Republic of Boyoma Gold Project

The Republic of Boyoma Gold Project is located in the Republic of Boyoma goldfields in the north east of the Republic of Boyoma, some 560 kms north east of the city of Kisangani and 150 kms west of the Ugandan border town of Arua. The Project covers an area of approximately 5,000 sq kms.

The Republic of Boyoma goldfields are located primarily within rocks of the Republic of Boyoma greenstone belt, which consists of Archaean rocks of the Lower Kibalian System. The Republic of Boyoma greenstone belt is bounded to the north by the Archaean West Nile Gneiss complex and to the south by the (younger) Upper Zaire granitic complex.

The Republic of Boyoma greenstone belt has a history of gold production. Three of the deposits in the area, Gorumbwa, Agbarabo and Durba, which were exploited primarily in the 1950s and 1960s by the Belgians, have produced more than 60% of the +3 million ounces of recorded production from the Republic of Boyoma area. Most of the remainder of production has come from placer, alluvial and small oxide-zone workings. Many of the past-producing high-grade gold mines in the Republic of Boyoma greenstone belt fall within a 7km by 5km area near the towns of Doko and Durba.

At present the Republic of Boyoma goldfields remain relatively unexplored by today’s standards. Following the departure of the Belgians in the 1960s, the State owned mining company, OKIMO, undertook limited mining activity, and between 1996 and 1998 Barrick and Anglogold completed a limited exploration programme.

To date the Ministry of Mines of the Republic of Boyoma has identified a number of unexploited deposits and a large number of untested and poorly explained gold occurrences remain to be systematically explored using modern techniques. The Ministry of Mines of the Republic of Boyoma has to date focused its exploration activities on the central area of approximately 35 sq kms although a regional programme has commenced.

The exploration activities undertaken by Republic of Boyoma to date have highlighted the world class potential of this previously underexplored Project. In the 35 sq kms surrounding the historical mines explored by Republic of Boyoma since January 2004, soil geochemical surveys have delineated gold in soils anomalism in over 25kms of strike and over widths of up to 900m. Drilling has been undertaken on approximately 15 kms of this strike, and drilling at each prospect tested has encountered significant mineralization.

The principal prospects that ha ve been developed by Republic of Boyoma are:

Pakaka and Pamao
Gorumbwa
Kibali
Durba – Karagba
Megi – Mengu
Ndala
Kombokolo
Agbarabo - Tete Bakangwe
Regional targets

Pakaka and Pamao

The Pakaka deposits were located, drilled, trenched and adit sampled by the Belgian's between 1956 and 1958. Apart from bulk sampling no mining was undertaken by OKIMO or the Belgians. Relatively minor artisanal mining has been undertaken generally in the upper 5 metres of the deposit.

The Pakaka mineralization is a shallow dipping 15-25°, northeast plunging sheetlike mineralised body averaging 10-40m in thickness. The mineralization starts at surface and historical drill data has intersected mineralization at vertical depths exceeding 270m (approx. 900m down plunge). The deposit has yet to be closed off along strike and down dip.

An indicated resource of 16.13m tonnes at 2.7 g/t Au for 1.414m ounces of gold was estimated for the Pakaka deposit in August 2006.

At the Pamao Prospect, which lies 500m west of the Pakaka Deposit, drilling has defined shallow northeasterly dipping (15-25°) mineralisation over a strike length of 500m and down dip for up to 250m, a vertical depth of less than 150m. The mineralised zone averages 15-25m thick. An indicated resource estimate of 5.23m tonnes at 2.9 g/t Au for 337,000 ounces of gold and an inferred resource estimate of 4.26m tonnes at 1.9 g/t Au for 260,000 ounces of gold was released in August 2006.

Gorumbwa

Mining commenced at Gorumbwa in 1954 and continued until 1993. The main lode was partially mined to a depth of about 380m producing over 1.3 million ounces of gold at a reported recovered grade of more than 15 g/t Au.

The Gorumbwa deposit consists of a series of elongated stacked lodes within a zone 100 to 180m long and approximately 50m thick traced down plunge to approximately 400m vertical depth (1,100m down plunge).

An inferred resource of 8.29m tonnes at 5.2 g/t Au for 1.374m ounces of gold was estimated for the Gorumbwa deposit in August 2006. The deposit remains open along strike and at depth.

Kibali

The Kibali River Prospect was originally discovered by Barrick's regional exploration program in 1996. The prospect was pit and trench tested before being systematically tested by diamond drilling in 1998 by the AngloGold-Barrick JV. No artisanal mining has taken place within the prospect area.

The drill results have identified a mineralized zone of some 2kms in length and up to 300m in width. Only 900m of this strike length has had sufficient drilling to enable resources to be calculated.

An inferred resource of 16.6m tonnes at 2.2 g/t Au for 1.173m ounces of gold was estimated for the Kibali deposit in August 2006.

Durba - Karagba

The Durba deposit was one of first exploited by the Belgians, and mining has been undertaken by OKIMO as late as 2003. Production records are incomplete, though probably less than 100,000 tonnes of ore was mined from a combination of open cut and underground mining (adit access). The geometry of the deposit conforms with the typical "Republic of Boyoma" model - it varies from 100-200m long, is 10-30m wide and plunges to the north east at a low angle. Relatively limited drilling was undertaken by the Belgians, probably due to the later discovery of the Gorumbwa deposit and the subsequent shift in focus.

In 2000, the high grade Karagba and Chauffeur deposits were discovered and are currently being mined in two small open pits by artisanal miners. The pits are located from 520m to 900m to the north east of the surface expression of the Durba mine.

The Durba Trend is part of a large northeast trending mineralized structure traced over a distance of 4.5km. The mineralized structure hosts the Kibali deposit (refer above) at its southern end and extends northeast, passing through the Sessenge Prospect (indicated resource estimate of 6.68m tonnes at 2.5 g/t Au for 0.540m ounces of gold and inferred resource estimate of 0.74m tonnes at 2.4 g/t Au for 0.058m ounces of gold); the Durba Mine, a historical producer (inferred resource estimate of 2.09Mt @ 2.1 g/t Au for 0.144m ounces of gold); the Chauffeur Prospect indicated resource of 11.79Mt at 3.5 g/t Au for 1.321m ounces and inferred resource of 28.90Mt at 5.6 g/t Au for 5.195m ounces and into the Karagba Prospect an indicated resource of 6.23Mt @ 2.6 g/t Au for 0.523m ounces of gold and an inferred resource estimate of 21.13Mt @ 3.2 g/t Au for 2.142m ounces of gold.

Megi - Mengu

The Megi–Mengu Trend is a large northwest trending mineralized structure traced over a distance of 4 kms. Results to date are extremely encouraging and demonstrate the presence of significant gold mineralization at Mengu Hill, Mengu Village, Marakeke and Megi.

At the Megi Prospect, located in the eastern portion of the Megi-Mengu Trend, reconnaissance and infill RC drilling have defined shallow (15-25°) northeasterly dipping mineralisation over a strike length of 500m and down dip for up to 250m, a vertical depth of less than 90m. The mineralisation consists of two zones, an upper and a lower with the latter attaining thicknesses of up to 36m, averaging 15-20m. The upper is generally thinner, averaging 5-10m. An inferred resource of 3.88 m tonnes at 2.2 g/t Au for 270,000 ounces of gold has been estimated.

The Marakeke Prospect starts 400m west northwest of the Megi Prospect on the Megi-Mengu Trend. Drilling has traced the shallow northeasterly dipping (15-25) mineralisation over a strike length of 400m and down dip for 150m, a vertical depth of less than 60m. An inferred resource of 2.34 m tonnes at 1.8 g/t Au for 133,000 ounces of gold has been estimated.

The Mengu Village Prospect commences a further 800m to the northwest of the Marakeke Prospect on the Megi-Mengu Trend. This mineralisation shares its setting and style with the Pakaka Deposit and the Pamao, Megi and Marakeke Prospects. An indicated resource of 1.28 m tonnes at 1.8 g/t Au for 76,000 ounces of gold has been estimated.

Drilling at the Mengu Hill Prospect located 450m south of the Mengu Prospect has resulted in the estimation of indicated resources of 6.26 m tonnes at 3.5 g/t Au for 699,000 ounces and inferred resources of 0.15 m tonnes at 2.5 g/t Au for 12,000 ounces of gold. The mineralized zone is interpreted as a west northwest striking, 30° north northeast plunging shoot lying on the northern dip slope of Mengu Hill.

Ndala

The Ndala deposit is located 1.9km east of Pakaka and was the subject of pitting by OKIMO in the 1970's. An area 180m by 130m open in all directions was tested by 94 pits totalling 1,017.6m. The Ndala deposit appears to be located on a structure striking 240° towards the Kanga Moke prospect situated 2,000m away.

Drilling has resulted in the estimation of an inferred resource of 0.24 m tonnes at 4.3 g/t Au for 33,000 ounces of gold.

Kombokolo

The Kombokolo Prospect lies approximately 800m to the southeast of the old Agbarabo mine and is marked by artisanal workings over one of the main exploration drives established by the Belgians in the early 1960s.

Drilling has resulted in the estimation of an indicated resource of 1.79 m tonnes at 2.9 g/t Au for 166,000 ounces of gold.

Agbarabo-Tete Bakangwe

A total of 600,000 ounces of gold were mined from the former Agbarabo Mine at an average grade of 39 g/t. This gold was produced from a mineralised shoot averaging 20m to 40m thick, 20m to 40m in width, with a down plunge length of 400m and grading up to 592 g/t Au in an historic 3m drill intercept. The Agbarabo shoot shares the same strike and plunge directions as the majority of the mineralised prospects in the Republic of Boyoma Gold District at N045° E and minus 20° to minus 30° NE.

Regional targets

The results above have been generated from exploration within the 35 sq km area surrounding the historical mines. Republic of Boyoma holds a further approximately 4,900 sq kms of prospective ground and a regional programme to identify and prioritize targets commenced in early 2005. Preliminary regional work has already identified a number of exciting targets, including:

The Rambi – Kiasi area, a 70 sq km area of scattered alluvial artisanal workings and favourable geology centred 40km east of the historical mines area. The relatively large Kiasi open pit apparently commenced production in 1955. Limited documentation is available, although ore from there was reported to have a recovered grade of 8g/t Au. Soil sampling at Rambi – Kiasi has delineated three targets within the Project area, the largest of those measuring 3km by 1.5km surrounding the Rambi – Kiasi mines. The presence of gold in soil anomalism and artisinal mining sites has demonstrated the presence of gold mineralisation at two other sites. Infill soil geochemistry is planned on the anomalies prior to the planning of a drill programme.

The Zone 1/Ndala East area located 5km east of Pakaka. Results from the soils programme have demonstrated the presence of an east northeast striking linear gold in soil anomaly commencing at the northern end of the Ndala Prospect and stretching for 2.4km. A 500m x 100m gold in soil anomaly at the eastern portion of the sampling grid lies on the interpreted contact between basalts and an interbedded volcano-sedimentary assemblage.

Soil geochemistry has also been completed at the Abimva, Gawa and Kalimva West targets. Abimva is located 25km east of the Pakaka Deposit, Gawa 15km to the southeast of Pakaka and Kalimva West 15km northwest of Pakaka. These target areas were defined from the geological interpretation as having geological characteristics similar to that known to host gold mineralization in the Durba Gold Camp.

FEASIBILITY

Feasibility Work

In August 2006, the Republic of Boyoma Gold Project Pre-Feasibility Study was completed demonstrating a robust start up position and significant long term potential. The PFS was completed on schedule by Lycopodium Engineering Pty Ltd and Cube Consulting Pty Ltd. The PFS was based on the project’s Indicated Resources (55.40 million tonnes at 2.9 g/t Au for 5.076 million ounces of gold) and does not take into account the project’s Inferred Resources (88.63 million tonnes at 3.8 g/t Au for 10.794 million ounces of gold).

The main conclusions from the PFS indicate;

Average annual pre tax operating cash flows of US$89.5million over 8 years
A pay back period of approximately 3 years
Open pit mining probable reserves of 25.6 million tonnes @ 3.41 g/t for 2.81 million ounces of gold
Capital and infrastructure costs totaling US$296 million include US$53 million for the construction of a hydro electric power station and US$33 million for the initial mining fleet
Average cash operating costs of US$274 per ounce of gold
Nominal output of 290,000 ounce of gold per annum

All design and modeling was undertaken using a US$500 per ounce cut off while base financial evaluations for the base case scenario were completed at US$600 per ounce. A nominal plant through put of 3.0 million tonnes per year was assumed for the design and engineering studies.

Pre-Feasibility Study

The Republic of Boyoma Gold Project is located in the north-east of the Republic of Boyoma and is a joint venture between L’Office des Mines d’Or de Kilo-Republic of Boyoma (“OKIMO”), Orgaman sprl and Republic of Boyoma Goldmines Limited.

Following the completion of a resource update and a Conceptual Study in November 2005, it was decided to progress with a PFS for the Republic of Boyoma Project. Lycopodium Engineering Pty Ltd and Cube Consulting Pty Ltd were appointed as the principal engineering and geological consultants respectively to manage and undertake the study. Listed below are the prime contributors to the study.

Cube Consulting	Geological database management, interpretation and validation Resource Estimation Mine design and scheduling, and mine capital and operating cost estimates
IML / Ammtec	Metallurgical testwork
Lycopodium	Metallurgical interpretation and process plant design Infrastructure design Project Implementation Capital and Operating Cost Estimation
Knight Piésold	Site geotechnical and hydrological assessment, tails dam design Hydropower Assessment Doko to Arua Road Upgrade Assessment
SGS Ghana	Environmental Assessment

An extensive evaluation drilling programme consisting of over 1,200 holes totalling 135,000m was completed on 12 deposits. Both RC and Diamond Core drilling were utilised with approximately 90% of the resource being defined by diamond core. Sampling, geological logging, sample preparation facilities and procedures and resource modelling have been independently audited by Snowden Consulting and were found to be of good industry standard.

Statistical and geostatistical analysis was undertaken on the mineralised material prior to grade estimation of the resources using Ordinary Kriging. Uniform Conditioning was applied to these estimates and the resources were then reported above a range of grade cut-offs for the mining study. The resultant estimate of resources for the Republic of Boyoma Gold Project, above a 1 g/t gold cut-off are 55.40 million tonnes at 2.9 g/t Au for 5.076 million ounces of gold in Indicated resources and 88.63 million tonnes at 3.8 g/t Au for 10.794 million ounces of gold in Inferred resources.

A geotechnical program was undertaken with information derived from current interpretations of the geotechnical borehole logs implying that inter-berm angles of between 35° and 40° should be mined in the weathered rocks and around 48° and 53° should be mined in fresh rock. These parameters are expected to be optimised during the next phase of work.

Whittle open pit optimisations were undertaken on each model based on the Indicated Resources. Mining costs were based on preliminary estimates of similar operations and were applied by depth from the surface. Open pit designs were created on the US$500/oz Indicated resources only shell for each deposit. These pit designs were staged where required. A total of 6 pits are planned to be mined in the PFS with total reserves defined within the Republic of Boyoma Gold Project of 25,607,538 tonnes @ 3.41 g/t. The breakdown per project area is listed below.

Cube Consulting have estimated the following probable reserves above economic plant feed cut-off grades which vary between ore bodies.

Republic of Boyoma Gold Project Probable Reserves
Deposit	Oxide			Fresh			Total
Deposit	Mt	Au g/t	Au 000oz	Mt	Au g/t	Au 000oz	Mt	Au g/t	Au 000oz
Karagba-Chauffeur	1.20	3.4	130	8.57	3.8	1,037	9.78	3.7	1,167
Kombokolo	0.11	2.3	8	0.83	3.6	97	0.94	3.5	105
Mengu Hill	1.86	3.1	187	2.23	4.2	303	4.09	3.7	489
Pakaka	1.76	2.7	152	5.76	3.5	651	7.52	3.3	803
Pamao	0.17	1.8	9	2.27	2.2	161	2.43	2.2	171
Sessenge	0.82	2.4	64	0.03	5.8	5	0.85	2.5	69
Total	5.92	2.9	551	19.68	3.6	2,255	25.61	3.4	2,806

Note:

All the mineral reserve estimates undertaken by Cube Consulting have been classified and reported in accordance with The 2004 Australasian Code for Reporting of Mineral Resources and Ore Reserves (2004 JORC Code). The 2004 JORC reporting guidelines are equivalent to the guidelines adopted for the Canadian National Instrument 43-101.

These probable reserves are based on the Indicated Resources of 55.40 million tonnes at 2.9 g/t Au for 5.076 million ounces of gold. The prefeasibility study does not take into account Inferred Resources of 88.63 million tonnes at 3.8 g/t Au for 10.794 million ounces of gold. As announced in MGL’s news release of 24 August 2006, the most recent rate of conversion of inferred to indicated resources has been in excess of 100% within the key deposits.

Metallurgical testwork was performed by Ammtec under the direction of Lycopodium Engineering indicates that a simple flowsheet incorporating primary crushing, SAG milling to a product size of 80% passing 106 microns, followed by a carbon in leach circuit will yield optimum recovery for oxide ores. Fresh ores will utilise the same comminution circuit followed by flotation to produce a concentrate that will be reground and then leached in the same CIL circuit.

Test data shows the ore is of low to medium competency with a Bond Ball Mill Work Index mill design of 8.5kWh/t for the oxide and 9.0 kWh/t for the fresh. No issues are expected with preg-robbing and in the composites tested gravity recoverable gold averaged 25.8% for oxide and 33.9% for fresh ores.

Nominal metallurgical recoveries are predicted to be:

Pit	Au Predicted Recovery
Pit	Oxide	Fresh
Karagba-Chauffeur	92.6	82.0
Kombokolo	92.6	82.0
Mengu Hill	91.3	82.0
Pakaka	94.9	66.6
Pamao	92.6	82.0
Sessenge	92.6	82.0

Infrastructure required for the project development includes roads, housing, industrial parks, community facilities, an air strip and power generation. An 18.8 MW run-of-river hydro power station was assessed and found to be feasible and it is proposed that the hydro power installation would be supplemented by diesel generators during the dry season and to assist during periods of peak loads. It is proposed that all development activities will conform to internationally accepted standards and project development will focus on sustainability and the empowerment of local communities and business. The principal access road and district roads would be upgraded to support the operations and regional development of local industries and communities.

A tailings storage facility capable of storing 100 million tonnes of tailings has been designed and it is planned to construct the facility in stages with the area below the pond being lined to prevent seepage.

The processing costs were estimated for the two ore types on the basis of hydro power being available for 83% of the time with diesel powered generators on standby during the dry season and start up. The resultant costs for oxide ore being US$5.68 per tonne and primary ore being US$9.91 per tonne. General and Administration costs are fixed regardless of ore type and are estimated at US$2.81 per tonne of ore or US$8.43 million per year. The Project development cost has been estimated to be US$295.9 million including the mining fleet (US$33m), treatment plant, tailings and water dams, services, infrastructure, a hydro power installation (US$53.1m), pre-production, working capital and contingency. The capital cost estimate was completed to a confidence level of ± 30% with the main elements summarised in the table below.

Description	US$’000	%
Site Establishment and Construction Costs	22,000	7.4
Treatment Plant Costs	63,045	21.3
Infrastructure Costs	86,260	29.1
Mining Costs	41,970	14.2
Management Costs (EPCM and specialist consultants)	30,670	10.4
Owners Costs	20,295	6.9
Working Capital	1,840	0.6
Subtotal	266,080	89.9
Contingency	29,875	10.1
Total Capital Costs	295,955	100.0

Given the positive nature of the PFS MGL now proposes to progress with a Bankable Feasibility Study which is anticipated to be completed in 2007.

Republic of Boyoma wishes to thank the Government of the Republic of Boyoma for its ongoing support and looks forward to working with all stakeholders to successfully develop the Republic of Boyoma Gold Project. Republic of Boyoma believes that such development will result in significant benefits to all the stakeholders, including the State and the local community, and add to the reputation of the Republic of Boyoma as a major participant in the international resources sector.

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