Minbos Resources : Notice of General Meeting/Proxy Form

MINBOS RESOURCES LIMITED ACN 141 175 493 NOTICE OF GENERAL MEETING

Notice is given that the Meeting will be held at:

TIME: 2.00pm (WST)

DATE: Tuesday, 12 September 2017

PLACE: The Hay Room, BDO, 38 Station Street, Subiaco WA 6008

The business of the Meeting affects your shareholding and your vote is important. This Notice of Meeting should be read in its entirety. If Shareholders are in doubt as to how they should vote, they should seek advice from their professional advisers prior to voting. The Directors have determined pursuant to Regulation 7.11.37 of the Corporations Regulations 2001 (Cth) that the persons eligible to vote at the Meeting are those who are registered Shareholders at 2pm (WST) on 10 September 2017.

Independent Expert's Report: Shareholders should carefully consider the Independent Expert's Report prepared for the purposes of ASX Listing Rule 10.1 and section 611, item 7 of the Corporations Act. The Independent Expert's Report comments on the fairness and reasonableness of the transactions the subject of Resolution 1 to the non-associated Shareholders. The Independent Expert has determined the Acquisition isnot fair but reasonable.

B US I NE S S O F T HE M E E T I NG

AGENDA

1. RESOLUTION 1 - APPROVAL OF ACQUISITION OF PETRIL PHOSPHATES LIMITED

   To consider and, if thought fit, to pass, with or without amendment, the following resolution as an ordinary resolution:

   "That, subject to the passing of all other Resolutions, for the purposes of ASX Listing Rules 10.1, 10.11 and 11.1.2 and section 611 (item 7) of the Corporations Act and for all other purposes, approval is given for:

2. the Company to acquire the entire issued capital of Petril Phosphates Limited from the Vendors on the terms of the Share Sale Agreement;

3. the Company to issue to the Vendors equity securities in the capital of the Company on the terms of the Share Sale Agreement;

4. the Company to make a significant change to the scale of its activities; and

5. the acquisition of a relevant interest in the voting shares of the Company by the Vendors which is otherwise prohibited by section 606(1) of the Corporations Act,

   on the terms and conditions set out in the Explanatory Statement.

   ASX Listing Rule Voting Exclusion: The Company will disregard any votes cast on this Resolution by the Vendors, Petril and any of their respective associates or any other person who might obtain a benefit, except a benefit solely in the capacity of a holder of ordinary securities, if the Resolution is passed. However the Company need not disregard a vote if it is cast by a person as a proxy for a person who is entitled to vote in accordance with the directions on the Proxy Form or it is cast by the person chairing the meeting as proxy for a person who is entitled to vote, in accordance with a direction on the Proxy Form to vote as the proxy decides.

   Corporations Act Voting Exclusion: No votes may be cast in favour of this Resolution by:

6. the person proposing to make the acquisition and their associates; or

7. the persons (if any) from whom the acquisition is to be made and their associates.

8. Accordingly, the Company will disregard any votes cast on this Resolution by the Vendors, Petril and any of their associates.

   Independent Expert's Report: Shareholders should carefully consider the report prepared by the Independent Expert for the purposes of the Shareholder approval required under ASX Listing Rule 10.1 and section 611 Item 7 of the Corporations Act. The Independent Expert's Report comments on the fairness and reasonableness of the transactions the subject of this resolution to the non-associated Shareholders in the Company.

9. RESOLUTION 2 - ELECTION OF DIRECTOR - YEHOSHUA RAZ

   To consider and, if thought fit, to pass, with or without amendment, the following resolution as an ordinary resolution:

   "That, subject to the passing of all other Resolutions, for the purpose of clause 13.3 of the Constitution, and for all other purposes, Yehoshua Raz, being eligible and having consented to act, be elected as a director of the Company, on and from completion of the Acquisition."

10. RESOLUTION 3 - ISSUE OF PERFORMANCE RIGHTS TO RELATED PARTY - SOFOSA

11. To consider and, if thought fit, to pass the following resolution as an ordinary resolution:

    "That, subject to the passing of all other Resolutions, for the purposes of section 208 of the Corporations Act, ASX Listing Rule 10.11 and for all other purposes, approval is given for the Company to issue 237,829,976 SOFOSA Performance Rights to Sociedade De Fosfatos De Angola (a company incorporated in Angola) (or its nominee) on the terms and conditions set out in the Explanatory Statement."

    Voting Exclusion: The Company will disregard any votes cast on this Resolution by SOFOSA (or its nominee) and any of its associates (Resolution 3 Excluded Party). However, the Company need not disregard a vote if it is cast by a person as a proxy for a person who is entitled to vote, in accordance with the directions on the Proxy Form, or, provided the Chair is not a Resolution 3 Excluded Party, it is cast by the person chairing the meeting as proxy for a person who is entitled to vote, in accordance with a direction on the Proxy Form to vote as the proxy decides.

    Voting Prohibition Statement:

    A person appointed as a proxy must not vote, on the basis of that appointment, on this Resolution if:

12. the proxy is either:

13. a member of the Key Management Personnel; or

14. a Closely Related Party of such a member; and

15. the appointment does not specify the way the proxy is to vote on this Resolution. However, the above prohibition does not apply if:

16. the proxy is the Chair; and

17. the appointment expressly authorises the Chair to exercise the proxy even though this Resolution is connected directly or indirectly with remuneration of a member of the Key Management Personnel.

18. Dated: 8 August 2017 By order of the Board

    David Sadgrove Company Secretary

    Voting in person

    To vote in person, attend the Meeting at the time, date and place set out above.

    Voting by proxy

    To vote by proxy, please complete and sign the enclosed Proxy Form and return by the time and in accordance with the instructions set out on the Proxy Form.

    In accordance with section 249L of the Corporations Act, Shareholders are advised that:

    • each Shareholder has a right to appoint a proxy;

    • the proxy need not be a Shareholder of the Company; and

    • a Shareholder who is entitled to cast 2 or more votes may appoint 2 proxies and may specify the proportion or number of votes each proxy is appointed to exercise. If the member appoints 2 proxies and the appointment does not specify the proportion or number of the member's votes, then in accordance with section 249X(3) of the Corporations Act, each proxy may exercise one-half of the votes.

      Shareholders and their proxies should be aware that changes to the Corporations Act made in 2011 mean that:

    • if proxy holders vote, they must cast all directed proxies as directed; and

    • any directed proxies which are not voted will automatically default to the Chair, who must vote the proxies as directed.

      Should you wish to discuss the matters in this Notice of Meeting please do not hesitate to contact the Company Secretary on [phone].

      E XP LA NA TO R Y S TA TE M E N T

      This Explanatory Statement has been prepared to provide information which the Directors believe to be material to Shareholders in deciding whether or not to pass the Resolutions.

    • BACKGROUND TO THE TRANSACTION

    • General

      On 5 December 2016, the Company announced to ASX that it had entered into a non-binding terms sheet under which it agreed in-principle to acquire all of the issued shares in Petril Phosphates Limited (Petril) from its shareholders (the Acquisition).

      The Company and Petril are 50:50 joint venture partners in the Cabinda phosphate project which incorporates an approximate 2000km² exploration permit covering all the known phosphate occurrences in the Cabinda Province, in the Republic of Angola (the Cabinda Project). The Cabinda Project is the current focus of a Bankable Feasibility Study on one of the Cabinda Project deposits, the Cacata Deposit. Petril also holds the rights to two other phosphate projects in the Zaire Province of Angola (the Lucunga Project and the Pedra de Feitico Project).

      Further details on the projects in which the Company will acquire an interest by its acquisition of Petril are included in Section 1.4 and in the Company's announcement to ASX on 5 December 2016.

    • Share Sale Agreement

      On 16 May 2017, the Company entered into a formal share sale agreement (the Share Sale Agreement) with Petril and its shareholders (the Vendors) to give effect to the Acquisition.

      The principal terms of the Share Sale Agreement are as follows:

    • Conditions: Completion of the Acquisition (Completion) is subject to satisfaction (or waiver) of certain conditions precedent, including:

    • completion of due diligence on Petril and its projects by and to the satisfaction of the Company, and on the Company and its projects by and to the satisfaction of the Vendors;

    • the Company obtaining all necessary shareholder approvals in relation to:

    • the issue of Securities under the Share Sale Agreement (being the subject of Resolution 1); and

    • the appointment of two nominees of the Vendors as Directors of the Company (being the subject of Resolution 2);

    • the Company issuing to SOFOSA the SOFOSA Performance Rights (being the subject of Resolution 3);

    • ASX confirming to the Company that it approves of the terms of the Class A Performance Rights and Class B Performance Rights;

    • each Vendor entering into a restriction agreement on terms agreed by the Company and approved by the Vendors (and in accordance with the ASX Listing Rules) which imposes restrictions on trading of the Consideration Shares, the Conditional Shares and any Shares to be issued upon the vesting of the Cabinda Performance Rights and Lucunga Performance Rights;

    • the parties doing all things necessary to procure that the Company shall, directly or indirectly, subject only to the approval of the Angolan Ministry of Geology and Completion occurring, be the sole holder of shares in Mongo Tando Ltda;

    • the Company, Petril and the Vendors obtaining all necessary third party approvals or consents and regulatory approvals necessary to give effect to the Acquisition; and

    • no event, occurrence or matter taking place which has a material adverse effect on Petril and its group companies, or the Company and its group companies.

    • Consideration: In consideration for the Acquisition, the Company has agreed to:

    • issue 2,073,547,651 Shares to the Vendors in their Respective Proportions (the Consideration Shares);

    • issue up to 384,958,009 Shares to the Vendors in their Respective Proportions (the Conditional Shares);

    • issue 237,829,976 Class A Performance Rights to the Vendors in their Respective Proportions (the Cabinda Performance Rights); and

    • issue 300,000,000 Class B Performance Rights to Paramount (the

      Lucunga Performance Rights), (together, theConsideration Securities); and

    • procure the grant of a royalty by Vale Fertil to the Vendors (as further described below).

    • Board composition: At Completion, Damian Black and Dganit Baldar will resign from their positions as Directors. As noted in Section 1.2(a)(ii)(B) above, the Share Sale Agreement entitles the Vendors to appoint two nominees as Directors of the Company. In addition to Mr Yehoshua Raz, the Vendors consider that Mr Bill Oliver will represent their interests on the Board. The Vendors may seek to replace Mr Oliver with another nominee Director in the future (in accordance with the Company's Constitution).

    • Completion adjustment and Conditional Shares: An adjustment of the net working capital of the respective corporate groups (of Petril and the Company) will be undertaken at Completion. If the completion adjustment requires payment by the Vendors to the Company, the issue of the Conditional Shares will be conditional on the Vendors making that payment. The Company will only issue Conditional Shares to the Vendors who make payment of their Respective Proportion of the completion adjustment.

    • Lucunga Royalty: At Completion, the Company will procure the grant by Vale Fertil to the Vendors in their Respective Proportions of a royalty in respect of phosphate produced at the Lucunga Project. The royalty will be based on the phosphate rock margin (PRM) produced from the Lucunga Project. The PRM will be calculated based on the sales price per tonne of phosphate rock less phosphate rock costs and ingredient cost per tonne of phosphate rock produced. The royalty rate applied to the royalty calculation will vary with the PRM as follows:

      PRM $80 to $130 Royalty Rate 33%

      The royalty will be payable for 15 years from the date of the first sale of phosphate produced from the Lucunga Project.

    • Termination payment: In the event that either the Company or the Vendors terminate the Share Sale Agreement for reason of breach of certain warranties or material default by the other party, the party in default must pay to the non-defaulting party $200,000.

      The Share Sale Agreement otherwise contains warranties, indemnities and obligations considered standard for an agreement of this nature.

    • Resolutions

      This Notice of Meeting has been prepared to seek shareholder approval for the matters required to complete the Acquisition. A summary of the Resolutions is as follows:

    • Resolution 1 - Approval of Acquisition of Petril Phosphates Limited

    • Resolution 2 - Appointment of Director - Yehoshua Raz

    • Resolution 3 - Issue of SOFOSA Performance Rights to SOFOSA

      Each of the Resolutions are inter-conditional and the passing of one of the Resolutions will have no effect unless all others are passed.

    • The Projects

    • Upon completion of the Acquisition, the Company will control the rights to three phosphate projects in Angola (the Projects). In addition to acquiring the remaining 50% of the Cabinda Project, the Company will add to its portfolio two phosphate projects located in the Zaire Province of Northern Angola, the Lucunga Project and the Pedra de Feitico Project (Figure 1).

      Figure 1: Location of the Cabinda, Lucunga and Pedra Project areas

    • Lucunga Project

      The Lucunga Project, which is located within the Zaire province in northern Angola, is comprised of a 100km2mining permit and exploration permit. The Lucunga Project consists of several prospects: Quindonacaxa Central, Quindonacaxa NE, Quindonacaxa SW, Quindonacaxa IR, RS Coco Grande, Lendiacolo, and Coluge Tando.

      The Company's proposed work plan at Lucunga consists of the following:

      • collation of historical data and generation of a geological model;

      • review Petril's metallurgical testwork;

      • CRU phosphate market study;

      • validation of historical data;

      • acquisition of airborne geophysical survey;

      • trenching to define limestone footwall;

      • complete SSP testwork; and

      • assess various product strategies to establish the optimal production strategy for Lucunga.

    • Pedra de Feitico Project

      The Pedra de Feitico Project area is located south of the Congo River within the Zaire province in northern Angola.

      The Pedra de Feitico Project is interpreted to be an extension of the graben structures that trend northwest-southeast from Angola's Cabinda Province, through the DRC and into Angola's Zaire Province. The geological setting of the project is interpreted to be directly analogous to the Company's Cacata deposit.

      The focus of the Company's exploration workplan is to validate historical geological maps of the Pedra de Feitico region and confirm the presence of phosphate hosting Upper Eocene sedimentary units, as well as the presence of the major faults that may define graben structures where the deposits may be concentrated.

      Based on a combination of historical results and Pedra de Feitico's interpreted along strike projection of the DRC and Cabinda Province phosphate deposits, the Company considers Pedra de Feitico to have significant blue sky potential, which warrants follow-up work.

      The Company's proposed work plan at the Pedra de Feitico Project consists of the following:

      • collation of historical rock-chip and soil sample results;

      • digitising of historical mapping;

      • acquisition of airborne geophysical survey;

      • define geological targets; and

      • initial first-pass trenching and drilling program.

    • Cabinda Project

    • The Cabinda Project, incorporates a 2000km2exploration permit covering all the known phosphate occurrences in the Cabinda Province, in the Republic of Angola. The Cabinda Project exploration permit currently contains one development project (Cacata) and five exploration projects (Mongo Tando, Chibuete, Ueca, Chivovo and Cambota).

      The Cabinda Project consists of sediments from the Cretaceous and Tertiary periods deposited in a large basin (the Congo Basin) situated in the southern part of the Republic of Congo, north western part of Angola, and the western part of the DRC.

      For further information in relation to the Projects, please refer to the Company's ASX announcement dated 5 December 2016 (Announcement). The Company confirms it is not aware of any new information or data that materially affects the information included in the Announcement and that all material assumptions and technical parameters underpinning the relevant estimates disclosed therein continue to apply and have not materially changed.

    • Pro forma balance sheet

      A pro forma balance sheet of the Company which shows the financial position upon completion of the Acquisition is set out in Schedule 3.

    • Pro forma capital structure

      The capital structure of the Company following completion of the Acquisition and issues of all Securities contemplated by this Notice is:

      Shares

      Number
      Shares on issue as at the date of this Notice	2,458,505,660
      Shares to be issued to the Vendors	2,458,505,6601
      Shares on issue on completion of the Acquisition	4,917,011,320

      Notes:

    • Assuming the maximum number of Conditional Shares are issued.

      Performance Rights

      Number
      Performance Rights on issue as at the date of this Notice	(59,457,494)1
      Performance Rights to be issued to the Vendors (Resolution 1)	237,829,9762
      Performance Rights to be issued to Paramount (Resolution 1)	300,000,0003
      Performance Rights to be issued to SOFOSA (Resolution 3)	237,829,9762
      Performance Rights on issue on completion of the Acquisition	775,659,952

      Notes:

    • Held by SOFOSA, which expire 27 January 2018. As detailed in Resolution 3, it is proposed that these performance rights will be cancelled.

    • Class A Performance Rights on the terms and conditions contained in Schedule 1.

    • Class B Performance Rights on the terms and conditions contained in Schedule 2.

    • Risk factors

      Following the Acquisition, there will be no material change in the nature of the Company's business activities as the Company will continue to explore for phosphate in Angola. Accordingly, the risk profile of Petril is analogous to that of the Company's existing business which has previously been disclosed to Shareholders. The relevant risks include: exploration and operational risks; risks associated with the legal environment in Angola; risks associated with operating in Angola; environmental regulations; changes in government policy; lack of specific infrastructure; and commodity price and foreign currency volatility.

      In addition, the Company will be exposed to the following risks as a result of entering into the Share Sale Agreement and the Acquisition:

      Contractual

      Under the terms of the Share Sale Agreement, the Company has agreed to acquire all of the issued shares in Petril, subject to the satisfaction of a number of conditions (as outlined in Section 1.2(a) above).

      The ability of the Company to acquire Petril and fulfil its stated objectives is subject to the performance by Petril and the Vendors of their obligations under the Share Sale Agreement. If Petril or the Vendors default in the performance of their obligations, it may delay the completion of any stage of the Acquisition (if it completes at all) and it may be necessary for the Company to approach a court to seek a legal remedy, which can be uncertain and costly.

    • Indicative Timetable

      Subject to the requirements of the ASX Listing Rules, the Company anticipates completion of the Acquisition will be in accordance with the following timetable:

      Event	Date
      ASX announcement of Acquisition	5 December 2016
      Notice of Meeting despatched to Shareholders	10 August 2017
      General Meeting to approve Acquisition	12 September 2017
      Completion of Acquisition	31 October 2017

      * These dates are indicative only and subject to change.

    • Intentions if Acquisition is not approved

    • If all Resolutions are not passed and the Acquisition is not completed, the Company expects that it will continue to hold its interest in its existing projects and carry on its business as conducted as at the date of this Notice.

    • RESOLUTION 1 - APPROVAL OF ACQUISITION OF PETRIL PHOSPHATES LIMITED

    • General

      Resolution 1 seeks Shareholder approval for the purposes of:

    • ASX Listing Rule 10.11 for the issue of Consideration Securities to a related party of the Company;

    • ASX Listing Rule 10.1 for the acquisition of a substantial asset from a substantial holder of the Company;

    • ASX Listing Rule 11.1.2 for the change to the scale of the Company's

      activities as a result of the Acquisition; and

    • item 7 of section 611 of the Corporations Act for the acquisition of a relevant interest in up to 4,122,337,811 Shares by the Vendors (in aggregate), which would increase their voting power in the Company from 45.80% to a maximum of 74.46%, pursuant to the:

    • issue of Consideration Shares and Conditional Shares;

    • the issue of the Cabinda Performance Rights and the Lucunga Performance Rights; and

    • issue of Shares on conversion of the Cabinda Performance Rights and Lucunga Performance Rights.

    • ASX Listing Rule 10.11

      Listing Rule Summary

      ASX Listing Rule 10.11 requires shareholder approval to be obtained where an entity issues, or agrees to issue, securities to a related party, or a person whose relationship with the entity or a related party is, in ASX's opinion, such that approval should be obtained unless an exception in ASX Listing Rule 10.12 applies.

      Green Services Innovations Ltd, a Vendor, is a related party of the Company as it is controlled by Mr Jorge Marques who is a related party of the Company under section 228(1) of the Corporations Act.

      As the transaction involves the issue of equity securities to a related party of the Company, Shareholder approval pursuant to ASX Listing Rule 10.11 is required unless an exception applies. It is the view of the Directors that the exceptions set out in ASX Listing Rule 10.12 do not apply in the current circumstances.

      Approval pursuant to ASX Listing Rule 7.1 is not required in order to issue Consideration Securities to Green Services Innovations Ltd as approval is being obtained under ASX Listing Rule 10.11. Accordingly, the issue of the Consideration Securities to Green Services Innovations Ltd will not be included in the 15% calculation of the Company's annual placement capacity pursuant to ASX Listing Rule 7.1.

      The Company considers that Shareholder approval of the issue of Consideration Securities to Green Services Innovations Ltdis not required for the purpose of Chapter 2E of the Corporations Act as the Company will issue those equity securities to Green Services Innovations Ltdon the same terms as to Vendors who are not related parties of the Company. Accordingly, the issue of Consideration Securities to Green Services Innovations Ltdis on arm's length terms for the purpose of section 210 of the Corporations Act.

      Technical Requirements

      Pursuant to and in accordance with ASX Listing Rule 10.13, the following information is provided in relation to the issue toGreen Services Innovations Ltd of its Consideration Securities (the Related Party Consideration Securities):

    • the Related Party Consideration Securities will be issued to Green Services Innovations Ltd, a Vendor;

    • the maximum number of Related Party Consideration Securities to be issued to Green Services Innovations Ltd is:

    • 267,239,565 Shares (being 225,394,630 Consideration Shares and 41,844,936 Conditional Shares); and

    • 25,852,118 Class A Performance Rights;

    • the Related Party Consideration Securities will be issued on Completion (and no later than one month after the date of the Meeting or such later date to the extent permitted by any ASX waiver or modification of the ASX Listing Rules) and it is intended that issue of the other Consideration Securities will occur on the same date;

    • the issue price is of the Related Party Consideration Securities is nil as they are being issued as consideration under the terms of the Share Sale Agreement;

    • Green Services Innovations Ltd is a related party of the Company by virtue of being controlled by Mr Jorge Marques, a related party of the Company under section 228(1) of the Corporations Act;

    • the Shares issued will be fully paid ordinary shares in the capital of the Company issued on the same terms and conditions as the Company's existing Shares;

    • the Class A Performance Rights issued will be on the terms set out in Schedule 1; and

    • no funds will be raised from the issue of the Related Party Consideration Securities as they are being issued as consideration under the terms of the Share Sale Agreement.

    • ASX Listing Rule 10.1

      ASX Listing Rule 10.1 provides that an entity must ensure that neither it, nor any of its child entities, acquires a substantial asset from, or disposes of a substantial asset to, amongst other persons:

    • a substantial holder of the entity; or

    • an associate of a substantial holder of the entity,

      without the prior approval of holders of the entity's ordinary shareholders.

      Substantial Asset

      For the purposes of ASX Listing Rule 10.1, an asset is substantial if its value, or the value of the consideration for it is, or in ASX's opinion is, 5% or more of the equity interests of the entity as set out in the latest accounts given to ASX under the ASX Listing Rules.

      The equity interests of the Company as defined by the ASX Listing Rules and as set out in the latest accounts given to ASX under the ASX Listing Rules (being for the financial year ending 31 December 2016 were $19,767,660). A substantial asset is therefore an asset of value greater than $988,383.

      As the consideration for the Acquisition includes the issue of Shares representing 50% of the Company (in addition to the Consideration Performance Rights and grant of the Lucunga Royalty), the value of the consideration exceeds 5% of the equity interests of the Company, and therefore the Acquisition will result in the acquisition of a substantial asset.

      Substantial holder

      For the purposes of ASX Listing Rule 10.1, a substantial holder is a person who has a relevant interest (either directly or through its associates), or had at any time in the six months before the transaction, in at least 10% of the total votes attaching to the voting securities of the Company.

      Mr Jorge Marques controls Green Services Innovations Ltd, a Vendor. Mr Marquesholds a relevant interest in 45.80% in the Company and is therefore a substantial holder for the purpose of ASX Listing Rule 10.1.

      The Company considers that each of the Vendors is an associate of Mr Marques (for the reason set out in Section2.5.1(d) below) andare therefore persons to whom ASX Listing Rule 10.1 applies.

      Requirement for shareholder approval

      As a result of the above conclusions, the completion of the Acquisition will result in the acquisition of a substantial asset from a substantial holder (or associates of a substantial holder) of the Company. The Company is therefore required to seek Shareholder approval under ASX Listing Rule 10.1.

      Independent Expert's Report

      ASX Listing Rule 10.10.2 requires a notice of meeting containing a resolution under ASX Listing Rule 10.1 to include a report on the transaction from an independent expert.

      The Independent Expert's Report prepared by BDO (a copy of which is enclosed with this Notice of Meeting) assesses whether the transactions contemplated by the Share Sale Agreement are fair and reasonable to the non-associated Shareholders of the Company.

      The Independent Expert's Report concludes that the transactions contemplated by the Share Sale Agreement are, in the absence of a superior offer, not fair but reasonable to the non-associated Shareholders of the Company.

      Shareholders are urged to carefully read the Independent Expert's Report to understand the scope of the report, the methodology of the valuation and the sources of information and assumptions made.

      The Independent Expert's Report is also available on the Company's website at www.minbos.com. If requested by a Shareholder, the Company will send to the Shareholder a hard copy of the Independent Expert's Report at no cost.

    • ASX Listing Rule 11.1.2

      ASX Listing Rule 11.1 provides that where an entity proposes to make a significant change, either directly or indirectly, to the nature or scale of its activities, it must provide full details to ASX as soon as practicable and comply with the following:

    • provide to ASX information regarding the change and its effect on future potential earnings, and any information that ASX asks for;

    • if ASX requires, obtain the approval of holders of its shares and any requirements of ASX in relation to the notice of meeting; and

    • if ASX requires, meet the requirements of Chapters 1 and 2 of the ASX Listing Rules as if the company were applying for admission to the official list of ASX.

      ASX has advised the Company that, given the proposed change in the scale of the Company's activities resulting from the Acquisition, it requires the Company to obtain Shareholder approval for the change in scale of its activities but it will

      not be required meet the requirements of Chapters 1 and 2 of the ASX Listing Rules as if the Company were applying for admission to the official list of ASX.

    • Item 7 of Section 611 of the Corporations Act

    • Legislative regime

    • Section 606 of the Corporations Act - Statutory Prohibition

      Pursuant to section 606(1) of the Corporations Act, a person must not acquire a relevant interest in issued voting shares in a listed company if the person acquiring the interest does so through a transaction in relation to securities entered into by or on behalf of the person and because of the transaction, that person's or someone else's voting power in the company increases:

    • from 20% or below to more than 20%; or

    • from a starting point that is above 20% and below 90%, (Prohibition).

    • Voting Power

      The voting power of a person in a body corporate is determined in accordance with section 610 of the Corporations Act. The calculation of a person's voting power in a company involves determining the voting shares in the company in which the person and the person's associates have a relevant interest.

    • The Vendors' entitlements in the Company

      The Vendors currently have the following interests in the Company:

      Shares

      Performance

      Rights

      Voting Power

      Vendors11,126,002,175 Nil 45.80%

      Total 1,126,002,175 Nil45.80%

      Notes:

    • Green Services Innovations Ltd, a Vendor, is controlled by Mr Jorge Marques who holds 1,126,002,175 Shares through nominees as follows:

      • 1,065,321,712 Shares held by HSBC Custody Nominees (Australia) Limited; and

      • 60,680,463 held by National Nominees Limited.

    • At Completion, assuming all Conditional Shares are issued, the Vendors' shareholding and voting power in the Company will be as follows:

      Maximum holdings of Vendors following issue of the Consideration Securities

      Shares Performance Rights

      Voting Power

      Following issue of Consideration Securities at Completion

      Vendors 3,584,507,835 537,829,976 72.90%

      Other Shareholders /	1,332,503,485	237,829,976	27.10%
      Performance Right
      Holders
      Total	4,917,011,320	775,659,952	100.00%

      Following issue of Shares on conversion of Lucunga Performance Rights only

      Vendors	3,884,507,835	237,829,976	74.46%
      Other Shareholders / Performance Right Holders	1,332,503,485	237,829,976	25.54%
      Total	5,217,011,320	475,659,952	100.00%
      Following issue of Shares on conversion of Consideration Performance Rights and SOFOSA Performance Rights
      Vendors	4,122,337,811	Nil	72.41%
      Other Shareholders / Performance Right Holders	1,570,333,461	Nil	27.59%
      Total	5,692,671,272	Nil	100.00%

    • Associates

      For the purposes of determining voting power under the Corporations Act, a person (second person) is an "associate" of the other person (first person) if:

    • (pursuant to section 12(2) of the Corporations Act) the first person is a body corporate and the second person is:

    • a body corporate the first person controls;

    • a body corporate that controls the first person; or

    • a body corporate that is controlled by an entity that controls the person;

    • the second person has entered or proposes to enter into a relevant agreement with the first person for the purpose of controlling or influencing the composition of the company's board or the conduct of the company's affairs; or

    • the second person is a person with whom the first person is acting

      or proposes to act, in concert in relation to the company's affairs.

      Associates are, therefore, determined as a matter of fact. For example where a person controls or influences the board or the conduct of a company's business affairs, or acts in concert with a person in relation to the entity's business affairs.

      The Company understands that each of the Vendors is an associate of one another in relation to the transaction as each Vendor is a person with whom each other Vendor is acting or proposes to act in concert in relation to the Company's affairs insofar as it relates to the transaction.

    • Relevant Interests

      Section 608(1) of the Corporations Act provides that a person has a relevant interest in securities if they:

    • are the holder of the securities;

    • have the power to exercise, or control the exercise of, a right to vote attached to the securities; or

    • have power to dispose of, or control the exercise of a power to dispose of, the securities.

      It does not matter how remote the relevant interest is or how it arises. If two or more people can jointly exercise one of these powers, each of them is taken to have that power.

      In addition, section 608(3) of the Corporations Act provides that a person has a relevant interest in securities that any of the following has:

    • a body corporate in which the person's voting power is above

      20%; and

    • a body corporate that the person controls.

    • The Corporations Act defines "control" broadly. Under section 50AA of the Corporations Act control means the capacity to determine the outcome of decisions about the financial and operating policies of the Company.

      Mr Jorge Marques controls Green Services Innovations Ltd and therefore will acquire a relevant interest in the Consideration Securities issued to Green Services Innovations Ltd. Mr Jorge Marques holds voting power in the Company of 45.80% as at the date of this Notice.

      Other than in respect of Mr Jorge Marques and Green Services Innovations Ltd, the Company understands that the Vendors do not hold a relevant interest in the securities of the Company as at the date of this Notice.

    • Reason Section 611 Approval is Required

      Item 7 of section 611 of the Corporations Act provides an exception to the Prohibition, whereby a person may acquire a relevant interest in a company's voting shares with shareholder approval.

      The Vendors (in aggregate) currently have a relevant interest in 1,126,002,175 Shares in the Company. Following Completion, assuming all Conditional Shares are issued, the Vendors will have a relevant interest in 3,584,507,835 Shares and 537,829,976 Performance Rights representing:

    • 72.90% voting power in the Company prior to the conversion of the Performance Rights;

    • 74.46% voting power in the Company following the conversion of the Lucunga Performance Rights only; and

    • 72.41% voting power in the Company following the conversion of all Performance Rights on issue (including the SOFOSA Performance Rights which carry the same terms as the Class A Performance Rights).

      Accordingly, Resolution 1 seeks Shareholder approval for the purpose of section 611 Item 7 to enable the Company to issue:

    • the Consideration Shares;

    • the Conditional Shares;

    • the Consideration Performance Rights; and

    • Shares on conversion of the Consideration Performance Rights.

    • Specific Information required by Section 611 Item 7 of the Corporations Act and ASIC Regulatory Guide 74

      The following information is required to be provided to Shareholders under the Corporations Act and ASIC Regulatory Guide 74 in respect of obtaining approval for Item 7 of section 611 of the Corporations Act. Shareholders are also referred to the Independent Expert's Report prepared by BDO which accompanies this Notice of Meeting.

    • Identity of the Acquirer and its Associates

      The Vendors are the current shareholders of Petril. The Vendors are parties to the Share Sale Agreement as summarised in Section 1 of this Explanatory Statement. As at the date of this Notice, the Vendors and the number of shares held by each Vendor in Petril are as follows:

      Vendor name	Number of Petril shares held	% of Petril held
      Reuven Behar	4,106	41.06%
      Tyros International Group Ltd	2,053	20.53%
      Green Services Innovations Ltd	1,087	10.87%
      Paramount Global Group Inc.	2,503	25.03%
      Yehoshua Raz	83	0.83%
      Ehud Levi	83	0.83%
      Gad Haran	42	0.42%
      Doron Latzer	42	0.42%
      Shaul Zipris	1	0.01%
      Total	10,000	100%

      Mr Jorge Marques is an associate of Green Services Innovations Ltd. Mr Marques holds voting power in the Company of 45.80% as at the date of this Notice.

      Other than in respect of Mr Jorge Marques and Green Services Innovations Ltd, the Company understands that no associates of the Vendors currently have a relevant interest in the Company, or will prior to Completion have a relevant interest in the Company.

    • Relevant Interest and Voting Power

      The relevant interest in Shares and the voting power of the Vendors (both current and following the issue of the Consideration Securities and conversion of the Performance Rights) are as follows:

      Party	Voting power as at the date of this Notice of Meeting	Maximum relevant interest after the issue of Consideratio n Shares and Conditional Shares (Shares)	Voting Power after the issue of the Consider ation Shares and Condition al Shares	Relevant Interest on conversion of Lucunga Performance Rights (Shares)	Voting Power on conversion of Lucunga Performance Rights	Relevant interest on conversion of the Consideration Performance Rights (Shares)	Voting Power on conversion of the Consideration Performance Rights
      Vendors	45.80%	3,584,507,835	72.90%	3,884,507,835	74.46%	4,122,337,811	72.41%
      Other Share holders	54.20%	1,332,503,485	27.10%	1,332,503,485	25.54%	1,570,333,461	27.59%

      Notes:

    • Assuming all Conditional Shares are issued and no other securities in the Company are issued prior to Completion.

    • The SOFOSA Performance Rights will be issued on the same terms as the Class A Performance Rights which form part of the Consideration Performance Rights. The SOFOSA Performance Rights will be issued to SOFOSA (a third party not associated with the Vendors).

    • Summary of increases

      The estimated maximum relevant interest that the Vendors will hold on Completion is 3,584,507,835 Shares giving the Vendors a voting power of 72.90% (in aggregate).

      If all Consideration Performance Rights are converted in accordance with the terms on which they are issued, the estimated maximum relevant interest that the Vendors will hold is 4,122,337,811 Shares giving the Vendors a voting power of 74.41% (in aggregate).

      If only the Lucunga Performance Rights are converted in accordance with the terms on which they are issued, the estimated maximum relevant interest that the Vendors will hold is 3,884,507,835 Shares giving the Vendors a voting power of 74.46% (in aggregate).

      The maximum voting power of 74.46% represents a maximum increase of 28.66%, being the difference between 74.46% and 45.80%.

    • Assumptions

      The following assumptions have been made in calculating the above voting power:

    • the Company has 2,458,505,660 Shares and 59,457,494 Performance Rights on issue as at the date of this Notice of Meeting. (As further described in Resolution 3 below, the 59,457,494 Performance Rights on issue in the Company as at the date of this Notice of Meeting will be cancelled in connection with the issue of the SOFOSA Performance Rights);

    • the Vendors are issued all of the 384,958,009 Conditional Shares;

    • the Company issues 2,458,505,660 Shares and 237,829,976 Performance Rights to the Vendors and 300,000,000 Performance Rights to Paramount in accordance with Resolution 1, and 237,829,976 Performance Rights to SOFOSA in accordance with Resolution 3;

    • the Company does not issue any other securities prior to Completion; and

    • the Vendors do not acquire a relevant interest in any additional securities in the Company other than under this Resolution.

    • Reasons for the proposed issue of securities

      As set out in Section 1 of this Explanatory Statement, the reason for the issue of the Consideration Securities to the Vendors is to comply with the Company's obligations under the Share Sale Agreement, which was entered into for the purpose of merging the Company and Petril thereby consolidating the ownership structure of the Cabinda Project and providing Shareholders with an interest in Petril's other projects.

    • Date of proposed issue of securities

      The Consideration Securities the subject of this Resolution will be issued on the date of Completion under the Share Sale Agreement. It is anticipated that Completion will take place during October 2017.

      The date of issue of Shares on conversion of the Performance Rights is not yet known as they will be issued subject to satisfaction of the conversion milestone in respect of each class of Performance Rights, as further described in the full terms and conditions of the Performance Rights set out in Schedules 1 and 2.

    • Material terms of proposed issue of securities

      The Consideration Shares and Conditional Shares will be issued in accordance with the terms and conditions of the Share Sale Agreement and will be issued on the same terms and conditions as all other existing Shares on issue in the Company. The material terms of the Share Sale Agreement are summarised in Section 1.2.

      The Consideration Performance Rights will be issued on the terms and conditions set out in Schedules 1 and 2.

    • Intentions of the Vendors

      Other than as disclosed elsewhere in this Explanatory Statement, the Company understands that the Vendors and their associates:

    • have no present intention of making any significant changes to the business of the Company;

    • will consider participating in further capital raisings of the Company to maintain their shareholding interest;

    • have no present intention of making changes regarding the future employment of the present employees of the Company (with future changes, if any, to be made in consultation with the Company's management team);

    • do not intend to redeploy any fixed assets of the Company;

    • do not intend to transfer any property between the Company and any other entity; and

    • have no intention to change the Company's existing policies in

      relation to financial matters or dividends.

      These intentions are based on information concerning the Company, its business and the business environment which is known to the Vendors at the date of this Notice.

      These present intentions may change as new information becomes available, as circumstances change or in the light of all material information, facts and circumstances necessary to assess the operational, commercial, taxation and financial implications of those decisions at the relevant time.

    • Proposed changes of Directors of the Company

      Subject to Completion, the Company will appoint Yehoshua Raz to the Board as a non-executive Director. Yehoshua Raz's appointment is the subject of Resolution 2.

      The Company draws to the Shareholders' attention that Mr Raz is also a Vendor under the Share Sale Agreement and in this capacity will acquire securities in the Company of the nature described in Section 1.2(b).

      Further details in relation to the qualifications of Mr Raz are set out in Section 3.2.

    • Interests and Recommendations of Directors

    • Other than Mr Domingos Catulichi who has an interest in the outcome of Resolution 3, the approval of which is conditional on approval of Resolution 1, none of the current Board members has a material personal interest in the outcome of Resolution 1.

    • Other than Mr Catulichi (who does not make a recommendation to Shareholders for the reason set out above), all of the current Directors are of the opinion that the transactions contemplated by the Share Sale Agreement are in the best interests of Shareholders and, accordingly, the current Directors unanimously recommend that Shareholders vote in favour of Resolution 1. The Directors' recommendations are based on the reasons outlined in paragraph (k) below.

    • The Directors are not aware of any other information other than as set out in this Notice that would be reasonably required by Shareholders to allow them to make a decision whether it is in the best interests of the Company to pass Resolution 1.

    • Advantages of the transaction

      The Directors are of the view that the following non-exhaustive list of advantages may be relevant to a Shareholder's decision on how to vote on the Resolutions contained in this Notice of Meeting:

    • on Completion, the Company will own the rights to 100% of the Cabinda Project and the Pedra de Feitico Project and will own a majority joint venture interest in the Lucunga Project;

    • the consideration payable under the Share Sale Agreement is predominantly scrip, therefore conserving the Company's cash reserves;

    • the potential increase in market capitalisation of the Company following Completion may lead to increased liquidity, increased coverage from investment analysts and increased access to equity capital market opportunities; and

    • the Independent Expert's Report identifies other advantages of

      the Transaction to which Shareholders should have regard.

    • Disadvantages of the transaction

      The Directors are of the view that the following non-exhaustive list of disadvantages may be relevant to a Shareholder's decision on how to vote on the Resolutions contained in this Notice of Meeting:

    • the issue of the Consideration Securities will result in the issue of a significant number of Shares (including Shares issued on conversion of the Consideration Performance Rights) which will have a dilutionary effect on the current holdings of Shareholders;

    • the Vendors and their associates (including Mr Jorge Marques) will own 72.90% of Shares on issue in the Company upon Completion. As a result, the Vendors will have significant influence over matters that require approval by the Company's shareholders including the election of directors and approval of significant corporate transactions. This concentration of ownership might also have the effect of delaying or preventing a change of control transaction in respect of the Company that other Shareholders may view as beneficial as the Vendors' shareholding interest will mean that they can block any proposal by a third party to acquire all of the Shares in the Company; and

    • Shareholders will be exposed to the additional risks associated with the Acquisition as set out in Section 1.7.

    • Independent Expert's Report

    • The Independent Expert's Report prepared by BDO (a copy of which is enclosed with this Notice of Meeting) assesses whether the Acquisition is fair and reasonable to the non-associated Shareholders of the Company.

      The Independent Expert's Report concludes that the Acquisition is not fair but reasonable to the non-associated Shareholders of the Company.

      Shareholders are urged to carefully read the Independent Expert's Report to understand the scope of the report, the methodology of the valuation and the sources of information and assumptions made.

    • RESOLUTION 2- ELECTION OF DIRECTOR - YEHOSHUA RAZ

    • General

      In accordance with the terms of the Share Sale Agreement, the Company has agreed to appoint Yehoshua Raz as a Director of the Company. This appointment will take effect subject to Completion.

      Pursuant to Resolutions 2, Yehoshua Raz seeks election from Shareholders to be appointed as a Director of the Company upon Completion.

    • Qualifications

      Mr Raz is a financial expert with more than 35 years' experience in financial, commercial, marketing, and general management within large international companies with focus on the natural resources, infrastructure & energy market.

      Mr Raz was the CEO of Bateman Litwin, a large multinational engineering company. Currently he is a Director in the LR Group, heading up their financing and energy division and Director of Sun Israel, a company specialising in renewable energy. In his various roles, he has gained extensive experience in the energy, minerals and metals industries and in securing finance for projects in the emerging markets (with a special focus on Africa).

      Mr Raz holds a BA in Economics from the Haifa University in Israel, an MSc in Industrial Management from the Haifa Technion and a MBA specialising in Contract and Acquisition Management from the Florida Institute of Technology, USA.

    • Independence

      If elected, the Board does not consider that Yehoshua Raz will be an independent director, due to Mr Raz also being a material shareholder in the Company.

    • Proposed remuneration

      The remuneration (inclusive of superannuation) proposed to be paid to Mr Raz on an annual basis following Completion is $36,000.

    • Board Recommendation

      The Board (other than Mr Catulichi who does not make a recommendation to Shareholders as he has an interest in the outcome of Resolution 3, the approval of which is conditional on the approval of Resolution 2) supports the election of Mr Raz, and recommends that Shareholders vote in favour of Resolution 2.

    • RESOLUTION 3 - ISSUE OF PERFORMANCE RIGHTS TO RELATED PARTY

    • General

      On the date on which the terms sheet was signed by the Company (as detailed in Section 1.1), Sociedade De Fosfatos De Angola (a company incorporated in Angola) (SOFOSA) held 237,829,976 Performance Rights. On 27 January 2017, 178,372,482 of the Performance Rights held by SOFOSA lapsed. SOFOSA retains 59,457,494 of the Performance Rights which will lapse on 27 January 2018.

      In connection with the Acquisition and as required by the terms of the Share Sale Agreement, the Company has agreed to do all things necessary to effectively

      extend the expiry date by 12 months for all Performance Rights which SOFOSA held as at the date of the terms sheet. To effect this, the Company proposes to:

    • obtain approval for the issue of 237,829,976 Class A Performance Rights to SOFOSA under this Resolution 3, the terms of which provide for expiry as follows:

    • as to tranche 1 (178,372,482 Performance Rights): on 27 January 2018; and

    • as to tranche 2 (59,457,494 Performance Rights): on 27 January 2019; and

    • subject to this Resolution 3 being passed, cancel the existing 59,457,494 Performance Rights on issue held by SOFOSA.

      SOFOSA is a related party of the Company. Accordingly, Shareholder approval is sought for the issue of the SOFOSA Performance Rights under Chapter 2E of the Corporations Act and ASX Listing Rule 10.11.

    • Shareholder Approval (Chapter 2E of the Corporations Act and ASX Listing Rule 10.11)

      For a public company, or an entity that the public company controls, to give a financial benefit to a related party of the public company, the public company or entity must:

    • obtain the approval of the public company's members in the manner set

      out in sections 217 to 227 of the Corporations Act; and

    • give the benefit within 15 months following such approval,

    • unless the giving of the financial benefit falls within an exception set out in sections 210 to 216 of the Corporations Act.

      The grant of the SOFOSA Performance Rights constitutes giving a financial benefit. SOFOSA is a related party of the Company by virtue of being an entity controlled by Mr Domingos Catulichi, a director of the Company.

      In addition, ASX Listing Rule 10.11 also requires shareholder approval to be obtained where an entity issues, or agrees to issue, securities to a related party, or a person whose relationship with the entity or a related party is, in ASX's opinion, such that approval should be obtained unless an exception in ASX Listing Rule

      10.12 applies.

      It is the view of the Company that the exceptions set out in sections 210 to 216 of the Corporations Act and ASX Listing Rule 10.12 do not apply in the current circumstances. Accordingly, Shareholder approval is sought for the grant of SOFOSA Performance Rights to SOFOSA.

      Pursuant to and in accordance with the requirements of section 219 of the Corporations Act and ASX Listing Rule 10.13, the following information is provided in relation to the proposed grant of SOFOSA Performance Rights:

    • the related party is SOFOSA. SOFOSA is a related party of the Company by virtue of being controlled by Mr Catulichi, a director of the Company;

    • the maximum number of Performance Rights (being the nature of the financial benefit being provided) to be granted to SOFOSA is 237,829,976 Class A Performance Rights (of which 178,372,482 are tranche 1 and 59,457,494 are tranche 2 for the purposes of the Class A Performance Right terms);

    • the SOFOSA Performance Rights will be granted to SOFOSA prior to Completion (and no later than one month after the date of the Meeting or such later date as permitted by any ASX waiver or modification of the ASX Listing Rules) and it is anticipated the SOFOSA Performance Rights will be issued on one date;

    • the issue price is nil as the SOFOSA Performance Rights will be granted for nil cash consideration, and accordingly no funds will be raised;

    • the terms and conditions of the SOFOSA Performance Rights are set out in Schedule 1;

    • the value of the SOFOSA Performance Rights as determined by the Independent Expert is set out in Schedule 4;

    • the relevant interests of SOFOSA in securities of the Company are set out below:

      Related Party	Shares	Performance Rights
      SOFOSA (and its associates)	17,640,000	59,457,4941

      1 As detailed above, the Performance Rights currently held by SOFOSA will be cancelled upon issue of the SOFOSA Performance Rights.

    • in accordance with the terms of the consultancy agreement with SOFOSA, the remuneration and emoluments from the Company to SOFOSA and its associates (including Mr Catulichi) for the previous financial year and the proposed remuneration and emoluments for the current financial year is set out below:

      Related Party	Current Financial Year	Previous Financial Year
      SOFOSA (including Mr Catulichi)	US$180,000	US$180,000

    • if the milestones to conversion of the Class A Performance Rights are achieved, a total of 237,829,976 Shares will be issued to SOFOSA and 237,829,976 Shares will be issued to the Vendors. This will increase the number of Shares on issue from 4,917,011,320 (which includes the Consideration Shares and Conditional Shares) to 5,392,671,272 (assuming that the milestones to conversion of the Class B Performance Rights are not achieved) with the effect that the shareholding of existing Shareholders would be diluted by an aggregate of 8.82%;

    • the primary purpose of the grant of the SOFOSA Performance Rights to SOFOSA is to comply with the Company's obligations under the Share Sale Agreement and to provide consideration for the following services provided (or to be provided) to the Company by SOFOSA:

    • the grant of new exploration permits to replace the existing Cabinda exploration permit (described as 006/06/01/L.P./GOV.ANG.MGM/2010) (Licence) by the Angolan

      Government to Mongo Tando Ltda (a company incorporated in Angola) (MTL) in accordance with the Angolan Mining Code;

    • promoting the Cabinda project to all stakeholders;

    • strategically supporting the Company (including the merger with Petril projects as per Resolution 1) and its corporate initiatives;

    • the transfer of SOFOSA's shares in MTL to the Company (or its nominee);

    • submitting all applications necessary to obtain a mining licence over the Cacata project area (Mining Licence); and

    • the granting of the Mining Licence;

    • Mr Catulichi does not make a recommendation to Shareholders in relation to Resolution 3 due to his material personal interest in the outcome of the Resolution. With the exception of Mr Catulichi, no other Director has a personal interest in the outcome of this Resolution 3;

    • each of the Directors (other than Mr Catulichi) recommends that Shareholders vote in favour of Resolution 3, for the following reasons:

    • the milestone terms of the SOFOSA Performance Rights will align the interests of SOFOSA with those of all Shareholders;

    • the grant of the SOFOSA Performance Rights is a reasonable and appropriate method to provide consideration for the services performed and to be performed by SOFOSA, as detailed in paragraph (j) above; and

    • it is not considered that there are any significant opportunity costs to the Company or benefits foregone by the Company in granting the SOFOSA Performance Rights upon the terms proposed; and

    • the Board is not aware of any other information that would be reasonably required by Shareholders to allow them to make a decision whether it is in the best interests of the Company to pass Resolution 3.

    • Approval pursuant to ASX Listing Rule 7.1 is not required in order to issue the SOFOSA Performance Rights to SOFOSA as approval is being obtained under ASX Listing Rule 10.11. Accordingly, the issue of SOFOSA Performance Rights to SOFOSA will not be included in the 15% calculation of the Company's annual placement capacity pursuant to ASX Listing Rule 7.1.

      G LO S S AR Y

      $ means Australian dollars.

      Acquisition has the meaning given in Section1.1.

      ASIC means the Australian Securities & Investments Commission.

      ASX means ASX Limited (ACN 008 624 691) or the financial market operated by ASX Limited, as the context requires.

      ASX Listing Rules orListing Rules means the Listing Rules of ASX.

      BDO orIndependent Expert means BDO Corporate Finance (WA) Pty Ltd (ABN 27 124 031 045).

      Board means the current board of directors of the Company.

      Business Day means Monday to Friday inclusive, except New Year's Day, Good Friday, Easter Monday, Christmas Day, Boxing Day, and any other day that ASX declares is not a business day.

      Cabinda Performance Rights means the Class A Performance Rights to be issued to the Vendors under the terms of the Share Sale Agreement.

      Chair means the chair of the Meeting.

      Class A Performance Rights means performance rights in the capital of the Company on the terms and conditions contained in Schedule 1.

      Class B Performance Rights means performance rights in the capital of the Company on the terms and conditions contained in Schedule 2.

      Company means Minbos Resources Limited (ACN 141 175 493).

      Completion means the completion of the Acquisition.

      Conditional Shares has the meaning given in Section 1.2(b)(ii).

      Consideration Performance Rights means the Cabinda Performance Rights and Lucunga Performance Rights.

      Consideration Shares has the meaning given in Section 1.2(b)(i).

      Consideration Securities means the Consideration Shares, Conditional Shares and Consideration Performance Rights.

      Constitution means the Company's constitution.

      Corporations Act means the Corporations Act 2001 (Cth).

      Directors means the current directors of the Company, or the directors seeking appointment to the Company pursuant to this Notice (as applicable).

      Explanatory Statement means the explanatory statement accompanying the Notice.

      General Meeting orMeeting means the meeting convened by the Notice.

      Independent Expert's Report means the report on the Acquisition completed by the Independent Expert for the purposes of Resolution 1, as enclosed with this Notice of Meeting.

      Lucunga Performance Rights means the Class B Performance Rights to be issued to Paramount under the terms of the Share Sale Agreement.

      Lucunga Project means the joint venture phosphate project held by Petril and minority partner Haifa Chemicals Ltd, located in the Zaire Province of Angola.

      Notice orNotice of Meeting means this notice of meeting including the Explanatory Statement and the Proxy Form.

      Paramount means Paramount Global Group Inc., a private company registered in the British Virgin Islands.

      Performance Rights means Class A Performance Rights, Class B Performance Rights, any other performance rights on issue in the Company or a combination of those, as the context provides.

      Proxy Form means the proxy form accompanying the Notice.

      Petril means Petril Phosphates Limited.

      Resolutions means the resolutions set out in the Notice, or any one of them, as the context requires.

      Respective Proportion means the proportion to which each Vendor's beneficial shareholding in the Petril bears to the total shares on issue in Petril, immediately prior to Completion.

      Section means a section of the Explanatory Statement.

      Share means a fully paid ordinary share in the capital of the Company.

      Shareholder means a registered holder of a Share.

      Share Sale Agreement means the formal share sale agreement entered into on 16 May 2017 between the Company, Petril and the Vendors.

      SOFOSA means Sociedade De Fosfatos De Angola (a company incorporated in Angola).

      SOFOSA Performance Rights means the Performance Rights to be issued to SOFOSA on the terms and conditions set out in Schedule 1 which are the subject of Resolution 3.

      Vendors means the current shareholders of Petril, as identified in Section 2.5.3(a).

      Vale Fertil means Vale Fertil Ltd, a company incorporated under the laws of the British Virgin Islands.

      WST means Western Standard Time as observed in Perth, Western Australia.

      S C H E D U LE 1 - TE R M S AN D C O N DI T I O N S O F C LA S S A P E R FO R MA NC E R I G H TS

      The terms and conditions attaching to Class A Performance Rights are set out below. Capitalised terms have the definition ascribed to them in the services agreement between the Company and SOFOSA dated 27 January 2015 (Services Agreement), unless the context indicates otherwise.

    • (Milestones): The Performance Rights shall have the following milestones attached to them (Milestones):

    • Tranche 1 Performance Rights:

    • the Company's existing Cabinda exploration permit is replaced by the Angolan Government with new exploration permits (described as 006/06/01/L.P./GOV.ANG.MGM/2010);

    • SOFOSA transfers to the Company (or its nominee) 100% of the securities that it currently holds in the capital of Mongo Tando Ltda; and

    • the proposed merger between the Company and Petril is progressed and supported via a letter of support from SOFOSA to the Company on SOFOSA letterhead which sets out the terms on which SOFOSA supports the abovementioned merger (as agreed between the parties); and

    • Tranche 2 Performance Rights: the Company is granted a mining licence over the Cacata project area (provided that this is granted pursuant to SOFOSA's assistance).

    • (Notification to holder): The Company shall notify the holder in writing when the relevant Milestones have been satisfied (and for the purposes of the Services Agreement, shall also notify the Vendors).

    • (Vesting): The relevant Performance Rights shall vest on the date that the Milestone relating to that Performance Right has been satisfied.

    • (Consideration): No consideration will be payable upon the vesting of the Performance Rights.

    • (Conversion): Upon satisfaction of the relevant Performance Rights vesting, each Performance Right will, at the election of the holder, vest and convert as follows:

    • Tranche 1 Performance Right: into one Share; and

    • Tranche 2 Performance Right: into one Share.

    • (Lapse of a Performance Right): If the Milestone attaching to a Performance Right has not been satisfied in the time periods set out below, it will automatically lapse:

    • Tranche 1 Performance Rights: 36 months from the execution date of the Services Agreement (Execution Date); and

    • Tranche 2 Performance Rights: 48 months from the Execution Date.

    • (Share ranking): All Shares issued upon the vesting of Performance Rights will upon issue rank pari passu in all respects with other Shares.

    • (Listing of Shares on ASX): The Company will not apply for quotation of the Performance Rights on ASX. The Company will apply for quotation of all Shares issued pursuant to the vesting of Performance Rights on ASX within the period required by ASX.

    • (Transfer of Performance Rights): A Performance Right is not transferable except with the prior written consent of the board of the Company.

    • (Participation in new issues): There are no participation rights or entitlements inherent in the Performance Rights and holders will not be entitled to participate in new issues of capital offered to Shareholders during the currency of the Performance Rights.

    • (Adjustment for bonus issue): If securities are issued pro-rata to the Shareholders generally by way of bonus issue (other than an issue in lieu of dividends or by way of dividend reinvestment), the number of Performance Rights to which each holder is entitled, will be increased by that number of securities which the holder would have been entitled if the Performance Rights held by the holder were vested immediately prior to the record date of the bonus issue, and in any event in a manner consistent with the Corporations Act and the ASX Listing Rules at the time of the bonus issue.

    • (Adjustment for reconstruction): If, at any time, the issued capital of the Company is reorganised (including consolidation, subdivision, reduction or return), all rights of a holder of a Performance Right (including the Vesting Conditions) are to be changed in a manner consistent with the Corporations Act and the ASX Listing Rules at the time of the reorganisation.

    • (Dividend and Voting Rights): A Performance Right does not confer upon the holder an entitlement to vote or receive dividends.

    • (No rights on winding up or reduction of capital): A Performance Right does not entitle the holder to any return of capital or to participate in the surplus profits or assets of the Company upon winding up of the Company, a reduction of capital or otherwise.

    • (a) (No other rights) A Performance Right gives the Holders no rights other than those expressly provided by these terms and those provided at law where such rights at law cannot be excluded by these terms.

      S C H E D U LE 2 - TE R M S A N D C O N DI T I O N S O F C L AS S B P E R FO R MA NC E R I G H TS

      The terms and conditions attaching to Class B Performance Rights are set out below.

    • (Lucunga Conditions): The Performance Rights shall be subject to satisfaction of each of the following conditions:

    • completion of the acquisition of Petril by the Company; and

    • renewal of the Lucunga Project concessions for a 20 year period (from the date of such renewal). For the avoidance of doubt, the parties acknowledge and agree that this paragraph (ii) will be satisfied on the date of renewal notwithstanding that such concessions are subject to review every 5 years pursuant to Angolan mineral laws,

      (the Lucunga Conditions).

    • (Notification): The Company shall notify the holder of the Performance Rights (Holder) (and the Vendors) in writing when the Lucunga Conditions have been satisfied.

    • (Vesting): The Performance Rights shall vest on the date that the Lucunga Conditions have been satisfied.

    • (Consideration): The Performance Rights will be issued as consideration for services provided in connection with the Lucunga Project including (but not limited to) procuring the renewal of the Lucunga Project concessions, and no consideration will be payable upon the vesting of the Performance Rights.

    • (Conversion): Upon the Performance Rights vesting, each Performance Right will, at the election of the Holder, vest and convert into one Share.

    • (Lapse of Performance Rights): If the Lucunga Conditions have not been satisfied by the date which is 5 years from the date of issue of the Performance Rights, the Performance Rights will automatically lapse.

    • (Share ranking): All Shares issued upon the vesting and conversion of the Performance Rights will upon issue rank pari passu in all respects with other Shares.

    • (Listing of Shares on ASX): The Company will not apply for quotation of the Performance Rights on ASX. However, the Company will apply for quotation of all Shares issued pursuant to the vesting and conversion of the Performance Rights on ASX within the period required by ASX.

    • (Transfer of Performance Rights): A Performance Right is not transferable except with the prior written consent of the board of the Company.

    • (Participation in new issues): There are no participation rights or entitlements inherent in the Performance Rights and the Holder will not be entitled to participate in new issues of capital offered to Shareholders prior to vesting of the Performance Rights by reason only of holding those Performance Rights (i.e. prior to the issue of Shares on vesting and conversion of the Performance Rights).

    • (Adjustment for bonus issue): If securities are issued pro-rata to Shareholders generally by way of bonus issue (other than an issue in lieu of dividends or by way of dividend reinvestment), the number of Performance Rights to which the Holder

      is entitled, will be increased by that number of securities which the Holder would have been entitled if the Performance Rights held by the Holder were vested immediately prior to the record date of the bonus issue, and in any event in a manner consistent with the Corporations Act and the ASX Listing Rules at the time of the bonus issue.

    • (Adjustment for reconstruction): If, at any time, the issued capital of the Company is reorganised (including, but not limited to, by way of consolidation, subdivision, reduction or return), all rights of the Holder of a Performance Right are to be changed in a manner consistent with the Corporations Act and the ASX Listing Rules at the time of the reorganisation.

    • (Dividend and Voting Rights): A Performance Right does not confer upon the Holder an entitlement to vote or receive dividends.

    • (No rights on winding up or reduction of capital): A Performance Right does not entitle the holder to any return of capital or to participate in the surplus profits or assets of the Company upon winding up of the Company, a reduction of capital or otherwise.

    • (No other rights) A Performance Right gives the Holders no rights other than those expressly provided by these terms and those provided at law where such rights at law cannot be excluded by these terms.

    • Tel: [phone]

      Fax: [phone]

      www.bdo.com.au

      38 Station Street

      Subiaco, WA 6008

      PO Box 700 West Perth WA 6872 Australia

      Mr David Sadgrove Minbos Resources Limited

      Unit 1, 245 Churchill Avenue

      SUBIACO WA 6008

      8 June 2017

      Dear David

      VALUATION OF SOFOSA PERFORMANCE RIGHTS

      Background

      Minbos Resources Limited ('Minbos' or 'the Company') has requested that BDO Corporate Finance (WA) Pty Ltd ('BDO') complete a valuation of the new SOFOSA Performance Rights (the 'Rights') to be issued as part of a merger ('the Merger') with its joint venture partner Petril Phosphates Limited ('Petril') for input into a Notice of Meeting.

      Valuation date

      The Rights are pending shareholder approval so we have adopted 7 June 2017 as the valuation date.

      Consideration

      No consideration will be payable upon vesting of the Rights.

      Vesting conditions

      The Rights will convert to Minbos shares once the following milestones are satisfied:

      • Tranche 1 being 178,372,482 Rights (these performance rights lapse on 27 January 2018):

        • the Company's existing Cabinda exploration permit is replaced by the Angolan Government with new exploration permits;

        • SOFOSA agreeing to transfer 100% of its securities that it currently holds in the capital of Mongo Tando Ltda;

        • the Merger between the Company and Petril is progressed and supported via a letter of support from SOFOSA to the Company on a SOFOSA letterhead which sets out the terms on which SOFOSA supports the Merger; and

      BDO Corporate Finance (WA) Pty Ltd ABN 27 124 031 045 AFS Licence No 316158 is a member of a national association of independent entities which are all members of BDO Australia Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Corporate Finance (WA) Pty Ltd and BDO Australia Ltd are members of BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of in dependent member firms. Liability limited by a scheme approved under Professional Standards Legislation, other than for the acts or omissions of financial services licensees.

      • Tranche 2 being 59,457,494 Rights (these performance rights lapse on 27 January 2019):

      o Minbos is granted a mining licence over the Cacata Project area (provided that this is granted pursuant to SOFOSA's assistance).

      Methodology

      No adjustment is made to the fair value at grant date for Rights with non-market based vesting conditions (i.e. a production milestone). Instead, vesting conditions are taken into account by adjusting the number of equity instruments to which the value is applied.

      Under this scenario, given that the Rights have been issued for no consideration and with no exercise price, the value of the Rights is reflected in the closing price of Minbos at the valuation date. Variable inputs used in traditional option valuation models (i.e. Black Scholes) such as implied share price volatility, the risk free interest rate and life of the right have no impact on the value of the Rights so long as the underlying asset does not pay a dividend.

      Valuation

      We are not aware of any market based performance hurdles that must be achieved that would otherwise potentially dilute the value of the Rights to the holder on the assumption that they may not vest.

      Accordingly, the closing price of Minbos on 7 June 2017 was $0.0065 so the value of these rights is below:

      Tranche	Rights	Value per right	Tranche value
      Tranche 1	178,372,482	$0.0065	$1,159,421

      Tranche 2 59,457,494 $0.0065 $386,474

      Yours faithfully

      BDO Corporate Finance (WA) Pty Ltd

      Adam Myers

      Director

      2

      MINBOS RESOURCES LIMITED | ABN 93 141 175 493

      GM Registration Card

      Holder Number: Vote by Proxy

      MINBOS RESOURCES LIMITED Independent Expert's Report OPINION: NOT FAIR BUT REASONABLE

      28 June 2017

      Financial Services Guide

      28 June 2017

      BDO Corporate Finance (WA) Pty Ltd ABN 27 124 031 045 ('we' or 'us' or 'ours' as appropriate) has been engaged by Minbos Resources Limited ('Minbos') to provide an independent expert's report on the proposal to merge with its Angolan joint venture partner Petril Phosphates Limited ('Petril'). You will be provided with a copy of our report as a retail client because you are a shareholder of Minbos.

      Financial Services Guide

      In the above circumstances we are required to issue to you, as a retail client, a Financial Services Guide ('FSG'). This FSG is designed to help retail clients make a decision as to their use of the general financial product advice and to ensure that we comply with our obligations as financial services licensees.

      This FSG includes information about:

      • Who we are and how we can be contacted;

      • The services we are authorised to provide under our Australian Financial Services Licence, Licence No. 316158;

      • Remuneration that we and/or our staff and any associates receive in connection with the general financial product advice;

      • Any relevant associations or relationships we have; and

      • Our internal and external complaints handling procedures and how you may access them.

      Information about us

      BDO Corporate Finance (WA) Pty Ltd is a member firm of the BDO network in Australia, a national association of separate entities (each of which has appointed BDO (Australia) Limited ACN 050 110 275 to represent it in BDO International). The financial product advice in our report is provided by BDO Corporate Finance (WA) Pty Ltd and not by BDO or its related entities. BDO and its related entities provide services primarily in the areas of audit, tax, consulting and financial advisory services.

      We do not have any formal associations or relationships with any entities that are issuers of financial products. However, you should note that we and BDO (and its related entities) might from time to time provide professional services to financial product issuers in the ordinary course of business.

      Financial services we are licensed to provide

      We hold an Australian Financial Services Licence that authorises us to provide general financial product advice for securities to retail and wholesale clients.

      When we provide the authorised financial services we are engaged to provide expert reports in connection with the financial product of another person. Our reports indicate who has engaged us and the nature of the report we have been engaged to provide. When we provide the authorised services we are not acting for you.

      General Financial Product Advice

      We only provide general financial product advice, not personal financial product advice. Our report does not take into account your personal objectives, financial situation or needs. You should consider the appropriateness of this general advice having regard to your own objectives, financial situation and needs before you act on the advice.

      BDO CORPORATE FINANCE (WA) PTY LTD

      Financial Services Guide

      Page 2

      Fees, commissions and other benefits that we may receive

      We charge fees for providing reports, including this report. These fees are negotiated and agreed with the person who engages us to provide the report. Fees are agreed on an hourly basis or as a fixed amount depending on the terms of the agreement. The fee payable to BDO Corporate Finance (WA) Pty Ltd for this engagement is approximately $21,000.

      Except for the fees referred to above, neither BDO, nor any of its directors, employees or related entities, receive any pecuniary benefit or other benefit, directly or indirectly, for or in connection with the provision of the report.

      Other Assignments

      BDO Audit (WA) Pty Ltd is the appointed Auditor of Minbos Resources Limited. We do not consider that this impacts on our independence in accordance with the requirements of Regulatory Guide 112 'Independence of Experts'. We have completed a conflict search of BDO affiliated organisations within Australia. This conflict search incorporates all Partners, Directors and Managers of BDO affiliated organisations. We are not aware of any circumstances that, in our view, would constitute a conflict of interest or would impair our ability to provide objective assistance in this matter. BDO Audit (WA) Pty Ltd has performed work for Minbos Resources Limited over the past two years for a collective fee of

      $65,480.

      BDO Corporate Finance (WA) Pty Ltd has performed work in relation to independent expert's reports in the past two years. Our total fee for work provided was $24,696.

      Remuneration or other benefits received by our employees

      All our employees receive a salary. Our employees are eligible for bonuses based on overall productivity but not directly in connection with any engagement for the provision of a report. We have received a fee from Minbos for our professional services in providing this report. That fee is not linked in any way with our opinion as expressed in this report.

      Referrals

      We do not pay commissions or provide any other benefits to any person for referring customers to us in connection with the reports that we are licensed to provide.

      Complaints resolution

      Internal complaints resolution process

      As the holder of an Australian Financial Services Licence, we are required to have a system for handling complaints from persons to whom we provide financial product advice. All complaints must be in writing addressed to The Complaints Officer, BDO Corporate Finance (WA) Pty Ltd, PO Box 700 West Perth WA 6872.

      When we receive a written complaint we will record the complaint, acknowledge receipt of the complaint within 15 days and investigate the issues raised. As soon as practical, and not more than 45 days after receiving the written complaint, we will advise the complainant in writing of our determination.

      Referral to External Dispute Resolution Scheme

      A complainant not satisfied with the outcome of the above process, or our determination, has the right to refer the matter to the Financial Ombudsman Service ('FOS'). FOS is an independent organisation that has been established to provide free advice and assistance to consumers to help in resolving complaints relating to the financial service industry. FOS will be able to advise you as to whether or not they can be of assistance in this matter. Our FOS Membership Number is 12561.

      Further details about FOS are available at the FOS website www.fos.org.au or by contacting them directly via the details set out below.

      Financial Ombudsman Service GPO Box 3

      Melbourne VIC 3001

      Toll free: 1300 78 08 08

      Facsimile: [phone] Email: [e-mail]

      Contact details

      You may contact us using the details set out on page 1 of the accompanying report.

      TABLE OF CONTENTS

    • Introduction 1

    • Summary and Opinion 2

    • Scope of the Report 5

    • Outline of the Transaction 8

    • Profile of Minbos 15

    • Profile of Petril 22

    • Economic analysis 28

    • Industry analysis 31

    • Valuation approach adopted 34

    • Valuation of Minbos prior to the Transaction 36

    • Valuation of a Minbos share in the Merged Entity following the Transaction 46

    • Is the Transaction fair? 52

    • Is the Transaction reasonable? 53

    • Conclusion 57

    • Sources of information 58

    • Independence 58

    • Qualifications 59

    • Disclaimers and consents 59

    • Appendix 1 - Glossary and copyright notice Appendix 2 - Valuation Methodologies

      Appendix 3 - Independent Valuation Reports prepared by Coffey Pty Ltd

      © 2017 BDO Corporate Finance (WA) Pty Ltd

      28 June 2017

      The Directors

      Minbos Resources Limited Suite 1, 245 Churchill Avenue

      SUBIACO WA 6008

      Dear Directors

      INDEPENDENT EXPERT'S REPORT

    • Introduction

      On 5 December 2016 Minbos Resources Limited ('Minbos' or 'the Company') announced it had entered into a non-binding term sheet with joint venture partner Petril Phosphates Limited ('Petril') to merge the two companies (the 'Merger' resulting in the 'Merged Entity') in an all script and royalty based transaction. The Merged Entity will control 100% of the Cabinda phosphate project ('Cabinda Project') located in Angola. On 17 May 2017, the Company announced the signing of a definitive binding Share Sale Agreement ('SSA') to acquire 100% of Petril.

      As consideration for the Merger, Minbos will issue the following:

      • 2,073,547,651 ordinary Minbos shares ('Consideration Shares') to Petril shareholders ('Petril Shareholders' or the 'Vendors'). This is the same number of Minbos shares on issue as at 5 December 2016 (the date of the announcement of the Merger). The balance of these shares can be adjusted to ensure that on completion of the Merger, the Vendors shall hold (or be entitled to hold) an equity interest equal to 50% of the undiluted share capital of the Company.

        To achieve this 50% equity interest, Minbos will also issue:

      • Up to 384,958,009 shares (the 'Conditional Shares') (to be determined by the working capital settlement in clause 6 of the SSA); and

      • 237,829,976 performance rights to Petril Shareholders ('Cabinda Performance Rights').

        Additionally, Minbos will issue 300,000,000 performance rights to Paramount Global Group Inc. (a Petril shareholder) ('Lucunga Performance Rights') and at settlement of the Transaction grant a royalty by Vale Fertil Ltd to the Vendors for consideration of the Lucunga phosphate project ('Lucunga Project') ('Lucunga Royalty').

        The issue of the Consideration Shares, Conditional Shares, Cabinda Performance Rights, Lucunga Performance Rights, Lucunga Royalty and the additional details described in section 4 for the consideration of Petril is collectively referred to as the Transaction ('the Transaction').

        BDO Corporate Finance (WA) Pty Ltd ABN 27 124 031 045 AFS Licence No 316158 is a member of a national association of independent entities which are all members of BDO (Australia) Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Corporate Finance (WA) Pty Ltd and BDO (Australia) Ltd are members of BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation (other than for the acts or omissions of financial services licensees) in each State or Territory other than Tasmania.

        Minbos' largest shareholder, Green Services Innovations Ltd ('Green Services'), currently owns 45.8% of the Company. Green Services is also a shareholder of Petril so the issue of shares arising from the Transaction to Petril Shareholders (which includes Green Services) will increase the Vendors collective holding in Minbos from 45.80% to a maximum of 74.46% pursuant to the issue of the Consideration Shares and Conditional Shares plus any rights which vest from the issue of the Cabinda Performance Rights and Lucunga Performance Rights.

        Accordingly, the acquisition of Petril requires shareholder approval which will be sought under Section 611 Item 7 of the Corporations Act 2001 (Cth) ('Corporations Act' or the 'Act') as the Vendors voting power in the Company is increasing from a starting point above 20% and below 90%.

        Additionally, shareholder approval and this independent expert's report ('our Report') is also required under Australian Securities Exchange ('ASX') Listing Rule 10.1 for the acquisition of a substantial asset from a substantial holder of the Company (being Green Services).

    • Summary and Opinion

    • Purpose of the report

      The directors of Minbos have requested that BDO Corporate Finance (WA) Pty Ltd ('BDO') prepare our Report to express an opinion as to whether or not the Transaction is fair and reasonable to the non- associated shareholders of Minbos ('Shareholders').

      Our Report is prepared pursuant to section 611 of the Corporations Act and ASX Listing Rule 10.1 and is to be included in the Explanatory Memorandum for Minbos in order to assist the Shareholders in their decision whether to approve the Transaction.

    • Approach

      Our Report has been prepared having regard to Australian Securities and Investments Commission ('ASIC') Regulatory Guide 74 'Acquisitions Approved by Members' ('RG 74'), Regulatory Guide 111 'Content of Expert's Reports' ('RG 111') and Regulatory Guide 112 'Independence of Experts' ('RG 112').

      In arriving at our opinion, we have assessed the terms of the Transaction as outlined in the body of this report. We have considered:

    • How the value of a Minbos share on a control basis prior to the Transaction compares to the value of a share in the Merged Entity on a minority basis following the Transaction;

    • Other factors which we consider to be relevant to the Shareholders in their assessment of the Transaction; and

    • The position of Shareholders should the Transaction not proceed.

    • Opinion

      We have considered the terms of the Transaction as outlined in the body of this report and have concluded that the Transaction is not fair but reasonable to the Shareholders.

      We have determined that the Transaction is not fair because the value of a Minbos share post completion of the Transaction on a minority basis is lower than the value of a Minbos share prior to the Transaction on a control basis.

      However, we consider the Transaction to be reasonable due to significant advantages that the Transaction will bring to the Company. In particular, we consider the Transaction provides shareholders of the Merged Entity with 100% control of the Cabinda Project.

    • Fairness

      In section 12 we compare the value of a Minbos share on a control basis prior to the Transaction against the value of a share in the Merged Entity on a minority basis following the Transaction as detailed below.

      Ref

      Low

      cents

      Preferred

      cents

      High

      cents

      Value of a Minbos share prior to the Transaction (control basis)

      10.1 0.636 0.814 1.353

      Value of a share in the Merged Entity following the Transaction (minority interest basis)

      11.1 0.499 0.713 1.219

      Source: BDO analysis

      The above valuation ranges are graphically presented below:

      Valuation Summary

      Value of a Minbos share prior to the Transaction on a control

      basis

      Value of a share in the Merged Entity following the Transaction on a minority basis

      0.00 0.50 1.00 1.50

      Value (cents)

      The above pricing indicates that, in the absence of any other relevant information, the Transaction is not fair for Shareholders.

    • Reasonableness

    • We have considered the analysis in section 13 of this report, in terms of both

      • advantages and disadvantages of the Transaction; and

      • other considerations, including the position of Shareholders if the Transaction does not proceed and the consequences of not approving the Transaction.

        In our opinion, the position of Shareholders if the Transaction is approved is more advantageous than the position if the Transaction is not approved. Accordingly, in the absence of any other relevant information, we believe that the Transaction is reasonable for Shareholders.

        The respective advantages and disadvantages considered are summarised below:

        ADVANTAGES AND DISADVANTAGES

        Section

        Advantages

        Section Disadvantages

        13.4.1 100% control of the Cabinda Project 13.5.1 The Transaction is not fair

        13.4.2

        The Transaction is predominantly script

        consideration

        13.5.2

        Dilution of existing Shareholders' interests

        13.4.3 The Merged Entity will hold the other

        existing assets of Petril contributing to a larger pool of assets which will give the Company greater flexibility to divest or develop a number of projects

        13.4.4

        Increased market capitalisation to

        improve equity capital market and debt funding opportunities

        13.4.5 Enhance development schedules

        13.4.6

        The Transaction is a merger of two

        similar sized entities with equal board representation in the merged entity

        13.4.7 Potential for synergies by being a single entity

        13.4.8

        Performance rights provide an incentive

        to increase Minbos' value

        Other key matters we have considered include:

        Section Description

      • Alternative proposal

      • Practical level of control

      • 13.3 Consequences of not approving the transaction

      • Scope of the Report

      • Purpose of the Report

        ASX Listing Rule 10.1

        ASX Listing Rule 10.1 requires that a listed entity must obtain shareholders' approval before it acquires or disposes of a substantial asset, when the consideration to be paid for the asset or the value of the asset being disposed constitutes more than 5% of the equity interest of that entity at the date of the last audited accounts.

        ASX Listing Rule 10.1 applies where the vendor or acquirer of the relevant assets is a substantial holder of the listed entity. Mr Jorge Marques controls Green Services and holds a relevant interest in the Company of 45.8% and is therefore a substantial holder for the purpose of ASX Listing Rule 10.1. The Merger of Petril and Minbos therefore results in an acquisition of a substantial asset from a substantial holder of the Company. As such, Minbos is required to seek Shareholder approval under ASX Listing Rule 10.1.

        Listing Rule 10.10.2 requires the Notice of Meeting for shareholders' approval to be accompanied by a report by an independent expert expressing their opinion as to whether the Transaction is fair and reasonable to the shareholders whose votes are not to be disregarded.

        Accordingly, an independent expert's report is required for the Transaction. The report should provide an opinion by the expert stating whether or not the terms and conditions in relation thereto are fair and reasonable to non-associated shareholders of Minbos.

        Section 611 of the Act and Merger of Equals

        Green Services owns 1,126,002,175 shares or 45.80% of the Company and is a shareholder of Petril. Section 606 of the Corporations Act expressly prohibits the acquisition of further shares by a party who already holds (with associates) more than 20% of the issued shares of a public company, unless an exception set out in section 611 of the Corporations Act applies.

        Section 611 of the Corporations Act permits such an acquisition if the shareholders of that entity have agreed to the issue of such shares. This agreement must be by resolution passed at a general meeting at which no votes are cast in favour of the resolution by any party who is associated with the party acquiring the shares, or by the party acquiring the shares. Section 611 states that shareholders of the company must be given all information that is material to the decision on how to vote at the meeting. A key matter to consider in determining the scope of our Report is whether the Transaction is a control transaction.

        In addition to section 611 of the Act, RG111.31 states that the expert may need to assess a scrip takeover as a merger of entities of equivalent value when control of the merged entity is shared equally between the bidder and the target. Whilst the Transaction may be characterised as a 'Merger of Equals', we consider the Transaction to be a control transaction for the following reasons:

    • the Vendors interest in the Company will increase from 45.80% to an approximate combined interest of between 70.41% and up to 74.46% of the issued capital in the Merged Entity; and

    • the difference between the net assets of the Company and the net assets of Petril to be acquired post completion of the Transaction. Our analysis of the comparison between the assets contributed by Minbos and Petril compared to the portion of equity owned following the Transaction (refer to section 13.4.3) varies sufficiently to conclude that this is not a 'Merger of Equals'.

      RG 74 states that the obligation to supply shareholders with all information that is material can be satisfied by the non-associated directors of Minbos, by either:

    • undertaking a detailed examination of the Transaction themselves, if they consider that they have sufficient expertise, experience and resources; or

    • by commissioning an Independent Expert's Report.

      The directors of Minbos have commissioned this Independent Expert's Report to satisfy this obligation.

    • Regulatory guidance

      Neither the Listing Rules nor the Corporations Act defines the meaning of 'fair and reasonable'. In determining whether the Transaction is fair and reasonable, we have had regard to the views expressed by ASIC in RG 111. This regulatory guide provides guidance as to what matters an independent expert should consider to assist security holders to make informed decisions about transactions.

      This regulatory guide suggests that where the transaction is a control transaction, the expert should focus on the substance of the control transaction rather than the legal mechanism to effect it. RG 111 suggests that where a transaction is a control transaction, it should be analysed on a basis consistent with a takeover bid.

      In our opinion, the Transaction is a control transaction as defined by RG 111 and we have therefore assessed the Transaction as a control transaction to consider whether, in our opinion, it is fair and reasonable to Shareholders.

      In determining whether the advantages of the Transaction outweigh the disadvantages, we have had regard to the views expressed by ASIC in RG 111. This Regulatory Guide suggests that an opinion as to whether the advantages of a transaction outweigh the disadvantages should focus on the purpose and outcome of the transaction, that is, the substance of the transaction rather than the legal mechanism used to effect it.

      RG 111 suggests that an expert should assess whether a premium for control will be provided to the vendor of any shares. The greater any premium for control then the greater the advantages of undertaking the transaction must be to non-associated shareholders.

      RG 111 sets out that the expert should inquire whether further transactions are planned between the entity, the vendor or their associates and if any are contemplated determine if these are at arm's length. RG 111 also suggests that an expert should consider whether the transaction will deter the making of a takeover bid.

    • Adopted basis of evaluation

    • RG 111 states that a transaction is fair if the value of the offer price or consideration is equal to or greater than the value of the securities subject of the offer. This comparison should be made assuming a knowledgeable and willing, but not anxious, buyer and a knowledgeable and willing, but not anxious, seller acting at arm's length.

      When considering the value of the securities subject of the offer in a control transaction it is inappropriate for the expert to apply a discount on the basis that the shares being acquired represent a minority or portfolio interest as such the expert should consider this value inclusive of a control premium. Further to this, RG 111 states that a transaction is reasonable if it is fair. It might also be reasonable if

      despite being 'not fair' the expert believes that there are sufficient reasons for security holders to accept the offer in the absence of any alternative options.

      Having regard to the above, BDO has completed this comparison in two parts:

    • A comparison between the value of a Minbos share on a control basis prior to the Transaction and the value of a share in the Merged Entity on a minority basis following the Transaction (fairness - see Section 12 'Is the Transaction Fair?'); and

    • An investigation into other significant factors to which Shareholders might give consideration, prior to approving the resolution, after reference to the value derived above (reasonableness - see Section 13 'Is the Transaction Reasonable?').

      Under RG111.31 we are required to assess the value of a Minbos share prior to the Transaction on a control basis and the value of a share in the Merged Entity following the Transaction on a minority basis.

      This assignment is a Valuation Engagement as defined by Accounting Professional & Ethical Standards Board professional standard APES 225 'Valuation Services' ('APES 225').

      A Valuation Engagement is defined by APES 225 as follows:

      'an Engagement or Assignment to perform a Valuation and provide a Valuation Report where the Valuer is free to employ the Valuation Approaches, Valuation Methods, and Valuation Procedures that a reasonable and informed third party would perform taking into consideration all the specific facts and circumstances of the Engagement or Assignment available to the Valuer at that time.'

      This Valuation Engagement has been undertaken in accordance with the requirements set out in APES 225.

    • Outline of the Transaction

      Announcement of the Transaction

      On 5 December 2016 Minbos entered into a non-binding term sheet with joint venture partner Petril to acquire the issued capital of Petril in a scrip and royalty based transaction. We also note that Minbos has subsequently entered into an SSA with Petril on 16 May 2017 which has replaced the non-binding term sheet.

      In exchange for 100% of the issued capital of Petril, Minbos will issue the same amount of shares on issue at 5 December 2016 to the Vendors. Both Petril and Minbos hold a 50% stake in Mongo Tando Limited BVI ('Mongo Tando'), which has a 100% interest in Mongo Tando Ltda (Angola) ('MTL'), the company in which the rights to the Cabinda Project are held. Completion of the Transaction will result in the Merged Entity holding a 100% interest in the Cabinda Project.

      Subsequent event post announcement of the Transaction

      On 7 December 2016, Minbos' largest shareholder, Green Services, exercised 384,958,009 options at $0.01 each to raise $3.85 million before costs. Under the terms of the Merger, a completion adjustment will be made to the net working capital of both Minbos and Petril so that that the Vendors will be entitled to receive the same amount of options that were exercised on 7 December 2016 in shares to avoid the dilutionary effect as a result of the exercised options (refer to Conditional Shares under the consideration below). The price paid for these shares will be calculated by the completion adjustment (refer to the completion adjustment under the major commercial terms below for additional information).

      Consideration for the acquisition of Petril

      The Vendors will receive the following consideration for the acquisition of Petril:

    • 2,073,547,651 Consideration Shares;

    • 237,829,976 Cabinda Performance Rights. The Cabinda Performance Rights are to be issued to match the 237,829,976 Sociedade De Fosfatos De Angola ('SOFOSA') performance rights ('SOFOSA Performance Rights') currently held by SOFOSA (or to be renewed as part of the Transaction and requiring shareholder approval). Both the SOFOSA Performance Rights and the Cabinda Performance Rights will convert to shares once the following milestones are satisfied:

      • Tranche 1 being 178,372,482 SOFOSA Performance Rights and 178,372,482 Cabinda Performance Rights (these performance rights lapse on 27 January 2018):

        • the Company's existing Cabinda exploration permit is replaced by the Angolan Government with new exploration permits;

        • SOFOSA agreeing to transfer 100% of its securities that it currently holds in the capital of MTL;

        • the Merger between the Company and Petril is progressed and supported via a letter of support from SOFOSA to the Company on a SOFOSA letterhead which sets out the terms on which SOFOSA supports the Merger; and

      • Tranche 2 being 59,457,494 SOFOSA Performance Rights and 59,457,494 Cabinda Performance Rights (these performance rights lapse on 27 January 2019):

        • The Company is granted a mining licence over the Cacata Project (refer to section 5.2) area (provided that this is granted pursuant to SOFOSA's assistance).

    • the Conditional Shares (as defined in point (f) below); and

    • the issue of 300,000,000 Lucunga Performance Rights to Paramount Global Group Inc. (a Petril shareholder) which will convert into Minbos shares subject to the following being satisfied:

      • Completion of the Merger; and

      • Renewal of all the Lucunga Project (refer to section 6.2) concessions for a 20 year period with this condition being satisfied on first renewal notwithstanding the review every 5 years according to the Angolan mineral laws.

      • The Lucunga Performance Rights will lapse if these conditions have not been satisfied by the date which is five years from the date of issue.

        (the Consideration Shares, Cabinda Performance Rights, the Conditional Shares (as defined in point (f) below and the Lucunga Performance Rights together form the 'Consideration Securities');

    • the grant of the Lucunga Royalty by Vale Fertil Ltd to the Vendors for consideration of the Lucunga Project. Petril now owns approximately 80% of the Lucunga Project and Haifa Chemicals Ltd owns the remaining 20%. On completion of the Transaction, Minbos will offer to acquire Haifa Chemicals Ltd's interest in the Lucunga Project in exchange for the provision of the Lucunga Royalty. The Lucunga Royalty is calculated by:

      • multiplying the applicable royalty rate (as detailed in the table below) by the phosphate rock volume and Phosphate Rock Margin ('PRM'); and

      • the royalty rate is dependent upon the phosphate rock margin (as shown in the table below):

        Phosphate rock margin	Royalty rate
        PRM	0%

        PRM $0/t to

        PRM >$80/t to >=130t 27%

        PRM >$130 33%

        o The royalty rate will be payable on any phosphate product produced and sold from the Lucunga Project attributable to the project interest acquired by Minbos. The royalty will be payable for 15 years from the date of first sales of product; and

    • subject to completion of the Transaction, Minbos has agreed to grant the Vendors the right to subscribe for 384,958,009 Conditional Shares to be determined by the completion adjustment to match the number of options which were exercised by Green Services on 7 December 2016.

    • Major commercial terms

      The following major commercial terms also apply:

      • Subject to completion of the Transaction, an adjustment will be made by subtracting the net working capital of Minbos from the net working capital of Petril (excluding the net cash of Mongo Tando). The working capital settlement also includes a provision for Minbos to pay some historical cash calls of US$179,000 and the termination payments of Petril consultants as a result of the Merger. Where the result is a positive figure, this amount will be paid by the company to the Vendors and where the result is a negative amount, this will be paid by the Vendors to the Company (the 'Completion Adjustment'). If the Completion Adjustment requires payment by the Vendors to the Company, the issue of the Conditional Shares will be conditional on the Vendors making that payment. Minbos will only issue the Conditional Shares to the Vendors who make payment of their respective proportion of the Completion Adjustment. The purpose of the Completion Adjustment is to ensure an even 50/50 division of working capital post completion of the Transaction;

      • In the event that either party terminates the Transaction for reason of breach of certain warranties or material default under the agreement by the other party, the party in default or breach of the agreement must pay to the non-defaulting party a sum of $200,000;

      • Also, if within 12 months of completion of the Transaction, any entity associated with Petril completes a sale of a direct or indirect interest in the Lucunga Project which involves a cash payment to any of those parties, the Company must procure that 25% of the cash payment is distributed to the Vendors; and

      • Minbos and SOFOSA have agreed to cancel the existing (and recently expired) SOFOSA Performance Rights and subject to shareholder approval, the Company is seeking to replace these performance rights with 237,829,976 replacement performance rights ('Replacement Performance Rights') which have the same conditions as the Cabinda Performance Rights in section (b) above.

        Board composition

        Minbos' current board consists of four non-executive directors and a non-executive chairman. The Transaction will restructure the board so there will be two directors of Minbos and two directors from Petril with an independent chairman to be determined by the Merged Entity.

        The proposed board of director's post completion of the Transaction are:

      • Mr Peter Wall (current Minbos Non-Executive Chairman);

      • Mr Domingos Catulichi (current Minbos Non-Executive Director);

      • Mr William Oliver (current Minbos Non-Executive Director); and

      • Mr Yehoshua Raz (Petril representative).

        Petril and the Vendors have nominated that Mr William Oliver will represent their interests on the Board and they may seek to replace him with another nominated director in the future.

        Conditions precedent

        Broadly, the conditions precedent are:

      • completion of due diligence on Petril and its projects (by and to the satisfaction of the Company) and on the Company and its projects (by and to the satisfaction of the Vendors);

      • approval of the Transaction by the Shareholders at a general meeting;

      • the Company obtaining all necessary regulatory approvals pursuant to the ASX Listing Rules, Corporations Act or any other law to allow Minbos to lawfully complete the Transaction and satisfying all other requirements of the ASX;

      • the transfer of the shares that SOFOSA and Terra Fertil Ltd holds in Mongo Tando Ltda to Mongo Tando Ltd; and

      • the Vale Fertil trustees transferring all the shares that it holds in Vale Fertil Ltda to Vale Fertil Ltd.

        Further details regarding the conditions precedent can be found in the notice of meeting.

        The current asset ownership is displayed below:

        The proposed merged assets post completion of the Transaction is displayed below (the ~50% split in the diagram below assumes that the Conditional Shares will be issued to the Vendors):

        Capital structure of the Merged Entity

        Set out below are the capital structures of the Merged Entity. Section a) illustrates the capital structure of the Merged Entity if the Vendors do not make payment of the Completion Adjustment and do not receive any Conditional Shares. Section b) illustrates the capital structures if Petril Shareholders make full payment of the Completion Adjustment and receive all the Conditional Shares.

      • Capital structure if the Conditional Shares are not issued

        The following table shows the capital structure of the Merged Entity post completion of the Transaction and assuming that the Vendors do not make payment of the Completion Adjustment so no Conditional Shares are issued.

        Transaction	Scenario 1 (no issue of Conditional Shares) Vendors interest Vendors interest Shares in total shares % (incl. Green (incl. Green Services) Services)
        Current Minbos shares on issue as at 5 December 2016	2,073,547,651	741,044,166
        Options exercised by Green Services on 7 December 2016	384,958,009	384,958,009
        Total Minbos shares on issue 7 December 2016	2,458,505,660	1,126,002,175	45.80%
        Shares issued to the Vendors
        Consideration Shares	2,073,547,651	2,073,547,651
        Issue of Conditional Shares	-	-
        Total Minbos shares on issue including the Consideration Shares	4,532,053,311	3,199,549,826	70.60%
        Lucunga Performance Rights	300,000,000	300,000,000
        Total shares on issue after Lucunga Performance Rights vest	4,832,053,311 3,499,549,826		72.42%
        SOFOSA Performance Rights convert*	237,829,976-
        Cabinda Performance Rights convert	237,829,976 237,829,976
        Total shares after performance rights conversion	5,307,713,263	3,737,379,802	70.41%

        * The SOFOSA Performance Rights will be issued to a third party who is not associated with the Vendors

        Source: BDO analysis

        As detailed in the capital structure above, the minimum Vendors shareholding in the Merged Entity post completion of the Transaction will increase from 45.80% to 70.60% assuming that the Lucunga Performance Rights, SOFOSA Performance Rights and the Cabinda Performance Rights do not vest and no Conditional Shares are issued.

      • Capital structure if the Conditional Shares are issued

      • We have also displayed the capital structure of the Merged Entity post completion of the Transaction and assuming that Petril Shareholders make full payment of the Completion Adjustment and receive all the Conditional Shares.

        Transaction	Scenario 2 (issue of Conditional Shares) Vendors interest Vendors interest Shares in total shares % (incl. Green (incl. Green Services) Services)
        Current Minbos shares on issue as at 5 December 2016	2,073,547,651	741,044,166
        Options exercised by Green Services on 7 December 2016	384,958,009	384,958,009
        Total Minbos shares on issue 7 December 2016	2,458,505,660	1,126,002,175	45.80%
        Shares issued to the Vendors
        Consideration Shares	2,073,547,651	2,073,547,651
        Issue of Conditional Shares	384,958,009	384,958,009
        Total Minbos shares on issue incl. Consideration Shares and Conditional Shares	4,917,011,320	3,584,507,835	72.90%
        Lucunga Performance Rights	300,000,000	300,000,000
        Total shares on issue after Lucunga Performance Rights vest	5,217,011,320 3,884,507,835		74.46%
        SOFOSA Performance Rights convert*	237,829,976-
        Cabinda Performance Rights convert	237,829,976 237,829,976
        Total shares after performance rights conversion	5,692,671,272	4,122,337,811	72.41%

        * The SOFOSA Performance Rights will be issued to a third party who is not associated with the Vendors

        Source: BDO analysis

        The Vendors maximum shareholding in the Merged Entity can increase to 74.46% assuming that the Petril Shareholders make full payment of the Completion Adjustment so all the Conditional Shares are issued and if the Lucunga Performance Rights vest however, no SOFOSA Performance Rights or Cabinda Performance Rights vest.

    • Profile of Minbos

    • History

      Minbos was incorporated on 17 December 2009 and proceeded to be listed on the ASX on 18 October 2010.

      Minbos is an exploration and development company that is focused on phosphate ore within the Cabinda Province of Angola and adjoining areas of far western Democratic Republic of Congo ('DRC'). The Company currently explores over 400,000 hectares of prospective phosphate ground in the Congo Basin running from Cabinda, Angola to Western DRC.

      Minbos has two projects, the Cabinda Project in Angola and the Kanzi phosphate project ('Kanzi Project') in the DRC. The current corporate structure of the Company is displayed below:

      The Company's current board members and senior management are set out below:

      • Mr Peter Wall - Non-Executive Chairman;

      • Mr Damian Black - Non-Executive Director;

      • Ms Dganit Baldar - Non-Executive Director;

      • Mr Domingos Catulichi - Non-Executive Director;

      • Mr William Oliver - Non-Executive Director;

      • Mr Lindsay Reed - Chief Executive Officer;

      • Mr David Sadgrove - Chief Financial Officer & Company Secretary;

      • Mr Mike Erwin - General Manager Marketing & Sales; and

      • Rebecca Morgan - Manager Business Development and Geology.

        On 30 January 2015 the Company announced that it had secured a strategic partnership with SOFOSA in relation to the Cabinda Project. SOFOSA's services in relation to this agreement include:

      • management of government and community relations;

      • management of the mine licence application process for Cabinda;

      • assistance in gaining general environmental and project approvals; and

      • ensuring compliance with the legal and regulatory requirements of Angola.

        As consideration for SOFOSA's services, Minbos will pay $15,000 United States dollars ('US$') per month. Additionally, Minbos issued SOFOSA with two separate classes of Performance Rights which are convertible up to a total of 237,829,976 shares in Minbos. The terms and conditions of these Performance Rights can be found in Section 4 of this report.

        On 31 March 2015 Minbos announced it had received commitments to raise $890,000 through the issuance of 178,000,000 shares to sophisticated and professional investors. The funds are to be used to progress technical and commercial aspects of the Cabinda Project as well as for general working capital purposes.

        Minbos completed a capital placement of 680,363,703 shares at $0.005 per share to Green Services on 19 February 2016. This placement raised $3.4 million for the Company and is being used to the fund the Bankable Feasibility Study ('BFS') on the Cabinda Project and for working capital. This capital placement was conducted in two tranches:

      • Tranche 1 consisted of the issue of 268,000,000 shares at $0.005 per share which raised $1.3 million. These shares were issued on 23 February 2016; and

      • Tranche 2 consisted of 412,363,703 shares at $0.005 per share which raised $2.1 million. These shares were issued on 17 May 2016. 384,958,009 options with an exercise price of $0.01 per option and expiry date of 30 December 2016 were also issued on this date.

        The Company also appointed Ms Dganit Baldar to the Minbos board following Green Service's right to nominate a director to the board of directors.

        On 7 December 2016, Minbos' largest shareholder Green Services exercised the 384,958,009 options that were issued in tranche 2 above at $0.01 per option to raise $3.85 million before costs.

    • Projects

      Set out below is a description of each of the Company's projects.

      Cabinda Project

      The Cabinda Project is located in the Cabinda province, in the Republic of Angola. The Cabinda Project includes an exploration permit covering a 1,909km² area which encompasses all the known phosphate occurrences in the Cabinda province. Minbos holds a 50% interest in the Cabinda Project, through a 50% interest in Mongo Tando Ltd ('MTL'), with joint venture partner Petril having an interest in the other 50%.

      The Cabinda Project comprises of one development project, Cacata, and five exploration projects; Mongo Tando, Chibuete, Ueca, Chivovo and Cambota. The Cacata Project is located approximately 60km from the new port, Porto de Caio. Phase one of the new port will be completed towards the end of 2017.

      Minbos and Petril have commenced work on the Cabinda Project BFS and completed the bulk sampling on the Cacata deposit in June 2016. A contract to deliver the BFS has been awarded to Ausenco Limited who

      has divided the scope into 2 stages. Stage 1 involves the completion of a trade-off study to reflect the beneficiation route that will optimise the whole of resource outcome for the Cacata deposit. Stage 2 will provide a +/- 15% estimate for capital and operating costs for the Cabinda Project.

      On 5 August 2016, Minbos also appointed Prime Resources Pty Limited for the Environmental and Social Impact Assessment which will become part of the BFS.

      Kanzi Project

      The Kanzi Project consists of nine exploration permits covering an area of approximately 2,000km² on the western edge of the DRC. Minbos holds a 49% interest in the Kanzi Project through its Phosphalux SPRL (DRC) joint venture with the controlling entity, Allamanda Trading Ltd (BVI), holding the remaining 51%.

      On 11 September 2015, Minbos announced that it had entered into a binding Deed of Offer and Release with African Phosphate Pty Ltd ('AFP') to dispose of its rights in the Kanzi Project for a total consideration of US$200,000. Minbos terminated this agreement in late February 2016 due to AFP failing to pay the US$200,000 consideration. Additionally, the Kanzi Project licences expired on 3 February 2017 and it is unclear if the controlling entity, Allamanda Trading Ltd (BVI) will renew these licences. It is also noted that Allamanda Trading Ltd (BVI) never transferred the licences to the joint venture entity.

    • Historical Balance Sheet

      Statement of Financial Position	Reviewed as at Audited as at 31-Dec-16 30-Jun-16 $ $		Audited as at Audited as at 30-Jun-15 30-Jun-14 $ $
      CURRENT ASSETS
      Cash and cash equivalents	4,325,382	1,606,934	192,872	30,727
      Trade and other receivables	103,947	29,269	33,102	13,653
      Other financial assets	-	335,981	-	-
      TOTAL CURRENT ASSETS	4,429,329	1,972,184	225,974	44,380
      NON-CURRENT ASSETS
      Net investment in associate	19,427,790	18,538,704	17,781,195	15,081,883
      Exploration and evaluation expenditure	34,852	34,229	33,629	49,575
      Property, plant and equipment	17,363	2,465	18,335	44,456
      TOTAL NON-CURRENT ASSETS	19,480,005	18,575,398	17,833,159	15,175,914
      TOTAL ASSETS	23,909,334	20,547,582	18,059,133	15,220,294
      CURRENT LIABILITIES
      Trade and other payables	146,721	104,281	312,403	586,963
      Borrowings	-	-	21,884	28,602
      Provisions	59,316	39,676	-	1,250,000
      Share placement liability	-	-	-	80,000
      TOTAL CURRENT LIABILITIES	206,037	143,957	334,287	1,945,565
      NON-CURRENT LIABILITIES Deferred tax liabilities	3,935,637	3,935,637	3,935,637	3,935,637
      TOTAL NON-CURRENT LIABILITIES	3,935,637	3,935,637	3,935,637	3,935,637
      TOTAL LIABILITIES	4,141,674	4,079,594	4,269,924	5,881,202
      NET ASSETS	19,767,660	16,467,988	13,789,209	9,339,092
      EQUITY
      Issued capital	37,078,599	33,240,544	29,733,200	26,172,620
      Reserves	5,330,956	6,915,025	6,089,536	3,003,347
      Accumulated losses	(22,641,895)	(23,687,581)	(22,033,527)	(19,836,875)
      TOTAL EQUITY	19,767,660	16,467,988	13,789,209	9,339,092

      Source: Minbos interim financial report for the half year to 31 December 2016 and audited financial reports for the years ended 30 June 2016 and 30 June 2015.

      Commentary on Historical Statement of Financial Position

      We have not undertaken a review of Minbos' unaudited accounts as at 31 December 2016 in accordance with Australian Auditing and Assurance Standard 2405 'Review of Historical Financial Information' and do not express an opinion on this financial information. However, nothing has come to our attention as a result of our procedures that would suggest the financial information within the management accounts has not been prepared on a reasonable basis.

      We note the following in relation to Minbos' Historical Statement of Financial Position:

      • The cash balance increased to $1,606,934 as at 30 June 2016 from $192,872 as at 30 June 2015 primarily due to capital placement to Green Services on 19 February 2016. This capital placement raised $3.4 million before costs. The capital placement was partially offset by payments to suppliers and employees and exploration and evaluation expenditure. Additionally, Minbos

        provided funding of $329,555 to MTL for the Cabinda BFS in accordance with the joint venture agreement and provided a short term loan of US$250,000 to Petril to cover their portion of the BFS funding required during the 2016 financial year. Petril repaid the loan subsequent to 30 June 2016.

      • The cash balance increased again to $4,325,382 as at 31 December 2016 due to the exercise of 384,958,009 options at $0.01 per option which raised $3,849,580 before costs. The cash raised from the exercise of these options was also partially offset by outflows arising from administration payments, exploration expenditure on the Cabinda Project and employee expenses.

      • The net investment in associate balance relates to Minbos' ownership of MTL. Minbos does not hold greater than 50% of the voting rights in MTL so the Company does not have control of this entity. Accordingly, this entity has been accounted as an investment in associate. The increase in the balance from 30 June 2015 to 30 June 2016 primarily relates to an increase in the US dollar, the official currency of the British Virgin Isles where MTL is incorporated. A breakdown of these balances is below:

        Statement of Financial Position	Unaudited as at Audited as at 31-Dec-16 30-Jun-16 $ $
        CURRENT ASSETS	247,288	308,340
        Cash and cash equivalents
        Other receivables	318,421	377,868
        TOTAL CURRENT ASSETS	565,709	686,208
        NON-CURRENT ASSETS
        Exploration and evaluation expenditure	11,430,054	9,882,756
        TOTAL NON-CURRENT ASSETS	11,430,054	9,882,756
        TOTAL ASSETS	11,995,763	10,568,964
        CURRENT LIABILITIES	654,016	509,612
        Trade and other payables
        Borrowings	14,951,532	13,382,901
        TOTAL CURRENT LIABILITIES	15,605,548	13,892,513
        TOTAL LIABILITIES	15,605,548	13,892,513
        NET LIABILITIES	(3,609,785)	(3,323,549)
        Movement of carrying amounts of net
        investment in associate
        Balance at beginning of period	18,538,704	17,781,195
        Exchange differences	416,932	565,368
        Share of net loss in associate	(85,073)	(137,414)
        Loan to associate	557,227	329,555
        Balance at end of period	19,427,790	18,538,704

        Source: Minbos management accounts to 31 December 2016 (reconciled to reviewed half year interim financial report as at 31 December 2016) and audited financial reports for the year ended 30 June 2016.

      • The sum of the balance at the beginning of the period, exchange differences, share of net loss in associate and the loan to associate equals the investment in associate balance in the Minbos balance sheet; and

        • The net investment in associate balance increased from $18.54 million at 30 June 2016 to $19.43 million at 31 December 2016. The increase is primarily due to exchange rate movements and Minbos submitting additional funds to MTL to cover its portion of the BFS funding. We note that this loan from Minbos to MTL will remain post completion of the Transaction but will be eliminated on consolidation of the MTL and Minbos accounts.

        • Minbos' deferred tax liability of $3,935,637 at 31 December 2016 relates to the accounting tax liabilities associated with uplift of the investment in MTL.

    • Historical Statement of Comprehensive Income

      Statement of Comprehensive Income	Reviewed for the Audited for the period 1-Jul-16 to year ended 31-Dec-16 30-Jun-16 $ $		Audited for the Audited for the year ended year ended 30-Jun-15 30-Jun-14 $ $
      Revenue
      Revenue from continuing operations	18,513	9,957	3,052	2,333
      Expenses
      Administration expenses	(289,016)	(366,595)	(393,409)	(687,228)
      Depreciation expenses	(2,297)	(5,261)	(25,852)	(29,096)
      Exploration expenditure Cabinda Project	(277,647)	(343,934)	(435,218)	-
      Finance costs	-	-	(608,119)	(1,046,442)
      Foreign exchange loss	(10,867)	(11,210)	(4,365)	(346)
      Impairment of exploration and evaluation expenditure	(16,651)	(40,457)	(66,259)	(126,328)
      Loss from sale of plant and equipment	-	(1,228)	(3,410)	(19,031)
      Personnel expenses	(298,080)	(541,418)	(587,553)	(526,255)
      Share-based payments	(178,631)	(216,494)	-	(114,576)
      Share of net loss from associate	(85,073)	(137,414)	(75,519)	(133,302)
      Loss from continuing operations before income tax	(1,139,749)	(1,654,054)	(2,196,652)	(2,680,271)
      Income tax expense	-	-	-	-
      Loss from continuing operations after income tax	(1,139,749)	(1,654,054)	(2,196,652)	(2,680,271)
      Foreign currency translation differences	416,932	565,254	2,651,645	(372,138)
      Total comprehensive profit / (loss) for the year	(722,817)	(1,088,800)	454,993	(3,052,409)

      Source: Minbos interim financial report for the half year to 31 December 2016 and audited financial reports for the years ended 30 June 2016 and 30 June 2015.

      Commentary on Historical Statement of Profit or Loss and Other Comprehensive Income

      We have not undertaken a review of Minbos' unaudited accounts as at 31 December 2016 in accordance with Australian Auditing and Assurance Standard 2405 'Review of Historical Financial Information' and do not express an opinion on this financial information. However, nothing has come to our attention as a result of our procedures that would suggest the financial information within the management accounts has not been prepared on a reasonable basis.

      We note the following in relation to the Statement of Profit or Loss and Other Comprehensive Income:

      • Administration costs as decreased from $393,409 for the period to 30 June 2015, to $366,595 in the 12 months to 30 June 2016. This was primarily due to a decrease in consulting and corporate expenses. Administration expenses have increased in the half year to 31 December 2016 due to additional costs associated with the Transaction.

      • Exploration and expenditure Cabinda Project relates to payment for expenses incurred directly on the Cabinda Project and primarily relates to payments to SOFOSA. Expenses incurred through the joint venture are reflected in investment in associates in the Statement of Financial Position.

      • Finance costs decreased from $608,119 at 30 June 2015 to nil in the 12 months to 30 June 2016. These finance costs relate to a convertible note which was extinguished in the period ending 30 June 2015.

      • Share of net loss in associate relates to losses made by MTL. Minbos owns 50% of MTL.

      • We note Minbos made a total comprehensive profit of $454,993 for the year ended 30 June 2015. This was due to a foreign exchange gain of $2,651,645 on Minbos' holding of MTL which is a result of the weakening of the Australian dollar against the United States dollar. Minbos made a total comprehensive loss of $1,088,800 in the 12 months to 30 June 2016.

    • Capital Structure

    • The share structure of Minbos as at 15 May 2017 is outlined below:

      Number

      Total ordinary shares on issue at 5 December 2016	2,073,547,651
      Exercise of Green Services options on 7 December 2016	384,958,009
      Total ordinary shares on issue at 15 May 2017	2,458,505,660
      Top 20 shareholders as at 15 May 2017	2,037,975,559
      Top 20 shareholders - % of shares on issue	82.89%

      Source: Share registry information

      The range of shares held in Minbos as at 15 May 2017 is as follows:

      Range of Shares Held	Number of Ordinary Shareholders	Number of Ordinary Shares	Percentage of Issued Shares (%)
      1 - 1,000	31	3,552	0.00%
      1,001 - 5,000	32	90,881	0.00%
      5,001 - 10,000	35	272,246	0.01%
      10,001 - 100,000	194	9,082,891	0.37%
      100,001 - and over	257	2,449,056,090	99.62%
      TOTAL	549	2,458,505,660	100.00%

      Source: Share registry information

      The ordinary shares held by the most significant shareholders as at 15 May 2017 are detailed below:

      Name	Number of Ordinary Shares Held	Percentage of Issued Shares (%)
      Jorge Marques	1,126,002,175	45.80%
      Mrs Eleanor Jean Reeves	105,761,533	4.30%
      Brijohn Nominees Pty Ltd	87,356,166	3.55%
      Jadekey Nominees Pty Ltd	83,333,333	3.39%
      Subtotal	1,402,453,207	57.04%
      Others	1,056,052,453	42.96%
      Total ordinary shares on Issue	2,458,505,660	100.00%

      Source: Share registry information

    • Profile of Petril

    • History

      Petril was established in the British Virgin Islands on 30 December 2010 as a private equity firm with the primary objective to invest in phosphate projects. There are currently four key shareholders who own 97.5% of Petril (refer to section 6.6 below) and a group of smaller shareholders who are technical employees of Petril.

      In addition to the 50% interest in the Cabinda Project, Petril also own 100% of the Pedra de Feitico phosphate project ('Pedra Project') and has a majority (~80%) interest in the Lucunga Project through a joint venture with Haifa Chemicals Limited. During the year Petril operated in three locations in Angola; Cabinda, Lucunga and Pedra with three concessions.

      Petril's current board members are:

      • Humberto Goncalves; and

      • Shaul Zipris.

        The organisational structure of Petril as at completion is dependent upon a number of factors (including upon the satisfaction of certain conditions precedent by Petril and the receipt of certain approvals from the Angolan Ministry of Geology). An illustrative diagram of Petril's proposed structure at completion is set out below:

        Petril has a 50% interest in MTL, and consequently does not control more than half of the voting power of those shares. However, based on the contractual arrangements between the Petril and Minbos, Petril have the power to appoint and remove the majority of the board of directors, and hence Petril has control over the financial and operating policies of MTL. Therefore, MTL is controlled by Petril and is consolidated in the accounts in sections 6.4 and 6.5.

    • Projects

      Lucunga Project

      The Lucunga Project is an exploration permit of 300 km2located in the coastal region of northern Angola. Petril has a 100 km2mining permit on this project which is also adjacent to a major highway currently under construction from the capital of Angola to the port Porto de Soya. Major high voltage power lines which service Porto de Soya transect the Lucunga Project.

      The Lucunga Project is at an advanced exploration stage. The existing Lucunga resource cannot be classified as compliant with any regulatory body's reporting codes (e.g. JORC 2012).

      Pedra Project

      The Pedra Project is 100% owned by Petril and is located on the southern banks of the Congo River. The Pedra concession covers a total area of 939 km2. The Pedra Project is approximately 45 kms from the town of Soyo. Soyo has the required infrastructure as this city services the local oil industry.

      This project is at an early exploration stage so no resources can be declared.

    • Material contracts

      Petril and Haifa Chemicals Ltd entered into a term agreement in July 2010 regarding the exploitation and production of mineral resources at the Lucunga deposit. Under the terms of the agreement Haifa Chemicals Ltd agreed to contribute 50% of the first phase development costs of the Lucunga concession. At the end of the first phase Haifa Chemicals Ltd will inform Petril Ltd if they still want to contribute to the development, and if so, Haifa Chemicals Ltd will compensate the company with 50% of the costs incurred prior to the first phase. In exchange Haifa Chemicals will receive 35% of the share capital of Vale Fertil Ltd which operates the Lucunga concession. Since the end of 2013 Haifa Chemicals Ltd has not contributed the amount equal to the 50% of the costs incurred and therefore the percentage of the share capital Haifa Chemicals Ltd will receive will be diluted accordingly.

    • Historical Balance Sheet

      Statement of Financial Position	Consolidated unaudited as at 31-Dec-16 A$	Consolidated unaudited as at 31-Dec-16 US$	Consolidated audited as at 31-Dec-15 US$	Consolidated audited as at 31-Dec-14 US$
      CURRENT ASSETS	791,601	570,030	1,670,731	797,159
      Cash and cash equivalents
      Trade and other receivables	364,613	262,557	179,026	134,838
      TOTAL CURRENT ASSETS	1,156,214	832,587	1,849,757	931,997
      TOTAL ASSETS	1,156,214	832,587	1,849,757	931,997
      CURRENT LIABILITIES
      Short term loans	31,248,782	22,502,183	20,729,423	17,806,207
      Trade and other payables	846,040	609,232	738,854	835,971
      Bank overdraft	769	554	-	23
      TOTAL CURRENT LIABILITIES	32,095,591	23,111,969	21,468,277	18,642,201
      TOTAL LIABILITIES	32,095,591	23,111,969	21,468,277	18,642,201
      NET ASSETS	(30,939,378)	(22,279,382)	(19,618,520)	(17,710,204)
      EQUITY Issued capital Accumulated losses/reserves attribute Company shareholders Minority interests	13,887	10,000	10,000	10,000
      	d to:
      	(23,426,064)	(16,869,060)	(14,867,861)	(13,096,585)
      	(7,527,201)	(5,420,322)	(4,760,659)	(4,623,619)
      TOTAL EQUITY	(30,939,378)	(22,279,382)	(19,618,520)	(17,710,204)

      Source: Petril audited financial statements as at 31 December 2014 and 2015 and draft accounts as at 31 December 2016. The consolidated unaudited figures as at 31 December 2016 have been converted to AUD using an USDAUD exchange rate of 1:1.3887 as at 31 December 2016.

      Commentary on Historical Statement of Financial Position

      We have not undertaken a review of Petril's draft accounts as at 31 December 2016 in accordance with Australian Auditing and Assurance Standard 2405 'Review of Historical Financial Information' and do not express an opinion on this financial information. However, nothing has come to our attention as a result of our procedures that would suggest the financial information within the management accounts has not been prepared on a reasonable basis.

      We note that Petril's auditor, KPMG Limited, issued an Emphasis of Matter paragraph in the audited financial report for the year ended 31 December 2015. Given that Petril incurred an operating loss of US$1.91 million and had net liabilities of US$19.62 million at 31 December 2015, the auditor outlined the existence of material uncertainty regarding Petril's ability to continue as a going concern, and therefore, Petril being unable to realise its assets and discharge its liabilities in the normal course of business.

      Additionally, the auditor indicated that the ability of Petril to continue as going concern was dependent on securing additional funding to fund ongoing exploration commitments and working capital expenses. Petril's shareholders have indicated their intention to continue providing such assistance to enable Petril to continue as a going concern.

      We note the following in relation to Petril's Historical Statement of Financial Position:

      • The short term loans balance of US$22.5 million as at 31 December 2016 consists of the following loans:

        Short term loans	unaudited as at unaudited as at 31-Dec-16 31-Dec-16 A$ US$
        Petril Phosphates (Petril shareholders)	19,788,406	14,249,590
        Vale Fertil Ltd	4,114,257	2,962,668
        Mongo Tando Ltd/Minbos (minority interests)	7,346,119	5,289,925
        TOTAL	31,248,782	22,502,183

        Source: Petril draft accounts as at 31 December 2016. The consolidated unaudited figures as at 31 December 2016 have been converted to AUD using an USDAUD exchange rate of 1:1.3887 as at 31 December 2016.

        • The Petril Phosphates loans of US$14.25 million is the aggregate loans from all the Petril Shareholders and were provided to fund the ongoing exploration expenditure of the Petril group of companies. These loans were provided interest free and there is no specified repayment date. These loans will be extinguished on completion of the Transaction.

        • The US$2.96 million loan from Vale Fertil Ltd as at 31 December 2016 relates to the funding provided by Haifa Chemicals Ltd, the minority partner in the Lucunga Project. Haifa Chemicals Ltd is not a registered shareholder of Petril but the agreement states it has legal entitlement over the Lucunga Project. Haifa Chemicals Ltd has an option to form part of the royalty arrangement on Lucunga and then sell its effective shareholding and the loan will be extinguished. However as at the date of this report, it appears that Haifa Chemicals Ltd will remain as a shareholder of Petril and therefore also the loan will remain post completion of the Transaction.

        • The Mongo Tando Ltd loans relate to the joint venture of the Cabinda Project with Minbos.

      • The majority of the trade and other payables balance of US$0.61 million as at 31 December 2016 relates to trade payables to related vendor companies. The current payables to related vendor companies will be extinguished on completion of the Transaction as will current receivables from related vendor companies. These adjustments will be made via the net working capital adjustment detailed in clause 6 of the SSA.

      • We also note that development expenditure is recognised as an asset after development activities commence and when Petril management have determined that a project is economically viable. As such, Petril has not recognised any exploration expenditure as an exploration and evaluation asset because the Petril projects are still in exploration phase.

    • Historical Statement of Comprehensive Income

      Statement of Comprehensive Income	Consolidated Consolidated Consolidated unaudited for the audited for the audited for the year ended year ended year ended 31-Dec-16 31-Dec-15 31-Dec-14 US$ US$ US$
      Revenue
      Other operating income	-	-	-
      Finance income	10,724	16,917	6,145
      Expenses
      Administration expenses	(286,616)	(153,441)	(270,155)
      Exploration costs	(2,355,238)	(1,715,197)	(368,005)
      Finance costs	(17,087)	(10,135)	(10,454)
      Other operating expenses	-	-	(15,630)
      Loss from continuing operations before income tax Income tax expense	(2,648,217) (12,646)	(1,861,856) (46,460)	(658,099) (7,946)
      Loss from continuing operations after income tax	(2,660,863)	(1,908,316)	(666,045)
      Total comprehensive loss for the year	(2,660,863)	(1,908,316)	(666,045)
      Loss attributable to:
      Shareholders of Petril	(2,001,200)	(1,771,275)	(569,793)
      Non-controlling interests	(659,663)	(137,041)	(96,252)
      Loss for the year	(2,660,863)	(1,908,316)	(666,045)

      Source: Petril's audited financial statements for the years ended 31 December 2014 and 2015 and draft accounts for the year ended 31 December 2016.

      Commentary on Historical Statement of Profit or Loss and Other Comprehensive Income

      We have not undertaken a review of Petril's draft accounts as at 31 December 2016 in accordance with Australian Auditing and Assurance Standard 2405 'Review of Historical Financial Information' and do not express an opinion on this financial information. However, nothing has come to our attention as a result of our procedures that would suggest the financial information within the management accounts has not been prepared on a reasonable basis.

      We note the following in relation to the Statement of Profit or Loss and Other Comprehensive Income:

      • The majority of the exploration costs relate to subcontracted work on the Petril exploration projects. We note the quantum of this expenditure has been increasing from 31 December 2014 to 31 December 2016 primarily due to the increased expenditure on the Cabinda Project as it progresses from exploration phase to production. Exploration expenditure on the Lucunga and Pedra projects also increased significantly in the 12 months to 31 December 2016.

    • Capital Structure

    • The ordinary shares held by the most significant shareholders as at 15 May 2017 are detailed below:

      Name	%
      Reuven Behar	41.06%
      Paramount Global Group Inc.	25.03%
      Tyros International Group Ltd.	20.53%
      Green Services Innovations Ltd	10.87%
      Others	2.51%
      Total	100.00%

      Source: Petril's share registry

    • Economic analysis

    • Global

      Overall, the global economy is continuing to grow at a moderate level, entering 2017 with more momentum than what was originally anticipated. Labour market conditions in advanced economies have improved over the past 12 months, with growth in global industrial production and trade also picking up.

      In China, growth was stronger over the second half of 2016 which was supported by higher spending on infrastructure and property construction. This has come as a result of China shifting away from an economy dependent on manufacturing, to one driven by consumer demand. High and rising debt, combined with excess capacity in some sectors remains a risk to its medium-term outlook for growth.

      Global financial markets have seen improved sentiment following a period of increased volatility. However, uncertainty regarding the global economic outlook and policy settings for major jurisdictions continues. Globally, monetary policy remains accommodative.

    • Australia

      Commodity prices

      Commodity prices have increased significantly in recent months, following a steep decline over the past few years. The increase in commodity prices is partly attributable to factors such as increased Chinese demand for bulk commodities. Chinese authorities have also restricted domestic production to reduce overcapacity, which has further contributed to the appreciation of prices. These higher price levels are unlikely to be sustained, with forecasts assuming that much of the recent increase in commodity prices will be unwound over the next couple of years.

      The increase in commodity prices has seen a consequent increase in Australia's terms of trade. The increase bucks a declining trend in Australia's terms of trade, which have steadily declined over the past four years.

      Domestic growth

      In Australia, the available information suggests that the economy is growing moderately. The Australian economy has experienced a large decline in mining investment. However, this is being offset by growth in other areas such as residential construction, government expenditure and exports. Despite higher commodity prices boosting the profits of resource firms, the increase is expected to be temporary.

      Consequently, it is unlikely that stronger commodity prices will translate into materially higher investment or employment in the resource sector.

      Inflation is expected to increase as the effects of some factors that have been weighing on domestic cost pressure dissipate, including earlier declines in the terms of trade and falling employment in mining related industries. The increase in underlying inflation is likely to be gradual.

      Recent data indicates that conditions in the labour market have softened, with the unemployment rate moving a little higher and employment growth subdued.

      Credit growth

      Credit growth has picked up over the last three months, partly due to a number of large privatisations being financed by business credit. Furthermore, loan approvals data suggests that lending to investors has risen over the past few months, which is consistent with the increase in investor housing loan approvals.

      Conditions in the established housing market have strengthened recently, although there is substantial variation across the country.

      Overall, financial conditions remain accommodative, with funding costs for creditworthy borrowers remarkably low.

      Currency movements

      The recent increase in the terms of trade have been associated with an appreciation of the Australian dollar. An overall depreciating Australian dollar since 2013 has assisted the ongoing adjustment of the economy towards non-resource sectors following the end of the mining boom; an appreciating exchange rate could complicate that process.

      Source: www.rba.gov.au Statement by Philip Lowe, Governor: Monetary Policy Decision 4 April 2017

    • Angola

    • Angola is positioned on the west coast of Africa bordered by the Democratic Republic of the Congo to the east, Namibia to the south and Congo to the north.

      Angola's economy is highly dependent on its oil sector, which contributes approximately 50% of Gross Domestic Product ('GDP') and over 90% of the country's exports. Agriculture drives employment in Angola, though the country imports approximately 50% of its food. Angola has experienced high growth in the construction and agriculture sectors as the country rebuilds after a 27 year civil war. Redevelopment of infrastructure has been funded through credit lines supplied by countries such as China, Brazil, Portugal, Germany and Spain.

      The Angolan economy has continued to grow, with the country's natural resource wealth aiding foreign direct investment into the country and ensuring strong economic growth over the past decade or so.

      Recently however, the economy has undergone a structural shock due to lower crude oil prices, and there exists immense uncertainty surrounding the country's oil exports and international commodity prices.

      GDP growth has decreased from 3.5% in 2015 to an estimated 3.3% in 2016, and is forecast to remain subdued at 3.5% in 2017. Over this period, agriculture is expected to show a strong recovery, therefore growing the non-oil sector by approximately 3.4%.

      In January 2016, the Angolan government responded to uncertainties surrounding the oil price by adopting a strategy aimed at sourcing substitutes for oil as a major source of revenue. As part of the strategy, investments in infrastructure, gradual reduction of imports, deepening of financial sector reforms, skills development and improvement of the overall business environment are envisaged.

      Growth in Angola is hampered by factors such as poor governance, a lack of transparency in the management of public resources, weak quality of infrastructure and limited quality of human resources. The country is also experiencing income inequality, unemployment and poverty.

      Source: www.africaneconomicoutlook.organd the World Factbook athttps://www.cia.gov/library/publications/the-world-factbook/geos/ao.html

      Implications for Minbos

      Weakening global commodity prices have slowed investment into the whole sector, creating difficulty in raising capital for junior miners and explorers such as Minbos. However, Australia's increasing terms of trade have led to a slightly stronger Australian dollar which may positively impact the purchasing power of the capital Minbos raises in Australia. This is important as Minbos will require additional funding to develop the Cabinda Project.

      Due to Minbos' operations being in Angola and the DRC, there are a number of country risks that are faced by the Company. Poor governance can make it difficult to manage the legal framework of the country when assuming the ownership of land, negotiating contracts and incorporating new entities. Furthermore, limited human resources can make it difficult for companies operating in sectors which require highly technical skills such as geology, processing and refinement and mine planning.

      The introduction of a new strategy by the Angolan government aimed at sourcing substitutes for oil may assist the future of Minbos by enticing foreign investment into the country and making it easier for foreign companies to create and extract profits.

    • Industry analysis

      Overview

      Phosphate rock is a general term that refers to rock with a high concentration of phosphate minerals, most commonly of the apatite group. It is the major resource mined to produce phosphate fertilisers for the agriculture sector. As such, approximately 90% of the phosphate rock mined is processed into fertilisers. Some other uses of phosphate include animal feed supplements, soft drinks, food preservatives, anti-corrosion agents, cosmetics, fungicides, ceramics, water treatment and metallurgy. Phosphate minerals are often used for control of rust and prevention of corrosion on ferrous materials applied with electrochemical conversion coatings. Phosphate deposits can be classified into three main types, being marine sedimentary deposits of phosphorites, apatite rich igneous rocks, and modern and ancient guano accumulations.

      Key drivers

      Production and exploration levels of phosphate are highly sensitive to the demand and supply of the final product, as well as other factors including oil prices, climate, exchange rates, and political and regulatory factors. The following table sets out the 2016 estimate of phosphate production by country and the actual production levels recorded by these countries in 2015 and 2014. All figures are presented in thousand metric tons.

      Country	2016*	Mine production 2015	2014	Reserves
      United States	27,800	27,400	25,300	1,100,000
      Algeria	1,500	1,400	1,500	2,200,000
      Australia	2,500	2,500	2,600	1,100,000
      Brazil	6,500	6,100	6,040	320,000
      China	138,000	120,000	100,000	3,100,000
      Egypt	5,500	5,500	5,500	1,200,000
      India	1,500	1,500	1,110	65,000
      Israel	3,500	3,540	3,360	130,000
      Jordan	8,300	8,340	7,140	1,200,000
      Kazakhstan	1,800	1,840	1,600	260,000
      Mexico	1,700	1,680	1,700	30,000
      Morocco and Western Sahara	30,000	29,000	30,000	50,000,000
      Peru	4,000	3,880	3,800	820,000
      Russia	11,600	11,600	11,000	1,300,000
      Saudi Arabia	4,000	4,000	3,000	680,000
      Senegal	1,250	1,240	900	50,000
      South Africa	1,700	1,980	2,160	1,500,000
      Syria	-	750	1,230	1,800,000
      Togo	900	1,100	1,200	30,000
      Tunisia	3,500	2,800	3,780	100,000
      Vietnam	2,800	2,500	2,700	30,000
      Other	2,410	2,470	2,570	810,000
      World Total	260,760	241,120	218,190	67,825,000

      * Estimate

      Source: US Geological Survey, Mineral Commodity Summaries January 2017

      As depicted in the table above, Morocco accounts for approximately 75% of the world's phosphate reserves. Further, Morocco's Office Cherifien de Phosphate, owned by the government of Morocco, is the largest exporter of phosphate.

      Demand in the phosphate industry is primarily affected by the state of the fertiliser manufacturing industry, which in turn is highly correlated with the global demand for agriculture products.

      Oil prices have a positive correlation with the demand, and therefore pricing, observed in the phosphate industry. As the price of crude oil increases, alternative energy sources such as biofuel and ethanol become more prevalent. These alternative energy sources require extensive agriculture therefore increasing the demand for fertiliser products, which in turn stimulates growth in the phosphate industry.

      Climate conditions can also have an impact on the demand for fertiliser products and consequently phosphate, with the dry, harsh conditions experienced in places such as Africa requiring increasing use of fertiliser products.

      Exchange rates can impact the demand for phosphate with the majority of trading being denominated in US dollars, however with the availability of hedging instruments; exchange rates do not have a massive impact on the demand for phosphate products.

      Due to the risky nature of exploration activities and the uncertainty surrounding infant exploration projects, phosphate explorers and producers are hesitant in bearing additional sovereign risk by exploring in foreign countries. As a result, the investment capital required for phosphate exploration is often restricted to those politically stable economies, therefore hindering phosphate supply in smaller developing countries.

      Prices

      The price that a producer can obtain for phosphate rock concentrate is contingent upon the percentage ofP2O5itcontains. Further, the high-cost side of the cost curve for production of phosphate assists in setting global prices as higher prices may highlight excess capacity.

      Phosphate prices are not quoted on a public exchange however, the Moroccan Phosphate Rock, containing 70% Bone Phosphate of Lime ('BPL') is commonly used as a global pricing benchmark. These historical prices are often used as a base for forecasting phosphate prices, with adjustments made for the grade, impurities and other competitive factors. The following chart outlines the historical price movements of this global benchmark over the past seven years.

      Monthly Rock Phosphate Prices 70% BPL

      500

      400

      $USD

      300

      200

      100

      0

      2008 2009 2010 2011 2012 2013 2014 2015 2016

      Source: Bloomberg and BDO analysis

      The Moroccan phosphate rock price, along with other commodities, went through a period of high volatility during the Global Financial Crisis ('GFC') in 2008 and 2009. This is evident by the dramatic price movement in the graph above from a peak of US$430 per tonne in August 2008 to US$90 per tonne in July 2009. The Moroccan phosphate rock price recovered to US$140 per tonne in 2010 and hit a post GFC high of US$202.50 per tonne in 2011. This price found strong support at US$100 per tonne in 2013 and has stabilised at the most recent price of US$98 per tonne recorded in February 2017.

      Outlook

      According to the International Fertilizer Association, world phosphate rock supply is projected to increase by 11% from 225 Mt in 2015 to 250 Mt in 2020. Further, it is forecast that global production capacity will increase to 250 Mt in 2015 to 290 Mt in 2020. It is estimated that Jordan, Morocco and Saudi Arabia will account for a large portion of this incremental increase in capacity, with a portion of projected growth expected to come from a combination of new mines and expansions of existing operations.

      Consumption of phosphate contained in fertilisers and industrial uses is further predicted by the US Geological Survey to increase gradually from 43.7 Mt in 2015 to 48.2 Mt in 2019.

    • Valuation approach adopted

      There are a number of methodologies which can be used to value a business or the shares in a company. The principal methodologies which can be used are as follows:

    • Capitalisation of future maintainable earnings ('FME')

    • Discounted cash flow ('DCF')

    • Quoted market price basis ('QMP')

    • Net asset value ('NAV')

    • Market based assessment

      A summary of each of these methodologies is outlined in Appendix 2.

      Different methodologies are appropriate in valuing particular companies, based on the individual circumstances of that company and available information. In our assessment of the value of Minbos shares we have chosen to employ the following methodologies:

    • NAV on a going concern basis as our primary valuation methodology; and

    • QMP as our secondary approach.

      Valuation of a Minbos share prior to the Transaction

      We have employed the NAV method in estimating the fair market value of Minbos prior to the Transaction by aggregating the estimated fair market values of its underlying assets and liabilities, having consideration to the:

      • value of Minbos' interest in the Cabinda Project (reliance on the valuation carried out by the independent technical expert);

      • value of Minbos' Kanzi Project; and

      • value of other assets and liabilities of Minbos (using their carried value under the NAV method) (refer to section 5.2).

        We have chosen the NAV method as our primary valuation methodology for the following reasons:

      • The Company does not currently have any producing assets so there is a lack of reliable long term forecasts available for a DCF approach to be undertaken. Additionally, Minbos is not earning any revenue or cash flow from these assets because the Company has one advanced exploration project and one early stage exploration project. As such, there is no reliable production data or mine plan, so we believe there are insufficient reasonable grounds to produce a net present value for the Cabinda Project or Kanzi Project using a DCF approach.

      • Minbos is not currently generating any income nor are there any historical earnings that could be used to represent future earnings. As such, the FME approach is not appropriate.

      • the QMP method is a relevant methodology to consider as Minbos' shares are traded on the ASX. This means that there is a regulated and observable market where Minbos' shares can be traded. However, in order for QMP to be considered an appropriate methodology, as per RG 111.69(d), we have considered whether there is a liquid and active market for Minbos' shares as well as accounted for the fact that the QMP only reflects a minority interest value.

      • the NAV on a going concern basis is considered an appropriate valuation approach. To supplement this valuation, we have relied on the independent market valuation of Minbos' Cabinda Project and Kanzi Project that was completed by Coffey Mining South Africa (Pty) Ltd ('Coffey'). Coffey's report has been prepared in accordance with the Australasian Code for Public Reporting of Technical Assessments and Valuations of Mineral Assets 2015 ('VALMIN Code'). The valuation report prepared by Coffey can be found in Appendix 3. Additionally, we have considered the value of the Kanzi Project based on the agreement Minbos held with AFP, as we believe this reflects a recent independently negotiated and agreed market value for the Kanzi Project. Lastly we have considered the remaining value of any assets and liabilities not included in the value of the Cabinda and Kanzi projects.

        Valuation of a Minbos share post completion of the Transaction

        In our assessment of the value of a Minbos share following the Transaction, we have adopted the sum-of- parts approach which estimates the market value of a company by separately valuing each asset and liability of the company. The value of each asset may be determined using different methods. The value of Minbos post completion of the Transaction consists of the following components:

      • Value of Minbos prior to the Transaction;

      • Adjustments to the value of Minbos following the Transaction; and

      • Value of Petril using a NAV approach.

        We have chosen the NAV approach in valuing Petril for the following reasons:

      • Petril's shares are not listed on any exchange so there is no regulated and observable market where Petril's shares are traded. Accordingly, we cannot value the shares of Petril based on the QMP basis.

      • Petril does not have reliable long term forecasts and as such we have insufficient reasonable grounds for a DCF approach to be undertaken. Additionally, a DCF cannot be used under the VALMIN Code as a valuation methodology because Petril's Lucunga Project is at an advanced exploration stage and the Pedra Project is at an early exploration stage.

      • The FME approach is most commonly applicable to profitable businesses with relatively steady growth histories and forecasts. However, we are unable to use this approach with regard to the valuation of Petril, as it has yet to earn any revenues from producing assets.

      • The NAV methodology is considered an appropriate valuation approach to undertake. Accordingly, we have also relied on the independent market valuation of the Cabinda Project when assessing the NAV of Petril. Additionally, Coffey also completed an independent market valuation of Petril's Lucunga and Pedra Projects. We have relied on Coffey's valuation of the Lucunga and Pedra Projects in our NAV of Petril. Coffey's reports can be found in Appendix 3.

      • Valuation of Minbos prior to the Transaction

      • Net Asset Valuation of Minbos

        The value of Minbos assets on a going concern basis is reflected in our valuation below:

        Statement of Financial Position	Note	Reviewed as at 31-Dec-16 $	Low value $	Preferred value $	High value $
        CURRENT ASSETS Cash and cash equivalents	1	4,325,382	3,048,322	3,048,322	3,048,322
        Trade and other receivables	103,947	103,947	103,947	103,947
        TOTAL CURRENT ASSETS NON-CURRENT ASSETS Net investment in associate	2	4,429,329 19,427,790	3,152,269 12,662,452	3,152,269 17,036,857	3,152,269 30,298,942
        Exploration and evaluation expenditure	3	34,852	-	-	-
        Property, plant and equipment	17,363	17,363	17,363	17,363
        TOTAL NON-CURRENT ASSETS	19,480,005	12,679,815	17,054,220	30,316,305
        TOTAL ASSETS	23,909,334	15,832,084	20,206,489	33,468,574
        CURRENT LIABILITIES Trade and other payables	146,721	146,721	146,721	146,721
        Provisions	59,316	59,316	59,316	59,316
        TOTAL CURRENT LIABILITIES	206,037	206,037	206,037	206,037
        NON-CURRENT LIABILITIES

        Deferred tax liabilities 4 3,935,637 - - -

        TOTAL NON-CURRENT LIABILITIES TOTAL LIABILITIES	3,935,637 4,141,674		- 206,037	- 206,037	- 206,037
        NET ASSETS	19,767,660	15,626,047	20,000,452	33,262,537
        Shares on issue (number)	2,458,505,660	2,458,505,660 $0.006	2,458,505,660 $0.008	2,458,505,660 $0.014
        Value per share ($)
        Value per share (cents)	0.636		0.814	1.353

        Source: BDO analysis

        We have been advised that there has not been a significant change in the net assets of Minbos since

        31 December 2016. The table above indicates the net asset value of a Minbos share is between 0.636 cents and 1.353 cents with a preferred value of 0.814 cents.

        The following adjustments were made to the net assets of Minbos as at 31 December 2016, as set out in Minbos' interim financial report, in arriving at our valuation.

        Note 1: Cash and cash equivalents

        Cash and cash equivalents have decreased from 31 December 2016 to 30 April 2017 as detailed below:

        Note 1	Pre the Transaction $
        Cash and cash equivalents
        Reviewed balance at 31 December 2016	4,325,382
        Less: cash expenditure - administration - from 1 Jan 17 to 30 Apr 17	(625,464)
        Less: cash expenditure - exploration - from 1 Jan 17 to 30 Apr 17	(283,902)
        Less: BFS payment on 19 May 2017*	(367,694)
        Closing balance	3,048,322

        Source: BDO analysis

        *This payment has been converted to AUD at a USDAUD ratio of 1:1.355 as at 19 May 2017

        We have adjusted Minbos' cash balance to reflect the decrease in cash from 1 January 2017 to 30 April 2017. The majority of this expenditure relates to administration costs associated with the Transaction and general working capital expenses. We also note that Minbos appointed a General Manager of Marketing in January 2017 which has increased the administration expense. Minbos has also spent $0.28 million on exploration expenditure with the majority of this balance comprising of expenses relating to the BFS of the MTL project. We also note Minbos paid its 50% share of the final stage one payment of the BFS on 19 May 2017. This US$0.271 million payment has been converted to AUD using the USDAUD exchange rate of 1:1.355 as at 19 May 2017.

        Note 2: Investment in associate (Cabinda Project exploration assets)

        The Company's investment in associate relates to the fair value of its 50% interest in MTL, the company which holds the Cabinda Project. Accordingly, we have adjusted the value of Minbos' 50% interest in MTL for the independent market valuation of the Cabinda Project provided by Coffey, as set out below:

        Valuation of Minbos' mineral assets

        We instructed Coffey to provide an independent market valuation of the exploration assets held by Minbos. The range of values for Minbos' Cabinda Project as calculated by Coffey is below:

        Minbos Resources Limited Low value Preferred value High value

        Mineral Asset Valuation Interest US$m US$m US$m

        Cabinda Project (comprising the Cacata, Mongo

        Tando, Chivovo and Chibuete deposits) 100% 18.3 24.643.7

        Source: Independent Valuation Report prepared by Coffey.

        The values of the independent valuation of the Cabinda Project have been converted to AUD using the USDAUD exchange rate of 1:1.3887 as at 31 December 2016. These values are set out below:

        Minbos Resources Limited Mineral Asset Valuation	Interest	Low value $	Preferred value $	High value $
        Cabinda Project (USD)	100%	18,300,000	24,600,000	43,700,000
        Cabinda Project (AUD)	100%	25,413,210	34,162,020	60,686,190

        Source: Independent Valuation Report prepared by Coffey.

        Coffey considered a number of different valuation methods when valuing the exploration assets of Minbos including the Multiple of Exploration Expenditure ('MEE') method and the comparable transaction method. The MEE method is discussed in Appendix 2. The comparable transaction method involves calculating a value per common attribute in a comparable transaction and applying that value to the subject asset. A

        common attribute could be the amount of resource or the size of a tenement. We consider these methods to be appropriate given the pre-feasibility stage of development for Minbos' exploration assets. Further information on these independent valuations can be found in Appendix 3.

        Mineral resources have been estimated and reported for all the Cabinda Project deposits except Cambota and Ueca. We also note that for the purpose of the Cabinda Project valuation Coffey has considered only the measured and indicated mineral resources for the Cacata, Mongo Tando, Chivovo and Chibuete deposits (that total 46.5 Mt). The inferred resources have been excluded from the Cabinda Projectvaluationbecause the inferred resources P2O5valuesof the comparable phosphate transactions considered in the Coffey valuation were all within 15% of their measured and indicated resources grades.

        Coffey indicated that the P2O5values of the Cabinda Project inferred resources differ by 52% with that of its measured and indicated resources so the Cabinda Project inferred resources are not comparable to the other comparable projects' inferred resources.

        The table above indicates a range of values for 100% of the Cabinda Project between $25.4 million and

        $60.7 million, with a preferred value of $34.2 million.

        As such, we have adjusted the exploration and evaluation expenditure in the investment in associate balance sheet (refer to section 5.3) to reflect the independent valuation provided by Coffey. This adjustment is set out below:

        Statement of Financial Position	Unaudited as at 31-Dec-16 A$	Low value Preferred value A$ A$		High value A$
        CURRENT ASSETS	247,288	247,288	247,288	247,288
        Cash and cash equivalents
        Other receivables	318,421	318,421	318,421	318,421
        TOTAL CURRENT ASSETS	565,709	565,709	565,709	565,709
        NON-CURRENT ASSETS
        Exploration and evaluation expenditure	11,430,054	25,413,210	34,162,020	60,686,190
        TOTAL NON-CURRENT ASSETS	11,430,054	25,413,210	34,162,020	60,686,190
        TOTAL ASSETS	11,995,763	25,978,919	34,727,729	61,251,899
        CURRENT LIABILITIES	654,016	654,016	654,016	654,016
        Trade and other payables
        Borrowings	14,951,532	14,951,532	14,951,532	14,951,532
        TOTAL CURRENT LIABILITIES	15,605,548	15,605,548	15,605,548	15,605,548
        TOTAL LIABILITIES	15,605,548	15,605,548	15,605,548	15,605,548
        NET ASSETS / (LIABILITIES)	(3,609,785)	10,373,371	19,122,181	45,646,351
        Minbos share of total equity (50%) of above	(1,804,893)	5,186,686	9,561,091	22,823,176
        Add back Minbos share of borrowings (50%)		7,475,766	7,475,766	7,475,766
        Net investment in associate pre transaction	12,662,452	17,036,857	30,298,942

        Source: BDO analysis

        Minbos has a 50% interest in the Cabinda Project which is recorded on the Company's balance sheet as an investment in associate. Accordingly, we have adjusted the net assets of the investment in associate to reflect the carrying amount of the Cabinda Project based on the independent technical valuation completed by Coffey.

        The table above indicates that the range of values for the investment in associate is between $12.66 million and $30.30 million with a preferred value of $17.04 million.

        Note 3: Exploration and evaluation expenditure (Kanzi Project)

        Coffey was also instructed to provide an independent market valuation of the Kanzi Project held by Minbos. Coffey valued the Kanzi Project at US$200,000 using the market based approach. This valuation is supported by the sale agreement entered into between Minbos and Australian Phosphate Pty Ltd in September 2015. Minbos agreed to sell the Kanzi Project to Australian Phosphate Pty Ltd for US$200,000 and payment was due on 10 October 2015. This sale never materialised so the sale agreement was terminated.

        The Kanzi Project licences have since expired post the date of the Independent Valuation Report prepared by Coffey. We also note that Minbos has indicated that it is unclear if the controlling entity of the Kanzi Project, Allamanda Trading Ltd (BVI), will renew these licences. Accordingly, we have reduced this balance to nil to reflect the current carrying value of the Kanzi Project.

        Note 4: Deferred tax liabilities

        The $3.94 million deferred tax liability as at 31 December 2016 relates to accounting tax liabilities associated with uplift in value of the associate in the books of Minbos. For the purpose of the assessment of valuation no tax liability is crystallised as the tax structure can be put in place to achieve this outcome. Accordingly, we have excluded the value of the deferred tax liability from our valuation on a pre and post Transaction basis.

      • Quoted Market Prices for Minbos Securities

        To provide a comparison to the valuation of Minbos in Section 10.1, we have also assessed the quoted market price for a Minbos share.

        The quoted market value of a company's shares is reflective of a minority interest. A minority interest is an interest in a company that is not significant enough for the holder to have an individual influence in the operations and value of that company.

        RG 111.43 suggests that when considering the value of a company's shares for the purposes of approval under item 7 of s611 the expert should consider a premium for control. An acquirer could be expected to pay a premium for control due to the advantages they will receive should they obtain 100% control of another company. These advantages include the following:

    • control over decision making and strategic direction;

    • access to underlying cash flows;

    • control over dividend policies; and

    • access to potential tax losses.

      Whilst Petril Shareholders will not be obtaining 100% of Minbos, RG 111 states that the expert should calculate the value of a target's shares as if 100% control were being obtained. The expert can then consider an acquirer's practical level of control when considering reasonableness. Reasonableness has been considered in Section 13.

      Therefore, our calculation of the quoted market price of a Minbos share including a premium for control has been prepared in two parts. The first part is to calculate the quoted market price on a minority

      interest basis. The second part is to add a premium for control to the minority interest value to arrive at a quoted market price value that includes a premium for control.

      Minority interest value

      Our analysis of the quoted market price of a Minbos share is based on the pricing prior to the announcement of the Transaction. This is because the value of a Minbos share after the announcement may include the effects of any change in value as a result of the Transaction. However, we have considered the value of a Minbos share following the announcement when we have considered reasonableness in Section 13.

      Information on the Transaction was announced to the market on 5 December 2016. Therefore, the following chart provides a summary of the share price movement over the 12 months to 2 December 2016 which was the last trading day prior to the announcement.

      0.009

      0.008

      0.007

      Share Price ($)

      0.006

      0.005

      0.004

      0.003

      0.002

      0.001

      0.000

      MNB share price and trading volume history

      30.0

      Volume (millions)

      25.0

      20.0

      15.0

      10.0

      5.0

      -

      Volume Closing share price

      Source: Bloomberg

      The daily price of Minbos shares from 2 December 2015 to 2 December 2016 has ranged from a low of

      $0.001 on 16 February 2016 to a high of $0.008 on 2 December 2016. Minbos shares rebounded quickly from the low of $0.001 on 16 February 2016 to $0.005 on 25 February 2016. We also note that almost 60 million shares were traded during this period. Minbos shares have essentially traded between $0.004 and

      $0.007 since 25 February 2016 but recently broke above this range to reach $0.008 on 2 December 2016. The highest single day of trading was on 19 October 2016, when approximately 25.7 million shares were traded.

      During this period a number of announcements were made to the market. The key announcements are set out below:

      08/11/2016	Investor Presentation-Cacata Project BFS Update	0.006		14.3%	0.006		0.0%
      20.0%
      26/09/2016	Minbos Annual Report for the year ended 30 June 2016	0.005		0.0%	0.005		0.0%
      16.7%
      09/09/2016	Africa DownUnder Presentation	0.006		20.0%	0.005		16.7%
      16.7%
      28/07/2016	June 2016 Quarterly Reports	0.005		29%	0.005		0%
      29%
      05/07/2016	Sophisticated Investor-Cacata continues to take shape	0.005		25%	0.005		0%
      20%
      18/05/2016	Change of Director's Interest Notice	0.006		0%	0.005		17%
      17%
      12/05/2016	Results of Meeting	0.005		25%	0.006		20%
      0%
      21/04/2016	Commencement of BFS Work Programs for Cabinda Project	0.005		0%	0.004		20%
      20%
      09/03/2016	Expiry of Unlisted Options	0.005		0%	0.004		20%
      25%
      23/02/2016	Information required under LR 3.10.5A	0.005		67%	0.005		0%
      0%
      19/02/2016	Minbos Raises $3.4 Million to Progress the Cabinda Project	0.003		50%	0.004		33%
      33%
      18/12/2015	Minbos In Advanced Discussions To Amend Cabinda JV	0.002		0%	0.003		50%
      50%

      Date	Announcement	Closing Share Price Following Announcement	Closing Share Price Three Days After Announcement
      		$ (movement)	$ (movement)
      29/11/2016	Results of Annual General Meeting	0.007 0.0%	0.008		14.3%

      27/10/2016

      September 2016 Quarterly Reports

      0.005 16.7%

      0.006

      

      19/09/2016

      Appointment of Manager Geology and Business Development

      0.006 0.0%

      0.005

      

      05/08/2016

      Prime Resources Appointed For ESIA On Cabinda Project

      0.006 0.0%

      0.005

      

      27/07/2016

      Ausenco Appointed To Deliver BFS For Cabinda Project

      0.007 0%

      0.005

      

      23/05/2016

      Ceasing to be a substantial holderX4

      0.005 0%

      0.004

      

      17/05/2016

      Capital Placement Completed

      0.006 0%

      0.005

      

      29/04/2016

      March 2016 Quarterly Report

      0.004 0%

      0.004

      

      11/03/2016

      Half Year Accounts-31 December 2015

      0.005 0%

      0.004

      

      24/02/2016

      Form 603-Becoming a substantial holder

      0.004 20%

      0.005

      

      23/02/2016

      Tranche 1 of Capital Placement Completed

      0.005 67%

      0.005

      

      29/01/2016

      Quarterly Activities Report-Quarter Ended 31 Dec. 2015

      0.003 0%

      0.002

      

      17/12/2015

      Update on Disposal of Kanzi Project

      0.002 33%

      0.003

      

      On 17 December 2015, the Company announced that African Phosphate Pty Ltd had failed to pay the US$200,000 proceeds due to Minbos and that the Company had provided African Phosphate Pty Ltd with a material breach notice. The share price initially decreased by 33% to $0.002, and then subsequently increased by 50% over the following three days.

      On 29 January 2016, the Company released its Quarterly Activities and Quarterly Cashflow Reports. The activities report outlined that the Company was renegotiating the Cabinda joint venture agreement with Petril, and the Angolan Ministry of Mines and Geology had issued two new licences for the Cabinda Project. There was no initial share price movement, the share price then declined by 33% over the following three days to $0.002.

      On 19 February 2016, Minbos announced it had raised $3.4 million via a capital placement of 680,363,703 shares at $0.005 per share to Green Services Innovations Ltd to progress the Cabinda Project. Minbos'

      share price increased 50% to $0.003 on the day of this announcement and increased by a further 33% to

      $0.004 over the following three days.

      On 21 April 2016, the Company announced it had commenced work with Petril on the Cabinda Project BFS. The first cash call for US$500,000 had been made to the Joint Venture Partners and Minbos had paid its 50% share of US$250,000. The share price remained flat on the day of this announcement and declined 20% in the subsequent three days.

      On 28 July 2016, Minbos released its quarterly activities report which detailed the appointment of Ausenco to deliver the BFS for the Cabinda Project, the completion of bulk sampling at the Cacata deposit and the finalisation of the $3.4 capital placement with Green Services. The Company's share price decreased 29% on the day of this announcement.

      The Company released its September quarterly report on the 27 October 2016. A number of developments were detailed in this report including the appointment of Prime Resources to complete the Environmental and Social Impact Assessment of the Cabinda Project. Minbos also appointed Rebecca Morgan as Manager Geology and Business Development during the September 2016 quarter. The Company's share price decreased from $0.006 to $0.005 on the day of this announcement but increased 20% in the three subsequent days.

      To provide further analysis of the market prices for an Minbos share, we have also considered the weighted average market price for 10, 30, 60 and 90 day periods to 2 December 2016.

      2 -Dec-16	10 Days	30 Days	60 Days	90 Days
      Closing Price	$0.008
      Weighted Average	$0.007	$0.006	$0.006	$0.006

      Source: Bloomberg, BDO analysis

      The above weighted average prices are prior to the date of the announcement of the Transaction, to avoid the influence of any increase in price of Minbos shares that has occurred since the Transaction was announced.

      An analysis of the volume of trading in Minbos shares for the twelve months to 2 December 2016 is set out below:

      Share price low Share price high			Cumulative Volume traded	As a % of Issued capital
      1 day	$0.008	$0.008	-	0.00%
      10 days	$0.006	$0.008	26,421,298	1.27%
      30 days	$0.005	$0.008	78,017,723	3.76%
      60 days	$0.005	$0.008	154,195,061	7.44%
      90 days	$0.004	$0.008	188,159,151	9.07%
      180 days	$0.004	$0.008	322,145,982	15.54%
      1 year	$0.001	$0.008	523,426,223	25.24%

      Source: Bloomberg, BDO analysis

      This table indicates that Minbos' shares display a low level of liquidity, with 25.24% of the Company's current issued capital being traded in a twelve month period. RG 111.69 states that for the quoted

      market price methodology to be an appropriate methodology there needs to be a 'liquid and active' market in the shares and allowing for the fact that the quoted price may not reflect their value should 100% of the securities not be available for sale. We consider the following characteristics to be representative of a liquid and active market:

    • Regular trading in a company's securities;

    • Approximately 1% of a company's securities are traded on a weekly basis;

    • The spread of a company's shares must not be so great that a single minority trade can significantly affect the market capitalisation of a company; and

    • There are no significant but unexplained movements in share price.

      A company's shares should meet all of the above criteria to be considered 'liquid and active', however, failure of a company's securities to exhibit all of the above characteristics does not necessarily mean that the value of its shares cannot be considered relevant.

      In the case of Minbos, we do not believe there is a liquid and active market for the Company's shares due to only 25.24% of the Company's issued capital being traded in the 12 months to 2 December 2016.

      Our assessment is that a range of values for Minbos shares based on market pricing, after disregarding post announcement pricing, is between $0.006 and $0.008.

      Control Premium

      We have reviewed the control premiums paid by acquirers of companies listed on the ASX. We have summarised our findings below:

      Year	Number of Transactions	Average Deal Value (A$m)	Average Control (%)
      2017	1	83.57	27.46
      2016	27	757.02	46.48
      2015	37	940.05	41.72
      2014	42	518.19	34.56
      2013	38	206.79	51.55
      2012	49	345.13	46.38
      2011	62	743.04	53.38
      2010	64	841.15	42.12
      2009	61	456.18	49.48

      Premium

      Source: Bloomberg and BDO analysis

      Mean 543.46 43.68

      Median 518.19 46.38

      Entire Data Set Metrics	Average Deal Value (A$m)	Average Control Premium (%)
      Mean	603.56	46.02
      Median	94.49	35.95

      The mean and median figures above are calculated based on the average deal value and control premium for each respective year. To ensure our data is not skewed we have also calculated the mean and median of the entire data set comprising control transactions from 2009 onwards, as set out below:

      Source: Bloomberg and BDO analysis

      In arriving at an appropriate control premium to apply we note that observed control premiums can vary due to the:

    • Nature and magnitude of non-operating assets;

    • Nature and magnitude of discretionary expenses;

    • Perceived quality of existing management;

    • Nature and magnitude of business opportunities not currently being exploited;

    • Ability to integrate the acquiree into the acquirer's business;

    • Level of pre-announcement speculation of the transaction;

    • Level of liquidity in the trade of the acquiree's securities.

      The tables above indicate that the long term average control premium paid by acquirers of companies listed on the ASX is approximately 46% since 2008. However, in assessing the sample of transactions that were included in the table, we noted transactions within the list that appear to be extreme outliers.

      These outliers include 29 transactions in which the announced control premium was in excess of 100%. In a sample where there are extreme outliers, the median often represents a superior measure of central tendency compared to the mean. We note that the median control premium over the review period was approximately 36%.

      In determining a control premium most appropriate for Minbos, we have considered a number of factors which may differentiate Minbos from other ASX listed companies considered in our analysis. Particularly, we consider the fact that Petril is the joint venture partner of Minbos and the holder of a 50% interest in MTL to be important factors that will influence the control premium. As such, a potential acquirer would not be expected to pay a premium for control in line with historical averages.

      Based on the above analysis, we consider that an appropriate premium for control to be paid by Petril is between 20% and 25%.

      Quoted market price including control premium

      Applying a control premium to Minbos' quoted market share price results in the following quoted market price value including a premium for control:

      Low

      Midpoint

      High

      Cents

      Cents

      Cents

      Quoted market price value 0.60 0.70 0.80

      Control premium 20% 23% 25%

      Quoted market price valuation including a premium for control 0.72 0.86 1.00

      Source: BDO analysis

      Therefore, our valuation of a Minbos share based on the quoted market price method and including a premium for control is between 0.72 cents and 1.00 cent, with a midpoint value of 0.86 cents.

    • Assessment of a Minbos share prior to the Transaction

    • The results of the valuations performed are summarised in the table below:

      Low

      Preferred

      High

      Cents

      Cents

      Cents

      Net assets value (Section 10.1) 0.636 0.814 1.353

      ASX market prices (Section 10.2) 0.72 0.86 1.00

      Source: BDO analysis

      Our valuation of a Minbos share under the QMP methodology (including a premium for control) is above our valuation under the NAV methodology on a low and preferred basis but below our NAV valuation on a high basis. The differences between the valuations obtained under the NAV and QMP approaches can be explained by the following:

      • As detailed in section 10.2, we consider a Minbos share to be illiquid with only 25.24% of the Companies issued capital trading over the year prior to the date of the announcement. We note that the largest four investors in the Company hold 56.17% and the top 20 shareholders hold 82.65% of the issued capital of Minbos which is likely to restrict the liquidity of the shares;

      • We note the range of value that results from the NAV approach due to the differing approaches used by Coffey. It would appear that the QMP prices reflect a narrower range that is more moderate on the low and high values;

      • The NAV values are lower than the QMP value range on the low and preferred values, which is not uncommon for exploration companies, which often trade at a premium to their net asset values. This is because investors anticipate some potential upside of 'blue-sky' prospects for the company, which are factored into the share price in advance of any such value being warranted. However, we note that the QMP valuation on a high basis is lower than the NAV valuation on the high basis primarily because the QMP may not capture the full potential of the Cabinda Project due to uncertainty regarding future production. We also note that the QMP prices broadly support our NAV valuation range.

        We consider the NAV methodology to be the most appropriate valuation methodology to employ when valuing a Minbos share for the following reasons:

      • The core value of Minbos lies in the exploration projects that it owns;

      • The NAV valuation incorporates the independent technical valuation of each of the Company's exploration projects which have been verified by Coffey, an independent specialist;

      • Given that Minbos' shares are illiquid and there have been significant and unexplained price movements, we do not consider the quoted market price of a Minbos share to represent its value as a primary methodology.

        Based on the results above we consider the value of a Minbos share to be between 0.636 cents and 1.353 cents, with a preferred value of 0.814 cents.

      • Valuation of a Minbos share in the Merged Entity following the Transaction

        When assessing non-cash consideration in control transactions, RG 111.31 suggests that a comparison should be made between the value of the securities being offered (allowing for a minority discount) and the value of the target entity's securities, assuming 100% of the securities are available for sale. This comparison reflects the fact that:

      • the acquirer is obtaining or increasing control of the target; and

      • the security holders in the target will be receiving scrip constituting minority interests in the combined entity.

      • Value of Minbos following the Transaction

        The value of a Minbos share following the Transaction is reflected in the valuation below:

        NAV following the Transaction	Ref	Low value A$	Preferred value A$	High value A$
        NAV of Minbos prior to the Transaction	10.1	15,626,047	20,000,452	33,262,537
        NAV of Petril	11.2	(7,200,942)	(103,296)	15,882,030
        Elimination of Petril Phosphate shareholder loan	11.3.1	19,788,406	19,788,406	19,788,406
        Adjust for other assets and liabilities consolidated into Petril	11.3.2	44,154	44,154	44,154
        Estimated Completion Adjustment (high value only)	11.3.3	-	-	2,922,594
        Value of Minbos following the transaction	11.3.4	28,257,664	39,729,715	71,899,720
        Discount for minority interest		20.00%	18.70%	16.67%
        Value of Minbos following the transaction (minority interest basis)	11.3.5	22,606,132	32,300,581	59,916,433
        Number of shares on issue following the Transaction		4,532,053,311	4,532,053,311	4,917,011,320
        Value per share ($)	0.0050	0.0071	0.0122
        Value per share (cents)	0.499	0.713	1.219

        Source: BDO analysis

      • Net Asset Value of Petril

        Statement of Financial Position	Note	Consolidated unaudited as at 31-Dec-16 A$	Low value Preferred value A$ A$		High value A$
        CURRENT ASSETS	11.2.1	791,601	791,601	791,601	791,601
        Cash and cash equivalents
        Trade and other receivables		364,613	364,613	364,613	364,613
        TOTAL CURRENT ASSETS	11.2.2	1,156,214	1,156,214	1,156,214	1,156,214
        NON-CURRENT ASSETS
        Exploration and evaluation expenditure		-	23,738,438	30,836,084	46,821,409
        TOTAL NON-CURRENT ASSETS	-	23,738,438	30,836,084	46,821,409
        TOTAL ASSETS	1,156,214	24,894,651	31,992,297	47,977,623
        CURRENT LIABILITIES
        Short term loans	31,248,782	31,248,783	31,248,783	31,248,783
        Trade and other payables	846,040	846,040	846,040	846,040
        Bank overdraft	769	769	769	769
        TOTAL CURRENT LIABILITIES	32,095,591	32,095,593	32,095,593	32,095,593
        TOTAL LIABILITIES	32,095,591	32,095,593	32,095,593	32,095,593
        NET ASSETS	(30,939,378)	(7,200,942)	(103,296)	15,882,030

        Source: BDO analysis

        We have been advised that there has not been a significant change in the net assets of Petril since 31 December 2016 apart from the adjustments discussed below:

      • Cash and cash equivalents

        Petril made its final 50% payment of the stage one BFS in the subsequent months following 31 December 2016 however, this payment was made through the MTL bank account and because all the cash in the MTL bank account is removed from the post Transaction value via the Completion Adjustment (see section

        11.3.3 below) this payment will not impact the net assets of the Merged Entity if removed above instead. For example, if the payment was removed from the cash balance above the Mongo Tando Ltd and Mongo Tando Lda cash balances in the Completion Adjustment in section 11.3.3 would be reduced by the same amount so the net result would be nil.

        We also note that Petril incurred some minor administrative and project costs relating to its other exploration projects but these payments were not material so no adjustment is required.

      • Exploration and evaluation expenditure

        As mentioned in section 6.5, Petril has not recognised any exploration expenditure as an exploration and evaluation asset because the Petril projects are still in exploration phase however, we requested an independent market valuation of the Lucunga Project and Pedra Project for the purpose of our NAV valuation.

        Valuation of Petril's mineral assets

        Accordingly, we instructed Coffey to provide an independent valuation of the Lucunga Project and Pedra Project held by Petril. The range of values for each of Petril's exploration assets as calculated by Coffey is below:

        Petril Phosphates Limited Mineral Asset Valuation	Interest	Low value Preferred value US$m US$m		High value US$m
        Exploration projects	100%	7.7	9.6	11.5
        Lucunga Project
        Pedra Project	100%	0.244	0.305	0.366
        Total (rounded) as presented by Coffey	8	10	12

        Source: Independent Valuation Report prepared by Coffey.

        The Lucunga Project and Pedra Project values have been converted to AUD using a USDAUD exchange rate of 1:1.3887 as at 31 December 2016. The AUD values are set out below:

        Petril Phosphates Limited Mineral Asset Valuation	Interest	Low value A$	Preferred value A$	High value A$
        Exploration projects	100%	10,692,990	13,331,520	15,970,050
        Lucunga Project
        Pedra Project	100%	338,843	423,554	508,264
        Cabinda Project as per Coffey valuation*	50%	12,706,605	17,081,010	30,343,095
        Total	23,738,438	30,836,084	46,821,409

        Source: Independent Valuation Report prepared by Coffey.

        *The Cabinda Project is 50% interest of the Coffey valuation in note 2 of section 10.1. This is because Petril is the controlling entity of MTL so the balances of MTL are consolidated into the Petril balance sheet so no additional adjustments to the Coffey valuation is required.

        Coffey considered a number of different valuation methods when valuing the exploration assets of Petril including the MEE method and the comparable transaction method. The MEE method is discussed in Appendix 2. The comparable transaction method involves calculating a value per common attribute in a comparable transaction and applying that value to the subject asset. A common attribute could be the amount of resource or the size of a tenement. We consider these methods to be appropriate given the pre-feasibility stage of development for Petril's exploration assets. Further information on these independent valuations can be found in Appendix 3.

        Because a JORC compliant mineral resource has not been declared at either the Lucunga Project or the Pedra Project, Coffey considers the MEE method of valuation to be appropriate to value these projects. We also acknowledge the agreement between Petril and Haifa Chemicals Ltd regarding the Lucunga Project where Haifa Chemicals Ltd can earn up to 35% of the share capital of Vale Fertil Ltd (the entity which operates the Lucunga concession) by contributing 50% of the costs incurred. We have allocated 100% of the Lucunga Project value to Petril as the Merged Entity will own 100% of the Lucunga Project post the Transaction as the agreement between Petril and Haifa Chemicals Ltd will be replaced with the Royalty Payment that is detailed in section 4.

        It is unlikely that the Lucunga Project will progress into a producing mine in the near future and therefore we haven't adjusted for the liability of the future Royalty Payment.

        The table above indicates a range of values, including the 50% interest in the Cabinda Project, is between

        $23.74 million and $46.82 million, with a preferred value of $30.84 million.

      • Adjustments arising from the Transaction

        The following adjustments were made to the value of a Minbos share following the Transaction:

      • Elimination of Petril's shareholder loans

        The following short term loan balance is eliminated as part of the Transaction:

        unaudited as at	unaudited as at
        Eliminated short term loan	31-Dec-16	31-Dec-16
        US$	A$
        Petril Phosphates	14,249,590	19,788,406

        Source: BDO analysis

        Note: this value has been converted to AUD using the USDAUD exchange rate of 1:1.3887 as at 31 December 2016.

        The Petril Phosphates loans which total $19.79 million are the aggregate loans from all the Petril shareholders and were provided to fund the ongoing exploration expenditure of the Petril group of companies. These loans were provided interest free and there is no specified repayment date. These loans will be extinguished on completion of the Transaction.

      • Adjustment for other assets and liabilities which are consolidated in Petril

        The following table illustrates the other assets and liabilities which are to be adjusted as they are consolidated in the net assets in Petril and 50% has been picked up in the investment in associate in Minbos so there is double counting of this amount on a post valuation basis and therefore this adjustment eliminates this double counting.

        Mongo Tango Ltd	Unaudited as at 31-Dec-16 A$
        Cash and cash equivalents Other receivables	247,288 318,421
        Trade and other payables	(654,016)
        TOTAL 50% portion of total liability above to be adjusted	(88,307) 44,154

        Source: BDO analysis

      • Estimated Completion Adjustment (high value only)

        Subject to completion of the Transaction, a Completion Adjustment will be made by subtracting the net working capital of Minbos from the net working capital of Petril (excluding the net cash of Mongo Tando). Where the result is a positive figure, this amount will be paid by the company to the Vendors and where the result is a negative amount, this will be paid by the Vendors to the Company at the Vendors discretion. Additionally, any payment to the Company from the Vendors will result in the issue of the Conditional Shares.

        Based on discussions with Minbos management and using the balance sheet information of Minbos and Petril at 31 December 2016 we have estimated the Completion Adjustment as per the table below:

        Estimated Completion Adjustment	Unaudited as at 31-Dec-16 A$
        Petril (Consolidated Group)
        Cash at Bank as at 31 December 2016	791,601
        Less Mongo Tando Ltd and Mongo Tando Lda cash balances (included above)	(562,380)
        Trade and other receivables	364,613
        Total effective cash on hand	593,833
        Total creditors	846,040
        Bank overdraft	769
        Total current liabilities	846,810
        NET PETRIL WORKING CAPITAL (A)	(252,977)
        Cash call adjustment (B)	179,406
        Redundancy payments adjustment (C)	97,209
        23,638
        Minbos
        Cash at bank as at 31 December 2016	4,325,382
        Less cash movements from 31 December 2016 to 30 April 2017	(909,366)
        Less BFS payment on 19 May 2017	(367,694)
        Trade and other receivables	103,947
        Total effective cash on hand	3,152,269
        Trade creditors	146,721
        Provisions	59,316
        Total current liabilities	206,037
        NET MINBOS WORKING CAPITAL (D)	2,946,232
        AMOUNT PAYABLE / (OWED) TO MINBOS	(2,922,594)

        Source: BDO analysis

        The Completion Adjustment calculation as displayed in the SSA is below: Completion Adjustment = A + B + C - D

        Accordingly, the table above indicates that the estimated Completion Adjustment will result in a payment by the Vendors to Minbos of approximately $2.92 million. If the Vendors agree to pay this amount in full then all the Conditional Shares will be issued. Accordingly, the estimated subscription price of the Conditional Shares is deemed to be the estimated Completion Adjustment divided by the Conditional Shares:

        $2,922,594 ÷ 384,958,009 = $0.0076

        As such, we have adjusted only the high value valuation for the estimated Completion Adjustment as our valuation of the Company post completion of the Transaction is above the estimated Conditional Share price value of $0.0076 on a high basis. We expect that the Vendors will pay the estimated Completion Adjustment in full under the high value scenario so they will receive all the 384,958,009 Conditional Shares.

      • Application of minority discount

        As outlined in section 3.3 of our Report, in assessing fairness we have compared the value of a Minbos share prior to the Transaction on a control basis to the value of a share in the Merged Entity following the Transaction on a minority interest basis. The values of Minbos and Petril using the NAV methodology represents a controlling interest value, therefore we have applied a minority discount to convert these values to a minority interest holding.

        A minority interest discount is the inverse of a premium for control and is calculated using the formula 1- (1÷ (1 + control premium)). As discussed in section 10.2, we consider an appropriate control premium for Minbos to be in the range of 20% to 25%, giving a minority interest discount in the range of 16.67% to 20.00%.

      • Shares on issue post completion of the Transaction

      • We have valued the Company post completion of the Transaction under minimum and maximum share scenarios as set out below:

      • On the minimum share scenario we have assumed that no other shares other than the Consideration Shares will be issued to the Vendors ('Minimum Subscription'); and

      • On the maximum share scenario we have included the issue of the Consideration Shares plus assumed that the Vendors will also pay in full the Completion Adjustment to Minbos so that all the 384,958,009 Conditional Shares are issued (the 'Maximum Subscription'). As such, we have increased the total shares on issue post completion of the Transaction by an additional 384,958,009 shares.

        A summary of the share movements is detailed below:

        Shares on issue following the Transaction	Minimum Subscription	Maximum Subscription
        Current number of shares on issue prior to the Transaction	2,458,505,660	2,458,505,660
        Issue of shares to the Vendors	2,073,547,651	2,073,547,651
        Issue of Conditional Shares	-	384,958,009
        Total shares on issue following the Transaction	4,532,053,311	4,917,011,320

        Source: BDO analysis

        We have not determined the value on a fully diluted basis. At present, there is limited available information and certainty around the future performance and ability of Minbos to achieve the following performance share milestones:

      • Vesting of 237,829,976 SOFOSA Performance Rights and vesting of 237,829,976 Cabinda Performance Rights; and

      • Vesting of 300 million Lucunga Performance Rights.

      • Is the Transaction fair?

        The value of Minbos share prior to the Transaction on a controlling interest basis is compared to the value of the Merged Entity share following completion of the Transaction on a minority interest basis is compared below:

        Ref

        Low Cents

        Preferred

        Cents

        High Cents

        Value of a Minbos share prior to the Transaction on a control basis

        10.1 0.636 0.814 1.353

        Value of share in the Merged Entity post completion of the Transaction on a minority basis

        11.1 0.499 0.713 1.219

        Source: BDO analysis

        The above valuation ranges are graphically presented below:

        Valuation Summary

        Value of a Minbos share prior to the Transaction on a control basis

        Value of a share in the Merged Entity following the Transaction on a minority basis

        0.00 0.50 1.00 1.50

        Value (cents)

        We note from the table and graph above that the value of a share in the Merged Entity on a minority basis is below the value of a Minbos share prior to the Transaction on a control basis. Therefore, we consider that the Transaction is not fair.

      • Is the Transaction reasonable?

      • Alternative Proposal

        We are unaware of any alternative proposal that might offer the Shareholders a premium over the value ascribed to, resulting from the Transaction.

      • Practical Level of Control

        If the Transaction is approved then the Vendors will hold an interest ranging between 70.60% and up to 74.46% of the share capital in the Merged Entity depending on the extent of the take up of the Conditional Shares and whether the performance rights vest. There will also be changes to the board with all but two directors of Minbos resigning from the board and two new directors nominated by Petril will be selected to join the board off the Merged Entity. An independent chairman will also be selected by the new board.

        This means that Petril's nominated directors will make up 40% of the Board.

        When shareholders are required to approve an issue that relates to a company there are two types of approval levels. These are general resolutions and special resolutions. A general resolution requires 50% of shares to be voted in favour to approve a matter and a special resolution required 75% of shares on issue to be voted in favour to approve a matter. If the Transaction is approved then Petril Shareholders will collectively be able to block special resolutions and pass general resolutions post completion of the Transaction.

        The Vendors control of Minbos following the Transaction will be significant when compared to all other shareholders. However, with a shareholding of between 70.60% and up to 74.46% in the Merged Entity, and 40% of the board, the Vendors will not have 100% control at the shareholder and board levels. Therefore, in our opinion, while the Vendors will be able to significantly influence the activities of Minbos, it will not be able to exercise a similar level of control as if it held 100% of Minbos.

      • Consequences of not Approving the Transaction

        Consequences

        Minbos has been loss making from continuing operations in every review period as set out in section 5.4. As such, it is imperative that Minbos develops the Cabinda Project into a producing mine with positive cash flows to sustain the future growth of the Company. The Merged Entity will control 100% of the Cabinda Project which will streamline decision making and assist with debt and/or equity funding.

        Additionally, Minbos also believes that the acquisition of Petril consolidates and simplifies the ownership of the Cabinda Project which is important as the Company completes the BFS on the Cacata deposit within the Cabinda Project.

        Potential decline in share price

        We have analysed movements in Minbos' share price since the Transaction was announced. A graph of Minbos' share price since the announcement is set out below:

        0.010

        0.009

        0.008

        0.007

        Share Price ($)

        0.006

        0.005

        0.004

        0.003

        0.002

        0.001

        0.000

        MNB share price and trading volume history since announcement of the Transaction

        Date of announcement

        16.0

        14.0

        Volume (millions)

        12.0

        10.0

        8.0

        6.0

        4.0

        2.0

        -

        Volume Closing share price

        Source: Bloomberg

        As illustrated by the graph above, Minbos' share price and volume of shares traded increased on the day of the announcement (5 December 2016). Significantly, Minbos' shares have since reached interim trading highs of 1 cent per share on a number of occasions since the announcement. Additionally, the Volume Weighted Average Price ('VWAP') of a Minbos share in the 30 days prior to 27 June 2017 is 0.7 cents which is an increase from the 30 day VWAP prior to the announcement of 0.6 cents. We also note that the Minbos share price post the announcement has traded above our quoted market price range of 0.6 to 0.8 cents (before applying a control premium) as assessed in section 10.2.

        We have also reviewed the announcements made by the Company post 5 December 2016. Minbos released five ASX price sensitive announcements since the Merger was announced. The first price sensitive announcement was released on 7 December 2016 and related to the exercise of options by Green Services which raised $3.85 million. We note the share price increased from 0.8 cents to 0.9 cents in the three days post this announcement. Minbos' December 2016 quarterly report was released on 31 January 2017 and the March quarterly report was announced on 28 April 2017. We note that the December 2016 and March 2017 quarterly reports did not impact the volume of shares traded or the share price of the Company. Minbos also announced the completion of the definitive share sale agreement to acquire Petril on 17 May 2017. We note that the closing share price of the Company did not change in the three days post this announcement.

      • Advantages of Approving the Transaction

        We have considered the following advantages when assessing whether the Transaction is reasonable:

      • 100% control of the Cabinda Project

        Post completion of the Transaction, the Merged Entity will have 100% control of the Cabinda Project. This is significant as it will allow the Merged Entity to access greater equity capital market opportunities and debt funding markets which will help progress the Cabinda Project through the feasibility stages and into

        development. Additionally, the administration and corporate decisions of the Merged Entity will become streamlined which is likely to improve decision making process and overall operations.

      • The Transaction is predominantly script consideration

        The consideration payable under the Transaction is predominantly script with a future royalty payment on the phosphate product produced and sold from the Lucunga Project. Accordingly, the Transaction will allow the Company to preserve its existing cash reserves. This is important as the Company can allocate the cash reserves to developing the Cabinda Project into a producing asset.

      • The Merged Entity will hold the other existing assets of Petril contributing to a larger pool of assets which will give the Company greater flexibility to divest or develop a number of projects

        In addition to acquiring 100% of the Cabinda Project, Minbos will also acquire 100% of the Pedra Project and will have a majority joint venture ownership in the Lucunga Project. This will give Minbos a stronger and more diversified portfolio of projects which will allow the directors to choose which projects to prioritise.

        We also note that under the preferred and high valuation scenarios, the percentage of assets the Vendors are contributing versus the percentage of equity the Vendors receive in the Merged Entity is greater than Minbos shareholders. This suggests the Transaction is value accretive for shareholders.

      • Increased market capitalisation to improve equity capital market and debt funding opportunities

        The potential increase in market capitalisation post completion of the Transaction may increase access to improved equity capital market opportunities, debt funding and increased liquidity. This is imperative as the Company looks to progress the Cabinda Project from exploration phase into production.

        We have also analysed the trading of Minbos' shares in the twelve-month period to 2 December 2016 and note that over this period, only 25.24% of the Company's issued capital had been traded. This is a low level of liquidity and makes it difficult for Shareholders who wish to buy or sell shares in the Company.

        Noting the increase in share price and trading in Minbos' shares following the announcement of the Transaction, as well as the increased number of shares which will be on issue following the Transaction, we consider it is likely that the level of liquidity for Minbos' shares will increase if the Transaction is approved. We note that increased liquidity will benefit Shareholders as it will improve their ability to trade Minbos shares.

      • Enhance development schedules

        It is envisaged that the Merged Entity will become more efficient due to the consolidation of the decision making channels which will speed up the ability of the Company post completion of the Transaction to make executive decisions. This will also enhance development schedules as the Merged Entity can react quickly to changing events.

      • The Transaction is a merger of two similar sized entities with equal board representation in the merged entity

        Following completion of the Transaction, the Vendors will hold between 70.60% and up to 74.46% of the Merged Entity. Additionally, the board of the proposed Merged Entity will consist of four directors and an independent chairman who will be selected by the proposed board. We consider that the expertise of the proposed board will provide the Merged Entity with the experience required to develop the exploration projects and generate positive returns for Shareholders.

      • Potential for synergies by being a single entity

        The Merged Entity post completion of the Transaction is expected to realise efficiencies by consolidating the corporate and administration departments. Additionally, Minbos have also estimated cost savings will arise from streamlining the management of the BFS in the Merged Entity plus financial cost savings related to equity and debt funding.

      • Performance rights provide an incentive to increase Minbos' value

        The following milestones will need to be accomplished in order for the SOFOSA Performance Rights and Cabinda Performance Rights to vest:

        Tranche 1 (these performance rights lapse on 27 January 2018):

        • the Company's existing Cabinda exploration permit is replaced by the Angolan Government with new exploration permits;

        • SOFOSA agreeing to transfer 100% of its securities that it currently holds in the capital of MTL;

        • the Merger between the Company and Petril is progressed and supported via a letter of support from SOFOSA to the Company on a SOFOSA letterhead which sets out the terms on which SOFOSA supports the Merger; and

          Tranche 2 (these performance rights lapse on 27 January 2019):

        • The Company is granted a mining licence over the Cacata Project (refer to section 5.2) area (provided that this is granted pursuant to SOFOSA's assistance).

          The following milestones will need to be accomplished in order for the Lucunga Performance Rights to vest:

        • Completion of the Merger; and

        • Renewal of all the Lucunga Project concessions for a 20 year period with this condition being satisfied on first renewal notwithstanding the review every 5 years according to the Angolan mineral laws.

        • The Lucunga Performance Rights will lapse if these conditions have not been satisfied by the date which is five years from the date of issue.

          The structure of the Consideration with the issue of the performance shares mentioned above provides an incentive for Petril to meet the milestones listed above. This is beneficial for Shareholders noting that, if the milestones are achieved, although Shareholders will be further diluted, Shareholders are likely to benefit from the capital growth associated with the successful operations of the Company.

      • Disadvantages of Approving the Transaction

        If the Transaction is approved, in our opinion, the potential disadvantages to Shareholders include those listed below:

      • The transaction is not fair

        As set out in section 12, the Transaction is not fair. The value of a Minbos share post Transaction on a minority interest basis, is lower than the value of a Minbos share pre Transaction on a control basis. RG 111 states that if an offer is fair it must be reasonable, in this case, the offer is not fair.

      • Dilution of existing Shareholders' interests

      • As set out in section 4, if the Transaction is approved, Shareholders' interests in Minbos (excluding Green Services) will be diluted from 54.20% to a minimum of 25.54%.

        This dilution will reduce the capacity for Shareholders' to influence the operations of the Company.

      • Conclusion

        We have considered the terms of the Transaction as outlined in the body of this report and have concluded that the Transaction is not fair but reasonable to the Shareholders of Minbos.

        In our opinion, the Transaction is not fair because the value of a share in the Merged Entity after the Transaction on a minority basis is less than the value of a Minbos share prior to the Transaction on a control basis. However, we consider the Transaction to be reasonable due to significant advantages that the Transaction will bring to the Company. In particular, we consider the Transaction provides shareholders of the Merged Entity with 100% control of the Cabinda Project.

      • Sources of information

        This report has been based on the following information:

    • Draft Notice of General Meeting and Explanatory Statement on or about the date of this report;

    • Audited financial statements of Minbos for the years ended 30 June 2016, 2015 and 2014;

    • Reviewed financial statements of Minbos for the half year to 31 December 2016;

    • Audited financial statements of Petril for the years ended 31 December 2015 and 31 December 2014;

    • Draft accounts for Petril for the year ended 31 December 2016;

    • Independent Valuation Report of the Cabinda Province Resources, Angola and the Kanzi Resources, DRC dated 1 February 2017 performed by Coffey;

    • Independent Valuation Report of the Lucunga and Pedra Phosphate Projects, Northern Angola dated 1 February 2017 performed by Coffey;

    • Share registry information;

    • Information in the public domain; and

    • Discussions with Directors and Management of Minbos.

    • Independence

      BDO Corporate Finance (WA) Pty Ltd is entitled to receive a fee of $21,000 (excluding GST and reimbursement of out of pocket expenses). The fee is not contingent on the conclusion, content or future use of this Report. Except for this fee, BDO Corporate Finance (WA) Pty Ltd has not received and will not receive any pecuniary or other benefit whether direct or indirect in connection with the preparation of this report.

      BDO Corporate Finance (WA) Pty Ltd has been indemnified by Minbos in respect of any claim arising from BDO Corporate Finance (WA) Pty Ltd's reliance on information provided by the Minbos, including the non provision of material information, in relation to the preparation of this report.

      Prior to accepting this engagement BDO Corporate Finance (WA) Pty Ltd has considered its independence with respect to Petril and Minbos and any of their respective associates with reference to ASIC Regulatory Guide 112 'Independence of Experts'. In BDO Corporate Finance (WA) Pty Ltd's opinion it is independent of Petril and Minbos and their respective associates.

      The provision of our services is not considered a threat to our independence as auditors under Professional Statement APES 110 - Professional Independence. The services provided have no material impact on the financial report of Minbos.

      A draft of this report was provided to Minbos and its advisors for confirmation of the factual accuracy of its contents. No significant changes were made to this report as a result of this review.

      BDO is the brand name for the BDO International network and for each of the BDO Member firms.

      BDO (Australia) Ltd, an Australian company limited by guarantee, is a member of BDO International Limited, a UK company limited by guarantee, and forms part of the international BDO network of Independent Member Firms. BDO in Australia, is a national association of separate entities (each of which has appointed BDO (Australia) Limited ACN 050 110 275 to represent it in BDO International).

    • Qualifications

      BDO Corporate Finance (WA) Pty Ltd has extensive experience in the provision of corporate finance advice, particularly in respect of takeovers, mergers and acquisitions.

      BDO Corporate Finance (WA) Pty Ltd holds an Australian Financial Services Licence issued by the Australian Securities and Investment Commission for giving expert reports pursuant to the Listing rules of the ASX and the Corporations Act.

      The persons specifically involved in preparing and reviewing this report were Sherif Andrawes and Adam Myers of BDO Corporate Finance (WA) Pty Ltd. They have significant experience in the preparation of independent expert reports, valuations and mergers and acquisitions advice across a wide range of industries in Australia and were supported by other BDO staff.

      Adam Myers is a member of the Australian Institute of Chartered Accountants. Adam's career spans 19 years in the Audit and Assurance and Corporate Finance areas. Adam is a CA BV Specialist and has considerable experience in the preparation of independent expert reports and valuations in general for companies in a wide number of industry sectors.

      Sherif Andrawes is a Fellow of the Institute of Chartered Accountants in England & Wales and a Member of the Institute of Chartered Accountants in Australia. He has over 29 years' experience working in the audit and corporate finance fields with BDO and its predecessor firms in London and Perth. He has been responsible for over 300 public company independent expert's reports under the Corporations Act or ASX Listing Rules and is a CA BV Specialist. These experts' reports cover a wide range of industries in Australia with a focus on companies in the natural resources sector. Sherif Andrawes is the Chairman of BDO in Western Australia, Corporate Finance Practice Group Leader of BDO in Western Australia and the Natural Resources Leader for BDO in Australia.

    • Disclaimers and consents

    • This report has been prepared at the request of Minbos for inclusion in the Notice of Meeting which will be sent to all Minbos Shareholders. Minbos engaged BDO Corporate Finance (WA) Pty Ltd to prepare an independent expert's report to consider if the Transaction to merge with Petril is fair and reasonable to the non-associated shareholders of the Company.

      BDO Corporate Finance (WA) Pty Ltd hereby consents to this report accompanying the above Notice of Meeting. Apart from such use, neither the whole nor any part of this report, nor any reference thereto may be included in or with, or attached to any document, circular resolution, statement or letter without the prior written consent of BDO Corporate Finance (WA) Pty Ltd.

      BDO Corporate Finance (WA) Pty Ltd takes no responsibility for the contents of the Notice of Meeting other than this report.

      We have no reason to believe that any of the information or explanations supplied to us is false or that material information has been withheld. It is not the role of BDO Corporate Finance (WA) Pty Ltd acting as an independent expert to perform any due diligence procedures on behalf of the Company. The Directors of the Company are responsible for conducting appropriate due diligence in relation to Petril. BDO Corporate Finance (WA) Pty Ltd provides no warranty as to the adequacy, effectiveness or completeness of the due diligence process.

      The opinion of BDO Corporate Finance (WA) Pty Ltd is based on the market, economic and other conditions prevailing at the date of this report. Such conditions can change significantly over short periods of time.

      With respect to taxation implications it is recommended that individual Shareholders obtain their own taxation advice, in respect of the Transaction, tailored to their own particular circumstances.

      Furthermore, the advice provided in this report does not constitute legal or taxation advice to the Shareholders of Minbos, or any other party.

      BDO Corporate Finance (WA) Pty Ltd has also considered and relied upon independent valuations for mineral assets held by Minbos.

      The valuer engaged for the mineral asset valuation, Coffey, possess the appropriate qualifications and experience in the industry to make such assessments. The approaches adopted and assumptions made in arriving at their valuation is appropriate for this report. We have received consent from the valuer for the use of their valuation report in the preparation of this report and to append a copy of their report to this report.

      The statements and opinions included in this report are given in good faith and in the belief that they are not false, misleading or incomplete.

      The terms of this engagement are such that BDO Corporate Finance (WA) Pty Ltd is required to provide a supplementary report if we become aware of a significant change affecting the information in this report arising between the date of this report and prior to the date of the meeting or during the offer period.

      Yours faithfully

      BDO CORPORATE FINANCE (WA) PTY LTD

      Adam Myers

      Director

      Sherif Andrawes

      Director

      Appendix 1 - Glossary of Terms

      Reference	Definition
      The Act	The Corporations Act 2001 Cth

      AFP African Phosphate Pty Ltd

      APES 225 Accounting Professional & Ethical Standards Board professional standard APES 225 'Valuation Services'

      ASIC Australian Securities and Investments Commission

      ASX Australian Securities Exchange

      A$ Australian dollar

      BDO BDO Corporate Finance (WA) Pty Ltd

      BPL Bone Phosphate of Lime

      Cabinda Project The Cabinda phosphate project which is 50% owned by Minbos and 50% owned by Petril

      Cabinda Performance Rights 237,829,976 performance rights to be issued to the Vendors

      Cacata Project The Cacata Project is the development project within the Cabinda Project

      Coffey Coffey Mining South Africa (Pty) Ltd

      The Company Minbos Resources Limited

      Completion Adjustment A net cash adjustment to Minbos and Petril on completion of the Transaction as set out in section 11.3.3

      Conditional Shares The 384,958,009 shares to be issued as part of the Completion Adjustment.

      Consideration Securities The Consideration Shares, Cabinda Performance Rights, SOFOSA Performance Rights and the Lucunga Performance Rights to be issued for consideration of acquiring 100% of the share capital of Petril

      Consideration Shares 2,073,547,651 Minbos shares offered to Petril Shareholders

      Corporations Act The Corporations Act 2001 Cth

      DCF Discounted Future Cash Flows

      DRC Democratic Republic of Congo

      EBIT Earnings before interest and tax

      EBITDA Earnings before interest, tax, depreciation and amortisation

      FME Future Maintainable Earnings

      GDP Gross Domestic Product

      GFC Global Financial Crisis

      Green Services Green Services Innovations Ltd

      JORC Code The Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves

      Kanzi Project Kanzi phosphate project

      Lucunga Performance Rights 300 million performance rights to be issued to Paramount Global Group Inc.

      Lucunga Project Lucunga phosphate project

      Lucunga Royalty A royalty payment to the Vendors for their share of the Lucunga Project

      Maximum Subscription The assumption that Petril Shareholders will pay in full the Completion Adjustment so all of the Conditional Shares are issued

      MEE Multiple of Exploration Expenditure

      Merged Entity The combined company of Minbos Resources Limited and Petril Phosphates Limited post completion of the Transaction

      The Merger The Transaction to merge Minbos Resources Limited with Petril Phosphates Limited

      Minbos Minbos Resources Limited

      Minimum Subscription The assumption that only the Consideration Shares will be issued

      Mongo Tando Limited The entity which owns Mongo Tando Ltda

      MTL Mongo Tando Ltda which is the entity which holds the Cabinda licences

      NAV Net Asset Value

      QMP Quoted market price

      RBA Reserve Bank of Australia

      Regulations Corporations Act Regulations 2001 (Cth)

      Replacement Performance Rights

      The 237,829,976 SOFOSA Performance Rights to be issued to replace existing and recently expired SOFOSA performance rights

      Our Report This Independent Expert's Report prepared by BDO

      Pedra Project Pedra de Feitico phosphate project

      Petril Petril Phosphates Limited

      Petril Shareholders The shareholders of Petril

      PRM Phosphate Rock Margin

      RG 74 Acquisitions approved by Members (December 2011)

      RG 111 Content of expert reports (March 2011)

      RG 112 Independence of experts (March 2011)

      Section 611 Section 611 of the Corporations Act

      Shareholders Shareholders of Minbos not associated with Petril

      SOFOSA Sociedade De Fosfatos De Angola

      SOFOSA Performance Rights 237,829,976 performance rights to be issued to SOFOSA

      SSA Share Sale Agreement

      The Transaction The proposal to merge Minbos and Petril by way of an all script and royalty based transaction

      US$ United States dollar

      Valmin Code Australasian Code for Public Reporting of Technical Assessments and Valuations of Mineral Assets

      Valuation Engagement An Engagement or Assignment to perform a Valuation and provide a Valuation Report where the Valuer is free to employ the Valuation Approaches, Valuation Methods, and Valuation Procedures that a reasonable and informed third party would perform taking into consideration all the specific facts and circumstances of the Engagement or Assignment available to the Valuer at that time.

      The Vendors The Petril Shareholders

      VWAP Volume Weighted Average Price

      Copyright © 2017 BDO Corporate Finance (WA) Pty Ltd

      All rights reserved. No part of this publication may be reproduced, published, distributed, displayed, copied or stored for public or private use in any information retrieval system, or transmitted in any form by any mechanical, photographic or electronic process, including electronically or digitally on the Internet or World Wide Web, or over any network, or local area network, without written permission of the author. No part of this publication may be modified, changed or exploited in any way used for derivative work or offered for sale without the express written permission of the author.

      For permission requests, write to BDO Corporate Finance (WA) Pty Ltd, at the address below: The Directors

      BDO Corporate Finance (WA) Pty Ltd 38 Station Street

      SUBIACO, WA 6008

      Australia

      Appendix 2 - Valuation Methodologies

      Methodologies commonly used for valuing assets and businesses are as follows:

    • Net asset value ('NAV')

      Asset based methods estimate the market value of an entity's securities based on the realisable value of its identifiable net assets. Asset based methods include:

    • Orderly realisation of assets method

    • Liquidation of assets method

    • Net assets on a going concern method

    The orderly realisation of assets method estimates fair market value by determining the amount that would be distributed to entity holders, after payment of all liabilities including realisation costs and taxation charges that arise, assuming the entity is wound up in an orderly manner.

    The liquidation method is similar to the orderly realisation of assets method except the liquidation method assumes the assets are sold in a shorter time frame. Since wind up or liquidation of the entity may not be contemplated, these methods in their strictest form may not be appropriate. The net assets on a going concern method estimates the market values of the net assets of an entity but does not take into account any realisation costs.

    Net assets on a going concern basis are usually appropriate where the majority of assets consist of cash, passive investments or projects with a limited life. All assets and liabilities of the entity are valued at market value under this alternative and this combined market value forms the basis for the entity's valuation.

    Often the FME and DCF methodologies are used in valuing assets forming part of the overall Net assets on a going concern basis. This is particularly so for exploration and mining companies where investments are in finite life producing assets or prospective exploration areas.

    These asset based methods ignore the possibility that the entity's value could exceed the realisable value of its assets as they do not recognise the value of intangible assets such as management, intellectual property and goodwill. Asset based methods are appropriate when an entity is not making an adequate return on its assets, a significant proportion of the entity's assets are liquid or for asset holding companies.

19. Quoted Market Price Basis ('QMP')

    A valuation approach that can be used in conjunction with (or as a replacement for) other valuation methods is the quoted market price of listed securities. Where there is a ready market for securities such as the ASX, through which shares are traded, recent prices at which shares are bought and sold can be taken as the market value per share. Such market value includes all factors and influences that impact upon the ASX. The use of ASX pricing is more relevant where a security displays regular high volume trading, creating a liquid and active market in that security.

20. Capitalisation of future maintainable earnings ('FME')

    This method places a value on the business by estimating the likely FME, capitalised at an appropriate rate which reflects business outlook, business risk, investor expectations, future growth prospects and other entity specific factors. This approach relies on the availability and analysis of comparable market data.

    The FME approach is the most commonly applied valuation technique and is particularly applicable to profitable businesses with relatively steady growth histories and forecasts, regular capital expenditure requirements and non-finite lives.

    The FME used in the valuation can be based on net profit after tax or alternatives to this such as earnings before interest and tax ('EBIT') or earnings before interest, tax, depreciation and amortisation ('EBITDA'). The capitalisation rate or 'earnings multiple' is adjusted to reflect which base is being used for FME.

21. Discounted future cash flows ('DCF')

    The DCF methodology is based on the generally accepted theory that the value of an asset or business depends on its future net cash flows, discounted to their present value at an appropriate discount rate (often called the weighted average cost of capital). This discount rate represents an opportunity cost of capital reflecting the expected rate of return which investors can obtain from investments having equivalent risks.

    Considerable judgement is required to estimate the future cash flows which must be able to be reliably estimated for a sufficiently long period to make this valuation methodology appropriate.

    A terminal value for the asset or business is calculated at the end of the future cash flow period and this is also discounted to its present value using the appropriate discount rate.

    DCF valuations are particularly applicable to businesses with limited lives, experiencing growth, that are in a start up phase, or experience irregular cash flows.

22. Market Based Assessment

The market based approach seeks to arrive at a value for a business by reference to comparable transactions involving the sale of similar businesses. This is based on the premise that companies with similar characteristics, such as operating in similar industries, command similar values. In performing this analysis it is important to acknowledge the differences between the comparable companies being analysed and the company that is being valued and then to reflect these differences in the valuation.

The resource multiple is a market based approach which seeks to arrive at a value for a company by reference to its total reported resources and to the enterprise value per tonne/lb of the reported resources of comparable listed companies. The resource multiple represents the value placed on the resources of comparable companies by a liquid market.

Copyright © 2017 BDO Corporate Finance (WA) Pty Ltd

All rights reserved. No part of this publication may be reproduced, published, distributed, displayed, copied or stored for public or private use in any information retrieval system, or transmitted in any form by any mechanical, photographic or electronic process, including electronically or digitally on the Internet or World Wide Web, or over any network, or local area network, without written permission of the author. No part of this publication may be modified, changed or exploited in any way used for derivative work or offered for sale without the express written permission of the author.

Appendix 3 - Independent Valuation Reports prepared by Coffey

Minbos Resources Limited

Angola and Congo Phosphate Projects

Independent Valuation of the Cabinda Province Resources, Angola and the Kanzi Resources, DRC

1 February 2017

Author(s):

Hannes Bornman Manager Mining BEng (Mining), MBA, FSAIMM, Pr. Eng.

Date: 1 February 2017

Project Number: JMIN05

Copies: Minbos Resources Limited (1)

Coffey - South Africa (1)

Document Review and Sign Off

This is a scanned signature held on file by Coffey. The person and signatory consents to its use only for the purpose of this document.

Hannes Bornman Manager/Author

This is a scanned signature held on file by Coffey. The person and signatory consents to its use only for the purpose of this document.

Supervising Principal Reviewed By Ken Lomberg

This document has been prepared for the exclusive use of BDO Corporate Finance (WA) Pty Ltd ("Client") on the basis of instructions, information and data supplied by them. No warranty or guarantee, whether express or implied, is made by Coffey with respect to the completeness or accuracy of any aspect of this document and no party, other than the Client, is authorised to or should place any reliance whatsoever on the whole or any part or parts of the document. Coffey does not undertake or accept any responsibility or liability in any way whatsoever to any person or entity in respect of the whole or any part or parts of this document, or any errors in or omissions from it, whether arising from negligence or any other basis in law whatsoever.

Table of Contents

EXECUTIVE SUMMARY vi

1. Introduction 1

2. Scope of work2

3. Site Visit2

4. Valuation Date and Code2

5. Qualifications and Organisations2

6. Project Locality2

7. Accessibility and Infrastructure6

8. Angolan Licenses 6

9. DRC Permits 7

10. Project Background8

11. Angolan Licenses 8

12. DRC permits 8

13. Independence and Experience 9

14. Participants9

15. Source Documentation9

16. Independence10

17. Disclaimer10

18. Tenements and Previous Exploration Activities 12

19. Angolan Projects12

20. License Details 12

21. Exploration History 12

22. DRC Projects15

23. Exploration Permits 15

24. Exploration History 15

25. Geology 18

26. Regional Geology18

27. Local Geology22

28. Angolan Licenses 22

29. DRC Permits 38

30. Mineralization 44

31. Mineralogy44

32. Mineral Resources48

33. Mining 52

34. Cacata and Chivovo52

35. Kanzi53

36. Infrastructure 54

37. Angolan Licenses54

38. DRC Permits54

39. Mineral Processing 56

40. Cacata and Chivovo56

41. Kanzi56

42. Valuation Background 57

43. Valuation 61

44. Mineral Resources61

45. Comparable Transaction Analysis62

46. Timeline and Transactions Discarded 62

47. Farim Phosphate 62

48. Phosco 63

49. Lam Lam and Kebemer 63

50. Baobab Phosphate 63

51. Arganara Phosphate 63

52. Bomfim 64

53. Market Approach Valuation 64

54. Yardstick Method65

55. Conclusion 65

56. Kanzi67

57. Market Approach 67

58. Cost Approach 67

59. Conclusion 68

60. Risk Summary 69

61. Introduction69

62. Geology and Mineral Resources Risk69

63. Market and Product Specifications69

64. Development and Operating Risk69

65. General Engineering and Site Infrastructure Risk70

66. Metallurgical and Processing Risk70

67. Foreign Operation and Political Risk70

68. Ownership Risk71

69. Project Economics and Overall Project Risk71

70. Risk Summary71

71. References 72

72. List of Tables

    Table 1 - DRC Exploration Permits ix

    Table 2- Cabinda Phosphate Project Mineral Resources October 2013 - Total xii

    Table 3 - Cacata Mineral Resources October 2013 - Total xiii

    Table 4- Cacata Mineral Resources October 2013 - Scrubbing and Screening xiii

    Table 5 - Cacata Mineral Resources October 2013 -Flotation xiii

    Table 7 - Mongo Tando Mineral Resources October 2013 xiv

    Table 8 - Chibuete Mineral Resources October 2013 xv

    Table 9 - Inferred grade as % of Measured and Indicated grades xvii

    Table 10 - Mineral Resources for Cabinda October 2013 xviii

    Table 11 - Cabinda Valuation - Market Approach xviii

    Table 12 - Cabinda Valuation - Market Approach xix

    Table 3.1.2_1 - Mongo Tando Drilling 2010-2011 13

    Table 3.1.2_2 - Chivovo Drilling 2010-2011 14

    Table 3.1.2_3 - Chibuete Drilling 2010-2011 14

    Table 3.1.2_4 - Cacata Drilling 2010-2011 14

    Table 3.1.2_5 - Cambota Drilling 2010-2011 14

    Table 3.1.2_6 - Ueca Drilling 2010-2011 14

    Table 3.2.1_1 - DRC Exploration Permits 15

    Table 3.2.2_1 - Kanzi Drilling 2011-2012 16

    Table 4.1_1 - Regional Stratigraphy on Land 19

    Table 5.2_1 - Cabinda Phosphate Project Mineral Resources October 2013 - Total 48

    Table 5.2_2 - Cacata Mineral Resources October 2013 - Total 49

    Table 5.2_3 - Cacata Mineral Resources October 2013 - Scrubbing and Screening 49

    Table 5.2_4 - Cacata Mineral Resources October 2013 -Flotation 49

    Table 5.2_6 - Mongo Tando Mineral Resources October 2013 50

    Table 5.2_7 - Chibuete Mineral Resources October 2013 51

    Table 9_1 - Valuation Approach Criteria 57

    Table 10.1_1 - Inferred grade as % of Measured and Indicated grades 61

    Table 10.1_2 - Mineral Resources for Cabinda October 2013 62

    Table 10.2.5_1 - Comparable Transactions - Market Approach 64

    Table 10.2.5_2 - Cabinda Valuation - Market Approach 65

    Table 10.3_1 - Cabinda Valuation - Yardstick Method 65

    Table 10.3.1_1 - Cabinda Valuation - Yardstick Method 66

    Table 10.4.2_1 - Kanzi - Exploration Expenditures 67

    Table 10.4.2_2 - Valuation of the Kanzi Phosphate Project 68

    Table 11.10_1 - Cacata and Kanzi Risk Summary 71

    List of Figures

    Figure 1 - Map showing the Location of Angolan and DRC Phosphate Deposits	x
    Figure 2 - Map of the Geology Cabinda and Western DRC	xi
    Figure 1.5 - Map showing the Location of Angolan and DRC Phosphate Deposits	3
    Figure 1.5.1_1 - Photograph showing the Mixed Savannah and Forest at Mongo Tando	4
    Figure 1.5.1_2 - Photograph of the Forest at Cacata Prospect	5
    Figure 1.5.2_1 - Photograph of the Kanzi Project area showing the Topography	6
    Figure 3.2.2_1 - Drilling Campaigns Drillhole positions	17
    Figure 4.1_1- Cacata Prospect - Photograph of UPM Phosphates	20
    Figure 4.1_2 - Mongo Tando Prospect - Photograph of Indurated Phosphatic Gravel Outcrop	21
    Figure 4.2.1_1 - Cacata Prospect - Geological Interpretation	23
    Figure 4.2.1_2 - Cacata Prospect - Interpretation of the Miocene Erosion Surface	24
    Figure 4.2.1_3 - Cacata Prospect - Interpretation of the Sedimentary Cycles	25
    Figure 4.2.1_4 - Chivovo Prospect - Grades	26
    Figure 4.2.1_5 - Chivovo Prospect - Geological Section	27
    Figure 4.2.1_6 - Chivovo Prospect - Geological Interpretation	28
    Figure 4.2.1_7 - Mongo Tando Modelled Geological Interpretation	30
    Figure 4.2.1_8 - Mongo Tando Prospect - Geological Cross Section Mongo Tando North	31
    Figure 4.2.1_9 - Mongo Tando Prospect - Geological Cross Section Mongo Tando Central	32
    Figure 4.2.1_10 - Mongo Tando Prospect - Geological Cross Section Mongo Tando South	33
    Figure 4.2.1_11 - Ueca Outline of Graben and Drillholes	35
    Figure 4.2.1_12 - Ueca Prospect Interpreted Stratigraphy	35
    Figure 4.2.1_13 - Chibuete Outline of Graben and Drillholes	36
    Figure 4.2.1_14 - Interpreted Stratigraphy of the Chibuete Prospect	37
    Figure 4.2.2_1 - Kanzi Project - Map showing the Mineralization Extent	40
    Figure 4.2.2_2 - Kanzi Project - Geological Section A-A'	41

    Figure 4.2.2_3 - Kanzi Project - Geological Section B-B' 42

    Figure 5.1_1 - Photograph showing the Phosphate Mineralization 44

    Figure 5.1_2 - Cacata UPM - Graph of the relationship between CaO and P2O545

    Figure 5.1_3 - Chivovo UPM - Graph of the relationship between CaO and P2O546

    Figure 5.1_4- Chibuete - Graph of the relationship between CaO and P2O546

    Figure 5.1_5 - Cacata PFCL Upper Pebbly Unit - Graph of the relationship between CaO and P2O547

    EXECUTIVE SUMMARY

    Introduction

    Coffey Mining South Africa (Pty) Ltd (Coffey) has been engaged by Adam Myers of BDO Corporate Finance (WA) Pty Ltd (BDO) to prepare an updated Independent Market Valuation (IMV) and Independent Technical Valuation (ITV) for the Cabinda Phosphate Resources and the Kanzi Phosphate Resources respectively. The valuation is required to be compliant with the Australasian Code for the Public Reporting of Technical Assessments and Valuations of Mineral Assets, The VALMIN Code. 2015 Edition. The previous report was submitted to Minbos in March 2016.

    The Cabinda Phosphate Project, of which Minbos holds a 50% share through Mongo Tando Lda, comprises the deposits listed below in the province of Cabinda, Angola. Coffey has previously undertaken mineral resource estimations on a number of these deposits for Mongo Tando Lda.

    The Kanzi Phosphate Project is located near the mouth of the Congo River on the DRC border with Northern Angola and includes exploration licences and exclusive options covering an area of approximately 200,000ha exploration licence in which Minbos has a 49% share.

    The purpose of the valuation is to support Minbos with a Fairness and Reasonableness Report that will be prepared by BDO as a reference for the proposed transaction in terms of which Minbos will acquire Petril. In addition to their 50% interest in the Cabinda Project, Petril also owns 100% of the Pedro de Feitico project and has a majority interest in the Lucunga Project through a joint venture with Haifa Chemicals. Minbos main projects are the Cabinda and Kanzi phosphate Projects. The six phosphate deposits for the Cabinda Project are;

    • Cacata,

    • Mongo Tando,

    • Ueca,

    • Chibuete,

    • Chivovo; and

    • Cambota.

      No Mineral Resources are reported for Ueca and Cambota. These two deposits have low phosphate grades and are currently not considered economically viable. For the purposes of this valuation only the Measured and Indicated Mineral Resources for the Cacata, Mongo Tando, Chivovo and Chibuete deposits are considered for valuation purposes which is a total combined Measured and IndicatedResourceof 46.5Mt. The relatively large (344.8Mt) inferred resources have very low P2O5values(2O5) and aretherefore considered marginal.

      Scope of Work

      Coffey has based this valuation on the data as supplied by Minbos on the Angolan and DRC Phosphate Projects. The valuation includes the broad tasks as outlined below:-

    • A review of the geology and mineral resources.

    • Compilation of a valuation in the property compliant with the VALMIN Code.

      As the Projects under review are regarded as transitional between Pure Exploration Areas and Advanced Exploration Areas, a discounted cashflow (DCF) cannot be used under the VALMIN Code as the valuation methodology. A comparable transaction valuation has been used for the Cabinda Phosphate Resources (Angola) and a market approach for the Kanzi Phosphate Resources (DRC).

      Effective Date

      The Effective Date for this report is 1 February 2017 and is in accordance with the guidelines of the VALMIN Code (2015 Edition).

      Disclaimer

      The information in this report that relates to Technical Assessment and Valuation of Mineral Assets reflects information compiled and conclusions derived by Hannes Bornman, who is a Fellow of the South African Institute of Mining and Metallurgy. Hannes Bornman is not a permanent employee of Minbos.

      Hannes Bornman has sufficient experience relevant to the Technical Assessment and Valuation of the Mineral Assets under consideration and to the activity which he is undertaking to qualify as a Practitioner as defined in the 2015 edition of the 'Australasian Code for the Public Reporting of Technical Assessments and Valuations of Mineral Assets'. Hannes Bornman consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

      This Independent Technical Valuation has been prepared on information available up to and including 1 February 2017. The conclusions expressed in this report are therefore only valid up to this date and may change with time in response to variations in economic, market, legal or political factors, in addition to on-going developments with respect to the planned exploration and development activities. All monetary figures included in this report are expressed in American dollars (US$) unless otherwise stated.

      The legal status of the Minbos assets, the various licensing and Joint Venture agreements covering those interests, and the exploration, mining and minerals processing legislation applicable in the various Project jurisdictions have not been independently verified by Coffey. The present status of tenements, agreements and legislation described in this report is based on information provided by Minbos, and the valuation has been prepared on the assumptions that exploration and potential development of the projects will prove to be lawfully allowable. Coffey is not qualified to comment on the nature of the transactions or arrangements between Minbos and other third parties.

      Coffey is not in a position to make direct comment on any interest the directors and promoters of Minbos may have in the company or its assets, nor is Coffey qualified to comment on or confirm this aspect.

      In the event that results of this work will be made public, Coffey wish to review any parts of the release that relates to our work before it is released.

      Kanzi

      Minbos entered into an agreement with Australian Phosphate Pty Ltd in September 2015 to sell the Kanzi Project to them for US$200,000. Payment was due on 10 October 2015 which never materialized and Minbos subsequently terminated the sale agreement. Using a Market Approach, Coffey values Kanzi Phosphate Project at US$200,000.

      Location and Tenements

      The Minbos phosphate project licenses are located in adjacent areas of Angola and the DRC (Figure 1). The licenses/permits cover an area of 3,909km2over the Atlantic Coastal Basin which hosts the phosphate deposits.

      The Cabinda Project Exploration License (Figure 1) is held by Mongo Tando Lda in which Minbos holds a 50% share through the Joint Venture Company Mongo Tando Ltd. The license covers 1,909km² and was initially granted for three years expiring on 20thJanuary 2013.

      In October 2015 two new licences were issued for the Cabinda project. The first licence is for the Cacata deposit and the second licence the remainder of the Cabinda project deposits. The new licences replace the old exploration permit (006/06/01/L.P./GOV.ANG.MGM.2010).

      The new licences has been issued for five years and are renewable for a further two years. The agreements for the new licences cover not only prospecting rights but also the mining phase of the Cabinda project. On completion of the Environmental Impact and Economic Viability Study the issue of a mining licence can be requested. The mining licence will be valid for thirty five years, renewable for successive periods of ten years.

      The new licences replace the old exploration permit (006/06/01/L.P./GOV.ANG.MGM.2010).

      The Kanzi Phosphate Project is located on Exploration Permit numbers 12908, 12910 and 12911 which are part of the nine Exploration Licenses, covering 2,000km2(200,000ha), in the DRC held by the Phospholux JV (Figure 1) Alamanda Trading Limited is the other partner and the registered Permit holder. The licenses are valid until 3 February 2017. Minbos holds a 49% interest in the JV.

      Three concessions are considered active, permits 12908, 12910 and 12911. Minbos, via its interest in the Phospholux JV, has the exclusive right to explore the remaining concessions owned by Alamanda.

      Table 1 Cabinda Phosphate Project DRC Exploration Permits
      Permit Number	Type	Area (Carres)	Status	Location
      12908	Exploration	382	Active	South - Covers Kanzi Deposit
      12910	Exploration	302	Active	South - Covers Kanzi Deposit
      12911	Exploration	375	Active	South - Kanzi Adjacent
      12905	Exploration	441	Exclusive Option	North - Covers Fundu Nzobe
      12906	Exploration	81	Exclusive Option	South - Kanzi Adjacent
      12907	Exploration	410	Exclusive Option	South - Kanzi Adjacent
      12909	Exploration	327	Exclusive Option	North - Covers Fundu Nzobe
      12912	Exploration	376	Exclusive Option	South - Kanzi Adjacent
      12913	Exploration	322	Exclusive Option	North - Covers Fundu Nzobe

      Figure 1

      Map showing the Location of Angolan and DRC Phosphate Deposits

      Geology

      The onshore geology of the Cabinda Province and neighbouring Republic of Congo (Brazzaville) and Democratic Republic of the Congo is not well documented. What is known is that the oldest rocks exposed in the region are Late Archaean to Lower Proterozoic metamorphic rocks of the Maiombe Shield. These form a fold belt that extends for more than 500km south of Cabinda through the DRC into Angola, and for several hundred kilometres north of Cabinda into the Republic of Congo (ROC).

      The Archaean and Proterozoic basement rocks are unconformably overlain to the west by up to 4,000m of Cretaceous to Pleistocene marine sedimentary rocks deposited in a coastal basin. These sediments host the petroleum, salt (+potash) and phosphate deposits found from Angola in the south to Gabon and Equatorial Guinea in the North. The phosphatic horizons are located in the coastal basin sediments (Figure 2) within the Cretaceous and Eocene rocks.

      Figure 2

      Map of the Geology Cabinda and Western DRC

      Mineral Resources were estimated in 2013 for all of the Cabinda deposits (except Cambota and Ueca) and for the Kanzi deposit in the DRC.

      Mineral Resources for the Cabinda deposits have been reported by deposit and by expected beneficiation process (scrubbing and screening only and scrubbing and screening followed by flotation). . At this stage the Mongo Tando Central deposit and the Chivovo deposit do not contain sufficient tonnage greater than23%P2O5towarrant a scrubbing and screening beneficiation process; it is anticipated that these deposits will require treatment by flotation.

      When the Cacata Mineral Resources were reported (2013), a portion of the Cacata deposit was considered qualified for beneficiation by scrubbing and screening only, with the remainder to be beneficiated by scrubbing and screening followed by flotation. However, the Cacata phosphate deposit is currently undergoing a trade-off study where by two process routes are being evaluated. The Trade- Off study is comparing the following 800,000tpa production scenarios:

    • 5 years of drying and sizing followed by 10 years of scrub screen and flotation,

    • 10 years of scrub and screen followed by 5 years of scrub screen and flotation. The results of the trade-off study are currently pending.

      The total mineral resource for the Cabinda deposits are presented in Table 2. Mineral resources by project and process are presented in Tables 3 to 8.

      Table 2 Cabinda Phosphate Project Cabinda Phosphate Project Mineral Resources (cut-off grade 5% P2O5) Total Resources October 2013
      Category	Tonnes (Mt)	P2O5	Contained P2O5(Mt)	CaO/P2O5	MgO(%)	R2O3(%)	SiO2(%)
      Measured	5.0	23.0	1.2	1.5	1.7	4.4	23.1
      Indicated	41.5	16.9	7.0
      Total Measured and Indicated	46.5	17.6	8.2
      Inferred	344.8	8.2	28.3
      Total	391.3	9.3	36.4

      Cacata

      Table 3 Cabinda Phosphate Project Cacata Mineral Resources October 2013 Total Mineral Resource (cut-off grade 5% P2O5)
      Category	Tonnes (Mt)	P2O5	Contained P2O5(Mt)	CaO/P2O5	MgO(%)	R2O3(%)	SiO2(%)
      Measured	5.0	23.0	1.2	1.5	1.7	4.4	23.1
      Indicated	10.2	25.3	2.6	1.5	1.0	4.2	21.3
      Total Measured and Indicated	15.2	24.5	3.8	1.5	1.2	4.3	21.9
      Inferred	11.8	8.8	1.0	2.1	3.7	4.7	45.5
      Total	27.0	17.7	4.8	1.8	2.3	4.5	32.2

      Table 4 Cabinda Phosphate Project Cacata Mineral Resources October 2013 Scrubbing and Screening (minimum grade 2O5)
      Category	Tonnes (Mt)	P2O5	Contained P2O5(Mt)	CaO/P2O5	MgO( %)	R2O3(%)	SiO2(%)
      Measured	4.1	24.7	1.0	1.5	1.7	3.6	19.4
      Indicated**	9.0	26.6	2.4	1.5	1.0	3.6	18.8
      Total Measured and Indicated	13.1	26.0	3.4	1.5	1.2	3.6	19.0
      Inferred	-	-	-	-
      Total	13.1	26.0	3.4	1.5	1.2	3.6	19.0
      *Includes 0.6Mt of low grade material with high calcium which might not be selected out during mining and will give reduced recoveries when processed. **Includes 1.7Mt of low grade material with high silica which might not be selected out during mining and will give reduced recoveries when processed.

      Table 5 Cabinda Phosphate Project Cacata Mineral Resources October 2013 Upgrading Requiring Flotation (cut-off grade 5% P2O5)
      Category	Tonnes (Mt)	P2O5	Contained P2O5(Mt)	CaO/P2O5	MgO(%)	R2O3(%)	SiO2(%)
      Measured	0.9	15.4	0.1	1.5	1.8	8.2	39.9
      Indicated	1.2	15.8	0.2	1.5	1.2	8.5	40.0
      Total Measured and Indicated	2.1	15.6	0.3	1.5	1.5	8.4	40.0
      Inferred	11.8	8.8	1.1	2.1	3.7	4.7	45.5
      Total	13.9	9.8	1.4	2.0	3.4	5.3	44.7

      Chivovo

      Table 6 Cabinda Phosphate Project Chivovo Mineral Resources October 2013 Upgrading Requiring Flotation (cut-off grade 5% P2O5)
      Category	Tonnes(Mt)	P2O5	Contained P2O5(Mt)
      Measured	-	-	-
      Indicated	6.5	20.5	1.3
      Total Measured and Indicated	6.5	20.5	1.3
      Inferred	-	-	-
      Total	6.5	20.5	1.3

      Mongo Tando

      Table 7 Cabinda Phosphate Mineral Resources for Mongo Tando October 2013 Upgrading Requiring Flotation (cut-off grade 5% P2O5)
      Category	Area	Tonnes (Mt)	P2O5(%)	Contained P2O5(Mt)
      Measured	-	-	-	-
      Indicated	Mongo Tando Central	24.8	11.5	2.9
      Total Measured and Indicated	24.8	11.5	2.9
      Inferred	Mongo Tando North	65.8	8.8	5.8
      	Mongo Tando Central	21.0	9.9	2.1
      	Mango Tando South	97.2	7.1	6.9
      	Total Inferred	184.0	8.0	14.8
      Total	208.8	8.4	17.6

      Ueca and Cambota

      No mineral resources. At Ueca there is insufficient tonnage at minable grades. No Mineral resources have been estimated for Cambota due to insufficient data.

      Chibuete

      Table 8 Cabinda Phosphate Project Chibuete Mineral Resources October 2013 (cut-off grade 5% P2O5)
      Category	Tonnes(Mt)	P2O5	Contained P2O5(Mt)
      Measured
      Indicated	-	-	-
      Total Measured and Indicated	-	-	-
      Inferred	149	8.3	12.4
      Total	149	8.3	12.4

      Infrastructure

      Angolan Licenses

      There is national grid power available but it is proposed that the Cacata mine will generate its own power. Potable water will be sourced from local rivers, drillholes and recycled water from the plant operations. Site communications will be via radio, cellular service and a satellite communication system. Access to all sites from the town of Cabinda is via paved and dirt roads. The mine(s) will have to upgrade all access roads to the main north-south paved road for mining operations and transport of ore to the port site.

      DRC Permits

      It is assumed that power will be sourced from the local grid. Potable water will be sourced from local rivers, drillholes and recycled water from the plant operations. Site communications will be via radio, cellular service and a satellite communication system. Access to all sites from the port of Boma is via paved and dirt roads. The mine(s) will have to upgrade all access roads to the main east-west road for mining operations and transport of ore to the port site.

      Mining

      All the pits can be mined through conventional truck and shovel mining methods applying a rollover technique, with phosphate removal being followed by backfilling of overburden material and topsoil. It is envisaged that this will be a free dig operation where no drilling and blasting activities are required. Topsoil is stripped and placed on an initial topsoil dump which will be used for backfilling as mined out areas are rehabilitated

      Mineral Processing

      Angolan Licenses

      ROM from the ROM stockpile will be transferred by frontend loader to a static oversize protection grizzly with an assumed maximum aperture size of 150mm.

      The plant feed will then be subjected to attrition scrubbing to remove lumps and clay agglomerates. The scrubber discharges onto a desliming screen. The screen undersize (-2.36mm) is sent for further desliming in either an Allflux unit or Hydrocyclone, the oversize (+2.36mm) being the discards. The underflow from the Allflux unit is thickened using a thickening cyclone.

      For phase 2, an additional scrubber-screen combination is added to cater to the increased tonnages. Milling is also included for proper liberation.

      Phase 2 milled product will then be subjected to conventional 3 stage flotation (Rougher, Scavenger and Cleaner) circuit.

      Phase 1 slimes (-106 µm) from Allflux and cyclone overflow are settled in a tailings thickener, allowing the clarified water to be re-circulated into the plant. Phase 2 requires a concentrate thickener, which de- froths the flotation concentrate. An additional tailings thickener is also added to meet the required tonnages.

      The underflow from the cyclone (phase 1) or concentrate thickener (phase 2), is de-watered in a vacuum belt filter to reduce the moisture content to ~15%.

      The product requires moisture content of 2-3% for export. Thus the filter cake is passed through a rotary drier to produce the exportable product. The dried phosphate concentrate will then be stored in a 20,000 ton intermediate covered storage shed. The product will then be loaded by frontend loaders onto trucks for transport to the port for export. (DTS Cacata Ver 02 230512 (2)).

      DRC Permits

      The preliminary evaluation of the Kanzi ore shows quite clearly that this sedimentary deposit can be beneficiated by physical means to a commercial grade concentrate that should be amenable to the production of merchant grade phosphoric acid. It should also be possible to produce concentrated phosphoric acid. Using physical means instead of chemical means such as froth flotation to beneficiate the ore should result in very low operating costs.

      Valuation Results

      Cabinda Phosphate Resources (Angola)

      Mineral Resources have been estimated and reported for all the Cabinda deposits (except Cambota and Ueca) in Angola. For the purposes of this valuation only the Measured and Indicated Mineral Resources for the Cacata, Mongo Tando, Chivovo and Chibuete deposits are considered for valuation purposes.Therelatively large (344.8Mt) inferred resources have very low P2O5values(2O5)and are therefore not considered economically feasible.

      The Inferred Resources' P2O5 values of the comparable phosphate transactions considered are all within 15% of their Measured and Indicated Resources grades (Table 9). However, the P2O5 values of the Cabinda Inferred Resources differs 52% with that of its Measured and Indicated Resources, making the Cabinda Inferred Resources not comparable to that of the other projects' Inferred Resources.

      Table 10.1_1 Cabinda Phosphate Inferred grade as % of Measured and Indicated grades
      Resource	Tonne	Grade % P2O5	Inferred grade as %
      FARIM PHOSPHATE
      Measured and Indicated	92.7Kt	28.68
      Inferred	18.3Kt	28.66	1.5%
      Lam Lam & Kebemer
      Total Resources	56Mt	Not given
      Baobab Phosphate
      Indicated	14.8	19.9
      Inferred	150	17	14.6%
      BOMFIN
      Measured and Indicated	316.5	15.09
      Inferred	4101.9	14.41	4.5%
      CABINDA
      Measured & Indicated	46.5	17.02
      Inferred	344.8	8.16	52%

      Table 10 shows the Mineral Resource for the Cabinda Deposits. The valuation will only be based on the Measured and Indicated Resource of 46.5Mt.

      Table 10 Cabinda Phosphate Mineral Resources for Cabinda October 2013
      Deposit	Category	Tonne (Mt)	Grade (%P2O5)	Cut-Off (%P2O5)
      Cacata	Measured	5	23	5
      Indicated	10.2	25.3	5
      Inferred	11.8	8.8	5
      Mongo Tando	Indicated	24.8	11.5	5
      Inferred	184	8	5
      Chivovo	Indicated	6.5	20.5	5
      Chibuete	Inferred	149	8.3	5
      Total	Measured	5	23	5
      Indicated	41.5	16.30	5
      Total	Measured & Indicated	46.5	17.02	5
      Inferred	344.8	8.16	5
      Total Resources	All	391.3	9	5

      The Cabinda Phosphate Resources are at an advanced exploration stage and Coffey elected to use the Market Approach to value the properties. Table 11 indicates the details of recent market transactions in phosphate market and how it relates to the Cabinda valuation.

      Table 11 Cabinda and Kanzi Valuation Cabinda Valuation - Market Approach
      Date	Project	% Sold	Price (US$)	100% Value (US$)	Total Resource	Transaction Value per tonne (US$)	Cabinda Valuation (US$)
      Feb 2011	Farim	50.10%	25,295,300	50,489,621	111Mt	0.45	21.15M
      Aug 2013	Lam Lam	55%	28,850,000	52,454,545	56Mt	0.93	43.56M
      Nov 2011	Phosco	100%	750,000	850,000*	32.8Mt	0.03	1.21M
      Nov 2015	Baobab	20%	8,004,888	40,024,439	164.8Mt	0.24	11.29M
      May 2013	Arganarra	100%	16,447,654	16,447,654	310Mt	0.05	2.47M
      Sep 2014	Bomfim	100%	2,136,562	2,136,562	4.1Mt	0.48	22.49M

      *US$100,000 additionally paid to explore Bierkraal

      The Phosco project is not considered a comparable transaction because only one project's resources (Duyker Eiland Phosphate Project) of the four tenements sold, is used in the above valuation. The Arganara transaction was not taken into consideration as it valued Lucunga at an order of magnitude less than the other transactions and is thus considered an outlier that skews the valuation unnecessary.

      Coffey considered the Farim, Lam Lam & Kebemer, Baobab and Bomfin transactions as comparable for the Lucunga Market Valutation. The Preferred value for Cabinda is calculated as the average of the of

      the four transactions' values of Cabinda. The low value was calculated as the average of the three lowest values for Cabida and the highest value is the highest value (US$43.03M) for Cabinda.

      Per a Market Approach the Cabinda Valuation can thus be shown as in Table 12.

      Table 12 Cabinda and Kanzi Valuation Cabinda Valuation - Market Approach
      Valuation	US$ Million
      Preferred	24.6
      High	43.7
      Low	18.3

      Kanzi Valuation

      Market Approach

      Minbos entered into an agreement with Australian Phosphate Pty Ltd in September 2015 to sell the Kanzi Project to them for US$200,000. Payment was due on 10 October 2015 which never materialized and Minbos subsequently terminated the sale agreement. Using a Market Approach, Coffey values Kanzi Phosphate Project at US$200,000.

      Project Risk Summary

      Geology and Mineral Resources Risk

      Coffey is satisfied that the mineral resources declared fairly represent the content of the deposits. The geological structure is simple with little faulting. The phosphate mineralization is generally continuous between drillholes and appears to be adequately estimated. Further drilling should reduce the uncertainty in the phosphate distribution.

      Low Risk

      Market and Product Specifications

      Identification of the market and the factors that influence market demand and the potential for success in the market are critical to determining 'value' for an industrial mineral. Value is a function of (i) product quality in relation to consuming industry or customer specification, (ii) product price, and (iii) project robustness. Costs are comprised of (i) mining costs, (ii) processing costs, and (iii) transportation and special handling costs.

      The specifications for industrial minerals include a variety of physical and/or chemical properties. Many applications for industrial minerals can be satisfied by several competing minerals offering similar functional properties, and often at similar costs. There is therefore the potential for product substitution when evaluating the market potential of an industrial mineral.

      Moderate

      Development and Operating Risk

      Mining operations generally involve a high degree of risk. A mine in Angola and the DRC is subject to all the hazards and risks normally associated with mineral production, including damage to or destruction of plant and equipment, unexpected geologic formations, pit collapse, injury or life endangerment, environmental damage, fire, equipment failure or structural failures, such as retaining walls or tailings dams, potentially resulting in environmental pollution and consequent liability. The payment of such liabilities may have a material, adverse effect on the Company's financial position.

      The marketability of natural resources that may be acquired or discovered by the owner will be affected by numerous factors beyond its control. These factors include market fluctuations, the proximity and capacity of natural resource markets and processing equipment, and government regulations, including regulations relating to prices, taxes, royalties, land tenure, land use, importing and exporting of minerals and environmental protection. The exact effect of these factors cannot be accurately predicted, but the combination of these factors may result in the owner not receiving an adequate return on invested capital.

      Moderate Risk

      General Engineering and Site Infrastructure Risk

      Mining, processing and development activities depend, to some degree, on adequate infrastructure. Reliable roads, bridges, power sources and water supply are important determinants that affect capital and operating costs. Unusual or infrequent weather phenomena, sabotage, government or other interference in the maintenance or provision of such infrastructure could adversely affect the Company's operations, financial condition and results of operations.

      Moderate Risk

      Metallurgical and Processing Risk

      Some metallurgical testwork has been performed on the resource. This makes it a low risk for the project. The processes to treat the phosphate rock is industry standard and are therefore not considered high risk.

      Low Risk

      Foreign Operation and Political Risk

      Whilst Coffey believes that the government support in Angola and DRC provides a favourable environment for mining operations, there is no guarantee against any future political or economic instability in this country or neighbouring countries which might adversely affect a mining company. A recent study by the University of Stellenbosch called Ethics and Compliance Risk Survey 2014 indicated that Angola and the DRC are perceived as very corrupt with very poor regulatory environment and law enforcements.

      Other effects may include limitations on the transfer of cash or other assets between the parent corporation and such entities, or among such entities, which could restrict a mining company's ability to fund its operations efficiently. All or any of these factors, limitations, or the perception thereof could impede a mining company's activities, result in the impairment or loss of part or all of the company's interest in the properties, or otherwise have an adverse impact on the mining company's valuation and stock price.

      Moderate to High Risk

      Ownership Risk

      There is no guarantee that title to the properties in which a mining company has an interest will not be challenged or impugned. Title to these properties may be affected by undetected defects, previous agreements, transfers or other valid challenges to the title of the Company's property interests.

      Low to Moderate Risk

      Project Economics and Overall Project Risk

      Coffey considers the Cabinda Phosphate Project to have a Moderate risk, which can be reduced by completing formal feasibility studies.

      Moderate Risk

      Based on the above risk summary, Coffey considers the Cabinda Project to have an overallModerate Risk.

      1 INTRODUCTION

      Coffey Mining South Africa (Pty) Ltd ("Coffey") has been engaged by Adam Myers of BDO Corporate Finance (WA) Pty Ltd (BDO) to prepare an updated Independent Market Valuation (IMV) and Independent Technical Valuation (ITV) for the Cabinda Phosphate Resources and the Kanzi Phosphate Resources respectively.

      The purpose of the valuation is to support Minbos with a Fairness and Reasonableness Report that will be prepared by BDO as a reference for the proposed transaction in terms of which Minbos will acquire Petril. In addition to their 50% interest in the Cabinda Project, Petril also owns 100% of the Pedro de Feitico project and has a majority interest in the Lucunga Project through a joint venture with Haifa Chemicals. Minbos main projects are the Cabinda and Kanzi phosphate Projects. The six phosphate deposits for the Cabinda Project are;

      The six phosphate deposits for the Cabinda Project are;

      • Cacata,

      • Mongo Tando,

      • Ueca,

      • Chibuete,

      • Chivovo; and

      • Cambota

      No Mineral Resources are reported for Ueca and Cambota. These two deposits have low phosphate grades are low and are currently not considered by Coffey to be economically viable. For the purposes of this valuation only the Measured and Indicated Mineral Resources for the Cacata, Mongo Tando, Chivovo and Chibuete deposits are considered for valuation purposes which is a total combined Measured and Indicated Resource of 46.5Mt. The relatively large (344.8Mt) inferred resources have very low P2O5values (2O5) and are therefore considered marginal.

      The Cabinda Phosphate Project, of which Minbos holds a 50% share through the Mongo Tando Joint Venture, comprises the above listed deposits in the province of Cabinda, Angola. Coffey has previously undertaken mineral resource estimations on a number of these deposits for Mongo Tando Lda the holder of the licences.

      The Kanzi Phosphate Project is located near the mouth of the Congo River on the DRC border with Northern Angola and includes exploration licences and exclusive options covering an area of approximately 200,000 exploration licence in which Minbos has a 49% share.

    • Scope of work

      Coffey has based this valuation on the data as supplied by Minbos on the Angolan and DRC Phosphate Projects. The valuation includes the broad tasks as outlined below:-

      • A review of the geology and mineral resources model.

      • Compilation of a valuation in the property compliant with the VALMIN Code.

        As the Projects under review are regarded as transitional between Pure Exploration Areas and Advanced Exploration Areas, a discounted cashflow (DCF) can therefore not be used under the VALMIN Code as the valuation methodology. A comparable transaction valuation has been used for the Cabinda Phosphate Resources (Angola) and a market approach valuation for the Kanzi Phosphate Resources (DRC).

    • Site Visit

      Site visits were conducted by Mrs Kathleen Body of Coffey on 5thto the 7thApril 2010 and 31stOctober to 5thNovember 2010 to the Cabinda Province of Angola to assess the geology of these deposits. A visit was undertaken to Kanzi by Mr Mpfariseni Mudau of Coffey from the 2ndto the 9thOctober 2012.

    • Valuation Date and Code

      The Valuation Date for this report is 1 February 2017 and it is compliant with the VALMIN Code of reporting.

    • Qualifications and Organisations

      Practitioner Hannes Bornman

      Degrees B Eng (Mining) (University of Pretoria)

      MBA (University of Stellenbosch Business School)

      Registrations Pr.Eng. (Engineering Council of South Africa reg.no. 20090201) Fellow (SAIMM reg. no. 700627)

    • Project Locality

    • The Minbos phosphate project licenses are located within adjacent areas of Angola and the DRC (Figure 1.5_1). The licenses/permits cover an area of 3,909km2over the Atlantic Coastal Basin which hosts the phosphate deposits.

      Figure 1.5 _1

      Map showing the Location of Angolan and DRC Phosphate Deposits

    • Angolan Licenses

      The Cabinda Phosphate Project deposits (Figure 1.5_1) are located within the Cabinda Enclave, a province of Angola which is separated from the main country by a 40km section of the DRC. The administrative centre of the province is the coastal city of Cabinda with a

      population of about 360,000 (2008). The Cabinda project has six prospects over north western Cabinda from the Atlantic Ocean Coast to the DRC border. The topography is generally flat to gently undulating with small rounded hills and valleys whose slopes are often cross cut by deep and steep sided gullies cutting into the sandy soil. Elevations range up to 170m above sea level. The central part of the Mongo Tando deposit is cut by the Itomba stream which originates in the deposit itself. Cacata and Chivovo also have streams through the deposit with outcrop in the stream beds. The project areas are characterised by a mixture of savannah and savannah woodland where cleared or partly cleared with some bamboo forest in part. These open areas are interspersed with tracts of rainforest. Typical topography and vegetation are shown in Figures 1.5.1_1 and 1.5.1_2. The climate is tropical with distinct wet and dry seasons.

      Figure 1.5.1._1

      Photograph showing the Mixed Savannah and Forest at Mongo Tando

      Figure 1.5.1_2

      Photograph of the Forest at Cacata Prospect

    • DRC Permits

    • The Kanzi Project is located on the Democratic Republic of the Congo (DRC) border with Angola in the Bas Congo province of the DRC (Figure 1.5_1), at the village of Kanzi, 15 km north of the Congo River and 35 km east of the port of Boma.

      Kanzi is characterized by series of undulating hills to the south and it is fairly flat in the northern sector where there is human settlement. There are a few dongas (erosion gullies) on the western side of the phosphate deposit (Figure 1.5.2_1).

      Kanzi area is well vegetated due to high humidity and a few streams. The climate at Kanzi is tropical semi-rainforest and can roughly be divided into two seasons: a dry, semi-humid season from mid-May to mid-September and a rainy season lasting from October through to May. Rainfall is highest during November and December and again between March and April with rainfall figures of 75-100m and 150 to 175mm, respectively. The humidity stays between 80 and 90% all year.

      Figure 1.5.2_1

      Photograph of the Kanzi Project area showing the Topography

    • Accessibility and Infrastructure

    • Angolan Licenses

      There is no land access to Cabinda from Angola. Primary access to Cabinda is via commercial flights from Europe or Johannesburg to Luanda the capital of Angola and then from Luanda to Cabinda. Cabinda has a small port with basic facilities which can handle small ships. The nearest current commercial port is 50km away by road at Pointe Noire in the Republic of Congo (ROC). The government is currently building the Port of Caio 60km from Cacata deposit which will have a 12.5m depth and may be available for bulk commodities. In July 2015 Minbos entered into a non -binding letter of intent with Caioporto SA which provides Minbos with initial port capacity to export no less than 800,000 tonnes of rock phosphate through the Port of Caio

      The biggest river in Cabinda is the Chilongo which separates the province into a northern and southern part. There is only one bridge over the river and this is close to Landana, on the Landana-Dinge road. The drainage network is well developed but generally sinuous with numerous swamps and pools.

      The climate is tropical, with two characteristic seasons: a dry to semi-wet season from mid-May until the end of September and a rainy season from October to May. The total annual rainfall is between 550 and 800mm. The largest amount of rain falls in November and during the first half of December (75-100mm). Heavy rains limit access, making working conditions difficult.

      Because of its location and the topography the rains will limit mining activities at Cacata and most likely Chivovo to 8 months of the year.

      The Cabinda province's primary economic activity is the exploitation of oil by the Cabinda Gulf Company near Malembo. The exploitation of forestry and the wood industry are important economic activities and the region is known for its high quality of wood. Agriculture is not well developed. Electricity is available in major centres but subject to interruptions. Generators supply power in rural areas. Power interruptions have become less frequent and shorter, recently, lasting at most a few hours. Diesel and petrol (gasoline) distributors are found in major centres. A 45MW gas turbine power station has been constructed at Malembo and is operational. The power network is also being upgraded. Public water is available in major centres and suitable for washing and bathing. It is not considered suitable for drinking and bottled water is advised. The mobile phone network is good in the towns and along the highways. Some mobile phone reception is available in the project areas where there are settlements. The government is currently building the Port of Caio 60km from Cacata deposit which will have a 12.5m depth and may be available for bulk commodities in the 2ndhalf of 2017. Until this is completed the nearest deep water port is at Pointe Noire in the Republic of Congo. Cabinda is serviced by an excellent network of roads which covers all the project areas.

    • DRC Permits

      Though the village is a rural area, the infrastructure development around Kanzi is good. Road access is through a main road that connects Kanzi to the coast and the port of Boma on the Congo River. This road has a tollgate and maintenance is good.

      Telecommunication is excellent as there are network towers (Vodacom and Airtel) for mobile phones at Kanzi. Generally telecommunication in the eastern part of DRC is good.

      Boma is a port town, on the north bank of the Congo River some 100km upstream from the Atlantic Ocean, in the Bas-Congo province of the Democratic Republic of the Congo. As of 2009, it had an estimated population of 527,725. Boma was the capital city of the Democratic Republic of the Congo from 1 May 1886 to 1926, when the capital was moved to Kinshasa. Boma has well developed facilities which include airport, schools, restaurants, hotels, shopping complexes, stadia, car garages, suburbs, and well maintained roads. There are well known fuel garages such as Caltex and Engen in Boma. There are good schools in the area. There is an open space market place and randomly distributed informal shops.

      Boma port is a natural river harbour with good holding ground. The port handles exports of tropical timber, bananas, cacao, and palm products. The great width and depth of the river allow sea-going ships to reach Boma, which serves as the DRC's major port. It is classified as a medium port in with a maximum vessel size of 152m in length. The maximum water channel depth ranges from 7.1 to 9.m. The cargo pier has a water depth of 9.1m. The mean tide at Boma port is 60cm. Mobile lifts and cranes at the port can lift up to 24 tonnes at a time. There are good maintenance facilities at the port.

    • Project Background

    • Angolan Licenses

      Early Discoveries

      Indications of phosphates in the Cabinda district were discovered in the 1920's at Landana on the Atlantic coast (Bequaert, 1923). In 1933 further work discovered signs of phosphates in the littoral formations of the Cabinda district and described outcrops located at Tumuna, Sassa- Zau, Malembo, Vonso, Lagao, Yanga, Mongo Tando, Cambota, Chibuete and Chiela. In the period from 1950 to 1951, the Mining and Geology Service investigated phosphates found in the deposits of Cambota, Mongo Tando and Ueca. During that period, new signs of phosphates were discovered in Cacata and in the region of Zaire (Angola) at Ambrizette, south of the Congo River.

      Investigations were interrupted for several years before resuming between 1956 and 1957. Based on the results obtained in the aforementioned investigations, at the end of 1968, Companhia de Fosfatos de Angola (COFAN) was established in order to investigate phosphates in the Cabinda Province. COFAN was a consortium of investors the largest of which was the Anglo American Corporation.

      There was another break in exploration until 1982 when Energo project (Energo), a Yugoslav company of consulting engineers carried out a small evaluation program of the Mongo Tando Deposit.

      No further work was done on the prospects until the commencement of the 2010-2012 exploration programmes of Mongo Tando Ltda.

    • DRC permits

    • The historical exploration of the phosphate deposits in the Bas Congo (Lower Congo) region Province in the DRC occurred in two phases by the United Nations Development Programme (UNDP). The first of these was in the late 1960 and the second in 1981. Phosphate deposits were identified and approximately 3,000m of drilling was completed on the targets during these exploration phases. Exploration focused on two areas: Kanzi and Fundu-Nzobe.

      A grade estimate of 30Mt at 15% P2O5was reported for the Kanzi deposit. It is noted that this is not reported in terms of the guidelines of an international reporting code.

      No further work was done on these projects until the Phospholux JV exploration programme of 2011-2012.

    • INDEPENDENCE AND EXPERIENCE

    • Participants

      The following personnel were nominated to the project team and their specific areas of responsibility and resumes are as shown below. All of the participants in the valuation are considered Specialists or Experts as defined in the VALMIN Code.

      Hannes Bornman, Manager Mining

      Valuations, Study Management

      Ken Lomberg, Senior Principal Consultant

      Peer Review

      The information in this report that relates to Technical Assessment and Valuation of Mineral Assets reflects information compiled and conclusions derived by Hannes Bornman, who is a Fellow of the South African Institute of Mining and Metallurgy. Hannes Bornman is not a permanent employee of Minbos.

      Hannes Bornman has sufficient experience relevant to the Technical Assessment and Valuation of the Mineral Assets under consideration and to the activity which he is undertaking to qualify as a Practitioner as defined in the 2015 edition of the 'Australasian Code for the Public Reporting of Technical Assessments and Valuations of Mineral Assets'. Hannes Bornman consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

      The study manager, Mr Bornman is a professional mining engineer with 29 years' experience in the precious and base metals industry. He has broad experience in audit, feasibility and due diligence studies both in South Africa and Internationally. He is a Fellow of the South African Institute of Mining and Metallurgy (FSAIMM) registration number 700627 and a registered Professional Engineer (Pr.Eng) with the Engineering Council of South Africa (ECSA) registration number 20090201.

      Each of the authors has the appropriate relevant qualifications, experience, competence and independence to be considered an "Expert" or "Specialist" under the definitions provided in the Valmin Code, and as "Competent Persons" under the definition provided in the JORC Code.

    • Source Documentation

      The following information was made available to Coffey by Minbos;

      • DRC - 30 June 2013 Final Summaried.xlsx - The historical exploration expenditures for the Kanzi Project.

      • MWP01278AA_ITV GoldenRim_TechValuation_Final_19092014LR (2)

      • jr_PEA Studies Mining and Beneficiation_October 2012 _v2 - PEA study on the Cabinda Phosphate Project

      • DTS Cacata Ver 02 230512 (2) - Cacata Desktop Study

      • Status report lucunga Nov 2012

        Coffey sourced the following information from the internet;

      • Montero Mining and Exploration press announcement, November 10th, 2011: "Montero announces closing of acquisition of Phosphate Assets in South Africa".

      • Consolidated Financial Statements of Plains Creek Phosphate Corporation for the years ended June 30, 2012 and 2011 (Expressed in Canadian dollars), Sedar Filing.

      • PhosAgro press statement, 27 August 2013: PhosAgro Completes Consolidation of 100% Apatit. (www.phosagro.com/press/company).

      • Farim Phosphate Project (http://gbminerals.com/project/farim_phosphate/).

      • http://www.minbos.com/assets/minbos-to-merge-with-angolan-jv-partner.pdf

    • Independence

      Neither Coffey, nor the key personnel responsible for the work, has any material interest in Minbos, Mongo Tando Lda, Petril, their subsidiaries, related companies or their mineral properties. This work, and any other work done by Coffey for Minbos, is strictly in return for professional fees. Payment for the work is not in any way dependent on the outcome of the work or on the success or otherwise of Minbos' own business dealings. There is no conflict of interest in Coffey undertaking the Independent Technical Valuation as contained in this document.

    • Disclaimer

      Coffey has based the findings of this report on data provided by Minbos. This data includes third party technical reports and other relevant published and unpublished third party information. Coffey has endeavoured, by making all reasonable enquiries, to confirm the authenticity and completeness of the third party technical data upon which this report is based. However, Coffey does not warrant the authenticity or completeness of any such third party information. A final draft of this report was provided to Minbos along with a written request to identify any material errors or omissions.

      This Independent Technical Valuation has been prepared on information available up to and including 1 February 2017. The conclusions expressed in this report are therefore only valid up tho this date and may change with time in response to variations in economic, market, legal or political factors, in addition to on-going developments with respect to the planned exploration and development activities. All monetary figures included in this report are expressed in American dollars (US$) unless otherwise stated.

      The legal status of the Minbos assets, the various licensing and Joint Venture agreements covering those interests, and the exploration, mining and minerals processing legislation applicable in the various Project jurisdictions have not been independently verified by Coffey. The present status of tenements, agreements and legislation described in this report is based on information provided by Minbos, and the valuation has been prepared on the assumptions that exploration and potential development of the projects will prove to be lawfully allowable.

      Coffey is not qualified to comment on the nature of the transactions or arrangements between Minbos and other third parties.

      Coffey is not in a position to make direct comment on any interest the directors and promoters of Minbos may have in the company or its assets, nor is Coffey qualified to comment on or confirm this aspect.

    • TENEMENTS AND PREVIOUS EXPLORATION ACTIVITIES

      Minbos has provided Coffey the following information in licenses and previous exploration activities.

    • Angolan Projects

    • License Details

      The Cabinda Project Exploration License (Figure 1) is held by Mongo Tando Lda in which Minbos holds a 50% share through the Mongo Tando JV with joint venture partner Petril. The license (No 0006/06/01/L.P./GOV.ANG.MGM/2010) covers 1,909km² and was initially granted for three years expiring on 20th January 2013 In October 2015 two new licences were issued for the Cabinda project. The first licence is for the Cacata deposit and the second licence the remainder of the Cabinda project deposits. The new licences replace the old exploration permit (006/06/01/L.P./GOV.ANG.MGM.2010).

      The first licence is for the Cacata deposit on the border with the DRC. The Prospecting Permit is 014/04/09/T.P/ANG-MGM/2015, Code number 029/04/28/0/2015, issued on the 25th September 2015. The prospecting permit is governed by the Articles 118 and subsequent one of the Mining Code and by Ministerial Order Number 57/14 of 18th December 2015. The permit is valid for 5 years to 25 September 2020. The concession area is 21.16km2. Coordinates are given in Table 3.1.1_1

      The second licence is for the remainder of the Cabinda Exploration Project's deposits. The Prospecting Permit is 015/01/10/T.P/ANG-MGM/2015, Code number 030/04/28/0/2015, issued on the 14th October 2015. The prospecting permit is governed by the Articles 118 and subsequent one of the Mining Code and by Ministerial Order Number 56/14 of 18th December 2015. The permit is valid for 5 years to 14 October 2020. The concession area is 1909km2. Coordinates are given in Table 3.1.1_2.

      The new licences have been issued for five years and are renewable for a further two years. The agreements for the new licences cover not only prospecting rights but also the mining phase of the Cabinda project. On completion of the Environmental Impact and Economic Viability Study the issue of a mining licence can be requested. The mining licence will be valid for thirty five years, renewable for successive periods of ten years

    • Exploration History

      COFAN 1969-1973

      In 1969 and 1970, COFAN carried out regional prospecting over eight areas: Chibuete, Ueca, Moampoate, Cacata, Mongo Tando, Tumuna, Chivovo and Cambota. The physical activity comprised:

      • 201 rotary mud drillholes totalling 19,231.8m

      • 29 core drillholes for 626.1m

      • 11 shafts totalling 142.9m

    • From August 1972 to May 1973, COFAN conducted more detailed investigations of the most promising phosphate areas in the Cabinda province with a focus on the Ueca, Mongo Tando and Chibuete areas. An additional 25,000m of rotary mud drilling and 783m of core drilling were completed along with 11 shafts.

      In general, the second phase of work returned lower grades than the first investigation phase. The average P2O5content of the mineralisation was estimated to be 12.4% P2O5at Mongo Tando, 8.7% P2O5at Ueca and 10.6% P2O5(lower phosphate unit) and 15% P2O5(upper phosphate unit) at Chibuete. The higher grades returned from the first phase are thought to be because the samples were "washed" prior to dispatch for analysis. No work was done at Cacata during the second phase.

      The quality of sampling by COFAN in both phases is variable and much of it does not conform to acceptable sampling methods, neither at the time the work was done nor to present requirements. COFAN data has not been used in the mineral resource estimations.

      ENERGO 1982-1983

      A third phase of exploration work was carried out on the Mongo Tando prospect only by Energo project (Energo), a Yugoslav company of consulting engineers, between June 1982 and February 1983. Energo completed 22 diamond core holes into the deposit for a total of 1,226.7m of drilling.

      The Energo drilling returned an average grade for the phosphorite of 15.19% P2O5(range 7.54% to 21.71%) and the average thickness was 13.42m (range 3.2m to 22.3m). In general the Energo work appears to have been systematic, the quality of the sampling and analyses is good and the results are acceptable for use in a mineral resource estimation. Energo estimated the total mineralisation at Mongo Tando. Historical estimates were not calculated in a manner comparable with modern methods and are not reported.

      MTL Exploration Work 2010-2011

      MTL carried the exploration drilling in 2010 and 2011 in six different areas as shown in Tables 3.1.2_1 to 3.1.2_6. Most of the drillholes were done in Mongo Tando and the least were in Cambota. Most of the drilling activity was carried out in 2011. The 2010 drilling was used to guide and confirm the presence of the phosphate mineralization while 2011 drilling was to increase confidence and knowledge of mineralization geometry, grade continuity and geological structures.

      Table 3.1.2_1 Cabinda Phosphate Project Mongo Tando Drilling 2010-2011
      2010 Drilling	2011 Drilling
      Number of drillholes	82	78
      Number of samples	521	243
      Total meterage drilled	4312	4,071

      Table 3.1.2_2 Cabinda Phosphate Project Chivovo Drilling 2010-2011
      2010 Drilling	2011 Drilling
      Number of drillholes	-	24
      Number of drillholes Diamond Core	-	4
      Number of samples	-	171
      Total meterage drilled	-	1,342

      Table 3.1.2_3 Cabinda Phosphate Project Chibuete Drilling 2010-2011
      2010 Drilling	2011 Drilling
      Number of drillholes	-	61
      Number of samples	-	312
      Total meterage drilled	-	4,534

      Table 3.1.2_4 Cabinda Phosphate Project Cacata Drilling 2010-2011
      2010 Drilling	2011 Drilling
      Number of drillholes Aircore	15	38
      Number of drillholes Diamond Core	-	8
      Number of samples	58	313
      Total meterage drilled	645	1,970.75

      Table 3.1.2_5 Cabinda Phosphate Project Cambota Drilling 2010-2011
      2010 Drilling	2011 Drilling
      Number of drillholes	-	5
      Number of samples	-	21
      Total meterage drilled	-	278.50

      Table 3.1.2_6 Cabinda Phosphate Project Ueca Drilling 2010-2011
      2010 Drilling	2011 Drilling
      Number of drillholes	35	15
      Number of samples	508	81
      Total meterage drilled	1526	662

    • DRC Projects‌

    • Exploration Permits

      The Kanzi Phosphate Project is located on Exploration Permit numbers 12908, 12910 and 12911 which are part of the nine Exploration Licenses, covering 2,000km2(200,000ha), in the DRC held by the Phospholux JV (Figure 1) Alamanda Trading Limited (Alamanda) is the other partner and the registered Permit holder. The licenses are valid until 3 February 2017. Minbos holds a 49% interest in the JV.

      Three concessions are considered active, permits 12908, 12910 and 12911. Minbos via its interest in the Phospholux JV has the exclusive right to explore the remaining concessions owned by Alamanda.

      Table 3.2.1_1 Cabinda Phosphate Project DRC Exploration Permits
      Permit Number	Type	Area (Carres)	Status	Location
      12908	Exploration	382	Active	South - Covers Kanzi Deposit
      12910	Exploration	302	Active	South - Covers Kanzi Deposit
      12911	Exploration	375	Active	South - Kanzi Adjacent
      12905	Exploration	441	Exclusive Option	North - Covers Fundu Nzobe
      12906	Exploration	81	Exclusive Option	South - Kanzi Adjacent
      12907	Exploration	410	Exclusive Option	South - Kanzi Adjacent
      12909	Exploration	327	Exclusive Option	North - Covers Fundu Nzobe
      12912	Exploration	376	Exclusive Option	South - Kanzi Adjacent
      12913	Exploration	322	Exclusive Option	North - Covers Fundu Nzobe

    • Exploration History

    • Early Work 1970-1980

      The Kanzi project and two other deposits at Fundu-Nzobe (Permit 12905) and Vuangu between Kanzi and Fundu-Nzobe) were identified during regional surveys in the 1970s conducted by the then Zaire government (Services Presidential D'Etudes, SPE) funded by the UNDP. Full details of the earliest work in 1970-1971 are unknown but a detailed report on the second campaign in 1978-1980 is available.

      At Kanzi the second campaign comprises a series of pits trenches and 12 drillholes, totalling 1456m. These drillholes were very widely spaced but outlined a graben of 8km by 500m in the Kanzi area. The phosphate layers were estimated at 5m thick with an average grade of 14% P2O5. It appears that at least two of the drillholes intersected the main Kanzi deposit and most of the rest intersected the lower phosphates layers. Beneficiation testwork showed that the phosphate material could be upgraded to 34% P2O5with a mass pull of 25% and phosphate recovery of 61%. No further work was undertaken on this deposit.

      At Fundu-Nzobe the second campaign comprises six trenches, 14 pits and at least 19 drillholes, 1759m. Drillholes intersected strata identified as Upper Cretaceous, some of which hosts beds of phosphate.

      Minbos 2011-2012

      Mongo Tando Lda drilled 31 Aircore holes in 2011 using a Wallis Aircore drill totalling approximately 1400m. Average depth of the holes is 44m with a minimum depth below surface of 21m and a maximum depth of 66m. The grid followed in the original drilling programme was nominally 500m x 250m (Figure 3.2.2_1). The purpose of drilling was to define the presence of the phosphate mineralization.

      Drilling was planned on a grid of 250m x 250m. A total of 98 drillholes were drilled in 2012. Of those drillholes drilled in 2012, 11 were twins of drillholes drilled during 2011. The average depth of the drillholes was 50m, with the deepest being 73m and the shallowest being 28m. All holes were drilling Aircore.

      Table 3.2.2_1 Cabinda Phosphate Project Kanzi Drilling 2011-2012
      2011 Drilling	2012 Drilling
      Number of drillholes Aircore	31	98
      Number of samples	227	570
      Total meterage drilled	1435	4912

      2500mE

      2000mE

      249500mE

      2011 and 2012 twin drillhole

      9354000mN

      KR016R

      KPP038

      KPP017

      Drillhole Legend

      KPP088

      KPP085

      KPP064

      KR015R

      KPP036R

      KPP080

      KPP032

      5

      KR014

      KPP031

      KR036R

      KPP024

      KPP076

      KR031R

      KPP025

      KPP068

      KR039R

      KPP086

      KPP019

      KPP003

      9356500mN

      KPP059

      KPP063

      KR100

      KPP053

      KPP071

      9354500mN

      mE mE mE

      0 0 0

      0 0 0

      9354000m5 N 0 5

      9 0 0

      4 5 5

      2 2 2

      Figure 3.2.2_1

      2011- 2012 Drilling Campaigns drillhole positions

      9359500mN

      9359500mN

      KR086

      KR085

      9359000mN

      9359000mN

      KR081

      KR080

      9358500mN

      9358500mN

      KR076

      KPP061

      KPP060

      KPP058

      KPP057

      KPP056

      9358000mN

      KR070

      9358000mN

      KPP055

      KR069

      KR068

      KPP082

      KPP072KPP054

      KR064

      KPP075

      9357500mN

      KPP052

      9357500mN

      KPP048

      KR062

      KR059

      KPP062

      KR058

      KPP047

      9357000mN

      KPP042

      KPP041

      KPP067

      9357000mN

      KPP046

      KPP040

      KPP045

      KPP078

      KPP047473939

      KPP044

      KPP005

      9356500mN

      KPP004

      KPP002

      KPP066

      KPP023

      KPP006

      KPP022

      KR024

      KPP009

      KPP021

      KR030

      9356000mN

      KPP020

      KR035R

      9356000mN

      KR043R

      KPP028

      KPP077

      KPP007

      KPP027

      KPP065

      KPP008

      KPP026

      KR025R

      9355500mN

      KPP050

      9355500mN

      KPP081

      KPP010

      KPP033

      KR010

      KPP011

      KPP049

      KPP012

      KR026KRRR020

      KPP030 KPP016

      9355000mN

      KPP029

      KPP087

      KPP01

      KPP083

      KPP034

      9355000mN

      KPP014

      KR017R

      KPP013

      KPP035

      KR021R

      0 200

      400 600m

      KPP018

      KPP073 KPP084

      KPP037

      KR008

      9354500mN

      2011 Drillhole

      KPP070

      KPP039

      KR012

      KPP069

      2012 Drillhole

      KPP074

      KR022

    • GEOLOGY

    • Regional Geology

      The onshore geology of the Cabinda Province and neighbouring Republic of Congo (Brazzaville) and Democratic Republic of the Congo is not well documented. The terminology used in the various reports available on the phosphate deposits is inconsistent between them and with the terminology used in published geology of the Congo Basin. The oldest rocks exposed in the region are Late Archaean to Lower Proterozoic metamorphic rocks of the Maiombe Shield. The Archaean rocks comprise quartzite, amphibolite, gneiss, schist and alkali intrusives (granite, syenite and diorite). Adjacent to the northeast are metasedimentary rocks (greywacke, arkose, conglomerate, quartzite, itabirite), tuff and schist belonging to the Lower Proterozoic, Cassinga Supergroup. Fringing the Shield to the northeast are schist, sandstone and tillite of the Congo Occidental Supergroup. These rocks are part of an Upper Proterozoic fold belt formed on the margin of the Maiombe Shield during the Pan African orogeny. The fold belt extends for more than 500km south of Cabinda through the DRC into Angola, and for several hundred kilometres north of Cabinda into the Republic of Congo (ROC).

      The Archaean and Proterozoic basement rocks are unconformably overlain to the west by up to 4,000m of Cretaceous to Pleistocene marine sedimentary rocks deposited in a coastal basin. Phosphate deposits and phosphatic horizons are located in the coastal basin sediments within the Cretaceous and Eocene rocks. A generalised geological map is shown in Figure 4.1_1 and the stratigraphy is discussed in more detail below.

      The general stratigraphy in the vicinity of the phosphorite deposits in Cabinda is given in Table 4.1_1. The area is underlain by redbeds and green grey shales and sands derived from the continental basement to the east. Overlying the redbeds is a series of limestones of early Cretaceous and late Cretaceous age. The Early Cretaceous of the Congo Basin contains the salt deposits and has been mined in the Republic of Congo and are known to be present in Gabon and Cabinda. In the late Cretaceous (Maastrichtian) there is a gradual transition to phosphatic units comprising the informally named the Lower Phosphate Member (LPM). In part this appears to be marked by a unit called the Blue Grey Mica Sand which forms the footwall to some of the mineralisation in Cabinda.

      The LPM is composed of three sedimentary cycles; the lowermost unit has the lowest grade phosphate bearing beds overlain by two upper units generally higher in phosphates. In the thicker sequences, the three phosphorite beds are separated by barren beds up to several metres thick. These phosphorite beds are composed of very fine phosphate pellets, organic remains and minor nodular beds, fine grained quartz, clay and fine grained calcite and/or dolomite. In the weathered zone the organic materials and the carbonates are usually leached out. This is especially noticeable at Ueca, which has much lower carbonate content than the other deposits.

      Coffey Mining South Africa (Pty) Ltd

      Table 4.1_1 Cabinda and Kanzi Phosphate Projects Regional Stratigraphy On Land (COFAN 1973, ENERGO,1983, Brownfield and Charpentier, 2006, MTL 2010-2012)
      Period / Epoch	Age	Phosphate Layers		Thickness	Description
      		Areas Preserved	Formation
      Quaternary	All	Recent sediments
      Neogene / Miocene	Uncertain	Uncertain	0-200?	Marine silt sand and conglomerate Yellow, reddish and black clay rocks, may be without fossils debris in some areas
      Palaeogene / Eocene	Ypresian	Cacata, Chivovo, Mongo Tando, Cambota, Kanzi	Upper Massabi Formation(Angola)/Vermelha or Labe Formation (DRC) Upper Phosphate Member (UPM)	6-38m	The Phosphorite layers are sandy, with some gravels and overlain by sandstone and argillites. A rich fauna was found in which the following fossils have been identified: Odontaspis speyeri Dartevelle (shark-teeth), Physodon tertius Winkler (mackerel shark-teeth), Pristis lathami Galeotti (sawfish) and other. Remains found in pits dug by MTL are teeth, jawbones and coprolites (Figures 4.1_1 and 4.1_2)
      	Montian -Thanetian	Cacata, Mongo Tando	Upper Massabi Formation(Angola)/Vermelha or Labe Formation (DRC) Pebbly Foraminiferal Clay and Limestone (PFCL)	>30m?	Upper Pebbly Unit COFAN reports an upper pebbly unit with fine to coarse clastics but no limestone. Phosphate gradually increases upwards and may be of economic interest in some areas. ENRGO does not record a similar unit. Intersected by MTL at Mongo Tando and Cacata but much thinner than 30m.
      		Cacata, Mongo Tando		65-120m	Lower Sandy Foraminiferal Clay and Limestone Unit The typical cross-cut of this series is represented by the Landana scarp. The upper part of the series consists of limestone and is rich in fossils, among which were identified: Lucina landanensis Vincent, Venericardia landanensis Vincent, Cylindracanthus rectus Agassiz, Oxyrhina precursor Leriche and others. Their age is attributed to the Thanetian epoch. This is probably part of the foraminiferal clay and limestone unit of COFAN. The lower part of the series is composed of marl clay sediments with thin beds of phosphatic sandstone. They are rich in fossils among which were: Climonia landanensis, Ginglymostoma africanum Leriche, Carcharodon landanensis Leriche and other.
      Cretaceous / Late	Maastrichtian	Chibuete Cambota	Upper Massabi Formation(Angola)/Liawenda- Kinkasi (DRC) Lower Phosphate member (LPM)	2m	Clayey with layers of sandy phosphates consisting of Phosphorite nodules and quartz grains. Fossils are Corax pristodontus Agassiz, Lamna appendiculata Agassiz, Congorhynchus trabeculatus Dartevelle and other
      		Chibuete, Ueca/Lico, Mongo Tando	Upper Massabi Formation(Angola)/Liawenda- Kinkasi (DRC) Lower Phosphate Member (LPM)	18-80m	The thickness of the series near Chibuete is more than 70m. It consists of sandstone, sands, clay and layers of Phosphorite with numerous fish teeth and fossils of Lamna biauriculata Wann, Lamna caribaea Leriche, Corax pristodontus Agassiz and other. This is considered the main phosphate zone.
      	Chibuete	Lower Massabi Formation (Angola)/ Liawenda-Kinkasi (DRC)	5-30m	Blue Grey Mica Sand
      	Campanian		20-35m	Yellow limestone with intercalations of sandstone, marl and clay. The age of this series is attributed to the Campanian epoch due to its relation to the Inhobo series; however there is a lack of fossil evidence to confirm the age.
      	Campanian		20-100m	White limestone, numerous fossils with layers of clay-aleuritic finely stratified sediments locally in the upper parts of the series.
      Cretaceous / Early	Pinda, Loeme, Chela, Bucomazi, Lucula Fms	110-150m	Bituminous limestone, outcrops of dolomites with intercalations of sandstone. ENERGO identifies an unconformity between this layer and the overlying white limestone. Aptian(Loeme Fm) aged layers contain the salt deposits found in the Republic of Congo and Gabon
      Jurassic	Lucula SS?	>250m?	Redbeds and Green/Grey sand and shales

      Figure 4.1_1 Cabinda Phosphate Project

      Cacata Prospect - Photograph of UPM Phosphates, Coprolites and Gravels

      Figure 4.2.2_1 Cabinda Phosphate Project

      Mongo Tando Prospect - Photograph of Indurated Phosphatic Gravel Outcrop

      Note pen for scale

    • Local Geology

    • Angolan Licenses

      Cacata

      The Cacata prospect is contained in a northwest-southeast trending graben approximately 400m wide and was originally identified by COFAN who drilled at least 31 drillholes into the prospect. Maps show that COFAN interpreted the stratigraphy as having both the UPM and LPM intersected and the relationship was assumed to be fault related. A similar sequence was intersected by MTL however deeper drilling of some holes and a reinterpretation of the similar geology at Mongo Tando now shows that what was originally interpreted to be LPM by COFAN is in fact the immediate footwall to the UPM known as the PFCL and the relationship at Cacata is that of an unfaulted sedimentary sequence (Figure 4.2.1_1 and 4.2.1_2). The sediments dip at a low angle to the north and beds are truncated by an erosion surface.

      The UPM is preserved in the northern part of the deposit over a length of approximately 1.7km. It is represented by three sedimentary units (Figure 4.2.1_3). There is a layer of low grade phosphate with a high alumina content at the top, partially eroded. The contact with the middle thick bed of high grade phosphate gravel (Figure 4.2.1_3) appears gradational. There is a partially preserved, partially drilled lower unit with moderate to high grade but irregularly deposited phosphate mineralization. The southern end of the UPM is interpreted to be bounded by an erosional surface.

      The beds of the PFCL (Figures 4.2.1_1 and 4.2.1_2) are found in the southern part of the drilled area. They are lower grade than the UPM and are chemically different from the UPM beds in that they contain dolomite cement in the matrix and a higher clay and silica content.

      Figure 4.2.1_1 Cabinda Phosphate Project

      Cacata Prospect - Geological Interpretation

      F i g u r e 4 . 2 . 1 _2

      C a b i n d a P h o s p h a t e P r o j e c t

      C a c a t a P r o s p e c t - I n t e r p r e t a t i o n o f t h e M i o c e n e E r o s i o n S u r f a c e

      ( G r a d e s f a r l e f t A l 2O 3l e f t F e 2O 3w i t h s a m e s c a l e - s e e F e 2O 3, r i g h t C a O , f a r r i g h t - P 2O 5

      F i g u r e 4 . 2 . 1 _3

      C a b i n d a P h o s p h a t e P r o j e c t

      C a c a t a P r o s p e c t - I n t e r p r e t a t i o n o f t h e S e d i m e n t a r y C y c l e s

      Coffey Mining South Africa (Pty) Ltd

      Chivovo

      Chivovo geology is simple and consists of a single structure bounded by faults on all sides with little or no internal faulting (Figure 4.2.1_4 and 4.2.1_5). Mineralized strata at Chivovo appear to be part of the UPM. Unlike Cacata which has higher grades in the middle, Chivovo's high grade layers sit at the bottom of the sedimentary sequence with grades decreasing upwards. Chivovo appears to have the top and middle layers found at Cacata but with the high grade middle layer being less well developed (Figure 4.2.1_6).

      Figure 4.2.1_4 Cabinda Phosphate Project Chivovo Prospect Grades

      Minbos Resources Limited - JMIN05 Page: 26

      Independent Market Valuation of the Cabinda Province Resources, Angola and of the Kanzi Resource, DRC - 1 February 2017

      F i g u r e 4 . 2 . 1 _5

      C a b i n d a P h o s p h a t e P r o j e c t

      C h i v o v o P r o s p e c t - G e o l o g i c a l S e c t i o n

      (P 2O 5g r a d e s o n l y a s i n F i g u r e 4 . 2 . 1 _ 3 )

      F i g u r e 4 . 2 . 1 _6

      C a b i n d a P h o s p h a t e P r o j e c t

      C h i v o v o P r o s p e c t - G e o l o g i c a l I n t e r p r e t a t i o n

      ( G r a d e s f a r l e f t A l 2 O 3 l e f t F e 2O 3w i t h s a m e s c a l e - s e e F e 2O 3, r i g h t C a O , f a r r i g h t - P 2O 5)

      Coffey Mining South Africa (Pty) Ltd

      Mongo Tando

      Mongo Tando phosphate beds are preserved in a graben bounded on the southwest and northeast by faults trending parallel and subparallel to the Atlantic rift (Figure 4.2.1_7). The deposit is broken up by faults perpendicular to the main fault system. The Puela Fault which divides Mongo Tando North and Mongo Tando Central is one of a series of parallel faults which divides the Central West African coast into a series of sub-basins, well described in petroleum industry literature. Mongo Tando Central and South are interpreted to be divided by a parallel but smaller fault.

      Preservation of stratigraphy is controlled by erosion at the base of the UPM and at the base of the Miocene overburden and the current surface. Less extensive channelling and erosion is found within the stratigraphic units.

      The current drilling by Mongo Tando Lda has focused on the upper phosphatic layers. Reinterpretation of the stratigraphy has shown the presence of true UPM and its immediate footwall the PFCL and essentially no LPM. The combined thickness of the mineralization in these units is up to 50m. The phosphate layers of the UPM are developed over the same three cycles as Cacata and Chivovo. They are however generally both thinner and have lower phosphate concentrations than the more easterly deposits. The thicker phosphate zones at Mongo Tando Central tend to have a thick bottom cycle and phosphate beds in the PFCL (Figure 4.2.1_8). The thinner UPM appears to be due to non-deposition over high ground in the footwall and erosion from above (Figure 4.2.1_8 - 10).

      Minbos Resources Limited - JMIN05 Page: 29

      Independent Market Valuation of the Cabinda Province Resources, Angola and of the Kanzi Resource, DRC - 1 February 2017

      F i g u r e 4 . 2 . 1 _ 7

      C a b i n d a P h o s p h a t e P r o j e c t

      M o n g o T a n d o M o d e l l e d G e o l o g i c a l I n t e r p r e t a t i o n

      ( P 2 O 5 g r a d e s a r e f o r t o p l a y e r o n l y , U T M Z o n e M 3 2 c o o r d i n a t e s s h o w n )

      F i g u r e 4 . 2 . 1 _8

      C a b i n d a P h o s p h a t e P r o j e c t

      M o n g o T a n d o P r o s p e c t - G e o l o g i c a l C r o s s S e c t i o n M o n g o T a n d o N o r t h ( l o o k i n g N o r t h w e s t ) T h i n d u e t o b o t h w e a k d e v e l o p m e n t a n d e r o s i o n

      G r a d e s a r e P 2O 5( r i g h t ) a n d A l 2O3( l e f t ) o n l y

      F i g u r e 4 . 2 . 1 _9

      C a b i n d a P h o s p h a t e P r o j e c t

      M o n g o T a n d o P r o s p e c t - G e o l o g i c a l C r o s s S e c t i o n M o n g o T a n d o C e n t r a l ( l o o k i n g N o r t h w e s t )

      G r a d e s a r e P 2O 5( r i g h t ) a n d A l 2O3( l e f t ) o n l y

      F i g u r e 4 . 2 . 1 _10

      C a b i n d a P h o s p h a t e P r o j e c t

      M o n g o T a n d o P r o s p e c t - G e o l o g i c a l C r o s s S e c t i o n M o n g o T a n d o S o u t h ( l o o k i n g N o r t h w e s t )

      G r a d e s a r e P 2O 5( r i g h t ) a n d A l 2O3( l e f t ) o n l y

      Ueca

      The dominant structural feature of the Ueca area is the Chimoueca Graben which is over 8.5km long and between 1km and 1.8km wide. The graben lies between an eastern, steeply west dipping, bounding fault and a western, steeply east dipping fault. The graben trends north-northwest and contains gently folded phosphatic stratigraphy (Figure 4.2.1_11 and 4.2.1_12). The Puela Transverse Fault extends from the Mongo Tando area to intersect the Chimoueca Graben at the southern end of the Ueca Prospect.

      The UPM has been removed by erosion and the main phosphatic unit of interest is interpreted to be the LPM. This was in turn divided into a higher grade upper unit and lower grade lower unit (Figure 4.2.1_12). The lower unit is composed of phosphatic quartz sand and silt while the upper unit was described as mostly composed of pelletal and organogenic phosphate. Mongo Tando Ltda drilling confirms the two layers and that the upper layer is more phosphate rich. The upper unit is composed of beds of phosphate pellets, phosphatic organic remains (organogenic phosphate), minor nodular phosphate beds and interbedded quartz sand, silt and clay.

      Ueca phosphate grades are generally low grade and no detailed work has been carried out on this deposit. Analysis of the assays however shows that this deposit is substantially lower in calcium than the other four. This has been interpreted to be the result of leaching during the weathering process.

      Figure 4.2.1_11 Cabinda Phosphate Project

      Ueca Outline of Graben and Drillholes

      Figure 4.2.1_12 Cabinda Phosphate Project

      Ueca Prospect Interpreted Stratigraphy (looking east)

      Chibuete

      Chibuete is a long thin graben filled with phosphorite layers of the Maastrichtian Upper Massabi Formation (Figure 4.2.1_13), locally called the Lower Phosphate Member (LPM). The phosphate layers at Chibuete are thicker than at Ueca. The phosphorite occurs in three layers with the upper two layers generally of a higher grade and better developed than the lowest layer (Figure 4.2.1_14). It appears that the upper layer has been preserved at Chibuete but eroded at Ueca.

      Figure 4.2.1_13 Cabinda Phosphate Project

      Chibuete Outline of Graben and Drillholes

      (Phosphate grades as in Figure 5.1.1_2)

      Figure 4.2.1_14 Cabinda Phosphate Project

      Chibuete Prospect Interpreted Stratigraphy (looking north-northwest)

      (Fe, Al2O3and Fe2O3grades as in Figure 4.2.1_3)

    • DRC Permits

      Kanzi

      The single dominant feature is a graben with the eastern boundary fault having the major displacement. The displacement on the eastern fault is more than 70m and on the western is about 50m. Both faults strike approximately N 25° W. The beds within the graben have a general westward dip of 2° - 5 °. The present known graben is 7km long and 1.2km wide. It is assumed to continue to the north and south some distance, possibly a few kilometres.

      There are two mineralized layers intersected in Kanzi. These layers are Upper and Lower phosphatic layers. The separation distance between the layers is thought to be around 15m to 20m. No drillhole intersected all the layers as drillholes were stopped immediately after intersecting the first well-mineralized layer. There is no phosphate mineralization outcropping within Kanzi area.

      Upper Phosphatic Layer

      Upper Phosphatic Layer is regionally termed Upper Phosphatic Member (UPM). The UPM consists of yellowish to greyish brown phosphorite or phosphatic siltstone with clay matrix. It has an average thickness of 10m. The phosphorite in the UPM comprised of coprolites, pellets and angular siltstone fragments. The bottom of the UPM is generally marked by the clay or silt.

      The UPM is divided into North and South geo-zones. These zones appear to be separated by a fault which results in a loss of UPM due to erosion. The thickness of the mineralized layer in the South geo-zone varies from 5m up to 20m. Based on the geo-chemical signatures of the mineralized layer, the South geo-zone is sub-divided into three layers; Top, Middle and Bottom layers (Figures 4.2.2_1 to 4.2.2_3). The mineralized layer in the North geo-zone has an average thickness of 6.5m and is considered the equivalent of the Middle Layer based on chemical analyses.

      Distributions of the three layers in the Kanzi area are given in Figures 4.2.2_1 to 3.

      The Bottom Layer (BL) of the South geo-zone has an average thickness of 4.2m. The BL has an average P2O5grade of 8.75% and an average SiO2content of 67.77%. The BL has the lowest average CaO content of 11.16% of the three layers. The ratio CaO/P2O5is around 1.3 indicating that the BL calcium is of apatite origin and has no dolomite component.

      The average CaO content in the ML is the highest at 23.39%.

      The ML has the highest P2O5and lowest silica (SiO2) grades 16.30% and 39.36% respectively.

      The Middle layer (ML) of the South geo-zone is the most laterally extensive domain on average 6.4m thick. The ML consists of silty phosphorite with coprolites, pellets

      and teeth. The ML in the south geo-zone has the highest P2O5and lowest silica (SiO2) grades, 16.30% and 39.36% respectively. Grades in the North geo-zone are similar at 16.32% and 44.62%, respectively. CaO content in the south and north geo-zones is similar at 23.39% and 21.49% combined Al2O3and Fe2O3contents are in the range of 8-9%. At grades below 20% P2O5there is a dolomite component to the matrix.

      The Top layer (TL) of the North geo-zone has an average thickness of 4.6m. The P2O5 has a mean grade of 9.50%. Silica content is high with an average grade of 49.23%. The CaO/P2O5ratio is not well defined but the lower grade mineralization (2O5) has a dolomite matrix.

      The Lower phosphatic layer is regionally termed Lower Phosphate Member (LPM) and is up to 20m thick. The LPM consists of clay with teeth, vertebrae and small nodular coprolites. Unlike the upper layers, the LPM has a traceable phosphatic clay layer. The LPM has a persistently high silica content and lower P2O5grades. The whole Kanzi project is assumed to be underlain by the LPM at depth. This layer is not of economic value due to extremely low P2O5(3%) and high SiO2(80%).

      Figure 4.2.2_1 Kanzi Phosphate Project

      Map showing the Mineralization Extent

      F i g u r e 4 . 2 . 2 _ 2

      K a n z i P h o s p h a t e P r o j e c t G e o l o g i c a l S e c t i o n A - A'

      F i g u r e 4 . 2 . 2 _ 2

      K a n z i P h o s p h a t e P r o j e c t G e o l o g i c a l S e c t i o n B - B'

      Other Permits

      The only known deposits of phosphate are in the far northern permit 12905 at Fundo-Nzobe (Figure 1.3_1) and near the Angolan border midway between Kanzi and Fundu-Nzobe. Only Fundu-Nzobe n the Phospholux JV permits. This deposit was identified during DRC government region surveys in the 1970s (SPE 1980). Neither Minbos nor its JV partner has carried out any exploration on this property and details of the geology are not known.

    • MINERALIZATION‌

    • Mineralogy

      Mineralization styles vary over the Kanzi Phosphate project from very high grade gravels with coprolites, pellets, teeth and bones (Figures 4.1_1 and 5.1_1) to silty fine grained low grade phosphorite with low grade. The phosphorite beds consist of three main mineral phases, a phosphate phase of mainly apatite/francolite, a sand phase of predominantly silica/quartz and a clay phase of primarily iron-potassium rich clay minerals. These phases are clearly seen in the assay results from high grade phosphates. At lower phosphate grades the distributions are more complex and dolomite is a component of most of the deposits.

      Mineralogical analysis was only undertaken for the PFCL beds at Cacata to investigate the reasons for the poor recoveries. Mineralogical details have been mapped from statistical analyses of whole rock analysis results on all samples.

      Figure 5.1_1

      Photograph showing the Phosphate Mineralization

      The general trend in all deposits is that the higher grade fractions have CaO/P2O5ratios close to the theoretical ratios for apatite and lower grade fractions have a higher and more variable calcium content consistent with a dolomite cement. The Cacata UPM has slightly elevated Calcium but is interpreted to be essentially contained in the apatite. This is also evident in the beneficiation testwork where the apatite was easily separated from the gangue minerals (Figures 5.1_2). Chivovo is similar but does show elevated calcium at moderate grades (dolomite cement?) and some depletion at very low grades (Figure 5.1_3).

      The LPM at Chibuete shows and CaO/P2O5ratio similar to apatite for the high grades but below 15% P2O5there is a substantial dolomite/limestone component to the rock (Figure 5.1_4). The PFCL at Cacata has elevated calcium levels consistent with the mineralogy study which showed a dolomite component to the cement matrix (Figure 5.1_5).

      Kanzi deposit shows similar relationships. The layer identified as UPM is not a clean as Cacata and Chivovo and shows elevated calcium content in the Middle and Top layers at grades below 20% P2O5indicating a dolomitic matrix may be present.

      Figure 5.1_2 Cacata - UPM

      Graph of the relationship between CaO and P2O5

      Figure 5.1_3 Chivovo - UPM

      Graph of the relationship between CaO and P2O5

      Figure 5.1_4 Chibuete

      Graph of the relationship between CaO and P2O5

      Figure 5.1_5

      Cacata PFCL Upper Pebbly Unit (PFCL) Graph of the relationship between CaO and P2O5

    • Mineral Resources‌

      Mineral Resources have been estimated and reported for all the Cabinda deposits (except Cambota and Ueca) and for the Kanzi deposit in the DRC.

      Mineral Resources for the Cabinda deposits have been reported by deposit and by expected beneficiation process (scrubbing and screening only and scrubbing and screening followed by flotation). The two processes are scrubbing and screening only and scrubbing and screening followed by flotation. At this stage the Mongo Tando Central deposit and the Chivovo deposit do not contain sufficient tonnage greater than 23% P2O5to warrant a scrubbing and screening beneficiation process; it is anticipated that these deposits will require treatment by flotation.

      When the Cacata Mineral Resources were reported (2013), a portion of the Cacata deposit was considered qualified for beneficiation by scrubbing and screening only, with the remainder to be beneficiated by scrubbing and screening followed by flotation. However, the Cacata phosphate deposit is currently undergoing a trade-off study where by two process routes are being evaluated. The Trade-Off study is comparing the following 800,000tpa production scenarios:

      • 5 years of drying and sizing followed by 10 years of scrub screen and flotation,

      • 10 years of scrub and screen followed by 5 years of scrub screen and flotation. The results of the trade-off study are currently pending..

      The total mineral resources for the Cabinda deposits are given in Table 5.2_1. Mineral resources by project and process are given in tables 5.2_2 to 5.2_7.

      Table 5.2_1 Cabinda Phosphate Project Cabinda Phosphate Project Mineral Resources (cut-off grade 5% P2O5) Total Mineral Resources October 2013
      Category	Tonnes (Mt)	P2O5	Contained P2O5(Mt)	CaO/P2O5	MgO(%)	R2O3(%)	SiO2( %)
      Measured	5.0	23.0	1.2	1.5	1.7	4.4	23.1
      Indicated	41.5	16.9	7.0
      Total Measured and Indicated	46.5	17.6	8.2
      Inferred	344.8	8.2	28.3
      Total	391.3	9.3	36.4

      Cacata

      Table 5.2_2 Cabinda Phosphate Project Cacata Mineral Resources October 2013 Total Mineral Resource (cut-off grade 5% P2O5)
      Category	Tonnes (Mt)	P2O5	Contained P2O5(Mt)	CaO/P2O5	MgO(%)	R2O3(%)	SiO2(%)
      Measured	5.0	23.0	1.2	1.5	1.7	4.4	23.1
      Indicated	10.2	25.3	2.6	1.5	1.02	4.2	21.3
      Total Measured and Indicated	15.2	24.5	3.8	1.5	1.2	4.3	21.9
      Inferred	11.8	8.8	1.0	2.1	3.7	4.7	45.5
      Total	27.0	17.7	4.8	1.8	2.3	4.5	32.2

      Table 5.2_3 Cabinda Phosphate Project Cacata Mineral Resources October 2013 Scrubbing and Screening (minimum grade 2O5)
      Category	Tonnes (Mt)	P2O5	Contained P2O5(Mt)	CaO/P2O5	MgO(%)	R2O3(%)	SiO2(%)
      Measured	4.1	24.7	1.0	1.5	1.7	3.6	19.4
      Indicated**	9.0	26.6	2.4	1.5	1.0	3.6	18.8
      Total Measured and Indicated	13.1	26.0	3.4	1.5	1.2	3.6	19.0
      Inferred	-	-	-	-	-	-	-
      Total	13.1	26.0	3.4	1.5	1.2	3.6	19.0
      *Includes 0.6Mt of low grade material with high calcium which might not be selected out during mining and will give reduced recoveries when processed. **Includes 1.7Mt of low grade material with high silica which might not be selected out during mining and will give reduced recoveries when processed.

      Table 5.2_4 Cabinda Phosphate Project Cacata Mineral Resources October 2013 Upgrading Requiring Flotation (cut-off grade 5% P2O5)
      Category	Tonnes (Mt)	P2O5	Contained P2O5(Mt)	CaO/P2O5	MgO(%)	R2O3(%)	SiO2(%)
      Measured	0.9	15.4	0.1	1.5	1.8	8.2	39.9
      Indicated	1.2	15.8	0.2	1.5	1.2	8.5	40.0
      Total Measured and Indicated	2.1	15.6	03	1.5	1.5	8.4	40.0
      Inferred	11.8	8.8	1.1	2.1	3.7	4.7	45.5
      Total	13.9	9.8	1.4	2.0	3.4	5.3	44.7

      Chivovo

      Table 5.2_5 Cabinda Phosphate Project Chivovo Mineral Resources October 2013 Upgrading Requiring Flotation (cut-off grade 5% P2O5)
      Category	Tonnes(Mt)	P2O5	Contained P2O5(Mt)
      Measured	-	-	-
      Indicated	6.5	20.5	1.3
      Total Measured and Indicated	6.5	20.5	1.3
      Inferred	-	-	-
      Total	6.5	20.5	1.3

      Mongo Tando

      Table 5.2_6 Cabinda Phosphate Mineral Resources for Mongo Tando October 2013 Upgrading Requiring Flotation (cut-off grade 5% P2O5)
      Category	Area	Tonnes (Mt)	P2O5(%)	Contained P2O5(Mt)
      Measured	-	-	-	-
      Indicated	Mongo Tando Central	24.8	11.5	2.9
      Total Measured and Indicated	24.8	11.5	2.9
      Inferred	Mongo Tando North	65.8	8.8	5.8
      	Mongo Tando Central	21.0	9.9	2.1
      	Mango Tando South	97.2	7.1	6.9
      	Total Inferred	184.0	8.0	14.8
      Total	208.8	8.4	17.6

      Ueca and Cambota

      No Mineral Resources are reported for Ueca and Cambota. Ueca currently contains insufficient tonnage at economically minable grades, and Cambota has insufficiently drilling to calculated a Mineral Resource.

      Chibuete

      Table 5.2_7 Cabinda Phosphate Project Chibuete Mineral Resources October 2013 (cut-off grade 5% P2O5)
      Category	Tonnes(Mt)	P2O5	Contained P2O5(Mt)
      Measured	-	-	-
      Indicated	-	-	-
      Total Measured and Indicated	-	-	-
      Inferred	149	8.3	12.4
      Total	149	8.3	12.4

    • MINING

    • Cacata and Chivovo

      After reviewing the Cacata Mineral Resource and geological model, Coffey Mining (Body et al, 2012) identified "pitable" high-grade material (>26% P2O5) of approximately 9.92Mt located in the southern and central mining areas. A further 4.43Mt of low-grade (17.0%) was sourced from the northern mining area. Approximately 1.16Mt of low-grade (2O526% phosphate material.

      Coffey Mining (Body et al, 2012) identified "pitable resource" of 6.37Mt from the Chivovo Mineral Resource on three areas; namely the southern, central and northern mining sections. After reviewing the Chivovo mineral resource and geological model, Coffey Mining was able to source some 672,000t of high-grade material (>26% P2O5) located in the central mining section. A further 995,000t of low-grade material was sourced from the central mining section and stockpiled. It is envisaged that after mining the high-grade material the stockpiled low-grade material will be used to feed a floatation plant.

      Based on the Coffey Mining Study (Body et al, 2012), mining operations and maintenance would be undertaken as an owner-operator mine. Limited stripping is envisaged for most of the mining areas and will coincide with phosphate production. The designed pit will be mined through conventional truck and shovel mining methods applying a rollover technique, with phosphate removal being followed by backfilling of overburden material and topsoil. It is envisaged that this will be a free dig operation where no drilling and blasting activities are required. Approximately one hectare of initial clearing and grubbing of vegetation for the pits is assumed for the establishment of mining operations. Topsoil is stripped and placed on an initial topsoil dump which will be used for backfilling as mined out areas are rehabilitated.

      The phosphate material will be loaded in pit with excavators with 5.2m³ buckets and transported by 24t articulated dump trucks (ADTs) to the plant/ROM pad estimated to be on average some 1,000m from the pit ramp. Waste material is planned utilising an excavator with 8.4m³ buckets and transported by 24t ADTs. A 3.7m bench height is planned for phosphate material and 5.0m bench height for overburden material. These heights are considered appropriate for the selected loading equipment and will give reasonable economies of scale for the loading and haulage equipment.

      As part of the 2017 BFS currently being undertaken by Minbos, the mining study is being updated. This work is ongoing and results are not available as of the date of this report.

    • Kanzi

      After reviewing the Kanzi Mineral Resource and geological model Coffey Mining (Body et al, 2012) has calculated a 26.07Mt "pitable" resource (>17% P2O5) available for development at the Kanzi Project area in the DRC. , . Coffey identified three mining areas in the Kanzi mineral resource block to be used for mine design purposes and applied a 5% mining loss to the mineral resources as well as a 5% dilution factor. Coffey has assumed all dilution to have zero P2O5content, albeit some of the dilution will contain P2O5.

      Based on the Coffey Mining Study (Body et al, 2012), the mining operations and maintenance can be undertaken as an owner-operator mine. Waste stripping is envisaged for all of the mining area (stripping ratio 7.09:1) and will coincide with phosphate production. The designed pit can be mined through conventional truck and shovel mining methods applying a rollover technique, with phosphate removal being followed by backfilling of overburden material and topsoil. It is envisaged that this will be a free dig operation where no drilling and blasting activities are required. Topsoil is stripped and placed on an initial topsoil dump which will be used for backfilling as mined out areas are rehabilitated.

      The phosphate material can be loaded in pit with excavators with 5.2m³ buckets and transported by 24t articulated dump trucks (ADTs) to the plant/ROM pad estimated to be on average some 600m to 1,400m from the pit ramp. Waste material is planned utilising an excavator with 8.4m³ buckets and transported by 63t rigid trucks. A 3.7m bench height is planned for phosphate material and 5.0m bench height for overburden material. These heights are considered appropriate for the selected loading equipment and will give reasonable economies of scale for the loading and haulage equipment.

    • INFRASTRUCTURE

    • Angolan Licenses

      Power

      There is National Grid power available but the mine will generate its own power.

      Water

      Potable water will be sourced from local rivers, drillholes and recycled water from the plant operations. The plant will initially get its water from the well fields and any make-up water as needed. It will recycle water from the tailings dams.

      Communications

      Site communications will be via radio, cellular service and a satellite communication system.

      Roads

      Access to all sites from the town of Cabinda is via paved and dirt roads. The mine(s) will have to upgrade all access roads to the main north-south paved road for mining operations and transport of ore to the port site.

      Site Infrastructure

      According to the Coffey Mining study (Body et al, 2012), the following site infrastructure is envisaged:

      • Permanent base camp at the mine with all the amenities for the employees at Cacata.

      • Port facility with a jetty, warehousing and offices at the coast.

      • Administration building for mine management and support staff.

      • Maintenance workshop, warehouse and a laboratory.

      • Fuel storage in HDPE lined and bunded tank farm.

      • Concentrate storage and reclaim facility.

      • Power plant.

      • Process control system.

      • Communication system.

      • Water supply (potable and process).

      • Roads.

    • DRC Permits

      Power

      It is assumed that power will be sourced from the local grid.

      Water

      Potable water will be sourced from local rivers, drillholes and recycled water from the plant operations.

      Communications

      Site communications will be via radio, cellular service and a satellite communication system.

      Roads

      Access to all sites from the port of Boma is via paved and dirt roads. The mine(s) will have to upgrade all access roads to the main east-west road for mining operations and transport of ore to the port site.

      Site Infrastructure

      According to the Coffey Mining study (Body et al, 2012), the following site infrastructure is envisaged:

      • Port facility with a jetty, warehousing and offices at the river.

      • Administration building for mine management and support staff.

      • Maintenance workshop, warehouse and a laboratory.

      • Fuel storage in HDPE lined and bunded tank farm.

      • Concentrate storage and reclaim facility.

      • Power plant.

      • Process control system.

      • Communication system.

      • Water supply (potable and process).

      • Roads.

      • Staff Housing may be near the mine site at Kanzi or in Boma.

    • MINERAL PROCESSING

    • Cacata and Chivovo

      The two treatment routes that are currently being considered for the development of the Cacata deposit are:

      • 5 years of drying and sizing followed by 10 years of scrub screen and flotation,

      • 10 years of scrub and screen followed by 5 years of scrub and screen flotation

      A decision about the best treatment is pending and expected to be taken in March 2017. If Minbos proceeds with the dry beneficiation route it will not require process water supply and tailings disposal

      The decision between wet and dry beneficiation will be a trade-off between higher capital expenditure for wet beneficiation and shorter stage 1 mine life for dry processing.

    • Kanzi

      The preliminary evaluation of the Kanzi ore shows quite clearly that this sedimentary deposit can be beneficiated by physical means to a commercial grade concentrate that should be amenable to the production of merchant grade phosphoric acid. It should also be possible to produce concentrated phosphoric acid.

      Using physical means instead of chemical means such as froth flotation to beneficiate the phosphates should result in very low operating costs.

    • VALUATION BACKGROUND‌

      There are numerous recognised methods used in valuing "mineral assets". The most appropriate application of these various methods depends on several factors, including the level of maturity of the mineral asset, and the quantity and type of information available in relation to any particular asset. Table 9_1 shows the relationship between stages of development and valuation approaches for mineral properties.

      Table 9_1 Cabinda and Kanzi Valuation Valuation Approach Criteria
      Valuation Approach	Exploration Projects	Pre Development Projects	Development Projects	Production Projects
      Market	Yes	Yes	Yes	Yes
      Income	No	In some cases	Yes	Yes
      Cost	Yes	In some cases	No	No

      The Valmin Code (2015), which is binding upon "Experts" and "Specialists" involved in the valuation of mineral assets and mineral securities, defines the level of asset maturity under the following categories:

      "Early-stage Exploration Projects" - Tenure holdings where mineralisation may or may not have been identified, but where Mineral Resources have not been identified.

      "Advanced Exploration Projects" refer to tenure holdings where considerable exploration has been undertaken and specific targets identified that warrant further detailed evaluation, usually by drill testing, trenching or some other form of detailed geological sampling. A Mineral Resource estimate may or may not have been made, but sufficient work will have been undertaken on at least one prospect to provide both a good understanding of the type of mineralisation present and encouragement that further work will elevate one or more of the prospects to the Mineral Resources category;

      "Pre-Development Projects" refer to tenure holdings where Mineral Resources have been identified and their extent estimated (possibly incompletely), but where a decision to proceed with development has not been made. Properties at the early assessment stage, properties for which a decision has been made not to proceed with development, properties on care and maintenance and properties held on retention titles are included in this category if Mineral Resources have been identified, even if no further work is being undertaken.

      "Development Projects" refers to Tenure holdings for which a decision has been made to proceed with construction or production or both, but which are not yet commissioned or operating at design levels. Economic viability of Development Projects will be proven by at least a Pre-Feasibility Study.

      "Production Projects" refer to tenure holdings - particularly mines, wellfields and processing plants - that have been commissioned and are in production.

      The various recognised valuation techniques are designed to provide the most accurate estimate of the asset value in each of these categories of project maturity. In some instances, a particular mineral property or project may include assets that logically fall under more than one of these categories.

      Regardless of the valuation techniques adopted, the consideration must reflect the perceived "fair value or market value", which is described in the Valmin Code as:

      "means the estimated amount of money (or the cash equivalent of some other consideration) for which the Mineral Asset should exchange on the date of Valuation between a willing buyer and a willing seller in an arm's length transaction after appropriate marketing wherein the parties each acted knowledgeably, prudently and without compulsion. Also see Clause 8.1 for guidance on Market Value."

      In the case of Pre-development, Development and Mining Projects, where Measured, Indicated and Inferred Resources have been estimated, and mining and processing considerations can be reasonably determined, valuations can be derived by compiling a discounted cash flow (DCF) and determining the net present value (NPV).

      Where Mineral Resources remain in the Inferred category, and the application of mining parameters to determine their economic viability has not been undertaken or is considered inappropriate, their value cannot be demonstrated using the more conventional DCF/NPV approach. A similar situation may apply where economic viability cannot be readily demonstrated for a resource assigned to a higher confidence category. In these instances it is frequently appropriate to adopt the In-situ Resource (or "Yardstick") method of valuation for these assets. This technique involves application of a heavily discounted valuation of the total in-situ metal contained within the resource. This usually equates to a range of 1.5% to 4.5% of the spot metal price as at the valuation date, but may vary substantially in response to a range of additional factors including physiography, infrastructure and the proximity of a suitable processing facility. The range is usually correlated to the confidence in the resource estimate such that the 1.5% factor is commonly applied to "Inferred" resources, 3.0% to "Indicated" and 4.5% to "Measured".

      In the case of Exploration Areas, and to a lesser extent Advanced Exploration Areas, the potential is speculative compared to projects where mineral resources have been estimated. The valuation of Exploration Areas is dependent, to large extent, on the informed, professional opinion of the valuator.

      Where useful previous and committed future exploration expenditure is known or can be reasonably estimated, the Multiple of Exploration Expenditure ("MEE") method is considered to represent one of the more appropriate valuation techniques. This method involves assigning a premium or discount to the relevant effective Expenditure Base ("EB"), represented by past and future committed expenditure, through application of a Prospectivity Enhancement Multiplier

      ("PEM"). This factor directly relates to the success or failure of exploration completed to date, and to an assessment of the future potential of the asset. The method is based on the premise that a "grass roots" project commences with a nominal value that increases with positive exploration results from increasing exploration expenditure. Conversely, where exploration results are consistently negative, exploration expenditure will decrease along with the value.

      Other valuation methods can be adopted to assist in confirming conclusions drawn from the MEE approach. Where sale transactions relating to mineral assets that are comparable in terms of location, timing and commodity, and where the terms of the sale are suitably "arm's length" in accordance with the Valmin Code, such transactions may be used as a guide to, or a means of, valuation.

      Where a joint venture agreement has been negotiated as an "arm's length" transaction, the Joint Venture Terms valuation method may be applied. In a typical staged earn-in agreement, the value assigned to each of the various stages can be combined to reflect the total, 100% equity, value, as follows:

      V100=VStage 1+VStage 2+ …….

      The value of equity assigned to an entity buying into the project, the farminor, at any earn-in stage of a joint venture can be considered as the sum of the value of liquid assets transferred to the seller, or farminee, in cash or shares, plus the value of future exploration expenditure. Commonly, an agreement may stipulate a minimum expenditure that must be met by the farminor prior to allowing withdrawal from the agreement, and these funds are thus committed, as distinct from the notional expenditure to successful completion of the earn-in stage. In calculating the value of an agreement that includes future expenditure, it is considered appropriate to discount (usually at a rate of 10% per annum) that expenditure by applying the discount rate to the mid-point of the term of the earn-in phase. A probability range is also usually applied to each earn-in stage to reflect the degree of confidence that the full expenditure specified to completion of any stage will occur and, consequently, each equity position achieved.

      The value assigned to the second and any subsequent earn-in stages will always involve discounted funds, and is likely to require exponentially increasing speculation as to the likelihood that each subsequent stage of the agreement will be completed. Correspondingly, in applying the Joint Venture Terms approach to staged earn-in agreements, it is regarded as most correct to consider only the first stage as the basis for estimating cash value equivalence at the time of the deal. Coffey adheres to this guideline by adopting the end of the initial earn- in period for valuation purposes.

      The total project value of the initial earn-in period can be estimated by assigning a 100% value, based on the deemed equity of the farminor, as follows:

      

      100 

      

       

       1 

      

      1 

      V100

      DCP CE *

      t EE*

      t *P

      

      

      

      

      (1 I ) 2

      

      1 I 2

      

      where:

      V100= Value of 100% equity in the project ($)

      D = Deemed equity of the farminor (%)

      CP = Cash equivalent of initial payments of cash and/or stock ($)

      CE = Cash equivalent of committed, but future, exploration expenditure and payments of cash and/or stock ($)

      EE = Uncommitted, notional exploration expenditure proposed in the agreement and/or uncommitted future cash payments ($)

      I = Discount rate (% per annum)

      t = Term of the Stage (years)

      P = Probability factor between 0 and 1, assigned by the valuer, and reflecting the likelihood that the Stage will proceed to completion.

    • VALUATION‌

      A number of different valuation methods were examined to determine those most appropriate for the assets under consideration. The Projects under review are regarded as transitional between Advanced Exploration projects and pure Exploration Areas.

    • Mineral Resources

      Mineral Resources have been estimated and reported for all the Cabinda deposits (except Cambota and Ueca) in Angola. For the purposes of this valuation only the Measured and Indicated Mineral Resources for the Cacata, Mongo Tando, Chivovo and Chibuete deposits are considered for valuation purposes which totals 46.5MT. The relatively large (344.8Mt) Inferred Resources have very low P2O5values (2O5) and are therefore considered marginal.

      The Inferred Resources' P2O5values of the comparable phosphate transactions considered are all within 15% of their Measured and Indicated Resources grades (Table 10.1_1). However, the P2O5values of the Cabinda Inferred Resources differs 52% with that of its Measured and Indicated Resources, making the Cabinda Inferred Resources not comparable to that of the other projects' Inferred Resources.

      Table 10.1_1 Cabinda Phosphate Inferred grade as % of Measured and Indicated grades
      Resource	Tonne	Grade % P2O5	Inferred grade as %
      FARIM PHOSPHATE
      Measured and Indicated	92.7Kt	28.68
      Inferred	18.3Kt	28.66	1.5%
      Lam Lam & Kebemer
      Total Resources	56Mt	Not given
      Baobab Phosphate
      Indicated	14.8	19.9
      Inferred	150	17	14.6%
      BOMFIN
      Measured and Indicated	316.5	15.09
      Inferred	4101.9	14.41	4.5%
      CABINDA
      Measured & Indicated	46.5	17.02
      Inferred	344.8	8.16	52%

      Table 10.1_2 shows the Mineral Resource for the Cabinda Deposits on which the valuation will be based.

      Table 10.1_2 Cabinda Phosphate Mineral Resources for Cabinda October 2013
      Deposit	Category	Tonne (Mt)	Grade (%P2O5)	Cut-Off (%P2O5)
      Cacata	Measured	5	23	5
      Indicated	10.2	25.3	5
      Inferred	11.8	8.8	5
      Mongo Tando	Indicated	24.8	11.5	5
      Inferred	184	8	5
      Chivovo	Indicated	6.5	20.5	5
      Chibuete	Inferred	149	8.3	5
      Total	Measured	5	23	5
      Indicated	41.5	16.30	5
      Total	Measured & Indicated	46.5	17.02	5
      Inferred	344.8	8.16	5
      Total Resources	All	391.3	9	5

    • Comparable Transaction Analysis

    • Timeline and Transactions Discarded

      Coffey considered publicly available phosphate market transactions during the period February 2011 to the present for the comparable transaction analysis as shown in Paragraph10.2.2 to Paragraph 10.2.7. The following two transactions were reviewed but not considered directly comparable.

      Blackmountain Agreement with African Phosphate (ASX Release 5 February 2016)

      This was an agreement with African Phospate Pty Limited to acquire 100% of Namakera Mining Company Limited which operates the Namakera Vermiculite Mine and Busumbu Phosphate Project in Uganda. Insufficient data is publicly available to do a Market Valuation of the Busumbu Phosphate project.

      Sal e of M inem ak ers ' int ere s ts in th e S and pi per an d R oc k y Po int Pr oj ec ts ( A SX R ele as e 4 October 2012)

      Sandpiper is an offshore marine phosphate project in Namibia and is not comparable to an onshore phosphate mine project.

    • Farim Phosphate

      On 25 February 2011 Plains Creek Phosphate Corporation bought 50.1% of GB Minerals' Farim Phosphate Project (Farim) in Guinea Bissau for US$25,295,300. Farim has 84Mt Measured

      and Indicated Mineral Resources and 44Mt Inferred Mineral Resources, giving it a 128Mt total resource. This equates to a US$0.45 transaction value per tonne resource.

      This advanced exploration project is 80km away from a port with good infrastructure and can be mined by opencast methods and simple beneficiation process to produce phosphate rock product. This is very comparable with the Cacata deposits that is 60km from port and where the infrastructure risk is only regarded as low to moderate

    • Phosco

      On 18 November 2011 Montero Projects Limited (Montero) bought 100% of Eurozone Investments Limited (Eurozone)'s Phosco Project with four Phosphate exploration licenses in South Africa for US$750,000 as well as a share's issue of US$100,000 to explore Bierkraal Exploration Project. Phosco had 32.8Mt Inferred Resources in the Duyker Eiland Phosphate Project. This equates to US$0.03 transaction value per tonne resource if only the Duyker Eiland Phosphate's resource is taken for valuation. The Duyker Eiland Phosphate Project is located in the Western Cape Province, South Africa, approximately 18 km north of Vredenburg and 140 km north-northeast of Cape Town, the provincial capital.

      There is sufficient area within the Project to host an open pit mining operation, including the proposed open pits, mine and plant infrastructure, waste rock and tailings storage facilities, and is therefore comparable to the Cacata deposit.

    • Lam Lam and Kebemer

      On 29 August 2013 Polish multi-component fertilizer producer Zaklady Chemiczne Police (ZChP) has agreed a deal to acquire 55% of Senegalese phosphate rock mining company African Investment Group (AIG). The total deal is worth $28.5M. The mining company's phosphate rock resources are estimated at 56Mt. This equates to a US$0.93 transaction value per tonne resource.

    • Baobab Phosphate

      On 04 November 2015 Minemakers Limited (Minemakers) signed a Memorandum of Understanding (MOU) with a Senegalese equity partner Mimran Natural Resources (Mimran), in which Mimran will directly invest US$11.25M for 20% of the Baobab Phosphate Project. The project's phosphate rock resources are estimated at 164.8Mt. This equates to a US$0.24 transaction value per tonne resource.

    • Arganara Phosphate

      On 24 May 2013 Rum Jungle Resources put in an offer of AU$17M for 100% of Central Australian Phosphate's Arganarra Phosphate Project. The Arganarra Phosphate Project has 310Mt Inferred Phosphate Rock Resources. This equates to a US$0.05 transaction value per tonne resource.

    • Bomfim‌

      On 12 September 2014 DuSolo Fertilizers Inc. (DuSolo) entered into a purchase agreement with Quantum Fertizantes Do Tocantins Ltda. (Quantum) to acquire the remaining 25% interest of the Bomfim Project. The Agreement in place provides DuSolo with 100% interest in the project effective immediately in exchange for future payments amounting to five million Brazilian Reals (or $2,400,000 CND at the current exchange rate on September 11, 2014). Bomfim has 317,000t Measured and Indicated and 4.1Mt Inferred Phosphate Rock Resources, giving it a total of 4.417Mt Phosphate Rock Resources. This equates to a US$0.48 transaction value per tonne resource.

      The Bomfim Project is centrally located within the Cerrado - Brazil's rapidly expanding agricultural region, on what is now considered the new phosphate belt of Brazil. Other major companies have claims in the area, including Vale and Votorantim

      Located in close proximity to the Bomfim Project are: roads, water dams, power lines and a local airport under construction serving domestic flights. Most recently, the Brazilian Government approved The FIOL (Ferrovia Integração Oeste Leste) - a new rail line that will pass 100km to the north of the Project's area. Coffey considers this open pitable project as comparable to the Cabinda project.

    • Market Approach Valuation

      Using the market approach the following values in Table 10.2.5_1 can be attributed to the 46.5Mt Cabinda Resource Phosphate Project.

      Table 10.2.5_1 Cabinda and Kanzi Valuation Comparable Transactions - Market Approach
      Date	Project	% Sold	Price (US$)	100% Value (US$)	Total Resource	Transaction Value per tonne (US$)	Cabinda Valuation (US$)
      Feb 2011	Farim	50.10%	25,295,300	50,489,621	111Mt	0.45	21.15M
      Aug 2013	Lam Lam	55%	28,850,000	52,454,545	56Mt	0.93	43.56M
      Nov 2011	Phosco	100%	750,000	850,000*	32.8Mt	0.03	1.21M
      Nov 2015	Baobab	20%	8,004,888	40,024,439	164.8Mt	0.24	11.29M
      May 2013	Arganarra	100%	16,447,654	16,447,654	310Mt	0.05	2.47M
      Sep 2014	Bomfim	100%	2,136,562	2,136,562	4.1Mt	0.48	22.49M

      *US$100,000 additionally paid to explore Bierkraal

      The Phosco project cannot be used since only one project's resources (Duyker Eiland Phosphate Project) of the four tenements sold, is used in the above valuation. The Arganara transaction was not taken into consideration as it valued Cabinda at an order of magnitude less than the other transactions and is thus considered an outlier that skews the valuation unnecessary.

      Coffey considered the Farim, Lam Lam & Kebemer, Baobab and Bomfin transactions as comparable for the Cabinda Market Valutation. The Preferred value for Cabinda is calculated as the average of the of the four transactions' values of Cabinda. The low value was calculated as the average of the three lowest values for Cabinda and the highest value is the highest value (US$43.03M) for Cabinda.

      Per a Market Approach the Cabinda Valuation can thus be as shown in Table 10.2.5_2.

      Table 10.2.5_2 Cabinda and Kanzi Valuation Cabinda Valuation - Market Approach
      Valuation	US$ Million
      Preferred	24.6
      High	43.7
      Low	18.3

    • Yardstick Method

      On 31 January 2017 the Phosphate Rock price was stable at US$99.00/t (https://ycharts.com/indicators/morocco_phosphate_rock_price). The 46.5Mt Cacata Measured and Indicated Resource can thus be calculated as The Yardstick Valuation range is usually correlated to the confidence in the resource estimate such that the 3.0% discount factor is commonly applied to an "Indicated" Mineral Resources and 4.5% to a "Measured" Mineral Resources. Table 10.3_1 shows the value breakdown of the Cabinda Project based on the Yardstick Methodology.

      Table 10.3_1 Cabinda and Kanzi Valuation Cabinda Valuation - Yardstick Method
      Category	Tonnes (Mt)	Phosphate Rock Price (US$/t)	Discount Rate	Value US$M
      Measured	5	99	4.5%	22.3
      Indicated	41.5	99	3.0%	123.8
      Total Measured and Indicated	46.5	99	3.83%	145.5

      Coffey applied the Yardstick Valuation Methodology to the Cabinda properties as a check measure. However, in Coffey's opinion this method values the properties at the high end and that the Market approach is a more reliable method in this case.

    • Conclusion

      Coffey considers the Market Approach the more reliable method of valuing the Cabinda Phosphate Projects and thus values it as follows (Table 10.3.1_1).

      Table 10.3.1_1 Cabinda and Kanzi Valuation Cabinda Valuation - Yardstick Method
      Valuation	US$ Million
      Preferred	24.6
      High	43.7
      Low	18.3

    • Kanzi‌

    • Market Approach

      Minbos entered into an agreement with Australian Phosphate Pty Ltd in September 2015 to sell the Kanzi Project to them for US$200,000. Payment was due on 10 October 2015 which never materialized and Minbos subsequently terminated the sale agreement. Using a Market Approach, Coffey values Kanzi Phosphate Project at US$200,000.

    • Cost Approach

      The Kanzi Phosphate Project is at an exploration stage of development and Coffey used the Cost Approach for valuing the project as a second methodology. Coffey is of the opinion that the Multiples of Exploration Expenditure (MEE) method of valuation is appropriate as a check valuation for the Kanzi Project. Table 10.4.2_1 shows the money spent to date on the Kanzi Project which has enabled the definition of a Mineral Resource.

      Table 10.4.2_1 Cabinda and Kanzi Valuation Kanzi Valuation - Exploration Expenditures
      Exploration Expenditure	Incorporation to 30 June 2011	1 July 2011 to 30 June 2012	1 July 2012 to 30 June 2013	TOTAL
      Site Preparation & Site Investigation	US$ 77,403	US$172,795	US$250,198
      Drilling Costs	US$179,885	US$170,642	US$526,339	US$876,866
      Sample Prep, Sample Shipment & Sample Analysis	US$5,000	US$14,328	US$50,417	US$69,745
      Geo Modelling, Resources Estimate, Map Design	US$ -	US$5,432	US$110,295	US$115,727
      Technical Support Costs	US$233,320	US$278,912	US$434,500	US$946,732
      Camp Costs	US$284,165	US$76,380	US$284,260	US$644,805
      Equipment & Vehicle Hire / Fuel & Oil / Transport	US$62,322	US$162,343	US$224,665
      Travel & Accommodation	US$111,599	US$21,048	US$317,469	US$450,116
      TOTAL EXPLORATION EXPENDITURE	US$953,694	US$566,742	US$ 2,058,418	US$ 3,578,854
      Motor Vehicles @ Cost	US$120,950	US$ -	US$ -	US$120,950
      Generator @ Cost	US$-	US$-	US$28,000	US$28,000
      TOTAL FIXED ASSETS	US$120,950	US$ -	US$28,000	US$148,950
      Bank Charges	US$7,793	US$4,175	US$8,391	US$20,359
      Consulting (Tax, Wages, Legal)	US$3,000	US$35,150	US$29,363	US$67,513
      Entertainment	US$ 445	US$ 959	US$13,889	US$15,293
      Insurance	US$-	US$1,300	US$1,000	US$2,300
      Office Expenditure	US$7,245	US$15,271	US$4,913	US$27,429
      Office Rent	US$31,800	US$36,000	US$81,300	US$149,100
      Repairs & Maintenance	US$5,348	US$22,354	US$27,702
      Miscellaneous	US$71,279	US$40,859	US$51,818	US$163,956
      TOTAL OFFICE ADMINISTRATION COSTS	US$121,562	US$139,062	US$213,028	US$473,652
      GRAND TOTAL	US$ 1,196,206	US$705,804	US$ 2,299,446	US$4,201,456

      An amount of US$ 4,201,456 had been spent to date on exploration of the Kanzi deposit to enable the generation of an Indicated Mineral Resource.

      The PEM is based on the success (or failure) of exploration completed to date and an assessment of the future prospects of the tenement. Selected PEMs usually range from 0.5 to 3.0, but can be as low as 0 and as high as 5. An upper limit of three and a lower limit of one for the PEM were applied due to the prospectivity of the deposit. Based on a Cost Approach, the Kanzi Phosphate Project can be valued as follows (Table 10.4.2_1).

      Table 10.4.2_2 Cabinda and Kanzi Valuation Valuation of the Kanzi Phosphate Project
      Valuation Methodology	Preferred Value (US$M)	High Value (US$M)	Low Value (US$M)
      MEE	8.4	12.6	4.2

    • Conclusion

      Since a direct offer had been accepted for the Kanzi Phosphate Project, Coffey is of the opinion Kanzi can be valued at US$200,000.

    • RISK SUMMARY

    • Introduction

      The risk analysis presented here is not a formal risk assessment that follows one of the standard risk management protocols. Coffey prefers to highlight areas of risk and the potential impacts of that risk that would normally be expected in similar operations. The focus is on highlighting areas of risk that are of relevance to the Cacata and Kanzi Projects.

    • Geology and Mineral Resources Risk

      Coffey is satisfied that the Mineral Resources declared fairly represent the content of the deposits. The geological structure is simple with little faulting. The phosphate mineralization is generally continuous between drillholes and appears to be adequately estimated. Further drilling should reduce the uncertainty in the phosphate distribution.

      Low Risk

    • Market and Product Specifications

      Identification of the market and the factors that influence market demand and the potential for success in the market are critical to determining 'value' for an industrial mineral. Value is a function of (i) product quality in relation to consuming industry or customer specification, (ii) product price, and (iii) project robustness. Costs are comprised of (i) mining costs, (ii) processing costs, and (iii) transportation and special handling costs.

      The specifications for industrial minerals include a variety of physical and/or chemical properties. Many applications for industrial minerals can be satisfied by several competing minerals offering similar functional properties, and often at similar costs. There is therefore the potential for product substitution when evaluating the market potential of an industrial mineral.

      Moderate to high risk

    • Development and Operating Risk

      Mining operations generally involve a high degree of risk. A mine in Angola and the DRC is subject to all the hazards and risks normally associated with mineral production, including damage to or destruction of plant and equipment, unexpected geologic formations, pit collapse, injury or life endangerment, environmental damage, fire, equipment failure or structural failures, such as retaining walls or tailings dams, potentially resulting in environmental pollution and consequent liability. The payment of such liabilities may have a material, adverse effect on the Company's financial position.

      The marketability of natural resources that may be acquired or discovered by the owner will be affected by numerous factors beyond its control. These factors include market fluctuations, the proximity and capacity of natural resource markets and processing equipment, and government regulations, including regulations relating to prices, taxes, royalties, land tenure, land use, importing and exporting of minerals and environmental protection. The exact effect of these

      factors cannot be accurately predicted, but the combination of these factors may result in the owner not receiving an adequate return on invested capital.

      Moderate Risk

    • General Engineering and Site Infrastructure Risk

      Mining, processing and development activities depend, to some degree, on adequate infrastructure. Reliable roads, bridges, power sources and water supply are important determinants that affect capital and operating costs. Unusual or infrequent weather phenomena, sabotage, government or other interference in the maintenance or provision of such infrastructure could adversely affect the Company's operations, financial condition and results of operations.

      The commencement and rapid progress of construction at Porto de Caio mitigates the impact of some of the infrastructure and operating risk

      Low to Moderate Risk

    • Metallurgical and Processing Risk

      Some metallurgical testwork has been performed on the resource. This makes it a low risk for the project. The processes to treat the phosphate rock is industry standard and are therefore not considered high risk.

      Low Risk

    • Foreign Operation and Political Risk

      Whilst Coffey believes that the government support in Angola and DRC provides a favourable environment for mining operations, there is no guarantee against any future political or economic instability in this country or neighbouring countries which might adversely affect a mining company. A recent study by the University of Stellenbosch called Ethics and Compliance Risk Survey 2014 indicated that Angola and the DRC are perceived as very corrupt with very poor regulatory environment and law enforcements.

      Other effects may include limitations on the transfer of cash or other assets between the parent corporation and such entities, or among such entities, which could restrict a mining company's ability to fund its operations efficiently. All or any of these factors, limitations, or the perception thereof could impede a mining company's activities, result in the impairment or loss of part or all of the company's interest in the properties, or otherwise have an adverse impact on the mining company's valuation and stock price.

      Moderate to High Risk

    • Ownership Risk‌

      There is no guarantee that title to the properties in which a mining company has an interest will not be challenged or impugned. Title to these properties may be affected by undetected defects, previous agreements, transfers or other valid challenges to the title of the Company's property interests.

      Low to Moderate Risk

    • Project Economics and Overall Project Risk

      Coffey considers the Cacata and Kanzi Phosphate Projects to have a Moderate risk, which can be reduced by completing formal feasibility studies.

      Moderate Risk

    • Risk Summary

      Based on the sections above, the following risks to the Project are given in the Table 11.10_1 below.

      Table 11.10_1 Cacata and Kanzi Phosphate Project Cacata and Kanzi Risk Summary
      Item	Relative Risk
      Geology and Mineral Resources	Low Risk
      Market and Product Specifications	Moderate to High
      Development and Operating	Moderate
      General Engineering and Site Infrastructure	Low to Moderate
      Metallurgy and Processing	Low
      Foreign Operation and Political	Moderate to High
      Ownership	Low to Moderate
      Project Economics	Moderate

      Based on the above risk summary, Coffey considers Cacata and Kanzi Projects to have an overall Moderate Risk.

    • REFERENCES

    • Brownfield, M.E., and Charpentier, R.R., 2006, Geology and total petroleum systems of the West-Central Coastal Province (7203), West Africa: U.S. Geological Survey Bulletin 2207-B, 52 p.

      Montero Mining and Exploration press announcement, November 10th, 2011: "Montero announces closing of acquisition of Phosphate Assets in South Africa.

      Cheney, T.M., 1970. Phosphate Deposits, District of Cabinda, Angola, West Africa-Report of Investigations, Companhia de Fosfatos de Angola. Luanda (COFAN 1).

      Cheney, T.M., 1973. Summary and conclusions of Phase II in the deposits of Phosphate of Cabinda. Companhia de Fosfatos de Angola. Luanda.

      Consolidated Financial Statements of Plains Creek Phosphate Corporation for the years ended June 30, 2012 and 2011 (Expressed in Canadian dollars) Sedar Filing.

      DTS Cacata Ver 02 230512 (2)

      Farim Phosphate Project,http://gbminerals.com/project/farim_phosphate/). Farim Phosphate Project (http://gbminerals.com/project/farim_phosphate/).

      PhosAgro press statement, 27 August 2013: PhosAgro Completes Consolidation of 100%

      Apatit. (www.phosagro.com/press/company).

      Milosevic, Z and Drakulic, D, February 1983. Report On Geological Investigations of The Mongo Tando Phosphate Deposit In The Cabinda Province, ENERGO PROJECT Corporation of Consultants and Development Engineers Belgrade - Yugoslavia.

      SPE 1980. Recherches et Evaluation des Phosphates du Bas-Zaïre, Rapport technique de la Campagne SPE-PNUD 1978-1980. Service Présidentiel D'Etudes, Kinshasa, 96pp.

      Vale Fértil Lda (2012). Prospecting Licence No.0001/01/06/L.P./GOV.ANG.MGM/2009 Quaterly Report Covering the months of July - September 2012

      Previously issued reports

      Cabinda

      Body K. (2010) Mongo Tando Site Visit Report. Coffey Mining (South Africa) (Pty) Ltd, Johannesburg, 18 November 2010.

      Body, K and Fleming, J. (2011). Independent Market Valuation of the Cabinda Province Resources, Angola and of the Kanzi Resource, DRC, Coffey Mining (South Africa) (Pty) Ltd, Johannesburg, 20 December 2011.

      Body K, (2012a). MTL Resource Update - Memorandum. Coffey Mining (South Africa) (Pty) Ltd, Johannesburg, 10 January 2012.

      Body K (2012). Mongo Tando Mineral Resource Update - Memorandum. Coffey Mining (South Africa) (Pty) Ltd, Johannesburg, 12 January 2012.

      Body K and Rupprecht S (2012) PEA Studies Mining and Beneficiation, Coffey Mining (South Africa) (Pty) Ltd, Johannesburg, 31 October 2012.

      Fleming J and Body K. (2011). Resource Estimate for Mongo Tando Project Area, Angola. Coffey Mining (South Africa) (Pty) Ltd, January 2011.

      Bornman, JJ (2016). Cabinda and Kanzi Valuation. Coffey Mining (South Africa) (Pty) Ltd, Johannesburg 30 November 2016.

      Fleming J and Body K. (2011). Updated Resource Estimate for Mongo Tando Project area, Angola. Coffey Mining (South Africa) (Pty) Ltd, Johannesburg, April 2011.

      Fleming J and Body K. (2011). Independent Market Valuation of the Cabinda Province Resources, Angola and of the Kanzi Resource, DRC. Coffey Mining (South Africa) (Pty) Ltd, Johannesburg August 2011.

      Fleming, J. (2011). Mineral Resource Estimation for Chibuete and Chivovo Projects in Angola, November 2011, Coffey Mining (South Africa) (Pty) Ltd, 30 November 2011.

      Mazzoni et al (2010). Independent Technical Report: JMIN05 , Coffey Mining (Pty) Ltd Perth Australia, 19 July 2010.

      Mudau, M (2012). Analytical Quality Assurance and Quality Control - Memorandum. Coffey Mining (South Africa) (Pty) Ltd, Johannesburg, 23 February 2012.

      Kanzi

      Body KJ and Mudau, M., 2013. Mineral Resource Update for Kanzi Phosphate Project in the Western Part of the Democratic Republic of Congo. Coffey Mining (South Africa) (Pty) Ltd, Johannesburg, 31 May 2013.

      Body KJ, Rupprecht,S and Vander Linde G., 2013. Preliminary Economic Assessment, Kanzi Phosphate Project, DRC. Coffey Mining (South Africa) (Pty) Ltd, Johannesburg, 8 November 2012.

      • Status report lucunga Nov 2012

        Coffey sourced the following information from the internet;

      • Arganarra Project: ASX Announcement 24 May 2013, Rum Jungle Resources increases and improves its Offer for Central Australian Phosphate Limited.

      • Baobab Project: Exchange Release 27 April 2015, Minemakers to acquire a potential near- term production rock phosphate project in the Republic of Senegal.

      • Bomfim Project (http://www.marketwired.com/press-release/dusolo-secures-100-interest- in-the-bomfim-project-and-arranges-financing-frankfurt-e6r-1946737.htm)

      • Consolidated Financial Statements of Plains Creek Phosphate Corporation for the years ended June 30, 2012 and 2011 (Expressed in Canadian dollars), Sedar Filing.

      • Farim Phosphate Project (http://gbminerals.com/project/farim_phosphate/).

      • Montero Mining and Exploration press announcement, November 10th, 2011: "Montero announces closing of acquisition of Phosphate Assets in South Africa".

      • http://www.minbos.com/assets/minbos-to-merge-with-angolan-jv-partner.pdf

      • PhosAgro press statement, 27 August 2013: PhosAgro Completes Consolidation of 100% Apatit. (www.phosagro.com/press/company).

      • Phosphate Rock Price (https://ycharts.com/indicators/morocco_phosphate_rock_price)

      Minbos Resources Limited

      Angola Phosphate Project

      Independent Valuation of the Lucunga and Pedra Phosphate Projects, Northern Angola

      1 February 2017

      Author(s):

      Hannes Bornman Manager Mining BEng (Mining), MBA, FSAIMM, Pr. Eng.

      Date: 1 February 2017

      Project Number: JMIN05

      Copies: Minbos Resources Limited (1)

      Coffey - South Africa (1)

      Document Review and Sign Off

      This is a scanned signature held on file by Coffey. The person and signatory consents to its use only for the purpose of this document.

      Hannes Bornman Manager/Author

      This is a scanned signature held on file by Coffey. The person and signatory consents to its use only for the purpose of this document.

      Supervising Principal Reviewed By Ken Lomberg

      This document has been prepared for the exclusive use of BDO Corporate Finance (WA) Pty Ltd ("Client") on the basis of instructions, information and data supplied by them. No warranty or guarantee, whether express or implied, is made by Coffey with respect to the completeness or accuracy of any aspect of this document and no party, other than the Client, is authorised to or should place any reliance whatsoever on the whole or any part or parts of the document. Coffey does not undertake or accept any responsibility or liability in any way whatsoever to any person or entity in respect of the whole or any part or parts of this document, or any errors in or omissions from it, whether arising from negligence or any other basis in law whatsoever.

      Minbos Resources Limited - JMIN05

      Independent Valuation of the Lucunga and Pedra Phosphate Projects, Northern Angola - 1 February 2017

      EXECUTIVE SUMMARY

      Introduction

      Coffey Mining South Africa (Pty) Ltd (Coffey) has been engaged by Adam Myers of BDO Corporate Finance (WA) Pty Ltd (BDO) to prepare an Independent Valuation of the Lucunga and Pedra Phosphate Projects, Northern Angola. The Valuation is required to be compliant with the Australian Code for the Technical Assessment and Valuation of Mineral and Petroleum Assets and Securities for Independent Expert Reports (the VALMIN Code).

      The purpose of the Valuation is to support Minbos with a Fairness and Reasonableness Report that will be prepared by BDO as a reference for the proposed transaction in terms of which Minbos will merge its interests with Petril Phosphate Limited (Petril). Petril's main projects are their 50% interest in the Cabinda Project (refer to report jr_Minbos_Cabinda and Kanzi Valuation_1 February 2017) through a joint venture with Minbos and the Lucunga and the Pedra de Feitico (Pedra) Phosphate Projects. The Lucunga Project is located in the coastal region of Northern Angola, near the village of Mucula, at elevations of 5m to 100m amsl and is majority owned through a joint venture with Haifa Chemicals. The Pedra Project is 100% owned by Petril and is located on the southern banks of the Congo River. This project has river access for potential transport of product via the port of Soyo (Angola). Limited exploration work has been undertaken on the Pedra Project to date.

      Scope of Work

      Coffey has based this Valuation on the data as supplied by Minbos for the Lucunga and the Pedra Projects. The Valuation includes the broad tasks as outlined below:-

    • A review of the geology and mineral resources model.

    • Compilation of a Valuation in the property compliant with the VALMIN Code.

      Both the Lucunga Project and the Pedra Projects do not have Mineral Resources compliant with either the JORC 2012 Code or NI 43-101, and therefore according to the guidelines of the VALMIN Code, a discounted cashflow (DCF) is not an appropriate Valuation methodology. A Multiple of Exploration Expenditures (MEE) Valuation and a Comparable Transaction Valuation have been used to value the Lucunga and Pedra Projects.

      Effective Date

      The Effective Date for this report is 1 February 2017 and is in accordance with the guidelines of the VALMIN Code (2015 Edition).

      Disclaimer

      This Independent Technical Valuation has been prepared on information available up to and including 1 February 2017. The conclusions expressed in this report are therefore only valid up to this date and may change with time in response to variations in economic, market, legal or political factors, in addition to

      on-going developments with respect to the planned exploration and development activities. All monetary figures included in this report are expressed in American dollars (US$) unless otherwise stated.

      The legal status of the assets, the various licensing and Joint Venture agreements covering those interests, and the exploration, mining and minerals processing legislation applicable in the various Project jurisdictions have not been independently verified by Coffey. The present status of tenements, agreements and legislation described in this report is based on information provided by Minbos, and the Valuation has been prepared on the assumptions that exploration and potential development of the projects will prove to be lawfully permitted. Coffey is not qualified to comment on the nature of the transactions or arrangements between Minbos and other third parties.

      Coffey is not in a position to make direct comment on any interest the directors and promoters of Minbos may have in the company or its assets, nor is Coffey qualified to comment on or confirm this aspect.

      Location and Tenements

      The Lucunga Project is located in the coastal region of Northern Angola, near the village of Mucula, at elevations of 5m to 100m amsl. The topography is rolling hills with steeper sections adjacent to streambeds.

      Lucunga is covered by a single exploration permit of 300 km2(0009/09/06/T.E./GOV.ANG.MGM/2009) and a 100 km2mining permit (Decreto Presidential No 135/15). Vale Fertil (Petril subsidiary) has indicated that renewal applications for the licences has been submitted and is currently being put forward for presidential decree. Minbos is not aware of any impediment to the licences being renewed. Vale Fertil has also applied for an extension of the Mining Permit to the west of the current mining permit. The Mining Permit (s) will exclude a servitude for a road and power line which pass through the property (see also Section 4.2.2).

      The available documentation indicates that:-

      A portion of mineral resource and reserves declared in this report currently fall outside of the Mining Permit. It has been assumed that the renewed exploration permit and Mining Permit extension will be granted before the end of the feasibility study. If this does not happen, there are sufficient material in the mineral resource to replace any resource which fall outside of the mining license.

      There is a road running west to east that roughly divides the property into a northern and southern section. This feature is also a rough boundary between the two types of mineralization found on the property. To distinguish the mineralization types the following convention is used in the remainder of the report; the North Domain, which consists of the Quindonacaxa Central, Quindonacaxa NE, and Quindonacaxa SW prospect areas, and the South Domain, which consists of the RS prospect area. In addition, the Lucunga Project contains several other prospect areas, namely Coco Grande, Lendiacolo, and Coluge Tando (Figure 1).

      Figure 1

      Project overview showing the various prospect areas and boundaries of the Mining Permit and the Exploration Permit currently under renewal

      The license can be seen in Figure 1. It is 36km long in the N-S direction and its width varies from 10km on the Northern part to 13.3km on the Southern part.

      The property is roughly parallel to the coastal road. Access to Lucunga is via a sealed and unsealed road that connects Luanda to Soyo, which is currently being upgraded to a four-lane sealed highway. Mucula, the closest town to the project area (Figure 1), is located approximately 250 km north of Luanda, and 120 km south of Soyo.

      The Pedra Project is 100% owned by Petril and is located on the southern banks of the Congo River. This project has river access for potential transport of product via the port of Soyo (Angola). To date, minimal work has been undertaken on the Pedra Phosphate Project. The Pedra concession covers a total area of 939 km². Access is from the town of Soyo, where there are daily flights and all required infrastructure, related to the oil industry. From Soyo, it is about 45 km on dirt tracks which require 4x4 vehicles, to the western edge of the concession.

      The Pedra Project lies to the south of the Congo River, in an area of river plain and adjacent Piedmont (Figure 2). The area is semi-arid with savannah like vegetation, and heavy forests along the washes. It rains heavily from September to May, when access to the concession is nearly impossible.

      Figure 2

      Pedra Concession Area

      Geology

      The Lucunga region is a platform with peneplained surface inclined Northeast at about 1.50 (Martins I.A., 1963) and moderate tectonics. The basement of the platform consists of Precambrian metamorphic- intrusive complex and sedimentary rocks which crop out in the eastern and southeast sections of the "Quindonacaxa" deposit. It is composed of highly metamorphosed rocks, mainly biotite-amphibole and biotite gneisses, with some syenite intrusives and dikes of microamphibolitic - microsyenites composition.

      Overlying the metamorphic-intrusive complex with transgressive and irregular contacts, are the rocks from the sedimentary complex, which constitute the external part of the platform. These rocks lie in a subhorizontal attitude, with a slight regional slope of 2º -30º, sometimes 5º -60º to the north and northeast. These are strata from the Upper Cretaceous, Eocene, Neogene and Quaternary periods.

      Lucunga is an alluvial deposit consisting of quartz and phosphatic gravels in fine matrix of soils or lacustrine muds. The area, which is the subject of this report, can be divided into two areas based on the

      concentration of the phosphate and the matrix of the gravels. The Northern Domain, which contains the prospects Quindonacaxa NE, Centre and SW, and the Southern Domain which contains the RS prospect. The northern domains are considered fluvial with areas of non-deposition, whilst the southern domain is interpreted to be more continuous and have a lacustrine component as well as a fluvial component. Gravels of the northern fluvial deposits generally have moderate to high grades (15% P2O5) and are contained in high iron soils. There is very little quartz gravel as a component. Gravels in the southern portion comprise phosphatic pellets and minor quartz pebbles in a mud matrix, phosphatic pellets and quartz gravels in a muddy matrix and quartz gravels with subordinate phosphatic pellets in a mud matrix.

      The Pedra Project is interpreted to be an extension of the graben structures that trend northwest- southeast from Angola's Cabinda Province, through the DRC and into Angola's Zaire Province. As such, the geological setting of the project is interpreted to be directly analogous to the Company's Cacata Deposit.

      The basement craton of the Pedra de Feitico region is comprised of Pre-Cambrian gneisses and granitic intrusives, which are unconformably overlain by Upper Cretaceous to Quaternary sediments. The Upper Cretaceous sediments have a total thickness of 50 m, are flat lying, and primarily consist of marine biogenic sedimentary rocks including some phosphatic limestones.

      Terrigenous sandstones, gravels, and conglomerates of Pliocene age with a total thickness of 120 m unconformably overly the Upper Cretaceous sediments. Overlying the Pliocene sediments are reworked Pleistocene sediments, and re-deposited sands, clays and gravels. Holocene sediments, primarily from the Congo River flood plain, overly these sediments with up to 25 m of sands and conglomerates.

      Beneficiation Testwork

      Several metallurgical testwork studies have been undertaken on phosphate samples from the Lucunga Project. Testwork indicates that there are potentially three (3) phosphate product routes that could be produced from Lucunga: calcined rock, NPK, or single super phosphate (SSP). One of the key strengths of the Lucunga Project is its high solubility making it potentially suitable for direct application products and SSP in the local and regional markets. However, the elevated cadmium content of the in-situ phosphate means that the beneficiated phosphate rock will possibly not be suitable to all markets. The Lucunga phosphate material has been successfully tested for its suitability for calcining, which removes the majority of the cadmium, and produces a high grade calcined rock. The availability of local gas for calcining warrants further investigation, and the production of calcined rock will require blending of feedmaterialfrom different deposit areas to control R2O3%levels (R2O3%= Al2O3%+ MgO + Fe2O3%).

      No beneficiation testwork has been carried out on material from the Pedra Project.

      Mineral Resources

      Mineral resources for the Lucunga Project were estimated and reported by Mr Jed Diner in 2012 (Diner 2012). Coffey has reviewed the methodologies and ran validation test for reasonableness of the results but has not re-estimated the mineral content (Body KJ, Rupprecht,S, 2016.). These resources are not considered JORC 2012 or NI 43-101 compliant Mineral Resources.

      The Coffey report notes:

      As part of the definition of a Mineral Resources it is necessary to demonstrate there are "reasonable prospects for eventual economic extraction". For all industrial minerals the following must exist: - the material can be beneficiated to a saleable product and that a market exists, i.e. there are buyers, for the beneficiated product. Neither of these conditions have been met as at 1 February 2017. Beneficiation testwork is not complete and Vale Fertil has not presented any market studies or offtake agreements to Coffey.

      Mineral Reserves are Mineral Resources with a demonstrated economic viability. This condition has also not been met as at 1 February 2017. Environmental Studies, engineering design and costing and the financial models to the required levels (Prefeasibility Study) have not been completed and/or presented to Coffey to assess the viability of the Mineral Resource.

      In addition, there are portions of the deposit and Life-of Mine Plan that are outside of the current mining license. Vale Fertil has applied (or will apply) for an extension to the mining license and a renewal of the expired exploration permit. As at 1 February 2017 Vale Fertil does not have a valid Permit for these areas and any potential resource and portions of the LoM plan would need to be excluded.

      Where the term mineral resource is used it should be read with the understanding of potential to become Mineral Resources. Likewise, where the term mineral reserves is used it should be understood as the Potential to become Mineral Reserves once the above criteria are met.

      Phosphate mineralization reported in Section 3.10 as mineral resources and mineral reserves is reported in a format consistent with the guidelines of Canadian NI 43-101.

      No mineral resources have been estimated for the Pedra Project. Lucunga Project Geological Modelling

      The Lucunga deposit is an alluvial phosphate deposit consisting of quartz and phosphatic gravels in a fine matrix of soils or lacustrine muds that presents as a thin flat lying gravel layer, with areas of erosion and non-deposition, over a wide area. The key factor affecting geological continuity is depositional age/environment and post depositional erosion. As the Lucunga deposit is alluvial, there are no impacting structures, however there are areas of erosion and non-deposition which impact geological continuity.

      The Lucunga deposit was modelled as three (3) seams; overburden, phosphate, and footwall. The overburden, which has an average thickness of 1.5 m, consists of quaternary alluvium, and waste rock in the hangingwall. The footwall consists of various Eocene lithologies, dominantly siltstones or limestone. The limestone footwall contact is not well understood and has been interpreted as a limestone karst. The phosphate unit is modelled as a single unit with no subdivisions as generally it is too thin to

      be accurately subdivided. The average thickness of the Lucunga phosphate unit is 0.6 to 1m, but does reach up to 4 m in places.

      The drill hole spacing nominated by Vale Fertil was largely based on work undertaken by AEE Bulgar Geomin, who essentially demonstrated the same results when using a 125m grid and 62.5m grid. It is however, important to note, that whilst the Bulgarian work indicates that they produced the same mineral resource numbers on a 125 m by 125 m grid as a 62.5 m by 62.5 m grid, this comparison is a 'bottom- line' numbers comparison. The Bulgarian mineral resource models are not available as 3D geological models with interpolated grade estimates. As such is it not possible to comment on what impact the 62.5 m by 62.5 m grid spacing had on the distribution of grade (i.e. grade continuity) compared with the 125 m by 125 m grid spacing.

      At this stage, there is some uncertainty surrounding the thickness of the mineable phosphate unit, and the limestone karst footwall contact, which both require further consideration.

      Lucunga Project Mineral Resources

      The 2012 Lucunga mineral resource (Table 1) was generated following the completion of the 2010 to 2012 drilling campaign, which was aimed at verifying the previously calculated resource. The drilling program covered all the Lucunga prospect areas (Quindonacaxa, RS, Coco Grande, and Coluge Tando), with the exception of Lendiacolo.

      These resources were classified by Diner (2012) based on the following criteria;

    • Cut-off grade of 14%

    • 'Measured' -drillhole spacing of 125m

    • 'Indicated' - drillhole spacing of 250m

    • 'Inferred' - drillhole spacing of 500m

    • All areas with Aircore drilling only are classified as 'Inferred'

      Table 1 Lucunga and the Pedra Phosphate Projects Mineral Resources as at 1 June 2016 (subject to confirmation of economic criteria)
      Cut-off Grade	'Measured'		'Indicated'		Total 'Measured' and 'Indicated'		'Inferred'
      (%P2O5)	Tonnes ('000)	Ave P2O5	Tonnes ('000)	Ave P2O5	Tonnes ('000)	Ave P2O5	Tonnes ('000)	Ave P2O5
      Central Domain
      14	2,990	17.27	2,956	16.69	5,946	16.98
      North East Domain
      14	3,067	16.58	3,067	16.58	8.5	15.4
      South West Domain
      14	293	16.55	293	16.55
      Total North Domains
      14	2,990	17.27	6,317	16.63	9,307	16.84	8.5	15.4
      RS (South) Domain
      14	425	16.84	425	16.84	844	14.9

      Only phosphate is reported for these mineral resources. No other criteria were used in this selection.Other elements suchas Al2O3,Fe2O3andSiO2areimportant for mining block selection and blending for plant feed (and therefore mineral reserves) but were not used to restrict mineral resources. Cadmium levels, which are considered high, were not used to restrict the mineral resource as it was assumed that Cadmium would be removed during beneficiation.

      Infrastructure

      The Lucunga Project is located adjacent to a major highway currently being constructed from the capital of Angola (Luanda) to the Porto de Soyo, located approximately 120 km north of the Lucunga Project. The highway is scheduled for completion in 2017. Major high voltage transmission lines servicing Soyo transect the Lucunga Project. The Soyo Port is connected to the nearby offshore gas fields and gas is available for purchase.

      The Pedra Project is accessible from the town of Soyo, where there are daily flights and all required infrastructure, related to the oil industry. From Soyo, it is about 45 km on dirt tracks which require 4x4 vehicles, to the western edge of the concession.

      Mining

      The proposed mining methodology to be used at Lucunga is conventional truck and shovel mining methods applying a rollover technique, with phosphate removal being followed by backfilling of overburden material and topsoil. It is envisaged that this will be a free dig operation where no drilling and blasting activities are required. Topsoil is stripped and placed on an initial topsoil dump which will be used for backfilling as mined out areas are rehabilitated.

      Mining will be impacted by the thickness of the mineable phosphate unit (minimum mining widths) and the limestone karst footwall contact, which is not fully understood at this stage.

      Mineral Processing

      Several metallurgical testwork studies have previously been undertaken on phosphate samples from the Lucunga Project. Testwork indicates that there are potentially three (3) phosphate product routes that could be produced from Lucunga: calcined rock, NPK, or SSP. The high solubility of the Lucunga phosphate makes it potentially suitable for direct application products and SSP in the local and regional markets However, the elevated (in-situ) cadmium content potentially means that beneficiated phosphate rock from Lucunga may not be suitable to all markets.

      Testwork has successfully demonstrated Lucunga's suitability for calcining, which removes the majority of the cadmium, and produces a high grade calcined rock. The availability of local gas for calcining warrants further investigation and the production of calcined rock will require blending of feed materialfromdifferent deposit areas to control R2O3%levels (R2O3% = Al2O3%+ MgO + Fe2O3%).

      Future proposed testwork (planned for 2017) includes the following:

    • CRU phosphate market study

    • Tailings material characterisation to establish the quantity of the desliming equipment in the beneficiation circuit.

    • Single Super Phosphate (SSP) testwork to be carried out on bulk product samples from Lucunga to confirm the technical viability of SSP production from Lucunga beneficiated rock phosphate.

    • Environmental studies for the disposal of cadmium dust residues produced in the calcining of Lucunga rock phosphate.

      LoM planning will be required once the phosphate product route has been defined/selected. No metallurgical testwork studies have been undertaken on material from the Pedra Project.

      Project Risk Summary

      A risk assessment (for the Lucunga and Pedra Projects) has been completed and is summarised in Table 2.

      Table 2 Lucunga and Pedra Phosphate Projects Risk Summary
      Item	Relative Risk
      Geology and Mineral Resources	Lucunga - Low to Moderate Risk Pedra - High Risk
      Development and Operating	Moderate
      General Engineering and Site Infrastructure	Moderate
      Metallurgy and Processing	Moderate Risk
      Foreign Operation and Political	Moderate to High
      Ownership	Low to Moderate
      Project Economics	Moderate

      Based on the above risk summary, Coffey considers Lucunga and Pedra Projectss to have an overall

      Moderate Risk.

      Valuation Results - Lucunga Project

      Cost Approach

      The Lucunga Phosphate Project is at an advanced exploration stage. A number of different valuation methods were examined to determine the most appropriate for the Lucunga Phosphate Project. No Mineral Resources have been declared at Lucunga. Until reasonable prospects for eventual economic extraction can be demonstrated, the existing Lucunga resource cannot classified as compliant with any regulatory body's reporting code (ie JORC 2012 or NI 43-101).

      Several metallurgical testwork studies have previously been undertaken on phosphate samples from Lucunga. Results indicate that there are potentially three (3) phosphate products that could be produced from Lucunga: calcined rock, NPK, or SSP. However, each of these potential phosphate product routes requires further testwork in order to determine their economic viability.

      The following factors need to be taken into consideration when determining Lucunga's prospects of eventual economic extraction:

      • Thickness/ continuity of the mineable phosphate unit

      • Uncertainty surrounding the limestone karst footwall contact

      • Low processing recoveries of the southern deposits

      • Settling issues associated with tailings material (slimes) Securing off-take agreements.

      • Transhipping costs

      • Port accessibility

      • Elevated cadmium content of the in-situ Lucunga phosphate

      • Management of R2O3% levels for the production of calcinedrock

      • Disposal of cadmium dust produced in calcining

      • Availability of local gas for calcining

      • Production of a marketable phosphate product

      • CAPEX and OPEX costs•

        Coffey decided to use the Cost Approach as the most appropriate valuation methodology. The Market Approach was used to compare the reasonableness of the Cost Approach. Table 4 shows the historical expenditure on the Lucunga Project.

        Coffey Mining South Africa (Pty) Ltd

        Table 3 Lucunga and Pedra Phosphate Projects Lucunga Historical Expenditures
        P-PFS	PFS Phase l	PFS Phase 2	LUCUNGA SCOPING STUDY	Acid Test & CD/AL Tests	Lucunga BFS	Original Total	2016 Total Value
        Petril Ltd	01/01/10 - 31/12/11	569,919.62	520,823.00	502,596.50	-	-	-	1,593,339.12	1,721,443.59
        	2012	-	-	1,169,053.00	807,087.23	-	-	1,976,140.23	2,061,904.72
        	2013	-	-	-	-	337,267.00	-	337,267.00	346,845.38
        	2014	-	-	-	-	-	-	0.00	0.00
        	2015	-	-	-	-	-	2,470,372.00	2,470,372.00	2,498,534.24
        Subtotal	569,919.62	520,823.00	1,671,649.50	807,087.23	337,267.00	2,470,372.00	6,377,118.35	6,628,727.92
        HC	432,930.00	520,823.00	1,671,648.50	-	337,266.50	-	2,962,668.00	2,962,668.00
        Total	1,002,849.62	1,041,646.00	3,343,298.00	807,087.23	674,533.50	2,470,372.00	9,339,786.35	9,591,395.92

        Minbos Resources Limited - JMIN05 Page: xii

        Independent Valuation of the Lucunga and Pedra Phosphate Projects, Northern Angola - 1 February 2017

        An amount of US$ 9,591,396 up to November 2016 has been spent to date on exploration of the Lucunga Project to bring it to its current status.

        The Prospectivity Expenditure Multiplier (PEM) considers the success (or failure) of exploration completed to date and an assessment of the future prospects of the tenement. Selected PEMs usually range from 0.5 to 3.0, but can be as low as 0 and as high as 5. Coffey took into consideration that no JORC compliant Resource can be declared for the Lucunga Project

        An upper limit of 1.2 and a lower limit of 0.8 for the PEM were applied due to the prospectivity of the deposit. Coffey thus has the following valuation for the Lucunga Phosphate Project (Table 3).

        Table 4 Lucunga and Pedra Phosphate Project Valuation of the Lucunga Project (US$ Million)
        Valuation Methodology	Preferred Value	High Value	Low Value
        MEE	9.6	11.5	7.7

        Comparable Transaction Analysis

        Table 5 presents a summary of the transactions analysed for the Market Approach Valuation of Lucunga.

        Table 5 Lucunga and Pedra Phosphate Projects Lucunga Valuation - Market Approach
        Date	Project	% Sold	Price	100% Value	Total Resource	Transaction Value per tonne	Lucunga Valuation
        Feb 2011	Farim	50.10%	US$25,295,300	US$50,489,621	111Mt	US$ 0.45	US$4.8M
        Aug 2013	Lam Lam	55%	US$28,500,000	US$51,818,182	56Mt	US$ 0.93	US$9.8m
        Nov 2011	Phosco	100%	US$ 750,000	US$ 850,000*	32.8Mt	US$ 0.03	US$0.27M
        Nov 2015	Baobab	20%	US$8,004,887	US$40,024,439	164.8Mt	US$0.24	US$2.6M
        May 2013	Arganara	100%	US$16,447,653	US$16,447,654	310Mt	US$0.05	US$0.56M
        Sep 2014	Bomfim	100%	US$2,136,56	US$2,136,562	4.42Mt	US$0.48	US$5.12M

        *US$100,000 additionally paid to explore Bierkraal

        The Phosco project is not considered comparable as only one project's resources (Duyker Eiland Phosphate Project) of the four tenements sold, was valued. The Arganara transaction was not taken into consideration as it valued Lucunga at an order of magnitude less than the other transactions and is thus considered an outlier that skews the valuation unnecessary. According to a Market Approach the Lucunga Valuation can thus be as shown in Table 6.

        Table 6 Lucunga and Pedra Phosphate Projects Lucunga Valuation - Market Approach
        Valuation	US$ Million
        Preferred	5.6
        High	9.8
        Low	4.2

        Conclusion

        Because a JORC compliant Mineral Resource has not been declared, Coffey considers the Cost Approach the more reliable method of valuing the Lucunga and Pedra Project and thus values it as follows (Table 7).

        Table 7 Lucunga and Pedra Phosphate Projects Total Valuation - Cost Approach
        Valuation	US$ Million
        Preferred	10
        High	12
        Low	8

        VALUATION RESULTS - PEDRA PROJECT‌

        Development Stage

        Pedra is at an early exploration stage and no resources can be declared. A Market Approach or Yardstick Method can thus not be applied.

        Cost Approach

        The Pedra de Feitico Phosphate Project is at an exploration stage of development and Coffey used the Cost Approach for valuing the project. Coffey is of the opinion that the Multiples of Exploration Expenditure (MEE) method of valuation is appropriate as a valuation for the Pedra de Feitico Phosphate Project. Pedra expenses to 2016 amounts to US$ 289,220 (Table 8).

        Table 8 Lucunga and Pedra Phosphate Projects Pedra Historical Expenditures
        Year	Pedra de Fiticio	Pedra de Fiticio- PGI	Original Total	2016 Total Value
        Petril Ltd	01/01/10 - 31/12/11	87,500	87,500	94,535
        	2012	201,720	201,720	210,475
        Total	87,500	201,720	289,220	305,010

        An upper limit of 1.2 and a lower limit of 0.8 for the PEM were applied due to the prospectivity of the deposit. Based on a Cost Approach, the Pedra de Feitico Phosphate Project can be valued as follows (Table 9).

        Table 9

        Lucunga and Pedra Phosphate Projects Valuation of the Pedra Phosphate Project

        Valuation Methodology	Preferred Value (US$)	High Value (US$)	Low Value (US$)
        MEE	305,000	366,000	244,000

        Using the Cost Valuation Approach, the total Lucunga and Pedra Phosphate Project is valued by Coffey as in Table 10.

        Table 10 Lucunga and Pedra Phosphate Projects Lucunga Valuation - Cost Approach
        Valuation	US$ Million
        Preferred	10.0
        High	12.0
        Low	8.0

        Table of Contents

        EXECUTIVE SUMMARY i

        Valuation Results - Pedra Project xv

      • Introduction 1

      • Scope of work1

      • Disclaimer1

      • Qualifications and Organisations2

      • Site Visit2

      • Valuation Date and Code2

      • Project Locality2

      • Mineral Rights and Project Boundaries4

      • Accessibility and Infrastructure6

      • Project Background6

      • Independence and Experience 8

      • Participants8

      • Source documentation8

      • Independence9

      • Disclaimer9

      • Tenements and Previous Exploration Activities 10

      • License Details10

      • Exploration History12

      • Geology 15

      • Regional Geology15

      • Local Geology - Lucunga18

      • Local Geology - Pedra21

      • Mineralization 22

      • Minerology22

      • Lucunga 22

      • Pedra 27

      • Mineral Resources30

      • Central Area 30

      • North East Domain 32

      • South West Domain 33

      • (RS) South Domain 34

      • Mineral Resource Classification35

      • Reporting37

      • Infrastructure 38

      • Angolan Licenses38

      • Mineral Processing 39

      • Mining 40

      • Social and Governmental40

      • Environmental40

      • Valuation Background 42

      • Valuation 45

      • Lucunga45

      • Cost Approach 46

      • Pedra48

      • Development Stage 48

      • Cost Approach 48

      • Lucunga Mineral Resources50

      • Comparable Transaction Analysis51

      • Timeline and Transactions Discarded 51

      • Farim Phosphate 51

      • Phosco 51

      • Lam Lam and Kebemer 52

      • Baobab Phosphate 52

      • Arganara Phosphate 52

      • Bomfim 52

      • Market Approach Valuation 53

      • Conclusion 54

      • Total Valuation54

      • Risk Summary 55

      • Introduction55

      • Geology and Mineral Resources Risk55

      • Lucunga 55

      • Pedra 55

      • Development and Operating Risk55

      • General Engineering and Site Infrastructure Risk55

      • Metallurgical and Processing Risk56

      • Foreign Operation and Political Risk57

      • Ownership Risk57

      • Project Economics and Overall Project Risk57

      • Risk Summary58

      • References 59

      • List of Tables

        Table 1 - Mineral resources as at 1 June 2016 viii

        Table 2 -Risk Summary x

        Table 3 - Lucunga Historical Expenditures xii

        Table 4 - Valuation of the Lucunga Phosphate Project xiii

        Table 5 - Lucunga Valuation - Market Approach xiii

        Table 6 - Lucunga Valuation - Market Approach xiv

        Table 7 - Total Valuation - Cost Approach xiv

        Table 8 - Pedra Historical Expenditures xv

        Table 9 - Valuation of the Pedra Phosphate Project xv

        Table 10 - Lucunga Valuation - Cost Approach xv

        Table 3.1_1 - Coordinates of the Vertexes of the Lucunga License 10

        Table 3.1_2 - Coordinates of the mineralized areas in the Lucunga License 11

        Table 5.2.1_1 - Summary of Statistics of the Grade Estimation 30

        Table 5.2.1_2 - Comparison of the Block Model vs Composites 30

        Table 5.2.1_3 - Grade and Tonnage Distribution Central Domain 31

        Table 5.2.2_1 - Grade and Tonnage Distribution NE Domain 32

        Table 5.2.3_1 - Grade and Tonnage Distribution SW Domain 33

        Table 5.2.4_1 - Grade and Tonnage Distribution RS (South) Domain 34

        Table 5.3_1 - Confidence Levels of Key Criteria for mineral resource classification of the Lucunga Deposit 36

        Table 5.4_1 - Mineral resources as at 1 June 2016 37

        Table 9_1 - Valuation Approach Criteria 42

        Table 10.1.1_1 - Historical USA Inflation Rates 46

        Table 10.1.1_2 - Lucunga Historical Expenditures 47

        Table 10.1.1_3 - Valuation of the Lucunga Phosphate Project 48

        Table 10.2.2_1 - Pedra Historical Expenditures 48

        Table 10.2.2_2 - Valuation of the Pedra Phosphate Project 49

        Table 10.3_1 - Mineral resources as at 1 June 2016 50

        Table 10.4.8_1 - Cacata and Chivovo Valuation - Market Approach 53

        Table 10.4.8_2 - Cabinda Valuation - Market Approach 53

        Table 10.4.9_1 - Lucunga Valuation - Cost Approach 54

        Table 10.4.9_1 - Total Valuation - Cost Approach 54

        Table 0_1 -Risk Summary 58

        List of Figures

        Figure 1 - The various prospect areas and boundaries of the Mining Permit and the Exploration Permit currently

        under renewal	iii
        Figure 2 - Pedra Concession Area	iv
        Figure 1.6_1 - Lucunga Phosphate Project Location	3
        Figure 1.6_2 - Pedra Concession Area	4
        Figure 1.7_1 - Location of Lucunga Phosphate Deposit and the Exploration and Mining Permit boundaries	5
        Figure 3.2_1 - Work done in July/August 2012	14
        Figure 4.1_1 - Stratigraphy of the Lucunga Project Area	17
        Figure 5.1.1_1 - Topographic Map at theBase of the Phosphate Layer	23
        Figure 5.1.1_2 - North Area Gravels: Photograph of Coprolites in a High Iron Soil	24
        Figure 5.1.1_3 - Photograph of North Area gravels with limestone boulders	24
        Figure 5.1.1_4 - Photograph of Phosphate Gravels in Mud Matrix South Area	25
        Figure 5.1.1_5 - Photograph of Phosphate and Clay without Quartz Gravels	25
        Figure 5.1.1_6 - Photograph of Phosphate in Clay with a Quartz Gravel Cap	26
        Figure 5.1.2_1 - Pedra de Feitico - Regional context	27
        Figure 5.1.2_2 - Pedra de Feitico Phosphate Bearing Areas	28
        Figure 5.1.2_3 - Rounded leached and recrystallized phosphate rocks	29
        Figure 8.2_1 - An example of a Baobab Tree on the Lucunga Project Site	40

      • INTRODUCTION

        Coffey Mining South Africa (Pty) Ltd (Coffey) has been engaged by Adam Myers of BDO Corporate Finance (WA) Pty Ltd (BDO) to prepare an Independent Valuation of the Lucunga and Pedra Phosphate Projects, Northern Angola. The valuation is required to be compliant with the Australian Code for the Technical Assessment and Valuation of Mineral and Petroleum Assets and Securities for Independent Expert Reports (the VALMIN Code).

        The purpose of the valuation is to support Minbos with a Fairness and Reasonableness Report that will be prepared by BDO as a reference for the proposed transaction in terms of which Minbos will merge its interests with Petril Phosphate Limited (Petril). Petril's main projects include their 50% interest in Cabinda Project (a joint venture with Minbos), the Lucunga Project and the Pedra Project. The Lucunga Project, which is majority held by Petril through a joint venture with Haifa Chemicals, is located in the coastal region of Northern Angola, near the village of Mucula, at elevations of 5m to 100m amsl.

        The Pedra Project is 100% owned by Petril and is located on the southern banks of the Congo River. This project has river access for potential transport of product via the port of Soyo (Angola). Limited exploration work has been undertaken on the Pedra Project to date.

      • Scope of work

        Coffey has based this valuation on the data as supplied by Minbos on the Lucunga Project and the Pedra Project. The valuation includes the broad tasks as outlined below:

        • A review of the geology and mineral resources model.

        • Compilation of a valuation in the property compliant with the VALMIN Code.

          Both the Lucunga and the Pedra Project's do not have Mineral Resources compliant with either the JORC 2012 Code or NI 43-101 Reporting Codes, therefore according to guidelines of the VALMIN Code, a discounted cashflow (DCF) is not an appropriate valuation methodology. A comparable transaction valuation and a Multiple of Exploration Expenditures (MEE) valuation have been used to value the Lucunga and Pedra Projects in Angola.

      • Disclaimer

        This Independent Technical Valuation has been prepared on information available up to and including 1 February 2017. The conclusions expressed in this report are therefore only valid up to this date and may change with time in response to variations in economic, market, legal or political factors, in addition to on-going developments with respect to the planned exploration and development activities. All monetary figures included in this report are expressed in American dollars (US$) unless otherwise stated.

        The legal status of the Minbos assets, the various licensing and Joint Venture agreements covering those interests, and the exploration, mining and minerals processing legislation

        applicable in the various project jurisdictions have not been independently verified by Coffey. The present status of tenements, agreements and legislation described in this report is based on information provided by Minbos, and the valuation has been prepared on the assumptions that exploration and potential development of the projects will prove to be lawfully permitted. Coffey is not qualified to comment on the nature of the transactions or arrangements between Minbos and other third parties.

        Coffey is not in a position to make direct comment on any interest the directors and promoters of Minbos may have in the company or its assets, nor is Coffey qualified to comment on or confirm this aspect.

      • Qualifications and Organisations

        Practitioner Hannes Bornman

        Degrees B Eng (Mining) (University of Pretoria)

        MBA (University of Stellenbosch Business School)

        Registrations Pr.Eng. (Engineering Council of South Africa reg.no. 20090201) Fellow (SAIMM reg. no. 700627)

      • Site Visit

        Site visits to Lucunga were undertaken by Dr. Rupprecht (03 - 05 May 2015) and by Mrs. K Body (18 - 21 September 2015). The intention of the site visits was to inspect the property, understand its location and local infrastructure, view potential plant and tailings sites and inspect metallurgical sampling pits in the northern and southern areas of the deposit. Mrs. K Body visited the site in May 2015 as part of a project orientation visit and in September 2015 to observe the second round of bulk sampling. Mrs. K Body also observed the beneficiation testwork carried out at Mintek in 2015 - 2016. Based on the results of these site visits, the Competent Valuator decided that he wouldn't need to undertake a site visit.

        No site visit by Coffey to the Pedra Project has been undertaken.

      • Valuation Date and Code

        The Valuation Date for this report is 1 February 2017 and is in accordance with the guidelines of the VALMIN Code.

      • Project Locality

        The Lucunga Project is located in the coastal region of Northern Angola, near the village of Mucula, at elevations of 5m to 100m amsl (Figure 1.6_1). The topography is rolling hills with steeper sections adjacent to streambeds. The area is exposed to ocean breezes and storms. Vegetation is open grassland with stands of large trees. The average daily minimum temperature during March is 26°C and in August 21°C. The annual precipitation as measured

        in adjacent stations varies between 400 to 740mm per annum and the area has a semi-arid character.

        Figure 1.6 _1

        Lucunga Phosphate Project Location

        The Pedra Project is located in Northern Angola, south of the Congo River, in an area of river plain and adjacent Piedmont. The area is semi-arid with savannah like vegetation, and heavy forests along the washes. It rains heavily from September to May.

        Figure 1.6_2 Pedra Concession Area

      • Mineral Rights and Project Boundaries

        Lucunga is covered by a single exploration permit of 300 km2(0009/09/06/T.E./GOV.ANG.MGM/2009) and a 100 km2mining permit (Decreto Presidential No 135/15). Vale Fertil has indicated that renewal applications for both of the licences has been submitted and is currently being put forward for presidential decree. Minbos is not aware of any impediment to the licences being renewed. Vale Fertil has also applied for an extension of the Mining Permit to the west of the current mining permit. The Mining Permit (s) will exclude a servitude for a road and power line which pass through the property.

        The available documentation indicates that:

        A portion of mineral resource and reserves declared in this report currently fall outside of the Mining Permit. It has been assumed that the renewed exploration permit and Mining Permit extension will be granted before the end of the feasibility study. If this does not happen, there are sufficient material in the mineral resource to replace any resource which fall outside of the mining license.

        There is a road running west to east that roughly divides the property into a northern and southern section. This feature is also a rough boundary between the two types of mineralization found on the property. To distinguish the mineralization types the following convention is used in the remainder of the report; the North Domain, which consists of the Quindonacaxa Central, Quindonacaxa NE, and Quindonacaxa SW prospect areas, and the South Domain, which consists of the RS prospect area. In addition, the Lucunga Project contains several other prospect areas, namely Coco Grande, Lendiacolo, and Coluge Tando (Figure 1).

        The main block of mineralization north of the road consists of the NE, Centre and SW block. This group of domains is referred to as the North domain. The RS and IR domains, mostly south of the road, are referred to as the South Domain.

        Figure 1.7_1

        Location of Lucunga Phosphate Deposit and the Exploration and Mining Permit boundaries

        The Pedra Project is covered by a single exploration permit (No 064/03/06/T.P/ ANG.MGMI/2012). Vale Fertil has indicated that a renewal application for the licence has been submitted and is currently being put forward for presidential decree. Minbos is not aware of any impediment to the licences being renewed.

      • Accessibility and Infrastructure

        The project area is located predominantly within the Lucunga river basin, with the Coco Grande deposit located to the south, on the Ndilo river basin. The "Quindonacaxa", Lendiacolo and Coluge Tando deposits lie within the Lucunga River basin. It has an overall plateau character, forming mild undulations in the vertical and horizontal directions. The deposits are located in a low plateau (littoral) region. The average altitude is approximately 40m. The highest point of the relief is 150m, obtained on the west boundary of the project, west of Coluge Tando, while the lowest section at 7m lies in the west part, on the Lucunga River. The topography is rolling hills with steeper sections adjacent to streambeds. The area is exposed to ocean breezes and storms. Vegetation is open grassland with stands of large trees.

        Access to Lucunga is via a sealed and unsealed road that connects Luanda to Soyo, which carries the national transportation along the coast, between Luanda and Soyo. This road is currently being upgraded to a four-lane sealed highway. Mucula, the closest town to the project area, is located approximately 250 km north of Luanda, and 120 km south of Soyo.

        The Luanda-Soyo highway is scheduled for completion in 2017. Major high voltage transmission lines servicing Soyo transect the Lucunga Project. The Soyo Port is connected to the nearby offshore gasfields and gas is available for purchase. Porto de Soyo currently services Angola's offshore oil and gas industry, and includes a general cargo and a LNG terminal. The Angola LNG gas plant at Soyo is operated by Cabinda Gulf Oil Company Limited, a wholly owned subsidiary of Chevron. The Angolan state oil company, Sonangol, commenced construction in 2015 of a new oil refinery in Soyo, which is due to be operational in 2017 at a capacity to process 110,000 barrels of oil per day.

        The Pedra Project is accessible from the town of Soyo, where there are daily flights and all required infrastructure, related to the oil industry. From Soyo, it is about 45 km on dirt tracks which require 4x4 vehicles, to the western edge of the concession.

      • Project Background

        Prospecting of phosphate occurrences in the Zaire province of Angola, started in the 1950's. These studies encompassed three regions: Pedro surroundings, Lucunga River basin, and Ambrizete surroundings (currently N'Zeto city). They were part of detailed studies on the regional geological structure, by P. Vasconcelos (1952), J. M. C. Almeida (1952), J. A. Gouveia (1957), J. A. Martins (1960, 1960a, 1963, etc.) M. G. Veiga (1961, 1962), etc.

        The Bulgarian company BulgarGeomin was engaged by the Angolan government to conduct a feasibility study on the Quindonacaxa area -Lucunga. Drilling, pitting and sampling were performed from June 1979 to October 1980. In 2009, the LR Group,a company associated with Val Fertil, commissioned BlueBird to complete a PFS (pre-feasibility study) based on the Bulgarian data, which existed mostly as paper copies of maps. The data was digitized from the maps but could not be validated against the originals, hence results of the PFS are

        questionable. A computerized seam model of the resource was done and published it as "Lucunga River Phosphate project -Pre-Feasibility Study" (Diner, 2009).

        Limited exploration work has been undertaken at Pedra. The earliest known work includes pitting and trenching in the 1970's, which was aided by a radiometric survey flown in the 1950's which produced readings of 5-10 times background readings, i.e. 0.04 to 0.200MR/Hr as compared to background readings of 0.008 -0.02 MR/Hr. Trenching and pitting results were reported to be disappointing and no economic potential was identified.

        In 2009, Vale Fertil Ltda acquired the project and undertook rock-chip sampling of outcropping phosphate rock, and soil sampling.

      • INDEPENDENCE AND EXPERIENCE

      • Participants

        The following personnel were nominated to the project team and their specific areas of responsibility and resumes are as shown below. All of the participants in the valuation are considered Specialists or Experts as defined in the VALMIN Code.

        Hannes Bornman, Manager Mining

        Valuations, Study Management

        Ken Lomberg, Senior Principal Consultant

        Peer Review

        The study manager, Mr Bornman is a professional mining engineer with 29 years' experience in the precious and base metals industry. He has broad experience in audit, feasibility and due diligence studies both in South Africa and Internationally. He is a Fellow of the South African Institute of Mining and Metallurgy (FSAIMM) registration number 700627 and a registered Professional Engineer (Pr.Eng) with the Engineering Council of South Africa (ECSA) registration number 20090201.

        The author has the appropriate relevant qualifications, experience, competence and independence to be considered an "Expert" or "Specialist" under the definitions provided in the Valmin Code, and as "Competent Person" under the definition provided in the JORC Code.

      • Source documentation

        The data and information made available to Coffey by ELB and Val Fertil consisted of electronic geological data (collar coordinates, geological logs, and assay data) and various copies of the work undertaken during the exploration phase and beneficiation testwork. This data formed the basis from which the mineral reserve estimation and Feasibility Study could be completed. Additional documentation and information was provided by ELB and Val Fertil on request

        The following information was made available to Coffey by Minbos;

        • Lucunga Pre Feasibility Study by BlueBird Ltd.; December 2009

        • Lucunga Resource estimation. Final draft, Report submitted to Vale Fertil Ltda by Jed Diner M.Sc., P.Geol 15.7.2011

        • jr_JLUC02_Lucunga Feasibility Study_Geology and Mining_20160711 (final)

        • Pedra quarterly report September 12

        • Status report lucunga Nov 2012 (002)

          Coffey sourced the following information from the internet;

        • Montero Mining and Exploration press announcement, November 10th, 2011: "Montero announces closing of acquisition of Phosphate Assets in South Africa".

        • Consolidated Financial Statements of Plains Creek Phosphate Corporation for the years ended June 30, 2012 and 2011 (Expressed in Canadian dollars), Sedar Filing.

        • PhosAgro press statement, 27 August 2013: PhosAgro Completes Consolidation of 100% Apatit. (www.phosagro.com/press/company).

        • Farim Phosphate Project (http://gbminerals.com/project/farim_phosphate/).

      • Independence

        Neither Coffey, nor the key personnel responsible for the work, has any material interest in Minbos, Mongo Tando Lda, Petril, their subsidiaries, related companies or their mineral properties. This work, and any other work done by Coffey for Minbos, is strictly in return for professional fees. Payment for the work is not in any way dependent on the outcome of the work or on the success or otherwise of Minbos' own business dealings. As such, there is no conflict of interest in Coffey undertaking the Independent Technical Valuation as contained in this document.

      • Disclaimer

        Coffey has based the findings of this report on data provided by Minbos. This data includes third party technical reports and other relevant published and unpublished third party information. Coffey has endeavoured, by making all reasonable enquiries, to confirm the authenticity and completeness of the third party technical data upon which this report is based. However, Coffey does not warrant the authenticity or completeness of any such third party information. A final draft of this report was provided to Minbos along with a written request to identify any material errors or omissions.

        This Independent Technical Valuation has been prepared on information available up to and including 1 February 2017. The conclusions expressed in this report are therefore only valid up to this date and may change with time in response to variations in economic, market, legal or political factors, in addition to on-going developments with respect to the planned exploration and development activities. All monetary figures included in this report are expressed in American dollars (US$) unless otherwise stated.

        The legal status of the Minbos assets, the various licensing and Joint Venture agreements covering those interests, and the exploration, mining and minerals processing legislation applicable in the various Project jurisdictions have not been independently verified by Coffey. The present status of tenements, agreements and legislation described in this report is based on information provided by Minbos, and the valuation has been prepared on the assumptions that exploration and potential development of the projects will prove to be lawfully allowable. Coffey is not qualified to comment on the nature of the transactions or arrangements between Minbos and other third parties.

        Coffey is not in a position to make direct comment on any interest the directors and promoters of Minbos may have in the company or its assets, nor is Coffey qualified to comment on or confirm this aspect.

      • TENEMENTS AND PREVIOUS EXPLORATION ACTIVITIES

        Minbos has provided Coffey the following information in licenses and previous exploration activities.

      • License Details

        The area of the license is 413.8 square km, as measured in Mapinfo, using the Vertex coordinates from Table3.1_1. The license can be seen in Figure 1.7_1. It is 36km long in the N-S direction and its width varies from 10km on the Northern part to 13.3km on the Southern part.

        The property is roughly parallel to the coastal road that connects Luanda to Soyo, and which is in the process of currently being upgraded to a four-lane sealed highway. Mucula, the closest town to the project area, is located approximately 250 km north of Luanda, and 120 km south of Soyo.

        Table 3.1_1 Cabinda Phosphate Project Coordinates of the Vertexes of the Lucunga License
        Vertex	E	N
        1	260,000	9,255,000
        2	270,000	9,255,000
        3	270,000	9,240,000
        4	275,000	9,230,000
        5	275,000	9,219,000
        6	261,500	9,219,000
        7	261,500	9,235,000
        8	260,000	9,240,000

        The coordinates in Table 3.1_2 define the individual mining areas within the large Lucunga license.

        Table 3.1_2 Cabinda Phosphate Project Coordinates of the mineralized areas in the Lucunga License
        License	Vertex	E	N	Area (Sq km)
        Coluge Tando	1	12 51'	6 44'	51.16
        Coluge Tando	2	12 54'	6 44'
        Coluge Tando	3	12 54'	6 49'
        Coluge Tando	4	12 51'	6 49'
        Lendiacolo	1	12 52'	6 50'	15.34
        Lendiacolo	2	12 55'	6 50'
        Lendiacolo	3	12 55'	6 51' 30"
        Lendiacolo	4	12 52'	6 51' 30"
        Quindonacaxa	1	12 51'	6 56'	20.42
        Quindonacaxa	2	12 54'	6 56'
        Quindonacaxa	3	12 54'	6 58'
        Quindonacaxa	4	12 51'	6 58'
        Coco Grande	1	12 51'	6 44'	148.3
        Coco Grande	2	12 54'	6 44'
        Coco Grande	3	12 54'	6 50'
        Coco Grande	4	12 55'	6 50'
        Coco Grande	5	12 55'	6 52'
        Coco Grande	6	12 52'	6 52'
        Coco Grande	7	12 54'	6 58'
        Coco Grande	8	12 51'	6 58'

        Both the Exploration Permit (0009/09/06/T.E./GOV.ANG.MGM/2009), and the Mining Permit (Decreto Presidential No 135/15) at Lucunga are in the process of being renewed. Vale Fertil has indicated that renewal applications for the licences has been submitted and is currently being put forward for presidential decree. Minbos is not aware of any impediment to the licences being renewed.

        Vale Fertil has also applied for an extension of the Mining Permit to the west of the current mining permit. The Mining Permit (s) will exclude a servitude for a road and power line which pass through the property (see also Section 4.2.2).

        The Pedra Project is covered by a single exploration permit (No 064/03/06/T.P/ ANG.MGMI/2012).

      • Exploration History

        Prospecting of phosphate occurrences in the Zaire province of Angola, started in the 1950's. These studies encompassed three regions: Pedro surroundings, Lucunga River basin, and Ambrizete surroundings (currently N'Zeto city). They were part of detailed studies on the regional geological structure, by P. Vasconcelos (1952), J. M. C. Almeida (1952), J. A. Gouveia (1957), J. A. Martins (1960, 1960a, 1963, etc.) M. G. Veiga (1961, 1962), etc. "Quindonacaxa" is one of the three large phosphate occurrences detected in the Lucunga River basin during an aerial radiometric survey by the British company Hunting Geophysics Ltd, solicited by the Colonial Service of Geology and Mines in Angola. Follow up surface radiometric surveys and detailed geological studies that included "Quindonacaxa" were executed (Martines I. A., 1960).

        These studies were followed by a pitting program, which demonstrated that the geophysical anomalies were generated by phosphates (coprolites) situated at relatively shallow depths. During 1960 and 1961, M. G. Veiga performed systematic detailed studies of "Coluga-Tando" and "Quindonacaxa" occurrences (Veiga M. G., 1961, 1962). In the "Quindonacaxa" region, 283 pits were dug on a grid of 250m and 500m, with a depth of 0.60 to 1.2m. This program covered an area of approximately 15km2. Based on these studies, presence of phosphate was detected over an area of 10.9km2, with phosphate layer of 0.62m average thickness, and resources of 14,353 thousand tons. Later, I. A. Martines (1963) performed a re-evaluation of the data and came up with the following figures: area - 16.4km2, average thickness of the phosphate layer - 0.58m, and total resources of 20,256,000 tons.

        Results of the technological studies of "Quindonacaxa" phosphate, performed by the French firm "Sofremines", were added in 1975.

        Issues related to geological structure, morphology of the phosphate layer, elemental composition and phosphate quality, age and genesis of "Quindonacaxa" occurrence, were mentioned in the summary paper by V. G. Petrov (1978). Issues of structural geology, general geological development, and the relations to phosphate development are mentioned in the geological report survey, on a scale of 1:50,000, performed in this part of the Zaire province from 1979 to 1980 (Nenov T. and others, 1980). The Bulgarian company BulgarGeomin (BG) was engaged by the Angolan government to conduct a feasibility study on the Quindonacaxa area. Drilling, pitting and sampling were performed from June 1979 to October 1980.

        In the "Quindonacaxa" deposit, 1237 drillholes or sampling in pits were performed, with a total of 5,532.75 linear metres. The average depth of the drillhole is 4.47m. In the intermediate report, 307 drillholes were mentioned, representing 1205.90m (Stefanov Iv., 1980). Physical work performed included 80 shafts and 8 trenches, 209m with an average depth of 2.61m, and 891.01m3respectively.

        The final tally reveals 4066 drillholes in the area, excluding Lendiacolo and Coluge Tando, for approximately 20,000m of drilling.

        The exploration shafts - 53 units in the northern parts of the deposit (next to the phosphate layer outcrops) are on a grid smaller than 125m. In other cases, they duplicate some drillholes and follow the drillhole grid. Twenty-seven shafts were dug on the borders of lots I and II, with the purpose of collecting bulk sample to determine the phosphate volumetric weight. In 2009, the LR Group,a company associated with Val Fertil, commissioned BlueBird to do a PFS (pre- feasibility study) based on the Bulgarian data, which existed mostly as paper copies of maps. The data was digitized from the maps but could not be validated against the originals, hence results of the PFS are questionable. A computerized seam model of the resource was done

        Limited exploration work has been undertaken at Pedra. The earliest known work includes pitting and trenching in the 1970's, which was aided by a radiometric survey flown in the 1950's. Results were reported to be disappointing with limited economic potential.

        In 2009, Val Fertil Ltda acquired the project and undertook rock-chip sampling of outcropping phosphate rock, and soil sampling. In 2011, remote sensing analysis of the license area, using Aster imagery and band rationing, was used to define areas with potential reflectance signature of phosphates A total of 74 soil samples were collected in 2011 and 69 rock-chip samples from outcropping phosphate and 54 soil samples in areas where no outcrop was present, were collected in 2012.

        Phosphate rocks of mostly low P2O5grade are encountered in few spots within the concession. Presence of some outcrops of significant grade (26.87%) near Colina de Congue prompted some exploration work which indicated these blocks were isolated with little economic potential.

        The samples were sent to SetPoint laboratories in South Africa, together with 24 QA/QC samples. Rocks and soils were analyzed by XRF method for major oxides, including P2O5%, and every tenth sample was analyzed for trace elements by ICP method.

        Figure 3.2_1 shows where the work was done in July/August 2012. The green polygons A, B and C denote the phosphate bearing areas.

        Figure 3.2_1

        Work done in July/August 2012

      • GEOLOGY

      • Regional Geology

        The region is a platform with peneplained surface inclined Northeast at about 1.50 (Martins I.A., 1963) and moderate tectonics. The basement of the platform consists of Precambrian metamorphic-intrusive complex and sedimentary rocks which crop out in the eastern and southeast sections of the "Quindonacaxa" deposit. It is composed of highly metamorphosed rocks, mainly biotite-amphibole and biotite gneisses, with some syenite intrusives and dikes of microamphibolitic - microsyenites composition.

        Overlying the metamorphic-intrusive complex with transgressive and irregular contacts, are the rocks from the sedimentary complex, which constitute the external part of the platform. These rocks lie in a sub-horizontal attitude, with a slight regional slope of 2° - 30°, sometimes 5° - 60° to the north and northeast. These are strata from the Upper Cretaceous, Eocene, Neogene and Quaternary periods.

        The Upper Cretaceous (Maastricht) sediments are carbonate-terrigeneous series (Nenov T. and others, 1980), which are generally identified with the N'Gondo series (Martins I.A., 1960), and classified as belonging to the Senonian age according to most authors (Martins I.A., 1963, Veiga M.G., 1961, 1962, Petrov V.G., 1978). There are two Senonian horizons: lower - mainly of carbonates, and upper - mainly terrigeneous. Layering varies from fine to medium, while the limestones, mainly shell rich and organogenic, alternate with sand grains in various dimensions, and in some areas grade to arenitic limestones.

        Upper Cretaceous sedimentary rocks are observed along most of the edges of the sedimentary basin, immediately adjacent to the metamorphic-intrusive complex. They are encountered to the northeast of "Quindonacaxa", in the Lucunga River valley, and southeast of the deposit, next to Tena Songatela top and in the M'Bridge River valley. Sometimes they are bituminous in the highest parts of the section.

        The Eocene sediments have mostly littoral facies, and in some places lagoon or shelf facies. They are distinguished by relatively rapid changes in vertical and horizontal directions, and by the presence of interformational unconformities. These are terrigeneous-silty, terrigeneous- carbonate and clayey-siliceous series that refer respectively to the Lower Eocene, medium and upper Eocene (Nenov T. and others,1980) Upper Cretaceous sediments are observed east, northeast and southeast of "Quindonacaxa". They overly the metamorphic-intrusive complex transgressively and uncorformably. In the northeast part of "Quindonacaxa", the border with the Middle Eocene is tectonic.

        The Lower Eocene rocks manifest alternations between different types of arenites with clayey limestones and rarely dolomite, conglomerates and siltstones, sometimes bituminous, with relicts of fish fossils. In the middle and upper parts of the section we find single scattered coprolites, or fine layers of coprolites, few centimetres in thickness. Northeast of "Quindonacaxa", the Eocene section ends in four phosphatic siltstones which constitute the

        highest parts of the relief in those locations. Their P2O5content reaches 13%. The sediments from the Middle Eocene are more common in the region, and play the main role in the geological framework. This is the oldest formation observed in the "Quindonacaxa" deposit area. These rocks overly the Lower Eocene conformably and the Upper Cretaceous and the metamorphic- intrusive complex unconformably and transgressively. They are covered by younger sediments from the Upper Eocene with irregular contact.

        The Middle Eocene is manifested by the terrigenous-carbonitic series that is identified with the formation called "Farol de Ambrizere" (Veiga M.G., 1961, 1962, Petrov V.G., 1978). Two horizons can be distinguished: Lower: clayey-siltstone, and Upper: sand-carbonate. Fossilized fish fragments (teeth, vertebra) are occasionally encountered. Sparse scattered coprolites and layers of 2 to 10cm thickness are observed throughout the entire section. Some layers demonstrate intraformational erosion.

        The sediments from the Upper Eocene are also characterized by the large area they cover - except for the ocean littoral, though, where the most representative sections of the Eocene are encountered, they rarely crop out. They are manifested by the clayey-siliceous series, which correlates almost completely with the N'Dielu formation (Veiga M.G., 1961, 1962, Petrov V.G., 1978). The sediments from the Upper Eocene are found with irregular contact, mainly over the Middle Eocene. These rocks were eroded over extensive areas. They are overlain, with irregular contacts, by Neogene and Quaternary sediments.

        The Upper Eocene typical facies is mainly composed of clays with significant quantity of coprolites. To the south, in the direction of Embrage River valley, they are sandier and poorer in coprolites, being cleaner and richer to the North. There are 2% - 3%, up to 8% - 10% intercalated chert ribbons. In the "Quindonacaxa" region, the upper part of the Upper Eocene is composed of finely layered siltstones - up to 8m - 10m in some places. However, the complete Eocene section is conserved only in a very small area. In most cases it is truncated, and the formation of phosphate deposits in this region is related to intraformational erosion of the Upper Eocene coprolitic clays.

        The Neogene sediments cover most of the area, and along with the Quaternary sediments, they form an uninterrupted layer which almost completely covers the pre Neogene sediments. These are sandy-gravel series of Mio - Pliocene age. They completely cover the "Quelo" formation (Martins I.A., 1960, Vaiga M.M.G., 1961, 1962), which initially was considered as Mio-Pliocene and then as Pliocene. It is composed of friable sediments - gravels, sands, clayey sands and sandy clays. In all parts, the gravels are at the bottom of the section.

        The Quaternary sediments are divided into Plio-Pleistocene, Pleistocene and Holocene.

        The Plio-Pleistocene sediments have limited development. They are formed in the watershed areas of the main rivers network or next to old mouths of big rivers. It is of significant practical interest, since a great part of the friable phosphate (coprolites) occurrences (and the deposits) is related to the geomorphology and to the sediments formed during that period. These are

        mostly gravel and red sandy clay materials, formed by resedimentation of the Mio-Pliocene materials, and of coprolitic phosphates formed by Upper Eocene erosion in paleogeographic favourable conditions.

        The Pleistocene sediments have the widest development amongst all of the Quaternary sediments. These are clayey sands of eolic genesis, loess, and alluvium sandy-gravel materials. The Holocene rocks are present in river valleys and in the ocean littoral. Rocks are sandy, clayey-sandy and gravel materials (Figure 4.1_1).

        Figure 4.1_1

        Stratigraphy of the Lucunga Project Area

      • Local Geology - Lucunga

        The Quindonacaxa deposits are underlain by Middle Eocene rocks and has, progressively upwards, rocks from the upper Eocene, Mio - Pliocene, Plio - Pleistocene and Holocene.

        Middle Eocene

        Rocks are mostly organgenic detritic limestones and sandy limestones with some arenites. Rocks of this period crop out only to the north, on the south slopes of the Zamungo River. They underlie most of the deposit at depths from 0.5m to 12 m, with thickness of the overlying sediments increasing to the south east. Its lower contact, with the Lower Eocene, is conformable, with mostly arenites above the contact. The upper contact, with the Upper Eocene, is erosional. This unit reaches maximum thickness of 20m (in places less due to erosional effects)

        The limestones are of fine grain texture, of white to beige colours. Fossils include foraminifera, (Gen. Globigerina, Gen. Nummulites) sea sponges, brachiopods and sea shells. Petrographically, the limestones are composed of fine crystalline calcite, which shows some recrystallization around sea shells.

        The terrigeneous component (5-10%) is constituted of angular to subrounded grains of quartz or albite, with small fraction of psammites. In some limestones, pieces of phosphatic material (5-9%) -bones, fish teeth and coprolites - are noted.

        Upper Eocene

        Rocks from this period are considered the main source of the coprolite deposits, mostly through enrichment in the Plio - Pleistocene. This unit's contact with the underlying Middle Eocene is erosional, with occasional depressions. This paleo relief is interpreted as a result of Karst processes. The distribution of the Upper Eocene rocks is patchy, in many areas missing altogether due to later erosion. Of significance is the fact that these rocks are almost everywhere conserved under the Mio - Pliocene gravels. This suggests post Mio - Pliocene erosion which removed the Eocene-Pliocene section in some areas. The upper contact of the unit with the Mio - Pliocene rocks is erosional

        The rocks are usually 2m - 4m thick, but reach up to 11m.

        They are composed mostly of silty clays, sandy near the bottom and fining up. Clays, especially in the middle, are mixed with coprolites, which in places are quite abundant. The section has abundant chert ribbons and nodules, up to 10 cm thick. The sand fraction of these rocks is made up of bone fragments, some coprolites and quartz, with minor magnetite, biotite, zircon, microcline and albite.

        The silty fraction is composed from coprolites and quartz grains on the upper size fraction, also noted are small bone fragments, as well as rare microcline, zircon, albite and magnetite. The

        clay fraction, based on XRD study, is made of montmorilonitic clay, hydromicas, quartz, feldspar, carbonate and apatite.

        Fossils noted are foraminifers (Gen. Globigerina) sponges, conodonts and bony remains. The silica noted in the cherts is chalcedonic, with nodules changing colour from dark brown near the centre to yellow brown near the rims. The cherts contain organogenic fossilized material, opal, chalcedony and calcite.

        The coprolites are dispersed or form fine layers with thickness of few centimetres with rapid pinch outs, resulting from intra formational erosion or from local erosions at the end of the Upper Eocene, some layers of 0.10m up to 0.90m in thickness were formed.

        The coprolites are rose to beige white, also grey and white colours, usually oval, 30mm - 40mm long. They are constituted by an isotropic, quite often pelitic substance. In transverse sections, intercalations of angular quartz fragments and hydroxides of iron are observed.

        Overlying the clay-chert facies are yellow clay-arkosic siltstones, friable in outcrop, with massive texture, becoming sandier up section, with ochre-yellow colour. They are composed of 40% clay fraction, 60% sand and are 3m - 4m thick. These rocks have been removed by erosion from many areas.

        The sediments from the Middle and Upper Eocene are identified with the Farol do Ambrizete formation and with the N'Dielu formation (Veiga M.G., 1961, 1962), which correspond, respectively, to a small series of terrigenous-carbonitic and clayey-chert layers (Nenot T. and others, 1980).

        Note: The above interpretation was that considered by BulgarGeomin. Vale Fertil considers these rocks to be part of the Plio-Pleistocene erosional package (See Plio-Plesitecine description), which is prevalent in the South area of the deposit. Vale Fertil interprets the clay- rich South (RS) package to have been deposited in lacustrine deltaic environment, as opposed to the fluviatile environment in the Center and NE deposits.

        The reasons for this are;

        • Presence of ferruginous quartz gravels mixed with abundant coprolites at the top of the clay section. From this layer there is gradual transition to the clay-coprolite layers

        • The coprolites are irregularly mixed with the clays, at times with abundant quarzitic sand.

        • All sedimentary phosphates we are familiar with form in association with carbonates in open sea environment. The depositional environment of the South deposit evidenced by the clays and quartz sand is indicative of deltaic environment and not of open sea.

    • Marked unconformity at the base of the clay formation.

    Regardless of the timing, these rocks are the main host to the mineralization in the South (RS) and south east.

    Mio - Pliocene

    Rocks from this period crop out near Tando, and are mostly covered by Pleistocene sands and loess. These sediments usually constitute the higher parts of the modern relief. Near the phosphate deposits they cover Mid to Lower Eocene, while to the South they overly Upper Cretaceous rocks. They range in thickness from 1m - 18m. The lower contact is irregular, transgressive and unconformable. The upper contact is irregular, and has an erosional character.

    These are friable continental sediments, 4m - 6m thick, with polymictic gravel with rounded clasts at the bottom of the section, covered by sand and siltstones.

    The sandy fraction is composed of quartz and feldspar with trace tourmaline, the silty fraction from quartz, limonite-hematite and zircon, while the clay fraction is made of kaolinite and hydromicas. The uppermost part has iron oxide concretions, at times forming a 0.2m thick ferrous crust (ferricrete) at the contact with the overlying Pleistocene.

    An important observation is that almost everywhere the phosphates are encountered under the Mio Pliocene sediments, suggesting an important genetic relationship.

    Plio - Pleistocene

    These rocks contain most of the phosphates. Their distribution is quite patchy, with abrupt thickness changes, from 0m to 6m, and in many areas they fill karst depressions in Eocene limestones. They are located in the watershed areas of the main river network or next to the ancient deltas of big rivers.

    This unit has irregular lower contact over a platform of various types of limestones from the Middle Eocene, and clays from the Upper Eocene. Their correlations with the Mio-Pliocene are very complicated.

    These are friable continental sands, and at the bottom are made up of coarse grain clay rich sands ± coprolites, about 0.5m thick.

    Next up is the phosphate layer, composed mostly of coprolites, 0.2m to 4.8m thick, but mostly between 0.5m - 1m thick. It has a mostly sandy foot wall and gravel and red sandy clay, up to 1m thick, on top.

    The contacts of the phosphate layers with the underlying sands and overlying gravels are gradual, i.e. they are syngenetic. The clayey sands of the bottom are more regular, and the gravels of the roof are patchier, not always present.

    The phosphate layer is composed of weakly compacted friable rocks of sand, red sandy clay and gravel. The main fraction - the red sandy clay - constitutes approximately 60% of the total mass, reaching up to 80% in some parts. It is generally made up of coprolites. Lesser quantities

    of fish teeth and vertebra, poly-crystalline quartz pieces, bone fragments, osseous and coprogenic detritus are noted.

    The gravel fraction content ranges from 1% - 2% up to 16%. It is represented by pieces of polycrystalline quartz, limestones lithoclasts, flints, large coprolites, etc.

    The sand fraction varies from 6% up to 18%. Noted in it are coprolite pieces, quartz crystals and slightly rounded albite, single grains of magnetite, hematite, epidote, titanite, zircon, anatase, biotite, pyrite, amphibole, garnet, etc.

    The gravels lying over the phosphate layer are identical to the bottom gravels from the Mio- Pliocene in morphology and fragment composition, and the genetic relation is evident.

    The Pleistocene sediments have the widest development amongst all of the Quaternary sediments. The unit is made of mainly clayey sands of eolic origin (loess) (petrographically, they are most often defined as clayey siltstones), and alluvial sands and gravel (Nenov T. 1980). The sandy fraction is about 10%. It is constituted of coprolithic, bone and shell fragments, lithoclasts, both silica and limestone, rounded quartz grains, feldspars, biotite, etc. The silty fraction (50% - 70%) is represented by small clasts of rounded quartz, coprolithic and bone fragments, hydroxides of iron ores, magnetite, single grains of epidote, and zircon. In the clayey fraction (20% - 30%), illite and heat resistant clays are predominant, based on X-ray diffraction (XRD) analysis. Phosphate residues, with minor quartz and feldspars traces, have also been identified.

    The Holocene rocks are present in river valleys and in the ocean littoral. The unit is composed of sands, clay rich-sands and gravels and is up to 3m thick.

73. Local Geology - Pedra

    The Pedra Project is interpreted to be an extension of the graben structures that trend northwest-southeast from Angola's Cabinda Province, through the DRC and into Angola's Zaire Province (Figure 5.1.2_1). As such, the geological setting of the project is interpreted to be directly analogous to the Company's Cacata Deposit.

    The basement craton of the Pedra de Feitico region is comprised of Pre-Cambrian gneisses and granitic intrusives, which are unconformably overlain by Upper Cretaceous to Quaternary sediments. The Upper Cretaceous sediments have a total thickness of 50 m, are flat lying, and primarily consist of marine biogenic sedimentary rocks including some phosphatic limestones.

    Terrigenous sandstones, gravels, and conglomerates of Pliocene age with a total thickness of

    120 m unconformably overly the Upper Cretaceous sediments. Overlying the Pliocene sediments are reworked Pleistocene sediments, and re-deposited sands, clays and gravels. Holocene sediments, primarily from the Congo River flood plain, overly these sediments with up to 25 m of sands and conglomerates.

74. MINERALIZATION

75. Minerology

76. Lucunga

    Lucunga is an alluvial deposit consisting of quartz and phosphatic gravels in fine matrix of soils or lacustrine muds. The area which is the subject of this report can be divided into two areas based on the concentration of the phosphate and the matrix of the gravels. The Northern Domain consists of the prospect areas labelled Quindonacaxa NE, Centre and SW, and the Southern Domain consists of the area labelled RS. In the Northern Domain, the phosphate deposits are fluvial in with areas of non-deposition, whilst in the Southern Domain, the phosphate deposits are more continuous and have a lacustrine component as well as a fluvial component (Figure 5.1.1_1). Gravels of the northern fluvial deposits generally have moderate to high grades, .15% P2O5and are contained in high iron soils. There is very little quartz gravel as a component (Figure 5.1.1_2 and Figure 5.1.1_3). Gravels in the southern portion comprise phosphatic pellets and minor quartz pebbles in a mud matrix, phosphatic pellets and quartz gravels in a muddy matrix and quartz gravels 5.1.1with subordinate phosphatic pellets in a mud matrix (Figures 5.1.1_4 to 5.1.1_6).

    Coffey Mining South Africa (Pty) Ltd

    Figure 5.1.1_1

    Topographic Map at the Base of the Phosphate Layer,

    5m contour interval. Red dotted areas - areas without phosphates

    Minbos Resources Limited - JMIN05 Page: 23

    Independent Valuation of the Lucunga and Pedra Phosphate Projects, Northern Angola - 1 February 2017

    Figure 5.1.1_2 North Area gravels

    Photograph of Coprolites in a high iron soil

    Figure 5.1.1_3

    Photograph of North Area gravels with limestone boulders

    Figure 5.1.1_4

    Photograph of Phosphate Gravels in Mud Matrix South Area

    Figure 5.1.1_5

    Photograph of Phosphate and Clay without Quartz Gravels

    Figure 5.1.1_6

    Photograph of Phosphate in Clay with a Quartz Gravel Cap

77. Pedra‌

78. Details regarding phosphate mineralisation at Pedra are limited at this stage. The project area is interpreted to be an extension of the graben structures that trend northwest-southeast from Angola's Cabinda Province, through the DRC and into Angola's Zaire Province (Figure 5.1.2_1).

    Figure 5.1.2_1 Cabinda Phosphate Project

    Pedra de Feitico - Regional context

    The orange colour belts are regional Late Mesozoic -Cenozoic phosphate basins.

    Previous exploration activities identified three phosphate bearing zones (Figure 5.1.2_2) that occur within a favourable stratigraphic horizon, at an elevation of 100m-120m ASL. Rockchip assays from Area A range from 26-31% P2O5. Area B range from 17% to 27% P2O5and Area C range from 1-2% P2O5with a single sample assaying 11.7% P2O5. Results indicate that the phosphates appear to be devoid of deleterious trace elements like Cd, As or U. However, additional sampling is required to confirm this.

    Outcropping phosphate bearing rocks are a result of extensive surface leaching and recrystallization, which has resulted in rounded rocks without any previous fabric (like bedding) or fracturing (Figure 5.1.2_3). It is unknown whether strong surface leaching has enriched the phosphate rock at surface or whether phosphate mineralisation extend at depth.

    High grade phosphate samples came from rocks which looked like ordinary calc-arenites that had little evidence for fossils, and as such, made visual identification difficult. All the phosphates observed were fine grain phospharenites, without obvious fossils

    Further work is required in order to gain an understanding of the phosphate mineralisation at Pedra.

    Figure 5.1.2_2

    Pedra de Feitico Phosphate Bearing Areas

    Figure 5.1.2_3 Cabinda Phosphate Project

    Rounded leached and recrystallized phosphate rocks

79. Mineral Resources‌

    Mineral resources for Lucunga were estimated and reported by Mr Jed Diner in 2012 (Diner, 2012). These resources are not considered JORC 2012 or NI 43-101 compliant Mineral Resources. Coffey has reviewed the methodologies and run validation test for reasonableness of the results but has not re-estimated the mineral content (Body KJ, Rupprecht,S, 2016). The following sections contain information extracted from the report along with comments of the Qualified Person.

    No mineral resources have been estimated for Pedra. The following sections are in reference to the non-compliant resources estimated for Lucunga.

80. Central Area

    Model results for P2O5are given in Tables 5.2.1 _1 and 5.2.1_2 and the seam thickness and grade distribution is shown in Figures 5.2.1_1 and 5.2.1_2.

    The P2O5grade is highest in the eastern half of the property with patchy high grades in the western half. The thickness shows a similar distribution. The grade and tonnage distributions if the Central Domain are given in Table5.2.1_3. Classification criteria are discussed in Section5.3.

    Table 5.2.1_1 Lucunga Phosphate Project Summary of Statistics of the Grade Estimation
    Number of blocks assigned grades:	2896
    Average block grade:	13.11
    Block Variance:	17.71
    Relative Block Variance:	0.10
    Average NN Sample/Composite grade:	12.56
    NN Sample/Composite Variance:	23.81
    Relative NN Samp/Comp Variance:	0.15
    Smoothing Factor:	0.74367

    Table 5.2.1_2 Lucunga Phosphate Project Comparison of the Block Model vs Composites
    Type	Min	Max	Mean	Variance	Std. Dev	Coef. of Var
    Model	4.685	26.997	13.112	17.709	4.2082	0.3209
    Composites	4.37	30.52	14.356	33.398	5.7791	0.4026

    Table 5.2.1_3 Lucunga Phosphate Project Grade and Tonnage Distribution Central Domain
    Cut-off Grade	'Measured'		'Indicated'		'Inferred'		Total
    (%P2O5)	Tonnes ('000)	Avg P2O5	Tonnes ('000)	Avg P2O5	Tonnes ('000)	Avg P2O5	Tonnes ('000)	Avg P2O5
    20	486,929	21.38	258,385	21.89	745,314	21.56
    19	710,511	20.77	334,296	21.31	1,044,807	20.94
    18	1,024,329	20.06	606,956	20.00	1,631,285	20.04
    17	1,430,279	19.36	1,008,877	18.97	2,439,156	19.20
    16	1,853,586	18.69	1,794,056	17.86	3,647,642	18.28
    15	2,421,224	17.92	2,284,907	17.35	4,706,131	17.64
    14	2,990,221	17.27	2,956,104	16.69	5,946,325	16.98
    13	3,355,137	16.86	3,518,598	16.17	6,873,735	16.51
    12	3,649,417	16.51	4,566,553	15.33	8,215,970	15.85
    11	3,794,377	16.32	5,654,609	14.59	9,448,986	15.28
    10	3,931,439	16.12	6,649,627	13.97	10,581,066	14.77
    5	4,095,394	15.81	11,331,567	11.36	15,426,961	12.54

81. North East Domain‌

    The North East area extends on both sides of the Zamungo River, which shows incised meanders, most likely related to Pleistocene lifting of the terrain and the resulting deepening of the base of erosion. The river crosses the deposit and its incision likely postdates the formation of the phosphate deposit. The P2O5grade is highest in the south eastern half of the property with patchy high grades in the western half. The thickness is variable throughout. The grade and tonnage distributions if the NE Domain are given in Table 5.2.2_1.

    Table 5.2.2_1 Lucunga Phosphate Project Grade and Tonnage Distribution NE Domain
    Cut-off Grade	'Measured'		'Indicated'		'Inferred'		Total
    (%P2O5)	Tonnes ('000)	Avg P2O5	Tonnes ('000)	Avg P2O5	Tonnes ('000)	Avg P2O5	Tonnes ('000)	Avg P2O5
    22	192,450	22.42	0	-	192,450	22.42
    21	230,151	22.26	230,151	22.26
    20	332,816	21.65	332,816	21.65
    19	415,340	21.21	415,340	21.21
    18	751,210	19.97	751,210	19.97
    17	986,891	19.42	986,891	19.42
    16	1,404,112	18.52	1,404,112	18.52
    15	2,143,390	17.49	8507	15.4	2,151,897	17.48
    14	3,067,492	16.58	8507	15.4	3,075,999	16.58
    13	3,877,807	15.94	8507	15.4	3,886,314	15.94
    12	4,307,774	15.60	8507	15.4	4,316,281	15.60
    11	4,818,431	15.15	8507	15.4	4,826,938	15.15
    10	5,492,523	14.59	8507	15.4	5,501,030	14.59
    5	6,690,264	13.50	8507	15.4	6,698,771	13.50

82. South West Domain‌

    The western part of this zone is located proximal to Mucula village, whilst another section straddles the main road and new power line from Luanda to Soyo. The P2O5grade is highest in the south-eastern blocks of the domain. The thickness is variable throughout but generally thinner in the western blocks. The grade and tonnage distributions if the SW Domain are given in Table 5.2.3_1.

    Table 5.2.3_1 Lucunga Phosphate Project Grade and Tonnage Distribution SW Domain
    Cut-off Grade	'Measured'		'Indicated'		'Inferred'		Total
    (%P2O5)	Tonnes ('000)	Avg P2O5	Tonnes ('000)	Avg P2O5	Tonnes ('000)	Avg P2O5	Tonnes ('000)	Avg P2O5
    21	4,592	21.06	4,592	21.06
    19	73,206	19.93	73,206	19.93
    16	145,960	18.18	145,960	18.18
    15	215,896	17.31	215,896	17.31
    14	293,325	16.55	293,325	16.55
    13	354,009	16.01	354,009	16.01
    12	470,799	15.11	470,799	15.11
    11	662,889	14.07	662,889	14.07
    10	823,207	13.35	823,207	13.35
    5	2,412,523	9.29	2,412,523	9.29

83. (RS) South Domain‌

    The RS or South Domain is located to the South and East of the main Quindoncaxa deposits. The highest P2O5grades are encountered to the west, while the thickest intervals are encountered on the east side. The grade and tonnage distributions of the RS (South) Domain are provided in Table 5.2.4_1

    Table 5.2.4_1 Lucunga Phosphate Project Grade and Tonnage Distribution RS (South) Domain
    Cut-off Grade	'Measured'		'Indicated'		'Inferred'		Total
    (%P2O5)	Tonnes ('000)	Avg P2O5	Tonnes ('000)	Avg P2O5	Tonnes ('000)	Avg P2O5	Tonnes ('000)	Avg P2O5
    17	377,445	17.05	25,255	17.05	402,700	17.05
    15	416,242	16.89	40,569	16.36	456,811	16.84
    14	424,540	16.84	844,278	14.90	1,268,818	15.55
    13	31,430	15.64	849,048	14.89	880,478	14.92
    12	1,782,344	13.39	853,912	14.88	2,636,256	13.87
    11	3,465,412	12.34	1,226,769	13.82	4,692,181	12.73
    10	5,689,213	11.60	2,143,055	12.36	7,832,268	11.81
    7	20,400,844	9.14	13,034,446	9.06	33,435,289	9.11
    5	40,206,863	7.48	23,436,455	7.72	63,643,318	7.57

84. Mineral Resource Classification

    Lucunga mineral resources were estimated and reported by Mr Jed Diner in 2012 (Diner, 2012). These resources are not considered JORC 2012 or NI 43-101 compliant Mineral Resources. Coffey has reviewed the methodologies and run validation test for reasonableness of the results but has not re-estimated the mineral content (Body KJ, Rupprecht,S, 2016). The following sections contain information extracted from the report along with comments of the Qualified Person;

    • Cut-off grade of 15%

    • 'Measured' -drillhole spacing of 125m

    • 'Indicated' - drillhole spacing of 250m

    • 'Inferred' - drillhole spacing of 500m

    The rational for choosing these numbers lies in the Bulgarian work which demonstrated essentially the same results when using a 125m grid and 62.5m grid. BG chose an area of 1 square km (area III) and proceeded to drill it on 500 x500m (9 dh), 250x250m (21 dh), 125 x125m (72 dh) and 62.5 x 62.5m (275 dh). The 62.5m grid yielded 887,248 tonnes phosphate material and 375,385 tonnes of concentrates, a 0.75m average thickness and 25.1% average P2O5, while the 125m grid yielded 866,688 tonnes of mineralized material, 356,987 tonnes concentrates, and average thickness of 0.8m and average grade of 25.1% P2O5.

    The 125m grid yielded 2.3% tons more and 2.56% more concentrates, at a similar grade. These results were obtained by using 28% of the drilling of the 62.5m grid. As a result, a distance of 125m was chosen to yield 'Measured' resources for interpolation, while the 'Indicated' category was chosen as double that, and the 'Inferred' category was defined by double the indicated number (500m).

    Table 5.3_1 Lucunga Phosphate Project Confidence Levels of Key Criteria for mineral resource classification of the Lucunga Deposit*
    Items	Discussion	Confidence
    Drilling Techniques	Bucket drilling provides good recoveries. All questionable AC drillholes re drilled by Bucket	Moderate-High
    Logging	Standard nomenclature and procedures	Moderate
    Drill Sample Recovery	Control on recovery is good in Bucket drilling	Moderate to High
    Sub-sampling Techniques and Sample Preparation	Possible contamination in AC drillholes. Minimal contamination in Bucket holes. Possible bias in assays due to no recovery of large quartz clasts in southern area.	Moderate- High
    Quality of Assay Data	QA/QC data shows good accuracy and reproducibility	Moderate- High
    Verification of Sampling and Assaying	QA/QC programme employed with appropriate controls.	Moderate- High
    Location of Sampling Points	GPS locations. Elevations based on LIDAR DTM +/-0.5M accuracy	Moderate-
    Data Density and Distribution	Drilled with a spacing of 250m for indicated, 125m for measured and 500m for inferred	Moderate-High
    Database Integrity	Errors identified and rectified.	Moderate
    Geological Interpretation	Stratigraphic definition is fairly straightforward. There may be some barren intervals within the phosphate horizon	Moderate
    Mineralisation Type	Gravels generally well understood. Able to correlate stratigraphy across the property.	High
    Estimation and Modelling Techniques	Kriging where variograms can be defined, Inverse Distance Squared elsewhere.	Moderate- High
    Cut-off Grades	Cut-off grade appropriate to mine planning and beneficiation requirements.	moderate

    *Coffey Lucunga Feasibility Study - Mineral Resources and Mine Planning (Body KJ, Rupprecht,S, 2016)

85. Reporting‌

86. Mineral resources for the four domains of the Lucunga deposit are given in Table 5.4_1.

    Table 5.4_1 Lucunga Phosphate Project Mineral Resources as at 1 June 2016 (subject to confirmation of economic criteria)
    Cut-off Grade	'Measured'		'Indicated'		Total 'Measured' and 'Indicated'		'Inferred'
    (%P2O5)	Tonnes ('000)	Ave P2O5	Tonnes ('000)	Ave P2O5	Tonnes ('000)	Ave P2O5	Tonnes ('000)	Ave P2O5
    Central Domain
    14	2,990	17.27	2,956	16.69	5,946	16.98
    North East Domain
    14	3,067	16.58	3,067	16.58	8.5	15.4
    South West Domain
    14	293	16.55	293	16.55
    Total North Domains
    14	2,990	17.27	6,317	16.63	9,307	16.84	8.5	15.4
    RS (South) Domain
    14	425	16.84	425	16.84	844	14.9

    Only phosphate is reported for the mineral resources. No other criteria were used in this selection. Other elements such as Al2O3, Fe2O3and SiO2are important for mining block selection and blending for plant feed (and therefore mineral reserves) but are not used to restrict mineral resources. Cadmium levels, which are considered high, were not used to restrict the mineral resource as Cadmium is expected to be removed during beneficiation.

87. INFRASTRUCTURE

88. Angolan Licenses

    Power

    Major high voltage transmission lines servicing Soyo transect the Lucunga Project. The Soyo Port is connected to the nearby offshore gas fields and gas is available for purchase.

    Water

    Potable water will be sourced from local rivers, boreholes and recycled water from the plant operations. The plant will initially get its water from the well fields and any make-up water as needed. It will recycle water from the tailings dams.

    Communications

    Site communications will be via radio, cellular service and a satellite communication system.

    Roads

    The Lucunga Project is located adjacent to a major highway currently being constructed from the capital of Angola (Luanda) to the Porto de Soyo, located approximately 120 km north of the Lucunga Project. The highway is scheduled for completion in 2017.

    The Pedra Project is located south of the Congo River and is accessible by 4WD via 45 km of dirt tracks from Soyo.

    Port

    Lucunga is located approximately 120 km south of the Porto de Soyo and Pedra is located approximately 45 km west of the Porto de Soyo. Porto de Soyo currently services Angola's offshore oil and gas industry, and includes a general cargo and a LNG terminal. The Angola LNG gas plant at Soyo is operated by Cabinda Gulf Oil Company Limited, a wholly owned subsidiary of Chevron. The Angolan state oil company, Sonangol, commenced construction in 2015 of a new oil refinery in Soyo, which is due to be operational in 2017 at a capacity to process 110,000 barrels of oil per day.

    Site Infrastructure

    The following site infrastructure for Lucunga is envisaged:

    • Permanent base camp at the mine with all the amenities for the employees at Cacata.

    • Port facility with a jetty, warehousing and offices at the coast.

    • Administration building for mine management and support staff.

    • Maintenance workshop, warehouse and a laboratory.

    • Fuel storage in HDPE lined and bunded tank farm.

    • Concentrate storage and reclaim facility.

    • Power plant.

    • Process control system.

    • Communication system.

    • Water supply (potable and process).

    • Roads.

89. MINERAL PROCESSING

    Several metallurgical testwork studies have previously been undertaken on phosphate samples from the Lucunga Project. Based on metallurgical bulk testwork results received to date, the key strengths of the Lucunga project are considered to be:

90. Free dig mining of shallow phosphatic lenses,

91. Zones of Lucunga phosphate can be processed by simple sieving,

92. Proximity to infrastructure - road, port, and low-cost energy, and

93. High solubility of phosphate making it potentially suitable for direct application products and single super phosphate (SSP) in the local and regional markets.

94. However, given the elevated cadmium content of the in-situ Lucunga phosphate, the beneficiated phosphate rock will not be suitable to all markets. The Lucunga rock has been successfully tested for its suitability for calcining, which removes the majority of the cadmium, and produces a high grade calcined rock. The availability of local gas for calcining warrants further investigation.

    The production of calcined rock will require blending of feed material from different deposit areas to control R2O3% levels (R2O3% = Al2O3% + MgO + Fe2O3%). As such LoM planning will need to be cognisant of the requirements to control the R2O3content to ensure a saleable product. Other factors that will require further consideration include the low processing recoveries of the southern deposits, which will be an important feed material for the reduction of R2O3content. Testwork results to date indicate recoveries of 60% to 65% for the northern areas of the Lucunga deposit, and 12% to 15% for the southern areas.

    In addition, testwork has highlighted problems with settling issues associated with the tailings material. Further testwork will be required to overcome this issue.

    Future proposed testwork (planned for 2017) includes the following:

    • Tailings material characterisation to establish the quantity of the desliming equipment in the beneficiation circuit.

    • Single Super Phosphate (SSP) testwork to be carried out on bulk product samples from Lucunga to confirm the technical viability of SSP production from Lucunga beneficiated rock phosphate.

    • Environmental studies for the disposal of cadmium dust residues produced in the calcining of Lucunga rock phosphate.

    Pedra is an early stage exploration project. To date no metallurgical testwork has been undertaken on material from Pedra.

95. MINING

96. Social and Governmental

    The status of agreements with key stakeholders and matters leading to social licence to operate have been communicated to. No material issues have been identified. Vale Fertil has informed Coffey that there are no governmental issues or claims against the Lucunga mining lease.

97. Environmental

    The Lucunga LoM plan has taken into account the many Baobab trees (Figure 8.2_1) mainly located in the northern section, as well as potentially sensitive drainage areas located adjacent to waters courses found within the property. Although Coffey has plotted the Baobab trees based on a LIDAR survey and has received an outline of the drainage areas, analysis of the environmental information has indicated that (due to the shallow nature the northern pits) the tonnage influenced by the Baobab trees and drainage areas is small, less than 1% of the planned mining tonnage, and therefore Coffey has factored the environmental issues within the 6% mining loss used in the conversion process from a mineral resource to a mineral reserve (Body et al, 2013).

    Figure 8.2_1

    An example of a Baobab Tree on the Lucunga Project Site

98. Economic and Marketing Factors

    The following are considered to be key factors that will impact Lucunga's prospects of eventual economic extraction:

    • Thickness/ continuity of the mineable phosphate unit

    • Uncertainty surrounding the limestone karst footwall contact Low processing recoveries of the southern deposits

    • Settling issues associated with tailings material

    • Securing off-take agreement(s).

    • Transhipping costs

    • Port accessibility

    • Elevated cadmium content of the in-situ Lucunga phosphate

    • Management of R2O3% levels for the production of calcined rock

    • Disposal of cadmium dust produced in calcining

    • Availability of local gas for calcining

    • Production of a marketable product

    • CAPEX and OPEX costs

      Future proposed works (planned for 2017) includes the following:

    • CRU Market Study

    • Tailings material characterisation to establish the quantity of the de-sliming equipment in the beneficiation circuit.

    • Single Super Phosphate (SSP) testwork to be carried out on bulk product samples from Lucunga to confirm the technical viability of SSP production from Lucunga beneficiated rock phosphate.

    • Environmental studies for the disposal of cadmium dust residues produced in the calcining of Lucunga rock phosphate.

99. VALUATION BACKGROUND‌

    There are numerous recognised methods used in valuing "mineral assets". The most appropriate application of these various methods depends on several factors, including the level of maturity of the mineral asset, and the quantity and type of information available in relation to any particular asset. Table 9_1 shows the relationship between stages of development and valuation approaches for mineral properties.

    Table 9_1 Lucunga Valuation Valuation Approach Criteria - VALMIN Code, 2015 Edition
    Valuation Approach	Exploration Projects	Pre-development Projects	Development Projects	Production Projects
    Market	Yes	Yes	Yes	Yes
    Income	No	In some cases	Yes	Yes
    Cost	Yes	In some cases	No	No

    The Valmin Code, which is binding upon "Experts" and "Specialists" involved in the valuation of mineral assets and mineral securities, defines the level of asset maturity under the following categories:

    "Exploration Areas" refer to properties where mineralisation may or may not have been identified, but where a mineral resource has not been defined.

    "Advanced Exploration Areas and Pre-Development Projects" are those where Mineral Resources have been identified and their extent estimated, but where a positive development decision has not been made.

    "Development Projects" refers to properties which have been committed to production, but which have not been commissioned or are not operating at design levels.

    "Operating Mines" are those mineral properties, which have been fully commissioned and are in production.

    The various recognised valuation techniques are designed to provide the most accurate estimate of the asset value in each of these categories of project maturity. In some instances, a particular mineral property or project may include assets that logically fall under more than one of these categories.

    Regardless of the valuation techniques adopted, the consideration must reflect the perceived "fair market value", which is described in Definition 43 of the Valmin Code as:

    "the amount of money (or the cash equivalent of some other consideration) determined by the Expert in accordance with the provisions of the VALMIN Code for which the Mineral or Petroleum Asset or Security should change hands on the Valuation Date in an open and unrestricted market between a willing buyer and a willing seller in an "arm's length" transaction, with each party acting knowledgeably, prudently and without compulsion."

    In the case of Pre-development, Development and Mining Projects, where Measured, Indicated and Inferred Resources have been estimated, and mining and processing considerations can be reasonably determined, valuations can be derived by compiling a discounted cash flow (DCF) and determining the net present value (NPV).

    Where mineral resources remain in the Inferred category, and the application of mining parameters to determine their economic viability has not been undertaken or is considered inappropriate, their value cannot be demonstrated using the more conventional DCF/NPV approach. A similar situation may apply where economic viability cannot be readily demonstrated for a resource assigned to a higher confidence category. In these instances, it is frequently appropriate to adopt the In-situ Resource (or "Yardstick") method of valuation for these assets. This technique involves application of a heavily discounted valuation of the total in-situ metal contained within the resource. This usually equates to a range of 1.5% to 4.5% of the spot metal price as at the valuation date, but may vary substantially in response to a range of additional factors including physiography, infrastructure and the proximity of a suitable processing facility. The range is usually correlated to the confidence in the resource estimate such that the 1.5% factor is commonly applied to "Inferred" resources, 3.0% to "Indicated" and 4.5% to "Measured".

    In the case of Exploration Areas, and to a lesser extent Advanced Exploration Areas, the potential is speculative compared to projects where mineral resources have been estimated. The valuation of Exploration Areas is dependent, to a large extent, on the informed, professional opinion of the valuator.

    Where useful previous and committed future exploration expenditure is known or can be reasonably estimated, the Multiple of Exploration Expenditure ("MEE") method is considered to represent one of the more appropriate valuation techniques. This method involves assigning a premium or discount to the relevant effective Expenditure Base ("EB"), represented by past and future committed expenditure, through application of a Prospectivity Enhancement Multiplier ("PEM"). This factor directly relates to the success or failure of exploration completed to date, and to an assessment of the future potential of the asset. The method is based on the premise that a "grass roots" project commences with a nominal value that increases with positive exploration results from increasing exploration expenditure. Conversely, where exploration results are consistently negative, exploration expenditure will decrease along with the value.

    Other valuation methods can be adopted to assist in confirming conclusions drawn from the MEE approach. Where sale transactions relating to mineral assets that are comparable in terms of location, timing and commodity, and where the terms of the sale are suitably "arm's length"

    in accordance with the Valmin Code, such transactions may be used as a guide to, or a means of, valuation.

    Where a joint venture agreement has been negotiated as an "arm's length" transaction, the Joint Venture Terms valuation method may be applied. In a typical staged earn-in agreement, the value assigned to each of the various stages can be combined to reflect the total, 100% equity, value, as follows:

    V100=VStage 1+VStage 2+ …….

    The value of equity assigned to an entity buying into the project, the farminor, at any earn-in stage of a joint venture can be considered as the sum of the value of liquid assets transferred to the seller, or farminee, in cash or shares, plus the value of future exploration expenditure. Commonly, an agreement may stipulate a minimum expenditure that must be met by the farminor prior to allowing withdrawal from the agreement, and these funds are thus committed, as distinct from the notional expenditure to successful completion of the earn-in stage. In calculating the value of an agreement that includes future expenditure, it is considered appropriate to discount (usually at a rate of 10% per annum) that expenditure by applying the discount rate to the mid-point of the term of the earn-in phase. A probability range is also usually applied to each earn-in stage to reflect the degree of confidence that the full expenditure specified to completion of any stage will occur and, consequently, each equity position achieved.

    The value assigned to the second and any subsequent earn-in stages will always involve discounted funds, and is likely to require exponentially increasing speculation as to the likelihood that each subsequent stage of the agreement will be completed. Correspondingly, in applying the Joint Venture Terms approach to staged earn-in agreements, it is regarded as most correct to consider only the first stage as the basis for estimating cash value equivalence at the time of the deal. Coffey adheres to this guideline by adopting the end of the initial earn- in period for valuation purposes.

    The total project value of the initial earn-in period can be estimated by assigning a 100% value, based on the deemed equity of the farminor, as follows:

    

    100 

    

     

     1 

    

    1 

    V100

    DCP CE *

    t EE*

    t *P

    

    

    

    

    (1 I ) 2

    

    1 I 2

    

    where:

    V100= Value of 100% equity in the project ($)

    D = Deemed equity of the farminor (%)

    CP = Cash equivalent of initial payments of cash and/or stock ($)

    CE = Cash equivalent of committed, but future, exploration expenditure and payments of cash and/or stock ($)

    EE = Uncommitted, notional exploration expenditure proposed in the agreement and/or uncommitted future cash payments ($)

    I = Discount rate (% per annum)

    t = Term of the Stage (years)

    P = Probability factor between 0 and 1, assigned by the valuer, and reflecting the likelihood that the Stage will proceed to completion.

100. VALUATION

101. Lucunga

     A number of different valuation methods were examined to determine the most appropriate for Lucunga. No JORC compliant Mineral Resource has been declared at Lucunga: Until reasonable prospects for eventual economic extraction can be demonstrated, the existing Lucunga resource cannot classified as compliant with any regulatory body's reporting code (ie JORC 2012 or NI 43-101).

     Several metallurgical testwork studies have previously been undertaken on phosphate samples from Lucunga. Results indicate that there are potentially three (3) phosphate products that could be produced from Lucunga: calcined rock, NPK, or SSP. However, each of these potential phosphate product routes requires further testwork in order to determine their economic viability.

     Future proposed works (planned for 2017) includes the following:

     • CRU Market Study

     • Tailings material characterisation to establish the quantity of the desliming equipment in the beneficiation circuit.

     • Single Super Phosphate (SSP) testwork to be carried out on bulk product samples from Lucunga to confirm the technical viability of SSP production from Lucunga beneficiated rock phosphate.

     • Environmental studies for the disposal of cadmium dust residues produced in the calcining of Lucunga rock phosphate.

       The following are considered to be key factors that will impact Lucunga's prospects of eventual economic extraction:

     • Thickness/ continuity of the mineable phosphate unit

     • Uncertainty surrounding the limestone karst footwall contact Low processing recoveries of the southern deposits

     • Settling issues associated with tailings material

     • Securing off-take agreement(s).

     • Transhipping costs

     • Port accessibility

     • Elevated cadmium content of the in-situ Lucunga phosphate

     • Management of R2O3% levels for the production of calcined rock

     • Disposal of cadmium dust produced in calcining

     • Availability of local gas for calcining

     • Production of a marketable product

     • CAPEX and OPEX costs:

102. Coffey decided to use the Cost Approach as the most appropriate valuation methodology. The Market Approach was used as a check on the Cost Approach.

     10.1.1 Cost Approach

     Coffey used the USA inflation numbers as depicted in Table 10.1.1_1 to convert the historical expenditures into 2016 equivalent expenditures.

     Table 10.1.1_1 Lucunga and Pedra Phosphate Projects Historical USA Inflation Rates
     Year	Inflation	% Increase to 2016
     2010	1.60%	9.64%
     2011	3.20%	6.44%
     2012	2.10%	4.34%
     2013	1.50%	2.84%
     2014	1.60%	1.24%
     2015	0.10%	1.14%
     2016	1.14%	-

     Table 10.1.1_2 shows the historical money spent to date on the Lucunga Phosphate Project.

     Coffey Mining South Africa (Pty) Ltd

     Table 10.1.1_2 Lucunga and Pedra Phosphate Projects Lucunga Historical Expenditures
     P-PFS	PFS Phase l	PFS Phase 2	LUCUNGA SCOPING STUDY	Acid Test & CD/AL Tests	Lucunga BFS	Original Total	2016 Total Value
     Petril Ltd	01/01/10 - 31/12/11	569,919.62	520,823.00	502,596.50	-	-	-	1,593,339.12	1,721,443.59
     	2012	-	-	1,169,053.00	807,087.23	-	-	1,976,140.23	2,061,904.72
     	2013	-	-	-	-	337,267.00	-	337,267.00	346,845.38
     	2014	-	-	-	-	-	-	0.00	0.00
     	2015	-	-	-	-	-	2,470,372.00	2,470,372.00	2,498,534.24
     Subtotal	569,919.62	520,823.00	1,671,649.50	807,087.23	337,267.00	2,470,372.00	6,377,118.35	6,628,727.92
     HC	432,930.00	520,823.00	1,671,648.50	-	337,266.50	-	2,962,668.00	2,962,668.00
     Total	1,002,849.62	1,041,646.00	3,343,298.00	807,087.23	674,533.50	2,470,372.00	9,339,786.35	9,591,395.92

     Minbos Resources Limited - JMIN05 Page: 47

     Independent Valuation of the Lucunga and Pedra Phosphate Projects, Northern Angola - 1 February 2017

     An amount of US$ 9,591,395.92 up to November 2016 has been spent on exploration of the Lucunga deposit to bring it to its current status.

     The PEM is based on the success (or failure) of exploration completed to date and an assessment of the future prospects of the tenement. Selected PEMs usually range from 0.5 to 3.0, but can be as low as 0 and as high as 5. Coffey took into consideration that no Resource can be declared for the Lucunga Phosphate Project

     An upper limit of 1.2 and a lower limit of 0.8 for the PEM were applied due to the prospectivity of the deposit. Coffey thus has the following valuation for the Lucunga Phosphate Project (Table 10.1.1_3).

     Table 10.1.1_3 Lucunga and Pedra Phosphate Projects Valuation of the Lucunga Phosphate Project (US$ Million)
     Valuation Methodology	Preferred Value	High Value	Low Value
     MEE	9.6	11.5	7.7

103. Pedra

104. Development Stage

     Pedra is at an early exploration stage and no resources can be declared. A Market Approach or Yardstick Method can thus not be applied.

105. Cost Approach

     The Pedra Phosphate Project is at an exploration stage of development and Coffey used the Cost Approach for valuing the project. Coffey is of the opinion that the Multiples of Exploration Expenditure (MEE) method of valuation is appropriate as a valuation for the Pedra de Feitico Phosphate Project. Pedra expenses to 2016 amounts to US$ 289,220 (Table 10.2.2_1).

     Table 10.2.2_1 Lucunga and Pedra Phosphate Projects Pedra Historical Expenditures
     Year	Pedro do Fiticio	Pedro do Fiticio- PGI	Original Total	2016 Total Value
     Petril Ltd	01/01/10 - 31/12/11	87,500	87,500	94,535
     	2012	201,720	201,720	210,475
     Total	87,500	201,720	289,220	305,010

     An upper limit of 1.2 and a lower limit of 0.8 for the PEM were applied due to the prospectivity of the deposit. Based on a Cost Approach, the Pedra de Feitico Phosphate Project can be valued as follows (Table 10.2.2_2).

     Table 10.2.2_2 Lucunga and Pedra Phosphate Projects Valuation of the Pedra Phosphate Project
     Valuation Methodology	Preferred Value (US$)	High Value (US$)	Low Value (US$)
     MEE	305,000	366,000	244,000

     Coffey Mining South Africa (Pty) Ltd

106. Lucunga Mineral Resources

     Mineral resources (subject to confirmation of economic criteria) for the four domains of the Lucunga deposit are given in Table 10.3_1.

     Table 10.3_1 Lucunga Phosphate Project Mineral Resources as at 1 June 2016 (subject to confirmation of economic criteria)
     Cut-off Grade	'Measured'		'Indicated'		Total 'Measured' and 'Indicated'		'Inferred'		Total
     (%P2O5)	Tonnes ('000)	Ave P2O5	Tonnes ('000)	Ave P2O5	Tonnes ('000)	Ave P2O5	Tonnes ('000)	Ave P2O5	Tonnes ('000)	Ave P2O5
     Central Domain
     14	2,990	17.27	2,956	16.69	5,946	16.98	-	-	5,946	16.98
     North East Domain
     14	-	-	3,067	16.58	3,067	16.58	8.51	15.40	3,076	16.58
     South West Domain
     14	-	-	293	16.55	293	16.55	-	-	293	16.55
     Total North Domains
     14	2,990	17.27	6,317	16.63	9,307	16.84	8.51	15.40	9,316	16.83
     RS (South) Domain
     14	-	-	425	16.84	425	16.84	844	14.90	1,269	15.55
     Total Domains
     2,990	17.27	6,741	16.64	9,732	16.84	853	14.90	10,584	16.68

     Minbos Resources Limited - JMIN05 Page: 50

     Independent Valuation of the Lucunga and Pedra Phosphate Projects, Northern Angola - 1 February 2017

     Only phosphate is reported for the mineral resources. No other criteria were used in this selection. Other elements such as Al2O3, Fe2O3and SiO2are important for mining block selection and blending for plant feed (and therefore mineral reserves) but are not used to restrict mineral resources. Cadmium levels are high overall but are not used to restrict the mineral resource as Cadmium is expected to be removed during beneficiation.

107. Comparable Transaction Analysis

108. Timeline and Transactions Discarded

     Coffey considered publicly available phosphate market transactions during the period February 2011 to the present for the comparable transaction analysis. The following two transactions were reviewed but not considered directly comparable.

     Blackmountain Agreement with African Phosphate (ASX Release 5 February 2016)

     This was an agreement with African Phospate Pty Limited to acquire 100% of Namakera Mining Company Limited which operates the Namakera Vermiculite Mine and Busumbu Phosphate Project in Uganda. Insufficient data is publicly available to do a Market Valuation of the Busumbu Phosphate project.

     Sale of Minemakers' interests in the Sandpiper and Rocky Point Projects (ASX Release 4 October 2012)

     Sandpiper is an offshore marine phosphate project in Namibia and is not comparable to an onshore phosphate mine project.

109. Farim Phosphate

     On 25 February 2011 Plains Creek Phosphate Corporation bought 50.1% of GB Minerals' Farim Phosphate Project (Farim) in Guinea Bissau for US$25,295,300. Farim has 84Mt Measured and Indicated Resources and 44Mt Inferred Resources, giving it a 128Mt total resource. This equates to a US$0.39 transaction value per tonne resource.

     This advanced exploration project is 80km away from a port with good infrastructure and can be mined by opencast methods and simple beneficiation process to produce phosphate rock product.

110. Phosco

     On 18 November 2011 Montero Projects Limited (Montero) bought 100% of Eurozone Investments Limited (Eurozone)'s Phosco Project with four Phosphate exploration licenses in South Africa for US$750,000 as well as a share's issue of US$100,000 to explore Bierkraal Exploration Project. Phosco had 32.8Mt Inferred Resources in the Duyker Eiland Phosphate Project. This equates to US$0.03 transaction value per tonne resource if only the Duyker Eiland Phosphate's resource is taken for valuation. The Duyker Eiland Phosphate Project is located in the Western Cape Province, South Africa, approximately 18 km north of Vredenburg and 140 km north-northeast of Cape Town, the provincial capital.

     There is sufficient area within the Project to host an open pit mining operation, including the proposed open pits, mine and plant infrastructure, waste rock and tailings storage facilities, and is therefore comparable to the Cacata deposit.

111. Lam Lam and Kebemer

     On 29 August 2013 Polish multi-component fertilizer producer Zaklady Chemiczne Police (ZChP) has agreed a deal to acquire 55% of Senegalese phosphate rock mining company African Investment Group (AIG). The total deal is worth $28.5M. The mining company's phosphate rock resources are estimated at 56Mt. This equates to a US$0.93 transaction value per tonne resource.

112. Baobab Phosphate

     On 04 November 2015 Minemakers Limited (Minemakers) signed a Memorandum of Understanding (MOU) with a Senegalese equity partner Mimran Natural Resources (Mimran), in which Mimran will directly invest US$11.25M for 20% of the Baobab Phosphate Project. The project's phosphate rock resources are estimated at 164.8Mt. This equates to a US$0.24 transaction value per tonne resource.

113. Arganara Phosphate

     On 24 May 2013 Rum Jungle Resources put in an offer of AU$17M for 100% of Central Australian Phosphate's Arganarra Phosphate Project. The Arganarra Phosphate Project has 310Mt Inferred Phosphate Rock Resources. This equates to a US$0.05 transaction value per tonne resource.

114. Bomfim

     On 12 September 2014 DuSolo Fertilizers Inc. (DuSolo) entered into a purchase agreement with Quantum Fertizantes Do Tocantins Ltda. (Quantum) to acquire the remaining 25% interest of the Bomfim Project. The Agreement in place provides DuSolo with 100% interest in the project effective immediately in exchange for future payments amounting to five million Brazilian Reals (or $2,400,000 CND at the current exchange rate on September 11, 2014). Bomfim has 317,000t Measured and Indicated and 4.1Mt Inferred Phosphate Rock Resources, giving it a total of 4.417Mt Phosphate Rock Resources. This equates to a US$0.48 transaction value per tonne resource.

     The Bomfim Project is centrally located within the Cerrado - Brazil's rapidly expanding agricultural region, on what is now considered the new phosphate belt of Brazil. Other major companies have claims in the area, including Vale and Votorantim

     Located in close proximity to the Bomfim Project are: roads, water dams, power lines and a local airport under construction serving domestic flights. Most recently, the Brazilian Government approved The FIOL (Ferrovia Integração Oeste Leste) - a new rail line that will pass 100km to the north of the Project's area. Coffey considers this open pitable project as comparable to the Cabinda project.

115. Market Approach Valuation‌

     Using the market approach the following values in Table 10.4.8_1 can be attributed to the 10.584Mt Resource Lucunga Phosphate Project.

     Table 10.4.8_1 Lucunga and Pedra Valuation Lucunga - Market Approach
     Date	Project	% Sold	Price (US$)	100% Value (US$)	Total Resource	Transaction Value per tonne (US$)	Lucunga Valuation (US$)
     Feb 2011	Farim	50.10%	25,295,300	50,489,621	111Mt	0.45	4.81M
     Aug 2013	Lam Lam	55%	28,500,000	51,818,182	56Mt	0.93	9.79M
     Nov 2011	Phosco	100%	750,000	850,000*	32.8Mt	0.03	0.27M
     Nov 2015	Baobab	20%	8,004,888	40,024,439	164.8Mt	0.24	2,57M
     May 2013	Arganarra	100%	16,447,654	16,447,654	310Mt	0.05	0.56M
     Sep 2014	Bomfim	100%	2,136,562	2,136,562	4.1Mt	0.48	5.12M

     *US$100,000 additionally paid to explore Bierkraal

     The Phosco project is not considered a comparable transaction because only one project's resources (Duyker Eiland Phosphate Project) of the four tenements sold, are used in the above valuation. The Arganara transaction was not taken into consideration as it valued Lucunga at an order of magnitude less than the other transactions and is thus considered an outlier that skews the valuation unnecessary.

     Coffey considered the Farim, Lam Lam & Kebemer, Baobab and Bomfin transactions as comparable for the Lucunga Market Valutation. The Preferred value for Lucunga is calculated as the average of the of the four transactions' values of Lucunga. The low value was calculated as the average of the three lowest values for Lucunga and the highest value is the highest value (US$9.8M) for Lucunga.

     Per a Market Approach the Lucunga Valuation can thus be as shown in Table 10.4.8_2.

     Table 10.4.8_2 Lucunga and Pedra Phosphate Projects Lucunga Valuation - Market Approach
     Valuation	US$ Million
     Preferred	5.6
     High	9.8
     Low	4.2

116. Conclusion‌

     As a JORC 2012 or NI 43-101 compliant mineral resource couldn't be declared, Coffey considers the Cost Approach the more reliable method of valuing the Lucunga Phosphate Projects and thus values it as follows (Table10.4.9_1). Details regarding the cost valuation approach are included in section10.1.1.

     Table 10.4.9_1 Lucunga and Pedra Phosphate Projects Lucunga Valuation - Cost Approach
     Valuation	US$ Million
     Preferred	9.6
     High	11.5
     Low	7.7

117. Total Valuation

118. Using the Cost Valuation Approach the total Lucunga and Pedra Phosphate Project is valued by Coffey as in Table _2.

     Table 10.4.9_1 Lucunga and Pedra Phosphate Projects Total Valuation - Cost Approach
     Valuation	US$ Million
     Preferred	10.0
     High	12.0
     Low	8.0

119. RISK SUMMARY

120. Introduction

     The risk analysis presented here is not a formal risk assessment that follows one of the standard risk management protocols. Coffey prefers to highlight areas of risk and the potential impacts of that risk that would normally be expected in similar operations. The focus is on highlighting areas of risk that are of relevance to the Lucunga and Pedra Projects.

121. Geology and Mineral Resources Risk

122. Lucunga

     The geology is moderately well understood to predict the likely content of mined material. There is however, some degree of uncertainty surround mining thickness and nature of the limestone karst footwall.

     Low to Moderate Risk

123. Pedra

     The geology of Pedra is surmised to be directly analogous to the Company's Cacata Deposit.

     Moderate to High Risk

124. Development and Operating Risk

     Mining operations generally involve a high degree of risk. A mine in Angola is subject to all the hazards and risks normally associated with mineral production, including damage to or destruction of plant and equipment, unexpected geologic formations, pit collapse, injury or life endangerment, environmental damage, fire, equipment failure or structural failures, such as retaining walls or tailings dams, potentially resulting in environmental pollution and consequent liability. The payment of such liabilities may have a material, adverse effect on the Company's financial position.

     The marketability of natural resources that may be acquired or discovered by the owner will be affected by numerous factors beyond its control. These factors include market fluctuations, the proximity and capacity of natural resource markets and processing equipment, and government regulations, including regulations relating to prices, taxes, royalties, land tenure, land use, importing and exporting of minerals and environmental protection. The exact effect of these factors cannot be accurately predicted, but the combination of these factors may result in the owner not receiving an adequate return on invested capital.

     Moderate Risk

125. General Engineering and Site Infrastructure Risk

     Due to the shallow draft at the harbour, a transhipment option will have to be considered. This may mean additional CAPEX AND OPEX to the project, increasing the financial risk of the operation.

     Mining, processing and development activities depend, to some degree, on adequate infrastructure. Reliable roads, bridges, power sources and water supply are important determinants that affect capital and operating costs. Unusual or infrequent weather phenomena, sabotage, government or other interference in the maintenance or provision of such infrastructure could adversely affect the Company's operations, financial condition and results of operations.

     Moderate Risk

126. Metallurgical and Processing Risk

     Several metallurgical testwork studies have been undertaken on phosphate samples from Lucunga. Results indicate that there are potentially three (3) phosphate products that could be produced from Lucunga: calcined rock, NPK, or SSP. Some metallurgical testwork has been performed on the resource. This makes it a low risk for the project. The processes to treat the phosphate rock is industry standard and are therefore not considered high risk.

     The process ricks faced by the Lucunga Phosphate Project include the following:

     • Impact of elevated cadmium content of the in-situ Lucunga phosphate for the production of NPK or SSP

     • Availability of local gas for calcining

     • Blending from different deposit areas to control R2O3% levels for the production of calcined rock

     • Low processing recoveries of the southern deposits

     • Loss of reactivity during grinding for NPK

     • Settling issues associated with tailings material

     • CAPEX and OPEX costs

     • Disposal of cadmium dust produced in calcining

     • Port access

     • Transhipping costs

     • Market suitability/ off-take agreements

     • Cadmium content of tailings material

     The inability to construct a tailings dam with the tailings from the processing plant is a high technical risk for the project. The cost to overcome this risk may prove too high for the financial viability of the project.

     No beneficiation testwork has been carried out on material from the Pedra Project

     High Risk

127. Foreign Operation and Political Risk‌

     Whilst Coffey believes that the government support in Angola provides a favourable environment for mining operations, there is no guarantee against any future political or economic instability in this country or neighbouring countries which might adversely affect a mining company. A recent study by the University of Stellenbosch called Ethics and Compliance Risk Survey 2014 indicated that Angola are perceived as very corrupt with very poor regulatory environment and law enforcements.

     Other effects may include limitations on the transfer of cash or other assets between the parent corporation and such entities, or among such entities, which could restrict a mining company's ability to fund its operations efficiently. All or any of these factors, limitations, or the perception thereof could impede a mining company's activities, result in the impairment or loss of part or all of the company's interest in the properties, or otherwise have an adverse impact on the mining company's valuation and stock price.

     Moderate to High Risk

128. Ownership Risk

     There is no guarantee that title to the properties in which a mining company has an interest will not be challenged or impugned. Title to these properties may be affected by undetected defects, previous agreements, transfers or other valid challenges to the title of the Company's property interests.

     Minbos understands from Petril that a renewal application for the licences has been submitted and is currently being put forward for presidential decree. Minbos is not aware of any impediment to the licences being renewed.

     Low to Moderate Risk

129. Project Economics and Overall Project Risk

     Coffey considers the Lucunga and Pedra Projects to have a Moderate risk, which can be reduced by completing ongoing (and proposed) metallurgical testwork, defining a marketable phosphate product, and undertaking formal feasibility studies, which includes defining complaint Mineral Resources and Mineral Reserves.

     Moderate Risk

130. Risk Summary‌

     Based on the sections above, the following risks to the Lucunga and Pedra Projects are given in the Table 0_1 below.

     Table 0_1 Lucunga and Pedra Phosphate Projects Risk Summary
     Item	Relative Risk
     Geology and Mineral Resources	Lucunga - Low to Moderate Risk Pedra - Moderate to High Risk
     Development and Operating	Moderate
     General Engineering and Site Infrastructure	Moderate
     Metallurgy and Processing	High Risk
     Foreign Operation and Political	Moderate to High
     Ownership	Low to Moderate
     Project Economics	Moderate

     Based on the above risk summary, Coffey considers the Lucunga and Pedra Projects to have a Moderate Risk.

131. REFERENCES

132. ALMEIDA, J. C.1953 - Proposta de trabalhos nos fosfatos nos distritos de Ca binda e do Zaire para o ano de 1953• Rel. inedito. Serv. de Geologic e Minas Luanda.

     Almeida I.M.C., 1953.Relatorio dos trabalhos realizados em 1952 nos fosfatos dos distritos de Cabinda e do Zaire Direocao dos Servisos de Geologic e Minas.Luanda.

     Brownfield, M.E., and Charpentier, R.R., 2006, Geology and total petroleum systems of the West-Central Coastal Province (7203), West Africa: U.S. Geological Survey Bulletin 2207-B, 52 p

     Cheney, T.M., 1970. Phosphate Deposits, District of Cabinda, Angola, West Africa-Report of Investigations, Companhia de Fosfatos de Angola. Luanda (COFAN 1)

     Cheney, T.M., 1973. Summary and conclusions of Phase II in the deposits of Phosphate of Cabinda. Companhia de Fosfatos de Angola. Luanda Montero Mining and Exploration press announcement, November 10th, 2011: "Montero announces closing of acquisition of Phosphate Assets in South Africa.

     Consolidated Financial Statements of Plains Creek Phosphate Corporation for the years ended June 30, 2012 and 2011 (Expressed in Canadian dollars) Sedar Filing.

     Farim Phosphate Project,http://gbminerals.com/project/farim_phosphate/)

     GOUVEIA A.J.C. 1953 - Pesquisa e reconhecimientode rochas fosfatadas no concelho de Ambrizete Re. Ined Serv. Geol. E Minas, Luanda

     Martins J. A. 1960a - Pesquisa de rochas fosfatadas nas Formacoes Sediments res a Sul do Zaire. Rel. ined. Serv. Geol. e Minas - Luanda.

     Martins J. A. 1960b - Proposta de trabalhos a realizar na Pesquisa de Rochas Fosfatadas nas Areas Delimitadas a Sul do Zaire. Rel. dined. Serv. Geol. e Mi nas - Luanda.

     Martins J. A. 1960c - Prospeccao de Rochas Fosfatads na Regiao do Ambrize- te pelo Metodo Cintilometrico - 1959. Rel. dined. Serv. Geol. e Mi nas - Luanda.

     Martins J. A. 1960d - Pesquisa de Rochas Fosfatadas nas Formacoes Sedimentares a Sul do Zaire 1960 (areal da Pedra do Feitigo). Rel. ined. Serv. Geol. e Minas - Luanda.

     Martins J. A. - 1961a Prospecting for Phosphates in the Lucunga Region, North Angola. Estudo apresentado a Reuni do Comite Regional do Sul de Geologic (CCTA) em Pretoria - Setembro de 1961.

     Martins J. A. 1961b - Reconhecimento e estudo Geologic da Bacia Sedimentar do Congo - Sul do Zaire -1960. Rel. dined. Serv. Geol. e Minas - Luanda. Lucunga Pre-Feasibility Study by BlueBird Ltd.; December 2009 218

     Martins T.A., 1963.Rochas fosfatadas de Angola (Bacia de Lucunga).Junta de Desenvolvimento Industrial.Luanda.

     Martines I.A, 1960. Surface radiometric surveys and detailed geological studies.

     Milosevic, Z and Drakulic, D, February 1983. Report On Geological Investigations of The Mongo Tando Phosphate Deposit In The Cabinda Province, ENERGO PROJECT Corporation of Consultants and Development Engineers Belgrade - Yugoslavia

     Nenov T., e groupo, 1980.Relatorio sobre a cartografia geologica em escala 1 :50 000 com busca de fosfatos na provincia do Zaire, efectuada nos anos 1979/80,

     October 2016 Phosphate Price: http://www.indexmundi.com/commodities/?commodity=rock- phosphate

     Petrov V.G, 1978. Os fosfatos da provincial do Zaire - Republica Popular de Angola, e sua avaliacao geologico-industrial ao Ks de Janeiro de 1976 , Dir.Nac, de Geologic e Industries Mineira.Luanda.

     PhosAgro press statement, 27 August 2013: PhosAgro Completes Consolidation of 100% Apatit. (www.phosagro.com/press/company)

     SPE 1980. Recherches et Evaluation des Phosphates du Bas-Zaïre, Rapport technique de la Campagne SPE-PNUD 1978-1980. Service Présidentiel D'Etudes, Kinshasa, 96pp.

     T.Nenov et. al 1981 "Report on the results of the detailed research of "Quindonacaxa" Phosphate Deposit, performed in 1979/1980, with reserves estimation on 01/06/1981

     Nenov T., e groupo, 1980.Relatorio sobre a cartografia geologica em escala 1 :50 000 com busca de fosfatos na provincia do Zaire, efectuada nos anos 1979/80.

     Vasconcelos, P. 1952 - As rochas fosfatadas em An Cola - Cabinda e Zaire - 1951. Rel. ined. Serv. Geol. e Mi nas - Luanda Vols. I, II e III.

     Veiga, M. G. 1961 - Relatorio dos trabalhos Geologico-Mineiros da Brigada de Fosfatos Ambrizete - Zaire. Relativo ao ano de 1960. Rel. ined. Ser. Geol. e Minas - Luanda Vols. I, II e.

     Veiga, M. G. 1962 - Relatorio complementar dos trabalhos Geologico-Mineiros respeitantes a actividade da Brigada de Fosfatos Ambrizete-_Zaire durante o ano de 1960. Rel. ined. Serv.Geo. e Mi nas - Luanda.

     Stefanov I, 1980 Intermediate Sampling Report

     Previously issued reports

     Cabinda

     Body K. (2010) Mongo Tando Site Visit Report. Coffey Mining (South Africa) (Pty) Ltd, Johannesburg, 18 November 2010

     Body, K and Fleming, J. (2011). Independent Valuation of the Lucunga and Pedra Phosphate Projects, Northern Angola, Coffey Mining (South Africa) (Pty) Ltd, Johannesburg, 20 December 2011

     Body K, (2012a). MTL Resource Update - Memorandum. Coffey Mining (South Africa) (Pty) Ltd, Johannesburg, 10 January 2012

     Body K (2012). Mongo Tando Mineral Resource Update - Memorandum. Coffey Mining (South Africa) (Pty) Ltd, Johannesburg, 12 January 2012.

     Body KJ, Rupprecht,S and Vander Linde G., 2013. Preliminary Economic Assessment, Lucunga Phosphate Project, DRC. Coffey Mining (South Africa) (Pty)Ltd, Johannesburg, 8 November 2012

     Fleming J and Body K. (2011). Resource Estimate for Mongo Tando Project Area, Angola. Coffey Mining (South Africa) (Pty) Ltd, January 2011

     Fleming J and Body K. (2011). Updated Resource Estimate for Mongo Tando Project area, Angola. Coffey Mining (South Africa) (Pty) Ltd, Johannesburg, April 2011.

     Fleming J and Body K. (2011). Independent Valuation of the Lucunga and Pedra Phosphate Projects, Northern Angola. Coffey Mining (South Africa) (Pty) Ltd, Johannesburg August 2011

     Fleming, J. (2011). Mineral Resource Estimation for Chibuete and Chivovo Projects in Angola, November 2011, Coffey Mining (South Africa) (Pty) Ltd, 30 November 2011.

     Mazzoni et al (2010). Independent Technical Report: JMIN05 , Coffey Mining (Pty) Ltd Perth Australia, 19 July 2010

     Mudau, M (2012). Analytical Quality Assurance and Quality Control - Memorandum. Coffey Mining (South Africa) (Pty) Ltd, Johannesburg, 23 February 2012

     Lucunga

     Body KJ and Mudau,M.,2013. Mineral Resource Update for Lucunga Phosphate Project in the Western Part of the Democratic Republic of Congo. Coffey Mining (South Africa) (Pty)Ltd, Johannesburg, 31 May 2013