGRAM Borehole planning Devico AS Drammensvegen 55 Postbox 206 7224 Melhus, Norway Improve core drilling accuracy devico@devico.no Ph. 47 72 87 01 01 VISIT OUR WEBSITE FOR MORE INFORMATION: www.devico.com Reduce drilling length Reduce environmental impact Reduce drilling time and cost

CONTENTS DCD SERVICES 02 04 05 06 07 08 09 10 11 13 15 16 Devico DCD services consist of world leading directional core drilling equipment, highly professional field engineers and a strong knowledge base. For every project Devico will deliver: DEVICO AS PLANNING SERVICES DEVIDRILL START PACKAGE DOGLEG SIDETRACKING SURVEY INSTRUMENTS ACCURACY COST SAVINGS BENEFITS REQUIREMENTS CASE STUDIES Free borehole planning before start-up and during drilling Free savings analysis for each target Control over natural deviation Target intercepts within 1 % error Branching of boreholes to reduce amount of drilling Daily reports and plotts of borehole progress Field technicians controlling the DCD, ensuring high quality results. Rock core sample with a distinct “Devico bend” Strong focus on on-site collaboration and efficient operation Branching of boreholes DEVICO AS Assistance in monitoring core orientation and surveying boreholes Devico has more than 20 years of experience with directional core drilling (DCD) and borehole surveying. The company has developed a range of top quality instruments including directional core barrel, core orientation equipment and both magnetic and non-magnetic downhole survey instruments. The product line ensures coring targets are reached successfully while the drilling costs are reduced. Today, the company is the market leader internationally in providing directional coring services directly or via its network of exclusive agents and subsidiaries. To provide top qualified DCD services to the drilling industry Devico and its subsidiaries have established an international group of expert field engineers that supervise directional projects around the globe. Our engineers are highly educated and have been through an extensive training period of one year or more to earn their title. On DCD projects they work together with the drilling contractor to secure that the operation runs smoothly and efficiently. The engineers also work with the project geologists to prepare and optimize drilling plans. They will suggest the depth where directional drilling should be started, and calculate the length of steering necessary to aim the hole towards the target. 2 Field engineer INTR INTRODUCTION RO ODUCTTION N TO TO DCD DC CD D 3

PLANNING SERVICES To investigate the benefit of directional drilling in a specific drilling program Devico will, free of charge, provide a drilling plan to potential clients. The plan will estimate the total amount of standard and directional drilling required, and the meters saved compared to drilling all targets from surface. Inclination and azimuth at target intercept will also be provided. The plans will be based on standard N-size wireline down to the proposed kick-off point, where DCD is initiated. DCD is performed until the borehole is aiming towards the final target, and then finalized with standard wireline core drilling. Core sample is taken during the steering process When the first target is reached, the hole (“mother hole”) is sidetracked and the branch hole aimed towards a second target. There are no limits on how many sidetracks can be made, but 5 to 10 branch holes are the most common. Instrument barrel Expanding pads Offset bushing Core sample DEVIDRILL TYPICAL DRILLING PLAN WITH ESTIMATED SAVING Directional Drilling Toolface (deg) 4 Dogleg (deg/30m) Azi (End) Dip (End) Dist. DCD (m) End of Hole (m) Standard Core Drilling (m) 298 9 327 -66 34 790 754 321 9 312 -56 41 738 220 18 9 329 -48 65 694 138 310 9 310 -49 96 680 314 311 9 311 -37 61 628 222 Directional core drilling (DCD) is done with the DeviDrill directional core barrel. The principle behind the DeviDrill is a drive shaft running through a bushing offset from the center line of the tool. Expanding pads operated by differential pressure keep the DeviDrill in a fixed orientation while drilling in a curve. The inner assembly carries an inner tube collecting the core, a muleshoe system, and an instrument barrel with the survey tool recording inclination and orientation. Orientation data is stored inside the survey tool and made available to the field engineers after each run. Specifications Bit diameter 75.4 mm/2.97” (N-size) Total with DCD: 1946 Reamer diameter 75.6 mm/2.98” Total with only standard core drilling: 3530 Core diameter 31.5 mm/1.24” Saved meters: 1584 Core length 3 m/10 ft Total DCD: 297 INTRODUCTION TO DCD 5

DOGLEG START PACKAGE Dogleg describes the average curvature of the borehole expressed as degrees deviated over a distance of 30 meter. Directional drilling may deviate the borehole with up to a dogleg of 12, depending on the drill string in use. When a DCD project is ordered, a start package is sent to the project site. The Devico field engineer will there assemble the equipment and prepare it for operation. One start package is enough to cover work on up to 3 drill rigs by moving between them whenever a directional correction is necessary. When not in use, the equipment is maintained and kept in a secure container near the field operation. Drill string Dogleg Deg. per m. Radius [m] N 8 0.27 215 N variable wall 12 0.4 145 H 4 0.13 430 H variable wall 8 0.4 215 THE PACKAGE INCLUDES: During drilling the achieved dogleg will vary depending on the geological formation, the DeviDrill setting, equipment wear and drilling parameters. DeviDrill core barrel The orientation is held near the bottom of the hole and thereby controlled very accurately, resulting in an extremely smooth curve with a stable curvature aiming the borehole towards the specified target. Borehole survey instrument Orientation instrument Spare parts Tools DOGLEG IS CALCULATED FROM THE CHANGE IN AZIMUTH AND INCLINATION The start package should be kept in a secure container, which can also be used as a workshop for the Devico engineers. 6 St Depth (m) 442.00 443.00 444.00 445.00 446.00 447.00 448.00 449.00 450.00 451.00 452.00 453.00 454.00 455.00 456.00 457.00 458.00 459.00 460.00 461.00 462.00 Direction (Az) 185.21 185.44 186.08 186.74 187.51 188.77 190.03 191.49 192.77 193.83 195.06 195.80 196.41 197.01 197.67 198.23 199.03 199.91 200.70 201.88 203.01 IINTRODUCTION NTTR RODUCTTIO ON N TO TO DCD D DC CD D Inclinaison Northing -78.70 -78.79 -78.91 -79.10 -79.34 -79.56 -79.79 -80.02 -80.22 -80.45 -80.69 -80.95 -81.21 -81.48 -81.68 -81.94 -82.26 -82.51 -82.75 -82.97 -83.27 0.00 -0.19 -0.39 -0.58 -0.76 -0.94 -1.12 -1.29 -1.46 -1.62 -1.78 -1.94 -2.08 -2.23 -2.37 -2.50 -2.63 -2.76 -2.88 -3.00 -3.11 Easting (m) 0.00 -0.02 -0.04 -0.06 -0.08 -0.11 -0.14 -0.17 -0.21 -0.24 -0.29 -0.33 -0.37 -0.41 -0.46 -0.50 -0.55 -0.59 -0.63 -0.68 -0.72 Elevation Turn Rate Build Rate Dogleg 0.00 -0.98 -1.96 -2.94 -3.93 -4.91 -5.89 -6.88 -7.86 -8.85 -9.83 -10.82 -11.81 -12.80 -13.79 -14.78 -15.77 -16.76 -17.75 -18.74 -19.74 0.00 0.00 0.00 15.30 20.70 26.90 32.90 39.80 40.00 38.00 35.70 30.30 25.80 19.50 18.70 18.20 20.20 22.40 24.70 28.50 31.00 0.00 0.00 0.00 4.00 5.50 6.50 6.90 6.80 6.60 6.60 6.70 7.30 7.60 7.90 7.30 7.30 7.80 8.30 8.10 7.10 7.60 4.97 6.76 8.22 9.16 9.85 9.63 9.28 8.98 8.82 8.64 8.46 7.83 7.77 8.31 8.85 8.74 7.99 8.51 7 D

SURVEY INSTRUMENTS SIDETRACKING WITHOUT CEMENT PLUGS OR WEDGES Borehole surveys are an important part of DCD and are performed at frequent intervals to ensure the planned path and dogleg are achieved. Therefore a magnetic survey instrument and an orientation instrument are always included in the start package. If magnetic disturbance is expected, e.g. drilling in iron ore, a non-magnetic instrument can also be included. The instruments are (see product brochure for further details): DeviDip orientation instrument Inclination accuracy 0.1 Azimuth accuracy Not measured Orientation (tool face) accuracy 0.2 SIDETRACKING PeeWee magnetic instrument When the first target is reached, the borehole can be sidetracked and aimed towards a new target by cutting the previous curve. “Cut the curve” means that the sidetracked borehole is cut straight out of an existing curve. The curve must be a DeviDrill section of the hole where the curvature has a dogleg of at least 8. Inclination accuracy 0.1 Azimuth accuracy 0.5 Orientation (tool face) accuracy 0.2 The cut is performed with a regular core barrel, and is usually completed in 3-4 hours. Wedging and cement plugs are methods used when the curvature is not sharp enough to cut. These methods are more time consuming and may take 1-2 shifts to complete. 8 DeviFlex non-magnetic instrument (optional) INTRODUCTION TO DCD Inclination accuracy 0.1 Azimuth accuracy 0.01 per station Orientation (tool face) accuracy 0.2 9

ACCURACY With DCD, it is possible to significantly increase the accuracy of a borehole. Boreholes are always influenced by a natural deviation that, if not compensated for, will move the borehole away from its intended target. The DeviDrill can steer a borehole in any given direction and bring it back to the planned path. Most holes will hit their intended target with one DCD correction, but extremely deep holes or in areas with high natural deviation, a second correction may be required as the hole progresses. COST SAVINGS The accuracy limits are specified by the project geologists, and may vary from project to project. The most common limits in the Devico projects are: Depth Limit (radius) 500 to 1000 5-15 m 1000 m and deeper 10-25 m In mining exploration projects there is a potential for significant savings by utilizing the DCD technology. Sidetracking and DCD reduces the total length of a drilling program, while the production rate is kept high. The saving potential is strongly related to the depth of the exploration area and the density of the drill targets. Deeper ore bodies with short distance between targets (step-out distance) are likely to generate higher cost savings than shallow targets. High accuracy hole with 1.5 m limit over 500 m (borehole in blue) Narrower limits can normally be achieved, though these may take further time to complete. POTENTIAL COST SAVINGS AS FUNCTION OF DISTANCE BETWEEN TARGETS AND TARGET DEPTH Costt ssavings Cost Cos Co sav aving vings i gs Target T Ta arg ge ett depth dep e Step-out S St te ep p--o ou utt distance d distta an nc ce e [m [m] m m] 10 INTRODUCTION IN NTTR RO ROD ODU OD DU UCTI TIO ON TO TO DCD DCD D 11

COST SAVINGS BENEFITS Devico has prepared a calculator, available at www.devico. com, where the users can quickly estimate the potential cost and time savings of utilizing the DCD technology in their own drilling program. Using DCD in your exploration project has many benefits. A few of them are listed here. COMPARED TO STANDARD WIRELINE DRILLING (RE-DRILLING FROM SURFACE) For a more accurate analysis the Devico planning service may be utilized free of charge. More information about this on page 4. Reduced drilling length Less wear on drilling equipment Fewer drill sites ESTIMATED COST SAVING DIRECTIONAL CORE DRILLING (DCD) COMPARED TO RE-DRILLING FROM SURFACE Less environmental impact Full control over natural deviation Improved borehole accuracy Activity description Qty/prices One or two shift operation COMPARED TO OTHER DIRECTIONAL DRILLING TECHNIQUES 1 Time to move rig to new site 1 shift Cost to move rig to new site 1500 /shift Target vertical depth Step-out distance Continuous core sample from directional sections 900 m Low water consumption 25 m All necessary equipment in small start package Production rate directional drilling 10 m / shift Fits directly on NQTM* drill string Rig & crew shift rates during directional drilling 1000 /shift High penetration rate in hard rocks Easily adjustable dogleg Production rate standard drilling 20 m/shift Cost per meter standard drilling 90 Cost per meter casing 100 Required casing trough overburden 10 m Drill string rotation also during steering Cost saving Re-drilling from surface 73 600 41 shift Directional drilling 11 850 3 shift Target drilling 18 354 7 shifts Approx. saving 48 396 31 shifts Percent saving 66% 75% Proposed kick-off depth (KOP) Move proposed kick-off depth (KOP) 12 Higher dogleg due to smoother curvature Directional surveys performed at hole bottom (through DeviDrill bit) Time saving Full N-size borehole and no additional reaming required *QTM is a trademark of Boart Longyear 624 m m INTRODUCTION TO DCD 13

REQUIREMENTS BENEFITS For optimal implementation of DCD in your drilling project, a few requirements are set: N-size drill string (ID 60.3 mm and OD 69.9 mm) The table below compares the DeviDrill with standard mud motors. The Devidrill recovers a core, requires significantly less water, has a more accurate orientation control, and shows a comparable penetration rate in sedimentary rocks, while being superior in hard rocks. Required Rotation control 300 - 1200 RPM Feed control feed/pull Min. 5000 kg Drill pipe clamp Required Wire line winch pull force 1000 kg Mud pump flow rate/pressure DEVIDRILL VS MUD MOTORS 14 Discharge pulsation damper/compensator Required Relief/by-pass valve Required Suction filter Required Flow meter Parameter Mud Motors DeviDrill Water flow 200 - 400 l/min 40 l/min Water pressure 30 bar 30 bar RPM 100 - 300 700 - 900 WOB 25 kN 45 kN Rock sample None (cuttings) Core Penetration rate soft rock 6 - 8 cm/min 10 - 14 cm/min Penetration rate hard rock 1 - 2 cm/min 6 - 10 cm/min Dogleg setting Fixed Adjustable Drill string B-size N Hole size N (reaming required) N-size (no reaming required) Borehole survey Behind motor Ahead of bit Orientation control At surface At hole bottom Water pump High capacity Standard Drill bit Navy bit Impregnated or surface set 60 l/min and 70 bar Preferred 0-100 l/min ( /- 2 l/min) Pressure gage Required ( /- 1 bar) Boart Longyear spearhead Required Mud mixer and cleaning system Preferred Drill bits 76 mm, Devico specification Reaming shells 76 mm Reaming shells over size 77 mm In case of extreme geo-technical conditions THE FOLLOWING SHOULD ALSO BE PROVIDED: 1. Working conditions in order to service the equipment, including container and internet access 2. Support obtaining work permits or VISA(s), if necessary 3. Board and lodging 4. Security protection for Devico personnel and equipment 5. Surface transportation vehicles. 6. Saving Devico from any delays, breakdowns or non-compliance of terms by others (third parties involved) INTRODUCTION TO DCD 15

CASE STUDIES CASE CA C AS SEE STUDIES STTU S UD DIEES D S CONTINENTAL GOLD AGNICO-EAGLE AG A GN NIIC CO C O--EEA AG A GLLEE G During most of 2014 Devico has been working ork o kin ng g at at C Co Continental on ntin ne en ntta al re ec ctio on na al co c orre e dr d rillliin ng g Golds property in Colombia providing dir directional core drilling ov ve en n hi h ig gh hly y ssu uc cc ce es ss sfu ull, services. The drilling program has proven highly successful, ollo ow win w ng ga ad dv va an nta ag ge es s: and Continental Gold highlights the fo following advantages: Since S in nc ce e2 20 2009 00 09 9D De Devico ev vic co o ha h has as sw wo worked orrk ke ed d fo ffor orr Ag A Agnico-Eagle gnic co oin their deep drrilllin d ng gp pr ro og gra am ma at th he eK Kit tttilä m min ne e in nF Fin nlla drilling program the Kittilä mine Finland. As the holes offte o en ng go od do ow wn n to o 1, 1 20 2 00 0m me ete ers s,, a ssig gn niifi often down 1,200 meters, significant amount of time an nd dm me ete errs s is s sa ssave av ve eb by yb ra an nc ch hiin ng g of o fff ho h and meters branching off holes. Substantial time and cost savings av vin ng gs sd du due ue e to to re reduced ed du uc ce ed dd dr drill rill ng gp pro od du uc ctiiv vitty y re rrelative ela attiv ve e to o tthe he meterages and better drilling productivity y-d drrille ed dd de ee ep ph ho ole es s re eq qu uirre ed d to to number of conventionally-drilled deep holes required an nd d effect similar coverage; a and arg ge ett k key ey ar a re ea as s, c co on ntrro ol dr d rilll d de ev via a The ability to better target areas, control drill deviaettte err a ng gle es so of a att ta ac ck ko nm min ne erra ations and achieve better angles attack on mineralized zones. Du D urrin ng g tthe he fir fi rs st yye ea ar o off dr drillling m mo ore e than 23,000 meters were During first year drilling more rre ep po orrte ed d saved ssa av ve ed d in in a 57,000 57 5 7,0 00 00 0m me ete er drilling program, leading to reported meter ttim me m e ssavings avin a ng gs so of 30 30 % and and cost co cos stt sa ssavings closer to 25 %. time “Fro “From “F om J January an a nu ua ary y to o Se S September ep ptte em m 2009, we drilled 45 holes ((2 26 6,7 75 50 0m me ete errs s) u us sin ng gD De (26,750 meters) using Devico technology. In a conventional dri d illin ng ga ap pp prro oa ac ch hw we ew drilling approach would have drilled 47,000 meters, so De D ev vic co o sa ssaved av ve ed d2 20 0,7 750 meters.” Devico 20,750 J Ju uk kk ka aV Vä älim ma aa – Senior Geologist Jukka Välimaa Drilling Dr D rillin ng gp pro program og grra am m fo for orr P Pl Platform la atffo orm m 46 46 Summary of the DCD project after the first year of operation 16 INTRODUCTION TO DCD 17

CASE STUDIES CASE STUDIES HATS STAGE 2A LUNDIN MINING DCD DC D CD D is is al a also so co c commonly om mm m mo on nly yu used sed iin n th tthe he e ge g geotechnical eo ote ec ch hn niic ca al a an and nd d tu ttunneun nn ne e liin ng g in ind du us sttry y. Th T he ea ab billitty y to to st ssteer te ee err a b bo ore reho ole ea an nd d ex e xttrra act c co ore e ling industry. The ability borehole and extract core ssa am mp m ple es sa alo on ng gap pla an nn ne ed d tu unne el p pa ath hc ca an n si ssignificantly ig gn nifi fic ca an nttly y rre ed du uc ce e samples along planned tunnel path can reduce th he e ri is sk ks s du d urrin ng g th tthe he e co c on ns sttrruc ctiio on nw wo ork. the risks during construction work. Due to the great depths and unpredictable natural deviation in the area, AGC mines in Portugal had problems delineating their reserves in a systematic pattern. Failures to hit the targets and missing the ore zones lead to higher exploration expenses than necessary. n the the HA HAT TS S 2a 2a ttu un nn ne elin ng g pr p ro oje ec ctt in nH Ho on ng gK Ko on ng g,, D DC CD Dw wa ass u us se ed d In HATS tunneling project Hong Kong, DCD was used to investigate in inv ve es stiig ga ate ov o ve err 50 5 00 00 0 m se ssection ec cttio on n th hrro ou ug gh h a co c om mp ple ex x an a nd d to over 5000 through complex and un nc ce ertta ain ng ge eo olo og gic ca al fo fformation. orm ma m attio on n. uncertain geological Bo B orre eh ho ole es su up p to o1 12 25 50 0mw we erre e dr d rille ed dh ho orrizzo on ntta allly yw wit th hin na5 Boreholes 1250 were drilled horizontally within ra rad dius of of a p pre red de d efi fin ne ed d pa p atth h. Th T he e in nffo orrm ma attio on ng ga atth he ere ed dw wa as s m radius predefined path. The information gathered was la atte er m ma ad de e av a va ailla ab ble e tto o th tthe he e te ttenderes, en nd de erre es s, h he elp piin ng g to to im mp m pro ov ve e tth he later made available helping improve the co c os st e es stim mation of of th tthe he ec on o ns strru uc ctio on nw wo orrk ks s. cost estimation construction works. “Having the Devico crew on site helps us to hit our planned targets at depths down to 1,300 meters in an environment where drill hole deviation is difficult to predict. We would not be able to target accurately without it.” Bob Carmichael – Group Manager, Resource Exploration Vertical depth (m) Northing GUYANA GOLD Corrin Coring Co ng ga alo along on ng gap pla planned an nn ne ed dp pat path ath h to to in investigate nvve es stigatte planned tunnel pl p anne ed d tu un nn ne ell tra ttrajectory ajectto orry Much for the same reason as Lundin Mining, Guyana Gold used the Devico technology to both increase the target accuracy and reduce exploration costs. The thin ore body stretches down more than 2,000 meters, and accurate drilling is critical to plan the development of the mine. “Cost-savings per hole (instead of drilling holes from surface): 45-50% (estimated).” Rex Camit – Project Geologist Rorys Knoll, Guyana 18 INTRODUCTION TO DCD 19

To investigate the benefit of directional drilling in a specific drilling program Devico will, free of charge, provide a drilling plan to potential clients. The plan will estimate the total amount of standard and directional drilling required, and the meters saved compared to drilling all targets from surface. Inclination and

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