FORWARDED FROM HONORABLE CHIEF MINISTER

BUSINESS INVESTMENT01

Pakistan is blessed with a complex and highly prospective geology which has already

demonstrated the potential for hosting rich mineral deposits of copper, gold, iron, coal and

numerous other commodities. The development and exploitation of this mineral wealth is an

important component of our national and provincial strategies to drive rapid and high

economic growth and to reduce our reliance on imported commodities. The Punjab

Government’s vision for growth and self-sufficiency encompasses a proactive and outward

looking drive to attract foreign investment and to stimulate opportunities for public-private

partnerships.

The Punjab Mineral Company (PMC) has been entrusted with the exploration, development

and exploitation of economic mineralization within the Province of Punjab. This is being

successfully achieved through the judicious application of modern technology and global

best practice.

The flagship Chiniot Iron Ore Project has been under development since 2014 and now, with

the completion of the updated mineral resource statement, is an integral part of the

province’s steel production strategy. The development program was completed by the

WSGRI Consortium (China), as Contractor, and Geo-RC Consortium (Germany & Pakistan)

as the overseeing Resident Consultant. Both were appointed through an international

competitive bidding process. In turn, BAW (Canada) provided the independent Qualified

Person (QP) services for the completion of a technical report, written to the Canadian

National Instrument 43-101 standard.

The studies to date indicate the development of an iron ore mine may herald a new age of

metallic resource mining and the downstream development of an indigenous steel mill. Along

with the provincial energy development plan, the steel production strategy will prove to be a

game changer for the province and the country at large vis-à-vis employment, revenues,

secondary and tertiary sector stimulation and GDP growth.

Not content with the significant progress made to date, PMC has developed and is now

implementing a second phase of development and exploration to further enhance the

geological understanding of the province’s natural resources and to assist with the

restructuring of the province’s ability to manage and exploit such resources.

In parallel with these initiatives PMC has appointed a consortium of international Transaction

Advisors, led by DMT (Germany), to advance the economic and commercial aspects of the

Chiniot project and to select concessionaires/investor(s) for both the mining of the iron ore

and the establishment of a steel mill in Punjab.

Once in production, the mine and the mill will catalyze private-sector led economic growth,

generate employment and reduce the import deficit. Dr. Arshad Mahmood, CEO PMC is

ensuring a high standard of work on all projects.

In summary, the Government of Punjab is moving steadily towards the vision of increased

prosperity for the people of the province and firmly placing the province on the international

mining map. Even though the challenge is great, I strongly believe in our ability to

accomplish what has not been achieved earlier and to continue to move steadily towards a

brighter future for our people.

TECHNICAL AND FINANICAL EXPERTISE

Wuhan Surveying – Geotechnical Research Institute (WSGRI), Resource

Estimation of in Chiniot-Rajoa area (Phase 1).

BAW Mining Inc., Toronto, (BAW) independent technical report on the

updated mineral resources

Geo-RC Resident Consultant (RC) is a German-Pakistani company

resident exploration supervisory services

SGS is the world’s leading inspection, verification, testing and certification

company provided assay analysis services for the Phase 1 exploration at

Chiniot.

AcmeLabs and Inspectorate provided assay analysis services for the

Phase 1 exploration at Chiniot.

The DMT group provides independent services for Exploration, Engineering,

Consulting and Geotechnics. and lead member of the consortium providing

Transaction Advisory services

National Engineering Services Pakistan (Pvt) Limited (NESPAK) is Pakistan’s NESPAK is a member of

the Transaction Advisory consortium and instrumental for infrastructural, social and environmental

issues.

The MME is a member of the Transaction Advisory consortium and

responsible for the steel making technology and related infrastructure.

Endeavour Financial (Endeavour) provides their experience in both natural

resources and finance, including: investment bankers, geologists, mining

engineers, cash flow modelers and financiers.

Fugro is providing resident consultancy services for the ongoing development

of the Chiniot Iron Ore Resource and regional exploration (Phase 2).

EY (formerly Ernst & Young) has been contracted to develop a Restructuring

Plan for the Mines and Minerals Department of the Government of the Punjab.

Grant Thornton (GT) has provided services in relation to the international

tender for services outlined in many of the programs above.

Rocklore provided mineral exploration, development and corporate services and

independent consultancy services, directly supporting the board and management

of PMC.

Ortadogu has been engaged by Mines & Mineral Department for

exploration drilling for Chiniot Iron Ore Resource and regional exploration

(Phase 2).

The Chiniot Project has benefited from the guidance and services of a number of well

renowned international and Pakistani experts and consultants. More broadly these and other

parties have supported a number of work phases and programs that constitute part of the

Punjab Government’s initiatives to develop the natural resources sector

GOVERNMENT OF THE PUNJAB 02

NI 43-101 resource for Chiniot is estimated to contain a total

of 149.8 Mt inferred and indicated resources, divided into

38.8 Mt Hematite and 111 Mt Magnetite. This figure is based

on the introduction of two individual tFe% cut-off grades for

magnetite (25%), and hematite (20%) respectively. The

average tFe concentration of the inferred and indicated

resource is estimated to be 30.8% tFe.

Existing geophysical measurements and outcrops on the

surface at Chiniot hills in conjunction with the already

discovered resources allow the reasonable assumption for a

potential extension of ore resources towards the north and

the south from the existing ore body. The further exploration

of adjacent mineral potentials is underway and may add

significant value to the project within a two-year period.

PROJECT INTRODUCTION

BUSINESS INVESTMENT03

MINING METHOD

Most suitable method for mining the deposit under the given

geological conditions is an underground stoping method with

access to the mine through two incline shafts; this the first for

men and material and a second for ore haulage.

The dimensions of the stopes (mine chambers) were chosen on

the basis of rock mechanical stability parameters. Mining stope

sizes of 20m by 20m for hematite and 30m by 30m for

magnetite are feasible. With increasing depth the chamber size

will be reduced.

The mining operation as such will be mechanized to achieve the

required 4.6 MTPA ore. The ore will be mined by cut-and-fill

stoping, using a drilling-blasting-lashing-loading-hauling

sequence. At any one time several stopes will be active to

ensure optimal grade control and a constant tFe in the ROM.

GOVERNMENT OF THE PUNJAB 04

STEEL MARKET AND MARKET APPETITE

Pakistan imports approximately 2 million tons of Hot Rolled Coil

(HRC) and heavy sections per year. HRC and sub-products would

add the most value to the project. These new products could replace

imports and boost the new local supply chain market. Additional

benefits are envisaged for possible local heavy structure steel

industry. HRC product as result of investigation is the better product

to consider for the realization of the steel plant. HRC leads to

development of industries downstream line.

STEEL MARKET AND MARKET APPETITE

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STEEL PRODUCTION

The Steel Making process of choice is the COREX® Process.

GOVERNMENT OF THE PUNJAB 06

Product Input (TPA) Final Product Output (TPA)

Iron ore Fines 1,912,865 Hot metal 1,137,709

Coke fines 511,615 Slag 455,084

Mn ore 22,769 Return coke/sinter 204,219

Coal dust (injection) 126,189 Loss of ignition 773,870

Flux 170,081 Sludge 45,167

Flue dust 127,196

TOTAL 2,743,519 TOTAL 2,743,245

STEEL PRODUCTION

The Material Balance for the COREX/FINEX® process is shown below.

The combined project with an economic entity of mine, processing

plant, smelter and steel mill is assessed as having the best chances

to generate an economic value. The cash flow analysis of the

combined mine and steel mill project yields an IRR (before tax and

financing) of 18% and an NPV of 985 mUSD at a discount rate of

10%.

PROJECT ECONOMICS

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PROJECT ECONOMICS

The Chiniot Iron Ore Mine and Steel Mill Project is a priority

development for the Government of Punjab and it has

therefore indicated that it is willing to consider providing

investment incentives to potential investors to increase

investor returns as well as decrease investor risks in order

to stimulate economic growth

INITIAL MINE & PROCESSING OPEXS

Mining USD /t conc 24.66

Processing USD /t conc 18.73

Others USD /t conc 10.93

TOTAL USD /t conc 54.32

GOVERNMENT OF THE PUNJAB 08

PROJECT ECONOMICS

In parallel, the Government of Punjab is working with the

Federal Government with regards to establishing a Special

Economic Zone (SEZ) for the Project as part of the China

Pakistan Economic Corridor (CPEC) and which brings

certain fiscal and other benefits with it.

INITIAL COPEX

Mining 87.23 mUSD

Processing 208.00 mUSD

G&A 8.82 mUSD

Other Costs 26.64 mUSD

Smelter/Mill 845.89 mUSD

SUB TOTAL 1,176.57 mUSD

BUSINESS INVESTMENT09

GOVERNMENT OF THE PUNJAB 10

THE BEST WAY TO PREDICT FUTURE

IS TO CREATE IT.