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 ANNEX -A





SECRETARY’S CERTIFICATE


 REGIONAL


OFJ t.'E NO. IV


MllVtAROEA


RECEIVLD


SECRETARY’S CERTIFICATE


6«4UB_03iQQ%








KNOW ALL MEN BY THESE PRESENTS:








I, Adrian S. Arias, being the duly elected Corporate Secretary of BERONG


CORPORATION, a corporation duly organized and existing under and by virtue of


Philippine laws, with office address at the 5th Floor, Quad Alpha Centrum, 125 Pioneer,


Mandaluyong City, DO HEREBY CERTIFY that at the meeting of the Board of


Directors held on 11 July'-2005, at which meeting a quorum was present and acted





throughout, the following resolutions were unanimously passed and approved:





"RESOLVED, That the President of Berong Nickel Corporation (BNC),





Mr. Frank N. Lubbock, be, as he is hereby, authorized to sign the mineral


agreement application, or any similar form, file the same with the central


and regional offices of the Mines and Geosciences 3ureau (MGB) in


behalf of BNC, and sign all relevant documents for the perfection of the


said application; including the Mineral Production Sharing Agreement


(MPSA) applications filed by Anscor Land Management and


Development Corporation (ALMDC) with the MGB Regional Office No.


IV dc.....linated as AMA-IVB-147 (consolidating AMA-IVB-002, 017,


020 and 036), AMA-IVB-038 and AMA-IVB-047 which have been


transferred to BNC;





"RESOLVED FURTHER, To authorize the President, Mr. Frank N.


Lubbock, with the assistance of Mr. Eduardo S. Arejola, whose specimen


signatures appear below, to follow-up BNCs mineral agreement


application and the above-mentioned AI MDC MPSA applications with


MGB, and to represent BNC in connection therewith and in any matter


required to be done in the processing or approval of the said mineral


agreement application and MPSA applications and, generally, to perform


and do any and all acts or things necessary to implement the foregoing.





Frank N. Lubbock





Eduardo S. Arejola $ -A








IN WITNESS WHEREOF, this Certificate has been issued and signed this 18th day of


July 2005 at Mandaluyong City.











ADRIAN S. ARIAS


Corporate Secretary





SUBSCRIBED AND SWORN to before me this July 18, 2005, affiant personally


appeared and signed the foregoing document in nwpresence and, as proof of his identity,


exhibited his community tax certificate novL3lJ86697, isJrUpd on January 24, 2005 at


Mandaluyong, City.





Doc. No. :MIGN0 F. MORALES


Page No. bty NOTARY PUBLIC


Book No. J? ' DEC. 31, 2005


Series of 2005. PTR NO. 0535231


,,ISSUED ON 1-3---(05


‘I MANDALU Y ONG ;DJjT\Y


 ANNEX -B








LOCATION MAP


OR


SKETCH PLAN


 SHEET2648 III











118°15'


05' 9°30'





^^gPeaked Island TECHNICAL DESCRIPTION





LINES BEARINGS DISTANCES


1-2 DUE WEST 900.00 M


2-3 DUE NORTH 300.00 M


3-4 DUE WEST 300.00 M


4-5 DUE NORTH 600.00 M


5-6 DUE WEST 1800.00 M





6-7 DUE SOUTH 300.00 M


7-8 DUE WEST 600.00 M


8-9 DUE NORTH 300.00 M


9-10 DUE EAST 600.00 M





10-11 DUE EAST 1800.00 M


11-12 DUE NORTH 300.00 M


12-13 DUE EAST 300.00 M


13-14 DUE NORTH 300.00 M





14-15 DUE EAST 300.00 M


15-16 DUE NORTH 300.00 M


16-17 DUE EAST 600.00 M


17-18 DUE SOUTH 600.00 M





18-19 DUE EAST 600.00 M


19-20 DUE SOUTH 1500.00 M


20-21 DUE WEST 600.00 M


21-1 DUE NORTH 300.00 M



























































HINA





















































1 nrATION PI AW


 LOCATION PLAN





OF THE AREA APPLIED FOR


MINERAL PRODUCTION SHARING AGREEMENT (MPSA)


GEOGRAPHIC COORDINATES NO. AMA-IVB-47


CORNERS LATITUDE LONGITUDE


1 9U24’09.604” • 118u14’00.455” As Prepared for


2 9I,24’09.539” 118u13’30.958”


? ■ , - )‘ 9°24’ 19.304” 118°13’30.936” BERONG NICKEL CORPORATION


4 . 9U24’19'282” " ■ ■U8°13’21.103”


Situated in the


5 9°24’38.811” • 118°13’21.060”


6 r 24’38 680” 118U12’22.063” BARANGAY OF BERONG


7 9°24’28 916” 118u12’22.086” MUNICIPALITY OF QUEZON


8 9U24’28.871” 118t)12’02.420” PROVINCE OF PALAWAN


9 9°24,38.635V- 118u12’02.398” ISLAND OF PALAWAN


10 9U24’38.680” ■ 118°12’22.063” CONTAINING AN AREA OF 288.0000 HAS.


11 9l)24’38.811” 1 T8U13’21.060”


9°24’48.576” ■ 118°13’2T.038” SCALE OF 1:50,000 M.


12


13 9°24’48.598”' 118ui3’30.871”


14 ~9U24’58.363” • 118u13’30.849” "


----


15 9°24’58.385” 118U13’39.720,r


16 • 9°25’08.149” : 118u13’40.660” JREVINAS,


17 9U25’08.192” 118° 14’00.326” Engineer


EG NO. 996/01/06/66


18 9U24’48.662” 118u14’00.369” PTR NO. 6067216834/01/10/06


19 ~9U24’48.705” 118u14’20.035” • QUEZON CITY


20 9°23’59.881” 118u14’20.142”


•21 9U23,59.839” 118u14’00.477”


11


10' J 9( ■20'


118°15





Scale 1:50,000


1 3 Statute Miles


1000 500 0 1000 2000 3000 4000 Meters


1000 500 3000 4000 Yards Nautical Miles


0 1000 2000


'A 0 1 2 3 INDEX TO BOUNDARIES INDEX TO ADJOINING SHEETS


1-1 I------{ H---I ■ I-





CONTOUR INTERVAL 20 METERS


WITH SUPPLEMENTARY CONTOURS AT 5 AND 10 METER INTERVALS


VERTICAL DATUM: MEAN SEA LEVEL





TRANSVERSE MERCATOR PROJECTION


HORIZONTAL DATUM: LUZON DATUM





HYDROGRAPHIC DATUM: MEAN LOWER LOW WATER














Municipality. -


Published by Province of Palawan.


Department of Environment and Natural Resources 1. Quezon Municipalily.


2. Aborlan Municipality.


NATIONAL MAPPING & RESOURCE INFORMATION AUTHORITY


Fort Bonifacio, Makati























ARAMAWAYAN


 ANNEX-C











TEMPORARY EXPLORATION


PERMIT


(TEP-IVB-008-2005)


 H *«• .<■> • /t gz'-tim' jn-.r-s-,-


Republic of the Pliilippines /


Department of Environment and Natural Resources $7


MINES AND GEOSCIENCES BUREAU j J/


North Avenue, Diliman, Quezon City I «i( ii


\?\ te,,N0 V 3 6 2®§A





TEMPORARY EXPLORATION PERMIT !


\ i .








Temporary Exploration Permit No. TEP-IVB-008-2005


Permittee Berong Nickel Corporation


Address 7th Floor, Quad Alpha Centrum Bldg.


125 Pioneer Street, Mandaluyong City








This Temporary Exploration Permit (TEP) covering an area of 288.00 hectares situated in


the Municipality of Quezon, Province of Palawan bounded by the following geographical


coordinates:











RNER LATITUDE LONGITUDE





1 9° 24’ 09.604” 118° 14’ 00.455”


2 9° 24’ 09.539” 118° 13’ 30.958”


3 9° 24’ 19.304” 118° 13’ 30.936”


4 9° 24’ 19.282” 118° 13’ 21.103”


5 9° 24’ 38.811” 118° 13’ 21.060”





6 9° 24’ 38.680” 118° 12’ 22.063”


7 9° 24’ 28.916” 118° 12’ 22.086”


8 9° 24’ 28.871” 118° 12’ 02.420”


9 9° 24’ 38.635” 118° 12’ 02.398”


10 9° 24’ 38.680” 118° 12’ 22.063”


11 9° 24’ 38.811” 118° 13’ 21.060”


12 9° 24’ 48.576” 118° 13’ 21.038”





13 9° 24’ 48.598” 118° 13’ 30.871”


14 9° 24’ 58.363” 118° 13’ 30.849”


15 9° 24’ 58.385” 118° 13’ 39.720”


16 9° 25’ 08.149” 118° 13’ 40.660”


17 9° 25’ 08.192” 118° 14’ 00.326”


18 9° 24’ 48.662” 118° 14’00.369”


19 9° 24’ 48.705” 118° 14’ 20.035”





20 9° 23’ 59.881” 118° 14’ 20.142”


21 9° 23’ 59.839” 118° 14’ 00.477”








(Please refer to attached Location Map marked Annex A)








is hereby granted to Berong Nickel Corporation, having filed the TEP application in the


Mines and Geosciences Bureau (Bureau) Regional Office No. IVB (MIMAROPA) on July


19, 2005 under Mineral Production Sharing Agreement application (MPSA) denominated


as AMA-IVB-047, in accordance with Republic Act No. 7942, otherwise known as “The


Philippine Mining Act of 1995” and all the pertinent implementing rules and regulations


promulgated thereunder: Provided, That areas with conflict, within ancestral





lands/domains without the free and prior informed consent by the concerned Indigenous ^


11. The Bureau Director may, at any time, cancel the TEP for violation of the provisions


of the Philippine Mining Act of 1995 and all the pertinent implementing rules and


regulations or the terms and conditions of this Permit,


12. The Permittee shall comply with its obligations under the TEP and other terms and


conditions which the Bureau Central Office/Regional Office concerned may deem


appropriate in accordance with existing laws, rules and regulations;


13. The Permittee shall strictly secure a written consent from any surface owner/s,


occupant/s and concessionaire/s within the Permit Area prior to entry or conduct of


any form of exploration activities therein;


14. The Permittee shall submit to the Bureau Central Office a copy of the baseline


environmental study, i. e., pedological and water quality, within six (6) months after


the issuance of this TEP; and


15. The Permittee shall furnish a copy of the approved EnWP to the Sangguniang


Panlalawigan concerned.











Quezon City, Philippines, NOV 1 5 2005














JI SO III


Ass Director


v *





I hereby accept the terms and conditions of this TEP as above stated.





BERONG NICKEL CORPORATION





By





FRANK N. LUBBOCK


Authorized Representative


TIN: 2o° Q2^





Signed in the presence of:


 ACKNOWLEDGEMENT








Republic of the Philippines _)


Quezon City _) s. s.


SUBSCRIBED AND SWORN to before me, JEREMIAS L. DOLINO, CESO


III, with Community Tax Certificate No. _issued on Z~l7-fS at


filAXftfn Qty in his capacity as Asst. Secretary and Concurrent Director of the


Mines and Geosciences Bureau and FRANK N. LUBBOCK, as the Authorized


Representative of Berong Nickel Corporation with Community Tax Certificate No.


^4 7509%_issued on ID' 01- H_at A/bfcnti Ca hj _, both known to me


and to me known to be the same persons who executed the foregoing instrument consisting


of four (4) pages, including this acknowledgement page, and acknowledged to me that the


same is their voluntary act and deeds.


IN WITNESS WHEREQF, I have hereunto set my hand and affix my Notarial


Seal, this_day of tl 6 ItQV 2005_.














NOTARY PUBLIC ^


'lUAtVt U, [-7-flhl* .





Doc. No.


Page No.


Book No. X


Series of 2005


 ANNEX-D











EXPLORATION WORK


PROGRAM


 BERONG NICKEL CORPORATION Exploration Work Program


AM A IVB - 047 Page 1 of 16





Republic of the Philippines


Department of Environment and Natural Resources


MINES AND GEOSCIENCES BUREAU


North Avenue, Diliman, Quezon City





EXPLORATION WORK PROGRAM





MPSA Application: AMA IVB - 047








1.0 Name and Address of Company/Proponent:





BERONG NICKEL CORPORATION


7th Floor Quad Alpha Centrum


125 Pioneer St., Mandaluyong City





Frank N. Lubbock


President











2.0 Location of Project:


The Project Area covered by Mineral Production Sharing Agreement application





denominated as AMA IVB - 047 is located in Barangay Berong, Municipality of Quezon


Province of Palawan, and is bounded by the following geographical coordinates:





Table I. Coordinates of Corner Boundaries of Berong Nickel Corporation Property.





Berong Property


Corner Lai titude (North) Longitude East)


Deg Min Sec Deg Min Sec


9 24 09.604 14 00.455


1 118


2 9 24 09.539 118 13 30.958


3 9 24 19.304 118 13 30.936


4 9 24 19.282 118 13 21.103


5 9 24 38.811 118 13 21.060


6 9 24 38.680 118 12 22.063


7 9 24 28.916 118 12 22.086


8 9 24 28.871 118 12 02.420


9 9 24 38.635 118 12 02.398


10 9 24 38.680 118 12 22.063


11 9 24 38.811 118 13 21.060


12 9 24 48.576 118 13 21.038


 BERONG NICKEL CORPORATION Exploration Work Program


AM A IVB - 047 Page 2 of 16





Berong Property





Lat tude (North) Longitude (East)


Corner


Deg Min Sec Deg Min Sec


13 9 24 48.598 118 13 30.871


14 9 24 58.363 118 13 30.849


15 9 24 58.385 118 13 39.720


16 9 25 08.146 118 13 40.660


17 9 25 08.192 118 14 00.326


18 9 24 48.662 118 14 00.369


19 9 24 48.702 118 14 20.035


20 9 23 59.881 118 14 20.142


21 9 23 59.839 118 14 00.477








3.0 Area of coverage: 288.00 hectares more or less








4.0 Type and Nature of the Mineral Deposit


The Exploration Work Program will cover the resumption of activities for the Nickel





Laterite / Saprolite Deposit covered by AMA IVB - 047 located in Quezon, Palawan. The


objective of the work program is to fast track the development of the project to


commence commercial mining operation within one (1) year period.





The nickeliferous laterite is confined within the weathering of ultramafic bedrock. Assay


results of previous test pit samples generally indicate high nickel in areas underlain by


saprolite. Nickel content varies from 0.5% Ni to more than 3.0% Ni.








5.0 Project Area Description:


5.1 Terrain/Physiography:





The Project Area topography is moderate near the coast and becomes


progressively rugged and terraced towards the interior. The nickel laterite deposits


are generally thickest over broad and sinuous ridges and spurs with intervening


steep-sided ravines. In the rugged terrains of Berong area, laterites found between


elevations 300 m and 800 m above sea level.


5.2 Accessibility:





The Project Area is under the jurisprudence of Barangay Berong, Municipality of


Quezon, Province of Palawan (Fig. 1). Quezon can be reached from Puerto


Princesa City by air-conditioned shuttle vans, and passenger jeepneys via a well-


paved southwest provincial coastal road, then across the center of the island to the


west. Berong proper can be reached from Quezon through a 50-km northeast


gravel road. An old 16 km non-paved road, passable only during dry season,


provides access to the Project Area.


BERONG NICKEL CORPORATION Exploration Work Program


AM A IVB - 047 Page 3 of 16


 BERONG NICKEL CORPORATION Exploration Work Program


AMA IVB - 047 Page 4 of 16





Puerto Princesa City, the capital city of Palawan, is approximately 625-air km


from Manila. Philippine Airlines, Cebu Pacific, Asian Spirit and Air Philippines


provide daily scheduled flights to the city. Commercial ferryboats and cargo


vessels from various Philippines centers make port calls in the city.





5.3 Drainage System:


The Berong and Ibatong Rivers and their tributaries provide the drainage to the





Project Area. These rivers flow northwest and empty their load to the South


China Sea. Both rivers are active year-round and are the main sources of


irrigation waters for the rice paddies on the coastal plains.


A prominent feature northwest of the project area is the 84 hectare Tagbong Saing





Lake. This lake is bounded by ridges, the most prominent of which is the Dangla


Ridge in the south.





5.4 Vegetation:





The climate sustains lush and diversified fauna. The high relief of Berong is


mostly covered with dense forest growth of commercial grade hardwoods and


softwoods. Secondary growth in the timbered area is extremely dense consisting


of bamboo, thomed bushes and a wide variety of vines. The laterite bearing areas


are noticeably covered with dense but stunted growth hardwoods.


5.5 Land use:


The Project Area covered by the proposed exploration activities is classified as





forestland. The nature of the soil being iron-rich lateritic, is not conducive for


agricultural purposes. Low-lying areas adjacent to the Project Area are mainly


agricultural and human settlement zones.








6.0 Description of Exploration Work Program:


Laterite deposits exploration in Central Palawan dates back to mid-1967, pioneered by the


exploration group of A. Soriano y Cia, the forerunner of ANSCOR. Extensive exploration


works were done in Central Palawan until 1989 where test pitting delineated extensive


nickel laterite/saprolite resources in Long Point, Moorsom, Berong and Tagkawayan


areas. Test pitting at Berong included 2,574 test pits, of which 158 were at 300 m spacing,


993 were at 50 meter spacing and 804 were at 25 meter spacing.


A review of test pitting results and assays at Berong from more closely-spaced test pits (at


50 m spacing or better), a calculated what was called “proven reserve” of 5.4 million


tones grading 1.26% Ni and 0.16% Co in laterite and 12.2 million tones in saprolite


grading 1.68% Ni and 0.046% Co. The currently accepted terminology would be


“indicated mineral resources” for this mineralization.


The amended exploration work program is focused now in exploring and developing the


property and synthesized into a commercial mining operation.


BERONG NICKEL CORPORATION Exploration Work Program


AM A IVB - 047 Page 5 of 16








6.1 Research Work:


6.1.1 Survey of previous work:


6.1.1.1 Nature of study:





Literature search on published and unpublished reports on the


Project Area and surrounding areas.





6.1.1.2 Duration : One month


6.1.1.3 Coverage : Berong and Aramaywan





6.1.1.4 Proponent : Berong Nickel Corporation





6.1.1.5 Results or Conclusions arrived at:





A much better overview of the geology and laterite


mineralization will guide the planning and execution of the


proposed exploration program outlined on this report.


Furthermore, this will also facilitate the geological survey that


will be conducted in congruence with the on-going exploration


program.


6.1.1.6 Estimated cost: The cost for this activity will be included in


the data compilation/collation cost.





6.1.2 Data compilation/collation:


6.1.2.1 Geochemical/Geophysical data:


Available information regarding the geochemical and





geophysical studies conducted in the area by the Mines and


Geosciences Bureau, BNC and other private companies will be


compiled and analyzed. This information will not only hasten


the laying out of grid lines for the exploration program but it


will also enhance the location of priority areas for test pit re¬


sampling program.


6.1.2.2 Lithological data:


The different rock types/formations on the Project Area, as





reported, will be studied carefully to have a better understanding


of the mode of formation of the laterite. Samples for


petrographic analysis will be collected, if no such studies were


done, to accomplish this goal. Likewise, age determination


studies on these rock suites will also be conducted to ascertain


the age of mineralization.


6.1.2.3 Mineralization/Alteration studies:


Mineralized areas indicated by previous studies conducted in the





BERONG NICKEL CORPORATION Exploration Work Program


AM A IVB - 047 Page 6 of 16








area will be noted and correlated. X-ray diffraction studies on


the laterites, if available, will be re-evaluated to determine the


primary and associated minerals on the lateritic soil. This will


also help in establishing the minerals that evolved as the


laterization process progresses to its ultimate form.


6.1.2.4 Various thematic maps covering the target areas:


A composite geologic map of the area is created to show the


different lithologies and geologic structures in the Project Area


and adjoining areas. Alteration and mineralized zones should be


incorporated on the map to show their lateral extension and


intensity.





6.1.2.5 Estimated cost : PhP 100,000.00








6.2 Detailed Geophysical Survey:


6.2.1 Geological mapping/alteration studies:


Areas showing anomalous results from the previous works will be re¬


evaluated further by conducting detailed geological mapping and re¬


sampling.


Grid lines spaced 100x100 m will be re-established by cutting lines along


the old line positions. This is in preparation for the Ground Penetrating


Radar (GPR) Survey. Geological mapping will be carried out


simultaneously with line cutting to define extent of laterization.


6.2.1.1 Coverage : Will cover the entire 288 has. tenement block.


6.2.1.2 Duration : One and a half (1 Vi) months





6.2.1.3 Manpower : One geologist, five (5) team leaders and 15


laborers to comprise the 5 clearing teams.


6.2.1.4 Output :





Geological maps with 1:10,000 scale will be presented showing


potentially mineralized zones. This is going to accompany a


geological report describing the obtained results.


6.2.1.5 Estimated cost : PhP 341,840.00














6.2.2 Topographic and Legal Survey:


A deputized Geodetic Engineer will be engaged to establish primary





BERONG NICKEL CORPORATION Exploration Work Program


AM A IVB - 047 Page 7 of 16








survey controls, based on the NAMRIA map, for use in redefining the


MPSA boundary lines, topographic survey controls and engineering


design controls. The primary survey controls will be established with the


use of geodetic-grade Global Positioning System (GPS) survey


equipment.


Employing a combination of GPS and conventional Total Station survey


equipment, the existing 100m on-center test pit grid will be re-established.


This survey will include location and elevation of test pit collars.


Employing a combination of GPS and conventional Total Station survey


equipment, a topographic survey will be undertaken to identify pertinent


site features and ground elevations for use in engineering design.


6.2.2.1 Coverage : The entire tenement block of 288 has.


6.2.2.2 Duration : Approximately 36 days of fieldwork during


the first couple of months.





6.2.2.3 Scale and contour intervals:


AutoCad drawing files will be created to enable drawing


reproduction at any desired scale and contour interval. For


report presentation purposes drawing scale proposed is 1:


20,000 and having a 10 meter contour interval.


6.2.2.3 Manpower : To be contracted to Geodetic Engineer to be


supported by field crews of five 5 teams consisting of


instrument man, rod man, 4 helpers and brushers, a total of 30


field men.


6.2.2.4 Output : A topographic survey map will be created and





used for the planned EWP.


6.2.2.5 Estimated cost : PhP 1,349,040.00





6.2.3 Ground Penetrating Radar (GPR) Survey:


It has been proven by other laterite exploration projects in the Philippines





that employment of GPR is an effective method in determining depth of


the laterite mineralization. This geophysical survey method is going to be


employed also in the entire project area. Line spacing will be 100 meters


along north-south and 100 m along east-west lines (Figure 2).


6.2.3.1 Coverage : the entire 288 has of the tenement block.


6.2.3.2 Duartion : Approximately 15 days





6.2.3.3. Manpower : To be done by foreign contractor but to be


supported by four (4) local laborers.


6.2.3.4 Output: Amapshowinglinelocationsandinterpreteddepth.lt


BERONG NICKEL CORPORATION Exploration Work Program


AMA IVB - 047 Page 8 of 16








will provide a generalized overview of the geological horizons,


supporting the previously completed test pits program and


identify the approximate depth of the mineralized bedrock. This


will give a more complete picture of the size of the ore body.


6.2.3.5 Estimated cost : PhP 3,746,820.00





6.3 Test Pitting:





6.3.1 Phase 1 - Re-sampling of old pits: All accessible old test pits will be re¬


sampled in known anomalous areas indicated by the geological,


geophysical and geochemical survey done previously. The main purpose


of which is to confirm the presence of economic laterite mineralization.


6.3.1.1 Coverage : Priority block has been identified where 25m


on-center grid test pits are located.


6.3.1.2 Duration : To be done immediately and completed within


20 days. This activity can be done in parallel with the line


clearing and topographic survey.


6.3.1.3 Number and overall length or depth:





Approximately 392 old test pits is planned for re-sampling with


an average depth of 7.5 meters, depending on the nature of the


pit site and safety of the laborers, for an aggregate of 2,940


meters.


6.3.1.4 Estimated number of samples to be taken:





Samples will be taken every 1.0-meter depth of the test pit.


Approximately 2,500 samples are expected to be collected.


6.3.1.5 Mode of analysis/target elements: Ni, Co, Fe, MgO, SiC>2, etc.


using XRF analysis.


6.3.1.6 Manpower : One geologist, three (3) geologic aides and 40


laborers to comprise 10 test pitting teams.


6.3.1.7 Output:





The thickness of the lateritic soil from anomalous areas will be


determined. The grade of the laterite ore will also be known and


characterized.





6.3.1.8 Estimated cost : PhP 5,389,490.00


BERONG NICKEL CORPORATION Exploration Work Program


AM A IVB - 047 Page 9 of 16


BERONG NICKEL CORPORATION Exploration Work Program


AM A IVB - 047 Page 10 of 16








6.3.2 Phase II - Re-sampling of old pits outside the priority block and fill-in


and exploratory test pits will be dug and sampled to cover the entire


tenement block. Test pit spacing will eventually be 25 meters on center


grid (Figure 3).


6.3.2.1 Coverage : 25 m grid spacing on area with good results


covering the entire tenement block.





6.3.2.2 Duration : Approximately 6 months to be done right after


Phase I.


6.3.2.3 Number and overall length or depth:


Approximately 240 re-sampling of old pits and 215 in-fill and


exploratory test pits are planned for excavation and sampling


with an average depth of 7.5 meters for an aggregate of 3,415


meters.


6.3.2.4 Estimated number of samples to be taken:


Samples will be taken every 1.0-meter interval of the hole.


Approximately 3,415 samples are expected to be collected.


6.3.2.5 Mode of analysis/target elements: Ni, Co, Fe, MgO, Si02 , etc.


using XRF analysis.


6.3.2.6 Manpower : One geologist, one geologic aide, 12 laborers





6.3.2.7 Output:


The thickness of the lateritic soil for new area will be


determined. The grade of the laterite ore will also be known and


characterized. The test pit program will support the GPR and to


increase tonnage of the known laterite resource.


6.3.2.8 Estimated cost : PhP 8,016,150.00


6.4 Diamond Drilling:


6.4.1 Phase 1 Core Drilling - Drilling of HQ size hole within the priority


block to serve as fill-in to the existing test pits. The objective of drilling is


also to determine the depth of the laterite profile. Location of drill holes


will be dependent on the result of GPR survey. Four to five portable rigs


will be employed to do the work.





6.4.1.1 Type of drilling: Portable drilling rig using HQ size


diameter hole spaced.


6.4.1.2 Coverage : Combined 150 holes aggregating to 3,000 m.


BERONG NICKEL CORPORATION Exploration Work Program


AMAIVB-047 Page 11 of 16


BERONG NICKEL CORPORATION Exploration Work Program


AM A IVB - 047 Page 12 of 16








6.4.1.3 Duration : Approximately two (2) months to be


implemented during the first half of the 1st year.


6.4.1.4 Number and overall length:


Approximately 150 holes with an average depth of 20 meters


and aggregating to 3,000 meters are planned for drilling.


6.4.1.5 Estimated number of samples to be taken:





Samples will be taken every 1.0-meter interval of the hole.


Approximately 3,000 samples are expected to be collected.


6.4.1.6 Mode of analysis/target elements: Ni, Co, Fe, MgO, SiC^, etc.


using XRF analysis.


6.4.1.7 Manpower : Contract drilling by accredited drilling


contractor to be supported by two (2) geologic aides and four (4)


samplers.


6.4.1.8 Output : Confirmation of the depth of mineralization as


indicated by GPR. This will also provide additional nickel grade


information and increase the level of confidence on the resource


estimate.


6.4.1.9 Estimated cost : PhP 11,426,530.00








6.5.2 Phase II Core Drilling- New holes will be drilled using HQ size


diameter hole, spaced at 25 m interval, to serve as fill-in to the existing


test pits outside the priority block. Drilling will also be done west of the


priority block as exploratory holes to test the laterite zone (Figure 3).


Holes will be spaced 100m on center grid. Four rigs used during Phase I


will also be used on Phase II.


6.5.2.1 Type of drilling: Portable drill rig using HQ size diameter hole


spaced at 25 m interval.


6.5.2.2 Coverage : Combined 150 holes aggregating to 3,000 m.


6.5.2.3 Duration : 56 days or two (2) months during the first half





of the first year


6.5.2.4 Number and overall length:


Approximately 150 holes with an average depth of 20 meters


and aggregating to 3,000 meters are planned for drilling.


6.5.2.5 Estimated number of samples to be taken:





Samples will be taken every 1.0-meter interval of the hole.


Approximately 3,000 samples are expected to be collected.


 BERONG NICKEL CORPORATION Exploration Work Program


AMAIVB-047 Page 13 of 16





6.5.2.6 Mode of analysis/target elements: Ni, Co, Fe, MgO, SiC>2, etc.


using XRF analysis.


6.5.2.7 Manpower: Contract drilling by local contractor to be


supported by two (2) geologic aides and four (4) samplers.


6.5.2.8 Output: Confirmation of the depth of mineralization as


indicated by GPR. This will also provide assay information on


the old test pits no longer accessible. Drilling on new area west


of the Priority block will provide additional resources.


6.5.2.9 Estimated cost : PhP 11,378,830.00


6.5.3 Phase III Core Drilling - To serve as fill in holes to the drill holes


west of the priority block, 50m x 50m on-center holes will be drilled


using the same rigs used in Phases I and II.


6.5.3.1 Type of drilling: Portable drill rig using HQ size diameter hole


spaced at 25 m interval.


6.5.3.2 Coverage : Combined 150 holes aggregating to 3,000 m.


6.5.3.3 Duration : 26 days during the 2nd half of the first year.


6.5.3.4 Number and overall length:





Approximately 150 holes with an average depth of 20 meters


and aggregating to 3,000 meters are planned for drilling.


6.5.3.5 Estimated number of samples to be taken:


Samples will be taken every 1.0-meter interval of the hole.


Approximately 3,000 samples are expected to be collected.


6.5.3.6 Mode of analysis/target elements: Ni, Co, Fe, MgO, Si02, etc.





using XRF analysis.


6.5.3.7 Manpower : Contract drilling by local contractor to be


supported by two (2) geologic aides and four (4) samplers.


6.5.3.8 Output : Confirmation of the depth of mineralization as


indicated by GPR. This will also provide assay information on


the old test pits no longer accessible. Drilling on new area west


of the Priority block will provide additional resources.


6.5.3.9 Estimated cost : PhP 11,607,180.00





7.0 Metallurgical Study


During the later part of the 1st year of exploration period, bulk sampling within the


defined resources will be carried out and send to reputable offshore laboratory.


Approximately 30,000 tons of ore grade material will be shipped out to determine the


most appropriate beneficiation method.


 BERONG NICKEL CORPORATION Exploration Work Program


AM A IVB - 047 Page 14 of 16








7.0. 1 Coverage:


Approximately 30,000 dry metric tons of ore grade bulk sample materials will be


extracted from defined ore grade resources and send to reputable offshore laboratory.


7.0. 2 Duration:


Excavation period will take about a month while the completed results are expected to be


available within the first two months of the 2nd year.


7.0. 3 Manpower:


Extraction from the site of the materials will be done by accredited contractor under the


supervision of Berong representative.


The samples will be shipped to a reputable offshore laboratory. The test work will be


supervised by a foreign Metallurgical Consultant.


7.0. 4 Output:





The metallurgical studies will determine the most appropriate beneficiation method for


the nickel laterite deposit.


7.0. 5 Estimated cost:





A total amount of PhP 15,000,000.00 is allocated for the bulk sampling and metallurgical


studies.


8.0 Ore Resource and Reserve Estimation and Validation


As soon as the compilation of all geologic and assay data have been completed, geologic


and ore grade modeling activities shall commence. Geostatistical analyses, 3D geology


and grade block models using GIS and mining softwares shall be generated to fully


evaluate the configuration of the ore deposits.


8.0. 1 Coverage:





The entire 288 hectares of ground area shall be evaluated and from which geologic


resources and mineable reserves of varying classifications shall be defined.


8.0. 2 Duration:


The entire exercise shall be undertaken in four (4) months.


8.0. 3 Manpower:





Two (2) Exploration/Resource Geologists, Two (2) Mine Planning/Ore Reserve


Engineers, and Three (3) Data Management Assistants shall comprise the team.


A foreign consultant shall also be engaged for purposes of generating resource/reserve


reports which will be JORC compliant and ready for international release.


 BERONG NICKEL CORPORATION Exploration Work Program


AM A IVB - 047 Page 15 of 16








8.0. 4 Output:


This activity will produce various maps, sections and 3-D representations of the geology


and grade model of the Ni-laterite deposit. Estimates on the Geologic Resources


classified into Inferred, Indicated and Measured Resources as well as the Mineable


Reserves classified into Probable and Proven Reserves shall be derived.


8.0. 5 Estimated Cost:


A total amount of P 2,000,000.00 will be allotted for these activities.





9.0 Definition In-fill Drilling/Test Pitting


Areas which need further sub-surface information in the modeling process shall be


covered with test pitting or drilling. The aim is to increase the level of confidence in the


estimation and possibly elevate resources and reserves to the measured and proven


categories, respectively.


9.0. 1 Type of drilling: Portable drill rig using HQ size diameter hole


spaced at 25 m interval.


9.0. 2 Coverage : The entire 288 hectare MPSA area


9.0. 3 Duration : Two (2) Months


9.0. 4 Number and overall length:


75 drill holes with aggregate length of 1,500 meters.





20 test pits with aggregate length of 160 meters.


9.0. 5 Estimated number of samples to be taken:


Approximately 1,660 samples are expected to be collected.





9.0. 6 Mode of analysis/target elements: Ni, Co, Fe, MgO, Si02, etc.


using XRF analysis.


9.0. 7 Manpower : Contract drilling by local contractor to be


supported by one (1) geologist, two (2) geologic aides and four


(4) samplers.


9.0. 8 Output : The geologic and assay data to be generated


from the activity will serve to define more fully the ore deposit


and will produce a more representative orebody model.


9.0. 9 Estimated cost : PhP 3,430,000.00





10.0 Final Resource/Reserve Estimation Declaration


Base on the new dataset which includes the additional definition drill holes and pits, a re¬


estimation shall be undertaken to come up with the final ore resource and reserve


declaration. This output shall be the final information that will be reported to the MGB


 BERONG NICKEL CORPORATION Exploration Work Program


AM A IVB - 047 Page 16 of 16








and this will be the basis for the feasibility study.


This activity is for a period of two months at the middle of the 2nd year. It will involve a


cost ofPhP 1,000.000.00


11.0 Preparation and Declaration of Mining Feasibility





All data will be collated by a team of Professionals. All technical, social, environmental


and economic parameters will be considered to come up with a declaration of mining


feasibility. The collation, validation, finalization of all pertinent information and the


actual mine feasibility study will take six (6) months to complete. The amount to be spent


is PhP 8,000,000.00.


12.0 Estimated Budget:


Approximately Php 91,064,470.00 is allocated for the proposed exploration work


program.





13.0 Schedule of Activities


The implementation of the exploration work program commenced last November 28,





2005 after securing the Temporary Exploration Permit (TEP-IVB-008-2005) from the


Mines and Geosciences Bureau Region IVB last November 15, 2005. The TEP program


covers the first year component of this two (2) year Exploration Work Program for the


MPSA application (AMA-IVB-047). The schedule of activities is presented in the


attached Gantt Chart.








Prepared by:





Hd OOiycd I <


eW





JO VENAL M GONZALEZ JR.


Registered Geologist


PRC No. 0627


PTRNo. 7548901


Issued on March 17, 2006


Issued at Quezon City








Conforme:








ALEX R. DE LEOZ


Vice President


Berong Nickel Corporation








APPENDIX 'A'





AMENDED BERONG EXPLORATION WORK PROGRAM SCHEDULE AND BUDGET ESTIMATES








Monthly Schedule of Activities B


ACTIVITIES 1st YEAR 2nd YEAR


1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24





1. RESEARCH AND PREPARATION WORKS


2. DETAILED GEOPHYSICAL SURVEY





2.1 Line Cutting IIII


2.2. Topographic Survey


2.3. Ground Penetration Radar





3. TEST PITTING





Phase I - Confirmatory Resampling of Old Pits (2,940 m)


Phase II - a) Resampling of Old Pits (1,800 m)





b) In-fill within old pits area (790 m)


c) New area (825 m)


4. DRILLING





Phase 1 - Confirmation Drilling of old pits (3,000 m)


Phase II - In-fill drilling and new area ■





Phase III - New Area drilling (3,000 m)


5. Bulk Sampling and Metallurgical Study


6. Ore Resource/Reserve Estimation/Validation





7. Definition In-fill Drilling/Test Pitting ■ ■


8. Final Resource/Reserve Estimation and Declaration





9. Preparation and Declaration of Mining Feasibility


10. Project Management


Sub-Total:





11. Environmental Management and Community Devt (10%)


TOTAL BUDGET: 70,520.28 20,544.19


 ANNEX-E











ENVIRONMENTAL WORK


PROGRAM


 Republic of the Philippines


Department of Environment and Natural Resources


MINES AND GEOSCIENCES BUREAU


North Avenue, Diliman, Quezon City





ENVIRONMENTAL WORK PROGRAM





MPSA APPLICATION: AMAIVB - 047








1.0 Name and Address of Company:





BERONG NICKEL CORPORATION


7th Floor, Quad Alpha Centrum


125 Pioneer St., Mandaluyong City





Frank N. Lubbock


President











2.0 Type and Nature of Project


2.1 Project Description


The Two (2) - Year Environmental Work Program will cover the resumption of


mineral exploration and evaluation activities under the Exploration Work


Program for the nickel laterite / saprolite deposit covered by MPSA application


denominated as AMA IVB-047 located in the Municipality of Quezon , Province


of Palawan.


The exploration program commenced last November 26 after securing the


Temporary Exploration Permit (TEP-IVB-008-2005) last November 15, 2005.


2.2 Type and Nature of Mineral Deposits


The contract area is known to contain nickel and cobalt mineralization in the form


of laterite and saprolite. The nickel in the laterite is associated with hydrated iron


oxides made up essentially of goethite.


Gamierite also occurs in the contract area within and below the laterite mantle. It


correlates well with abrupt increase in the nickel content of the laterite.


Berong Nickel Corporation Environmental Work Program


AMA IV - 047 Page 2 of35





3.0 General Location and Area to be Covered by the Permit/Contract Area.


3.1 Location and Accessibility


The Project Area covered by Mineral Production Sharing Agreement application


denominated as AMA IVB - 047, is under the jurisprudence of Barangay Berong,


Municipality of Quezon, Province of Palawan (Fig. 1). Quezon can be reached


from Puerto Princesa City by air-conditioned shuttle vans, and passenger jeepneys


via a well-paved southwest provincial coastal road, then across the center of the


island to the west. Berong proper can be reached from Quezon through a 50-km.


northeast gravel road. A 16 km non-paved road, passable only during dry season,


provides access from the barangay proper to the Project Area.


Puerto Princesa City, the capital city of Palawan, is approximately 625-air km


from Manila. Major commercial airlines provide daily scheduled flights to the


city. Commercial ferryboats and cargo vessels from various Philippines centers


make port calls in the city.








3.2 Total Area


The total area under AMA IVB - 047 is 288.0 hectares more or less and is





bounded by coordinates presented in Table 1:








Table I. Coordinates of Corner Boundaries of Berong Nickel Corporation


Property.





Berong Property


Corner Lai titude (North) Longitude (East)


Deg Min Sec Deg Min Sec


1 9 24 09.604 118 14 00.455


2 9 24 09.539 118 13 30.958


3 9 24 19.304 13 30.936


118


4 9 24 19.282 118 13 21.103


5 9 24 38.811 118 13 21.060


6 9 24 38.680 118 12 22.063


7 9 24 28.916 118 12 22.086


8 9 24 28.871 118 12 02.420


9 9 24 38.635 118 12 02.398


10 9 24 38.680 118 12 22.063


11 9 24 38.811 118 13 21.060


12 9 24 48.576 118 13 21.038


13 9 24 48.598 118 13 30.871


14 9 24 58.363 118 13 30.849


15 9 24 58.385 118 13 39.720


16 9 25 08.146 118 13 40.660


17 9 25 08.192 118 14 00.326


Berong Nickel Corporation environmental Work Program


AMA IV - 047 Page 3 of35





Table I. Coordinates of Corner Boundaries of Berong Nickel Corporation


Property.





Berong Property


Corner Lai titude (North) Longitude (East)


Deg Min Sec Deg Min Sec


18 9 24 48.662 118 14 00.369


19 9 24 48.702 118 14 20.035


20 9 23 59.881 118 14 20.142


21 9 23 59.839 118 14 00.477





4.0 Baseline Environmental Conditions


4.1 Land Environment





4.1.1 Topography/Physiography


The Project Area topography is moderate near the coast and becomes


progressively rugged and terraced towards the interior. The nickel laterite


deposits are generally thickest over broad and sinuous ridges and spurs


with intervening steep-sided ravines. In the rugged terrains of Berong


area, laterites are found between elevations 300 m and 800 m above sea


level.


4.1.2 Land Use / Capability





The area covered by the exploration activities is classified as forestland.


The nature of the soil, being lateritic, is not conducive for agricultural


purposes. Low-lying areas adjacent to the Project Area are mainly


agricultural and human settlement zones.


4.1.3 Pedology


The soil types within Quezon town basically consist of two groups. The





dominant type of soil which comprises 60 percent of the town is the


entisols or soils without pedogenic horizons, either usually wet, moist or


dry (Municipal Land use Plan).





About 40 percent of the total land area is classified as mountain soil or


soils with various moisture and temperatures regimes which are found in


steep slopes where relief and total elevation vary from place to place.





4.2 Water Environment


4.2.1 Water Quality





The entire area abounds with underground springs from water catchments


that are scattered in the area. The residents of Barangay Berong get their


water from these springs and from deep wells. The rest of the population,


especially within the vicinity of the Project Area, rely mainly on open


 BERONG NICKEL CORPORATION


AMA IVB - 047































































































"~A


Berong Nickel Corporation Environmental Work Program


AMA IV - 047 Page 5 of35





wells, rainwater cisterns, rivers and streams. Many of these sources have


doubtful water quality.





Water quality information from the local water sources such as springs


and/or deep wells was gathered during the Environmental Impact


Assessment done by Long Point Nickel Mining Project in 1997. Water


quality sampling location and results are presented in Tables II and III.








Table II. Water Quality Sampling Location.





Station


I.D. Location Depth Width


1 Katuayan River, downstream (mangrove 0.1 -0.2 1.5-2.0


stand)


2 Katuayan River, upstream (along ricefield) 0.2 -0.3 1.0- 1.2


3 Malamig River 0.1 -0.2 2.5-3.0





4 Tagbulante River 0.2 - 0.3 3-4


5 Confluence of Malamig and Tagbulante 2.0-2.5 5-6


Rivers


6 Tagbulante River, downstream 1.8 - 2.0 6.5-12.0





7 Berong River, downstream 1.5-2.0 5-6


8 Berong River, upstream 0.2-0.3 1.0- 1.5





9 Creek passing thru old quarry site less than 0.5- 1.0


0.1


10 Tagbung Saing River 0.1 -0.2 0.5-1.0





11 Tagbung Saing Lake, outflow 0.3-0.4 3.0-4.5


12 Tagbung Saing Lake lO


o


1


CM


O


13 Creek along old Dangla Camp 0.1 -0.2 1.0- 1.5





14 Sea, near Peak Island





15 Shallow well, old campsite


16 Shallow well, old campsite





17 Artesian well, Berong


Berong Nickel Corporation Environmental Work Program


AMA IV - 047 Page 6 of 35





Table III. Water Quality Monitoring Results for the Headwaters, Underground Springs


and Wells.





Parameters Units Station I.D. DENR


2 3 4 8 9 10 13 15 16 17 Standard


Temperature (°C) 30 28 30 30 30 28 28 29 29 29 34


PH 7.2 7 7 7 7.5 7.3 7.6 7.8 7.6 7.8 6.5-8.5


DO ppm 8.6 8.7 10 6.8 4.8 6.5 5 6 5.5 5.5 5


BOD ppm 1.8 1.1 2 2 3 2 2 3.5 3.3 3 5


S04 ppm 0 0 0 0 10 0 0 0 0 0 250


Alkalinity ppm 70 50 50 45 70 150 130 125 120 100 NR


Chloride ppm 52 54 44 46 42 60 52 64 60 64 250


NH3 ppm 0.19 0.15 0.19 0.24 0.3 28 0.2 0.18 0.2 0.2 0.5


P04 ppm 0.2 0.18 0.2 0.31 0.3 0.35 0.35 0.3 0.28 0.21 0.1


Turbidity FTU 3 0 0 0 0 0 0 0 0 0 NR


Total


Hardness ppm 175 181 181 162 148 296 258 343 340 331 350


TDS mg/L 400 260 184 205 520 810 482 310 390 350 1000


TSS mg/L 52 18 16 76 120 220 110 150 120 122 50


N03 ppm ND ND ND ND ND ND ND ND ND ND 10


N02 PPm 0.01 0.01 0 0.05 0.03 ND 0.03 0.01 0.01 0.01 NR





ND - Not detectable


NR - No recommendation made











4.2.2 Hydrology


The Berong and Ibatong Rivers and their tributaries provide the drainage





to the Project Area. These rivers flow northwest and empty their load to


the South China Sea. Both rivers are active year-round and are the main


sources of irrigation waters for the rice paddies on the coastal plains.


A prominent feature northwest of the project area is the 84 hectare


Tagbong Saing Lake. This lake is bounded by ridges, the most prominent


of which is the Dangla Ridge in the south.








4.3 Climatology/ Meteorology





4.3.1 Climate





The prevailing climate in the project area falls under Type 1 of the


Modified Corona’s Classification of the Philippines. This climate type


prevails over the western coast of Palawan Island, characterized by


pronounced wet and dry seasons. The main factor controlling type 1


climate is topography where the area is shielded from the northeast


monsoon by mountain ranges but is exposed to the southwest monsoon


and cyclonic storms.


Berong Nickel Corporation Environmental Work Program


AMA IV - 047 Page 7 of35





4.3.2 Rainfall





The annual average recorded rainfall at the Palawan National Agriculcural


College (PNAC) in Aborlan is 1,588.40 mm. Based on the data collected


from this station, peak rainfall occurs during October to November, with


driest period from February to March. Rainfall-causing system includes


the southwest and northwest monsoons, intertropical convergence zone,


tropical cyclones, easterly waves and thermal convection.


Rainfall patterns in the project area differ from that observed in the PNAC


station, as these areas belong to different climate types.








Table IV. PNAC Agro-meteorological Station 25-year Climatological


Averages (1977 - 2003)








Temperature (C) Rainfall Relative


Amount No. of


Month Max Min Mean (mm) Rainy Humidity


Days


January 30.6 21.8 26.2 48.1 6 89


February 31.0 21.5 26.3 22.8 4 88


March 31.9 26.5 26.9 34.0 5 86


April 32.8 22.9 27.8 50.4 7 84


May 32.5 23.8 28.2 126.5 12 85


June 31.6 23.7 27.6 147.2 14 88


July 31.3 23.1 27.2 159.7 17 89


August 31.3 23.2 27.3 179.3 18 89


September 31.6 23.0 27.3 162.8 17 89


October 31.3 23.1 27.2 227.2 18 88


November 31.2 23.0 27.1 264.8 16 90


December 30.5 22.6 26.6 165.7 10 89


Annual 31.5 22.8 27.2 1,588.5 144 88








4.3.3 Temperature


Palawan Island is tropical and monsoonal. Daytime temperatures range





from a low of 16 degrees Celsius in January to a high of 36 degrees


Celsius in June. Seasonal changes in the mean monthly temperature are


within the range of about 2 degrees Celsius only (1998 PFS-MBMI).





Temperature data in Table IV shows average annual temperature of


31..5°C with April and May being the warmest month. However, due to


its elevation, the project area experiences cooler temperatures.


Berong Nickel Corporation Environmental Work Program


AMA IV - 047 Page 8 of 35





4.3.4 Relative Humidity


Relative humidity recorded at the PNAC station ranges from 84% to 90%.


There is no information on relative humidity at the project site.


Nonetheless, with the wetter and cooler conditions at the project area,


humidity might slightly be above that of PNAV station.


4.3.5 Wind Velocity





Palawan experiences infrequent tropical storms, usually at the northern


end of the island. Only ten tropical storms have been recorded at Puerto


Princesa between 1948 and 2005.


Monthly average wind speeds range between about 1.0 m/s and 3.0 m/s


although strong winds can occur during major rain storms. The project


area is expected to have dominantly southwest winds from May to


September due to the southwest monsoon.








4.4 Geological/Geomorphologic Environment


4.4.1 Geology





The surficial geology of the uplands in the Project Area typically consists


of tropical soils (residual) overlying iron-rich lateritic material/saprolite


which in turn overlies the bedrock. The geological mapping conducted by


previous workers indicates primary intrusive (ultramafic) or ophiolite rock


(basalt, gabbro, peridotite and dunite) towards the central portion of the


island and in the vicinity of the Project Area (Figure 2). These types of


ophiolitic rock formations are expected to be quite competent unless


highly weathered in situ.


Towards the coastal regions, published geological mapping identifies


older metasedimentary rocks consist of chert, quartzite, schist with quartz


lens intrusion.


The coastal plains downstream from the uplands are expected to be


overlain by alluvium, comprising mainly silts, sands, gravels and cobbles.


The thickness of the alluvium appears to be substantially greater beneath


the coastal lowlands to the south of Berong River but no drilling data is


presently available.


4.4.2 Mineralization: Morphology of Nickeliferous Laterite





Nickeliferous laterite is the end product of the tropical weathering of


ultramafic rocks, mainly the olivine bearing dunite and harzburgite. The


mineral olivine is the principal progenitor of nickel where the metal


occurs only as a minor constituent in the crystal lattice.


Berong Nickel Corporation Environmental Work Program





AMA IV - 047 Page 9 of35




















































































































































































































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Berong Nickel Corporation Environmental Work Program


AMA IV - 047 Page 10 of 35





Typical weathering characterized by high humidity and temperature


breaks down the complex mineralogical structures of the ultramafic rocks


into their elemental components. Consequently, new minerals and


chemical complexes are formed which are stable in the oxygenated


environment e.g. iron oxides, aluminium oxides and clay minerals.


Unstable species such as silica and magnesia are leached out from the


system. Minor elements such as nickel and cobalt are incorporated with


the stable species and together become enriched in the residuum.


As the weathering process progresses downward, the redistribution of the


liberated rock components produces compositional layering as shown on


the idealized vertical profile. The distinctive reddish-brown to yellow


brown limonitic upper layers constitute the true laterite overlying the pale,


greenish-grey, highly weathered ultramafic rock (called saprolite) that


grades down to the parent unweathered rocks.


Mature laterite deposits normally exhibit distinct to subtle layers


distinguishable by colour variations as well as the presence of common


minerals such as chromite and magnetite.


Significant accumulations of laterites to tens of meters occur in places





where there is free drainage and when the rate of erosion is much slower


that the rate of weathering. Formation of nickeliferous laterite and its


subsequent accumulation is therefore governed by a favourable


combination of lithology, climate, topography and regional geological


stability.


4.4.3 Geomorphology





The topography in the Project Area is moderate to rugged. The central to





southern part of the area, which hosts most of the known laterite deposits,


features gently-sloping broad ridges and small plateaus, whereas the


northern and eastern part of the terrain is precipitously rugged. The


laterite-bearing grounds lie mainly between 200 m and 700 m elevation


above sea level.








4.5 Geologic Hazards


In general, the Philippines is located along the Circum-Pacific Seismic Belt where


more than 80% of the world’s earthquakes occur. Philippine seismicity is mainly


related to the crustal underthrusting along several subduction zones and partly to


strike-slip movement along the transcurrent faults. Earthquakes are generally


shallow near the ocean trenches and progressively go deeper landward to a


maximum of 700 km in depth.


The Philippine Seismic Zone Map (Figure 3) is presented on the next page


showing the relationship of seismicity to the subduction zones. The National


Structural Code classifies Palawan as Zone II. The available earthquake records


indicate that Palawan Island is a relatively “quieter” zone of seismic activity


compared to the rest of the Philippines, and there has been no recent documented


seismic activity on the island.


Berong Nickel Corporation Environmental Work Program


AMA IV - 047 Page 11 of35
















































































































































































The hazards identified in the project site are based on the geological and





geomorphological setting, as well as on historical records. The minor risks


identified are from geological structures, unfavourable subsurface conditions that


Berong Nickel Corporation Environmental Work Program


AMA IV - 047 Page 12 of 35





may result in excessive settlement or liquefaction and on migration of river


channels and riverbank erosion.








4.6 Biological Environment


4.6.1 Flora and Fauna





The climate sustains lush and diversified fauna. The high relief of Berong


is mostly covered with dense forest growth of commercial grade


hardwoods and softwoods. Secondary growth in the timbered area is


extremely dense consisting of bamboo, thomed bushes and a wide variety


of vines. The laterite bearing areas are noticeably covered with dense but


stunted growth hardwoods.


The general vegetation types covering Berong area consist of mangrove





and coastal forest near the lake’s ecosystem, agricultural and agro-forestry


on the flat to rolling terrain, and disturbed secondary growth adjacent to


the over logged forest in the proposed mining area. Grass shrub


communities, agricultural crops and wildings on the forest floor occupy


the lower stratum. The agricultural area is basically farmed using kaingin,


irrigation, and rain-fed system to raise crops like cashew, mango, bananas,


coconuts, and bamboo were observed. The tree layers occur as secondary


growth interspersed with immediate and undergrowth layers.


The ecological status of plants found in the area varied from common,


abundant to threatened. Based on the International Union of Nature


Conservation (IUCN), five species (i.e. Malabayabas, Mangkono, Narra,


Kalingang and Puso puso) from the secondary forest are classified as


vulnerable. The dipterocarp species, Palosapis, encountered in Sitio


Tungib is listed as critically endangered, while Malamaga species


recorded from the secondary growth is an endangered species.


4.6.2 Marine Plants and Animals





The project area has a diversified marine life based on the Environmental


Impact Statement study made by MAUNSELL in June 2005 for Berong


Nickel Corpoartion.. Fresh water faunas include banak, samaral bangus,


sigwil, dukuson tilapia and sugpo (present in Tagbaung Saing Lake).


Freshwater benthos consisted of insects, annelids and nematodes. Among


the insect larvae, a chironomid, Camptocladius byssinus, was the most


abundant with density range of 44 individuals/m2 to 2,978


individuals/m2.


Aquatic insects, particularly the larval forms, are excellent overall


indicators of aquatic environmental conditions. For instance, the order


Diptera (midges) is generally known to be tolerant of higher pollution as


they occupy the full spectrum of habitats and conditions in streams and


lakes. The large numbers of the chironomid Camptocladius byssinus


indicate an environment under some level of pollution mainly at the


downstream section of the Berong River. Only chironomid dipterans


were recorded in this section of the Berong River.


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Overall, the Marangrong River appears to have the best water quality


due to the presence of plecopterans (stoneflies), ephemeropterans


(mayflies) and trichopterans (caddisflies), which are generally


considered pollution-intolerant; while the presence of mainly dipterans


in the midstream and downstream sections of the Berong River


indicate fair to poor water quality.


A total of seven seagrass species was recorded along the coastal waters


of Berong. Four of these species belong to Family Potamogenotaceae,


while three belong to Family Hydrocharitaceae. Cymodocea rotundata


and Enhalus acoroides were the most frequently encountered species.


The least-frequently encountered species was Halophila ovalis. All


species present are considered common macrophytes, which can also


be found in other coastal municipalities of Palawan.








4.7 Socio-economic Environment


4.7.1 Population Size, Growth and Density





According to the Comprehensive Land Use Plan (CLUP) of Quezon,


the estimated population of Berong for 2005 is 1,678 persons. The


inhabitants are a mixture of settlers (mostly from the Ilonggo-speaking


provinces and the Cuyonin-speaking parts of Palawan) and indigenous


people, the Tagbanua. Settlements by and large are along ethnic lines


with the Tagbanua almost wholly inhabiting Tungib and part of


Badlisan in the coast. Berong Proper, on the other hand, is a settler


community.





The CLUP cites the results of the survey by the Community-Based


Monitoring System in 2000, which shows a high incidence of poverty


(80% of households) in Quezon town. Barangay Berong, in turn, has


one of the highest proportions of households in the municipality living


below the subsistence threshold level at 97%. This observation is


confirmed in BNC-initiated socio-economic surveys, which revealed


average monthly cash earnings per household ranging from PhP 774 to


1,833. Again, as in settlements, low income in this instance is closely


associated with the Tagbanuas. For example, the survey reveals that


the average monthly cash income of Tagbanua households is less than


half of settler counterparts. In other words, settler households tend to


be better, twice over in income than households of indigenous


communities.








5.0 Description of Exploration Work Program


The following were extracted from the amended Exploration Work Program submitted by





Berong Nickel Corporation (BNC):


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Laterite deposits exploration in Central Palawan dates back to mid-1967, pioneered by the


exploration group of A. Soriano y Cia, the forerunner of ANSCOR. Extensive exploration


works were done in Central Palawan until 1989 where test pitting delineated extensive


nickel laterite/saprolite resources in Long Point, Moorsom, Berong and Tagkawayan


areas. Test pitting at Berong included 2,574 test pits, of which 158 were at 300 m spacing,


993 were at 50 meter spacing and 804 were at 25 meter spacing.


A review of test pitting results and assays at Berong from more closely-spaced test pits (at


50 m spacing or better), a calculated what was called “proven reserve” of 5.4 million


tones grading 1.26% Ni and 0.16% Co in laterite and 12.2 million tones in saprolite


grading 1.68% Ni and 0.046% Co. The currently accepted terminology would be


“indicated mineral resources” for this mineralization.


The exploration work program is focused now in exploring and developing the property


and synthesized into a commercial mining operation.





5.1 Research Work:


5.1.1 Survey of previous work:





5.1.1.1 Nature of study:





Literature search on published and unpublished reports on the


Project Area and surrounding areas.





5.1.1.2 Duration : One month





5.1.1.3 Coverage : Berong and Aramaywan


5.1.1.4 Proponent : Berong Nickel Corporation





5.1.1.5 Results or Conclusions arrived at:





A much better overview of the geology and laterite


mineralization will guide the planning and execution of the


proposed exploration program outlined in this report.


Furthermore, this will also facilitate the geological survey that


will be conducted in congruence with the on-going exploration


program.





5.1.1.6 Estimated cost: The cost for this activity will be included in


the data compilation/collation cost.








5.1.2 Data compilation/collation:


5.1.2.1 Geochemical/Geophysical data:


Available information regarding the geochemical and


geophysical studies conducted in the area by the Mines and


Geosciences Bureau, BNC and other private companies will be


compiled and analyzed. This information will not only hasten


the laying out of grid lines for the exploration program but it


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AMA IV - 047 Page 15 of 35





will also enhance the location of priority areas for test pit re¬


sampling program.


5.1.2.2 Lithological data:


The different rock types/formations on the Project Area, as





reported, will be studied carefully to have a better understanding


of the mode of formation of the laterite. Samples for


petrographic analysis will be collected, if no such studies were


done, to accomplish this goal. Likewise, age determination


studies on these rock suites will also be conducted to ascertain


the age of mineralization.


5.1.2.3 Mineralization/Alteration studies:





Mineralized areas indicated by previous studies conducted in the


area will be noted and correlated. X-ray diffraction studies on


the laterites, if available, will be re-evaluated to determine the


primary and associated minerals on the lateritic soil. This will


also help in establishing the minerals that evolved as the


laterization process progresses to its ultimate form.


5.1.2.4 Various thematic maps covering the target areas:





A composite geologic map of the area is created to show the


different lithologies and geologic structures in the Project Area


and adjoining areas. Alteration and mineralized zones should be


incorporated on the map to show their lateral extension and


intensity.


5.1.2.5 Estimated cost : PhP 100,000.00








5.2 Detailed Geophysical Survey:


5.2.1 Geological mapping/alteration studies:





Areas showing anomalous results from the previous works will be re¬


evaluated further by conducting detailed geological mapping and re¬


sampling.


Grid lines spaced 100x100 m will be re-established by cutting lines along


the old line positions. This is in preparation for the Ground Penetrating


Radar (GPR) Survey. Geological mapping will be carried out


simultaneously with line cutting to define extent of laterization.


5.2.1.1 Coverage : Will cover the entire tenement block.


5.2.1.2 Duration : One and a half (1 Vi) months





5.2.1.3 Manpower : One geologist, five (5) team leaders and 15


laborers to comprise the 5 clearing teams.


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5.2.1.4 Output : Geological maps with 1:10,000 scale will be


presented showing potentially mineralized zones. This is going


to accompany a geological report describing the obtained


results.


5.2.1.5 Estimated cost : PhP 341,840.00








5.2.2 Topographic and Legal Survey:


A deputized Geodetic Engineer will be engaged to establish primary


survey controls, based on the NAMRIA map, for use in redefining the


MPSA boundary lines, topographic survey controls and engineering


design controls. The primary survey controls will be established with the


use of geodetic-grade Global Positioning System (GPS) survey


equipment.


Employing a combination of GPS and conventional Total Station survey


equipment, the existing 100m on-center test pit grid will be re-established.


This survey will include location and elevation of test pit collars.


Employing a combination of GPS and conventional Total Station survey


equipment, a topographic survey will be undertaken to identify pertinent


site features and ground elevations for use in engineering design.


5.2.2.1 Coverage : The entire tenement block of 288 has.





52.2.2 Duration : Approximately 36 days of fieldwork during


the first couple of months.


5.2.2.3 Scale and contour intervals:


AutoCad drawing files will be created to enable drawing


reproduction at any desired scale and contour interval. For


report presentation purposes drawing scale proposed is 1:


20,000 and having a 10 meter contour interval.


5.2.2.3 Manpower : To be contracted to Geodetic Engineer to be


supported by field crews of five 5 teams consisting of


instrument man, rod man, 4 helpers and brushers, a total of 30


field men.


5.2.2.4 Output : A topographic survey map will be created and


used for the planned EWP.


5.2.2.5 Estimated cost : PhP 1,349,040.00





5.2.3 Ground Penetrating Radar (GPR) Survey:


It has been proven by other laterite exploration projects in the Philippines


that employment of GPR is an effective method in determining depth of


the laterite mineralization. This geophysical survey method is going to be


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AMA IV - 047 Page 17 of 35





employed also in the entire project area. Line spacing will be 100 meters


along north-south and east-west lines (Figure 4).


6.2.3.1 Coverage : the entire 288 has of the tenement block.





6.2.3.2 Duration : Approximately 13 days


6.2.3.3. Manpower : To be done by foreign contractor but to be


supported by four (4) local laborers.


6.2.3.4 Output: A map showing line locations and interpreted depth. It


will provide a generalized overview of the geological horizons,


supporting the previously completed test pits program and


identify the approximate depth of the mineralized bedrock. This


will give a more complete picture of the size of the ore body.


6.2.3.5 Estimated cost : PhP 3,746,820.00








5.3 Test Pitting:





5.3.1 Phase 1 - Re-sampling of old pits: All accessible old test pits will be re¬


sampled in known anomalous areas indicated by the geological,


geophysical and geochemical survey done previously (Figure 5). The


main purpose of which is to confirm the presence of economic laterite


mineralization.


5.3.1.1 Coverage : Priority block has been identified where 25m


on-center grid test pits are located.


5.3.1.2 Duration : To be done immediately and completed within


20 days. This activity can be done in parallel with the line


clearing and topographic survey.


5.3.1.3 Number and overall length or depth:


Approximately 392 old test pits is planned for re-sampling with


an average depth of 7.5 meters, depending on the nature of the


pit site and safety of the laborers, for an aggregate of 2,940


meters.


5.3.1.4 Estimated number of samples to be taken:


Samples will be taken every 1.0-meter depth of the test pit.


Approximately 2,500 samples are expected to be collected.


5.3.1.5 Mode of analysis/target elements: Ni, Co, Fe, MgO, Si02, etc.


using XRF analysis.


BERONG NICKEL CORPORATION


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BERONG NICKEL CORPORATION


AMA IVB - 047


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AMA IV - 047 Page 20 of 35





5.3.1.6 Manpower : One geologist, three (3) geologic aides and 40


laborers to comprise 10 test pitting teams.


5.3.1.7 Output : The thickness of the lateritic soil from


anomalous areas will be determined. The grade of the laterite


ore will also be known and characterized.


5.3.1.8 Estimated cost : PhP 5,389,490.00








5.3.2 Phase II - Re-sampling of old pits outside the priority block and fill-in


and exploratory test pits will be dug and sampled to cover the entire


tenement block. Test pit spacing will eventually be 25 meters on center


grid (Figure 5).


5.3.2.1 Coverage : 25 m grid spacing on area with good results


covering the entire tenement block.


5.3.2.2 Duration : Approximately 6 months to be done right after


Phase I.


5.3.2.3 Number and overall length or depth:





Approximately 240 re-sampling of old pits and 215 in-fill and


exploratory test pits are planned for excavation and sampling


with an average depth of 7.5 meters for an aggregate of 3,415


meters.


5.3.2.4 Estimated number of samples to be taken:





Samples will be taken every 1.0-meter interval of the hole.


Approximately 3,415 samples are expected to be collected.


5.3.2.5 Mode of analysis/target elements: Ni, Co, Fe, MgO, Si02 , etc.


using XRF analysis.


5.3.2.6 Manpower : One geologist, one geologic aide, 12 laborers





5.3.2.7 Output : The thickness of the lateritic soil for new area


will be determined. The grade of the laterite ore will also be


known and characterized. The test pit program will support the


GPR and to increase tonnage of the known laterite resource.


5.3.2.8 Estimated cost : PhP 8,066,150.00





5.4 Diamond Drilling:





5.4.1 Phase 1 Core Drilling - Drilling of HQ size hole within the priority


block to serve as fill-in to the existing test pits. The objective of drilling


is also to determine the depth of the laterite profile. Location of drill holes


will be dependent on the result of GPR survey. Four to five portable rigs


will be employed to do the work.


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AMA IV - 047 Page 21 of35


5.4.1.1 Type of drilling: Portable drilling rig using HQ size


diameter hole spaced.


5.4.1.2 Coverage : Combined 150 holes aggregating to 3,000 m.


5.4.1.3 Duration : Approximately two (2) months to be


implemented during the first half of the 1st year.


5.4.1.4 Number and overall length:





Approximately 150 holes with an average depth of 20 meters


and aggregating to 3,000 meters are planned for drilling.





5.4.1.5 Estimated number of samples to be taken:


Samples will be taken every 1.0-meter interval of the hole.


Approximately 3,000 samples are expected to be collected.


5.4.1.6 Mode of analysis/target elements: Ni, Co, Fe, MgO, SiC>2, etc.


using XRF analysis.


5.4.1.7 Manpower : Contract drilling by accredited drilling


contractor to be supported by two (2) geologic aides and four (4)


samplers.


5.4.1.8 Output : Confirmation of the depth of mineralization as


indicated by GPR. This will also provide additional nickel grade


information and increase the level of confidence on the resource


estimate.


5.4.1.9 Estimated cost : PhP 11,426,530.00





5.4.2 Phase II Core Drilling- New holes will be drilled using HQ size


diameter hole, spaced at 25 m interval, to serve as fill-in to the existing


test pits outside the priority block. Drilling will also be done west of the


priority block as exploratory holes to test the laterite zone (Figure 5).


Holes will be spaced 100m on center grid. Four rigs used during Phase I


will also be used on Phase II.


5.4.2.1 Type of drilling: Portable drill rig using HQ size diameter hole


spaced at 25 m interval.


5.4.2.2 Coverage : Combined 150 holes aggregating to 3,000 m.





5.4.2.3 Duration : 56 days or two (2) months during the first ahlf


of the first year


5.4.2.4 Number and overall length:


Approximately 150 holes with an average depth of 20 meters


and aggregating to 3,000 meters are planned for drilling.


5.4.2.5 Estimated number of samples to be taken:


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AMA IV - 047 Page 22 of 35





Samples will be taken every 1.0-meter interval of the hole.


Approximately 3,000 samples are expected to be collected.


5.4.2.6 Mode of analysis/target elements: Ni, Co, Fe, MgO, Si02 , etc.


using XRF analysis.


5.4.2.7 Manpower: Contract drilling by local contractor to be


supported by two (2) geologic aides and four (4) samplers.


5.4.2.8 Output : Confirmation of the depth of mineralization as


indicated by GPR. This will also provide assay information on


the old test pits no longer accessible. Drilling on new area west


of the Priority block will provide additional resources.


5.4.2.9 Estimated cost : PhP 11,378,830.00








5.4.3 Phase III Core Drilling - To serve as fill in holes to the drill holes west


of the priority block, 50m x 50m on-center holes will be drilled using the


same rigs used in Phases I and II.


5.4.3.1 Type of drilling: Portable drill rig using HQ size diameter hole


spaced at 25 m interval.


5.4.3.2 Coverage : Combined 150 holes aggregating to 3,000 m.


5.4.3.3 Duration : 26 days during the 2nd half of the first year.





5.4.3.4 Number and overall length:


Approximately 150 holes with an average depth of 20 meters


and aggregating to 3,000 meters are planned for drilling.


5.4.3.5 Estimated number of samples to be taken:





Samples will be taken every 1.0-meter interval of the hole.


Approximately 3,000 samples are expected to be collected.


5.4.3.6 Mode of analysis/target elements: Ni, Co, Fe, MgO, Si02 , etc.


using XRF analysis.


5.4.3.7 Manpower : Contract drilling by local contractor to be


supported by two (2) geologic aides and four (4) samplers.


5.4.3.8 Output : Confirmation of the depth of mineralization as


indicated by GPR. This will also provide assay information on


the old test pits no longer accessible. Drilling on new area west


of the Priority block will provide additional resources.


5.4.3.9 Estimated cost : PhP 11,607,180.00


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6.0 Bulk Sampling and Metallurgical Study


During the later part of the 1st year exploration period, bulk sampling within the defined


resources will be carried out. The samples will be sent to reputable offshore laboratories.


Approximately 30,000 tons of ore grade material will be shipped out to determine the


most appropriate beneficiation method.


6.0. 1 Coverage:





Approximately 30,000 dry metric tons of ore grade bulk sample materials will be


extracted from defined ore grade resources and send to reputable offshore laboratory.


6.0. 2 Duration:


Excavation period will take about a month while the completed results are expected to be


available within the first two months of the 2nd year.


6.0. 3 Manpower:


Extraction from the site of the materials will be done by accredited contractor under the


supervision of Berong representatives.


The samples will be shipped to reputable offshore laboratories. The test work will be


supervised by a foreign Metallurgical Consultant.


6.0. 4 Output:


The metallurgical studies will determine the most appropriate beneficiation method for


the nickel laterite deposit.


6.0. 5 Estimated cost:





A total amount of PhP 15,000,000.00 is allocated for the bulk sampling and metallurgical


studies.


7.0 Ore Resource and Reserve Estimation and Validation


As soon as the compilation of all geologic and assay data have been completed, geologic


and ore grade modeling activities shall commence. Geostatistical analyses, 3D geology


and grade block models using GIS and mining softwares shall be generated to fully


evaluate the configuration of the ore deposits.


7.0. 1 Coverage:





The entire 288 hectares of ground area shall be evaluated and from which geologic


resources and mineable reserves of varying classifications shall be defined.


7.0. 2 Duration:


The entire exercise shall be undertaken in four (4) months.


7.0. 3 Manpower:


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AMA IV - 047 Page 24 of 35





Two (2) Exploration/Resource Geologists, Two (2) Mine Planning/Ore Reserve


Engineers, and Three (3) Data Management Assistants shall comprise the team.


A foreign consultant shall also be engaged for purposes of generating resource/reserve


reports which will be JORC compliant and ready for international release.


7.0. 4 Output:


This activity will produce various maps, sections and 3-D representations of the geology


and grade model of the Ni-laterite deposit. Estimates on the Geologic Resources


classified into Inferred, Indicated and Measured Resources as well as the Mineable


Reserves classified into Probable and Proven Reserves shall be derived.


7.0. 5 Estimated Cost:


A total amount of P 2,000,000.00 will be allotted for these activities.





8.0 Definition In-fill Drilling/Test Pitting


Areas which need further sub-surface information in the modeling process shall be


covered with test pitting or drilling. The aim is to increase the level of confidence in the


estimation and possibly elevate resources and reserves to the measured and proven


categories, respectively.


8.0. 1 Type of drilling:





Portable drill rig using HQ size diameter hole spaced at 25 m. interval.


8.0. 2 Coverage:


The entire 288 hectare MPSA area.


8.0. 3 Duration:





Two (2) Months


8.0. 4 Number and overall length:


75 drill holes with aggregate length of 1,500 meters.


20 test pits with aggregate length of 160 meters.





8.0. 5 Estimated number of samples to be taken:


Approximately 1,660 samples are expected to be collected.


8.0. 6 Mode of analysis/target elements:





Ni, Co, Fe, MgO, Si02,etc. using XRF analysis.


8.0. 7 Manpower:


Contract drilling by local contractor to be supported by one (1) geologist, two (2) geologic


 Berong Nickel Corporation Environmental Work Program


AMA IV - 047 Page 25 of 35





aides and four (4) samplers.





8.0. 8 Output :


The geologic and assay data to be generated from the activity will serve to define more


fully the ore deposit and will produce a more representative orebody model.





8.0. 9 Estimated cost:


PhP 3,430,000.00


9.0 Final Resource/Reserve Estimation and Declaration


Base on the new dataset which includes the additional definition drill holes and pits, a re¬





estimation shall be undertaken to come up with the final ore resource and reserve


declaration. This output shall be the final information that will be reported to the MGB


and this will be the basis for the feasibility study.


This activity is for a period of two months at the middle of the 2nd year. It will involve a


cost of PhP 1,000.000.00


10.0 Preparation and Declaration of Mining Feasibility


All data will be collated by a team of Professionals. All technical, social, environmental


and economic parameters will be considered to come up with a declaration of mining


feasibility. The collation, validation, finalization of all pertinent information and the


actual mine feasibility study will take six (6) months to complete. The amount to be spent


is PhP 8,000,000.00.


11.0 Estimated Budget:


Approximately Php 91,064,470.00 is allocated for the proposed exploration work


program broken down as follows.


First Year - PhP


70.520.280.00


Second Year 12.265.600.00


Environmental/Community Dev’t - 8.278.590.00


Total PhP 91.064.470.00


12.0 Identification of Potential Environmental Effects





A summary of the impacts of the exploration activities is appended. Within the defined


impact zone, the nearest local residents will notice the presence of the exploration team.


The Project Area is sparsely populated and the land is not used for agricultural purposes.


The projected impacts are temporary and short in duration and will not cause any long


term harm to the existing ecosystem.


12.1 During the Exploration Phase


12.1.1 Limited surface disturbance of the Project Area subject to





exploration.


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12.1.1.1 Road Construction


Existing tracks or roads shall be used. However, new roads will





likely be constructed to access the drill sites as exploration


progresses.


12.1.1.2 Sampling





Exploration activities such as rock sampling on outcrops and


floats will have very minimal effect on the ground surface.


Channel samples will be taken every 1.0-meter depth in the


existing and newly-dug test pits. Approximately 10,000


samples of 4 kg weight each are expected to be collected for


analysis.


12.1.1.3 Construction of sumps





The construction of 2x2 meter sumps for the drilling operations





will temporarily alter the ground surface and allow possible soil


erosion and run-off siltation or sedimentation.


12.1.1.4 Construction of Test Pits


Test pits will be dug in mineralized areas indicated by the





geological, geophysical and geochemical surveys. The main


purpose of test pitting is to probe the depth of the laterite


deposits and allow high quality samples to be collected for


analysis.


Test pits will be dug to about 10 meters depending on the nature


of the pit site and safety consideration. Approximately 5,700


meters overall depth of new pits is planned.


12.1.1.5 Construction of Tunnels/Adits


No tunnels or adits will be constructed.





12.1.1.6 Construction of Drill Sites


Drilling program will be undertaken using a portable type





diamond core drilling machine using triple tube for better


recovery of samples. Large diameter HQ size drill-core samples


shall be specified.


The use of portable drilling machine will minimize the cutting


of trees in site preparation. The site will be located in such a


way that no trees with greater than 4” diameter trunks will be


cut.


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12.1.1.7 Construction of Campsites


The exploration team constructed a house at the edge of the


Project Area. Minor clearing is needed for camp construction.


12.2 Hydrology and Water Quality





12.2.1 Potential generation of acid mine drainage


The generation of acid mine drainage occurs when sulfide deposits are





oxidized by the action of water and air that produces acidic run-off. Since


the exploration work is targeting lateritic deposit, no substantial acid mine


drainage is expected because the soils are extensively naturally weathered.


12.2.2 Siltation and Pollution of Surface Waters





It is expected that minor siltation and pollution of surface waters may


occur especially when constructing access roads, drill sites and sumps for


the drilling operations. Maintenance activity shall be carried out regularly


particularly in handling, control and/or proper disposal of hazardous


materials (fuel and lubricants), drill muds and industrial refuse.


12.2.3 Changes in Water Availability and Quality and Drainage Pattern Due


to Construction of Water Storage Areas, etc.





Water availability and drainage pattern will not be affected by the


exploration activities. There will be no massive clearing of vegetation to


be undertaken in the Project Area. Small patches of shrubs and grass


cover will be uprooted during construction of access roads and drill sites,


if necessary, but will be replanted after usage.


The Berong and Aramaywan Rivers and their tributaries provide the


drainage to the Project Area. The quality of water will not be affected by


the above mentioned activity because strategically located sumps and


dams will be installed to eliminate siltation of drainage channels.





12.3 Potential Effects on the Ecology


The effects of the exploration activities on ecology, as a whole, are insignificant





and temporary. There may be some clearing and uprooting of shrubs and bushes


during the site preparation for test pits and drill sites. Such will be temporary ,


will be back-filled and reforested to restore to near original condition.





12.4 Potential Effects on the Socio-Economic Environment


Base line data on the existing socio-economic status in the area have already been





established and were fully discussed in the project’s EIS. The studies included


the culture and tradition of indigenous communities in the region.





However, the usual impacts of exploration are positive and are based on:


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• Increase in employment opportunities for unskilled workers.


• Increase in small scale community entrepreneurs.


• Increase in income level would mean increase in the buying power of


families.


• Provision of community facilities by the Project Proponent.


• Livelihood and skills training to local communities provided by the Project


Proponent.








13.0 Environmental Management Measures


13.1 Progressive rehabilitation/restoration of areas subject of exploration


disturbance and related activities by reforestation or by undertaking civil


structure programs such as rip-rap, retaining walls, etc., to prevent erosion


and siltation.


13.1.1 Revegetation


All disturbed areas will be assisted to regenerate or be revegetated upon


completion of use. Vegetation established should be in harmony with the


surrounding vegetation and local species will be cultivated in a nursery for


supply of replanting stock.


13.2 Management of stockpile of excavated and removed earth, if any, to prevent


dust and siltation problems (e.g., revegetation of disposal areas) and reduce


the impact of topographical changes.


Any land disturbed during the exploration activity will be revegetated to allow


regenerating similar to the adjacent land. Revegetation of disturbed areas will be


done upon completion of use.


All test pits dug will be back-filled covered by the same soil material taken from


it after completion of the exploration program. This will prevent living creatures


from falling into the pit. If the pits need to be maintained for future re-sampling,


re-mapping or any other necessary studies, the pits will be fenced off to avoid


accidents to human and animals alike.


13.3 Maintenance of Roads


Existing roads will be used whenever possible. New road/track access (if


construction is required) will be kept to a minimum. Maintenance activity on the


roads will be carried out. Any spillage of hazardous materials like oil, fuel, drill


muds and industrial refuse on the road shall be collected for proper disposal off


site.


13.4 Solid Waste Disposal


An existing base camp will be utilized for employee's accommodation. Solid


waste generated from the camp will be disposed properly by implementing waste


segregation scheme. Proper sewerage system will be employed to handle human


Berong Nickel Corporation Environmental Work Program


AMA IV - 047 Page 29 of 35





waste. Garbage pits will be dug to serve as dumping site of biodegradable waste.


The pits will be covered with soil when full. Non-biodegradable waste shall be


brought out of the site for disposal at the Municipality’s designated dumpsite.


13.5 Handling of Toxic and Hazardous Materials, if any, Including an Emergency





Response Program


Maintenance activity should be carried out such that spillage of hazardous


materials like oil, fuel, drill muds and industrial refuse shall be collected for


proper disposal off site.


13.6 Accommodation of Other Economic Activities in the Area.


Economic development programs in the community will be encouraged to the


extent of providing assistance to locals in developing livelihood projects that will


both benefit the community and the project proponent. If drilling commences, the


fabrication of core drill boxes using indigenous materials will be funded by the


Project Proponent as one type of community livelihood project.


13.7 Alternative Plan if Special Habitat of Flora and Fauna Are Affected.


Preservation plans and measures of identified endangered species will be done in


coordination with the proper government agencies like the DENR-PAWB,


DENR-CENRO, etc.


13.8 Socio-economic Mitigating Measures.





13.8.1 Plans For Information And Education Campaign And Dialogue


Between The Company And Populations Regarding Project Plans


Including Compensation Measures, If Necessary.


A periodic educational and information campaign shall be undertaken to


inform the affected communities, particularly the Indigenous Peoples,


regarding the progress of the exploration program. Landowners, if any,


will be compensated for any land use or disturbance like drilling (they are


given the option to work for the company during a particular activity on


their land.)


The company will closely coordinate with the LGU of Quezon, PCSD,


NCIP, DENR and other government agencies as well as legitimate


stakeholders in the implementation of and compliance to the exploration


and environmental work programs.


13.8.2 Working Environment and Protection Measures for Employees.


In compliance with the mining and exploration safety standards, the





Project Proponent will be providing its employees with the necessary on¬


site skills and safety training as well as safety equipment. This is a “first


priority” corporate policy and working safely shall be the duty of every


employee. The safety of every employee will not be compromised.


Berong Nickel Corporation Environmental Work Program


AMA IV - 047 Page 30 of 35





13.9 Abandonment - Measures and Procedures after the Conduct of Exploration


with Cost-Estimate Including, but not Limited to the Following:


13.9.1 Control measures for acid mine drainage, the generation of which is


not only limited to the period of exploration but occurs also after


exploration.


Upon completion of any exploration activities in the area, all equipment


will be decommissioned and removed from the Project Area. Other


structures will be left for the local community to use unless constructed by


competent authority. All non-toxic waste materials not salvaged or sold


will be buried in the dug waste dump area. Waste oils and fluids will be


collected in drums and trucked to an officially sanctioned disposal facility


off site.


13.9.2 Rehabilitation of the Area by Replanting and Reforestation Programs


All areas of significant disturbance shall be assisted to regenerate or be re¬


vegetated upon completion of any activity. All drill holes will be plugged


and cemented to prevent small animals from being trapped and to prevent


surface run-off of ground water.


13.9.3 Restoration of the Original Flow of the River Systems that Have Been


Diverted/Altered with Emphasis on Quality.


No diversion or alteration of water flow of drainage systems is expected


during the exploration program.


14.0 Summary of Identification of Potential Environmental Effects and Environmental


Management Measures.


The following tables show the identification of the different potential environmental


effects and environmental management measures:


 Berong Nickel Corporation Environmental Work Program


AMA IV - 047 Page 31 of 35





Table V. Identification of Potential Environmental Effects and Environmental


Management Measures on the Project Area.








SOURCE POTENTIAL EFFECT MITIGATING MEASURES BUDGET


Excavations (for Depression of selected • The Field Team will backfill the area


Settling Ponds, areas due to immediately after target completion.


Camp Construction, excavations • Immediate backfilling of excavations,


Test pits, Trenches, if any, upon work completion.


Auger Drilling, • Revegetation or reforestation after P 200,000.00


Drill Pad project completion but before


Preparation, Bulk abandonment to give ample time for


Sampling) rehabilitation measures maintenance. P 450,000.00


Proliferation of insects • Proper drainage shall be provided to P 325,000.00


particularly prevent accumulation of water from


mosquitoes any excavation.


• Immediate backfilling of excavations


upon work completion.


Entrapment of stray • Fencing of excavations using ropes P 70,000,00


animals or accident to and wood.


passers by • Provide warning devise/signs to as


safety reminders to by-passers. P 125,000.00


• Immediate backfilling of excavations


and drill holes upon work completion.


Erosion • The topsoil excavated, if any, shall be


stockpiled separate from the subsoil


for proper backfilling and revegetation


and each stockpile shall be maintained


at considerable heights and low


angles.


• Any stockpiles or erosion prone areas


shall be provided with drain channels


to prevent erosion.


• As much as possible the stockpile, if


any, shall be put at the low-prone P 300,000,00


erosion areas or at the upper side of


the excavations so that whatever will


be eroded goes back to the excavated


portion.


• Enclosure of stockpile. P 80,000.00


Soil compaction • Ripping the contour to promote P 200,000.00


natural plant growth.


• To ensure that slopes are stabilized to


prevent erosion and loss of vegetation,


moon scrapes will be introduced.


Loss of vegetation • Encourage the growth of natural


vegetation by spreading the stockpiled


topsoil


 Berong Nickel Corporation Environmental Work Program


AMA IV - 047 Page 32 of 35





Table VI. Identification of Potential Environmental Effects and Environmental


Management Measures on Hydrology and Water Quality.








SOURCE POTENTIAL EFFECT MITIGATING MEASURES BUDGET


Excavation in Siltation, Soil Erosion, • Immediate backfilling of test pits and


Test Pitting and trenches (if any) and plugging of drill holes P 250,000.00


Drilling Water and Soil immediately after the desired samples are


Preparation of Contamination, Loss taken or after the study are completed.


of Vegetation • Test pits and trenches, if any, during its P 65,000.00


Stock Pile Area active state will be provided with a canvass


Excavation in bulk roof not only to prevent water from going


sampling into the excavation and disrupt the work


schedule but also to protect the health of the


workers. P 1,229,000.00


• Provide silt/sediment traps, ponds and dikes


and drainage lines


Use of drilling Water and soil • Biodegradable drilling fluids shall be used


chemicals contamination as much as possible; P 205,000.00


• Refuelling areas shall be provided with


bunds and lined with impervious materials


to prevent soil contamination


• Water recycling will be implemented P 145,000.00


through provision of water tanks/ponds in


each drill site.


Clearing of Siltation/ turbidity • Provide silt/sediment traps; P 500,000.00


vegetation • Provide temporary silt ponds and permit the P 250,000.00


release of clear water only. De-siltation


shall be done regularly to make the said


ponds efficient. Silt materials will be either


mixed with the soil stockpile or be


immediately used in the progressive


rehabilitation of the pro ject.


imping Contamination of river • Campsites will be located at least 100


water due to meters away from creeks and/or river


generation of human system, if any, and it will be provided with P 42,000.00


related waste proper latrine facilities


• A waste segregation scheme will be


introduced to encourage recycling and to


lessen the volume of waste generation.


• Biodegradable waste shall be buried in pits


while non-recyclable non-biodegradable P 154,000.00


waste shall be brought out of the site for


disposal at the Municipality’s designated


dumpsite.


 Berong Nickel Corporation Environmental Work Program


AMA IV - 047 Page 33 of 35





Table VII. Identification of Potential Environmental Effects and Environmental


Management Measures on Socio-Economic Effects.


SOURCE POTENTIAL EFFECT MITIGATING MEASURES BUDGET


Project Displacement of socio¬ • Promote employment opportunities by


implementation economic activities giving local residents priority on job


available in relation to this project


• Provide a just compensation to private


property owners that may be disturbed by


the project


Misinformation on Disharmonious • Conduct IEC activities before the project P 83,000.00


project relationship between implementation to keep the personnel,


implementation the residents and the residents and the LGU well-informed of the


Contractor programs of the company P 275,000.00


• Keep an open communication with the


community through a conduct of regular


meetings to give an update on the status of P 65,000.00


the project


• Meet the community after the project has


been accomplished to give them the


information with regard to the findings and


future company plans involving the area, if


there are any.


Movement of Dust generation • Vehicular traffic, if any, shall be restricted


vehicles to existing roads as much as possible and


their speed will be regulated especially at


populated areas;


• Road maintenance shall be conducted


regularly; P 650,000.00


• Table drains at water prone areas shall be


provided and growth of vegetation shall be


encouraged to prevent erosion. P 175,000.00


• Trees shall be planted at roadside in order


that roads constructed, if any, can be used


even after the life of the project. P 220,000.00


' Tisafe working Health hazards to • All employees shall be provided with


^ndition workers protective equipment and proper medical P 485,600.00


attention will be accorded to them regularly


• All workers prior to hiring will be required


to submit to a medical examination as an


assurance that they are indeed fit to work. P 173,040.00


• Training on safety and proper equipment


handling shall be provided to all personnel.


Increase of Disharmonious • Limit the hiring of non-resident workers to


migration relationship with technical personnel;


residents and loss of • Priorities for employment shall be given to


traditions/ culture all residents of the concerned Municipality/


Province.


 Berong Nickel Corporation Environmental Work Program


AMA IV - 047 Page 34 of 35





Table VIII. Identification of Potential Environmental Effects and Environmental


Management Measures on Ecology.





SOURCE POTENTIAL EFFECT MITIGATING MEASURES BUDGET


Clearing of Displacement/loss of • Vegetation clearing will be avoided as much


vegetation and noise flora and fauna as possible and noise generation will be kept


generation to its barest minimum.


Loss of rare species of • Areas identified as special habitat of flora and


flora and fauna fauna will be avoided and its existence will be


reported to concerned government agencies


Waste generation Foul odour, health • A specific site away from any source of water P 187,000.00


problem, water pollution, will be designated for any waste dumping,


visual nuisance, may organic waste will be buried in pits while the


displace sensitive flora inorganic waste will be collected and taken


and fauna out of the site for possible recycling or


disposal to Municipal dumpsite.








Table IX. Identification of Potential Environmental Effects and Environmental


Management Measures Outside of the Project Area.





SOURCE POTENTIAL EFFECT MITIGATING MEASURES BUDGET


Construction, Loss of vegetation • The Field Team shall use existing access


restoration or tracks as much as possible.


upgrading of access


routes from the main • Portions of wild vegetation to be brushed or


highway or cut during field exploration will be allowed to P 200,000.00


Barangay site. regenerate and revegetated after completion of


the exploration program.


Preparation of Ore Siltation/turbidity • Settling ponds and/or sediment traps and dikes


Stock Pile Area will be installed where it is judged necessary P 200,000.00


Erosion The Field Team shall:


• Minimize height of muck stockpile/s, if any,


along slopes; P 700,500.00


• Provide proper drain channels and direct the


flow to siltation/sediment traps and ponds;


• Minimize stockpiling and accumulation of


unwanted debris or waste;


• Promote the growth of grasses/shrubs along P 124,450.00


roadsides and over the stockpiles to prevent


erosion and siltation;


• Conduct regular road maintenance


Provision of base Domestic and • A waste segregation scheme will be


camp/makeshift laboratory waste introduced to encourage recycling and to P 50,000.00


laboratory outside generation lessen the volume of waste generation


the project area particularly in the field camp.


• Biodegradable drill waste will be properly P 100,000.00


disposed in pits, which will be covered with


soil and revegetated before site abandonment.


Berong Nickel Corporation Environmental Work Program


AMA IV - 047 Page 35 of 35





15.0 Total Estimated Environmental Cost


A budget of PhP 8,278,590.00 equivalent to ten per cent (10%) of the exploration work


program cost (PhP 82,785,880.00) will be allocated to cover the cost of the environmental


work program and community development activities/programs on the Project Area. This


budget allocation shall include drill pads and test pits rehabilitation, road rehabilitation,


drainage, silt ponds and dikes, land use compensation, social awareness, community


development projects, stakeholder consultations, etc. Surveying, supplies, field expenses


and all other indirect cost are included in the exploration work program.


Please refer to the attached amended 2-yr Exploration and Environmental Work Programs


schedule and budget estimates (Appendix “A”).


This budget may be adjusted and amended or expedited dependent on the results of each


survey.




















Prepared by:











JO VENAL M. GONZALEZ JR.


Registered Geologist


PRC No. No. 0627


PTRNo. 7548901


Issued on: March 17, 2006


Issued at: Quezon City











Conforme:











ALEX R. DE LEOZ^


Vice President


Berong Nickel Corporation


 Berong Nickel Corporation








APPENDIX 'A'








AMENDED BERONG EXPLORATION WORK PROGRAM SCHEDULE AND BUDGET ESTIMATES





Monthly Schedule of Activities





ACTIVITIES 1st YEAR 2nd YEAR


1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24





1. RESEARCH AND PREPARATION WORKS


2. DETAILED GEOPHYSICAL SURVEY





2.1 Une Cutting


2.2. Topographic Survey ■■





2.3. Ground Penetration Radar ■


3. TEST PITTING





Phase I - Confirmatory Resampling of Old Pits (2,940 m)





Phase II - a) Resampling of Old Pits (1,800 m)


b) In-fill within old pits area (790 m)





c) New area (825 m)


4. DRILLING





Phase 1 - Confirmation Drilling of old pits (3,000 m)


Phase II - In-fill drilling and new area





Phase III - New Area drilling (3,000 m)


5. Bulk Sampling and Metallurgical Study


6. Ore Resourca/Reserve Estimation/Validation





7. Definition In-fill Drtlling/Test Pitting ■ ■


8. Final Resourca/Reserve Estimation and Declaration





9. Preparation and Declaration of Mining Feasibility


---


10. Prp|ect Management





Sub-Total:





11. Environmental Management and Community Devi (10%)


TOTAL BUDGET:


70,520.28 20,544.19