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Mineral Resource Estimate

Resource Estimation*

The revised estimate for the Lomonosovskoye Project is based on the same drill database as used in the report prepared in compliance with National Instrument 43-101 -- Standards of Disclosure for Mineral Projects ("NI 43-101") which was dated December 18, 2012 (and resubmitted on SEDAR on May 9, 2013) (the "December 2012 report"), but with a re-interpretation of the geological and geophysical data and an estimation method that includes an allowance for bulk open-pit or underground mining. This better understanding of the geology and mineralization controls and additional definition provided by down-hole geophysics has allowed an increase in the confidence levels of the estimates.

The new resource estimate is outlined below, above a cut-off grade of 20% Fe:

Notes to the Lomonosovskoye Mineral Resource Estimate need to read in conjunction with the table above:

1. The current resource estimate is based on holes drilled and assays received up to 31 October 2014;
2. The geological cross sections, completed using historic and 2010-2013 drill holes, geophysical borehole data and local geology models were used to constrain and extend the resource estimation domains up to 50 m beyond the last drill hole, where reasonable;
3. Three dimensional wireframes were constructed for geological domains in Northwest and Central deposits, using a 10% Fe cut-off grade. Interpretations were guided by 5 m bench composites, down hole magnetic susceptibility data, newly interpreted lithology logs and images of ground magnetic data;
4. Assay results were composited to 5 meter intervals down-hole within domains;
5. No grade caps were required for Fe, Fem, P or S
6. Block Model extents cover the combined Northwest and Central deposits, with a block size of 15mN x 15mE x 10mRL, without sub-blocking to reflect block open-pit or underground;
7. An Indicator approach was used to select blocks with a greater than 40% probability of being above a cut-off grade of 20% Fe within domains;
8. Grade was interpolated into a constrained block model using all 5 m sample composites within above or below 20% Fe blocks, including samples with a value below or above 20% Fe respectively. This is considered to represent the true "mining block" grade, including both internal and edge dilution. Ordinary Kriging estimation technique with anisotropy was applied;
9. Maximum search radius was varied by domain, from 120 m to 400 m with 2 minimum to 42 maximum informing samples;
10. Density of mineralisation was calculated using the formula: density = 2.9 / (1-0.0061x Fe%) taken from a nonlinear regression coefficient for density against Fe content for over 3000 samples;
11. Mineral Resources are reported above 20% Fe for both Deposits;
12. Inferred resource category -- within domain wireframes and with at least 2 informing samples.
13. Indicated resource category -- within domain wireframes and the maximum of 24 informing samples and Krig Slope greater than 0.1.
14. Measured resource category -- within domain wireframes and the maximum of 24 informing samples and a Krig Slope > 0.5.

* Extracts from Independent Technical Report on the Lomonosovskoye Iron Project, Republic of Kazakhstan revised on October 31, 2014 by Qualified Person, Andrew Vigar of Mining Associates.