Mineral Exploration Guidelines 2023

1. “Drilling” means digging a hole into the earth using either handheld drilling tools or machines.

2. “Core” shall refer to the drill core of rocks and minerals obtained using drilling tools and machines.

3. “Environment” means the physical features (both biotic and abiotic) surrounding human beings. The biotic components are animals and plants while the earth, soil, water, atmosphere, climate, sound, odors, tastes form abiotic components. The complex web of interrelationships between the abiotic and biotic components sustain life on earth.

4. “Geochemical” shall refer to the chemical composition of the rocks, minerals, and soil.

5. “Geological Mapping” is a mapping process to produce a special-purpose or thematic map showing the distribution of geological features such as rock types, mineralization, faults, folds, foliations, lineation, joints, etc.

6. “Geophysical” shall refer to recording or mapping of physical properties of rocks and minerals through an application of physics.

7. “Grid System” is a simplified grid used for systematic planning of prospecting and exploration works.

8. “Inspector” means a person employed by the DGM to monitor all activities pertaining to mineral prospecting and exploration.

9. “Mineral” means any substance occurring naturally in or on the earth and having definite chemical formula or rocks with an economic significance formed through a geological process(s) that can be obtained from the earth by digging, drilling, dredging, quarrying, hydraulicking, sluicing or other mining methods.

10. “Mineral Deposit” is any occurrence of a valuable commodity or mineral that is of sufficient size and grade (concentration) that has potential for economic development under past, present, or future favorable conditions.

11. “Mineral Exploration or Exploration” refers to an exploration of geological resources such as minerals, rocks, fuels, gemstones, alluvial, glacial, colluvial and residual deposits for various uses in construction, industry, metal extraction, tourism, decoration, and energy. It is a process of determining the grade and reserve of identified potential geological resources for economic extraction. ii | Page Mineral Exploration Guidelines 2023

12. “Exploration Permit” is a permit that provides the right to explore or study the permitted mineral(s) within the permitted area to determine the geology, grade and reserve of the permitted mineral(s) for economic extraction.

13. “Mineral Resource” means a concentration or occurrence of minerals in or on the earth’s crust in such form, quality, and quantity that are reasonable prospects for eventual economic extraction.

14. “Mineralogical Study” is a scientific study of chemistry, crystal structure, and physical (including optical) properties of minerals and mineralized artifacts for identification purposes.

15. “Officer” means an officer of the DGM authorized in writing by DGM to exercise powers conferred by the MMMA 1995, MMMR 2022 and this Guidelines.

16. “Permit” means an approval granted for exploration issued under MMMR 2022 and this Guidelines.

17. “Permit Area” shall mean the delineated or demarcated area by DGM, as reflected in the permit inside which prospecting or exploration activity shall be carried out.

18. “Exploration Permit Holder” shall refer to an individual or company, whose name is reflected in the permit and has the right to carry out prospecting or exploration.

19. “Petrological Study” is a scientific study of chemistry, crystal structure, and physical (including optical) properties of minerals for identification purposes.

20. “Pitting” is digging of shallow depth holes in the earth’s surface within permit area for determination of mineralization continuity, size and shape and sampling purpose.

21. “Prospecting” means the systematic process of searching for a mineral deposit by narrowing down areas of promising mineral deposits.

22. “Provision” shall mean a condition or requirement in a legal document.

23. “Reserve” is that subgroup of a mineral resource that has been discovered, has a known size or extent that can be extracted at a profit at a given point of time.

24. “Sampling” is the process of taking a small portion of the target mineral such that it is representative of the entire property under assessment.

25. “Topographical Survey” is defined as collecting spatial data or information of the features on the surface of the land both natural and man-made using standard tools and technologies. iii | Page Mineral Exploration Guidelines 2023

26. “Trenching” is digging of shallow depth trenches on the earth surface within permit area for determination of mineralization continuity, size and shape and sampling purpose iv | Page Mineral Exploration Guidelines 2023 TABLE OF CONTENTS Introduction 1 PART I: MINERAL EXPLORATION BY PERMIT HOLDER 2 Chapter 1. Exploration by Permit Holder 2 Mineral Resources covered by the Exploration Permit 2 Exploration Permit Area 2 Exploration Permit Validity and Renewal 2 Surrender of the Exploration Permit 3 Transfer of Exploration Permit 3 Suspension of the Exploration Permit 3 Termination of the Exploration Permit 3 Compensation 4 Chapter 2. Application Procedures for Exploration Permit 4 Renewal of Exploration Permit 5 Chapter 3. Inspection and Compliance Monitoring 5 PART II: MINERAL EXPLORATION BY DGM 8 Chapter 4. Exploration by DGM 8 PART III: GENERAL PROVISIONS 10 Chapter 5. Code of Exploration Practices 10 General Code of Practices 10 Stages of Exploration 10 Social and Environment Management 11 Annexure 1. Stages of Exploration 12 Annexure 2. Social and Environmental Management in Exploration projects 22 Annexure 3. Report Standards and Format 26 Annexure 4. Form EP-1 (Application for Exploration Permit) 30 Annexure 5. Form EP-2 (Exploration Permit) 33 v | Page Mineral Exploration Guidelines 2023 Introduction Mineral resources and its development are one of the key drivers of economic growth. Mineral resources of Bhutan include dolomite, limestone, quartzite, gypsum, talc, marble, graphite, coal, construction stones and aggregates. These resources form raw materials to mineral-based industries of Bhutan and are also exported to India, Bangladesh and Nepal. Metallic mineral resources such as copper, lead, zinc, tungsten, gold, rare earth elements (REE) and iron are also known. Regional geological mapping on a 1:50,000 scale is underway to map the remaining 50 percent of the country’s areas, which will help understand mineral resource endowment and drive new discoveries. The RGoB identified mining as one of the key sectors for economic development of Bhutan. To enhance the contribution of the mining sector to the economy, mineral exploration is fundamental in determining geological characteristics, reserve, grade, mining and economic feasibility of mineral deposits. Thus, in exercise of the power conferred by MMMA 1995 and MMMR 2022, DGM hereby adopts this guidelines hereafter known as “Mineral Exploration Guidelines 2023”. The Guidelines shall provide details on requirements, procedures, specifications and standards for mineral exploration works in the Kingdom of Bhutan. The guidelines for obtaining Exploration Permit, Rights and Obligations of Permit Holder, and Monitoring of the Exploration Works are provided as Part-I. Part-II provides guidelines for exploration by DGM. Part-III provides the code of exploration practices for both Permit Holder and exploration by DGM. 1 | Page Mineral Exploration Guidelines 2023 PART I: MINERAL EXPLORATION BY PERMIT HOLDER Chapter 1. Exploration by Permit Holder Mineral Resources covered by the Exploration Permit

1. The Exploration Permit shall be issued for minerals in accordance with MMMR 2022.

2. Any other mineral not specified in the Exploration permit, fossil, and gemstone discovered during exploration must be reported to DGM within 30 days from the date of discovery. The report shall comprise brief description of the following: (1) location (with highest possible accurate location coordinates); (2) geology and mineralization including reserve and grade; and (3) conclusions and recommendations.

3. The mineral reported in section 2 of this Guidelines shall be permitted for exploration, subject to expression of interest and eligibility. Exploration Permit Area

4. The maximum area permissible for exploration shall be up to 3 km2.

5. Exploration shall be permitted in both the SRF and private registered land. Exploration within the private registered land shall be permitted upon submission of a written consent from the private registered landowner or any person in custody of such land by the applicant.

6. Proposals for any change in the demarcation of the permitted area must be submitted to DGM with reasons for approval. Exploration Permit Validity and Renewal

7. The Exploration Permit shall be valid for a period of 3 years. 2 | Page Mineral Exploration Guidelines 2023

8. The Exploration Permit may be renewed up to additional 3 years based on the need, valid justification and fulfillment of the compliance requirements. Surrender of the Exploration Permit

9. The Exploration Permit Holder may submit a written application for surrender of a part or whole of the Exploration Permit Area to DGM.

10. The DGM shall accept the application for surrender of a part or whole of the Exploration Permit Area upon fulfillment of the environmental restoration and other Terms and Conditions of this Guidelines by the Exploration Permit Holder. Transfer of Exploration Permit

11. The Exploration Permit shall be non-transferable. Suspension of the Exploration Permit

12. The DGM shall suspend the part or whole of the Exploration Permit Area on the following grounds: (1) in case of serious and imminent threat to human health or the environment caused by non-compliance to the Terms and Conditions of Exploration Permit; (2) if the Exploration Permit Holder fails to comply with the notices issued by the DGM; or (3) if the Exploration Permit Holder fails to submit a report as per section 32(9) and (10) of this Guidelines.

13. The DGM may lift the suspension upon necessary rectification of the compliance requirements. Termination of the Exploration Permit

14. The DGM shall terminate the part or whole of the Exploration Permit Area on the following grounds: (1) breach of the Terms and Conditions of the Exploration Permit or the provision(s) of MMMA 1995, MMMR 2022 and this guidelines, and other relevant laws of the Kingdom of Bhutan; (2) withdrawal of the Exploration Permit in the interest of RGoB. 3 | Page Mineral Exploration Guidelines 2023

15. Upon termination, the Exploration Permit Holder shall be required to fulfill the environmental restoration and other Terms and Conditions of this Guidelines. Compensation

16. The RGoB shall pay reasonable compensation to the Exploration Permit Holder if the Exploration Permit is terminated in line with section 14 (2) of this Guidelines.

17. The Exploration Permit Holder shall compensate for any accident resulting in the injury or death as per existing laws of the Kingdom. Chapter 2. Application Procedures for Exploration Permit To obtain an Exploration Permit for mineral exploration, the following procedures and requirements shall be followed and fulfilled by the applicant: Eligibility Criteria

18. Any Bhutanese citizen, proprietor of licensed firm or company shall be eligible to apply for the Exploration Permit.

19. The DGM shall issue an Exploration Permit based on eligibility and requirements of MMMR 2022 and this Guidelines. Procedure for obtaining Exploration Permit

20. The applicant shall submit the application in Form EP-1 in Annexure 4 of this Guidelines to the DGM;

21. The applicant shall obtain a written consent from the private registered landowner or any person in custody of such land which falls within the radial distance of 200m from the proposed exploration boundary.

22. The DGM shall convene a technical committee meeting, where necessary, to assess the eligibility and capability of the applicant and communicate the decision on acceptance or rejection.

23. The use of airborne or UAV for exploration shall require approval from MoIT.

24. The use of explosives for exploration shall require approval from MoHA. However, DGM discourages the use of explosives during mineral exploration.

25. DGM shall approve and issue Exploration Permit in Form EP-2 in Annexure 5 of this Guidelines upon fulfillment of the requirements as per this Guidelines. 4 | Page Mineral Exploration Guidelines 2023

26. Any changes in the Exploration Permit Area(s) would require the approval of DGM upon which the new Exploration Permit shall be issued. Renewal of Exploration Permit

27. The Exploration Permit Holder shall submit a written application to the DGM for renewal of the Exploration Permit at least 6 months prior to the expiry of the Exploration Permit.

28. The DGM shall renew and issue the Exploration Permit in Form EP-2 in Annexure 5 of this Guidelines based on feasibility and completion of more than half of the work under initial Exploration Permit and submission of reports as per sections 32 (9) and (10) of this Guidelines. Chapter 3. Inspection and Compliance Monitoring

29. The DGM shall regulate and monitor the exploration activities in approved areas in line with MMMA 1995, MMMR 2022 and this Guidelines to ensure compliance by the Exploration Permit Holder.

30. The Officer(s) or Mines Inspector(s) shall: (1) carry out inspection and monitoring of the exploration activities; (2) produce proof of identification issued by the DGM; (3) call for and examine all reports, registers and records required to be maintained by the Exploration Permit Holder; (4) have access to the permit area and all facilities related to exploration, with or without prior notice, at any time for inspection and monitoring; (5) take samples of minerals for verification and validation purposes; (6) issue order(s) or levy fines and penalties to the permit Holder for any non-compliance or infringement of terms and conditions of the permit, MMMA 1995 and MMMR 2022; and (7) submit a report to the Head Office after completion of the inspection and compliance monitoring of such activities. 5 | Page Mineral Exploration Guidelines 2023

31. The DGM shall: (1) maintain the confidentiality of the reports and data submitted until an appropriate time for disclosure or sharing is determined; (2) disclose or share the confidential material or document only through a written consent of the Exploration Permit Holder. The Exploration Permit Holder shall not withhold such consent without strong basis; and (3) use reports (including publications) or data if DGM deems it as a public or national interest and the DGM may request additional information on the reports.

32. The Exploration Permit Holder shall: (1) undertake exploration work in accordance with Chapter V of this Guidelines; (2) inform in writing to the DGM, Divisional Office of DoFPS, Local Government and other relevant agencies prior to the commencement of the mineral exploration works; (3) cooperate with the officer(s) or inspector(s) at all times when they are on inspection and monitoring; (4) produce Exploration Permit and other relevant records/documents; (5) keep accurate records of exploration activities including financial records carried out as may be prescribed under this Guidelines; (6) carry out exploration in accordance with Terms and Conditions of the Exploration Permit and the Exploration Plan approved by the Department; (7) abide by all regulations, orders and standards as may be issued by the DGM; (8) ship samples to other countries for analysis with prior approval from DGM; (9) submit a half yearly progress report to DGM including the findings on geology and mineralization and expenditure made for the exploration work on or before 15th day of the following month. 6 | Page Mineral Exploration Guidelines 2023 (10) submit Final Report fulfilling the standards as per Annexure 3 of this Guidelines to DGM within 6 months from the completion of the exploration or the date of expiry of permit, whichever is earlier.; (11) submit survey or raw field data to Geological Survey Division of DGM for archival in the system maintained by DGM; (12) submit all the digital data of GIS (in shapefile) and images (in JPEG or TIFF, GeoTIFF or PNG) to the Geological Survey Division of DGM; and (13) keep all data, drill cores and other samples for at least one year after the expiry of the permit. After this period, all data, drill cores and other samples shall be submitted to DGM before its discard and destruction. 7 | Page Mineral Exploration Guidelines 2023 PART II: MINERAL EXPLORATION BY DGM Chapter 4. Exploration by DGM

33. The Exploration by DGM shall be guided by the MRDP, FYP, EDP, MDP and available geological and mineral resources information of the country.

34. The DGM shall carry out the planned exploration activity on its own or outsource to a qualified exploration firm, where necessary.

35. The DGM shall hire the qualified exploration firm for execution of the planned exploration activity using appropriate method of selection, in accordance with the provisions of the Procurement Rules and Regulations.

36. The DGM shall inform in writing to the Divisional Office of DoFPS, Local Government and other relevant agencies prior to the commencement of the mineral exploration work.

37. The DGM shall seek written consent from the private registered landowner or a person in custody of such land prior to commencement of the exploration works. -

38. The RGoB shall pay fair compensation to the land and property owner if any damages are caused during exploration.

39. The exploration by DGM or exploration firm undertaking exploration works on behalf of DGM shall be undertaken in accordance with Chapter V of this Guidelines.

40. The exploration team of DGM or exploration firm undertaking exploration works on behalf of DGM shall remove all the installation and restore any environmental damages in the area on completion of the exploration activity.

41. The exploration team of DGM shall report on the progress and way forward to the DGM on a monthly basis.

42. The exploration firm undertaking exploration works on behalf of DGM shall report on the progress and way forward to the DGM as per the contractual term.

43. The exploration team of DGM shall prepare and submit the exploration report in accordance with Annexure 3 of this Guidelines as per the planned target.

44. The exploration firm undertaking exploration works on behalf of DGM shall prepare and submit the exploration reports in accordance with Annexure 3 of this Guidelines to DGM as per the contractual term. 8 | Page Mineral Exploration Guidelines 2023

45. The exploration team of DGM or exploration firm undertaking exploration works on behalf of DGM shall present the findings of the exploration to the DGM. 9 | Page Mineral Exploration Guidelines 2023 PART III: GENERAL PROVISIONS Chapter 5. Code of Exploration Practices This Chapter shall provide standards and specifications to be fulfilled for Exploration in the Kingdom by both Exploration Permit Holder and exploration by DGM. General Code of Practices

46. The Exploration work in the country shall ensure the following: (1) abide by the provisions of MMMA 1995, MMMR 2022, this Guidelines and Terms and Conditions of the Exploration Permit, where relevant; (2) abide by the methods, specifications, and standards mentioned under this Guidelines; (3) carry out the activities without disturbing or damaging cultural and heritage sites, properties of government, private and corporate, with exception to possession of prior approval or permission; (4) carry out with minimal interference to locals, other lawful activities and not expose a person or third-party property to danger; (5) carry out the exploration activities with minimal impacts to forests and the natural environment. In unavoidable circumstances, the permit holder shall adhere to the provisions of the environmental and forestry legislations of the Kingdom of Bhutan. (6) provide adequate first aid kits with proper signs maintained; and (7) use adequate PPE and abide by the OHS standards. Stages of Exploration

49. In this Guidelines, exploration shall comprise of (1) Prospecting, (2) General Exploration and (3) Detailed Exploration.

50. The detailed standards and specifications for each stage of exploration are provided in Annexure 1 of this Guidelines. 10 | Page Mineral Exploration Guidelines 2023 Social and Environment Management

51. The exploration activities shall be carried out: (1) in accordance with the provisions of the environmental legislations and standards of the Kingdom of Bhutan; and (2) with minimal social and environmental impact by implementing the mitigation and management measures provided in Annexure 2 of this Guidelines. 11 | Page Mineral Exploration Guidelines 2023 Annexure 1. Stages of Exploration a. Prospecting Stage The objective of prospecting is to identify a deposit for further exploration. Estimates of quantities and grades are inferred, based on interpretation of geological, geophysical and geochemical results. This stage of exploration may include geological mapping, sampling, pitting, trenching, drilling, Petrological and Mineralogical Studies, sample analysis and reserve estimation. The details of the standards for each work item are provided below:

1. Geological mapping The following are the standards for geological mapping during the prospecting stage: (1) geological mapping on 1:25,000 or larger scale using Toposheet Map of NLC or DEM and geological tools; (2) location of data must be collected using GPS with coordinates in decimal degree and WGS 1984; and (3) qualitative and quantitative data must be collected and recorded based on a scale of mapping.

2. Sampling The following sampling standards shall be required to fulfill: (1) sampling method recommended are Grab or Chip and Soil Sampling; (2) the samples collected shall be used only for analysis purposes; and (3) samples must be collected: a. using handheld tools only; b. with wide space ranging from 50-100 meters; c. to represent the area of interest; d. free of weathering and contamination; e. with locations (geo coordinates using WGS 1984 datum); 12 | Page Mineral Exploration Guidelines 2023 f. with each sample weighing 1-2 kg for petrological or mineralogical studies, and geochemical tests for non-metallic minerals and 5-100 kg for metallic minerals and geotechnical tests; and g. with proper packaging and labeling. (4) The total allowable weight of samples collected shall be determined by DGM based on the type of mineral and purpose of analysis.

3. Pitting and Trenching The pitting and trenching for sampling and determination of extent, size and shape of mineral of interest shall be carried out fulfilling the following: a. Pitting (1) limited number(s) of pits may be carried out. The number(s) and spacing may differ depending on the nature of mineral occurrence or deposit. Spacing may range from 50-100m; (2) excavating about 1 x 1 m2 or 1 m radius pits using handheld tools only; (3) the depth of the pits varies depending on the extent of weathering and location of mineral(s) of interest; (4) the representative material recovered from each meter of the pit must be stacked separately to collect samples for analysis to determine the variations across the mineralization; and (5) other materials excavated from the pit must be stacked properly for backfilling purposes. b. Trenching (1) limited number of trenches with appropriate dimensions may be carried out using handheld tools only; (2) the number and spacing may differ depending on the nature of mineral occurrence or deposit. Spacing may range from 50-100m; (3) the representative material recovered from each meter of the trench must be stacked separately to collect samples for analysis to determine the variations across the mineralization; and 13 | Page Mineral Exploration Guidelines 2023 (4) other materials excavated from the trench must be stacked properly for backfilling purposes.

4. Drilling (1) limited or few, wide spaced (200-2,000 m) drilling using handheld drilling tools may be used; (2) the number and spacing of drilling will depend on the type and nature of the mineral deposit; (3) all drill hole location(s) must be maintained on the base map of 1:25,000 or larger scale with proper geo-coordinates; (4) drilling must be planned and executed to ensure maximum core recovery; (5) drill cores must be systematically preserved and properly labeled in the core boxes for core logging purposes.

5. Petrological and Mineralogical Studies, Sample Analysis (1) samples collected must be tested or analyzed in a standard licensed or certified laboratory.

6. Reserve Estimation This Guidelines shall follow Indian Classification System of Reserve. The Reserve shall include both quality (grade) and quantity (tonnes) aspects. (1) reserve estimates must be at least in the “Possible” category; (2) reserve must be estimated using an appropriate method depending on type and nature of topography and mineral deposits. Recommended methods are provided in Table 1; (3) the error of the estimated reserve shall not exceed 50%; (4) the reserve estimate is based on limited geological, geochemical and/or geophysical information; and (5) the level of geological confidence on the reserve is low. 14 | Page Mineral Exploration Guidelines 2023 Table 1. Conventional Methods of Reserve Estimation Sl. Geological Condition Reserve Estimation Method No. 1 Moderately to Steeply dipping ore/mineral -Cross Section method deposits -Longitudinal Section method -Level plan method 2 Horizontal to low dipping ore/mineral -Polygon method (triangular, square and deposits rectangle) -Method of isograd/isopach 15 | Page Mineral Exploration Guidelines 2023 b. General Exploration Stage Based on the findings and recommendations of Prospecting and/or Preliminary Socio-Economic and environmental considerations, General Exploration may be undertaken. The objective of general exploration is to establish the main geological features of a deposit, giving a reasonable indication of continuity and providing an initial estimate of extent, shape, structure, and grade. The degree of accuracy should be sufficient for deciding whether a Detailed Exploration is warranted. Estimates of quantities and grades are indicated, based on interpretation of geological, geophysical and geochemical results. The details of the standards for each item are as follows:

1. Topographical Surveying The following are the standards for topographical surveying during the General Exploration stage: (1) prior to undertaking the topographical survey, carry out proper desktop study with field reconnaissance of the proposed site to assess the topography for proper mobilization of resources; (2) the topographical survey shall be carried out using appropriate technology and instruments to generate accurate base maps, geological maps and cross sections. Some of the available technologies or equipment are Total Station, UAV based LiDAR, photogrammetry, GNSS and RS techniques; (3) the topographical survey must be carried out on large scale considering nature and type of deposits; (4) the contour interval must be in consistent with the map scale or should be adequate enough to represent the topography; (5) the topographical survey or any kind of data collection must be carried out on Standard Spatial Reference Coordinate System (Preferably National Coordinate Reference System - DRUKREF-03); (6) in the process of map production and construction of cross sections, state of art technology in data input, spatial database management, GIS techniques, and relevant software shall be used; (7) the GIS layers should contain required attribute information; (8) the final maps should contain, inset of location Map, title, scale bar, contour interval, field data collection period, name of surveyor, name of the reference 16 | Page Mineral Exploration Guidelines 2023 coordinate system, orientation, legend, projected grid and all other map elements; (9) base Map/Fundamental Datasets may include but not limited to the following layers/features: ● Contour; ● Drainage; ● Infrastructures; and ● Land Use and Land cover. (10) the number of cross sections should be representative of the scale of mapping and type and nature of deposits and topography; (11) the cross section should be oriented normal to the strike of the lithology and should represent all the lithological units. Where orientation deviates from normal to the strike, apparent dip amount must be used for sub-surface projection; and (12) the cross section should contain title, scale bar, orientation of the section line, legend and grid.

2. Geological Mapping The following are the standards for geological mapping during the General Exploration stage: (1) geological mapping should be on a same or smaller scale topographic map; (2) location of data must be collected using an instrument that has the capability to collect the locational data consistent with the accuracy level of the topographic base map and in the coordinates system consistent with base data; and (3) qualitative and quantitative data must be collected and recorded based on a scale of mapping.

3. Sampling The following sampling standards shall be required to fulfill: 17 | Page Mineral Exploration Guidelines 2023 (1) sampling methods recommended are Groove or Channel, Core sampling, and Soil Sampling with sample spacing ranging from 25-50m; and (2) other requirements and standards of the samples collected shall be as per provisions of the Prospecting Stage of this Guidelines.

4. Pitting and Trenching The pitting and trenching for sampling and determination of extent, size and shape of mineral of interest shall be carried out fulfilling the following: a. Pitting (1) limited number(s) of pits may be carried out. The number(s) and spacing may differ depending on the nature of mineral occurrence or deposit. (2) spacing may range from 25- 50m; and (3) other requirements and standards shall be as per provisions of the Prospecting Stage of this Guidelines. b. Trenching (1) systematic trenching may be carried out by excavating appropriate dimensions; (2) the numbers and spacing may depend on the nature of the mineral occurrence or deposit. Spacing may range from 25-50m; and (3) other requirements and standards shall be as per provisions of the Prospecting Stage of this Guidelines.

5. Drilling (1) diamond drilling or other drilling methods may be used; (2) grid or other appropriate drilling plans may be used; (3) boreholes must be moderately spaced (400 - 1000 m); (4) the number of boreholes will depend on type, and nature of the mineral deposit; (5) the borehole locations must be shown on a final geological map; 18 | Page Mineral Exploration Guidelines 2023 (6) the width of the approach track must be not more than 2m; (7) clearances from concerned authority(s) for approach road, if deemed necessary, must be obtained; (8) drilling must be planned and executed to ensure maximum core recovery; (9) quality control or assurance of drilling operations and cores must be maintained; (10) drill cores must be systematically preserved and properly labeled in the core boxes for core logging purpose; and (11) systematic drill logs must be maintained by the concerned drilling professional and systematic core logs must be maintained by the geologist. 6. Petrological and Mineralogical Studies, Sample Analysis (1) samples collected must be tested or analyzed in a standard licensed or certified laboratory.

7. Reserve Estimation (1) reserve estimates must be at least in “Probable” Category; (2) reserve must be estimated using an appropriate method, which will depend on the type and nature of topography and mineral deposits. Recommended methods are provided in Table 1; (3) the error of the estimated reserve shall not exceed 30%; (4) the reserve estimate is based on moderate geological, geochemical and/or geophysical information; and (5) the level of geological confidence on reserve is moderate. 19 | Page Mineral Exploration Guidelines 2023 c. Detailed Exploration Stage Detailed Exploration involves clear three-dimensional delineation of a known deposit extent, shape, structure, grade, and other characteristics of the deposit with a high degree of accuracy. A decision whether to conduct a Feasibility Study can be made from the information provided by Detailed Exploration. Estimates of quantities and grades are measured, based on interpretation of geological, geophysical and geochemical results. The work items and standards for detailed exploration are as follows:

1. Topographical Surveying The following are the standards for topographical surveying during the Detailed Exploration stage: (1) the requirements and standards shall be as per the provisions of the General Exploration Stage of this Guidelines.

2. Geological Mapping The following are the standards for geological mapping during the Detailed Exploration stage: (1) the requirements and standards shall be as per the provisions of the General Exploration Stage of this Guidelines.

3. Sampling The following sampling standards shall be required to fulfill: (1) sampling methods recommended are Groove or Channel, Core sampling, and Soil Sampling with the sample spacing ranging 5 to 50 meters; and (2) other requirements and standards shall be as per the provisions of the General Exploration Stage of this Guidelines.

4. Pitting and Trenching The pitting and trenching for sampling and determination of extent, size and shape of mineral of interest shall be carried out fulfilling the following: a. Pitting (1) the number(s) and spacing of pits may differ depending on the nature of mineral occurrence or deposit. Spacing may range from 5- 50m; 20 | Page Mineral Exploration Guidelines 2023 (2) other requirements and standards shall be as per the provisions of the General Exploration Stage of this Guidelines. d. Trenching (1) the numbers and spacing may depend on the nature of mineral occurrence or deposit. Spacing may range from 5-50m; (2) other requirements and standards shall be as per the provisions of the General Exploration Stage of this Guidelines.

5. Drilling The following are the standards for drilling during the Detailed Exploration stage: (1) boreholes must be closely spaced (less than 400m); (2) other requirements and standards shall be as per the provisions of the General Exploration Stage of this Guidelines.

6. Petrological and Mineralogical Studies, Sample Analysis Samples collected must be tested or analyzed in a standard licensed or certified laboratory.

7. Reserve Estimation (1) reserve estimates must be at least in “Proven” Category; (2) reserve must be estimated using an appropriate method, which will depend on the type and nature of topography and mineral deposits. Reserve estimation based on 3-D modeling and geo-statistical techniques using standards software may be used; (3) the error of the estimated reserve shall not exceed 20%; (4) the reserve estimate is based on detailed geological, geochemical and/or geophysical information; and (5) the level of geological confidence on the reserve is high. 21 | Page Mineral Exploration Guidelines 2023 Annexure 2. Social and Environmental Management in Exploration projects POTENTIAL TYPE ACTIVITIES MITIGATION MEASURES MANAGEMENT PLAN IMPACT

1. Camping, Damages to 1. Minimize the vegetation 1. Undertake Re-plantation surveying, topography and clearance, confined to wherever works. mapping. physiography, necessary only. 2. Carryout landscaping, if

2. Drilling removal of 2. Select the ideal camping necessary activities vegetation, location (appropriate distance 3. Backfill and seal any dug land,

3. Pitting and waste from villages, safe and stable) holes, pits and trenches. trenching. generations, avoiding ecologically sensitive 4. Construct proper drainages.

4. Construction soil pollution areas. 5. Implement the terms and of approach from oil 3. Carry out Drilling, pitting and conditions of the permit. LAND tracks and spillages trenching, construction of tracks 6. Dispose waste in a safe or roads. within standards of this designated area. Guidelines. 7. Adopt precautionary measures

4. Carry out proper segregation to prevent wildfires. and disposal of waste. 8. Carry out proper closure of the

5. Install Trays/thick plastic mats sites with necessary beneath stationary machinery reclamation/restoration works. and oil drums to prevent oil 9. Stock the oil absorbent spills. materials for any potential oil spill. 22 | Page Mineral Exploration Guidelines 2023

1. Drilling Air 1. Transport material in closed 1. Wear personal protection activities pollution/Dust vehicles to reduce dust emission. equipment. emission 2. Carry out regular maintenance of 2. Regulate the driving speeds on-

2. Vehicles and vehicles and machines. site. AIR machine 3. Use dust suppression and air 3. Use dust suppression and air exhaust pollution control systems to meet pollution control systems to fumes the desired standard. meet the desired standard.

4. Implement drilling control standards.

1. Camping, Induced 1. Maintain a natural drainage 1. Clean any spillage of fuels and surveying, pressure on system. lubricants from drilling. mapping. local water 2. Minimal spillage of fuels and 2. Rectify any leakages of fuels resources, lubricants used for drilling. and lubricant containers and

2. Drilling decrease in 3. Inspect leakages of the fuels and machines. activities groundwater lubricants containers and 3. Rectify damages caused to

3. Pitting and recharge machines. community water sources. WATER trenching. potential, 4. Select the ideal location of the 4. Dismantle and seal properly, the contamination drilling pump away from the toilets and degradable waste

4. Construction of nearby water bodies. pits. of approach water bodies. 5. Ensure responsible sharing and 5. Construct and maintain a tracks and use of water resources with the garland drain and siltation pond. roads. local community.

6. Proper maintenance of sanitation and drinking water in the camp and field sites. 23 | Page Mineral Exploration Guidelines 2023

1. Camping, Fragmentation 1. Prohibit encroachment of 1. Backfill all excavations resulted surveying, and loss of established habitat and corridor. from prospecting/exploration mapping. wildlife habitat, 2. Provide proper advocacy to the activities.

2. Drilling Increased risk prospecting/exploration team. 2. Carry out replantation and activities of poaching and 3. Avoid poaching or hunting of reclamation works. WILD 3. Pitting and hunting of wild animals including trenching. animals, stress malicious scarring, harassing, LIFE 4. Construction on local attracting or chasing of wild of approach resources. animals. tracks and 4. Avoid picking up the remains roads. (part or whole) of the wild animal.

1. Camping, Impact on 1. Provide part time employment 1. Rectify any damages to the surveying, social and to local inhabitants. infrastructures, cultural and mapping. economy 2. Maintain harmony with the heritage, and properties must be SOCIAL 2. Drilling Influx of community. carried out on a common & activities people. 3. Ensure no damages to the understanding of all parties ECONOMI 3. Pitting and infrastructures, cultural and involved. C trenching. heritage sites and properties. 2. Resolve any pending social

4. Construction issues before leaving the camp. of approach tracks and roads. 24 | Page Mineral Exploration Guidelines 2023

1. Aerial Noise and 1. Serve prior notice to the local 1. Rectify any damages caused. survey vibration government authority. 2. Provide appropriate personal

2. Camping, 2. Ensure that the activities be protective equipment. surveying, carried out between 6 AM and 10 mapping. PM, if near settlements. OTHERS 3. Drilling activities

4. Pitting and trenching.

5. Constructio n of approach tracks and roads. 25 | Page Mineral Exploration Guidelines 2023 Annexure 3. Report Standards and Format The Exploration Report must be submitted to DGM in following standards or format: (1) Font size 14-16 for headings, 12 for others; (2) Font style must be “Times New Roman”; (3) Paper size must be A4 for text and appropriate size for maps and cross- sections (not less than A3); (4) softcopy (PDF) and one hard copy; (5) Units used must be in SI unit system; (6) pictures or photographs must be in color with proper annotations; (7) Proper captions for tables, figures, annexures, appendices etc; (8) All the maps, cross-sections, annexure, and appendix and other supporting documents must be enclosed with reports in proper sequence; and (9) the survey or base data (in softcopy) to determine the consistency of the map and data. The following layout or outline should be included in the Mineral Exploration Report: Cover page The title, author, submission date (dd/mm/yy), representative photo, company or firm logo (if relevant), permit number. Abstract or Executive Summary A brief description of background, objectives, study area, methodology, results, conclusion, and recommendations not more than 350-700 words. Table of Content With proper categorization of headings and page number, list of figures, tables, pictures, plates, and annexure etc. 26 | Page Mineral Exploration Guidelines 2023

1. Introduction Should include: (1) Concise and appropriate background scope, and limits of the work; (2) aims and objectives of the study; (3) Detailed description on study area including locations, accessibility, topography, drainage, climate, flora and fauna; and (4) Outline what has been done before by citing truly pertinent literature, but do not include a general survey of semi- relevant literature.

2. Regional Geological Setting A brief description of regional geology of the study area using existing information.

3. Materials and Methods or Techniques Applied This section should succinctly describe what was done. It should include a description of the techniques used including the scale of mapping, sampling methods, analytical techniques, geophysical methods, statistical procedures, drilling methods, surveying methods, data analysis, software used, etc.

4. Results and Discussion This section should present the findings/results with respect to methods or techniques used in

3. The findings should include but not limited to: (1) discuss analytical results on geology, structures, petrological & mineralogical studies; (2) laboratory analysis results; (3) geological reserve estimation; and (4) other graphical results or maps.

5. Conclusions and Recommendations (1) include summarized key findings or result; (2) key findings should be based on the evidence presented in the report and validated against the studies or methodology of similar kind; and (3) based on conclusive evidence, the recommendation can be made for decision making. 27 | Page Mineral Exploration Guidelines 2023

6. Acknowledgement A brief acknowledgement to an individual and/or organization.

7. References (1) the purpose of the reference is for the credibility of the report and to help readers; (2) find the literature easily; (3) the references shall be in the Standard Referencing System (e.g. Harvard, Chicago, APA etc); and (4) in-text citation for all the references listed under this section shall be provided in the report.

8. Annexures Annexures shall include but not limited to: (1) maps, cross-sections, models, core and sample logs, and laboratory results. 28 | Page Map Layout 29 | Page Mineral Exploration Guidelines 2023 Annexure 4- Form EP-1 For Official Use Application ID No. Date received Receiving Officer ANNEXURE 4. FORM EP-1 (APPLICATION FOR EXPLORATION PERMIT) APPLICANT DETAILS a. INDIVIDUALS Title (tick)* Mr. Mrs. Ms. Dasho Dr. Others Name* Postal Address Telephone No. Mobile No.* CID No.* Email ID* b. LICENSED FIRMS OR COMPANY Name* Postal Address* Telephone No. Mobile No.* License No.* Email ID* SHORT DESCRIPTION OF THE PROPOSED EXPLORATION ACTIVITY Mineral(s) of interest* Proposed duration* Source of Finance* Loan Equity 30 | Page Mineral Exploration Guidelines 2023 Annexure 4- Form EP-1 Technical competence & experience Workforce requirement & recruitment* SRF Total area Land ownership* Private (acres) (acres) (acres) LOCATION OF THE PROPOSED EXPLORATION ACTIVITY Place* Nearest village* Gewog* Dungkhag/Dzongkhag* Geographical Latitude ° ’ ” N Longitude ° ’ ” E Coordinates* DECLARATION I hereby declare that the information provided herewith are true to the best of my knowledge and in the event of false or misleading information, I shall be liable for any action under the Mines and Minerals Management Act and Regulations thereof. SIGNATURE* Applicant Witness Signature* Affix legal stamp Name* CID No. * Contact no. * Date: Place: Required documents to be attached: 31 | Page Mineral Exploration Guidelines 2023 Annexure 4- Form EP-1 ΅ΚΔΜ͙͑‫͚͑׼‬ Sl. Appendix Appendices mark if No. No. enclosed Description of exploration activity (description of area, exploration plan and value addition proposal) Description of area - a written description of the area such as location, type of land, land use, cultural and heritage, accessibility, topography, vegetation, drainage, flora and fauna, the potential of mineral(s) of interest, settlements, demography, infrastructures, objective of the proposal, and likely environmental 1 A impacts. Exploration Plan - Exploration Plan containing work items, equipment, methodology, timeline, deliverables and cost estimates, which may be supported by maps, figures, etc. Project Proposal - proposal for use of mineral and value additions to process mineral deposit as captive mines. Location map with proposed boundary (a map in the scale of 1:25,000 or larger 2 with clearly delineated proposed exploration area boundaries and geo-coordinates B showing important infrastructure, settlements, cultural and heritage sites, natural drainage system, roads and footpaths, etc. in the surrounding area) Curriculum Vitae (CV) along with certificates of the qualified professionals with a minimum of Bachelor’s Degree in Geology, and other relevant disciplines OR 3 persons with a minimum of at least five years of field experience in mineral C exploration validated by relevant authority, to be engaged in the exploration activity. 4 Copy of CID in case of individual/license/company registration certificate. D 5 A copy of Household Information (family tree) issued by MoHA for an individual E or proprietor of a licensed firm. Written consent letter from the private landowner if: 6 i. the proposed area falls within private registered lands F ii. the private land falls within 200m radial distance from the proposed exploration boundary. 32 | Page ANNEXURE 5. FORM EP-2 (EXPLORATION PERMIT) Permit No: EP- /DGM/2023/ Date: The Department of Geology and Mines (DGM) under Ministry of Energy and Natural Resources, hereby issue this Exploration Permit as under: i. Details of the Exploration Permit Holder a. Name: _______________________________________ b. CID/License number: ___________________________ c. Postal address: _________________________________ d. Email ID: _____________________________________ e. Mobile number: ________________________________ ii. Details of the permit a. Name of Exploration Site: b. Mineral(s): c. Location: Place/Village(s): ____________; Nearest Village: ______________________; Gewog: _______________; Dungkhag/Dzongkhag: ____________________; d. Area (acres): SRF: __________Private: ___________ Total: ___________ e. Validity Period: from __________________ to______________________ Terms and Conditions

1. The Exploration Permit Holder shall carry out the exploration: (1) for the approved mineral(s) only; (2) within the validity period only; (3) by consulting geologist and relevant professionals; and 33 | Page (4) in accordance with the relevant provisions of MMMA 1995, MMMR 2022, Mineral Exploration Guidelines 2023, Terms and Conditions of this Exploration Permit and other relevant laws of the Kingdom.

2. The Exploration Permit holder shall: (1) inform in writing to the DGM, Divisional Office of DoFPS, Local Government and other relevant agencies prior to the commencement of the mineral exploration works; (2) report discovery of any other mineral not specified in the permit, fossil, and gemstone discovered during exploration to the DGM within 30 days from the date of discovery; (3) obtain approval from the DGM to carry out exploration of mineral(s) reported in 2 (2), subject to expression of interest and eligibility; (4) not transfer or sublet the Exploration Permit to any third party; (5) pay fair compensation to the land and property owner if any damages are caused during exploration; (6) carry out the social and environmental mitigation and management measures in line with the Annexure 2 of the Mineral Exploration Guidelines 2023 to minimize social and environmental impacts. (7) submit half yearly progress report to the DGM on or before the 15th day the following month as per section 32(9) of this Guidelines, if applicable; (8) submit Final Report fulfilling the standards as per Annexure 3 of this Guidelines to DGM within 6 months from the completion of the exploration or the date of expiry of permit, whichever is earlier; and (9) remove all the installation and restore any environmental damages in the area within a year of expiry, withdrawal, surrender or termination of the permit to the satisfaction of the DGM;

3. The Exploration Permit Holder shall be debarred for future exploration permits in the event of failure to remove all the installations and restore any environmental damages in the area after the expiry, withdrawal, surrender or termination of the Exploration Permit.

4. The Exploration Permit Holder may submit a written application for surrender of a part or whole of the Exploration Permit Area to DGM.

5. This Exploration Permit does not guarantee automatic grant of mining lease to the 34 | Page Exploration Permit Holder. The mining leasing process shall entail the fulfillment of a separate set of procedures and clearance requirements in line with the provisions of MMMA 1995 and MMMR 2022. Failure to abide by the provisions of MMMA 1995, MMMR 2022, Mineral Exploration Guidelines 2023 and the Terms and Conditions of this Permit may lead to suspension or termination of the Exploration Permit. (Chief Geologist) Geological Survey Division Department of Geology & Mines Copy to:

1. Director, DGM, Thimphu for kind information

2. Dasho Dzongdag, Dzongkhag Administration, ………………… for kind information

3. Gup, Gewog Administration, ………………..for kind information.

4. Chief Engineer, Mining Division, DGM, Thimphu for information.

5. Chief Engineer, Mineral Policy and Cadastre Division, DGM, Thimphu for information.

6. Chief Forest Officer …………………. Divisional office, DoFPS for information

7. Chief Environmental Officer, EACD, DoECC, MoENR, Thimphu for information

8. Regional Director, RRCO, …………………………. for information

9. Regional Coordinator, DGM, ………………... for information and necessary compliance monitoring. Attachment:

1. Topographical Map of the approved area showing the boundaries and coordinates of approved mineral exploration areas on 1:25,000 scale or larger, and the surrounding area showing important infrastructure, settlements, cultural and heritage sites, natural drainage system, roads and footpaths, etc. 35 | Page