- ii -

The WGM review included two site visits, an audit of the Mineral Resource estimate for a significant portion of the Galmoy Mine, a review of the land holdings in the vicinity of the mine, a review of the underground operation, equipment and procedures, a review of the life of mine plan, a review of the concentrator, its equipment and operation, a review of the tailings disposal area and capital and operating costs. We also reviewed ongoing exploration activities in the mine area and briefly reviewed the potential of the ARCON PLs located elsewhere in Ireland.

The Mineral Reserve estimate for the Galmoy Mine (which is included within the Mineral Resource reported above, the Proven being derived from the Measured and the Probable from the Indicated) is as follows:

WGM is satisfied that the mine-staff estimates of Mineral Resources and Mineral Reserves are valid and accepts the results.

Although different cutoff grades and minimum mining thicknesses have been used over time, an examination of historic Mineral Resource estimates indicates that Galmoy has been successful at replacing Mineral Reserves both by converting Mineral Resources to Mineral Reserves and by finding new Mineral Resources, most recently in 2002 when the high-grade, large tonnage R Zone was discovered. At this time, however, the portion of the Measured and Indicated Mineral Resources not incorporated within the Proven and Probable Reserves is generally either below the 6% ZnEq cutoff grade or tied up in "permanent" pillars and unlikely to be mined. Therefore there is no reason to believe that any significant portion of the Measured and Indicated Mineral Resource not already classified as Mineral Reserve will be converted to Mineral Reserve. Should another discovery be made this situation will change.

Galmoy entered into production in early 1997 and to the end of 2004 has mined 4.4 million tonnes with a head grade of 11.02% Zn, 1.99% Pb. Recoveries have averaged 82.6% for Zn and 24.8% for Pb. From 2002 through 2004 production averaged approximately 654,000 tonnes per annum ("tpa") grading 11.39% Zn, 3.61% Pb with recoveries of 82.4% for Zn and 16.4% for Pb. As of September 30, 2004 the Galmoy life of mine plan projected production continuing until the end of 2009 at a rate of approximately 740,000 tpa grading 14.07% Zn, 4.3% Pb. Planned production for 2005 was adjusted downwards early in 2005 and a new life of mine plan is in preparation. It is WGM's opinion that as of January 1, 2005, the September 30, 2004 Proven and Probable Mineral Reserves (adjusted to take into account production until December 31, 2004) are sufficient to support production for 5.3 years, that is through April 2010.

WGM has completed an economic analysis of the Galmoy operation starting from January 1, 2005 and ending April 2010. The analysis projects production of 694,000 t in 2005, 720,000 tpa for 2006-2009 inclusive and 218,000 t in 2010. In compliance with NI 43-101, this analysis incorporates only Proven and Probable Mineral Reserves. The analysis does not take into account any financial matters related to the proposed Lundin – ARCON merger.

The analysis shows that the operation will have an accumulated Net Cash Flow of US$140,523,000. The NPV at a discount rate of 10% is US$111,799,000.

WGM is of the opinion that using reasonable economic and operational assumptions the Galmoy operation starting from January 1, 2005 will be financially viable. It will remain robust under a variety of metal price, operating cost and exchange rate conditions.

The Galmoy Mine operation has no significant environmental liabilities due to its proactive attitude, stringent government regulations and the modern containment practices in place. Although there are occasional non-compliance levels with respect to several elements in the discharge water, Galmoy, with regulators' support is actively trying methods to reach 100% compliance.

There is considerable opportunity for operational and metallurgical improvements in the mill, which would improve the mechanical availability and metal recoveries.

WGM believes that the Galmoy operation can become a middle of the cost curve zinc producer for its remaining mine life, currently projected to be 5.3 years. Due to depressed zinc prices, the mine has not been fully capitalized and operational challenges have made it difficult to fully optimize the mine development and metal recoveries. These situations are now being addressed.

WGM is of the opinion that the Galmoy Mine and Surrounding PLs area hold excellent exploration potential. Irish-type deposits are not, however, easy to target or discover as they are not necessarily surrounded by extensive alteration or weakly mineralized haloes, which broaden the exploration footprint. Clear evidence of this is the fact that the R Zone occurs within 400 m of the CW Zone yet despite several years of exploration, development and even mining in the general area, was only discovered in 2002. Drilling is the primary exploration tool and there must be a strong commitment to an active drilling program in order to achieve success. While the entire Galmoy area holds potential, areas of particular note are the possible northerly extension of the G West Zone and the area between the R Zone and the Rapla Prospect. ARCON has held discussions regarding access for drilling with the owner of the surface rights for the former and has further drilling planned for the latter.

The eight outside PLs all hold a certain amount of potential. With the exception of Harberton Bridge, ARCON has plans in place for a modest exploration programme on them and WGM supports these plans, however, all the PLs should be reviewed critically after these programs are completed if they fail to produce positive results (bearing in mind the challenges involved in exploring for Irish-type Zn, Pb deposits).

In order to take advantage of these exploration opportunities and operate more efficiently, a larger drilling budget, more exploration staff and modernized geophysical equipment and computer hardware and software are required. ARCON had a 2004 exploration budget of €846,000 and has a tentative 2005 exploration budget of €950,000 including funds for on-site and off-site projects. It is recommended that consideration be given to increasing this by 25% to approximately €1,200,000 or US$1,500,000.

In conducting this study, WGM relied on reports and information prepared by and/or for Galmoy and/or ARCON and supplied to us directly by them. WGM also drew on published scientific papers and other documents in the public domain. Portions of the descriptive material used in this report have been taken from all of the above. Both site visits were carried out by G. Ross MacFarlane, WGM Senior Associate Metallurgical Engineer and John Sullivan, WGM Senior Geologist. Discussions were held with management and technical personnel of Galmoy and ARCON on site and between and subsequent to the site visits by telephone and e-mail.

Representative samples of mineralization were taken during the first site visit. These samples were carried back to Canada for analysis.

Documents used in the preparation of this report are listed under "References".

Metric units are used throughout this report unless noted otherwise. Currency is primarily United States dollars ("US$") and Euros. In mid-April 2005, the currency exchange rates were approximately 0.78 Euros and 1.24 C$ per US$.

WGM has reviewed the State Mining Licences ("SML") for the Galmoy Mine deposit area and the ARCON PLs, as supplied by ARCON, but has not carried out a formal title search of them or the extensive surface rights held by ARCON covering portions of the same areas. WGM has relied on information provided by ARCON and Lundin in this regard.

This report or portions of this report are not to be reproduced or used for any purpose other than to support Lundin's proposed merger with ARCON, without WGM's prior written permission in each specific instance. WGM does not assume any responsibility or liability for losses occasioned by any party as a result of the circulation, publication or reproduction or use of this report contrary to the provisions of this paragraph.

3. PROPERTY DESCRIPTION AND LOCATION

The Galmoy Mine is located in south-central Ireland in County Kilkenny, on its northern boundary with County Laois, at approximately 52°50'N latitude, 7°35'W longitude. As shown in Figure 1 (which also shows the outlines of ARCON's Prospecting Licences), it lies 30 km northwest of the city of Kilkenny and 105 km southwest of Dublin. There are several villages and hamlets close to the mine site but only a handful of residents in the immediate vicinity of the mine. Most of the lands overlying areas being worked underground or being explored by diamond drilling are pasture lands.

On making a discovery the PL holder has the exclusive right to apply for a State Mining Facility, which may take the form of a State Mining Licence ("SML"), such as those held by ARCON, State Mining Lease or State Mining Permission, all of which entitle the holder to exploit the minerals. The surface area is determined by the size of the deposit and the initial duration is related to the predicted life of the operation and may be renewed/extended. In the case of Galmoy, as SMLs have been granted, the durations have been set to match that of the first-granted SML, namely until February 2016. There is a basic annual licence fee for each SML. These fees amount to €157,000 for 2005. As of 2007 these fees will be adjusted annually according to changes in the consumer price index. In addition, production is subject to the effective equivalent of a Net Smelter Returns ("NSR") royalty payable to the state. The amount and terms are negotiated between the proponent and the Department as part of the licencing process. Galmoy production revenue is subject to a 1.25% NSR until June 30, 2006 and a 1.75% NSR until the cessation of production. A condition of all SMLs requires that if the Mineral Rights/compensation rights are privately held that compensation is paid. This compensation is negotiated between the owner and SML holder with the owner having the right to appeal to the Mining Board, an independent body, if no agreement can be reached. In order to establish a mining plant, surface rights must be obtained from the owner. Normally mining companies negotiate for and purchase these outright, which was the case with Galmoy. There is no provision for expropriation in the event negotiations are unsuccessful.

The immediate Galmoy mine, plant and tailings containment area is covered by four contiguous SMLs, SML 1, SML 6, SML 8 and SML 10, totalling 1,557.9 ha, all held in the name of ARCON Mines Limited. These SMLs are located within and surrounded by a contiguous block of six PLs (the "Surrounding PLs"). Five of these are held by ARCON Exploration P.l.c. and the sixth was optioned by ARCON Exploration P.l.c. from Westland Exploration Limited in 1998. The PL is now held by Minco Ireland Limited, an Irish junior company. ARCON was to have earned a 50% interest in the PL by incurring I£450,000 in expenditures by June 2003. That deadline was extended to June 2005 and by the end of 2004 some €217,000 remained to be spent to meet the original commitment. At this time ARCON has no plans to work this PL in 2005 so this extension must be renewed by June 2005. Minco has indicated to ARCON that it is prepared to do so provided that in return ARCON agrees that after vesting it will carry Minco's share of expenditures (so that it avoids dilution) for a period equal to that of the extension. ARCON holds an additional eight PLs (the "Outside PLs") in five isolated groups elsewhere in the Irish Midlands. In addition to mining and exploration titles, ARCON owns numerous surface rights/properties over the immediate mine and surrounding area.

The various mining and exploration titles are more fully described in Tables 1 and 2 and are shown on Figures 1 and 2. WGM has neither researched nor reviewed the surface rights holdings, therefore has not documented them.

Local government, in this case County Kilkenny through its Planning Board, regulates much of the activity, both on surface and underground, at the mine. It administers with applications, conducts hearings and issues Planning Permissions, which set surface and underground use terms and conditions, however, the national government Environmental Probation Agency is responsible for most environmental matters. The County employs consultants to provide advice on many technical matters since it does not have the population base to support a large number of fulltime professionals and as a largely agricultural community had no history of dealing with mining related matters before the discovery of Galmoy. It also consults with the Department on certain matters. Galmoy is generally in compliance with all its Planning Permissions. In instances where the mine has exceeded compliance levels of certain elements for mine discharge water the operation has always been forthright with regulators and demonstrated a willingness to address the issues and the mine's environmental impact. The mine environmental supervisor spends a considerable portion of his time interacting with local residents and government authorities discussing issues and advising them of mine developments on an ongoing basis.

The mine can be reached from Dublin WSW along the M 7 motorway to Port Laoise for approximately 80 km, then SW to Johnstown for 36 km on highway N 8. From there well maintained, paved secondary roads lead about 8 km to the mine. The city of Kilkenny lies about 30 km to the southeast and the mine is easily accessible from there as it is from other major centres. Numerous secondary and tertiary roads, most of them paved, although often narrow and sinuous, reach all corners of the immediate mine area and Surrounding PLs. The Outside PLs are also easy of access on well maintained, paved roads.

Given that it is a relatively small island surrounded by ocean and sea, Ireland as a whole has a stable, maritime temperate climate. Portions of the interior, including County Kilkenny have more of a continental climate. The average temperature in July is 16°C and in January 5°C. Prevailing westerly winds pick up moisture from the warm Gulf Stream in the Atlantic Ocean and drop it first over the western mountains. About 80% of the rest of the country has 760-1,250 mm of rainfall yearly, although the eastern coast is relatively dry. Annual precipitation in the Kilkenny area is about 1,000 mm.

County Kilkenny has a population of about 80,500. Of these approximately 30,000 live in the city of Kilkenny. The nearest towns to the mine of any size are Johnstown, 8 km to the south and Rathdowney, 8 km to the north. Galmoy is a very significant employer in the area with about 240 employees. The area is largely rural and the main economic activity in the vicinity of the mine is dairy, beef and sheep farming, with limited construction and light service industries.

As with virtually all of Ireland there is an extensive network of paved highways, excellent telecommunications facilities, national grid electricity, an ample supply of water and a well educated work force. Other than the need to apply for and abide by Planning Permissions referred to above, it is not anticipated that there would be any particular impediments to expand existing facilities or establish new ones should this be required. Although there was some concern in the community prior to the start of operations about potential impact on surface and underground water resources, the water supply has actually been enhanced by infrastructure supplied to the communities near the mine.

The mine is located in the southeastern part of the Central Plain which lies 60 to 90 m above sea level. It includes numerous lakes and large areas of marsh and peat bog, some of which are exploited commercially by a state organization, as well as fertile agricultural land. Scattered ridges rise above the plain, but none reach any great height.

Although most of the Central Plain is drained by the River Shannon, the southeastern part is within the catchment of the River Nore, which together with the Barrow and Suir Rivers flow into the sea near Waterford. In parts of the country, the limestone bedrock has formed an underground drainage system.

The main resource in Ireland is its agricultural land that covers more than 70% of the countryside. Less than 5% of the remaining land is under tree cover, despite reforestation. Outcrop is scarce.

The most significant discovery since production began was the R Zone, first intersected in 2002 less than 400 m east-southeast of the CW Zone. It is high grade and hosts roughly 36% of the mine's Mineral Resource as estimated at September 30, 2004 and is indicative of the additional potential of the property.

Production figures from start-up through the end of 2004 are shown in Table 3.

ARCON has over the years carried out aggressive exploration programmes both in the general mine area and on Outside PLs, although this has fluctuated to some extent with the economic fortunes of the mine. Exploration on the Outside PLs has occasionally been in joint ventures with other companies providing funding to earn an interest. A summary of exploration results on the Outside PLs is provided in Section 9.2.

Virtually all the ARCON exploration work (with the exception of diamond drilling), including geophysical surveys, has been carried out by in-house crews.

6. GEOLOGICAL SETTING

The following regional description is largely derived from a recent paper by Hitzman and Beaty (Hitzman and Beaty, 2003) in a volume titled "Europe's Major Base Metal Deposits," published by the Irish Association for Economic Geology.

Two stratigraphic intervals within the Lower Carboniferous carbonate sequence, which are the local stratigraphically lowest units of non-argillaceous carbonate rocks, host all the Irish zinc deposits: the Navan Group in the central and northern portion of the Irish Midlands and the Waulsortian Limestone in central and southern Ireland. Figure 3 shows the generalized geology of Ireland, along with its significant mineral deposits and the ARCON PLs.

The transgressive Irish Carboniferous carbonate sequence hosting the Irish zinc-lead deposits lies conformably above Upper Devonian to Lower Carboniferous red beds. These red beds rest unconformably on lower greenschist facies, complexly folded and faulted greywackes, slates, volcanic rocks, and volcaniclastic sediments of Lower Palaeozoic and Precambrian age. The basement rocks are cut by late Silurian to early Devonian granitic to granodioritic intrusions. The Old Red Sandstone is the basal component of the major transgressive sequence which covers the Irish Midlands. The Upper Old Red Sandstone forms a northward-thinning wedge which ranges in thickness from approximately 6 km in SW Ireland to several tens of metres in the north-central Midlands. Regional thickness variations in Upper Old Red Sandstone indicate that it was deposited in a 70 to 100 km wide, ENE-trending basin termed the Munster Basin. The northern margin of the Munster Basin is interpreted as a synsedimentary fault zone from the presence of rapid thickness variations, extremely coarse conglomeratic sequences, and bimodal volcanic rocks. Another normal fault zone developed 50 to 70 km south of the northern edge of the Munster Basin at the end of the Upper Devonian. The area south of this fault zone is termed the South Munster Basin.

The basal Carboniferous red bed sequence thins and youngs northward. It is conformably overlain in the south and central Midlands by a 50 to 100 m thick, dominantly argillaceous, marine carbonate sequence informally termed the Lower Limestone Shale. North of an ESE-trending line from Galway to south of Dublin, these transgressive basal marine sediments gradually thicken and become less argillaceous. In the northern Midlands the basal Carboniferous carbonate sediments are informally termed the Navan Group or Mixed Beds. They consist of a thin basal section of terrigenous sediments overlain by mudstones, sandy and bioclastic grainstones, and oolite grainstones. The Navan Group contains minor disseminated sphalerite and thin sphalerite-galena veinlets throughout the north-central Midlands, one economic orebody (Navan), and a number of zinc-lead prospects (Tatestown, Moyvoughly, Oldcastle, Keel). At Navan and Tatestown, high-grade mineralization commonly occurs in undolomitised micrites or grainstones beneath sandy or shaley dolomitic horizons, suggesting that these contacts facilitated the lateral flow of ascending hydrothermal fluids. At Moyvoughly, mineralization preferentially occurs within a mixed sediment package of grainstones, siltstones, sandstones, and micrites lying above a basal mudstone and below a well cemented calcareous sandstone unit; sulphide zones are most laterally persistent within grainstones. At Oldcastle, sulphides occur primarily within micrite