review of qa/qc for lamelee-hobdad 2012 program

GM 67790REVIEW OF QA/QC FOR LAMELEE-HOBDAD 2012 PROGRAM

http://gq.mines.gouv.qc.ca/documents/examine/GM67790

http://gq.mines.gouv.qc.ca/documents/sigeom/Licence.pdf

http://gq.mines.gouv.qc.ca/documents/sigeom/license.pdf

1285893

Ressources naturelles et Faune, Québec

0 5 FEV, 2014

Service de la Géoinformation

Nits, Griffis and McOuat 91. 1962 CONSULTING GEOLOGISTS AND ENGINEERS

GM 67790

REÇU AU MRNF

2 0 M 2013

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March 7, 2013

Mr. Brian Butterworth, GM, North American Exploration Cliffs Natural Resources Suite 301, 8 King St. East, Toronto, ON M5C 1B5

delivered by e-mail: [email protected]

Dear Brian:

RE: REVIEW OF QA/QC FOR LAMÉLÉE-HOBDAD 2012 DRILL PROGRAM

Cliffs Natural Resources ("Cliffs") in 2012 completed a diamond drill program on its Peppler-Hobdad mining claims, Faber & Malapart Cantons, MRC Caniapiscau, Fermont area, Québec. The Property comprises a total of 636 mining claims in several different groups. Some of the claims are registered to Quinto Mining Corporation ("Quinto"). Quinto is a wholly-owned subsidiary of Cliffs. Other claims comprising the Property are registered to Cliffs Québec Mine de Fer Limitée. The 2012 program comprised drilling on two iron deposits, namely the Lamêlée and the Hobdad deposits (or Lamêlée Hill and Hobdad Hill deposits). The Lamêlée Deposit is centred at approximately 67°31'W Longitude and 52°27'N Latitude, 23B/05; Hobdad is centred at approximately 67°29'W Longitude and 52°21'N Latitude. This program was supervised by Watts, Griffis and McOuat Limited ("WGM") on behalf of Cliffs. WGM logged all core, completed the sampling and provided supervision of the drilling. The program consisted of a total of 31 drillholes, aggregating 9,327.9 m of drilling. Eighteen of the holes (HH-12-001 to HH-12-018) aggregating 6,460.6 m were drilled on the Hobdad Deposit whilst 13 holes (L-12-088 to L-12-100) aggregating 2,867.3 m were drilled to further assess the Lamêlée Deposit. The Lamêlée Deposit was previously drilled in 2007 and 2008. The drilling on the Hobdad Deposit was the first drilling undertaken to assess this iron occurrence. Drilling started on June 14 and was completed by October 24. Cabo Drilling (Atlantic) Corp. ("Cabo") was the drilling contractor. Outland Camps constructed and managed the camp providing accommodation and catering for drillers, geotechnical and survey crews.

Nick Payne, Exploration Manager Eastern Canada, Cliff's Natural Resources designed the drilling program with input from WGM. The assaying, in-lab QA/QC and lab reporting protocols were under Cliffs' auspices and WGM had minimal input. No secondary check assaying has been undertaken.

Cliffs requested WGM review the Sampling/Assaying QA/QC results for the program and report its results to Cliffs.

WATTS, GRIFFIS AND McOUAT LIMITED SUITE 400 - 8 KING STREET EAST, TORONTO, CANADA, M5C 1B5 TEL: (416) 364-6244. FAX: (416) 864-1675 EMAIL: [email protected] WEB: www.wgm.ca

Ïttc, Griffu and McOuat Cliffs Natural Resources March 7, 2013

DRILL CORE SAMPLING

The demarcation of sampling boundaries was made generally on a geological basis as selected by the drill geologist during logging. The sampling guidelines required minimum sample lengths of 1-2 m, with maximum lengths of approximately 6 m. This scheme was closely followed for the most part but some sampling irregularities occurred with samples crossing major lithological boundaries. In total, 774 samples were taken from the 18 Hobdad drillholes and 473 samples from the 13 Lamêlée drillholes (these totals include Routine and Field QA/QC samples). Tables 1 and 2 provide more details. The term "Routine" samples is used herein to refer to regular split drill core samples taken to assess the iron content of the drill core; the term "field-inserted QA/QC" samples refers to all samples other than the Routine samples. These field-inserted QA/QC samples 'are quality control materials inserted into the sample stream in the field. The Field QA/QC sampling included second half core Duplicates, Blanks and Standards. This component of the sampling is described under QA/QC. No samples were taken from holes HH-12-004, HH-12-007, and HH-12-016 because these holes intersected no significant iron formation. The average sample length was close to 4.9 m and most samples ranged in weight from 5 kg to 12 kg, averaging 15.7 kg.

TABLE 1. HOBDAD PROGRAM SAMPLE SUMMARY

Total Field Samples 774 Routine 689 FBLK 31 FSTD 34 FDUP 20

XRF-WR, Satmagan and FeOTotal performed on all samples. SG, STota] and C also done on samples submitted to SGS-Lakefield.

Of the 774 total samples 749 were processed and assayed at SGS-Lakefield and 23 were done at Actlabs. 2 samples lost and not assayed.

TABLE 2. LAMÉLÉE PROGRAM SAMPLE SUMMARY

Total Field Samples 473 Routine 421 FBLK 22 FSTD 21 FDUP 9

XRF-WR, Satmagan and FeOTotal performed on all samples. Of the 473 total samples, 0 were processed and assayed at SGS-Lakefield and 473 were prepared and analysed at

Actlabs. 0 samples lost and not assayed.

All rock estimated to contain at least 10% iron in the form of oxide was sampled. In addition, one sample on either side of all IF was taken in wall rock to bracket all IF sequences. These are called "bracket" or "shoulder" samples. Some samples include more than one rock type because

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• Watts, Griffis and McOuat Cliffs Natural Resources March 7, 2013

of the minimum sample length stipulation. This situation most often occurs in sequences of IF alternating with narrow, less than 1 m intervals of amphibolite or where sampling irregularities have occurred. In such cases, individual samples may include both amphibolite and IF.

Sample intervals were marked out by the drill geologist with a china marker during descriptive logging. Three-part sample tickets, from sample books with unique sequential ticket numbers, were used to identify sampled intervals. Sample numbers and intervals were recorded in the drillhole database.

One portion of the sample ticket remained in the sample book. One portion was placed and stapled under the first few centimetres of core in the sample interval in the core tray. The third portion was inserted by the core splitter/sampler into a polyweave sample bag with the split core sample. The sample number was also written on the sample bag.

Core samples were split using a hydraulic core splitter. One half of the split core segments were returned to the core trays in the original order and reassembled as best as possible. Core trays were then stacked on core racks located on site where they currently remain. The other half of Routine samples was placed in the sample bags with sample tag.

Sample bags were loaded into 205 litre barrels which were picked up by the transport company for shipping by truck to the laboratories on a periodic basis.

SAMPLE PREPARATION AND ASSAYING

General During the first part of the program the samples were shipped to SGS Minerals Services ("SGS-Lakefield"), Lakefield, Ontario. During the second half of the program the samples were sent to Actlabs Assay Laboratory, Ancaster, Ontario ("Actlabs"). Both SGS-Lakefield and Actlabs are accredited. Actlabs is accredited by the Standards Council of Canada ("SCC") which requires on-site assessment of the laboratory and also requires continued participation in proficiency testing programs like CANMET's PTP-MAL. Actlabs' Quality System is accredited to international quality standards through the International Organization for Standardization/International Electrotechnical Commission ("ISO/IEC"). ISO/IEC 17025 includes ISO 9001 and ISO 9002 specifications with CAN-P-1758 (Forensics), CAN-P-1579 (Mineral Analysis) and CAN-P-1585 (Environmental) for specific registered tests by the SCC.

SGS-Lakefield is similarly accredited for specific mineral tests to the ISO/IEC standard. ISO/IEC 17025 or ISO 9001 addresses both the quality management system and the technical aspects of operating a testing laboratory.

SGS-Lakefield Upon arrival at SGS-Lakefield each sample was inventoried and weighed, and if required, dried. Each sample was crushed to nominal passing %" and rotary split to form a 6.2 kg to 6.4 kg charge.

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fj Wilts, Griffis and McOuat Cliffs Natural Resources March 7, 2013

The reject was weighed and stored for possible future use. The -6.2 kg charge was the working fraction. This fraction was screened to 850 gm (20 mesh) and roll crushed to 100% passing 850 gm. It was then rotary (12-way splitter) split to produce four fractions:

1. A —500 g aliquot weighed and stored for possible future use. 2. A 500 g aliquot riffled-out into two 250 g charges. 3. One —250 g charge weighed, pulverized and submitted for Head assays, including Whole

Rock Analysis ("WRA") by XRF which includes SiO2, A1203, Na20, K20, CaO, MgO, TFe2O3, MnO, TiO2, P205, Cr2O3, V205 and LOI. In addition, this fraction was submitted for analysis of STora1, and C as well as Satmagan and specific gravity determination. Selected samples were also assayed for FeOTotal using a H2SO4-HF digestion.

Appendix 1, contains details concerning sample processing and analysis conducted at SGS-Lakefield. Figure 1 of SGS-Lakefield's documentation in Appendix 1 is the Sample Preparation and testing flow sheet which was used both for this Lamêlée-Hobdad program and a parallel drilling program conducted on Cliff's Bloom Lake Iron Mine property. The Bloom program also included metallurgical testwork components represented by the more advanced steps of the flow sheet which were not applied to the Lamêlée or Hobdad samples. For the Lamêlée and Hobdad samples the processing flow sheet terminated with the Head assaying.

Actlabs Sample preparation at Actlabs included dry crush to 90% -10 mesh followed by a riffle split. Approximately 250 g of rock was pulverized to 95%, -200 mesh. Cleaner sand was used between each sample pulverized.

Similar to sample analysis performed at SGS-Lakefield, analysis at Actlabs included determination of major elements by XRF on lithium metaborate/tetraborate bromide glass discs, (Code 8-Iron Ore Analysis XRF Fusion-XRF), and Fe304 (magnetite) by Satmagan. FeOTothi was determined on all samples at Actlabs under code Code 4F-FeO Titration. SG, S and C were not determined on the samples sent to Actlabs.

Sample analysis methods at Actlabs are summarized in Appendix 2.

OA/OC - GENERAL

Sampling and assaying QA/QC included procedures operated by the geotechnical field personnel (In-field QA/QC) and procedures operated in each of the Primary analytical laboratories (In-lab QA/QC). As part of assay processing all assays less than detection limit have been adjusted to one half detection limit.

IN-FIELD OA/OC

The in-field Sampling/assaying QA/QC protocol involved the insertion of Blanks, second half core Duplicates and Standards into the sample stream going to the labs.

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`j Watts, Griffis and McOuat Cliffs Natural Resources March 7, 2013

FIELD BLANKS (FBLKS)

The material used for Field Blanks ("FBLK") for the program was intervals of amphibolite drill core from Cliffs' Bloom Mine. Amphibolite at Bloom is a course grained massive to cryptically bedded rock comprised of hornblende, plagioclase and biotite. This rock is low in magnetite and low in hematite but does contain 9 to 12 percent Fe. The material was harvested from historic and recent drill core in the Bloom core farm. Prior to selection these cores were scanned with a hand-held magnetic susceptibility meter to ensure and allow for the rejection of amphibolite enriched in magnetite. The sampling protocol called for insertion of Blanks into the sample stream at a frequency of one per 20 routine samples. When a Blank was required, half split amphibolite core representing a sample length of 3 to 6 m of core was placed into a regular sample bag and given a regular sample identifier in sequence with the Routine samples.

A total of 53 FBLKs were sampled and assayed during the program. Of these 30 were assayed at SGS-Lakefield while the remaining 23 were assayed at Actlabs.

Table 3 summarizes iron assay results for all field Blanks. The assay results for the FBLKs are also shown on the plots for the FSTDs.

The parameters hmFe, OtheFe, SumFe and SumOxFe are calculated parameters.

Hematitic Fe ("hmFe"), was estimated by subtracting the iron in magnetite (determined from Satmagan) and the iron from the FeO analysis, in excess of what can be attributed to the iron in the magnetite, from %TFe, and then restating this excess iron as hematitic Fe, as below:

(1) %hmFe = %TFe - (Few (computed from Satmagan) + Fe++ (computed from Fe0))

The distribution of Fe++ and Few to magnetite was done assuming the iron in magnetite is 33.3% Fe++ and 66.6% Few. The estimation method also assumes all iron in silicates, carbonates and sulphides is Fe++ and there are no other iron oxide species present in mineralization, to a significant extent, other than hematite and magnetite. This latter assumption is generally believed to be substantially true.

In practice, %OtherFe was computed as the first step in the calculation. %OtherFe is assumed to represent the Fe in sulphides, carbonates and/or silicates is the iron represented by Fe++ from FeO that is not in magnetite.and subsequently %hmFe is computed:

(2) %OtherFe=Fe++from Fe0 - magFefromsatmagan*0.333

Subsequently %hmFe is calculated from the difference between total Fe and magFe and OtherFe:

(3) %hmFe = %TFe - (%magFe+%OtherFe)

SumFe is the sum of magFe, hmFe and OtherFe. SumOxFe is the sum of only the magFe and hmFe components.

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`j Watts, Griffis and MlOuat Cliffs Natural Resources March 7, 2013

TABLE 3. SUMMARY OF IRON ASSAY RESULTS FOR FIELD BLANKS

SamplelD HolelD CertificatelD TFe (%)

magFe Sat (%)

FeO (%)

hmFe (calc) OtherFe (%) (%)

SumFe (%)

Sum OxFe (%)

Fell (%)

A00113770 HH-12-001 CA02539-OCTI 2 9.37 0.60 10.56 0.80 8.01 9.41 1.40 8.21 A00I13800 HH-12-002 CA02642-OCT 12 9.93 0.50 - 11.38 0.80 8.68 9.98 1.30 8.85 A00113889 HH-12-003 CA02915-OCT 12 9.86 0.30 10.80 1.30 8.29 9.89 1.60 8.39 A00113055 HH-12-005 CA03085-OCTI 2 9.72 0.70 10.92 0.80 8.25 9.75 1.50 8.49 A00113026 HH-12-005 CA02968-OCT12 10.42 0.70 11.79 0.80 8.93 10.43 1.50 9.16 A00109580 HH-12-006 CA03801-OCT12 10.77 0.60 11.77 1.20 8.95 10.75 1.80 9.15 A00109559 HH-12-006 CA03801-OCT12 10.28 0.10 11.59 1.20 8.98 10.28 1.30 9.01 A00109535 HH-12-006 CA03616-OCT12 9.79 0.10 11.16 1.10 8.64 9.84 1.20 8.67 A00109510 11H-12-006 CA03544-OCT12 11.33 0.60 12.57 1.20 9.57 11.37 1.80 9.77 A00113123 HH-12-008 CA03339-OCT1 2 10.84 0.60 12.04 1.10 9.16 10.86 1.70 9.36 A00113143 HH-12-008 CA03413-OCT12 10.63 0.10 2.73 8.40 2.09 10.59 8.50 2.12 A00113088 HH-12-008 CA03267-OCT12 9.79 0.40 11.10 0.90 8.49 9.79 1.30 8.63 A00113103 HH-12-008 CA03339-OCT12 11.89 0.70 12.98 1.30 9.86 11.86 2.00 10.09 A00109603 HH-12-009 CA02043-NOV 12 11.26 0.90 12.01 1.30 9.04 11.24 2.20 9.34 A00113208 HH-12-010 CA02200-NOV 12 10.00 0.40 11.21 1.00 8.58 9.98 1.40 8.71 A00113163 HH-12-010 CA03413-OCT12 10.28 0.30 11.42 1.20 8.78 10.28 1.50 8.88 A00113183 HH-12-010 CA02122-NOV 12 10.77 0.20 12.17 1.20 9.39 10.79 1.40 9.46 A00113223 HH-12-010 CA02200-NOV 12 10.42 0.50 11.37 1.30 8.67 10.47 1.80 8.84 A00113243 HH-12-010 CA02421-NOV 12 9.58 0.40 10.74 1.00 8.21 9.61 1.40 8.35 A00109653 HH-12-011 CA02347-NOV 12 10.63 1.00 11.48 1.00 8.59 10.59 2.00 8.92 A00109629 HH-12-011 CA02347-NOV 12 10.07 0.60 11.07 1.10 8.40 10.10 1.70 8.60 A00113263 HH-12-012 CA02421-NOV 12 10.63 0.30 11.64 1.40 8.95 10.65 1.70 9.05 A00113282 HH-12-012 CA02548-NOV 12 10.42 0.60 11.28 1.30 8.57 10.47 1.90 8.77 A00109694 HH-12-0I3 CA02664-NOV 12 10.21 0.50 11.11 1.20 8.47 10.17 1.70 8.64 A00109672 HH-I2-013 CA02548-NOV I2 10.77 0.70 11.70 1.20 8.86 10.76 1.90 9.09 A00113303 HH-12-014 CA02548-NOV 12 10.28 0.50 11.60 0.90 8.85 10.25 1.40 9.02 A00113323 HH-12-014 CA02734-NOV 12 10.42 0.40 11.81 1.00 9.05 10.45 1.40 9.18 A00113343 HH-12-014 CA02881-NOV 12 10.35 0.40 11.64 1.00 8.91 10.31 1.40 9.05 A00113364 HH-12-014 CA02881-NOV 12 10.98 0.60 12.18 1.10 9.27 10.97 I.70 9.47 A00109725 HH-12-015 CA02734-NOV 12 11.12 0.60 12.22 1.20 9.30 11.10 1.80 9.50 A00163150 HH-12-018 Al2-125980) 9.61 0.43 10.70 1.00 8.17 9.61 1.43 8.32 A00113376 L-12-088 Al2-125980) 10.71 0.36 11.60 1.50 8.90 10.76 1.86 9.02 A00109843 L-I2-089 Al2-125980) 11.14 0.72 12.10 1.30 9.16 11.19 2.02 9.41 A00113439 L-12-090 Al2-125980) 9.76 0.29 10.10 1.70 7.75 9.74 1.99 7.85 A00113418 L-12-090 Al2-125980) 11.00 0.72 11.20 1.80 8.46 10.99 2.52 8.71 A00113467 L-12-090 Al2-125980) 9.95 0.43 10.70 1.30 8.17 9.91 1.73 8.32 A00109863 L-12-091 Al2-125980) 10.44 0.43 10.90 1.70 8.33 10.46 2.13 8.47 A00109901 L-12-092 Al2-12598(1) 10.33 0.58 11.20 1.20 8.51 10.29 1.78 8.71 A00109920 L-12-092 Al2-125980) 9.99 0.43 10.70 1.40 8.17 10.01 1.83 8.32 A00109940 L-12-093 Al2-12598(i) 10.08 0.43 10.40 1.70 7.94 10.07 2.13 8.08 A00109965 L-12-093 Al2-12598(i) 9.98 0.43 9.80 2.10 7.47 10.01 2.53 7.62 A00163041 L-I2-094 Al2-125980) 9.96 0.43 10.30 1.70 7.86 10.00 2.13 8.01 A00113491 L-12-094 Al2-12598(i) 9.97 0.43 9.90 2.00 7.55 9.98 2.43 7.70 A00163021 L-12-094 Al2-12598(i) 11.32 0.72 12.00 1.50 9.09 11.31 2.22 9.33 A00109993 L-12-095 Al2-12598(i) 10.77 0.36 11.30 1.70 8.66 10.72 2.06 8.78 A00163067 L-12-096 Al2-125980) 10.71 1.01 11.80 0.90 8.83 10.75 1.91 9.17 A00163507 L-12-097 Al2-125980) 9.91 0.51 10.40 1.50 7.92 9.92 2.01 8.08 A00163524 L-12-098 Al2-125980) 9.93 0.29 10.70 1.40 8.22 9.91 1.69 8.32 A00163543 L-12-098 Al2-125980) 11.18 0.43 12.50 1.20 9.57 11.21 1.63 9.72 A00163129 L-12-099 Al2-125980) 10.06 0.58 11.30 0.90 8.59 10.07 1.48 8.78 A00163109 L-12-099 Al2-125980) 9.56 0.58 10.60 0.90 8.05 9.53 1.48 8.24 A00163087 L-12-099 Al2-125980) 10.60 0.43 11.20 1.60 8.56 10.60 2.03 8.71 A00163555 L-12-100 Al2-125980) 10.56 0.36 11.10 1.70 8.51 10.57 2.06 8.63

Count 53 53 53 Min 9.37 0.10 2.73 Max 11.89 1.01 12.98 Avg 10.38 0.50 11.14

The highlight indicates anomalous results. It is unknown whether the 1-2% hmFe calculated in these samples is actual hematite or hydroxide Fe or represents minor Fe' in silicate phases.


Review of Table 3 shows that all but one of the FBLKs assayed as expected. % TFe averaged 10.38 and ranged from a minimum of 9.37 to 11.89 and % magFe was low in all samples. All but one of the samples also report low hmFe generally in the range of 1% to 2%. For the one anomalous sample the hmFe values is 8.40%. Further inspection shows that FeO for this one sample is very low compared to the other samples. The FeO assay for this one sample is suspect. WGM's recommendation is that the first step in addressing this issue, and all assay issues, is to re-assay the Issue Sample and the two samples in sequence on either side in the assay sequence. WGM recommends that the assaying include the entire analytical package standard to the Project. Once these results are reviewed a decision to re-assay more samples can be made. If assay errors for adjacent samples are indicated, then the new assays will need to be substituted into the database in place of the erroneous original assays.

Other than for this one assay issue the results for the FBLKs indicate no sample mix-ups in the lab or field. The results for the FBLKs along with the results for the Preparation Duplicates inserted into the SGS sample stream also indicate minimal carry over iron from one sample to the next during sample preparation. No carry over iron during crushing was possible for samples processed at Actlabs because a sand wash was used between samples.

FIELD STANDARDS (FSTD)

Three different Standards were used through the drilling program. One of the Standards, SCH-1, was a Certified Reference Standard purchased from CANMET; the two others denoted as MRC-1 and MRC-2 (Appendix 3) were purchased from Midland Research Center ("MRC"). MRC is a laboratory located in Nashwauk, Minnesota. MRC-1 and MRC-2 were made by MRC from iron ore available to them following rough grade specifications provided by WGM. These two Standards contained varying amounts of magnetite and minor hematite. The Standards comprised pulped rock provided to WGM in glass jars or metal foil-lined envelopes. Standards, similar to Blanks, were inserted into the sample stream at a frequency of approximately one per 20 Routine samples. The three Standards in use were alternated. When a Standard was called for a 25 to 35 g aliquot of material was spooned into a small plastic bag inserted into a regular sample bag and given a regular, in-sequence sample identifier.

On the charts following the assay results for the Standards are plotted and distinguished by Standard ID and also by the laboratory where the samples were assayed. The Actlabs assays are plotted against analytical sequence. The SGS-Lakefield sample assays are plotted against certificate of analysis date.

Figures 1 (SGS-Lakefield assaying) and 2 (Actlabs assaying) show results for % TFe for the three Standards (MRC-1, MRC-2 and SCH-l) plus the Field Blanks.

One sample (A00163127) of MRC-1 and one sample designated as MRC-2 (A00109954) returned inappropriate values for %TFe at Actlabs. The error for A00163127 may be mix-up in the field. The assay values reported are appropriate for MRC-2.

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SCH-1 Accepted Value

6 Watts, Griffu and McOuat Cliffs Natural Resources March 7, 2013

Figure 1. %TFe Results at SGS-Lakefield for Field Standards

Figure 2. %TFe Results at Actlabs for Field Standards

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Îj Watts, Griffis and McOuat Cliffs Natural Resources March 7, 2013

For A00109954 the %TFe, magFe, FeO and SiO2 values reported are not appropriate for either of the other Standards. The sample books have been checked in both cases and resolution is not possible from documents available. In the case of A00109954 a check of the archived core might help resolve the issue, but the core is not presently accessible, so re-assay of the Issue Sample and immediately adjacent samples is recommended to provide resolution.

Figure 3 and 4 show results for % magFe for the three Standards plus the Field Blanks.

At SGS-Lakefield the magFe values for MRC-1 and MRC-2 on average are very slightly higher than the values received from either MRC or Actlabs. One sample of MRC-2 (A00109612) assayed at SGS-Lakefield reports assays higher than the others and is a little too high while the XRF results and FeO results are normal.

For samples of FSTD assayed at Actlabs one instance of MRC-1 reported a value of magFe more appropriate for MRC-2. This aforementioned sample A00163127 as mentioned under %TFe may have been misidentified in the field.

Two instances of MRC-2 returned significantly low values for magFe. One of these, A00109954, has been previously mentioned. The other, A00163064, reported appropriate results for TFe but low magFe.

Re-assays of these and their immediately adjacent samples are recommended.

Figure 3. %magFe Results at SGS-Lakefield for Field Standards

9

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Watts, Griffis and McOuat Cliffs Natural Resources March 7, 2013

Figure 4. %magFe Results at Actlabs for Field Standards

Figures 5 and 6 show results for FeO at SGS-Lakefield and Actlabs.

The plots for FeO are challenging because of the spread of values.

For SGS-Lakefield sample A00113141 reports an excessive value of FeO. This samples values for TFe and magFe are however appropriate so some lab assay error for magFe is indicated. In addition, as previously highlighted in Table 3, one instance of a FBLK also returned a very low and inappropriate value. One sample, A00109954, not shown on Figure 6, but mentioned previously returned a low value for FeO at Actlabs.

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• Watts, Griffis and McOuat Cliffs Natural Resources March 7, 2013

Figure 5. %FeO Results at SGS-Lakefield for Field Standards

Figure 6. %FeO Results at Actlabs for Field Standards

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IZ SZ a+ > > V

VI N p CertificateZlate Z ô

Ob 00 Ob A A A

- MRC-1 Accepted Value MRC-2 Accepted Assays

- SCH-1 Accepted Assays ♦ SCH-1 Assays

• MRC-1 Assays A MRC-2 Assays

70.0

60.0 • •e

w • s s

50.0 •

p 40.0 i in ~ F

30.0 + r

20.0 I

10.0 -

0.0 --- i , , i t , ,

0 100 200 300 400 500 600

Assay Sequence

• MRC-1 Assays - MRC-1 Accepted Value

A MRC-2 Assays - MRC-2 Accepted Value

• FBLKAssays -SCH-1 Accepted Value


Figures 7 and 8 show results for Si02 in FSTDs at SGS-Lakefield and Actlabs.

Figure 7. %Si02 Results at SGS-Lakefield for Field Standards

Figure 8. %Si02 Results at Actlabs for Field Standards

- 12 -

50.0 CL)

Co

11-40.0

a L û 30.0 — ~o x

= 20.0 t ♦ SGS n=19

11) Actlabs n=10

X1 10.0 ,F ,

LL

0.0 0.0

10.0

20.0 30.0

40.0

% TFe_H

• SGS-Lakefield • Actlabs 1:1 Line

50.0

Watts, Grids and McOuat Cliffs Natural Resources March 7, 2013

No issues other than for some samples previously mentioned are evident for Si02 at either lab for the FSTDs or FBLKs.

Additionally, but not shown, pycnometer SG results are a little noisy as indicated by determinations made on many of the FSTDs despite reasonable TFe assays.

CORE DUPLICATES (FSTD)

Second half core Duplicates were taken at a frequency of 1 per 50 Routine samples. Second-half core Duplicate sampling involves the sampling of the second half of the drill core. On a routine basis one half of the core is sampled for assay and the other half is retained for archive in the original core tray. When a second-half core Duplicate is sampled, both halves of the sample interval are sampled leaving no core in the tray. The first half is considered the "Original" portion and the other half the Duplicate. The Original portion is given an in-sequence sample identifier. The Duplicate sample is assigned a sample identifier that may be in sequence, directly follow the Original portion or displaced by several sample positions from the Original portion.

Figures 9, 10, 11 and 12 show comparison between "original" and duplicate assay results for TFe, magFe, FeO and Si02 for the FDUPs.

Figure 9. %TFe results for Field Duplicates at SGS-Lakefield and Actlabs

- 13 -

SGS n=19

Actlabs n=10

0.0 10.0 20.0 30.0

% magFe_H

• SGS • Actlabs 1:1 Line

~. co u

3 40.0

a

8 30.0 w ~

-a 20.0 _ o u a = 10.0

a

00 0.0 ~

50.0

40.0

50.0

20.0 30.0 40.0

% FeO _H

• Actlabs —1:1 Line

10.0

• SGS

0.0

• SGS n=19

Actlabs n=10

40.0

30.0

20.0

10.0

0.0

WI tts, Griffis and McOuat Cliffs Natural Resources March 7, 2013

Figure 10. %magFe results for Field Duplicates at SGS-Lakefield and Actlabs

Figure 11. %FeO results for Field Duplicates at SGS-Lakefield and Actlabs

-14-

40.0 50.0 60.0

% Si02 H H

• Actlabs 1:1 Line

10.0 20.0 30.0

C SGS

70.0 80.0

80.0 CI) ~ " 70.0 o_

60.0 a, ô ~ 50.0 To

40.0 -o C â 30.0 v.)

20.0 N

~ 10.0

• •

"'As •~t.

•9. • •` SGS n=19 Actlabs n=10 •

Watts, Grils and McOuat Cliffs Natural Resources March 7, 2013

Figure 12. %Si02 results for Field Duplicates at SGS-Lakefield and Actlabs

Results for FDUPs are generally acceptable but there are a few samples where correlation is not quite as good as might be expected. The sample pair A00113083/ A00113084 shows poor correlation for TFe, magFe and Si02. Sample pair A00113148/A00113150 shows poor correlation for FeO. If the archived core was accessible the recommended process would be first to examine the core to be sure no field sampling irregularities are indicated. Otherwise re-assay of the Issue Samples and their immediate neighbors is recommended to check the repeatability of sample assays.

Table 4 presents a summary of Issue Samples from forgoing analysis of field-inserted QA/QC materials.

TABLE 4. SUMMARY OF FIELD-INSERTED QA/QC ISSUE SAMPLES

SamplelD DriliholeID Comment A00113143 HH-12-008 FBLK see Table 3 A00163127 L-12-099 FBLK, MRC-1, Actlabs, TFe high, magFe low. Likely field error

and sample is MRC-2. A00109954 L-12-093 FSTD, MRC-2, Actlabs, TFe, magFe, FeO all low. A00109612 HH-12-009 FSTD, MRC-2, SGS, magFe slightly too high A00163064 L-12-096 FSTD, MRC-2, Actlabs, TFe & FeO OK; bad magFe. A00113141 HH-12-008 FSTD, MRC-1, SGS, TFE & magFe OK; FeO high. A00113804 HH-12-002 FSTD, SCH-1, SGS, TFe, magFe OK; FeO high A00109636 HH-12-011 FSTD, SCH-1, SGS, TFe, magFe OK; Fe0 high

A00113083/ A00113084 HH-12-008 FDUP, SGS, Correlation not too good.

A00113148/ A00113150 1W-12-010 FDUP, SGS, Correlation not too 000d.

- 15 -

Wilts, Griffis and McOuat Cliffs Natural Resources March 7, 2013

Fe-BALANCE

Since we have three different, and independent types of Fe determinations: TFe, magFe and FeOTota1, for all samples and certain relationships between the permissible values are stoichiometrically defined we can infer possible assay errors by inspection of the relationships between the three iron assays.

The permissible relationships between Fe species are developed from equations 2 and 3 on page 9. Where %Other Fe (from equation 3) is less that -2% assay error is suspected. Where %hmFe (from equation 2) is less that -2% error is also suspected. Where magFe exceeds TFe error is suspected. In WGM's process of calculation of %OtherFe and %hmFe small negative values greater than -2 are ignored and these parameters are replaced with 0. Neither TFe or magFe are revised only %hmFe can be reduced so TFe from XRF is not exceeded by the sum of magFe, hmFe and OtherFe.

The samples that returned Fe-assays out-of-balance are listed in Table 5.

There are only two samples where magFe exceeds TFe and the margin between TFe and magFe is small so the assay errors for these two samples may not be very serious. Five samples are suspect on the basis of %OtherFe being less than -2%. Experience suggests that the -2%.

threshold of interest may be a little too severe and WGM recommends that only the three samples where %Other Fe is less than -4% be re-assayed. There are 9 samples where %hmFe calculated is less than -2%. This type of error suggests probable error for either FeO or magFe whilst XRF values are usually robust. WGM's recommendation is that re-assay of the suspect samples and immediate neighbors include the entire analytical package standard to the Project.

IN-LABORATORY OA/QC

As aforementioned both SGS-Lakefield and Actlabs are accredited facilities and as part of their own quality assurance requirements they operate internal QA/QC programs.

These programs include insertion of Blanks, Certified Reference Standards and assay of Duplicates along with samples they receive from clients.

At both labs Certified Reference Standards were assayed along with the Lamêlée and Hobdad samples from the field. Both labs also assayed Analytical Duplicates. In addition Actlabs prepared and assayed Preparation Duplicates, which it refers to as Splits. Preparation Duplicates are Duplicates created at the crushing stage which proceed through the remainder of the assaying protocol as two distinct samples. At SGS-Lakefield Preparation Duplicates, which it calls Replicates may also have been prepared and assayed, but WGM is uncertain because no results for such samples were reported to WGM. SGS-Lakefield did however report results for Preparation Blanks. Actlabs apparently did not use Preparation Blanks. Preparation Blanks are samples inserted into the preparation protocol prior to crush, that are crushed and pulverized and continue through the remainder of the assay protocol like regular samples.

- 16-

ON MI 11111.1 OM MO OS OM OM IMP SO IMO OM Mil Olt, OW IMO GIN IMO MO

mitts, Grifrs and MMOuat Cliffs Natural Resources March 7, 2013

TABLE 5. SUSPECTED SAMPLES FROM FE-BALANCE

Sample Hole Certificate Sample From To TFe magFe Sat hmFe FeO Other Fe Other Fe Check TFe hmFe ID ID ID Type (m) (m) (%) (%) (%) (%) (%) Alert vs magFe Alert

A00113022 HH-12-005 CA02968-OCT 12 Routine 282.90 288.90 26.86 23.90 -11.20 28.43 14.13 OK OK ALERT A00109551 HH-12-006 CA03616-OCT 12 Routine 254.50 260.50 8.88 0.50 -10.90 24.96 19.23 OK OK ALERT A00109550 HH-12-006 CA03616-OCT12 Routine 248.50 254.50 13.22 0.60 -11.50 31.34 24.16 OK OK ALERT A00113141 HH-12-008 CA03413-OCT12 FSTD 497.00 497.00 24.13 15.50 -4.40 23.39 13.01 OK OK ALERT A00113127 H11-12-008 CA03339-OCT12 Routine 427.70 434.30 0.52 0.60 -0.40 0.69 0.34 OK Alert OK A00113142 1-11I-12-008 CA03413-OCT12 Routine 501.90 508.00 2.38 0.20 -6.10 10.76 8.30 OK OK ALERT A00113146 H11-12-010 CA03413-OCT12 Routine 81.70 85.00 10.35 0.40 -3.90 17.97 13.83 OK OK ALERT A00113145 H11-12-010 CA03413-OCT12 Routine 80.00 81.70 27.77 19.60 8.20 2.37 -4.69 Alert OK OK A00109644 H1I-12-011 CA02347-NOV 12 Routine 413.20 418.00 38.75 39.00 -0.30 15.78 -0.73 OK Alert OK A00109639 1-II--12-011 CA02347-NO V 12 Routine 359.80 366.20 37.98 21.60 16.40 6.03 -2.51 Alert OK OK A00113289 HH-12-014 CA02548-NOV 12 Routine 191.90 195.80 22.59 21.60 -5.70 17.86 6.68 OK OK ALERT A00113330 HH-12-014 CA0288 1-NOV12 Routine 347.00 352.00 31.40 28.70 -4.90 22.04 7.57 OK OK ALERT A00113453 L-12-090 Al2-12598(i) Routine 201.60 208.00 33.71 21.42 12.30 3.00 -4.81 Alert OK OK A00109956 L-12-093 Al2-12598(i) Routine 150.00 154.00 28.15 24.53 3.60 2.70 -6.08 Alert OK OK A00163069 L-12-096 Al2-12598(i) Routine 113.50 119.00 31.08 16.57 14.50 3.80 -2.57 Alert OK OK A00163065 L-12-096 Al2-12598(i) Routine 94.50 99.50 14.84 11.58 -4.40 14.80 7.65 OK OK ALERT

- 17-

Watts, Griffis and McOaat Cliffs Natural Resources March 7, 2013

At Actlabs the frequency of use of quality control materials varies depending on batch size. Table 6 provides a summary of the Quality Control Materials used for the 1 batch of samples completed at Actlabs (one batch contained all of the Lamêlée and Hobdad samples processed by Actlabs).

TABLE 6. SUMMARY OF IN-LAB QUALITY CONTROL SAMPLES AT ACTLABS

Sample Classification Number of Instances Analytical Method Samples from Field Analytical Blanks (ABLK)

Analytical Duplicates (ADUP)

Lab Standards (LSTD)

496 (Cert#Al2-12598(i)) 2 0 59

16 16 46

6 0 84

XRF-WR Satmagan FeO

XRF-WR Satmagan FeO

XRF Satmagan FeO

Actlabs used 5 different Standards for monitoring XRF assays and 7 different ones for FeO.

SGS-Lakefield similarly inserted Certified Reference Standards, for monitoring XRF and FeO titration, Preparation Blanks and Analytical Blanks. The Preparation Blanks were used for the XRF, Satmagan and FeO assays. The Analytical Blanks were only used for XRF. No Satmagan results for Standards, Blanks or Duplicates are reported.

TABLE 7. SUMMARY OF IN-LAB QUALITY CONTROL SAMPLES AT SGS-LAKEFIELD Sample Classification Number of Assay Instances Analytical Method

Samples from Field 750 Analytical Blanks (ABLK) 22 XRF-WR

0 Satmagan 0 FeO

Preparation Blanks (PBLK) 22 XRF-WR 22 Satmagan 22 FeO

Analytical Duplicates (ADUP) 25 XRF-WR 25 Satmagan 25 Fe0

Lab Standards (LSTD) 42 XRF 0 Satmagan 50 Fe0

SGS-Lakefield used 4 different Standards (607-1, SARM-12, SCH-1 & TILL4) for XRF and 4 Standards (607-1, 609-1, 681-1 & MW-1) for FeO.

- 18 -

bits, Gris and McOuat Cliffs Natural Resources March 7, 2013

Table 7 presents summary results for the 4 different Standards (plus the PBLK and ABLK) used by SGS-Lakefield for control of XRF analysis in terms of TFe results. Tables 8, 9, 10 and 11 show results for FeO, Si02 and MnO. As aforementioned no certified reference Standards were used for magFe (Satmagan).

TABLE 8. SUMMARY RESULTS FOR SGS-LAKEFIELD LAB STANDARDS FOR TFE

LabStdID TFe Recommended

Value

Count of pctTFe_H

Avg of pctTFe_H

Min of pctTFe_H

Max of pctTFe_H

607-1 30.89 9 30.84 30.70 31.12 Lithium Blank XRF 22 0.00 0.00 0.00 Lkfd-Sample Prep BLK 21 0.23 0.13 1.33 SARM-12 66.63 16 66.66 66.24 66.94 SCH-1 60.73 7 60.80 60.50 61.06 TILL4 3.97 10 4.06 4.04 4.10

TABLE 9. SUMMARY RESULTS FOR SGS-LAKEFIELD LAB STANDARDS FOR FEO

LabStdID

FeO

Count of

Avg of

Min of

Max of Recommended

Value pctFeO_H pctFeO_H pctFeO_H pctFeO_H

607-1 7.65 17 7.51 7.23 7.75 609-1 20.13 12 19.92 19.64 20.50 681-1 8.699 9 8.69 8.62 8.76 Lkfd-Sample Prep BLK 21 0.23 0.03 0.50

TABLE 10. SUMMARY RESULTS FOR SGS-LAKEFIELD LAB STANDARDS FOR SiO2

LabStdID Si02 Recommended

Value

Count of pctSiO2_H

Avg of pctSiO2_H

Min of pctSi02_H

Max of pctSiO2_H

607-1 6.57 9 6.61 6.56 6.67 Lithium Blank XRF 22 0.01 0.01 0.01 Lkfd-Sample Prep BLK 21 59.85 58.80 60.20 SARM-12 16 0.33 0.30 0.36 SCH-1 8.085 7 8.12 8.05 8.19 TILL4 10 65.70 64.90 66.20

- 19 -


TABLE 11. SUMMARY RESULTS FOR SGS-LAKEFIELD LAB STANDARDS FOR MnO

LabStdID MnO Recommended

Value

Count of pctMnO_H

Avg of pctMnO_H

Min of pctMnO_H

Max of pctMnO_H

607-1 0.328 9 0.32 0.31 0.33 Lithium Blank XRF 22 0.01 0.01 0.01 Lkfd-Sample Prep BLK 21 0.01 0.01 0.03 SARM-12 0.219 16 0.22 0.20 0.23 SCH-1 1.003 7 1.00 0.98 1.02 TILL4 0.06 10 0.05 0.05 0.06

Tables 12 to 14 show results for Actlabs inserted lab Standards.

TABLE 12. SUMMARY RESULTS FOR ACTLABS LAB STANDARDS FOR TFe

LabStdID Fe Count of Avg of Min of Max of Recommended pctTFe_H pctTFe_H pctTFe_H pctTFe_H

Value AC-E 1.77 1.76 1.76 1.76 BE-N 8.98 1 8.97 8.97 8.97 IF-G 39.06 1 38.92 38.92 38.92 MICA-FE 17.94 1 18.02 18.02 18.02

TABLE 13. SUMMARY RESULTS FOR ACTLABS LAB STANDARDS FOR FeO

LabStdID FeO Recommended

Value

Count of pctFeO_H

Avg of pctFeO_H

Min of pctFeO_H

Max of pctFeO_H

BIR-la 8.34 8 8.36 8.00 8.70 GA 1.32 7 1.36 1.30 1.40 j Gb-2 5.41 48 5.34 5.10 5.70 JR-1 0.49 7 0.50 0.50 0.50 SY-4 2.86 7 2.86 2.70 3.00

TABLE 14 SUMMARY RESULTS FOR ACTLABS LAB STANDARDS FOR SiO2

LabStdID Count of petSi02_H

Avg of petSi02_H

Min of petSi02_H

Max of pctSiO2_H

AC-E 70.35 1 70.21 70.21 70.21 BE-N 38.2 1 38.63 38.63 38.63 IF-G 41.2 1 40.76 40.76 40.76 MICA-Fe 34.4 34.68 34.68 34.68

- 20 -

SGS n=24 Actlabs n=16

10.0 50.0 40.0

50.0 w - .. ro " 40.0 L- 71. 7 C T•o 30.0 — u - • •• c 20.0 — a x L21 10.0 — I— _ é

0.0 0.0 20.0 30.0

%TFe_H Original

• Actlabs —1:1 Line • SGS-Lakefield

50.0 a - .. _ ca u •â 40.0 — m 0

Ti 30.0 — g.

To â20.0- x - I ▪ 10.0 - ~

~ E

' 0.0

SGS n=24 Actlabs n=16

0.0 10.0 20.0 30.0 40.0 50.0

%magFe_H Original

• Actlabs 1:1 Line • SGS-Lakefield

`j Watts, Grids and McOuat Cliffs Natural Resources March 7, 2013

Analytical results for the lab analytical Duplicates in terms of TFe, magFe and Fe0 are shown in Figures 13 to 15. As expected assay results for duplicate samples strongly correlate.

Figure 13. Results for ADUPs at SGS-Lakefield and Actlabs - %TFe

Figure 14. for ADUPs at SGS-Lakefield and Actlabs - %magFe

-21 -

50.0 a

" 40.0 a 0 ~o 30.0

,a ~

2 20.0 SGS n=24

Actlabs n=16 o 10.0 a

0 0 1102t v i

0.0 10.0 20.0 30.0 40.0 50.0

%FeO_H Original

• Actlabs 1:1 Line • SGS-Lakefield

•

`j Watts, Grids and McOuai Cliffs Natural Resources March 7, 2013

Figure 15. for ADUPs at SGS-Lakefield and Actlabs - %FeO

The results indicate that the Analytical Duplicates Standards performed generally well and Routine assays are accurate because assays for the Standards are close to Recommended or Accepted Certified values for the Standards. One instance of Lakefield's Preparation Blank on certificate of analysis CA02539-OCT12 however returned a highly anomalous assay value for Fe and SGS-Lakefield should be asked about this result.

CONCLUSIONS

WGM's review and analysis of QA/QC results for sampling and assaying included review of the in-field and the in-laboratory analytical results for conformity to expectations based on accepted, or certified, and maximum and minimum acceptable values for each Standard or Blank and acceptable variance for Duplicates. It also includes review of Iron balance between TFe determined by XRF, magFe determined by Satmagan and FeOTotaJ determined by titration.

This monitoring and review shows most program assays are accurate and precise. It also has led to the identification of a number of samples with suspect assays. These samples are called Issue Samples.

Where non-conformity of results was identified for specific instances then explanation through examination of field sampling records and/or archived drill core is requested. However, since the onset of winter and the inaccessibility of the Project site to allow for the examination of archived drill core this one important aspect discontinued. Sample/Assay issues identified are in the database compiled into an Issues Table to enable the tracking of the follow-up process and results. Issues not resolved through examination of sampling records or the archived drill core require re-assay. WGM believes the re-assay of rejects is better than check assaying of pulps.

- 22 -

r

1

WiriIts, Griffis and McOuat Cliffs Natural Resources March 7, 2013

WGM recommends that the re-assay of Issue Samples and samples immediately adjacent to Issue Samples (minimum two samples on either side of the Issue Sample) be requested.

It is only through check assaying of the Issue Samples and immediate neighbors in the sequence that the significance of suspect sample assays can be measured.

When the re-assays are reported these again require review to determine whether the new results are to be substituted for the original assays in the assay table in the project database or further samples require re-assaying.

Sincerely,

t t Peter Banks, P.Geo.

Senior Associate Geologist (Ordre des Géologues du Québec no. 1712)

1 r 23 -

1

19 Watts, Griffis and McOuat Cliffs Natural Resources March 7, 2013

APPENDICES

-24-

`j Watts, Griffas and McOuat Cliffs Natural Resources March 7, 2013

1

APPENDIX 1: SGS-LAKEFIELD ASSAYING PROTOCOLS

-25-

Project Name: Bloom Lake

Client: Cliffs Natural Resources

Project Number: 13521-001 and 002

Project Manager: Guillaume Chiasson

Sample Processing

It is understood that two type of samples will be received; 1) Mine samples and 2) Exploration

samples. It is also understood that the two types of samples should be treated the same way but must

be reported and billed separately. The Mine samples will be treated under SGS project 13521-001

and the Exploration samples under SGS project 13521-002. The samples will be treated as described

below and as depicted in Figure 1.

Upon receipt, each sample will be inventoried and weighed. All wet samples will be dried as

necessary prior to processing. Each sample will be crushed to nominal passing 14' and rotary split to

form a 6.2 kg to 6.4 kg charge. The reject will be weighed and stored for possible future use. The

—6.2 kg charge will be the working fraction. This fraction will be screened to 850 pm (20 mesh) and

roll crushed to 100% passing 850 pm.

The crushed material will be rotary (12-way splitter) split to produce four fractions:

1. A —500 g aliquot which will be weighed and stored for possible future use.

2. A 500 g aliquot will be riffled-out in two 250 g charges.

3. One —250 g charge which will be weighed, pulverized and submitted for head assays,

including Whole Rock Analysis (WRA) by XRF which includes SiO2, Al2O3, Na2O, K2O,

CaO, MgO, Fe2O3, MnO, TiO2, P2O5, Cr2O3, V2O5 and LOI. In addition, this fraction

will also be submitted for analysis of S(total), C as well as Satmagan and specific

gravity determination. Specific mine samples will be assayed for FeO as well.

4. A —5 kg portion which will be weighed and stored.

5. One —250 g charge will be weighed and processed further as described below.

Dry screen size analysis will be conducted on the 250 g aliquot to a bottom screen size of 75 pm

(200 mesh). All fractions will be weighed and kept individually. The -75 pm fraction will be weighed

and submitted for assays (WRA and Satmagan).

The +75 pm material will be recombined and wet screened at 75 pm to ensure the fine fraction has

been removed prior to additional processing. The wet -75 pm fraction will be discarded.

1 r 1 t r r 1 1

1

Assay (WRA, Satmagan)

HLS Sink Dry Screen

300 pm

Pulverize HLS Sink (-300 pm)


1 HLS Float Dry Screen

300 pm

Pulverize HLS Float (+300 pm)


~ 300 pm Pulverize

HLS Floa (-300 pm)


(~ i

f

Reject Rotary split Weigh and store

Rotary split -5 kg Weigh and store

Dry screen size analysis (to 75 pm)

-500 g Store remainder (Spare charge)

Recombine +75 pm -75 um Weigh Assay (WRA, Satmagan)

Wet screen at 75 pm

• +75 pm Dry and Weigh

Heavy Liquid

Separation (3.32 g/cm3)

-250 g

Head assays (WRA, Satmagan,

S, C, S.G.)

hundred of samples, the heavy liquid products will both be dry screened at 300 pm, resulting in four

products:

1. +300 pm HLS Sink

2. -300 pm HLS Sink

3. +300 pm HLS Float

4. -300 pm HLS Float

Every fraction will be weighed, pulverized and submitted for WRA and Satmagan analysis.

QA/QC Measures:

The internal blanks, standards and duplicates performed on the head assay samples or on the

metallurgical test products will be provided to Cliffs in the certificates of analysis.

The specific gravity of Methylene Iodide will be checked every 25 samples as per SGS Standard

Operating procedure (SOP). A 100 ml volumetric flask will be filled to the mark and will be weighed,

and the SG of the liquid calculated. The checks will be recorded and will be provided to Cliffs as

needed.

Internal checks will be made on the head assays prior to be issued to Cliffs. The head sample specific

gravity (S.G.) and the Satmagan will be plotted against the iron grade in the head to ensure the results

are within acceptable limits. Repeats will be done on any outlier.

For the metallurgical test results, the calculated head assay will be compared to the direct head assay

for every HLS test and the results will be corrected or reviewed if outside acceptable limits. A QA/QC

control box will be located in every test sheet and will include the following: initials of the approving

metallurgist, approval date, basic indication of any issue with the results and the actions taken to fix

the problem. Every test will be reviewed, fixed (if necessary) and approved by the metallurgist in

charge of the program prior to be sent to Cliffs.

1 1 1 i

1 t

t ~ ✓

1

1

sGs Metallurgy Minerals Services

& Mineralogy Lakefield

Revision 0.0 Types. Method Summary

Doc. Code MS-LR-MIN-MET-DS-A01

Service Testing

Issued

Date 23-Oct-12

Review 23-Oct-13 Date

Minerals Services Method Summary

Determining Specific Gravity by Gas Pycnometer

1. SUMMARY The Multivolume Pycnometer 1305 is used to determine the specific gravity (S.G.) of a solid material. Specific gravity, or relative density, is a dimensionless number relating the density of a material to that of water at 4°C, whose specific gravity is set as 1. Specific gravity differs from bulk density (g/cm3) in that it describes the density of a material while discounting its porosity. The pycnometer is used to measure the volume of the sample without pores by replacing air with a lighter gas such as helium or nitrogen. The specific gravity is calculated from this volume and the weight of sample used.

2. SAMPLE REQUIREMENTS When using the gas pycnometer, the typical sample required is dry and pulverized (-100 mesh or 150 pm). The standard assay sample preparation method is suitable, and both the pycnometer and the test sample should be at room temperature. There should be sufficient sample to almost fill the appropriate cell; 5 cm3, 35 cm3 or 150 cm3.

3. PROCEDURE The Multivolume Pycnometer 1305 is standardized and calibrated using materials provided by the supplier. This step provides the calibration volume for calculation. The sample cell size is selected and the valve range is set using the >5< and >35< dials. Sufficient sample is used to fill the sample cell to approximately 2 mm from the top lip, and this mass is recorded. The centre knob is turned to the "Prep" position, the vent control is opened and the fill control is closed. The sample cell is placed in the chamber and the lid is tightened. The cell void space is filled with gas by switching the vent lever closed and opening the fill lever. Once the pressure reaches between 16.0 - 18.0 psi, the cell is depressurized by switching the vent lever open and the fill lever closed and allowing the pressure to drop to 0.5 - 1.0 psi. The gas fill and gas purge steps are repeated twice more in order to ensure that all air has evacuated the system. The centre knob is then turned to the "Test" position. After waiting for the pressure reading to stabilize, the zero control knob is used to adjust the pressure reading to 0.000 psi. The centre knob is turned back to the "Prep" position. (This step is repeated if the pressure reading changes at this point). The vent lever is switched to the closed position and the fill lever is opened. The pressure increases until 19.5 +/- 0.2 psi, at which point the fill lever is turned to the closed position. The pressure reading is allowed to stabilize and this is recorded as P1. The centre knob is switched to the "Test" position. The pressure reading is allowed to stabilize and this reading is recorded as P2. Specific gravity is determined using the following calculation:

Page 1 of 2

Confidential - Uncontrolled document unless printed on coloured paper and within SGS Minerals Services premises

1 1

1 A

__sGs____ Minerals Services

Metallurgy & Mineralogy Doc.

Lakefield

Revision 0.0

Method Summary Type

Doc. Code MS-LR-MIN-MET-DS-A01

Service Testing

Issued

Date 23-Oct-12

Review 23-Oct-13 Date

Minerals Services Method Summary

Determining Specific Gravity by Gas Pycnometer

Sample Weight (g) S.G. =

Cell Volume (mL) Calibration Volume (mL)

(P1/P2- 1)

4. REPORTING

The readings are manually recorded on a worksheet and entered into the master spreadsheet for calculation of specific gravity. Based on the requesting department, the results are then copied to the Laboratory Information Management System (LIMS) or reported in MS Excel to the results worksheet in the bucking room folder.

5. QUALITY CONTROL

The pycnometer is calibrated prior to taking measurements. When appropriate, duplicate analysis is performed once every 20 samples.

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Minerals Services Revision 0.1

Metallurgy & Mineralogy Type Method Summary

Lakefield Doc. Code MS-LR-MIN-MET-MS-A01

Service Testing Method Summary Issued Date 10-Apr-12

Measuring Magnetics by Minerals Services Satmagan Saturation Review Date 07-Dec-12

Magnetization Analyzer

1. SUMMARY

The Satmagan Saturation Magnetization Analyzer (Satmagan) is a magnetic balance that measures the percentage of magnetic material, specifically magnetite and magnetic iron, by weight in a sample.

2. SAMPLE REQUIREMENTS

A minimum of 2 g of dry sample, ideally finer than 150 mesh (106 um), is required for Satmagan analysis.

3. PROCEDURE

The Satmagan is allowed to warm up for at least 30 minutes, after which quality control routines (calibration, tare check and blank check) are conducted. The 10x button is depressed and the hand crank is lowered to disengage the magnet. The sample cell is filled sufficiently to allow closure with the plug and then placed in the sample holder. Using the gravity knob, the Satmagan is balanced to a zero reading. The magnet is engaged by moving the hand crank up. Using the magnet knob, the Satmagan is balanced and the reading is taken. (If the reading is greater than 70, the process is repeated using the 20x button.) The magnet is disengaged and the gravity balance is rechecked for stability. The reading and multiplier scale (10x or 20x) are entered in the computer spreadsheet and the percentage of magnetic iron is calculated.

4. REPORTING

The results are manually transferred to a computer spreadsheet to calculate the percentage of magnetic iron. The reading and calculated result are fed to the Laboratory Information Management System, establishing a secure audit trail.

5. QUALITY CONTROL

A series of quality control routines are undertaken at least once per shift, including calibration, a tare check and a blank check. Duplicate analysis is performed once every 20 samples.

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Minerals Services METHOD SUMMARY

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Method 9-9-1 Determination Sulphur and Carbon by Combustion-Infrared Detection

1. Parameter(s) measured, unit(s): Carbon, Sulphur %

2. Typical sample size: 0.1 to 0.5 g

3. Type of sample applicable (media): Rocks, ores, concentrates, metals and metallurgical products

4. Sample preparation technique used: Samples are crushed and pulverized to -150 mesh. A weighed sample is mixed with an accelerator, combusted and analyzed.

5. Method of analysis used: Combustion followed by infrared detection on LECO instrumentation.

6. Data reduction by: The results are exported via computer, on line, data fed to the Laboratory Information Management System with secure audit trail.

7. Figures of Merit: This method has been fully validated for the range of samples typically analyzed. Method validation includes the use of certified reference materials, replicates and blanks to calculate accuracy, precision, linearity, range, limit of detection, limit of quantification, specificity and measurement uncertainty.

The Limit of Ouantitation has been determined according to the following: element Limit of Quantification (LOO) % C 0.01 S 0.01

The estimated Measurement Uncertainty (MU) has been established for the following parameters of this method at the following concentration ranges and is based on laboratory replicate data (comprising of different samples, analysts, laboratory conditions, equipment, etc.,) for a period of greater than 3 months.

Page 1 of 2 SGS Minerals Services — Lakefietd Laboratory

P.O.Box 4300, 185 Concession Street, Lakefield, Ontario, Canada KOL 2H0 www.met.sos.com

Member of SGS Group (Société Générale de Surveillance)

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r Concentration range (%) Estimated Measurement Uncertainty (MU) +/- %

S C 0.01 — 0.1 0.007 0.004 0.1 - 1 0.02 0.02 1 - 5 0.1 0.1 5 - 10 0.2 0.2 10-50 0.85 0.98

8. Quality control: One blank, one replicate and a matrix-suitable certified or in-house reference material per batch of 20 samples.

9. Accreditation: The Standards Council of Canada has accredited this test in conformance with the requirements of ISO/IEC 17025. See www.scc.ca for scope of accreditation.

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SGS Minerals Services — Lakefield Laboratory P.O.Box 4300, 185 Concession Street, Lakefield, Ontario, Canada KOL 2H0

www.met.sos.com Member of SGS Group (Société Générale de Surveillance)

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Minerals Services METHOD SUMMARY ~I

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Method 9-6-1 Determination of Major Element Oxides and Rare Earth Oxides by Borate Fusion-XRF

1. Parameter(s) measured, unit(s): Si02, A1203, Fe203, MgO, CaO, Na20, K20, P205, MnO, Ti02, Cr203 Ni, Co, La203, Ce203, Nd203, Pr203, Sm203, BaO, SrO, Zr02, Hf02, Y203, Nb205, Th02, U308 , Sn02, W03, Ta205, LOI; %

2. Typical sample size: 0.2 to 0.5 g

3. Type of sample applicable (media): Rocks, oxide ores and concentrates

4. Sample preparation technique used: Samples are crushed and pulverized to -150 mesh. This method is used to report, in percentage, the whole rock suite (Si02, A1203, Fe2O3, MgO, CaO, Na20, K20, P2O5, MnO, Ti02, Cr203) and Ni, Co as well as the rare earth oxides (La203, Ce203, Nd203, Pr203, Sm203), and other major element oxides (BaO, SrO, ZrO2, Hf 02, Y2O3, Nb205, ThO2, U208). Sample preparation entails the formation of a homogenous glass disk by the fusion of 0.2 to 0.5 g of rock pulp with 7g of lithium tetraborate/lithium metaborate (50/50). The LOI at 1000°C is determined separately gravimetrically. The LOI is included in the matrix-correction calculations, which are performed by the XRF instrument software.

5. Method of analysis used: The disk specimen is analyzed by WDXRF spectrometry.

6. Data reduction by: The results are exported via computer, on line, data fed to the Laboratory Information Management System with secure audit trail. Corrections for dilution and summation with the LOI are made prior to reporting.

7. Figures of Merit: element Limit of Quantification (LOQ) % Si02 0.01 A1203 0.01 MgO 0.01 Na,O 0.01 K,O 0.01 CaO 0.01 P205 0.01 TiO2 0.01

SGS Minerals Services — Lakefield Laboratory P.O.Box 4300, 185 Concession Street, Lakefield, Ontario, Canada KOL 21-10

www.met.ses.com Member of SGS Group (Société Générale de Surveillance)

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Cr203 0.01 V205 0.01 Fe203 0.01 Mn0 0.01 Ni 0.01 Co 0.01 Ce203 0.02 Pr203 0.02 Sm203 0.03 Ba0 0.02 La203 0.01 Nd203 0.02 Zr02 0.01 Y203 0.02 Sr0 0.02 Nb205 0.01

This method has been fully validated for the range of samples typically analyzed. Method validation includes the use of certified reference materials, replicates and blanks to calculate accuracy, precision, linearity, range, limit of detection, limit of quantification, specificity and measurement uncertainty.

8. Quality control: One blank, one duplicate and a matrix-suitable certified or in-house reference material per batch of 20 samples.

9. Data approval steps:

Step Approval Criteria 1. Sum of oxides Majors 98-101%;

Majors + NiO + CoO 98-102% 2. Batch reagent blank 2 x LOQ 3. Inserted weighed reference materials

Statistical Control Limits

4. Weighed Lab Duplicates Statistical Control Limits by Range

10. Accreditation: This method is accredited by the Standards Council of Canada (SCC) and found to conform to the requirements of the ISO/IEC 17025 standard. See www.scc.ca for SGS Minerals Services Lakefield's scope of accreditation.

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SGS Minerals Services — Lakefield Laboratory P.O.Box 4300, 185 Concession Street, Lakefield, Ontario, Canada KOL 2H0

www.met.sas.com Member of SGS Group (Société Générale de Surveillance)

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Cliffs Natural Resources March 7, 2013

`j Watts, Grip and McOuat

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APPENDIX 2 — ACTLABS ASSAYING PROTOCOLS

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Quality Analysis .. . Innovative Technologies

Satmagan

Satmagan 135 is used to measure the magnetite content of iron ore samples. Accuracy is better than 0.4%. Samples are placed in special vials supplied by the manufacturer. The vial is placed in the measuring hole of the Satmagan 135 that has been calibrated with standards of varying magnetite content. The % magnetite is then determined.

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Quality Analysis ... Innovative Technologies

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• Note from WGM: The whole rock analysis'at Actlâbs-was performed under Code 8. Actlabs provided the following description for protocol Code 4c and stated the protocol for 4c is similar to Code 8.

Code 4C

To minimize the matrix effects of the samples, the heavy absorber fusion technique of Norrish and Hutton (1969, Geochim. Cosmochim. Acta, volume 33, pp. 431-453) are used for major element (oxide) analysis. Prior to fusion, the loss on ignition (LOI), which includes H2O+, CO,, S and other volatiles, can be determined from the weight loss after roasting the sample at 1050°C for 2 hours. The fusion disk is made by mixing a 0.5 g equivalent of the roasted sample with 6.5 g of a combination of lithium metaborate and lithium tetraborate with lithium bromide as a releasing agent. Samples are fused in Pt crucibles using an automated crucible fluxer and automatically poured into Pt molds for casting. Samples are analyzed on a Panalytical Axios Advanced wavelength dispersive XRF

The intensities are then measured and the concentrations are calculated against the standard G-16 provided by Dr. K. Norrish of CSIRO, Australia. Matrix corrections were done by using the oxide alpha - influence coefficients provided also by K. Norrish. In general, the limit of detection is about 0.01 wt% for most of the elements.

Code 4C Oxides and Detection Limits (%

Oxide Detection Limit

Si02 0.01 TiO2 0.01 A1203 0.01 Fe203 0.01 MnO 0.001 MgO 0.01 CaO 0.01 Na20 0.01 K20 0.01 P205 0.01 Cr203 0.01 V205 0.003 LOI 0.01

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Code 4F - FeO FeO is determined through titration, using a cold acid digestion of ammonium metavanadate, and hydrofluoric acid in an open system. Ferrous ammonium sulphate is added after digestion and potassium dichromate is the titrating

1101 agent.

This cold digestion will dissolve silicates and some sulphides. Pyrite may not be totally dissolved. The extent of dissolution is affected by the ferric iron content higher Fe(3+) concentration increases the solubility of pyrite. Concentrations of S(II) has a tendency to reduce Fe(3+) to Fe(2+). This is minimized in an open system. If the S concentration is greater than 10% an alternative hot digestion method is used for FeO.

1 Quality Analysis ... Innovative Technologies

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Code 4F

Analysis Method Detection Limit Upper Limit FeO Titration 0.01% -

e When titrating, the endpoint is determined by colour. Certain solutions high in MnO, or certain matrices make the endpoint determination difficult or impossible.

Modified method from Wilson (1955. Bull Geol. Sur. Gt. Britain, volume 9, pp. 56-68).

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APPENDIX 3 — MIDLAND RESEARCH CENTER STANDARD SPECIFICATIONS — MRC-1 AND MRC-2

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Midland Research Center Post Office Box 67

Nashwauk, MN 55769-0067

Telephone: 1-218-885-1951

Fax: 1.218-885-1955

E-mail: [email protected]

April 27, 2012

Project 450.301

Watts, Griffis and McOuat Iron Ore Quality Control Check Sample Material

(both samples prepared to 100% -325 mesh; showing variability among 200 g splits from 2 kg samples)

Sample Number

Quality Control Sample #1, Lower Grade Quality Control Sample #2, Higher Grade Fettot,lj Fe" Satmagan Mag Fe Si02 Fettot,lj Fe- Satmagan Mag Fe Si02

1 2 3 4 5 6

7 8 9 10

Mean

23.83% 8.44% 14.72% 60.7% 33.48% 8.22% 11.36% 46.1% 23.90% 8.44% 14.74% 61.0% 33.70% 8.37% 11.38% 46.0% 24.05% 8.37% 14.71% 60.9% 33.48% 8.37% 11.33% 46.5% 23.75% 8.44% 14.64% 60.8% 34.01% 8.29% 11.36% 43.5% 23.98% 8.44% 14.66% 60.4% 33.55% 8.29% 11.34% 43.1% 24.05% 8.29% 14.65% 61.0% 33.85% 8.29% 11.38% 45.5% 23.83% 8.44% 14.67% 61.0% 33.55% 8.29% • 11.31% 46.4% 23.90% 8.37% 14.64% 61.0% 33.93% 8.44% 11.33% 44.0% 23.90% 8.37% 14.64% 60.8% 33.78% 8.29% 11.31% 46.3% 23.90% 8.44% 14.76% 60.9% 33.63% 8.44% 11.36% 46.2% 23.91% 8.40% 14.68% 60.9% 33.70% 8.33% 11.35% 45.4%

NEI MI 2E1 NE In In r 1111111 111111 11E1 NMI all 111111 EN MIN MN UN NMI SIM

review of qa/qc for lamelee-hobdad 2012 program

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