Malawi NI 43-101 - December 2011 - Gold Canyon Resources Inc.

18drill) and the other a small portable diesel-powered drill (YBM-05). Drilling will be mostlydry, chemicals will not be used, drill-sites should have minimal disturbance and holes willbe backfilled. Topsoil from pits and trenches will be stripped and replaced when backfilled.Accommodation will be in existing huts with piped water supplies. The Joint Venture hasretained a biologist familiar with the area to ensure environmental issues of the currentexploration are monitored. In the author’s opinion the environmental impact of the currentexploration will be insignificant.However, the Chambe Basin lies within the Mulanje Mountain Reserve, which wasestablished in 1927, and environmental issues for any eventual mining operation areimportant. Although mining can apparently proceed within this reserve, development mustbe done in a way that conserves the environment, especially water catchment areas suchas the Chambe Basin. There is also now an interest in eradicating introduced plants suchas the Mexican pine, Himalayan raspberry and the Australian eucalyptus and in replantingthe native cypress. Clearly, it is too early to consider the impact of any eventual mine butthe Joint Venture has proposed that it might be possible to combine restoration of a minedarea with reforestation of the basin with cypress.The Mulanje Mountain Conservation Trust was founded in 2000 with funding by theWorld Bank for research and conservation of biological diversity and promotion ofsustainable use of natural resources in the Mulanje Mountain Forest Reserve. It hasadvocated removal of introduced flora and restoration of endemic species, particularly theMulanje cypress, and has lead opposition to proposed mining of bauxite from the MulanjeMassif, principally on the Lichenya Plateau. While solution extraction of REE from soils inChambe Basin has little in common with the stripping and removal of large tonnages ofbauxite, environmental issues of REE resource extraction if it affected streams or createddust, etc. will need to be considered.(g) Work permitsNo work permit is required for the current work on the Joint Venture, but approvalwas required by the Ministry of Environmental Affairs before this work began.If the project proceeds to a second phase (in 2012) an Environmental Impact Study(“EIS”) will need to be initiated. Should the project eventually prove feasible the EIS willneed to be completed and a “Mining Licence” from the Ministry of Natural Resources would