MGB Resource Validation Report - JDVC

MINERAL RESOURCE VALIDATION REPORT
FOR THE EVALUATION OF

DECLARATION OF MINING PROJECT FEASIBILITY
OF
JDVC RESOURCES CORPORATION’s
OFFSHORE MAGNETITE SAND MINING PROJECT
COVERED BY MINERAL PRODUCTION SHARING AGREEMENT
DENOMINATED AS MPSA No. 338-2010-II-OMR
Offshore areas of the Municipalities of Sanchez Mira, Pamplona, Abulug, Ballesteros,
Aparri, Buguey and Gonzaga, Cagayan Province
Lands Geological Survey Division

Economic Geology Section
July 2018
Resource Validation Report of JDVC’s Offshore Magnetite Proj. under MPSA No. 338-2010-II-OMR, Cagayan Province
TABLE OF CONTENTS
Page No.
EXECUTIVE SUMMARY
1.0 INTRODUCTION ……… 4
2.0 GEOGRAPHICAL FEATURES ……… 7

2.1 Location and Accessibility …….. 7
2.2 Climate and Vegetation …….. 7
2.3 Topography and Drainage …….. 11
2.3.1 Topography …….. 11
2.3.2 Drainage …….. 12
2.4 Sea Bottom Topography …….. 13
3.0 TENEMENT INFORMATION ……… 17

3.1 Description of Mineral Rights ……… 17
3.2 History of Mineral Rights ……… 18
4.0 EXPLORATION HISTORY AND RECENT WORKS CONDUCTED ……… 21
5.0 REGIONAL GEOLOGIC SETTING ……… 33

5.1 Regional Geology ……… 33
5.2 Tectonic Setting ……… 34
5.3 Stratigraphy ……… 34
6.0 LOCAL GEOLOGY ……… 39
7.0 DEPOSIT TYPE AND MINERALIZATION ……… 39

7.1 Deposit Type ……… 39
7.2 Mineralization ……… 39
8.0 MGB FIELD VALIDATIONS ……… 40

8.1 Methodology ……… 40
8.2 Verification of Deposit Type/Mineralization, Collection of check
samples and Results of Check Samples Analyses ……… 40
8.2.1 Verification of Deposit Type/Mineralization ……… 40
8.2.2 Collection of Check Samples for Laboratory Analysis ……… 45
8.2.3 Results of Check Samples Analyses ……… 46
9.0 MINERAL RESOURCE ESTIMATION ……… 48

9.1 JDVCRC Mineral Resource Estimate ……… 48
9.2 MGB Mineral Resource Estimate ……… 52
9.2.1 Parameters Used in the Resource Estimation ……… 52
9.2.2 Basic Statistics ……… 54
i
9.2.2 Geological Model Rendering ……… 55

9.2.4 Mineral Resource Classification Used ……… 56
9.2.5 MGB’s Summary of Mineral Resource Classification ……… 57
9.2.6 Variations in the JDVCRC and MGB Resource Computations ……… 59
10.0 CONCLUSION AND RECOMMENDATION ……… 60

11.0 REFERENCES ……… 61
LIST OF FIGURES
Page No.
Figure 1a: Site Location Map …….. 5

Figure 1b: Regional Site Location Map …….. 6
Figure 2: Climate Map of the Phil. …….. 8
Figure 3: Digital Terrain Model Map of Cagayan Valley …….. 9
Figure 4: Drainage Map of Cagayan Valley …….. 10
Figure 5: Location of Luzon Strait, Balintang and Babuyan Channel …….. 14
Figure 6: Paths of Kuroshio Current in Luzon Strait through Babuyan Balintang …. 15
and Bashi Channels
Figure 7: Sea bottom topography and submarine features of Babuyan Channel …….. 16
Figure 8A: Tenement Map Showing Political Boundaries …….. 19
Figure 8b: Tenement Map Showing claim Boundaries …….. 20
Figure 9: Pre-determined Track lines Along the Eastern Segment of the JDVCRC …….. 24
Figure 10: Schematic Representation of Seismic Reflection and Bathymetric …….. 25
Surveys
Figure 11: Location of Actual Traverse lines Within the Eastern Segment of the …….. 26
JDVCRC Tenement
Figure 12: Bathymetry of the Eastern Segment of MPSA-338-2010-II-OMR …….. 28

Figure 13: A More Detailed View of the Bathymetry of the Eastern Segment of …….. 28
the Tenement Area.
Figure 14: Color-filled Bathymetric Map of the Easternmost Segment of the JDVCRC …….. 29
Tenement Area
Figure 15: Color-filled Contour Map and 3-D Illustration of the Seabed of the …….. 30
JDVCRC Tenement Area
ii
Figure 16: Color-filled Contour Map Showing the Various Thicknesses of …….. 33
Identified Sand-bearing Horizons Consisting of Seismo- stratigraphic
Units 1, 2 and 3.
Figure 17: Regional Geologic Map of Northern Luzon …….. 36

Figure 18 Tectonic Map of The Phil. …….. 37
Figure 19: Stratigraphy of Cagayan Valley Basin …….. 38
Figure 20: Analytical Method of MGB for Fe Determination …….. 46
Figure 21: RPE for %MF …….. 48
Figure 22: Polygon Plan for Level 0 to 5 meters …….. 50
Figure 24: Polygon Plan for Level 10 to 1 5 meters …….. 51
Figure 27: Polygon method using Surpac v6.8.1 …….. 53
Figure 28: Histogram showing the % MF grades of the samples of JDVC …….. 55
Figure 29: Geological solid showing the magnetite sand with the tenement area of JDVC …….. 56
Figure 30: Grade Tonnage Curve ….. 59
Figure 31: Drillhole Location Map ….. 64
LIST OF TABLES
Page No.
Table 1: Mining Tenement of JDVCRC …….. 17

Table 2: Field Investigation Activities Conducted Between 1969 and 1977 …….. 21
Table 3: Summary of drillhole data …….. 22
Table 4. MGB-JDVCRC Comparative %Magnetite Fraction (MF) Analysis …….. 47
Table 5: JDVCRC Mineral Resource Estimate …….. 49
Table 6. Summary of Basic Statistics …….. 54
Table 7a: JDVC and MGB summary of resource estimates …….. 58
Table 7b: Grade-Tonnage Curve Table …….. 58
ANNEXES
Annex 1. Transmittal Letters of MGB and JDVCRC

Annex 2. OR of Validation Fee
Annex 3. Assay Results
Annex 4. Seismic Profiles
iii
EXECUTIVE SUMMARY
The mineral resource validation of JDVC Resources Corporation’s (JDVCRC’s) Offshore

Magnetite Mining Project in the Offshore areas of the Municipalities of Sanchez Mira,
Pamplona, Abulug, Ballesteros, Aparri, Buguey and Gonzaga, Cagayan Province was
conducted by the technical personnel of the Lands Geological Survey Division, Mines and
Geosciences Bureau Central Office (MGB-CO) from June 13 to 17, 2018, upon the request
of Mr. Napoleon M. De Leon Jr.-President of JDVCRC. The field validation team composed
of Resty C. Gomez, Senior Science Research Specialist-Team Leader; Karla Anne M,
Navarro, Geologist II, Cerilo V. Samuya and Mario V. Asis, both Geologic Aides of the Lands
Geological Survey Division.
The purpose of the request is to conduct field validation of the declared mineral resource
within the explored portion of the mineral property covered by Mineral Production Sharing
Agreement denominated as MPSA No. 338-2010-II-OMR, which is the subject of Declaration
of Mining Project Feasibility (DMPF) application of JDVCRC. As provided for in Chapter
XXVII, Section 252(f) of the Consolidated Department Administrative Order No. 9210356, the
verification fee was paid for by JDVCRC under Official Receipt No. 9086364 dated June 08,
2018 in the amount of Fifty Thousand Pesos Only (PhP 50,000.00).
The JDVCRC Final Exploration Report dated April, 2015 was prepared and signed by Mr.
Rafael R. Liwanag, a Philippine Mineral Reporting Code (PMRC) accredited Competent
Person (CP) for Reporting Exploration Results with PMRC Registration No. 08-03-02. The
JDVCRC Final Exploration Report is compliant with Philippine Mineral Reporting Code
(PMRC) of 2007 guidelines and Department of Environment and Natural Resources (DENR)
Administrative Order (DAO) No. 2010-09. The estimated mineral resources declared by
JDVCRC were computed based on the data obtained from the drilling exploration works
conducted at cut-off date July 31, 2015 exploration period.
The undersigned MGB personnel validated the acceptability of the declared mineral resources
of JDVCRC through: 1) Confirmation of deposit/mineralization type in the project site and
collection of check samples for variance and statistics study; 2) In-situ assessment and quality
acceptability of the mining contractor’s existing set up of analytical laboratory for sampling,
assaying, and handling of assay results; 3) confirmation of parameters used in the resource
estimation and resource models; and 4) gathering of basic exploration data and validating the
integrity of database.
Mines and Geosciences Bureau, North Ave., Diliman, Quezon City 1

The deposit type in the JDVCRC MPSA area is an Iron Ore that can be classified Titano-
Magnetite sand offshore deposit. The sand is being transported materials from the weathering
of volcanic rocks, intrusive rocks and sedimentary derivatives of the older rocks of Abuan and
Dibuluan Formations from the hinterlands. The sand and the contained titano-magnetite being
the most resistant materials transported by rivers and creeks to the seas and re-worked by long
shore current.
The sediment built-up i n t h e MP S A a r e a is influenced by the supply of sediments

coming from the Cagayan River and the Kuroshio. The Kuroshio Current is a northward
flowing ocean current induced by West Pacific Current in the North Pacific Ocean and
intrudes into the West Philippine Sea and South China Sea through the Luzon Strait. The
Kuroshio Current flows from the east coast of Luzon through Taiwan and thence to Japan.
The effects of the northeast monsoon cause the deflection of the Kuroshio Current towards
the deeper portion of the Babuyan Channel. The Kuroshio Current contributes significantly to
the dispersal pattern and accumulation of sediments in the Babuyan Channel including the
delta built-up in northeast of Appari.
The mineral resource estimate conducted by MGB made use of the drillhole database of
JDVCRC; the integrity of the database was checked by MGB technical personnel as well as the
number of drillholes used for rendering and consequent computations. The mineral resource
estimation included geostatistical analysis, rendering of geological domains/solids and block
modelling using GEMS software v6.8.
A total of 10 drillholes and 28 sample intervals were used for the resource estimate at cut-off
grade of 5%MF (Magnetite Fraction). The histogram for the MF shows that the samples are
distributed along 5%MF. The procedure of the mineral resource estimation by MGB included
basic statistical analysis, geological modelling and volumetrics and tonnage calculations. The
construction of the polygons signifying the area of influence of each drillhole was done using
SURPAC v6.8.1. Statistical analysis, geological modelling and resource computations were
done using GEMS v6.8.1. A bulk density of 1.69 dmt/m3 was used in the tonnage calculation,
which was also the same density used by JDVCRC.
After MGB field validation and manipulation of the JDVCRC drillholes used in the resource
estimation, the undersigned estimated a grand total raw offshore magnetite sand resource of
512,971,918.94 DMT with weighted average grade of 26.51%MF. The cut-off grade of 5%MF
came out to be the most economical cut-off considering the trade-offs in the reduction in mining
and processing cost over the decrease in concentrates expected to be produced. Furthermore,
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it can be observed in the histogram that a small size of the sample has a very low grade (MF <
5%). Thus, it was deemed necessary to set a cut-off grade of 5%
The overall resource estimate of MGB is lesser by 93,486,053.58 DMT than that of JDVCRC’s
declared total resource estimate of 606,457,972.52 DMT due to the different softwares used in
the construction of the polygons and determination of the area. The difference between the
estimates can also be accounted to different cut-off grades and % recovery used. While the
JDVC did not set any cut-off grades and % recovery, MGB used a 5%MF cut-off grade and
90% recovery. Overall, the Measured mineral resource estimates of MGB is lower by
93,486,053.58 MT with grade difference of 1.04 % MF.
Based on the Amended Feasibility Study (FS) of JDVCRC, the initial projected 10-year
production schedule is set at an annual extraction rate of 6.91 million DMT. In consideration of
the estimated grand total offshore raw magnetite sand resource of 512,971,918.94 DMT
classified as Measured category at cut-off grade of 5% MF with weighted average grade of
26.51%MF, the projected mine life is more than 25 years and stands sufficient to support
JDVCRC’s Offshore Magnetite Sand Project, with good potential for additional measured and/or
indicated resource that will be blocked by in-fill drilling program with inferred resource of 177.80
million DMT at 49.68%MF.
In view of the foregoing discussions, it is hereby concluded that the Declaration of Mineral
Resource Estimate of JDVC Resources Corporation's Offshore Magnetite Project under MPSA
No. 338-2010-II-OMR, Cagayan Province is acceptable and compliant to the Philippine Mineral
Reporting Code (PMRC) of 2007 and guidelines of the Department of Environment and Natural
Resources (DENR) Administrative Order (DAO) No. 2010-09.
_____________________________________________________________________________________
1.0 INTRODUCTION
The mineral resource validation of JDVC Resources Corporation’s (JDVCRC’s)

Offshore Magnetite Mining Project in the Offshore areas of the Municipalities of
Sanchez Mira, Pamplona, Abulug, Ballesteros, Province of Aparri, and Buguey and
Gonzaga, Cagayan Province was conducted by the technical personnel of the Lands
Geological Survey Division, Mines and Geosciences Bureau Central Office (MGB-
CO) from June 13 to 17, 2018, upon the request of Mr. Napoleon M. De Leon Jr.-
President of JDVCRC. The field validation team composed of Resty C. Gomez,
Senior Science Research Specialist-Team Leader; Karla Anne M, Navarro, Geologist
II, Cerilo V. Samuya and Mario V. Asis, both Geologic Aides of the Lands Geological
Survey Division. As provided for in Chapter XXVII, Section 252(f) of the Consolidated
Department Administrative Order No. 9210356, the verification fee was paid for by
JDVCRC under Official Receipt No. 9086364 dated June 08, 2018 in the amount of
Fifty Thousand Pesos Only (PhP 50,000.00).
The purpose of the request is to conduct field validation of the declared mineral
resource within the explored portion of the mineral property covered by Mineral
Production Sharing Agreement denominated as MPSA No. 338-2010-II-OMR, which
is the subject of Declaration of Mining Project Feasibility (DMPF) application of
JDVCRC.
The JDVCRC Final Exploration Report dated April, 2015 was prepared and signed by
Mr. Rafael R. Liwanag, a Philippine Mineral Reporting Code (PMRC) accredited
Competent Person (CP) for Reporting Exploration Results with PMRC Registration
No. 08-03-02. The JDVCRC Final Exploration Report is compliant with the Philippine
Mineral Reporting Code (PMRC) of 2007 guidelines and Department of Environment
and Natural Resources (DENR) Administrative Order (DAO) No. 2010-09. The
estimated mineral resources declared by JDVCRC were computed based on the data
obtained from the drilling exploration works conducted in year 2015 exploration
period.
_____________________________________________________________________________________
N Study Area
Source: Incept Holdings Limited
Figure 1a. General Location Map of the Study Area
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0
N 9km
Study Area
Source:Mapsof.net
Figure 1b. Regional Location Map showing the Study Area
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2.0 GEOGRAPHICAL FEATURES
2.1 Location and Accessibility
The Offshore Magnetite Mining Project of JDVC is located in the municipal

waters of Sanchez Mira, Pamplona, Abulug, Ballesteros, Aparri, Buguey and
Gonzaga, all in the province of Cagayan (Figure 1a and b). Cagayan lies in
the northeastern part of mainland Luzon, approximately 17° 30' north and 121°
15' east, occupying the lower basin of the Cagayan River. Tuguegarao (now a
component city), its capital is 483 kilometers north of Manila, about one hour by
air travel, and ten hours by land, through the Maharlika Highway, also known as
the Cagayan Valley Road--Region 02's trunkline road--which runs parallel to the
Cagayan River.
The project site is easily accessible via domestic flights from Manila to
Tuguegarao City, the capital of Cagayan province, taking about one hour,
followed by a 3-hour drive north via Pan-Philippine Highway to Sta. Ana Port,
Cagayan. From Sta. Ana Port, the tenement area is located about 14 kilometers
off and parallel to the coast of the said coastal municipalities and can be
reached by 2-hour ride by pump boat.
2.2 Climate and Vegetation
The project area belongs to Type III climate under the Modified Coronas
Classification of the Philippine Climate System (Figure 2). This climate type has
no pronounced maximum rain period, with a short dry season lasting only from
one to three months, either during the period from December to February or from
March to May. This climate type resembles Type I since it has short fry season.
The average annual temperature is 29.0 °C while the average annual rainfall is
1196.6 mm. The least amount of rainfall occurs in March with an average of 25.2
mm. The greatest amount of precipitation occurs in October, with an average of
167 mm. The temperatures are highest on average in June, at around 30 °C.
The lowest average temperatures in the year occur in January, when it is around
23 °C.
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The elevated areas in the locality are forested, given the high precipitation
over the region’s Type II Philippine’s tropical weather. The lower lands are
agricultural and are mainly planted with rice, corn and tobacco.
Study Area
Source: PAGASA-DOST
Figure 2. Climate Map of the Philippines
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Figure 3. Digital Terrain Model Map of Cagayan Valley

Figure 4. Drainage Map of Cagayan Valley
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2.3 Topography and Drainage
2.3.1 Topography
Of its total land area, 28.19% or 253,831 hectares are flat to nearly level
land. This consists of alluvial plains, river deltas, low wetlands,
mangroves, and beaches. Most of these are found contiguous to the
bodies of water, especially along the Cagayan, Pared, Dummun,
Pinacanauan, Abulug, and Chico Rivers (Figure 3). These areas are
planted to rice and corn, subjected to frequent floods during the wet
season.
The gentle and moderate slopes of the province, which constitute 6.08%
and 13.48%, respectively of the total land area of the province are mostly
contiguous to the level land, enclosing the plains of the meandering rivers
and creeks. This arrangement forms the various dales or valleys found in
between the hills of the province.
Majority of the rolling land to moderately steep areas which account for
17.07% of the province's total area are found at the foothills of the Sierra
Madre and Cordillera mountains, separating the valleys and the mighty
ranges.
Steep and very steep land which constitute 10.44% and 24.73%,
respectively, of the total land area, or 94,030 hectares and 222,595
hectares, respectively, are found along the Cordilleras, in some parts of
Sta. Praxedes, Claveria, Sanchez Mira, Pamplona, Lasam, Sto. Niño, and
Rizal; and in the eastern parts of Santa Ana, Gonzaga, Lal-lo, Gattaran,
Baggao and Peñablanca, as the northern mountains of the Sierra Madre
range.
The Babuyan group of islands, which include the islands of Calayan,

Babuyan, Dalupiri, Balintang and Camiguin, has a mixture of flat to nearly
level land, and steep to very steep slopes. These islands have extensive
coral reefs. There are two volcanoes in the Babuyan Islands: Mount
Didicas off Camiguin Island, which has a symmetrical cinder cone, about

215 meters above sea level, and Mount Pangasun in Babuyan Island,
which is about 840 meters above sea level and has two craters.
2.3.2 Drainage
The Cagayan River, also known as the Rio Grande de Cagayan, is the
longest river in the Philippines and the largest river by discharge volume
of water (followed by Rio Grande de Mindanao). It has a total length of
approximately 350 kilometers and a drainage basin covering 27,753
square kilometres. It is located in the Cagayan Valley region in
northeastern part of Luzon Island and traverses the provinces of Nueva
Vizcaya, Quirino, Isabela and Cagayan (Figure 4). The estimated annual
discharge is 53,943 million cubic meters with a groundwater reserve of
47,895 million cubic meters.
The Cagayan River's headwaters are at the Caraballo Mountains of

the Central Luzon at an elevation of approximately 1,524 meters. The
river flows north for some 350 kilometers to its mouth at the Babuyan
Channel near the town of Aparri, Cagayan. The river drops rapidly to 91
meters above sea level some 227 kilometers from the river mouth. The
larger tributaries of the Cagayan River are the Pinacanauan River in
Peñablanca in the southeast; the Dummun River in Gattaran and the
Pared River in Alcala, both in central Cagayan; and the Zinundungan
River in Lasam and the Matalag River in Rizal, both in the west. The other
rivers in the province are the Chico River in southwest Cagayan at Tuao,
the Pata River and Abulug River in the northwest, Buguey River in the
north, and the Cabicungan River in the northeast. These rivers drain the
plains and valleys of the province, and provide water for domestic and
irrigation purposes, as well
Cagayan River and its tributaries have deposited sediments

of Tertiary and Quaternary origin, mostly limestone sands and clays
throughout the relatively flat Cagayan Valley which is surrounded by
the Cordillera Mountains in the west, Sierra Madre in the east and
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the Caraballo Mountains in the south. Iron sands are deposited offshore
of Sanchez Mira, Pamplona, Abulug, Ballesteros, Aparri, Buguey and
Gonzaga, all in the province of Cagayan.
2.4 Sea Bottom Topography
The Luzon Strait is approximately 250-kilometer wide span of body of water

that connects the East Philippine Sea and the Pacific Ocean with the West
Philippine Sea and the South China Sea (Figure 5, JDVCRC). The Strait is
subdivided into three smaller channels (JDVCRC). The Babuyan Channel
separates mainland Luzon with Babuyan Islands, which is separated from the
Batanes Islands by the Balintang Channel. The Bashi Channel separates
Batanes Islands with Taiwan. Based on the NAMRIA nautical chart and from
satellite images, the bathymetry of the Babuyan Channel ranges from a few
meters to more than 1,000 meter depth (JDVCRC).
The prominent sea bottom topographic features of the Babuyan Channel are
the westward trending trough that passes through the northernmost tip of
northern Luzon in Sta. Ana Cagayan and the Camiguin and Fuga Islands of
Babuyan Group of Islands. The peculiar delta built up is present northeast of
the mouth of Cagayan River in Aparri, Cagayan (Figure 5, JDVCRC).
_____________________________________________________________________________________
Source: JDVCRC FER

Photo 5. Location of Luzon Strait, Balintang and Babuyan Channel

The sediment built-up is influenced by the supply of sediments coming from the
Cagayan River and the Kuroshio Current (Figure 6, JDVCRC). The Kuroshio Current
is a northward flowing ocean current induced by West Pacific Current in the North
Pacific Ocean and intrudes into the West Philippine Sea and South China Sea
through the Luzon Strait. The Kuroshio Current flows from the east coast of Luzon
through Taiwan and thence to Japan as illustrated it Figure 6. The effects of the
northeast monsoon cause the deflection of the Kuroshio Current towards the deeper
portion of the Babuyan Channel. The Kuroshio Current contributes significantly to the
dispersal pattern and accumulation of sediments in the Babuyan Channel including
the delta built-up in northeast of Appari
There are indications that Cagayan River had meandered through time as suggested
by the relict lakes and marsh lands in the Buguey, Cagayan (Figure 7, JDVCRC).
The blue colored arrow in Figure 7 is presumed to be the former river path and
the submerged channel. The blue dotted line is inferred to be the relict river path
of Cagayan River; the white dash arrow represents the trajectory of the Kuroshio
Current deflected from its northward direction. As will be shown later, the
submarine channel has been identified and traced during the bathymetric survey in
the project area.
N N
Source: JDVCRC FER

Figure 6. Paths of Kuroshio Current in Luzon Strait through Babuyan,
Balintang and Bashi Channels

Source: JDVCRC FER

Figure 7: Sea bottom topography and submarine features of Babuyan Channel

3.0 TENEMENT INFORMATION
3.1 Description of Mineral Rights
The JDVCRC tenement area under Mineral Production Sharing Agreement

docketed as MPSA No. 330-2010-II-OMR is located in the municipal waters of
Sanchez Mira, Pamplona, Abulug, Ballesteros, Aparri, Buguey and Gonzaga, all
in the province of Cagayan (Figure 8a and b, Table 1) covering a total area of
14,240 hectares.
The property was originally covered by MPSA No. 338-2010-II-OMR, a Mineral

Production Sharing Agreement between the Republic of the Philippines and Bo
Go Resources Mining Corporation (BGRMC) entered into on June 9, 2010.The
MPSA has a term of twenty-five (25) years, or until June 8, 2035, renewable for
another 25 years. The contract grants BGRMC the exclusive rights to
explore and develop the magnetite resources within the MPSA area, subject
to the terms and conditions of the MPSA, and subject to compliance to the
rules and regulations of other government agencies.
The corners and area of the claim boundary are bounded by the following
geographical coordinates:
Table 1. Geographical coordinates of MPSA No. 338-2010-II-OMR
Corner North Latitude East Longitude Total Area

(Has.)
1 18° 42' 34.56'' 121° 13' 26.76''
2 18° 33' 39.60'' 121° 29' 45.96''
3 18° 31' 01.20'' 121° 40' 18.48''
4 18° 26' 36.24'' 121° 53' 32.28''
5 18° 27' 42.84'' 121° 58' 06.24''
6 18° 26' 57.48'' 121° 58' 31.44''
7 18° 25' 35.04'' 121° 53' 36.96'' 14,240
8 18° 30' 14.40'' 121° 40' 04.44''
9 18° 32' 53.16'' 121° 29' 37.68''
10 18° 36' 30.96'' 121° 22' 01.20''
11 18° 41' 51.36'' 121° 13' 14.52''

3.2 History of Mineral Rights
MPSA-338-2010-II-OMR was approved on June 9, 2010 as a contract

between the Republic of the Philippines and BGRMC.
The MPSA Contract ownership was transferred to JDVCRC by BGRMC on

November 25, 2011 by virtue of a Deed of Assignment duly approved and
confirmed by both company’s Board of Directors Resolutions and Corporate
Secretary’s Certifications. The same Deed of Assignment was duly registered
with the DENR-MGB Region II, Tuguegarao City, Cagayan on 27, January
2012. It was duly approved on January 25, 2013 by the DENR Secretary
Ramon J. P. Paje as recommended by MGB Director Leo L. Jasareno.
The Deed of Assignment as approved carries with it the responsibility to

implement the Exploration Work Programs and the Environmental Work
Program, which were eventually undertaken by JDVCRC, as well as the
submission of the regular Technical/Progress Reports. The Environmental
Impact Assessment (EIA) has likewise been completed and presented to the
various Municipalities and stake holders in the Province of Cagayan.
The first renewal of the Exploration Period of MPSA No. 338-2010-II-OMR

was granted on June 17, 2013.
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Source: JDVC FER 2015

Figure 8a. Tenement Map Showing Political Boundaries

Figure 8b. Tenement Map Showing Claim Boundaries

4.0 EXPLORATION HISTORY AND RECENT WORK PROGRAM CONDUCTED
Site investigations previously undertaken by various workers in the area were noted
between 1969 and 1979. Table 2 presents a summary of relevant findings by
previous companies or organizations:
Table 2. Field Investigation Activities Conducted Between 1969 and 1979
Year Organization Activities Findings
Anglo-Philippine oil and Presence of magnetite

1969 Offshore Survey
Mining Corporation sand deposit
Occurrence,
Mines and Geosciences Mineral verification from
1971 character,
Bureau Sanchez Mira to
and thickness of
Ballesteros
the deposit
Occurrence,
Mines and Mineral verification in
1974 character,
Geosciences Gonzaga
and thickness of
Bureau
the deposit
Mineral verification of the
Mines and Geosciences Sediment profile
1974 magnetite sand deposits in
Bureau and thickness
Sanchez Mira
Delineation of
Mines and Beach and near-
1978-1979 potential
Geosciences shore sediment
magnetite sand
Bureau sampling
accumulations
In mid-2014 to April 2015, the company has completed an exploration programme

over an area of 4,999.2358 hectares out of the 14,240-hectare MPSA total area,
consisting of geophysical surveys involving seismic reflection profiling and
bathymetric surveys and diamond drilling and core sampling that employed a boat-
mounted Longyear 38 Wireline drill with modified ”Jar drill” core recovery system
to ensure an acceptable high core recovery; using bathymetric points and drill
collars surveyed by GPS using WGS 84 projection that enabled the delineation of an
ore envelope using the conventional Polygon Method of resource estimation. Based
on the data gathered from the seismic reflection survey, the drillhole spacing
programmed for Parcel A is 2,000 meters with an average drilling depth of 20 meters;
while for Parcel B-1, it is 4,000 meters, with an average drilling depth of 5 meters.

Within this ore envelope, 11 vertical confirmation drillholes with an average of 90%
recovery, amounting to more than 140 meters, with the collection of 142 samples,
which were all analyzed by XRF for %Fe, %Al2O3, %CaO, %Cr2O3, %K2O,
%MgO, %P2O5, %SiO2,%V2O5, %As, %BaO, %Cl, %Co, %Cu, %MnO, %Na2O,
%Ni, %Pb, %SO3, %Sn, %Sr, %TiO2, %Zn,%Zr and Per cent loss-on-ignition (LOI)
and Sieve Test at Intertek Testing Services Philippines,Inc., and analyzed for
Magnetic Fraction (MF) using a Dings Davies Tube (DDT) which segregates the
magnetite through magnetism at the Petrochemical Laboratory of the Mines and
Geosciences Bureau. The geographic coordinates of the said 4,999.23- hectare
portion of the MPSA contract area are shown in Table 3.
Table 3. Summary of Drillhole Data
Drill
From To
Hole %MF %Fe Latitude Longitude Water Depth
(m) (m)
ID
0 5 26.58 62.05
5 10 43.87 61.53 18° 26' 121° 53'
GN18 58 M
10 15 24.89 60.45 19.9572" 0.4992"
15 20 12.58 62.58
0 5 3.23 59.69
18° 25' 121° 53'
GN30 5 10 21.01 61.8 52 M
41.106" 44.8656"
10 15 20.71 61.38
0 5 22.56 62.53
5 10 41.89 61.52 18° 26' 121° 54'
GN33 37 M
10 15 23.63 61.23 17.0016" 11.0016"
15 20 11.65 62.03
0 5 24.87 60.58
5 10 46.55 62.12 18° 26' 121° 55'
GN48 35 M
10 15 25.41 62.35 34.0008" 14.9988"
15 20 12.66 60.09
0 5 24.94 60.5
5 10 47.29 61.49 18° 26' 121° 56'
GN58 56 M
10 15 27.89 60.37 48.0012" 12.0012"
15 20 10.24 61.78
0 5 26.98 60.38
5 10 43.15 62.58 18° 27' 121° 57'
GN68 64 M
10 15 23.89 61.06 5.0004" 7.9992"
15 20 13.56 61.74
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20 22 18.86 60.53
18° 26' 121° 50'
GN01 0 5 59.3 48.4224" 38.49"
18° 27' 121° 48'
GN02 0 5 45.2 34.6716" 32.148"
18° 28' 121° 46'
GN03 0 5 46.7 20.9208" 22.4796"
18° 29' 121° 44'
GN04 0 5 45.4 6.1188" 56.0364"
Source: JDVCRC FER

Photo 1. A Longyear 38 Rotary Drill mounted in 3 interconnected boats
A marine geophysical survey was carried out within Parcels A and B-1 of the MPSA
contract area in April 2015 located in Gonzaga, Buguey and Aparri (portion), Cagayan to
provide subsurface information on the stratigraphy, character and structure of
unconsolidated sediments. The survey consisting of high-resolution seismic reflection
profiling and continuous bathymetric measurements was undertaken primarily to
precisely map water depths, characterize submarine topographic features, subsurface
stratigraphy of consolidated sediments and to identify, delineate and map areas with
potential economic occurrences of magnetite bearing sand bodies in the area.
High-resolution seismic profiling was carried out simultaneous with bathymetric

measurements along pre-determined survey tracklines. Traverse lines were oriented
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almost perpendicular to the general trend of the shoreline and spaced at 500 to
1,000 meters interval. Figure 9 shows the proposed traverse lines within the eastern
segment of the mineral tenement of JDVCRC covering/adjoining the municipal waters
of Ballesteros, Aparri, Buguey and Gonzaga, Cagayan. The traverse lines running
NNE-SSW and NNW-SSE were spaced at 1 km interval with the option of using a
closer interval (i.e. 500-meter) in areas where on-site preliminary analysis of the data
indicates promising sites. The picture in Figure 10 shows a schematic representation of
the seismic reflection and bathymetric surveys.
Source: JDVCRC FER

Figure 9. Pre-determined Tracklines Along the Eastern Segment of the JDVCRC
Tenement
_____________________________________________________________________________________
Source: JDVCRC FER

Figure 10. Schematic Representation of Seismic Reflection and Bathymetric Surveys
The complete set of the seismic reflection survey equipment was sourced from
Hydronav Services (Singapore) Pte Ltd on contract rental basis including the
assignment of field technician during the course of the survey. The Delph Seismic
Analog Acquisition Unit was used as central control and signal processing module.
The bathymetric survey was carried out using a dual frequency Teledyne Echotrac MK-III
high precision echo sounder set at frequencies of 200 KHz and 33 KHz. A total of 452 line-
kilometers of bathymetric traverses were accomplished to produce a more detailed and
precise bathymetric map in the area. Figure 11 shows the actual traverse lines within the
eastern segment of the JDVCRC tenement area. The dotted gray lines represent the
additional bathymetric measurements. Surfer V.11 software was used in constructing
bathymetric contours and 3-D representation of the seabed.
_____________________________________________________________________________________
Source: JDVCRC FER

Photo 2. Equipment Used in Seismic Profiling
Source: JDVCRC FER
Figure 11. Location of Actual Traverse lines Within the Eastern Segment of the JDVCRC
Tenement
_____________________________________________________________________________________
The marine geophysical survey undertaken in the study area generated a total of 187.3 line-
kilometers of high-resolution seismic reflection data and a total of 377.3 line-kilometers of
bathymetric data. The additional echosounder measurements of about 190 kilometers were
accomplished in order to get a more precise seabottom topographic configuration of the
submarine delta within and adjacent to the municipal waters of Aparri, Buguey and
Gonzaga, Cagayan. Figure 12 shows the actual traverse lines within the study area.
The deltaic sediment sequence is believed to compose largely of progradational sediments

that potentially host possible economic occurrences of magnetite and other associated
minerals.
Analysis of the bathymetric contours shown in the NAMRIA 1:250,000 topographic map
(Figure 13) indicates contrasting submarine topography of the seabed east and west of the
mouth of Cagayan River. A gentler slope of the seabed prevails on the eastern side of
offshore Cagayan from the mouth of Cagayan River towards the town of Santa Ana. In
contrast, the seabed west of Cagayan River shows a moderate slope of about -1.4% slope
from the shoreline of the town of Ballesteros to a distance of 3,600 meters (where the -50
meter contour is encountered) seaward. The slope of the seabed from the Town of Buguey to
a distance of 24,500 meters (up to -50 meter contour line) has a relatively gentler slope of
about -0.2%.
Result of the bathymetric survey of the eastern segment of MPSA-338-2010-II-OMR is shown

in Figures 12 and 13. The bathymetric contours are presented at 5-meter interval.
_____________________________________________________________________________________
Source: JDVCRC FER
Figure 12. Bathymetry of the Eastern Segment of MPSA-338-2010-II-OMR
Source: JDVCRC FER

Figure 13: A More Detailed View of the Bathymetry of the Eastern Segment of the Tenement
Area.
_____________________________________________________________________________________
Figures 14 and 15 graphically present the color-filled contour maps and 3-D
presentations of the seabed of the eastern portion of MPSA-338-2010-II-OMR.
Source: JDVCRC FER
Figure 14. Color-filled Bathymetric Map of the Easternmost Segment of the JDVCRC
Tenement Area
_____________________________________________________________________________________
Source: JDVCRC FER

Figure 15: Color-filled Contour Map and 3-D Illustration of the Seabed of the JDVCRC
Tenement Area
_____________________________________________________________________________________
Results of data interpretation reveal that the unconsolidated sediment section

underlying the contract area was deduced to be divided into four (4) distinct units
characterized by their different internal seismic reflection patterns and separated by
distinct reflection horizons. For purposes of identification, these units have been
designated as Unit 1, Unit 2, Unit 3 and Unit 4 (from top to bottom).
Unit 1:
Unit 1 generally consists of recent sediments of beach deposits along the shore
grading into finer sediments offshore. It is characterized by parallel to divergent
reflection patterns. Due to the influence of the Kuroshio Current flowing from the
East Philippine Sea and deflected towards the Babuyan Channel, the finer
sediments particularly on the eastern part of the area are transported towards the
west. This unit generally consists of silt to fine grained sand with variable
amounts of magnetite sand.
Unit 2:
This unit is inferred to generally comprise of fine to medium sand of fluviatile to

shallow marine origin. The internal reflection pattern consists of sigmoidal to
chaotic patterns. There appears to be a gradational change to Unit 1 sediments
which are characterized by a weak parallel reflection pattern with some oblique
reflections nearer “shore”. This unit is inferred to consist of shallow marine
sediments deposited nearshore or at the shoreline.
Unit 3:
Characterized by parallel to seaward dipping/sigmoidal reflections and consists of

the prograded shoreline deposits characterizing the eastern part of the contract
area. It is deduced to consist essentially of fine to medium – grained sand
materials. This Unit together with Unit 2 is believed to host valuable detrital mineral
deposits particularly magnetite sand accumulations. Representative seismic
profiles in the eastern and western parts of the area are shown in Figures.
Unit 4:
The oldest unconsolidated sediment sequence in the area is Unit 4 that generally
shows parallel to divergent and in some places hummocky reflection patterns. It is
_____________________________________________________________________________________
inferred to consist predominantly of older mud to silty sediment sequences.

Underlying this unit is the acoustic basement which in, some instances coincide
with the bedrock. In seismology, the term acoustic basement is generally referred to
as the surface, below which strata cannot be penetrated by seismic signals or
cannot be imaged by seismic data. The acoustic basement surface covered by the
survey, so far, is interpreted to be a relatively strong and irregular reflector.
Based on the analysis and interpretation of seismic reflection data gathered in the
area, the seismo-stratigraphic units that can be considered as the most
promising targets for magnetite sand exploration are Units 2 and 3. Table 5 shows
the tabulation of the individual thicknesses of Unit 1 and the combined Units 2 and
3. It will be observed in the tabulation and in the contour map in Figure 17 that the
sediments are thicker in the eastern portion of the tenement, which is identified
here as Parcel A. The area to the west is called Parcel B-1. The sediments are
observed to be thinning out going westward to Parcel B-1. These thicknesses
were determined from the meticulous interpretation of the seismic reflection
profiles of the seismic reflection survey lines shown in Annex 4. On the average,
the thicknesses of the sediments per Unit are as mathematically computed follows:
Unit 1 (meters) Unit 2 (meters) Total (meters)

Parcel A 6.8 19.0 25.8
Parcel B-1 3.0 6.8 9.80
_____________________________________________________________________________________
Source: JDVCRC FER

Figure 16. Color-filled Contour Map Showing the Various Thicknesses of Identified Sand-
bearing Horizons Consisting of Seismo- stratigraphic Units 1, 2 and 3.
5.0 REGIONAL GEOLOGIC SETTING
5.1 Regional Geology
The Cagayan Valley is a major intermontane structural basin containing

folded and faulted late Tertiary eugeosynclinal deposits measuring 250
kilometers long and 80 kilometers wide (Figure 17). The oldest sedimentary
rock in the basin is the Oligocene to Miocene marine sediments consisting
of shale, chalk, turbidites and limestone. Regional uplift in the Plio-
Pleistocene resulted in the deposition of transitional marine and fluvial
sediments of the Ilagan and Awidon Mesa Formations. The latter is a thick
sequence of pyroclastic and fluvial sediments that conformably overlies the
Ilagan Formation but unconformably overlies the folded Miocene and Pliocene
strata in the foothills of the Cordillera.
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5.2 Tectonic Setting
The N-S trending Cordillera Central, a 300 km-long and 90 km wide, is one
of the major tectonic unit of Northern Luzon (Figure 18). Acid plutonic rocks
form the core of the mountain chain, the outer shell of which consists of
shallow to deep sea sedimentary rock formations with intercalated volcanics.
The uplift of the Central Cordillera batholith started during the Miocene. The
Sierra Madre Range likewise consists of the acidic plutonic intrusive bodies.
The third morpho-tectonic unit is the Caraballo Mountains, which serve as the
connection of the southern segment of the Central Cordillera and the Sierra
Madre. These three morpho-tectonic units form the catchment basin of the N-
S oriented Cagayan River Valley. The fault-bounded Cagayan Valley, 200
km long and about 50 km wide, is surrounded by these mountains, except on
the northern side
5.3 Stratigraphy
The area of interest has a good potential for magnetite mineralization due to
the presence of rock units/lithology that are good source of heavy minerals
such as magnetite which are of products of continuous weathering and
erosion from the mountains particularly at the northern Sierra Madre. Below
are the geologic rock formations in the area and their position in the
stratigraphic column as shown in Figure 19.
• Abuan Formation
The Abuan Formation, which was named as Abuan River Formation by

MMAJ-JICA (1989), is the oldest formation in the western part of the
Northern Sierra Madre and presumably comprises part of the basement of
the Cagayan Valley sedimentary sequence. It is a heterogeneous mixture of
basaltic to andesitic flows, pyroclastics and sedimentary rocks widely
distributed in the southwest part of Divilaca River and northern and western
part of Maconacon River. The age deposition of the Abuan formation is
inferred to be before Early Oligocene, probably Eocene. The thickness of
this formation was not indicated by MMAJ- JICA (1989).
_____________________________________________________________________________________
 Dibuluan Formation
This formation, named by MMAJ-JICA (1989) as Dibuluan River Formation,

is found along the western flanks of the Northern Sierra Madre Range. It
embodies the principal position of the westward-dipping monoclinical structure
of the Cagayan Basin. It unconformably overlies the Abuan Formation and is
unconformably overlain by the Ibulao Limestone along Dibuluan River and
elsewhere in the southeastern end of the Cagayan Valley Basin (Aurelio and
Billedo, 1987). The Dibuluan Formation consists mainly of basic volcanic
flows, volcanic breccias and pyroclastic rocks, with interbeds of clastic rocks.
The clastic rocks in the lower portions generally consists of well-indurated

brownish gray to greenish gray feldspathic wacke with minor intercalated
intraformational conglomerate, while the upper portions are marked by thin
to medium beds of green siltstone and light green to red, well-indurated
mudstone. Radiometric K-Ar dating of a sample of basic lava flow of the
Dibuluan Formation gave an age of 29 Ma, equivalent to late Early
Oligocene (Billedo, 1994).
• Quaternary Alluvium
The Cagayan Valley basin is overlain by various assemblages of

Quaternary alluvium resulting from weathering and erosion of the older
rocks and natural transport of minerals by rivers, wind and current. These
are accumulations of detrital minerals or placer minerals that compose
most of the Quaternary alluvium within the Cagayan River Valley and
the Cagayan Basin.
_____________________________________________________________________________________
Figure 17. Regional Geologic Map of Northern Luzon

_____________________________________________________________________________________
Figure 18. Tectonic Map of the Philippines
_____________________________________________________________________________________
Source: GOP 2010

Figure 19. Stratigraphy of Cagayan Valley Basin
_____________________________________________________________________________________
6.0 LOCAL GEOLOGY
The Titano-Magnetite sand within JDVCRC MPSA area are offshore deposits found at
the seabed of Babuyan Channel. The rock formations that may have contributed as
source of magnetite and other associated placer minerals include the volcanic,
pyroclastics and sedimentary derivatives of the older rocks of Abuan and Dibuluan
Formations from the hinterlands. These volcanic flows intercalated with pyroclastic and
sedimentary rocks and intrusions of diorite, quartz diorite and andesitic to dacitic rocks
commonly have specks of magnetite that were disintegrated from the host rocks during
weathering process and eventually transported and concentrated through river systems
and through the winnowing actions of waves tides and currents.
7.0 DEPOSIT TYPE AND MINERALIZATION
7.1 Deposit Type
The deposit type in the JDVCRC MPSA area is an Iron Ore that can be classified Titano-
Magnetite sand offshore deposit. The sand is being transported materials from the
weathering of volcanic rocks, intrusive rocks and sedimentary derivatives of the older
rocks of Abuan and Dibuluan Formations from the hinterlands. The sand and the
contained titano-magnetite being the most resistant materials transported by rivers and
creeks to the seas and re-worked by long shore current.
7.2 Mineralization
The iron mineralization in the MPSA area consists of magnetite (Fe3O4)

concentration in beach and alluvial sand in the seabed of Babuyan Channel.
Economic deposits generally contain 15 to 30 % magnetite or magnetic fraction (MF)
which can be concentrated by magnetic separation to yield about 55 to 62 % Fe.
The magnetite concentrate usually contains impurities of titanium and vanadium which
interfere with the smelting process, thus lowering the quality of the iron ore; however,
the value of the magnetite concentrate is however enhanced when the titanium and/or
vanadium content are high enough to produce special steel.
_____________________________________________________________________________________
8.0 MGB FIELD VALIDATIONS
8.1 Methodology
The undersigned MGB personnel validated the acceptability of the declared

mineral resources of JDVCRC through: 1) Confirmation of deposit
type/mineralization in the project area and collection of check samples for
variance and statistics study; 2) in-situ assessment and quality acceptability of
the mining contractor’s existing set up of analytical laboratory for sampling,
assaying, and handling of assay results; 3) confirmation of parameters used in
the resource estimation and resource models; and 4) gathering of basic
exploration data and validating the integrity of database.
The MGB-CO technical personnel inspected the JDVCRC's core house, sample
preparation facility located in Sta. Ana, Cagayan. A total of three (3)
representative check samples were taken and will be subjected to chemical
analysis upon return to MGB-CO for Quality Assurance/Quality Control (OA/QC)
study and to determine the overall reliability of field sample preparation
techniques, the accuracy of analytical data supplied by JDVCRC and finally to
ensure that analytical results were free of bias.
The JDVCRC resource geologists provided the latest compiled drillhole database
used during resource modelling and subsequent calculation of tonnages. MGB-
CO geologists will import the drillhole database of JDVCRC to GEMS v.6.8
software which will be recalculated and subjected to geostatistical analysis and
block modelling.
8.2 Verification of deposit type and mineralization, Collection of check

samples and Results of Check Samples Analyses
8.2.1 Verification of deposit type and mineralization
The field validation verified the deposit type and mineralization of JDVC
though their Siphon Vessel with 3-stage magnetic separator and
_____________________________________________________________________________________
processing apparatus on board located 15-km offshore of Gonzaga,

Cagayan (Photos 2 to 11). Processed iron ore concentrate is very fine,
deep black with assay grade of >57%Fe based on XRF (Photo 10). The
verified deposit type/mineralization and assay grade in the project site
conform to the data and values declared in the CP-signed Final
Exploration Report (FER).
Photo 2. Twin engine motor boat used going to Siphon Vessel of JDVCRC located 15km-offshore of
Gonzaga, Cagayan, travel time of which is 2-hr though rough sea.
_____________________________________________________________________________________
Photo 3. JDVCRC Siphon vessel with magnetic separator and processing apparatus on board located 15-km
offshore of Gonzaga, Cagayan.
Photo 4. Transfer from motorboat through vertical ladder going to the Siphon Vessel.
_____________________________________________________________________________________
Photo 5. Introduction lecture, safety orientation explanation of production and processing of magnetite
sand.
Photo 6. Operation set-up for magnetite Photo 7. 3-stage magnetic separator system
extraction
_____________________________________________________________________________________
Photo 8. Extraction/siphon pump Photo 9. Flyout conveyor where waste materials

will go back to the sea
Photo10. Samples of magnetite sand after processing.
_____________________________________________________________________________________
Photo 11. MGB Validation Team with JDVC staff at roof top of Siphon Vessel.
8.2.2 Collection of Check Samples for Laboratory Analysis
Check samples for laboratory analysis were taken by the MGB validating
team from the core house facility of JDVCRC office in Times Street,
Quezon City (Photos 12 to 14, Figure 20). A total of three (3) drill core
samples comprised of magnetite sand materials were randomly collected
from the representative mineralized samples. The MGB used analytical
volumetric titration method using K-dichromate for Iron (Fe) ore determination.
_____________________________________________________________________________________
Determination of Total Iron (Fe) by Titration with Standard Potassium

Dichromate (K2Cr2O7)
1. Take 50 ml aliquot from the solution in the volumetric flask in step A.7 and transfer
to 250 ml beaker. Dilute / fill up to 100ml with distilled water and boil.
2. Add NH4OH drop by drop until all the iron is precipitated. Boil.
3. Allow the precipitate to settle. Filter thru Whatman filter paper No. 1 and wash
the sides of the beaker and the filter paper containing the precipitate for about 5
times with hot distilled water. Discard the filtrate.
4. Return the precipitate to the beaker where precipitation took place and dissolve
the precipitate adhering to the filter paper with 1:1 hydrochloric acid and then
wash with hot distilled water thoroughly. Remove the filter paper from the beaker.
5. Make up to about 50 – 75 ml with distilled water and boil. Add SnCl 2 solution drop
by drop until solution turn colorless, adding 1 to 2 drops in excess. 1 Cool.
6. Add 10 ml of saturated HgCl2 while stirring.2
7. Add 20 ml of titrating solution and 2-3 drops of diphenylamine indicator.
8. Titrate with standard potassium dichromate (K2Cr2O7) solution to a violet end
point.
9. Compute the total Fe.
% Fe = ( V x T) K2Cr2O7 where T = % Fe - g / ml
( V x N) K2Cr2O7 x 55.85/ 1000

% Fe = _________________________________ x 100
weight of sample in grams
% Fe2O3 = % Fe x Fe2O3 = % Fe x 1.4297

2 Fe
Figure 20. Analytical Method of MGB for Fe Determination
8.2.3 Results
% Fe2Oof Check Samples Fe2Analyses
3 = % Fe x O3 = % Fe x 1.4297
Check samples were collected during field validation and sent back to MGB
2 of
for metallurgical testing, the results Fewhich are subjected to computation
of Relative Percentage Error (RPE) between assay results of JDVCRC

samples and MGB to determine relative variations and bias. The RPE is an
indicator of variability between samples, the average error measures any
bias that may occur; unbiased sample comparison has an RPE value close
_____________________________________________________________________________________
( V North
Mines and Geosciences Bureau, x N) Ave., x Quezon
Diliman,
K2Cr2O7 55.85/
City 1000 46
% Fe = _________________________________ x 100
to zero with minimal spread about this average value. Formula for
computation of RPE is:
RPE= ((X-Y)/ (0.5)*(X+Y))*100 wherein X=original assay, Y=duplicate assay.
Adopting the standard procedure for Quality Assurance (QA)/Quality Control

(QC) studies, a total of three (3) check samples or about 5% out of the total
28 sample intervals used in the resource estimation were collected during
the field validation (Photos 12 to 14). The MGB used analytical volumetric
titration method using K-dichromate for Iron (Fe) ore determination. The JDVCRC
sample analyses were carried out in Intertek Manila by using XRF method
(x-ray fluorescence).
The comparison of the analysis results conducted by MGB and JDVRC can
be summarized by the relative percentage errors (RPE) and the correlation
as shown in Figure 21 and Table 4. After computation of RPE for the 3
check samples concluded that the RPE outliers may have resulted from
different instrumentations and analysis methods used by MGB and JDVCRC.
Considering the number of samples used, the analysis results of the RPE
showed relatively good errors/ allowable error (<17%) and indicating good
repeatability and correlation (R^2).
Table 4. MGB-JDVCRC Comparative %Magnetite Fraction (MF) Analysis
% MF
No. of Pairs 3
Average RPE 16.93
Correlation 0.36
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Figure 21. RPE for %MF
9.0 MINERAL RESOURCE ESTIMATION
9.1 JDVCRC Mineral Resource Estimate
JDVC Resources Corporation (JDVCRC) used conventional polygon method of

assigning the areas of influence according to grade and drillhole distance to
perform its mineral resource modelling and resource computations (Figure 22 to
26). A total of 10 drillholes and 28 sample intervals were used for the geological
modelling and subsequent resource estimation. JDVC did not set a cut-off grade
since selective mining is not applicable in offshore areas. Additionally, a 100%
recovery was also used by the company in declaring the mineral resource
estimates. All analytical methods (XRF, Sieve analysis, Density measurement,
etc, are done on 5-meter composite samples. Specific gravity value of 1.69
DMT/m3 at 0% cut-off grade was adopted by JDVCRC in the tonnage
calculation. The complete results of their estimates are shown below:
_____________________________________________________________________________________
Table 5. JDVCRC Mineral Resource Estimate
_____________________________________________________________________________________
Figure 22. Polygon Plan for Level 0 to 5 meters
Figure 23. Polygon Plan for Level 5 to 1 0 meters
_____________________________________________________________________________________
_____________________________________________________________________________________
Figure 26. Polygon Plan for Level 20 to 25meters
9.2 MGB Mineral Resource Estimate
9.2.1 Parameters Used in the Resource Estimation
The mineral resource estimate conducted by MGB made use of the same
database used by the JDVC in its resource computations. The integrity of
the database, number of drillholes and sample intervals were checked by
MGB technical personnel before being utilized for geologic modelling and
resource calculation. The procedure of the mineral resource estimation by
MGB included basic statistical analysis, geological modelling and
volumetrics and tonnage calculations. The construction of the polygons
signifying the area of influence of each drillhole was done using SURPAC
v6.8.1. Statistical analysis, geological modelling and resource
computations were done using GEMS v6.8.1.
The polygons were constructed using Surpac v 6.8.1. In polygon method

(Figure 27), the area of influence is equivalent to half of the distance from
one sample to another. The midpoints between samples were determined
_____________________________________________________________________________________
in order to mark the extent of the area of influences. These distances were
used to construct polygons representing the areas of influence for each
sample. These polygons were then used for the rendering of geological
models.
Figure 27. Polygon method using Surpac v6.8.1
The average magnetic fraction contents used in the calculation are the
average of the sum of products of thickness of the horizon and average
magnetic fraction contents. The volume of raw sand is computed by
multiplying the area of sand with the average thickness of sand horizon.
The tonnage of the raw sand is computed by multiplying the volume with
specific gravity of raw sand (1.69 dmt/m3). The tonnage of the magnetite
sand was calculated by multiplying the tonnage of raw sand with the with
the average magnetic fraction
A total of 10 drillholes and 28 sample intervals were used for the resource
estimate. MGB set the cut-off grade to 5% MF and recovery at 90%. The
geological modelling was also done using the polygon method, which is similar to
that used by the JDVC in their resource estimates. Interpolation of grade values
_____________________________________________________________________________________
was deemed to be not applicable considering the distances of the drillholes of

JDVC. For this reason, block modelling was also deemed not necessary. Instead,
solids representing the area of influence of each drillhole and the thicknesses
show the sample intervals. A dry density of 1.69 dmt/ m 3 was used in the
calculation of tonnage, which was also the same density used by the JDVC.
9.2.2 Basic Statistics
Basic statistical analysis was done to determine data variance from the
sample analysis results that may arise from the geological interpretation of
the deposit, sampling practices, and laboratory analyses (Table 6). Basic
statistical analysis consisted of all 28 sample intervals from all 10 drillholes
used. After statistical analysis, it is imperative that dispersion of grades
especially in %MF Fe does not deviate much from the mean grades.
GEMS (Version 6.8) was used to perform the univariate statistical analysis
for %MF value subjecting each mineralized domain to this process. The
histogram for %MF is shown in Figure 28.
Table 6. Summary of Basic Statistics

Variable %MF
Number of 28
samples
Min.value 3.23
(Grade %)
Max. value 59.3
(Grade %)
Mean 28.32
Median 24.90
Geometric 24.49
mean
Variance 193.52
Standard 13.91
deviation
Coefficient of 0.49
Variance
_____________________________________________________________________________________
Figure 28. Histogram showing the % MF grades of the samples of JDVC.
9.2.3 Geologic Model Rendering
The extent of the deposit was based on the area of influence of the drillholes
which was determined by the conventional polygon method (Figure 29. In the
polygon method, the radius of the area of influence of a sample is equivalent to
half of the distance from one sample to another. The thicknesses were based on
the sample intervals used by the JDVC which is 5 meters. After constructing the
extents of the polygon of each sample, geological solids were constructed based
on these polygons and the thicknesses of the sample intervals. After the
geological model was constructed, it was clipped using the MPSA boundaries of
JDVC to ensure that the deposit calculated is within the bounds of the claim area.
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Figure 29. Geological solid showing the magnetite sand with the tenement area of JDVC
9.2.4 Mineral Resource Classification Used
The Mineral Resource of JDVCRC herein refers to the titano-magnetite sand

resource that has been blocked by high-resolution seismic reflection profiling,
echo sounder and geological sampling through confirmatory offshore drilling.
The vertical extent and horizontal limit of the deposit were defined by means of
logging of drill cores and incorporated with the updated bathymetric survey of the
project area.
Mineral Resource computed is categorized/classified as Measured to Inferred

Mineral Resource on the basis of drillhole spacing and geologic continuity, in this
case 2km x 2km and >2km drillhole spacing were used to delineate ore outlines
for Measured and Inferred categories, respectively. The following categories
were used in the reporting of mineral resource:
 Indicated Mineral Resource is part of a Mineral Resource in which tonnage,

densities, shape, physical characteristics, grade and mineral content can be
estimated with a high level of confidence. It is based on detailed and reliable
exploration, sampling and testing information gathered through appropriate
techniques from locations such as outcrops, trenches, pits, workings and drill
holes. The locations are spaced closely enough to confirm geological and grade
continuity. In this report, measured mineral resource refers to the offshore
_____________________________________________________________________________________
magnetite resource that has been drilled by confirmatory drilling at 2km x

2km grid based on based on the result of the interpretation of the seismic
reflection profiling data.
 Inferred Mineral Resource is part of a Mineral Resource in which tonnage,

grade and mineral content can be estimated with a low level of confidence. It is
inferred from geological evidence and assumed but not verified geological and/or
grade continuity. It is based on information gathered through appropriate
techniques from locations such as outcrops, trenches, pits, working and drill
holes which may be limited or of uncertain quality and reliability. An Inferred
Mineral Resource has a lower level of confidence than that applying to an
Indicated Mineral Resource. In this report, measured mineral resource refers
to the offshore magnetite resource that has been drilled by confirmatory
drilling at >2km distance based on based on the result of the interpretation of
the seismic reflection profiling data.
9.2.5 MGB’s Summary of Mineral Resource Estimate
The procedure of the mineral resource estimation by MGB included basic

statistical analysis, geological modelling and volumetrics and tonnage
calculations. The construction of the polygons signifying the area of influence of
each drillhole was done using SURPAC v6.8.1. Statistical analysis, geological
modelling and resource computations were done using GEMS v6.8.1.
After MGB field validation and manipulation of the JDVCRC drillholes used in the
resource estimation, the undersigned estimated a grand total raw offshore
magnetite sand resource of 512,971,918.94 DMT with weighted average grade of
26.51% MF(Table 7a, b and c, Figure 30 and 31). The cut-off grade of 5%MF
came out to be the most economical cut-off considering the trade-offs in the
reduction in mining and processing cost over the decrease in concentrates
expected to be produced. Furthermore, it can be observed in the histogram that a
small size of the sample has a very low grade (MF < 5%). Thus, it was deemed
necessary to set a cut-off grade of 5%
_____________________________________________________________________________________
Table 7a: JDVC and MGB summary of resource estimates
JDVC MGB
Tonnage Grade Tonnage Grade

Level (DMT) (%MF) (DMT) (%MF)
MEASURED RESOURCE
0-5 meters 114,167,560.95 23.16 121,598,620.18 25.40
5-10 meters 158,146,240.41 41.55 131,123,235.97 42.89
10-15 meters 164,786,486.19 24.68 131,123,235.97 24.86
15-20 meters 153,893,321.90 12.17 121,598,620.18 12.19
20-25 meters 15,464,363.07 18.86 7,528,206.63 18.86
Total 606,457,972.52 25.47 512,971,918.94 26.51
INFERRED RESOURCE
0-5 meters 63,179,310.69 47.71 177,800,022.17 49.68
The inferred resource of 177.80 million DMT at 53.49.68%MF was not

included in the total mineral resource estimate since the only mineral resource
categories allowed for DPMF are measured and indicated classification.
Table 7b. GRADE TONNAGE CURVE
Cut-off
Tonnage Grade
grade
0% 580551705.26 26.08
1% 580551705.26 26.08
2% 580551705.26 26.08
3% 580551705.26 26.08
4% 569968798.83 26.51
5% 569968798.83 26.51
_____________________________________________________________________________________
Figure 30. Grade Tonnage Curve
9.2.6 Variations in the JDVC and MGB Resource Estimates
Variations in the tonnage and grade estimates of MGB and JDVC can be
observed in Table 7. It should be noted that different softwares were used in the
construction of the polygons and determination of the area. This may result to
slight differences in the resource estimates. The total measured mineral resource
estimate by MGB of 512,971,918.94 MT is less than that of JDVC
(606,457,972.52 DMT) by 93,486,053.58 DMT with weighted average grade of
26.51 % MF compared to that of JDVC which is 25.47 %. The difference between
the estimates can be accounted to different cut-off grades and % recovery used.
While the JDVC did not set any cut-off grades and % recovery, MGB used a
5%MF cut-off grade and 90% recovery. Overall, the measured mineral resource
estimates of MGB is lower by 93,486,053.58 DMT with grade difference of 1.04
% MF.
_____________________________________________________________________________________
10.0 CONCLUSION AND RECOMMENDATION
Based on the Amended Feasibility Study (FS) of JDVCRC, the initial projected 10-year
production schedule is set at an annual extraction rate of 6.91 million DMT. In
consideration of the estimated grand total offshore raw magnetite sand resource of
512,971,918.94 DMT classified as Measured category at cut-off grade of 5% MF with
weighted average grade of 26.51%MF, the projected mine life is more than 25 years
and stands sufficient to support JDVCRC’s Offshore Magnetite Sand Project, with good
potential for additional measured and/or indicated resource that will be blocked by in-fill
drilling program with inferred resource of 177.80 million DMT at 49.68%MF
In view of the foregoing discussions, it is hereby concluded that the JDVCRC’s

Declaration of Mineral Resource Estimate of JDVC Resources Corporation's Offshore
Magnetite Project under MPSA No. 338-2010-II-OMR is acceptable and compliant to
the Philippine Mineral Reporting Code (PMRC) of 2007 and guidelines of the
Department of Environment and Natural Resources (DENR) Administrative Order
(DAO) No. 2010-09.
Prepared by:
Resty C. Gomez
Senior Science Research Specialist
Anne Karla M. Navarro

Geologist II
_____________________________________________________________________________________
11.0 REFERENCES
Liwanag, R.E. 2015. Final Exploration Report of JDVCRC Offshore

Magnetite Sand Project, CP Report to JDVC Resources Corporation.
Climate Map of the Philippines based on the Modified Corona Classification
Mines and Geosciences Bureau, 2010. Geology of the Philippines, 2nd ed.
Peña, R.E. 2008. Lexicon of the Philippine Stratigraphy. Geological Society

of the Philippines, Mandaluyong City.
_____________________________________________________________________________________
RESOURCE HOLE DEPTH VOLUME TONNAGE TOTAL TONNAGE

DENSITY %MF %FE %MF %FE
CLASSIFICATION ID (m) (cu.m.) (DMT) (DMT)
INFERRED GN01 0-5 33,708,643.93 1.69 56,967,608.24 59.3 56,967,608.24 59.30
INFERRED GN02 0-5 31,920,128.64 1.69 53,945,017.41 45.2 53,945,017.41 45.20
INFERRED GN03 0-5 29,031,769.14 1.69 49,063,689.84 46.7 49,063,689.84 46.70
INFERRED GN04 0-5 22,236,251.30 1.69 37,579,264.70 45.4 37,579,264.70 45.40
INDICATED 0-5 25,410,145.14 1.69 42,943,145.29 26.58 62.05
INDICATED 5-10 25,410,145.14 1.69 42,943,145.29 43.87 61.53
GN18 171,772,581.15 26.98 61.65
INDICATED 10-15 25,410,145.14 1.69 42,943,145.29 24.89 60.45
INDICATED 15-20 25,410,145.14 1.69 42,943,145.29 12.58 62.58
INDICATED 5-10 6,262,074.81 1.69 10,582,906.44 21.01 61.8
GN30 21,165,812.87 20.86 61.59
INDICATED 10-15 6,262,074.81 1.69 10,582,906.44 20.71 61.38
INDICATED 0-5 12,067,221.47 1.69 20,393,604.28 22.56 62.53
INDICATED 5-10 12,067,221.47 1.69 20,393,604.28 41.89 61.52
GN33 81,574,417.12 24.93 61.83
INDICATED 10-15 12,067,221.47 1.69 20,393,604.28 23.63 61.23
INDICATED 15-20 12,067,221.47 1.69 20,393,604.28 11.65 62.03
INDICATED 0-5 15,734,912.14 1.69 26,592,001.52 24.87 60.58
INDICATED 5-10 15,734,912.14 1.69 26,592,001.52 46.55 62.12
GN48 106,368,006.07 27.37 61.29
INDICATED 10-15 15,734,912.14 1.69 26,592,001.52 25.41 62.35
INDICATED 15-20 15,734,912.14 1.69 26,592,001.52 12.66 60.09
INDICATED 0-5 14,360,438.94 1.69 24,269,141.81 24.94 60.5
INDICATED 5-10 14,360,438.94 1.69 24,269,141.81 47.29 61.49
GN58 97,076,567.22 27.59 61.04
INDICATED 10-15 14,360,438.94 1.69 24,269,141.81 27.89 60.37
INDICATED 15-20 14,360,438.94 1.69 24,269,141.81 10.24 61.78
INDICATED 0-5 12,373,778.16 1.69 20,911,685.09 26.98 60.38
INDICATED 5-10 12,373,778.16 1.69 20,911,685.09 43.15 62.58
INDICATED GN68 10-15 12,373,778.16 1.69 20,911,685.09 23.89 61.06 92,011,414.39 26.16 61.36
INDICATED 15-20 12,373,778.16 1.69 20,911,685.09 13.56 61.74
INDICATED 20-22 4,949,511.26 1.69 8,364,674.04 18.86 60.53
Mines and Geosciences Bureau, North Ave., Diliman, Quezon City

TOTAL INDICATED 569,968,798.83 26.51 61.45

TOTAL INFERRED 197,555,580.19 49.68
Table 7c. MGB’s Summary of Magnetite Sand Resource Estimate of JDVCRC at cut-off grade of 5% MF.
Mines and Geosciences Bureau, North Ave., Diliman, Quezon City Page 63
Figure 31. Drillholes Used by MGB in the Resource Estimation
Mines and Geosciences Bureau, North Ave., Diliman, Quezon City Page 64
REPRESENTATIVE SEISMIC PROFILES
I. NW – SE Lines
A. Line B3
Unit 1 is essentially characterized by reflection-free to parallel sub-parallel reflection patterns deduced to consist essentially of mud
to silty mud sediments. The thickness of this unit is relatively variable with an average of about 4 to 5 meters. Unit 2 is generally
characterized by relatively strong stratified divergent to sigmoidal to chaotic in some places internal reflection patterns and is inferred
to consist predominantly of fine to medium grained most possibly sand-sized deposits. It has an average thickness of about 8 to 10
meters. Unit 3 is characterized by irregular, discontinuous and faintly chaotic to hummocky reflection patterns and is deduced to
consist essentially of silty sand to muddy sand deposit. It has an average thickness of about 5 meters. Unit 4 – The “acoustic
basement” surface underlying the study area.
II. N – S / S – N Lines

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MINERAL RESOURCE VALIDATION REPORT

FOR THE EVALUATION OF

Lands Geological Survey Division

1.0 INTRODUCTION ……… 4

2.0 GEOGRAPHICAL FEATURES ……… 7

3.0 TENEMENT INFORMATION ……… 17

4.0 EXPLORATION HISTORY AND RECENT WORKS CONDUCTED ……… 21

5.0 REGIONAL GEOLOGIC SETTING ……… 33

6.0 LOCAL GEOLOGY ……… 39

7.0 DEPOSIT TYPE AND MINERALIZATION ……… 39

8.0 MGB FIELD VALIDATIONS ……… 40

9.0 MINERAL RESOURCE ESTIMATION ……… 48

9.2.2 Geological Model Rendering ……… 55

10.0 CONCLUSION AND RECOMMENDATION ……… 60

Figure 1a: Site Location Map …….. 5

Figure 12: Bathymetry of the Eastern Segment of MPSA-338-2010-II-OMR …….. 28

Figure 17: Regional Geologic Map of Northern Luzon …….. 36

Table 1: Mining Tenement of JDVCRC …….. 17

Annex 1. Transmittal Letters of MGB and JDVCRC

The mineral resource validation of JDVC Resources Corporation’s (JDVCRC’s) Offshore

Mines and Geosciences Bureau, North Ave., Diliman, Quezon City 1

The sediment built-up i n t h e MP S A a r e a is influenced by the supply of sediments

The mineral resource validation of JDVC Resources Corporation’s (JDVCRC’s)

Source: Incept Holdings Limited

Figure 1a. General Location Map of the Study Area

2.0 GEOGRAPHICAL FEATURES

2.1 Location and Accessibility

The Offshore Magnetite Mining Project of JDVC is located in the municipal

2.2 Climate and Vegetation

Figure 2. Climate Map of the Philippines

Figure 3. Digital Terrain Model Map of Cagayan Valley

Mines and Geosciences Bureau, North Ave., Diliman, Quezon City 9

Figure 4. Drainage Map of Cagayan Valley

2.3 Topography and Drainage

The Babuyan group of islands, which include the islands of Calayan,

Mines and Geosciences Bureau, North Ave., Diliman, Quezon City 11

The Cagayan River's headwaters are at the Caraballo Mountains of

Cagayan River and its tributaries have deposited sediments

2.4 Sea Bottom Topography

The Luzon Strait is approximately 250-kilometer wide span of body of water

Source: JDVCRC FER

Mines and Geosciences Bureau, North Ave., Diliman, Quezon City 14

Source: JDVCRC FER

Mines and Geosciences Bureau, North Ave., Diliman, Quezon City 15

Source: JDVCRC FER

Mines and Geosciences Bureau, North Ave., Diliman, Quezon City 16

3.0 TENEMENT INFORMATION

3.1 Description of Mineral Rights

The JDVCRC tenement area under Mineral Production Sharing Agreement

The property was originally covered by MPSA No. 338-2010-II-OMR, a Mineral

Table 1. Geographical coordinates of MPSA No. 338-2010-II-OMR

Corner North Latitude East Longitude Total Area

Mines and Geosciences Bureau, North Ave., Diliman, Quezon City 17

3.2 History of Mineral Rights

MPSA-338-2010-II-OMR was approved on June 9, 2010 as a contract

The MPSA Contract ownership was transferred to JDVCRC by BGRMC on

The Deed of Assignment as approved carries with it the responsibility to

The first renewal of the Exploration Period of MPSA No. 338-2010-II-OMR

Source: JDVC FER 2015

RPE= ((X-Y)/ (0.5)(X+Y))100 wherein X=original assay, Y=duplicate assay.